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Home My WebLink AboutFiscal Year 2021 Adopted Operating BudgetTRANSMITTAL LETTER July 1, 2020 To the Honorable Mayor and City Council 2021 Fiscal Year Operating & Capital Budget Transmittal Dear Mayor and Council Members: In accordance with the City Charter, I am presenting the City of Palo Alto's Fiscal Year 2021 Adopted Operating Budget and Fiscal Year 2021 Adopted Capital Budget along with the Fiscal Year 2021-2025 Capital Improvement Program (CIP) Plan. The operating budget totals $796.8 million and the capital budget totals $300.0 million in FY 2021 and $772.4 million over the five- year CIP. As required by the City Municipal Code, the Planning and Transportation Commission (PTC) reviewed the 2021-2025 CIP in May 2020 to evaluate the program's compliance with the Updated Comprehensive Plan which was adopted by City Council in November 2017. This Adopted budget reflects the significant and difficult work that the staff and City Council com- pleted in May and June 2020 to address the significant impacts on revenues and expenses as a result of the novel coronavirus (COVID-19) and is the start of continuing to manage the long- term fiscal sustainability in light of the global health crisis. This FY 2021 Adopted budget was developed as the world grappled with the novel coronavirus (COVID-19), a global pandemic. Through both government and industry, society continues to respond to slow the spread and contain the virus in order to safeguard as many lives as possi- ble. The financial implications of this public health emergency are unknown in exact magnitude. However, they are significant, with regional, national and global impacts on economies in response to Shelter -In -Place orders required by the State of California and the County of Santa Clara and related social distancing restrictions. Santa Clara County Ordered a Shelter -In -Place on March 16, 2020 and Palo Alto has seen retail stores, many hotels, and restaurants close their doors completely as the community struggles to adapt to this extraordinary challenge. The City's daytime population dropped as workers and visitors shelter in place, telework, and limit their movements to slow the spread of the virus. These impacts have been stark and immediate. On March 12, 2020 the City Manager, acting as the Director of Emergency Services, issued a Proclamation of Local Emergency regarding the presence and community spread of COVID-19 in Santa Clara County and our region which was later ratified by the City Council on March 16, 2020. The Proclamation allows the City to exercise extraordinary police powers, should these be needed; provides immunity for emergency actions; authorizes issuance of certain necessary orders and regulations; activates pre -established emergency processes; and is a prerequisite for requesting state or federal assistance related to the emergency. The Emergency Operations Center was activated and managed virtually through a cross -functional multi -departmental team. Due to the immediate constraints on social activities, severe impacts to transient occupancy taxes, sales tax, documentary transfer tax, and revenue from licenses, permits, and charges for services are ongoing. Staff has seen hotel tax receipts fall over 90 percent from prior year levels and many restaurants and retail establishments remain closed while Shelter -in -Place Orders and social distancing practices remain in effect. The financial outlook beyond the current environ- ment is also unknown as unemployment claims have reached unprecedented levels and the financial markets remain volatile. The State of California and the County of Santa Clara Public TRANSMITTAL LETTER • �ITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Health Orders now provide phases for reopening, however, metrics at both the local and State lev- els indicate that the public health emergency will extend for many months to come. On May 4, 2020, the City Council began a process that spanned more than a month to address the financial impacts of this public health emergency and provided direction to staff to assume a more conservative revenue estimate. This revised revenue estimate reflects a loss of $39 million in Gen- eral Fund tax revenues in FY 2021. In a series of public hearings, the City Council reviewed the FY 2021 Proposed Operating Budget along with City Manager's Reports #11322 (www.cityofpaloalto.org/civicax/filebank/documents/76585), #11376 (www.cityofpaloalto.org/ civicax/filebank/blobdload.aspx?BloblD=76803), and other materials and provided tentative approvals, changes, and areas for further follow up. Staff compiled all the feedback gained during May and, in response, brought forward the final adoption of the FY 2021 budget that the City Council approved on June 22, 2020. The unprecedented circumstances of this extended public health emergency forced the City to take a hard look at our operating and capital budgets and this FY 2021 budget reflects tough choices that we would prefer not to be outlining. Service impacts are unavoidable when more than 60 percent of the City's General Fund budget is attributed to the outstanding workforce delivering the City's services on a daily basis. The City has been forced to prioritize essential services and pare back discretionary services as part of this adopted budget. In the months since COVID-19 was detected and found to be spread via community transmission, City staff have taken, and continue to take, numerous actions to promote community safety and address existing and potential impacts on City services and operations. Staff has consistently proven adaptive and responsive as our community and state grapple with reopening phases and continued monitoring of progress of the virus' spread. The City has transitioned a majority of its workforce to remote (telework) status and expects to maintain this at least for a large portion of FY 2021, while maintaining essential services such as fire, police, public works, and utilities. While mindful of the unprecedented circumstances at hand, this Budget Message includes the fol-lowing sections to outline the City's resource allocations for the year ahead and beyond: ▪ City Council Priorities ▪ Council Adopted Budget Principles • Continuing Fiscal Sustainability Actions • Fiscal Reality and Budget Priorities • Summary of Other Funds (including the FY 2021-2025 Capital Improvement Plan) ▪ Acknowledgments City Council Priorities In February of this year, the City Council held a retreat and selected three priorities to focus on in 2020. The priorities include: • Housing with an emphasis on affordable housing • Sustainability, in the context of the changing climate • Improving mobility for all II TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Two of these priorities, mobility, and sustainability, relate to City Council priorities from 2019. For the City Council Retreat staff report highlighting past Council priorities and community input gained to help inform this discussion, go here: www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=62811.92&BloblD=75033 Council Adoptec Budget Principles As part of the FY 2021 - FY 2030 Long Range Financial Forecast, the City Council approved budget guidelines that have driven development of the FY 2021 operating and capital budgets. The budget principles include: 1. Develop a structurally balanced budget that brings ongoing revenues and expenses into alignment. Develop a plan for any structural imbalance to ensure that the City maintains it fiscal sustainability over the short, medium, and long-term. 2. Allocate one-time resources for one-time needs rather than committing one-time resources to ongoing services. Examine appropriate uses of revenue surpluses that exceed forecasted levels including planning for recession needs. 3. Ensure appropriate resource allocation for City Council's existing priorities. 4. Focus on business process redesign to enhance quality, flexibility, and cost effectiveness of service delivery (include examining opportunities to streamline, simplify, reorganize, and reallocate resources to avoid duplication of effort). 5. Explore alternative service delivery models (such as partnerships with non -profits or other public/private sector groups) to minimize overlap, maximize cost share, and effectively use resources. 6. Continue to thoroughly analyze non-personnel/equipment/other costs, such as contract services, for cost savings opportunities. 7. Explore the expansion of existing revenue sources or the addition of new revenue sources, including the alignment of existing charges for services and the opportunity to establish new fees, when appropriate. 8. Continue to analyze and prioritize resource augmentations, seeking to offset augmenta- tions with reductions elsewhere for net -zero impacts to the budget whenever possible. The FY 2021 - FY 2030 Long Range Financial Forecast can be found here: www.cityofpaloalto.org/civicax/filebank/documents/74907 As we have all been reading in the current news, it is expected that society will remain suscepti- ble to restrictions and a possible resurgence of the infections of COVID-19 for the foreseeable future. As we continue to grapple with these unknown effects and the uncertain timeline, we established a set of Budget and Fiscal Recovery Priorities, adding to the City Council's adopted Budget Principles highlighted above, to help guide our work to balance this significant change and continue to evolve through these difficult times. These include: Support Economic Recovery through changes to our policies and programs TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET III TRANSMITTAL LETTER ▪ Focus on resiliency over the long-term while making service reductions and changes, ensuring that any services eliminated can be restored in future years • Seek new ways to conduct our work through efficiencies and a learning environment • Apply a citywide approach to reductions, balancing impacts to the community, where possible • Use temporary solutions to bridge extreme revenue losses expected in the short-term Recognizing that some of the necessary measures may not be sustainable in the long-term, some deferrals of longstanding priorities will be necessary to respond to the downturn and allow for an economic recovery before resuming. We must assume this may take years, as the actual duration is unknown. Continuing Fiscal Sustaina oility Actions The FY 2021 Adopted Budget significantly impacts services delivery levels, however, this budget ensures that the City continues to proactively pay for long-term liabilities, continues capital investments in our most critical infrastructure, provides resources for the City to successfully adapt from 'shelter in place' to future service delivery models, and establishes funding to ensure those service delivery transitions. As a balanced budget, the assumptions contained herein continue to follow conservative proac- tive fiscal management across all funds and sets aside funds that enable the City to adapt and respond to the public health emergency. Significant progress towards ongoing cost contain- ment over the past several years and the reductions that have been made across the organiza- tion have set the foundation through which the City was able to effectively respond to the financial impacts of COVID-19. It shows the continued push to proactively fund liabilities by maintaining the City Council approved additional annual payments to the City's irrevocable IRS Section 115 Pension Trust Fund ("Pension Trust Fund") ($3.4 million General Fund, $5.5 million all funds) and additional payments to the City's OPEB Trust (approximately $3.0 million annually all funds). Investment in capital infrastructure has been a key priority as well and is funded by approval of two (2) Transient Occupancy Tax rate changes as well as a transfer from the General Fund to the Capital Improvement Fund for the catch-up and keep -up priorities identified by the Infra- structure Blue Ribbon Commission (IBRC). This capital budget continues to prioritize the 2014 Council approved Infrastructure Plan in the General Capital Improvement Fund. In order to accomplish this, some of the larger projects previously planned in the five-year CIP have been pushed out beyond the 2021-2025 timeframe. This prioritization of fiscal sustainability did not come without impacts. The ability to maintain these financial investments in capital and sustain proactive payments towards long-term liabili- ties, while funding Council priorities over the years, has resulted in service and staffing reduc- tions and service delivery changes such as the animal shelter transition to a public/private partnership with Pets in Need. The FY 2020 Adopted Budget and this FY 2021 Adopted Budget contain reductions previously approved in the Fire Department, position eliminations in the Library Department and Public Works, as well as ongoing expense reductions in the Office of IV TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER the City Clerk, the City Manager's Office, the Office of Emergency Services, and Information Technology. Additional significant reductions across all services in order to grapple with the estimated $39 million loss in revenues are approved in this budget and outlined in this letter and attachments. Staff released the "City Services Guide" in December 2019 to assist in further conversations about the exceptional services provided by the City and the resources necessary to provide them. You can find the City Services Guide and the appendix here: www.cityofpaloalto.org/civicax/filebank/documents/74888 www.cityofpaloalto.org/civicax/filebank/documents/74176 Fiscal Reality anc Revisec Buc cet A a °roach This year's budget recognizes the need to set new priorities in light of the significant uncer- tainty the City faces. Depending on the length and depth of this current public health emer- gency, the magnitude and severity of the financial ramifications remains unknown. As discussed previously, the City Council provided direction to build the FY 2021 budget assuming a loss of $39.0 million in General Fund tax revenues in FY 2021. In prior years, Sales Tax and Transient Occupancy Taxes (TOT) alone made up nearly 30 percent of the General Fund revenues, both of which are expected to see significant declines. In addition, CaIPERS will not meet their expected investment returns this year. It is expected that these costs will materialize in the City's FY 2022-2023 retirement rates and continue through a 20 -year period. The budget is bal- anced assuming that these major tax revenues meet the restated target; staff will continue to monitor these economically sensitive resources to ensure that the City maintains balanced operating and capital budgets during the fiscal year. Overall, the City's General Fund is recommended to collect $197.0 million in revenues and $197.0 million in expense, a balanced budget for FY 2021. These funding levels reflect a nearly 20 per- cent reduction from the FY 2021 Proposed Budget (released on April 20) and a 15 percent reduction compared to the FY 2020 Adopted Operating Budget. The City's Capital Improve- ment Plan reflects a $300.0 million FY 2021 budget, and a $772.4 million plan over the five-year CIP (FY 2021- FY 2025). Of this, the General Capital Improvement Fund reflects expected expenses of $174.4 million in the FY 2021 budget and $296.8 million over the five-year CIP. Over- all, this includes a reduction of 83 full-time staff (equivalent of 76.50 FTE) and 107 part-time staff (equivalent of 26.18 FTE) resulting in a workforce of 958.35 FTE full-time positions and 80.14 FTE part-time positions. In the General Fund, full-time staffing is reduced from 574.43 FTE to 509.91 FTE (a reduction of 64.52 FTE) and part-time staffing is reduced from 81.31 FTE to 55.61 FTE (a reduction of 25.70 FTE). It is also important to note that the Management/Profes- sional employees and the City's Public Safety labor Groups (Police Officers Association, Police Management Association, International Association of Fire Fighters, Fire Chief's Association) agreed upon concessions of which the savings are part of this FY 2021 Adopted Budget. This budget ensures the City will focus on maintaining outdoor recreation and open space preserves, recognizing that outdoor options are critical during this time and provide an especially high value to the community during COVID-19. Sworn police officers will focus on patrol and other TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET V TRANSMITTAL LETTER collateral duties, while administrative procedures are completed through more cost effective civilian staffing. All five libraries will remain open, however, on reduced schedules - three of the five libraries will operate as "neighborhood" libraries (open 3 days a week) and two libraries will operate as "full -service" libraries (open 6 days a week). The City will support resident and the business community through minimal to no rate increases in various utility enterprise fees. Citywide Strategies Citywide Cost Containment: Continuing a hiring freeze and freezing all nonessential travel, elim- inating current vacancies and reducing future vacancies through attrition, and/or implementing furloughs with corresponding service reductions such as reduced walk-in office hours. The FY 2021 Adopted Budget includes reductions for the Management and Professionals Group, an unrepresented bargaining unit with employees across the organization. This 10 percent com- pensation reduction generated $2.3 million in savings in the General Fund and approximately $3.5 million in all funds. City General Capital Infrastructure Fund Transfer Suspension: The City's General Fund transfers upwards of $30 million annually to the General Capital Infrastructure Fund, consisting of a base- line transfer as well as the allocation of TOT receipts as designated by the City Council. Funding for these capital investments are significantly impacted by the losses in TOT revenues and a reduction in the General Fund transfer bridges operating budget impacts. Both will significantly reduce the capacity for capital investments in the near term. The FY 2021 - 2025 capital plan prioritizes investments in essential capital projects and also the Public Safety Building, 2014 City Council approved Infrastructure Plan, Parks improvements such as Birch Street, the newly acquired property adjacent to Boulware Park, and various transportation projects including but not limited to grade separations. Proactive Funding of Long -Term Liabilities: The City Council approved a proactive funding strat- egy to contribute to the City's Pension Trust Fund assuming a normal cost for contributions with a 6.2 percent discount rate. This resulted in additional annual contribution of $5.0 million in all funds, $3.0 million in the General Fund. Support of Economic Recovery through Changes to our Policies and Programs: The City has ini- tiated Business Roundtables and other programs and services to continue supporting the busi- ness community. Support that is focused towards businesses in the University Avenue district is also funded in this budget. Initiatives include marketing and outreach programs, modifications that support the County's health guidelines, modifications to streets and sidewalks for outdoor dining, the implementation of our new online permit system to ensure review of planning and permitting processes even while sheltering in place and policy changes to support businesses in the City. VI TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Department Specific Strategies Public Safety: Suspended specialized police units such as the traffic enforcement unit and investigation unit to maintain minimal police patrol services and shift the priority of police ser- vices to focus on urgent calls and reduce the level of service and ability to respond to non - urgent calls for services. Reduced officer training, promotional testing, uniform purchases and eliminate or change to full cost recovery for non -essential programming such as school resource officers. Reduced emergency incident response and training and work to adopt fees for first responder and ambulance subscription. Reduced a staff vacancy in the Office of Emer- gency Services. Community & Library Services: Reduced library hours at all branches, neighborhood libraries (Children's, Downtown, and College Terrace) open three days a week and full -service branches (Mitchell Park and Rinconada) open six days per week. This includes greater cost -recovery through changes in service delivery, charges for services, and/or limiting operating hours, for facilities such as the new Junior Museum and Zoo (JMZ), community center, the Children's The- atre, and the Art Center. Reduced operating hours for Community Services facilities such as community centers, museums, theaters or open space preserves. Reduced or eliminated pro- gramming such as special events, art exhibits, and teen programs. Planning & Infrastructure: Understanding that this could delay services to our development community, reorganized building inspection and plan review which will result in longer lead times for inspections, delay progress on the Energy Reach Code, and next day inspections. Reduced current planning and Development Services front count support, causing delays in customer service response times. Reduced code enforcement staffing, eliminated the Crosstown and Embarcadero shuttle pro- grams and redesigning the delivery of this service to reduce costs. Implementing license plate recognition for efficiencies in parking enforcement, and initiating a paid parking program to increase revenues. Reduced funding for tree trimming and vehicle replacement and suspended rate changes in various utility enterprise funds for the coming year(s). Internal Services & Council Appointed Officers: Internal Services departments include the Infor- mation Technology, Human Resources, and Administrative Services Departments as well as the Council and appointed officers (City Manager, City Attorney, City Auditor and City Clerk). Reductions in these areas align with the changes in services, increasing timeframes for assis- tance and review in areas such as recruitments, procurements, and risk management. Technol- ogy solutions will be constrained to only essential contracts and systems and support equipment needs as majority of our workforce continues to work from home. Eliminated the City Council, Innovation and Special Events, and Human Recourses contingency accounts. At the direction of the City Council, we have also changed the Municipal Code to now allow a Council member to waive their right to compensation. Once again, we must recognize that many of these budget balancing strategies are not sustain- able over the long term. However, these, or similar solutions, are necessary to bridge the gap created by a steep economic downturn, contain costs, and support our economic recovery. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET VII TRANSMITTAL LETTER Summary of Other Func S The City's Enterprise and other funds, including the General Capital Fund reflect the priorities from the FY 2020 budget development with updates for FY 2021 rates and limited adjustments for the zero to minimal rate increases approved for FY 2021. The capital budgets have been updated for the current status and cost estimates of projects based on engineering designs and prioritize investments of limited resources, including deferral of some large projects beyond the five year CIP. The City will continue to maintain services and facilities for the community and the region, such as Utilities, Palo Alto Airport, and Wastewater Collection and Treatment plant. Sus- pension of rate changes for electric, water, wastewater, and refuse are assumed in this budget with minimal rate changes assumed for fiber, stormwater, and gas to avoid compromising the integrity of utility systems. Parking permit prices are also recommended to increase by 2.6 per- cent, consistent with most other fees, except for resident permits which are recommended to remain at $50. Significant changes in the various parking funds, including transitioning to License Plate Reader (LPR) enforcement, virtual permitting, and various policy and operational changes are anticipated to enable the Residential Preferential Parking program (RPP) to return the General Fund's investment into the program. Reduction in the Transportation Management Association (TMA) funding and reallocation of these funds to support business recovery as a result of impacts from COVID-19 is also included. The City's Capital Improvement Plan reflects a $300.0 million budget in FY 2021 and $772.4 mil- lion plan over the five-year capital plan (FY 2021 - FY 2025). Major investments continue in the Wastewater Treatment Plant's capital program, with approximately 64 percent of the expenses reimbursed by five contributing partner agencies outside of the City of Palo Alto, The general Capital Improvement Fund is the largest single fund in the 2021-2025 CIP with $269.8 million planned for 87 projects. Responsible investments and essential infrastructure are prioritized in this budget and will be necessary as the uncertainty of economically sensitive TOT revenue remains. As part of the budget hearing process, the City Manager and the Director of Public Works reviewed all General Fund projects in the proposed CIP, and confirmed that with the reduced General Fund transfer, the remaining funding levels sustain investment in essential infrastruc- ture. Based on this review, the revised proposed CIP provides a minimal, while responsible, investment in the City's essential infrastructure with several specific objectives: • Reduce carryover funding to "keep up" spending on essential infrastructure rather than fall behind and require new funding sources or levels to "catch up" in upcoming years; • Position shovel -ready projects to take advantage of the favorable construction market pricing typical of a recession; • Minimize near -term funding of discretionary projects; and, • Ensure a steady flow of projects that minimizes peaks and valleys in project delivery staffing needs, as this would reduce efficiency and introduce bottlenecks in productivity. In total, the City Council approved reducing the transfer from the General Fund to the Capital Improvement Fund in Fiscal Year 2021 by $19.1 million, from $30.7 million to $11.6 million. VIII TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Acknowledgments I would like to thank the City Council for your leadership and our Executive Leadership Team and the entire staff of the City for providing outstanding services to our community. While rec- ognizing the challenges ahead, the Palo Alto community should be proud of your leadership and commitment to service. A budget document takes countless hours of teamwork, collaboration, and patience to produce. I would like to offer special thanks to Kiely Nose, our Chief Financial Officer and the dedicated Office of Management and Budget Team - Christine Paras, Paul Harper, Steve Guagliardo, Jessie Deschamps, Alexandra Harris, Kayla Shapiro, and Chaitali Paliwal. Completing this budget could not have been accomplished without the skill, dedication, and professionalism of this team. Their willingness to work through these unique circumstances and sacrifice countless hours are a testament to their commitment to this organization and to the community. Thanks are also due to David Ramberg, Assistant Director, Administrative Services Department, and Tarun Narayan, Treasury Manager. I am also grateful to the Department Directors of our Executive Leadership Team and the department personnel who worked on the material. There are too many to list here by name, but the budget could not have been produced without the senior/ management analysts, division managers, administrative assistants, and others throughout the organization who helped produce this budget. Respectfully submitted, Ed Shikada City Manager TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET IX TRANSMITTAL LETTER Attachment A: Fiscal Year 2021 Budget Balancing The FY 2021 Operating Budget of $796.8 million reflects a 10.1 percent increase from the FY 2020 Operating Budget of $723.8 million. The increase primarily reflects the year -over -increase in programmed costs in the Capital Improvement Plan (CIP). The CIP expenses budgeted in FY 2020 were $191.5 million; FY 2021 includes programmed expenses of $300.0 million. The Gen- eral Fund has $197.0 million in budgeted expenses and represents 24.7 percent of the City's total expenditures. The FY 2021 Adopted Budget reflects a balancing strategy that has prioritized essential ser- vices, maintains investments in the City's most critical infrastructure, and continues to proac- tively fund long term obligations against impacted resources due to the severity of COVID-19. As a balanced budget, the assumptions contained therein continue to follow conservative pro- active fiscal management across all funds, while including resources in the General Fund to ensure that the City successfully adapts and responds to the current public health emergency. Revenue estimates contained in this budget have been considered alongside the current state of the economy. This budget begins what staff expects to be an ongoing conversation and diffi- cult work ahead to plan for the return or recovery period once the shelter in place order is slowly lifted and the impacts of COVID-19 continue to materialize financially. It is expected that these deliberations will require resetting expectations and many shared sacrifices as outlined in this adopted budget and moving forward through FY 2021. This FY 2021 Adopted Budget includes concessions for the Management and Professionals Group, unrepresented employees across the organization. In total, the these concessions gener- ated $3.5 million in savings citywide ($2.3 million in the General Fund). Additional agreements were reached with safety groups including the Police officers Association (POA), Police Man- agement Association (PMA), International Association of Fire Fighters (IAFF), and Fire Chief's Association (FCA) that generated approximately $1.1 million in savings. These savings have pro- vided attrition ramps, delaying the potential separation of the newest employees in these forces pending additional vacancies through attrition. Additional information relating to concessions is included in the Salary section of Attachment B. X TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER General Func The FY 2021 Adopted Operating Budget is balanced through aligning reduced available resources that are impacted by COVID-19 with service delivery reductions throughout the orga- nization. Prioritizing essential services and reducing or eliminating discretionary services is reflected in this budget and was achieved through compiling feedback throughout the May and June budget sessions with the City Council. Notwithstanding the service delivery reductions reflected in this budget, the budget balancing strategy ensures that the City continues to pro- actively pay for long term liabilities, maintains capital investments in our most critical infrastruc- ture, provides resources for the City to successfully adapt from "shelter in place" to future service delivery models, and establishes funding to ensure those service delivery transitions. The FY 2021 Adopted Budget includes revenues of $197.0 million in the General Fund, repre- senting a 14.7 percent decrease over the FY 2020 Adopted Budget of $232.1 million. General Fund expenses are budgeted at $197.0 million in FY 2021, representing a decrease of 14.7 per- cent from the FY 2020 Adopted Budget of $230.8 million. The FY 2020 Budget Stabilization Reserve (BSR) is anticipated to be $33.0 million, which is 16.8 percent of General Fund expenses and $3.4 million below the City Council target level of $36.4 million, or 18.5 percent of General Fund expenses. While the FY 2021 Adopted Budget reflects a balanced budget, the estimated BSR balance anticipates an $11.7 million draw on this reserve due to the financial impact of the current shelter in place health order; this action was approved by Council in June 2020 and reflects the best estimates that that time. Staff continues to mon- itor revenues and judiciously mitigate expenses through the end of FY 2020, to minimize the draw on the BSR to the extent possible. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET XI TRANSMITTAL LETTER General Fund Balancing Strategy REVENUES Revenues of $197.0 million in the General Fund represent a more conservative revenue estimate that reflects the severity of the current public health emergency and its impacts on the City's financial situation. On May 4, 2020, the City Council provided direction to staff to assume a $39 million revenue loss in the General Fund (Staff Report #11315, www.cityofpaloalto.org/civicax/ filebank/documents/76481). The FY 2021 Adopted Budget assumes the COVID-19 shelter -in - place order is lifted halfway through the fiscal year. The FY 2021 adopted revenue budget rep- resents an overall $34.1 million decrease compared to the FY 2020 Adopted Budget. Tax reve- nue constitutes 60 percent of General Fund resources and therefore fluctuations in this category significantly impact the City's financial outlook. Overall, major tax revenue in the FY 2021 Adopted Budget totals $107.2 million, a 22.5 percent decrease compared to $138.2 million in the FY 2020 Adopted Budget. It should be noted, that staff brought forward downward adjustments to the FY 2020 Adopted Budget revenues estimates of $23.7 million for City Coun- cil approval on June 16, 2020, in recognition of the impacts of the public health emergency during the March through June 2020 period (Staff Report #11328, www.cityofpaloalto.org/ civicax/filebank/documents/77256). Estimates for the major tax revenues listed below will be refined as additional data and information become available. Even at the time of printing this Adopted Budget, staff expects further revisions to TOT and Sales Tax estimates due to expected prolonged social distancing and shelter in place orders and public sentiment. ▪ Sales Tax is projected to decrease by 40.3 percent (from $34.3 million to $20.5 million), • Property Tax is estimated to increase by 6.9 percent (from $48.6 million to $52.0 million), • Transient Occupancy Tax (TOT) is anticipated to decrease by 49.2 percent (from $29.3 million to $14.9 million) • Utilities Users Tax is expected to decrease by 14.1 percent (from $17.6 million to $15.1 million), and • Documentary Transfer Tax estimated to decrease by 43.8 percent (from $8.4 million to $4.7 million). The City will continue to monitor current revenues and analyze the economic and fiscal impacts of COVID-19. Additionally, funding from other sources, such as Measure B and SB1, are included in this budget to provide resources for Capital Infrastructure. Impacts to these revenues are dis- cussed in the FY 2021 -FY 2025 Adopted Capital Budget. Impacts on external funding sources, such as these, will be monitored and potentially adjusted as the fiscal year progresses. EXPENSES The City's FY 2021 General Fund expense budget is $197.0 million and reflects a 15 percent reduction compared to the FY 2020 Adopted Budget. As a service -driven organization, salaries and benefits, including the City's proactive pension funding contributions, represent 58.2 per- cent of total General Fund expenses. Following staffing costs, the next largest expense in the General Fund is contract services, which is decreasing 6.3 percent from $23.4 million to $22.0 million. This category includes a variety of services including legal counsel, staffing for Planning and Development Services, facility maintenance and citywide landscaping. The third largest cost in the General Fund is transfers to other funds, which was previously the second largest XII TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER cost in the General Fund, is decreasing 51.9 percent from $36.8 million to $17.7 million. This cost category includes the transfer to infrastructure that is associated with TOT revenues. Due to the severe decline in TOT revenue and other major tax revenue sources, the transfer to infrastruc- ture is $11.6 million and accounts for the $19.1 million reduction in transfers to other funds to align with the loss in TOT revenue and overall available reprioritization of resources in the Gen- eral Fund. As discussed during budget hearings with City Council, the level of infrastructure investment in the FY 2021 Adopted Budget reflects a responsible investment in the City's essen- tial infrastructure to maximize the availability of operating funds to retain services in the General Fund. Significant service delivery impacts include but are not limited to: changes in the space avail- able at the Cubberley facility as a result of a new lease agreement; changes in operating hours and program availability at Community Centers, including increases in fees to aid in cost recov- ery levels; reduced Children's Theatre productions; reduction in library hours across the five library branches; a brownout flexible staffing model for fire services resulting in reduced capac- ity when staff is out on leave; elimination of shuttle services; and restructuring of the Residential Preferential Parking Permit Program (RPP). The FY 2021 Adopted Budget ensures that the City will focus on maintaining outdoor recreation and open space preserves, providing the highest value to the community for the duration of the COVID-19 pandemic when outdoor options are critical during this time. Very limited one-time funding was included in the FY 2021 Adopted Budget, such as an expense for the November 2020 election in the Non -Departmental section of the Budget. The City is responsible for paying its proportional share of election costs, which is administered by Santa Clara County. The FY 2021 Adopted Budget reflects a 61.77 reduction in full-time equivalent (FTE) positions. These positions were defunded and frozen in this budget reducing the General Fund FTE from 573.68 to 511.91 FTE. In addition to these full-time staff reductions, 25.70 part-time FTEs were also reduced in FY 2021. All changes to positions included in the FY 2021 Adopted Budget are discussed in Attachment B of the transmittal letter along with more detail regarding salary and benefit changes. The General Fund also sets aside funds to assist the community and organization with recovery and restoration efforts related to COVID-19. Details for these reserves can be found in the Non - Departmental section of this book. All Funds In addition to prioritizing essential services, critical infrastructure improvements, and reducing discretionary costs in the General Fund, operations and capital projects in non -General Funds were scrutinized. Revenue estimates contained in this budget here revised to ensure a balanced budget in several funds with economically sensitive revenues. Major activities in non -general funds the FY 2021 Adopted Budget are described below. Wastewater Treatment Fund The FY 2021 Adopted Budget includes significant funding for the Wastewater Treatment plant's seven system improvement capital projects programmed through the FY 2021 - FY 2025 Capital Improvement plan. $32.7 million is budgeted in FY 2021 for these projects, including $14.1 million for the Primary Sedimentation Tank Replacement, and $7.8 million for the Outfall Line Construc- TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET XIII TRANSMITTAL LETTER tion project. Through the five-year CIP, expenses of $146.4 million are programmed across the seven projects. It is important to note that approximately 65 percent of expenditures in the Wastewater Treatment Fund are reimbursed by five contributing partner agencies outside of the City of Palo Alto, based on each agency's expected capacity share. Details of these capital projects and expenses can be found in the Wastewater Treatment Fund section of the FY 2021 - FY 2025 Adopted Capital Budget. Airport Fund Revenues in the Airport Fund are anticipated to be $24.7 million with corresponding expenses of $26.0 million in FY 2021. While part of the Airport's increase in revenues are attributed to fees and charges that are scheduled to increase by 2.5 percent, $22.7 million comes from the Federal Aviation Administration (FAA), which provides a grant to cover 90 percent of Airport's major construction projects. In addition to the grant, the Airport is seeking a full grant from the FAA to complete Phase I I I of the Apron project, if unsuccessful, staff will look at a state loan to bridge any matching contribution requirements. The Airport continues to seek alternatives to ensure that there is sufficient funding for operating costs and continued services with minimal service delivery impact. In the past, the Airport Fund has received loans from the General Fund, totaling $3.1 million in principal since the City took over operations. The Airport Fund began repayment to the General Fund in FY 2020 in the amount of $272,000 annually for the next fifteen years as part of its commitment to fiscal sustainability and financial viability. Various Parking Funds This FY 2021 Adopted Budget includes minimal changes to staffing levels. It includes the exten- sion of one limited -term position to provide customer support services during the implementa- tion and transition to the new parking management software system expected to begin August of 2020. Similarly, capital improvement investments are relatively low due to the reprioritization of new projects and extension of timelines for existing projects. As a result of the recommended changes in various parking programs, this budget includes significant changes to the RPP pro- gram including a transition to License Plate Reader (LPR) enforcement and virtual permitting, a policy change to no longer provide a first permit free to residents (with limited exceptions), as well as other program updates such as the department's work to fix the 'no reparking' signage issue. These programmatic changes are expected to work to allow the RPP to return the sub- sidy to the General Fund and remain financially solvent. Corresponding Municipal Fee Schedule adjustments are recommended to reflect the policy change to no longer provide the first annual residential parking permit free, although the annual cost of such permits is not recommended to change in FY 2021. Staff expects to return to the City Council for program change reviews and implementation timeframes in the new fiscal year. Increases to parking permit revenue estimates to reflect the anticipated opening of the new Cal- ifornia Avenue parking garage (345 parking spaces) and addition of a residential parking dis- trict in Old Palo Alto. Parking permit prices are also recommended to increase by 2.6 percent, consistent with most other fees, with the exception of resident permits which are recom- mended to remain at $50. A more detailed presentation of the FY 2021 Budget for the Univer- sity Avenue Parking District Fund and California Avenue Parking District Fund are available at the end of the Special Revenue Funds Overview section. XIV TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER In the Downtown Parking Permit Fund and consistent with City Council direction, funding to the Palo Alto Transportation Management Association (TMA) is reduced by $750,000. This savings is reallocated to be used to support business recovery as a result of impacts from COVID-19. Stormwater Management Fund In FY 2021, the Stormwater Management fee is scheduled to increase by 2.5 percent as approved by the voters in 2017 to keep fund revenues consistent with inflationary cost increases and to provide sufficient funds for planned Stormwater Management capital and operating expenditures. The Stormwater Management fee was approved by property owners through a ballot measure in April 2017. The projects and infrastructure component of this fee has a sunset date of June 1, 2032 unless extended through a subsequent ballot measure. This fee provides financial resources for a number of projects and infrastructure components as outlined in the Storm Drain Blue Ribbon Committee's recommendations, which identified 13 Capital Improve- ment projects. Work on those projects began in FY 2019 and is programmed in the FY 2021 Adopted Capital Budget. UTILITY RATE CHANGES Due to the COVID-19 pandemic, the City Council aimed to provide economic relief for residential and commercial customers by directing staff to maintain flat rates without compromising the safety and integrity of the utility systems. The FY 2021 Adopted Budget assumes the following rate changes as adopted by the City Council in June 22, 2020. ▪ 0% rate change for Wastewater; • 0% rate change for Water; ▪ 2.5% CPI increase for Fiber; • 0% rate change for Electric; • 0% rate change for Refuse; • 2.5% CPI increase for Stormwater; • 2.0% rate increase for Gas. Council approved of the 2.5 percent CPI increase for Fiber to enable the City to expand the dark fiber network for new commercial and residential customers. A 2.0 percent increase for Gas was approved to enable continuation of the cross -bore safety inspection program and PVC gas main replacement project. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET XV TRANSMITTAL LETTER Attachment 3: Fiscal Year 2021 Salaries, Benefits, and Position Details The most significant asset the City has in serving the community is its employees. Local govern- ment services are primarily delivered by employees, whether they are police officers, utility line- men, librarians, or planners. Therefore, it should not be surprising that nearly 60 percent of the FY 2021 General Fund Budget is attributable to salaries and benefits. The City has negotiated labor agreements with SEIU that extends through FY 2021 and anticipates developing new labor agreements with UMPAPA whose contract expired June 30, 2020. Discussed in more detail below, the City reached agreements with the management and safety groups that extend the terms of the existing Memorandum of Agreements (MOA's) and reduce or postpone negoti- ated increases and other forms of compensation one year. With these extensions, agreements expire June 30, 2021 and June 30, 2022 respectively. As in prior years, the FY 2021 Budget pre- sumes funding for those units consistent with City Council authority. This budget includes actions during the public hearing process for the FY 2021 Adopted Budget to significantly reduce revenue and expense appropriations due to economic uncertainties sur- rounding the COVID-19 pandemic. While there is no change to authorized staffing levels year over year, significant reductions were made through position freezes, labor concessions, and other staffing changes. These actions are discussed in detail below and in the individual sec- tions of the budget document where the transactions occur, including the Staffing Tables and Budget Adjustments sections of the respective departments, and the Table of Organization. XVI TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER Position Changes The FY 2021 budget maintains FY 2020 staffing levels of 1,034.85 FTE, with minor changes to the allocation of staffing across the various funds. However, once adjusted for the extensive staffing freezes, the City's authorized staffing level is 958.35 full time positions. The table below summarizes the changes in full-time positions and is followed by a more detailed discussion. Position Changes FY 2020 Adopted to FY 2021 Adopted Budget Fiscal Year 2020 Adopted Budget Fiscal Year 2020 Approved Adjustments Fiscal Year 2020 Modified Budget Fiscal Year 2021 Increase Fiscal Year 2021 Decrease Fiscal Year 2021 Reallocation Fiscal Year 2021 Adopted Budget Net Difference Fiscal Year 2021 Position Freezes** Revised Fiscal Year 2021 Adopted Budget General Fund 574.93 574.93 3.00 (3.00) (0.50) 574.43 (0.50) (64.52) 509.91 Enterprise Funds 358.61 358.61 1.00 (1.00) 0.13 358.74 0.13 (4.35) 354.39 Other Funds* 101.31 Total 1,034.85 101.31 1,034.85 4.00 (4.00) 0.37 101.68 1,034.85 0.37 (7.63) (76.50) 94.05 958.35 NOTE: This Table does not include part-time/hourly positions * Other Funds include Internal Service, Special Revenue, and Capital Improvement Funds. ** Not presented in the chart above, 26.18 FTE part-time/hourly positions were frozen in FY 2021 out of a total 106.32 FTE, resulting in revised staffing levels of 80.14 FTE citywide. The majority of these freezes were in the General Fund, reducing staffing levels from 81.31 FTE to 55.61 FTE. In the General Fund, 3.0 FTE eliminations are offset by the addition of 3.00 FTE, and 0.50 FTE have been reallocated to the Enterprise and Cubberley Capital Fund. In the Enterprise Funds, 1.0 FTE elimination is offset by the addition of 1.00 FTE in the Utility department. Position Changes recommended in this budget include eliminations, additions, reclassifications, and reallocation/ realignment of staff: Eliminations ▪ Elimination of 1.0 Division Manager in the Community Services Department, reflecting a shift of responsibilities to the existing management resources. ▪ Scheduled elimination of a limit -dated 1.0 Principal Management Analyst in Planning and Development Services that was authorized on a one-time basis for FY 2020 to assist in the merge of Planning and Community Environment and Development Services. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET XVII TRANSMITTAL LETTER • Elimination of 1.0 Planning Manager in Planning and Development Services as part of a staffing reorganization to add staffing resources for inspection services. • Elimination of 1.0 Lineperson Cablesplicer in the Utilities Department as part of a staffing reorganization to add staffing resources for inspection services. Additions, reclassifications, and realignments • Addition of 1.00 Producer of Arts and Sciences in the Community Services Department and reclassification of 1.0 Program Assistant Ito 1.00 Program Assistant II for the reopening of the Junior Museum and Zoo (JMZ), reflecting the need for higher level oversight of operations, guest services, and animal care. Not included in the table above, an additional 5.79 part-time staff is requested as part of this action (CMR 11222, www.cityofpaloalto.org/ civicax/filebank/documents/76565). ▪ Addition of 1.00 Compliance Technician in the Utilities Department to meet operational needs and increased inspection levels. This action is offset by the reduction of 1.0 Lineperson Cablesplicer position described in the preceding section for eliminations. • Addition of 2.00 Building Inspector Specialist positions, one for a limited one-year term, increasing total inspection staff from 4.00 to 6.00 and providing additional resources to support service levels. This action is partially offset by the reduction of 1.00 Planning Manager described in the preceding section for eliminations. ▪ Reclassification of 6.70 FTE Heavy Equipment Operators in the Utilities fund to 4.70 Water, Gas, Wastewater (WGW) Heavy Equipment Operators and 2.00 Electric Heavy Equipment Operators, in accordance with labor agreement terms that distinguished the activities of this classification (CMR 10214). • Reclassification of 1.0 Program Assistant Ito 1.0 Program Assistant II in the Community Services Department to facilitate the development of a therapeutics program. • Reclassification of 1.0 Performance Auditor II to 1.0 Senior Performance Auditor to align with personnel actions. • Reclassification of 1.0 Senior Project Manager to 1.0 Senior Engineer in the Public Works Department to align the Parks and Open Space division with the management structure of other workgroups. • Realignment in the Community Services Department to shift 1.0 Administrative Associate I I I from general administration to the recreation and youth science division and minor adjustments to various staff to better align with the organizational needs and programs in the department. An additional adjustment is recommended to realign building service staff to the Cubberley Fund (This action results in a net 0.25 FTE decrease in the General Fund and a net 0.25 FTE increase in the Cubberley Capital Fund). ▪ Realignment of 1.0 Performance Auditor II from the City Auditor Office to the Administrative Services Department to align staff with the shift the City's annual Performance Report, which was produced by the City Auditor Office in prior years. • Realignment of 0.75 Management Analyst from the City Manager's Office to the Public Works Department, reflecting the transition of the Office of Sustainability to Public Works. XVIII TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER ▪ A net addition of 6.60 part-time positions, inclusive of the positions requested for JMZ mentioned above. These part-time position changes are discussed in greater detail in individual department sections of this document. In addition, this Budget includes position freezes of 83 full-time positions (equivalent of 76.50 FTE) and 107 part-time positions (equivalent of 26.18 FTE), recognizing savings equivalent to various positions throughout the organization in different departments. Frozen positions will be held vacant through the duration of FY 2021 and are expected to be two-year freezes while the organization assesses the financial impacts to the City due to the COVID-19 pandemic. This is beyond the normal vacancy savings presumed by the City as part of its regular budget process and generated approximately $16.0 million in one-time cost savings in FY 2021, primarily in the General Fund. These positions are identified with "(Freeze)" following the job classification title in the department section Staffing Tables and the citywide Table of Organization. Additional information relating to position freezes is available in the individual department section Organi- zational Chart and Budget Adjustment summaries. Salary & Benefits SALARIES During the budget hearing process, the City engaged with the various labor groups and suc- cessfully negotiated concessions to generate cost savings in FY 2021 with some of it's labor groups. This budget includes compensation reductions in the unrepresented Management and Professionals Group at the equivalent of a 10 percent 'give -back' that consists of a wage freeze, furlough, and reduced flexible management benefits. In total, this generated savings of $3.5 mil- lion in savings citywide ($2.3 million in the General Fund). Agreements with safety groups include a deferral of wage increases for one year in the Fire Chief's Association (FCA), Police Management Association (PMA), and Palo Alto Peace Officers' Association (PAPOA), and deferral of wage and step increases for one year in the International Association of Fire Fighters (IAFF) Group. The savings achieved in the safety groups were used to fund retirement incen- tives and offset an attrition period that allows the Fire and Police Departments to delay the sep- aration of filled positions identified to be held vacant in FY 2021 (position freezes). As separations occur during the attrition period, due to retirement incentives or the normal course of attrition, employees in frozen positions will move into vacant positions. This strategy avoids the layoff of more recently -hired police officers and firefighters, who would otherwise be sub- ject to union seniority rules, and retains the investments that have gone into the hiring, training, and equipping of these staff. PENSION The City Council has implemented multiple efforts to minimize the growth of pension and other benefit expenses through labor negotiations. These are an important part of the City's overall cost -containment strategies. Past successful steps include: • Continued employee payment of the CaIPERS employee contribution for all bargaining groups. ▪ Employees contributing an additional amount between 1 percent and 4 percent of the employer portion of CaIPERS consistent with current contract terms. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET XIX TRANSMITTAL LETTER • Employees sharing the cost of health plans with almost all bargaining units receiving a flat - rate medical benefit. • Implementing a less costly second -tier pension plan, parallel to the state's implementation of a third tier that went into effect January 1, 2013. As expected, new employees are hired into the lower tiers as existing employees retire, thereby lowering the City's overall pension liability. This budget reflects the required employer pension contributions determined in the CaIPERS actuarial valuation as of June 30, 2018 (CMR 10641, www.cityofpaloalto.org/civicax/filebank/ documents/73356). The actuarial reports provide an update on the funding status, the results of assumption changes such as rate of return (ROR) which impacts the discount rate assumption, the new fiscal year Actuarial Determined Contribution (ADC) and the projected future ADC as a percentage of payroll. Discussed in more detail below, the contribution rates are highly depen-dent on the investment returns that CaIPERS achieves. Therefore, there are potential significant impacts to the City's pension liability resulting from the COVID-19 pandemic and associated market volatility. Most recently, CaIPERS reported a 4.7 percent investment return for fiscal year 2019-20, 2.3 percent below the 7.0 percent target. Actuarial reports are completed two years in arrears therefore impacts from losses or other factors will materialize beginning in the June 30, 2020 valuation which will be included in the FY 2023 budget. The City will continue to work to understand the ramifications and strategize appropriate actions that address long-term pension obligations. CalPERS has taken a number of steps over the past few years that are intended to mitigate future impacts to cities even as they result in greater near -term costs. In December 2016, the CaIPERS board voted to lower the discount rate (used in calculating investment returns) from 7.5 percent to 7.0 percent, phasing in the reduction over three years. This phase -in began in 2019 and reaches the final phase in this FY 2021 Adopted Budget. The discount rate used by CaIPERS to calculate the City's FY 2021 Actuarially Determined Contribution (ADC) was 7.00 percent, down from 7.25 percent used in FY 2020. When compared to FY 2020, FY 2021 employer contribution rates increased in line with previous CalPERS projections. • The Miscellaneous Plan increased by 2.8 percentage points, an increase of 7.9 percent year - over -over, from 35.6 percent of payroll in FY 2020 to 38.4 percent of payroll in FY 2021. • The Safety plan increased by 5.9 percentage points, an increase of 9.9 percent year -over - year, from 59.4 percent of payroll in FY 2020 to 65.3 percent of payroll in FY 2021. CaIPERS projected pension rates through FY 2026 are included in the table below (expressed in percent): Pension Rates By Plan (Fiscal Year) - CaIPERS Miscellaneous (%) Safety (%) Discount Rate (%) 2020 2021 2022 2023 35.6 59.4 7.25 38.4 65.3 7.0 40.3 69.4 7.0 41.7 72.7 7.0 2024 2025 2026 42.3 74.4 7.0 42.8 75.6 7.0 40.2 75.6 7.0 As the above table indicates, the City's pension costs will continue to increase through FY 2025 and decrease or stabilize in 2026. The decrease and stabilization present in 2026 are attribut- XX TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TRANSMITTAL LETTER able to the ramp policy that increases (ramps up) and decreases (ramps down) gains and losses over five years. Employer pension rates are greatly impacted by the discount rate set by CaIPERS and invest- ment returns achieved. CaIPERS use of a 7.0 percent discount rate results in greater costs than when a higher discount rate (7.5 percent) was used. This is representative of CaIPERS' efforts to meet its investment return more frequently. In a given year, if CaIPERS meets or exceeds its investment return, the City's Unfunded Accrued Liability would shrink. This is because CaIPERS provides, as part of its ADC to cities, not only a Normal Cost (NC), which represents the 'pay-as- you-go' portion and an Unfunded Accrued Liability (UAL) payment calculation which rep- resents the 'catch-up' payment. Thus, if CaIPERS investment target is met in a given year, the normal cost would cover the 'pay-as-you-go' portion, and the UAL payment lessens the long- term liability. Thus, if CaIPERS investment target is met in a given year, the normal cost would cover the 'pay-as-you-go' portion, and the UAL payment lessens the long-term liability. Conversely, in a year when CaIPERS does not meet its investment return, the UAL of the City would grow. In order to address this potential gap, the City Council directed that the City of Palo Alto fundamentally change its budgeting practice. Beginning in FY 2020, rather than use the CaIPERS ADC (which is the standard practice for calculating pension costs in a given year) the City Council directed that the City use a discount rate of 6.2 percent, effectively decreasing the City's sensitivity to lower CaIPERS returns. This additional normal cost (pay as you go) is included in the FY 2021 budget and will be sent to the City's irrevocable section 115 trust. The FY 2021 budget transmits a total of $5.0 million from all funds ($3.0 million General Fund) to the 115 Pension Trust Fund, managed by PARS. This brings total contributions through FY 2021 to $32.3 million ($21.0 million General Fund) since the trust was created in FY 2017. This funding represents important contributions towards addressing the City's long-term pension liability and will help insulate the City against potential future increases to the UAL. In comparison to the $50.1 million in CaIPERS projected pension costs, this additional pay-as-you-go cost of $5.0 million is roughly 10 percent of the City's annual pension costs. Of note, the contribution levels from FY 2020 to FY 2021 decreased $1.2 million, from $6.2 million to $5.0 million, primarily due to the change in CaIPERS discount rate from 7.25 percent to 7.00 percent; narrowing the funding gap to meet the 6.2 percent target. Approximately $500,000 ($400,000 in the General Fund) of this decrease is due to conces- sions and staff freezes that resulted in lower pension costs; normal cost, employee share of pen- sion, and supplemental pension costs are assessed as a percentage of payroll. During FY 2020, Staff met with the Finance Committee and City Council to review and discuss options and elements to establish a Pension Funding Policy (CMR 10645 www.cityofpalo alto.org/civicax/filebank/documents/73639, CMR 11407 www.cityofpaloalto.org/civicax/ filebank/documents/77075). Four scenarios were evaluated that included different timelines, mechanisms, and options available to reach a target funded status of 100 percent. Ultimately, the City Council recommended a draft policy that suggests a fifteen -year timeframe to reach a 90 percent funding level. Staff anticipates returning to the City Council to formally adopt the Pension Funding Policy and report back on the progress towards meeting these funding goals in the fall of 2020. TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET XXI TRANSMITTAL LETTER Additional information regarding the City's plan for proactively addressing escalating pension costs, and the discussions that the City Council has already conducted to date, can be found in the Employee Information section of this document. RETIREE HEALTHCARE Consistent with past practice, this budget assumes the full payment of the Actuarial Deter- mined Contribution (ADC) for not only retiree pension but also healthcare costs. With the pay- ment of the ADC it is assumed that, all else being equal, the City will fully pay off its obligations for retiree healthcare costs. The City's outside actuarial consultant (Bartel Associates) performs an actuarial analysis of the City's Other Post Employment Benefits (OPEB) funding every two years. The most recent report was completed in May 2020 to inform both the FY 2021 and FY 2022 Operating Budgets (CMR 11284, www.cityofpaloalto.org/civicax/filebank/documents/ 76465). This study captured investment gains for the Retiree Healthcare Trust Fund as of June 30, 2019, lowered the assumed investment returns from 6.75 percent to 6.25 percent in deter- mining annual funding contributions and restated the City's Fiscal Year 2021 annual Actuarial Determined Contribution (ADC). Retiree Healthcare Annual Required Contributions (by Fiscal Year) 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 General Fund Non -General Funds TOTAL 10.5 10.2 10.5 10.8 11.1 11.5 11.8 12.2 12.6 13.0 13.4 6.0 5.8 7.6 16.5 15.9 16.4 16.9 17.4 18.0 18.5 19.1 19.7 20.3 20.9 5.9 6.1 6.3 6.5 6.7 6.9 7.1 7.3 The FY 2021 Budget for Retiree Healthcare decreased to $15.9 million, representing a 0.3 per- cent decrease from the FY 2020 Adopted Budget of $16.5 million. This primarily reflects the change in funding status that the trust has experienced from the June 30, 2017 to June 30, 2019, lower than anticipated premium costs and caps, and increased Medicare eligibility among plan participants. Additional information regarding Retiree Healthcare can be found in the Employee Information section of this document. XXII TRANSMITTAL LETTER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY OF PALO ALTO Fiscal Year 2021 Adopted Operating Budget City Council Adrian Fine, Mayor Tom DuBois, Vice Mayor Alison Cormack Eric Filseth Liz Kniss Lydia Kou Greg Tanaka Ed Shikada, City Manager Kiely Nose, Director of Administrative Services/Chief Financial Officer David Ramberg, Assistant Director of Administrative Services Christine Paras, Assistant Director of Administrative Services Paul Harper, Budget Manager, Office of Management and Budget Greg Tanaka, Finance Committee Chair • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 1 CITY OF PALO ALTO The government of the City of Palo Alto exists to promote and sustain a superior quality of life in Palo Alto. In partnership with our community, our goal is to deliver cost-effective services in a personal, responsive and innovative manner. Quality Superior delivery of services Courtesy Providing service with respect and concern Efficiency Productive, effective use of resources Integrity Straight -forward, honest and fair relations Innovation Excellence in creative thought and implementation 2 • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 3 CITY OF PALO ALTO TABLE OF CONTENTS Table of Contents 0 Introduction 7 Budget Acknowledgments 9 City of Palo Alto Organizational Chart 11 Palo Alto at a Glance 13 The Budget Process and Document 21 Budget Awards 29 El Citywide Funds 33 Citywide Funds Overview 35 Citywide Revenues 37 Citywide Expenses 39 Citywide Projected Operating Fund Balance 41 Citywide Average Salary 43 Major Capital Projects 47 General Fund 59 General Fund Overview 61 General Fund Reserves 71 General Fund Revenues 75 General Fund Expenditures 76 General Fund Expenditures 78 Enterprise Funds 81 Enterprise Funds Overview 83 Q Internal Service Funds 97 Internal Service Funds Overview 99 Special Revenue Funds 103 Special Revenue Funds Overview 105 El Debt Service Funds . . . . 121 Debt Service Funds Overview 123 City Departments 131 City Attorney 133 City Auditor 145 City Clerk 157 City Council 167 City Manager 173 Office of Transportation 188 Office of Transportation 189 Administrative Services 201 General Fund 206 Printing and Mailing Services 215 Community Services 221 Fire 245 Human Resources 259 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 5 TABLE OF CONTENTS General Fund 264 General Liabilities Insurance Program 271 Workers' Compensation Fund 275 Information Technology 283 Library 297 Office of Emergency Services 309 Planning and Development Services 319 Police 337 Public Works 355 General Fund 361 Airport Fund 372 Refuse Fund 379 Stormwater Management Fund 390 Vehicle Replacement and Maintenance Fund 399 Wastewater Treatment Fund 407 Utilities 415 Electric Fund 423 Fiber Optics Fund 436 Gas Fund 444 Wastewater Collection Fund 455 Water Fund 464 Non -Departmental 477 Employee Information 483 Employee Information 485 Retiree Health Benefit Fund Overview 492 Table of Organization 497 Supplemental Information 515 Budget Adoption Ordinance 517 Appropriations Limit Resolution and Calculation 521 Financial Policies 525 Glossary 529 Americans with Disabilities Act 533 6 TABLE OF CONTENTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 7 CITY OF PALO ALTO BUDGET ACKNOWLEDGEMENTS .budget Acknowledgments Department Budget Coordinators Administrative Services David Ramberg City Attorney Tricia Hoover City Clerk Jessica Brettle City Manager/Office of Transportation Chantal Gaines Judy Ng Elizabeth Egli Community Services Jazmin LeBlanc Lindsay Wong Fire Amber Cameron Human Resources Frank Lee Information Technology Sherrie Wong Library Giovanna Erkanat Office of Emergency Services Nathan Rainey Planning & Development Services Khashayar Alaee Sherry Nikzat Sarah McRee Police Eric Jensen Public Works Michelle Austin Maybo AuYeung Dinaa Alcocer Jamie Perez Utilities Anna Vuong Budget Document Producers - Office of Management & Budget Staff Kiely Nose Christine Paras Paul Harper Jessie Deschamps Steve Guagliardo Alexandra Harris Chaitali Paliwal Kayla Shapiro BUDGET ACKNOWLEDGMENTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 9 CITY OF PALO ALTO CITY OF PALO ALTO ORGANIZATIONAL CHART City of Palo Alto Organizational Chart Palo Alto Residents City Council I I I City Attorney Molly Stump City Manager* Ed Shikada Administrative Services Kiely Nos& Director/Chief Financial Officer Community Services Kristen O'Kane, Director Fire Department Geoffrey Blackshire, Chief Information Technology Darren Numoto, Interim Chief Information Officer Library Gayathri Kanth, Interim Director Office of Emergency Services Kenneth Dueker, Director City Clerk Beth Minor City Auditor Human Resources Rumi Portillo, Director/Chief People Officer Planning and Development Jonathan Lait, Director Police Department Robert Jonsen, Chief Public Works Brad Eggleston, Director Utilities Dean Batchelor, Director *The Office of Transportation is situated in the City Manager's Office. CITY OF PALO ALTO ORGANIZATIONAL CHART • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 11 CITY OF PALO ALTO Palo Alto at a Glance San Francisco Sacs,i Dvr:rrr: f.,,,i Irar+.ers Point Ve1151 it LI San Marlon Alameda Regional Park Fsar1 I. eons ro San Francisco Day (-Ay r:n:a:�,ane Bay Snulh San I -r iI1C1:ICO Pao f , :a NI brae I Francisco S?ale and Lair in Refugr Cat 7lerra El Granada I all Moor Bay So+.rh Sar Mn1Cc San Carlos Redwond City 3 Anerton ;�y 14111 Pal. Aldo 7� Woodside Alto _ iL'ilE �' s '-North San Jos Portola Valley ,- Castr7 Valley _.— V Eavy and isal Union City Eden Larding Ecological Reserve Frenao nt Newark La Honda l 5' Sunnyvale Cupertino San JO PALO ALTO AT A GLANCE INCORPORATION April 23, 1894 GOVERNMENT Palo Alto is a charter city operating under the Council -Manager form of government COUNTY Santa Clara County www.sccgov.org SCHOOL DISTRICT Palo Alto Unified School District www.pausd.org LOCATION 33 miles south of San Francisco; 17 miles north of San Jose; and 356 miles north of Los Angeles CLIMATE Mediterranean climate with cool, wet winters and warm, dry summers AREA 25.85 square miles ELEVATION 30 feet above sea level PARKS, PRESERVES AND OPEN SPACE 4,385 acres CREDIT RATING AAA PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 13 PALO ALTO AT A GLANCE POPULATION Palo Alto's population was 67,019 in 2019. This represents a 0.1 percent decrease over the previous year and a 13.2 percent increase since 2000. Approximately 23.6 percent of the population is under the age of 18, and the median age is 41.9. Approximately 50.9 per- cent of the population is female, and 49.1 per- cent of the population is male. EDUCATION Palo Alto has one of the most outstanding educational systems in the nation and was recently named one of California's most edu- cated cities. Over 97.4 percent of Palo Alto residents aged 25 or over have received a high school diploma. Over 81.9 percent have obtained a bachelor's degree or higher and 53.4 percent have earned a post -graduate or professional degree. School enrollments in Palo Alto decreased to 11,938 from 12,230, or by 3.2 percent, between 2010 and 2019. In school -year 2018-19, Palo Alto and Gunn high schools had a average SAT scores of 1,331 and 1,377 on a scale of 1,600. The average scores for the United States and California were 1,059 and 1,065, respectively. INCOME In 2018, Palo Alto's median household income was $147,537 and the per capita income was $82,576. As of 2018, 64.9 percent of all house- holds in Palo Alto had an annual income of greater than $100,000. PERSONS PER HOUSEHOLD The average number of persons per house- hold in Palo Alto owner -occupied and renter occupied homes was 2.5 in 2018, compared to 2.3 per household in 2000. HOUSING UNITS In 2018, 55.1 percent of the 26,212 housing units were owner -occupied and 44.9 percent were renter -occupied. In 2000, there were 26,048 housing units, 55.4 percent owner - occupied, 41.4 percent renter -occupied, and 3.2 percent were vacant. There were 0.6 per- cent more total housing units from 2000 to 2018. 14 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PALO ALTO AT A GLANCE DEVELOPMENT The City issued approximately 2,395 residential and 525 commercial building permits in Fiscal Year (FY) 2019. The combined valuation for all permits was $435.9 million. OFFICE AND INDUSTRIAL RENTAL ACTIVITY Palo Alto's net rentable office space totaled approximately 7.2 million square feet as of the fourth quarter of 2019. The vacancy rate during this same time period was 4.4 percent com- pared to 6.0 percent for the Silicon Valley mar- ket. Average asking rents in Palo Alto and the Silicon Valley were, respectively, $9.39 and $5.45 per square foot, as of the fourth quarter of 2019. Net rentable square footage for industrial facil- ities in Palo Alto was 1.1 million, with a vacancy rate of 1.6 percent and average asking rent of $2.20 per square foot for manufacturing and $2.85 per square foot for warehouse. The Sili- con Valley market had an average vacancy rate of 3.4 percent and asking rent averaged $1.19 per square foot for manufacturing and $1.10 for warehouse. Net rentable space for Research and Develop- ment (R&D) facilities in Palo Alto totaled 10.3 million square feet with a vacancy factor of 7.2 percent and average asking rent of $6.47 per square foot. The vacancy rate for the Silicon Valley market was 7.1 percent with an average asking rent of $2.73 per square foot. wEf dF JA11+1E ' aTEWART HE GLEHH_Mlt-LER STORY Top 25 Major Sales/Use Tax Contributors, FY 2019 Anderson Honda Apple Stores Audi Palo Alto Bloomingdales Bon Appetit Management Co. Hermes Houzz Shop Hp Enterprise Services Integrated Archive Systems Lucile Packard Children's Hospital Macy's Department Store Magnussen's Toyota of Palo Alto McLaren San Francisco Neiman Marcus Department Store Nest Labs Nordstrom Department Stores Shell Service Stations Stanford Outpatient Clinic Pharmacy RETAIL SALES AND SALES TAX REVENUE Sales and use tax totaled $36.5 million in FY 2019 an increase of $5.4 million, or 17.3 percent, due to combination of economic performance in sectors such as auto sales, leasing factors and restaurants. In FY 2018 the California Department of Tax and Fee Administration (CDTFA) was established. CDTFA introduced a new technology and a revamped collection PALO ALTO AT A GLANCE • CITY OF PALO Tencent Tesla Tesla Lease Trust Tiffany & Company Urban Outfitters Varian Medical Systems Volvo Cars Palo Alto process, which initially delayed distribution of FY 2018 sales tax. This resulted in lower sales tax in FY 2018 and higher sales tax in FY 2019. Included in the receipts are continued erosion of brick and mortar receipts that is resulting from steady growth in on-line retail sales. However, increase receipts from the county pool which includes a growing number of on- line retailers collecting sales and use tax, has been offsetting these losses. ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 15 PALO ALTO AT A GLANCE Principal Property Taxpayers, FY 2019 Rank Taxpayer Taxable Assessed Value 1 Leland Stanford Jr. University 2 Loral Space and Communications 3 Google Inc. 4 395 Page Mill LLC 5 ARE -San Francisco 69 LLC 6 SVF Sherman Palo Alto Corporation 7 Hohbach Realty Co. LP 8 SI 45 LLC 9 Gwin Property Inc. 10 BVK Hamilton Avenue LLC PALO ALTO BUSINESSES As the birthplace of the Silicon Valley, Palo Alto is the home to Stanford University and thousands of innovative companies including Hewlett-Packard, IDEO, Tesla, Flipboard, Palantir Technologies, Xerox's Palo Alto Research Center (PARC), Wilson Sonsini Goodrich & Rosati, Manatt Phelps Phillips, Accel Partners, Google, Genencor, Tencent America, Skype Technologies, Nest, the Insti- tute for the Future, and many other leading technology and business services firms. Palo Alto continues to be a desirable place to live due to its economy, climate and natural beauty, parks and recreational activities, excellent public school system, university presence, proximity to three major airports (Oakland, San Jose and San Francisco), rail service, world -class medical facilities, excel- lent retail centers and restaurants, and its highly acclaimed City services. Total $5,446,309 $248,247 $213,982 $118,303 $114,575 $97,856 $94,642 $81,145 $78,540 $73,189 $6,566,788 Businesses are drawn to Palo Alto not only because of its great location, workforce, and entrepreneurial culture but also because of incentives including: great local utilities (including dark fiber), no payroll tax, and no business license tax. Additionally, the City's Development Center is a "one -stop" service center staffed by the Planning and Develop- ment Services, Public Works, Utilities, and Fire departments. 16 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PALO ALTO AT A GLANCE EMPLOYMENT The City had 32,287 employed residents in 2019. Due to its location on the Peninsula and the presence of Stanford University, the City is a job importer versus exporter with a total of 99,420 jobs citywide. Palo Alto's unem- ployment rate was 2.1 percent in 2019, which was considerably lower than the nation (3.7 percent), state (4.0 percent), and county (2.6 percent), during the same period. LARGEST EMPLOYERS Palo Alto's top ten employers as of June 30, 2019 reflect jobs in industries ranging from education and healthcare to technology and research and development. Principal Employers, FY 2019 Rank Employer Number of Employees 1 Stanford Healthcare 2 Lucile Packard Children's Hospital 3 Stanford University 4 Veteran's Affairs Palo Alto Healthcare System 5 VMware, Inc. 6 SAP Labs Inc. 7 Space Systems/Loral 8 Hewlett-Packard Company 9 Palo Alto Medical Foundation 10 Varian Medical Systems Total 5,500 5,700 4,500 3,900 3,500 3,500 2,800 2,500 2,200 1,400 35,500 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 17 PALO ALTO AT A GLANCE Parks, Recreation & Public Safety Community Centers Item (FY 2019) Parks Parks Acreage Dog Parks Playgrounds Community Centers & Museums Zoo Golf Courses Gymnasiums/Fitness Rooms Youth Centers Walking/Biking Trails (Miles) Libraries Item (FY 2019) Library Branches Items Checked Out (Circulation) Books (Inventory) eBooks & eMusic (Inventory) AudioNisual - DVD/CDs (Inventory) Reference Questions Numbe 36 174 4 30 5 1 1 6 1 41 Number 5 1,467,038 247,030 191,449 46,678 14,924 Item (FY 2019) Number Police Police Stations Sworn Police Personnel Police Vehicles Motorcycles Canine Units Number of Calls for Service Item (FY 2019) 1 90 29 3 2 54,979 Maim Fire Fire Stations Sworn Fire Personnel Fire Engines Fire Trucks Ambulances Number of Calls for Service 7 96 9 2 6 9,086 18 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PALO ALTO AT A GLANCE Infrastructure, Vaintenance & Development Activity Item (FY 2019) Street Miles Lane Miles Resurfaced Annually Building Permits Issued Annually Number of Fire Inspections Active Capital Improvement Projects Capital Improvement Projects Exp. Miles of Water Municipal Mains Number 471 9.8 2,918 10,984 231 $103.3 million 235.3 Gallons of Water Delivered Daily 9.0 million Miles of Municipal Wastewater Mains Gallons of Wastewater Treated 7.0 million Miles of Gas Mains Miles of Overhead Electrical Line 211 Miles of Underground Electrical Line 216 211 267 Miles of Fiber Optic Backbone 48 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 19 PALO ALTO AT A GLANCE Sustainability Numbe Total Tons of Material Recycled or Composted Total Megawatt -hours Purchased from Eligible Renewable Sources* Percent of Electric Portfolio Purchased from Eligible Renewable Sources Percent of Electric Portfolio Purchased from Carbon Neutral Sources** 55,900 560,245 INCOME: 2018 American Community Survey 5 -Year Estimates, Selected Economic Characteris- tics, Table DP03. PERSONS PER HOUSEHOLD AND HOUSING UNITS: 2018 American Community Survey 5 -Year Estimates, Selected Housing Characteristics, Tables, DP04. DEVELOPMENT: 62% City of Palo Alto Planning and Development Services Department 100% * FY 2019 "Eligible Renewable Sources" are wind, solar, small hydroelectric, and biogas generators whose output is directly purchased by the City under a power purchase agreement. ** FY 2019 "Carbon Neutral Sources" include eligible renewable (62%) and large hydroelectric power (62%). Due to the bountiful hydro conditions in 2019, the City was able to sell surplus carbon ne tral electricity supplies to other utilities. SOURCES: POPULATION: U.S. Census Bureau, 2018 American Commu- nity Survey, Demographic and Housing Esti- mates, 5 -Year Estimates, Table DP05. 2020 Official City Data Set. EDUCATION: U.S. Census Bureau, 2018 American Community Survey, Social Characteristics in United States, Educational Attainment, 5 - Year Estimates, Table DP02. City of Palo Alto 2018-2019 CAFR (Demographic and Economic Statistics- Last Ten Fiscal Years). 2019 average SAT scores on Prescholar.com for National and State level SAT scores. Data collected from College Board 2019 SAT reports. OFFICE AND INDUSTRIAL RENTAL ACTIVITY: CBRE Silicon Valley MarketView Q4 2019 RETAIL SALES AND SALES TAX REVENUE: City of Palo Alto Sales Tax Digest Summary 2019 (Office of the City Auditor) City of Palo Alto 2018-2019 CAFR TOP 25 MAJOR SALES/USE TAX CONTRIBUTORS: City of Palo Alto Sales Tax Digest Summary Second Quarter Sales (April -June- 2019) -Top 25 Major Sales/Use Tax Contributors. PRINCIPAL PROPERTY TAXPAYERS: City of Palo Alto 2018-2019 CAFR- Principal Property Taxpayers -Current Year and Nine Years Ago. EMPLOYMENT: 2020 Official City Data Set. California Employment Development Department - Labor Market Information Division for State and County unemployment rate, US Depart- ment of Labor -Bureau of Labor Statistics for Nation unemployment rate. PALO ALTO BUSINESSES: City of Palo Alto Economic Development LARGEST EMPLOYERS: City of Palo Alto 2018-2019 CAFR 20 PALO ALTO AT A GLANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT The Budget Process and Document Basis for Buc get Development The budget is the City's financial plan for delivering effective services and efficiently managing the revenues which support those services. The City's charter and municipal code provide broad governance for preparation of the operating and capital budgets. The budget is also developed based on the following: ▪ The City Council's top priorities and other City Council directives • Organizational financial status and budgetary guidelines • Service level prioritization, as identified by the City Manager • Availability and sustainability of revenues • Legal mandates • Prioritization criteria, as outlined in the capital budget • The City's policies regarding land use and community design, transportation, housing, natural environment, business, and economics, as outlined in the Comprehensive Plan The review of the operating and capital budgets is structured around public hearings con- ducted prior to City Council adoption of the budget in order to incorporate community input into the decision -making process. City Council Top Priorities The City is committed to providing high quality, cost effective services that reflect the City's core values and strategic goals. In addition, each year the City Council establishes top priorities, which are topics or service areas that will receive particular, unusual, and significant attention during the year. The top priorities guide both budget development and department priority -set- ting. The following are the City Council's top priorities for 2020, adopted in February 2020: • Housing • Sustainability ▪ Mobility THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 21 THE BUDGET PROCESS AND DOCUMENT Operating and Ca Activities oital Budgets - Calendar of September - November: Operating budget preparation begins with determination of the base budget for the upcoming year. The base budget establishes the current year adopted budget service levels with updated costs, removes one-time revenue and expenses, and adds ongoing expenditures as approved by the City Council. The capital budget preparation process begins with department staff and appointed committees meeting to review and discuss potential modifications to the five-year capital plan. November - December: Budget guidelines and timeframes are developed and distributed for the operating and capital budgets as well as the annual municipal fee schedule. January: Departments submit requests to reallocate staffing and non -salary resources for the upcoming year to meet changing operational needs. The reallocation process results in no net change to the level of resources allocated to the department overall. The General Fund Capital Improvement Plan (CIP) Review Committee, consisting of senior managers in Public Works, Community Services, Administrative Services, and the Office of Transportation, reviews requests for General Fund capital projects. February: Departmental requests for changes and/or augmentations to the base budget are submitted to the Office of Management and Budget (OMB) for analysis. Departments provide targeted outcomes and performance measures associated with requests for resource or service level augmentations. Departments also submit updates to the budget document regarding goals and objectives, significant accomplishments, and key performance and workload mea- sures. OMB staff reviews operating and capital budget requests. March: Internal budget hearings are held with the City Manager to discuss department budget requests and OMB's budget recommendations. April: OMB staff complete preparation of the proposed operating and capital budget docu- ments based on the City Manager's direction. May: The City Manager releases and presents the proposed operating and capital budgets to the City Council and posts the budget document on the City's website. Through a series of public hearings, the budget is discussed and amendments are proposed. June: Final adoption by the City Council occurs after a public hearing in June. All changes made during the public process are incorporated into the adopted budget documents which are dis- tributed to City libraries as well as posted on the City's website and Open Budget website by August. 22 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT BUDGET HEARINGS* With City Council k_ FY 2021 Budget escription Location Descriptio Monday, April 20 City Council Teleconference City Manager comments reviewing the proposed Capital and Operating Budgets and notices the start of public budgetary discussions in May Monday, May 11 City Council Teleconference City Council Budget Hearing Tuesday, May 12 City Council Teleconference City Council Budget Hearing Wednesday, May 13 City Council Teleconference City Council Budget Hearing Tuesday, May 26 City Council Teleconference City Council Budget Hearing Monday, June 22 City Council Teleconference Public Hearing - Budget Approval & Adoption *Public meetings were held by virtual teleconference pursuant to the provisions of California Governor's Executive Order N-29-20, issued on March 17, 2020. To prevent the spread of COVID-19, these meetings were held by virtual teleconference only, with no physical location. These meetings were broadcast on Cable TV Channel 26, live on You - Tube at www.youtube.com/c/cityofpaloalto, and Midpen Media Center at www.midpenmedia.org. Members of the public who wished to participate by computer or phone could access the meeting by going to www.zoom.us/join and entering meeting ID 362 027 238. If they called from a land line or non -smart phone they were able to call 1- 669-900-6833 to join the meeting. THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 23 THE BUDGET PROCESS AND DOCUMENT Unc erstandinc the Budget Document The operating budget document includes citywide information as well as information specific to each fund and each department. The City receives revenue from numerous sources, many of which have restrictions on how funds can be used. Separate funds are established to account for the different types of revenues and their allowable uses. The annual budget information is available after the publication of the Adopted Budget, which occurs in August. General Fund: This is the primary fund used to account for all general revenues of the City (e.g. property, sales, transient occupancy, and utility user taxes). In general, these funds are allo- cated at the discretion of the City Council. This revenue is used to support citywide services such as public safety, community services, planning and development services, and administra- tive support services. Enterprise Funds: These funds are established to function as self-supporting operations wherein expenditures are entirely offset by fees or charges for services. For example, the City of Palo Alto provides a variety of utility services (electric, gas, water, etc.) for the community. Revenues from fees or charges are accounted for in separate enterprise funds and can only be used to pay for expenses related to those services. Internal Service Funds: These funds are established to account for a variety of business services provided by one City department (or division) to other City departments. Information technol- ogy, fleet maintenance, printing and mailing, general employee benefits, general liability, and workers' compensation services are provided to all City departments through internal service funds. Departments are charged for these services based on their respective utilization. Capital Funds: Revenues and expenses for capital projects are also accounted for in a separate fund. Capital projects are those that have a minimum cost of $50,000 for each standalone or combined project. Additionally, the project must have a useful life of at least five to seven years and/or extend the life of an existing asset or provide a new use for an existing asset for at least five years. The City produces a standalone budget document for capital projects with detailed information about each project. Special Revenue Funds: These funds are used to account for the proceeds of revenues that are designated for specific or restricted uses. These funds include gas tax funds from the state, in - lieu housing fees assessed for the City's Below Market Rate housing projects, and transporta- tion mitigation fees paid by developers. Other special revenue funds include assessments for parking lot bond payments, parking permit revenues, Community Development Block Grants (CDBG) funds from the federal government, and development impact fees related to libraries, parks, and community centers. Debt Service Funds: Debt financing is occasionally undertaken for the purchase, replacement, or rehabilitation of capital assets. A separate fund is established to account for these non -oper- ating expenses. 24 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT Open Budget In order to facilitate understanding and transparency of the budget document, the City pro- vides budget information through OpenGov, an online tool that provides users with different views of the City's budget data by fund, department, revenues, and expenditures. The tool can be accessed by visiting www.paloalto.opengov.com. The City invites you to use the online tool to: • Search budget and financial data • View trends in revenues and expenditures over time • Drill down into expenses by department or account type • Display the data as graphs or charts • Download into Excel • Share with friends using email or social media • Send comments directly to the City online HOW DOES IT WORK? Governmental budgets are composed of funds, departments, and accounts. Using a pull -down filter you can choose the combination you want to explore. By clicking on one of these icons, you can choose whether you want to display graphs showing changes over the years, a pie chart for a single year, or download portions into Excel. You can also cut and paste any illustration into another document, send it to friends using email or Twitter, or post it on Facebook. P , D4p6A91C9ts 11.104 n. ., Departments ic<x..• 2142 p0044% l S 2A976pee {.1.9'91 Poe 21.919:1Sa11e.atp 200209 200410 2010-1, 2011-12 2019 2012.19 2014,. Arum Gnual .....1 Amu; 22149 0 2990.0 2/1491 Fs. 1,4o 090 000y0.rv.9 425.770,6(741] 2!) Ptla9 $?9.076401,144) AI Knor warn S13,412,455 (7.994 PV"0n90104mmru,n54 s 0.023]'27 a4R:mm0400 $0 02.1 51.175.505412! S 7,520A1211.4%4 Morn {e 2.oupaaI $ 40:1$2.2491,0 0$i THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 25 THE BUDGET PROCESS AND DOCUMENT De oartment anc Enterprise Fund Information The budget document includes the following information for each department and enterprise fund: Mission Statement, Purpose, and Description: introduces the department. Organizational Chart: depicts full-time equivalent (FTE) positions that report to a department director. The total FTE count in the organizational chart may not match the total FTE count in a department section if positions are budgeted in a fund not included in the department section. For example, the Administrative Services Department (ASD) Assistant Director oversees the SAP functional team, as displayed on the organizational chart but those positions are budgeted in the Technology Fund so they do not appear in the ASD departmental budget summary. Accomplishments: identifies the department's noteworthy accomplishments of the past fiscal year. Initiatives: highlights the major work plan items for the department for the upcoming fiscal year. Goals and Objectives: identifies major goals as well as activities that support achievement of those goals. Key Performance Measures: lists key department performance measures related to some goals and objectives. Workload Measures: identifies key quantifiable department outputs. Budget Summary: summarizes key expenditure, revenue, and position data for the department and/or fund for several fiscal years (two prior years of actuals, the current year adopted bud- get, and the budget for the upcoming year). Revenues are shown as either internal or external depending on their source. External revenues include grant funds as well as fees collected for the provision of services such as inspections, plan checks, and recreational programs. Internal revenues are those that are received from another City department. For example, the Utilities Department reimburses the Attorney's Office for legal services. It should be noted that a vari- ance will be seen between prior actuals and the current adopted budget columns in the salary and benefits total expenses. This variance reflects the difference between estimated vacancies and staff costs actually incurred as well as the changes in labor terms from year to year. Staffing: lists all full-time equivalent (FTE) positions and their respective salaries in a depart- ment based on their actual levels of compensation. Budget Reconciliation: outlines the major base budget and adopted budget expenditure and revenue changes from the previously adopted budget to the newly presented proposed or adopted budget. Base budget reconciliation changes include updated salary and benefits cost in accordance with the salary and benefits structure approved by the City Council, deletion of one-time expenditures, and/or the addition of ongoing expenditures as approved by the City Council. The budget change table itemizes expenditure and revenue recommendations and the net impact on the fund. 26 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET THE BUDGET PROCESS AND DOCUMENT 0 Budget Adjustments: describes service level changes compared to the prior fiscal year as well as the anticipated performance impact as it relates to Quality, Cost, Cycle Time, Customer Sat- isfaction, and Sustainability, identified with icons as follows: Quality Cost Cycle Time Customer Satisfaction Sustainability BUDGETARY BASIS The budget is prepared in accordance with Generally Accepted Accounting Principles. The budget for governmental funds has been prepared on a modified accrual basis. The modified accrual basis recognizes expenditures when the related fund liability is incurred. Revenues are recognized when they become both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. FUND STRUCTURE AND ACCOUNTING BASIS The accounts of the City are made up of funds that help organize and account for restricted resources. A fund is defined as a fiscal and accounting entity with a self -balancing set of accounts (comprised of assets, liabilities, fund equity, revenues, and expenditures), which are segregated for the purpose of carrying out specific activities or attaining certain objectives in accordance with regulatory requirements. The City has the following fund type categories: Governmental Fund Types The Governmental funds include the General, Special Revenue, Debt Service, and Capital Proj- ect Funds. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Proprietary Fund Types The Proprietary funds, which include the Enterprise and Internal Service Funds, are used to account for the City's business -type activities. Proprietary funds are reported using the eco- nomic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Fiduciary Fund Types The Fiduciary funds track assets held by the City in trust or as an agent for various assessment and community facilities districts. These funds are not included in the budget process. THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 27 THE BUDGET PROCESS AND DOCUMENT Agency Fund Types The Agency funds are custodial in nature and do not involve measurement of results of opera- tions. The City maintains three agency funds, which are not included in the budget process. 28 THE BUDGET PROCESS AND DOCUMENT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET BUDGET AWARDS A CaCtfornia Society of Jv!unicipaCFinance Officers Certificate of Award Operating Budget Excellence Award Fiscal Year 2019-2020 Presented to the City of Palo Alto For meeting the criteria established to achieve the CSMFO Excellence Award in Budgeting. January 31, 2020 Steve Heide Yolanda Rodriguez, Chair CSMFO President Recognition Committee Dedicated Excellence in Municipal Financial Reporting BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 29 BUDGET AWARDS GD GOVERNMENT FINANCE OFFICERS ASSOCIATION Distinguished Budget Presentation Award PRESENTED TO City of Palo Alto California For the Fiscal Year Beginning July 1, 2019 c,q R •i'e,A:u Executive Director 30 BUDGET AWARDS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET BUDGET A WA RDS • CITY OF PA LO A LTO FISCAL YEAR 2021 A DO PTED OPERATING BUDGET 31 The G overnment Finance Officers Associatio n of the United States and Canada prese nts this CERTIFICATE OF RECOGNITION FOR BUDGET P REP ARATION to Office of Management & Budget City of Palo Alto, California The Certificate of Recognition for Budget Preparation is prese nted by the Government Fin ance Officers Associati on to those individuals who have been instrumental in their government unit achieving a Distinguished Budget Presentation Award. The Distinguished Budget Presentation Award, which is the highest award in governmental budgeting, is pre sented to those government units whose budgets are judged to adhere to program standard s. Executive Director Date March 03, 2020 P. 21teu.0 M . IJA irT CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 33 CITY OF PALO ALTO ■ CITYWIDE FUNDS OVERVIEW Fund Structure General Fund General Operating Utility Users Tax Special Revenue Fund Community Development Street IIII Improvement Federal & State Revenues Housing In -Lieu Special Districts Public Benefits Business Improvemen, Stanford Development Capital Capital Projects Cubberley Projects Traffic Mitigation & Parking in -Lieu • Debt Service 2002 Certificate of Participation 2010 Library General Obligation Golf Course California Ave. Garage CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 35 CITYWIDE FUNDS OVERVIEW Fund Structure Enterprise Electric Airport Gas Refuse Water 7 StormwaterII Management Fiber Optics I Wastewater Collection Wastewater7 Treatment 11- Internal Service General Benefits Retiree Health Benefits Printing & Mailing Services U Vehicle Replacement & Maintenance Workers' Compensation Information Technology General Liability Insurance 36 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Total Citywide Revenue by Category ($000s) Charges for Services Charges to Other Funds Documentary Transfer Tax From Other Agencies Net Sales Other Revenue Other Taxes and Fines Permits and Licenses Property Taxes Rental Income Return on Investments Sales Taxes Transient Occupancy Tax Utility Users Tax Total FY 2018 Actuals 28,699 12,706 9,229 17,820 316,038 42,968 2,477 11,294 47,242 16,507 9,150 31,091 24,937 15,414 585,572 FY 2019 Actuals FY 2020 Adopted Budget 32,298 31,440 11,361 11,477 6,923 8,369 11,492 8,691 332,564 335,525 69,846 60,864 2,029 2,372 11,415 11,725 51,776 53,217 17,059 17,186 14,768 10,057 36,508 34,346 25,649 29,309 16,402 17,581 640,090 632,159 FY 2021 Adopted Budget FY 2021 Change $ 26,980 (4,460) 12,589 1,112 4,700 (3,669) 25,351 16,660 325,499 (10,026) 165,844 104,980 2,192 (180) 11,516 (209) 56,699 3,482 16,832 (354) 9,417 (640) 20,500 (13,846) 14,900 (14,409) 15,100 (2,481) 708,119 75,960 FY 2021 Change % (14.2)% 9.7% (43.8)% 191.7% (3.0)% 172.5% (7.6%) (1.8)% 6.5% (2.1)% (6.4)% (40.3)% (49.2)% (14.1)% 12.0% CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 37 CITYWIDE FUNDS OVERVIEW 3 Year Trend - Citywide Revenues By Category ($000s) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 u� 11■ ii. ■.■ c, o°a� 'k G? �``eh ya\eh eoJe �`t`eh They a+eh ode a��y a+ey <a+ ‹b' ‘1'.(4- e�� yke �Oe � eJ oa �`�e �`�� e'�� e� �� yeti h oc ‘90 '0 �ta0 �`ceiQ' �re�� eya aca ode" �N, \cue c, ov '`AJ c$e h �atJ O 0 •S2' Qt se °p �0� ,L `,ca `rte `J�eo otc ON''( Qet� S y`e* a t 00 �e 'Sao • FY 2019 Actuals ■ FY 2020 Adopted ■ FY 2021 Adopted FY 2021 Sources $796.8 Million Use of Reserves/Fund Balance. Utility Users Tax 11'1° 1.9% Transient Ocucpancy Tax_ �\ 1.9% Sales Taxes 2.6% Return on Investments 1.2% Rental Income 2.1% Property Taxes 7.1% Permits and Licenses 1.4% Other Taxes and Fines 0.3% Charges for Services 3.4% Other Revenue 20.8% Charges to Other Funds 1.6% Documentary Transfer Tax 0.6% ------From Other Agencies 3.2% Net Sales 40.9% 38 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Total Citywide Expense by Category FY 2018 Actuals* FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Allocated Charges Contract Services Debt Service Facilities & Equipment General Expense Rents & Leases Salary & Benefits Supplies & Material Utility Purchase Capital Improvement Program Net Transfers Total 43,024 42,770 54,911 50,669 (4,242) 36,473 44,806 48,993 48,338 (2,655) 17,693 15,894 22,553 20,387 (2,166) 437 613 904 478 (426) 32,491 17,225 19,408 16,913 (2,495) 12,659 12,908 14,792 13,735 (1,057 184,306 170,951 216,144 206,881 (9,263) 6,514 6,457 8,302 7,825 (477) 154,157 152,748 169,713 153,811 (15,902) 89,582 90,147 154,257 270,122 115,865 (1,264) (6,592) 13,860 9,600 (4,260) 576,072 547,927 723,837 796,759 72,922 (7.7)% (5.4)% (9.6)% (47.1)% (12.9)% (7.1)% (4.3)% (5.7%) (9.4)% 75.1% (30.7)% 10.1% * FY 2018 Actuals as they appeared in the FY 2020 Adopted Budget inadvertently included an accounting transaction that should be excluded for budgetary purposes. The numbers in the table above correctly reflect the budgetary actuals for FY 2018. CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 39 CITYWIDE FUNDS OVERVIEW 3 Year Trend - Citywide Expenses By Category ($000s) 300,000 250,000 200,000 150,000 100,000 50,000 Eli ■ I• ■U• c�ey ``ey `tee ec� dye yey i�y • �`a` aye a� ety ea`ra I. e c,e� �c°J•�� a��C1fie �j�ea Q,e�e �a`e Q JtrC. �q.O `tacy� 42: L i.., c 5 5o i ‹b \`' ��aCP FY 2021 Expenses $796.8 Million Capital Improvement Program 33.9% • FY 2019 Actuals ■ FY 2020 Adopted • FY 2021 Adopted Utility Purchase 19.30% Net Transfers 1.20% Allocated Charges 6.36% Contract Services 5.82% Debt Service 2.56% Facilities & Equipment 0.06% General Expense 2.12% Rents & Leases 1.72% Salary & Benefits 25.97% _Supplies & Material 0.98% 40 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund 3alance GENERAL FUND General Fund Total General Fund ENDING FUND BALANCE 6/30/20 ESTIMATED REVENUES 33,045 I 175,614 33,045 175,614 NET FUND TRANSFERS 3,558 3,558 ESTIMATED EXPENDITURES 179,172 179,172 ENDING FUND BALANCE 6/30/21 33,045 CAPITAL FUNDS Capital Improvement Fund Cubberley Property Infrastructure Fund Total Capital Funds 46,798 119,359 4,171 0 50,969 119,359 23,891 1,864 25,755 174,389 2,187 176,576 15,659 3,848 19,508 DEBT SERVICE FUNDS 1 2018 Golf Course 2002B Refinancing 2019 California Ave Parking Garage Library Bonds 248 18 3,660 0 0 4,589 530 2,380 0 530 2,380 4,645 248 18 3,604 Total Debt Service Funds 3,926 4,589 2,910 7,555 3,870 ENTERPRISE FUNDS Electric Fund Fiber Optics Fund Gas Fund Wastewater Collection Fund Water Fund Refuse Fund Stormwater Management Fund Wastewater Treatment Fund Airport Fund Total Enterprise Funds 65,330 31,536 (583) (4,956) 15,899 8,806 (932) (16,898) (3,262)1 94,939 157,343 5,563 38,822 22,005 46,958 33,727 7,909 60,134 21,813 394,274 (10,884) (102) (7,529) (279) 421 (57) (5) 0 (272) (18,707) 169,873 4,243 41,177 41,916 32,754 (10,467) 23,619 (6,849) 5,958 32,353 10,122 (2,895) 59,737 (16,502) (2,808) 51,230 57,320 9,867 21,087 419,276 INTERNAL SERVICE FUNDS General Benefits Fund Retiree Health Benefit Fund Workers' Compensation Fund Liability Insurance Fund 4,545 2,469 2,918 1,756 76,859 13,641 5,553 3,101 (2,347) 2,347 0 5 73,875 15,986 6,947 4,146 5,182 2,471 1,524 716 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 41 CITYWIDE FUNDS OVERVIEW Citywide Projected Operating Fund Balance ENDING FUND BALANCE 6/30/20 Printing and Mailing Services Fund 0 Technology Fund 18,353 12,889 Vehicle Replacement and Maintenance Fund ESTIMATED REVENUES 8,729 1,633 NET FUND TRANSFERS ESTIMATED EXPENDITURES 0 1,309 7,680 (816) 1,541 16,982 ENDING FUND BALANCE 6/30/21 92 15,569 11,976 3,617 Total Internal Service Funds 38,770 121,356 498 131,453 29,171 SPECIAL REVENUE FUNDS Community Development Fund 13,781 1,009 (6,035) 0 8,755 Street Improvement Fund 75 2,843 (2,954) 0 (36) Federal and State Revenue Funds 5,919 939 0 1,145 5,713 Housing In -Lieu and BMR Fund 52,260 2,817 0 358 54,719 Special Districts Funds 6,598 5,910 170 5,016 7,662 Traffic Mitigation & Parking In -Lieu 12,268 536 (400) 0 12,404 Fund Downtown Business Improvement District Stanford Development Agreement 19,918 370 (3,250) 0 17,038 (SUMC) 106 140 0 148 98 Public Art Funds 1,684 216 170 202 1,868 Total Special Revenue Funds 112,609 14,780 (12,299) 6,869 108,221 TOTAL OPERATING FUND BALANCE 334,258 829,972 1,715 920,901 245,044 42 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITYWIDE FUNDS OVERVIEW Citywide Average Salary Full -Time Equivalent (FTE) Authorized Positions Frozen Positions (1) Mgmt/ Prof Utilities Mgmt/ Prof Fire Chief Asscn. Fire Fighters Police Mgmt Asscn. lir Total/ Average 211.85 47.50 4.00 80.00 7.00 72.00 537.00 959.35 17.90 2.00 - 8.00 - 11.00 36.60 75.50 Total Full -Time Equivalent 229.75 49.50 4.00 88.00 7.00 83.00 573.60 1,034.85 22.2% 4.8% 0.4% 8.5% 0.7% 8.0% 55.2% 100.0% Salary ($) (2) 137,865 178,871 195,873 135,272 219,018 142,837 100,166 119,882 N/A N/A N/A 5,867 N/A 4,386 284 1,400 Incentive Pay ($) (3) N/A N/A N/A 943 N/A 1,226 394 552 N/A N/A N/A 21,945 N/A 16,795 4,940 8,271 Management Leave (80 Hours) ($) 5,302 6,880 7,534 N/A 8,424 N/A N/A 5,677 % of City In -Lieu Holiday ($) Overtime (Average) ($) Pension Employer Portion ($) Misc 38.37%;Safety 65.33% Medicare ($) Medical ($) DentalNision ($) Retiree Medical ($) (41 Workers' Comp ($) LIFE/LTD/SUI ($) Non -salary Benefits ($)151 Average Salary & Benefits ($) City's Proactive Contributions to Long -Term Pension Liabilities (Margin for using a 6.2% Discount Rate to calculate the Normal Cost) Isolate Holiday Pay from Salary Salary, includes holidays ($) Holidays (assumes 11, 9 hour 5,706 days) ($) Salary, excludes holidays ($) 131,303 170,358 186,550 128,834 208,594 136,039 95,398 114,176 Notes: 52,895 68,628 127,967 88,376 143,089 93,319 38,431 52,790 1,999 2,594 2,840 1,961 3,176 2,071 1,452 1,738 18,888 20,21 24,114 19,506 22,111 19,394 18,171 18,680 1,956 2,179 2,274 2,129 2,166 1,971 1,897 1,952 7,249 7,180 13,927 11,090 13,369 13,074 6,002 7,415 3,869 3,555 N/A 11,670 N/A 9,237 3,869 4,907 667 667 667 667 667 667 667 667 2,154 4,387 4,846 1,734 3,387 3,108 569 1,443 232,845 294,961 380,042 301,161 415,407 308,085 176,841 225,374 5,094 6,672 13,346 9,492 15,216 9,649 3,736 5,257 137,865 178,871 195,873 135,272 219,018 142,837 100,166 119,882 6,562 8,514 9,323 6,438 6,799 (1) The FY 2021 budget includes position freezes that reduce funding equivalent to holding a position vacant. The FTE allocations of the frozen positions remain in the table of organization; therefore, the associated reductions have been excluded from the calculations and averages reflect the salaries and benefits of all 1,034.85 FTE. (2) Salary is calculated at actual pay rate (base pay and special pays, as applicable) and adjusted for step or performance increases in accordance with applicable Memoranda of Understandings with the City's bargaining groups. CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 43 4,767 10,424 CITYWIDE FUNDS OVERVIEW Citywide Average Salary Utilities Mgmt/ Prof Fire Chief Asscn. Fire Fighters Police Mgmt Asscn. SEIU Total/ Average (3) Incentive pay includes: Fair Labor and Standards Act Charges and Night Shift Differential pay. (4) The Miscellaneous groups will pick up 1% of the employer share of pension and Safety groups will pick up 3% to 4% (IAFF/PAFCA: 4%, PAPOA: 3.5%, PAPMA: 3%) (5) Annual amount incurred for active employees (normal cost only). (6) Non -salary Benefits include professional development for Mgmt, Utilities Mgmt, FCA and PMA; tuition reimbursement for FCA and PMA; and management excess benefit for Mgmt, Utilities Mgmt, FCA and PMA. Does not include administrative fees for General Benefits and Workers' Compensation Funds. 44 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 700 600 500 H 400 —1 300 H 200 H 100 —1 0 CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE by Fund FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 ■ General Fund FTE ■ Enterprise Fund FTE FY 2018 FY 2019 I Other Funds FTE FY 2020 FY 2021 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 45 CITYWIDE FUNDS OVERVIEW 10 Year Trend - Citywide FTE Positions vs. Population Growth 1,100 1,090 1,080 1,070 1,060 1,050 1,040 1,030 67,019 64,527 1,020 1,016.60 1,010 H 1,000 1,034.60 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total Citywide FTE -Population 67,500 67,000 66,500 66,000 65,500 65,000 64,500 64,000 63,500 63,000 46 CITYWIDE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS Description The combined Fiscal Year 2021 Adopted Capital Budget, which includes the Capital Improvement Funds, Enterprise Funds, and Internal Service Funds, is $299.9 million, an increase of $108.4 mil- lion, or 56.6 percent, compared to the Fiscal Year 2020 Adopted Capital Budget of $191.5 million. The overall 2021-2025 Capital Improvement Program (CIP) is $772.4 million, a decrease of $21.6 million, or 2.9 percent, compared to the 2020-2024 CIP of $750.8 million. 2021-2025 CIP PLANNED FUNDING BY FUND TYPE ($772.4 MILLION) Capital Project Funds, 91 Projects $341.3M Internal Service Funds, 16 Projects $20.7M Enterprise Funds, 85 Projects $410.4M On the following pages, please find a listing of major capital improvement projects which include: • Projects that are part of the City Council Approved Infrastructure Plan ▪ Projects that are politically sensitive ▪ Projects with over $750,000 of costs in the first year of the 5 -Year CIP ▪ One-time projects with over $3.0 million over the 5 -Year CIP For a detailed discussion of the City's Fiscal Year 2021 Adopted Capital Budget, please visit the City's website at www.cityofpaloalto.ora/budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 47 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2021 Five -Year Total Budget j CIP Cost Project Cost Airport Fund: Airfield Electrical Improvements (AP -19001) AnirlM $0 $5,266,500 $5,266,500 This project provides funding for electrical and lighting improvements to the airfield. Operating Impact This project is anticipated to have operating expenses related to pavement maintenance. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Airport Fund: Airport Apron Reconstruction (AP -16000) $19,367,600 $19,418,600 $44,573,116 This project provides funding for the design and reconstruction of the Palo Alto Airport apron in multiple phases within the existing footprint. Operating Impact This project will have operating expenses related to pavement maintenance for asphalt slurry seal estimated every five years. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. Capital Improvement Fund: Art In Public Spaces (AC -86017) $1,615,424 $2,748,081 Recurring This project provides funding for innovative public art for both interior and exterior public spaces in accordance with the City Council -approved Art in City Capital Improvement Projects ordinance. Operating Impact Annual funding in the amount of $30,000 for public art maintenance is allocated to the Community Services Department in the General Fund. Capital Improvement Fund: Bicycle and Pedestrian Transportation Plan Implementation (PL -04010) $1,273,595 $7,323,595 $16,616,736 This project provides funding for the design and construction of bicycle boulevards, enhanced bikeways, shared -use paths, bicycle parking, and pedestrian improvements in accordance with the Palo Alto Bicycle and Pedestrian Transportation Plan, which was adopted by City Council in 2012. Operating Impact This project is anticipated to impact operating expenses in the future. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. There may be increased operating impacts due to ongoing maintenance of protected and separate bikeways. Certain types of bikeways may require special equipment or services to maintain them. The amount of impacts are unknown at this time. Capital Improvement Fund: Birch Street Improvements (PE -19003) - $0 $2,400,000 $5,120,000 This project provides funding for conversion of an undeveloped lot recently purchased by the City into a park facility and removal of Ash Street and reconfiguration of Chestnut Avenue to link the existing Boulware Park with this additional parcel. Operating Impact The maintenance cost of the project would be approximately $25,000 annually and will need major renovations every 20 years after its opening to replace equipment and park amenities. Capital Improvement Fund: Byxbee Park Completion (PE -18006) $2,881,146 $2,881,146 $3,240,044 This project provides funding for the remaining improvements to Byxbee Park per the conceptual plan developed in the Baylands Comprehensive Conservation Plan. The conceptual plan for additional native planting islands, park seating, interpretive signage and an expanded parking lot. Operating Impact This project is anticipated to impact operating expenses in the future. Byxbee Park is maintained under a large parks maintenance contract which will be bid out for services. As these costs are quantified, adjustments will be brought forward in future cycles. 48 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET I MAJOR CAPITAL PROJECTS Fund . Pro'.-:ct. Tita.- A... D r' • . 'cs_,. FY 2021 Budget Five -Year Total CIP Cost Project Cost Capital Improvement Fund: Charleston/Arastradero Corridor Project (PE -13011) $5,800,000 $5,800,000 $19,554,490 This project provides funding for the reconfiguration of the Charleston/Arastradero corridor, including engineering design and construction of new landscaped median islands, bulb outs, enhanced bike lanes, new street trees, and lighting. During the design phase, opportunities for including "green infrastructure" features such as infiltration basins and porous hardscape surfaces were explored. The conceptual design and California Environmental Quality Act (CEQA) review for the entire corridor was completed in September 2015 and the National Environmental Protection Act (NEPA) was completed in October 2016. Final design for the corridor was completed in Fall 2017. Operating Impact Landscaping and irrigation maintenance is estimated to increase by $52,000 in FY 2021 and by 3% annually thereafter. Tree trimming maintenance is estimated to be $20,000 per year. Capital Improvement Fund: Churchill Avenue Enhanced Bikeway (PL - 14000) $3,159,466 $3,159,466 $3,580,681 This project includes planning, design and construction of a shared -use path along the north side of Churchill Avenue between the existing shared -use path at Castelleja Avenue and the Stanford Perimeter Trail. It also includes intersection improvements at Churchill Avenue and El Camino Real, which will include a new dedicated westbound right -turn lane. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Churchill Avenue/Alma Street Railroad Crossing Safety Improvements (PL -20000) $4,636,200 $4,636,200 $5,036,200 This project includes design and construction of pedestrian and bicycle safety improvements on the west side of the Churchill Avenue and Alma Street railroad crossing intersection. Design includes, but is not limited to, traffic signal modifications, street lighting improvements, roadway resurfacing, sidewalk realignment and/or widening, drainage improvements, utility relocations, signage and striping, innovative bicycle treatments, traffic calming elements, and way - finding improvements. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Downtown Automated Parking Guidance Systems, Access Controls, and Revenue Collection Equipment (PL -15002) $2,726,860 $2,726,860 $2,857,336 This project addresses infrastructure and capital improvements for parking facilities.This project includes design and installation of new downtown parking guidance systems, access controls and revenue collection equipment. This project includes cameras in garages for added security for patrons. Operating Impact The ongoing operating costs for cameras and other equipment is not know at this time; however, as these costs are quantified, adjustments will be brought forward in the next budget cycle. Capital Improvement Fund: El Camino Real Pedestrian Safety and Streetscape Project (PL -18000) $2,954,181 $6,505,931 $6,662,520 The El Camino Real Pedestrian Safety and Streetscape Project will install improvements focused on pedestrian safety at controlled and uncontrolled crosswalks, enhanced bus operations at two existing major transit stops, and new urban design amenities between Stanford Avenue and Sheridan Avenue. The project includes: curb extensions; median refuges; median shade trees; pedestrian scale lighting and potential bus enhancement. Operating Impact MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 49 MAJOR CAPITAL PROJECTS Fund, Project Title, & Description FY 2021 Five -Year Total Budget CIP Cost Project Cost The maintenance costs are unknown at this time; however, as these costs are quantified, adjustments will be brought forward in the next budget cycle. Capital Improvement Fund: Fire Station 4 Replacement (PE -18004) • $700,000 $9,850,000 $10,200,000 This project provides funding to replace Fire Station 4 at the corner of Middlefield Road and East Meadow Drive. The replacement facility will be based on the prior Replacement Study and Needs Assessment prepared in 2005. Operating Impact This project is anticipated to impact operating expenses in the future. Maintenance is estimated to increase by $9,200 in FY 2024 and by 3% annually thereafter. Capital Improvement Fund: Junior Museum and Zoo (JMZ) Renovation (AC -18001) $2,231,551 $2,231,551 $4,474,913 This project provides funding to relocate the Palo Alto Junior Museum & Zoo (JMZ) for two years to the Cubberley Community Center to facilitate construction of a new JMZ at the current site. This project also includes funding for permit and inspection fees related to the JMZ rebuild project, new exhibitions (including temporary staffing to design and prototyping), deck construction costs (partial), park signage (partial), furniture and equipment costs, payment and performance bonds, re -opening marketing and outreach expenses. Operating Impact This project is anticipated to impact operating expenses in the future. Additional staffing, exhibit, maintenance, and custodial costs are expected to have a net impact of approximately $340,000 in FY 2021 and ongoing. Additional information about costs associated with opening the JMZ can be found in the Community Services Department section of the FY2021 Operating budget. Capital Improvement Fund: Magical Bridge Playground Rubber and Synthetic Turf Resurfacing (PE -21003) $404,050 $867,300 $867,300 This project provides funding for the replacement of all rubberized and synthetic turf surfacing in the playground and play equipment. Operating Impact There is no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Municipal Service Center A, B, and C Roof Replacement (PF-17000) $2,169,800 $2,169,800 $2,169,800 This project provides funding for a fluid, reinforced waterproofing application over the existing roof. The existing asphalt and gravel roof is nearing the end of its useful life and needs to be rehabilitated. If the existing roof is allowed to deteriorate beyond a certain point, the fluid applied system cannot be used and a full replacement of the roofing system would be required. The application will meet current cool roofing codes to optimize energy efficiency. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Municipal Service Center Lighting, Mechanical, and Electrical Improvements (PF-16006) $6,038,732 $6,038,732 $7,226,945 This project provides funding for the replacement of original mechanical and electrical systems and lighting installed in 1966 in the Municipal Service Center's (MSC) Buildings A, B, and C. The project also includes the renovation of office space and shop areas in Building C. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 50 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS FY 2021 Budget Five -Year Total CIP Cost Project Cost Capital Improvement Fund: New Downtown Parking Garage (PE -15007) L$0 $5,103,000 $6,583,943 This project provides funding for a new public parking garage in the University Avenue commercial area at existing Parking Lot D at the corner of Hamilton Avenue and Waverley Street. The project will evaluate the feasibility of including retail and stacked parking as part of the new structure. Design and environmental consultant services will be needed, including the development of preliminary plans and cost estimates, and completion of the project's environmental review. Operating Impact This project is anticipated to impact operating expenses in the future. Custodial and maintenance costs are estimated to be $94,000 in FY 2025 and increase 3% annually thereafter. Capital Improvement Fund: New Public Safety Building (PE -15001) $102,800,000 $106,600,000 $118,007,021 This project provides funding for the design and construction of a new Public Safety Building on Lot C-6 in the California Avenue commercial area. Design and environmental consultant services will be needed, including the development of preliminary plans, cost estimates and special studies as part of an Environmental Impact Report (EIR), and site evaluation for the approximately 44,500 square foot facility. The size and programming of the new facility were developed by the 2006 Blue Ribbon Task Force. Operating Impact This project is anticipated to impact operating expenses in the future. Custodial and maintenance costs are estimated to be $335,000 in FY 2024 and increase by 3% annually thereafter. Capital Improvement Fund: Newell Road/San Francisquito Creek Bridge Replacement (PE -12011) $6,017,111 $12,371,411 $16,188,313 This project will provide funding to remove and replace the Newell Road bridge over San Francisquito Creek. Design considerations include a clear span over the creek to allow the channel to convey a flow consistent with the San Francisquito Joint Powers Authority's (JPA) initial flood protection project as well as bicycle and pedestrian traffic. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Quarry Road Improvements and Transit Center Access (PL -16000) $928,400 $5,030,300 $6,318,351 This project provides funding for the planning, design and construction of bicycle and pedestrian improvements along Quarry Road between El Camino Real and Welch Road, including, but not limited to, upgraded bicycle lanes and crosswalks, innovative intersection treatments for bicyclists, and improved access to transit stops. Planning, design, and construction of a new bicycle, pedestrian, and transitway between the Palo Alto Transit Center bus depot and the intersection of Quarry Road and El Camino Real has been completed. Operating Impact Street and landscaping maintenance of the street connection would be supported by the Public Works Department's operations fund. Costs are still being determined and will be brought forward as part of the next budget cycle. Capital Improvement Fund: Railroad Grade Separation (PL -17001) $4,260,625 $9,268,225 $13,075,721 This project, Connecting Palo Alto, is a community -based process to advance the railroad grade crossing circulation study and context sensitive solutions study envisioned by the City Council. It will also fund the preparation of Project Study Report and environmental analysis that will be required for the City to realize its goals of advancing grade separations. Operating Impact Operating impacts, if any, will depend upon the grade separation alternative selected. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 51 MAJOR CAPITAL PROJECTS Capital Improvement Fund: Rinconada Park Improvements (PE - 08001) FY 2021 Budget Five -Year Total CIP Cost Project Cost $2,495,229 $6,107,329 $8,752,380 Upon completion of the Rinconada Park Long Range Plan (LRP) adopted in 2017, funding was secured to begin these park improvements, Phase 1 improvements at Rinconada Park will be implemented in the western half of the park in fall 2020 and would include funding to safety, site amenities, playground facilities, irrigation, drainage, restroom , and accessibility improvements. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund:Roth Building Maintenance (PF-07011) I $31,973 • $31,973 $67,870 This project provides funding for window repairs, waterproofing of foundation walls, installation of electrical service, and a new ventilation system at the Roth building. In addition, roofing repairs will be done on an as needed basis until such time that the building is leased and occupied. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Street Maintenance (PE -86070) $5,435,543 $24,835,243 Recurring This project provides funding for annual resurfacing, slurry sealing, crack sealing, and reconstruction of various City streets. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Capital Improvement Fund: Traffic Signal and Intelligent Transportation Systems (PL -05030) $1,172,355 $5,051,655 Recurring This project provides funding for the design and construction of traffic signals, traffic signal communications networks, signal performance/surveillance projects for transportation use, and maintenance of the City's traffic signal central management system. The project includes the replacement of traffic signal controllers/cabinets, video detection systems, and other field equipment. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Cubberley Property Infrastructure Fund: Cubberley Repairs (CB $831,778 $1,266,878 Recurring 17001) This project provides funding to make repairs and minor improvements at the Cubberley Community Center. Work completed under this project may include items such as painting, sidewalk repairs, breezeway pavement resurfacing, landscaping improvements, minor equipment replacement, and improvements to interior finishes. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Colorado Power Station Equipment Upgrades (EL - 19001) I $900,000 $6,700,000 $10,832,970 This project will replace aging peripheral equipment used on the substation transformer banks at the Colorado Power Station. The Colorado Power Station is the 115kV/60kV transmission side of the Colorado Substation, which transforms the electricity to a lower sub -transmission voltage that feeds the individual for distribution stations around the city. 52 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS Fund, Project Title, & Description ..1 FY 2021 Five -Year Total Budget CIP Cost Project Cost Operating Impact There are no additional operating impacts anticipated from this project. Normal maintenance costs that will be absorbed within the available maintenance schedule and annual budget. Electric Fund: Colorado/Hopkins System Improvement (EL -15000) MI $0 $3,000,000 $3,000,000 This project will replace deteriorating equipment, which will increase system capacity and improve service reliability for the areas served by the Hopkins and Colorado substations and adjacent substations. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Electric Customer Connections (EL-89028) pig $2,700,000 $13,500,000 Recurring This project allows for the installation of services, transformers, meters for new customers, upgrades of existing services, temporary service connections, and overhead/underground extensions for new/existing customers. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Electric System Improvements (EL -98003) AT $2,504,700 $12,562,400 Recurring This project provides funding, as needed, to improve the Electric Distribution System. Typical activities include: increasing system capacity for load growth, replacing deteriorated capital facilities, reconfiguring/adding to the system to improve service reliability, repairing and replacing storm damaged equipment, and making general improvements to the system. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Facility Relocation for Caltrain Modernization (EL -17007) $2,723,631 $2,723,631 $3,127,417 This project allows for the relocation of overhead Utility Electric and Fiber Optic lines to provide adequate clearance from new electric lines being installed by the Peninsula Corridor Joint Powers Board (Caltrain) to convert their commuter trains from diesel to electric power. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Foothills Rebuild ( Fire Mitigation) (EL -21001) i $2,000,000 $4,000,000 $4,000,000 Devastating wildfires throughout the State of California have prompted electric utilities throughout the state to identify areas within their jurisdiction that are susceptible to power -line ignited wildfires and to take steps to prevent their occurence. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Hopkins Substation 4/12kV Conversion (EL -20000) _M $0 $4,110,000 $4,110,000 This project will fund the conversion of the distribution system connected to the Hopkins Substation from 4kV to 12kV. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 53 MAJOR CAPITAL PROJECTS Electric Fund: Smart Grid Technology Installation (EL -11014) $5,000,000 $19,000,000 $19,697,399 This project will implement portions of the Smart Grid Road Map that can be cost effectively applied to the City's Electric, Gas, and Water utility systems resulting in operating cost savings, environmental benefits, plus an increased quality of life and productivity for the residents and businesses of Palo Alto. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Substation 60kV Breaker Replacement (EL -17002) I $600,000 $3,018,000 $3,980,650 This project funds the purchase and replacement of high voltage circuit breakers that interconnect the nine electric substations and two power switching stations. There are 25 circuit breakers reaching the end of their recommended reliable useful life expectancy and/or are now underrated for the use. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Substation Physical Security (EL -16003) in $1,865,852 $2,695,852 $3,248,572 The electric substations are a key element of the Electric Distribution System used to provide electricity to residents and customers of Palo Alto. This project will evaluate options for protecting electric substations from outside vandalism and intrusion.lf necessary, fences and other protections will be repaired. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Underground District 46 - Charleston/EI Camino Real (EL -12001) $1,021,531 $1,021,531 $3,499,992 This project includes the costs to underground the existing overhead Electrical Distribution System in the area along the 400 block of West Charleston and El Camino Real. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Electric Fund: Wood Pole Replacement (EL -19004) $2,975,000 $9,020,000 Recurring This project will fund the annual replacement of deteriorated wood poles. Operating Impact There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Fiber Optics Fund: Fiber Optics System Rebuild (FO -16000)) $1,075,000 $1,075,000 $1,242,165 This system capacity improvement project rebuilds portions of the fiber system around Palo Alto, which, in turn, licenses dark fiber to companies providing telecommunication services to residents and businesses in Palo Alto. The rebuild projects will install new aerial duct or substructures (conduit and boxes) and additional fiber backbone cable to increase capacity for sections of the system that are at or near capacity. This will allow the Utilities Department to meet customer requests for service connections. The main rebuild project areas are the Stanford Research Park, the Palo Alto Internet Exchange (PAl) at 529 Bryant Street, and the downtown business district. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 54 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS Fund Pro'.ect Title & Descri • tion FY 2021 Budget Five -Year Total CIP Cost Project Cost Gas Fund: Gas Main Replacement - Projects 23 to 25 (GS -13001, GS -14003, GS -15000) $7,620,046 $29,620,046 $30,064,572 These projects replace leaking, inadequately -sized, and structurally deficient gas mains and services located on various streets throughout the City. Staff identifies problematic mains/services by researching maintenance and leak histories, analyzing performance of the entire gas distribution system, and considering risk ratings of the Distribution Integrity Management Plan. Operating Impacts There are no additional operating impacts anticipated from these projects. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Gas Fund: Gas System, Customer Connections (GS -80017) $1,082,688 $5,831,880 Recurring This funding allows for the Gas Distribution System to be extended in order to provide gas service to new customers and augment service to customers with increased natural gas demands. Improvements include new mains, services, valves, regulators, meters, and accessories. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Stormwater Management Fund: Corporation Way System Upgrades and Pump Station (SD -21000) $1,879,186 $3,741,333 $3,972,333 This project provides funding for the design of a new small pump station with 25 cubic feet per second capacity and the upgrade of 700 linear feet of storm drain pipe to 30 -inch High Density Polyethylene. Operating Impacts This project is anticipated to impact operating expenses in the future with costs for electricity to serve the pump station; future routine inspections; and maintenance of the mechanical, electrical, and fiber operating systems. As these costs are quantified, and if the department determines they cannot be absorbed within the available maintenance schedule and annual operating budget, adjustments will be brought forward in future budgets, as necessary. Stormwater Management Fund: Storm Drainage System Replacement And Rehabilitation (SD -06101) $2,069,475 $3,567,475 Recurring This project provides funding for annual replacement and rehabilitation projects, identified by a previous condition assessment, to help maintain the integrity of the storm drain system, including the replacement or rehabilitation of deteriorated storm drain pipes, manholes, and storm drain inlets. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Technology Fund: Enterprise Resource Planning Upgrade (Reserve) (TE-19000) J $0 $2,029,000 $4,950,000 This project provides funding to upgrade the existing Enterprise Resource Planning (ERP) system and Customer Information System (CIS) to better meet the City's needs. Operating Impact Annual licensing fees of $0.4 million are anticipated to begin in FY 2021 for this project once the ERP system is upgraded, which is approximately $0.1 million more than the current licensing costs. Vehicle Replacement Fund: Scheduled Vehicle and Equipment Replacement - Fiscal Years 2019 to 2025 (VR-19000, VR-20000, VR-21000, VR-23000, VR-25000) $5,011,000 $11,495,000 $14,722,770 These projects provide funding for the scheduled replacement of existing City fleet vehicles and equipment. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 55 MAJOR CAPITAL PROJECTS Alm,Fund, Project Title, & Description Operating Impacts Costs to operate and maintain the City's fleet are budgeted annually in the Vehicle Replacement Fund and allocated to other City departments based on historical maintenance and repair needs. There are no additional operating impacts anticipated from these projects and maintenance will be absorbed within the available maintenance schedule and annual operating budget. FY 2021 Five -Year Total Budget CIP Cost Project Cost Wastewater Collection Fund: Sewer Lateral/Manhole Rehabilitation and Replacement (WC -99013) $876,000 $4,226,500 Recurring This project will replace defective sewer laterals, cleanouts, and manholes; install backwater devices; and purchase equipment to support these activities in order to maintain the Wastewater Collection System. Information collected during routine annual maintenance activities is used to prioritize work. Defective laterals, for example, will be replaced to re-establish existing services, reduce maintenance expenses, and eliminate ground water intrusion. Backwater devices will be installed to reduce backflows of sewage. New manholes will be installed or rehabilitated to improve structural integrity. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Collection Fund: Wastewater Collection System Rehabilitation/Augmentation Projects 24 to 33 (WC -16001, WC - 17001, WC -19001) $2,675,424 $15,025,424 $15,638,890 These projects fund the design and construction of high priority main and lateral replacement work, which reduces inflow of rainfall and ground water into the collection system, for various streets throughout the City. These projects will be comprised of laterals identified in video inspection work or through maintenance records identified as deficient and in need of replacement. Priority will be given to areas identified by Public Works as targeted work zones ensuring infrastructure coordination among different City departments. Operating Impacts There are no additional operating impacts anticipated from these projects. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Advanced Water Purification Facility (WQ-19003) $448,000 $21,564,000 $24,229,000 This project provides funding for an Advanced Water Purification Facility to further improve the quality of the tertiary - treated recycled water by microfiltration or ultrafiltration followed by reverse osmosis to reduce the level of total dissolved solids (TDS). Operating Impacts This project is anticipated to impact operating expenses in the future such as utilities, janitorial services, and alarm/ security systems. Once the design, including features and square feet, is complete, costs will be quantified and adjustments will be brought forward in future budgets. Wastewater Treatment Fund: Headworks Facility Replacement (WQ- 16002) $0 $20,268,000 $20,268,000 This project provides funding for replacing influent pumping, including the suction and discharge piping, pipe manifolds, valves, the electrical and controls system, screening equipment, grit handling equipment, the force main to the primaries and modifying headworks building, and yard piping. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 56 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET MAJOR CAPITAL PROJECTS FY 2021 Budget Five -Year Total CIP Cost Project Cost Wastewater Treatment Fund: New Laboratory and Environmental Services Building (WQ-14002) $1,503,460 $23,167,460 $24,191,995 This project provides funding for a new building that will consolidate staff and provide a larger and updated laboratory. Operating Impacts This project is anticipated to impact operating expenses in the future such as utilities, janitorial services, and alarm/ security systems. Once the design, including features and square feet, is complete, costs will be quantified and adjustments will be brought forward in future budgets. Wastewater Treatment Fund: Plant Repair, Retrofit, and Equipment Replacement (WQ-19002) I $7,332,834 $21,514,834 Recurring This project provides funding for the assessment, repair, and retrofit of the RWQCP's concrete and metal structures; the replacement of necessary RWQCP equipment and ancillary facilities to maintain treatment reliability and existing infrastructure; and the replacement of large diameter flow meters built into the wastewater treatment system on sewers, pipes, and water lines. Tasks and funding previously budgeted in three separate maintenance related projects, WQ-80021, WQ-80022, and WQ-04011, will now be consolidated and budgeted in this one recurring project. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Outfall Line Construction (WQ-19000) $7,775,000 $8,886,000 $8,926,000 This project consists of the construction of a new parallel outfall pipe to convey final plant effluent to San Francisco Bay. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Primary Sedimentation Tank Rehabilitation PO -14003) $14,068,800 $19,654,800 $20,681,850 This project provides funding for new protective coatings on each of the four concrete primary sedimentation tanks and replacement of worn rotating parts. The tanks, installed in 1972, are 220 feet long by 41 feet wide and remove settleable solids and grease. The coating ensures reinforcing steel bars within the concrete are protected from penetrating corrosive sewer gases and extends the concrete's life another 30 years. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Wastewater Treatment Fund: Secondary Treatment Upgrades (WQ- 19001) $1,552,300 $31,362,300 $32,831,980 This project provides funding for upgrades to the Secondary Treatment process at the Regional Water Quality Control Plant. The existing Secondary Treatment process has two main components; the Fixed Film Reactors (FFR) and the Activated Sludge (AS) Process. This project includes the reconstruction of the AS Process, rehabilitation of the AS Aeration Basins and the elimination of the FFRs. The AS Aeration Basins will be subdivided with concrete walls creating different zones where different pollutants can be treated. One of the zones will then operate without oxygen, treating nitrogen and cutting the nitrogen in the treated wastewater in half. The project will not only reduce organics and ammonia in the existing processes, but will also reduce total nitrogen, the next pollutant being regulated. Operating Impacts This project is anticipated to impact operating expenses in the future, potentially by lowering utilities usage. As these costs are quantified, adjustments will be brought forward in future budgets, as necessary. MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 57 MAJOR CAPITAL PROJECTS Water Fund: Water, Gas, Wastewater Utility GIS Data (WS -02014) I $905,862 $2,930,528 Recurring This project covers the annual maintenance and support contract to improve the ability of Utilities Department staff to use the Geographic Information System (GIS). As with other GIS activities, continuing the completion of data -related tasks is the primary emphasis. Because field personnel still need accurate paper maps in the field, standard map books will be produced to meet their specific needs. Funding is also included to improve the GIS user interface to better serve the unique requirements of Utility Department users. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Water Fund: Water Main Replacement - Projects 26 to 32 (WS-i 13001, WS -14001, WS -15002) These projects will fund the design and replacement of structurally deficient water mains and appurtenances throughout the City. Mains are selected by researching the maintenance history of the system and identifying those that are undersized, corroded, and subject to breaks. $3,085,107 $20,935,107 $25,652,633 Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual budget. Water Fund: Water System Customer Connections (WS -80013) _ _ $850,000 $4,524,300 Recurring This project allows for improvements that include new main extensions, valves, domestic services, meters on upgraded services, backflow devices, fire services, and fire hydrants. Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. Water Fund: Water Tank Seismic Upgrade and Rehabilitation (WS - 09000) • This project will provide tank rehabilitation, seismic upgrades, and/or tank replacement structural reinforcement for the Corte Madera, Park, Boronda, and Dahl reservoirs in order to improve earthquake resistance in compliance with the American Society of Civil Engineers (ASCE 7) seismic codes. Work at the reservoir sites will also include the installation of: new seismic shut off valves between the reservoirs and valve vaults, new plug valves, piping and pipe supports in the valve vaults, and recoating of the interior and exterior reservoir walls. $7,093,000 $11,993,000 $15,642,385 Operating Impacts There are no additional operating impacts anticipated from this project. Any maintenance costs that arise will be absorbed within the available maintenance schedule and annual operating budget. 58 MAJOR CAPITAL PROJECTS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 59 CITY OF PALO ALTO GENERAL FUND OVERVIEW Overview The Long Range Financial Forecast (LRFF) marks the beginning of the annual budget process and is produced to project the City's General Fund financial position in the near -term and long- term horizon. The LRFF presents the fiscal health of the General Fund, based on City Council approved service levels, as well as alternative financial scenarios. The Fiscal Year (FY) 2021-2030 LRFF was accepted by the Finance Committee on December 3, 2019 and was accepted by the City Council on February 3, 2020. The forecast continues to incorporate direction from the City Council to budget pension costs more conservatively than CaIPERS projections. The base forecast projected a $1.1 million General Fund surplus, followed by annual gaps where expenses outpace forecasted revenue growth ranging from a deficit of $2.4 million in FY 2023, that tapers to $1.1 million in FY 2025, before reaching significant sur- pluses in the final years of the forecast. The base forecast provided a preliminary baseline that assists in gauging effects of major policy changes against a "status quo" version of the future. It also assumed that the economy and world events continue to change and unfold in line with current expectations. It is shown below. FY 2021 - FY 2030 Long Range Financial Forecast Base Case 2021 2023 2024 2025 2026 2027 2028 2029 2030 Total Revenue Total Expenditures 232,101 241,527 41% 230,809 240,447 42% 248,358 2.8% 250,168 40 255,808 263,083 3.0% 28% 258,194 265,396 .32% 28% 271,318 3.1% 272,465 27% 280,028 3.2% 277,743 L9% 289,307 3.3% 283,366 zoe 299,625 310,488 3.6% 3.6% 291,169 298,276 28% 24% 321,728 3.6% 304,382 20% Cumulative Net Operating Margin (One -Tian) $39,664 $1,080 ($2890) ($576) $73 $1,166 $3,431 $3,657 $2,516 $3,755 $5,135 Cumulative Net Operating Margin Assumes that the annual shortfalls are solved with ongoing solutions and annual surpluses are spent for ongoing expenditures. $17,347 The LRFF was developed at a time when national, state, and local economic indicators were mixed. Unemployment remained low, job growth slowed, and international trade had negative impacts on economic data. The nation continued to operate at "full employment" level with 3.6 percent unemployment as of October 2019. The Bay Area region boasted a 2.2 percent unem- ployment rate for the same month. Those levels have not occurred in 20 years, last appearing at the height of the Dot.Com Boom. Consumer consumption, government spending, and exports contributed to Growth Domestic Product (GDP) which grew by 1.9 percent in the third (calen- dar) quarter of 2019, which was expected to slow as real income and job growth further slowed in 2020. In addition to these indicators, economically sensitive revenue sources, such as tran- GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 61 GENERAL FUND OVERVIEW sient occupancy tax and documentary transfer tax, showed declines, while sales tax growth remained stable. The forecast continued the assumption that the strong foundations of the local economy - stable housing market, diverse and favorable mix of business segments lead by pro- fessional and technology industries, and academic and medical properties - would moderate the financial impact of a severe economic downturn. Tax revenues were modeled in correspon- dence with the health of the local economy and were projected to be $9.8 million, or 7.0 per- cent, above the FY 2020 Adopted Budget. While the LRFF is a valuable tool for extrapolating "status quo" financial scenarios and modeling the impacts of potential policy or economic changes, it is not meant to comprehensively fore- cast all impacts to the City's finances. The list below includes several projects, factors, and data points, the fiscal impact of which were not contemplated in the FY 2021-2030 LRFF. This list is not intended to be comprehensive nor in any priority order; it is provided as qualitative context. • Labor negotiations and changes to employee compensation in years where there is no agreement • Operating costs associated with Capital Projects • Rail grade separation • Parks Master Plan funding strategy ▪ Capital improvement projects ▪ Additional capital or operating investments for city owned assets operated by non-profit organizations ▪ Cubberley Community Center Concept Plan ▪ General Fund loans for special projects • Legislative updates at the state and federal level • Greater CaIPERS contributions • Tax revenue alignment with updated Comprehensive Plan • Unknown changes in the local, regional, and national economy Based on the LRFF, staff continued to review and refine estimates to establish the FY 2021 Base Budget. FY 2021 Budget Development Guidelines were transmitted to Council together with the LRFF. The Guidelines were used as part of the City's efforts to strategically plan and prioritize spending to ensure financial stability. World events have since redirected the City's outlook, fis- cal and otherwise, towards the measures necessary to contain the spread of COVID-19. The eco- nomic impacts and disruptions to communities caused by COVID-19 are widespread and significant. Performance and volatility of markets contribute to an unprecedented challenge of minimizing the risk to our community while ensuring that crucial services continue uninter- rupted. As a result of these uncertainties and challenges the General Fund budget represents, in large part, adjustments to service levels in FY 2021 to address economic impacts experienced as a result of COVID-19. The adjustments reflect critical changes to service delivery to mitigate near term revenue declines as well as planning for estimated longer term depressed revenue. 62 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW FISCAL YEAR 2021 GENERAL FUND BUDGET Subsequent to the development of the LRFF, revenue and expense estimates were reviewed to calculate the Base Budget. The details of these adjustments can be found throughout this doc- ument. Significant base changes, which reflect the change in revenues and/or expenses to maintain services at their current levels or incorporate policy direction from City Council issued after the LRFF, and their General Fund impact, are discussed below: • Tax revenue . Salary and benefits . Allocation charges . Contract services . Transfers The FY 2021 Adopted Budget assumes revenue totaling $197.0 million, a 14.7 percent, or $34.1 million decrease compared to the FY 2020 Adopted Budget, and General Fund expenditures totaling $197.0 million, a 14.7 percent, or $33.8 million, decrease from the FY 2020 Adopted Budget of $230.8 million. The Budget Stabilization Reserve (BSR) is estimated to be $33.0 million, or 16.8 percent of the FY 2021 Adopted Budget. As discussed in the Reserves section of the General Fund Overview, the Adopted Budget has a net $0 impact to the BSR. With this funding level, the BSR would be within the 15.0-20.0 percent reserve level set by policy, and $3.5 million, or 1.7 percent below the 18.5 percent target. The following sections discuss the General Fund's major revenue and expense categories in the FY 2021 Adopted Budget compared to the FY 2020 Adopted Bud- get. REVENUES Revenues for the FY 2021 Adopted Budget were based on reduced revenue assumptions as a result of COVID-19's economic impacts as communicated through conversations with the City Council as part of the public hearing process for the adoption of the FY 2021 Budget. Prior to COVID-19, the Bay Area economy had sustained better performance than the state and the nation with strong foreign trade; however, challenges with expected slowdown in job growth and potential impacts to local housing markets posed uncertainty with predicting whether robust growth could be expected throughout the forecast. Tax revenues constitute 60 percent of General Fund resources and therefore fluctuations in this category may significantly impact the City's financial outlook. The FY 2021 Adopted Budget assumes the shelter in place order as a result of COVID-19 is lifted halfway through the fiscal year, and recessionary levels of activity continue with long-term constraints on discretionary spending and corresponding tax revenues of both businesses and consumers alike causing an overall $35.6 million, 15.4 percent, decrease compared to the FY 2020 Adopted Budget. SALES TAX The FY 2021 Adopted Budget assumes sales tax revenue of $20.5 million, a 40.4 percent, or $13.9 million decrease compared to the FY 2020 Adopted Budget. Revenue from this source totals $20.5 million in the FY 2021. This estimate was developed assuming a shelter in place order due to COVID-19 with a very slow phased lifting of that order through the end of calendar GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 63 GENERAL FUND OVERVIEW year 2020, This would result in continued social distancing and corresponding restrictions on travel, gatherings, and events; continued closure of populous locations, including local econom- ically significant areas such as the downtown core, California Avenue district, and Stanford Shopping Center; and significant continuing impacts to other business activities. In addition, the State has offered certain businesses the option to defer sales tax payments through interest - free payment plans. This plan allows large businesses to delay their sales and use tax remittance for 90 days and small businesses to defer remittance over 12 months. The sales tax revenue assumptions in this budget also assume that this program will continue. As the nation transitions from a shopping center country to online sales, a surge in online retail sales will partially displace tax revenue from traditional industry segments to state and county pools. Online sales data that cannot be tracked to a specific county jurisdiction are allocated to the Santa Clara County sales tax pool and then distributed to local jurisdictions based on local tax percentage. Palo Alto's average proportion of county pool sales tax allocation is approxi- mately 7.3 percent. These trends will be monitored as the shift in consumer spending habits transition from brick and mortar to online and as economic impacts resulting from COVID-19 unfold. PROPERTY TAX Property tax revenue is the General Fund's largest revenue source and represents 26.5 percent of total revenues. Property tax grew 20.2 percent from FY 2017 levels of $39.4 million to $47.3 million in FY 2019 due to higher assessed values. These higher assessed values reflect continued robust commercial and residential real estate markets during those periods. The FY 2021 Adopted Budget assumes $52.0 million in property tax revenue, a $3.4 million or 7.0 percent increase, compared to FY 2020 Adopted Budget level of $48.6 million. Unlike other tax revenue property taxes, are not estimated to be impacted as severely from COVID-19. In addition, FY 2017, FY 2018, and FY 2019 included receipts of $0.7 million, $1.4 million, and $2.7 million, respectively, for excess Educational Revenue Augmentation Fund (ERAF) distributions from the County of Santa Clara. ERAF is the fund used to collect and disburse property taxes that are shifted to/from cities, the County, and special districts prior to their reallocation to K-14 school agencies. When the state shifts more local property tax than required to support schools these funds are returned and known as excess ERAF. Due to the uncertainty of whether local agencies will continue to receive excess ERAF funds, it is not considered a permanent local rev- enue source. The FY 2021 Adopted Budget assumes $2.8 million in excess ERAF revenue. TRANSIENT OCCUPANCY TAX (TOT) In FY 2021, TOT revenue is estimated to be $14.9 million, a $14.4 million, or 49.1 percent, decrease compared to the FY 2020 Adopted Budget. This estimate assumes significant impacts to this segment as a result of COVID-19 and the shelter in place order that restricted the travel and hotel businesses. This decrease corresponds with assumptions of a very slow phased lifting of the shelter in place order through the end of calendar year 2020. This would result in contin- ued restrictions on travel and other related impacts as a result of social distancing. During the fourth quarter of FY 2020 the average occupancy rate has been below 25 percent and the aver- age daily room rate has declined by over 60 percent. 64 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW DOCUMENTARY TRANSFER TAX (DTT) The FY 2021 Adopted Budget assumes $4.7 million in DTT revenue, which is significantly lower than levels seen in recent years. This revenue source is challenging to forecast since it is highly dependent on property sales volume and the mix of commercial and residential sales. The num- ber of transactions for FY 2020 (500) are lower than FY 2019 (579). Though the Palo Alto hous- ing market remains strong, as discussed in the Property Taxes section, the residential median sales price in Palo Alto has declined. In addition, DTT in the fourth quarter of FY 2020 declined by 40.9 percent and the number of sales declined 28.2 percent. UTILITY USERS' TAX (UUT) The UUT is levied on electric, gas, and water consumption, as well as on telephone usage. In total, The FY 2021 Adopted Budget assumes $15.1 million in UUT revenue, a $2.5 million, or 14.1 percent, decrease compared to the FY 2020 Adopted Budget revenue of $17.6 million. Lower business consumption of utilities is anticipated as a result of COVID-19 restrictions. OTHER TAXES AND FINES The FY 2021 Adopted Budget assumes $1.9 million in other taxes and fines, which is generally consistent with the FY 2020 Adopted Budget. The primary component of this revenue category is parking citation revenue. Staff anticipates evaluating and recommending any necessary adjustments to this budget category as a result of COVID-19 with the City Council as any impacts become more clear in FY 2021. CHARGES FOR SERVICES This revenue category consists of charges to Stanford for fire services and paramedic services, fees related to the City's golf course, arts and science classes, and plan check fees. The FY 2021 Adopted Budget assumes $25.4 million in charges for services revenue, $4.3 million, or 14.5 per- cent decrease, compared to the FY 2020 Adopted Budget. The FY 2020 Adopted Budget lev- els for each category included reductions of revenue related to Animal Shelter services that were previously provided by the Police Department but are now provided by the City's non- profit partner Pets -in -Need. Golf course revenues trends were also reviewed as part of the FY 2020 budget process. Based on activity and appropriately categorizing costs associated with the golf course, revenue estimates were reduced in FY 2020 and are at a similar level in FY 2021. Development Services continues to be cost neutral in FY 2021. Some of the revenues in this category offset operating expenses for certain services that the City can not provide as a result of COVID-19 and the shelter in place order. City Council approved expense and corresponding revenue adjustments for service level changes resulting from COVID-19 as part of the public hearing process for the adoption of the FY 2021 Budget. The budget assumes reimbursement levels consistent with the negotiated fire service agree- ment with Stanford University; however, the actual reimbursement value may change as a result of updates to the Fire Department budget. City staff will communicate with Stanford to discuss these adjustments. Additional reimbursements from Stanford for Public Safety Dispatch Ser- vices are also budgeted, resulting in a net reimbursement of $7.6 million. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 65 GENERAL FUND OVERVIEW PERMITS AND LICENSES Permits and licenses consist of payments to the City for issuance of Building Permits, Fire Per- mits, and miscellaneous health and safety -related licenses. The FY 2021 Adopted Budget esti- mates $8.3 million in permit and license revenue, a $3.4 million, or 29.1 percent decrease as compared to the FY 2020 Adopted Budget. RETURN ON INVESTMENT The return on investment category reflects the interest earnings on the City's investment port- folio. This category is a combination of past investments, new investments at current market rates, and available cash to invest which fluctuates seasonally and annually. The average portfo- lio rate of return for FY 2020 was 2.2 percent. With interest rates significantly lower, the FY 2021 Adopted Budget return on investment revenue is estimated to be $1.1 million, $0.3 million or 20.8 percent, lower than the FY 2020 Adopted Budget. RENTAL INCOME Rental income of $16.0 million primarily reflects rent paid to the General Fund from the City's Enterprise Funds and the Cubberley Community Center. There is a slight decrease in rental income from FY 2020 to FY 2021, which represents the phase -out of payments from the Refuse Fund to the General Fund associated with the Landfill. In FY 2020, the City conducted a Rent Study to analyze the appropriate rates for rental payments from Enterprise Funds. The FY 2021 Operating Budget includes these revised rates and changes are detailed in the respective Enter- prise Funds later in this document. CHARGES TO OTHER FUNDS The main source of revenues in this category is General Fund administrative cost allocation plan charges to the Enterprise and Internal Service Funds. Internal support departments such as Administrative Services, Human Resources, and Council Appointed Offices provide services to Enterprise and Internal Service Funds. The costs for these services are recovered through the administrative cost allocation plan charges. The FY 2021 estimate for Charges to Other Funds of $12.0 million reflects growth of 10.0 percent from the FY 2020 Adopted Budget of $10.9 million; this is primarily attributable to year over year increases in costs for salary and benefits and increased support for non -General Fund activities. OTHER REVENUE This revenue category is mainly comprised of Animal Services revenue from neighboring cities; the Palo Alto Unified School District's (PAUSD) share of maintenance for athletic fields; Public, Education, and Government (PEG) revenue from Cable Franchise Fees; and other one-time rev- enue sources such as grants. Revenues in this category are anticipated to remain flat at $2.6 million in the FY 2021 Adopted Budget. OPERATING TRANSFERS -IN Overall, compared to the FY 2020 Adopted Budget, operating transfers -in increased by $0.4 million, from $21.0 million to $21.4 million. Operating Transfers -in materialize as expenses in other funds throughout the City and as a revenue in the General Fund. This budget category includes the equity transfer from the Electric and Gas funds that represents the return on the 66 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW initial investment the City made when the Utilities Department was created more than 100 years ago. In accordance with a methodology approved by the City Council in June 2009, the equity transfer is calculated by applying a rate of return on the capital asset base of the Electric and Gas funds. This rate of return is based on PG&E's rate of return on equity as approved by the California Public Utilities Commission (CPUC). The equity transfer from the Electric and Gas Funds is projected to be $20.6 million in FY 2021, an increase of $0.4 million, a 2.0 percent increase compared to FY 2020. In addition, repayment of the loan to the Airport Fund began in FY 2020. The FY 2021 Adopted Budget continues the scheduled repayment of the loan and includes a $0,3 million transfer from the Airport Fund for that purpose. EXPENSES FY 2021 expenditures total $197.0 million in the Adopted Budget, representing a $33.8 million, or 14.7 percent, decrease compared to the FY 2020 Adopted Budget. This decrease is attributed to service delivery reductions resulting from the severity of the current public health emergency and its impacts on the City's financial situation. As discussed earlier in this section and in the Transmittal Letter, the FY 2021 Adopted Budget represents service level impacts that prioritize essential services and pare back discretionary services. SALARY AND BENEFITS Salary and benefit costs represent 63.2 percent of the FY 2021 Adopted Budget. The salary and benefit budget in the General Fund totals $124.5 million, a 7.4 percent decrease from the FY 2020 Adopted Budget total of $134.5 million. This decrease includes salary and benefit changes for the City's Management Group totaling $2.3 million and positions reductions throughout the General Fund Departments. In addition to labor terms outlined in employee agreements, CaIP- ERS-determined retirement contribution levels, and offsetting attrition savings, the FY 2021 Adopted Budget also assumes $3.0 million in proactive funding contributions above CaIPERS required costs. While this is a decrease of $0.8 million from the FY 2020 Adopted Budget's pro- active pension funding level, it is still a significant investment above and beyond CaIPERS' required funding and supports the City's commitment to fiscal sustainability. The budget for the additional pension contributions is based on what the normal cost component would be if the contribution was calculated at a 6.2 percent discount rate instead of 7.0 percent, the current CaIPERS discount rate. The level of proactive pension funding budgeted will continue to decrease until the City and CaIPERS are aligned in assuming a 6.2 percent discount rate. These funds are transferred to the City's irrevocable pension trust fund, which is estimated to total $32.4 million at the end of FY 2021, of which $21.0 million is from the General Fund. Finally, the General Fund budget includes assumed vacancy savings of $2.0 million that are expected to materialize as positions are vacated and new employees are hired through the normal course of business. It should be noted that in the "Budget Summary" section of each document, a variance will be seen between FY 2019 Actuals and the FY 2020 Adopted Budget columns in the salary and benefits total expenses. This variance primarily reflects the difference between estimated vacancies and staff costs actually incurred. The variance also includes changes in labor terms from year to year, changes in CaIPERS' required contributions, and FY 2020's proactive contri- butions to address the City's long-term pension liability. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 67 GENERAL FUND OVERVIEW Salaries: In FY 2021, salaries, including overtime, are projected to decrease $8.1 million in the General Fund, representing a 10.0 percent decrease compared to prior year. The Adopted Bud- get includes actions to service delivery impacts that reduce staff costs across the organization. Overall, the General Fund was reduced by 61.77 full-time FTE and 25.7 part-time FTE. These actions include: ▪ Supporting the transition of Project Safety Net to a non-profit ▪ Transferring the Animal Services administrative citation function from the Community Services Department to the Police Department • Aligning the overtime budget with contractually obligated salary increases • Administrative support staff reductions in a variety of departments • Children's Theatre, Teen Services, Art Center, Community Center, Open Space and Recreation programming and support reductions ▪ Reductions in the Fire, Police, and Office of Emergency Services that impact emergency incident and response services; emergency preparedness; and police community relations, patrol, technical services, dispatch, investigations, records, traffic, recruitment, and animal control ▪ Library staffing reductions that result in reduced branch hours, coverage at Service Desks, and capactiy for special projects and events • Planning and Development Services staff reductions in front counter support, code enforcement, building inspection and plan review ▪ Reduction of staff in internal support departments and executive offices including Administrative Services, Human Resources, City Manager's Office, and City Attorney's Office Pension Costs: The General Fund's overall pension costs increased by $0.5 million, or 2.0 per- cent, from $31.5 million to $32.0 million. Pension costs are driven by primarily by CaIPERS and the City Council's direction to budget pension costs more conservatively than CaIPERS. CaIP- ERS calculates an Actuarially Determined Contribution (ADC) for the City each year. Excluding FY 2021 staff reductions and proactive contributions to prefund the City's long-term pension liabilities, the General Fund's ADC costs are increasing by 8.8 percent, resulting in a $2.5 million year -over -year increase; this increase was significantly offset by position reductions that occurred in this year's budget. The CaIPERS Board voted in December 2016 to lower the dis- count rate over three years from 7.5 percent to 7.0 percent. Beginning FY 2019, the discount rate has been lowered from 7.5 percent to 7.375 percent, to 7.25 percent in FY 2020, and 7.0 percent in FY 2021. The FY 2021 CaIPERS "blended rate" (includes both the unfunded actuary liability and normal cost) increased from 35.6 percent to 38.4 percent for the miscellaneous group and from 59.4 percent to 65.3 percent for the safety group. The City budgets its pension contributions more conservatively than CaIPERS and transmits the additional funding to the pension trust fund. CaIPERS' discount rate for FY 2021 is 7.0 percent and, based on City Council's direction, a 6.2 percent discount rate is use for calculating normal cost. This results in a blended contribution rate of 41.8 percent for the miscellaneous group and 72.0 percent for the safety group. This means that for every $100,000 of salary, an additional $3,400 to $6,700 was budgeted for proactive funding. 68 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW Retiree Health: The City is required to perform an actuarial review of its Other Post Employment Benefits (OPEB) every two years. The June 30, 2019 actuarial valuation of the City's retiree healthcare plan recommended a 6.25 percent discount rate to be used in the calculation of annual Actuarial Determined Contribution (ADC). As a result of this study, the City's Other Post - Employment Benefits (OPEB) costs, primarily Retiree Healthcare, are decreasing from $9.1 mil- lion to $8.7 million, a 4.3 percent decrease. Healthcare and Other Benefits: The budget includes negotiated increases for healthcare on a calendar year basis and moderate increases, consistent with past experience, for units who will not have a contract in place as of January 2021. Costs for special pays, long-term disability, and Medicare remain generally consistent with FY 2020 levels. This is in large part due to the City's cost containment strategies achieved in labor agreements. As part of the City's overall balanc- ing strategy, the management excess benefit was reduced from $2,500 to $1,250. Workers' Compensation: The City is self -insured for Workers' Compensation. The Workers' Compensation Fund operates as an internal service fund where the costs are centralized and recovered through allocated charges to departments. An outside consultant performs a valua- tion every year to inform the City's financial planning. Workers' Compensation costs in the Gen- eral Fund total $3.4 million, a $0.3 million decrease, compared to the FY 2020 Adopted Budget. NON -DEPARTMENTAL EXPENSES Non -departmental expenses include expenses that are not directly related to the operation of a single department, such as payments to the Palo Alto Unified School District (PAUSD) as part of the Cubberley Community Center lease, or debt service. The FY 2020 Adopted Budget included several one-time items that were removed from the FY 2021 Adopted Budget. These items are detailed in the Non -Departmental section of this docu- ment. The FY 2021 Adopted Budget includes one-time costs for the November 2020 City Coun- cil election. CONTINGENCY ACCOUNTS Contingency Accounts are budgeted appropriations that are used at the discretion of the City Council, City Manager, City Attorney, or Human Resources Director to fund unanticipated expenses. A $100,000 ongoing adjustment to reallocate the City Attorney's Contingency Fund from the Non -Departmental Budget to the City Attorney's Office is included this budget. In FY 2020, an early reappropriation was included to shift the $100,000 of remaining funding in the Sustainability Contingency from FY 2019 to FY 2020. This has been removed from the FY 2021 budget. In addition, to balance the budget, the Council Contingency ($125,000), Human Resources Contingency ($50,000), and Innovation and Special Events Contingency ($50,000) were eliminated in the FY 2021 Adopted Budget. OPERATING TRANSFERS -OUT Funds are transferred from the General Fund to various funds throughout the City, including the Capital Infrastructure Fund, the Cubberley Infrastructure Fund, the Debt Service Fund, and the Technology Fund on an annual basis. In FY 2021, a total of $17.8 million will be transferred, with the majority of this being transferred to the Infrastructure Fund. The transfer to the Capital Fund of totals $13.5 million decreased by $15.5 million, of 4.7 percent, from $29.0 million in the GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 69 GENERAL FUND OVERVIEW FY 2020 Adopted Budget. Transient Occupancy Tax (TOT) revenue losses due to COVID-19 impacted the transfer to the Infrastructure Fund by $8.5 million and the base transfer to Capital by $7.0 million as part of the overall General Fund balancing strategy. The General Fund also transfers funds to the University Avenue parking fund to pay for employee parking permits; a total of $318,000 is included in FY 2021 for this purpose. When parking rates for the University Avenue parking district change, the General Fund's transfer is adjusted accordingly. The General Fund is also responsible for paying the electricity costs associated with streetlights and traffic signals. This is realized as a transfer to the Electric Fund of $2.1 million in FY 2021. RESERVES The City's general reserve is referred to as the Budget Stabilization Reserve (BSR). By policy, the City maintains a reserve level of 15.0-20.0 percent of the General Fund operating budget, with a targeted goal of 18.5 percent. City Council approval is required prior to setting reserves lower than 15.0 percent. The City Manager is authorized to transfer any amount in excess of 18.5 percent to the Capital Projects Infrastructure Reserve at their discretion. The FY 2021 Adopted Budget is projected to have a $33.0 million BSR balance, which exceeds the 15.0 percent mini- mum BSR level by $3.5 million. As discussed earlier, the economic impacts of COVID-19 are widespread and significant. These projections include a $11.8 million COVID-19 impact to the BSR in FY 2020. The City will continue to revise its projections for FY 2021 ending BSR as the situation develops. 70 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Reserves -11 Fund Summary ($000) FY 2019 Actuals FY 2020 Adopted Changes FY 2020 Net Adjustments Projected FY 2020 Year -End FY 2021 Adopted Budget Projected FY 2021 Year -End Budget Stabilization Reserve (BSR) Activity: BSR Other Reserve Activity Human Services Resource Allocation Process (HSRAP) 40 Reserve 43,511 1,292 Encumbrance & Reappropriation Inventory of Materials & Supplies Notes Receivable, Prepaid Items, Interfund Advances, & Unrealized Gains and Losses 6,489 (11,758) 33,045 33,045 ..M111111 — 40 40 6,489 - 6,489 4,517 - - 4,517 - 4,517 3,839 3,839 3,839 Total Reserves -- 58,396 1,292 (11,758) 47,930 47,930 1. The BSR is projected to be 16.8 percent of the FY 2021 Adopted Expense Budget at the end of FY 2021. 2. City reserve policy indicates a 15-20 percent range, with an 18.5 percent target. 3. Minimum FY 2021 BSR $29.5 million (15 percent); Maximum FY 2021 BSR $39.4 million (20 percent). 4. Target FY 2021 BSR $36.4 million (18.5 percent) 5. Projected FY 2020 adjustments include BAOs through June 2020. 6. This assumes the Human Services Resource Allocation Process Reserve will not be spent in FY 2020 and is recommended to be carried forward to FY 2021. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 71 GENERAL FUND OVERVIEW General Fund Revenue Descriptions PROPERTY TAX Under current law, all taxable real and personal property is subject to a basic tax rate of one percent of assessed value collected by local jurisdictions and school districts for general service purposes. There are other taxes and levies on a typical property tax bill such as parcel, General Obligation bond, and special assessments. On June 6, 1978, California voters approved Proposition 13, a seminal change in property tax lev- ies. The proposition, which added Article XIII A to the state constitution, placed limits on increases in the valuation of real property. The major change was that the assessed value of real property could only be adjusted upward annually by the change in the California Consumer Price Index (CCPI) up to a maximum of two percent per year. One exception to this rule, how- ever, is that when property changes ownership and/or is substantially altered or newly -con- structed, it would be reassessed at full market value in the first year and then subject to the CCPI or two percent cap thereafter. Another important exception to the formula for increasing assessed valuations and taxes is that during periods of declining property values (e.g., recessions), the County Assessor has the flexi- bility to decrease assessments whether through appeal by property owners or through the Assessor's analysis of value declines. In effect, this reduces the property valuation and tax. As market conditions improve, however, and values return or increase, the Assessor can then increase assessed values and taxes. In following years, another amendment to the constitution was passed that allows local govern- ments and school districts to raise property taxes above one percent to finance general obliga- tion (GO) bond sales. This change has to be approved by two-thirds of those voting in a local GO bond election. For school districts, however, the voting threshold for approving GO bonds was subsequently lowered to fifty-five percent. Dating back to the early 1990s, the state has made numerous and complex adjustments to local jurisdiction property tax revenues to solve its budget shortfalls. In one such action in 1992, which is known as the Educational Revenue Augmentation Funds (ERAF), the state shifted mil- lions of dollars in local government funds to school districts. As a consequence of this action the City of Palo Alto has foregone a cumulative $119.0 million through FY 2018 limiting its ability to meet its infrastructure needs. The County of Santa Clara administers and collects property taxes and remits the appropriate amounts (based on law and a complex formula) to local jurisdictions. Contrary to commonly held views, the City receives a relatively small portion of the basic one percent property tax. The City receives around 9.4 percent or 9.4 cents for every property tax dollar a property owner pays to the county. The majority of the tax dollar paid, or 56.6 percent goes to the school dis- trict, community college and county school service, 15.9 percent goes to the county, and the remaining goes to special districts and to the State. 72 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW SALES AND USE TAX The Sales Tax is a tax imposed on retailers for the privilege of selling tangible personal property such as clothing, automobiles, and computers. Currently, and according to State law, sales tax is not applied to personal services such as legal, dental, or consultant services. The Use Tax is a form of sales tax and is applied, for example, on the sale of tangible goods from an out-of-state vendor. The City receives a specific portion or percentage of the sales tax paid by a consumer. Of the current 9.0 percent tax rate paid for goods sold within Palo Alto, the City receives 1.0 percent of the purchase price or 11.1 percent for each tax dollar paid. The remaining 8.0 percent of sales tax is distributed as follows: State of California (5.5 percent), Public Safety Fund (0.5 percent), Transportation Development Act (TDA) (0.25 percent), Santa Clara County - Measure A (0.125 percent), Santa Clara Valley Transportation Districts (1.625 percent). Sales tax rates may differ across jurisdictions since local jurisdictions have some flexibility on a countywide level (e.g. county or city) to increase the local portion of the sales tax with voter approval. The local Sales and Use Tax is collected and administered by the State Board of Equal- ization. TRANSIENT OCCUPANCY TAX The Transient Occupancy Tax rate in Palo Alto is 15.5 percent and is applied to the daily rate charged by a hotel, motel, and lodging establishment. The rate only applies to stays of 30 days or less. In November 2018, Palo Alto voters approved increasing the tax rate from 14 percent to 15.5 percent. The rate increase was effective as of January 1, 2019. DOCUMENTARY TRANSFER TAX This tax is applied to the sale of real property within Palo Alto at the time property ownership is transferred. The current rate is $3.30 per thousand dollars of sale value. A house that sells for $1.5 million, for example, would result in the City collecting $4,950. This tax is collected by Santa Clara County and then remitted to the City. The county also levies a transfer tax of $1.10 per thousand dollars of sales value that is in addition to Palo Alto's tax. UTILITY USERS TAX The Utility Users Tax is charged to all users of electricity, gas, water, and telephone services. The current tax rate is for electricity, gas, and water is 5.0 percent and for telephone is 4.75 percent. In November 2014, Palo Alto voters approved decreasing the telephone utility user tax rate from 5 percent to 4.75 percent. This tax decrease became effective on April 1, 2015 due to Public Util- ity Commission advance noticing requirements. OTHER TAXES AND FINES The largest source of revenue in this category is derived from parking violations. Other revenue items in this category include traffic violations, and administrative citations. CHARGES FOR SERVICES Departmental charges are comprised of fees charged for services which are primarily provided by the following departments: Community Services, Planning and Development Services, Police, GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 73 GENERAL FUND OVERVIEW and Public Works. Charges for Services from departments are approved annually by the City Council through the adoption of the Municipal Fee Schedule. The City has two separate agreements with Stanford University to provide Fire Response ser- vices and Dispatch services. As part of these agreements to reimburse the City for Stanford's proportional share of these services, Stanford is charged 16.0 percent of the Police Depart- ment's Communication and Dispatch Division. The Stanford contract for Fire Services is cur- rently under negotiation. PERMITS AND LICENSES The City requires payment for the issuance of Building Permits, Fire Permits, and miscellaneous health and safety -related licenses and permits as approved annually by the City Council through the adoption of the Municipal Fee Schedule. RETURN ON INVESTMENT The City invests idle funds in order to earn interest. The total income varies with the market rates of interest and the funds available to invest. The basic principles underlying Palo Alto's investment philosophy is to ensure the safety of public funds; provide that sufficient money is always available to meet current expenditures; and achieve a reasonable rate of return on its investments. RENTAL INCOME The General Fund charges rent to internal and external entities. The majority of rental income is derived from the Cubberley Community Center and Enterprise Funds. REVENUE FROM OTHER AGENCIES This revenue category includes revenue received from a variety of other local government agen- cies, the state, and the federal government usually due to grants or contracts for services. CHARGES TO OTHER FUNDS The General Fund recuperates the cost for services provided by internal services departments such as Administrative Services, Council Appointees, and Human Resources to Enterprise, Inter- nal, and Special Revenue funds through allocated charges. OTHER REVENUE Major revenue sources in this category are Animal Services charges to Los Altos and Los Altos Hills, reimbursements from PAUSD for its share of Cubberley and athletic field maintenance, donations from non -profits for City libraries, and miscellaneous revenues. OPERATING TRANSFERS -IN Operating Transfers include the equity transfer from the Electric and Gas Funds. In accordance with a methodology approved by Council in June 2009, the equity transfer is calculated by applying a rate of return to the capital asset base of the Electric and Gas Funds. This rate of return is based on PG&E's rate of return on equity as approved by the California Public Utilities Commission (CPUC). 74 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Revenues by Category Charges for Services Charges to Other Funds Documentary Transfer Tax From Other Agencies Other Revenue Other Taxes and Fines Permits and Licenses Property Taxes Rental Income Return on Investments Sales Taxes Transient Occupancy Tax Utility Users Tax Subtotal Operating Transfers -In Subtotal FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 26,344 26,669 29,719 25,417 11,476 10,684 10,908 11,992 9,229 6,923 8,369 4,700 1,461 951 980 551 2,513 5,084 2,362 2,571 2,141 1,888 2,032 1,925 9,035 9,088 9,076 8,336 42,839 47,327 48,634 52,000 15,969 16,411 16,399 16,022 1,437 2,018 1,388 1,100 31,091 36,508 34,346 20,500 24,937 25,649 29,309 14,900 15,414 16,402 17,581 15,100 193,886 205,602 211,103 175,114 20,385 20,154 20,999 21,359 214,271 225,756 232,102 196,475 Development Services Reserve 0 0 Fund FY 2021 Change $ (4,300) 1,084 (3,669) (429) 209 (107) (740) 3,366 (377) (288) (13,846) (14,409) (2,481) (35,987) 360 (34,627) FY 2021 Change % (14.5)% 9.9% (43.8)% (43.8)% 8.8% (5.3)% 8.2% 6.9% (2.3)% (20.7)% (40.3)% (49.2)% (14.1)% (17.0)% 1.7% (15.4)% 0 500 500 N/A Total 214,271 225,756 232,102 196,973 (34,129) (14.7)% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 75 GENERAL FUND OVERVIEW 3 Year Trend - General Fund Revenues By Category ($000s) 60,000 50,000 40,000 30,000 20,000 10,000 11, III ... 111 _.. +e`' +ey 4a+ ,�a+ ,�a+ fie`' ee`' yes �,5 �e .\e5 ay Je .Sa ,Sa eJ es to F` tom` e� e eo 6e J6 e6 et' \e`' •J a6 05`�• eJee a6a tcie Ve e`'`. �\� Pa°e eta fie, /y� cpa oQe e.>Q ,eta \.J e`' s o at• \c• zcs ret per ret ,\ta Qt Oe .0 „,'D J�� <6 + a qo iaoeh 5 Q pC S o pe •cs �ta�ye6 oe�te6 pre Or et ��t Cote U- tie eta Q e F a pQ O • FY 2019 Actuals I FY 2020 Adopted I FY 2021 Adopted $196.4 Million/FY 2021 Budget Other Revenue 1.3% Operating Transfers -In 10.9% Chargesto Other Funds 6.1% From OtherAgencies 0.3% Rental Income 8.2% Return on Investments 0.6% Permits and Licenses 4.2% Charges for Services 12.9% OtherTaxes and Fines 1.0% Utility Users Tax 7.7% SalesTaxes 10.4% PropertyTaxes 26.5% Transient OccupancyTax 7.9% Do cureentaryTransferTax 2.4% 76 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW General Fund Expenditures by Department T Fund Summary ($000) Administrative Services City Attorney City Auditor City Clerk City Council City Manager (1) Community Services Fire Human Resources Library Non -Departmental Office of Emergency Services Office of Transportation Planning and Development Services (2) Police Public Works (3) Subtotal Transfer to Infrastructure Operating Transfers -Out Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 7,680 7,588 8,519 8,362 (157) (1.8)% 3,307 3,651 3,387 3,485 98 12.9% 1,233 1,183 1,235 828 (407) (33.0)% 1,171 1,096 1,346 1,245 (101) (7.5) % 476 369 498 419 (79) (15.9)% 3,713 3,854 4,546 3,161 (1,385) (30.5)% 27,136 28,977 30,913 28,362 (2,551) (8.3)% 33,639 33,642 34,864 33,607 (1,257) (3.6)% 3,480 3,586 3,945 3,597 (348) (8.8)% 9,121 9,288 10,314 8,421 (1,893) (18.4)% 6,402 12,177 9,024 8,235 (789) (8.7)% 968 1,238 1,728 1,357 (371) (21.5)% N/A N/A 2,312 1904 (408) (17.6)% 19,882 20,442 20,356 17,386 (2,970) (14.6)% 39,983 42,177 44,666 40,376 (4,290) (9.6)% 18,396 17,119 19,172 18,427 (745) (3.9)% 176,587 186,387 196,825 179,172 (17,653) (9.0)% 24,801 27,514 28,962 13,467 (15,495) (53.5)% 4,734 9,574 5,023 4,334 (689) (13.7% 206,122 223,476 230,810 196,973 (33,837) (14.7)% (1) The Office of Sustainability was combined with the City Manager's Office in FY 2019 and then moved to Public Works in FY 2021 (2) The Development Services Department was combined with the Planning and Community Environment Department in FY 2020 and renamed to the Planning and Development Services Department. (3) The Office of Sustainability was moved from the City Manager's Office to Public Works in FY 2021. GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 77 GENERAL FUND OVERVIEW General Fund Expenditures by Category Fund Summary ($000) FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted FY 2021 Budget Change $ FY 2021 Change % Allocated Charges Contract Services Debt Service Facilities & Equipment General Expense Rents & Leases Salary & Benefits Supplies & Material Subtotal Transfer to Infrastructure Operating Transfers -Out Total 18,842 20,382 20,889 18,311 (2,578) (12.3)% 21,144 28,966 23,429 21,953 (1,476) (6.3)% 432 431 - - - -% 399 576 771 427 (344) (44.6)% 10,062 9,258 12,090 9,103 (2,987) (24.7)% 1,560 1,640 1,734 1,862 128 7.4% 120,798 121,953 134,546 124,541 10,005 -7.4% 3,350 3,181 3,366 2,975 (391) (11.6)% 176,588 186,387 196,825 179,172 (17,653) -9.0% 24,801 27,514 28,962 13,467 (15,495) (53.5)% 4,734 9,574 5,023 4,334 (689) (13.7)% 206,122 223,475 230,810 196,973 (33,837) (14.7)% 78 GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET GENERAL FUND OVERVIEW 3 Year Trend - General Fund Expenses By Category ($000s) 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 .I. .._ �e>\5 �,`e5 e, s-\\ e��e et,\• `e ��°5 sc` as °5 `,c, ho�� ,� e e 'z' +� c. 5 .Q 0r �t� is ?' . hie era '<a' 0Q • FY 2019 Actuals • FY 2020 Adopted • FY 2021 Adopted $196.9 Million/FY 2021 Budget Transfers Allocated Charges 9.0% 9.3% Facilities & Equipment 0.2% Rents & Leases 0.9% General Expense 4.6% Supplies & Materia 1.5% Contract Services 11.1% Salary & Benefits 63.2% GENERAL FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 79 CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 81 CITY OF PALO ALTO ENTERPRISE FUNDS OVERVIEW Overview The City of Palo Alto's Utility and Public Works operations are comprised of the Airport, Elec- tric, Fiber Optics, Gas, Refuse, Stormwater Management, Wastewater Collection, Wastewater Treatment, and Water Funds. A financial summary of the funds follows this overview along with discussion and pertinent information in each fund section. REVENUES The total budgeted revenue of the Enterprise Funds for FY 2021 is $397.5 million, which rep- resents a $9.5 million, or 2.4 percent increase from the FY 2020 Adopted Budget of $388.0 mil- lion. Airport Fund revenues are expected to increase by approximately $19.3 million from FY 2020 as a result of Federal Aviation Administration (FAA) grant funding and state loan for the Apron Reconstruction project, offset by a decrease of $8.3 million in Electric retail sales due to lower projected load forecast. The FAA provides grants to public agencies for the planning and development of public -use airports and reimburses up to 90 percent of the non -salary cost of eligible projects. Utility services with rate increases for FY 2021 include Fiber Optics, Gas, and Stormwater Management. Electric, Wastewater, Water and Refuse rates will remain the same for FY 2021. Details on these changes are discussed below. EXPENDITURES The total budgeted expenditure of the Enterprise Funds for FY 2021 is $441.2 million, which rep- resents a $11.0 million, or 2.5 percent increase from the FY 2020 Adopted Budget of $430.2 mil- lion. The primary driver for this year over year change is an increase of $26.8 million in capital improvement projects from $87.0 million in FY 2020 to $113.8 million in FY 2021. In FY 2021, new funding of $19.0 million was added for the Airport Apron project as a result of FAA grant fund- ing. Utility purchase or commodity costs is $153.8 million, which represents a decrease of $15.9 million compared to $169.7 million in prior year, due to lower usage forecasts and relatively steady market -based supply costs. UTILITY RATE CHANGES The FY 2021 Adopted Budget includes utility rate adjustments for Fiber Optics, Gas and Storm - water Management. Due to the COVID-19 pandemic, Council aimed to provide economic relief for residential and commercial customers by directing staff to keep rates flat without compro- mising the safety and integrity of the utility systems and impacting service delivery. In general, the size and timing of rate adjustments account for current and future revenue requirements, capital projects and reserve levels. They may also smooth the impacts on customer bills by spreading rate adjustments during consecutive or alternate years. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 83 ENTERPRISE FUNDS OVERVIEW • Electric Fund - No rate adjustment is scheduled for FY 2021. The Electric Fund will draw down a portion of the CIP and Operating reserves to fund continuing capital infrastructure improvements and increasing transmission costs. ▪ Gas Fund - Scheduled rate increase is 2.0 percent due to increasing construction costs for gas main replacements and continuation of the Crossbore Gas Safety Program. • Water Fund - No rate adjustment is scheduled for FY 2021 due to no change in supply costs and adequate reserves for capital improvement program. ▪ Wastewater Collection Fund - No rate adjustment is scheduled for FY 2021. ▪ Fiber Optics Fund - Scheduled rate increase is 2.5 percent, based on Consumer Price Index (CPI) for All Urban Consumers in the San Francisco Bay Area, for customers on the EDF-1 rate. ▪ Stormwater Management Fund - Scheduled rate increase of 2.5 percent based on CPI for All Urban Consumers in the San Francisco Bay Area. ▪ Refuse Fund - No rate adjustment is scheduled for FY 2021. RENT Enterprise Funds pay market -based rental fees for the sites needed to conduct their business operations. Rent is adjusted on an annual basis consistent with CPI and recently the City con- ducted a study to assess the appropriate rent expense for City -owned sites. As a result of that study, FY 2021 rents were adjusted throughout the enterprise funds. Additionally, the Refuse Fund will complete its payments associated with the landfill. As a result of these actions, the net change to rent year -over -year in the Enterprise Funds is a decrease of $1.2 million, or 9.0 per- cent, from $13.1 million to $11.9 million. EQUITY TRANSFERS In FY 2009, the City Council adopted a change to the methodology, beginning in FY 2010, used to calculate the equity transfer from Utilities Funds to the General Fund. Under this methodol- ogy, the equity transfers are based on the asset base in the Electric and Gas Funds, along with the rate of return for each utility, which is based on Pacific Gas and Electric's (PG&E) rate of return on equity as approved by the California Public Utilities Commission (CPUC). For FY 2021, the equity transfers from the Electric and Gas Funds are projected to increase by approximately $0.4 million from $20.2 million to $20.6 million. RESERVES The financial revenue and expense forecasts are estimates at a single point in time. Some Utili- ties reserves serve as balancing accounts, which mitigate the risk of commodity price swings and insure against default by the City's wholesale suppliers. Other reserves are used to provide cash for capital infrastructure improvement, replacement parts during an emergency infrastruc- ture failure or serve as temporary parking for planned expenditures. Reserve levels that are above guidelines are returned to customers in the form of lower future rates or used to pay for expenses, which also result in lower future rates. Based on the actions included in this budget, the total Enterprise Fund Reserve Balances are estimated to decrease by $43.7 million, or 46.0 percent, from a projected FY 2020 total reserve 84 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW balance of $94.9 million. The use of reserves in FY 2021 has been approved to mitigate impacts of COVID-19 while minimizing utility rate increases as discussed below. UTILITIES ENTERPRISE FUNDS The City of Palo Alto Utilities (CPAU) had to rely on its reserves more heavily over the past few years to offset rate increases. In order for CPAU to cover its operating costs while maintaining and continuing to provide safe and reliable utility services to customers, rate increases are pro- jected beyond FY 2021. Rate increases will ensure CPAU has the ability to replenish depleted reserves and provide sufficient funding for continued increasing expenses in commodity costs and repair and replacement of the City's aging utility infrastructure through various capital proj- ects. Electric FY 2021 electric rates remain unchanged despite increasing transmission costs and substantial additional capital investment in the aging electric distribution system. Electricity purchase costs have increased substantially as new renewable projects have come online to fulfill the City's environmental goals and as transmission costs continue to increase to make improvements to the California energy grid. Projected capital expenses include relocation of overhead lines for Caltrain, rebuilds of existing underground districts, substation improvements, 4kV to 12kV volt- age conversion projects, foothills rebuild for fire mitigation, as well as the continuation of the Advanced Metering Infrastructure (AMI) and smart grid implementation. Once these larger, one- time project cost increases are completed, annual Capital Improvement Program (CIP) projects are anticipated to decline back to levels seen in recent years. The forecast also assumes that smart grid costs are funded from the Electric Special Projects Reserves. Gas FY 2021 gas rates are scheduled to increase by 2.0 percent due to increasing capital and opera- tion costs. In the short term, some increases in operations costs are related to the Crossbore Gas Safety Program, but CIP costs have increased substantially as the City resumes a pattern of regular main replacement. While CPAU has historically planned a new gas main replacement project every year, bids were received in amounts that exceeded originally anticipated expenses, resulting in the need to resize and redesign some previously planned projects. Higher bid amounts are attributed to the national and regional focus on gas infrastructure improve- ments, which drives market demand and increases construction costs. Future estimated CIP project costs have been revised upwards from prior forecasts to reflect higher bids on gas CIP projects. Water FY 2021 water rates remain unchanged. The San Francisco Public Utilities Commission (SFPUC) is projecting no increases in water supply rates until FY 2023. Capital projects were deferred in FY 2019 and FY 2020 leading to lower capital costs than budgeted. Many of these deferred capital projects are anticipated to be completed in FY 2021. CIP reserves are established to complete these projects while holding rates steady in future years. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 85 ENTERPRISE FUNDS OVERVIEW Wastewater Collection FY 2021 wastewater collection rates remain unchanged. Capital and operating costs are antici- pated to increase for the wastewater collection system. In addition, CPAU anticipates treatment costs to rise over the forecast period due to increasing operating costs and capital replacement needs at the Regional Water Quality Control Plant. A cost of service study is expected to be completed in FY 2021. Fiber Optics Fiber optics rates are scheduled to increase by 2.5 percent for customers on the EDF-1 rate schedule in FY 2021. CPAU provides commercial dark fiber optic services within the boundaries of the City. In September 2006, the City Council approved the Dark Fiber Licensing Agreement allowing the commercial fiber optic fees charged under the EDF-1 rate schedule to be adjusted annually in accordance with CPI. EDF-1 was a promotional rate and was closed to new dark fiber licenses in 2006. Customer expenses for engineering, construction and connection to the fiber optic backbone are charged under the EDF-2 rates. New fiber customers are enrolled under the Dark Fiber Licensing Services Rate Schedule EDF-3. As CPI increases are implemented for the EDF-1 rate, some customers may voluntarily choose to move from the EDF-1 rate to the EDF-3 rate for cost saving purposes. PUBLIC WORKS ENTERPRISE FUNDS Refuse FY 2021 refuse rates remain unchanged. FY 2022 rates are projected to increase at a rate based on CPI in conjunction with the beginning of a new agreement for garbage processing and dis- posal. Implementing initiatives from the 2018 Zero Waste Plan will continue to help the City make progress on its Zero Waste goals to divert 95.0 percent or more waste by 2030. Stormwater Management FY 2021 Stormwater Management fee is scheduled to increase by 2.5 percent. The Stormwater Management fee was approved by property owners through a ballot measure in April 2017. The projects and infrastructure component of this fee has a sunset date of June 1, 2032 unless extended through a subsequent ballot measure. The Stormwater Management Fund maintains activities that ensure adequate local drainage of the City's storm drainage system. This fund also provides litter reduction, urban pollution prevention programs, and flooding emergency response services with the goals of reducing stormwater runoff and maintaining stormwater quality protection for discharge to creeks and the San Francisco Bay. Wastewater Treatment The City's Regional Water Quality Control Plant serves six communities including Palo Alto, East Palo Alto Sanitary District, Mountain View, Stanford, Los Altos, and Los Altos Hills. The Waste- water Treatment Fund works with the City and Partner Cities' regional service area to protect the environment and the public's health while ensuring compliance with regulations protecting the San Francisco Bay. FY 2021 revenues in the Wastewater Treatment Fund are expected to decrease by approximately $17.6 million or 30.1 percent compared to FY 2020. The majority of the decrease resulted from funding sources programmed for multiple capital improvement proj- ects being postponed to FY 2022. 86 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Airport The City assumed airport operations from Santa Clara County in August 2014 for the Palo Alto Airport, which ranks among the busiest general aviation airports in the country. Airport Fund revenues from rentals of facilities and tie -downs are projected to increase by approximately $80,563 in FY 2021. The Airport's fees and charges are scheduled to increase by 2.5 percent, based on CPI. Expenses are also projected to increase due to major construction projects that are 90 percent offset by grants from the Federal Aviation Administration to complete Phase I I I of the Apron project. The Airport fund received loans from the General Fund, totaling $3.1 mil- lion. Since taking over operations from the County, the Airport Fund began a 15 -year loan repay- ment to the General Fund in FY 2020 in the amount of $272,000 annually. ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 87 ENTERPRISE FUNDS OVERVIEW Enterprise Funds Summary Fund Summary ($000) Charges for Services Charges to Other Funds Revenues 220 145 From Other Agencies Net Sales 145,996 Operating 2,645 Transfers -In Other Revenue 8,918 Other Taxes and Fines Rental Income Return on Investments Total Expenses Allocated Charges Contract Services Debt Service Equity Transfer Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Salary & Benefits Supplies & Material Transfer to Infrastructure 20 106 37,161 913 Waste water Treatm ent Fund 10 34 Wastewater Collection Fund 10 Stormwater Management Fund 118 Airport Fund Fiber Optics Fund Total 412 90 161 63 33 - - - 597 577 19,289 - 19,865 44,004 30,732 30,852 21,415 7,635 627 4,716 323,139 557 - - - - - - 3,202 1,288 2,311 28,900 302 1,094 200 43,926 - 4 3 7 - 801 - 801 2,064 622 989 489 316 244 153 3 647 5,527 159,988 38,822 47,516 33,727 60,134 22,005 7,909 21,813 5,563 397,477 9,417 4,785 4,840 1,649 5,789 2,863 1,298 605 756 32,002 6,377 2,441 800 6,497 3,819 249 915 140 455 21,693 8,443 803 3,223 197 1,469 129 949 15,212 13,479 7,114 20,593 27 2 1 3 8 3 8 - - 51 3,442 778 670 112 432 123 147 36 12 5,753 50 415 136 20 279 5 272 102 1,279 6,389 610 3,396 1,013 22 352 25 12 54 11,872 19,461 7,928 8,431 2,941 13,573 3,421 2,247 878 1,448 60,328 924 495 618 143 1,970 381 94 56 9 4,690 - 37 - - - 37 Utility Purchase 88,084 14,051 20,621 19,799 11,256 - 153,811 88 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Funds Summary T Electric Fund T Gas Fund Refuse Fund Waste water Treatm ent Fund Capital Improvement 27,308 9,283 14,719 — 32,657 Program Total Wastewater Stormwater Collection Management Airport Fund Fund Fund 4,842 Fiber Optics Fund Total 4,185 19,360 1,510 113,864 183,402 48,706 57,456 32,411 59,737 23,897 9,872 21,359 4,345 441,185 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 89 ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS REVENUES BY FUND ($THOUSANDS) $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Gas Fund Water Fund Refuse Fund WW WW Treatment Collection Fund Fund Electric Fund Electric Fund $160.0 /40.3% Fiber Optics Fund $5.6 /1.4% Airport Fund $21.8 /5.5% Stormwater Management Fund $7.9 /2.0% -L Stormwater Airport Fund Fiber Optics Management Fund Fund FY 2019 Actuals FY 2020 Adopted FY 2021 Adopted FY 2021 REVENUES/$397.5 MILLION • 111 - WW Collection Fund $22.0 /5.5% Gas Fund $38.8 /9.8% Water Fund $47.5 /12.0% Refuse Fund $33.7 /8.5% WW Treatment Fund $60.1 /15% 90 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW 3 YEAR TREND - ENTERPRISE FUNDS EXPENSES BY FUND ($THOUSANDS) $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 dFdl Electric Fund Gas Fund Water Fund Refuse Fund WW Treatment Collection Fund Fund ' -� WW Stormwater Airport Fund Fiber Optics Management Fund FY 2019 Actuals FY 2020 Adopted FY 2021 Adopted Electric Fund $183.4/41.6% Fiber Optics Fund $4.3/1.0% Airport Fund $21.4/4.9% Stormwater Management Fund $9.9/2.2% FY 2021 EXPENSES /$441.2 MILLION WW Collection Fund $23.9/5.4% Gas Fund $48.7/11.0% Water Fund $57.5/13.0% Refuse Fund $32.4/7.3% WW Treatment Fund $59.7/13.5% Fund ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 91 ENTERPRISE FUNDS OVERVIEW Enterprise Fund Reserves Reserves ($000) Electric Fund FY 2020 Projected Ending Balance FY 2021 Changes FY 2021 Projected Ending Balance FY 2021 Reserve Guideline Range Operations Hydro Stabilization Electric Special Projects Public Benefit Underground Loan CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve 55,327 (28,413) 26,914 30,100 - 60,300 11,400 0 11,400 41,665 5,000 46,665 810 0 810 727 0 727 880 0 880 (31,323) 0 (31,323) (14,156) 0 (14,156) Subtotal 65,330 (23,413) MI 41,917 Gas Fund • Rate Stabilization 2,534 0 2,534 Operations 13,117 (6,064) 7,053 8,000 - 16,000 CIP Reserves 3,820 (3,820) 0 GASB 68 Pension Reserve (13,824) 0 (13,824) GASB 75 OPEB Reserve (6,230) 0 (6,230) Subtotal (583) (9,884) Mr (10,467) Wastewater Collection Fund ■ Rate Stabilization 342 0 342 Operations 3,933 (915) 3,018 3,900 - 9,800 CIP Reserves 978 (978) 0 GASB 68 Pension Reserve (7,827) 0 (7,827) GASB 75 OPEB Reserve (2,382) 0 (2,382) Subtotal (4,956) (1,893) (6,849) 92 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund 'Reserves Reserves ($000) FY 2020 Projected Ending Balance FY 2021 Changes FY 2021 Projected Ending FY 2021 Reserve Balance Guideline Range Water Fund Rate Stabilization Operations CIP Reserves GASB 68 Pension Reserve GASB 75 OPEB Reserve 4,069 0 4,069 26,526 (9,941) 16,585 9,400-18,900 2,726 0 2,726 (13,076) 0 (13,076) (4,346) 0 (4,346) Subtotal 15,899 (9,941) 5,958 Refuse Fund Rate Stabilization 15,822 Landfill Corrective Action Reserve 741 Geng Road Reserves 268 GASB 68 Pension Reserve (5,374) GASB 75 OPEB Reserve (2,651) 1,316 0 0 0 0 17,138 741 268 (5,374) (2,651) 5,300 - 10,700 Subtotal 8,806 1,316 10,122 Stormwater Management Fund Rate Stabilization 3,726 (1,963) 1,763 GASB 68 Pension Reserve (3,501) 0 (3,501) GASB 75 OPEB Reserve (1,157) 0 (1,157) Subtotal (932) (1,963) (2,895) Wastewater Treatment Fund Rate Stabilization 7,612 Emergency Plant Replacement 1,980 Notes and loans 559 397 8,009 9,800 - 19,600 0 1,980 0 559 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 93 ENTERPRISE FUNDS OVERVIEW Enterprise Fund 'Reserves lEr Reserves ($000) GASB 68 Pension Reserve GASB 75 OPEB Reserve Subtotal FY 2020 Projected Ending Balance (19, 716) (7,333) (16,898) FY 2021 Changes 0 0 FY 2021 Projected Ending Balance (19,716) (7,333) Mik(16,501) FY 2021 Reserve Guideline Range Fiber Optics Fund Rate Stabilization Emergency Plant Replacement GASB 68 Pension Reserve GASB 75 OPEB Reserve 32,538 1,000 (2,002) 0 1,218 33,755 0 1,000 0 (2,002) 0 0 700-1,400 Subtotal 31,536 1,218 'Mr32,753 Airport Fund Rate Stabilization GASB 68 Pension Reserve GASB 75 OPEB Reserve (2,147) (684) (431) 454 (1,693) 0 (684) 0 (431) Subtotal (3,262) 454. (2,808) TOTAL RESERVES 94,939 (43,709) 230 Summary of Reserves Emergency Plant Replacement Hydro Stabilization Rate Stabilization Operations CIP Reserves Geng Road Reserve Electric Special Projects 2,980 11,400 64,496 98,902 8,404 268 41,665 0 2,980 0 11,400 1,422 65,918 (45,333) 53,569 (4,798) 3,606 0 268 5,000 46,665 94 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET ENTERPRISE FUNDS OVERVIEW Enterprise Fund 'Reserves Reserves ($000) FY 2020 Projected Ending Balance FY 2021 Changes FY 2021 Projected Ending Balance FY 2021 Reserve Guideline Range Public Benefit Notes and loans Underground Loan Landfill Corrective Action Reserve GASB 68 Pension Reserve GASB 75 OPEB Reserve 810 559 727 741 (97,327) (38, 686) 0 0 0 0 0 0 810 559 727 741 (97,327) (38, 686) TOTAL RESERVES 94,939 (43,709) 51,230 Landfill Postclosure Care Liability 6.975 126 7.101 TOTAL RESERVES AND FULLY - FUNDED LIABILITY 101,914 (43,583) 58,331 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 95 ENTERPRISE FUNDS OVERVIEW Resic ential Monthly Utility Cost Information $ Difference % Difference Electric Gas Water Wastewater Refuse Storm Drain User Tax 57.31 64.00 90.42 41.37 50.07 14.68 10.59 57.31 64.53 90.42 41.37 50.07 15.05 10.61 0.00% 0.53 0.83% 0.00% 0.00% 0.00% 0.37 2.52% 0.02 0.19% Total Monthly Bill 328.44 329.36 0.92 0.28% 1. FY 2021 Rates are effective July 1, 2020. 2. Rate change displayed is the system average change and impact to individual customers. 96 ENTERPRISE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET LRjohn Lucas EER of Pato Val ,'"• f '^� CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 97 CITY OF PALO ALTO INTERNAL SERVICE FUNDS OVERVIEW Overview Internal Service Funds provide services to City departments and recover their costs through user charges. Charges for employee benefits (health, pension, life insurance, etc.) and workers' compensation are reflected in the departments' salary and benefit accounts. The remaining user charges are included in the 'allocated charges' expenditure category within each department or fund. GENERAL BENEFITS FUND This fund reflects costs for a variety of employee benefits including pension, health, dental, vision, and life insurance. Funds are also included for payments made to employees who elect to waive healthcare coverage under a City plan because they have other coverage. As discussed in the overview of this fund that appears in the 'Employee Information' section, costs for employee health benefits as well as pension benefits are projected to increase in Fiscal Year (FY) 2021 and will be allocated out to departments and funds in proportion to their share. In addition, the FY 2021 Adopted Budget continues to incorporate City Council's direction to make additional contributions to the City's irrevocable IRS Section 115 Pension Trust Fund. The Gen- eral Benefits Fund displays the total Section 115 Pension Trust Fund contribution. GENERAL LIABILITIES INSURANCE PROGRAM FUND This fund reflects costs for the City's General Liability Insurance Program. In FY 2021, costs are projected to increase compared to the FY 2020 Adopted Budget. This increase is based on an actuarial analysis of the City's liability costs over the past few years and provides an 85 percent confidence level in the funding levels of the fund. This will ensure that the General Liabilities Insurance Program fund has the necessary resources to deal with unforeseen claims. The alloca- tion of these charges is reevaluated annually as part of the budget process to ensure that suffi- cient resources are available and that the fund balance is maintained at an appropriate level. PRINTING AND MAILING SERVICES FUND This fund reflects costs for central copying, printing, and mailing services provided to City departments. An overview of the Fund is included in the 'Administrative Services Department' section of this document. RETIREE HEALTH BENEFITS FUND This fund reflects costs for medical insurance provided to retired City employees. In addition, this fund includes payments for the unfunded liability for future medical benefits that will be provided to current and future retirees. An overview of the Fund is included in the 'Employee Information' section of this document. INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 99 INTERNAL SERVICE FUNDS OVERVIEW TECHNOLOGY FUND This fund reflects costs associated with citywide Information Technology (IT) activities. IT staff maintain critical desktop, software, infrastructure, and maintenance activities for all City depart- ments. An overview of the Fund is included in the 'Information Technology Department' section of this document. VEHICLE REPLACEMENT AND MAINTENANCE FUND This fund reflects costs for providing maintenance and replacement of vehicles and equipment used by City departments. In FY 2021, $5.8 million is allocated for vehicles and equipment that are due for replacement. Of the $5.8 million, $4.2 million is for the continuation of projects approved by City Council in prior fiscal years. The 2021-2025 Capital Improvement Program (CIP) reflects funding totaling $16.5 million over the next five years for vehicle replacements. The current reserve balance in the Vehicle Replacement and Maintenance Fund reflects funding allo- cated from City departments and committed to this five year plan. WORKERS' COMPENSATION FUND This fund reflects costs for the City's Workers' Compensation program. In FY 2021, costs are projected to increase compared to the FY 2020 Adopted Budget based on an actuarial analysis of the City's workers' compensation costs over the past few years and in order to provide an 85 percent confidence level in the funding levels of the fund. This will ensure that the Workers' Compensation Fund has the necessary resources to deal with unforeseen claims. The allocation of these charges is reevaluated annually as part of the budget process to ensure that sufficient resources are available and that the fund balance is maintained at an appropriate level. 100 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INTERNAL SERVICE FUNDS OVERVIEW Internal Service Funds Summary Fund Summary ($000) Vehicle Replacement and Maintenance Fund Printing and Mailing Services Revenues Charges to Other Funds 7,285 12,322 1,633 Operating Transfers -In 50 1,340 Other Revenue 155 18 Return on Investments 239 549 - Total 7,730 14,229 1,633 Expenses General Benefits Fund Workers' Compensation Program Fund 76,496 5,078 363 475 76,859 5,553 General Liabilities Insurance Program Fund 2,892 5 41 168 3,106 Retiree Health Benefit Fund Total 24,132 2,347 3,742 13,577 95,365 64 1,858 15,988 125,096 Allocated Charges 1,176 1,661 363 3,200 Contract Services 624 4,653 60 221 7 72 5,637 Facilities & Equipment 557 557 General Expense 71 442 302 - 650 4,074 - 5,539 Operating Transfers 121 31 - 2,347 - - - 2,499 Out Rents & Leases 337 401 402 - 1,141 Salary & Benefits 2,138 7,558 240 73,654 6,289 15,986 105,865 Supplies & Material 1,465 85 175 - - - - 1,725 Transfer to 745 - - - - - - 745 Infrastructure Capital Improvement 6,165 1,624 7,789 Program Total 12,842 17,013 1,541 76,222 6,947 4,146 15,986 134,697 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 101 INTERNAL SERVICE FUNDS OVERVIEW Internal Service Funds Reserves Vehicle Replacement and Maintenance Fund Technology Fund Printing and Mailing Services Retiree General Workers' Liability Health Benefits Compensation Insurance Benefit Fund Program Fund Fund Fund Total Internal Service Funds Changes to Unrestricted Assets June 30, 2020 Projected Unrestricted Assets FY 2021 Adopted Changes 8,729 18,353 2,918 1,756 *2,469 38,770 (5,113) (2,784) 92 L 637 (1,394) (1,040) 2 I (9,600) June 30, 2021 Projected Unrestricted Assets 3,616 15,569 ® 716 2,471 29,170 102 INTERNAL SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 103 CITY OF PALO ALTO SPECIAL REVENUE FUNDS OVERVIEW Overview Special Revenue Funds have revenues with either restriction on their use or special reporting requirements, such as development impact fees for community centers, libraries, parks, public facilities, and transportation; gas tax revenues from the state; housing mitigation fees assessed on commercial and industrial projects; in -lieu fees for the City's Below Market Rate (BMR) hous- ing program; transportation mitigation fees paid by developers; parking in -lieu fees from com- mercial projects in the downtown area; parking permit revenues; and Community Development Block Grants (CDBG) from the federal government. PUBLIC ART FUND Administered by the Community Services Department, the Public Art Fund was created in FY 2014 to support the City's Public Art Program. The program seeks to increase the public's daily exposure to art through the commissioning and acquisition of a diverse range of artworks inte- grated into the City's urban environment. The Public Art Program strives to build the City's rep- utation as a dynamic public art locale with works of diverse styles, disciplines, and the highest aesthetic standards. Funding for the Public Art Program is determined by the Municipal Code's direction of 1 percent for Art in Private Development. Construction projects over 10,000 square feet that require Architectural Review and have an estimated construction value of more than $200,000 have the option of commissioning artwork on the development site equal to the cost of 1 percent of the estimated construction valuation or paying the 1 percent to the Public Art Fund. In FY 2021, the projected revenue for the Public Art Fund is $200,000 and includes a transfer of $170,000 from the General Fund to comply with requirements that limit the adminis- tration costs that are funded through fees. Additionally, although not accounted for in this fund, the City requires that for specific City -funded capital projects a 1 percent public art expense is set aside (please refer to the Art in Public Space capital project (AC -86017) in the FY 2021 Adopted Capital Budget for further detail). COMMUNITY DEVELOPMENT FUNDS Revenue in this category comes from Development Impact Fees for community centers, librar- ies, parks, public facilities, and transportation. The Development Impact fees collected from new developments provide funding for the City's infrastructure related to community centers, librar- ies, parks, public safety facilities, general government facilities, and the Charleston-Arastradero Corridor. The projected revenue within the Community Development Impact Fee Funds is $675,000 in FY 2021, primarily reflecting anticipated receipts in the Park Impact and Parkland Dedication Funds. The FY 2021 Adopted Capital Budget includes transfers of $6.0 million for the completion of Byxbee Park ($2.4 million), improvements at Rinconada Park ($2.4 million), design and construction of a new Public Safety building ($350,000), installation of restrooms at City parks ($350,000), an Automated Material Handling (AMH) systems to sort returned Library SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 105 SPECIAL REVENUE FUNDS OVERVIEW materials ($260,000), building and renovation of dog parks ($150,000), and renovations to the Junior Museum and Zoo ($125,500). Annually, the Administrative Services Department issues a report of the activities in these funds, including the remaining balances within them. The 2019 annual report ending June 30, 2019, is included in CMR 10796 found here: www.cityofpaloalto.org/civicax/filebank/documents/74854 STREET IMPROVEMENT FUNDS (SIF) Revenue in this category comes from the state gas tax, including estimated receipts from the recently approved S.B.1 transportation funds and federal and state grants earmarked for street improvements. These funds are used for transportation and traffic -related capital projects. Pre- liminary estimates from the State Department of Finance in May 2020 projected revenues at an estimated $2.8 million. These receipts include adjustments to Highway Users Tax Account (HUTA) allocations and the new S.B. 1 transportation funding bill, effective July 1, 2017. Under S.B. 1, it is anticipated that the City is allocated a total of $1.2 million in revenue from the Road Maintenance and Rehabilitation Account (RMRA). Repayments from the State General Fund were received over three years at $80,000 per year, ending FY 2020. In FY 2021, $2.6 million is programmed to be transferred to the Capital Improvement Fund for various citywide transportation projects that include projects for street maintenance and safe routes to school. The City achieved its primary goal of reaching a citywide average Pavement Condition Index (PCI) score of 85 in 2018, three years earlier than the initial goal; however, fund- ing is maintained through the 2021 - 2025 Capital Improvement Plan to work towards the City's secondary street maintenance goal of having no streets under a PCI score of 60. FEDERAL AND STATE REVENUE FUNDS The Federal and State Revenue Funds consist primarily of Community Development Block Grant (CDBG) funds. The City of Palo Alto receives funds annually from the U.S. Department of Housing and Urban Development (HUD) as an entitlement City under the CDBG program. This is the principal Federal program that provides funds to the CDBG Program to expand and main- tain affordable housing supply, promote housing opportunities, improve and maintain commu- nity facilities, and increase economic opportunities for persons of low and moderate -income. CDBG project expenditures draw upon program income and prior year allocations that have been unspent. The CDBG action plan for FY 2021 included an allocation of $1.1 million and was approved by the City Council in June 2020 to be finalized and submitted by the extended August 16, 2020 dead- line (CMR 11148). This amount includes agency requests of $851,000 and a $295,000 grant from the Coronavirus Aid, Relief, and Economic Security act (CARES) to provide rent relief, food assistance, and COVID-19 testing and equipment. A more detailed presentation of the FY 2021 Budget for the CDBG Fund is available at the end of the Special Revenue Funds Overview section. 106 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW HOUSING IN -LIEU FUNDS In -lieu housing revenues come from fees required of commercial, industrial, and residential developers. These fees are used to provide housing for the City's Subsidized Housing Program. For FY 2021, $2.3 million in in -lieu fees are anticipated. These estimates remain constant from FY 2020 and are based on historical tracking and Planning and Development Services (PDS) Department staff projections. Annually, the Administrative Services Department issues a report of the activities in these funds, including the remaining balances within them. The 2019 annual report ending June 30, 2019, is included in CMR 10796 found here: www.cityofpaloalto.org/civicax/filebank/documents/74854 As of June 30, 2019, these funds had a balance of $51.6 million. The majority of this funding is committed to projects in progress. SPECIAL DISTRICTS FUNDS Special District Funds reflect the combined financial activity of the following funds: University Avenue Parking District Fund, California Avenue Parking District Fund, and Residential Preferential Parking (RPP) Fund. This grouping does not include Assessment District Funds. Revenue in these funds, generated from parking permits and citations, is used for maintenance, repair, enforcement, and beautification of parking facilities and public areas within the Univer- sity and California Avenue business districts and RPP districts. As of FY 2021, six neighborhoods are active in the RPP program, which seeks to mitigate parking congestion in Palo Alto neigh- borhoods: College Terrace, Downtown, Evergreen Park/Mayfield, Crescent Park, Southgate, and Old Palo Alto (approved as a one-year pilot by City Council on October 21, 2019, in staff report 10612). In FY 2021, the new California Avenue parking garage will be opening to the public. This will add 345 new available employee parking permits, which is enough to accommodate the entire exist- ing waitlist. With this new garage coming online, additional revenue and expenses will occur in the California Avenue Parking Fund. One such additional cost is the increased custodial services needed to maintain the cleanliness of this new public space. A more detailed presentation of the FY 2021 Budget for the California Avenue Parking Fund is available at the end of the Special Revenue Funds Overview section. The FY 2020 budget established a separate Office of Transportation (OOT) situated in the City Manager's Office. Transportation was previously a division in the Planning and Development Services Department; this change was in recognition of the significant need to develop and implement strategies that address the City Council priority to improve mobility and resolve traf- fic and transportation challenges. Additional information about the establishment and current operations of OOT can be found in the subsequent section for City Departments within the City Manager's Office. This FY 2021 budget also includes a 2.6 percent increase, the General Rate of Increase (GRI) for FY 2021, to Employee Parking Permit rates in the University Avenue and Downtown areas. Employee Parking Permit rates are recommended to increase from $806 to $830 per year in University Avenue and Downtown RPP district and $403 to $620 per year in California Avenue, SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 107 SPECIAL REVENUE FUNDS OVERVIEW Evergreen Park/Mayfield RPP district, and Southgate RPP district. A price increase is not rec- ommended in FY 2021 to annual residential parking permits so these permits will remain at $50. A policy change to charge for the first residential parking permit is included, as approved by the City Council on May 13, 2020, and discussed in further detail below. A more detailed presenta- tion of parking fees can be found in the FY 2021 Municipal Fee schedule. During the FY 2021 budget hearings the City Council approved several programmatic changes to the RPP program in order to improve cost recovery and maintain the RPP Fund's solvency. These changes are detailed in this at -places memo, as provided to the City Council on May 13, 2020: www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=86391.49&BIoblD=76681. Changes included decreases in ongoing operating expenses due to a shift to License Plate Reader (LPR) parking enforcement in the RPP districts, one-time expenses to purchase neces- sary equipment to support the implementation of LPR and correct RPP signage, and revenue estimate increases due to increased citations and a policy change to no longer provide a free first residential parking permit. This FY 2021 Adopted Budget includes the following significant actions: ▪ Extend the temporary 0.48 part-time Administrative Specialist II to provide customer support services during the implementation and transition to the new parking management software system (6-12 months, $34,750 one-time); ▪ Continue to provide funding to the Transportation Management Association (TMA) to support the reduction of single -occupancy vehicles (SOV) rates in Palo Alto. ($453,000 one-time); • Provide support to businesses in response to COVID-19 ($297,000 one-time); • Increase permit sales revenue estimates by $5,900 in University Avenue, $524,900 in California Avenue, and $110,000 in Residential Preferential Parking Funds to reflect parking permit increases (ongoing); • Increase permit sales revenue estimates by $154,000 in the RPP Fund to reflect the FY 2021 policy change to no longer provide the first residential parking permit free (ongoing); ▪ Increase citation revenue estimates by $110,000 in the RPP Funds to reflect the enforcement of 'no re -parking' in the RPP districts, (ongoing); • Reduce contract expenses by net $256,800 to reflect the programmatic changes brought forward during the FY 2021 budget hearings including decreasing enforcement and permitting contract expenses (-$486,800, ongoing) and a one-time expense adjustment to purchase License Plate Reader (LPR) equipment and sign overlays necessary to enforce 'no - parking', totaling ($230,000, one-time); and ▪ Capital improvement investments in FY 2021 through a transfer of $100,000 from the University Avenue Parking Fund to the General Capital Improvement Fund for the University Avenue Parking Improvements project. The transfer is relatively low because these funds are supporting no new projects, and several existing projects have had their timelines pushed out. Additional project details can be found in the FY 2021 Adopted Capital Budget. The ability of these funds to meet future cash flow needs will be significantly impacted by existing projects in the pipeline and the design and complexity of the elements of the corn - 108 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW prehensive parking strategy, including permit pricing. In the upcoming year, staff will continue to develop and implement potential strategies for the organization and scaling of a comprehen- sive parking strategy. In order to strategically manage existing projects and programs in the pipeline and to enact a comprehensive parking strategy, a pause on new projects and initiatives is still recommended in the upcoming fiscal year to allow staff to fill critical vacancies and assess the various programs. A more detailed presentation of the FY 2021 Budget for the University Avenue Parking District Fund and California Avenue Parking District Fund is available at the end of the Special Revenue Funds Overview section. TRAFFIC MITIGATION AND PARKING IN -LIEU FUNDS Traffic mitigation fee revenue is derived from fees paid by developers of new, non-residential projects to alleviate additional traffic congestion resulting from new development. Parking in - lieu fees result from commercial projects in assessment district areas, which contribute a fee for parking spaces in lieu of providing the required spaces within the project area itself. In FY 2021, $275,000 in traffic mitigation and parking in -lieu fees are anticipated. These estimates remain steady with 2020 revenues and are based on historical tracking and Office of Transportation (OOT) staff projections. The FY 2021 - 2025 Capital Improvement Plan includes a transfer of $400,000 in FY 2021 for improvements to traffic signals. Of note, the City Council approved recommendations on April 22, 2019 (CMR 9531) to phase out all but one of the area -specific transportation impact fees and transition to a single citywide fee. The full staff report detailing these actions can be found here: www.cityofpaloalto.org/civicax/filebank/documents/70517 PUBLIC BENEFIT FUNDS Revenue in these funds is a result of a senior housing project on Hamilton Avenue and contribu- tions and mitigation fees paid for Planned Community Zone approvals. The Hamilton Avenue funds will continue to be used by Avenidas (formerly Senior Coordinating Council) to provide services to seniors. DOWNTOWN BUSINESS IMPROVEMENT DISTRICT (BID) The Downtown Business Improvement District (BID) was established by an ordinance adopted in January 2004 to promote the economic revitalization and physical maintenance of the Palo Alto Downtown business district. The Council appointed the Board of Directors of the Palo Alto Downtown Business and Professional Association (PADBPA), a non-profit corporation, as the Advisory Board for the BID to advise the Council on the method and basis for levy of assess- ments in the BID and the expenditure of revenues derived from the assessments. In prior years, the BID has focused on street cleanliness, creating a safe downtown, and providing events and communication tools that bring business downtown. In 2020 the novel coronavirus (COVID-19) pandemic caused significant economic impacts to local businesses. Concerning these impacts, the City Council adopted a resolution in May 2020 that rescinded the levy of assessments for the BID in calendar year 2020 and reimbursed pay- ments made by businesses during the period (CMR 11219). The PADBPA typically uses fees col- lected through the BID assessment for programs and activities. With no collections in FY 2020, SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 109 SPECIAL REVENUE FUNDS OVERVIEW a $70,000 subsidy from the General Fund was required. Staff continues to confirm necessary expenditures and anticipates returning to the City Council with an action plan for the upcoming period for review and approval. The FY 2021 Adopted budget maintains FY 2020 funding levels, and any necessary budget adjustments as a result of the finalized action plan will be brought forward as a budget amendment. The most recent action plan for FY 2019-20 was included in CMR 10315 and can be found here: www.cityofpaloalto.org/civicax/filebank/documents/72074 STANFORD UNIVERSITY MEDICAL CENTER (SUMC) In 2011, the City of Palo Alto entered into a Development Agreement between the City of Palo Alto and the Stanford University Medical Center Parties (SUMC). Funds received in FY 2012 as part of this agreement were used in FY 2013 - 2014, and beyond as outlined in the agreement and approved by the City Council. In FY 2018, the City received the final payment of $11.8 mil- lion, for a total amount of $44.3 million throughout the development agreement. The funds received per the development agreement are allocated for specific purposes, which include funding for the 2014 City Council approved Infrastructure Plan. As outlined in the agreement, expenses and revenues for each category must be accounted for separately. Annually the Planning and Development Services Department, formerly the Planning and Com- munity Environment Department, issues a report of activities during the prior period for Council review to ensure compliance with the agreement. Staff anticipates bringing forward the annual report for 2017-2018 in FY 2021. The most recent annual report for the 2016-2017 period is included in CMR 8999 found here: www.cityofpaloalto.org/civicax/filebank/documents/65285 Community Health and Safety: Funds are to be distributed to selected community health pro- grams that benefit residents of the City. The projected beginning balance in this category is $2.8 million. There are no planned transfers in FY 2021 to the Capital Improvement Fund. Stanford Hospital Expansion Cost Mitigation: Funds are being held in this category to assure that City costs associated with the project do not exceed revenues to the City and ensure cost neutrality of the development. The projected beginning balance for this category is $2.9 million. The FY 2021 Adopted Capital Budget includes a $500,000 transfer for railroad grade separa- tion and safety improvements. Intermodal Transit: Funds are to enhance the pedestrian and bicycle connection from the Transit Center to the El Camino/Quarry Road intersection. The projected beginning balance in this cat- egory is $1.2 million. There are no planned transfers in FY 2021 to the Capital Improvement Fund. Quarry Road Improvements: Funds are to improve and enhance the public right-of-way at the pedestrian and bicycle connection from El Camino to Welch Road along Quarry Road. Begin- ning in FY 2019, there is no longer a fund balance in this category. The remaining funding for Quarry Road Improvements and Transit Center Access will be expended from the Intermodal Transit Fund in future periods, consistent with the development agreement and recognizing cost increases incurred as a result of Quarry Road delays and mobilization of two separate proj- ects rather than one combined project as initially planned. 110 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing: Funds in this category are to be used in connection with infrastructure, sustainable neighborhoods and communities, and affordable housing. The projected beginning balance in this category is $10.9 million. The FY 2021 Adopted Capital Improvement Budget includes a $1.5 million transfer for the replacement of Fire Station four ($750,000) and the design and construction of a new Pub- lic Safety building ($800,000). Climate Change: Funds are to be used for projects and programs for a sustainable community, including programs identified in the City's Climate Action Plan. The projected beginning balance for this category is $2.8 million. The FY 2021 Adopted Capital Improvement Budget includes a $1.2 million transfer for the Bicycle and Pedestrian Plan -Implementation Project. A more detailed presentation of the FY 2021 budget for the Stanford University Medical Center Fund is available at the end of the Special Revenue Funds Overview section. SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 111 SPECIAL REVENUE FUNDS OVERVIEW Special Revenue Summary by Fund Type Fund Summary ($000) Revenues Corn. Dev. Funds Bus. Improv. District Housing In -Lieu Funds Street Improv. Fund Federal & State Rev. Funds Special District Funds Traffic Mitig. & Parking In -Lieu Funds Stan. Univ. Medical Center Fund 1,149 Charges for Services From Other Agencies Net Sales Operating Transfers -In Other Revenue Other Taxes and Fines Permits and Licenses Property Taxes Rental Income Return on Investments Total Expenses Allocated Charges 2 1 2 299 305 Contract Services 247 2,329 2,576 General Expense 1 148 53 1,055 799 2,056 Operating - - - - 364 - 130 - - 494 Transfers -Out Salary & Benefits 199 57 88 1,468 1,811 Supplies & 121 121 Material 200 170 16 386 673 337 1,010 - 2,345 140 9 463 140 2,817 2,834 9 2,843 796 2,360 400 136 260 - 3,180 7 109 939 6,310 276 260 370 536 370 3,631 2,360 570 2,481 260 3,180 140 9 1,571 15,351 Transfer to - 6,035 - - 2,591 - 100 400 3,250 12,376 Infrastructure Total 202 6,035 148 358 2,954 1,145 5,246 400 3,250 19,738 112 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Consolidated Special Revenue Funds Fund Summary ($000) REVENUES FY 2018 Actuals Gas Tax Federal CDBG Housing In -Lieu Traffic Mitigation Fees Developer Impact Fees Parking Mitigation Fees BID Assessment SUMC Interest Income Other Revenue Subtotal Revenue FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 1,858 2,602 2,891 2,834 363 687 393 501 108 27.48% 1,145 5,613 2,150 2,150 3,077 2,301 276 276 1,296 2,212 673 673 3,643 4,505 4,728 5,801 1,073 22.69% 72 58 140 140 11,745 1,525 1,909 1,185 1,571 386 32.57% 717 1,117 375 835 460 122.67% 12,811 14,781 1,970 15.38% FY 2021 Change $ FY 2021 Change % 25,440 21,004 (57) (1.97)% Transfers In General Fund 426 453 453 489 36 7.95% Technology Fund 21 24 24 27 3 12.50% Utility Admin Fund 48 47 47 55 8 17.02% Subtotal Operating Transfers In Total Source of Funds EXPENDITURES General Expense Subtotal Expenditures 495 25,935 524 21,528 524 13,335 571 15,352 47 2,017 8.97% 15.13% 22,031 8,056 8,439 6,896 (1,570) (18.60)% 22,031 8,056 8,439 6,896 (1,760) (18.6)% Transfers Out General Fund 739 565 500 494 (6) (1.30)% CapitallmprovementFund 10,696 4,886 26,377 12,376 (14,001) (53.08)% General Benefits - 11 13 - (13) (100.00)% Subtotal Operating Transfers Out Total Use of Funds Net To (From) Reserves 11,435 33,465 (7,530) 5,462 13,518 8,010 26,890 35,329 (21,994) 12,869 19,738 (4,386) (14,021) (15,591) 17,608 (52.14) % (44.13) % (80.06) % SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 113 SPECIAL REVENUE FUNDS OVERVIEW Community Development 3lock Grant 11M - Community Development Block Grant Fund SOURCE OF FUNDS Housing & Urban Development, current year Housing & Urban Development, prior years Prior Year Excess/Reallocation (1) CDBG Coronavirus (CV) Grant Program Income Palo Alto Housing Corporation TOTAL SOURCE OF FUNDS USE OF FUNDS Public Service Palo Alto Housing Corporation - SRO Resident Support Services Catholic Charities - Long -Term Care Ombudsman YWCA/Support Network - Domestic Violence Services LifeMoves (formerly InnVision) - Opportunity Service Center Silicon Valley Independent Living - Housing and Emergency Services Subtotal: Public Service Planning and Administration Project Sentinel/Fair Housing Services City of Palo Alto - CDBG Administration includes 0.10 FTE & 0.48 Hourly CDBG Administrative Staff Subtotal: Planning and Administration FY 2020 Adopted Budget 499,868 88,661 136,049 FY 2021 Agency Requests 724,578 31,831 10,000 5,000 31,832 12,000 29,220 10,000 5,000 29,220 12,000 FY 2021 Adopted Budget 501,355 213,167 294,909 136,049 1,145,480 29,220 10,000 5,000 29,220 12,000 90,663 85,440 85,440 37,940 89,243 37,480 90,000 37,480 90,000 127,183 127,480 127,480 Housing, Economic Development, Capital Projects, & Public Facilities Downtown Streets Team/Workforce Development MayView Community Health Center Habitat for Humanity - Minor Home Repair Palo Alto Housing - Alma Place Subtotal: Housing, Economic Development & Capital Projects 361,473 145,259 336,400 151,301 149,950 506,732 637,651 236,000 149,950 385,950 Rent Relief Assistance LifeMoves (formerly InnVision) - Opportunity Service Center 294,000 114 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Community Development dock Grant Community Development Block Grant Fund FY 2020 Adopted Budget FY 2021 Agency Requests FY 2021 Adopted Budget YWCA/Support Network - Domestic Violence Services Silicon Valley Independent Living - Housing and Emergency Services 10,000 75,000 Subtotal: Rent Relief Assistance - 379,000 Food Assistance Downtown Streets Team/Food Closet Program 100,000 Subtotal: Food Assistanc • 100,000 COVID-19 Testing and PPE Equipment MayView Community Health Center 67,610 Subtotal: COVID-19 Testing and PPE Equipment 67,610 TOTAL USE OF FUNDS 724,578 850,571 1,145,480 (1) Funds received in excess of revenue estimate for local program income (prior fiscal years) SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 115 SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund ■ Revenues Permit Sales Day Passes Ticket Machine Transfer from Other Funds for City Share 380,250 380,250 Investment Income FY 2020 Adopted 2,372,000 FY 2020 Adjusted 2,277,100 675,000 579,800 215,000 386,900 Total Revenue 68,200 3,710,450 68,200 3,692,250 Expenditures Administration Positions 1.66 1.66 Salaries & Benefits 249,261 189,728 Contract Staffing 182,248 173,071 Parking Occupancy Services Miscellaneous Supplies Ticket Machine (bankcard services, transmission, maintenance) Subtotal Administration 77,031 32,772 21,048 21,048 28,100 557,688 Maintenance Positions 3.87 Salaries & Benefits 547,542 456,469 Supplies 60,090 Twinkle/Tree Lights 30,000 30,000 Landscaping 28,100 444,719 3.87 60,090 Maintenance (garage, elevator, fire sprinkler) Custodial (janitorial services, power washing, sweeping) Steam Cleaning 94,660 20,090 20,090 78,024 78,024 280,346 Subtotal Maintenance 1,110,752 280,346 FY 2021 Adopted 2,358,860 580,000 388,000 400,060 77,500 3,804,420 1.66 250,435 182,248 35,000 21,048 20,400 509,131 3.87 526,479 60,090 30,000 78,024 20,593 286,537 94,660 94,660 1,019,679 1,096,383 116 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW University Avenue Parking Permit Fund FY 2020 Adopted FY 2020 Adjusted FY 2021 Adopted Police Patrol Positions 0.50 0.50 0.50 Salaries & Benefits 128,598 128,598 130,000 Subtotal Patrols 128,598 128,598 130,000 Other Valet Programs (Lots R, CC, CW, & S) 289,972 289,972 289,972 Temporary Valet Programs (garage construction) Downtown Streets Team 118,744 Transportation Management Authority (TMA) 750,000 150,000 118,744 118,744 750,000 453,000 COVID-19 Business Support 297,000 Utilities/Indirect costs 207,986 207,986 196,314 Transfer to CIP Fund 1,135,220 1,135,220 100,000 Subtotal Other 2,501,922 2,651,922 1,455,030 Total Operating Expenses 4,298,960 4,244,918 3,190,544 Income from Operations (588,510) (552,668) 613,876 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 117 SPECIAL REVENUE FUNDS OVERVIEW California Avenue Parking Permit Fund ■ Revenues Permit Sales Day Passes Investment Income FY 2020 Adopted 296,625 FY 2020 Adjusted 251,788 225,000 287,178 12,000 12,000 FY 2021 Adopted 821,500 290,000 12,800 Total Revenue 533,625 550,966 1,124,300 Expenditures Administration Positions Salaries & Benefits 151,383 98,935 Miscellaneous Supplies 35,620 Contract Staffing Parking Occupancy Services 1.05 1.05 35,620 41,400 39,347 17,545 13,497 1.05 153,247 35,620 41,400 17,545 Subtotal Administration 245,948 187,399 247,812 Maintenance Positions Salaries & Benefits Supplies Contracts Garage maintenance Sweeping Ted Thompson and Cambridge garages Fire sprinkler maintenance Steam Cleaning Landscaping Facilities repair Custodial Street Sweeping 0.43 73,601 7,855 0.43 55,812 7,855 5,255 5,255 4,008 4,008 1,453 1,453 7,060 7,060 10,597 10,597 637 82,101 637 82,101 0.43 71,793 7,855 79,106 4,008 1,453 7,060 11,583 637 54,650 82,101 Subtotal Maintenance 192,567 174,778 320,246 Utilities/Indirect costs Transfer to OP Fund 38,849 38,849 138,000 138,000 58,485 Subtotal Other Total Operating Expenses Income from Operations 176,849 176,849 58,485 615,364 539,026 626,543 (81,739) 11,940 497,757 118 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET SPECIAL REVENUE FUNDS OVERVIEW Stanford Development Agreement Fund SOURCE OF FUNDS Unrestricted- Community Health and Safety Unrestricted- Stanford Hospital Expansion Cost Mitigation Unrestricted- Intermodal Transit Unrestricted- Quarry Road Improvements Unrestricted- Neighborhoods and Communities and Affordable Housing Unrestricted- Climate Change Total Beginning Fund Balance Revenue Interest - Community Health and Safety Interest - Stanford Hospital Expansion Cost Mitigation Interest - Intermodal Transit Interest - Quarry Road Improvements Interest - Neighborhoods/Communities/ Affordable Housing Interest - Climate Change Total Revenue TOTAL SOURCE OF FUNDS a USE OF FUNDS Expenditures Transfers Out Community Health and Safety: Capital Improvement Fund Stanford Hospital Expansion Cost Mitigation Intermodal Transit: Capital Improvement Fund Quarry Road Improvements: Capital Improvement Fund Neighborhood and Communities and Affordable Housing: Capital Improvement Fund Climate Change: Capital Improvement Fund Total Transfers Total Expenditures FY 2020 Estimated 2,778,889 FY 2021 Adopted 2,825,721 2,865,946 2,914,245 1,203,107 10,862,556 1,021,697 11,045,620 2,771,602 1,608,199 20,482,100 46,832 19,415,482 53,893 48,299 55,582 18,590 183,063 36,597 333,382 20,815,482 200,000 1,200,000 r 1,400,000 1,400,000 19,486 210,667 Change 46,832 48,299 (181,410) 183,063 (1,163,403) (1,066,618) 7,062 7,283 896 27,603 30,672 (5,925) 370,300 19,785,782 500,000 1,550,000 1,200,000 3,250,000 3,250,000 36,918 (1,029,700) (200,000) 1,550,000 1,350,000 1,850,000 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 119 SPECIAL REVENUE FUNDS OVERVIEW Ending Fund Balance Stanford Development Agreement Fund FY 2020 Estimated FY 2021 Adopted Change Unrestricted- Community Health and Safety 2,825,721 2,879,614 53,893 Unrestricted- Stanford Hospital Expansion Cost Mitigation 2,914,245 2,469,827 (444,418) Unrestricted- Intermodal Transit 1,021,697 1,041,183 19,486 Unrestricted- Quarry Road Improvements Unrestricted- Neighborhoods and Communities and Affordable Housing 11,045,620 9,706,286 (1,339,333) Unrestricted- Climate Change 1,608,199 438,871 (1,169,328) Total Ending Fund Balance TOTAL USE OF FUNDS 19,415,482 16,535,782 (2,879,700) 20,815,482 19,785,782 (1,029,700) 120 SPECIAL REVENUE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET Debt Swvice Fu. • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 121 CITY OF PALO ALTO DEBT SERVICE FUNDS OVERVIEW Overview CITY OF PALO ALTO DEBT POLICY The City of Palo Alto recognizes the need for spending a prudent amount every year for ongo- ing capital replacement and rehabilitation needs. An ongoing capital improvement plan is vital to ensuring the future viability of services. To achieve this priority, the City funds its regular and ongoing capital needs primarily on a "pay-as-you-go" basis. There are, however, special or extraordinary capital improvement projects, refinancing of existing debt, and purchase of major and multiple pieces of equipment in which it is appropriate to consider debt financing. The City's Debt Policy establishes the guidelines to support the decision -making process for issuing debt. DEBT POLICY GUIDELINES The City's Debt Policy provides guidelines for refinancing existing debt; detailing the responsi- bilities of City staff engaged in issuing debt; delineating the debt instruments or vehicles (e.g. General Obligation Bonds or Certificates of Participation) the City can utilize; and describing sit- uations in which tax-exempt and taxable debt can be used. The depth and breadth of the policy serve to guide current and future staff. Below are highlights of the Debt Policy guidelines for the use of debt and other financing. A. Debt may be judiciously used when some or all of the following conditions exist: ▪ Estimated future revenue is sufficient to ensure the payment of annual debt service. ▪ Other financing options have been explored and are not viable for the timely or economic acquisition or completion of a capital project. • A capital project is mandated by federal or state authorities with no other viable funding option available. • The capital project or asset lends itself to debt financing rather than pay-as-you-go funding based on the expected useful life of the project. ▪ Debt will not be used to fund ongoing operating expenses of the City except for situations in which cash flow problems arise and the City may need to issue short-term Tax or Revenue Anticipation Notes. • Annual debt service shall not exceed 10 percent of annual operating expenses for the General Fund unless an exception is approved by City Council. For all other City funds annual debt service shall not exceed 15 percent of annual operating expenses unless an exception is approved by City Council. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 123 DEBT SERVICE FUNDS OVERVIEW B. Minimize borrowing costs by: • Maximizing the use of existing resources for capital projects and equipment needs. • Issuing tax-exempt debt except in instances where IRS regulations require taxable bonds. ▪ Striving to obtain the highest credit ratings possible. ▪ Maintaining a competitive bid process on bond sales except for situations in which negotiated or private placement sales meet City objectives. In negotiated or private placement sales, City staff will work with its Municipal Advisor (aka Financial Advisor) to review proposed interest rates and proposed fees. ▪ Ensuring that the type of debt and debt structure developed ensure advantageous marketing of each issue. C. Linking debt to appropriate revenue sources and project users: • When possible, tie project financing directly to users of a specific facility or use. Examples include renovation of the Golf Course where user fees can offset debt service or replacing gas mains where gas rates can be increased to cover debt expense. • Debt financing in the Enterprise Funds so as to avoid significant spikes in user rates by smoothing out costs over time. In addition to capital projects, the City can finance essential equipment and vehicles. These assets range from public safety vehicles to utility equipment. The underlying asset must have a minimum useful life of three years. Short-term financings, including loans and capital lease pur- chase agreements, are executed to meet such needs. It has been the City's practice to fund these purchases with existing resources; however, debt financing flexibility for future needs remains an option. Also, the Chief Financial Officer or Director of Administrative Services, supported by Treasury Division, will periodically evaluate its existing debt and execute refinancings when economically beneficial. A refinancing may include the issuance of bonds to refund existing bonds or the issu- ance of bonds in order to refund other obligations. A net present value analysis, both in dollar and percentage terms, will be conducted to determine whether a re -financing is optimal. As a "rule of thumb," a minimum 3 percent net present value savings will be used as a basis to begin re -financing efforts. As with new debt, all refinancings must be approved by City Council. In September 2016, the state legislature adopted Senate Bill (SB) 1029 (Hertzberg), amending Government Code section 8855 to place additional reporting obligations on issuers of public debt, effective January 1, 2017. The amendments require an issuer to certify that they have adopted a debt policy concerning the use of debt and that the proposed debt issuance is con- sistent with that Policy. Though the City's Debt Policy prior to this legislation and practice sub- stantially complied with the new requirements, minor updates to the Debt Policy were approved by the City Council in April 2017, to explicitly comply with SB 1029 requirements. This statue also added additional reporting requirement to the California Debt and Investment Advisory Commission (CDIAC) such as the submission of annual report for any issue of debt. 124 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW LEGAL DEBT LIMIT Based upon the assessed valuation of $36.8 billion for the fiscal year ending June 30, 2019, the City is limited to general obligation indebtedness of $1.4 billion per State law. As of June 30, 2019, the amount of debt applicable to the debt limit was $60.5 million, which is well below the City's legal debt limit. The debt limit is applicable to voter -approved general obligation (GO) bonds that have been approved in prior years to fund capital improvement projects to renovate and build out the City's libraries including the Mitchell Park Library and Community Center. DEBT OBLIGATION DESCRIPTIONS 2010A and 2013A General Obligation (GO) Bonds On June 30, 2010, the City issued the first series of $55.3 million and on June 26, 2013 the sec- ond series of $20.6 million of GO bonds to finance costs for constructing a new Mitchell Park Library and Community Center, as well as substantial improvements to the Main Library and the Downtown Library. Principal payments are due annually on August 1 and interest payments semi-annually on February 1 and August 1, from 2.0 percent to 5.0 percent, and are payable from property tax revenues. As of June 30, 2020, for the above 2010 and 2013 bonds, $43.3 million and $15.5 million princi- pal and $24.3 million and $8.0 million interest will be the remaining debt service on the bonds with final payment occurring in Fiscal Year 2041 and Fiscal Year 2042, respectively. 2018 Capital Improvement ("Golf Course") Project and 2002B ("Civic Center Refinancing and Downtown Parking Improvements Project") Refinancing Certificates of Participation (COPs) On June 5, 2018, the City issued taxable (Green Bonds) COPs of $8.4 million for the renovation of Palo Alto's Municipal Golf Course and $0.6 million to refinance the 2002B COPs. Debt service payments are due semi-annually on May 1 and November 1. The 2018 Capital Improvement Proj- ect and 2002B refinancing COPs maturity dates and true interest costs are November 2047 and 4.14 percent and November 2022 and 3.11 percent, respectively. 2019 California Avenue Parking Garage Certificates of Participation (COPs) On March 21, 2019, the City issued $26.8 million tax-exempt and $10.6 million taxable COPs for the construction of a six story (four above ground levels and two below ground levels) parking garage in the California Avenue Business District. The new garage will replace existing surface parking lots at two locations and provide 310 additional parking spaces, totaling 636 parking spaces in the new garage. Debt service payments on the $37.4 million COPs are due semi-annually on May 1 and Novem- ber 1, with the first payment due on November 1, 2019. The COPs mature in FY 2049 and have a combined true interest cost (TIC) of 3.75 percent with the tax-exempt bonds' TIC being 3.52 percent and taxable bonds' TIC being 4.32 percent. 1995 Utility Revenue Bonds, Series A On February 1, 1995 the City issued Utility Revenue Bonds to finance certain extensions and improvements to the City's Storm Drainage and Surface Water systems. The bonds are special obligations of the City payable solely from and secured by a pledge of and lien upon the reve- DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 125 DEBT SERVICE FUNDS OVERVIEW nues derived by the City from the funds, services, and facilities of all Enterprise Funds except the Refuse Fund and the Fiber Optics Fund. Principal payments are payable annually on June 1, and interest payments semi-annually on June 1 and December 1. A $2.9 million 6.3 percent term bond is due June 1, 2020. In lieu of a reserve fund, the Bonds are secured by a Surety Bond issued by AMBAC Indemnity Corporation. The pledge of future net revenues for the above funds ends upon repayment of the $0.6 million principal and $40,313 interest as the remaining debt service on the bonds as of June 30, 2019 with final payment occurring in Fiscal Year 2020. 1999 Utility Revenue and Refunding Bonds, Series A On June 1, 1999 the City issued Utility Revenue Bonds to refund the 1990 Utility Revenue Refunding Bonds, Series A and the 1992 Utility Revenue Bonds, Series A, and to finance rehabil- itation of the Wastewater Treatment System's two sludge incinerators. The 1990 Utility Revenue Refunding Bonds, Series A and the 1992 Utility Revenue Bonds, Series A, were subsequently retired. The 1999 Bonds are special obligations of the City payable solely from and secured by a pledge of, and lien upon, certain net revenues derived by the City's sewer system and its storm and surface water system, the "Stormwater Management System". As of June 30, 2001, the 1999 Bonds had been allocated to and were repayable from net revenues of the following Enterprise Funds: Wastewater Collection (10.2 percent), Wastewater Treatment (64.6 percent) and Storm - water Management (25.2 percent). Principal payments are payable annually on June 1, and inter- est payments semi-annually on June 1 and December 1. In lieu of a reserve fund, the bonds are secured by a Surety Bond issued by AMBAC Indemnity Corporation. The pledge of future net revenues for the above funds ends upon repayment of the $6.7 million principal and $0.9 million interest as the remaining debt service on the bonds as of June 30, 2020, with final payment occurring in Fiscal Year 2024. 2009 Water Revenue Bonds, Series A On October 6, 2009, the City issued Water Revenue Bonds in the amount of $35.5 million to finance certain improvements to the City's Water utility system. Principal payments are due annually on June 1, and interest payments are due semi-annually on June 1 and December 1, from 1.8 percent to 6.0 percent. The final debt service payment will be made in 2035. When these bonds were issued they were designated as 'Direct Payment Build America Bonds' under the provisions of the American Recovery and Reinvestment Act of 2009 ('Build America Bonds'). The City expected to receive a cash subsidy payment from the United States Treasury equal to 35.0 percent of the interest payable on the 2009 bonds, however, due to the United States federal government budget (sequestration) cuts in calendar year 2013, the receipts declined to 32.5 percent in 2013 and were 33.3 percent in calendar year 2018. The lien on the 1995 Bonds on the net revenues is senior to the lien on net revenues securing the 2009 Bonds and the 2002 Bonds. The City received subsidy payments amounting to $0.5 million, which rep- resents 33.3 percent of the two interest payments due on June 1 and December 1 annually. The pledge of future net revenues of the above funds ends upon repayment of the $25.5 million principal and $13.3 million interest as the remaining debt service on the bonds as of June 30, 2020 with final payment occurring in Fiscal Year 2035. 126 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW 2011 Utility Revenue Bonds, Series A On September 22, 2011 the City issued Utility Revenue Bonds to refinance the 2002 Utility Rev- enue Bonds, which were issued for certain improvements to the City's Water and Natural Gas utility system. The refinancing resulted in net present value savings of 16.9 percent and cash savings over 15 years of $4.0 million. Principal payments are due annually on June 1, and interest payments are due semi-annually on June 1 and December 1 from 3.0 percent to 4.0 percent. The Revenue Bonds are secured by net revenues generated by the Water and Gas Funds. The pledge of future net revenues ends upon repayment of the $7.9 million principal and $0.9 million interest remaining debt service on the bonds as of June 30, 2020 with final payment occurring in Fiscal Year 2026. 2007 Electric System Clean Renewable Energy Tax Credit Bonds On November 1, 2007 the City issued $1.5 million of Electric Utility Clean Renewable Energy Tax Credit Bonds (CREBS), 2007 Series A, to finance the City's photovoltaic solar panel project. The bonds do not bear interest. In lieu of receiving periodic interest payments, bondholders are allowed federal income tax credit in an amount equal to a credit rate for such CREBS multiplied by the outstanding principal amount of the CREBS owned by the bondholders. The bonds are payable solely from, and secured solely by, a pledge of the net revenues of the Electric system and other funds pledged therefore under the Indenture. The pledge of future Electric Fund net revenues ends upon repayment of the $0.2 million as the remaining debt service on the bonds as of June 30, 2020 with final payment occurring in Fiscal Year 2022. 2007 State Water Resources Loan In October 2007, the City approved the $9.0 million loan agreement with State Water Resources Control Board (SWRCB) to finance the City's Mountain View/Moffett Area Reclaimed Water Pipeline Project. Under the terms of the contract, the City agreed to repay $9.0 million to the State in exchange for receiving $7.5 million in proceeds to be used to fund the project. The dif- ference between the repayment obligation and proceeds amounts to $1.5 million and represents in -substance interest on the outstanding balance. Loan proceeds are drawn down as the project progresses and debt service payments commenced on June 30, 2010. Concurrently with the loan, the City entered into various other agreements including a cost sharing arrangement with the City of Mountain View. Pursuant to that agreement, the City of Mountain View agreed to finance a portion of the project with a $5.0 million loan repayable to the City. This loan has been recorded as 'Due from other government agencies' in the financial statements. The pledge of future net revenues of the above funds ends upon repayment of the $4.1 million principal and $0.7 million in -substance interest as the remaining debt service on the bonds as of June 30, 2020 with final payment occurring in Fiscal Year 2029. 2009 State Water Resources Loan In October 2009, the City approved an $8.5 million loan agreement with the State Water Resources Control Board (SWRCB) to finance the City's Ultraviolet Disinfection Project. As of June 30, 2011, the full loan in the amount of $8.5 million was drawn down and became outstand- ing. Interest in the amount of $96,000 was accrued and added to the outstanding balance. DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 127 DEBT SERVICE FUNDS OVERVIEW The pledge of future net revenues of the above funds ends upon repayment of the $5.3 million principal and $0.9 million interest as the remaining debt service on the bonds as of June 30, 2020 with final payment occurring in Fiscal Year 2031. 2017 State Water Resources Loan In June 2017, the State Water Resources Control Board (SWRCB) and the City executed an agreement for an award up to $30.0 million at a rate of 1.8 percent, payable over 30 years, with the first annual installment due May 31, 2020 to finance the replacement of sewage sludge "bio- solids" incinerators at the City's Regional Water Quality Control Plant (RWQCP). In September 2017, due to the projected lower project costs, the agreement was amended to reduce the SWRCB loan amount to $29.7 million. Under the terms of the contract, a portion of the loan amount, $4.0 million, is a federally funded grant (by the U.S. Environmental Protection Agency). The new facility will dewater the bio-solids and allow the material to be loaded onto trucks and taken to a separate facility for further treatment. The RWQCP provides treatment and disposal for wastewater for Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. Though Palo Alto is the recipient of the loan, the City's agree- ment with the partner agencies obliges them to pay their proportionate share of the principal and interest of this loan. Palo Alto's share of the loan payment is 38.2 percent with the partner agencies paying 61.8 percent. As of June 30, 2020, the City is anticipated to incur and draw down $25.0 million of the project costs from the loan award. Credit Rating Agencies Credit rating is a critical component of strong municipal management. According to Moody's Investors Service, reserves are an important factor in the analysis of a municipality's fiscal health and, therefore, a jurisdiction's fiscal policies should include a plan for maintaining reserves. Rat- ing agencies view sound reserves favorably, thus improving a municipality's rating and its ability to obtain low-cost financing for important projects. The City is proud to report that both Moody's and Standard and Poor's (S&P) awarded their highest credit ratings, Triple A, to the City's General Obligation Bonds for library and community center capital improvements in 2010 and 2013 and reaffirmed these ratings a few times, the last one being in May 2020 by Moody's and February 2019 by S&P. These ratings demonstrate that Palo Alto's prudent financial man- agement and fiscal strength are viewed favorably by credit agencies. The four Utility bonds (1995, 1999, 2009, & 2011) that are rated also received S&P's highest credit rating of Triple A. Moody's has rated these Utility bonds with their second highest (Aa1) or third highest (Aa2) rat- ings. 128 DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET DEBT SERVICE FUNDS OVERVIEW Debt Service Fund Fund Summary ($000) FY 2018 Actuals FY 2019 Actuals Revenues Bond Proceeds 595 301 Property Tax 4,331 4,390 4,443 Return on Investments 40 142 0 Transient Occupancy Tax 0 0 2,335 Subtotal Revenues 4,966 4,833 6,778 Operating Transfers In General Fund 233 339 530 530 0 0.0% Capital Projects Fund 0 18 0 0 0 0.0% Subtotal Operating Transfers 233 357 530 530 0 0.0% 1 5,199 5,190 7,308 7,498 190 2.6% FY 2020 Adopted FY 2021 Adopted FY 2021 Change $ FY 2021 Change % Total Source of Funds Expenses Golf Course 2018A Interest Golf Course 2018A Principal Library GO Bonds Debt Service Library GO Bonds Interest Library GO Bonds Principal Parking 2002B COPS Taxable Debt Service Parking 2002B COPS Taxable/ 2018B Refinancing Interest Parking 2002B COPS Taxable/ 2018B Refinancing Principal Parking 2019A COPS Tax Exempt Interest Parking 2019B COPS Taxable Interest Parking 2019B COPS Taxable Principal Parking 2019A&B COPS Issuance Expense Total Use of Funds Net to (from) Reserves 0 0 (11) 2,863 1,570 14 77 975 0 0 0 0 5,499 (300) 320 35 0 2,787 1,640 0 0 0 0 0 0 285 5,067 123 0 335 35 0 2,718 1,725 0 15 145 1,488 470 375 0 7,306 2 0 4,558 30 2,380 6,968 345 185 0 3,015 1,630 0 0 0 1,340 410 630 0 7,555 (57) 0 115 30 45 190 10 150 0 297 (95) 0 (15) (145) (148) (60) 255 0 249 (59) 0.0% 2.6% 100.0% 1.9% 2.8% 3.0% 428.6% 0.0% 10.9% (5.5)% 0.0% (100.0)% (100.0)% (9.9) % (12.8)% 68.0% 0.0% 3.4% N/A DEBT SERVICE FUNDS OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 129 CITY OF PALO ALTO • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 131 CITY OF PALO ALTO CITY ATTORNEY Mission Statement The Office of the City Attorney's mission is to serve Palo Alto and its policymakers by providing legal representation of the highest quality. Purpose The purpose of the Office of the City Attorney is to partner with City leaders to find creative approaches to the opportuni- ties and challenges that face Palo Alto; draft contracts, legislation, legal opinions, and other legal documents; negotiate on behalf of the City; provide training and advice on how to manage risk and comply with the law; enforce the municipal code; and defend the City when it is sued. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 133 CITY ATTORNEY CITY ATTORNEY Molly S. Stump 1.00 Senior Management Analyst 1.00 Secretary to City Attorney 1.00 Claims Investigator 1.00 Chief Assistant City Attorney 3.00 Assistant City Attorney 2.00 Deputy City Attorney 1.00 Legal Fellow^ FY 2021 POSITION TOTALS 11.00 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. These position have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 0.50 FTE Legal Fellow 134 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY ATTORNEY Description The Office of the City Attorney provides comprehensive legal services to the City by: providing legal advice and training to the City Council, City Manager, boards, commissions, and operating departments; investigating and resolving claims against the City; defending the City in litigation and administrative actions; initiating and prosecuting litigation on behalf of the City; and drafting and approving contracts, legislation, and other legal documents. Accomplishments • Supported City's response to COVID-19 health emergency and recovery, including preparing emergency orders and eviction moratoria, interpreting health orders, and supporting business recovery. • Supported development and implementation of FY 2021 budget, including program and service impacts and concessionary bargaining. ▪ Advised and assisted initial discussions regarding black lives matter and race equity movements, including review of police policies and practices, access to City programs and services, and diversity and inclusion in City hiring and promotion. ▪ Supported the Highway 101 Pedestrian/Bicycle Overpass project, assisting with design issues, construction management, competitive solicitations and contracts, Caltrans requirements and temporary construction easements. ▪ Supported the upgrade of the City's human resources and finance enterprise computer systems, negotiating and finalizing contracts with vendors. • Provided legal review and advice on Council -requested updates to the City's objective standards for wireless facilities in the public rights of way. ▪ Advised and drafted Municipal Code updates to City organization, code enforcement procedures, and Energy Reach Code to support the City's green building and sustainability goals. • Supported staff in extensive negotiations and drafting of a groundbreaking partnership agreement with Valley Water and City of Mountain View for a long-term effluent transfer from the Regional Water Quality Control Plant (RWQCP) to facilitate water reuse regionally and funding for a local advanced water purification plant at RWQCP. • Negotiated regulatory agreements to preserve 300+ units of affordable senior housing at the Lytton Gardens complex. ▪ Supported purchase of Birch Street lot for use as public park. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 135 CITY ATTORNEY • Guided resolution of significant contract administration dispute at Fire Station 3, paving the way for successful completion of the project without significant additional cost. ▪ Supported Council Ad Hoc Committee to update and improve the organization, training and functions of the City's boards and commissions. Initiatives • Support ongoing efforts to contain the COVID-19 pandemic and promote business, economic and social recovery. • Support development and implementation of black lives matter and race equity initiatives in policing and citywide services. • Complete overhaul of watershed protection ordinances to enhance protection of the environment from industrial discharge and stormwater pollution in furtherance of the Clean Water Act. • Prepare comprehensive overhaul of Accessory Dwelling Unit (ADU) ordinance to simplify regulations and streamline ADU production in keeping with changes in state law. • Support the Newell Road Bridge Replacement Project implementation, assisting with the cooperation agreement with East Palo Alto, construction procurement and contracting, and compliance with Caltrans requirements. • Support the Public Safety Building Project implementation, including prequalification, design, construction administration, competitive solicitations and contracting. • Contribute to development of handbook and annual training for City boards and commissions. Goals and Objectives GOAL 1 Advance the public interest by providing high -quality legal representation to the City. Objectives: • Enhance relationships with clients as trusted advisors and strategic partners. • Provide practical and effective advice that includes creative solutions to difficult problems. • Propose alternative, legally acceptable ways to accomplish public objectives when the City encounters legal obstacles. ▪ Regularly brief City employees on legal developments that impact their areas of service. • Inform the public about the City's legal program through the City Attorney's website. GOAL 2 Evaluate all claims and litigation promptly, resolving disputes where appropriate and vigorously defending the City's interests. 136 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY ATTORNEY Objectives: ▪ Thoroughly investigate to promptly and appropriately resolve claims. • Increase transparency by reporting claim filings and resolutions to the public. ▪ Advocate effectively in court and before administrative agencies when legal actions are brought against the City. GOAL 3 Identify and reduce exposure to legal risks. Objectives: ▪ Identify legal risks and craft strategies to reduce the City's exposure. • Provide relevant training to City officials and staff to reduce legal risk exposure. • Create user-friendly tools to assist new and existing employees in complying with public service requirements such as ethics, conflicts of interest, open meeting, and public records laws. Key Performance Measures CLAIMS RESOLUTION Goal Objective Evaluate all claims and litigation promptly, resolving disputes where appropriate and vigorously defending the City's interests. Thoroughly investigate to promptly and appropriately resolve claims. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 FY 2021 Estimated Adopted Percent of claims resolved within 45 days of filing Description Purpose Status 98% 91% 98% 96% 98% This measure tracks the number of claims that are resolved within 45 days of filing. Thorough investigation to promptly and appropriately resolve claims is a core responsibility of the Office of the City Attorney. This measure is important because timely processing of claims demonstrates responsiveness to residents' concerns and safeguards public resources by reducing unnecessary lawsuits. The number of claims resolved within 45 days may go up or down in part due to the complexity of a claim. CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 137 CITY ATTORNEY Number of claims handled 84 REDUCTION OF LEGAL RISK Goal Objective Identify and reduce exposure to legal risks. Provide relevant training to City officials and staff to reduce legal risk exposure. FY 2018 FY 2019 Actuals Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of surveyed who agree/ strongly agree that the training provided is useful and relevant Description Purpose Status N/A 99% 90% 98% 98% This measure tracks the usefulness and relevance of the training provided by the Office of the City Attorney to City staff. Training assists in reducing errors thereby reducing the exposure of liability to the City. There was not sufficient data in Fiscal Year 2018 for this measure. However, in Fiscal Year 2019, the data reflects that almost 100% of the attendees agree that the training provided was useful and relevant. Workload Measures FY 2019 FY 2020 Actuals Adopted FY 2020 Estimated FY 2021 Adopted 90 84 95 90 138 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY ATTORNEY 3udget Summary FY 2018 Actuals Dollars by Division Administration 553,106 595,602 644,611 593,825 (50,786) (7.9)% Consultation and Advisory 1,619,693 1,810,065 1,904,890 1,909,989 5,099 0.3% Litigation and Dispute Resolution 1,044,767 1,156,868 717,728 886,294 168,566 23.5% Official and Administration Duties 89,885 113,556 119,725 95,045 (24,680) (20.6)% Total 3,307,450 3,676,092 3,386,954 3,485,154 98,200 2.9% FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Category Salary & Benefits Healthcare 128,784 120,239 155,397 134,925 (20,472) (13.2)% Other Benefits 81,506 80,307 71,484 67,461 (4,024) (5.6)% Pension 424,196 451,560 621,851 616,344 (5,507) (0.9)% Retiree Medical 152,481 115,560 119,026 113,677 (5,349) (4.5)% Salary 1,452,038 1,576,263 1,764,909 1,616,847 (148,062) (8.4)% Workers' Compensation 42,882 60,951 56,470 (4,482) (7.4)% Total Salary & Benefits 2,239,004 2,386,811 2,793,619 2,605,723 (187,896) (6.7)% Allocated Charges 123,759 150,152 138,831 116,419 (22,411) (16.1)% Contract Services 910,987 1,063,494 372,301 725,250 352,949 94.8% Facilities & Equipment - 1,545 1,000 - (1,000) (100.0)% General Expense 13,709 30,831 52,642 17,500 (35,142) (66.8)% Operating Transfers -Out 24,857 -% Rents & Leases 1,265 1,245 2,130 1,330 (800) (37.6)% Supplies & Material 18,725 17,157 26,432 18,932 (7,500) (28.4)% Total Dollars by Expense Category 3,307,450 3,676,092 3,386,954 3,485,154 98,200 2.9% Revenues Charges for Services 28,052 28,052 -% Charges to Other Funds 1,063,627 1,001,904 704,051 1,578,427 874,375 124.2% Other Revenue 16,000 2,015 10,789 10,789 -% Total Revenues 1,079,627 1,003,919 742,892 1,617,268 874,375 117.7% CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 139 CITY ATTORNEY 3udget Summary Positions by Division Administration Consultation and Advisory Litigation and Dispute Resolution Official and Administration Duties Total FY 2018 Actuals 1.47 7.31 1.86 0.36 11.00 FY 2019 Actuals 1.47 6.46 1.71 0.36 10.00 FY 2020 Adopted Budget 1.47 6.46 1.71 0.36 10.00 FY 2021 Adopted Budget 1.47 6.46 1.71 0.36 10.00 FY 2021 Change $ FY 2021 Change % -% Staffing Job Classification Assistant City Attorney Chief Assistant City Attorney City Attorney Claims Investigator FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 3.00 3.00 3.00 3.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Deputy City Attorney 1.00 1.00 1.00 1.00 Legal Fellow 1.00 1.00 1.00 0.50 Legal Fellow (Freeze) 0.50 Secretary to City Attorney 1.00 1.00 1.00 1.00 FY 2021 Change FTE FY 2021 Salary 596,024 254,405 - 313,414 84,989 - 142,938 (0.50) 52,208 0.50 52,208 77,792 Senior Legal Secretary 1.00 - - - - - Senior Management Analyst 1.00 1.00 1.00 1.00 - 116,189 Sub -total: Full -Time Equivalent 11.00 10.00 10.00 10.00 - 1,637,958 Positions Total Positions 11.00 10.00 10.00 10.00 - 1,637,958 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to po- sition freezes is available in the department section organizational chart and budget adjustment sum- maries. 140 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY ATTORNEY 3udget Reconciliation Prior Year Budget 10.00 3,386,954 742,893 2,644,061 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Contract Services for Outside Counsel General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (27,391) 4,550 430 (4,482) — 303,524 74,068 74,068 256,349 256,349 874,375 (874,375) (27,391) — 4,550 874,375 430 (4,482) (570,851) Total FY 2021 Base Budget 10.00 3,690,478 1,617,268 2,073,210 Budget Adjustments 1 Shift City Attorney's Contingency Funds to City Attorney's Budget 2 Travel, Training, and Supply Expense Reductions 3 Legal Services Staffing Reduction 4 Management and Professionals Group Compensation Reduction Total Budget Adjustments 100,000 (47,342) (81,171) (176,811) - (205,324) 100,000 (47,342) (81,171) (176,811) - (205,324) Total FY 2021 Adopted Budget 10.00 1,867,886 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 141 CITY ATTORNEY Budget Adjustments I. Budget Adjustments Positions Expenditures Revenues Net General Fund 1 Shift City Attorney's Contingency Funds to City Attorney's Budget 0.00 I 100,000 0 100,000 This ongoing action shifts the City Attorney's contingency funds into the City Attorney's Budget. This funding alignment will streamline operations and decrease administrative work associated with the movement of authorized funding between Council Appointee departmental budgets. This change does not result in any increased expenses or revenue, it is a technical adjustment. (Ongoing costs: $100,000) Performance Results This action aligns the contingency funding with the correct department and will decrease administrative work and increase efficiency. 2 Travel, Training, and Supply Expense Reductions 0.00 (47,342) 0 (47,342) This action reduces the department's travel, training, and office supply budget. This will reduce the department's capacity to maintain best practices, training, and pursue professional development opportunities, limit flexibility to take on new administrative projects and duties, and reduce resources available for office work. (Ongoing savings: $47,342) Performance Results This action contributes to cost containment strategies in FY 2021 142 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY ATTORNEY 3udget Adjustments udget A. ustments Positions Expenditures Revenues Net General Fund 3 Legal Services Staffing Reduction This action reduces 0.50 FTE Legal Fellow in the City Attorney's Office. This will curtail prosecution of municipal citations, code enforcement support, and public records response, and lengthen response times to new initiatives. (Ongoing savings: $81,171) Performance Results This action contributes to cost containment strategies in FY 2021. 4 Management and Professionals Group Compensation Reduction MI0.00 (176,811) 0 (176,811) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021 CITY ATTORNEY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 143 CITY OF PALO ALTO CITY AUDITOR Mission Statement The mission of the Office of the City Auditor is to promote honest, efficient, effective, economical, fully accountable, and transparent City government. Purpose The purpose of the Office of the City Audi- tor is to conduct internal audits and exam- inations of any City department, program, service, activity, or fiscal transaction to provide the City Council and City manage- ment with information and evaluations regarding the effectiveness and efficiency with which City resources are employed, the adequacy of the system of internal controls, and compliance with City policies and procedures and regulatory requirements. In addition, the City Auditor's Office ensures that City depart- ments and officers responsible for accounting and financial management activ- ities comply with statutory requirements and accounting standards, and provides other analyses of financial and operating data as directed by the City Council. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 145 CITY AUDITOR CITY AUDITOR 3.00 Senior Performance Auditor FY 2021 POSITION TOTALS 4.00 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 146 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY AUDITOR Description The Office of the City Auditor (OCA) conducts performance audits and reviews of City departments, programs, and services. Performance audits provide the City Council, City management, and public with independent and objective information regarding the economy, efficiency, and effectiveness of City programs and activities. Each fiscal year, the OCA presents an annual audit work plan for City Council approval. The OCA will continue to report quarterly to the City Council on the status of audit projects and the recommendations made as a result of those audits. The OCA contracts with an independent certified public accountant for the City's annual external financial audit. The OCA also conducts and coordinates revenue monitoring of sales and use tax. Accomplishments and Initiatives Upon the prior City Auditor's retirement in February 2019, the City Council directed the engage- ment of external experts to assist the City with two scopes of work related to the City Auditor's Office: (1) assist with the continuity of operations and work product in the City Auditor's Office; and (2) conduct a review of internal auditing practices in the public sector and Palo Alto (Report 10109: www.cityofpaloalto.org/civicax/filebank/documents/69382). The City Council approved contracts: 1) 2) Senior Consultant Services: After reviewing several firms that provide audit services, the consulting firm of Management Partners was selected to provide a senior consultant to oversee the ongoing work from the City Auditor's Office. The senior consultant's assignment began in March 2019 and continued through mid -November 2019. Once the contract term ended and in the absence of an external senior consultant, the existing City Auditor staff of three fulltime employees continued their assignments in accordance with pre -established workplans. Review of Internal Auditing Practices: The City published a public Request for Proposal (RFP) for an Auditor Organizational Review. The RFP invited individuals with the appropriate professional expertise to submit proposals for this work. The Council Appointed Officers (CAO) Committee met in a public session on May 2, 2019 to evaluate and rate the proposals and Kevin Harper CPA & Associates was selected to perform the review. The final report was transmitted to the full Council for public review and was approved February 10, 2020 (Report 11039: www.cityofpaloalto.org/civicax/filebank/documents/75035). CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 147 CITY AUDITOR The City Council then directed the Mayor to assign the CAO Committee to develop and issue a specification for the City Auditor function which would focus on consideration of firms (Min- utes: www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=68980.89&BIoblD=75728). Per City Council direction, the City released a RFP for internal auditing services, but given the nature of the responses received, all proposals were rejected (Memo: www.cityofpaloalto.org/ civicax/filebank/documents/76842). In FY 2021 the CAO Committee and City Council will con- tinue the RFP process and City Auditor staff will continue to accomplish assignments in accor- dance with pre -established workplans. Currently approved workplans can be referenced on the City Auditor's website: www.cityofpaloalto.org/gov/depts/aud/default.asp. Goals and Objectives GOAL 1 Add value and improve the City's operations by providing independent, objective analysis and information regarding the stewardship, performance, and/or cost of City policies, programs, or operations to assist the City Council and management in making informed decisions. Objectives: • Focus on the City's highest risks by maintaining an effective, systematic, and documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. • Provide impactful audit services through timely and value-added communication to key stakeholders regarding the effectiveness and efficiency with which City resources are employed; the adequacy of internal controls; and compliance with provisions of laws, regulations, contracts, grant agreements, and City policies and procedures. • Maintain an effective follow-up process to monitor and evaluate the adequacy, effectiveness, and timeliness of actions taken by management to address audit recommendations and report to the City Council whether City management has implemented the recommendation or has assumed the risk of not taking action. GOAL 2 Provide the residents of Palo Alto, City Council, City staff, and other stakeholders with informa- tion on past performance to strengthen public accountability, improve government efficiency and effectiveness, and support future decision -making. Objectives: • Contract with the City's external auditor for the completion of the City's Comprehensive Annual Financial Report (CAFR) and the Single Audit Report. GOAL 3 Maintain efficient and effective audit processes. Objectives: . Maintain an efficient and effective system of quality control by regularly performing internal and external assessments and periodically updating the Office of the City Auditor's policies 148 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY AUDITOR and procedures to ensure compliance with professional standards and incorporation of applicable leading industry practices. ▪ Maintain an adequately skilled, knowledgeable, and competent staff of audit professionals. . Communicate the engagement's objectives, scope, conclusions, and recommendations accurately, objectively, clearly, concisely, constructively, completely, and in a timely manner. Key Performance Measures NUMBER OF MAJOR WORK PRODUCTS PER AUDIT STAFF Focus on the City's highest risks by maintaining an effective, systematic, and Goal documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. Provide impactful audit services through timely and value-added communication to key stakeholders regarding the effectiveness and efficiency with which City Objective resources are employed, the adequacy of internal controls, and compliance with provisions of laws, regulations, contracts, grant agreements, and City policies and procedures. Number of major work products per audit staff Description Purpose Status FY 2018 Actuals 1.33 FY 2019 Actuals 1.75 FY 2020 Adopted 1.75 FY 2020 Estimated TBD* FY 2021 Adopted TBD* This workload measure indicates the number of major work products generated by each audit staff. In order to provide timely impactful audit services, the Office of the City Auditor has a target to complete 1.20 major work products per audit staff on an annual basis. It is important to remember that performance audits can vary significantly from one to the next in the amount of time taken to complete them in accordance with Generally Accepted Government Auditing Standards. Factors such as the scope of the audit, the condition of the data to be audited, the availability of appropriate staff, and the possibility of having to expand the scope depending on what is found during the audit all will contribute to the possibility that an audit may take more time than originally estimated. That said, the City Auditor's Office will always strive to perform audits as efficiently and expeditiously as possible, while still meeting required professional standards. The number of major work products generated by each audit staff stayed the same (1.75) from the FY 2019 estimate. FY 2019 included five audits and two non -audit activities completed by 4.0 staff members, while in FY 2020 we expect to complete seven major projects carried over from the current year's audit work plan. Additional work products may be added to next year's work plan, which could potentially increase the number of major work products per audit staff above the 1.75 level. *The City Auditor's Office service delivery model was under review in FY 2020, continuing into FY 2021, which may impact the data reported here. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 149 CITY AUDITOR PERCENT OF AUDIT RECOMMENDATIONS IMPLEMENTED OVER THE LAST FIVE YEARS Goal Objective Percent of open audit recommendations implemented over the last five years Description Purpose Status Add value and improve the City's operations by providing independent, objective analysis and information regarding the stewardship, performance, and/or cost of City policies, programs, and/or operations to assist the City Council and management in making informed decisions. Maintain an effective follow-up process to monitor and evaluate the adequacy, effectiveness, and timeliness of actions taken by management to address the audit recommendations and report to the City Council whether City management has implemented the recommendation or has assumed the risk of not taking action. FY 2018 Actuals 52% FY 2019 Actuals 57% FY 2020 Adopted 60% FY 2020 Estimated TBD* FY 2021 Adopted TBD* This measures the degree to which departments have implemented audit recommendations. Recommendations are effective when they are addressed to parties that have authority to act and when the recommended actions are specific, cost-effective, and measurable. Each audit recommendation is provided to specifically enhance and improve the effectiveness and efficiency of the respective entity being audited. Departments are responsible to follow up on audit recommendations every six months from the date of issuance to the Policy and Services Committee with the goal of encouraging management to implement all audit recommendations in a timely manner. The Office of the City Auditor must sign off on all audit recommendations before they are considered complete. Due to the number of audit recommendations, as well as general capacity of departments, implementation time frames continue to lag. *The City Auditor's Office service delivery model was under review in FY 2020, continuing into FY 2021, which may impact the data reported here. RATIO OF SALES TAX REVENUE RECOVERIES TO COST Add value and improve the City's operations by providing independent, objective analysis and information regarding the stewardship, performance, and/or cost of City policies, programs, or operations to assist the City Council and management in making informed decisions. Focus on the City's highest risks by maintaining an effective, systematic, and Objective documented process that identifies the most significant strategic, operational, financial, and regulatory risks to the achievement of the City's objectives. Goal Ratio of sales tax revenue recoveries to cost. Description Purpose Status FY 2018 Actuals 5:00 FY 2019 Actuals 5:97 FY 2020 Adopted 3:00 FY 2020 Estimated TBD* FY 2021 Adopted TBD* This measure is a ratio of sales tax revenue recovered by in-house staff and the City's consultant to the total cost (salary and benefits plus contracted cost). To determine the effectiveness of cost recovery efforts for sales and use tax revenues. The Office of the City Auditor updates the amount of revenue generated on a quarterly basis. *The City Auditor's Office service delivery model was under review in FY 2020, continuing into FY 2021, which may impact the data reported here. 150 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY AUDITOR Workload Measures 111E - Number of major work products issued. FY 2018 Actuals 6 FY 2019 Actuals 7 FY 2020 Adopted 7 FY 2020 Estimated TBD* FY 2021 Adopted TBD* `The City Auditor's Office service delivery model was under review in FY 2020, continuing into FY 2021, which may impact the data reported here. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 151 CITY AUDITOR 3udget Summary Dollars by Division Audit Services Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 1,233,315 1,192,633 1,235,450 827,564 (407,886) (33.0)% 1,233,315 1,192,633 1,235,450 827,564 (407,886) (33.0)% Dollars by Category Salary & Benefits Healthcare 31,468 42,958 51,724 45,498 (6,226) (12.0)% Other Benefits 33,253 27,655 24,144 20,076 (4,068) (16.8)% Pension 173,254 151,515 202,989 173,084 (29,905) (14.7)% Retiree Medical 36,399 44,844 46,189 44,482 (1,707) (3.7)% Salary 613,045 522,842 577,387 300,080 (277,308) (48.0)% Workers' Compensation - 17,129 24,256 22,473 (1,783) (7.4)% Total Salary & Benefits 887,418 806,944 926,690 605,693 (320,997) (34.6)% Allocated Charges 60,540 64,516 63,501 50,612 (12,890) (20.3)% Contract Services 248,993 299,786 228,000 155,000 (73,000) (32.0)% General Expense 33,817 10,681 14,279 13,279 (1,000) (7.0)% Operating Transfers -Out - 9,505 - - - -% Supplies & Material 2,547 1,201 2,980 2,980 - -% Total Dollars by Expense Category 1,233,315 1,192,633 1,235,450 827,564 (407,886) (33.0)% Revenues Charges to Other Funds 363,802 318,326 1,012,636 965,884 (46,752) (4.6)% Sales Taxes 470,263 189,256 150,000 - (150,000) (100.0)% Total Revenues 834,065 507,582 1,162,636 965,884 (196,752) (16.9)% Positions by Division Audit Services 5.00 4.00 4.00 3.00 (1.00) (25.0)% Total 5.00 4.00 4.00 3.00 (1.00) (25.0)% 152 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY AUDITOR Staffing Job Classification City Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor Sub -total: Full -Time Equivalent Positions Total Positions FY 2018 Actuals 1.00 1.00 1.00 2.00 FY 2019 Actuals 1.00 1.00 1.00 1.00 FY 2020 Adopted Budget 1.00 2.00 1.00 FY 2021 Adopted Budget 1.00 FY 2021 Change FTE (2.00) 2.00 1.00 274,808 FY 2021 Salary 195,042 5.00 4.00 4.00 3.00 (1.00) 469,850 5.00 4.00 4.00 3.00 (1.00) 469,850 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 153 CITY AUDITOR 3udget Reconciliation Prior Year Budget One -Time Prior Year Budget Adjustments 4.00 1,235,450 1,162,636 72,814 None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Fund Cost Allocation Plan Contract Services Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges 31,608 4,000 (13,415) 1,823 (1,297) (1,783) 31,608 (46,752) 46,752 4,000 (13,415) 1,823 (1,297) (1,783) Adjustments to Costs of Ongoing Activities 20,936 (46,752) 67,688 Total FY 2021 Base Budget 4.00 1,256,386 MEW 140,502 Budget Adjustments 1 Tax Compliance and National Citizens Survey (Transfer from City Auditor to Administrative Services and City Managers' Office) 2 Reclassification of 1.0 FTE Performance Auditor II to 1.0 FTE Senior Performance Auditor 3 Management and Professionals Group Compensation Reduction 4 Reduction in the City Auditor's Office 5 Reallocate 1.0 FTE Performance Auditor II to Administrative Services for Performance Report (77,000) (150,000) 73,000 57,555 (49,365) (165,000) (1.00) (195,011) 57,555 (49,365) (165, 000) (195,011) Total Budget Adjustments (1.00) (428,821) (150,000) (278,821) Total FY 2021 Adopted Budget 3.00 827,564 965,884 (138,319) 154 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY AUDITOR .budget Adjustments udget Adj;ustments 1 Tax Compliance and National Citizens Survey (Transfer from City Auditor to Administrative Services and City Managers' Office) Positions Expenditures Revenues Net General Fund 0.00 (77,000) (150,000) 73,000 This ongoing action moves tax compliance services and estimated revenue to the Administrative Services Department ($50,000 in expense, $150,000 in revenue) and the National Citizen Survey function and funding ($27,000) to the City Manager's Office. A corresponding action is recommended in the Administrative Services Department and City Managers' Office. (Ongoing net costs: $73,000) Performance Results This action aligns the duties and associated funding of the City Auditor's Office, the Administrative Services Department, and the City Manager's Office. 2 Reclassification of 1.0 FTE Performance Auditor II to 1.0 FTE Senior Performance Auditor 0.00 57,555 57,555 This ongoing action reclassifies a 1.0 FTE Performance Auditor II to a 1.0 FTE Senior Performance Auditor. This will align staffing with current workload needs. (Ongoing costs: $60,000) Performance Results This action aligns the duties of this position with the correct classification and will ensure clear communication and efficient audit support. 3 Management and Professionals Group Compensation Reduction 1111-0.00 (49,365) 0 (49,365) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 155 CITY AUDITOR 3udget Adjustments I 4 Reduction in the City Auditor's Office 0.00 (165,000) 0 (165,000) This action reduces resources in the City Auditor's Office equal to similar internal services reductions. At the direction of the City Council and in coordination with the Council Appointed Officer Committee, staff is currently evaluating the service delivery. (Ongoing savings: $165,000) Performance Results This action contributes to cost containment strategies in FY 2021. 5 Reallocate 1.0 FTE Performance Auditor II to _1.00 Administrative Services for Performance Report (195,011) F 0 (195,011) This ongoing action reallocates 1.0 FTE Performance Auditor II from the City Auditor's Office to the Administrative Services Department, Office of Management and Budget (OMB). The move of this position will increase workload capacity and allow OMB to produce the City's annual Performance Report, which was produced by the Auditor's Office in prior years. The City's performance measure data for both the Operating Budget document and the annual Performance Report is stored in the City's budget production software database, so this action will align the City's performance reporting within OMB. A corresponding action is recommended in the Administrative Services Department. (Ongoing savings: $195,011) Performance Results This action aligns the duties and associated funding of the City Auditor's Office and the Administrative Services Department. 156 CITY AUDITOR • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY CLERK Mission Statement The City Clerk's Office promotes transparency and public engagement through coordinating the legislative process, records management, elections, public records requests, supporting the Mayor and City Council, and acting as a liaison between the City Council and the public. Purpose The purpose of the City Clerk's Office is to provide prompt, high quality public service by connecting the public with the legisla- tive process; ensure the City's legislative processes are open and transparent including friendly customer service, knowledgeable staff, and easy accessibility through technology; elections administration; facilitate the preservation of Palo Alto's legislative history, including approved action minutes; coordination of public records requests, claims against the City, applications for boards and commissions, and update and maintain City Ordinances and the Municipal Code; provide access to legislative meeting information and coordinate State- ments of Economic Interest as well as campaign and other financial disclosure related filings. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 157 CITY CLERK CITY CLERK Beth Minor 1.00 Assistant City Clerk 1.00 Deputy City Clerk FY 2021 POSITION TOTALS 5.00 - Full-time This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. 2.00 Administrative Associate I l l 158 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY CLERK Description The City Clerk's Office provides a wide range of public services including: supporting the City Council, City staff, and public by providing copies of agendas and associated reports; posting and publishing legal notices, and scheduling public hearings; transcribing meeting minutes; recording of Ordinances and Resolutions; coordination and scheduling of Parking and Administrative Hearings; engaging in records management, elections, and board and commission recruitments; and processing of public records requests. Accomplishments ▪ Supported the City Council with Zoom meetings during the COVID-19 Pandemic and trained staff and numerous boards and commissions on how to hold and run public meetings on the Zoom platform. ▪ Held the annual Board and Commission recognition event in the Council Conference Room. ▪ Successfully managed the annual Council Retreat and the Mayor's State of the City address at the Mitchell Park Community Center. ▪ Received applications for Board and Commission vacancies resulting in 58 interviews, totaling 10 hours of interviews in calendar year 2019. ▪ Prepared and published 41 City Council meeting agenda packets, and 21 Finance Committee and Policy and Services Committee agenda packets in calendar year 2019. ▪ Supported 300 plus hours of Council and Council Standing Committee meetings in calendar year 2019. • Scheduled and supported 151 administrative and parking citation hearings in calendar year 2019, which included 5 administrative hearings and 9 mail -in hearings. ▪ Coordinated the responses to 537 Public Records Requests in calendar year 2019. Initiatives ▪ Run a successful Council Member election in November 2020. • Continue to coordinate and manage the transition of public meeting to a virtual format. • Continue the work with departments to create a Staff Report writing guide. • Update citywide records management and training program. ▪ Continue streamlining the citywide records destruction process. ▪ Continue auditing vital records stored off -site. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 159 CITY CLERK • Update the citywide email retention policy. ▪ Oversee the successful migration of online content to the City's next generation website. • Explore an online records portal. ▪ Update the Conflict of Interest Code, with the assistance of every department. • Continue to explore various online board and commission application solutions. Goals and Objectives GOAL 1 Lead the agenda management process and records management program promoting transpar- ency, accountability, and effective service delivery. Objectives: • Ensure that preparation and distribution of the Council's agenda packets are timely, accurate and responsive 11 days prior to the Council meeting. • Transcribe and post Council action minutes within one week of meeting date. • Effectively manage the records destruction process and maintain the Records Retention Schedule for all City departments. GOAL 2 Respond to the legislative needs of the City Council, staff, and the community in a timely and effective manner. Objectives: • Utilize technology to enhance access to legislative items, such as agendas, reports, recordings, Ordinances, Resolutions, and Minutes on the City Council and City Clerk webpages. ▪ Continue to manage a successful transition from in -person to virtual teleconference for all City Council and Board and Commissions, as necessary. • Encourage online filing of campaign statements in compliance with the Fair Political Practices Commission (FPPC) and Municipal Code requirements. ▪ Encourage staff, City Council, and Board & Commission Members to use online filing of Statement of Economic Interest forms. GOAL 3 Effectively administer appointments to Boards and Commissions. Objectives: • Improve boards and commissions recruitment process, including expanding application accessibility, exploring new methods of advertising, and continuing successful interview processes. • Create and maintain community partnerships to enhance the public's knowledge of, and interest in serving on boards and commissions. 160 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY CLERK Key Performance Measures PERCENTAGE OF ACTION MINUTES POSTED WITHIN ONE WEEK AFTER THE COUNCIL MEETING Goal Objective Percentage of action minutes posted within one week after the Council meeting Description Purpose Status Provide timely reporting of City Council action in support of City operations and transparency to the public. Transcribe and submit Council action minutes for approval within one week of each Council meeting. FY 2018 Actuals 96% FY 2019 Actuals 97% FY 2020 Adopted 98% FY 2020 Estimated 98% FY 2021 Adopted 98% After each Council meeting, the City Clerk's Office transcribes the draft actions that the Council took and, within one week, submits these actions to Council for approval. This supports transparency and informed decision making, by providing the public with Council actions in a timely manner. The City Clerk's Office has maintained a high performance level with 96% to 98% of action minutes posted online within one week after each Council meeting and anticipates maintaining the 98% level of performance estimated for FY 2020 into FY 2021. PERCENTAGE OF COUNCIL AGENDA PACKET MATERIALS POSTED ON THE THURSDAY, 11 DAYS PRIOR TO THE MONDAY CITY COUNCIL MEETING Goal Lead the agenda management process and records management program promoting transparency, accountability, and effective service delivery. Ensure that the preparation and distribution of the Council's agenda packets are timely, accurate, and responsive. Objective Percentage of Council agenda packet materials posted Thursdays, 11 days prior to the Council meeting Description Purpose Status FY 2018 Actuals 98% FY 2019 Actuals 98% FY 2020 Adopted 98% FY 2020 Estimated 98% FY 2021 Adopted 98% The City Clerk's Office strives to distribute agenda packets to the City Council and public on Thursday, 11 days before the Council's Monday meeting in order to maximize the amount of time to review the packet. Provide the City Council and public with adequate time to review upcoming issues that will be discussed by the City Council, ensuring transparency of Council proceedings. Through implementing an 11 -day goal for posting City Council agenda packets, the City Clerk's Office coordinates with other City departments to accomplish this at a level of 98% of packets posted 11 days prior to the Council meeting and anticipates maintaining a level of 98% for FY 2021. CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 161 CITY CLERK PERCENTAGE OF PUBLIC RECORDS REQUESTS RESPONDED TO WITHIN THE TEN DAYS REQUIRED BY LAW Goal Respond to the legislative needs of the City Council, staff, and the community in a timely and effective manner. Objective Provide excellent customer service to the public. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percentage of public records requests responded to within the ten days required by law Description Purpose Status 98% 98% 99% 98% 98% Public Records requests are required to be addressed within ten days of receipt. This could be the actual response or a request for an extension of time to gather the requested records. Provide the public with information that is held by the City and is subject to public disclosure; ensure that a response is received by the requester within the allotted ten days. The City is close to meeting the goal adopted for FY 2020 and anticipates meeting the target in FY 2021. Workload Measures FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Number of City Council Meeting Action Minutes posted annually Number of weekly agenda packets produced annually Number of public records requests received annually Number of applications processed for open Board and Commission 65 59 seats 54 37 51 40 50 40 455 537 450 60 49 41 50 42 500 525 40 45 162 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY CLERK 3udget Summary Dollars by Division Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management Public Information Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 145,167 497,654 562,057 613,682 51,625 9.2% 79,118 55,363 85,634 60,193 (25,441) (29.7)% 660,249 384,715 514,672 388,508 (126,164) (24.5)% 110,879 109,186 120,772 118,203 (2,569) (2.1)% 90,769 57,457 62,687 64,565 1,878 3.0% 84,626 - - - - -% 1,170,808 1,104,374 1,345,822 1,245,151 (100,671) (7.5)% Dollars by Category Salary & Benefits Healthcare 37,875 33,391 37,961 48,361 10,400 27.4% Other Benefits 18,649 19,349 22,401 22,273 (128) (0.6)% Overtime 2,586 3,842 7,048 7,232 183 2.6% Pension 139,312 145,547 191,630 191,808 178 0.1% Retiree Medical 84,602 40,532 41,748 39,540 (2,208) (5.3)% Salary 474,887 488,284 539,752 520,507 (19,245) (3.6)% Workers' Compensation 10,353 16,186 21,804 20,201 (1,603) (7.4)% Total Salary & Benefits 768,264 747,131 862,344 849,921 (12,424) (1.4)% Allocated Charges 151,503 144,826 159,999 135,535 (24,464) (15.3)% Contract Services 195,124 143,007 254,346 196,961 (57,385) (22.6)% General Expense 46,440 56,857 62,640 59,741 (2,899) (4.6)% Operating Transfers -Out - 8,510 - - - -% Supplies & Material 9,475 4,044 6,493 2,993 (3,500) (53.9)% Total Dollars by Expense Category 1,170,808 1,104,374 1,345,822 1,245,151 (100,671) (7.5)% Revenues Charges for Services 6 135 2,043 2,043 -% Charges to Other Funds 352,022 290,532 671,548 647,391 (24,157) (3.6)% Other Revenue 354 524 3,143 3,143 - -% Total Revenues 352,382 291,192 676,734 652,577 (24,157) (3.6)% CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 163 CITY CLERK 3udget Summary Positions by Division Administration Administrative Citations Council Support Services Election/Conflict of Interest Legislative Records Management Public Information Total Staffing Administrative Associate Ill Assistant City Clerk City Clerk Deputy City Clerk Hearing Officer Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals FY 2019 Actuals 0.35 2.85 1.23 0.48 - 2.85 1.30 1.30 0.65 0.55 0.55 0.50 0.30 0.30 0.65 6.23 5.48 5.00 5.00 FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2018 Actuals 2.00 1.00 1.00 1.00 0.75 FY 2019 Actuals 2.00 1.00 1.00 1.00 2.851 FY 2020 Adopted Budget 2.00 1.00 1.00 1.00 2.85 1.30 0.55 0.30 FY 2021 Adopted Budget 2.00 1.00 1.00 1.00 FY 2021 Change $ FY 2021 Change FTE FY 2021 Change % -% FY 2021 Salary 168,064 117,229 159,182 86,944 5.75 5.00 5.00 5.00 - 531,419 0.48 0.48 - - - - 6.23 5.48 5.00 5.00 - 531,419 164 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY CLERK 3udget Reconciliation Prior Year Budget 5.00 1,345,822 676,735 669,087 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Association Membership Fees General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges 28,206 1,601 (13,854) 1,639 (12,248) (1,603) (24,157) 28,206 1,601 24,157 (13,854) 1,639 (12, 248) (1,603) Adjustments to Costs of Ongoing Activities Total FY 2021 Base Budget Budget Adjustments 5.00 3,741 1,349,563 (24,157) 652,577 27,898 696,985 1 Management and Professionals Group Compensation Reduction 2 Travel, Training, Supply, and Event Expense Reductions (39,026) (65,385) (39,026) (65,385) Total Budget Adjustments — (104,411) — (104,411) Total FY 2021 Adopted Budget 5.00 592,574 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 165 CITY CLERK 3udget Ac justments Positions Expenditures Revenues Net General Fund 1 Management and Professionals Group Compensation Reduction 0.00 (39,026) (39,026) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 4 This action contributes to cost containment strategies in FY 2021 2 Travel, Training, Supply, and Event Expense Reductions (65,385) 0 (65,385) This action reduces the department's travel, training, office supply, and special event budget. This will reduce the department's capacity to attend training and maintain best practices and professional development opportunities, limit flexibility to take on new administrative projects and duties, and eliminate all board and commission special events. (Ongoing savings: $65,385) Performance Results This action contributes to cost containment strategies in FY 2021. 166 CITY CLERK • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Description CITY COUNCIL Mission Statement The City Council's mission is to develop an overall vision for the community as a whole. Purpose The City Council is responsible for the scope, direction, and financing of City ser- vices; establishing policy based on infor- mation provided by staff, advisory boards and commissions, and the general public; and implementing policy through staff under the Council -Manager form of gov- ernment. Under the Council -Manager form of government, the City Council is responsible for the legislative functions of the City such as establishing policies and priorities, developing an overall vision, and approving the annual spending plan for the City. The terms of the Mayor and the Vice - Mayor are one year, expiring at the first meeting in January. The terms of Council members are four years, and the General Municipal Election is held in even -numbered years on the first Tuesday after the first Monday in November. CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 167 CITY COUNCIL 3udget Summary 5 Dollars by Division City Council Operations Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 475,912 370,419 498,261 419,304 (78,957) (15.8)% 475,912 370,419 498,261 419,304 (78,957) (15.8)% Dollars by Category Salary & Benefits Healthcare 111,678 90,338 136,904 111,526 (25,378) (18.5)% Other Benefits 8,158 8,023 5,729 6,022 293 5.1% Pension 21,743 18,774 32,634 32,851 218 0.7% Retiree Medical 87,553 49,156 50,631 48,601 (2,030) (4.0)% Salary 108,014 96,474 84,000 84,000 - -% Workers' Compensation - 3,076 5,331 4,939 (392) (7.4)% Total Salary & Benefits 337,148 265,842 315,228 287,939 (27,289) (8.7)% Allocated Charges 15,871 18,007 17,149 14,435 (2,713) (15.8)% Contract Services 80,460 43,233 108,000 108,000 -% General Expense 41,020 39,877 54,955 6,000 (48,955) (89.1)% Operating Transfers -Out 1,686 - - - -% Supplies & Material 1,414 1,775 2,930 2,930 - -% Total Dollars by Expense Category 475,912 370,419 498,261 419,304 (78,957) (15.8)% Revenues Charges to Other Funds 138,473 103,376 94,792 155,566 60,774 64.1% Total Revenues 138,473 103,376 94,792 155,566 60,774 64.1% Positions by Division City Council Operations 9.00 7.00 7.00 7.00 -% Total 9.00 7.00 7.00 7.00 - -% 168 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY COUNCIL Staffing Job Classification FY 2018 FY 2019 Actuals Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary City Council Sub -total: Full -Time Equivalent Positions 9.00 9.00 7.00 7.00 7.00 7.00 7.00 7.00 84,000 84,000 Total Positions 9.00 7.00 7.00 7.00 — 84,000 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 169 CITY COUNCIL 3udget Reconciliation Prior Year Budget 7.00 498,261 94,791 403,470 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Fund Cost Allocation Plan Information Technology Allocated Charges Liability Insurance Allocated Charges Workers' Compensation Allocated Charges (26,897) (3,114) 401 (392) 60,774 (26, 897) (60,774) (3,114) 401 (392) Adjustments to Costs of Ongoing Activities (30,002) 60,774 (90,776) Total FY 2021 Base Budget .0 (48,955) 312,694 Budget Adjustments 1 Travel, Training, Supply and Event Expense Reductions (48,955) 7.00 419,304 155,566 263,739 170 CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY COUNCIL 3udget Adjustments Positions Expenditures Revenues Net General Fund 1 Travel, Training, Supply and Event Expense Reductions 0.00 (48,955) 0 (48,955) This action reduces the department's travel, training, office supply, and special event budget. This will reduce the City Council's capacity to travel for City business and reduce the number of special events that the Council can host. (Ongoing savings: $48,955) Performance Results This action contributes to cost containment strategies in FY 2021. CITY COUNCIL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 171 CITY OF PALO ALTO CITY MANAGER The City Manager's Office provides leadership and professional management to the City government organization and works with the City Council to develop and implement policies to maintain and enhance Palo Alto's quality of life. The City Manager's Office adheres to guid- ing values that emphasize community, stewardship, and public service to ensure goals and objectives are achieved in a timely manner. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 173 CITY MANAGER CITY MANAGER Ed Shikada OPERATIONS 1.00 Assistant City Manager 1.00 Deputy City Manager 2.00 Assistant to the City Manager" SUPPORT 1.00 Executive Assistant to the City Manager 2.00 Administrative Assistant I COMMUNICATIONS 1.00 Chief Communications Officer 1.00 Communications Manager OFFICE OF TRANSPORTATION* 15.00 Full-time FY 2021 POSITION TOTALS 25.00 - Full-time 0.48 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. These position have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Assistant to the City Manager `A detailed breakdown of the organizational structure of the Office of Transportation is included later in this section. 174 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER Description The City Manager's Office (CMO) provides strategic leadership and guidance to the City operations and services for the City of Palo Alto through the following areas (including incubation of new programs): FACILITATE CITY COUNCIL LEGISLATIVE ACTIONS The City Council sets policy direction for the City of Palo Alto and confers that direction through legislative actions. To support the Council's work, the City Manager's Office guides the preparation of City Manager Reports, including analysis and recommended City Council action, and directs implementation of City Council actions. The CMO acts on priorities identified by the City Council during the annual City Council Retreat and City Council -initiated policies or pro- grams. The CMO also engages other governments through participation in regional, statewide, and national organizations, and directs state and federal legislative advocacy efforts on behalf of the City. MANAGE SPECIAL INTERDEPARTMENTAL PROJECTS Each year, the City tackles special projects that, due to their scale and scope, require extensive interdepartmental coordination, community outreach, and engagement with the community, neighboring communities and public agencies. The City Manager's Office takes responsibility for managing these special projects in order to ensure efficient and effective coordination, implementation, and achievement of the City's goals. Some projects may be planned and iden- tified as City Council priorities in one year or another (such as Grade Separation and Sustain - ability) and others may arise as the City responds to unfolding events and community concerns, such as racial equity and inclusion. Special long-term projects, such as Transportation, remain an 'Office' within the CMO department for specific attention and coordination. Others, such as Sustainability, move to another department for long-term operational work, though regular reporting and project development may be facilitated and communicated via the CMO. FACILITATE BUSINESS ENGAGEMENT & ECONOMIC VITALITY The City Manager's Office maintains collaborative relationships with businesses and residents to facilitate desired economic activity. In addition to addressing issues with individual businesses, local and regional associations serve as leaders and partners in this endeavor. Accordingly, the City Manager assigns staff to these organizations. The CMO acts as an ombudsman for the City, connecting business with appropriate departments, answering questions, and addressing issues that arise. In addition, the CMO leads Palo Alto's participation in Sister Cities, creating meaning- ful connections with cities around the world. COORDINATE COMMUNICATIONS & COMMUNITY ENGAGEMENT Palo Alto stands out as a well-informed and engaged community. The City Manager's Office builds on this strength by proactively communicating public information, creating and support- ing community partnerships, and facilitating citizen involvement in order to develop mutual understanding and support between City government and constituents. The CMO achieves this by supporting new community engagement efforts, such as Cool Block, while also promoting CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 175 CITY MANAGER best communication practices throughout the City. In addition, communications staff respond to requests from media and the public, broadcast information on a range of platforms, and assist departments in their communication activities. DIRECT AND COORDINATE DEPARTMENT OPERATIONS The City Manager's Office provides strategic leadership and guidance to the City's Executive Leadership Team to ensure the provision of high -quality, cost-effective, and focused services. The CMO ensures City operations demonstrate transparency and fiduciary responsibility to the public. In this capacity, the CMO also provides timely, accurate, and results -oriented financial and operational reports. Through the budget and development of citywide business plans, the CMO ensures resources are allocated to the City Council's policies and priorities. SUPPORT A PRODUCTIVE AND HEALTHY WORKFORCE The City Manager's Office maintains a highly qualified, engaged, and effective workforce to suc- cessfully attain the City's goals and objectives. Towards that end, the CMO cultivates a strong service culture and provides ongoing, informative communications to City employees regarding key objectives, challenges, and accomplishments. As vacancies occur within the organization, the CMO provides support to maintain service delivery. In addition, the CMO mentors junior and senior staff, developing a pipeline of qualified managers within the organization. Accomplishments The City Manager's Office provides leadership and professional management to the City gov- ernment organization. The accomplishments demonstrated throughout the budget document, within the department chapters, are a consequence of the overall guidance provided by the office. In addition to these many accomplishments, the office completed a series of key projects and activities through its general administration, public communication and economic develop- ment duties: • Supported City Council priority setting and agenda planning while providing leadership and guidance to the organization. • Advanced organizational excellence through work plans, support for professional development and work/life balance, and performance management through the Executive Leadership Team. ▪ Supported. City departments following departures of several executive leaders by ensuring operations continued and while working to fill vacancies. The City Manager's Office provided this support to the Fire Department, the Public Works Department, the Planning & Development Services Department, the Administrative Services Department, and the Office of Transportation. • Managed the City's state and federal legislative program to advance City Council and City department goals. • The City Manager's Office facilitated the City Council and Finance Committee's efforts to achieve fiscal sustainability and complete critical infrastructure projects. 176 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER • The City Manager's Office supported the efforts of departments moving forward on infrastructure projects. Construction activity continues for the 101 Pedestrian and Bicycle Bridge, the Charleston/Arastradero Corridor, the California Avenue Garage, and the Public Safety Building. The construction at Fire Station 3 was completed and the station opened in March 2020. ▪ Supported regular communication and visits with Sister Cities both in person and virtually. ▪ Supported the citywide emergency response to the COVID-19 pandemic, including the evolution of issues starting with emergency services and community support, to public safety, communications, and economic recovery. This also involved planning throughout fire and winter storm seasons. ▪ Supported multiple community outreach efforts on a variety of issues aimed at increasing civic participation, feedback and engagement including Grade Separation, Budget, Cool Block, town halls, the Cubberley master planning process, and the North Ventura Coordinated Area Plan. • Produced and published multi -platform communications content related to City Council and organizational goals and programs; further expanded outreach by launching a monthly newsletter; established a new daily COVID-19 report to inform during the public health emergency; and provided responsive, informed and timely information to community, public, and media stakeholders. • Partnered with local community groups to host the United Nations Association Film Festival throughout various City locations. • Advanced efforts to address impacts of air traffic by advocating for and responding to initiatives by the Federal Aviation Administration (FAA) and supported the creation of the Santa Clara Santa Cruz Counties Community Roundtable. ▪ Continued to support key business districts such as Downtown Palo Alto, California Avenue, Stanford Shopping Center and the Stanford Research Park. ▪ Participated in the planning and execution of the 10th Annual Bike Palo Alto event in partnership with community partners and the Office of Transportation. Bike Palo Alto is a day of self -guided bike tours and bike education. • The City's AAA rating for the City's General Obligation (GO) bonds was affirmed by S&P Global Ratings. In addition, the City recently received an AA+ credit rating related to the California Avenue Certificate of Participation (COP) bond issuance. Both ratings are the highest possible for these respective debt obligations. • Completed usability assessment of current website with internal/external stakeholders in anticipation of website redesign and platform migration. • Created and launched an internal Leadership Cohort to provide leadership development training, coaching, and mentoring to managers serving the City of Palo Alto. The program's first cohort concluded in 2018 and the second cohort continued in 2019. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 177 CITY MANAGER Initiatives ▪ Continue to support the City Council, the priority setting process, and regular, special, and committee meetings. • Continue to provide leadership and professional management to the City government organization. • Work with the City Council and the Expanded Community Advisory Panel (XCAP), citizens, and stakeholders to achieve agreement on a grade separation alternative for rail crossings. As a result, the options for grade separation have been reduced from 37 to 8 (it was reduced to 6 and then 2 new ideas were generated by the XCAP); further refinement is being pursued. • Enhance and advance international programs through the partnership with Neighbors Abroad to create smart city relationships with existing Sister Cities to share knowledge, experience and best practices related to government services and innovation. • Continue to support the City Council and departments with federal and state legislative priorities and goals. • Further advance the City's digital engagement and online presence through responsiveness and quality content to both inform and engage the community. • Launch the City's new website to further the City's communication, transparency and community engagement efforts. • Provide strategic communications support to departments across the City with a focus on programs and projects under the City Council priorities. ▪ Provide strategic support for outreach efforts specifically related to grade separation, planning and transportation issues, as well as infrastructure projects including major downtown construction projects. • Continue partnership with businesses to advance the City's economic development goals and meet business owners' needs regarding concerns such as transportation, parking, and development. ▪ Transition from emergency response of the public health emergency to lead the recovery of the City and broader community, through planning and reopening of city services, continued business support efforts, small business grants and more. • Provide support to departments and the community as Palo Alto works to advance racial equity and opportunities for all. Goals and Objectives GOAL 1 Implement the City Council's policy direction and ensure their goals and objectives are achieved in a timely manner. 178 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER Objectives: • Provide timely, accurate, and results -oriented financial and operational reports. • Lead the development of citywide business plans that support achievement of the Council's policies and priorities. • Maintain a highly qualified, engaged, and effective workforce to successfully attain the City's goals and objectives. GOAL 2 Lead the City's management team to ensure the provision of quality, cost-effective, equitable, and community -focused services. Objectives: • Provide data and analytics to support informed decision -making processes. • Improve the efficiency of the City's infrastructure, facilities, and equipment to support environmental and fiscal sustainability. ▪ Facilitate a high level of citizen understanding and satisfaction with City services. GOAL 3 Maintain an environment that supports a strong local economy, supporting retailers, employees, and employers through sound financial planning and implementation of the City's Operating and Capital Improvement Program (CIP) budgets. Objectives: • Advance structural reforms to ensure the City lives within our means. • Offer different ways for the community to stay informed and engaged on the City's budget process. • Expand the use of innovation, performance management, and community partnerships to maintain and/or enhance public services. • Balance and manage economic growth and development initiatives. GOAL 4 Promote and sustain citizen participation and engagement in public matters. Objectives: • Engage public and private partners to advance community initiatives. • Expand outreach efforts and communications platforms to broaden listening opportunities to encourage citizen participation in local government and community matters. • Ensure timely and responsive resolution to citizens' inquiries. • Preserve transparency and enhance communication with the public. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 179 CITY MANAGER Key Performance Measures CITIZEN SATISFACTION Goal Objective Lead the City's management team to ensure the provision of quality, cost- effective, equitable, and community -focused services. Facilitate a high level of citizen understanding and satisfaction with City services. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of surveyed who rated the Quality of City Services as "Good" or "Excellent" Percent of surveyed who rated the Value of Services for the Taxes Paid as "Good" or "Excellent" Percent of surveyed who rated the Overall Image/Reputation of the City as "Good" or "Excellent" Description Purpose Status 82% N/A* 85% 85% N/A* 58% N/A* 63% 63% N/A* 83% N/A* 88% 88% N/A* The City participates in the National Citizen Survey (NCS), which is a collaborative effort between National Research Center, Inc. and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Residents' feedback on the quality of services provided by the City allows staff to evaluate performance and identify improvement opportunities. Palo Alto will expand efforts to understand citizen satisfaction measures and ways to continue to meet citizens' evolving interests and priorities. Finding new methods of engaging community participation and feedback will be critical to future success and, one could guess, improved satisfaction. * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. 180 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER FACILITATE BUSINESS ENGAGEMENT AND ECONOMIC VITALITY Maintain an environment that supports a strong local economy, supporting retailers, employees, and employers through sound financial planning and implementation of the City's Operating and Capital Improvement Program (CIP) budgets. Goal Objective Percent of surveyed who rated Vibrant Downtown and Commercial Areas as "Good" or "Excellent" Percent of surveyed who rated Shopping Opportunities as "Good" or "Excellent" Percent of surveyed who rated Employment Opportunities as "Good" or "Excellent" Balance and manage economic growth and development initiatives. FY 2018 Actuals 71% FY 2019 Actuals N/A* FY 2020 Adopted 73% FY 2020 Estimated 73% FY 2021 Adopted N/A* 79% NIA* 80% 80% NIA* 73% N/A* 73% 73% N/A* Absolute value of sales tax revenue $31,100,000 $36,500,000 $34,346,000 $30,600,000 $20,500,000 Year -over -year percentage increase in sales tax revenue Description Purpose Status 3.90% 17.36% (5.90)% (16.16)% (33.01)% The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of economic activities and business and service establishments. The NCS is a collaborative effort between the National Research Center, Inc., and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. The City also looks to performance measures such as sales tax revenue and the year -over -year change as indicators of the strength of the local economy and its connection to the City and the services funded by sales and other business -generated taxes. Because the City will not conduct a survey in late 2019/early 2020, these results will be delayed until sometime in 2021. Understanding the community perception of the business environment allows staff to work with developers and investors to ensure the right composition of business and services in Palo Alto. Although Palo Alto continues to rank above the benchmark, the high cost of commercial real estate has had an impact on local services. The City continues to work with business owners to increase parking supply, walkability and enhance public spaces with arts and events to increase customer experience. During the current public health emergency, staff continues to partner with local businesses and identify ways to support business and community recovery. * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 181 CITY MANAGER COORDINATE COMMUNICATIONS AND COMMUNITY ENGAGEMENT Goal Objective Percent of surveyed engaged in community issues by attending a local public meeting Percent of surveyed who rated the City's website as "Good" or 65% N/A* 65% 65% N/A* "Excellent" N/A** 6,422 6,900 6,590 6,700 Promote and sustain citizen participation and engagement in public matters. Preserve transparency and enhance communication with the public. FY 2018 Actuals 25% FY 2019 Actuals N/A* FY 2020 Adopted 25% FY 2020 Estimated 25% FY 2021 Adopted N/A* Number of subscribers to the City Manager's online newsletter Number of unique visitors to the 853,343 753,596 851,469 887,068 975,775 City of Palo Alto website Percent of surveyed rating the City's public info services (non - Police) as "Good" or "Excellent" Description Purpose Status 76% N/A* 78% 78% N/A* The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of local government media services. The NCS is a collaborative effort between National Research Center, Inc., and the International City/County Management Association. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. The City tracks additional performance measures that indicate the volume of traffic to our communications resources (website) and the volume of people receiving our newsletter. Robust levels of community awareness and participation demand communication systems that are timely, accurate, meaningful, and readily accessible. Although Palo Alto continues to rank above the benchmark, the City is always seeking opportunities to expand efforts to increase transparency, information sharing, and outreach. The City recently launched new online engagement tools and is progressing towards a launch of a redesigned website in FY 2021. The new website will enhance communication between the City and the community. * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. **This is a new performance measure for which FY 2018 data is not available. Workload Measures Number of City Council and City Council Committee meetings Total Hours of City Council and City Council Committee meetings FY 2018 Actuals 70 322 FY 2019 Actuals 92 350 FY 2020 Adopted 70 285 FY 2020 Estimated 83 307 FY 2021 Adopted 82 326 182 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Summary 7 Dollars by Division Administration and City Management Economic Development Public Communication Sustainability Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 2,777,772 2,917,905 3,543,655 2,884,827 (658,828) (18.6)% 163,802 41,253 111,447 25,193 (86,255) (77.4)% 287,076 234,988 257,136 250,652 (6,484) (2.5)% 487,332 692,445 635,564 - (635,564) (100.0)% 3,715,982 3,886,591 4,547,803 3,160,671 (1,387,131) (30.5)% Dollars by Category Salary & Benefits Healthcare 182,623 179,667 220,033 183,005 (37,028) (16.8)% Other Benefits 127,634 110,832 71,067 58,285 (12,782) (18.0)% Overtime 210 -% Pension 489,601 490,421 700,537 619,102 (81,435) (11.6)% Retiree Medical 131,822 126,770 130,574 115,708 (14,866) (11.4)% Salary 1,846,341 1,821,458 1,986,232 1,561,988 (424,243) (21.4)% Workers' Compensation 5,188 42,653 69,863 60,210 (9,653) (13.8)% Total Salary & Benefits 2,783,419 2,771,802 3,178,306 2,598,299 (580,007) (18.2)% Allocated Charges 175,155 175,508 203,839 158,894 (44,945) (22.1)% Contract Services 532,169 764,712 1,074,935 338,185 (736,750) (68.5)% General Expense 212,202 134,197 77,641 58,391 (19,250) (24.8)% Operating Transfers -Out 2,039 31,999 2,039 - (2,039) (100.0)% Rents & Leases 54 45 154 154 - -% Supplies & Material 10,945 8,329 10,889 6,639 (4,250) (39.0)% Total Dollars by Expense Category 3,715,982 3,886,591 4,547,803 3,160,671 (1,387,131) (30.5)% Revenues Charges to Other Funds 1,205,312 971,893 1,702,712 1,549,472 (153,240) (9.0)% From Other Agencies 42,374 340,807 260,000 - (260,000) (100.0)% Other Revenue 16,487 - - - - -% Total Revenues 1,264,173 1,312,699 1,962,712 1,549,472 (413,240) (21.1)% CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 183 CITY MANAGER 3udget Summary Positions by Division Administration and City Management Public Communication Sustainability Total Staffing Administrative Assistant Administrative Associate Ill Assistant City Manager FY 2018 Actuals 9.35 FY 2019 Actuals 9.35 FY 2020 Adopted Budget 9.10 FY 2021 Adopted Budget 9.10 FY 2021 Change $ FY 2021 Change % -% 0.90 0.90 0.90 0.90 - - % 1.96 1.75 0.75 - (0.75) (100.0)% 12.21 12.00 10.75 10.00 (0.75) (6.98) % FY 2018 Actuals 1.00 1.00 Assistant City Manager/Utilities 0.25 General Manager FY 2019 Actuals 1.00 1.00 0.25 FY 2020 Adopted Budget 2.00 FY 2021 Adopted Budget 2.00 1.00 1.00 FY 2021 Change FTE FY 2021 Salary 178,621 256,838 Assistant to the City Manager 2.00 2.00 2.00 1.00 (1.00) 164,861 Assistant to the City Manager - - - 1.00 1.00 150,010 (Freeze) Chief Communications Officer 1.00 1.00 1.00 1.00 180,003 Chief Sustainability Officer 1.00 1 .00 City Manager 1.00 1.00 1.00 1.00 356,013 Deputy City Manager 2.00 2.00 1.00 1.00 - 220,542 Executive Assistant to the City 1.00 1.00 1.00 1.00 - 107,328 Manager Management Analyst 0.75 0.75 (0.75) Manager Communications 1.00 Sub -total: Full -Time Equivalent Positions Temporary/Hourly 0.96 Total Positions 11.25 1.00 1.00 1.00 126,360 10.75 10.00 (0.75) 1,740,576 12.00 12.21 12.00 10.75 10.00 (0.75) 1,740,576 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to po- sition freezes is available in the department section organizational chart and budget adjustment sum- maries. 184 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Reconciliation Prior Year Budget One -Time Prior Year Budget Adjustments Recruitment and Retention Initiatives Contractural Funding for Office of Sustainability Economic Development Funding One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Office of Sustainability Transition to Public Works Federal Transit Administration (FTA) Grant Completion Transfer to Electric Fund for Canopy Contract General Fund Cost Allocation Plan City Manager Relocation Expense Reimbursement Information Technology Department Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 10.75 4,547,803 (250,000) - (100,000) (72,000) - (422,000) (0.75) (13,340) (261,767) - (260,000) (2,039) (0.75) 24,000 (35,715) 5,361 (11,818) (4,581) (559,899) 1,962,712 2,585,091 (250,000) - (100,000) (72,000) - (422,000) (13,340) (118,751) (143,016) (260,000) (2,039) (34,489) 34,489 24,000 (35,715) (413,240) 5,361 (11,818) (4,581) (146,659) Total FY 2021 Base Budget 10.00 3,565,904 1,549,472 2,016,432 Budget Adjustments 1 Tax Compliance and National Citizens Survey (Transfer from City Auditor to Administrative Services and City Manager's Office) 2 Travel, Training, and Supply Expense Reductions 3 Management and Professionals Group Compensation Reduction 4 Executive Administration Staffing Reduction Total Budget Adjustments 27,000 (32,000) - (181,483) I (218, 750) - (405,233) 27,000 (32, 000) (181,483) (218,750) - (405,233) Total FY 2021 Adopted Budget 10.00 3,160,671 1,549,472 1,611,199 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 185 CITY MANAGER .budget Adjustments Budget Adjustment 1 Tax Compliance and National Citizens Survey (Transfer from City Auditor to Administrative Services and City Manager's Office) I Positions Expenditures 0.00 27,000 Revenues Net General Fund 1. 27,000 This ongoing action moves funding and responsibility for the National Citizen Survey to the City Manager's Office from the City Auditor's Office. A corresponding action is recommended in the City Auditor's Office. (Ongoing costs: $27,000) Performance Results This action aligns the duties and associated funding of the City Auditor's Office and the City Manager's Office. 2 Travel, Training, and Supply Expense Reductions (32,000) (32,000) This action reduces the department's travel, training, and office supply budget. This will reduce the department's capacity to travel for city business such as regulatory and legislative advocacy and interagency coordination, limit flexibility to take on new administrative projects and duties, and reduce resources available for office work. (Ongoing savings: $32,000) Performance Results This action contributes to cost containment strategies in FY 2021. 186 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER 3 Management and Professionals Group Compensation Reduction 3udget Adjustments Positions Expenditures 0.00 (181,483) Revenues Net General Fund 0 (181,483) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 4 Executive Administration Staffing Reduction (218,750) 0 (218,750) This action reduces 1.0 FTE Assistant to the City Manager in the City Manager's Office. This will adversely impact the department's ability to implement, manage, or coordinate any new initiatives; work on crossdepartmental priorities; respond to Council and community requests; or provide support for public outreach. This position is responsible for special projects, community engagement, and related activities. (Ongoing savings: $218,750) Performance Results This action contributes to cost containment strategies in FY 2021. CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 187 CITY OF PALO ALTO CITY MANAGER OFFICE OF TRANSPORTATION Mission Statement The Office of Transportation's mission is to preserve and enhance the quality of life for Palo Alto residents, visitors, and businesses by providing efficient and cost-effective transportation services for all modes of transportation. Purpose The purpose of the Office of Transporta- tion is to improve the safety of the users of all modes of transportation, reduce reli- ance on single -occupancy vehicles, address congestion, and reduce through traffic and non-resident parking in Palo Alto neighborhoods, leading to an integrated transportation system that serves local, regional, and intercity travel. 189 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER Chief Transportation Official Philip Kamhi Administration 1.00 Management Analyst 1.00 Administrative Assistant Mobility Planning 1.00 Transportation Planning Manager 1.00 Senior Transportation Planner 1.00 Associate Planner 2.00 Safe Routes to School Coordinators Parking Program Manager 1.00 Transportation Planning Manager 1.00 Parking Operations - Lead Engineering 1.00 Senior Engineer 1.00 Traffic Operations - Lead 2.00 Project Engineer 1.00 Associate Engineer FY 2021 POSITION TOTALS 15.00 - Full-time 0.48 - Hourly" This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 0.48 Hourly FTE 190 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER Description The Office of Transportation (OOT) was established in recognition of the scale, complexity, and level of citizen engagement related to transportation. High -profile issues include the separation of at -grade rail crossings, neighborhood traffic safety and bike boulevards, permit parking, traffic mitigation, and the safety of vulnerable road users. The Office is responsible for mobility, engineering, and parking in coordination with other City departments and agencies (such as Valley Transportation Authority, Caltrain, Metropolitan Transportation Commission, California Public Utilities Commission, Palo Alto Unified School District and neighboring cities) through the following: MOBILITY/PLANNING Responsible for sustainable transportation systems that aim to reduce traffic congestion and auto emissions through increased pedestrian, bicycle, public transportation use, and other alter- native modes of transportation. Programs include: Bicycle and Pedestrian - This program includes the discrete capital improvement projects and the programmatic elements needed to implement goals of the Palo Alto Bicycle & Pedestrian Transportation Plan, including the Neighborhood Traffic Safety & Bicycle Boulevard project. This program also provides staffing to the Pedestrian and Bicycle Advisory Committee (PABAC). Palo Alto Shuttle - The Palo Alto Free Shuttle Program is currently suspended due to City-wide budgetary issues. The staff is currently looking for funding opportunities for shuttle or other transit options. Safe Routes to School - In partnership with the Palo Alto Unified School District (PAUSD) and Palo Alto PTA, this program aims to reduce risk, and educate and encourage more families to safely walk, bicycle, bus, and carpool to school. It also includes the development of capital improvement projects to provide safer routes to schools. PARKING/PROGRAM MANAGEMENT Plan, develop, and administer the Residential Permit Parking (RPP) program, parking in the City's garages and lots, and on -street parking in business districts. ENGINEERING Oversee the City's traffic and transportation infrastructure investments through long- and short- range plans, corridor plans, traffic studies, and review of proposed private developments; transportation demand management initiatives; traffic impact fees; and regional coordination. Projects include: CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 191 CITY MANAGER Rail Grade Separations: This is a monumental capital improvement to improve safety at existing railroad crossings. This project will span more than a decade to complete planning, environmen- tal review, design, and construction. Traffic Operations & Capital Improvement Projects: These projects include the monitoring, oper- ations, and modifications of the traffic system; investigation and response to citizen inquiries; and development of plans and funding for capital improvement projects that provide enhanced safety and relieve traffic congestion. Accomplishments • Conducted enhanced community engagement for the Rail Grade Separation project by holding twenty-one extended community advisory meetings and three town hall meetings. • Fully developed concept renderings, animations, and plan views for nine rail grade separation alternatives. • Implemented Old Palo Alto Residential Preferential Parking Pilot Program in October, 2019. • Developed an implementation plan for new online parking permit and citation management system, which will be executed in early 2021. • Increased the percentage of middle and high school students biking to school from 47% in FY 2018 to 55% in FY 2019. ▪ Completed conversion of transportation impact methodology from Level of Service (LOS) to Vehicle Miles of Travel (VMT) per state law. ▪ Provided report on completed portions of Phase 1 of the Neighborhood Traffic Safety & Bicycle Boulevard project and initiated prioritization process for remaining segments. • Implemented signal modifications and improvements at seven intersections and along two corridors. • Completed Phases 1 and 2 (Clemo Avenue to Foothill Expressway and Middlefield Road to Alma Street, respectively), and initiated Phase 3 (El Camino Real to Alma Street and Middlefield Road to Fabian Way) of the Charleston/Arastradero Corridor Project. • Initiated design of traffic signal improvements at San Antonio and Charleston. • Evaluated results of Phase 1 of the Neighborhood Traffic Safety & Bicycle Boulevard project. Initiatives • Achieve the following Rail Grade Separation program milestones: select the preferred solution, obtain a commitment for Measure B funds, and start the environmental process. ▪ Update the community engagement process for transportation projects. • Start Phase 2 of the Neighborhood Traffic Safety & Bicycle Boulevard project. • Initiate update of the Bicycle and Pedestrian Transportation Plan. • Continue to revise the Residential Preferential Parking (RPP) Program to enhance its effectiveness and sustainability. 192 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER • Implement the new online parking permit and citation management system. • Evaluate the Bicycle and Scooter Share Pilot Program. • Provide a Transportation, Traffic Safety, and Operations Report. ▪ Research updates to the Parking Ambassador Program to increase garage capacity. • Develop outcome -based performance measures for all transportation programs with links to the Annual National Citizen Survey where appropriate. • Enhance professional development for the Office of Transportation to optimize staff abilities and productivity. ▪ Complete current Palo Alto Safe Routes to School City, Palo Alto Unified School District (PAUSD) and Parent Teacher Association (PTA) Partnership Five -Year Work Plan objectives to help grow and strengthen community -wide support through the Safe Routes to School model for safe, active, healthy, and sustainable school commutes. ▪ Initiate construction of traffic signal improvements at San Antonio and Charleston. • Implement Automated Parking Guidance System (APGS) in California Avenue Garage. • Initiate construction of the enhanced bike -way at Churchill and El Camino Real. Goals and Objectives GOAL 1 Provide, design, and implement transportation services that meet or exceed the expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle (SOV) trips; and improve traffic flow and parking availability Objectives: • Improve traffic flow on major streets • Increase safety and ease of travel by bicycle in Palo Alto • Increase safety and ease of walking in Palo Alto ▪ Increase awareness of transit options • Pilot micro -mobility options (e.g. scooter and bicycle share programs) GOAL 2 Ensure that services are delivered efficiently and continue to improve Objectives: • Institute a revised community engagement process for transportation projects ▪ Revise the RPP Programs to enhance effectiveness and sustainability ▪ Increase or add automated data collection systems • Improve public parking management systems GOAL 3 Increase the professional capacity of the members of the Office of Transportation CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 193 CITY MANAGER Objectives: ▪ Work collaboratively with staff to create and institute a professional development plan to optimize the abilities and productivity of the Office of Transportation staff • Develop a career development plan to promote the retention of Transportation staff /Key Performance Measures** CITIZEN SURVEY - TRAFFIC FLOW ON MAJOR STREETS Provide, design, and implement transportation services that meet or exceed the Goal expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objective Improve traffic flow on major streets. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent surveyed residents rating the traffic flow on major streets as good or excellent Description Purpose 33% N/A* 30% 30% N/A* The City participates in the National Citizen Survey (NCS) which asks residents to rate their perception of traffic flow on major streets. The NCS is a collaborative effort between the National Research Center and the International City/County Management Association. To obtain feedback from residents on the traffic flow on major streets to determine the perceived functionality of major streets. Status * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. Staff will continue working on managing traffic operations and improving safety. 194 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER CITIZEN SURVEY - EASE OF PUBLIC PARKING Provide, design, and implement transportation services that meet or exceed the Goal expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objective Percent surveyed residents rating the amount of parking as good or excellent Description Purpose Status Increase ease of public parking FY 2018 Actuals 32% FY 2019 Actuals N/A* FY 2020 Adopted 38% FY 2020 Estimated 38% FY 2021 Adopted N/A* The City participates in the National Citizen Survey (NCS) which asks residents to rate their perception of the ease of public parking. The NCS is a collaborative effort between the National Research Center and the International City/County Management Association. To obtain feedback from residents on the ease of public parking to determine if the program's resources are appropriate. * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. An Automated Parking Guidance System (APGS) will be implemented in the California Avenue Garage and the elimination of employee permit parking in some Residential Preferential Parking districts will begin. NUMBER OF SHUTTLE RIDERS Provide, design, and implement transportation services that meet or exceed the Goal expectations of Palo Alto residents; encourage transportation alternatives to single occupancy vehicle trips; and improve traffic flow and parking availability. Objective Number of annual shuttle bus riders Description Purpose Status Increase the annual number of riders on the Palo Alto shuttle FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted N/A 104,929 145,000 65,000 This measure tracks the annual usage of the shuttle program. To track changes in satisfaction and ridership with the shuttle program. The Palo Alto Free Shuttle Program has been defunded in FY 2021 therefore shuttle service is no longer being provided. FY 2018 actuals are not available due to issues with data collection. The staff is currently looking for funding opportunities for shuttle or other transit options. N/A CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 195 CITY MANAGER Number of transportation inquiries to 311 Workload Measures** FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Number of households in RPP district Number of students reached through educational programs with Safe Routes to School Number of development projects reviewed 328 N/A N/A N/A 275 6,569 5,442 275 300 300 7,850 5,900 5,900 6,800 5,442 6,735 71 65 75 80 Number of traffic signals maintained N/A 101 101 101 101 **The Office of Transportation was created in FY 2020. The Key Performance Measures and Workload Measures in this document reflect available information as of June 2020. 196 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Summary Dollars by Division Administration Engineering and Planning Programs Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Facilities & Equipment General Expense Operating Transfers Out Supplies & Material Total Dollars by Expense Category Revenues Operating Transfers -In Other Revenue Permits and Licenses Total Revenues FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget 261,621 473,466 624,274 606,628 499,205 532,481 796,624 861,232 1,155,380 1,664,873 1,833,902 2,312,134 FY 2021 Adopted Budget 630,126 604,400 669,648 1,904,173 FY 2021 Change $ FY 2021 Change % 5,852 0.9% 71,919 13.5% (485,732) (42.0)% (407,961) (17.6)% 67,804 50,920 121,341 103,177 (18,163) (15.0)% 12,328 11,358 24,821 26,528 1,707 6.9% 1,459 2,897 7,597 7,795 198 2.6% 125,212 116,288 295,707 304,620 8,914 3.0% 58,534 74,971 77,220 78,098 878 1.1% 461,605 431,343 854,147 791,163 (62,984) (7.4)% 15,948 17,523 21,922 4,399 25.1% 726,942 703,726 1,398,355 1,333,304 (65,052) (4.7)% 121,435 133,778 - 184,424 184,424 -% 624,852 754,971 642,779 132,446 (510,333) (79.4)% - - 21,000 5,000 (16,000) (76.2)% 189,595 233,380 244,750 228,750 (16,000) (6.5)% 7,780 -% 2,049 267 5,250 20,250 15,000 285.7% 1,664,873 1,833,902 2,312,134 1,904,173 (407,961) (17.6)% 128,000 128,000 1,195 33,460 13,332 162,655 141,332 128,000 128,000 13,332 13,332 141,332 141,332 -% CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 197 CITY MANAGER 3udget Summary Positions by Division Administration Engineering and Planning Programs Total FY 2018 Actuals 0.55 1.90 2.59 5.04 FY 2019 Actuals 0.50 2.18 2.21 4.89 FY 2020 Adopted Budget 2.18 1.70 2.80 6.68 FY 2021 Adopted Budget 2.33 1.70 2.80 6.83 FY 2021 Change $ 0.15 FY 2021 Change % 6.88% -% -% 0.15 2.25% Staffing Administrative Assistant Administrative Associate Ill Associate Engineer Associate Planner FY 2018 Actuals 0.70 0.73 Chief Transportation Official 0.37 Coordinator Transportation Systems Management Management Analyst 0.02 0.50 0.88 FY 2019 Actuals 0.30 0.65 0.24 0.55 0.74 FY 2020 Adopted Budget 0.50 0.30 0.30 0.70 1.25 FY 2021 Adopted Budget 0.50 0.30 0.45 0.70 1.25 FY 2021 Change FTE 0.15 FY 2021 Salary 43,680 37,421 49,065 133,006 139,308 0.50 55,130 Parking Operations - Lead 0.10 - - - Program Assistant II 0.60 - - - - - Project Engineer 0.50 0.50 0.45 0.45 - 68,047 Senior Engineer 0.20 0.20 30,335 Senior Planner 0.15 0.28 0.50 0.50 67,309 Traffic Engineering -Lead 0.38 0.65 0.35 0.35 55,692 Transportation Planning Manager 0.20 0.36 1.15 1.15 - 170,797 Sub -total: Full -Time Equivalent Positions Temporary/Hourly 0.53 0.50 0.48 0.48 - 30,122 Total Positions 5.04 4.89 6.68 6.83 0.15 879,912 4.51 4.39 6.20 6.35 0.15 849,790 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to po- sition freezes is available in the department section organizational chart and budget adjustment sum- maries. 198 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY MANAGER 3udget Reconciliation Prior Year Budget One -Time Prior Year Budget Adjustments 6.68 2,312,134 141,332 2,170,802 VMT Estimation Tool (one-time surcharge) (14,000) (14,000) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (14,000) — (14,000) Salary and Benefits Adjustments Peninsula Corridor Joint Powers Board (PCJPB) Shuttle Service Contract Funding Alignment Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Workers' Compensation Allocated Charges 0.15 6,072 25,000 53,875 22,627 6,700 100,649 4,399 6,072 25,000 53,875 22,627 6,700 100,649 4,399 Adjustments to Costs of Ongoing Activities 0.15 118,674 118,674 Total FY 2021 Base Budget 2,275,476 Budget Adjustments 1 Parking Services Staffing Reduction 2 Management and Professionals Group Compensation Reduction 3 Free Shuttle Service Elimination (29,678) (45,845) (538,333) (29,678) (45,845) (538, 333) Total Budget Adjustments - (613,856) — (613,856) Total FY 2021 Adopted Budget 6.83 1,904,173 1,762,841 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 199 CITY MANAGER 3udget Adjustments 1 Parking Services Staffing Reduction 0.00 (29,678) (29,678) This action reduces 0.48 FTE in part-time staff resources in the Office of Transportation. The department's response times and capacity to review and reconcile parking citation appears in the Residential Preferential Parking (RPP) program will be adversely impacted. (Ongoing savings: $29,678) Performance Results 0 O 0 This action contributes to cost containment strategies in FY 2021 and will increase response times for administrative citations in the RPPs. 2 Management and Professionals Group Compensation Reduction 0.00 (45,845) 0 (45,845) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $45,845) Performance Results 0 This action contributes to cost containment strategies in FY 2021. 3 Free Shuttle Service Elimination 0.00 (538,333) MM. 0 (538,333 This action eliminates the free Crosstown and Embarcadero Shuttles. Staff previously assigned to the shuttle program will be reassigned to other key transportation projects. The shuttles connect the University Avenue/Downtown to South Palo Alto at Charleston Road and provide peak hour service between the University Avenue Caltrain Station and the Baylands Business Parks east of Highway 101/Embarcadero. This action will reduce free alternative transportation options to residents of and visitors to Palo Alto, including senior citizens and local students. The Crosstown and Embarcadero shuttles provided 104,929 rides in FY 2019. (Ongoing savings: $538,333) Performance Results 0 0 0 This action contributes to cost containment strategies in FY 2021 and eliminate free shuttle services, reducing the availability of alternative modes of transportation in Palo Alto, 200 CITY MANAGER • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Mission Statement The Administrative Services Department strives to provide proactive financial and analytical support to City departments and decision -makers and to safeguard and facilitate the optimal use of City resources. Purpose The purpose of the Administrative Services Department is to provide excellent cus- tomer service to decision -makers, the pub- lic, employees, and City departments; provide analytical, organizational, and administrative support for a wide variety of projects; record, monitor, and protect City assets in a responsible manner; provide essential financial management and forecasting reports; and prepare and present financial reporting to various committees and City Council. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 201 ADMINISTRATIVE SERVICES ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER Kiely Nose ADMINISTRATION 1.00 Administrative Assistant 0.50 Senior Management Analyst 1.00 Management Analyst 1.00 Assistant Director INVESTMENT & DEBT 0.60 Manager of Treasury, Debt Investment 0.40 Senior Management Analyst PURCHASING & CONTRACTS 1.00 Chief Procurement Officer 4.00 Contract Administrator" 1.00 Administrative Associate II" 1.00 Buyer 2.00 Senior Buyer RISK MANAGEMENT 0.40 Manager of Treasury, Debt & Investment 0.10 Senior Management Analyst ACCOUNTING 1.00 Finance Manager GENERAL LEDGER 1.00 Senior Accountant 1.00 Accountant 1.00 Lead Account Specialist ENTERPRISE FUND 1.00 Senior Accountant 1.00 Accountant 1.00 Account Specialist ACCOUNTS PAYABLE 1.00 Senior Accountant 1.00 Lead Account Specialist 2.00 Account Specialist" 1.00 1.00 2.00 PAYROLL Senior Accountant Accountant Payroll Analyst SAP FUNCTIONAL 1.00 Principal Business Analyst 2.00 Senior Business Analyst OFFICE OF MANAGEMENT AND BUDGET 100 Director" 2.00 Budget Manager 1.00 Administrative Associate III 2.00 Senior Management Analyst 1.00 Performance Auditor II" 1.00 Management Analyst 1.00 Assistant Director PRINT & MAIL SERVICES 2.00 Offset Equipment Operator REAL ESTATE 1.00 Real Property Manager 1.00 Senior Management Analyst REVENUE COLLECTIONS 1.00 Manager of Revenue Collections 2.00 Lead Account Specialist 5.50 Account Specialist" STORES WAREHOUSE 1.00 Warehouse Supervisor 1.00 Lead Storekeeper 3.00 Storekeeper FY 2021 POSITION TOTALS 59.50 Full -Time 1.46 Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 2.00 FTE Account Specialist 0.50 FTE Administrative Associate II 0.40 FTE Contracts Administrator 1.00 FTE Director Office of Management and Budget 1.00 FTE Performance Auditor II 202 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Description The Administrative Services Department (ASD) is responsible for the following functions: ADMINISTRATION Provides financial, analytical, budget, strategic, and administrative support services for the department and organization. ACCOUNTING Performs financial transactions and provides accurate, timely, and reliable financial information for internal and external customers, including vendor payments, customer billing, payroll, and financial reporting. PURCHASING AND CONTRACTS Facilitates negotiations, purchasing, and contracting needs in a timely, efficient, and customer - oriented manner. OFFICE OF MANAGEMENT AND BUDGET (OMB) Oversees the citywide operating and capital budget preparation, review, and analysis, perfor- mance measures, and budget monitoring. In addition, prepares the long-range financial forecast and provides independent analytical support to the organization. PROPERTY MANAGEMENT AND ACQUISITION Provides asset management, acquires property rights, manages the leasing of City properties, prepares real estate agreements, completes easement acquisitions/vacations, negotiates real estate agreements, and provides real estate services citywide. TREASURY AND REVENUE COLLECTIONS Treasury safeguards and invests the City's portfolio, forecasts major General Fund tax revenues, issues and manages debt, and performs Utility Risk Management oversight. Revenue Collec- tions collects payment revenue and provides customer support for parking permits and pay- ment transactions. Provides print shop services to departments and warehouse services, including logistics, for the City's Electric, Water, Gas, and Wastewater Utilities, as well as for Public Works and the Regional Water Quality Control Plant. Accomplishments • Maintained the City's AAA credit rating, which results in the lowest possible borrowing costs; confirmed in the most recent rating by Standard and Poors in February 2019. ▪ Continued progress on developing a Pension Funding Policy as part of a comprehensive effort to proactively address the City's long term liabilities. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 203 ADMINISTRATIVE SERVICES • Contributed $5.2 million ($3.5 million from the General Fund) in FY 2020 to the City's Section 115 Pension Trust Fund, bringing the total contributions to $27.2 million ($17.8 million from the General Fund). ▪ Managed the City's real estate leases resulting in revenue of approximately $4.2 million. ▪ Acquired a 27,829 square foot portion of 3350 Birch Street for the potential expansion of Boulware Park. • Acquired tie -back easements for construction of the California Avenue Parking Garage project. ▪ Participated in citywide emergency preparation and planning to ensure that financial tracking and reporting continue to be included as part of the coordinated emergency response effort for COVID-19. ▪ Implemented department -wide, technology -focused, core competency training such as: SAP module specific training for support resources and SAP reporting training in the Human Resources and Payroll modules. • Earned the `excellence in financial reporting award' from the Government Finance Officers' Associations of United States and Canada (GFOA) for the FY 2019 Comprehensive Annual Financial Report (CAFR). • Earned the capital and operating budget excellence awards' from the California Society of Municipal Finance Officers (CSMFO) and the 'distinguished budget presentation award' and 'certificate of recognition for budget preparation' from GFOA for the Fiscal Year 2020 Adopted Capital and Operating budgets. • Started a new revenue sharing agreement with the Media Center and cable joint powers partners for public, education, and government (PEG) funds enabling the Media Center to receive PEG revenue in compliance with federal regulations. • Completed a review of fundraising for the Roth Building rehabilitation project and presented findings to the City Council. • Implemented a new meals policy for City staff, which satisfied an internal audit recommendation regarding taxable meals. • Introduced new copier printing software, in partnership with the Information Technology Department, to reduce paper and toner consumption citywide. • Processed grant payments and disbursed payments for the COVID-19 Small Business Grant Program in partnership with the City Manager's Office. Initiatives ▪ Continue implementation of the ASD strategic plan in four focus areas: 1) High -quality customer service, 2) Innovation and continuous improvement, 3) Best practices, and 4) Employee excellence, including customer support resources in purchasing, payroll, and accounting and implementation of electronic forms. • Maintain employee excellence through training plans designed to improve customer service and responsiveness and incorporating those aspects into the employee rating form. 204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES • Train and educate City staff on the procurement process to improve efficiencies and align with industry best practices. This will ensure the changing workforce is equipped to handle their procurement needs in an expeditious fashion and allow changes in purchasing policies, processes, and requirements to be proactively communicated to key staff. • Facilitate the implementation of a new online parking permit management system in a phased approach, beginning with residential parking permit programs. • Expand the paperless office program, currently in the Purchasing Division, to other divisions including Accounting and Real Estate. • Support the citywide effort to upgrade the SAP Enterprise Resource Planning (ERP) system. • Prepare and submit reimbursement requests to FEMA for costs associated with the City's response to the COVID-19 emergency. 3udget Summary FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Fund General Fund -Operating 7,680,331 7,653,228 8,519,330 8,362,345 (156,986) (1.8)% Printing & Mailing Services Fund 1,638,395 1,608,622 1,730,856 1,541,318 (189,538) (11.0)% Total 9,318,726 9,261,850 10,250,186 9,903,663 (346,523) (3.4)% Revenues Charges for Services 13,890 9,077 187,673 191,266 3,592 1.9% Charges to Other Funds 4,090,745 3,679,830 3,186,802 3,426,620 239,818 7.5% Other Revenue 145,266 168,531 171,400 171,400 — —% Return on Investments (1,100) (1,163) 2,300 — (2,300) (100.0)% Sales Taxes 150,000 150,000 —% Total Revenues 4,248,801 3,856,274 3,548,175 3,939,285 391,110 11.0% Positions by Fund General Fund 40.06 39.61 40.61 41.61 1.00 2.46% Printing and Mailing Services 2.10 2.10 2.10 2.10 — —% Total 42.16 41.71 42.71 43.71 1.00 2.34% ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 205 ADMINISTRATIVE SERVICES GENERAL FUND Goals and Objectives GOAL 1 • Ensure the City of Palo Alto's short and long-term financial status is healthy and sound. Objectives: • Assist with implementation of City Council's 2014 Infrastructure Plan by providing updated financial planning and issuance of debt. • Review opportunities for new and/or enhanced revenues. ▪ Analyze additional options for reducing the City's pension and retiree healthcare long-term liabilities. ▪ Provide long-term recommendations and strategies for the City's real estate assets such as Cubberley, Ventura, and Middlefield Road lots. • Manage real estate assets effectively to enhance revenue and reduce cost. ▪ Recommend a strategically balanced budget, maintaining City Council -approved reserve levels, for City Council consideration. • Assist with ongoing labor negotiations with analysis of labor and City proposals. ▪ Develop plans for addressing any forecast shortfalls in funding for operations and infrastructure. • Provide bond financing of major capital projects such as the Wastewater Treatment facility replacements, Public Safety Building, etc. GOAL 2 . Provide timely and accurate financial reporting and transactions. Objectives: • Ensure that payroll processing, vendor payments, budget, and annual financial reporting are clear, timely, accurate, and in compliance with governmental finance standards. • Enhance financial reporting mechanisms to ensure that departmental financial information is relevant and timely; look for opportunities to improve reporting as part of technology implementation upgrades. • Increase information availability and transparency using open data tools and dashboards. • Implement complex new labor agreements including new benefit structures, ensuring timely and accurate payments to employees and governing bodies such as the federal government and CaIPERS. GOAL 3 . Ensure public funds and assets are invested prudently and are well -managed. 206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Objectives: • Ensure sufficient cash is always available to meet current expenditures. • Maintain a reasonable rate of return on investments. • Invest in sound Environmental, Social, and Governance (ESG) securities, which include green and sustainable bonds, when available and appropriate, in alignment with recently approved changes to the investment policy. GOAL 4 • Continue implementation of the ASD Strategic Plan in the focus areas of customer service, innovation, best practices, and employee excellence. Objectives: • Continue implementing a succession plan for the department. • Review ASD policies and procedures to continuously update, enhance, and streamline. ▪ Roll out training and resources for customer support to improve processing time. ▪ Enhance training plans for employees for job specific training and career development. ▪ Implement new tools for team collaboration and sharing, such as Office 365 and SharePoint. /Key Performance Measures ANNUAL PERCENTAGE YIELD ON INVESTMENTS Goal Ensure public funds and assets are invested prudently and are well -managed. Objective Maintain a reasonable rate of return on investments. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Annual percentage yield on investments Description Purpose Status 2.16% 2.29% 2.22% 2.08% 1.92% This measure tracks the City's annual rate of return on investments while following primary objectives (in priority order) of safety, liquidity, and yield. A stable rate of return helps to grow the City's investment portfolio and is one component in measuring the City's financial rating. With a now declining interest rate environment, the City's adopted goal of 2.40% is being revised downward. In comparison, the State Investment Pool average yield for FY 2019 was 2.29%. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 207 ADMINISTRATIVE SERVICES AVERAGE PROCESSING TIME FOR PURCHASE REQUISITIONS Implement performance management programs to support and enhance communication, accountability, and positive outcomes. Continue developing and implementing Procurement and Inventory process improvements. Goal Objective Average time from receipt of a Purchase Requisition to issuance of Purchase Order (Days) Description Purpose Status FY 2018 Actuals 26 FY 2019 Actuals 22 FY 2020 Adopted 25 FY 2020 Estimated 22 FY 2021 Adopted 25 The City is required to follow procurement rules and regulations as outlined in the Municipal Code and State Law to ensure open and fair competition and the most cost-effective use of tax dollars. In compliance with existing rules and regulations, ASD endeavors to provide goods and services as quickly as possible to City departments. To measure the average processing time for Purchase Requisitions (PR) in order to identify processing improvements while being compliant with existing rules and regulations. The Purchasing Division has maintained efficiency with the use of e -Procurement software that was implemented in FY 2016. Staff anticipates an increase in larger, more complex PRs in FY 2020 due to the volume of capital improvement projects planned over the next several years. This influx of capital projects will result in an increase in estimated cycle time. Over the next year, the Purchasing Division will continue to work with City stakeholders to meet business needs in a timely manner despite this uptick in complex procurements. Workload Measures Number of P -card (City credit card) transactions Number of Purchase Orders and Purchase Requisitions processed Total amount of cash and investments - as of June 30 (Millions) FY 2018 Actuals 19,230 1,455 FY 2019 Actuals 18,065 1,380 FY 2020 Adopted 18,000 1,500 FY 2020 Estimated 15,920 1,300 FY 2021 Adopted 16,500 1,400 $526 $528 $530 $530 $525 208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES 3udget Summary FY 2018 Actuals Dollars by Division Accounting 2,154,241 2,360,606 2,517,142 2,489,905 (27,237) (1.1)% Administration 701,429 654,087 362,163 405,408 43,245 11.9% Office of Management and Budget 1,471,554 1,380,332 1,515,138 1,412,447 (102,691) (6.8)% Purchasing 1,561,940 1,441,582 1,719,881 1,587,025 (132,856) (7.7)% Real Estate 567,478 602,957 682,402 652,081 (30,321) (4.4)% Treasury 1,223,689 1,213,665 1,722,605 1,815,480 92,874 5.4% Total 7,680,331 7,653,228 8,519,330 8,362,345 (156,986) (1.8)% FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Category Salary & Benefits Healthcare 659,957 640,224 786,754 695,174 (91,580) (11.6)% Other Benefits 164,532 152,448 169,450 159,466 (9,983) (5.9)% Overtime 23,104 48,289 35,499 36,422 923 2.6% Pension 1,185,868 1,176,622 1,661,345 1,655,645 (5,700) (0.3)% Retiree Medical 564,670 473,449 487,653 465,417 (22,236) (4.6)% Salary 4,146,162 4,070,985 4,198,750 4,105,561 (93,189) (2.2)% Workers' Compensation 39,412 108,269 171,647 159,026 (12,621) (7.4)% Total Salary & Benefits 6,783,704 6,670,287 7,511,098 7,276,711 (234,386) (3.1)% Allocated Charges 405,529 491,501 461,207 375,807 (85,399) (18.5)% Contract Services 304,787 238,703 288,148 455,348 167,200 58.0% Facilities & Equipment 2,570 633 4,200 4,200 -% General Expense 144,980 149,751 207,924 203,524 (4,400) (2.1)% Operating Transfers -Out - 65,146 - - - -% Rents & Leases 12,856 12,856 12,856 12,856 - -% Supplies & Material 25,905 24,351 33,898 33,898 -% Total Dollars by Expense Category 7,680,331 7,653,228 8,519,330 8,362,345 (156,986) (1.8)% Revenues Charges for Services 13,890 9,077 187,673 191,266 3,592 1.9% Charges to Other Funds 2,333,469 2,075,728 1,466,507 1,793,879 327,372 22.3% Other Revenue 145,266 168,531 171,400 171,400 -% ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 209 ADMINISTRATIVE SERVICES 3udget Summary Sales Taxes Total Revenues FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget 150,000 FY 2021 Change $ 150,000 FY 2021 Change % -% 2,492,625 2,253,336 1,825,580 2,306,544 480,964 26.3% Positions by Division Accounting 13.60 13.52 13.52 13.52 - -% Administration 1.60 1.60 1.60 1.60 -% Office of Management and Budget 6.62 6.02 6.02 7.02 1.00 16.61% Purchasing 8.57 9.05 9.05 9.05 -% Real Estate 2.32 2.32 2.32 2.32 - -% Treasury 7.35 7.10 8.10 8.10 - -% Total 40.06 39.61 40.61 41.61 1.00 2.46% Staffing Job Classification Account Specialist Account Specialist (Freeze) Account Specialist -Lead Accountant Administrative Assistant Administrative Associate II Administrative Associate II (Freeze) Administrative Associate III Assistant Director Administrative Services FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 4.88 4.63 4.63 3.13 1.50 3.05 3.45 3.45 3.45 3.00 3.00 3.00 3.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.50 0.50 1.00 1.00 1.00 1.00 FY 2021 Change FTE (1.50) 1.50 FY 2021 Salary 244,986 117,406 289,121 306,966 90,480 (0.50) 39,197 0.50 39,198 84,032 1.65 1.65 1.65 1.65 - 330,318 Buyer 1.00 1.00 1.00 1.00 - 104,416 Chief Procurement Officer 1.00 1.00 1.00 1.00 - 149,864 Contracts Administrator 2.70 2.70 2.70 2.30 (0.40) 249,909 Contracts Administrator (Freeze) 0.40 0.40 43,463 Director Administrative Services/ CFO Director Office of Management and Budget 0.80 0.80 0.80 0.80 - 189,530 1.00 1.00 1.00 (1.00) 210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Staffing Director Office of Management and Budget (Freeze) Management Analyst Manager Accounting Manager Budget FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget - 1.00 2.00 1.00 - - 1.00 2.00 2.00 Manager Real Property 1.00 1.00 1.00 Manager Revenue Collections 0.62 0.62 0.62 Manager Treasury, Debt & Investments FY 2021 Adopted Budget 1.00 2.00 2.00 1.00 0.62 FY 2021 Change FTE FY 2021 Salary 1.00 199,035 195,104 328,640 154,523 99,041 0.60 0.60 0.60 0.60 - 93,026 Manager, Finance 1.00 1.00 1.00 - 177,923 Payroll Analyst 2.00 2.00 2.00 2.00 186,659 Performance Auditor II (Freeze) 1.00 1.00 110,074 Senior Accountant 3.00 3.00 3.00 3.00 - 382,450 Senior Buyer 1.00 1.00 1.00 1.00 - 109,637 Senior Management Analyst 4.90 2.30 2.30 2.30 - 293,632 Storekeeper 1.00 1.00 1.00 1.00 79,498 Storekeeper -Lead 0.20 0.20 0.20 0.20 17,019 Warehouse Supervisor 0.20 0.20 0.20 0.20 20,688 Sub -total: Full -Time Equivalent 38.60 38.15 39.15 40.15 1.00 4,725,833 Positions Temporary/Hourly 1.46 1.46 1.46 1.46 - 101,077 Total Positions 40.06 39.61 40.61 41.61 1.00 4,826,910 This budget includes position freezes that reduce the funding equivalent to holding a position va- cant. These positions are identified with "(Freeze)" following the job classification title in the depart- ment section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjust- ment summaries. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 211 ADMINISTRATIVE SERVICES 3udget Reconciliation Prior Year Budget 40.61 8,519,330 1,825,580 6,693,750 One -Time Prior Year Budget Adjustments Administrative Services Staffing Vacancies One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Business Registry Fee Minimum Wage Compliance Tax and Fee Consulting Services (CMR 10493) General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 277,547 — 277,547 231,700 15,000 59,700 9,585 (82,000) 7,830 (20,814) (12,621) 208,380 277,547 — 277,547 231,700 3,592 (3,592) 15,000 59,700 288,872 (288,872) 9,585 (82,000) 7,830 292,464 (20,814) (12,621) (84,084) Total FY 2021 Base Budget 40.61 ,005,257 2,118,044 6,887,213 Budget Adjustments 1 Reallocate 1.0 FTE Performance Auditor II from City Auditor's Office and Suspend City's Performance Report 2 Real Estate Software 3 Tax Compliance (Transfer from City Auditor's Office) 4 Purchasing Staff Reorganization and Service Reduction 5 Accounting and Revenue Collections Reorganization 6 Management and Professionals Group Compensation Reduction Total Budget Adjustments 1.00 25,668 1.00 38,500 50,000 (185,582) (200,538) (370,960) (642,912) 25,668 38,500 — 150,000 (100,000) (185,582) (200,538) (370,960) (831,412) 188,500 Total FY 2021 Adopted Budget 41.61 8,362,3 • 2,306,544 6,055,801 212 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES .budget Adjustments udget :Adjustments_ Positions Expenditures Revenues Net General Fund 1 Reallocate 1.0 FTE Performance Auditor II from City Auditor's Office and Suspend City's Performance Report 1.00 25,668 25,668 This action reallocates 1.0 FTE Performance Auditor II from the City Auditor's Office to the Administrative Services Department, Office of Management and Budget (OMB), and reduces the position as a cost containment strategy. The City's annual Performance Report, which was produced by the Auditor's Office in prior years, will be suspended; however, the move of this position is anticipated to increase workload capacity and allow OMB to produce the report in future years. The City's performance measure data for both the Operating Budget document and the annual Performance Report is stored in the City's budget production software database, so this action will align the City's performance reporting within OMB. A corresponding action to reallocate the position is recommended in the City Auditor's Office. (Ongoing costs: $25,668) Performance Results © 0 This action aligns the duties and associated funding of the City Auditor's Office and the Administrative Services Department, and contributes to the City's cost containment strategies in FY 2021 as a result of economic impacts associated with COVID-19. 2 Real Estate Software This action allocates one-time funding ($20,000) to purchase and implement new lease administration software as well as ongoing funding for the annual licensing ($18,500). The costs are offset by recognizing increased lease revenue from outside vendors that rent City owned property. (Ongoing costs: $18,500) Performance Results © 0 The software will streamline and automate lease management for the City's various properties that are rented to external vendors as well as internal non General Fund departments. In addition, it will automate the production of GASB 87 reports to standardize reporting of lease related assets and liabilities for the annual Comprehensive Annual Financial Report (CAFR). 3 Tax Compliance (Transfer from City Auditor's Office) 50,000 I 150,000 (100,000) This action moves one-time funding for contractual tax compliance services and the ongoing estimated revenue generated by the compliance services to the Administrative Services Department. This will align the City's tax revenue services A corresponding action is recommended in the City Auditor's Office. (Ongoing savings: $150,000) ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 213 ADMINISTRATIVE SERVICES 3udget Adjustments T ud•et Adjustments Positions Expenditures Revenues Net General Fund Performance Results O 0 This action aligns the duties and associated funding formerly in the City Auditor's Office, in the Administrative Services Department. 4 Purchasing Staff Reorganization and Service Reduction .1-0.00 (185,582) (185,582) This action reduces resources in the procurement division by reducing 0.5 FTE Administrative Associate and 0.4 FTE Contract Administrator. This action will require the review of purchasing policies and requirements to allow for efficiencies in solicitation cycle time, such as changing levels for competitive solicitations or partially decentralizing low dollar items to departments. (Ongoing savings: $185,582) Performance Results © © 0 This action contributes to the City's cost containment strategies in FY 2021 as a result of economic impacts associated with COVID-19. This may result in delays, decentralization, and increased risk because of a loss in oversight of procurement processes and adherence to the municipal code. 5 Accounting and Revenue Collections Reorganization 0 (200,538) I This action reorganizes resources in revenue collections, accounting, and the office of management and budget (OMB). 2.00 FTE Accounting Specialist and 1.00 FTE Director of OMB will be reduced across all funds as a result of this action. Staff will explore shifting revenue collection functions to an electronic or online platform to achieve efficiencies where possible. Printing of checks will happen every two weeks, and payment inquiries from vendors and city staff will take longer to resolve. OMB will restructure and explore options to reallocate duties across the team. (Ongoing savings: $200,538) Performance Results © © 0 0 This actions contributes to the City's cost containment strategies in FY 2021 as a result of economic impacts associated with COVID-19. This reduces customer service counter hours, increases internal and external wait times, and impacts the workload capacity of the budget team. 6 Management and Professionals Group 0.00 (370,960) 0 (370,960) Compensation Reduction This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 214 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES PRINTING AND MAILING SERVICES Accomplishments • Processed 271,000 utility bills. • Maintained timelines for producing City Council packets. • Provided timely printing services for a wide variety of print jobs for City departments. Initiatives • Maintain a high level of customer service for Printing and Mailing by listening to customers and, when appropriate, making relevant changes to operations. • Provide quality printing products that meet the needs of customers. Goals and Objectives GOAL 1 • Provide timely and high -quality services for City departments, City Council, and Committees. Objectives: ▪ Ensure timely distribution of mail and utility bills. . Ensure timely creation and distribution of City Council and Committee packets. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 215 ADMINISTRATIVE SERVICES 3udget Summary Dollars by Division Printing and Mailing Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 1,644,249 1,608,622 1,730,856 1,541,318 (189,538) (11.0)% 1,644,249 1,608,622 1,730,856 1,541,318 (189,538) (11.0)% Dollars by Category Salary & Benefits Healthcare 28,566 29,760 28,291 31,872 3,581 12.7% Other Benefits 3,267 3,289 3,359 4,054 695 20.7% Overtime 4,779 1,582 -% Pension 30,959 33,209 47,533 41,862 (5,671) (11.9)% Retiree Medical 62,960 14,663 15,103 14,004 (1,100) (7.3)% Salary 128,064 134,197 142,079 142,940 862 0.6% Workers' Compensation 462 3,289 5,387 4,991 (396) (7.4)% Total Salary & Benefits 259,056 219,990 241,752 239,722 (2,029) (0.8)% Allocated Charges 205,990 273,237 360,090 362,756 2,665 0.7% Contract Services 29,083 239,711 60,000 (179,711) (75.0)% General Expense 370,562 292,503 286,975 301,600 14,625 5.1% Operating Transfers -Out 3,154 1,598 9,200 - (9,200) (100.0)% Rents & Leases 640,236 636,515 512,870 402,240 (110,630) (21.6)% Supplies & Material 165,252 155,826 80,258 175,000 94,742 118.0% Total Dollars by Expense 1,644,249 1,608,751 1,730,856 1,541,318 (189,538) (11.0)% Category Revenues Charges to Other Funds 1,757,276 1,604,102 1,720,295 1,632,741 (87,554) (5.1)% Return on Investments (1,100) (1,163) 2,300 - (2,300) (100.0)% Total Revenues 1,756,175 1,602,939 1,722,595 1,632,741 (89,854) (5.2)% Positions by Division Printing and Mailing 2.10 2.10 2.10 2.10 Total 2.10 2.10 2.10 2.10 -% -% 216 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Staffing Job Classification FY 2018 Actuals FY 2019 Actuals Manager Revenue Collections 0.10 0.10 Offset Equipment Operator 1.52 1.52 Sub -total: Full -Time Equivalent 1.62 1.62 1.62 1.62 — 121,825 Positions Temporary/Hourly 0.48 0.48 0.48 0.48 FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary Total Positions 0.10 1.52 0.10 1.52 15,974 105,850 27,256 2.10 2.10 2.10 2.10 — 149,081 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 217 ADMINISTRATIVE SERVICES Prior Year Budget 2.10 1,730,856 1,722,595 3udget Reconciliation Net Printing and Mailing Services One -Time Prior Year Budget Adjustments 8,261 Transfer to Technology Fund (fE-19001 City Council Chambers Upgrade) (9,200) (9,200) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities — (9,200) — (9,200) Salary and Benefits Adjustments Rents & Leases Expenditure Alignment Printer Maintenance and Repair Return on Investments General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges 42 (35,630) (35,344) 9,002 301 (6,637) (396) 42 (35, 630) (35, 344) (2,300) 2,300 9,002 301 (6,637) 22,446 (22,446) (396) Adjustments to Costs of Ongoing Activities (68,662) 20,146 (88,808) Total FY 2021 Base Budget 2.10 1,652,994 1,742,741 (89,747) Budget Adjustments 1 Management and Professionals Group Compensation Reduction 2 Printing Services and Allocated Charges (1,676) (110,000) 1 (110,000) (1,676) Total Budget Adjustments Total FY 2021 Adopted Budget — (111,676) 2.10 1,541,318 (110,000) (1,676) 1,632,741 (91,423) 218 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ADMINISTRATIVE SERVICES Budget Adjustments Positions Expenditures Net rinting and Mailing ervices 1 Management and Professionals Group Compensation Reduction (1,676) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 2 Printing Services and Allocated Charges 0.00 (110,000) (110,000) This action restructures the City's printing services through a reduction in costs by $110,000 as well as a reduction in printing allocated charges across City funds. Staff is evaluating adjustments to the City's copier leases. The General Fund portion of these savings is anticipated to be approximately $88,000 based on the allocation of printing costs. (Ongoing Net Savings: $0) Performance Results 4 This action contributes to cost containment strategies in FY 2021. ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 219 CITY OF PALO ALTO COMMUNITY SERVICES Mission Statement The Community Services Department's mission is to engage individuals and families in creating a strong and healthy community through parks, recreation, social services, arts, and sciences. Purpose The purpose of the Community Services Department is to provide a diverse range of quality programs and services that are highly valued and relevant to the needs of the community. Community Services aims to develop and provide programs for increased knowledge, creativity, artistic expression, physical activity, social help, and enjoyment of the outdoors; seeks to be responsible stewards of many unique community assets including open space, parks and related interpretive centers, the Animal Shelter, Children's The- atre, Palo Alto Art Center, Junior Museum and Zoo and three community cen- ters at Cubberley, Mitchell Park and Lucie Stern, and the Palo Alto Public Art collection; seeks to provide comfortable, safe, and attractive facilities; strives for sustainable practices that lower the City's carbon footprint; and develops and maintains mutually beneficial partnerships and collaborations with local organi- zations, businesses, individuals and foundations to achieve its mission. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 221 COMMUNITY SERVICES COMMUNITY SERVICES DIRECTOR Kristen O'Kane HUMAN SERVICES 1.00 Human Services Manager 1.00 Management Assistant OPEN SPACE, PARKS & GOLF DIVISION 1.00 Open Space, Parks & Golf Superintendent 1.00 Coordinator, Recreation Programs OPEN SPACE 2.00 Community Services Manager" 5.00 Park Ranger PARKS ADMINISTRATION 1.00 Parks Superintendent CITY PARKS & FACILITIES 2.00 Inspector, Field Services 4.00 Sprinkler System Representative 1.00 Park Maintenance - Lead 1.00 Community Services Manager 2.00 Parks Crew - Lead 6.00 Park Maintenance Person CAPITAL PROJECTS 1.00 Coordinator Public Works Projects ADMINISTRATION 2.00 Assistant Director" 1.00 Senior Management Analyst 1.00 Management Analyst 1.00 Administrative Assistant 1.00 Administrative Associate III" RECREATION DIVISION 1.00 Recreation Superintendent" LUCIE STERN COMMUNITY CENTER 1.00 Community Services Manager 2.00 Program Assistant I" 1.00 Coordinator, Recreation Programs 1.00 Building Service Person - Lead MITCHELLPARK COMMUNITY CENTER 1.00 Community Services Senior Program Manager 1.00 Program Assistant I" 1.00 Program Assistant II 2.00 Coordinator, Recreation Programs 1.00 Building Service Person CUBBERLEY COMMUNITY CENTER 1.00 Community Services Manager 1.00 Program Assistant I 1.00 Program Assistant II 1.00 Building Service Person - Lead 1.00 Building Service Person FY 2021 POSITION TOTALS 75.37 - Full-time 54.73 - Hourly" ARTS & SCIENCES DIVISION PALO ALTO ART CENTER 1.00 Community Services Senior Program Manager 4.25 Producer Arts & Sciences' 1.00 JMZ Educator" 1.00 Program Assistant I" PUBLIC ART PROGRAM 1.00 Community Services Senior Program Manager 1.00 Program Assistant II CHILDREN'S THEATER 1.00 Community Services Senior Program Manager 1.00 Theater Specialist 3.75 Producer Arts & Sciences' 1.00 Program Assistant I JUNIOR MUSEUM & ZOO 1.00 Community Services Senior Program Manager 3.00 Theater Specialist 2.00 Producer Arts & Sciences 2.60 JMZ Educator 1.00 Program Assistant II This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary table summarizes FTEs by position allocation. These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Administrative Associate I I I 1.00 FTE Assistant Director 0.35 FTE Junior Museum & Zoo Educator 1.00 FTE Manager Community Services 1.75 FTE Producer Arts/Science Program 4.00 FTE Program Assistant I 1.00 FTE Superintendent Recreation 10.61 Hourly FTE 222 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES Description The Community Services Department operates three divisions and an Office of Human Services, providing the following services to the community: ARTS AND SCIENCES Provides visual and performing arts, music, dance, and science programs to youth and adults, with a focus on family programs. The division manages the Art Center, Junior Museum and Zoo (JMZ), Children's Theatre, Community Theatre, Cubberley Theatre, the Public Art Program, the Cubberley Artist Studios Program, and the MakeX studio. OPEN SPACE, PARKS, AND GOLF Maintains nature interpretive centers and operates more than 4,000 acres of open space and urban parkland including 43 miles of trails, 4 community gardens, 4 dog parks, and dozens of sports fields. The division offers programs in ecology and natural history in open space, mainte- nance of facilities for outdoor recreational use in City parks, and a full -service golf complex. RECREATION Provides a diverse range of programs and activities for the community, establishing a culture of health and well-being for families and individuals of all ages. Programs include youth devel- opment and enrichment, teen services, summer camps, organized sports, aquatics, special events, and a wide variety of adult recreation classes. The Recreation Division manages and operates three community centers, a teen center, and through a contracted vendor, the Rinco- nada Pool. OFFICE OF HUMAN SERVICES Provides funding and coordinates grants to nonprofit organizations through the Human Ser- vices Resource Allocation Process (HSRAP). Provides oversight of the afterschool child care program, the Palo Alto Mediation Program, and the Family Resources database. Serves as a key liaison to local social services organizations and child care providers. Accomplishments • Developed and managed new artworks in municipal and private percent for art projects including artwork for the Highway 101 Bike and Pedestrian Bridge, the Public Safety Building, the Charleston/Arastradero corridor, the Junior Museum and Zoo, temporary artworks at the California Avenue Garage site, Avenidas, and 1050 Page Mill Road. • Engaged in repairs to the Baylands Sailing Station dock to fix critical infrastructure and make it more useable to the community. . Created an agreement with Palo Alto Christian Reformed Church to develop a new community garden site on the church's property in South Palo Alto. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 223 COMMUNITY SERVICES • Constructed two new pickleball courts, converted one existing tennis court to four dedicated pickleball courts, and striped two tennis courts for shared pickleball and tennis use at Mitchell Park. This tripled the amount of programming for Pickleball for youth, teens and families, which are all taught by volunteers. • Engaged in Capital Improvement Projects at Cubberley Community Center to replace the synthetic turf field and to replace the Cubberley track with an all-weather track. ▪ Partnered with community to create five new pollinator gardens. The gardens were created by converting grass and ivy landscaped areas into valuable habitat and aesthetically attractive areas by planting native plants that support pollinator species. ▪ Planned approximately 20 Community Service Programs through the Cubberley Artist Studio Program (CASP), which were free and open to all members of the public, including: open studios, solo and group exhibitions, artist panels and lectures, and hands-on workshops. ▪ The Palo Alto Children's Theatre launched an initiative to create sensory and spectrum friendly experiences for families. This includes sensory -friendly public performances, and spectrum -friendly camps and classes that are enrolled based on developmental age. • Developed new works commissioned by the Children's Theatre and funded by the Friends of the Palo Alto Children's Theatre that celebrate cultural diversity and serves traditionally under -represented audiences, with a commitment to inclusiveness and a goal of reaching diverse audiences. Current plays in development include an adaptation of the Indian folktale One Grain of Rice; a LGBTQ+ positive fairy-tale drawn from Latin-American folktales; an educational musical for classrooms, Grammaropolis; and a new adaptation of Sleeping Beauty. • Worked with the Magical Bridge Foundation to add more co -sponsored concerts at the Magical Bridge Playground and collaborating to host an Active -Learning focused pilot programming that would serve individuals with multiple disabilities. • Collaborated with the Palo Alto Recreation Foundation (PARF) to host The Black & White Ball on Friday, October 4, 2019. The ball honored the City's 125th birthday and was an evening filled with fun including non-stop live musical performances. ▪ The Junior Museum & Zoo (JMZ) provided expertise and oversite to the construction of the new facility, designed and fabricated new exhibits, prepared to acquire and quarantine new animals, and began the process of organizing staff and materials to move from the temporary facility at Cubberley Community Center to the new facility, which will open in FY 2021. ▪ Launched an initiative at the Art Center, in collaboration with the JMZ and funded by the Institute of Museum and Library Services, called Working Together, which is intended to provide a ladder of engagement to involve diverse populations in meaningful museum work and volunteer experiences, and advance a culture of inclusiveness at both institutions. The program supports paid teen opportunities, paid undergraduate internships, and paid graduate fellowships for diverse youth. • The Junior Museum & Zoo launched an eight -month design process for the Friendship Trail Project, which aims to install interpretive exhibits and graphics on two miles of trails and the 224 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES new boardwalk in the Palo Alto Baylands. The project will link the Cooley Landing Education Center in East Palo Alto with the Lucy Evans Baylands Nature Center in Palo Alto. The Program is being funded by a partnership between the City of Palo Alto, the State of California, and the Friends of the Palo Alto Parks. Completion is scheduled for December 2020. ▪ Transitioned to a new vendor for the department's Recreation Management Software to process program registrations, memberships, facility rentals and point of sale transactions across the department. The new system is more user friendly with an improved mobile interface and easier search and filtering options for registrations and facility rentals. • Entered a public -private partnership with Pets In Need to operate the Palo Alto Animal Shelter. In the first six months of operations with Palo Alto, Pets In Need was able to care for nearly 600 animals, which resulted in nearly 400 adoptions, over 70 lost animals returned to owners and over 40 animals transferred to other agencies for adoption in other communities. • Beautified the Lucie Stern Community Center which included restoring the redbrick entry of the lobby, enhanced the hallways by removing the carpet and re -staining the original concrete floors, new flooring throughout the rooms and offices as well as fresh paint on the walls. • Provided over $75,000 of funding via the Human Services Emerging Needs Fund to eight local nonprofit agencies directly addressing the COVID-19 related basic needs of local residents. • Provided virtual classes and programs as a response to the COVID-19 pandemic and adapted to the need to make fast changes to the way we engage with our customers and community members. Virtual programs were developed and implemented at the Art Center, the Children's Theater, the Junior Museum & Zoo and throughout the department's recreation division. Initiatives • Produce planning and development for Code:ART2, a three-day public art festival in which the Public Art Program will engage residents and commuters by temporarily refraining downtown's underutilized spaces as a laboratory for interactive urban interventions and creative placemaking, sparking dialogue about the future of our downtown. • Complete the California Avenue Public Art plan, including implementation of temporary installations to draw visitors and shoppers back to the district and help mitigate construction impacts. ▪ Continue to explore funding strategies for implementation of the Parks, Trails, Natural Open Space and Recreation Master Plan with assistance from the Parks and Recreation Commission. • The Palo Alto Art Center will celebrate its 50th anniversary and continue ongoing free and fee -based virtual programming to engage the community. From potters' -wheel rental programs, to virtual exhibitions, the Art Center will continue to adjust its offerings to meet COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 225 COMMUNITY SERVICES community needs for quality arts programming in the year ahead as a result of COVID-19 related closures. ▪ The Office of Human Services, with the assistance of the Palo Alto Early Care & Education Committee (PAACECE) and a consultant, conducted an Assessment of the Needs of Families and Young Children in Palo Alto. Staff & PAACECE will create a 3 to 5 year work plan to address the key learnings identified in the Assessment. Key focus areas of the assessment included the quality of life in Palo Alto, the early care & educations landscape, access & inclusion, and community services, resources & supports. Due to COVID-19 related closures and operating limitations on child care providers and its resulting effect on families, early work plan goals may center on advocacy and resource provision. • Engage in several Capital Improvement Projects at a variety of parks including Rinconada, Cameron, and Ramos Parks to replace the playgrounds and other park amenities. • Further develop the "Youth on Course" program at the Baylands Golf Links. The program encourages youth golf play by reducing fees via a partnership with NCGA Foundation. • Children's Theatre will provide multi -arts education to thousands of community members. Through its many theatre, music and dance programs in City facilities as well as in local schools. • Animal Services will continue to expand its pet adoption programs, as well as other community outreach activities. In addition, the short-term facility renovations of the Shelter's medical suite, kennels, and modular unit are expected to be completed in FY 2021. ▪ The rebuilding project for the Junior Museum and Zoo will be completed in FY 2021. The new JMZ will reopen as a state-of-the-art museum and zoo with a focus on inclusion, accessibility, and the highest standards in animal care. With the rebuilding of the Junior Museum and Zoo complete, new animals will be established and new interactive exhibits will be installed. • CSD's Recreation Division will provide hundreds of classes and activities to all ages. The Division hosts special events and programs for all ages and abilities and will continue to develop sensory and spectrum friendly experiences for families. CSD will continue to adapt and improve these crucial services to the community by providing virtual programming and continuing to restructure and develop safe in -person programs. Goals anc Objectives GOAL 1 Provide high -quality, relevant, and diverse services and programs to the public. Objectives: ▪ Achieve a high level of customer satisfaction for all programs and services offered by the department. • Increase public awareness of, and participation in, recreational services. • Ensure programs are responsive to a broad range of needs within the community. 226 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES GOAL 2 Ensure parks and recreational areas are safe and environmentally sensitive. Objectives: ▪ Maintain grounds to be in good condition and facilities to be in good repair. • Protect public land and utilize best management practices for environmental preservation. GOAL 3 Provide innovative, well -managed programs and services. Objectives: • Increase and diversify community involvement and volunteerism. • Monitor cost recovery to facilitate sustainability of programs and services with a goal to maintain or increase cost recovery levels. ▪ Explore partnerships with other agencies to maximize services for the public. Key Performance Measures COMMUNITY SERVICES DEPARTMENT ONLINE REGISTRATION AND EFFICIENCY Goal Provide innovative, well -managed programs and services. Objective Increase online class registration. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 FY 2021 Estimated Adopted Percent of class registrations occurring online Description Purpose Status 59% 65% 60% 65% This measure tracks the utilization rate of online class registration service available. Increase staff productivity and capacity. Currently, online class registration is the preferred method of registration. 65% COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 227 COMMUNITY SERVICES Percent of surveyed who rate the City's success in preserving natural areas as "Good" or "Excellent" COMMUNITY SERVICES Goal Objective DEPARTMENT OPEN SPACE AND PARKS Ensure parks and recreational areas are safe and environmentally sensitive. Protect public land and utilize best management practices for environmental preservation. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Description Purpose Status 83% N/A* 81% 81% N/A* This measure tracks resident responses when asked to rate Palo Alto's preservation of natural areas such as open space and green belts in an annual National Citizen Survey (NCS). The Department maintains and manages 4,029 acres of open space including Foothills Park, Baylands Nature Preserve, Pearson- Arastradero Preserve, and Esther Clark Nature Preserve. The City participates in the NCS, which asks residents to rate their perception of local government services. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinions about the quality of life in the community. It is important for the City to solicit feedback from and respond to residents regarding the services and programs provided. *The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process CrovIRM!l'AIITY SERVICES DEPARTMENT PROGRAMS AND SERVICES Goal Provide high quality, relevant, and diverse services and programs to the public. Objective Ensure programs are responsive to a broad range of needs within the community. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of surveyed who rate recreation programs/classes as "Good" or "Excellent" Description Purpose Status 81% N/A* 88% 88% N/A* The Department's motto is "Engage, Create, Enjoy!" to enhance the quality of life. We offer diverse experiences for children, teens, and adults of all ages. This measure tracks resident responses when asked to rate Palo Alto's recreation programs or classes in the annual National Citizen Survey (NCS). The City participates in the NCS, which asks residents to rate their perception of local government services. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinions about the quality of life in the community. It is important for the City to solicit feedback from and respond to residents regarding the services and programs provided. *The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process 228 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES Total Enrollment in classes/camps in arts, sciences, recreation, and open space programs Workload Measures FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Average Enrollment in classes/ camps in arts, sciences, recreation, and open space programs 13,783 13,553 15,500 11,000** 15,500 15 15 22 12** 17 **In 2020 the novel coronavirus (COVID-19) pandemic caused significant disruption to City and community activities, which may be reflected in FY 2020 data. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 229 COMMUNITY SERVICES 3udget Summary Dollars by Division Administration and Human Services Arts and Sciences Open Space, Parks and Golf Recreation and Cubberley Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Total Dollars by Expense Category Revenues Charges for Services Charges to Other Funds From Other Agencies Other Revenue FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 4,238,687 4,878,165 5,402,694 4,619,930 (782,764) (14.5)% 6,207,926 6,413,922 6,865,224 6,218,740 (646,483) (9.4)% 10,433,800 11,662,062 12,059,618 11,773,746 (285,872) (2.4)% 6,262,160 6,133,781 6,592,649 5,750,032 (842,617) (12.8)% 27,142,572 29,087,930 30,920,184 28,362,448 (2,557,736) (8.3)% 1,734,186 1,687,053 1,792,800 250,676 251,024 260,263 182,169 170,818 107,157 1,966,642 2,053,046 2,543,515 998,502 909,817 937,111 8,784,819 8,729,623 9,032,247 84,027 240,516 345,719 14,001,021 14,041,898 15,018,813 5,132,897 5,594,001 5,416,584 5,279,123 7,664,389 8,661,260 33,308 39,356 73,700 1,981,352 994,865 1,049,787 6,990 110,605 6,990 19,753 16,858 25,983 688,129 625,958 667,066 1,568,607 271,793 109,916 2,474,652 892,942 7,674,209 320,300 13,312,418 5,290,971 7,882,148 57,700 1,123,456 12,570 683,185 (224,193) 11,530 2,759 (68, 864) (44,169) (1,358,038) (25,420) (1,706,395) (125,613) (779,112) (16,000) 73,669 (6,990) (13,413) 16,119 (12.5)% 4.4% 2.6% (2.7)% (4.7)% (15.0)% (7.4)% (11.4)% (2.3)% (9.0)% (21.7)% 7.0% (100.0)% (51.6)% 2.4% 27,142,572 29,087,930 30,920,184 28,362,448 (2,557,736) (8.3)% 4,356, 738 56,230 8,324 650,289 6,792,563 7,594,929 8,607,557 1,012,628 111,636 197,455 202,581 5,126 43,500 43,500 528,085 820,882 936,086 115,205 230 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Summary Other Taxes and Fines Rental Income Total Revenues FY 2018 Actuals 770 1,204,639 6,276,990 FY 2019 Actua►s 1,463 1,383,915 8,817,663 FY 2020 Adopted Budget FY 2021 Adopted Budget 1,026 1,026 1,107,654 1,089,094 (18,560) (1.7)% 9,721,945 10,879,844 1,157,899 11.9% FY 2021 Change $ FY 2021 Change % -% Positions by Division Administration and Human 6.24 6.24 10.85 6.79 (4.06) (37.41)% Services Arts and Sciences 46.28 44.42 44.75 52.98 8.23 18.39% Open Space, Parks and Golf 32.87 30.59 30.59 29.59 (1.00) (3.27)% Recreation and Cubberley 59.65 42.85 42.85 41.35 (1.50) (3.50)% Total 145.04 124.10 129.04 130.71 1.67 1.30% Staffing Job Classification Administrative Assistant Administrative Associate III Administrative Associate I II (Freeze) Assistant Director Community Services FY 2018 Actuals 1.00 1.00 2.00 Assistant Director Community Services (Freeze) Building Serviceperson 2.00 Building Serviceperson-Lead 2.00 Coordinator Recreation Programs 4.00 Director Community Services 1.00 Division Manager Open Space, Parks and Golf Heavy Equipment Operator 0.07 Inspector, Field Services 2.00 Junior Museum & Zoo Educator 3.60 Junior Museum & Zoo Educator (Freeze) Management Analyst 1.00 1.00 FY 2019 Actuals FY 2020 Adopted Budget 1.00 1.00 2.00 1.25 0.60 3.00 1.00 1.00 0.07 2.00 3.60 1.00 1.00 2.00 1.25 0.60 4.00 1.00 1.00 0.07 2.00 3.60 1.00 1.00 FY 2021 Adopted Budget 1.00 1.00 1.00 1.00 FY 2021 Change FTE (1.00) 1.00 84,032 197,829 FY 2021 Salary 95,826 (1.00) 1.00 173,638 1.00 (0.25) 64,563 0.60 - 41,471 4.00 363,834 1.00 222,498 (1.00) 0.07 - 7,331 2.00 212,618 3.25 (0.35) 264,384 0.35 0.35 28,472 1.00 - 108,160 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 231 COMMUNITY SERVICES Staffing Management Assistant Manager Community Services Manager Community Services (Freeze) Manager Community Services Senior Program Manager Human Services Park Maintenance Person Park Maintenance -Lead Park Ranger Parks/Golf Crew -Lead Producer Arts/Science Program Producer Arts/Science Program (Freeze) Producer Arts/Science Programs Program Assistant I Program Assistant I (Freeze) Program Assistant II Project Manager Senior Management Analyst Sprinkler System Representative Superintendent Community Services Superintendent Recreation Superintendent Recreation (Freeze) Theater Specialist Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals 1.00 5.00 4.00 FY 2019 Actuals 1.00 5.00 4.00 FY 2020 Adopted Budget 1.00 5.00 4.00 FY 2021 Adopted Budget 1.00 4.00 1.00 FY 2021 Change FTE FY 2021 Salary 85,488 (1.00) 404,914 1.00 94,266 4.00 392,218 1.00 1.00 1.00 1.00 - 138,736 6.00 6.00 6.00 6.00 - 464,131 1.00 1.00 1.00 1.00 - 89,648 5.00 5.00 5.00 5.00 - 438,880 2.00 2.00 2.00 2.00 168,272 11.00 11.00 11.00 9.25 (1.75) 918,918 1.75 1.75 135,621 1.00 1.00 98,634 8.00 8.00 8.00 3.00 (5.00) 238,680 4.00 4.00 318,240 4.00 4.00 3.00 4.00 1.00 341,952 0.10 0.10 0.10 0.10 - 11,985 1.00 1.00 1.00 1.00 - 149,427 4.00 4.00 4.00 4.00 314,579 2.00 1.00 2.00 78.77 2.00 2.00 2.00 269,318 1.00 1.00 - - - 1.00 2.00 2.00 2.00 75.62 75.62 (1.00) 1.00 127,587 210,912 75.37 (0.25) 7,277,061 66.27 48.48 49.29 54.73 5.44 2,916,080 145.04 124.10 124.91 130.10 5.19 10,193,141 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to posi- tion freezes is available in the department section organizational chart and budget adjustment sum- maries. 232 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Reconciliation Prior Year Budget 124.91 30,920,184 9,721,945 21,198,239 One -Time Prior Year Budget Adjustments Impact Fee Nexus Study One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Project Safety Net Transition (Year 2) Realignment of Animal Control Staffing to Police Department Youth Community Services Funding Expiration Realignment of Cubberley Staffing to Cubberley Fund (CMR #9925, approved by the City Council on December 17, 2018) Eliminate Funding for Downtown Streets Team Park Maintenance General Contract Adjustments Animal Services Shelter Transition from Police Department to Community Services Department with Pets -In -Need (CMR #9822 Approved by the City Council on November 26, 2018) (Year 2) Transfer to Electric Fund for Canopy Contract Arastradero Stewardship Consumer Price Index Adjustment Technical Clean -Up, Arts & Sciences Professional Supplies and Materials Adjustments CSD Management Alignment (Year 2) and Net Benefit Adjustments Human Services Resource Allocation Program/ Avenidas/PACC (consumer price index) Golf Course Revenue and Expense (CMR #8848, approved by the City Council on April 6, 2018) Institute of Museum and Library Services (IMLS) Grant for Interns Glyphosate Elimination at Road Medians Around 6 Schools Expansion of Special Interest Classes Recreation Management System Software (60, 000) — (60,000) 201,567 (0.45) (196,790) (0.48) (60,663) (50,000) (0.25) (29,662) (29,124) (12,701) (6,840) (6,990) 2,030 5,369 9,000 (1.00) 33,942 40,713 41,280 43,500 67,000 70,500 101,170 (60, 000) — (60,000) 201,567 (196, 790) (60, 663) (50,000) (29,662) (29,124) (12,701) (6,840) (6,990) 2,030 5,369 9,000 — 33,942 40,713 1,440 39,840 43,500 70,500 101,170 67,000 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 233 COMMUNITY SERVICES 3udget 'Reconciliation Positions Expenditures Revenues Net General Fund Communication Services Allocated Charges Information Technology Allocated Charges Landscape Maintenance Contract/Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Refuse Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (2.18) , 8,600 (220,147) 27,739 20,088 14,236 1,102 99,525 (76,757) (25,420) 72,268 8,600 (220,147) 5,126 (5,126) 230,736 27,739 20,088 14,236 1,102 99,525 (76, 757) (25,420) (158,468) Total FY 2021 Base Budget 30,932,452 9,952,681 20,979,771 Budget Adjustments 1 Art Center Position Request & Contract Funding 2 Art Center and Public Art Installation Position Requests 3 Human Services Funding Adjustments 4 Middle School Athletics and Adult Sports Leagues Revenue Adjustments 5 Community Program and Event Reduction 6 Teen Services Reduction 7 Open Space and Recreation Reduction 8 Management and Professionals Group Compensation Reduction 9 Parks Maintenance Contract Service Reduction 10 Community Center Reduction 11 Theater Programming and Support Reduction 12 Art Center Programming Reduction 13 New Junior Museum and Zoo Operating Plan 14 Administrative Staffing Reduction Total Budget Adjustments 0.20 40,205 40,205 0.38 - - - (75,000) (75,000) 100,520 (100,520) - (154,404) - (201,590) (243,905) (255,557) (274,844) - (282, 695) (710,827) (452,084) 6.79 620,464 - (579, 768) 7.37 (2,570,005) (13,542) (140,862) (52,000) (149,590) (243, 905) (255,557) - (274,844) - (282,695) (283,643) (427,184) (4,623) (447,461) 1,140,247 (519,783) (579,768) 927,164 (3,497,169) Total FY 2021 Adopted Budget 130.10 28,362,448 10,879,844 17,482,602 234 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES .budget Adjustments S. Positions Expenditures Revenues Net General Fund 1 Art Center Position Request & Contract Funding This ongoing, cost neutral action adds 0.20 FTE Arts & Sciences Professional I and contract services funding, and recognizes commensurate offsetting revenue from the Palo Alto Art Center Foundation. The Arts & Sciences Professional I will support the Community Services Department's Project Look program. Project Look is a school tour program that provides field trips and educational experiences at the Art Center to local schools with interactive tours led by Art Center volunteers, as well as hands-on activities taught by professional artist educators. The contract services funding will fund the Cultural Kaleidoscope teaching artists. Cultural Kaleidoscope is an artist -in -the -schools program that links the neighboring and diverse communities of Palo Alto, East Palo Alto, and Menlo Park, by building bridges through the arts and partnering with K-5 classrooms. The Arts & Sciences Professional I will be responsible for coordination of these programs and oversight of part-time staff and contracted teaching arts who implement the programs. Previously, this position was employed by the Palo Alto Art Center Foundation, however this action allows the City to hire a staff member directly while being reimbursed by the Foundation. (Ongoing net costs: $0) Performance Results © 0 This action will be cost neutral and provides greater flexibility in Art Center staffing to continue to provide these high quality programs. 2 Art Center and Public Art Installation Position Requests This ongoing, cost neutral action realigns staffing for the Palo Alto Art Center and Public Art program through a reallocation of contract dollars to fund one 0.45 FTE Staff Specialist position. 0.07 FTE of this position will be funded by the ongoing capital project Art in Public Spaces, AC -86017, while the other 0.38 will be funded within the General Fund. The Art Center and Public Art program host exhibits and manage art installations annually and skilled support is needed to prepare exhibition spaces and safely transport and handle the artwork. This action will ensure the Art Center and Public Art programs remain in compliance with state and local laws governing this type of work, as well as the insurance policies for valuable artworks. This action will also provide the necessary staffing support for both programs while maintaining service delivery levels by providing greater flexibility for seasonal staffing to assist with exhibition gallery maintenance, preparation, and shipping work. (Ongoing costs: $0) Performance Results 0 0 This action will be cost neutral and ensure safe handling of artwork and high quality art exhibit installations. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 235 COMMUNITY SERVICES 3udget Adjustments Expenditures Revenues Net General Fund 3 Human Services Funding Adjustments 0.00 (75,000) This action eliminates the funding provided to the Santa Clara County Reentry Resource Center ($125,000) and increases one-time funding provided to Youth Community Services' Youth Connectedness Initiative to $50,000. Human services funding remains available through the Human Services Resource Allocation Process (HSRAP) which is maintained at the funding level detailed in the Human Service Contracts section of the FY 2021 Operating Budget. (Ongoing savings: $125,000) Performance Results © 0 0 This action contributes to cost containment strategies in FY 2021 and results in fewer resources available to support reentry of formerly incarcerated individuals back into Santa Clara County. 4 Middle School Athletics and Adult Sports Leagues 0.00 0 100,520 (100,520) Revenue Adjustments This ongoing action increases the revenue from participation fees for Middle School Athletics and Adult Sports Leagues by increasing fees by approximately 25%, from $260 to $325 and from $730 to $913, respectively. If participation remains steady, this action will generate revenue close to cost recovery for City expenses for these programs. (Ongoing savings: $100,520) Performance Results This action contributes to cost containment strategies in FY 2021. 5 Community Program and Event Reduction 0.00 (154,404) (13,542) (140,862) This action reduces funding for the Know Your Neighbors Grant (KYNG) program and special events such as May Fete and Chili Cook -Off. The KYNG provides grants up to $1,000 to dozens of community members annually for events that support community connections, such as block parties. Staff assigned to the management of these programs will be reassigned to other critical work in the department. (Ongoing net savings: $140,862) Performance Results © 0 This action contributes to cost containment strategies in FY 2021 and results in reduced opportunities for community events. 6 Teen Services Reduction 0.00 (201,590) (52,000) (149,590) This action reduces some teen programs and services that are likely infeasible due to continued social distancing requirements. Impacted programs include some summer camps and a temporary closure of The Drop (teen center at Mitchell Park) through December 2020. This action also recognizes the loss of related program revenue, partially offset with new donations from the Palo Alto Parks & Recreation Foundation and new membership and participation fees for teen programs. This action reduces 1.0 Program Assistant I and 1.44 FTE of part-time staff resources. (Ongoing net savings: $149,590) Performance Results © 0 This action contributes to cost containment strategies in FY 2021 and results in reduced classes, camps, and services for teens. 236 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Adjustments 7 Open Space and Recreation Reduction (243,905) 0 (243,905) This action reduces contracted ranger services and coverage in Palo Ato Open Space Preserves and reduces public operating hours of the Lucy Evans Baylands Nature Interpretive Center by 50% (schedule TBD). This includes a reduction of 1.0 Community Services Manager and 0.17 FTE of part-time staff resources. The Interpretive Center is currently open four days per week, houses an array of science and nature exhibits, and is a feature of the curriculum of Palo Alto Unified and Ravenswood School Districts. In FY 2019 Palo Alto's Open Space Preserves received approximately 845,000 visits. This action will result in fewer ranger patrols, delayed response to maintenance such as trail and campsite repairs, decreased capacity for litter removal and group rental site reservation support, and reduced support for science educational opportunities. (Ongoing savings: $243,905) Performance Results © © 0 0 This action contributes to cost containment strategies in FY 2021 and results in delayed open space maintenance, reduced ranger coverage in open spaces, and reduced operating hours of the Lucy Baylands Nature Interpretive Center. 8 Management and Professionals Group (255,557) 0 (255,557) Compensation Reduction This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 4 This action contributes to cost containment strategies in FY 2021. 9 Parks Maintenance Contract Service Reduction ir 0.00 (274,844) This action reduces contracts for maintenance of parks, athletic fields, courts, roadsides, medians, City buildings, community centers, and other facilities by approximately 25%. This will moderately reduce aesthetic maintenance such as clearing of weeds, turf mowing, and playground washing, while still preserving and prioritizing safety -focused maintenance. (Ongoing savings: $274,844) Performance Results © © 0 This action contributes to cost containment strategies in FY 2021 and results in reduced aesthetic maintenance of parks and other public spaces. 10 Community Center Reduction (282,695) At 0 (282,695) This action reduces operating hours by approximately one to two days per week (schedule TBD) at Mitchell Park Community Center, Lucie Stern Community Center, Cubberley Community Center, and the Palo Alto Art Center. This will result in diminished services across a wide range of activities including responding to customer inquiries, scheduling facility rentals, providing class and camp programming, oversight of invoice payment, and managing custodial needs. This action reduces 2.0 Program Assistant I and 1.27 of part-time FTE staff resources. (Ongoing savings: $282,695) Performance Results © 0 This action contributes to cost containment strategies in FY 2021 and results in reduced public access, programming, and services across all community centers. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 237 COMMUNITY SERVICES 3udget Adjustments ud•et Ad'ustmen 0.00 (710,827) (283,643) (427,184) 11 Theater Programming and Support Reduction This action reduces programming at the Children's Theatre and reduces support for community theater productions. This action also reduces 1.0 Producer Arts/Science Program and 5.09 FTE of part-time staff resources. This reduces programming at the Palo Alto Children's Theatre (PACT) by limiting to two core productions and several smaller productions, and maintaining smaller groups for classes and camps to allow for social distancing. This action also recognizes reduced revenue for productions to reflect reduced audience sizes necessary for social distancing. PACT productions serve roughly 100 participants and bring in over 50,000 audience members annually. The Stern Community Theater is used by three local companies who produce approximately 15 productions annually. This action reduces on - site logistical support for community productions and administrative support to other City theaters. (Ongoing net savings: $427,184) Performance Results © 0 This action contributes to cost containment strategies in FY 2021 and results in fewer productions and smaller group sizes at the Children's Theatre and limited support for other theater programs. 12 Art Center Programming Reduction 0.00 (452,084) (4,623) (447,461) This action reduces programming at the Palo Alto Art Center such as the scope and frequency of exhibitions, visual arts programming, and educational outreach, while retaining studio programs and classes for youth and adults. This action also recognizes the loss of related program revenue partially offset by additional donations from the Palo Alto Art Center Foundation and implementation of fees to several programs/services to improve cost recovery. The Palo Alto Art Center serves approximately 120,000 people each year through programs like free art exhibitions, educational outreach including school tours for Palo Alto Unified School District, art classes and workshops, and art -based summer camps. This action includes a reduction of 0.35 Junior Museum and Zoo Educator, 0.75 Producer Arts/Science Program, 1.0 Program Assistant, and 2.16 FTE of part-time staff resources. (Ongoing net savings: $447,461) Performance Results © 0 This action contributes to cost containment strategies in FY 2021 and results in reduced public access, programming, and services at the Art Center. 238 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES 3udget Adjustments ud•et Ad'ustmen Net Expenditures Revenues General Fund 13 New Junior Museum and Zoo Operating Plan 6.79 L620,464 1,140,247 (519, 783) This ongoing action adds 6.79 FTE (3.16 in Animal Care and Experiences, 0.75 in Exhibitions and Museum Maintenance, and 2.88 in Guest Services), reclassifies 1.0 FTE Program Assistant Ito a 1.0 FTE Program Assistant II, adds new operating expenses, and recognizes new revenues for ticketed entry and annual memberships. These actions constitute the implementation of the approved operating plan for the newly built Junior Museum and Zoo (JMZ), as approved by Finance Committee (Staff Report 11093), and as amended by City Council for an opening date of March 2021 (Staff Reports 11222 and 11330). It is anticipated that new revenues will offset new expenditures and result in no additional operating costs to the City. Revenues and expenses are pro -rated accordingly for FY 2021 for a March 2021 opening date, and in a full year of operations the JMZ as a whole would be budgeted at 85% cost recovery. The JMZ will reopen as a state-of-the-art museum and zoo built with a focus on inclusion, accessibility and the highest standards in animal care. These actions are recommended in order to ensure a safe and enjoyable experience for users of the new facility. (Ongoing net costs: $0) Performance Results This action will enhance the quality of service and increase customer satisfaction at the Junior Museum and Zoo by expanding exhibit programming and animal collections, providing appropriate staffing levels, expanding hours of operation, and ensuring ongoing maintenance of the new facility. 14 Administrative Staffing Reduction • 0.00 I (579,768) 0 (579,768) This action reduces 1.0 Administrative Associate III, 1.0 Assistant Director of Community Services, 1.0 Recreation Superintendent, and 0.48 FTE in part-time staff resources. This will adversely impact the department's ability to support and respond to City Commissions and public inquiries, reduce capacity for marketing and communications, reduce CivicRec oversight and troubleshooting which could impact customers' experience, limit managerial oversight, and delay development of a therapeutic recreation plan. (Ongoing savings: $579,768) Performance Results © 0 This action contributes to cost containment strategies in FY 2021. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 239 COMMUNITY SERVICES CSD Golf Course Financials r FY 2017 Actuals1 FY 2018 Actuals2 FY 2019 Actuals FY 2020 Projected3 FY 2021 Adopted REVENUES Tournament Fees Green Fees Driving Range Cart/Club Rentals Proshop Lease/Merchandise Sales Restaurant Lease Restaurant Utilities Other Fee Total Revenue 40 211,290 52,676 118,390 0 2,231,690 1,922,691 227,072 359,495 293,441 402,850 1,236 0 362,810 246,840 12,677 239,190 160,213 228,355 32,657 2,222 0 48,000 16,500 1,500 0 18,000 18,000 4,039 6,738 15,180 8,245 294,719 754,940 3,419,655 2,750,106 3,832,090 2,565,755 13,175 449,300 49,440 0 532,552 EXPENDITURES Operating Expenses Salaries & Benefits 111,906 117,662 120,590 172,720 134,540 Advertising & Publishing 1,126 7,714 0 0 Supplies and Materials 27,008 42,669 0 0 0 General Expense 52 347 1,015 2,332 Facilities and Equipment Purchases 6,434 18,860 0 0 0 Allocated Charges 156,748 180,057 245,770 262,970 303,274 367,307 367,375 438,022 352,580 0 1,440 Subtotal 216,600 Contract Services Golf Maintenance 364,666 750,978 2,522,515 2,538,739 2,648,418 Miscellaneous 49,068 9,437 0 0 Range fees 195,631 166,902 0 0 0 Management Fees 30,500 924,477 108,000 111,240 Contract Contingency 0 0 0 0 27,630 0 114,577 Subtotal Total Operating Expenses 639,865 943,139 1,851,795 2,219,102 2,630,515 2,997,890 2,649,979 3,088,001 2,790,625 3,143,205 Income From Operations (648,420) (1,464,162) 421,765 (337,895) 688,885 240 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 0 199,251 COMMUNITY SERVICES CSD Golf Course Financials FY 2017 Actuals1 FY 2018 Actuals2 FY 2019 Actuals FY 2020 Projected3 FY 2021 Adopted Debt Expenses Debt Service (Refunded) Debt Service (New) 432,150 0 432,271 431,154 0 0 0 338,886 369,771 373,733 Subtotal I 432,150 432,271 770,040 369,771 373,733 Net Income (Loss) AIIM (1,080,570) (1,896,433) (348,275) (707,666) 315,152 1. The Golf Course was closed during FY 2017 due to renovation. 2. The renovated Golf Course opened in May 2018 under the new management. 3. In 2020 the novel coronavirus (COVID-19) pandemic caused significant disruption to City and community activities, which may be reflected in FY 2020 data. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 241 COMMUNITY SERVICES CSD Human Service Contracts Human Services Contracts FY 2020 Adopted GENERAL HUMAN SERVICES CONTRACTS 4 Avenidas - Senior Services PACCC - Child Care Subsidy and Outreach Mediation Service Provider County of Santa Clara7'8 Youth Community Sv. (YCS) - Youth Connectedness Initiative 508,356 515,013 69,223 125,000 50,000 General Human Service Contracts Subtotal 1,267,592 FY 2020 Agency Award 508,356 515,013 69,223 125,000 50,000 1,267,592 FY 2021 Base Budget 521,065 527,888 70,954 125,000 50,000 1,294,907 HUMAN SERVICES RESOURCE ALLOCATION PROCESS CONTRACTS 5 Abilities United Ada's Cafe Adolescent Counseling Services (Outlet Program) Counseling and Support Services for Youth (CASSY) Downtown Streets Team DreamCatchers KARA LifeMoves (formerly InnVision Shelter Network) La Comida de California MayView Community Health Center Palo Alto Housing Corporation Senior Adults Legal Assistance The Health Trust Vista Center for the Blind & Visually Impaired Youth Community Sv. (YCS) 53,757 5,195 44,157 44,157 37,840 25,975 22,858 81,989 48,181 41,560 31,170 15,949 10,390 41,560 31,170 Two -Year Contractors Subtotal 535,908 53,757 5,195 44,157 44,157 37,840 25,975 22,858 81,989 48,181 41,560 31,170 15,949 10,390 41,560 31,170 53,757 5,195 44,157 44,157 37,840 25,975 22,858 81,989 48,181 41,560 31,170 15,949 10,390 41,560 31,170 535,908 535,908 FY 2021 Agency Requests 508,356 515,013 69,223 125,000 50,000 FY 2021 Adopted Budget 521,065 527,888 70,954 0 50,000 1,267,592 1,169,907 51,739 50,000 100,000 50,000 36,420 25,000 22,000 132,739 46,372 40,000 36,000 15,350 20,000 42,070 30,000 55,101 5,325 45,261 45,261 38,786 26,624 23,429 84,039 49,386 42,599 31,949 16,348 10,650 42,599 31,949 697,690 549,306 TOTAL 1,803,500 1,803,500 1,830,815 1,965,282 1,719,213 242 COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET COMMUNITY SERVICES CSD Human Service Contracts Human Services Contracts FY 2020 FY 2020 Agency FY 2021 Base Adopted Award Budget FY 2021 FY 2021 Agency Adopted Requests Budget HSRAP Emerging Needs Fund6 50,000 50,000 50,000 50,000 50,000 4. Not part of the Human Services Resource Allocation Process. 5. Human Services Resource Allocation Process (HSRAP) contracts are requested as part of a two- year cycle, and once approved, the agencies receive the same level of funding across each year of the cycle. The Agency Request amounts reflect the request made for each year. 6. Funding is in the Non -Departmental section of this document. 7. These existing contracts have been added to this chart to provide a holistic display of all the General Human Services Contracts in the City. As these contracts are already established, there is no new budgetary impact as a result of their inclusion. 8. FY 2021 funding has been eliminated, consistent with City Council direction during the FY 2021 budget hearings and City Manager's Report 11322. COMMUNITY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 243 CITY OF PALO ALTO FIRE Mission Statement We are a professional team of individuals dedicated to safeguarding and enriching the lives of anyone, anytime, anywhere with compassion and pride. Purpose The purpose of the Fire Department is to protect life, property, and the environment from fire, hazardous materials, and other disasters; provide rapid emergency response, proactive code enforcement, modern fire prevention methods, and pro- gressive safety education for our citizens and coworkers; and promote customer satisfaction by maintaining quality, profes- sional, and friendly service to others. FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 245 FIRE CHIEF Geoffrey Blackshire 1.00 Administrative Assistant SUPPORT SERVICES 1.00 Deputy Chief 1.00 EMS Chief 1.00 EMS Data Specialist 0.50 GIS Specialist 1.00 Training Battalion Chief 1.00 Training Captain" OPERATIONS 1.00 Deputy Chief" 3.00 Battalion Chief 21.00 Fire Captain 26.00 Fire Apparatus Operator 34.00 Fire Fighter" 1.00 Senior Management Analyst FIRE PREVENTION* 1.00 Deputy Chief/Fire Marshal 1.00 Administrative Associate II 2.00 Hazardous Materials Inspector 4.00 Fire Inspector" FY 2021 POSITION TOTALS 103.50 - Full-time 0.55 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. ADMINISTRATION 2.00 Administrative Associate II" * Fire Prevention is functionally a part of the Planning and Development Services Department. The Fire Department retains administrative oversight over department personnel. " These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Deputy Chief (continued from FY 2020) 1.00 FTE Administrative Associate 5.00 FTE Fire Fighter 1.00 FTE Training Captain 2.00 FTE Fire Inspector 246 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Description The Fire Department provides a wide range of community and employee related services for the City of Palo Alto through the following service programs: FIRE SUPPRESSION Maintain a state of readiness to effectively respond to emergency and non -emergency calls. Provide a means for a safer Palo Alto through community outreach, public education, and pre- vention. EMERGENCY MEDICAL SERVICES In an emergency setting, rapid assessment, treatment, and transport of patients to definitive care in a safe and efficient manner. FIRE PREVENTION BUREAU Improve the quality of life for the Palo Alto community through risk assessment, code enforce- ment, fire investigation, public education, and hazardous materials management. EMPLOYEE FIRE/EMS CERTIFICATION TRAINING Provide training to certify that staff maintain safe, efficient, and effective practices when responding to emergencies. Ensure personnel are familiar with and able to utilize the most up- to-date and proven techniques. Training specific to required EMT and/or Paramedic re -certifica- tion is also incorporated. Accomplishments • Hired and successfully graduated six firefighters in the Santa Clara County Joint Fire Academy in 2020. • Worked with the City Manager's Office and Human Resources Department to conduct a national executive recruitment for Fire Chief; appointed Geo Blackshire as Fire Chief. ▪ Selected and transitioned to new records management system that seamlessly integrates Fire and Emergency Medical incident reports. • Developed Apparatus Operator Handbook, and completed testing and training process for four Acting Fire Captains. • Collaborated with Public Works to replace Fire Station No. 3 on Embarcadero Road with a new, state of the art fire station (part of Council Infrastructure Plan). • Successful installation of fire station alerting system upgrade that provide more immediate and specialized notifications, improving response times, and communications between crews and dispatchers. ▪ Achieved annual accreditation compliance with the Center for Public Safety Excellence. FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 247 FIRE • Established multi -agency workgroup to develop alternative services business plan to prepare for expected 25-24 percent increase in Emergency Medical calls predicted in the Community Health Needs Assessment report. ▪ Completed first phase of Hydrant Inspection Program, including maintenance and clearing of individual hydrants. • Responded to 133 fire incidents in Fiscal Year 2019 with 86 percent of responses within eight minutes. • Responded to 5,490 medical/rescue calls in Fiscal Year 2019; 99 percent of paramedic calls for service were responded to within 12 minutes and 93 percent of emergency medical calls within 8 minutes. ▪ Continued to increase the number of fire inspections using an improved cataloging system implemented in 2018; conducted 10,888 fire inspections in Fiscal Year 2019. Initiatives • Create and implement new deployment strategy, using predictive modeling, to minimize impact of emergency response brown outs to the community. • Develop business and implementation plan and outreach program for new First Responder Fee and Paramedic Subscription Program Fee; present to Council for consideration and adoption. • Negotiate impact of service level changes on the Stanford Fire Services Contract. • Deploy and analyze effectiveness of Emergency Signal Pre-Emption software reducing response times in high traffic areas. • Complete purchasing process to upgrade Automatic External Defibrillators (AEDs) citywide. • Support efforts to modernize and replace essential public safety facilities and equipment. Goals and Objectives GOAL 1 Arrive at the scene of emergencies safely and in a timely manner within the Department's tar- geted response times. Objectives: ▪ Promote timely adherence to Santa Clara County's clinical protocols and ensure consistent medical care in both Advanced and Basic Life Support (ALS/BLS) to the Palo Alto and Stanford communities. ▪ Provide the highest level of patient care and response standards by ensuring Palo Alto ambulances respond to all ambulance calls for service. • Target fire response time within 8 minutes 90 percent of the time. • Target Advanced Life Support (ALS) response times within 12 minutes 90 percent of the time. 248 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET FIRE GOAL 2 Ensure reasonable life safety conditions through inspection programs. Objectives: • Perform periodic inspections of all facilities within the Department's designated target cycle time. ▪ Identify and direct abatement of conditions or operating procedures which could cause an increase in probability or severity of a fire or hazardous materials release. GOAL 3 Develop, maintain, and sustain a comprehensive community risk reduction program that engages the whole community. Objectives: • Support the Office of Emergency Services, the Palo Alto and Stanford Citizen Corps Council and the Emergency Services Volunteers in training and preparation in the areas of Medical Disaster Operations, Triage, Fire Suppression, and Light Search and Rescue. • Complete an Integrated Risk Assessment and Management Plan designed to identify and quantify community risks and mitigation strategies. ▪ Identify high -risk communities within the City of Palo Alto and design risk reduction programs for the highest risk groups. GOAL 4 Enhance training and maintain all certifications required by governing agencies such as the State Fire Marshal's Office and Santa Clara County Emergency Medical Services Office. Objectives: • Document all training through the Joint Apprenticeship Committee (JAC). ▪ Maintain the required minimum of 20 hours per month per employee of fire related training. • Maintain, as mandated, records of training related to Emergency Medical Service (EMS) and Emergency Medical Technician (EMT)/Paramedic certification. GOAL 5 Internalize commitment to excellence in public service by continuously evaluating the assis- tance provided, identifying areas needing improvement, and implementing mitigation methods. Objective: • Maintain awareness of service quality from a customer perspective of assistance that was provided. FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 249 FIRE' Key Performance Measures FIRE DEPARTMENT RESPONSE TIMES Arrive at the scene of emergencies safely and in a timely manner within the department's targeted response times. Goal Objective Fire and EMS response times will be within 8 minutes, and Advanced Life Support (ALS) response times will be within 12 minutes 90 percent of the time. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of responses to EMS calls within 8 minutes Percent of responses to paramedic calls within 12 minutes Percent of responses to fire emergencies within 8 minutes Description Purpose Status 94% 99% 89% 93% 99% 92% 99% 86% 90% 93% 99% 93% 99% 90% 90% This measure tracks the percentage of calls for service that are within established response time percentiles. Quick response times can mean the difference between short and long-term recovery, the extent and severity of injury, and most importantly, the difference between life and death. In FY 2019, the Fire Department responded to 99 percent of paramedic calls for service within 12 minutes and responded to 93 percent of emergency medical calls within 8 minutes. The Department responded to 86 percent of fire calls within 8 minutes. The Department continues to focus on ways to reduce response times. FIRES CONTAINED TO ROOM OF ORIGIN Goal Objective Limit structural fire damage to the room or area of origin. Contain fires to the room or area of origin 90 percent of the time. FY 2018 Actuals FY 2019 Actuals FY 2020 FY 2020 Adopted Estimated FY 2021 Adopted Percent of fires contained to the room or area of origin Description Purpose Status 77% 81% 90% 90% 90% This measure tracks the percentage of fires that are contained to the room or area of origin. Containing a fire to the room or area of origin limits damage and spread of the fire. In FY 2019, the Department limited 81 percent of fires to the room of origin which was below the goal of 90 percent. This measure can vary significantly from year to year because of the small number of structure fires the Department responds to each year. In the cases where the fires were not contained, the fire had spread throughout the entire structure prior to arriving on scene despite a response time under 8 minutes. 250 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET FIRE PERCENT OF SURVEYED RESIDENTS RATING FIRE DEPARTMENT SERVICES GOOD OR EXCELLENT Goal Objective Percent of surveyed residents rating fire services "good" or "excellent" Percent of surveyed residents rating fire prevention services "good" or "excellent" Percent of surveyed residents rating ambulance/EMS services "good" or "excellent" Description Purpose Status Internalize commitment to excellence in public service by continuously evaluating the assistance provided, identifying areas needing improvement, and implementing mitigation methods. Maintain awareness of service quality from a customer perspective of assistance that was provided. FY 2018 Actuals 94% FY 2019 Actuals N/A FY 2020 Adopted 95% FY 2020 Estimated 95% FY 2021 Adopted N/A 84% N/A 85% 85% N/A 93% N/A 95% 95% N/A This measure tracks the percent of surveyed residents rating fire and emergency services good or excellent, as well as Fire Prevention Services, as reported monthly from the Customer Satisfaction Survey. Collecting this data allows the Department to compare itself to nationwide benchmarking data prepared by the National Research Center. Citizen satisfaction with Fire Department services is an important assessment of the overall quality of fire services offered to the community. * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. Workload Measures Number of fire calls for service Number of medical/rescue calls for service FY 2018 Actuals 189 5,342 FY 2019 Actuals 133 5,490 FY 2020 Adopted 160 5,400 FY 2020 Estimated 150 5,500 FY 2021 Adopted 150 5,500 Number of all other calls for service 3,419 3,220 3,440 3,440 3,440 Total number of calls for service 8,983 8,843 9,000 9,000 9,000 Number of ambulance transports 3,590 3,659 3,800 3,800 3,800 Fire calls average response time 5:23 5:51 5:25 5:25 5:25 (Target: 8:00 Minutes) Medical/rescue calls average response time (Target: 8:00 4:53 5:11 5:00 5:00 5:00 Minutes) FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 251 FIRE' 3udget Summary Dollars by Division Administration 1,916,884 2,212,337 2,745,530 2,326,807 (418,724) (15.3)% Emergency Response 29,345,212 30,441,361 30,703,654 30,100,130 (603,525) (2.0)% Environmental Safety Management 151,752 433,531 558,962 552,015 (6,946) (1.2)% FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Records and Information 342,412 384 - - - -% Management Training and Personnel 1,882,244 861,339 855,545 627,969 (227,576) (26.6)% Total 33,638,504 33,948,953 34,863,692 33,606,921 (1,256,771) (3.6)% Dollars by Category Salary & Benefits Healthcare 1,952,238 1,992,070 2,182,484 1,974,692 (207,792) (9.5)% Other Benefits 351,540 339,714 307,559 486,342 178,783 58.1% Overtime 3,568,300 2,914,480 1,672,872 1,931,121 258,249 15.4% Pension 6,030,222 6,665,085 8,091,590 8,411,292 319,702 4.0% Retiree Medical 2,559,706 2,223,229 2,289,926 2,187,049 (102,877) (4.5)% Salary 13,191,022 13,685,234 14,211,642 13,612,650 (598,993) (4.2)% Workers' Compensation 1,027,998 753,623 1,108,460 1,026,959 (81,501) (7.4)% Total Salary & Benefits 28,681,026 28,573,435 29,864,533 29,630,104 (234,429) (0.8)% Allocated Charges 3,144,612 3,071,942 3,282,610 2,467,094 (815,516) (24.8)% Contract Services 762,479 590,569 566,625 526,000 (40,625) (7.2)% Facilities & Equipment 151,244 340,204 327,723 216,723 (111,000) (33.9)% General Expense 436,545 628,320 388,800 393,600 4,800 1.2% Operating Transfers -Out - 306,850 - - - -% Supplies & Material 462,598 437,631 433,400 373,400 (60,000) (13.8)% Total Dollars by Expense Category 33,638,504 33,948,953 34,863,692 33,606,921 (1,256,771) (3.6)% Revenues Charges for Services 9,815,952 9,589,264 10,649,581 12,243,794 1,594,213 15.0% Charges to Other Funds 161,322 163,605 162,610 162,610 - -% From Other Agencies 1,093,263 259,946 170,000 175,000 5,000 2.9% Other Revenue 18,931 410,191 282,000 282,000 -% 252 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET FIRE 3udget Summary Other Taxes and Fines Total Revenues FY 2018 Actuals (275) FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % -% 11,089,193 10,423,007 11,264,190 12,863,403 1,599,213 14.2% Positions by Division Administration 3.00 5.68 5.68 5.68 - -% Emergency Response 99.07 89.57 89.57 89.57 -% Environmental Safety Management 0.48 1.15 1.15 1.15 -% Records and Information 1.50 - - - -% Management Training and Personnel 5.15 2.00 2.00 2.00 Total 109.20 98.40 98.40 98.40 - -% Staffing 40 -Hour Training Battalion Chief 40 -Hour Training Captain Job Classification 40 -Hour Training Captain (Freeze) Administrative Assistant Administrative Associate II Administrative Associate II (Freeze) FY 2018 Actuals 1.00 1.00 1.00 2.00 FY 2019 Actuals 1.00 1.00 1.00 2.20 FY 2020 Adopted Budget 1.00 1.00 1.00 2.20 FY 2021 Adopted Budget 1.00 1.00 1.00 1.20 1.00 Battalion Chief 3.00 3.00 3.00 3.00 Business Analyst 0.80 0.80 0.80 0.80 Deputy Chief/Fire Marshal 0.05 0.05 0.05 0.05 Deputy Director Technical Services Division Deputy Director Technical Services Division (Freeze) Deputy Fire Chief Deputy Fire Chief (Freeze) Emergency Medical Service Director Emergency Medical Services Data Specialist 0.20 0.20 2.00 2.00 1.00 1.00 2.00 2.00 1.00 FY 2021 Change FTE (1.00) 1.00 (1.00) 1.00 0.20 - (0.20) 2.00 2.00 1.00 1.00 1.00 -% FY 2021 Salary 203,070 164,486 86,549 94,074 78,395 580,420 124,268 10,758 0.20 0.20 42,898 1.00 1.00 1.00 (1.00) 219,045 1.00 219,045 177,133 1.00 - 84,032 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 253 FIRE Staffing Fire Apparatus Operator Fire Captain Fire Chief Fire Fighter Fire Fighter (Freeze) Fire Inspector Fire Inspector (Freeze) FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 30.00 26.00 26.00 26.00 21.00 21.00 21.00 21.00 1.00 1.00 1.00 1.00 41.00 34.00 34.00 29.00 - - - 5.00 0.80 0.80 0.80 0.40 0.40 FY 2021 Change FTE FY 2021 Salary - 3,738,018 3,343,791 - 258,024 (5.00) 3,899,721 5.00 617,635 (0.40) 65,795 0.40 65,795 Geographic Information System 0.50 0.50 0.50 0.50 - 65,198 Specialist Hazardous Materials Inspector 0.30 0.30 0.30 0.30 - 49,346 Senior Management Analyst 1.00 1.00 1.00 1.00 - 154,586 Sub -total: Full -Time Equivalent 97.85 97.85 97.85 - 14,342,080 Positions 108.65 I Temporary/Hourly 0.55 0.55 0.55 0.55 - 54,739 Total Positions 109.20 98.40 98.40 98.40 - 14,396,820 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional informa- tion relating to position freezes is available in the department section organizational chart and budget adjustment summaries. 254 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET FIRE 3udget Reconciliation Prior Year Budget 98.40 34,863,692 11,264,190 23,599,502 One -Time Prior Year Budget Adjustments Fire Staffing Adjustment Firefighter New Hire Costs Equipment Replacement One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Overtime Adjustments Stanford Emergency Fire Services Annual Revenue Alignment State Quality Assurance Fee Alignment Communication Services Allocated Charges Industrial Waste Discharge Fee Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Refuse Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 352,511 (80,625) (48,000) 223,886 352,511 (80, 625) (48, 000) 223,886 629,269 629,269 63,958 63,958 - (260,787) 260,787 5,000 14,800 2,910 (275,068) 28,728 (876) (621) (194) 5,493 - (623,688) (81,501) - (231,790) 5,000 (255,787) 14,800 2,910 (275,068) 28,728 (876) (621) (194) 5,493 (623,688) (81, 501) 23,997 Total FY 2021 Base Budget 98.40 34, 855, 788 11, 008, 403 23,847,385 Budget Adjustments 1 Modified Staffing and Overtime Adjustment 2 Fire Inspection and Plan Review Reduction 3 Management and Professional Group Compensation Reduction 209,225 (93, 297) (121,210) 209,225 (93,297) (121,210) FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 255 FIRE 3udget 'Reconciliation Positions Expenditures Revenues Net General Fund 4 Fire Administrative and Support Services 5 Emergency Incident Response Services 6 First Responder and Ambulance Subscriptions Fee Total Budget Adjustments (412,030) (831,555) (412,030) (831,555) — 1,855,000 (1,855,000) - (1,248,867) 1,855,000 (3,103,867) Total FY 2021 Adopted Budget 98.40 33,606,921 12,863,403 20,743,518 3udget Adjustments Revenues Net General Fund 1 Modified Staffing and Overtime Adjustment ■ 0.00 I 209,225 0 209,225 This one-time action restores Medic 61, recognizes savings of $353,500, equivalent to 1.0 FTE Deputy Fire Chief position as a temporary measure to create savings for the duration of FY 2021. With additional time to operate with fewer executive management positions in FY 2021, the department will continue to analyze and assess ongoing options for staffing adjustments to continue cost containment and return with recommendations. (Ongoing costs: $0) Performance Results © © 0 0 This action is anticipated to help manage medical services call volume and maintain the department's current level of service. 2 Fire Inspection and Plan Review Reduction Alimi 0.00 I (93,297) This action reduces 2.0 Fire Inspector positions (0.40 allocated to the Fire Department) and other resources that were budgeted in the Planning and Development Services Department Budget. These reductions are anticipated to delay fire inspections, increase wait times and impact customer service overall. The corresponding fee revenue associated with these services are reduced in the Planning and Development Services Department budget. (Ongoing net savings: $93,300) 0 (93,297) Performance Results O 0 256 FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET FIRE 3udget Adjustments udget Ad'ustme: Position Expenditures Revenues Net Qeneral Fund This action may result in delays to response times. 3 Management and Professional Group Compensation Reduction L 0.00 (121,210) 0 (121,210) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 0 This action contributes to cost containment strategies in FY 2021. 4 Fire Administrative and Support Services (412,030) 0 (412,030) This action reduces staffing resources where functions will be reassessed and reassigned and will result in a reduction of public outreach, training, and strategic planning activities and will be limited based on available resources. The impacted positions include 1.0 Administrative Associate II, 1.0 Training Captain, and 0.2 FTE Deputy Director Technical Services, which is shared with the Police Department. The cost savings assumed in this proposal does not include the Deputy Fire Chief position freeze that was included in the FY 2020 Adopted Budget and in the base budget for FY 2021. (Ongoing savings: $412,030) Performance Results 0 0 This action may result in a delay in response to administrative support and department response to staff training plans. 5 Emergency Incident Response Services (831,555) 0 (831,555) This action temporarily reduces units when firefighters are on leave, rather than staffing units with overtime; reduces incident response resources and staffing and moves towards a brownout flexible staffing model. This action includes reducing 5.0 Fire Fighter EMT positions. Response times and ability to handle concurrent calls will be reduced evenings and weekends, resulting in some calls being handled by the County mutual aid partners. This will require renegotiation of the Fire Services contract with Stanford University. (Ongoing savings: $831,555) Performance Results 0 0 This action is anticipated to reduce response times during evenings and weekends and also may impact resident rating of the Fire Department's services. 6 First Responder and Ambulance Subscription Fee 1,855,000 (1,855,000) The First Responder Fee would be charged for all EMS calls regardless of transport and would cover cost for initial response for first due engine. This fee would be assessed on insurance companies. The Ambulance Subscription Program is an optional fee for residents and businesses to secure co -pay free ambulance transport. (Ongoing savings: $1,855,000) Performance Results 0 This action recovers cost for services and does not have a direct impact on department performance. FIRE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 257 CITY OF PALO ALTO HUMAN RESOURCES Mission Statement The Human Resources Department's mission is to recruit, develop, and retain a diverse, well -qualified, and professional workforce that reflects the high standards of the community we serve, and to lead City departments in positive employee relations, talent management, succession planning, and employee engagement. Purpose The purpose of Human Resources is to support City departments in achieving key goals and objectives; to provide a range of services, including new employee orienta- tion, staffing and recruitment management, talent and skill development, per- formance assessment, safety and wellness programs; and to support employee relations, compensation, job classification, risk management, and organization development to City departments. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 259 HUMAN RESOURCE HUMAN RESOURCES DIRECTOR/ CHIEF PEOPLE OFFICER Rumi Portillo 1.00 Assistant Director of Human Resources WORKERS' COMPENSATION 1.00 Senior Human Resources Administrator EMPLOYEE/LABOR RELATIONS & TRAINING 1.00 Manager, Employee Relations 1.00 Senior Human Resources Administrator 1.00 Human Resources Representative" BENEFITS DIVISION 1.00 Manager, Employee Benefits 1.00 Senior Human Resources Administrator 1.00 Human Resources Representative 1.00 Human Resources Technician RECRUITMENT 1.00 Senior Management Analsyt 1.00 Senior Human Resources Administrator 1.00 Human Resources Representative" 1.00 Human Resources Technician" HUMAN RESOUCES INFORMATION SYSTEMS 1.00 Senior Management Analyst 2.00 Human Resources Technician" FY 2021 POSITION TOTALS 17.00 - Full-time 1.44 - Hourly' This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. " These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 0.50 FTE Human Resources Representative 0.50 FTE Human Resources Technician 0.96 Hourly FTE 260 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES Description The Human Resources Department provides guidance to City departments in the following areas: TOTAL COMPENSATION Administer salary, health, pension, and other benefits. EMPLOYEE AND LABOR RELATIONS Provide guidance to City staff to enhance performance, create a positive work environment, and effectively resolve complaints, grievances, and other problems, as well as lead the City through labor contract negotiations. ORGANIZATION AND EMPLOYEE DEVELOPMENT Identify and implement training and development opportunities to enhance skills, innovation, and leadership of City staff members. TALENT MANAGEMENT Recruit, select, and onboard employees who have a passion for public service and the right knowledge, skills, and abilities to take on increasingly complex public service roles. RISK MANAGEMENT, SAFETY, AND WORKERS COMPENSATION Support workplace safety, reduce injuries, and actively manage risk and other potential liabili- ties. Accomplishments • Implemented emergency telework for 400 nonessential employees to work from home. Implementation included assisting departments to identify impacted employees, providing citywide communication, protocols, approval workflow and oversight for employees to gather equipment, assignments, and instructions to work from home. • Assisted with the implementation of workplace safety protocols and COVID-19 exposure response for the workplace, including for first responders, in accordance with federal Centers for Disease Control (CDC) and Santa Clara County Health Department guidelines. • Implemented an emergency paid administrative leave program for employees who were unable to work due to facility shutdowns, stoppage of work, childcare impacts or medial restrictions resulting from the shelter -in -place health order. ▪ Staffed the Emergency Operations Center (EOC) for a newly created EOC Human Resources section, by participating in daily briefings, conducting research on workforce - related issues, and tracking emergency work. • Implemented a citywide hiring freeze by coordinating communications to hiring managers and candidates. Identified critical vacancies for exemption from the freeze and adapted to a HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 261 HUMAN RESOURCES virtual hiring process for those critical vacancies, including adjusting pre -employment screening and onboarding. ▪ Created an employee resource portal with online information to support employees and their families, including health and safety, wellness, financial resources, training, counseling resources, benefits and policies. • Launched an employee redeployment center to match assignments to displaced staff. • Negotiated with unions to bargain for concessions, including requests for a wage freeze, furloughs and other cost -savings measures. • Initiated and implemented Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act per federal mandates. • Recruited and filled 230 positions, including Assistant City Manager, Fire Chief, Fire Battalion Chief, Communications Officer, Chief Transportation Official, Police Officers, Firefighters, City Planners and Utilities field staff. • Enhanced recruitment social media presence, automated adverting for job postings and expanded diversity outreach. • Conducted a pilot for virtual interviews on a new system using one-time money granted by Council to improve hiring processes. ▪ Developed 2 -Year Master Plan for citywide employee training, expanded leadership academy training, implemented training in managing personal finances and greatly expanded Mindfulness training for employee wellness. ▪ Completed a public selection process for a new benefits broker. • Supported the City's Enterprise Resource Planning (ERP) system upgrade by providing workflow, business process, and testing of employee data, payroll, and other personnel related functions. • Completed a streamlining project for paperless Personnel Action Forms (PAF), as well as an on-line Employee Verification process which were previously processed manually. Initiatives • Continue to support the emergency response to the COVID-19 pandemic and ongoing recovery efforts as it unfolds. • Develop labor strategies that are responsive to the changing economic factors, increased liabilities, and evolving workforce and organizational needs. • Explore options to expand Employee Assistance Program services to include online and mobile therapy services. ▪ Expand the development of online interviewing software to support virtual hiring and candidate skills assessments. • Redesign the New Employee Orientation (NEO) process to be conducted virtually. ▪ Implement a virtual open enrollment and benefits fair in Fall 2020. 262 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES • Implement new and revised federal or state laws in response to COVID-19. • Continue to support the City's Enterprise Resource Planning (ERP) upgrade through full implementation. • Continue to update report configurations that ensure accurate reporting of pensionable compensation to CaIPERS. 3udget Summary 1 Dollars by Fund General Fund -Operating Liability Insurance Worker's Compensation Total Revenues Charges to Other Funds Operating Transfers -In Other Revenue Return on Investments Total Revenues Positions by Fund General Fund Workers' Compensation Program Fund Total FY 2018 Actuals 3,479, 721 2,647,980 3,513,168 9,640,869 FY 2019 Actuals FY 2020 Adopted Budget 3,614,677 3,945,119 4,481,136 2,971,622 6,233,418 6,738,337 14,329,231 13,655,078 FY 2021 Adopted Budget FY 2021 Change $ 3,596,503 (348,616) 4,146,146 1,174,524 6,946,942 208,605 14,689,590 1,034,513 FY 2021 Change % (8.8)% 39.5% 3.1% 7.6% 2,842,356 3,901,219 4,333,860 4,806,659 472,799 10.9% 5,000 5,000 5,000 5,000 — —% 2,025,670 4,595,511 5,522,040 5,119,040 (403,000) (7.3)% 541,650 602,871 708,600 642,900 (65,700) (9.3)% 5,414,677 9,104,601 10,569,500 10,573,599 4,099 —% 17.20 16.96 16.96 16.96 —% 1.00 1.00 1.48 1.48 —% 18.20 17.96 18.44 18.44 — _0/0 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 263 HUMAN RESOURCES GENERAL FUND Goals and Objectives GOAL 1 Implement a Comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Objectives: ▪ Invigorate the recruitment process to decrease 'time to fill' and increase quality of hires. . Reduce turnover with higher quality of hires and improved performance coaching. GOAL 2 Enhance City culture of engagement and innovation. Objectives: • Ensure employee attendance rate is high. ▪ Enhance learning opportunities through a comprehensive employee training program. • Increase employee communication through all media, including an enhanced HR department website. • Continue to champion a Wellness Program with a target of 15 percent employee participation. GOAL 3 Implement improvements to the department's operational systems especially employment, leave of absence, and benefit administration to ensure responsiveness and effectiveness of Human Resources staff performance. Objectives: • Strengthen oversight of benefit plan costs and processes. • Improve Human Resources ability to meet customer needs and provide superior customer service. 264 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES Key Performance Measures EMPLOYEE ATTENDANCE Goal Enhance City culture of employee engagement and innovation. Objective Maintain high employee attendance rate. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Attendance Description Purpose Status RECRUITMENT Goal Objective 95% 96% 95% 96% 90% This measure will track the attendance of employees in terms of percentage of time present. Attendance is a proxy metric for engagement and productivity. Absenteeism hinders City operations, and results in inefficiency when employees assume additional responsibilities because of unexpected absences. The Department of Labor benchmark for attendance is 96 percent, allowing for absenteeism rate of 4 percent. Under this standard, absenteeism is defined to include unscheduled time away from work (not including vacations or holidays and scheduled/approved Workers Compensation, ADA or FMLA leave). Employee attendance in prior years is in line with expectations and anticipated to remain stable through FY 2020. This rate has been decreased in FY 2021 in anticipation that more absences due to COVID-19 will result in less attendance. Implement a comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Invigorate the recruitment process to decrease time to fill and increase quality of hires. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Recruitment - Days to fill a position Description Purpose Status 103 98 100 98 110 This measure will provide the average number of days to fill a position from requisition approval until a hiring decision is made. A strong recruitment strategy is the foundation of talent management and should be accomplished in a focused, timely manner to provide departments with quality candidates as expeditiously as possible. This measure aligns with the International City/County Management Association's (ICMA) human resource metrics and is a standard tool as defined in the Society of Human Resource Management. As the City continues to compete for talent and hard to fill positions, the Days to Fill decreased by emphasizing efficiency and increasing resources to the efforts. Due to COVID-19, an online recruitment process was instituted and with revised hiring practices, it is expected that days to fill will increase in FY 2021. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 265 HUMAN RESOURCES TURNOVER Goal Objective Implement a Comprehensive Talent Management Program that will enable the City to attract, develop, and retain a committed workforce. Reduce turnover with higher quality of hires and improved performance coaching. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Turnover - Voluntary Turnover 4.66% Turnover - Total Turnover 9.42% Turnover - Involuntary Turnover 0.84% Turnover - Retirement Turnover 3.93% Description Purpose Status 5.60% 12.05% 0.74% 5.71% 5.75% 12.20% 0.70% 5.75% 4.73% 8.50% 0.65% 3.12% 4.50% 9.50% 1.50% 4.50% This metric provides data to identify trends when there is turnover, including voluntary exits, involuntary separations and retirements. Employees who are qualified, are a good match for the organization, and who are actively engaged with work, are not expected to leave the City. If turnover is high, the City incurs additional costs of hiring new staff. Initiatives, such as offering a robust training program, provide employees with skills and knowledge to keep productivity at an optimal level. Turnover in prior years is in line with expectations. This rate is anticipated to be lower in FY 2020 due to economic uncertainties of COVID-19 and higher in FY 2021 as a result of adopted position reductions and potentially improved economic conditions. Workload Measures Employee personnel transactionsa Percentage of employees participating in Citywide training programb FY 2018 Actuals 5,000 84% FY 2019 Actuals 4,500 95% FY 2020 Adopted 4,500 90% FY 2020 Estimated 4,000 95% FY 2021 Adopted 3,500 100% a. The number in personnel transaction decreased in FY 2020 due to COVID-19 shelter in place or- ders that resulted in a remote workforce. It is anticipated that personnel transactions will decrease in FY 2021 due to labor concessions to defer compensation adjustments. b. During FY 2020, staff successfully enhanced an e -learning platform, and due to various regula- tory and mandatory requirements, the City is expected to achieve 100% training participation for all City employees in FY 2021. 266 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES Dollars by Division Administration, Employee Org Development and HR Systems 3udget Summary FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 1,214,231 1,352,856 1,245,888 1,178,595 (67,294) (5.4)% Benefits and Compensation 435,416 457,524 516,904 492,960 (23,944) (4.6)% Employee and Labor Relations 1,180,702 1,156,530 1,339,974 1,225,159 (114,814) (8.6)% Recruitment 375,727 424,826 484,318 401,762 (82,557) (17.0)% Risk Mgmt, Safety, Workers' 273,645 222,940 358,034 298,027 (60,007) (16.8)% Compensation Total 3,479,721 3,614,677 3,945,119 3,596,503 (348,616) (8.8)% Dollars by Category Salary & Benefits Healthcare 237,758 260,430 314,498 273,193 (41,305) (13.1)% Other Benefits 75,229 85,945 94,705 81,546 (13,159) (13.9)% Overtime 1,147 2,638 - - - -% Pension 482,170 532,637 702,839 705,374 2,535 0.4% Retiree Medical 201,668 190,587 196,305 187,814 (8,490) (4.3)% Salary 1,746,388 1,860,870 1,956,231 1,786,285 (169,946) (8.7)% Workers' Compensation 55,727 70,466 65,285 (5,181) (7.4)% Total Salary & Benefits 2,744,360 2,988,834 3,335,044 3,099,497 (235,546) (7.1)% Allocated Charges 155,613 193,988 218,126 186,056 (32,070) (14.7)% Contract Services 462,714 311,923 285,309 205,309 (80,000) (28.0)% Facilities&Equipment - - 4,150 4,150 - -% General Expense 58,875 40,192 43,098 42,098 (1,000) (2.3)% Operating Transfers -Out 28,209 -% Rents & Leases 43,000 43,000 43,000 43,000 -% Supplies & Material 15,159 8,532 16,392 16,392 - -% Total Dollars by Expense Category Revenues Charges to Other Funds 3,479,721 3,614,677 3,945,119 3,596,503 (348,616) (8.8)% 1,067,356 976,010 1,856,860 1,914,659 57,799 3.1% HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 267 HUMAN RESOURCES 3udget Summary Other Revenue Total Revenues FY 2018 Actuals 41,593 FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % -% 1,108,949 976,010 1,856,860 1,914,659 57,799 3.1% Positions by Division Administration, Employee Org 5.56 5.56 Development and HR Systems Benefits and Compensation 2.44 2.20 2.20 2.20 Employee and Labor Relations 5.00 5.00 5.00 5.00 Recruitment 2.60 2.60 2.60 2.60 5.56 Risk Mgmt, Safety, Workers' 1.60 Compensation Total Staffing 1.60 1.60 1.60 17.20 16.96 16.96 16.96 Job Classification Assistant Director Human Resources Director Human Resources/CPO Human Resources Representative Human Resources Representative (Freeze) Human Resources Technician 4.00 Human Resources Technician (Freeze) Manager Employee Benefits 1.00 Manager Employee Relations 1.00 1.00 1.00 3.00 3.00 3.00 Senior Management Analyst 2.00 2.00 2.00 2.00 - 287,914 Sub -total: Full -Time Equivalent Positions This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to po- sition freezes is available in the department section organizational chart and budget adjustment sum- maries. FY 2018 Actuals 1.00 1.00 FY 2019 Actuals 1.00 1.00 FY 2020 Adopted Budget 1.00 1.00 3.00 3.00 3.00 Senior Human Resources Administrator 4.00 4.00 5.56 FY 2021 Adopted Budget 1.00 1.00 2.50 0.50 3.50 0.50 FY 2021 Change FTE - % - % - % FY 2021 Salary 201,448 237,806 (0.50) 231,954 0.50 46,391 (0.50) 270,707 0.50 38,672 1.00 - 149,968 1.00 163,051 3.00 1.00 1.00 16.00 16.00 16.00 16.00 - 1,949,563 321,651 268 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES Temporary/Hourly Total Positions Job Classification FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted FY 2021 Budget Change FTE FY 2021 Salary 1.20 17.20 0.96 16.96 3udget Reconciliation 0.96 16.96 0.96 16.96 103,324 - 2,052,888 Prior Year Budget 16.96 3,945,119 1,856,860 2,088,259 One -Time Prior Year Budget Adjustments Candidate Screening Tools One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments General Fund Cost Allocation Plan Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (80,000) — (80,000) (80,000) — (80,000) — 213,908 213,908 57,799 (57,799) 6,921 6,921 — (27,641) — (27,641) — (11,350) — (11,350) — (5,181) — (5,181) — 176,657 57,799 118,858 Total FY 2021 Base Budget 16.96 4,041,776 1,914,659 2,127,117 Budget Adjustments 1 Management and Professionals Group Compensation Reduction 2 Human Resources Services Staffing Reductions Total Budget Adjustments - (209,272) (236,001) - (445,273) - (209,272) (236,001) (445,273) Total FY 2021 Adopted Budget 16.96 3,596,503 1,914,659 1,681,844 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 269 HUMAN RESOURCES .budget Adjustments udget :Adjustments Positions Expenditures Revenues Net General Fund 1 Management and Professionals Group Compensation Reduction 0.00 (209,272) 0 (209,272) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 2 Human Resources Services Staffing Reductions la_ 0.00 (236,001) This action reduces the equivalent of 1.0 FTE staff resources from the Human Resources Department. This will result in reduced administrative and analytical support for assigned programs and functions in the recruitment, employee relations and training, and information systems divisions. (Ongoing savings: $236,001) 0 (236,001) Performance Results © 0 This action may result in delays to process employee personnel transactions. 270 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES GENERAL LIABILITIES INSURANCE PROGRAM Description The City's General Liability Program provides funding to cover flood, property, and various other insurance policies for City -owned equipment and machinery. The City is self -insured for the first $1.0 million in losses per occurrence and participates in a Joint Powers Authority for coverage up to $55 million per occurrence. This program uses an 85 percent confidence level, calculated by an outside actuarial consultant, for financial planning to ensure adequate resources are available for anticipated expenses. Accomplishments ▪ Revised and improved the City's interactive process for handling reasonable accommodation for Americans with Disabilities Act (ADA) cases. Initiatives • Review and monitor reopening plans for City facilities and provide recommendations to promote health and safety in accordance with County, State, and Federal guidelines. Goals and Objectives GOAL 1 Reduce liability exposure to the City. Objectives: • Reduce liability exposure to the City for employee -involved vehicle collision. • Review Department of Motor Vehicle (DMV) records on an annual basis for all employees whose job duties require that they drive City vehicles. ▪ Provide a proactive defensive driving course to all employees involved in vehicle collisions involving City vehicles regardless of fault. HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 271 HUMAN RESOURCES Reduce the number of claims related to City vehicle collision losses. Key Performance Measures "'"e° VEHICLE COLLISION LOSS Goal Reduce liability exposure to the City. Objective Reduce the number of claims related to City vehicle collision losses. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Annual number of claims related to City vehicle collision losses Description This measure will provide data to identify trends. Analyzing claim trends will assist risk management staff in developing programs designed to reduce employee involved vehicle collisions. The total number of employee involved collisions was lower than expected in FY Status 2019. Vehicle collisions loss cases are expected to trend similarly in FY 2020 and FY 2021. Purpose DEFENSIVE DRIVING TRAINING Goal Objective 11 7 Reduce liability exposure to the City. Provide defensive driver training. 8 6 6 FY 2018 Actuals FY 2019 Actuals FY 2020 FY 2020 FY 2021 Adopted Estimated Adopted Attendance at defensive driver training Description Purpose Status 14 214 50 100 150 This measure tracks the number of employees completing proactive and/or mandatory defensive driving class. Providing supplemental training will increase knowledge and awareness about safe driving behavior in order to protect employee and public safety, in addition to preventing future claims against the City. The total number of employees who were trained in driver safety -related training increased significantly in FY 2019 due to an online class provided to employees. This number is expected to decrease and stabilize in FY 2020 - 2021 following the initial cycle of employees that completed training. 272 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Summary --1 Dollars by Division Non -Departmental Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 2,647,980 4,481,136 2,971,622 4,146,146 1,174,524 39.5% 2,647,980 4,481,136 2,971,622 4,146,146 1,174,524 39.5% Dollars by Category Salary & Benefits Total Salary & Benefits — — — — — —% Contract Services 52,139 41,938 71,820 71,820 —% General Expense 2,595,841 4,439,116 2,899,802 4,074,326 1,174,524 40.5% Rents & Leases 81 —% Total Dollars by Expense 2,647,980 4,481,136 2,971,622 4,146,146 1,174,524 39.5% Category Revenues Charges to Other Funds Operating Transfers -In Other Revenue Return on Investments Total Revenues Positions by Division 1,775,000 5,000 42,900 126,629 1,949,529 Total 2,925,209 2,477,000 2,892,000 415,000 16.8% 5,000 5,000 5,000 —% 536,912 41,040 41,040 —% 141,817 168,200 168,200 — —% 3,608,938 2,691,240 3,106,240 415,000 15.4% _OA HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 273 HUMAN RESOURCES 3udget Reconciliation ■ Positions Expenditures Revenues Net General Liabilities Insurance Program Prior Year Budget 2,971,622 2,691,240 280,382 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Charges to Other Funds Umbrella Excess Liability Insurance Increase Property Loss Insurance Increase General Liability Insurance Claims 896,704 121,820 156,000 415,000 (415,000) 896,704 121,820 156,000 Adjustments to Costs of Ongoing Activities Total FY 2021 Base Budget Budget Adjustments 1,174,524 4,146,146 415,000 3,106,240 634,524 1,039,906 None Total Budget Adjustments Total FY 2021 Adopted Budget 4,146,146 3,106,240 1,039,906 274 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES WORKERS' COMPENSATION FUND Description The Workers' Compensation Program provides wage and medical benefits for employees who sustain an injury or develop an occupational illness within the course and scope of employment. This program uses an 85 percent confidence level, calculated by an outside actuarial consultant, for financial planning to ensure adequate resources are available for anticipated expenses. Accomplishments • Developed safe work protocol to protect employees' health by minimizing close contact and maintaining social distance. • Established guidance to assess risk factors for COVID-19 employee exposures to determine appropriate steps in accordance with Santa Clara County Health Department and the Centers for Disease Control (CDC) guidance. Initiatives • Establish a citywide protocol in accordance with new state law establishing occupational COVID-19 illnesses to be covered under the City's Workers' Compensation program. Goals and Objectives GOAL 1 Provide a safe environment for employees. Objectives: . Provide workplace safety training for all departments. . Comply with all requirements of the Occupational Safety and Health Act (OSHA). HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 275 HUMAN RESOURCES GOAL 2 Minimize loss of productivity and disruption of services. Objectives: • Facilitate early return to work program. • Reduce the number of costly lost time claims filed and days away from work. /Key Performance Measures DOI P.AR AMOUNT OF CLAIMS PAID Goal Minimize loss of productivity and disruption of services. Objective Reduce the number of costly lost time claims filed and days away from work. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Total dollar amount of claims paid 1,827,485 2,804,300 2,000,000 2,600,000 2,500,000 This measure tracks the total cost paid for work -related illness and injury claims in a given fiscal year. As claims develop, prior year total costs paid are revised. Effective workplace safety and loss control programs lessen the use of public funds for work -related employee injuries and illness. The total cost of workers' compensation claims increased in FY 2019 compared to the prior year due to a higher than anticipated increase in cases. The claims Status cost in FY 2020 and FY 2021 are estimates of current conditions but due to the COVID-19 event, the number of workers' compensation costs may vary in FY 2020 and FY 2021. Description Purpose NUMBER OF CLAIMS Goal Minimize loss of productivity and disruption of services. Objective Reduce the number of costly lost time claims filed and days away from work. Number of Workers' Compensation Claims Filed Description Purpose Status FY 2018 Actuals 79 FY 2019 Actuals 92 FY 2020 Adopted 75 FY 2020 Estimated FY 2021 Adopted 97 97 This measure tracks the total employee workers' compensation claim volume filed each fiscal year. Effective workplace safety and injury prevention program lessen the use of public funds for work -related injuries and illness. In addition to claim costs, the expense of paying overtime or hiring additional staff is mitigated. The total numbers of claims increased in FY 2019 and the trend in FY 2020 is expected to remain stable. Due to the COVID-19 event, the numbers of workers' compensation cases in FY 2020 and FY 2021 may vary significantly. 276 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Summary Dollars by Division Non -Departmental Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 3,513,168 6,233,418 6,738,337 6,946,942 208,605 FY 2021 Change % 3.1% 3,513,168 6,233,418 6,738,337 6,946,942 208,605 3.1% Dollars by Category Salary & Benefits Healthcare 10,020 10,183 11,166 10,310 (856) (7.7)% Other Benefits 198,412 280,276 251,514 250,327 (1,187) (0.5)% Pension 35,757 37,780 52,034 46,993 (5,041) (9.7)% Salary 124,472 125,882 161,746 155,435 (6,311) (3.9)% Workers' Compensation 2,704,248 5,190,579 5,604,340 5,826,340 222,000 4.0% Total Salary & Benefits 3,072,909 5,644,701 6,080,800 6,289,405 208,605 3.4% Contract Services 4,750 6,750 7,079 7,079 - -% General Expense 432,049 580,155 650,458 650,458 -% Operating Transfers -Out 3,460 1,813 -% Total Dollars by Expense Category 3,513,168 6,233,418 6,738,337 6,946,942 208,605 3.1% Revenues Other Revenue 1,941,177 4,058,599 5,481,000 5,078,000 (403,000) (7.4)% Return on Investments 415,022 461,055 540,400 474,700 (65,700) (12.2)% Total Revenues 2,356,199 4,519,654 6,021,400 5,552,700 (468,700) (7.8)% Positions by Division Non -Departmental 1.00 1.00 1.48 1.48 Total 1.00 1.00 1.48 1.48 -% _OA HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 277 HUMAN RESOURCES Staffing Senior Human Resources Administrator Job Classification Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals 1.00 1.00 1.00 FY 2019 Actuals 1.00 1.00 FY 2020 Adopted Budget 1.00 1.00 0.48 1.00 1.48 FY 2021 Adopted Budget 1.00 1.00 0.48 1.48 FY 2021 Change FTE FY 2021 Salary 127,566 127,566 29,163 156,730 278 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES 3udget Reconciliation Prior Year Budget 6,738,337 6,021,400 716,937 Base Adjustments Workers' Compensation Program Temporary Staffing (0.48) (30,386) (30,386) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (0.48) (30,386) — (30,386) Salary and Benefit Adjustments Charges to Other Funds Workers' Compensation Insurance Claims Adjustments Investment Income Adjustment 1,039 1,039 (403,000) 403,000 222,000 — 222,000 65,700 (65,700) Adjustments to Costs of Ongoing Activities 223,039 (468,700) 691,739 Total FY 2021 Base Budget 6,930,990 5,552,700 1,378,290 Budget Adjustments 1 Workers' Compensation Program Temporary Staffing 2 Management and Professionals Group Compensation Reduction 0.48 29,586 (13,635) 29,586 (13,635) Total Budget Adjustments 0.48 15,951 15,951 Total FY 2021 Adopted Budget 1.48 6,946,941 5,552,700 1,394,241 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 279 HUMAN RESOURCES 3udget Ac justments Budget Adjustments Positions Expenditures Revenues Net Workers' Compensatio n Fund 1 Workers' Compensation Program Temporary Staffing 0.48 29,586 411L 29,586 This action extends a 0.48 FTE Management Specialist for an additional one-year term to assist with workload in workers' compensation and risk management administration. This request will add capacity to maintain ongoing operations and assist with correct salary continuation for injured workers and accuracy of department timecard coding, tracking injured worker and return -to -work status and maintaining Human Resources claim files. This position will also assist in completing reporting for Community facilities special event insurance, and scheduling annual hearing audiogram testing as time permits. Staff will continue to assess the needs in risk management loss control and bring forward recommendations for ongoing support as part of future budget cycles. (Ongoing costs: $0) Performance Results © 0 This action provides resources necessary to implement audit recommendations that streamline the workers' compensation reporting process and improve the accuracy and completeness of claim forms. 2 Management and Professionals Group Compensation Reduction 0.00 (13,635) (13,635) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 0 This action contributes to cost containment strategies in FY 2021. 280 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET HUMAN RESOURCES Workers' Compensation Func 1 FY 2018 Actuals FY 2020 FY 2019 Actuals Estimated FY 2021 Adopted Workers' Compensation Fund Claims Paid 1,827,485 5,108,087 2,989,402 5,703,000 Change in Estimated Self - Insurance Liability 766,339 CSAC Excess Insurance Premium 432,049 579,259 486,966 649,458 Actuarial Services 4,750 6,750 6,750 7,079 TPA Administrator Fees 193,122 275,005 241,109 246,240 State Self -Insurance fees 110,423 82,492 111,297 122,340 In -House Administration 170,000 181,825 221,622 217,825 Workers' Compensation Fund Subtotal 3,513,168 6,233,418 4,057,146 6,946,942 HUMAN RESOURCES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 281 CITY OF PALO ALTO order for each to meet their INFORMATION TECHNOLOGY Mission Statement The Information Technology Department's mission is to provide innovative technology solutions that support City departments in delivering quality services to the community. Purpose The purpose of the Information Technol- ogy Department is to champion an inspir- ing and forward -leaning vision for citywide technology that reflects the unique role of the City of Palo Alto as a global leader in technology innovation; to provide a broad range of high -quality technology -related solutions to employees, departments, council members, and the community in respective goals; to support and continuously improve essential technology infrastructure for enabling the day-to-day opera- tions of the City; and to create and maintain an exciting workplace for the Infor- mation Technology Department team that inspires high-performance and provides career growth opportunities. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 283 INFORMATION TECHNOLOGY CHIEF INFORMATION OFFICER" Darren Numoto (Interim) IT PROJECT MANAGEMENT OFFICE 1.00 IT Manager 5.00 Senior Technologist' 1.00 Business Analyst IT OPERATIONS 1.00 IT Manager 8.00 Senior Technologist" 6.00 Desktop Technician OFFICE OF THE CIO 1.00 Senior Management Analyst 1.00 Senior Technologist 1.00 Technologist" 1.00 Administrative Assistant IT ENTERPRISE SERVICES 1.00 IT Manager 4.00 Senior Technologist INFORMATION SECURITY SERVICES 1.00 Security Manager FY 2021 POSITION TOTALS 33.00 - Full-time 0.48 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Director Information Technology/CIO 2.00 FTE Senior Technologist 1.00 FTE Technologist 284 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY Description The Information Technology Department's vision statement is to build and enable a leading smart and digital city. A digital city broadly adopts innovative internet-based technologies to enable quality services and processes among City employees, citizens, visitors, and businesses. A smart city integrates technology and digital capabilities with the physical environment to improve livability, workability, and sustainability. Beginning Fiscal Year 2013, the Information Technology Department embarked on a multi -year journey to transform itself into being a provider of higher -value information technology solutions and make steady progress towards building a leading digital city. The Information Technology Department provides a wide range of services for the City of Palo Alto through the following operational divisions: OFFICE OF THE CIO (OCIO) Provides leadership and strategic direction for the City of Palo Alto's use of technology. OCIO provides advisory services to City departments regarding opportunities to leverage technology to improve government services. In addition, the division sets IT policies and directions for the IT Department and the City. This division is often the public -facing component of the team and is responsible for fostering mutually beneficial public -private, technology -related partnerships. The core services include IT strategic planning, financial management, contract management, communications, work force development, overall department administration, and data analyt- ics. IT PROJECT MANAGEMENT OFFICE (PMO) The IT PMO ensures successful execution of technology projects in a consistent and cost-con- scious manner. Through IT project governance the department maintains project awareness and manages the project assessment lifecycle. The IT PMO is the City's center of excellence for tech- nology projects, within IT and all other City departments, through the promotion of standards, awareness, and education. IT OPERATIONS Maintains and supports all deployed back -end and front-end City technologies, including the process of retiring products and services. The team also ratifies standards working alongside other IT divisions. Services include enterprise architecture, service desk, infrastructure support, INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 285 INFORMATION TECHNOLOGY server hosting, office automation software support, technical training and support, and asset management. IT ENTERPRISE SERVICES Maintains a core set of large enterprise systems such as the Enterprise Resource Planning (ERP), Utility Billing & Customer Information System (CIS), Customer Relationship Management (CRM), Business Intelligence & Warehouse systems (BI/BW) for supporting Financial, Human Resource, Utilities business processes, information flow, reporting, data analytics, and enterprise data governance for the City. These services include all aspects of enterprise systems management such as planning, archi- tecture, development, integration, administration, support, maintenance, governance, and change management. INFORMATION SECURITY SERVICES Develops and implements the citywide information security program that includes the preser- vation of the availability, integrity, and confidentiality of the City's information resources. These services include security policy and procedures, legal compliance, risk management, disaster recovery, and security audit. Accomplishments • Began the City's Enterprise Resource planning (ERP) upgrade project by obtaining licensing; selected implementation consultant. • Selected vendor and began implementation of the Next Generation City Website. • Implemented infrastructure enhancements to increase network availability. ▪ Implemented CyberSecurity enhancements to further protect the City's infrastructure. ▪ Implemented new Geographic Information System (GIS) OpenData portal leveraging the ESRI software platform. • Migrated select departments to modern SharePoint. • Deployed new Windows 10 computers to half of City staff as part of the computer replacement project. ▪ Completed Police vehicle computer replacement project. ▪ Completed migrating the Business Intelligence / Business Warehouse (BI/BW) platform to modern hardware and software. Initiatives ▪ Continue implementation of the upgrade for the City's Enterprise Resource Planning (ERP) system. • Continue implementation of the new Geographic Information System (GIS). • Continue implementation of a citywide Data Strategy, Standardization, and Governance. 286 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY • Continue deployment of new computers as part of the computer replacement project. ▪ Continue with the support for the design of the new Public Safety Building. • Deploy upgraded Business Intelligence system. ▪ Launch the Next Generation City website. • Review and refine the Information Technology Three -Year Strategic Plan. Goals and Objectives GOAL Support a multiyear roadmap to significantly increase the City's adoption of digital services and smart city capabilities. Objectives: ▪ Develop, enhance, and provide IT services that will increase the community's access to mobile services. ▪ Deploy and maintain enterprise -wide platforms and processes for supporting open and participative government to enrich our community. • Maintain an ongoing program of civic innovation activities in government technology and include broad participation from innovators in the public and private sectors. ▪ Formalize an Urban Innovation Network to bring together innovators, entrepreneurs, and organizations in the local area to collaborate. GOAL 2 Enhance IT service delivery to provide excellent customer service to all City departments. Objectives: • Support high -quality, consistent, and efficient services by organizing around a standardized delivery framework based on the Information Technology Infrastructure Library (ITIL). • Mature the established citywide IT governance processes based on an industry -recognized model. ▪ Deploy new tools to support higher quality service and knowledge management. • Formalize career path and succession planning for the City's technology staff. • Review and refresh IT position descriptions, roles, and responsibilities. • Baseline current IT capabilities and identify targeted improvements based on a model such as the IT Capability Maturity Framework. GOAL 3 Strengthen the City's technology infrastructure and communication systems. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 287 INFORMATION TECHNOLOGY Objectives: • Reduce the City's data center footprint by utilizing a hybrid cloud approach. • Virtualize and decommission systems as necessary to reclaim office space. • Implement unified communications to optimize business processes and increase user productivity and collaboration. ▪ Standardize data storage approach and solutions. • Execute the 2017 adopted GIS Strategy Plan which includes the implementation of the new GIS system and added capabilities. GOAL 4 Enhance and improve information security to ensure confidentiality, integrity, and availability of information across all City systems. Objectives: • Enhance Cybersecurity awareness processes throughout the City. • Implement additional annual Cybersecurity training for all City employees. • Ensure a fully -tested disaster recovery and continuity program for mission critical services. ▪ Continue to identify and invest in innovative tools in order to appropriately protect City systems and data as conditions dictate. GOAL 5 Design and formalize a citywide data strategy to leverage the high value of our City data. Objectives: • Implement citywide Data Governance based on a recognized, industry standard framework such as DM-BOK. • Mature our Open Data initiative to address data -driven decision making. • Deploy a defined set of citywide data capabilities for departments. 288 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY Key Performance Measures PERCENT OF SURVEY RESPONDENTS RATING THE SERVICES PROVIDED BY THE INFORMATION TECHNOLOGY DEPARTMENT AS EXCELLENT Increase customer satisfaction on the services provided by the Information Technology Department. Establish clear division processes, staff responsibilities, and performance measures. Goal Objective Percent of survey respondents rating the services provided by the Information Technology Department as excellent. Description Purpose Status FY 2018 Actuals N/A FY 2019 Actuals 93% FY 2020 Adopted 93% FY 2020 Estimated 93% FY 2021 Adopted 94% This measure identifies the overall level of satisfaction internal customers have with telephone, network, application, and desktop support services. This measure is an important qualitative assessment of how well IT is supporting its internal customers and whether they feel IT is meeting their needs. The FY 2018 survey was put on hold as they survey process was being reviewed. Ongoing outreach and customer relationship management is being employed to ensure high customer satisfaction. Programs such as "Customer Shadowing" have provided excellent feedback and relationship building. PERCENT OF SERVICE DESK REQUESTS RESOLVED BY RESOLUTION TIME Goal Track the overall time it takes to resolve service desk work orders. Objective Percent of service desk requests resolved at time of call Percent of service desk requests resolved within 4 hours Percent of service desk requests resolved within 8 hours Percent of service desk requests resolved within 5 days Percent of service desk requests resolved beyond 5 days Description Purpose Status Establish clear division processes, staff responsibilities, and performance measures. FY 2018 Actuals 28% 25% 6% FY 2019 Actuals 28% 23% 5% 29% 27% 13% 15% FY 2020 Adopted 30% FY 2020 Estimated 30% 23% 23% 5% 5% 28% 26% 14% 16% FY 2021 Adopted These measures track the time it takes to resolve service desk work orders. 31% 22% 5% 27% 15% Ensuring that IT staff are resolving work orders in a timely manner provides a quantitative measurement of one of the important services the department provides. There were minor fluctuations of actuals for help desk work order resolution times; however, with the implementation of self-service and cloud automation tools to address lower level Tier 1 requests, staff will be available to work on more complex work orders. This may result in higher first call resolution times. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 289 INFORMATION TECHNOLOGY Workload Measures Number of closed help desk requests Number of datasets published on open data platforms FY 2018 Actuals 8,224 91 FY 2019 Actuals 8,097 94 FY 2020 Adopted 9,572 95 FY 2020 Estimated 8,790 94 FY 2021 Adopted 8,997 95 290 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY 3udget Summary Dollars by Division CIP Technology Fund Enterprise Systems Office of the CIO Operations Project Services Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 2,094,809 590,523 7,892,514 1,623,537 (6,268,977) (79.4)% 3,115,197 3,039,401 3,460,217 3,358,027 (102,190) (3.0)% 2,599,009 2,754,666 3,562,652 2,787,604 (775,048) (21.8)% 6,782,791 6,761,641 8,506,210 7,455,210 (1,051,001) (12.4)% 1,653,497 1,696,765 2,014,474 1,788,562 (225,911) (11.2)% 16,245,303 14,842,997 25,436,067 17,012,940 (8,423,127) (33.1)% Dollars by Category Salary & Benefits Healthcare 752,469 772,301 877,401 721,919 (155,482) (17.7)% Other Benefits 185,468 184,640 188,658 163,649 (25,009) (13.3)% Overtime 3,913 3,439 19,564 20,073 509 2.6% Pension 1,316,033 1,376,049 2,046,081 1,796,963 (249,118) (12.2)% Retiree Medical 314,799 347,609 358,038 340,208 (17,830) (5.0)% Salary 4,500,068 4,614,661 5,206,438 4,388,414 (818,024) (15.7)% Workers' Compensation 7,873 92,201 137,314 127,218 (10,096) (7.4)% Total Salary & Benefits 7,080,624 7,390,900 8,833,494 7,558,444 (1,275,050) (14.4)% Allocated Charges 998,111 1,436,029 1,721,906 1,661,357 (60,549) (3.5)% Contract Services 4,361,775 3,913,285 5,140,131 4,653,184 (486,947) (9.5)% Facilities & Equipment 644,357 549,739 868,296 556,869 (311,427) (35.9)% General Expense 452,063 417,447 475,179 442,179 (33,000) (6.9)% Operating Transfers -Out 161,418 99,746 30,590 31,150 560 1.8% Rents & Leases 362,749 374,357 388,957 401,220 12,263 3.2% Supplies & Material 49,732 45,335 85,000 85,000 - -% Capital Improvement Program 2,134,475 619,097 7,892,514 1,623,537 (6,268,977) (79.4)% Total Dollars by Expense Category 16,245,303 14,845,934 25,436,067 17,012,940 (8,423,127) (33.1)% Revenues Charges to Other Funds 13,774,906 14,570,588 14,409,229 12,321,660 (2,087,568) (14.5)% From Other Agencies - 15,000 - - - -% Operating Transfers -In 2,031,612 1,365,708 2,137,482 1,340,005 (797,477) (37.3)% INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 291 INFORMATION TECHNOLOGY 3udget Summary Other Revenue Return on Investments Total Revenues FY 2018 Actuals FY 2019 Actua►s 318,973 488,765 561,304 16,295,283 16,831,573 FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 103,264 17,713 (85,551) 644,400 549,200 (95,200) 17,294,375 14,228,578 (3,065,797) FY 2021 Change % (82.8)% (14.8)% (17.7)% Positions by Division Enterprise Systems 9.50 9.00 9.00 9.00 Office of the CIO 6.10 6.10 5.10 5.10 Operations 14.48 14.48 14.48 14.48 Project Services 7.00 7.00 8.00 8.00 Total 37.08 36.58 36.58 36.58 Staffing Job Classification Administrative Assistant Assistant Director Administrative Services Business Analyst FY 2018 Actuals 1.00 0.10 FY 2019 Actuals 1.00 0.10 1.00 1.00 Desktop Technician 6.00 6.00 Director Information Technology/ 1.00 CIO Director Information Technology/ CIO (Freeze) FY 2020 Adopted Budget 1.00 0.10 FY 2021 Adopted Budget 1.00 0.10 1.00 1.00 6.00 6.00 1.00 1.00 1.00 FY 2021 Change FTE - % - % - % -% - % FY 2021 Salary 95,826 21,509 - 155,334 - 558,605 (1.00) 1.00 220,085 Manager Information Technology 4.00 3.00 3.00 3.00 - 490,194 Manager Information Technology 1.00 1.00 1.00 1.00 167,086 Security Principal Business Analyst 1.00 1.00 1.00 1.00 - 165,027 Senior Business Analyst 2.00 2.00 2.00 2.00 - 300,893 Senior Management Analyst 1.00 1.00 1.00 1.00 - 147,264 Senior Technologist 17.00 18.00 18.00 16.00 (2.00) 2,331,784 Senior Technologist (Freeze) 2.00 2.00 299,499 Technologist 1.00 1.00 1.00 (1.00) 292 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY Staffing Technologist (Freeze) Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals 36.10 FY 2019 Actuals 36.10 FY 2020 Adopted Budget 36.10 FY 2021 Adopted Budget 1.00 36.10 FY 2021 Change FTE 1.00 FY 2021 Salary 155,334 5,108,440 0.98 0.48 0.48 0.48 — 46,056 37.08 36.58 36.58 36.58 — 5,154,497 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional informa- tion relating to position freezes is available in the department section organizational chart and budget adjustment summaries. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 293 INFORMATION TECHNOLOGY 3udget Reconciliation Positions Expenditures Revenues Net Technology Fund Prior Year Budget 36.58 25, 436, 067 17,294,375 8,141,692 One -Time Prior Year Budget Adjustments None Adjustments to Costs of Ongoing Activities Salary and Benefits Return on Investments & Other Revenue Contract Adjustments & Equipment Cost Changes Rents and Leases Transfer from the General Fund -Technology Surcharge Charges to Other Funds -Information Technology Services Capital Improvement Funding General Fund Cost Allocation Plan Communication Services Allocated Charges General Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Refuse Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 79,067 — 79,067 (94,753) 94,753 (6,933) (6,933) 12,263 12,263 29,523 (29,523) 308,682 (308,682) (6,268,977) (913,000) (5,355,977) — (61,200) — (61,200) — 1,500 — 1,500 10,320 10,320 (1,768) (1,768) 31 (6,530) (2,903) — (10,096) - (6,255,226) 31 (6,530) (2,903) (10,096) (669,548) (5,585,678) Total FY 2021 Base Budget 36.5 19,180,841 16,624,827 2,556,014 Budget Adjustments 1 Reduction in Software and Equipment Support 2 Position Eliminations, Deferral of Hiring, and Reduction in Department Training 3 Management and Professional Group Compensation Reduction Total Budget Adjustments - (2,167,901) (790,880) (1,472,993) (923,256) (923,256) (453,765) — (453,765) (2,396,249) 682,113 228,348 Total FY 2021 Adopted Budget 36.58 17, 012, 940 14,228,578 2,784,362 294 INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET INFORMATION TECHNOLOGY 11 11 Olio Li" 2001 011 1 „ ] r 1©001,1 01011© q O1 oi1i0ii4 i21 O01 OC orb00 0 o f ao 11 1 1 4 0 o pD o 11,©10 000i1D1 1 1a101g04i1 D1 01 101 11110 1110 111#1111!1 014©11 1 =1 101DOto 00110 1 i 1 a 0011 D D11�p0 0 1 11,1311, 1M01111! O100Ifl!It 0 l1 001410 04001 1 a D a al 1 10 s 101 11 of a as 1 1o1D0q 0D011iD111j11 Q Ol 11 { 1i1 00010Ui1 01l01011400111#1 Q' t1 0sa11100 410eDg011a111� ° " 1111Dolt loo/11q4 71111 OOOI 014100111Dp 10111 #11101,011: l# A 1100201. i0011101a1D1#00100 1010101s, II' i s', 0111.11tiotolo11! 11004111 1101001Dn1 ODlnilil 2' yp1 Q°py0444i. II 1100011io100100110 .budget Adjustments Budget Adjustment" 1 Reduction in Software and Equipment Support Net Technology Positions Expenditures Revenues Fund M- (790,880) (1,472,993) 682,113 This action reduces the Citywide allocation for software replacement and may result in use of reserves or a resource impact to a department where replacement costs have not fully amortized. This reduction also contains costs that are no longer needed due to the City moving to an alternative platform, equipment being taken out of service, or alternative service delivery models being utilized. (Ongoing savings: $302,000) Performance Results This action will not impact performance but will have an impact on fund reserves. 2 Position Eliminations, Deferral of Hiring, and Reduction in Department Training 0.00 (923,256) (923,256) 1 1 0 This action reduces and defers the hiring of staff including 1.0 Director, Information Technology, 2.0 Senior Technologists, and 1.0 Technologist. This budget impact will result in decreased response time for internal work orders and delays in projects support and management across the organization. (Ongoing savings: $923,256) Performance Results 0 This action will result in decreased response time. 3 Management and Professional Group Compensation Reduction 0.00 (453,765) 0 (453,765) 11111111 This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 0 This action contributes to cost containment strategies in FY 2021. INFORMATION TECHNOLOGY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 295 CITY OF PALO ALTO LIBRARY Mission Statement The Palo Alto City Library connects our diverse community through knowledge, resources and opportunities. We nurture innovation, discovery, and delight. Purpose The purpose of the Library Department is to provide exceptional, responsive public service to Palo Alto residents and employ- ees; promote exploration of library resources to support learning, recreation, and personal enrichment; foster a love of reading, creative expression, and commu- nity engagement for all ages; and develop library facilities, technology, and staff to create a welcoming, inclusive environment in which to share valuable resources and skilled expertise. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 297 LIBRARY LIBRARY DIRECTOR Gayathri Kanth (Interim) PUBLIC SERVICES DIVISION 1.00 Assistant Director RINCONADA LIBRARY 1.00 Library Services Manager 1.00 Supervising Librarian 1.00 Senior Librarian 1.00 Coordinator, Library Program 3.00 Librarian 1.00 Library Associate 3.50 Library Specialist CHILDREN'S LIBRARY 1.00 Supervising Librarian 2.00 Senior Librarian 1.00 Librarian 1.00 Library Associate MITCHELL PARK LIBRARY 1.00 Library Services Manager 2.00 Supervising Librarian 1.00 Senior Librarian 3.00 Librarian 1.00 Library Associate 4.00 Library Specialist COLLEGE TERRACE LIBRARY 1.00 Library Associate DOWNTOWN LIBRARY 1.00 Library Associate 1,00 Library Specialist ADMINISTRATION 1.00 Management Analyst 1.00 Administrative Associate Il l " INFORMATION TECHNOLOGY & COLLECTIONS DIVISION 1.00 Division Head, IT & Collections COLLECTIONS & TECHNOLOGY 2.00 Senior Librarian 2.00 Library Associate 2.00 Library Specialist " 1,00 Business Analyst DIGITAL SERVICES & E -BRANCH 1.00 Library Services Manager 2.00 Senior Librarian 1.00 Library Specialist FY 2021 POSITION TOTALS 46.50 - Full -Time 14.78 - Hourly " This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Administrative Associate III 1.00 FTE Assistant Director 2.00 FTE Senior Librarian 1.00 FTE Library Associate 1.00 FTE Library Specialist 10.41 Hourly FTE 298 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET LIBRARY Description The Library provides a wide range of public services for the City of Palo Alto through the following: PUBLIC SERVICES & PROGRAMS Offers a variety of programs free of charge to library users of all ages, interests, and abilities, to provide educational, self-help, recreational, technological, and multi-lingual outreach. When appropriate, partners with other civic, non-profit, business, and educational organizations to present these programs. INFORMATION, TECHNOLOGY, & COLLECTIONS Library collections include a diverse selection of print and non -print materials, and digital resources such as electronic books, magazines, and media, to meet the educational, informa- tional, and recreational needs of its clientele, reflecting the variety of languages, cultures, and interests of our community. Provides opportunities (sometimes through experimental partner- ships with other agencies) for the public to access a variety of technologies both inside and outside library facilities, including hardware devices, online databases, free WiFi, mobile applica- tions. BUILDINGS, SUPPORT, & ADMINISTRATION Provides information, training, and support for City employees and the public, and ensures that all aspects of library services and policies are delivered with the highest degree of public stew- ardship in mind. By funding major facility renovations and improvements to three libraries through a dedicated library bond and two previous renovation projects, Palo Alto has modern libraries offering comfortable, inviting, and flexible spaces for everyone in our community to gather and learn. Accomplishments ▪ Won the Urban Library Council's Top Innovator 2019 Award for providing educational programming for youth and families using robots. • Recipient of California Center for the Book's Book to Action 2020 Grant. The focus of Palo Alto City Library's Book to Action programming was Alzheimer's Disease and its effect on the community. Activities include a documentary screening and a featured talk by TED Fellow Alanna Shaikh (both postponed to August 2020 due to Public Health Emergency Shelter in Place Restrictions). There is also a book discussion and community service project component to be planned in FY 2021. • Recipient of a grant from the Pacific Library Partnership, the Palo Alto City Library launched the Vintage Media Lab on September 26, 2019. This new service provides equipment to digitize old formats, including slides, VHS Tapes, 8mm Video Tapes (Video8/Hi8/ Handycam), Super 8 or 8mm Movie Film, with more equipment coming soon to digitize LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 299 LIBRARY photos, cassettes, and vinyl albums. Volunteers or Staff assist customers during their one - hour sessions every Thursday, and since launching, there have been over 50 sessions. ▪ Participated in the YMCA's Welcome Week initiative (September 12-22), highlighting special events and services around Palo Alto that support the contributions of New Americans. The Library co -hosted a potluck with the YMCA and Kafenia Peace Collective at the Mitchell Park Community Center on September 21, 2019. • Continued effort to Celebrate Cultures, including successful Diwali and Lunar New Year events. The Library hosted its 3rd annual Diwali event at the Mitchell Park Community on November 3, attracting 525 attendees, who enjoyed the performances, crafts, food and celebrating this event with their larger community. The Library hosted its annual Lunar New Year event on February 1, at the Art Center Auditorium. This year 175 attendees, including many children, came out to see a martial arts demonstration by Studio Kicks, and made several crafts, including puppets, lanterns and jegis. • Launched several popular virtual programs on social media including story times, crafts, book discussions and a Spring into Reading program. • The Teen Library Advisory Board (TLAB) teamed up with Art Center Teen Leadership to develop and paint a 4 -canvas mural for the Teen Zone at Mitchell Park Library. The mural, entitled "Rhythm of Time," was unveiled on December 5 and was inspired by the groups' desire to bring the outside in and offer a calming and inspirational piece of artwork for teens to enjoy while studying in the library. Initiatives ▪ Coordinate with Public Works on the Library Automated Materials Handling capital project (LB -21000) to install Automated Materials Handling (AMH) Machines at all City libraries, starting with the Children's Library. Automated Materials Handling Machines in place at Rinconada and Mitchell Park Library branches sort up to 4,000 library materials per hour. ▪ Explore and develop efficiencies in cash handling processes to reduce staff time spent processing revenue collections. ▪ Explore and develop new virtual programming to engage the community. • Develop new opportunities for revenue generation to capitalize on library strengths. New revenue explorations include using the library as space rental for events and photoshoots, and providing exam proctoring services. • Integrate technology into more programming and library projects, including the exploration of robot gardening in libraries. ▪ Continue to offer free and open access for the public to emerging technologies through workshops and displays. • Explore creative ways to extend Library open hours by exploring the possibility of piloting Library book vending machines and holds pickup lockers that can be placed outside the library or in the community to access outside of typical library hours. 300 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET LIBRARY Goals and Objectives GOAL Be the place where everyone can learn anything. Objectives: • Provide and promote opportunities to read for learning and for pleasure. • Create learning opportunities for community members to be able to make sense of and succeed in our changing society. ▪ Provide a portal to American culture, language, and civic life. • Ensure that the library's collections, technology, and buildings support the evolving requirements of 21st Century lifelong learning. ▪ Provide tools for improving all types of literacy. • Provide early childhood literacy programs based on current research in child development and learning. GOAL 2 Be the partner of choice for community organizations. Objectives: ▪ Support Project Safety Net's programs to promote youth well-being and implement the 41 Developmental Assets. • Increase collaboration with Palo Alto's public and private schools and their school librarians. ▪ Support library stakeholders in their advocacy and fundraising activities. • Connect staff to community organizations in order to support their goals and collaborate in their activities. • Encourage relationships with community organizations that enhance library services and programs. ▪ Develop partnerships to enhance customers' digital experiences. GOAL 3 Connect community members to exchange and share stories, interests, and skills, with particu- lar emphasis on intergenerational opportunities. Objectives: • Provide a forum to explore current events and issues of community interest. ▪ Engage community members in library services as volunteers and program advisors. • Connect community members to exchange and share stories, interests, and skills. ▪ Encourage reading, writing, and other forms of creative expression among community members. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 301 LIBRARY GOAL 4 Leverage technology to integrate the library into the lives of community members. Objectives: ▪ Enhance and preserve unique and local collections. • Plan and implement a social media strategy. • Produce web content that is relevant to the needs and interests of our diverse audiences. • Facilitate access for library users to resources that enable them to create content. ▪ Provide staff training and technology infrastructure to support digital projects. • Keep abreast of emerging technologies and trends and of library -specific applications. GOAL 5 Provide a richer library experience for our community because of the expertise and effort of our dynamic staff. Objectives: • Attract and retain the most skilled and knowledgeable staff. • Motivate and recognize staff through opportunities to innovate and be creative. ▪ Create opportunities for staff members to bring their talents and interests to work. ▪ Explore opportunities for improving employee work -life balance. • Support and promote efforts to make it possible for staff to live in or near Palo Alto. Key Performance Measures NUMBER OF TEENS WHO PARTICIPATE IN THE LIBRARY'S PROGRAMS FOR TEENS, INCLUDING THE SUMMER READING PROGRAM Goal Develop and provide library services and programs supporting the 41 Developmental Assets for Adolescents Model. Objective Number of teens Description Purpose Status Encourage adolescents between the ages of 12 and 18 to read for pleasure three or more hours a week (Developmental Asset #25). FY 2018 Actuals 5,653 FY 2019 Actuals 2,619 FY 2020 Adopted 6,430 FY 2020 Estimated 7,350 FY 2021 Adopted 7,497 This measure tracks the level of interest and participation in the library's recreational reading programs. Adolescents who enjoy reading are more likely to grow up into healthy, caring, and responsible adults. The Teen Library Advisory Board (T -LAB) works with staff to implement and guide program development. A Teen Librarian position, vacant for most of FY19, was filled in FY20 leading to an increase in programming and teen participation. 302 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET LIBRARY PERCENT OF SURVEYED RESIDENTS RATING SATISFACTION WITH LIBRARY DEPARTMENT SERVICES AS GOOD OR EXCELLENT Connects Palo Alto's diverse community through knowledge, resources, and opportunities. Objective Maintain and enhance the community's satisfaction with library services. Goal FY 2018 Actuals FY 2019 Actuals FY 2020 FY 2020 Adopted Estimated FY 2021 Adopted Variety of Library Materials Neighborhood Branch Libraries Public Library Services Recommend Palo Alto's Libraries to Friends Description Purpose Status 88% 92% 93% N/A* N/A* N/A* 89% 93% 94% 89% 93% 94% N/A* N/A* N/A* 92% N/A* 93% 93% N/A* These measures track the percent of residents rating overall library services to the community as good or excellent. This data is collected as part of the National Citizen's Survey that is conducted annually by the International City/County Management Association (ICMA) and allows the City to compare itself to other municipalities. Community satisfaction with the Library Department is an important assessment of the quality of services provided to the City and its residents. * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. Workload Measures FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Meeting Room Reservations Visits to library branches Virtual visits to the library** Checkouts of library materials Annual turnover rate of library collections 14,155 14,648 14,726 17,408 17,756 1,045,282 1,009,639 1,181,530 962,250 1,181,530 889,343 809,014 887,548 696,656 710,589 1,538,118 1,467,038 1,600,104 1,597,412 1,629,360 4.51 4.60 4.30 4.94 4.30 **Use of ad blockers on Google Analytics causes lower numbers when counting virtual visits. Ad blockers and incognito browsing make virtual visits difficult to track. This is a trend seen across library systems in California. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 303 LIBRARY 3udget Summary I Dollars by Division Administration 1,164,911 1,244,458 1,187,866 812,581 (375,285) (31.6)% Collection and Technical Services 2,591,757 2,785,373 2,817,967 2,579,780 (238,187) (8.5)% Public Services 5,364,455 5,318,107 6,308,195 5,028,932 (1,279,263) (20.3)% Total 9,121,123 9,347,938 10,314,028 8,421,293 (1,892,735) (18.4)% FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Category Salary & Benefits Healthcare 892,788 845,474 990,332 752,158 (238,174) (24.0)% Other Benefits 127,532 119,568 132,680 129,376 (3,304) (2.5)% Overtime 12,020 10,079 72,406 74,289 1,883 2.6% Pension 1,096,212 1,087,781 1,484,589 1,444,034 (40,555) (2.7)% Retiree Medical 458,425 444,128 457,452 434,938 (22,514) (4.9)% Salary 4,329,080 4,302,479 4,624,038 3,511,210 (1,112,828) (24.1)% Workers' Compensation 3,107 100,737 148,509 137,589 (10,919) (7.4)% Total Salary & Benefits 6,919,165 6,910,246 7,910,006 6,483,595 (1,426,412) (18.0)% Allocated Charges 1,024,363 1,132,770 1,259,768 1,030,752 (229,016) (18.2)% Contract Services 379,141 405,532 337,993 293,185 (44,808) (13.3)% Facilities & Equipment 24,131 1,599 9,900 9,900 - -% General Expense 97,546 62,219 88,430 58,380 (30,050) (34.0)% Operating Transfers -Out 59,859 -% Supplies & Material 676,778 775,713 707,931 545,481 (162,450) (22.9)% Total Dollars by Expense 9,121,123 9,347,938 10,314,028 8,421,293 (1,892,735) (18.4)% Category Revenues Charges for Services 22,988 20,240 25,461 25,461 -% Operating Transfers -In 15,000 -% Other Revenue 37,029 63,504 60,123 51,400 (8,723) (14.5)% Other Taxes and Fines 95,675 91,614 124,433 39,255 (85,178) (68.5)% Total Revenues 155,691 190,358 210,017 116,116 (93,901) (44.7)% 304 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET LIBRARY 3udget Summary Positions by Division Administration Collection and Technical Services Public Services Total Staffing Administrative Associate Ill FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 0.40 0.40 0.40 0.40 -% 13.24 13.55 13.55 13.59 0.04 0.3% 49.94 48.63 47.33 47.29 (0.04) (0.04)% 63.58 62.58 61.28 61.28 - _0/0 FY 2018 Actuals Administrative Associate I ll (Freeze) Assistant Director Library Services Assistant Director Library Services (Freeze) 1.00 FY 2019 Actuals 1.00 1.00 1.00 Business Analyst 1.00 1.00 Coordinator Library Programs 1.00 1.00 Director Libraries 1.00 1.00 Division Head Library Services 1.00 1.00 Librarian 7.00 7.00 Library Associate 7.00 7.00 Library Associate (Freeze) Library Specialist 12.50 11.50 Library Specialist (Freeze) Management Analyst 1.00 1.00 Manager Library Services 4.00 4.00 Senior Librarian 9.00 9.00 Senior Librarian (Freeze) Supervising Librarian Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 2.00 2.00 48.50 47.50 46.50 FY 2020 Adopted Budget 1.00 1.00 FY 2021 Adopted Budget 1.00 1.00 FY 2021 Change FTE (1.00) 1.00 (1.00) FY 2021 Salary 84,032 1.00 173,326 1.00 1.00 155,334 1.00 1.00 92,706 1.00 1.00 237,994 1.00 1.00 - 161,824 6.00 6.00 - 489,840 7.00 6.00 (1.00) 440,170 1.00 1.00 73,362 11.50 10.50 (1.00) 728,801 1.00 1.00 69,410 1.00 1.00 - 92,248 3.00 3.00 - 364,104 8.00 6.00 (2.00) 556,234 - 2.00 2.00 185,411 4.00 4.00 389,314 46.50 - 4,294,108 15.08 15.08 14.78 14.78 - 776,881 63.58 62.58 61.28 61.28 - 5,070,989 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 305 LIBRARY 3udget Reconciliation Prior Year Budget 61.28 10,314,028 210,017 10,104,011 One -Time Prior Year Budget Adjustments Pacific Library Partnership (PLP) Grant Funds Distribution One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Library Equipment Maintenance Expenses Adjustment General Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Allocated Charges Refuse Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Charges Workers Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (8,723) (8,723) (8,723) (8,723) 148,028 13,915 10,215 (198,486) (3,893) 10,868 60 (47,436) (345) (10,919) (77,992) 148,028 13,915 10,215 (198,486) (3,893) 10,868 60 (47,436) (345) (10,919) (77,992) Total FY 2021 Base Budget 61.28 10,227,313 201,294 10,026,019 Budget Adjustments 1 Elimination of Library Late Fines for Overdue Adult Materials 2 Management and Professionals Group Compensation Reduction 3 Travel, Training, and Materials Expense Reductions 4 Reduced Library Hours and Services 5 Administrative and Library Staffing Reductions Total Budget Adjustments (151,494) (241,500) - (694, 616) (718,410) - (1,806,020) (85,178) 85,178 (151,494) (241,500) (85,178) (694,616) (718,410) (1,720,842) Total FY 2021 Adopted Budget 61.2 8,305,177 306 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET LIBRARY .budget Adjustments JOHN OKADA am more av R.eslsters.com _ --- fb firantabao rnisters.m� Budget ;AdJ;ustme Positions Expenditures Revenues Net General Fund 1 Elimination of Library Late Fines for Overdue Adult Materials 0.00 0 (85,178) 85,178 This ongoing action eliminates budgeted revenue from library late fines for overdue adult materials. This action aligns the budget with the updated policy to no longer charge these fines. This change is recommended in response to industry trends towards removing barriers to access, implementation of automatic renewals, and the recommendation of the Library Advisory Commission on August 22, 2019. Eliminating adult library late fines will also decrease administrative work associated with the collection and enforcement of fines. (Ongoing costs: $85,178) Performance Results This elimination of late fines for overdue adult materials will align the budget with Library policy, reduce barriers to access, and reduce administrative work. 2 Management and Professionals Group 0.00 (151,494) 0 Compensation Reduction (151,494) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 307 LIBRARY 3 Travel, Training, and Materials Expense Reductions 3udget Adjustments Expenditures Revenues Net General Fund 0.00 (241,500) 0 (241, 500) This action reduces the department's travel and training budget and contracts and reduces the department's new material (books) acquisition budget for two years. This will reduce the department's capacity to attend conferences and pursue other professional development opportunities, decrease the number of new books that can be purchased in response to patron or commission requests, and increase wait time customers experience for new books. Physical book circulation has been trending downward since 2018 while electronic resource utilization is trending upward. (Ongoing savings: $241,500) Performance Results © © 0 0 This action contributes to cost containment strategies in FY 2021. 4 Reduced Library Hours and Services 0.00 (694,616) L0 (694,616) This action reduces operating hours and/or days at all Library branches. Neighborhood Libraries (Children's, Downtown and College Terrace) will be open 3 days per week and full service libraries (Mitchell Park and Rinconada) will be open 6 days per week. Evening hours will also be eliminated at Rinconada Library, which will close at 6pm every day as opposed to remaining open until 9pm Monday - Thursday. Children's Library will also transition to providing Neighborhood Branch level of service, which includes fewer programs and special events, similar to service levels at the Downtown Library. In FY 2019, the Libraries conducted about 770 program events for Youth ages 0-12; this action is anticipated to result in approximately 200 fewer annual youth programs. The reduced hours of Rinconada Library are expected to increase wait times for community meeting rooms and increase utilization and crowds at Mitchell Park between 6pm - 9pm. This action includes a reduction of 1.0 Library Associate, 2.0 Senior Librarian and 6.27 FTE of part-time staff resources. (Ongoing savings: $694,616) Performance Results © © 0 0 This action contributes to cost containment strategies in FY 2021. 5 Administrative and Library Staffing Reductions 0.00 (718,410) =62 (718,410) This action reduces staffing for administrative support, information technology, and customer service. This action will decrease availability of Library staff and services such as reference services, readers advisory, public programs, and book clubs; decrease administrative support; increase time for re -circulating materials and responding to customer service inquiries; decrease coverage at Service Desks from two to one staff member; and limit the Library's ability to manage special projects. This action reduces 1.0 Administrative Associate III, 1.0 Assistant Director of Library Services, 1.0 Library Specialist, and 4.14 FTE of part time staff resources. (Ongoing savings: $718,410) Performance Results © © 0 0 This action contributes to cost containment strategies in FY 2021. 308 LIBRARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES Emergency Services is to prevent, prepare for, mitigate, respond to, and recover from all hazards. The purpose of the Office of Emergency Services is to develop, maintain, and sus- tain a citywide, comprehensive, all -hazard, risk -based emergency management pro- gram that engages the whole community. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 309 OFFICE OF EMERGENCY SERVICES EMERGENCY SERVICES DIRECTOR Kenneth Dueker 1.00 Office of Emergency Services Coordinator 1.00 Program Assistant II" FY 2021 POSITION TOTALS 3.00 - Full-time 0.48 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. "The 1.00 FTE Program Assistant II position has been de -funded in FY 2021 and is identified in the Table of Organization with "(Freeze)" following the job classification title. 310 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES Description The Office of Emergency Services (OES) develops, maintains, and sustains a citywide, comprehensive, all -hazard, risk -based emergency management program that engages the whole community. Accomplishments • Led the City's response to the COVID-19 incident in March 2020, operated a virtual Emergency Operations Center (EOC) for three months (March 17 to June 15), and supported the City's recovery efforts. • Provided OES staff member support to the Town of Gilroy EOC following the active shooter incident and the deployment of the Mobile EOC (MEOC) for the town's public safety vigil event. ▪ Coordinated and executed a Silicon Valley Safety and Preparedness Day at the Stanford Shopping Center July 27, 2019 with support from a wide variety of public safety agencies, community organizations, and the shopping center, which was well attended by the public. • Awarded a $200,000 grant to procure a mobile emergency solar generator platform. Completed the Request for Proposal (RFP) process with a vendor selection. • Continued to develop the Emergency Services Volunteer (ESV) program and general community public safety awareness through ongoing public education sessions, trainings, and exercises; during the COVID-19 incident, activated the ESV Program to assist in the communication flow of information to city neighborhoods, and welfare checks of our residents. • Continued to work with regional public safety partners on a wide range of planned and special events, ranging from visits by dignitaries to mass -gatherings and high -risk events. The Mobile Emergency Operations Center (MEOC) and other specialized OES vehicles were deployed in support of such events. Initiatives ▪ Coordinate regional planning for wildland fire response and evacuations and restore the Foothills Fire Station fire camera. ▪ Explore new technologies, including resilient power for key sites and critical systems and bring online a mobile solar generator platform. ▪ Partner with and advise the Public Works, Police, and Fire Departments on the design/build of the new Public Safety Building (PSB); participate in routine planning meetings and projects to maintain the construction schedule. • Continue to work with the IT and Utilities Departments to deploy a new Public Safety Wireless Network. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 311 OFFICE OF EMERGENCY SERVICES • Maintain the Intrusion Detection System (IDS); develop a service agreement with system vendor. Goals and Objectives GOAL 1 Promote operational readiness of the City to implement the emergency management cycle (mitigate, prepare, respond, recover). Objectives: • Execute a training and exercise plan for designated staff assigned to the Emergency Operations Center (EOC), Mobile Emergency Operations Center (MEOC), Department Operations Center, and other assignments. • Maintain emergency management facilities, critical infrastructure, and essential equipment to ensure they are fully mission capable. ▪ Coordinate development of new technologies for emergency management. • Acquire grant funding to improve capabilities of preparedness and response resources. GOAL 2 Engage the whole community to prepare for all hazards. Objectives: • Administer the City Emergency Services Volunteer Program (ESV) to provide a cadre of trained volunteers in residential neighborhoods. • Coordinate with the private sector and non -governmental organizations to promote continuity of business operations. • Administer outreach to the citizenry to encourage emergency preparedness. GOAL 3 Maintain policies and plans related to disasters, critical incidents, and City safety. Objectives: ▪ Lead a process to identify threats and hazards and to assess risks the City faces. ▪ Maintain awareness of threats through coordination with law enforcement agencies and other public safety partners. • Participate in regional planning efforts. • Revise the Emergency Operations Plan and associated plans and annexes through an adaptive planning process. 312 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES Key Performance Measures READINESS OF OFFICE OF EMERGENCY SERVICES (OES) RESOURCES Goal Promote operational readiness of the City to implement the emergency management cycle (mitigate, prepare, respond, recover). Maintain OES emergency management facilities, critical infrastructure, and equipment fully mission capable. Objective Percent of Office of Emergency Services resources that are able to respond effectively to hazards Description FY 2018 Actuals 98% FY 2019 Actuals 99% FY 2020 Adopted 95% FY 2020 Estimated 95% FY 2021 Adopted 95% OES must be able to implement response procedures to an all -hazards threat matrix at any time. OES strives to maintain fully mission capable status to respond effectively to all hazards. However, given the specialized and discrete inventory of equipment, it is not feasible to maintain all systems to a 100 percent readiness standard. Therefore, the goal is to meet a 95 percent readiness rate, allowing some flexibility for unscheduled equipment maintenance during the year. Purpose Critical resources will improve the City's ability to manage a response. The Emergency Operations Center (EOC) is functioning as an information intelligence center hub and staffed during the day on a regular basis. Other Status assets, such as the Mobile Emergency Operations Center (MEOC) and support vehicles and equipment were also maintained at a near fully operational rate and involved in a number of deployments in FY 2020. NUMBER OF ANNUAL REPORTED INCIDENTS WITHIN THE CALTRAIN RIGHT-OF-WAY Goal Objective Number of annual reported incidents within the CalTrain right- of-way Description Purpose Status Promote operational readiness of the City to implement the emergency management cycle (mitigate, prepare, respond, recover). Coordinate development of new technologies for emergency management. FY 2018 Actuals N/A* FY 2019 Actuals N/A* FY 2020 Adopted N/A* FY 2020 Estimated N/A* FY 2021 Adopted 50 This measure provides the number of Intrusion Detection System (IDS) incidents reported events by the G4S monitoring center, and other public safety reported incidents outside of the IDS coverage area. Over time, OES expects to reduce the number of annual reported incidents as the department becomes more aware of the causality of these incidents. * This is a new performance measure beginning in FY 2021 and will provide a baseline for the following years. OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 313 OFFICE OF EMERGENCY SERVICES Workload Measures FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Number of presentations, training sessions, and exercises Number of deployments of the Emergency Operations Center, Mobile EOC, and Incident Command Post 216 62 163 35 150 35 130 86 150 35 314 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES 3udget Summary Dollars by Division Emergency Services Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 968,477 1,243,411 1,728,080 1,356,976 (371,104) (21.5)% 968,477 1,243,411 1,728,080 1,356,976 (371,104) (21.5)% Dollars by Category Salary & Benefits Healthcare 35,781 37,365 42,910 31,703 (11,206) (26.1)% Other Benefits 12,098 13,831 14,719 13,617 (1,102) (7.5)% Overtime 2,283 5,300 -% Pension 101,659 113,636 138,382 144,829 6,447 4.7% Retiree Medical 54,299 49,844 51,339 50,986 (353) (0.7)% Salary 383,382 395,155 420,657 341,417 (79,240) (18.8)% Workers' Compensation 1,596 16,272 22,402 21,574 (828) (3.7)% Total Salary & Benefits 591,098 631,402 690,409 604,125 (86,283) (12.5)% Allocated Charges 54,407 104,411 116,550 185,722 69,172 59.3% Contract Services 114,993 304,689 559,500 400,508 (158,992) (28.4)% Facilities & Equipment 134,493 122,131 277,000 82,000 (195,000) (70.4)% General Expense 28,788 29,276 34,700 34,700 - -% Operating Transfers -Out - 5,631 - - - -% Supplies & Material 44,699 45,872 49,922 49,922 -% Total Dollars by Expense Category 968,477 1,243,411 1,728,080 1,356,976 (371,104) (21.5)% Revenues Charges to Other Funds 94,623 96,336 95,589 95,589 - -% From Other Agencies 2,600 - 200,000 - (200,000) (100.0)% Total Revenues 97,223 96,336 295,589 95,589 (200,000) (67.7)% Positions by Division Emergency Services 3.48 3.48 3.48 3.48 Total 3.48 3.48 3.48 3.48 -% -% OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 315 OFFICE OF EMERGENCY SERVICES Staffing Job Classification FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary Director Office of Emergency Services Office of Emergency Services Coordinator Program Assistant Program Assistant II Program Assistant II (Freeze) Sub -total: Full -Time Equivalent Positions Temporary/Hourly 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 167,794 142,189 1.00 1.00 (1.00) — 1.00 1.00 85,488 3.00 3.00 3.00 3.00 — 395,470 0.48 0.48 0.48 0.48 — 35,942 Total Positions 3.48 3.48 3.48 3.481 — 431,413 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to posi- tion freezes is available in the department section organizational chart and budget adjustment sum- maries. 316 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET OFFICE OF EMERGENCY SERVICES 3udget Reconciliation Prior Year Budget One -Time Prior Year Budget Adjustments 3.48 1,728,080 295,589 1,432,491 Mobile Solar Energy Generation and Storage Trailer - (200,000) (200,000) One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities — (200,000) (200,000) Salary and Benefits Contract Services Realignment (Shift to Communication Services and Utilities Allocation) Communication Services Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges 45,343 45,343 — (93,992) — (93,992) 9,400 9,400 (24,079) 1,643 1,554 84,492 (3,839) (828) (24,079) 1,643 1,554 84,492 (3,839) (828) Adjustments to Costs of Ongoing Activities 19,695 19,695 Total FY 2021 Base Budget 3.48 1,547,775 95,589 1,452,186 Budget Adjustments 1 Management and Professionals Group Compensation Reduction 2 Intrusion Detection Systems (IDS) Reduction 3 Emergency Preparedness Staffing Reduction (32,594) (60,000) (98,204) (32,594) (60,000) (98,204) Total Budget Adjustments - (190,798) - (190,798) Total FY 2021 Adopted Budget 3.48 1,356,977 95,589 1,261,388 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 317 OFFICE OF EMERGENCY SERVICES ,riilergericyfAat Co you do? Or d,r , r .budget Adjustments udget :Adjustments 1 Management and Professionals Group Compensation Reduction m Positions Expenditures Revenues Net General Fund 0.00 (32,594) 0 (32,594) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 2 Intrusion Detection Systems (IDS) Reduction (60,000) 0 (60,000) This action reduces funding for IDS camera systems along the Caltrain corridor from $440,000 to $380,000; maintaining fiber and monitoring services, and reducing maintenance. (Ongoing savings: $60,000) Performance Results This action is not anticipated to impact service delivery levels. 3 Emergency Preparedness Staffing Reduction (98,204) 0 (98,204) This action reduces 1.0 Program Assistant II in the Office of Emergency Services. This reduction will result in fewer resources to support the critical infrastructure program, which includes establishing key community contacts, conducting assessments, and maintaining an essential database. Scaling back this program will impact the preparedness of the community and will result in a shortage of trained personnel to perform essential functions during an activation. Staff also anticipates that without a dedicated resource to manage Intrusion Detection Systems (IDS) that performance will decline over time. (Ongoing savings: $98,204) Performance Results © © 0 0 This action may impact the readiness of the community in an emergency response. 318 OFFICE OF EMERGENCY SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES Mission Statement The mission of the Planning and Development Services Department is to provide effective implementation of land use development, planning, housing and environmental policies, and efficient processing of building permit applications that maintain and enhance the City as a safe, vital, and attractive community. Purpose The Planning and Development Services Department is responsible for a range of actions aimed at preserving and enhancing the quality of life in Palo Alto, protecting the public health, safety, and general welfare while facilitating land use and development decisions through consistent and transparent processes. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 319 PLANNING AND DEVELOPMENT SERVICES DIRECTOR PLANNING & DEVELOPMENT SERVICES Jonathan Lait OPERATIONS/BUDGET 2.00 Senior Management Analyst 3.00 Administrative Associate III 2.00 Administrative Associate II 1.00 Program Assistant I" DATA ANALYSIS/RECORDS 1.00 Senior Business Analyst 1.00 Senior Planner" 1.00 Administrative Associate III 1.00 Administrative Associate I 1.00 Administrative Assistant 1.00 Assistant Director 1.00 Chief Building Official 1.00 Assistant Building Official PROJECT MANAGEMENT/ DEVELOPMENT SERVICES* 1.00 Planning Manager 3.00 Development Project Coordinator I I I 2.00 Development Project Coordinator II PROJECT MANAGEMENT/ INSPECTIONS 1.00 Planning Manager 6.00 Building Inspector Specialist** FY 2021 POSITION TOTALS 51.00 - Full-time 3.03 - Hourly" I1.00 Chief Planning Official PROJECT MANAGEMENT/ CODE ENFORCEMENT 1.00 Associate Planner 3.00 Building/Planning Technician" 1.00 Code Enforcement Lead 2.00 Code Enforcement Officer" CURRENT PLANNING 1.00 Planning Manager 1.00 Principal Planner" 2.00 Senior Planner 3.00 Planner 2.00 Associate Planner LONG RANGE PLANNING 1.00 Planning Manager 1.00 Principal Planner 1.00 Senior Planner 1.00 Planner This organizational chart represents citywide Full -Time Equivelants (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. "Fire Prevention and select Public Works staff are budgetarily part of the Development Services divisions. The departments retain administrative oversight, and staffing for these functions appears in the respective department's organizational charts. **1.00 Building Inspector Specialist approved for a limited one-year term. "These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Program Assistant I 1.00 FTE Prinicipal Planner 1.00 FTE Senior Planner 1.00 FTE Building/Planning Technician 2.00 FTE Code Enforcement Officers 0.96 Hourly FTE 320 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES Description The Planning and Development Services (PDS) Department is responsible for the following functions: ADMINISTRATION Provides personnel, contract, budget, operations, and project support, including managing and measuring performance metrics and responding to data requests for the department. The divi- sion also supports the Planning and Transportation Commission, Architectural Review Board, Historic Resources Board, and other public meetings. CODE ENFORCEMENT Responsible for enforcement of code requirements and conditions of approval. CURRENT PLANNING Responsible for the review of public and private projects pursuant to the California Environmen- tal Quality Act (CEQA), the City's Zoning Ordinance, and the Comprehensive Plan. Activities include the review of applications submitted for planning entitlements, review of applications for building permits, and providing general information to the public regarding the City's zoning and Comprehensive Plan provisions. DEVELOPMENT SERVICES Responsible for taking in applications for entitlements and permits, routing and coordinating with other departments such as Public Works, Fire, and Utilities to ensure that the proposed and completed construction complies with all state and local code requirements, including Green Building requirements. LONG RANGE PLANNING Responsible for updating and maintaining the City's Comprehensive Plan, including its Housing Element. The division also prepares zoning ordinance amendments and site -specific plans and is responsible for data and analysis to support a wide variety of planning projects. Accomplishments • Established the Planning and Development Services (PDS) Department through the merging of the Planning and Community Environment (PCE) Department and Development Services Department (DSD) to create one cohesive unit focused on entitlements, permitting, code enforcement, and land use visioning. • Accelerated a pilot program for an online permit system for application intake and permit processing, enabling services to continue during the Development Services Center's temporary physical closure due to COVID-19. ▪ Adopted Phase I of the 2019 Energy Reach Code Ordinance to require all -electric designs for new low-rise residential building construction. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 321 PLANNING AND DEVELOPMENT SERVICES • Presented an ordinance for City Council to adopt new 2019 California Code of Regulations, Title 24, Part 1-12. ▪ Supported the 100% affordable housing project at Wilton Court (3705 El Camino) through an additional $10.5 million loan, for a total of $20.5 million in contributions towards the project. • Provided a comprehensive revision to accessory dwelling unit (ADU) regulations to comply with State law. ▪ Successfully applied for the Challenge Grant for Housing Protection and Preservation and was granted a two-year fellowship to advance the Council -directed rental protection study. • Successfully applied for and received funding for the SB 2 Planning Grant Program from the State of California Housing and Community Development Department. ▪ Amended the Municipal Code to provide more opportunities to install Electrical Vehicle (EV) chargers in multifamily and commercial parking lots. • Progressed on the North Ventura Coordinated Area Plan (NVCAP) through community outreach and study sessions to advance the project objectives. Initiatives • Continue to support the Summer Street's Initiative and develop long term policies to support businesses related to street closures, parklet dining, public spaces and recommend supportive business regulations in response to COVID-19. ▪ Continue to advance the housing work program to enhance housing protection, preservation and production. • Engage in a new fee study to align department -wide fees with the evolved structure of the newly combined Development Services and Planning and Community Environment Departments. • Explore administrative and procedural changes to streamline the application process. • Create an appointment -based system at the development center to reduce wait times. • Adopt and implement Phase II and Phase I I I of the Energy Reach Code Ordinance to require all -electric designs for new commercial, high-rise residential and ADU construction to comply with current codes. • Begin work on updating the City's Housing Element, a mandatory element of the City's Comprehensive Plan, to plan to meet the existing projected housing needs of all economic segments of the community. ▪ In response to the code enforcement audit, integrate the 311 Customer Relationship Manager with Accela to provide a more streamlined real-time reporting, tracking, and responses for customer service calls. ▪ Continue to integrate Planning and Development Services into a cohesive department. 322 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES Goals and Objectives GOAL `I Provide a high level of customer service and optimize application review, processing, and permit issuance times. Objectives: • Optimize number of days to issue a permit. • Optimize the number of over-the-counter plan checks that result in a permit issuance. • Interpret and apply building codes through inspection and enforcement. GOAL 2 Deliver ongoing programs that improve people's lives, including code enforcement, housing, development services, historic preservation, and community block grant programs. Objectives: • Manage the City's Community Development Block Grant (CDBG) and Below Market Rate (BMR) housing programs, • Exemplify the City's commitment to well -enforced building codes, health, safety, and general welfare and improve the City's Insurance Services Office (ISO) rating. • Respond to citizen complaints and effectively abate zoning and building code violations. GOAL 3 Work collaboratively with City departments to set fees at full cost recovery while monitoring activity levels to ensure costs and revenues are aligned. This requires monitoring of activities and revenues to ensure rates are set at the appropriate levels and the applicant receives the ser- vice established by said fees. Objectives: • Complete regular fee studies to ensure revenues cover expenditures in each of the departments that collaborate with Development Services. ▪ Monitor and track real-time activity levels from each of the departments to ensure activities are aligned with expenditures. • Share and publish goals, metrics, and accomplishments with all stakeholders to ensure the department is on track with established goals and fees are in line with activity levels. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 323 PLANNING AND DEVELOPMENT SERVICES Key Performance Measures AVERAGE NUMBER OF DAYS FROM ISSUANCE TO FINAL Provide a high level of customer service and decrease the total time to approve the construction phase of a commercial tenant improvement. Goal Objective Decrease number of days from permit issuance to final inspection. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Average number of days between permit issuance and temporary occupancy or final inspection Description Purpose Status CODE ENFORCEMENT 186 191 176 197 200 This measure tracks the amount of days it takes to inspect and approve commercial tenant improvement for occupancy. Moving new tenants into their space as quickly as possible is essential for the financial health and long-term success of new businesses. It is also important in promoting the general economic vitality of the City by reducing the number of days commercial spaces stay vacant and out of production. The goal is to provide the necessary information and coordination early in the construction phase, which results in a positive outcome for the business owner while enhancing the economy of Palo Alto. Meanwhile, inspectors need to ensure construction complies with ever increasing requirements added to the building and green codes. This measure is impacted by the contractor's performance and their ability to complete projects in a timely manner after receiving approved plans from the City. This measure is impacted by the ability of developers to finance projects, find qualified contractors, and perform on schedule. Targets in FY 2021 have been increased based on experience in prior years. Deliver ongoing programs that improve people's lives, including code Goal enforcement, housing, development services, historic preservation, and community block grant. Respond to citizen complaints and effectively abate zoning and building code violations. Objective FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of surveyed residents rating the quality of code enforcement as "good" or "excellent" Description Purpose Status 55% N/A" 60% 60% N/A" This measure tracks residents' opinions through data collected in the National Citizen Survey (NCS). This measure can be used to measure changes in satisfaction as service enhancements to the code enforcement function are implemented. *The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. 324 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES BUILDING PLAN CHECKS Increase the public's trust in the City's planning functions, reaffirming the role of the Comprehensive Plan as the City's fundamental land use and transportation policy document, maintaining transparency and objectivity, and providing ample data and a reasonable basis for recommendations. Goal Objective Percent of Planning Review of building plan checks completed within 30 days of application intake Description Purpose Status Improve the review times for building permit applications. FY 2018 Actuals 74% FY 2019 FY 2020 Actuals Adopted N/A 80% FY 2020 FY 2021 Estimated Adopted N/A N/A This measure tracks the percentage of building plan checks completed within an expected time frame. Staff level reviews of building plan checks ensure compliance with land use and development standards. At the timing of the development of the FY 2021 budget, data for FY 2019 and FY 2020 Estimated was not available. The department will reassess this measure in FY 2021 and recommend an alternative measure that is more reflective of the Development Center performance as a whole. INSURANCE SERVICES OFFICE (ISO) RATING Exemplify the City's commitment to well -enforced building codes, health, safety, and general welfare. Objective Obtain and maintain the highest rating (Class 1). Goal FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Insurance Services Office (ISO) Rating Description Purpose Status 1 3 1 3 3 ISO administers the Building Code Effectiveness Grading Schedule (BCEGS) program for the property/casualty insurance industry. The BCEGS program assesses the building codes in effect in a particular community and how the community enforces its building codes, assigning each municipality a class of 1 (exemplary commitment to building code enforcement) to 10. Municipalities with well -enforced, up-to-date codes demonstrate less property damage due to fire and natural disasters. This can be reflected in the citizens' insurance rates. BCEGS helps communities by: 1. Improving building codes (by encouraging the adoption of the most current codes), building departments, and code enforcement; 2. Promoting construction of better, more catastrophe - resistant buildings; 3. Reducing property losses from catastrophes; and 4. Reducing the economic and social disruption that results from catastrophes' serious and widespread destruction. In FY 2019 and 2020, the department's ISO rating declined from a Class 1 to a Class 3 as a result of a few factors such as loss of tenured staff and lower training and certifications of new staff. ISO reviews a community's classification on an approximate five year cycle or as requested by the City. Over the next few fiscal years, the department will strive to make progress towards achieving a Class 1 rating. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 325 PLANNING AND DEVELOPMENT SERVICES PERCENT OF PERMITS ISSUED ON TIME Work collaboratively with City departments, which support development services, Goal to adequately staff and respond to workload demands and achieve excellent customer service outcomes. Objective Provide customers with clear, succinct, and consistent guidelines. FY 2018 Actuals FY 2019 Actuals FY 2020 FY 2020 Adopted I Estimated FY 2021 Adopted Percent of permits initiated within a given period where all department reviews are completed Description Purpose Status 54% 48% 80% 84% 70% This measure tracks the percentage of building permit plan reviews that are completed by the estimated due date provided to the customer at the time of permit submittal. This includes projects that are submitted for the standard 30 - day review period and require multi -departmental review. This measure is a result of the collaborative approach with all involved departments. A project is not deemed on -time unless every review stage is completed on time. Customers depend upon the accuracy and dependability of estimated due dates to plan their construction projects. They may move out of their house or enter into a lease on a commercial tenant space based on the estimated timeline provided by Development Services. Being successful at adhering to timelines reduces costs for developers and property owners and has a direct correlation to the economic vitality of the City. In FY 2020, staff updated the measure to exclude non -working days (weekends and holidays) from the calculation and excluded voided and canceled permits. Industry best practices call for an 80% on -time plan review, which the department expects to meet in the current fiscal year. The department will continue to aim to meet the industry standard of 80%; however, the target has been decreased in FY 2021 to 70% to reflect potential economic impacts from COVID-19 that may affect this metric over the next fiscal year. 326 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES PERCENT OF PERMITS ISSUED OVER THE COUNTER Goal Objective Percent of permits that are reviewed and approved by all necessary departments over-the- counter Description Purpose Status Provide a high level of customer service and decrease application review, processing, and permit issuance times. Increase the number of over-the-counter (OTC) plan checks that result in same day permit issuance. FY 2018 Actuals 67% FY 2019 Actuals 61% FY 2020 Adopted 65% FY 2020 Estimated 64% FY 2021 Adopted 65% This measure tracks the percentage of building permits that can be successfully reviewed and approved by all the affected City departments (over-the-counter) while the customer waits. This requires that Public Works, Planning, Utilities, and the Fire Prevention Bureau also review and approve the application for permit issuance. Without complete approval, the permit cannot be issued. To streamline the process so customers make as few trips as possible to the Development Center to obtain a permit. It is also beneficial to City staff, resulting in less reviewing and processing time than if the plans were taken in for review. This process also reduces waste as fewer plans are created and distributed for various departmental reviews. The department tries to issue as many permits over-the-counter as possible. This measure is a function of all divisions being able to review and approve projects. Approval rates are impacted by program and policy decisions, availability of customer education programs and materials, staff training, and staffing levels. The department is currently piloting an online permit system in response to COVID-19 impacts on business operations, including the temporary closure of the Development Services Center. Staff anticipates that approvals for over-the- counter permits will fluctuate greatly in the next year based on the development of online processes. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 327 PLANNING AND DEVELOPMENT SERVICES Number of building permit applications Workload Measures FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted 3,938 Number of building permits issued 3,105 Number of planning and Architectural Review Board applications completed (including staff level) Average number of days for Planning to first review building 20 24 20 24 20 permit applications Average number of days from Individual Review application to 68 69 80 60 60 approval* 3,424 2,918 3,903 3,336 3,594 2,556 3,200 2,500 342 327 300 275 330 Number of fire permit inspections Number of walk-in customer interactions Number of building inspections 2,350 1,961 2,352 1,341 1,900 22,085 22,307 22,550 15,973 11,000 26,893 24,316 27,752 18,510 20,000 * Beginning in FY 2019, the measure was revised to consider only the time it takes staff in the review process and exclude time that is dependent on information or follow up from the applicant. 328 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES 3udget Summary Dollars by Division Administration Building Fire Green Building Planning Counter Support Planning Public Works Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 4,337,696 4,371,624 4,943,202 4,783,923 (159,279) (3.2)% 5,635,155 5,403,597 5,128,576 4,692,863 (435,713) (8.5)% 2,073,943 2,423,849 2,454,984 2,125,367 (329,617) (13.4)% 386,349 200,378 304,000 187,730 (116,270) (38.2)% 644,137 634,305 789,567 623,019 (166,548) (21.1)% 4,230,918 4,607,829 5,492,973 3,963,683 (1,529,291) (27.8)% 942,688 1,096,344 1,249,830 1,009,815 (240,015) (19.2)% 18,250,886 18,737,926 20,363,132 17,386,399 (2,976,733) (14.6)% Dollars by Category Salary & Benefits Healthcare 1,018,091 965,048 1,334,024 1,008,021 (326,004) (24.4)% Other Benefits 193,234 182,876 217,265 219,055 1,790 0.8% Overtime 287,343 144,855 97,854 100,398 2,544 2.6% Pension 2,105,557 1,985,454 2,852,430 2,802,482 (49,948) (1.8)% Retiree Medical 664,519 645,983 665,362 631,148 (34,214) (5.1)% Salary 6,415,444 6,064,343 7,293,386 6,309,217 (984,169) (13.5)% Workers' Compensation 101,488 172,769 241,480 218,037 (23,443) (9.7)% Total Salary & Benefits 10,785,675 10,161,329 12,701,803 11,288,359 (1,413,444) (11.1)% Allocated Charges 1,647,953 2,056,715 2,198,509 1,705,192 (493,317) (22.4)% Contract Services 4,161,066 4,682,121 3,634,699 2,460,296 (1,174,403) (32.3)% Facilities & Equipment 2,405 13,483 15,650 15,650 - -% General Expense 468,571 452,650 522,514 519,284 (3,230) (0.6)% Operating Transfers -Out 33,933 121,412 7,607 - (7,607) (100.0)% Rents & Leases 1,092,015 1,216,867 1,241,381 1,356,650 115,269 9.3% Supplies & Material 59,268 33,349 40,969 40,969 -% Total Dollars by Expense Category 18,250,886 18,737,926 20,363,132 17,386,399 (2,976,733) (14.6)% Revenues Charges for Services 10,467,921 8,791,258 9,803,816 8,234,718 (1,569,097) (16.0)% Charges to Other Funds 362,500 761,268 21,797 22,364 567 2.6% PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 329 PLANNING AND DEVELOPMENT SERVICES 3udget Summary Other Revenue Other Taxes and Fines Permits and Licenses Total Revenues Positions by Division Administration Building Fire Planning Counter Support Planning Public Works Total Staffing Job Classification Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate I II Assistant Chief Building Official Assistant Director PCE Associate Engineer Associate Planner Building Inspector Specialist Building/Planning Technician Building/Planning Technician (Freeze) Business Analyst Chief Building Official Chief Planning Official FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 270,931 17,884 3,413 3,413 -% 120,133 381,153 25,637 25,773 136 0.5% 8,055,975 7,582,819 8,209,915 7,548,178 (661,736) (8.1)% 19,277,459 17,714,382 18,064,577 15,834,447 (2,230,131) (12.3)% 12.16 17.81 7.08 5.09 19.66 4.81 66.61 FY 2018 Actuals 12.01 13.44 17.28 15.60 6.88 6.88 5.09 4.50 19.94 19.45 5.50 5.50 66.70 65.37 FY 2019 Actuals FY 2020 Adopted Budget 13.74 0.30 2.23% 17.60 2.00 12.82% 6.88 - -% 4.25 (0.25) (5.56)% (2.20) (11.31)% 4.80 (0.70) (12.73)% 64.52 (0.85) (1.30)% 17.25 FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary 2.00 2.00 1.00 1.00 - 79,830 1.00 1.00 1.00 1.00 - 72,176 3.00 2.80 2.80 - 213,287 3.30 3.29 4.00 4.00 - 330,491 1.00 1.00 1.00 1.00 151,258 1.00 1.00 1.00 1.00 190,549 0.02 0.02 0.22 0.20 (0.02) 24,948 1.00 3.03 3.15 3.00 (0.15) 327,101 4.00 4.00 4.00 6.00 2.00 705,120 3.00 3.00 3.00 2.00 (1.00) 176,842 1.00 1.00 1.00 1.00 1.00 1.00 2.80 1.00 1.00 1.00 1.00 1.00 1.00 88,421 189,530 167,752 330 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES Staffing Job Classification FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget Chief Transportation Official 0.06 0.09 Code Enforcement Officer 2.00 2.00 2.00 Code Enforcement Officer (Freeze) - - - 2.00 Code Enforcement -Lead 1.00 1.00 1.00 1.00 Deputy Chief/Fire Marshal 0.80 0.80 0.80 0.80 Development Project Coordinator II 2.00 2.00 2.00 2.00 Development Project Coordinator 3.00 3.00 3.00 3.00 III Development Services Director 1.00 1.00 - - - - Director Planning/Community 1.00 1.00 1.00 1.00 245,523 Environment Engineer 0.64 0.64 0.64 0.52 (0.12) 73,062 Engineering Technician III 1.78 1.78 1.78 1.50 (0.28) 147,826 Fire Inspector 3.20 3.20 3.20 1.60 (1.60) 263,178 Fire Inspector (Freeze) - - - 1.60 1.60 263,178 Hazardous Materials Inspector 1.60 1.60 1.60 1.60 263,178 Industrial Waste Inspector 0.01 0.01 0.01 (0.01) Industrial Waste Investigator 0.35 0.35 0.35 0.35 38,293 Inspector, Field Services 0.68 0.68 0.68 0.68 - 72,290 Landscape Architect Park Planner - 0.50 0.50 0.50 - 59,509 Management Analyst 1.99 1.79 0.01 - (0.01) - Manager Development Center 1.00 1.00 Manager Environmental Control 0.10 0.10 0.10 (0.10) Program Manager Planning 4.00 3.00 5.00 4.00 (1.00) 570,212 Manager Urban Forestry 0.04 0.04 0.04 - (0.04) - Planner 4.00 4.00 4.00 4.00 458,598 Planning Arborist 0.29 Planning Division Manager 1 .00 Principal Management Analyst - - 1.00 - (1.00) (159,500) Principal Planner 1.00 2.00 1.00 (1.00) 122,803 Principal Planner (Freeze) - - - 1.00 1.00 122,803 Program Assistant 1.00 (1.00) Program Assistant I (Freeze) - - 1.00 1.00 79,560 FY 2021 Change FTE FY 2021 Salary (2.00) 2.00 211,494 - 113,110 - 172,124 192,150 317,928 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 331 PLANNING AND DEVELOPMENT SERVICES Staffing Job Classification Project Engineer Senior Business Analyst FY 2018 Actuals 0.03 FY 2019 Actuals 0.33 FY 2020 Adopted Budget 0.13 1.00 Senior Engineer 0.46 0.46 0.46 Senior Industrial Waste Investigator 0.01 0.01 0.01 Senior Management Analyst 2.00 1.88 2.00 Senior Planner 6.60 3.60 3.60 Senior Planner (Freeze) Supervisor Inspection and Surveying 0.27 0.27 Transportation Planning Manager - 0.05 Sub -total: Full -Time Equivalent 62.23 62.32 62.45 61.60 Positions (0.85) 7,416,620 Temporary/Hourly 4.38 4.38 2.92 2.92 267,394 Total Positions 66.61 66.70 65.37 64.52 (0.85) 7,684,014 FY 2021 Adopted Budget 0.10 1.00 0.40 2.00 2.60 1.00 0.27 0.25 FY 2021 Change FTE (0.03) FY 2021 Salary 15,122 158,746 (0.06) 69,888 (0.01) - 293,571 (1.00) 350,006 1.00 134,618 (0.02) 34,133 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to po- sition freezes is available in the department section organizational chart and budget adjustment sum- maries. 332 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES 3udget Reconciliation Prior Year Budget 65.37 20,363,132 18,064,577 2,298,555 One -Time Prior Year Budget Adjustments Planning and Development Services Department Vacancies Planning and Development Services Department Staffing Reorganization One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Rent and Lease Expenditure (office space lease at 526 Bryant St) On -Call Contracts Increase Revenue Adjustment (align with cost recovery levels) Utilities Transfer for Electric Services Communication Services Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (1.00) (1.00) (0.15) (0.15) 152,393 (267,683) (115,290) 266,917 115,269 165,200 (7,607) 800 (219,050) 4,167 (96,293) (131,613) (51,328) (23,443) 23,019 152,393 (267, 683) - (115,290) 266,917 115,269 165,200 397,354 (397,354) (7,607) 397,354 800 (219,050) 4,167 (96,293) (131, 613) (51,328) (23,443) (374,335) Total FY 2021 Base Budget 64.22 20,270,860 18,461,931 1,808,929 Budget Adjustments 1 Building Inspection and Plan Review Reorganization 2 Planning and Development Services Fee Study 3 Public Works Development Services Alignment 4 Fire Inspection and Plan Review Reduction 5 Green Building Program Reduction 6 Current Planning and Development Services Front Counter Reduction 1.00 (401,295) (1,335,306) 934,011 - 110,000 - 110,000 (0.70) (208,853) (207,162) (1,691) (531,561) (529,424) (2,137) (105,548) (68,985) (36,563) (736,897) (486,607) (250,290) PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 333 PLANNING AND DEVELOPMENT SERVICES 3udget 'Reconciliation Positions Net Expenditures F General Fund 7 Code Enforcement Reduction 8 Management and Professionals Group Compensation Reduction 9 Administration and Program Assistance Staffing Reduction (264,546) (295,070) (450, 691) (264, 546) (295,070) (450,691) Total Budget Adjustments 0.30 (2,884,461) (2,627,484) (256,977) Total FY 2021 Adopted Budget 64.52 17,386,399 15,834,447 1,551,952 3udget Adjustments Budget Adjustments Net Positions Expenditures Revenues General Fund 1 Building Inspection and Plan Review Reorganization 1.00 (401,295) (1,335,306) 7 934,011 This action reduces 1.0 Planning Manager and consultant inspection services by 50 percent, and adds 2.0 Building Inspector Specialists (1.0 for a one-year term). This will result in longer lead times for inspections, delayed progress on the Energy Reach Code, and less participation in collaborative efforts such as sustainability, waste reduction, and other priorities. Next day inspections will no longer be an option for most projects. A corresponding reduction is recommended for associated fee revenue. (Ongoing net costs: $934,011) Performance Results This action may result in delays to response times and progress towards sustainability goals. 334 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PLANNING AND DEVELOPMENT SERVICES • 110,000 3udget Adjustments ud•et Ad'ustme 2 Planning and Development Services Fee Study 0 110,000 This action provides one-time funding for a fee analysis of Planning and Development Services Department fees. In Fiscal Year 2020, the Planning and Community Environment Department (PCE) and Development Services Department (DSD) merged into a single Planning and Development Services (PDS) Department. With this merge, staff recommends a study of municipal fees to determine staff time and related costs spent on each fee -related activity. Adjustments to Planning and Development Services Department fees, and potential establishment of new fees, will be brought forward for City Council consideration during Fiscal Year 2021 or as part of the Fiscal Year 2022 Proposed Municipal Fee Schedule. (Ongoing costs: $0) Performance Results This action will ensure that fees are set at proper levels and will allow the City Council and the community to be informed about the cost recovery level for fee -related activities. 3 Public Works Development Services Alignment MIL -0.70 j (208,853) l (207,162) AIL (1,691) This action reduces $74,000 in consultant services to process applications and reallocates staff (equivalent to 0.70 FTE) from the Public Works division to various funds citywide. This reallocation of staff is recommended to better align with workloads anticipated in FY 2021. A corresponding reduction is recommended for associated fee revenue. (Ongoing net savings: $1,691) Performance Results © 0 This action ensures that appropriate staffing levels are available to support Public Works activities. 4 Fire Inspection and Plan Review Reduction a 0.00 I (531,561) (529,424) .1 (2,137) This action reduces 2.0 Fire Inspector positions (0.40 allocated to the Fire Department), 0.48 FTE part-time staffing resources, and consultant services by $78,000 in the Fire Prevention Bureau, which is anticipated to delay fire inspections, increase wait times and impact customer service overall. A corresponding reduction is recommended for associated fee revenue. (Ongoing net savings: $2,137) Performance Results © 0 0 This action may result in delays to response times. 5 Green Building Program Reduction 0.00 (105,548) (68,985) (36,563) This action reduces consulting services for green building programs, energy programs, and customer support. Progress towards these programs are anticipated to slow as a result. A corresponding reduction is recommended for associated fee revenue. (Ongoing net savings: $36,563) Performance Results © 0 0 This action may result in delays to response times and progress towards sustainability goals. PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 335 PLANNING AND DEVELOPMENT SERVICES 3udget Adjustments udget Ad'ustmen Expenditures Revenues Net General Fund 6 Current Planning and Development Services Front Counter Reduction 0.00 (736,897) (486,607) (250,290) This action reduces 1.0 Principal Planner, 1.0 Building/Planning Technician, and $436,000 in contract services that process applications (including over the counter permit approval), provide customer service, and schedule projects before the Planning and Transportation Committee (PTC), Architectural Review Board (ARB), and Historic Resources Board (HRB). Significant delays in application processing and customer service response times are expected. Modification to local zoning regulations may be required to streamline application review, reducing the amount of time staff spends on each project and with public engagement. A corresponding reduction is recommended for associated fee revenue. (Ongoing net savings: $250,290) Performance Results © 0 This action may result in delays to response times. 7 Code Enforcement Reduction AlW IR 0.00 j (264,546) This action reduces 2.0 Code Enforcement Officer positions, resulting in limited responses to the highest priority health and safety -related cases, and response times will slow. Implementation of the Code Enforcement Audit recommendations will not be prioritized. (Ongoing savings: $264,546) 0 (264,546) Performance Results This action may result in delays to response times. 8 Management and Professionals Group Compensation Reduction 0.00 (295,070) milL 0 (295,070) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 9 Administration and Program Assistance Staffing Reduction L0.00 (450,691) 0 (450,691) This action reduces 1.0 Program Assistant I, 1.0 Senior Planner, a 0.48 FTE of part-time staffing resources, and $180,000 in consultant services in the administrative divisions of Planning and Development Services. Staff's ability to provide administrative, project management, and customer support will be reduced and responses to public record requests delayed. Reductions in other programs and strategic planning are anticipated as workloads are assumed by existing staff. (Ongoing savings: $450,691) Performance Results © 0 0 This action may result in delays to response times. 336 PLANNING AND DEVELOPMENT SERVICES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE book on 21st Century Policing, the purpose of the Police Department is to: build trust and legitimacy; provide for policy and oversight; implement modern technology solutions and social media platforms; focus on community policing and crime reduc- tion; implement officer training and educa- tion; and ensure officer safety and wellness. POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 337 POLICE CHIEF Robert Jonsen 1.00 Assistant Chief of Police POLICE PERSONNEL SERVICES 1.00 Police Lieutenant" 1.00 Police Officer/Agent 1.00 Administrative Associate II 1.00 Program Assistant II ADMINISTRATION 1.00 Communications Manager" 1.00 Senior Management Analyst 1.00 Administrative Assistant TECHNICAL SERVICES 1.00 Deputy Director, Technical Services" 1.00 Court Liaison 2.00 Business Analyst 1.00 Crime Analyst 1.00 Code Enforcement Officer 1.00 Communications Technician" 0.50 GIS Specialist DISPATCHING SERVICES 1.00 Public Safety Communications Manager" 4.00 Public Safety Dispatcher - Lead 16.00 Public Safety Dispatcher" INFORMATION MANAGEMENT 1.00 Public Safety Program Manager 1.00 Police Records Specialist - Lead 6.00 Police Records Specialist FIELD SERVICES 1.00 Police Captain 1.00 Police Agent/Officer 1.00 Administrative Associate II" FIELD SERVICES (PATROL) 3.00 Police Lieutenant 10.00 Police Sergeant 50.00 Police Agent/ Officer" FY 2021 POSITION TOTALS 150.50 - Full-time 3.30 - Hourly" This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. INVESTIGATIVE SERVICES 1.00 Police Captain 1.00 Administrative Associate II 2.00 Police Sergeant 11.00 Police Agent/ Officer" 2.00 Property/Evidence Technician ANIMAL CONTROL 1.00 Animal Control Officer -Lead 3.00 Animal Control Officer" TRAFFIC, PARKING, & SPECIAL EVENT SERVICES 1.00 Police Lieutenant 2.00 Police Sergeant 6.00 Police Agent/Officer" 1.00 Public Safety Program Manager 8.00 Community Service Officer" "These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Administrative Associate II 1.00 FTE Animal Control Officer 1.00 FTE Communications Manager 1.00 FTE Communications Technician 2.00 FTE Community Services Officer 1.00 FTE Deputy Director Technical Services Division 1.00 FTE Police Lieutenant 11.00 FTE Police Officers 1.00 FTE Public Safety Communications Manager 4.00 FTE Public Safety Dispatchers 2.28 Hourly FTE 338 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE Description The Police Department provides a wide range of public safety services for the City of Palo Alto through the following divisions: FIELD SERVICES Responsible for police response, critical incident resolution, regional assistance response, and police services for special events. TECHNICAL SERVICES Provides 911 dispatch services for Police, Fire, Utilities, Public Works, Stanford, and Police infor- mation technology management. INVESTIGATIONS Conducts police investigations, oversees storage and maintenance of evidence, and coordinates some youth services activities. TRAFFIC SERVICES Responsible for traffic enforcement, complaint resolution, and school safety. PARKING SERVICES Responsible for parking enforcement, parking citations and adjudication, and abandoned vehi- cle abatement. POLICE PERSONNEL SERVICES Oversees police hiring, retention, personnel records, and training. ANIMAL CONTROL Provides regional animal control and enforcement. Accomplishments ▪ Reduced collisions in numerous traffic -related categories by 16%. ▪ Added a Sergeant to directly work with and supervise the Traffic Team. ▪ Reached safe resolution in a 29 hour stand-off. • Resolved threats of violence on schools campuses. • Sent officers to regional task forces to combat regional crime trends including narcotics sales, illegal weapons, stolen property sales and stolen vehicles used in burglaries locally. ▪ Transitioned out of Animal Shelter operations in February of 2019 in accordance with operating agreement with Pets in Need (PIN). ▪ Completed a successful Community Service Officer (CSO) pilot period and transitioned the team into a regular program, taking 341 reports in calendar year 2019. POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 339 POLICE • Transitioned several gasoline fueled police vehicles into hybrids. • Implemented text to 9-1-1 capabilities. • Partnered with Public Works to finish the design and building plans for the Public Safety Building (PSB). Initiatives ▪ Reduce the rise in robbery, sexual assaults, and auto burglaries. • Continue to partner with Public Works on the Public Safety Building project as plans are submitted for review for building permits. • Explore new technology in an effort to enhance police services to the community. ▪ Implement online crime reporting for documentation of minor crime reports. • Purchase and implement a Records Management System. ▪ Identify resources for fulfilling new Public Records Requests as a result of SB-1421 and AB - 748. Goals anc Objectives GOAL 1 Building Trust and Legitimacy: In line with pillar one of the Department of Justice Implementa- tion Guidebook on 21st Century Policing, the Police Department will embrace a guardian mind- set to build public trust and legitimacy. Objectives ▪ Reduce crime rates, traffic violations, and accidents. ▪ Respond promptly to urgent calls for service. • Apprehend and assist with prosecution of offenders. • Provide assistance, enforcement, and guidance to the community regarding animal control. • Continue development of the Public Safety Building. GOAL 2 Policy and Oversight: In line with pillar two of the Department of Justice Implementation Guide- book on 21st Century Policing, the Department will collaborate with community members in developing policies that impact them. Objectives: ▪ Continue Office of Independent Review as per contract. • Increase quality and timeliness of response to citizens' complaints regarding use of force and other internal affairs matters. • Continue to train to address emerging social issues and situations. 340 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE • Create opportunities for increased communication, visibility, and interaction with community members. ▪ Maintain and enhance the community's satisfaction with police services. • Engage the Chief's Advisory Group on key policies and procedures. GOAL 3 Technology and Social Media: In line with pillar three of the Department of Justice Implementa- tion Guidebook on 21st Century Policing, the Department will continue to use Department and Regional technology solutions to enhance services, as well as leveraging social media platforms to fully engage and educate our community. Objectives: • Enhance the Department's open data initiative efforts by providing additional information to the public, including implementing compliance with SB-1421 and AB -748. • Engage the community through outreach programs. • Continue the regional Records Management System project. • Implement online reporting. • Enhance technology applications in alignment with national initiatives. GOAL 4 Community Policing and Crime Reduction: In line with pillar four of the Department of Justice Implementation Guidebook on 21st Century Policing, the Department will continue to engage the community through its cultural mindset that focuses on community policing and commu- nity partnerships. Objectives: • Contribute to the Safe Routes to School Program by contracting crossing guards at major intersections for Palo Alto Unified School District. ▪ Continue to seek input from the Citizens Advisory Group to enhance resident safety. GOAL 5 Officer Training and Education: In line with pillar five of the Department of Justice Implementa- tion Guideline on 21st Century Policing, the Department will continue to enhance in-service offi- cer training in the areas of fair and impartial policing; de-escalation; legal updates; and community relations. The Department will exceed minimum standards with regard to continuing education standards. Objectives: ▪ Continue to train and educate all employees in fair and impartial policing philosophies. • Ensure all officers receive Crisis Intervention Training. • Implement Crisis Intervention Training for Dispatchers. • Partner with Santa Clara County Behavioral Health Services to explore a Psychiatric Evaluation Response Team (PERT). POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 341 POLICE GOAL 6 Officer Safety and Wellness: In line with pillar six of the Department of Justice Implementation Guideline on 21st Century Policing, the Department will ensure that wellness and safety efforts occur at every level of the organization. Objectives: • Ensure that critical incident defusing and debriefings occur as needed. • Enhance employee assistance resources including urgent or emergency access to a psychologist and employee assistance program referrals for employees and their families. ▪ Build the resiliency of the employee in stressful situations through mindfulness training. ▪ Stress policies related to safety, in -line with the "Below 100" initiatives, a national initiative to reduce police officer fatalities to under 100 per year: www.below100.org. ▪ Enhance the Department's peer support program. Key Performance Measures ANIMAL CONTROL RESPONSE TIMES Goal Protect and serve the public through proactive and effective policing, animal control, and emergency preparedness. Objective Respond promptly to animal calls for service. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of Palo Alto live animal calls responded to within 45 minutes Description Purpose Status 90% 89% 90% 90% 90% A 45 -minute response time to live animal calls is the threshold of service set by the Animal Control Division. Live animal calls require the most timely response because they are generally life threatening or represent higher danger crimes in progress. The department has met or nearly met the target response time of 90% in prior years. In FY 2021, the department will monitor the ability to achieve this goal with one less Animal Control Officer on staff (1.0 FTE Animal Control Officer reduction in FY 2021). 342 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE PERCENT OF SURVEYED RESIDENTS RATING POLICE DEPARTMENT SERVICES GOOD OR EXCELLENT Goal Cultivate, enhance, and foster trustworthy relationships with the community. Objective Animal Control Services Crime Prevention Services Traffic Enforcement Services Overall Police Services Description Purpose Status Maintain and enhance the community's satisfaction with police services. FY 2018 Actuals 75% 78% 53% FY 2019 Actuals *N/A "N/A *N/A FY 2020 Adopted 80% 80% 60% 89% "N/A 90% FY 2020 Estimated 80% 80% 60% 90% FY 2021 Adopted *N/A *N/A *N/A *N/A These measures track the percent of residents rating overall and division specific police services to the community as "good" or "excellent". This data is collected as part of the National Citizen's Survey that is conducted annually by the International City/County Management Association (ICMA) and allows the City to compare itself to other municipalities. Community satisfaction with the Police Department is an important assessment of the quality of services provided to the City and its residents. *The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. POLICE DEPARTMENT RESPONSE TIMES Goal Respond promptly to urgent calls for service. Objective Percent of urgent calls responded to within 10 minutes Percent of emergency calls responded to within 6 minutes Description Purpose Status Protect and serve the public through proactive and effective policing, animal control, and emergency preparedness. FY 2018 Actuals 72% 70% FY 2019 Actuals 72% 65% FY 2020 Adopted 90% 90% FY 2020 Estimated 72% 70% FY 2021 Adopted 90% 90% Percent of emergency calls responded to within 6 minutes and percent of urgent calls responded to within 10 minutes. Emergency and urgent calls require the most timely police response because they are generally life threatening or represent higher danger crimes in progress. The year -over -year percentage of instances an officer arrives to a priority 1 (emergency) and priority 2 (urgent) call within the targeted response time has remained relatively consistent, near 70%. The goal remains at 90% and the Department will continue to strive to meet that goal. POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 343 POLICE Workload Measures Number of police calls for service Number of Part I crimes Number of Part II crimes Average response time for emergency calls (Goal: within 6 minutes) Average response time for urgent calls (Goal: within 10 minutes) Total number of Palo Alto animal control calls Number of regional animal control calls (Los Altos and Los Altos Hills) FY 2018 Actuals 55,480 1,764 2,674 FY 2019 Actuals 54,979 1,883 2,531 FY 2020 Adopted 54,000 1,600 2,600 FY 2020 Estimated 54,000 1,600 2,600 FY 2021 Adopted 54,000 1,600 2,600 5:10 5:23 6:00 5:30 6:00 8:39 8:31 8:00 8:30 8:00 2,659 2,550 2,300 2,400 2,400 719 570 425 500 425 344 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE 3udget Summary Dollars by Division Administration Animal Control Field Services Investigations and Crime Prevention Services Parking Services Police Personnel Selection Technical Services Traffic Services Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Total Dollars by Expense Category FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget 1,306,311 1,703,481 1,253,980 1,591,383 1,392,255 888,578 20,053,299 21,122,982 22,695,327 FY 2021 Adopted Budget 667,239 574,995 22,269,199 4,651,584 5,013,053 5,359,118 4,725,683 1,517,466 1,670,222 1,751,550 1,431,168 1,392,010 1,483,792 8,414,141 9,026,838 9,729,426 1,017,739 1,254,156 1,504,711 39,983,091 42,574,997 44,666,482 1,568,360 978,274 8,438,977 1,152,801 40,375,528 FY 2021 Change $ FY 2021 Change % (586,740) (46.8)% (313,583) (35.3)% (426,128) (1.9)% (633,434) (11.8)% (183,190) (505,518) (1,290,449) (351, 910) (4,290,954) (10.5)% (34.1)% (13.3)% (23.4)% (9.6)% 2,779,207 2,739,511 3,231,563 2,570,737 (660,826) (20.4)% 1,027,281 1,111,984 752,408 716,646 (35,762) (4.8)% 2,286,527 2,604,366 1,842,231 944,186 (898,044) (48.7)% 7,108,339 7,930,395 10,147,394 10,570,770 423,376 4.2% 2,805,449 2,575,256 2,652,514 2,532,285 (120,229) (4.5)% 16,950,029 18,094,964 19,030,233 16,822,420 (2,207,813) (11.6)% 421,542 840,707 1,157,437 1,071,516 (85,922) (7.4)% 33,378,375 35,897,184 38,813,780 35,228,560 (3,585,221) (9.2)% 3,202,873 3,626,937 3,511,437 2,964,098 (547,339) (15.6)% 2,397,033 1,612,777 1,365,894 1,467,830 101,936 7.5% 48,871 56,860 34,500 34,500 450,935 462,074 446,089 369,600 (76,490) (17.1)% 398,383 3,335 3,408 3,560 4,960 1,400 39.3% 501,670 517,375 491,221 305,981 (185,241) (37.7)% - % - % 39,983,091 42,574,997 44,666,482 40,375,528 (4,290,954) (9.6)% POLICE • ,CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 345 POLICE 3udget Summary I FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Revenues Charges for Services 1,211,543 1,161,326 1,379,804 1,037,540 (342,264) (24.8)% Charges to Other Funds 481,000 481,000 481,000 641,850 160,850 33.4% From Other Agencies 258,639 304,391 349,900 332,900 (17,000) (4.9)% Other Revenue 256,417 327,531 28,899 176,300 147,401 510.1% Other Taxes and Fines 1,890,505 1,360,237 1,881,255 1,859,358 (21,897) (1.2)% Permits and Licenses 289,090 242,505 230,302 151,998 (78,304) (34.0)% Rental Income 400 150 1,067 (1,067) (100.0)% Total Revenues 4,387,594 3,877,140 4,352,227 4,199,946 (152,281) (3.5)% Positions by Division Administration Animal Control Field Services Investigations and Crime Prevention Services Parking Services Police Personnel Selection Technical Services Traffic Services Total Staffing Administrative Assistant Administrative Associate II Administrative Associate II (Freeze) Animal Control Officer Animal Control Officer (Freeze) Animal Control Officer -Lead Animal Services Specialist II 5.30 5.30 5.30 5.30 -% 10.56 10.56 4.00 4.48 0.48 12.00% 73.55 73.55 73.55 73.55 -% 16.38 16.38 16.38 16.38 - -% 7.75 8.75 8.75 8.75 -% 4.10 4.10 4.22 4.22 -% 37.00 37.00 37.00 37.00 -% 3.74 2.74 2.62 2.62 - -% 158.38 158.38 151.82 152.30 0.48 0.32% FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 1.00 1.00 1.00 1.00 3.00 3.00 3.00 2.00 1.00 3.00 3.00 3.00 2.00 - - - 1.00 1.00 1.00 1.00 1.00 2.00 2.00 FY 2021 Change FTE FY 2021 Salary 72,779 (1.00) 156,790 1.00 78,395 (1.00) 148,470 1.00 74,235 79,435 346 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE Staffing FY 2018 Actuals FY 2019 Actuals Assistant Police Chief 1.00 1.00 Business Analyst 1.20 1.20 Code Enforcement Officer 1.00 1.00 Communications Manager 1.00 1.00 Communications Manager (Freeze) - Communications Technician 1.00 Communications Technician (Freeze) FY 2020 Adopted Budget FY 2021 Adopted Budget 1.00 1.00 1.20 1.20 FY 2021 Change FTE 1.00 1.00 - 1.00 - (1.00) - - 1.00 1.00 1.00 1.00 (1.00) 1.00 FY 2021 Salary 212,243 186,401 105,747 131,997 1.00 108,326 Community Service Officer 7.50 7.50 7.50 5.63 (1.87) 454,832 Community Service Officer (Freeze) - - - 1.87 1.87 151,072 Court Liaison Officer 1.00 1.00 1.00 1.00 105,123 Crime Analyst 1.00 1.00 1.00 1.00 105,123 Deputy Director Technical Services 0.80 0.80 0.80 - (0.80) - Division Deputy Director Technical Services 0.80 0.80 171,592 Division (Freeze) Geographic Information System 0.50 0.50 0.50 0.50 - 65,198 Specialist Police Agent 19.00 19.00 19.00 19.00 - 3,010,405 Police Captain 2.00 2.00 2.00 2.00 466,877 Police Chief 1.00 1.00 1.00 1.00 278,658 Police Lieutenant 5.00 5.00 5.00 4.00 (1.00) 851,292 Police Lieutenant (Freeze) - - - 1.00 1.00 214,957 Police Officer 50.00 50.00 50.00 39.00 (11.00) 5,458,177 Police Officer (Freeze) - - - 11.00 11.00 1,546,586 Police Records Specialist II 6.00 6.00 6.00 6.00 468,998 Police Records Specialist -Lead 1.00 1.00 1.00 1.00 83,637 Police Sergeant 14.00 14.00 14.00 14.00 2,491,923 Program Assistant II 1.00 1.00 1.00 1.00 85,488 Property Evidence Technician 2.00 2.00 2.00 2.00 - 161,699 Public Safety Communications Manager Public Safety Communications Manager (Freeze) Public Safety Dispatcher 16.00 16.00 16.00 12.00 (4.00) 1,398,405 1.00 1.00 1.00 (1.00) - - - 1.00 1.00 136,677 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 347 POLICE Staffing Public Safety Dispatcher (Freeze) Public Safety Dispatcher -Lead Public Safety Program Manager Senior Management Analyst Superintendent Animal Services Veterinarian Veterinarian Technician Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals 4.00 2.00 1.00 1.00 1.00 2.00 FY 2019 Actua►s 4.00 2.00 1.00 1.00 1.00 2.00 155.00 155.00 3.38 FY 2020 Adopted Budget 4.00 2.00 1.00 149.00 3.38 2.82 158.38 158.38 151.82 FY 2021 Adopted Budget 4.00 4.00 2.00 1.00 FY 2021 Change FTE 4.00 FY 2021 Salary 461,469 534,061 264,160 123,635 149.00 - 20,444,863 3.30 0.48 306,676 152.30 0.48 20,751,539 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to po- sition freezes is available in the department section organizational chart and budget adjustment sum- maries. 348 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE 3udget Reconciliation Prior Year Budget 151.82 44,666,482 4,352,227 40,314,255 One -Time Prior Year Budget Adjustments CAD Reporting System Update One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Overtime Adjustment Animal Services Revenue Alignments/Adjustments SVRIA Subscription Fee Adjustments Staffing Vacancies Alignment Animal Services Staffing Realignment Contractual Increases Revenue Alignments Crossing Guards (CMR #8952 approved June 25, 2018) Stanford Emergency Communication Services Revenue Task Force Reimbursement Communication Services Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (219,772) (85, 923) 0.48 1,661,969 (45,000) — (45,000) 1,899,302 51,537 197,550 88,636 0.48 35,000 15,400 (45, 000) (45,000) 1,899,302 51,537 (369,157) 369,157 46,300 151,250 88,636 35,000 15,400 (13,000) 13,000 7,806 7,806 64,098 (64,098) 130,000 (130,000) 160,850 (160,850) (391,239) — (391,239) 66,212 — 66,212 1,209 1,209 (3,749) (3,749) (219,772) 19,091 (85,923) 1,642,878 Total FY 2021 Base Budget 152.30 46,283,451 4,371,318 41,912,133 Budget Adjustments 1 Reduce Information Management and Records 2 Suspend Parent Project 3 Reduce Police Reserve Program 4 Reduce Animal Control Program 5 Reduce Training (24,129) (60,000) (75,449) (139,863) (103,901) (24,129) (60,000) (75,449) (40,372) (99,491) (103,901) POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 349 POLICE 3udget 'Reconciliation Positions Expenditures Revenues Net General Fund 6 Management and Professionals Group Compensation Reduction 7 Reduction in Police Relations 8 Reallocate Position from Police to City Manager's Office 9 Reduce Police Investigations 10 Reduce Technical Services Support 11 Reduce Recruitment 12 Suspend Traffic Program 13 Reduce Dispatch Services 14 Reduce Patrol Operations Total Budget Adjustments (146,116) - (196,465) (296,190) (345,649) (391,139) (444,039) (539,134) - (1,323,353) (1,822,497) - (5,907,924) (146,116) - (196,465) (131,000) (171,372) (296,190) (345, 649) (391,139) (444,039) (539,134) (1,192,353) (1,822,497) (5,736,552) Total FY 2021 Adopted Budget 152.30 40,375,527 4,199,946 36,175,581 3udget Adjustments udget A• just e is x•enditures Revenues Net General Fund 1 Reduce Information Management and Records 0.00 (24,129) 0 (24,129) This action reduces 0.29 FTE in part-time staffing resources in the information and records management division related to reporting to other agencies. It is anticipated that all other services will remain intact. (Ongoing savings: $24,129) Performance Results This action may result in reporting and customer service delays. 350 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE 3udget Adjustments 2 Suspend Parent Project (60,000) This action suspends the Parent Project program. As a result, staff anticipates increased calls for service at homes with domestic disturbances and runaways as families will no longer be referred to the program. (Ongoing savings: $60,000) Performance Results © 0 This action fully suspends the program and may result in lower resident approval rates for services. 3 Reduce Police Reserve Program (75,449) (75,449) This action reduces 0.72 FTE of part-time staffing resources (six positions) in the Police reserve program that provide services at special events throughout the City. (Ongoing savings: $75,449) Performance Results © 0 This action reduces the program and may result in lower resident approval rates for services. 4 Reduce Animal Control Program (139,863) 1 (40,372) (99,491) This action reduces 1.0 Animal Control Officer, 0.48 FTE in part-time staffing resources, and $5,000 in supplies in the Animal Control division. As a result, some overnight services may be reduced. Collection of fees and fines related to enforcement will be impacted. A corresponding reduction in revenue is recommended for these reductions. (Ongoing net savings: $99,491) Performance Results © O This action may result in longer response times. 5 Reduce Training 0.00 (103,901) 0 (103,901) This action reduces training from the current 78 total designated hours down to only the mandatory 32 hours of training. Firearm training and qualification will be reduced by 50 percent. (Ongoing savings: $103,901) Performance Results This action contributes to cost containment strategies in FY 2021. 6 Management and Professionals Group 0.00 (146,116) A 0 (146,116) Compensation Reduction This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 351 Budget Adjustments 7 Reduction in Police Relations 0.00 (196,465) -1 0 (196,465) This action reduces 1.0 Communications Manager in the Police Department. This will result in the elimination of proactive news releases (for all cases but those that present danger to public safety), completion of the PAPD annual report, Basic and Advanced Citizens Police Academy, and participation in National Night Out. Significant time delays are anticipated for responses to routine press inquiries. (Ongoing savings: $196,465) Performance Results © 0 0 This action may result in delayed response times to inquiries and news releases. 8 Reallocate Position from Police to City Manager's Office U.00 (296,190) a 0 (296,190) This action reallocates 1.0 Police Lieutenant from the Police Department to the City Manager's Office. This resource will be redeployed to evaluate critical staffing gaps and potential recruitments of new employees during the upcoming year. (Ongoing savings: $296,190) Performance Results © 0 0 This action aligns resources with the City Manager's Office to support recruitment efforts and improve overall services. 9 Reduce Police Investigations 0.00 (345,649) This action reduces 2.0 Police Officer positions and 0.08 FTE part-time staffing in the detective division. Staff's ability to follow-up on criminal investigations, conduct surveillance and undercover crime suppression operations, participate in region -wide investigative meetings, and collaborate with other local police agencies will be delayed or suspended. Little to no impact is anticipated to the property and evidence unit. (Ongoing savings: $345,649) Performance Results © 0 0 This action may result in longer response times. 10 Reduce Technical Services Support 0 (391,139) This action reduces 1.0 Deputy Director (0.20 allocated to the Fire Department) and 1.0 Communications Technician in technical support functions. Administrative and personnel management will be significantly delayed or not occur for this division. Resources that manage radio repairs, inventories, and replacement schedules will no longer be available and potentially need to be outsourced to an outside consultant. (Ongoing savings: $391,139) Performance Results © 0 This action may result in delays to technical support functions. 11 Reduce Recruitment This action reduces 1.0 Police Lieutenant position, 0.22 FTE in part-time staffing (two positions), and $103,000 in other expenses in the recruitment division. This will delay the current 18 -month recruiting and training cycle for a new sworn employee. (Ongoing savings: $444,039) Performance Results This action contributes to cost containment strategies in FY 2021. 352 POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET POLICE 3udget Adjustments ud•et Adjustments Positions (539,134) Net Revenues General Fund 12 Suspend Traffic Program 0 (539,134) This action reduces 3.0 Police Officer positions and suspends the specialized traffic program. This will result in a loss of personnel assigned full-time to targeted enforcement of traffic laws, which may result in higher instances of traffic collisions, increased dangerous driving behavior and a reduced police presence in residential neighborhoods. (Ongoing savings: $539,134) Performance Results © 0 This action fully suspends the program and may result in lower resident approval rates for services. 13 Reduce Dispatch Services I 0.00 (1,323,353) (131,000) (1,192,353) This action reduces 4.0 Public Safety Dispatcher positions, 1.0 Communications Manager, 0.49 FTE in part-time staffing (five positions), and $500,0000 in overtime expenses for Police dispatch operations. This is anticipated to reduce services to 80% of their current levels. This will result in potential impacts to the span of control, longer answer times for 911, and potential outsourcing of non -emergency calls. Time constraints will reduce the ability to provide Emergency Medical Dispatch (EMD) instructions and notifications to specialty teams. Extended answer times for administrative, Utility, and Public Works customers are anticipated and after hours call -outs will be limited to emergencies. A corresponding reduction to revenue is recommended for dispatch services provided to Stanford. (Ongoing net savings: $1,192,353) Performance Results © 0 0 This action may result in longer response times for non -emergency activities. 14 Reduce Patrol Operations MIL MI 0.00 (1,822,497) a 0 (1,822,497) This action reduces 6.0 Police Officer positions, 2.0 Community Service Officers (0.13 allocated to the Residential Parking Permit Fund), 1.0 Administrative Associate II position, reduces overtime expense by $500,000, and reduces contract services by $57,000 in Police patrol operations. Patrol's ability to positively impact crime rates, address traffic safety issues, and meet key performance measures for proposed response times to urgent and emergency calls for service will be impacted. Urgent and emergency calls will remain the priority for timely police response to ensure safety during potentially life threatening or higher danger crimes in progress. Patrols response to non -emergency calls for service, directed patrol checks, generalized traffic enforcement activities, and special community engagement events will be eliminated or significantly reduced. Other sworn police personnel will be reassigned to backfill patrol vacancies as they arise to cover staffing shortages. (Ongoing savings: $1,822,497) Performance Results © 0 0 This action may result in longer response times and lower participation levels in other community activities. POLICE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 353 CITY OF PALO ALTO PUBLIC WORKS Mission Statement To preserve and enhance the quality of life for Palo Alto residents and visitors by providing efficient, safe, and cost effective services in partnership with our citizens while maintaining City assets and being environmental stewards of the community. Purpose The purpose of the Public Works Depart- ment is to ensure the City's valuable infra- structure is well -maintained and available well into the future; promote the protec- tion and enhancement of Palo Alto's urban forest; enhance the quality of life for resi- dents and visitors by preventing pollution of the creeks and bay, promoting reuse and recycling, and encouraging use of alternative fuel vehicles; ensure continuous operation of the Regional Water Quality Control Plant; provide effi- cient and cost effective garbage, recyclables, and compostables collection, pro- cessing, and disposal; deliver timely support to City departments in the area of engineering services; operate a safe and financially sustainable general aviation airport; and effectively manage the City's Capital Improvement Fund, including the Council Infrastructure Plan. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 355 PUBLIC WORKS PUBLIC WORKS DIRECTOR Brad Eggleston 1.00 -Administrative Assistant 1 00 -Senior Management Analyst PUBLIC SERVICES 1.00 Assistant Director, Public Services 1.00 Management Analyst 1.00 Management Assistant 3.00 Administrative Associate II FACILITIES MAINTENANCE 1.00 Facilities Manager 1.00 Facilities Maintenance Operations 2.00 Facilities Maintenance -Lead 6.00 Facilities Technician 2.00 Facilities Painter 1.00 Project Manager" 1.00 Facilities Carpenter 1.00 Electrician 1.00 Coordinator Public Works Projects 1.00 Building Service Person -Lead 1.00 Engineering Technician II I FLEET 1.00 Fleet Manager 1.00 Assistant Fleet Manager 1.00 Project Manager 1.00 Fleet Services Coordinator 2.00 Motor Equipment Mechanic -Lead 2.00 Equipment Maintenance Service Person 6.00 Motor Equipment Mechanic II" URBAN FORESTRY 1.00 Manager Urban Forestry' 1.00 Landscape Architect' 2.00 Project Manager" 2.00 Tree Maintenance Special" 1.00 Tree Trim/Line Clear -Lead 7.00 Tree Trim/Line Clear TRAFFIC CONTROL / STREET SWEEPING 1.00 Manager, Maintenance Operations 1.00 Project Manager 2.00 Street Sweeper Operator 2.00 Street Maintenance Assistant 1.00 Coordinator, Public Works Projects 2.00 Traffic Control Maintenance II 2.00 Traffic Control Maintenance I STORM DRAIN / STREET MAINTENANCE 1.00 Manager, Maintenance Operations 2.00 Heavy Equipment Operator -Lead 3.00 Heavy Equipment Operator 3.00 Equipment Operator 1.00 Cement Finisher -Lead 2.00 Cement Finisher ENVIRONMENTAL SERVICES 1.00 Assistant Director, Environmental Service 1.00 Management Analyst WATER QUALITY CONTROL PLANT 1.00 Water Quality Control Plant Manager 2.00 Administrative Associate II 2.00 Assistant Manager WOC 2.00 Senior Engineer 3.00 Supervisor WQC Operations 6.00 Senior Operator, WQC 16.00 Plant Operator II 1.00 Manager Laboratory Services 1.00 Senior Chemist 3.00 Chemist 3.00 Lab Technician 2.00 Electrician Lead 3.00 Electrician 1.00 Senior Mechanic 7.00 Plant Mechanic 1.00 Senior Technologist 1.00 Project Engineer 1.00 Technologist WATERSHED PROTECTION 1.00 Watershed Protection Manager 2.00 Manager Environmental Controls 2.00 Program Assistant II 1.00 Project Manager 1.00 Senior Engineer 3.00 Associate Engineer 1.00 Senior Waste Investigator 2.00 Industrial Waste Investigator 3.00 Industrial Waste Inspector ZERO WASTE / REFUSE 1.00 Manager Solid Waste 3.00 Manager Environmental Controls 1.00 Zero Waste Coordinator 1.00 Program Assistant I 2.00 Environmental Specialist 1.00 Facilities Maintenance Lead 1.00 Landfill Technician 1.00 Landfill Maintenance Assistant SUSTAINABILITY PROGRAM 0.75 Management Analyst This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation ENGINEERING SERVICES 1.00 Assistant Director, Engineering Service 1.00 Management Analyst 1.00 Administrative Associate III 1.00 Administrative Associate I FIELD SERVICE (SURVEY AND INSPECTION) 1.00 Supervisor Inspections/Survey 2.00 Inspector -Field Service 1.00 Surveyor CIP PROGRAM (STRUCTURES, STREETS & SIDEWALKS, STORM DRAIN, PARKS) 4.00 Senior Engineer 1.00 Architect/Park Planner 7.00 Project Engineer 4.00 Engineer" 2.00 Associate Engineer" 1.00 Project Manager PRIVATE DEVELOPMENT 1.00 Senior Engineer' 3.00 Engineering Technician III* 1.00 Engineer' AIRPORT DIVISION 1.00 Airport Manager 1.00 Manager, Maintenance Operations, 1.00 Management Analyst 1.50 Facilities Technician FY 2021 POSITION TOTALS 200.25 - Full -Time 10.12 - Hourly" 'These positions serve functions that support the Planning and Development Services Department " These positions serve functions that support the Utilities Department " These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.00 FTE Project Manager 1.00 FTE Engineer 1.00 FTE Associate Engineer 1.00 FTE Motor Equipment Mechanic II 0.48 Hourly FTE 356 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Description The Public Works Department is responsible for operations and capital projects in the following areas: ENGINEERING SERVICES Designs and constructs City -owned facilities, streets, sidewalks, storm drains, parks, and airport infrastructure; and provides engineering support to City departments for construction in the public right of way. PUBLIC SERVICES Maintains and renovates City -owned and leased structures, streets, sidewalks, storm drains, street signage and parking lots; manages the City's urban forest; manages the street sweeping program; and maintains the City's fleet. ENVIRONMENTAL SERVICES Operates and maintains the Regional Water Quality Control Plant; maintains a pretreatment program for control of industrial and commercial dischargers; provides pollution and waste prevention and stormwater management information and programs to residents and businesses; leads implementation of sustainability programs through the Office of Sustainabil- ity; manages the City's zero waste programs, household hazardous waste program, and the post -closure maintenance and monitoring of the City's closed landfill. AIRPORT OPERATIONS Operates the Palo Alto Airport; maintains airport facilities and grounds; manages agreements with airport tenants; serves as liaison with the Federal Aviation Administration (FAA) and the Palo Alto flying community; and maintains compliance with FAA regulations. Accomplishments ▪ Continued implementation of the 2014 Council Infrastructure Plan. Completed construction of Fire Station No. 3 Replacement project. Completed 90% of construction of the new California Avenue Area Parking Garage project. Started construction on the Highway 101 Bicycle and Pedestrian Overcrossing project. • Certified the Environmental Impact Report for the Newell Road Bridge Replacement project. ▪ Completed improvements at the Animal Shelter, including new modular building and renovations to the medical suite. • Planted 200 new trees in addition to replacement trees. • Signed an agreement with Valley Water and Mountain View to secure funding for an Advanced Water Purification Facility with a 1 million gallons per day (MDG) capacity to produce enhanced recycled water while reserving half of the wastewater flows for a future regional purification plant up to 9 MGD managed by Valley Water. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 357 PUBLIC WORKS • Received an A score, for the second year in a row, for reporting on climate -related data to the Carbon Disclosure Project (CDP). Among the 800 cities reviewed, the City of Palo Alto joined 43 other cities in the CDP Leadership Scoring band for demonstrating best practice standards. Some of the criteria reviewed were adaptation, mitigation, making progress towards achieving ambitious but realistic goals, and having strategic plans in place to ensure the actions being taken will reduce climate impacts to citizens, businesses, and organizations residing in the City. • Received approval by City Council of the 2019-2020 Sustainability Work Plan to guide the City on sustainability initiatives through 2020. Initiatives • Continue managing the 2014 Council Infrastructure Plan (IP) projects as a program and develop a funding strategy that will allow for the completion of the IP projects while maintaining funding in the Capital Improvement Fund for other citywide capital needs. • Continue working toward the goals and objectives identified in the Urban Forest Master Plan, with a FY 2021 focus on utilizing geographic information system tools to analyze canopy coverage trends, and determine tree protection needed at construction sites during the permitting process. • Continue to build the Infrastructure Management System (IMS) to capture street and sidewalk maintenance conducted by the Public Services Division and begin using the IMS to report to Council on the status of Palo Alto's infrastructure. • Complete Municipal Services Center mechanical and electrical improvements and roofing replacements. ▪ Implement Stormwater Blue Ribbon Committee recommendations on the high priority storm drain infrastructure improvements and implement the completed Green Stormwater Infrastructure Plan. ▪ Continue to increase the number of Electric Vehicles (EV)s and alternative fuel vehicles within the fleet through scheduled replacements. By the end of FY 2021, 23% of passenger vehicles within the fleet will be Electric, Hybrid or Compressed Natural Gas (CNG). • Complete Phase I I I of the Airport Apron Reconstruction project. ▪ Conduct an electric vehicle charger and location study to determine future locations of electric vehicle chargers at City facilities in support of Fleet electrification initiatives. ▪ Evaluate the fleet electrification pilot program of Plug-in Hybrid electric pick-up trucks on performance, operational compatibility, maintenance and repair needs, fuel efficiency, product availability, and total cost of ownership. ▪ Continue development of the 2020 Sustainability and Climate Action Plan (S/CAP) Update, consistent with the Council's adoption of "Sustainability, in the context of climate change" as one of the top three priorities for 2020, to help the City meet its sustainability goals, including reducing greenhouse gas (GHG) emissions 80 percent below 1990 levels by 2030. 358 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Embed S/CAP goals and actions into department work plans, program goals, objectives, and operations, and support interdepartmental S/CAP implementation teams. .budget Summary FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Fund Airport Enterprise Fund 11,884,689 8,211,989 2,447,323 21,359,009 18,911,686 772.8% General Fund -Operating 18,412,469 17,213,301 19,188,318 18,427,090 (761,229) (4.0)% Refuse Fund - Operating 28,300,353 29,985,449 38,600,779 32,410,760 (6,190,019) (16.0)% Stormwater Management 9,873,062 5,684,038 9,944,891 9,871,984 (72,907) (0.7)% Operating Vehicle Replacement& 10,718,000 8,754,905 14,075,104 12,842,044 (1,233,061) (8.8)% Maintenance Fund Wastewater Treatment - Operating 39,920,647 37,482,291 55,434,126 59,737,415 4,303,289 7.8% Total 119,109,220 107,331,972 139,690,541 154,648,301 14,957,760 10.7% Revenues ANL Charges for Services 202,666 166,454 199,208 199,208 — —% Charges to Other Funds 13,390,921 12,413,563 11,762,186 9,663,623 (2,098,563) (17.8)% From Other Agencies , 13,333,527 5,869,673 19,288,640 19,288,640 —% Net Sales 65,334,402 66,097,248 69,427,158 69,845,759 418,601 0.6% Operating Transfers -In 1 222,433 196,107 196,107 246,107 50,000 25.5% Other Revenue 5,491,951 4,775,942 30,938,300 32,466,020 1,527,720 4.9% Other Taxes and Fines 900 2,475 6,500 6,500 — —% Permits and Licenses 656,944 1,248,297 622,096 622,096 — —% Rental Income 527,173 631,362 778,100 801,443 23,343 3.0% Return on Investments 1,113,433 1,229,925 1,414,100 1,200,100 (214,000) (15.1)% Total Revenues 100,274,350 92,631,046 115,343,755 134,339,496 18,995,741 16.5% Positions by Fund* Airport Fund 5.46 5.46 5.94 5.94 — —% General Fund 56.66 52.49 50.45 51.65 1.20 2.38% Refuse Fund 15.65 15.65 15.93 15.93 —% Stormwater Management Fund 13.55 13.55 13.55 13.55 —% Vehicle Replacement and 17.26 16.53 16.01 16.01 — —% Maintenance Fund PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 359 PUBLIC WORKS Wastewater Treatment Fund 3udget Summary FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Total 71.26 71.26 71.26 71.39 179.84 174.94 173.14 174.47 0.13 0.18% 1.33 0.77% *This table does not reflect positions in the Capital Improvement Fund nor the Cubberley Property Infra- structure Fund. 360 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS GENERAL FUND Goals and Objectives GOAL 1 Ensure the City's assets and infrastructure inventory are updated and well -maintained. Objectives: ▪ Use an Infrastructure Management System (IMS) to support planning, budgeting, and accountability for the City's assets in accordance with the Infrastructure Blue Ribbon Commission's recommendations. • Maintain and enhance the overall condition of the City's streets while effectively communicating the program's accomplishments to the public. ▪ Begin implementing repairs identified in the completed Sidewalk Program Evaluation Study. • Begin developing a citywide facilities assessment plan to identify facility conditions and prioritize improvement needs. GOAL 2 Provide high quality, cost-effective oversight of the City's capital improvement and facilities maintenance programs. Objectives: ▪ Continue implementation of the 2014 City Council approved Infrastructure Plan for key infrastructure needs, managing the projects as a program. • Provide cost-effective custodial and facilities maintenance services that meet the expectations of the public and provide clean and safe buildings. ▪ Continue to evaluate and implement the recommendations identified in the Facilities Work Group Organizational Study, which includes data collection, performance standards, benchmarking, and customer satisfaction surveys. GOAL 3 Preserve the public's health and safety to ensure a vibrant, sustainable community for future generations. Objectives: • Complete planning entitlements, obtain regulatory permits, and prepare construction documents necessary to proceed with the Newell Road Bridge Replacement project. • Ensure compliance with all applicable regulations related to the public's health and safety. • Increase the total number of City trees by committing to plant a total of 200 new and replacement trees annually while maintaining the health of the City's urban forest and ensuring proper tree clearance of all utility lines. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 361 PUBLIC WORKS Modernize City building systems to reduce energy consumption by including LED lighting conversions, roofing replacement upgrades, water efficient fixtures, more efficient mechanical equipment, computer controls of lighting and heating, ventilation and air conditioning (HVAC) systems. Key Performance Measures CITIZEN SURVEY - QUALITY OF SIDEWALK MAINTENANCE Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Increase rating given by residents for quality of sidewalk maintenance. Percent of citizens rating the quality of sidewalk maintenance as "good" or "excellent" Description Purpose Status FY 2018 Actuals 61% FY 2019 Actuals N/A" FY 2020 Adopted 65% FY 2020 Estimated 65% FY 2021 Adopted N/A` The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of sidewalk maintenance. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Obtain feedback from residents on whether sidewalks are being maintained adequately in order to determine if the program's resources are appropriate. The Department had estimated that a 65% rating would be reached in FY 2020 for sidewalk maintenance. *The National Citizen's Survey was not completed in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. CITIZEN SURVEY - STREET MAINTENANCE Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Increase rating given by residents for quality of street maintenance. Percent of citizens rating the quality of street repair as "good" or "excellent" Description Purpose Status FY 2018 Actuals 46% FY 2019 Actuals N/A* FY 2020 Adopted 54% FY 2020 Estimated 54% FY 2021 Adopted N/A" The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of street maintenance. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Obtain feedback from residents on whether streets are being maintained adequately in order to determine if the program's resources are appropriate. The Department had estimated that a 54% rating would be reached in FY 2020 for street maintenance. *The National Citizen's Survey was not completed in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. 362 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS CITIZEN SURVEY - STREET TREE MAINTENANCE Preserve the public's health and safety to ensure a vibrant, sustainable community for future generations. Increase rating given by residents for quality of street tree maintenance. Goal Objective Percent of citizens rating street tree maintenance "good" or "excellent" Description Purpose Status FY 2018 Actuals 72% FY 2019 Actuals N/A FY 2020 Adopted 72% FY 2020 Estimated 72% FY 2021 Adopted N/A The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of street tree maintenance. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Obtain feedback from residents on whether street trees are being maintained adequately in order to determine if the program's resources are appropriate. *The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY22 budget process. PAVEMENT CONDITION SCORE Goal Ensure the City's assets and infrastructure inventory are updated and well maintained. Objective Maintain and enhance the overall condition of the City's streets. Pavement Condition Score Description Purpose Status FY 2018 Actuals 84 FY 2019 Actuals 85 FY 2020 Adopted 85 FY 2020 Estimated FY 2021 Adopted 84 82 This measure tracks the condition of the City's streets based on Pavement Condition Index (PCI) published by the Metropolitan Transportation Commission (MTC) as well as changes in that PCI score. The PCI scores are rated as follows: 80+ = very good or excellent, 70-79 = good, 60-69 = fair, 50-59 = at risk, 25-49 = poor, 0-24 = failed. Improving the condition of the City's streets reduces overall maintenance costs and increases ride satisfaction. The City Council set a goal of raising the citywide average PCI score to 85 by FY 2019 and the Department achieved this goal. Annual reports by the MTC indicate that Palo Alto now has one of the highest citywide average PCI scores in Santa Clara and San Mateo Counties. The PCI dipped slightly in FY 2020 and is anticipated to reduce further in the coming years given reductions in the City's capital program due to budget priority adjustments in FY 2021 to address impacts from COVID-19. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 363 PUBLIC WORKS RESPONSE TO POTHOLE NOTIFICATION Ensure the City's assets and infrastructure inventory are updated and well maintained. Goal Objective Maintain a standard timeframe for pothole repairs. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percent of potholes repaired within 15 days of notification Description Purpose Status 80% 85% 80% 82% 80% This measure records the number of potholes that are repaired within 15 days of the Department being notified of the problem. The Department has a goal of repairing potholes within 15 days to ensure streets are maintained and repaired in a timely manner. The Department has been making repairs within 15 days 82% of the time. FY 2021 percentages will lower to 80% due to a previous reduction in workforce impacting timeliness of job completion. Increased inspection of adjacent areas to increase cost effectiveness and increase PCI scores has resulted in additional work. Since implementation of Palo Alto 311, the number of notifications related to potholes continue to be significant and impact response times. Workload Measures Square feet of sidewalk replaced or permanently repaired Number of lane miles resurfaced Percent of lane miles resurfaced Total square footage of facilities maintained Cost per square foot for custodial services Cost per square footage for maintenance services Number of facilities work order requests completed Number of trees trimmed annually Total of trees maintained by the City Number of tree related electrical service disruptions Number of publicly available electric vehicle chargers in garages and city facilities FY 2018 Actuals 38,557 31 FY 2019 Actuals 66,662 10 FY 2020 Adopted 64,250 28 FY 2020 Estimated 34,100 27 FY 2021 Adopted 44,130 19 6.50% 2.00% 6.00% 5.70% 4.00% 1,659,028 1,815,298 1,815,298 1,815,298 1,903,280 $2.11 $1.82 $1.88 $1.88 $1.89 $2.21 $2.11 $2.29 $2.29 $2.16 7,291 6,162 7,400 6,500 6,200 8,762 7,758 5,220 4,941 4,000 36,378 36,813 36,545 36,270 36,478 8 6 8 18 12 53 57 79 57 90 364 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary Dollars by Division General Fund Administration General Fund Engineering Services General Fund Public Services: Streets General Fund Public Services: Structures and Grounds General Fund Public Services: Trees Sustainability Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Total Dollars by Expense Category Revenues Charges for Services Charges to Other Funds FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 1,543,614 1,462,803 1,653,749 1,398,906 1,257,574 1,198,656 1,095,381 1,233,122 3,763,354 3,191,234 3,878,053 3,912,930 7,655,871 7,117,954 8,029,740 7,834,494 4,192,056 4,242,654 4,531,396 3,796,332 251,305 18,412,469 17,213,301 19,188,318 18,427,090 FY 2021 Change $ (254,843) 137,740 34,878 (195,246) (735,064) 251,305 (761,229) FY 2021 Change % (15.4)% 12.6% 0.9% (2.4)% 1,116,308 1,004,852 1,137,805 1,087,944 (49,861) (4.4)% 151,664 137,372 146,112 167,027 20,915 14.3% 239,717 265,771 167,886 172,251 4,365 2.6% 1,491,805 1,388,663 1,804,560 1,879,915 75,355 4.2% 949,314 825,828 850,603 841,486 (9,117) (1.1)% 5,094,927 4,641,204 4,920,549 4,999,491 78,942 1.6% 127,270 133,352 199,115 188,991 (10,125) (5.1)% 9,171,005 8,397,042 9,226,630 9,337,106 110,476 1.2% 3,425,459 3,422,668 3,840,817 3,444,579 (396,237) (10.3)% 4,688,287 4,392,507 4,879,358 4,406,565 (472,793) (9.7)% 2,000 2,146 2,146 -% 67,588 58,001 125,009 137,659 12,650 10.1% 16,574 94,518 16,574 (16,574) (100.0)% 210,191 168,978 227,974 227,974 - -% 831,365 679,589 869,811 871,061 1,250 0.1% 18,412,469 17,213,301 19,188,318 18,427,090 (761,229) (4.0)% 77,881 47,778 47,320 47,320 3,796,696 3,331,386 2,355,516 2,155,112 (200,405) -% (8.5)% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 365 PUBLIC WORKS 3udget Summary Operating Transfers -In Other Revenue Permits and Licenses Total Revenues FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 196,107 196,107 196,107 196,107 46,345 119,557 54,500 6,000 (48,500) 656,944 1,248,297 622,096 622,096 - 4,773,973 4,943,125 3,275,539 3,026,635 (248,905) (7.6)% FY 2021 Change % Positions by Division General Fund Administration 3.05 3.05 3.05 3.05 General Fund Engineering Services 5.29 4.92 3.38 3.79 General Fund Public Services: 18.22 15.74 15.74 15.74 Streets General Fund Public Services: Structures and Grounds General Fund Public Services: Trees Sustainability Total Staffing Job Classification Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate I II Assistant Director Public Works Associate Engineer Building Serviceperson Building Serviceperson-Lead Cement Finisher Cement Finisher -Lead Coordinator Public Works Projects Director Public Works/City Engineer Electrician Engineer 17.31 15.83 15.33 15.33 -% (89.0)% - % - % 0.41 12.13% -% - % 12.79 12.95 12.95 12.99 0.04 0.31% - - - 0.75 0.75 -% 56.66 52.49 50.45 51.65 1.20 2.38% I FY 2018 Actuals 1.00 0.60 2.65 0.01 0.87 0.30 1.00 1.00 3.00 0.26 1.50 1.00 0.80 0.66 FY 2019 Actuals 1.00 0.60 2.65 0.01 0.87 0.30 FY 2020 Adopted Budget 1.00 0.10 2.65 0.01 0.73 FY 2021 Adopted Budget 1.00 0.10 2.65 0.01 0.73 FY 2021 Change FTE FY 2021 Salary 93,205 7,218 207,747 840 138,014 1.00 1.00 1.00 69,118 2.00 2.00 2.00 190,154 0.26 0.26 0.26 - 26,440 1.50 1.50 1.50 - 129,420 1.00 1.00 1.00 - 221,478 0.80 0.80 0.80 89,507 0.66 0.36 0.48 0.12 67,442 366 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Staffing FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget Engineering Technician III 1.47 1.47 1.47 1.75 Equipment Operator 3.46 2.46 2.46 2.46 Facilities Carpenter 1.00 1.00 1.00 1.00 Facilities Maintenance -Lead 1.85 1.85 1.85 1.85 Facilities Painter 1.75 1.75 1.75 1.75 Facilities Technician 4.05 4.05 4.05 4.05 Heavy Equipment Operator 2.33 2.33 2.33 2.33 Heavy Equipment Operator -Lead 0.85 0.85 0.85 0.85 Inspector, Field Services 0.11 0.11 0.11 0.11 Landscape Architect Park Planner 0.10 0.60 0.60 0.60 Management Analyst 0.70 0.70 0.70 1.45 0.75 Manager Facilities 0.90 0.90 0.90 0.90 Manager Maintenance Operations 1.20 1.20 1.20 1.20 Manager Urban Forestry 0.96 0.96 0.96 1.00 0.04 Manager Watershed Protection 0.05 0.05 0.05 0.05 - Planning Arborist 0.71 - - - - Project Engineer 0.50 0.50 - - - Project Manager 2.65 2.65 2.65 2.00 (0.65) Project Manager (Freeze) 0.65 0.65 Senior Engineer 0.79 0.79 0.59 0.60 0.01 Senior Management Analyst 1.11 1.11 1.11 1.11 - Senior Project Manager 0.10 0.10 - - - Supervisor Inspection and 0.10 0.10 0.10 0.10 - 13,653 Surveying Surveyor, Public Works 0.33 0.33 0.33 0.33 35,507 Traffic Controller Maintainer I 1.94 1.94 1.94 1.94 - 166,613 Traffic Controller Maintainer II 2.00 2.00 2.00 2.00 - 159,078 Tree Maintenance Person 1.00 1.00 1.00 1.00 - 88,150 Tree Trim/Line Clear 7.00 7.00 7.00 7.00 607,443 Tree Trim/Line Clear -Lead 1.00 1.00 1.00 1.00 92,810 FY 2021 Change FTE FY 2021 Salary Sub -total: Full -Time Equivalent Positions 0.28 172,463 215,264 95,077 227,147 166,384 400,224 244,016 95,189 11,694 73,482 172,132 141,317 168,605 163,197 8,060 221,672 72,008 104,832 144,172 54.66 51.45 49.41 50.61 1.20 5,300,774 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 367 PUBLIC WORKS Staffing Job Classification FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted FY 2021 Budget Change FTE FY 2021 Salary Temporary/Hourly Total Positions 2.00 1.04 1.04 1.04 56.66 52.49 50.451 51.65 87,826 1.20 5,388,600 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional informa- tion relating to position freezes is available in the department section organizational chart and budget adjustment summaries. 368 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation Prior Year Budget 50.45 19,188,318 3,275,539 15,912,779 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Urban Forestry (Contract Alignment and Tree Mitigation Fee) Vacancy Factor Adjustment Transfer to Electric Fund (Canopy Contract) Contract Services Alignment (Facilities Maintenance) Charges to Other Funds for Engineering Services Custodial Contract (Amendment #2 and Year 4 Adjustments) Office of Sustainability (OOS) Transition General Fund Cost Allocation Plan Communication Services Allocated Charges Liability Insurance Allocated Charges Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Refuse Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges 0.75 216,404 (152, 845) (40,510) (16,574) 31,176 128,305 261,767 5,370 34,921 (185,753) 6,001 (4,888) 748 (196,097) (88,984) (15,196) 216,404 (48,500) (104,345) (40, 510) (16,574) 31,176 (40,874) 40,874 128,305 (2,516) 264,283 (130,717) 130,717 5,370 34,921 - (185,753) 6,001 (26,297) 26,297 (4,888) 748 - (196, 097) (88,984) (15,196) Adjustments to Costs of Ongoing Activities 0.75 (16,154) (248,904) 232,750 Total FY 2021 Base Budget 51.20 19,172,165 3,026,63 16,145,529 Budget Adjustments 1 San Francisquito Creek Joint Powers Authority (SFCJPA) Membership 2 Public Works Development Services Alignment 123,000 0.45 80,109 123,000 80,109 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 369 PUBLIC WORKS 3udget 'Reconciliation Positions Expenditures Revenues Net General Fund 3 Buildings and Facilities Reductions 4 Management and Professionals Group Compensation Reduction 5 Urban Forestry (Tree Trimming Services) (110,642) (183,143) (654,399) (110,642) (183,143) - (654, 399) Total Budget Adjustments 0.45 (745,075) - (745,075) Total FY 2021 Adopted Budget 51.65 18,427,090 3,026,635 15,400,454 3udget Adjustments Budget Adjustment Expenditures Revenues Net General Fund 1 San Francisquito Creek Joint Powers Authority (SFCJPA) Membership 0.00 L23000 0 123,000 This action includes a one-time increase of $94,000 to cover consultant fees for an environmental assessment on an upstream project, and will increase expenses ongoing for the City of Palo Alto's membership fee ($29,000) with the San Francisquito Creek Joint Powers Authority (SFJPA) which allows the City to participate in the decision -making process for a series of projects to provide flood protection for local residents. The SFJPA is an independent regional government agency founded by three cities and two countywide agencies divided by San Francisquito Creek and united by its watershed and floodplain. This joint agency leads projects along the creek and S.F. Bay to reduce flood threat, enhance ecosystems and recreational opportunities, and connect communities. (Ongoing cost: $29,000) Performance Results © 0 This allows the City to continue to participate in the decision -making process for a series of projects to provide flood protection for local residents. 2 Public Works Development Services Alignment 0.45 80,109 0 ▪ 80,109 This action recognizes the reallocation of staffing from the Planning and Development Services Department's Public Works division to the Public Works Department. This reallocation of staff will align the position with the anticipated workload for the position. (Ongoing cost: $80,109) 370 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Adjustments ua•et Adjustments Positions Expenditures Revenues Net General Fund Performance Results This action ensures that appropriate staffing levels are available to support Public Works activities. 3 Buildings and Facilities Reductions 0.00 (110,642) 0 (110,642) This action reduces 1.0 Project Manager across all funds (0.65 FTE in the General Fund). This position manages facilities maintenance contracts and facilities related capital projects. This will realign work capacity while ensuring continued management of facilities contracts like the citywide custodial contract, and sufficient staff time is appropriated to manage the remaining capital projects. (Ongoing savings: $110,642) Performance Results This action is commensurate with the funding reductions in the Capital Improvement Fund and contributes to cost containment strategies in FY 2021. 4 Management and Professionals Group Compensation Reduction 0.00 (183,143) 0 (183,143) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 5 Urban Forestry (Tree Trimming Services) (654,399) r 0 (654,399) This action will reduce contractual funding for tree trimming services citywide by 50%. Although this reduction will significantly reduce the number of trees trimmed in FY 2021 and FY 2022, it is not anticipated to adversely impact the City's goal of a 7 -year average tree trimming cycle because the City is currently ahead of schedule. Management of the contract to maximize tree trimming may result in deferral of other activities such as stump grindings and plantings of replacement trees. (Ongoing savings: $654,399) Performance Results © 0 This action contributes to cost containment strategies in FY 2021. If the reduction is continued for more than two years, it would impact the cycle time over the medium and long-term. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 371 PUBLIC WORKS AIRPORT FUND Description The Palo Alto Airport serves as a general aviation reliever airport to the Bay Area's major air carrier airports. It is the fourth busiest airport in the Bay Area, averaging 150,000 annual operations; open 24 hours each day, 365 days annually; and has a Federal Aviation Administration -staffed air traffic control tower. Accomplishments ▪ Completed Phase II of the Airport Apron Reconstruction Project. Prior to paving, the pavement was in poor condition with a Pavement Condition Index (PCI) score of 36. The score is anticipated to improve when the next PCI evaluation is conducted after Phase I I I of the project is completed. The Airport has received grant funding for Phase I I I and the City has received bids for this project. • Completed the Airport Facilities Assessment, and determined the repairs and safety needs for the Airport buildings. Initiatives • Develop an Airport Business Plan to establish goals, objectives, and action plans that will frame the day-to-day operation and management of the airport as well as identify capital improvements and inform staffing decisions. ▪ Complete the Apron Reconstruction Project by completing Phase I I I of the project to improve the pavement condition of the airport and bring the apron to current FAA safety standards. Goals and Objectives GOAL 1 Operate a safe and viable airport. Objectives: • Maintain compliance with federal and state requirements for airfield conditions. ▪ Continue to follow industry standards and trends in staff training and education. • Maintain sufficient staff to provide coverage during the FAA air traffic control tower operating hours of 7:00 am to 9:00 pm. 372 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS GOAL 2 Provide high quality, cost-effective oversight of the airport's capital improvement program (CIP). Objectives: • Continue management of FAA -sponsored CIP projects at the airport. • Submit grant applications to the FAA for multi -phase projects that ensure efficiency and airfield safety. ▪ Maintain grant funding eligibility by submitting a Five -Year Airport CIP work plan to the FAA annually. GOAL 3 Manage a financially sustainable and self-sufficient airport enterprise fund. Objectives: ▪ Adopt and implement an Airport Business Plan to guide future development and ensure fund stability. ▪ Control expenses and generate sufficient revenues to accommodate the needs of the Palo Alto Airport, including loan repayment to the General Fund. Key Performance Measures AIRCRAFT OPERATIONS Goal Operate a safe and viable airport. Objective Number of aircraft operations Description Purpose Status Provide a safe, aesthetically pleasing, and profitable airport. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted 149,000 152,479 160,000 130,000 120,000 The Palo Alto Airport (PAO) is owned and operated by the City of Palo Alto and is a general aviation field. The Federal Aviation Administration defines workload measures for airports with an air traffic control tower by the number of aircraft operations (sum of landings and takeoffs). In addition to being the twelfth busiest airport in California, PAO is a reliever to three Bay Area airports. PAO's significant air traffic must be accommodated by the one paved runway which measures 2,443 x 70 feet. Providing a safe, well maintained and attractive airport will appeal to the tenants, pilots, visitors, outside agencies, residents, and the flying community at large. Total operations were 149,000 in FY 2018 and 152,479 in FY 2019 and estimated to be 130,000 in FY 2020 and 120,000 in FY 2021. Operations were affected by construction, weather, and training schools in the area as well as the shelter in place order issued by Santa Clara County in FY 2020 in response to COVID-19 which is expected to continue in FY 2021. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 373 PUBLIC WORKS PERCENTAGE OF TIE -DOWNS LEASED Goal Objective Manage a financially sustainable and self-sufficient airport enterprise fund. Increase tenant occupancy by providing a safe and well maintained airport that is also cost recoverable. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Percentage of Tie -downs Leased Description Purpose Status 72% 64% 75% 89% 90% The City of Palo Alto operates and maintains the Palo Alto Airport and provides airport users with safe transportation options and a high level of airport services. The airport has a total of 510 tie -down spaces, including spaces under construction or maintenance. Out of the total number spaces, 347 are available for rent. Maximizing tie -down space occupancy increases revenue and provides funding to revitalize the Palo Alto Airport without changing or increasing the current airport footprint. Tie -down and apron areas that are in disrepair are not available for leasing and unsightly. Providing a safe, well maintained, and attractive airport appeals to the tenants, pilots, visitors, outside agencies, residents, and the flying community at large. Airport staff is responsible for maintaining 102.4 acres of airport facilities, infrastructure and equipment; and managing over 250 tenants and 329 leased tie - down spaces. In FY 2018 the percentage of leased rentable tie -downs was 72%. In FY 2019 it decreased to 64% due to the Airport Apron Reconstruction project, causing some airport tenants to temporarily move to other airports during construction. The percentage of leased rentable tie -downs has increased to 89% in FY 2020. Due to an apron shift as result of FAA standards and construction, only 347 tie -downs are available for rent at this time. However, the tie -down number will increase as construction is completed for Phase III of the Apron Reconstruction Project. 374 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary Dollars by Division Airport Administration Airport Operations CIP Airport Fund Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 893,430 890,348 1,058,650 934,946 (123,704) (11.7)% 620,616 673,141 1,042,477 1,063,943 21,467 2.1% 10,370,643 6,648,126 346,196 19,360,120 19,013,924 5,492.2% 11,884,689 8,211,615 2,447,323 21,359,009 18,911,686 772.8% Dollars by Category Salary & Benefits Healthcare 101,705 99,225 131,582 109,120 (22,462) (17.1)% Other Benefits 18,545 21,246 21,521 21,564 43 0.2% Overtime 11,972 24,407 - - - -% Pension 136,462 155,080 217,892 201,977 (15,916) (7.3)% Retiree Medical 11,804 43,990 45,310 42,835 (2,475) (5.5)% Salary 531,225 574,373 632,325 628,838 (3,487) (0.6)% Workers' Compensation 14,961 20,763 19,236 (1,527) (7.4)% Total Salary & Benefits 811,714 933,283 1,069,393 1,023,570 (45,823) (4.3)% Allocated Charges 647,135 637,851 669,891 604,614 (65,277) (9.7)% Contract Services 100,229 51,014 140,700 139,900 (800) (0.6)% General Expense 89,588 96,890 36,480 36,480 - -% Operating Transfers -Out 11,231 7,471 281,200 272,000 (9,200) (3.3)% Rents & Leases 10,322 6,123 11,630 11,630 -% Supplies & Material 29,947 10,458 56,472 56,472 -% Capital Improvement Program 10,184,522 6,468,900 181,556 19,214,343 19,032,786 10,483.1% Total Dollars by Expense Category 11,884,689 8,211,989 2,447,323 21,359,009 18,911,686 772.8% Revenues From Other Agencies 9,333,527 5,869,673 19,288,640 19,288,640 -% Net Sales 641,868 667,142 654,767 626,767 (28,000) (4.3)% Other Revenue 1,145,804 1,155,324 1,008,800 1,094,020 85,220 8.4% Rental Income 593,303 631,362 778,100 801,443 23,343 3.0% PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 375 PUBLIC WORKS Facilities Technician Management Analyst 1.50 Return on Investments 3udget Summary FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Total Revenues 20,629 11,735,131 8,346,376 2,463,067 21,813,370 19,350,303 785.6% 22,874 21,400 2,500 (18,900) (88.3)% Positions by Division Airport Administration Airport Operations CIP Airport Fund Total Staffing 2.00 2.00 2.48 2.48 2.21 2.21 2.71 2.71 1.25 1.25 0.75 0.75 5.46 5.46 5.94 5.94 -% FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary 1.00 Manager Airport 1.00 Manager Maintenance Operations 1.00 Sub -total: Full -Time Equivalent 4.50 4.50 4.50 Positions Temporary/Hourly 0.96 0.96 1.44 1.44 86,676 Total Positions 5.46 5.46 5.94 5.94 - 652,842 1.50 1.00 1.00 1.00 1.50 1.00 1.00 1.00 1.50 1.00 1.00 1.00 4.50 148,231 121,098 174,907 121,930 566,166 376 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Budget Reconciliation Positions Expenditures Revenues Net Airport Fund Prior Year Budget 2,447,323 2,463,067 (15,744) One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Revenue Adjustments Return on Investments Transfer to Technology Fund (TE-19001 Council Chambers Project) Capital Improvement Projects and FM Grant Funding General Fund Cost Allocation Plan Industrial Waste Discharge Fee Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Refuse Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 28 (9,200) 17,034,600 (91,898) 582 (5,910) 3,653 (1,632) (2,630) 49,564 (25,560) 5,941 (1,527) — 16,956,011 28 80,563 (80,563) (18,900) 18,900 (9,200) 17,288,640 (254,040) 17,350,303 (91,898) 582 (5,910) 3,653 (1,632) (2,630) 49,564 (25,560) 5,941 (1,527) (394,292) Total FY 2021 Base Budget 5.94 19,403,334 19,813,370 (410,036) Budget Adjustments 1 Department of Transportation (DOT) Loan 2 Management and Professionals Group Compensation Reduction Total Budget Adjustments Total FY 2021 Adopted Budget - 2,000,000 (44,325) - 1,955,675 5.94 21,359,009 2,000,000 2,000,000 21,813,370 (44, 325) (44,325) (454,361) PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 377 PUBLIC WORKS 3uc get Ac justments udget :Adjustments_ Positions Expenditures Revenues Net Airport Fund 1 Department of Transportation (DOT) Loan T This one-time cost -neutral action recognizes the acceptance of a $2,000,000 loan from the Department of Transportation (DOT), increasing both expenses and revenues by a commensurate amount. This loan will help support the Airport Apron Reconstruction Project (AP -16000) funding Phase III of the project. This is a 17 -year loan with annual debt service payments beginning in FY 2022. (Ongoing Costs: $146,307) 0.00 — 2,000,000 2,000,000 71 1 Performance Results This action will ensure that the Airport has adequate resources to support operations and implementation of the Airport Apron Project (AP -16000) in FY 2021. 2 Management and Professionals Group 0.00 (44,325) 0 (44,325) Compensation Reduction This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 378 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS REFUSE FUND Description Public Works provides refuse -related services on a user charge basis to Palo Alto's residents and businesses. The Refuse Fund goals are to minimize waste generation, maximize recycling and reuse to meet and exceed the City's Zero Waste goals, protect the environment by safely collecting and disposing of household hazardous waste, and maintain and monitor the City's closed landfill. Accomplishments • Developed outreach strategies on the new Disposable Foodware Ordinance, provided outreach on requirements to the community, food service establishments, and farmer's markets, and began initial compliance assessments. Required some City events to use reusable foodware as an effort towards the transition. • Developed outreach for the new Deconstruction and Construction Materials Management Ordinance and provided information on requirements to the community and the affected projects. GreenWaste of Palo Alto, the City's collector, began preparations to provide new collection services of smaller containers that will accommodate projects with compact footprints. • Expanded the Household Hazardous Waste Reuse Zone to encourage the public to participate in donating and showcasing the reuse of good quality, gently used household products that would otherwise be discarded. ▪ Continued active engagement with commercial customers by conducting additional inspections and requiring more accurate sorting of commercial recyclables to clean up the City's recyclable materials so that they can be marketed beneficially, and improve waste diversion from landfills. ▪ Implemented a new enhanced curbside Clean Up Day service with a focus on collection of reusable items and recyclable materials. Created and executed an outreach and educational plan to ensure successful communication and transition for the community. • Completed developing and implementing the clean recyclables outreach campaign with the goal for Palo Alto's recyclables to meet new market demands for cleaner material. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 379 PUBLIC WORKS Initiatives ▪ Issue a Request for Proposals (RFP) and select the facility to process Palo Alto's garbage and the disposal destination. This new contract will either continue the current SMaRT Station agreement with the cities of Sunnyvale and Mountain View or lead to a new contract with another independent entity. • Implement a new process for reviewing and approving deconstruction projects required to meet the new Deconstruction and Construction Materials Management Ordinance effective July 2020. ▪ Develop and conduct outreach on the new ordinance requirement effective July 2020 for color coded bags to visually ease sorting of waste materials designed for custodial services. ▪ Assess compliance of food service establishments with the new Foodware Ordinance that bans specific single plastic items and requires compostable alternatives. ▪ Conduct community engagement to obtain input to further expand the Foodware Ordinance to prohibit additional single -use foodware and prioritize more environmentally friendly alternatives. • Conduct community engagement to require food waste prevention and edible food recovery measures for commercial food generators. Goals and Objectives GOAL 1 Minimize waste generation and maximize recycling and reuse programs to achieve zero waste to landfills by 2030. Objectives: ▪ Promote waste prevention, reuse, recycling, and composting through educational programs and outreach to increase public participation. • Reduce waste sent to landfills by implementing new programs and enforcing existing requirements such as the recycling and composting ordinance. • Develop and recommend new innovative policies and programs to minimize and divert waste and other problem materials. GOAL 2 Protect the environment by providing convenient, weekly, and local household hazardous waste collection services to residents and small businesses. Objectives: ▪ Increase participation in the City's Household Hazardous Waste collection services through educational programs and outreach. ▪ Promote the reuse of good household products to residents at the City's Household Hazardous Waste Station. 380 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS GOALS Effectively manage the City's closed landfill to meet all regulatory requirements and minimize the impacts of postclosure maintenance on Byxbee Park users. Objectives: • Perform annual repairs of settled landfill areas to minimize the impacts of periodic larger repairs to park users. • Maintain a comprehensive preventative maintenance program for the landfill environmental control systems. Key Performance Measures NUMBER OF HOUSEHOLDS SERVICED THROUGH THE HOUSEHOLD HAZARDOUS WASTE PROGRAM ON AN ANNUAL BASIS Protect the environment by providing convenient, weekly, and local household hazardous waste collection services to residents and small businesses. Goal Objective Increase participation with the City's Household Hazardous Waste collection services through educational programs and outreach. Promote the reuse of good household products to residents at the City's Household Hazardous Waste Station reuse storage cabinets. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Number of households participating in the Household Hazardous Waste program Description Purpose Status 5,814 5,523 5,800 5,660 5,700 The number of households serviced at the Household Hazardous Waste Station is a direct measurement of the usage of the program which indirectly measures the convenience and public awareness of the program. The more the residents use the Household Hazardous Waste collection program, the less likely unused hazardous products may be disposed in the garbage or down the drain. The City's Household Hazardous Waste Program continues to have one of the highest public participation rates in the state at 18.9% in FY 2019. By comparison, the County of Santa Clara Household Hazardous Waste Program had a participation rate of 5.4%. The State did not generate data for FY 2019, but historically the participation rate has been between 4-5% statewide. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 381 PUBLIC WORKS PERCENTAGE OF HOUSEHOLDS WITH MINI -CAN GARBAGE SERVICE Minimize waste generation and maximize recycling and reuse programs in order to achieve zero waste to landfills by 2030. Promote recycling, composting, and reuse through educational programs and outreach in order to increase public participation. Goal Objective Percent of households with mini - can garbage service Description Purpose Status FY 2018 Actuals 42% FY 2019 Actuals 43% FY 2020 Adopted 45% FY 2020 Estimated 44% FY 2021 Adopted 45% The percentage of households with mini -can garbage service measures reductions in residential garbage generation. As more residents participate in the City's Zero Waste programs and elect smaller mini -can garbage service, their garbage volume will be reduced. This increases the City's diversion from landfill disposal and helps the community meet its zero waste and sustainability goals. Verify if residents are reducing their garbage generation to achieve zero waste to landfills by 2030. Residents continued the trend of downsizing their garbage carts and decreasing the amount of garbage landfilled by diverting their recyclable and compostable materials. PERCENTAGE OF WASTE DIVERTED FROM LANDFILLS Goal Minimize waste generation and maximize recycling and reuse programs to achieve zero waste to landfills by 2030. Objective Promote recycling, composting, and reuse through educational programs and outreach to increase public participation. Percentage of waste diverted from landfills Description Purpose Status FY 2018 Actuals 80% FY 2019 Actuals 82% FY 2020 Adopted 82% FY 2020 Estimated 82% FY 2021 Adopted 84% The percent of waste diverted from landfills is derived from both the amount of waste sent to landfills in the previous calendar year based on data from CalRecyle and the per capita disposal rate in landfills and it measures the effectiveness of Zero Waste programs. Track waste generation and verify the City is meeting its zero waste goals. The City's waste diversion percentage increased to 82% from FY 2018 to FY 2019. This is due to a decrease in the amount of waste landfilled by residents and businesses. 382 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS PERCENTAGE OF COMMERCIAL ACCOUNTS WITH COMPOST SERVICE Minimize waste generation and maximize recycling and reuse programs in order to achieve zero waste to landfills by 2030. Reduce landfilled waste by implementing new programs such as the recycling and composting ordinance approved by Council in January 2016. Goal Objective Percentage of commercial accounts with compost service Description Purpose Status FY 2018 Actuals 97% FY 2019 Actuals 100% FY 2020 Adopted 100% FY 2020 Estimated 100% FY 2021 Adopted 100% The percentage of commercial customers with compost service measures commercial customer participation in the City's Zero Waste programs, and compliance with the Recycling and Composting Ordinance. As more customers order compost service and sort their waste properly, additional food scraps and soiled paper will be diverted from landfills, thereby advancing the City's goals. Tracking commercial customer compost service usage provides insight to levels at which they are reducing garbage generation and verifies compliance with the City's Recycling and Composting Ordinance. Since FY 2019, all commercial accounts have compost service and are compliant with the City's refuse ordinance. The next step is to improve waste sorting and minimize contamination of materials by conducting inspections and waste audits to ensure compliance. As commercial customers improve their waste sorting capabilities, an increase in waste diverted from landfill disposal should be evident. This performance measure will be replaced by a new workload measure that reports on the number of inspections and waste audits conducted to review compliance. Workload Measures Tons of materials recycled or composted Number of inspections performed annually on recycling and compost sorting compliance Number of complete deconstruction of structures FY 2018 Actuals 57,744 NEW NEW FY 2019 Actuals 55,900 FY 2020 Adopted 60,000 FY 2020 Estimated 56,500 FY 2021 Adopted 57,000 NEW NEW NEW 150 NEW NEW NEW 100 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 383 PUBLIC WORKS 3udget Summary FY 2018 Actuals Dollars by Division Refuse Administration 3,771,780 3,486,653 3,652,067 2,261,310 (1,390,757) (38.1)% FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Refuse Collection, Hauling and Disposal: Operations Refuse Collection, Hauling and Disposal: Payment to Green Waste Refuse Solid Waste: Operations Refuse Street Sweeping 4,501,196 15,264,971 20,978,767 29,749,071 24,988,260 (4,760,811) (16.0)% -% 3,476,378 4,195,810 3,710,915 3,731,992 21,077 0.6% 1,286,027 1,324,218 1,488,727 1,429,198 (59,529) (4.0)% 29,985,449 38,600,779 32,410,760 (6,190,019) (16.0)% Total 28,300,353 Dollars by Category Salary & Benefits Healthcare 226,357 252,782 293,415 290,025 (3,390) (1.2)% Other Benefits 44,742 49,162 53,426 56,321 2,895 5.4% 41,215 39,379 43,990 45,134 1,144 2.6% Pension 409,227 445,520 650,896 591,767 (59,129) (9.1)% 380,709 219,089 225,662 214,998 (10,663) (4.7)% Salary 1,551,087 1,448,451 1,699,773 1,685,997 (13,777) (0.8)% 29,936 41,152 60,728 56,263 (4,465) (7.4)% Total Salary & Benefits 2,683,274 2,495,535 3,027,889 2,940,505 (87,385) (2.9)% Allocated Charges 1,841,980 1,974,933 1,863,189 1,648,930 (214,259) (11.5)% Contract Services 6,103,675 6,921,151 6,355,681 6,497,221 141,540 2.2% 155,637 196,299 195,864 196,509 645 0.3% Facilities & Equipment 3,000 3,000 -% General Expense 29,660 14,730 112,275 112,275 - -% Operating Transfers -Out 62,283 42,586 55,100 20,125 (34,975) (63.5)% 2,277,759 2,191,696 2,161,066 1,013,231 (1,147,835) (53.1)% Supplies & Material 86,334 92,335 142,805 142,805 -% 73,000 37,250 (35,750) (49.0)% Utility Purchase 15,059,752 16,056,182 24,610,909 19,798,909 (4,812,000) (19.6)% Overtime Retiree Medical Workers' Compensation Debt Service Rents & Leases Transfer to Infrastructure Total Dollars by Expense Category 28,300,353 29,985,449 38,600,779 32,410,760 (6,190,019) (16.0)% 384 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary I Revenues Charges for Services Charges to Other Funds Net Sales Other Revenue Other Taxes and Fines Rental Income Return on Investments Total Revenues FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 70,804 65,897 34,000 34,000 251,309 160,552 160,552 160,552 31,202,240 31,070,886 30,662,000 30,732,000 70,000 3,186,411 2,704,985 2,311,000 2,311,000 (1,300) (425) (66,129) 428,095 612,423 517,800 489,100 (28,700) (5.5)% 35,071,430 34,614,317 33,685,352 33,726,652 41,300 0.1% FY 2021 Change $ FY 2021 Change % Positions by Division Refuse Administration 0.43 0.43 0.43 0.43 Refuse Collection, Hauling and 1.00 1.00 1.00 1.00 Disposal: Operations Refuse Solid Waste: Operations 11.54 11.54 11.82 11.82 Refuse Street Sweeping 2.68 2.68 2.68 2.68 Total 15.65 15.65 15.93 15.93 Staffing Account Specialist Accountant Job Classification Assistant Director Public Works Deputy Chief/Fire Marshal FY 2018 Actuals 0.10 0.10 0.35 0.03 Environmental Specialist 2.00 Facilities Maintenance Lead 1.00 Hazardous Materials Inspector 0.02 Landfill Technician 1.00 Management Analyst 0.43 Manager Environmental Control Program Manager Maintenance Operations 3.00 FY 2019 Actuals 0.10 0.10 0.35 0.03 2.00 1.00 0.02 1.00 0.43 3.00 FY 2020 Adopted Budget 0.10 0.10 0.35 0.03 2.00 1.00 0.02 1.00 0.43 3.00 FY 2021 Adopted Budget 0.10 0.10 0.35 0.03 2.00 1.00 0.02 1.00 0.43 3.00 FY 2021 Change FTE - % - % - % FY 2021 Salary 7,827 9,707 71,531 6,455 231,795 107,453 3,290 107,453 48,910 400,275 0.46 0.46 0.46 0.46 - 60,881 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 385 PUBLIC WORKS Staffing 11N - Job Classification Manager Solid Waste Program Assistant I Project Manager Senior Accountant FY 2018 Actuals 1.00 1.00 0.20 0.10 Senior Management Analyst 0.08 Street Maintenance Assistant 1.00 Street Sweeper Operator 1.63 Zero Waste Coordinator 1.00 FY 2019 Actuals 1.00 1.00 0.20 0.10 0.08 1.00 1.63 1.00 FY 2020 Adopted Budget 1.00 1.00 0.20 0.10 0.08 1.00 1.63 1.00 FY 2021 Adopted Budget 1.00 1.00 0.20 0.10 0.08 1.00 1.63 1.00 FY 2021 Change FTE FY 2021 Salary 161,096 79,560 22,156 13,237 10,899 73,382 142,363 101,650 Sub -total: Full -Time Equivalent 14.50 14.50 14.50 14.50 - 1,659,921 Positions Temporary/Hourly 1.15 1.15 1.43 1.43 - 70,743 Total Positions 15.65 15.65 15.93 15.93 - 1,730,664 386 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation Prior Year Budget 15.93 38,600,779 33,685,352 4,915,427 One -Time Prior Year Budget Adjustments Refuse Hauling Fleet Replacement One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Refuse Hauling Fleet Replacement Residential and Commercial Refuse Hauling and Processing Services Rents & Leases Return on Investments Debt Service: City of Sunnyvale Solid Waste Revenue Refunding Bonds Transfers to Technology Fund (Citywide Technology CIP) Transfers to Infrastructure Fund (City facilities CIP) Postclosure Landfill Rent General Fund Cost Allocation Plan Communication Services Allocated Charges General Liability Insurance Allocated Charges Industrial Waste Discharge Fee Allocated Charge Information Technology Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Refuse Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities - (7,100, 000) — (7,100,000) (7,100,000) — (7,100,000) 2,436 2,436 - 1,850,000 1,850,000 543,540 543,540 64,645 — 64,645 645 (34,975) (35,750) (1,212,480) (71,244) 4,850 10,684 3,423 (80,890) 5,141 (5,259) 41 (12,588) (68,418) (4,465) 959,336 (28,700) 28,700 645 (34, 975) (35,750) (1,212,480) (71,244) 4,850 10,684 3,423 (80,890) 5,141 (5,259) 70,000 (70,000) 41 (12, 588) (68,418) 41,300 (4,465) 918,036 Total FY 2021 Base Budget 15.93 32,460,115 33,726,652 (1,266,537) Budget Adjustments PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 387 PUBLIC WORKS 3udget 'Reconciliation W - Positions Expenditures Net Refuse Fund 1 Landfill Compressor Replacement 2 Zero Waste Program Implementation 3 Management and Professionals Group Compensation Reduction 25,000 11,000 (85,355) 25,000 11,000 (85,355) Total Budget Adjustments (49,355) (49,355) Total FY 2021 Adopted Budget 15.93 32,410,760 33,726,652 (1,315,892) 3udget Adjustments nI1VV ItCUSC lit 41111k:._ derle1116 02 4,11 141131164 gitirkrailh q° A, 6_ ply MV'T�, ~ Budget Adjustments Positions Net Expenditures Revenues I Refuse Fund 1 Landfill Compressor Replacement 0.00 25,000 25,000 This one-time action provides funding for the replacement of the landfill compressor nearing the end of its useful life. The compressor is used at the landfill to comply with federal, state, and local requirements for landfill leachate extraction operations. The compressor is a vital part of the landfill leachate collection system, supplying air to power the 24 pneumatic pumps within the leachate extraction wells. (Ongoing costs: $0) Performance Results This action ensures the necessary equipment is available to maintain compliance with federal, state, and local requirements and proper operation at the City's landfill. 2 Zero Waste Program Implementation 0.00 I 11,000 This action increases the expense budget to fund initiatives identified in the City's Zero Waste Plan. Funding will support the continuation and expansion of the ReThink Disposable program, which provides tools to identify and redesign wasteful practices, products, and packaging, and promotes the purchase more environmentally preferred products. (Ongoing costs: $11,000) Performance Results © © 0 388 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Adjustments Budget Adjustment 1 Positions Expenditures � Revenues Net Refuse Fund This action aligns funding with the City's Zero Waste goals outlined in the Zero Waste Plan. 3 Management and Professionals Group 0.00 Compensation Reduction (85,355) I 0 (85,355) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. PUBLIC WORKS • ITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 389 PUBLIC WORKS STORMWATER MANAGEMENT FUND Description The City's stormwater management services are funded through user fees charged to property owners of developed parcels in Palo Alto. Stormwater management activities include inspection, clean-up, operation, maintenance, replacement of and improvement to the storm drainage system to ensure adequate local drainage and reduce stormwater runoff impacts consistent with the 2015 Stormwater Master Plan and the 2019 Green Stormwater Infrastructure Plan. The Fund also provides litter reduction, urban pollution prevention programs, commercial and residential rebates, and flooding emergency -response services with the goals of reducing stormwater runoff and maintaining stormwater quality protection for discharge to creeks and San Francisco Bay. Accomplishments • Completed design of the Loma Verde Avenue Trunk Line Improvements project (SD -19000), the first of the 13 high -priority projects included in the 2017 Storm Water Management Fee ballot measure. • Awarded a design contract for three Capital Improvement Projects identified in the 2017 Storm Water Management Fee ballot measure including the Corporation Way System Upgrades and Pump Station project (SD -21000), West Bayshore Road Pump Station project (SD -20000), and West Bayshore Road Trunk Line Improvements project (SD -23000). ▪ Completed design for the Oregon Expressway Box Culvert Rehabilitation Project. ▪ Finalized the Green Stormwater Infrastructure Plan. Initiatives ▪ Continue implementing the 13 high -priority stormwater management projects outlined in the Storm Water Management Fee ballot measure passed in April 2017. 390 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS • Continue to assist the San Francisquito Creek Joint Powers Authority (SFCJPA) with public outreach, environmental documents, and plan review for the San Francisquito Creek: Upstream to Highway 101 project. ▪ Continue planning efforts for the Newell Road Bridge Replacement project, which will improve multi -modal access and increase creek channel capacity to contain future 70 -year storm event flows. • Continue to assist Valley Water with the public outreach associated with the Flood Basin Tide Gate replacement project. • Implement the Green Stormwater Infrastructure (GSI) Plan recommendations, including understanding and improving the maintenance of GSI features, developing GSI design standards, and researching potential funding options. ▪ Implement the City's Long -Term Trash Reduction Plan to achieve 100% reduction by July 2022 in the volume of trash entering local creeks and San Francisco Bay through local storm drains. Goals and Objectives GOAL 1 Effectively manage the storm drain system to ensure adequate local drainage. Objectives: • Systematically clean storm drain lines to prevent backups and ponding on City streets. • Complete the 13 high -priority stormwater management projects, Green Stormwater Infrastructure Plan improvements, and the Storm Drain Blue Ribbon Committee's recommendation for stormwater management programs outlined in the Storm Water Management Fee ballot measure passed in April 2017. • Assist with inter -agency projects such as the San Francisquito Creek: Upstream to Highway 101 project, Flood Basin Tide Gate Replacement project, and planning for Sea Level Rise through the SAFER feasibility report and Valley Water's Shoreline Study Phase II Study. GOAL 2 Reduce stormwater runoff and protect the quality of waters discharged to creeks and San Fran- cisco Bay. Objectives: • Continue to comply with the 2015 Municipal Regional Stormwater Discharge Permit. • Conduct regular inspections of commercial facilities, industrial facilities, and construction sites to ensure compliance with stormwater discharge regulations. ▪ Develop ordinance requirements that improve water quality during construction and at existing facilities as required in the Municipal Regional Stormwater Discharge Permit. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 391 PUBLIC WORKS Key Performance Measures CITIZEN SURVEY - STORM DRAIN Goal Effectively manage the storm drainage system to ensure adequate local drainage. Objective Percent of respondents rating the quality of storm drainage as good or excellent Description Purpose Status Measure ratings from residents on the quality of storm drainage. FY 2018 Actuals 71% FY 2019 Actuals N/A" FY 2020 Adopted 80% FY 2020 Estimated 80% FY 2021 Adopted N/A"' The City participates in the National Citizen Survey (NCS), which asks residents to rate their perception of storm drain management. The NCS is an annual survey of approximately 500 jurisdictions in the United States whose residents evaluate local government services and give their opinion about the quality of life in the community. Obtain feedback from residents on whether storm drains are being maintained adequately in order to determine if the program's resources are appropriate. The quality of storm drainage has been achieving between 71 % and 81 % satisfaction since FY 2016. The City is estimating to achieve and maintain an 80% rating. *The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for the FY 2022 budget process. PERCENT OF INSPECTIONS IN COMPLIANCE WITH STORMWATER REGULATIONS Goal Objective Percent of inspections in compliance with stormwater regulations Description Purpose Status Reduce stormwater runoff and protect the quality of waters discharged to creeks and San Francisco Bay. Conduct regular inspections to ensure compliance. FY 2018 Actuals 92% FY 2019 Actuals 89% FY 2020 Adopted 85% FY 2020 Estimated 90% FY 2021 Adopted 90% Watershed Protection staff conducts a comprehensive program of public outreach and education, site inspections, and enforcement actions to prevent pollutants from contaminating stormwater runoff. Inspections are conducted at industrial facilities, commercial facilities, construction sites, and other outdoor activities. Stormwater pollution prevention activities are required by the Municipal Regional Stormwater Discharge Permit issued to the City by the San Francisco Bay Regional Water Quality Control Board. Controlling pollutant discharges to the storm drain system helps to improve the water quality in local creeks and San Francisco Bay. Watershed Protection staff conducts inspections at commercial and industrial facilities, food facilities, construction projects, and stormwater treatment measures, and investigates reported illicit discharges to ensure compliance with the City's stormwater regulations. Staff anticipates attaining a compliance rate of 90% in FY 2021 based on the inspections conducted and associated compliance to date. 392 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Number of 2005 ballot measure capital projects completed - as of June 30* NUMBER OF CAPITAL PROJECTS ON THE STORM WATER MANAGEMENT FEE BALLOT MEASURE COMPLETED Goal Effectively manage the stormwater system to ensure adequate local drainage. Manage a capital improvement program that utilizes annual revenues and staff resources in an efficient manner to complete capital improvement projects resulting from Stormwater Management ballot measures. Objective FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 FY 2021 Estimated Adopted Number of 2017 ballot measure capital projects completed - as of June 30 Description Purpose Status 6 0 7 7 7 7 0 0 0 1 Public Works Engineering Services staff manages a capital improvement program to increase the capacity and maintain the condition of the storm system infrastructure in accordance with Storm Ballot Measures. The storm drain system must be improved and maintained on a regular basis so that it will continue to provide service to the community. Thirteen capital improvement projects were identified in the 2017 Storm Water Management Fee ballot measure. Construction for the first project in the 2017 Storm Water Management Fee ballot measure is scheduled to be completed in Summer 2020. Design for three of the thirteen projects will begin early FY 2021, and the construction of these projects will be phased over FY 2021 through FY 2024. *All seven projects in the 2005 ballot measure have been completed, therefore this Performance Measure this will be deleted in the FY 2022 Budget Document. Workload Measures Number of inspections performed annually (Stormwater Management) FY 2018 Actuals 532 FY 2019 Actuals 671 FY 2020 Adopted 800 FY 2020 Estimated 439 FY 2021 Adopted 600 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 393 PUBLIC WORKS 3udget Summary Dollars by Division FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % CIP Stormwater Management Fund 5,551,183 1,675,333 4,505,895 4,184,617 (321,278) (7.1)% Stormwater Environmental 935,125 982,027 1,156,254 1,224,907 68,653 5.9% Compliance Stormwater Management 1,768,546 1,394,876 1,934,221 1,993,755 59,535 3.1% Administration Stormwater Operations and Maintenance Stormwater Systems Improvement Flood Control Total 1,425,879 1,425,569 1,646,677 1,765,337 118,660 7.2% 192,330 206,232 701,845 703,368 1,523 0.2% 9,873,062 5,684,038 9,944,891 9,871,984 (72,907) (0.7)% Dollars by Category Salary & Benefits Healthcare 236,012 210,877 242,292 252,378 10,086 4.2% Other Benefits 35,186 37,409 43,837 47,825 3,988 9.1% Overtime 17,655 35,883 52,032 53,385 1,353 2.6% Pension 406,962 404,257 605,953 578,952 (27,001) (4.5)% Retiree Medical 66,895 144,909 149,256 146,627 (2,629) (1.8)% Salary 1,287,106 1,271,169 1,512,516 1,598,242 85,727 5.7% Workers' Compensation 94,896 28,410 53,111 49,206 (3,905) (7.4)% Total Salary & Benefits 2,144,712 2,132,914 2,658,997 2,726,615 67,618 2.5% Allocated Charges 1,089,398 969,252 1,059,274 1,297,963 238,689 22.5% Contract Services 474,599 376,615 907,899 915,379 7,480 0.8% Debt Service 298,580 258,899 949,300 949,300 - -% Facilities & Equipment 7,881 - 7,621 7,621 - -% General Expense 11,059 12,164 145,960 146,960 1,000 0.7% Operating Transfers -Out 34,722 25,403 36,700 4,550 (32,150) (87.6)% Rents & Leases 47,482 45,211 50,468 25,031 (25,437) (50.4)% Supplies & Material 63,949 87,720 94,726 93,726 (1,000) (1.1)% Transfer to Infrastructure 330,000 330,000 - - - -% Capital Improvement Program 5,370,680 1,445,861 4,033,947 3,704,840 (329,107) (8.2)% Total Dollars by Expense Category 9,873,062 5,684,038 9,944,891 9,871,984 (72,907) (0.7)% 394 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary I Revenues Charges for Services Charges to Other Funds Net Sales Other Revenue Other Taxes and Fines Return on Investments Total Revenues Positions by Division CIP Stormwater Management Fund Stormwater Environmental Compliance Stormwater Management Administration Stormwater Operations and Maintenance Stormwater Systems Improvement Flood Control Total Staffing Job Classification Account Specialist Accountant Administrative Associate I Administrative Associate II Administrative Associate I II Assistant Director Public Works Associate Engineer Electrician Electrician -Lead Engineer FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 53,980 52,779 117,888 117,888 - 1,806 - - - 6,911,617 7,194,560 7,449,209 7,635,439 186,230 2.5% 129 44 - - - -% 2,200 1,900 2,500 2,500 -% 153,636 126,469 225,900 153,400 (72,500) (32.1)% 7,121,562 7,377,559 7,795,497 7,909,227 113,730 1.5% FY 2021 Change % - % - % 2.37 2.37 2.37 2.37 - -% 4.59 4.59 4.59 4.59 - % 0.80 0.80 0.80 0.80 - -% 5.00 5.00 5.00 5.00 -% 0.79 13.55 FY 2018 Actuals 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 0.90 0.79 13.55 FY 2019 Actuals 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 0.90 0.79 13.55 FY 2020 Adopted Budget 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 0.90 0.79 13.55 FY 2021 Adopted Budget 0.10 0.05 0.10 0.15 0.10 0.30 1.19 0.10 1.00 0.90 FY 2021 Change FTE - % _OA FY 2021 Salary 7,827 4,854 7,218 11,759 8,403 59,172 148,438 11,188 119,808 126,454 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 395 PUBLIC WORKS Staffing Job Classification Engineering Technician III Equipment Operator Heavy Equipment Operator Heavy Equipment Operator -Lead FY 2018 Actuals 0.25 0.54 0.90 1.15 Industrial Waste Inspector 0.40 Industrial Waste Investigator 1.00 Management Analyst 0.30 FY 2019 Actuals 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2020 Adopted Budget 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2021 Adopted Budget 0.25 0.54 0.90 1.15 0.40 1.00 0.30 FY 2021 Change FTE FY 2021 Salary 24,638 47,253 94,255 128,785 38,954 109,408 34,409 Manager Environmental Control 0.70 0.70 0.70 0.70 - 90,709 Program Manager Maintenance Operations 0.50 0.50 0.50 0.50 - 67,309 Manager Watershed Protection 0.20 0.20 0.20 0.20 32,240 Program Assistant II 0.60 0.60 0.60 0.60 51,293 Project Engineer 0.83 0.83 0.83 0.83 125,509 Project Manager 0.55 0.55 0.55 0.55 - 66,238 Senior Accountant 0.10 0.10 0.10 0.10 - 13,237 Senior Engineer 0.76 0.76 0.76 0.76 - 119,256 Senior Industrial Waste Investigator 0.10 0.10 0.10 0.10 12,474 Surveyor, Public Works 0.12 0.12 0.12 0.12 12,912 Technologist 0.30 0.30 0.30 0.30 46,600 Traffic Controller Maintainer I 0.06 0.06 0.06 0.06 - 5,153 Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions 13.35 13.35 13.35 13.35 - 1,625, 752 0.20 0.20 0.20 0.20 - 8,320 13.55 13.55 13.55 13.55 - 1,634,072 396 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation Prior Year Budget 9,944,891 7,795,497 2,149,394 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Return on Investments Contractual Adjustments Rents & Leases Expenditures Stormwater Rate Adjustment (CPI increase of 2.5%) Transfers to Technology Fund (Citywide Technology CIP) Capital Improvement Program General Fund Cost Allocation Plan Communication Services Allocated Charge Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges — I 123,169 7,480 (25,437) (32,150) (330,941) 147,166 2,250 (50,661) 9,345 (1,833) (3,945) 234,017 (95, 816) (3,905) (72,500) 123,169 72,500 7,480 (25,437) 175,960 (175,960) (32,150) - (330, 941) 147,166 2,250 (50, 661) 9,345 (1,833) (3,945) 10,270 (10,270) 234,017 (95,816) (3,905) Adjustments to Costs of Ongoing Activities (21,261) 113,730 (134,991) Total FY 2021 Base Budget 13.55 9,923,630 7,909,227 2,014,403 Budget Adjustments 1 Management and Professionals Group Compensation Reduction (51,646) (51,646) Total Budget Adjustments Total FY 2021 Adopted Budget — (51,646) 13.55 9,871,984 7,909,227 (51,646) 1,962,757 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 397 PUBLIC WORKS 3udget Ac justments 1 Management and Professionals Group Compensation Reduction Budget Adjustments Positions Expenditures Revenues Net Stormwater Management Fund 0.00 (51,646) 0 (51,646) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 0 This action contributes to cost containment strategies in FY 2021 398 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS VEHICLE REPLACEMENT AND MAINTENANCE FUND Description The Vehicle Replacement and Maintenance Fund is an internal service fund providing fleet management services for City vehicles and heavy equipment. Timely maintenance and replacement of vehicles and equipment ensures safe, reliable, and efficient use of resources. This program also provides for safe, efficient fuel storage and dispensing facilities while pursuing alternative fuel technologies, and minimizing the pollution and carbon footprint generated by the City's vehicle fleet. Accomplishments ▪ Delivered 23 vehicles and 4 pieces of equipment in FY 2020 to maintain safe, reliable, and efficient use of resources. ▪ Developed a 5 -year vehicle replacement plan in the Police Department to achieve 15% hybrid units out of Police vehicles assigned. • Identified 4 trailer mounted portable air compressors as surplus, helping to reduce the size of the City Fleet. ▪ Awarded a contract for AssetWorks GPS monitoring services. Initiatives • Perform a review of underutilized vehicles annually and remove vehicles from the fleet that do not meet the minimum usage requirements per policy. ▪ Continue to reduce the backlog of older vehicles that need to be replaced with more efficient vehicles/equipment to reduce the City's carbon footprint. ▪ Continue increasing the number of electric and alternative fuel vehicles/equipment in the fleet where possible. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 399 PUBLIC WORKS • Continue to implement recommendations from the fleet cost recovery study. ▪ Award a contract for citywide generator maintenance and repair services. • Conduct an electric vehicle charger and location study to determine future locations of electric vehicle chargers at City facilities in support of Fleet electrification initiatives. • Evaluate the fleet electrification pilot program of Plug-in Hybrid electric pick-up trucks on performance, operational compatibility, maintenance and repair needs, fuel efficiency, product availability, and total cost of ownership. ▪ Continue implementation of the updated Vehicle and Equipment Use, Maintenance, and Replacement Policy, including the efforts to evaluate and limit idling time for City vehicles. Goals and Objectives GOAL 1 Ensure the City's vehicles, equipment, and fuel storage/dispensing facilities are safe, reliable, and energy efficient to reduce Greenhouse Gas (GHG) emissions. Objectives: ▪ Continue seeking opportunities to increase the number of electric and alternative fuel vehicles/equipment, thereby reducing fuel consumption. • Continue providing staff training for safe operation and maintenance of vehicles/equipment and fueling stations. • Annually review and update the 5 -year vehicle/equipment replacement Capital Improvement Program to maximize cost-effectiveness, reduce GHG emissions, and explore opportunities to reduce the fleet. GOAL 2 Provide cost-effective preventive maintenance and repair services. Objectives: ▪ Perform fleet utilization analyses annually to ensure the City has an appropriately sized fleet. ▪ Continue replacing the oldest, least efficient vehicles first; replacing with electric or alternative fuel vehicles when possible. • Continue providing staff education and training. • Annually assess rates for Compressed Natural Gas (CNG), shop and commercial maintenance and repairs, and parts to ensure cost -recovery. 400 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Key Performance Measures PERCENT OF NON -EMERGENCY VEHICLES IN FLEET THAT ARE USING ALTERNATE FUEL OR TECHNOLOGIES Ensure the City's vehicles, equipment, and storage/dispensing facilities are safe, reliable, and energy efficient. Objective Increase the usage of alternative fuels. Goal Percent of alternative fuel consumed by non -emergency vehicles Description Purpose Status FY 2018 Actuals 32% FY 2019 Actuals 1 43% FY 2020 Adopted 52% FY 2020 Estimated 44% FY 2021 Adopted 50% The City fleet is comprised of vehicles and equipment that are primarily gasoline, diesel, and compressed natural gas (CNG). To move toward lower emissions goals, the City needs to increase the use of alternative fuel vehicles/equipment. The City's fleet used a total of 345,932 gallons of fuel in FY 2019 among unleaded, diesel, and natural gas. It used 149,129 gallons of compressed natural gas, which equates to 43% of alternative fuel use. Actuals for FY 2020 and Estimates for FY 2021 will see an increase due to Green Waste adding nine CNG vehicles that refuel at the City of Palo Alto. Workload Measures Number of vehicles and equipment that are alternatively fueled or electric FY 2018 Actuals 51 FY 2019 Actuals 46 FY 2020 Adopted 51 FY 2020 Estimated 50 FY 2021 Adopted 55 Number of vehicle repair and preventative maintenance work 3,674 3,307 3,400 3,300 3,200 orders Total number of vehicles and equipment in the City's fleet 557 558 562 558 554 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 401 PUBLIC WORKS Dollars by Division Vehicle Operations and Maintenance 3udget Summary FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 5,399,075 5,264,698 7,389,956 6,676,769 (713,188) (9.7)% Vehicle Replacement and Additions 5,318,926 3,490,206 6,685,148 6,165,275 (519,873) (7.8)% Total 10,718,000 8,754,905 14,075,104 12,842,044 (1,233,061) (8.8)% Dollars by Category Salary & Benefits Healthcare 302,081 318,880 335,879 281,327 (54,552) (16.2)% Other Benefits 48,298 49,631 49,456 54,031 4,575 9.2% Overtime 9,277 14,935 59,592 61,141 1,549 2.6% Pension 394,672 430,641 577,445 532,217 (45,228) (7.8)% Retiree Medical 91,489 148,359 152,810 145,803 (7,007) (4.6)% Salary 1,296,957 1,365,098 1,447,511 1,422,653 (24,858) (1.7)% Workers' Compensation 69,959 38,855 57,764 53,517 (4,247) (7.4)% Total Salary & Benefits 2,212,733 2,366,399 2,680,456 2,550,689 (129,768) (4.8)% Allocated Charges 1,287,670 1,415,931 1,262,711 1,176,366 (86,345) (6.8)% Contract Services 437,272 379,511 517,748 623,940 106,192 20.5% Facilities & Equipment 126,894 (1,550) - -% General Expense 82,805 78,267 70,630 70,630 -% Operating Transfers -Out 38,394 142,786 184,769 120,569 (64,200) (34.7)% Rents & Leases 188,086 194,454 202,467 337,068 134,600 66.5% Supplies & Material 1,218,310 1,028,759 1,427,924 1,464,938 37,014 2.6% Transfer to Infrastructure - - 1,460,000 745,000 (715,000) (49.0)% Capital Improvement Program 5,125,837 3,150,348 6,268,399 5,752,845 (515,554) (8.2)% Total Dollars by Expense Category 10,718,000 8,754,905 14,075,104 12,842,044 (1,233,061) (8.8)% Revenues Charges to Other Funds 9,305,728 8,875,562 9,192,300 7,285,440 (1,906,860) (20.7)% Operating Transfers -In 26,326 - - 50,000 50,000 -% Other Revenue 346,482 429,638 155,000 155,000 -% 402 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary Return on Investments Total Revenues FY 2018 Actuals 203,870 9,882,406 FY 2019 Actuals 220,163 9,525,363 FY 2020 Adopted Budget 260,000 9,607,300 7,729,540 (1,877,760) (19.5)% FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 239,100 (20,900) Positions by Division Vehicle Operations and 15.86 14.28 13.61 13.61 Maintenance Vehicle Replacement and Additions 1.40 2.25 2.40 2.40 Total Staffing Job Classification Administrative Associate Ill Assistant Director Public Works Assistant Fleet Manager 17.26 16.53 16.01 16.01 FY 2018 Actuals 1.00 0.25 1.00 FY 2019 Actuals 1.00 0.25 1.00 FY 2020 Adopted Budget 0.25 1.00 FY 2021 Adopted Budget 0.25 1.00 FY 2021 Change FTE (8.0)% - % - % - Ok FY 2021 Salary 46,930 112,882 Equipment Maintenance Service 2.00 2.00 2.00 2.00 141,690 Person Fleet Services Coordinator 2.00 2.00 1.00 1.00 - 90,459 Management Analyst 0.20 0.20 0.20 0.20 - 25,172 Management Assistant 1.00 1.00 91,312 Manager Fleet 1.00 1.00 1.00 1.00 138,382 Motor Equipment Mechanic II 6.00 6.00 6.00 5.00 (1.00) 502,008 Motor Equipment Mechanic II - - - 1.00 1.00 100,402 (Freeze) Motor Equipment Mechanic -Lead 2.00 2.00 2.00 2.00 - 214,822 Project Manager 1.00 1.00 1.00 1.00 108,077 Senior Management Analyst 0.08 0.08 0.08 0.08 10,899 Sub -total: Full -Time Equivalent 16.53 16.53 15.53 15.53 - 1,583,035 Positions Temporary/Hourly 0.73 - 0.48 0.48 - 21,935 Total Positions 17.26 16.53 16.01 16.01 - 1,604,970 This budget includes position freezes that reduce the funding equivalent to holding a position va- cant. These positions are identified with "(Freeze)" following the job classification title in the depart- ment section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 403 PUBLIC WORKS Prior Year Budget 16.01 14,075,104 9,607,300 3udget Reconciliation Net Vehicle Replacement and Maintenance Fund 4,467,804 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Rents & Leases Expenditure Vehicle Parts and Fuel Contractual and Managed Services Return on Investments Contract Services Alignment Transfer to Infrastructure Fund (Citywide Facilities CIP) Capital Improvements Program Transfer to Technology Fund (Citywide Technology CIP) General Fund Cost Allocation Plan Communication Services Allocated Charges Industrial Waste Discharge Fee Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 48,903 134,600 41,566 1,640 (715,000) - 1,267,759 (64,200) (30,320) 1,150 582 (97,016) 10,163 (488) (9,204) 41,476 (4,247) 627,364 48,903 134,600 41,566 (20,900) 20,900 1,640 (715, 000) - 1,267,759 (64,200) (30,320) 1,150 582 (97,016) 10,163 (488) (9,204) 41,476 235,800 (235,800) 214,900 (4,247) 412,464 Total FY 2021 Base Budget 16.01 14,702,468 9,822,200 4,880,268 Budget Adjustments 404 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Budget Adjustments 3udget 'Reconciliation 1 Vehicle Maintenance & Replacement Services Reduction 2 Electric Vehicle Charger and Location Study 3 Management and Professionals Group Compensation Reduction Total Budget Adjustments Total FY 2021 Adopted Budget i Positions Expenditures (1,913,067) 100,000 (47,357) (1,860,424) 16.01 12,842,044 Revenues (2,142, 660) 50,000 (2,092,660) 7,729,540 Net Vehicle Replacement and Maintenance Fund 229,593 50,000 (47,357) 232,236 5,112,504 3udget Adjustments Positions Net Vehicle Replacement and Maintenance Expenditures Revenues Fund 1 Vehicle Maintenance & Replacement Services Reduction 0.00 (1,913,067) (2,142,660) ` 229,593 This action will reduce vehicle replacements and maintenance resources, including 1.0 Motor Equipment Mechanic II, for FY 2021 and FY 2022. The amount of annual replacement funding will be reduced by approximately 50% in the FY 2021 and FY 2022 vehicle replacement capital projects. Vehicle maintenance work capacity will be impacted as a result of the Motor Equipment Mechanic II reduction. Allocated charges revenue from other City funds for vehicle maintenance and replacement services will also be reduced as a result of service reductions. (Ongoing net costs: $229,539) Performance Results © O This will limit vehicle replacements to regulatory or serious maintenance issues, resulting in an increase in backlog and the need to catch up to the replacement schedule in the future. PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 405 PUBLIC WORKS 3udget Adjustments Budget Adjustments Positions Expenditures Revenues Net Vehicle Replacement and Maintenance Fund 2 Electric Vehicle Charger and Location Study 100,000 50,000 This one-time action adds funding to conduct a study assessing current and potential future locations of electric vehicle chargers at City facility sites. The study will also explore the standardization of chargers to support fueling for existing and new City vehicles. With the expansion of electric vehicles in the City's fleet, the number of chargers must also expand. Funding for this study is supported by the Vehicle Replacement and Maintenance Fund Reserve ($50,000) and the Utilities Department ($50,000) through a transfer from the Electric Fund. A corresponding action is proposed in the Electric Fund. (Ongoing costs: $0) Performance Results © 0 This action supports the Sustainability and Climate Action Plan goal of expanding the electric vehicle deployment of the City's fleet. 3 Management and Professionals Group Compensation Reduction (47,357) 0 (47,357) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 406 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS WASTEWATER TREATMENT FUND Description The City's Regional Water Quality Control Plant (RWQCP) operates 24 hours a day to treat all wastewater from the City of Palo Alto and the City's five partner agency regional service areas (Mountain View, Los Altos, Los Altos Hills, Stanford, and East Palo Alto Sanitary District) to ensure compliance with regulations protecting the San Francisco Bay and the environment. Accomplishments • Began operation of the sludge dewatering and truck loadout facility (WQ-14001). • Successfully retired the two sludge -burning incinerators in Fall 2019. • Completed the Northwest County Recycled Water Strategic Plan, which assessed the feasibility of the reuse options for the RWQCP's effluent including non -potable reuse, indirect potable reuse, and direct potable reuse. ▪ Signed an agreement with Valley Water and Mountain View to secure funding for the Advanced Water Purification Facility (WQ-19003) to produce enhanced recycled water as payment to reserve half of the wastewater flows for a larger regional purification plant managed by Valley Water. • Completed environmental review of the Advanced Water Purification Facility (WQ-19003). Initiatives ▪ Begin construction of the Primary Sedimentation Tank Rehabilitation project (WQ-14003) and the Outfall Line Construction project (WQ-19000). ▪ Initiate design of the Advanced Water Purification Facility (WQ-19003), a 1-2 million gallons per day (MGD) salt removal facility, which will include microfiltration/ultrafiltration and reverse osmosis treatment systems. • Initiate the development of a One Water Plan in partnership with the Utilities Department. PUBLIC WORKS • ITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 407 PUBLIC WORKS Goals and Objectives GOAL 1 Protect the environment and the public's health. Objectives: • Conduct regular inspections of commercial permittees to ensure compliance with all regulations. ▪ Complete new capital improvement projects to ensure the RWQCP's reliability. • Conduct ongoing operation and maintenance. GOAL 2 Operate high quality, cost-effective, and visually neutral facilities. Objectives: • Mitigate cost increases through effective maintenance of equipment and analysis of potential operational efficiencies. • Follow the Palo Alto Baylands Nature Preserve Design Guidelines and the Architectural Review Board's recommendation when planning and constructing new facilities and buildings. GOAL 3 Expand recycled water use. Objectives: • Improve recycled water quality through source control of salt water intrusion into sanitary sewers and potential future advanced treatment for recycled water. • Conduct ongoing research on potential regional expansion of recycled water usage in the RWQCP's service areas. 408 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS Key Performance Measures DISCHARGE TESTS IN COMPLIANCE Goal Protect the environment and the public's health. Objective Maintain 99% discharge test compliance. FY 2018 Actuals FY 2019 FY 2020 Actuals Adopted FY 2020 Estimated FY 2021 Adopted Percent of wastewater treatment discharge tests in compliance Description Purpose Status 100% 100% 99% 99% 99% The plant has numerous effluent limits and requirements to meet as part of its National Pollutant Discharge Elimination System (NPDES) discharge permit for water discharged to the south San Francisco Bay. 99% or higher compliance with these limits is the goal of the RWQCP. Measure compliance of the RWQCP treatment system's final water discharged compared to the limits established in the NPDES discharge permit. Over 99% of discharge tests are expected to be in compliance with discharge limits in FY 2020 and FY 2021. PERCENT OF PASSED FISH ACUTE TOXICITY BIOASSAY TESTS Goal Protect the environment and the public's health. Objective Obtain fish acute toxicity bioassays with 100% survival. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Fish toxicity test (percent survival) 100% 100% 100% Description Percent of acute fish toxicity bioassay tests passed. Fish survival in the bioassay is an indicator that the RWQCP discharges to the Bay are safe for receiving water marine life. In FY 2019, all acute toxicity bioassay tests passed with 100% survival rate. This trend is expected to continue in FY 2020 and FY 2021. Purpose Status 100% 1 100% Workload Measures Millions of gallons of recycled water delivered Number of inspections performed annually (Wastewater Treatment) Millions of gallons processed by the Palo Alto Regional Water Quality Control Plant FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted 260 214 260 406 503 550 FY 2020 Estimated 250 382 FY 2021 Adopted 250 530 6,464 6,958 6,422 6,988 7,000 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 409 PUBLIC WORKS 3udget Summary Dollars by Division CIP Wastewater Treatment Fund Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Wastewater Treatment Systems Improvement Operations Total Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Debt Service Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Capital Improvement Program Total Dollars by Expense Category Revenues Charges to Other Funds FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 16,876,892 14,088,055 28,282,159 32,656,997 4,374,837 633,281 780,836 4,188,831 475,914 23,678 17,544,767 18,323,119 19,161,729 18,590,589 (571,139) 4,865,706 4,290,281 3,801,407 4,664,745 3,825,085 39,920,647 37,482,291 55,434,126 59,737,415 4,303,289 1,311,044 175,441 310,868 1,986,062 858,810 6,788,334 102,448 11,533,008 6,659,425 2,524,990 406,136 452,963 210,478 1,391,491 16,742,155 1,226,483 186,828 332,744 2,003,517 853,066 6,715,499 195,136 11,513,272 6,907,185 2,442,785 366,808 3,210 713,092 107,065 1,496 1,500,930 13,926,447 FY 2021 Change % 0.6% (3.0)% 7.8% 1,459,350 1,423,717 (35,633) (2.4)% 206,957 237,367 30,410 14.7% 326,462 334,950 8,488 2.6% 3,059,763 2,827,412 (232,351) (7.6)% 878,658 836,103 (42,554) (4.8)% 7,802,750 7,992,380 189,630 2.4% 277,378 256,983 (20,395) (7.4)% 14,011,318 13,908,913 (102,405) (0.7)% 5,593,553 5,788,994 195,441 3.5% 3,738,908 3,818,758 79,850 2.1% 1,468,851 1,468,851 -% 7,500 7,500 -% 389,029 431,829 42,800 11.0% 156,100 - (156,100) (100.0)% - 21,700 21,700 -% 2,069,754 1,969,754 (100,000) (4.8)% 27,999,113 32,321,116 4,322,004 15.4% 39,920,647 37,482,291 55,434,126 59,737,415 4,303,289 7.8% 37,189 44,257 53,818 62,519 8,701 16.2% 410 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Summary From Other Agencies Net Sales Other Revenue Other Taxes and Fines Return on Investments Total Revenues Positions by Division FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 4,000,000 26,578,677 27,164,660 30,661,182 30,851,553 190,371 766,779 366,393 27,409,000 28,900,000 1,491,000 - 1,000 4,000 4,000 - 307,203 247,996 389,000 316,000 (73,000) (18.8)% 31,689,848 27,824,306 58,517,000 60,134,072 1,617,072 2.8% FY 2021 Change % CIP Wastewater Treatment Fund 1.30 Wastewater Treatment Administration Wastewater Treatment Environmental Compliance Wastewater Treatment Systems Improvement Operations Total Staffing Job Classification 0.59 13.21 56.16 71.26 FY 2018 Actuals Account Specialist Accountant Administrative Associate II Assistant Director Public Works Assistant Manager WQCP Associate Engineer Chemist Deputy Chief/Fire Marshal Electrician Electrician -Lead Hazardous Materials Inspector Industrial Waste Inspector Industrial Waste Investigator 0.10 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.59 0.15 l .:3U 0.59 13.21 56.16 71.26 l.dU l.,iU 0.59 0.59 13.21 13.34 56.16 56.16 71.26 71.39 FY 2019 Actuals nin FY 2020 Adopted Budget n in FY 2021 Adopted Budget n in 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.59 0.15 0.25 2.00 0.65 2.00 1.80 3.00 0.04 2.90 1.00 0.02 2.59 0.15 0.25 2.00 0.65 2.00 1.81 3.00 0.04 2.90 1.00 0.02 2.60 0.15 - % 0.6% 5.4% - % -% - % 0.13 0.98% - % 0.13 0.18% FY 2021 Change FTE 0.01 0.01 FY 2021 Salary 7,827 24,268 156,790 137,174 297,398 225,775 317,616 8,606 324,461 119,808 3,290 253,203 16,411 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 411 PUBLIC WORKS Staffing FY 2018 Actuals FY 2019 Actuals Laboratory Technician WQC 3.00 3.00 Management Analyst 0.57 0.57 Manager Environmental Control Program Manager Laboratory Services 1.00 1.00 1.00 1.00 Manager Water Quality Control Plant Manager Watershed Protection 0.75 0.75 0.75 0.75 - 120,900 Plant Mechanic 7.00 7.00 7.00 7.00 - 722,904 Program Assistant II 1.40 1.40 1.40 1.40 - 119,683 Project Engineer 1.00 1.00 1.00 1.00 151,216 Project Manager 0.60 0.60 0.60 0.60 74,431 Senior Accountant 0.10 0.10 0.10 0.10 - 13,237 Senior Buyer 1.00 1.00 1.00 1.00 - 109,637 Senior Chemist 1.00 1.00 1.00 1.00 - 117,603 Senior Engineer 3.00 3.00 3.00 3.00 475,197 Senior Industrial Waste Investigator 0.89 0.89 0.89 0.90 0.01 112,264 Senior Management Analyst 0.13 0.13 0.13 0.13 17,340 Senior Mechanic 1.00 1.00 1.00 1.00 - 113,298 Senior Operator WQC 6.00 6.00 6.00 6.00 - 706,867 Senior Technologist 1.00 1.00 1.00 1.00 - 158,746 Storekeeper 1.00 1.00 1.00 1.00 79,498 Supervisor WQCP Operations 3.00 3.00 3.00 3.00 375,981 Technologist 0.70 0.70 0.70 0.70 108,734 WQC Plant Operator II 16.00 16.00 16.00 16.00 - 1,662,003 Sub -total: Full -Time Equivalent 68.84 68.84 68.84 68.97 0.13 7,991,465 Positions Temporary/Hourly 2.42 2.42 2.42 2.42 - 216,177 Total Positions 71.26 71.26 71.26 71.39 0.13 8,207,642 1.20 1.20 FY 2020 Adopted Budget 3.00 0.57 1.20 FY 2021 Adopted Budget 3.00 0.57 1.30 1.00 1.00 1.00 FY 2021 Change FTE 0.10 FY 2021 Salary 1.00 284,107 62,742 170,331 149,386 192,733 412 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET PUBLIC WORKS 3udget Reconciliation Prior Year Budget 55,434,125 58,517,000 (3,082,875) One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments FY 2020 Municipal Fee Revenue Adjustment Return on Investments Source Control Program Increases Strategic Plan (Revenue from Santa Clara Valley Water District) Recycled Water Year 3 Water Quality Control Plant (WQCP) Operations Alignment Tributary Agency Partner Contribution Transfer to Technology Fund (Citywide Technology CIP) Capital Improvements Projects General Fund Cost Allocation Plan Communication Services Allocated Charge Industrial Waste Discharge Fee Allocated Charges Information Technology Allocated Charges Liability Insurance Allocated Charges Printing & Mailing Services Allocated Charges Public Works Administration Allocated Charges Refuse Allocated Charges Stormwater Management Allocated Charges Utilities Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Wastewater Treatment Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 129,967 42,700 (9,000) (9,000) 129,967 (75,000) 75,000 (73,000) 73,000 42,700 — (11,150) (11,150) — — 243,591 (243, 591) — (156,100) (156,100) 4,321,082 1,500,000 2,821,082 — 412,416 — 412,416 — 1,150 — 1,150 — — 7,497 (7,497) 222,390 — 222,390 48,801 1 48,801 1,792 1,792 (5,259) (5,259) (1,946) — (1,946) 249 — 249 (457,647) (25,583) (20,394) 4,493,468 1,617,072 (457, 647) (25,583) 22,984 (22,984) (20,394) 2,876,396 Total FY 2021 Base Budget 71.26 59,927,593 60,134,072 (206,479) PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 413 PUBLIC WORKS 1 Public Works Development Services Alignment Budget 'Reconciliation Positions Expenditures Revenues Net Wastewater Treatment Fund Budget Adjustments 1 Public Works Development Services Alignment 2 Trailer Rental Lease 3 Management and Professionals Group Compensation Reduction Total Budget Adjustments 0.13 0.13 27,184 21,700 (239,062) (190,178) 27,184 21,700 (239,062) (190,178) Total FY 2021 Adopted Budget 71.39 59,737,415 60,134,072 (396,657) Budget Adjustments Positions Expenditures Revenues Net Wastewater Treatment Fund 27,184 27,184 This action recognizes the reallocation of staffing from the Planning and Development Services Department's Public Works division to the Public Works Department. This reallocation of staff will better align the positions' funding source with the workload performed. Performance Results No impacts to performance are anticipated as a result of this action. 2 Trailer Rental Lease 0.00 21,700 This action increases the department's expenses by $21,700 for costs associated with a rental trailer used for temporary office space for City employees and contractors implementing Capital Improvement Program (CIP) projects at the Regional Water Quality Control Plant (RWQCP) where office spaces and work stations are at full capacity. The contractor currently leasing the trailer will complete their work in early FY 2021, so the department will take over the trailer lease on a month to month basis. The department will continue to analyze ongoing options for the temporary office space and will return with recommendations. (Ongoing costs: $0) Performance Results This action will continue to provide temporary office space for City employees during planned rehabilitation and replacement of buildings at the RWQCP. 3 Management and Professionals Group Compensation Reduction (239,062) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 4 This action contributes to cost containment strategies in FY 2021. 414 PUBLIC WORKS • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Mission Statement The City of Palo Alto Utilities' mission is to provide safe, reliable, environmentally sustainable, and cost-effective services. Purpose The purpose of the City of Palo Alto Utilities is to provide high quality, cost-effective electric, gas, fiber optics, water and wastewater collec- tion services; promote effective energy and water efficiency programs; proactively man- age infrastructure needs and replace deterio- rated or aging facilities with new technologies to ensure safe and reliable delivery of services; and ensure the City's utilities are in sound financial condition. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 415 UTILITIES UTI LI TI ES DI RECTOR Dean Batchelor ELECTRIC ENGI NEERI NG & OPERATI ONS 2.00 Administrative Associate II 1.00 Assistant Director Utilities Operations 1.00 Business Analyst 1.00 Coordinator Utilities Projects 3.00 Electrician Assistant I 1.00 Electric Equipment Technician 2.00 Electric Heavy Equipment Operator 4.00 Electric Project Engineer 2.00 Electric Underground Inspectors 1.00 Electric Underground Inspector -Lead 1.00 Engineering Manager - Electric 2.00 Engineer Technician II I 10.00 Unperson / Cable Splicer 4.00 Uneperson / Cable Splicer -Lead 1.00 Manager Electric Operations 3.00 Metering Technician 1.00 Metering Technician- Lead 2.00 Overhead/Underground Troubleman 1.00 Power Engineer 2.00 SCADA Technologist 4.00 Senior Electrical Engineer 5.00 Street Light, Traffic Signal & Fiber Technician 2.00 Street Light, Traffic Signal & Fiber Technician -Lead 6.00 Substation Electrician^ 2.00 Substation Electrician -Lead 1.00 Supervisor, Electric Project Engineer 3.00 Utilities Camp Tech 1.00 Utilities Comp Tech -Lead 3.00 Utilities Engineer Estimator 1.00 Utilities Engineer Estimator -Lead 3.00 Utilities Locator 6.00 Utilities Supervisor 5.00 Utilities System Operator UTI LI TI ES ADMI NI STRATI ON 1.00 Administrative Assistant 1.00 Administrative Associate II 2.00 Business Analyst 1.00 Chief Operating Officer^ 1.00 Compliance Manager 1.00 Coordinator, Utilities Projects 1.00 Manager Communications 1.00 Manager Utilities Telecom 1.00 Principal Business Analyst 0.50 Program Assistant 1.00 Safety Officer 3.00 Senior Business Analyst 1.00 Senior Resource Renner 1.00 Strategic Business Manager CUSTOMER SUPPORT SERVICES 1.00 Assistant Director Utilities Customer Support Services 2.00 Credit and Collections Specialist 2.00 Customer Service Specialist -Lead 7.00 Customer Service Representative 2.00 Customer Service Specialist 1.00 Manager Customer Service 1.00 Manager, Utilities Credit and Collections 6.00 Meter Reader 1.00 Meter Reader -Lead RESOURCE MANAGEMENT 1.00 Assistant Director, Resource Management 1.00 Administrative Associate II 1.00 Business Analyst 3.00 Key Account Representative 1.00 Manager, Utility Program Services 4.00 Marketing Program Administrator 1.00 Program Assistant II 5.00 Resource Banner 5.5 Senior Resource Renner FY 2021 POSITI ON TOTALS 245.0 - Full-time 9.46 - Hourly This organizational chart represents citywide Full -Time Equivalents (FTEs) for this department. The Department Summary tables summarize FTEs by position allocation. WGW ENGI NEERI NG & OPERATI ONS 2.00 Administrative Associate II 1.00 Assistant Director Utilities Engineering^ 2.00 Business Analyst^ 1.00 Cathodic Protection Tech -Asst 1.00 Cathodic Technician 2.00 Cement Finisher 4.00 Coordinator Utilities Projects 4.00 Engineer 1.00 Engineering Manager - WGW 1.00 Engineering Technician III 1.00 Gas & Water Meter Measurement and Control Technician - Lead 4.00 Gas & Water Meter Measurement and Control Technician 4.00 Heavy Equipment Operator / Installer Repairer 5.00 Inspector, Reld Services 2.00 Maintenance Mechanic Welding 1.00 Manager WGW Operations 1.00 Program Assistant 5.00 Project Engineer 1.00 Restoration Lead 5.00 Senior Project Engineer 1.00 Senior Mechanic 1.00 Senior Utilities Reld Service Rep 2.00 Senior Water System Operator 2.00 Utilities Engineer Estimator 5.00 Utilities Reld Service Rep 10.00 Utilities Installer/Repairer 1.00 Utilities Installer/Repairer Assistant 5.00 Utilities Install/Rep-Lead 3.00 Utilities Install/Rep-Welding 2.00 Utilities Install/Rep-Welding-Lead 6.00 Utilities Supervisor^ 4.00 Water Systems Operator II 5.00 WGW Heavy Equipment Operator ^ These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. The following positions are frozen in FY 2021: 1.0 FTE Assistant Director Utilities Engineering (WGW) 1.0 FTE Business Analyst (WGW) 1.0 FTE Substation Electrician (Electric) 1.0 FTE Utilities Chief Operating Officer 1.0 FTE Utilities Supervisor (WOW) 416 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Description Palo Alto is the only city in California that offers a full array of utility services to its citizens and businesses. Because of this, the City has a unique opportunity to partner with the Palo Alto community to enjoy the benefits and achievements of reliable, home-grown, and environmentally -focused utilities. Palo Alto has a tradition of over 100 years of successful public utility operations. It is a tradition that continues to provide the Palo Alto community with safe and reliable utilities service, local decision -making over policies, utility rate -making, environmental programs, and customized services. The City of Palo Alto Utilities (CPAU) continues to focus on customer service, infrastructure reliability, regulatory compliance, and cost containment. CPAU also supports the City's sustainability goals by building a low -carbon energy supply through the use of renewable energy and offsets and by promoting programs to help customers use energy and water more efficiently, reduce their carbon footprint, and help them integrate new technologies. At CPAU, our people empower tomorrow's ambitions while caring for today's needs. We make this possible with our outstanding professional workforce, leading through collaboration, and optimizing resources to ensure a sustainable and resilient Palo Alto. ADMINISTRATION Utilities Administration is responsible for the overall management of the CPAU including com- munication, regulatory compliance, strategic planning, budget coordination, legislation and reg- ulatory policy analysis, and personnel and administrative support to the entire Department. CUSTOMER SUPPORT SERVICES Customer Support Services annually bills $250 million for the City's electric, natural gas, water, commercial fiber optic, wastewater collection (operated by CPAU), storm drain, and refuse (operated by Public Works) services; operates the Customer Service Call Center with 75,000 annual customer interactions; reads 90,000 utility meters per month; and implements Credit and Collection policies and financial assistance programs. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 417 UTILITIES ENGINEERING Engineering is responsible for managing all phases of CPAU's capital improvement projects which include providing new or upgrading existing service to customers and replacing and rehabilitating the City's electric, fiber, gas, water, and wastewater distribution systems. OPERATIONS Utilities Operations is responsible for the operations, maintenance, and emergency response for the electric, fiber, gas, water, and wastewater distribution systems. RESOURCE MANAGEMENT Resource Management is responsible for the long-term resource acquisition plan for, electricity, natural gas, and water; contract negotiations to acquire renewable resources; financial planning; rate development; energy efficiency and water conservation programs; and management of key accounts. Accomplishments • Hosted the first Bay Area Home Electrification Expo partnering with cities, energy providers and environmental agencies in Santa Clara and San Mateo counties to learn about building electrification. ▪ Launched MyCPAU- the new City of Palo Alto Utilities online account management service. New features include usage charts, customer alerts, efficiency programs and recurring payments. • Replaced 115kV transformer, 60kV breaker and aging peripheral equipment at Colorado Power Station to enhance system capacity and reliability. ▪ Partnered with Mountain View and Santa Clara Valley Water District to implement Advanced Resilient Water Reuse Programs including a local advanced treatment facility for recycled water and potential for a regional advanced water purification center. ▪ Deployed mobile workforce application which provides real-time service orders for field staff to enhance operational efficiency. • Partnered with VMware to develop a microgrid at its campus which could provide a charging site for the City's emergency command vehicles during major emergencies. • Deployed mobile workforce application for field staff to enhance operational efficiency. ▪ Collaborated with IT Department to develop new user interface with the new GIS ESRI platform. ▪ Participated in several career job fairs at local colleges, trade schools and high schools. ▪ Received National Energy Innovator Award and Smart Energy Provider Award from American Public Power Association (APPA) for City's Home Efficiency Genie program. The Genie House Call provides a professional, in -home energy and water assessment and recommendations. 418 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Initiatives • Launch new Efficiency Action Platform (Home Energy / Water Reports and Online Marketplace) and implement single sign -on with MyCPAU for customers to adopt new energy and water measures, reduce their utility bills and improve sustainability. • Begin design and construction of a new 12kV Electric and Fiber Optic distribution system in the foothills. • Complete citywide meter survey (75,000 meters) in preparation for the new advanced metering infrastructure (AMI) and utilities billing systems. • Implement the new Energy Reach Code to reduce greenhouse gas emissions. Partner with Planning and Development Services Department to enhance education, outreach and programs for building electrification. ▪ Continue to work with the Utilities Advisory Commission (UAC) and community on a Utilities Resilience workplan that includes communication, education and project prioritization. • Begin construction of a new 1.5 million gallon Corte Madera Reservoir. • Implement new turnkey direct -install energy efficiency program for small and medium businesses. • Upgrade the City's SAP Enterprise Resource Planning (ERP) and Business Intelligence (BI) reporting systems. ▪ Complete phase 1 design of the City's fiber network expansion plan to support AMI, Supervisory Control and Data Acquisition (SCADA), and internal wireless communication for Public Safety and City staff. • Award contracts for equipment, software and services for the City's AMI project. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 419 UTILITIES Key Performance Measures COMPARABLE AND COST-EFFECTIVE SERVICES Goal Ensure fiscally sound and cost-effective services. Objective Reduce the cost of delivering services through best management practices. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Palo Alto's average residential monthly utility bill above/below the (8.25)% (9.20)% (12.00)% (14.00)% (10.00)% median of neighboring cities Description Purpose Status This compares the average residential monthly utility bill which includes electricity, gas, water, and wastewater services to the nearby communities (Menlo Park $292, Mountain View $223, Santa Clara $164, Hayward $214, Redwood City $280). This measure compares the City's average utility rates charged to residents to other comparable cities (e.g., similar size, similar commodity purchase options, similar geography). The monthly average residential utility bill in FY 2020 for Palo Alto was lower compared to the nearby communities described above. Palo Alto's monthly average residential utility bill was $201, and for all the communities combined the average was $234. Electric rates were significantly lower than PGE and slightly higher than Santa Clara. Natural gas rates were lower due to PGE's increased distribution rates for capital improvement and maintenance. Water rates were higher primarily due to differing system characteristics, levels of infrastructure investment, and sources of supply. Palo Alto's water supply comes from the San Francisco Public Utilities Commission (SFPUC), which is undergoing a $4.6 billion improvement project, and Palo Alto is also investing more than other communities in improving local distribution pipelines and enhancing the emergency water supply system. 420 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES CUSTOMER SATISFACTION Goal Objective Percent rating services (electric, gas, wastewater, and water) "Good" or Excellent" Description Purpose Provide excellent customer service. Maintain a high level of customer satisfaction, equal to or greater than 83 percent of Palo Alto citizens rating satisfaction of utility services as "Excellent" or "Good" in the National Citizen Survey. FY 2018 Actuals 84.75% FY 2019 Actuals N/A FY 2020 Adopted 86.00% FY 2020 Estimated 86.00% FY 2021 Adopted N/A The National Citizen Survey (NCS) is a collaborative effort between National Research Center, Inc. (NRC) and the International City/County Management Association (ICMA). The NCS was developed by NRC to provide a statistically valid survey of opinions about community and services provided by local governments. There are ten California communities participating in the survey. To get feedback on whether customers are satisfied with the nature, extent and delivery of services provided, using random -selection survey processes that include a good cross-section of the customer base. Status Results are statistically weighted to reflect the proper demographic composition of the entire community. In FY 2019 a total of 614 completed surveys were obtained, providing an overall response rate of 21 percent. Typically, response rates obtained on citizen surveys range from 25 percent to 40 percent. From FY 2018 to FY 2019, Utilities has met its target of 83 percent and anticipates this continuing through FY 2021. The National Citizen's Survey was not completed in time for the printing of this document. Survey data is anticipated to be available for the FY 2022 budget process. Workload Measures Total cost of Capital Improvement Program annually (Millions) FY 2018 Actuals $24.10 FY 2019 Actuals $35.42 FY 2020 Adopted $51.50 FY 2020 Estimated $33.60 FY 2021 Adopted $47.40 3udget Summary Ti FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Fund Electric Fund - Operating 51,443,024 56,124,382 76,606,602 81,054,023 4,447,421 5.8% 108,624,454 102,141,767 110,086,193 102,347,623 (7,738,570) (7.0)% Fiber Optics 3,377,476 2,885,744 4,325,932 4,345,287 19,355 0.4% 22,120,579 26,250,191 26,707,978 32,174,633 5,466,655 20.5% Gas Supply 14,110,302 17,293,927 17,866,764 16,531,287 (1,335,476) (7.5)% Electric Supply Gas Fund - Operating UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 421 UTILITIES 3udget Summary Wastewater Collection - Operating Water Fund - Operating Total Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Rental Income Return on Investments Total Revenues Positions by Fund Electric Fund Fiber Optics Fund Gas Fund Utilities Administration Wastewater Collection Fund Water Fund Total FY 2018 Actuals 17,880,581 46,737,022 265,293,438 459,431 841,410 500,773 248,735,959 3,977,536 9,785,634 5,000 4,131,918 268,437,661 FY 2019 Actuals 18,413,480 43,707,332 266,816,823 FY 2020 Adopted Budget 27,310,057 60,843,556 323,747,082 FY 2021 Adopted Budget 23,897,257 57,456,171 317,806,280 509,624 420,000 260,000 470,943 354,717 374,310 488,052 576,632 576,632 264,444,785 264,139,740 253,293,473 3,873,979 3,163,724 3,202,109 11,348,937 11,719,065 11,620,946 10,000 4,908,650 5,160,700 4,565,900 286,054,971 285,534,578 273,893,369 111.23 111.33 110.95 111.34 7.60 7.60 7.50 7.10 53.11 53.83 53.83 53.83 19.21 19.21 19.46 19.46 29.00 29.16 29.16 28.50 47.90 46.92 46.94 47.61 268.05 268.05 267.84 267.84 FY 2021 Change $ (3,412,801) (3,387,385) (5,940,801) FY 2021 Change % (12.5)% (5.6)% (1.8)% (160,000) (38.1)% 19,593 (10,846,268) 38,385 (98,119) (594,800) (11,641,209) 5.5% - % 0.39 0.35% (0.40) (5.33)% - % - % (0.66) (2.26)% 0.67 1.43% - % 422 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES ELECTRIC FUND Description On January 16, 1900, the City of Palo Alto began operation of its own electric system. A steam engine was the initial source of the City's electricity and was replaced by a diesel engine in 1914. As demand for electricity and the population continued to grow, the City of Palo Alto Utilities (CPAU) connected to the Pacific Gas and Electric distribution system and purchased power from additional sources. The integrity of the infrastructure required for achieving a high level of reliability and value for customers is of paramount importance to CPAU. The Electric Fund strives to enhance the customer service connection experience, increase energy efficiency participation, and increase the percentage of electric supply obtained from renewable energy supplies. The City has entered into a number of contracts with producers of wind, landfill gas, and solar energy for more than 15 -year terms. Accomplishments ▪ Launched an enhanced electric vehicle (EV) technical assistance and incentive program to promote EV chargers in multi -family dwellings, schools and local nonprofits. • Replaced 115kV transformer, 60kV breaker and aging peripheral equipment at Colorado Power Station to enhance system capacity and reliability. ▪ Issued request for proposal (RFP) for Advanced Metering Infrastructure project including equipment, software and professional services to implement a smart grid network for the City. ▪ Collaborated with Fire, Public Works, Community Services, and Office of Emergency Services to develop a wildfire mitigation plan to minimize the risk of overhead electric lines causing wildfires. • Hosted a successful Bay Area Home Electrification Expo with over 300 attendees partnering with cities, energy providers and environmental agencies to learn about building electrification for cooking, heating and home appliances. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 423 UTILITIES • Completed energization of a new wing at Stanford Hospital which includes installation of three miles of primary conductor. ▪ Developed an electric panel upgrade guide for customers considering EV chargers or building electrification. • Updated the Carbon Neutral Plan to implement hourly carbon emissions accounting standards and sales of renewable energy certificates to support electrification. • Launched an induction cooktop loan program to familiarize people with induction cooking. • Developed a work plan for encouraging adoption of new technologies that create electric grid flexibility, such as battery storage, smart EV chargers, and flexible heat pump water and space heating. Initiatives • Launch a new electric efficiency program providing customers with online efficiency and usage comparison tools, a marketplace, and an energy challenge platform. • Reconstruct the City's electric distribution system along the railway to facilitate the electrification of the Caltrain system, converting commuter trains from diesel to electric power. • Evaluate options with PG&E and California Independent System Operator for a second connection point and transmission line to Palo Alto. • Partner with the City's Planning and Development Services Department, and the community to expand education and outreach of building electrification for new and existing buildings. • Design a new 12kV electric distribution line to replace the existing overhead system in the foothills as part of the City's wildfire mitigation plan. • Rebuild and replace aging underground electric system that have exceeded their expected life of 30 years. ▪ Launch a new cash rebate program with Low Carbon Fuel Standard funding to encourage purchase of new electric vehicles. • Replace undersized 60kV high voltage circuit breakers that interconnect the substations and power stations. • Evaluate and implement new programs to encourage building electrification including customer education, pilots, rebate incentives and on -bill financing. 424 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Goals and Objectives GOAL 1 Provide safe and reliable delivery of electric services to customers. Objectives: • Develop a plan to complete a second electric transmission line source to improve service reliability. ▪ Implement activities outlined in the Utilities Wildfire Mitigation Plan to reduce the possibility of fires in the western foothills of Palo Alto caused by overhead electric lines. ▪ Increase emphasis on the proactive infrastructure replacement program, replacing infrastructure before failure, to support reliability and resiliency. • Enhance planned maintenance programs for all utilities through clearly defined maintenance plans, improved management reporting, and developing innovative ways to ensure efficient completion of all maintenance. GOAL 2 Increase environmental sustainability and promote efficient use of resources. Objectives: • Achieve the ten-year goal for electric energy efficiency of 5.7 percent of the electric load by 2027. ▪ Accelerate Electric Vehicle (EV) penetration for both Palo Alto -based and inbound vehicles by providing more charging infrastructure. • Expand effort to lower greenhouse gas emissions through electrification of the transportation sector such as encouraging adoption of electric vehicles. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 425 UTILITIES Key Performance Measures ENVIRONMENTAL SUSTAINABILITY Goal Objective Percent of retail electric sales volume provided by renewable supply resources under long-term PPAs Description Purpose Status Support environmental sustainability and promote efficient use of resources. Achieve Renewable Portfolio Standard (RPS) of at least 50 percent by 2030. FY 2018 Actuals 61% FY 2019 Actuals 61% FY 2020 Adopted 60% FY 2020 Estimated 39% FY 2021 Adopted 35% This measures the fraction of the City's retail electric sales volume that is provided by renewable supply resources that are under long-term agreement. The Clean Energy and Pollution Reduction Act (SB 350) of 2015 raised the state's renewable portfolio standard (RPS) to 50 percent by 2030 and required a doubling of energy efficiency savings by 2030. The FY 2020 estimated RPS level is lower than historical levels due to the sale of 216,000 Renewable Energy Credits (RECs) that had exceeded the City's annual load in calendar year 2020. Due to a wet year, hydro generation provided 57% of the City's annual retail sales volume, and the City had a significant amount of surplus renewable energy supply. For FY 2021, the City is anticipated to sell all of its in -state renewable generation amount in excess over the minimum needed for RPS compliance. An estimated 272,000 RECs will be sold. Having lower -cost, out-of-state RECs will reduce electric supply costs. SYSTEM RELIABILITY Goal Provide safe and efficient delivery of electric services to customers. Objective Average duration of customer outages in minutes as reported using industry guidelines Description Purpose Status Provide exceptional system reliability. FY 2018 Actuals 87.98 FY 2019 Actuals 121.79 FY 2020 Adopted 60.00 FY 2020 Estimated 60.00 FY 2021 Adopted 60.00 System Average Interruptible Duration Index (SAIDI) is a measure of outage duration. It measures the number of minutes over the year that the average customer is without power. Reliability indices were introduced in order to keep track of utility performance. This information will help Utilities prioritize capital and operating spending so that reliability can be improved without increasing costs. The goal to attain 60 minutes or less in overall response time to restore outages was impacted in FY 2019 due to staffing vacancies and abnormally stormy weather causing a cluster of outages that resulted in longer response times. The Electric Utility had 27 sustained outages affecting a range of customers from 48 to 3,365 customers. Of the 27 outages, 19 were storm related and 8 non -storm. The non -storm outages were attributed to various types of equipment failure throughout the distribution system. 426 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES ENVIRONMENTAL SUSTAINABILITY - SOLAR Goal Objective Support environmental sustainability and promote efficient use of resources. Increase the penetration of local solar installations. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Cumulative installed capacity of photovoltaic (PV) systems measured in megawatts (MW) Description Purpose Status 11.80 13.00 14.00 14.10 14.10 This represents the cumulative installed capacity of PV systems in Palo Alto, measured in MW. It includes PV systems installed prior to the passage of California Senate Bill 1 (SB1), which enacted the Million Solar Roofs Initiative and expands upon the current California Solar Initiative (CSI) and the Energy Commission's New Solar Homes Partnership (NSHP). This measure supports the City's goal of achieving a 100 percent carbon neutral electric supply portfolio, meeting 4 percent of the City's electricity needs through local solar by 2023, and complying with California Senate Bill 1 (SB1) to increase PV installations. Increasing the cumulative installed capacity of PV systems will also benefit the environment and expand the flexibility of the City's electric generation portfolio. California Senate Bill 1 (SB1) became effective in 2006 and required all California electric utilities to achieve a Statewide goal of adding 3,000 MW of new PV systems over ten years. The City of Palo Alto's portion of this statewide goal was to achieve 3.0 MW cumulative installed capacity of PV systems by FY 2016. The City exceeded this goal in FY 2016 and installed 7.70 MW of PV systems. With the costs of installing PV systems steadily decreasing, staff anticipates an increase of PV installations to 14.108 MW in FY 2020 primarily in residential and commercial construction projects. Workload Measures FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 FY 2021 Estimated Adopted Number of Customer Accounts (Electric) Number of momentary outages Percent of residents surveyed who rate the quality of the Electric Utility as "Good" or "Excellent" 29,475 2 29,600 0 29,746 0 29,746 0 29,834 1 88% N/A" 88% 88% NIA* Total Number of Outages 35 42 28 32 27 * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 427 UTILITIES 3udget Summary FY 2018 Actuals Dollars by Division CIP Electric Fund 10,315,316 Electric Administration 24,586,157 Electric Customer Service 2,292,027 Electric Demand Side Management 3,958,743 Electric Engineering (Operating) 1,790,943 Electric Operations and Maintenance FY 2019 Actuals 15,615,817 23,218,636 2,294,092 3,716,457 1,843,389 FY 2020 Adopted Budget 23,765,466 27,176,349 2,665,595 6,991,511 2,415,964 FY 2021 Adopted Budget 27,308,142 27,202,398 2,682,485 7,052,872 2,482,242 FY 2021 Change $ 3,542,677 26,048 16,890 61,361 66,278 11,664,339 11,606,585 16,103,804 17,008,182 904,378 Electric Resource Management 105,459,953 99,971,173 107,574,106 99,665,325 (7,908,781) Total 160,067,478 158,266,150 186,692,795 183,401,646 (3,291,149) Dollars by Category Salary & Benefits Healthcare Other Benefits Overtime Pension Retiree Medical Salary Workers' Compensation Total Salary & Benefits Allocated Charges Contract Services Debt Service Equity Transfer Facilities & Equipment General Expense Operating Transfers -Out Rents & Leases Supplies & Material Transfer to Infrastructure Utility Purchase FY 2021 Change % 14.9% 0.1% 0.6% 0.9% 2.7% 5.6% (7.4)% (1.8)% 1,949,617 1,820,670 2,475,451 2,330,631 (144,820) (5.9)% 304,713 318,143 373,996 455,345 81,349 21.8% 929,360 1,017,707 517,920 531,386 13,466 2.6% 3,103,244 3,214,302 5,290,653 5,296,009 5,356 0.1% 1,617,277 1,555,185 1,601,840 1,532,993 (68,847) (4.3)% 10,816, 735 10,846,696 13,384,300 14,884,804 1,500,504 11.2% 123,558 292,351 441,673 409,199 (32,475) (7.4)% 18,844,505 19,065,053 24,085,834 25,440,367 1,354,533 5.6% 5,506,903 4,253,400 10,434,079 9,416,874 (1,017,205) (9.7)% 3,096,678 2,786,957 7,615,180 6,377,366 (1,237,814) (16.3)% 8,770,695 8,368,513 8,476,576 8,442,678 (33,898) (0.4)% 12,887,000 12,973,000 13,129,000 13,479,000 350,000 2.7% 2,174 18,379 64,155 27,300 (36,855) (57.4)% 2,135,223 2,258,230 3,441,967 3,441,967 -% 560,572 297,973 - 50,000 50,000 -% 5,612,918 5,784,139 6,276,636 6,389,015 112,379 1.8% 474,977 533,907 924,207 924,207 - -% 199,167 -% 94,659,116 89,680,963 95,678,373 88,084,000 (7,594,373) (7.9)% 428 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGE I UTILITIES Total Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services Assistant Director Utilities Customer Support Services 3udget Summary Capital Improvement Program Total Dollars by Expense Category FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ 7,516,715 12,058,775 16,566,787 21,328,871 4,762,084 FY 2021 Change % 28.7% 160,067,478 158,278,458 186,692,795 183,401,646 (3,291,149) (1.8)% Revenues Charges for Services 310,863 375,880 380,000 220,000 (160,000) (42.1)% Charges to Other Funds 460,890 193,480 139,712 145,401 5,689 4.1% Net Sales 145,962,397 154,155,483 154,329,190 145,996,103 (8,333,087) (5.4)% Operating Transfers -In 3,465,100 3,334,701 2,615,588 2,644,849 29,261 1.1% Other Revenue 7,508,222 8,797,973 8,928,000 8,918,000 (10,000) (0.1)% Rental Income 5,000 10,000 - - - -% Return on Investments 1,941,997 2,431,950 2,158,000 2,063,800 (94,200) (4.4)% Total Revenues 159,654,470 169,299,467 168,550,490 159,988,153 (8,562,337) (5.1)% Positions by Division CIP Electric Fund 31.90 31.90 31.90 24.35 (7.55) (23.67)% Electric Customer Service 11.70 12.00 11.90 11.90 - -% Electric Demand Side Management 6.17 6.17 5.59 5.59 - -% Electric Engineering (Operating) 4.98 4.98 4.98 6.67 1.69 33.94% Electric Operations and 48.10 48.10 48.10 54.35 6.25 12.99% Maintenance Electric Resource Management 8.38 8.18 8.48 8.48 - -% 111.23 111.33 110.95 111.34 0.39 0.35% FY 2018 Actuals 0.31 3.90 FY 2019 Actuals 0.31 3.90 0.20 0.20 FY 2020 Adopted Budget 0.31 3.30 FY 2021 Adopted Budget 0.31 3.30 FY 2021 Change FTE FY 2021 Salary 24,264 258,704 0.20 0.20 - 36,462 0.40 0.40 0.40 0.40 - 81,178 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 429 UTILITIES Staffing Job Classification Assistant Director Utilities Engineering Assistant Director Utilities Engineering (Freeze) Assistant Director Utilities Operations Assistant Director Utilities/Resource 0.50 0.50 0.50 0.50 - 104,447 Management Business Analyst 1.94 1.60 1.60 1.35 (0.25) 209,701 Business Analyst (Freeze) 0.25 0.25 38,834 Contracts Administrator 0.10 0.10 0.10 0.10 - 10,113 Coordinator Utilities Projects 1.55 1.55 1.55 1.55 - 148,385 Customer Service Representative 1.87 1.87 1.87 1.87 - 145,277 Customer Service Specialist 0.66 0.66 0.66 0.66 56,381 Customer Service Specialist -Lead 0.58 0.58 0.58 0.58 52,985 Electric Heavy Equipment Operator 2.00 2.00 217,318 Electric Project Engineer 1.95 1.95 3.25 3.65 0.40 580,788 Electric Underground Inspector 2.00 2.00 2.00 2.00 - 228,883 Electric Underground Inspector 1.00 1.00 1.00 1.00 - 122,387 Lead Electrical Equipment Technician 1.00 1.00 1.00 1.00 116,958 Electrician Assistant I 3.00 3.00 3.00 3.00 - 272,563 Engineering Manager - Electric 0.55 0.55 0.55 0.55 - 118,244 Engineering Technician III 1.40 1.40 1.40 1.40 - 137,971 Heavy Equipment Operator 2.00 2.00 2.00 (2.00) Inspector, Field Services 0.25 0.25 0.25 0.25 26,577 Lineperson/Cable Specialist 11.00 11.00 11.00 10.00 (1.00) 1,574,352 Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 - 673,837 Manager Customer Service 0.33 0.33 0.33 0.33 - 52,070 Manager Electric Operations 1.00 1.00 1.00 1.00 - 192,546 Manager Treasury, Debt & 0.30 0.30 0.30 0.30 46,513 Investments Manager Utilities Compliance 0.15 0.15 0.15 0.15 - 29,531 Manager Utilities Credit & 0.15 0.15 0.15 0.15 - 23,902 Collection Manager Utilities Program Services 0.40 0.40 0.40 0.40 - 61,718 FY 2018 Actuals 0.40 FY 2019 Actuals 0.40 FY 2020 Adopted Budget 0.40 FY 2021 Adopted Budget FY 2021 Change FTE (0.40) FY 2021 Salary 0.40 0.40 86,969 0.60 0.60 0.60 0.60 136,307 430 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Staffing 11N - Job Classification Meter Reader Meter Reader -Lead Metering Technician Metering Technician -Lead Offset Equipment Operator FY 2018 Actuals 1.99 0.33 3.00 1.00 0.48 FY 2019 Actuals 1.99 0.33 3.00 1.00 0.48 FY 2020 Adopted Budget 1.99 0.33 3.00 1.00 0.48 FY 2021 Adopted Budget 1.99 0.33 3.00 1.00 0.48 FY 2021 Change FTE FY 2021 Salary 145,286 25,781 409,157 145,974 33,426 Overhead Underground 2.00 2.00 2.00 2.00 330,720 Troubleman Power Engineer 2.30 2.30 1.00 1.00 150,030 Principal Business Analyst 0.34 0.34 0.34 0.34 - 62,064 Program Assistant II - - 0.60 0.60 - 51,293 Project Manager 0.75 0.75 0.75 0.75 81,806 Resource Planner 3.85 3.65 2.85 2.85 409,091 SCADA Technologist 1.00 1.00 1.00 1.01 0.01 154,031 Senior Business Analyst 0.68 1.02 1.02 1.02 - 161,921 Senior Electrical Engineer 3.95 3.95 3.95 3.95 - 766,016 Senior Management Analyst 0.10 0.10 0.10 0.10 - 12,881 Senior Resource Planner 3.06 3.06 3.36 3.36 600,182 Senior Utilities Field Service Representative Street Light, Traffic Signal & Fiber Technician Street Light, Traffic Signal & Fiber - Lead Substation Electrician Substation Electrician (Freeze) Substation Electrician -Lead Supervising Electric Project Engineer Tree Maintenance Person Utilities Compliance Technician Utilities Compliance Technician - Lead Utilities Credit/Collection Specialist Utilities Engineer Estimator Utilities Field Services Representative 0.10 0.10 3.00 3.00 1.00 1.00 5.50 2.00 1.00 1.00 0.10 0.10 3.00 3.00 1.00 1.00 11,588 391,310 139,610 5.50 5.50 4.50 (1.00) 640,505 - - 1.00 1.00 142,334 2.00 2.00 2.00 304,595 1.00 1.00 1.00 1.00 2.00 2.00 1.00 162,968 1.00 - 88,150 2.00 3.00 1.00 472,306 1.00 1.00 1.00 1.00 168,459 2.00 2.00 2.00 3.25 3.25 0.50 2.00 - 201,469 3.25 3.23 0.50 0.50 (0.02) 422,605 0.50 54,184 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 431 UTILITIES Staffing Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator FY 2018 Actuals 1.35 1.95 1.60 FY 2019 Actuals 1.35 1.95 FY 2020 Adopted Budget 1.35 1.95 1.90 2.70 FY 2021 Adopted Budget 1.35 1.95 2.70 FY 2021 Change FTE FY 2021 Salary 162,106 203,652 307,981 Utilities Safety Officer 0.55 0.55 0.55 0.55 72,781 Utilities Supervisor 5.00 5.00 5.00 5.00 - 851,822 Utilities System Operator 5.00 5.00 5.00 5.00 - 881,400 Utility Engineering Estimator- Lead 1.00 1.00 1.00 1.00 - 141,336 Sub -total: Full -Time Equivalent Positions Temporary/Hourly 4.11 4.11 3.43 3.43 - 290,926 107.12 107.22 107.52 107.91 0.39 15,226,987 Total Positions 111.23 111.33 110.95 11t34 0.39 15,517,913 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. 432 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation Prior Year Budget 110.95 186, 692, 795 168, 550, 490 18,142,305 One-time Prior Year Budget Adjustments Elwell Court Improvements Administrative Services Staffing Vacancies One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Electric Commodity Purchase Adjustments Contract Services Alignment (Overhead Line Maintenance) Transfer from the General Fund (Traffic Signal and Streetlight Electric Costs) Radio Subscription Fees Utility Payment Processing Transfer to General Fund (Canopy Contract) Utilities Capital Staffing Alignment Return on Investments Surplus Energy Revenue Rents & Leases Expenditure Alignment Equity Transfer to the General Fund Electric Customer Sales Revenue (0% Rate Change) Capital Improvement Program General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Print & Mail Allocated Charges Public Works Engineering & Inspection Allocated Charges Utilities Administration Allocated Charges Adjustment Vehicle Replacement & Maintenance Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (170,791) 19,968 — (150,823) (170,791) 19,968 — (150,823) - 1,628,807 1,628,807 - (7,846,935) - (937,814) (36,855) 0.39 92,220 283,170 350,000 4,753,821 218,681 28,732 10,696 (3,382) (826,083) (218,923) (32,475) 0.39 (2,536,339) 5,969,877 (13,816,812) - (937,814) 62,471 (62,471) (36,855) 5,689 (5,689) (33,210) 33,210 92,220 (94,200) 94,200 (249,524) 249,524 283,170 350,000 (14,053,440) 14,053,440 (170,000) 4,923,821 218,681 28,732 10,696 (8,562,337) (3,382) (826,083) (218, 923) (32,475) 6,025,998 Total FY 2021 Base Budget 111.34 184,005,633 159,988,1 24,017,480 Budget Adjustments UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 433 UTILITIES 3udget 'Reconciliation Positions Expenditures Net Revenues Electric Fund 1 Electric Vehicle Chargers and Location Study 2 Compliance Group Staffing Realignment 3 Management and Professionals Group Compensation Reduction 4 Staffing Resource Reduction and Concessions 50,000 0 (20,043) (633,944) 50,000 0 (20,043) (633, 944) Total Budget Adjustments - (603,987) - (603,987) Total FY 2021 Adopted Budget 111.34 183,401,646 159,988,153 23,413,493 434 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 1 Electric Vehicle Chargers and Location Study 3udget Ac justments Positions Expenditures 50,000 ` 0.00 50,000 This one-time action adds funding to conduct a study assessing current and potential future locations of electric vehicle chargers at City facility sites. The study will also explore the standardization of chargers to support fueling for existing and new City vehicles. With the expansion of electric vehicles in the City's fleet, the number of chargers must also expand. Funding for this study is supported by the Vehicle Replacement and Maintenance Fund Reserve ($50,000) and the Utilities Department ($50,000) through a transfer from the Electric Fund. A corresponding action is proposed in the Vehicle Replacement and Maintenance Fund. (Ongoing cost: $0) Performance Results This action supports the Sustainability and Climate Action Plan goal of expanding the electric vehicle deployment of the City's fleet. 2 Compliance Group Staffing Realignment This ongoing action will add one vacant 1.0 FTE Compliance Technician and drop one vacant 1.0 FTE Linerperson Cablesplicer position to reallocate resources from the Linesperson group to the Compliance group. The Compliance group is responsible for inspecting and coordinating electrical line construction, including construction by contractors. Reallocating resources to the Compliance group aligns with the current business operational needs to meet the growing amount of inspections being conducted and will have minimal impact to the Linesperson group, which receives additional support through a third party contractor. (Ongoing cost: $0) Performance Results 0 Reallocating resources from the Lineperson group to the Compliance group will help meet the current business operational needs with minimal to no impact to costs and service delivery. 3 Management and Professionals Group Compensation Reduction (20,043) 0 (20,043) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 4 Staffing Resource Reduction and Concessions 0.00 (633,944) (633,944) This action reduces the Electric Fund's respective portion of the following positions which are budgeted throughout the Utilities Funds: 0.40 Assistant Director, Utilities Engineering; 0.25 Business Analyst; 1.0 Substation Electrician. Minimal short-term impacts, however, may delay some building electrification and other carbon reduction efforts. The City will also have to defer some underground rebuild capital improvement projects to maintain reserves at the target level. (Ongoing savings: $633,944) Performance Results This action contributes to cost containment strategies in FY 2021. UTILITIES • ,_IITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 435 UTILITIES FIBER OPTICS FUND Description In 1996, the City built a dark fiber ring around Palo Alto capable of supporting multiple network developers and service providers with significant growth potential. The fiber backbone network was routed to pass by and provide access to key City facilities and the Palo Alto business community, including research centers and commercial properties. Dark fiber optics service consists of providing the fiber optics cabling, splice points, service connections, and other infrastructure providing high -capacity bandwidth needed to transport large quantities of data. This service excludes the transmitters, receivers, and data itself, which are owned and operated by each customer. Accomplishments • Completed design of the new fiber backbone from Park Boulevard Substation to the Stanford Research Park area. • Awarded contract for phase 1 design of the City's fiber network expansion plan to support AMI, Supervisory Control and Data Acquisition (SCADA), and internal wireless communication for Public Safety and City staff. • Developed scope of work to include installation of fiber from Dahl Reservoir to Montebello Reservoir to enable full remote -control valves at Montebello, installation of new weather station and improvement of radio coverage in the foothills area for the wildfire mitigation plan. Initiatives ▪ Provide high -quality and competitively -priced fiber optic utility services to City departments and commercial customers in the City of Palo Alto. ▪ Install substructure and dark fiber cable from Park Boulevard Substation to the Stanford Research Park area to enhance network capacity to enable future expansion opportunities for licensing dark fiber for commercial purposes. 436 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES • Conduct a comprehensive asset inventory of Palo Alto's current fiber-optic network infrastructure data to determine its usefulness for supporting current and future AMI, Smart Grid, SCADA, and wireless communications applications. ▪ Create a high-level fiber network design that incorporates current City needs and supports a future fiber -to -the -premise platform. • Develop local ordinances (i.e. Dig Once, One Touch Make Ready, Multi -unit Housing Access) to reduce construction costs and implementation time associated with a fiber network expansion Goals and Objectives GOAL 1 Increase the value of fiber utility services to customers. Objectives: • Provide high -quality and competitively -priced fiber optic utility services to City departments and commercial customers in the City of Palo Alto. • Manage costs and add new dark fiber license agreements with commercial customers. GOAL 2 Improve capacity and reliability of the Dark Fiber System. Objectives: • Ensure sufficient fiber optic cables are available to meet future City and customer needs. ▪ Make system enhancements to prevent damage from outside sources and improve reliability. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 437 UTILITIES Number of Customer Accounts (Fiber) Key Performance Measures CUSTOMER SATISFACTION Goal Provide excellent customer service. Objective Provide high -quality and competitively -priced fiber optic utility services to City departments and commercial customers in the City of Palo Alto. FY 2018 Actuals FY 2019 Actuals FY 2020 FY 2020 Adopted Estimated FY 2021 Adopted Number of commercial fiber connections completed Description Purpose Status 198 207 215 215 219 This measure shows the growth of the Fiber Enterprise based on customers and connections. Estimates are based on analyzing the number of upcoming developments, anticipating how many customers would sign on for Fiber, and taking into account how many existing connections may result in disconnections such as companies leaving. Some customers may also have multiple fiber connections at various locations. The purpose of this measure is to add value to companies doing business in Palo Alto by providing a cost-effective, world class telecommunications system. The goal is to build out and fully leverage the fiber network to add value to the business and other communities as needed. The Fiber enterprise continues to build out the network to provide more service options to our ever expanding customer base. These expansions will also help provide fiber access to previously unserved areas, for example, the fiber network currently under construction for the Palo Alto Unified School District will not only serve the schools, but provide fiber access to surrounding areas. Workload Measures FY 2020 Adopted FY 2020 FY 2021 Estimated Adopted Number of Wholesale re -sellers 93 13 96 14 98 15 98 15 100 15 438 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary 7 Dollars by Division CIP Fiber Optics Fund 1,047,968 791,530 1,525,441 1,509,517 (15,924) (1.0)% Fiber Optics Administration 188,357 205,681 919,370 897,311 (22,060) (2.4)% Fiber Optics Customer Service 678,580 633,076 1,241,621 1,232,615 (9,006) (0.7)% Fiber Optics Operations and 1,462,572 1,255,457 639,500 705,843 66,344 10.4% Maintenance Total 3,377,476 2,885,744 4,325,932 4,345,287 19,355 OA% FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Category Salary & Benefits Healthcare 163,825 152,237 171,660 138,139 (33,521) (19.5)% Other Benefits 24,736 23,681 29,786 33,590 3,805 12.8% Overtime 21,055 20,229 25,521 26,184 664 2.6% Pension 242,846 247,607 358,230 327,788 (30,442) (8.5)% Salary 1,007,041 884,605 967,733 984,062 16,329 1.7% Workers' Compensation 666 19,047 30,967 28,690 (2,277) (7.4)% Total Salary & Benefits 1,460,169 1,347,406 1,583,895 1,538,453 (45,443) (2.9)% Allocated Charges 542,597 412,690 747,422 756,042 8,621 1.2% Contract Services 161,241 173,912 454,646 454,646 -% Facilities & Equipment 1,224 2,457 (2,457) (100.0)% General Expense 2,430 2,125 12,000 12,000 -% Operating Transfers -Out 129,531 123,557 102,176 102,176 - -% Rents & Leases 75,375 77,787 82,360 53,531 (28,829) (35.0)% Supplies & Material 8,738 1,661 9,000 9,000 - -% Transfer to Infrastructure 5,700 15,218 - -% Capital Improvement Program 991,695 730,163 1,331,975 1,419,438 87,463 6.6% Total Dollars by Expense Category 3,377,476 2,885,744 4,325,932 4,345,287 19,355 0.4% Revenues Charges for Services 37,224 26,712 - - - -% Charges to Other Funds 135,895 -% Net Sales 4,356,872 4,566,484 4,594,824 4,716,421 121,597 2.6% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 439 UTILITIES 3udget Summary Other Revenue Return on Investments Total Revenues FY 2018 Actuals 66,032 582,095 5,178,117 FY 2019 Actuals 163 683,895 5,277,254 FY 2020 Adopted Budget 200,000 749,500 5,544,324 FY 2021 Adopted Budget 200,000 646,700 (102,800) (13.7)% 5,563,121 18,797 0.3% FY 2021 Change $ FY 2021 Change % -% Positions by Division CIP Fiber Optics Fund 0.79 0.79 0.79 0.39 (0.40) (50.63)% Fiber Optics Customer Service 3.68 3.68 3.58 3.58 -% Fiber Optics Operations and 3.13 3.13 3.13 3.13 - -% Maintenance Total Staffing Administrative Associate II Job Classification Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Engineering (Freeze) 7.60 7.60 7.50 7.10 (0.40) (5.33)% FY 2018 Actuals 0.20 0.20 FY 2019 Actuals 0.20 0.20 FY 2020 Adopted Budget 0.20 0.20 FY 2021 Adopted Budget 0.20 0.20 FY 2021 Change FTE 0.05 0.05 0.05 - (0.05) 0.05 Business Analyst 0.30 0.30 0.30 0.30 Electric Project Engineer 0.05 0.05 0.45 0.05 Manager Utilities Compliance 0.10 0.10 0.10 0.10 Manager Utilities Credit & 0.40 0.40 0.40 0.40 Collection Manager Utilities Program Services 0.20 0.20 0.20 0.20 - 30,859 Manager Utilities Telecommunications Power Engineer 0.40 0.40 Senior Electrical Engineer 0.05 0.05 0.05 0.05 - 9,637 Street Light, Traffic Signal &Fiber 2.00 2.00 2.00 2.00 - 260,874 Technician 0.05 FY 2021 Salary 15,679 40,589 10,871 1.00 Street Light, Traffic Signal & Fiber- 1.00 Lead 1.00 1.00 1.00 1.00 1.00 (0.40) 46,600 7,956 19,687 63,740 154,586 1.00 139,610 440 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Staffing Utilities Key Account Representative Utilities Locator Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary 0.80 0.80 0.80 0.80 96,063 0.03 0.03 0.03 0.03 3,133 6.78 6.78 6.78 6.38 (0.40) 899,882 0.82 0.82 0.72 0.72 — 74,506 7.60 7.60 7.50 7.10 (0.40) 974,388 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 441 UTILITIES 3udget Reconciliation Prior Year Budget 7.50 4,325,932 5,544,324 (1,218,392) One-time Prior Year Budget Adjustments None One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Fiber Optics Revenue (Rate Increase of 2.5% CPI for EDF-1) Utilities Capital Staffing Alignment Rents & Leases Expenditure Alignment Radio Subscription Fees Return on Investments Capital Improvement Program General Fund Cost Allocation Plan Liability Insurance Allocated Charges Utilities Administration Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 65,568 65,568 121,597 (121,597) (0.40) (93,626) — (93,626) — (28,829) — (28,829) (2,457) (2,457) (102,800) 102,800 87,300 87,300 31,697 31,697 — 2,015 — 2,015 — (24,928) — (24,928) — (2,277) — (2,277) (0.40) 34,462 18,797 15,665 Total FY 2021 Base Budget 7.10 4,360,394 5,563,121 (1,202,727) Budget Adjustments 1 Staffing Resource Reduction Total Budget Adjustments (15,107) (15,107) (15,107) (15,107) Total FY 2021 Adopted Budget T 7.10 4,345,287 5,563,121 (1,217,834) 442 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES .budget Adjustments Budget Adjustments Positions Expenditures Revenues Net Fiber Optics Fund 1 Staffing Resource Reduction (15,107) This action reduces the Fiber Fund's respective portions of the following staff resources that are budgeted throughout the Utility Funds: 0.05 Assistant Director. These changes are anticipated to have minimal short-term impact to this fund. (Ongoing savings: $15,107) Performance Results This action contributes to cost containment strategies in FY 2021. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 443 UTILITIES GAS FUND Description The municipal natural gas system began operations in 1917 when Palo Alto acquired a privately -owned gas business. During the early years, gas was manufactured from coal tar. This was replaced in the 1920s by natural gas from Pacific Gas and Electric. Today, gas is purchased from several sources. The Gas Utility services include Crossbore Safety, Gas Main Replacements, and Home Energy Audits. The Gas utility infrastructure and its crews maintain an excellent safety record. The gas fund is responsible for planning, designing, budgeting, and constructing major capital improvements to the City's gas distribution system. Accomplishments ▪ Completed replacement of 114 natural gas service laterals made of Acrylonitrile Butadiene Styrene (ABS) or Tenite to ensure safe delivery of natural gas, preserve reliable customer service and reduce maintenance costs. ▪ Implemented a new alternating year gas main replacement strategy to increase bidding competition and obtain better pricing for larger scale capital improvement project. • Established a new process to address gas meter Abnormal Operating Conditions (AOC) by notifying property owners and initiating a coordinated effort to relocate the gas meter classified as an AOC. These notifications resulted in a 50% response rate. ▪ Finalized design of the Gas Main Replacement 23 project within business districts to replace approximately 27,000 linear feet of natural gas mains and 350 natural gas service pipelines made of Polyvinyl Chloride (PVC). ▪ Completed inspection of 300 of the 1250 sanitary sewer laterals to be inspected in year one under the Phase II Crossbore Gas Safety Program. The Crossbore Gas Safety Program is to inspect existing sanitary sewer laterals for damages caused during the installation of natural gas main and service pipelines. Initiatives • Begin Phase II of the Advanced Metering Infrastructure (AMI) / Smart Grid project including selection of AMI network, meter data management system (MDMS) and replacement of up to 11,906 gas meters. 444 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES • Launch a new gas efficiency program that will provide customers with online efficiency and usage comparison tools, a marketplace and an energy challenge platform. ▪ Begin construction of the Gas Main Replacement 23 project within business districts to replace approximately 27,000 linear feet of natural gas mains and 350 natural gas service pipelines made of Polyvinyl Chloride (PVC). • Implement new turnkey direct -install gas efficiency program for small and medium businesses. • Continue Phase II of the Crossbore Gas Safety Program to inspect high priority sanitary sewers for the presence of natural gas lines. Goals and Objectives GOAL 1 Provide safe and efficient delivery of natural gas to customers. Objectives: • Continue repairing 100 percent of laterals damaged by crossbore within 24 hours. ▪ Remove and replace the remaining PVC pipe from the gas system. ▪ Complete a walking gas leak survey for 50 percent of the City and a mobile gas leak survey of services in business districts and 100 percent of the City's gas mains on an annual basis. GOAL 2 Increase environmental sustainability and promote efficient use of natural gas resources. Objectives: • Ten-year goal for natural gas efficiency is a reduction in expected gas use of 2.85 percent by 2023 (base year 2013). • Reduce the carbon intensity of the gas portfolio in accordance with the Sustainability and Climate Action Plan (S/CAP) using offsets. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 445 UTILITIES Key Performance Measures GAS LEAKS REPAIRED Goal Provide safe and efficient delivery of natural gas to customers. Objective Respond to and repair all Grade 1 gas leaks immediately. Percentage of Grade 1 leaks responded to within 24 hours Description Purpose Status GAS SAFETY Goal Objective Percentage of gas system surveyed by walking Percentage of gas system surveyed by mobile (vehicle) Description Purpose Status FY 2018 Actuals 100% FY 2019 Actuals 100% FY 2020 Adopted 100% FY 2020 Estimated 100% FY 2021 Adopted 100% This measures the total response time to Grade 1 leaks found during the walking and mobile (vehicle) surveys and any reported leaks classified as Grade 1. The City's policy is to respond and repair Grade 1 leaks within 24 hours. Grade 1 leaks are hazardous leaks that pose an immediate hazard to persons or property and require continuous action until conditions are no longer hazardous. Leaks are assigned priority gradings according to location, extent of migration, gas concentration, potential for concentration, ignition sources, and potential hazard to the public and property. These priority grades are intended only as guidelines. Utilities Operations responds immediately to Grade 1 leaks. The average repair time can vary depending on the size and location of the gas leak. Provide safe and efficient delivery of natural gas to our customers. Complete a walking gas leak survey for 50 percent of the City and a mobile gas leak survey of services in business districts and 100 percent of the City's gas mains on an annual basis. FY 2018 Actuals 100% FY 2019 Actuals 100% FY 2020 Adopted 50% FY 2020 Estimated 100% FY 2021 Adopted 100% 100% 100% 100% 100% 100% A walking survey is conducted to check for gas leaks on service/gas meters and covers one-half of the City (approximately 105 miles of gas mains and 36 miles of service lines) every year, so that the entire City's gas service system can be reviewed in a two-year period. The Federal Department of Transportation (DOT) regulations require a survey of the entire City once every five years. In addition to a walking survey, a mobile (vehicle) survey of all gas mains and some gas service lines (services in the business district) are conducted annually. To ensure the safety of all who live and work in Palo Alto and to comply with Federal DOT requirements. The department is meeting the requirements and repairing all discovered gas leaks in a timely manner. 446 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES INCREASE ENVIRONMENTAL SUSTAINABILITY AND PROMOTE EFFICIENT USE OF NATURAL GAS RESOURCES Goal Support environmental sustainability and promote efficient use of natural gas resources. Objective Increase gas efficiency participation. FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Natural gas savings achieved annually through efficiency programs (therms) Description Purpose Status 249,725 1 301,000 316,000 316,000 314,000 The department measures specific savings achieved from the installation of natural gas efficiency improvements, which are tracked through energy efficiency incentive programs. The Department can also track overall savings by customer class. Much of the non-residential savings were achieved through third party contractors who help large customers give their buildings a tune-up known as retrocommissioning. The carbon intensity of the natural gas portfolio is a function of where and how the gas is acquired and how much of it is burned in use. Improving gas efficiency directly reduces the gas -related carbon footprint in Palo Alto. Gas savings declined partially as a result of savings decay claimed from home energy reports, but there were overall fewer savings from the Commercial and Industrial program, despite no changes to how the program is run. Workload Measures FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 Estimated FY 2021 Adopted Number of Customer Accounts (Gas) Number of gas leaks repaired 23,395 81 23,629 126 23,665 80 23,593 112 23,629 75 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 447 UTILITIES 3udget Summary Dollars by Division CIP Gas Fund 5,504,869 9,145,930 3,342,737 9,283,062 5,940,325 177.7% Gas Administration 11,065,620 10,587,695 13,182,008 12,930,871 (251,137) (1.9)% Gas Customer Service 1,529,936 1,558,608 1,911,680 1,922,079 10,399 0.5% Gas Demand Side Management 828,561 536,424 1,567,605 1,578,651 11,046 0.7% Gas Engineering (Operating) 350,902 400,087 670,487 613,019 (57,468) (8.6)% Gas Operations and Maintenance 4,673,257 4,957,368 7,101,687 7,538,469 436,782 6.2% Gas Resource Management 13,277,736 16,358,006 16,798,537 14,839,770 (1,958,767) (11.7)% Total 37,230,881 43,544,118 44,574,742 48,705,920 4,131,179 9.3% FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Category Salary & Benefits Healthcare 883,093 911,670 1,143,407 1,074,047 (69,359) (6.1)% Other Benefits 120,687 134,145 176,172 199,862 23,689 13.4% Overtime 200,797 192,593 198,165 203,318 5,152 2.6% Pension 1,333,372 1,428,625 2,310,105 2,125,769 (184,336) (8.0)% Retiree Medical 625,662 667,617 687,645 663,940 (23,705) (3.4)% Salary 4,151,790 4,384,864 5,432,855 5,928,585 495,730 9.1% Workers' Compensation 90,119 124,864 186,916 173,173 (13,743) (7.4)% Total Salary & Benefits 7,405,521 7,844,377 10,135,265 10,368,694 233,428 2.3% Allocated Charges 2,690,914 2,527,804 5,033,119 4,785,034 (248,086) (4.9)% Contract Services 617,044 542,232 2,463,313 2,441,313 (22,000) (0.9)% Debt Service 203,683 179,933 802,615 802,615 - -% Equity Transfer 6,699,000 6,601,000 7,106,000 7,114,000 8,000 0.1% Facilities & Equipment 2,027 8,570 19,039 1,840 (17,199) (90.3)% General Expense 421,873 358,847 762,991 778,491 15,500 2.0% Operating Transfers -Out 972,491 713,892 410,403 414,965 4,562 1.1% Rents & Leases 735,359 757,276 851,539 610,121 (241,418) (28.4)% Supplies & Material 344,184 355,647 488,816 495,316 6,500 1.3% Transfer to Infrastructure 5,700 84,833 - - -% Utility Purchase 12,921,050 15,957,533 16,012,329 14,051,296 (1,961,033) (12.2)% 448 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary Capital Improvement Program Total Dollars by Expense Category FY 2018 Actuals 4,212,033 FY 2019 Actuals 7,617,592 FY 2020 Adopted Budget 489,312 FY 2021 Adopted Budget 6,842,237 FY 2021 Change $ 6,352,925 37,230,881 43,549,535 44,574,742 48,705,920 4,131,179 FY 2021 Change % 1,298.3% 9.3% Revenues Charges for Services 28,560 34,269 20,000 20,000 - -% Charges to Other Funds 115,229 111,459 100,622 105,529 4,907 4.9% Net Sales 35,794,564 40,955,173 37,278,530 37,161,478 (117,051) (0.3)% Other Revenue 1,109,304 1,023,183 1,124,303 913,000 (211,303) (18.8)% Return on Investments 568,475 596,995 802,300 621,800 (180,500) (22.5)% Total Revenues 37,616,132 42,721,079 39,325,755 38,821,807 (503,947) (1.3)% Positions by Division CIP Gas Fund 15.80 15.80 15.80 11.73 (4.07) (25.76)% Gas Customer Service 9.03 9.13 9.03 9.03 -% Gas Demand Side Management 1.94 1.54 1.54 1.54 - -% Gas Engineering (Operating) 1.40 1.40 1.40 1.85 0.45 32.14% Gas Operations and Maintenance 23.98 24.30 24.30 27.92 3.62 14.90% Gas Resource Management 0.96 1.66 1.76 1.76 Total 53.11 53.83 53.83 53.83 - -% Staffing Account Specialist Administrative Associate II Job Classification Assistant Director Administrative Services Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Engineering (Freeze) FY 2018 Actuals 0.23 0.85 FY 2019 Actuals 0.23 0.85 0.05 0.05 0.20 0.20 0.20 0.20 FY 2020 Adopted Budget 0.23 0.60 FY 2021 Adopted Budget 0.23 0.60 FY 2021 Change FTE -% FY 2021 Salary 18,002 47,037 0.05 0.05 - 9,116 0.20 0.20 40,589 0.20 - (0.20) - 0.20 0.20 43,484 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 449 UTILITIES Staffing Job Classification Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst Business Analyst (Freeze) FY 2018 Actuals 0.15 0.25 FY 2019 Actuals 0.15 FY 2020 Adopted Budget 0.15 0.25 0.25 1.48 1.15 FY 2021 Adopted Budget 0.15 0.25 1.15 0.90 0.25 FY 2021 Change FTE FY 2021 Salary 34,077 52,224 (0.25) 139,801 0.25 38,834 Cathodic Protection Technician 1.00 1.00 1.00 1.00 - 106,621 Assistant Cathodic Technician 1.00 1.00 1.00 1.00 130,853 Cement Finisher 0.68 0.68 0.68 0.68 64,652 Contracts Administrator 0.10 0.10 0.10 0.10 10,113 Coordinator Utilities Projects 1.26 1.26 1.26 1.26 - 144,092 Customer Service Representative 1.87 1.87 1.87 1.87 - 145,277 Customer Service Specialist 0.68 0.68 0.68 0.68 - 58,089 Customer Service Specialist -Lead 0.58 0.58 0.58 0.58 52,985 Engineer 2.00 2.00 2.00 2.00 281,008 Engineering Manager- Electric 0.15 0.15 0.15 0.15 32,248 Engineering Manager-WGW 0.33 0.33 0.33 0.33 - 66,540 Engineering Technician III 0.70 0.70 0.70 0.70 - 68,985 Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead Heavy Equipment Operator 3.20 3.20 3.20 3.40 0.20 345,326 0.80 0.80 0.80 0.80 - 86,944 2.52 2.52 2.52 - (2.52) Heavy Equipment Operator 0.65 0.65 0.65 0.65 68,635 Install/Repair Inspector, Field Services 1.42 1.42 1.42 2.05 0.63 217,933 Maintenance Mechanic -Welding 1.00 1.00 1.00 1.00 - 106,538 Manager Customer Service 0.33 0.33 0.33 0.33 - 52,070 Manager Treasury, Debt & Investments Manager Utilities Compliance 0.25 0.25 0.25 0.25 Manager Utilities Credit & Collection Manager Utilities Operations WGW 0.20 0.20 0.20 0.20 37,041 Manager Utilities Program Services 0.20 0.20 0.20 0.20 30,859 0.10 0.10 0.15 0.15 0.10 0.10 0.15 0.15 15,504 49,218 23,902 450 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Staffing Job Classification FY 2018 Actuals FY 2019 Actuals Meter Reader 1.98 1.98 Meter Reader -Lead 0.33 0.33 Principal Business Analyst 0.33 0.33 Program Assistant I 0.33 0.33 Program Assistant II - - Project Engineer 1.00 1.00 Resource Planner (0.05) 0.65 Restoration Lead 0.43 0.43 SCADA Technologist 0.20 0.20 Senior Business Analyst 0.66 0.99 Senior Engineer 2.70 2.70 Senior Mechanic 0.33 0.33 Senior Resource Planner 0.46 0.46 Senior Utilities Field Service Representative Substation Electrician 0.10 0.10 0.10 0.25 Utilities Engineer Estimator 0.85 0.85 0.85 0.73 (0.12) Utilities Field Services 1.75 1.75 1.75 1.75 189,644 Representative Utilities Install Repair -Lead -Welding 1.30 1.30 1.30 0.77 (0.53) 90,859 Certified FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary 0.41 1.98 0.33 0.33 0.33 0.25 1.00 0.45 0.43 0.20 0.99 2.70 0.33 0.56 1.98 0.33 0.33 0.33 0.25 1.00 0.45 0.43 0.10 0.99 2.35 0.33 0.56 144,556 25,781 60,238 26,255 21,372 151,216 64,593 48,530 (0.10) 15,251 157,158 (0.35) 400,449 37,388 97,650 0.41 0.41 0.41 - 47,509 0.15 35,584 91,288 Utilities Install Repair Welding 1.95 1.95 1.95 1.43 (0.52) 141,077 Certified Utilities Install/Repair 3.85 3.85 3.85 4.56 0.71 481,828 Utilities Install/Repair Assistant 0.65 0.65 0.65 0.65 - 58,244 Utilities Install/Repair-Lead 1.98 1.98 1.98 1.93 (0.05) 205,564 Utilities Key Account 0.50 0.50 0.50 0.50 60,039 Representative Utilities Locator 0.29 0.29 0.29 0.29 - 30,287 Utilities Marketing Program 1.00 0.70 0.90 0.90 102,660 Administrator Utilities Safety Officer 0.20 0.20 0.20 0.20 26,466 Utilities Supervisor 2.37 2.37 2.37 1.87 (0.50) 281,691 Utilities Supervisor (Freeze) 0.50 0.50 81,328 Water System Operator II 0.66 0.66 0.66 0.66 - 65,345 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 451 UTILITIES Staffing 11N - Job Classification FY 2018 Actuals FY 2019 Actuals WGW Heavy Equipment Operator — Sub -total: Full -Time Equivalent Positions 51.14 51.54 FY 2020 Adopted Budget 51.64 FY 2021 Adopted Budget 2.50 51.64 FY 2021 Change FTE 2.50 FY 2021 Salary 263,484 — 6,121,931 Temporary/Hourly 1.97 2.29 2.19 2.19 — 121,205 Total Positions 53.11 53.83 53.83 53.83 — 6,243,137 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. 452 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 3udget Reconciliation Prior Year Budget 53.83 44,574,742 39,325,755 5,248,987 One-time Prior Year Budget Adjustments Elwell Court Improvements One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Gas Commodity Purchase Adjustments Rents & Leases Expenditure Alignment Utilities Capital Staffing Alignment Radio Subscription Fees Transfer to the Water Fund Equity Transfer to the General Fund Gas Customer Sales Revenue Adjustments (2% Rate Increase) Return on Investments Capital Improvement Program General Fund Cost Allocation Plan General Liability Insurance Allocated Charges Printing & Mailing Allocated Charges Public Works Engineering & Inspection Allocated Charges Utilities Administration Allocated Charges Adjustment Vehicle Replacement & Maintenance Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (67,452) — (67,452) 517,953 (1,960,908) (173,966) (47,798) (17,199) 4,562 8,000 - 6,349,273 205,498 12,159 2,371 (67,452) — (67,452) 517,953 (1,960, 908) (173,966) (47,798) — (17,199) 4,562 8,000 (112,145) 112,145 (180,500) 180,500 (211,303) 6,560,576 205,498 12,159 2,371 (4,595) — (4,595) (290,519) (169,474) (13,743) - 4,421,613 (503,948) (290, 519) (169,474) (13,743) 4,925,561 Total FY 2021 Base Budget 53.83 48,928,903 38,821,80 10,107,096 Budget Adjustments 1 Management and Professionals Group Compensation Reduction 2 Staffing Resource Reduction Total Budget Adjustments (3,685) - (219,298) - (222,983) (3,685) (219,298) (222,983) Total FY 2021 Adopted Budget 53.83 48,705,920 38,821,807 9,884,114 UTILITIES • ,_IITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 453 UTILITIES .budget Adjustments udget :Adjustments 1 Management and Professionals Group Compensation Reduction m Positions Expenditures Revenues Net Gas Fund 0.00 (3,685) 0 (3,685) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 2 Staffing Resource Reduction 0.00 (219,298) _ 0 (219,298) This action reduces the Gas Fund's respective portions of the following staff resources that are budgeted throughout the Utility Funds: 0.20 Assistant Director, Utilities Engineering; 0.25 Business Analyst; 0.50 Utilities Supervisor. These changes are anticipated to have minimal short-term impact to this fund, however, this may delay implementation of gas meter replacements and other capital improvement projects. (Ongoing savings: $219,298) Performance Results This action contributes to cost containment strategies in FY 2021. 454 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES WASTEWATER COLLECTION FUND Description In 1898, Palo Alto approved $28,000 in bond money to fund construction of the City's first sewer network, which was completed in 1899. Private cesspools and privies were banned, and the City Health Officer had residents connected to the sewer system within a few years. Wastewater Collection's staff is responsible for design, construction, operation, and maintenance of approximately 216 miles of sewer mains and over 18,000 City -owned laterals. Staff continues overlapping the design and construction elements of rehabilitation and augmentation projects. Wastewater Collection's priorities are: maintaining infrastructure reliability; identifying problems in mains and service laterals through expanded use of video technology; complying with all regulatory requirements; and maintaining its excellent safety record. Accomplishments ▪ Completed construction of Sanitary Sewer Replacement (SSR) Project Part B (SSR 28) to replace approximately 7,655 feet of sewer pipes, 77 service laterals, and 12 manholes on Oregon Expressway and rehabilitate 2,000 linear feet of sewer main pipelines on lower Page Mill Road and Colorado Avenue. ▪ Completed design of Sanitary Sewer Replacement Project (SSR 29) to replace approximately 8,952 linear feet of sanitary sewer mains, 154 service laterals, as well as replacement and rehabilitation of 41 sewer manholes in the Charleston Meadows neighborhood. • Completed the Wastewater Cost of Service Study to calculate the cost of service -based wastewater collection rates to ensure continued compliance with Proposition 218. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 455 UTILITIES Initiatives ▪ Begin construction of Sanitary Sewer Replacement Project (SSR 29) to replace approximately 8,952 linear feet of sanitary sewer mains in the Charleston Meadows neighborhood. ▪ Implement a new asset management software platform for Operations to generate work orders, schedule planned or unplanned maintenance work and prioritize capital pipeline replacement projects. ▪ Design Sanitary Sewer Replacement Project (SSR 30) to replace approximately 12,066 linear feet of sanitary sewer mains in the Ventura and Research Parks neighborhood. Goals and Objectives GOAL 1 Maintain and provide reliable and cost-effective wastewater services to customers. Objectives: • Clean and maintain sewer mains in commercial areas on a quarterly basis. • Clean and video a minimum of 17 percent, or 3,060, of the City -owned laterals annually to comply with the City's Sewer Overflow Reduction Plan. • Maintain a low level of inflow and infiltration of saltwater into the City's wastewater system. • Maintain the integrity of the City's wastewater collection system by replacing mains and laterals as identified in the Wastewater Collection System Rehabilitation/Augmentation Capital Improvement Project plan. • Minimize sanitary sewer overflows and stoppages. • Maintain a fleet of dependable vehicles to provide high quality cleaning and servicing of the sewer system. 456 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Key Performance Measures MAINTAIN AND PROVIDE RELIABLE SERVICES Goal Maintain and provide a reliable wastewater system to customers. Objective Percentage of sewer laterals inspected annually Description Purpose Status Clean and video a minimum of 17 percent of the City -owned laterals annually to comply with the City's Sewer Overflow Reduction Plan. FY 2018 Actuals 19% FY 2019 Actuals 21% FY 2020 Adopted 18% FY 2020 Estimated 19% FY 2021 Adopted 18% The purpose of the Sewer System Management Plan (SSMP) is to maintain and improve the condition of the collection system infrastructure; control infiltration and provide appropriate sewer capacity; and minimize the number and impact of sanitary sewer overflows. The goal is to perform sewer main cleaning of the entire collection system every 30 months (81.6 miles per year). This measures inspections and maintenance of 17 percent of City -owned laterals annually using closed-circuit television (CCTV) inspection data, including results of the on -going crossbore lateral inspection program, to target sewer mains and lower laterals for rehabilitation and replacement. To prevent blockage, sewer overflows, and to comply with the City's SSMP, all the City's sewer mains must be cleaned within 30 months. The City is meeting the objectives of its SSMP; through the implementation of an aggressive sewer main cleaning, the number of blockages and overflows has decreased. The division is on target to complete inspection of 19 percent, or 3,528, laterals of 18,141 in the City. Workload Measures Percent of sewage spill responses within two hours Number of Customer Accounts (Wastewater) Number of miles of sewer lines cleaned/treated in a fiscal year Percent of surveyed residents rating the quality of the Sewer Service as good/excellent FY 2018 Actuals 98% 21,979 134 85% I FY 2019 Actuals 98% 22,599 FY 2020 Adopted 100% 22,216 FY 2020 Estimated 100% 22,216 FY 2021 Adopted 100% 22,010 162 75 125 75 N/A* 86% 86% N/A" Number of sewage overflows 65 67 58 60 60 Percent of miles of sewer lines replaced 0.04% 1.00% 1.00% 0.01% 1.00% * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 457 UTILITIES 3udget Summary Dollars by Division CIP Wastewater Collection Fund Wastewater Collection Administration Wastewater Collection Customer Service Wastewater Collection Engineering (Operating) Wastewater Collection Operations and Maintenance Total FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 2,948,288 3,328,061 8,257,990 4,842,433 (3,415,557) (41.4)% 2,024,750 1,755,355 3,038,712 2,914,040 (124,671) (4.1)% 283,291 304,021 355,693 367,727 12,034 3.4% 345,136 328,587 560,183 425,122 (135,061) (24.1)% 12,279,116 12,697,456 15,097,480 15,347,934 250,454 1.7% 17,880,581 18,413,480 27,310,057 23,897,257 (3,412,801) (12.5)% Dollars by Category Salary & Benefits Healthcare 530,834 521,663 659,170 591,131 (68,038) (10.3)% Other Benefits 65,624 66,144 88,978 101,915 12,937 14.5% Overtime 204,273 200,097 154,911 158,939 4,028 2.6% Pension 748,942 777,467 1,271,815 1,144,899 (126,916) (10.0)% Retiree Medical 143,626 259,629 267,418 256,185 (11,232) (4.2)% Salary 2,238,681 2,307,005 3,192,081 3,194,454 2,373 0.1% Workers' Compensation 19,139 68,779 104,473 96,792 (7,682) (7.4)% Total Salary & Benefits 3,951,119 4,200,783 5,738,846 5,544,315 (194,530) (3A)% Allocated Charges 1,173,511 925,975 3,043,020 2,863,022 (179,997) (5.9)% Contract Services 95,622 142,314 248,986 248,986 -% Debt Service 38,190 33,560 129,001 129,001 - -% Facilities & Equipment - 4,897 12,828 3,000 (9,828) (76.6)% General Expense 67,985 91,013 122,900 122,900 - -% Operating Transfers -Out 442,062 340,672 274,068 278,630 4,562 1.7% Rents & Leases 432,531 420,220 480,121 351,729 (128,391) (26.7)% Supplies & Material 270,575 236,250 380,618 380,618 -% Transfer to Infrastructure - 47,444 - - - -% Utility Purchase 9,559,183 9,842,738 11,233,922 11,255,702 21,780 0.2% 458 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary Capital Improvement Program Total Dollars by Expense Category FY 2018 Actuals 1,849,801 17,880,581 FY 2019 Actuals 2,129, 686 18,415,551 FY 2020 Adopted Budget 5,645,748 27,310,057 FY 2021 Adopted Budget FY 2021 Change $ 2,719,352 (2,926,396) 23,897,257 (3,412,801) FY 2021 Change % (51.8)% (12.5)% Revenues Charges for Services 22,450 21,253 10,000 10,000 - -% Charges to Other Funds 30,107 30,890 31,693 33,238 1,545 4.9% Net Sales 18,026,146 20,129,208 21,106,047 21,415,012 308,965 1.5% Other Revenue 229,212 313,720 1,082,534 302,000 (780,534) (72.1)% Return on Investments 169,663 201,076 297,700 244,400 (53,300) (17.9)% Total Revenues 18,477,578 20,696,146 22,527,974 22,004,650 (523,324) (2.3)% Positions by Division CIP Wastewater Collection Fund Wastewater Collection Customer Service Wastewater Collection Engineering (Operating) Wastewater Collection Operations and Maintenance Total Staffing Job Classification Account Specialist Administrative Associate II Assistant Director Utilities Engineering Assistant Director Utilities Engineering (Freeze) Assistant Director Utilities Operations Business Analyst Business Analyst (Freeze) 12.52 12.52 12.52 9.82 2.22 2.22 2.22 2.22 1.40 1.40 1.40 1.40 12.86 13.02 13.02 15.06 29.00 29.16 29.16 28.50 0.23 0.23 0.40 0.15 0.40 FY 2020 Adopted Budget 0.23 0.40 0.15 0.15 0.10 0.10 FY 2021 Adopted Budget 0.23 0.40 0.15 0.10 0.10 0.75 0.75 0.75 0.50 0.25 (2.70) 2.04 (0.66) FY 2021 Change FTE (0.15) 0.15 (0.25) 0.25 -% 15.66% (2.26)% FY 2021 Salary 18,002 31,358 32,613 22,718 77,667 38,834 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 459 UTILITIES Staffing 11N - Job Classification FY 2018 Actuals FY 2019 Actuals Cement Finisher 0.76 0.76 Contracts Administrator 0.05 0.05 Coordinator Utilities Projects 1.10 1.10 Customer Service Representative 1.45 1.45 Customer Service Specialist -Lead 0.25 0.25 Engineer 1.00 1.00 Engineering Manager- Electric 0.15 0.15 Engineering Manager - WGW 0.34 0.34 Engineering Technician III 0.45 0.45 Heavy Equipment Operator 0.23 0.23 FY 2020 Adopted Budget 0.76 0.05 1.10 1.45 0.25 1.00 0.15 0.34 0.45 0.23 FY 2021 Adopted Budget 0.76 0.05 1.10 1.45 0.25 1.00 0.15 0.34 0.45 FY 2021 Change FTE (0.23) FY 2021 Salary 72,258 5,056 125,794 112,648 22,838 140,504 32,248 68,556 44,348 Heavy Equipment Operator 3.15 3.15 3.15 3.15 315,006 Install/Repair Industrial Waste Investigator 0.50 0.50 0.50 0.50 54,704 Inspector, Field Services 1.68 1.68 1.68 0.96 (0.72) 102,056 Maintenance Mechanic -Welding 0.20 0.20 0.20 0.20 - 21,308 Manager Utilities Credit & 0.15 0.15 0.15 0.15 23,902 Collection Manager Utilities Operations WGW 0.30 0.30 0.30 0.30 55,561 Program Assistant I 0.34 0.34 0.34 0.34 - 27,050 Project Engineer 2.00 2.00 2.00 2.00 - 302,432 Restoration Lead 0.26 0.26 0.26 0.26 - 29,344 Senior Engineer 1.30 1.30 1.30 0.91 (0.39) 148,083 Senior Mechanic 0.33 0.33 0.33 0.33 37,388 Utilities Engineer Estimator 0.47 0.47 0.47 0.56 0.09 68,831 Utilities Field Services 1.25 1.25 1.25 1.25 - 135,460 Representative Utilities Install RepairLead Welding 0.24 0.24 0.24 0.58 0.34 68,439 Certified Utilities Install Repair Welding 0.36 0.36 0.36 0.63 0.27 67,816 Certified Utilities Install/Repair 4.25 4.25 4.25 4.00 (0.25) 422,656 Utilities Install/Repair-Lead 2.00 2.00 2.00 2.00 230,589 Utilities Locator 0.39 0.39 0.39 0.39 40,730 Utilities Safety Officer 0.10 0.10 0.10 0.10 - 13,233 Utilities Supervisor 1.72 1.72 1.72 1.72 - 253,660 460 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Staffing WGW Heavy Equipment Operator Sub -total: Full -Time Equivalent Positions Temporary/Hourly Total Positions FY 2018 Actuals 28.40 FY 2019 Actuals 28.40 FY 2020 Adopted Budget 28.40 FY 2021 Adopted Budget 0.23 27.74 FY 2021 Change FTE 0.23 FY 2021 Salary 24,241 (0.66) 3,287,933 0.60 0.76 0.76 0.76 50,339 29.00 29.16 29.16 28.50 (0.66) 3,338,272 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 461 UTILITIES 3udget Reconciliation Prior Year Budget 27,310,057 22,527,974 4,782,083 One-time Prior Year Budget Adjustments Elwell Court Improvements One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits Adjustments Wastewater Collection Customer Sales Revenue (0% Rate Increase) Utilities Capital Staffing Alignment Rents & Leases Expenditure Alignment Facilities and Equipment Alignment Utility Payment Processing Transfer to Water Fund (WS -02014 Water, Gas, Wastewater Utility GIS Data) Wastewater Treatment Expenses Return on Investments Capital Improvement Program General Fund Cost Allocation Plan Liability Insurance Allocated Charges Printing & Mailing Allocated Charges Public Works Services Allocated Charges Utilities Administration Allocated Charges Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities (48,087) I — (48,087) (0.66) 45,741 (141,273) (80,304) (9,828) 4,562 21,780 (2,929,392) 136,368 6,796 (329) (27,721) - (175,443) (0.66) (116,672) (7,682) (3,273,397) (48,087) — (48,087) 45,741 308,965 (308,965) - (141,273) (80,304) (9,828) 1,545 (1,545) 4,562 21,780 (53,300) 53,300 (780,534) (2,148,858) 136,368 6,796 (329) (27, 721) (176, 988) (523,324) (116,672) (7,682) (2,750,073) Total FY 2021 Base Budget 28.50 23,988,573 22,004,650 1,983,923 462 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Budget 'Reconciliation Positions Expenditures Revenues Net Wastewater Collection Fund Budget Adjustments 1 Management and Professionals Group Compensation Reduction 2 Staffing Resource Reduction Total Budget Adjustments (842) (90,474) (91,316) (842) (90,474) (91,316) Total FY 2021 Adopted Budget 28.50 23,897,257 22,004,650 1,892,607 Budget Adjustments Budget Adjustments Positions Expenditures Revenues Net Wastewater Collection Fund 1 Management and Professionals Group Compensation Reduction This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results 0 This action contributes to cost containment strategies in FY 2021. 2 Staffing Resource Reduction (90,474) This action reduces the Wastewater Collection Fund's respective portions of the following staff resources that are budgeted throughout the Utility Funds: 0.15 Assistant Director, Utilities Engineering; 0.25 Business Analyst. These changes are anticipated to have minimal short-term impact in this fund. (Ongoing savings: $90,474) Performance Results This action contributes to cost containment strategies in FY 2021. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 463 UTILITIES WATER FUND Description From 1895 until 1928, the City's water supply came from deep wells. When the groundwater supply started to decline, water was purchased from the San Francisco Regional Water System to supplement the local water system. Since 1962, when Palo Alto's wells were discontinued as the primary water system, 100 percent of the water has come from the Regional Water System: 85 percent derived from snow melt flowing into the Hetch Hetchy Reservoir and the balance from runoff stored in San Francisco Bay Area reservoirs. The Water Fund focuses on increasing infrastructure reliability and responsiveness to meet the City's water supply needs during an emergency; maintaining high -quality and reliable sources of water; updating water efficiency goals; and implementing water efficiency programs and services. Additionally, the engineering division is implementing a seismic upgrade to the existing reservoirs, wells and receiving stations to increase supply reliability during catastrophic emergencies. Accomplishments • Partnered with Mountain View and Santa Clara Valley Water District to implement Advanced Resilient Water Reuse Programs including a local advanced treatment facility for recycled water and potential for a regional advanced water purification center. ▪ Completed construction of Water Main Replacement project (WMR 27) to replace approximately 5,032 linear feet of water main pipelines, 35 new water services, 11 new fire hydrants and associated services in Oak Creek and Leland Manor/Garland neighborhoods. ▪ Repaired water main transmission pipeline on Old Page Mill Road and installed associated hydrants and valves. ▪ Completed the El Camino Real Pump Station and Mayfield Pump Station modifications to the system and control programs to improve operational flexibility and system resiliency. ▪ Received Moody's credit rating of Aa1 for Palo Alto Water; the second highest possible rating. Key factors that support this rating include a low debt profile, a large system size and an exceedingly healthy financial position. 464 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES • Started development of the Water Infrastructure Risk and Resilience Assessment document as required by America's Water Infrastructure Act of 2018 (AWIA 2018). AWIA 2018 requires community water systems serving 3,300 or more persons to conduct a risk and resilience assessment and develop an emergency response plan that must be actively updated every five years. Initiatives ▪ Begin design -build project to replace the 1.5 million gallons Corte Madera tank that was constructed in 1969 and is now approaching the end of its useful life. • Launch a new water efficiency program providing customers with online efficiency and usage comparison tools, and a marketplace. • Begin phase 2 of the Advanced Metering Infrastructure (AMI) / Smart Grid project including selection of AMI network, meter data management system (MDMS) and replacement of up to 8,562 water meters. • Evaluate conceptual potable and non -potable water reuse options in the Northwest County Recycled Water Strategic Plan. ▪ Complete the Mayfield Reservoir Upgrade project including seismic rehabilitation of the reservoir and construction of a new pump station. • In collaboration with the Regional Water Quality Control Plant, begin design of 1.125 million gallons per day advanced water purification system with building space to accommodate expansion. • Complete the Water Infrastructure Risk and Resilience Assessment document as required by America's Water Infrastructure Act of 2018 by December 2020. ▪ Design of Water Main Replacement project (WMR 28) to replace approximately 14,000 linear feet of water main pipelines and associated services in Duveneck/St. Francis and Barron Park neighborhoods. Goals anc Objectives GOAL 1 Provide safe and clean drinking water for customers. Objectives: ▪ Ensure drinking water meets all regulatory standards. ▪ Maintain and update water infrastructure to ensure reliable service. ▪ Educate customers about backflow prevention as part of the City's Cross Connection Control Program. ▪ Ensure adequate water supplies are available to meet existing and future water demands. • Complete storage and supply upgrades to water system (e.g. reservoirs, receiving stations, and wells). UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 465 UTILITIES GOAL 2 Increase environmental sustainability of the water supply system. Objective: • Increase water conservation and efficiency participation. • Develop programs to facilitate the use of non-traditional, non -potable water resources (e.g. storm water, recycled water, gray water). ▪ Collaborate with the Regional Water Quality Control Plant and the Santa Clara Valley Water District to evaluate multiple water reuse opportunities to meet both near and long-term water demands. /Key Performance Measures PROVIDE SAFE AND CLEAN DRINKING WATER FOR OUR CUSTOMERS Goal Provide safe and clean drinking water for customers. Objective Ensure drinking water meets all regulatory standards. FY 2018 Actuals FY 2019 Actuals FY 2020 FY 2020 Adopted Estimated FY 2021 Adopted Number of customer -owned water backflow prevention devices in compliance Description Purpose Status 90% 92% 92% 93% 92% Customer -owned and maintained backflow devices are an integral part of the City's Cross Connection Control Program, which began in early 2010. The devices help to ensure that no contaminants of any kind (e.g. chemicals, debris, reclaimed water) enter the potable water system. The California Department of Public Health provides regulations for the City and its customers through California Code of Regulations, Title 17. These regulations specify the types of hazards that require backflow devices. The City is achieving a compliance rate of up to 90-95 percent on an annual basis. There are 3,961 backflow devices in compliance. This number is growing every year as current codes require backflow installation for residences as well as commercial properties. 466 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES WATER EFFICIENCY Goal Increase environmental sustainability of the water supply system. Objective Annual savings achieved through water efficiency programs as a percentage of total sales Description Purpose Status W e T F l p QUALITY Goal Objective Percentage of samples passed from all sampling stations Description Purpose Status Increase water conservation and efficiency participation. FY 2018 Actuals 1.07% FY 2019 Actuals 0.52% FY 2020 Adopted 0.91% FY 2020 Estimated 0.91% FY 2021 Adopted 0.92% The department measures specific savings achieved by the installation of water efficiency improvements through the programs that the City offers through the Santa Clara Valley Water District. The California drought greatly affected the City's water savings numbers with the largest amount of savings attributed to the non- residential installation of drought tolerant landscapes and water efficient irrigation hardware. Improving water efficiency for homes and businesses can result in water supply, water operations, and wastewater processing savings. This measure supports the Water Fund's ten-year goal to reduce expected water use by 20 percent by 2020. Water savings are anticipated to increase in FY 2021 compared to prior years as the City began claiming savings associated with the City's green building ordinance. The business process was updated in FY 2019 to enable the City to collect water savings data more efficiently, which also resulted in a significant impact to the total claimable savings. Ensure the provision of safe and clean drinking water for customers. Safe testing of drinking water to meet all regulatory standards. FY 2018 Actuals 100% FY 2019 Actuals 100% FY 2020 Adopted 100% FY 2020 Estimated 100% FY 2021 Adopted 100% The City of Palo Alto (CPA) regularly collects and tests water samples from connection points between the San Francisco Public Utilities Commission/City of Palo Alto (SFPUC/CPA), storage reservoirs, emergency wells, residential areas, and sample station locations within the distribution system to ensure that the water quality meets all California Department of Public Health (CDPH) and U.S. Environmental Protection Agency (EPA) prescribed regulations that limit the amount of contaminants in the drinking water. The City has 18 sampling stations and collects 84-105 samples monthly to test levels of chlorine residual, coliform and pH levels are within regulatory guidelines. All sample results are reported to CDPH on a monthly basis. Complying with regulations guarantees the City maintains its high standards of water quality and avoids fines. Palo Alto drinking water continues to be in complete compliance with all existing county, state, and federal standards for water quality. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 467 UTILITIES Percent of miles of water mains replaced Workload Measures FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted FY 2020 FY 2021 Estimated Adopted Number of Customer Accounts (Water) Percent of surveyed rating the quality of the Drinking Water (Water) as "Good" or "Excellent" 2.00% 20,000 87% 0.01% 20,012 N/A* 1.00% 20,219 88% 1.00% 20,219 88% 1.00% 20,220 N/A* * The National Citizen's Survey was not complete in time for the printing of this document. Survey data is anticipated to be available for FY 2022 budget process. 468 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES 3udget Summary FY 2018 Actuals Dollars by Division CIP Water Fund 8,504,410 6,039,680 16,973,334 14,719,292 (2,254,043) (13.3)% Water Administration 7,639,414 7,482,882 9,042,889 9,154,922 112,033 1.2% Water Customer Service 1,625,334 1,624,947 2,443,155 2,472,510 29,355 1.2% Water Engineering (Operating) 354,598 384,551 641,946 688,274 46,328 7.2% Water Operations and Maintenance 5,732,995 5,999,504 8,371,072 8,598,172 227,100 2.7% Water Resource Management 22,880,271 22,175,768 23,371,160 21,823,001 (1,548,158) (6.6)% Total 46,737,022 43,707,332 60,843,556 57,456,171 (3,387,385) (5.6)% FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % Dollars by Category Salary & Benefits Healthcare 821,267 822,482 1,021,133 943,198 (77,935) (7.6)% Other Benefits 119,660 125,716 164,802 193,501 28,698 17.4% Overtime 199,089 196,939 282,078 289,412 7,334 2.6% Pension 1,246,740 1,306,588 2,091,774 1,996,127 (95,647) (4.6)% Retiree Medical 300,042 427,827 440,662 419,287 (21,374) (4.9)% Salary 4,959,173 5,266,306 5,372,634 5,646,382 273,749 5.1% Workers' Compensation 92,187 118,581 181,202 167,879 (13,323) (7.4)% Total Salary & Benefits 7,738,159 8,264,439 9,554,284 9,655,786 101,502 1.1% Allocated Charges 3,702,043 3,404,874 5,220,481 4,840,165 (380,316) (7.3)% Contract Services 190,454 386,318 819,002 799,502 (19,500) (2.4)% Debt Service 1,697,010 1,632,435 3,222,606 3,222,606 -% Facilities & Equipment - - 16,711 1,150 (15,561) (93.1)% General Expense 511,796 480,190 658,077 670,077 12,000 1.8% Operating Transfers -Out 698,113 551,820 136,335 136,335 - -% Rents & Leases 1,906,700 1,983,270 3,144,502 3,396,161 251,660 8.0% Supplies & Material 451,691 390,121 610,982 618,482 7,500 1.2% Transfer to Infrastructure 5,700 93,339 -% Utility Purchase 21,957,711 21,210,399 22,177,643 20,621,296 (1,556,347) (7.0)% Capital Improvement Program 7,877,646 5,313,905 15,282,934 13,494,610 (1,788,323) (11.7)% Total Dollars by Expense Category 46,737,022 43,711,111 60,843,556 57,456,171 (3,387,385) (5.6)% UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 469 UTILITIES 3udget Summary I Revenues Charges for Services Charges to Other Funds From Other Agencies Net Sales Operating Transfers -In Other Revenue Return on Investments Total Revenues FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 60,334 51,511 10,000 10,000 -% 99,288 135,114 82,690 90,142 7,452 9.0% 500,773 488,052 576,632 576,632 - -% 44,595,981 44,638,437 46,831,149 44,004,458 (2,826,691) (6.0)% 512,436 539,278 548,136 557,260 9,124 1.7% 872,864 1,213,898 384,228 1,287,946 903,718 235.2% 869,689 994,735 1,153,200 989,200 (164,000) (14.2)% 47,511,365 48,061,024 49,586,035 47,515,638 (2,070,397) (4.2)% Positions by Division CIP Water Fund 8.03 8.03 8.03 5.34 (2.69) (33.49)% Water Customer Service 9.66 9.66 9.58 9.58 -% Water Engineering (Operating) 1.35 1.35 1.35 2.33 0.98 72.59% Water Operations and Maintenance 25.34 24.85 24.85 27.23 2.38 9.58% Water Resource Management 3.52 3.02 3.12 3.12 - -% Total 47.90 46.92 46.94 47.61 0.67 1.43% Staffing Job Classification Account Specialist Administrative Associate II Assistant Director Utilities Customer Support Services Assistant Director Utilities Engineering Assistant Director Utilities Engineering (Freeze) Assistant Director Utilities Operations Assistant Director Utilities/Resource Management Business Analyst FY 2018 Actuals 0.23 0.65 FY 2019 Actuals 0.23 0.65 0.20 0.20 0.20 FY 2020 Adopted Budget 0.23 0.50 FY 2021 Adopted Budget 0.23 0.50 FY 2021 Change FTE FY 2021 Salary 18,002 39,198 0.20 0.20 - 40,589 0.20 0.20 (0.20) - - - 0.20 0.20 43,484 0.15 0.15 0.15 0.15 34,077 0.25 0.25 0.25 0.25 - 52,224 1.53 1.20 1.20 0.95 (0.25) 147,568 470 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Staffing Job Classification Business Analyst (Freeze) Cement Finisher Contracts Administrator Coordinator Utilities Projects Customer Service Representative Customer Service Specialist Customer Service Specialist -Lead Electric Project Engineer Engineer Engineering Manager - Electric Engineering Manager - WGW Engineering Technician III Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement 0.20 0.20 0.20 0.20 - 21,736 and Control Technician - Lead Heavy Equipment Operator 1.95 1.95 1.95 (1.95) Heavy Equipment Operator 0.20 0.20 0.20 0.20 - 21,086 Install/Repair Inspector, Field Services 1.65 1.65 1.65 1.74 0.09 184,977 Maintenance Mechanic -Welding 0.80 0.80 0.80 0.80 85,230 Manager Customer Service 0.34 0.34 0.34 0.34 53,648 Manager Utilities Compliance 0.50 0.50 0.50 0.50 98,436 Manager Utilities Credit & 0.15 0.15 0.15 0.15 - 23,902 Collection Manager Utilities Operations WGW 0.50 0.50 0.50 0.50 92,602 Manager Utilities Program Services 0.20 0.20 0.20 0.20 30,859 Meter Reader 2.03 2.03 2.03 2.03 148,206 Meter Reader -Lead 0.34 0.34 0.34 0.34 - 26,562 Power Engineer 0.30 0.30 - - - - Principal Business Analyst 0.33 0.33 0.33 0.33 - 60,238 Program Assistant I 0.33 0.33 0.33 0.33 26,255 Program Assistant II 0.15 0.15 12,823 Project Engineer 2.00 2.00 2.00 2.00 302,432 FY 2018 Actuals FY 2019 Actua►s FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Salary 0.56 0.56 0.56 0.10 0.10 0.10 1.09 1.09 1.09 1.81 1.81 1.81 0.66 0.66 0.66 0.59 0.59 0.59 0.30 1.00 1.00 1.00 0.15 0.15 0.15 0.33 0.33 0.33 0.45 0.45 0.45 0.25 0.56 0.10 1.09 1.81 0.66 0.59 0.30 1.00 0.15 0.33 0.45 0.80 0.80 0.80 0.60 0.25 38,834 53,243 10,113 124,651 140,615 56,381 53,899 47,736 140,504 32,248 66,540 44,348 (0.20) 60,940 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 471 UTILITIES Staffing Job Classification FY 2018 Actuals FY 2019 Actuals Resource Planner 1.20 0.70 Restoration Lead 0.31 0.31 SCADA Technologist 0.80 0.80 Senior Business Analyst 0.66 0.99 Senior Engineer 1.00 1.00 Senior Mechanic 0.34 0.34 Senior Resource Planner 1.68 1.68 Senior Utilities Field Service Representative FY 2020 Adopted Budget 0.70 0.31 0.80 0.99 1.00 0.34 1.78 FY 2021 Adopted Budget 0.70 0.31 0.89 0.99 1.74 0.34 1.78 FY 2021 Change FTE FY 2021 Salary - 100,479 34,987 0.09 135,730 - 157,158 0.74 285,652 38,521 322,997 0.49 0.49 0.49 0.49 - 56,780 Senior Water Systems Operator 2.00 2.00 2.00 2.00 - 224,640 Substation Electrician 0.40 0.40 0.40 0.25 (0.15) 35,584 Utilities Engineer Estimator 0.43 0.43 0.43 0.48 0.05 60,037 Utilities Field Services Representative Utilities Install Repair -Lead -Welding Certified Utilities Install Repair -Welding Certified Utilities Install/Repair Utilities Install/Repair Assistant Utilities Install/Repair-Lead Utilities Key Account Representative Utilities Locator Utilities Marketing Program Administrator Utilities Safety Officer Utilities Supervisor Utilities Supervisor (Freeze) Water System Operator II WGW Heavy Equipment Operator Sub -total: Full -Time Equivalent Positions 1.50 1.50 1.50 1.50 - 162,552 0.46 0.46 0.46 0.65 0.19 76,699 0.69 0.69 0.69 0.94 0.25 96,201 1.90 1.90 1.90 1.44 (0.46) 152,156 0.35 0.35 0.35 0.35 31,362 1.02 1.02 1.02 1.07 0.05 114,631 0.35 0.35 0.35 0.35 - 42,027 0.34 0.34 0.34 0.34 - 35,509 0.40 0.40 0.40 0.40 45,627 0.15 0.15 0.15 0.15 - 19,849 2.91 2.91 2.91 2.41 (0.50) 378,102 - - - 0.50 0.50 81,328 3.34 3.34 3.34 3.34 330,687 1.97 1.97 207,625 45.29 44.79 44.89 45.56 0.67 5,661,105 472 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET UTILITIES Temporary/Hourly Total Positions Staffing FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted FY 2021 Budget Change FTE FY 2021 Salary 2.61 47.90 2.13 46.92 2.05 46.94 2.05 47.61 171,414 0.67 5,832,519 This budget includes position freezes that reduce the funding equivalent to holding a position vacant. These positions are identified with "(Freeze)" following the job classification title in the department section staffing tables and the Citywide table of organization. Additional information relating to position freezes is available in the department section organizational chart and budget adjustment summaries. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 473 UTILITIES 3udget Reconciliation Prior Year Budget 46.94 60,843,556 49,586,035 11,257,521 One-time Prior Year Budget Adjustments Elwell Court Improvements One-time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities (69,643) (69,643) (69,643) — (69,643) Salary and Benefits Adjustments — 145,360 145,360 Water Commodity Purchases — (1,556,347) (1,556,347) Revenue from Water System Customer — — 328,718 (328,718) Connections Radio Subscription Fees — (15,561) — (15,561) Transfer From Wastewater and Gas Fund (WS - 02014 Water, Gas, Wastewater Utility GIS Data) 9,124 (9,124) Return on Investment — (164,000) 164,000 Utilities Capital Staffing Alignment 0.67 190,447 — 190,447 Rents & Leases Expenditure Alignment — 321,303 — 321,303 Water Customer Sales Revenue (0% Rate — (2,819,239) 2,819,239 Increase) Capital Improvement Program — (1,790,341) 575,000 (2,365,341) General Fund Cost Allocation Plan — 78,472 78,472 Liability Insurance Allocated Charges — 11,788 — 11,788 Printing & Mailing Services Allocated Charges — 3,083 3,083 Public Works Services Allocated Charges — (3,458) (3,458) Utilities Administration Allocated Charges — (267,368) (267,368) Utilities Allocated Charges — (72,535) (72,535) Vehicle Replacement & Maintenance Allocated Charges Workers' Compensation Allocated Charges Adjustments to Costs of Ongoing Activities 0.67 (128,280) (13,323) (3,096,760) - (128,280) (13,323) (2,070,397) (1,026,363) 57,677,153 47,515,638 10,161,515 Budget Adjustments 1 Management and Professionals Group Compensation Reduction 2 Staffing Resource Reduction Total Budget Adjustments (1,684) (219,298) 1 - (220,982) (1,684) (219,298) (220,982) Total FY 2021 Adopted Budget 47.61 57,456,171 47,515,638 9,940,533 474 UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 3udget Adjustments udget :Adlustme 1 Management and Professionals Group Compensation Reduction m Positions 0.00 Expenditures (1,684) Revenues Net Water Fund (1,684) This action recognizes salary and benefits savings associated with a 10 percent compensation 'give -back' for the unrepresented Management and Professionals Group. These savings are achieved through a wage freeze, furlough, and reduced flexible management benefits. In total, this concession generates $3.5 million in savings Citywide ($2.3 million in the General Fund). (Ongoing savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 2 Staffing Resource Reduction (219,298) j— 0 (219,298) This action reduces the Water Fund's respective portions of the following staff resources that are budgeted throughout the Utility Funds: 0.20 Assistant Director, Utilities Engineering; 0.25 Business Analyst; 0.50 Utilities Supervisor. These changes are anticipated to have minimal short-term impact to this fund, however, this may delay implementation of water meter replacements and other capital improvement projects.(Ongoing savings: $219,298) Performance Results 4 This action contributes to cost containment strategies in FY 2021. UTILITIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 475 CITY OF PALO ALTO NON -DEPARTMENTAL Description The General Fund Non -Departmental budget includes revenue and expenditure appropriations that are not related to a specific department or function. These costs typically benefit the City as a whole and include such items as Cubberley lease payments to Palo Alto Unified School Dis- trict (PAUSD). The Non -Departmental budget may also include estimated provisions or place - holders for certain revenues and expenditures that have not yet materialized or distributed at the time the budget is developed or adopted. These items can be one-time or ongoing depend- ing on the nature and frequency of the item. Various one-time items that appeared in the Fiscal Year 2020 Budget have been removed in FY 2021 including contractual services for sea level rise and efforts related to airplane noise, trans- fers to various funds to subsidize expenses for parking and business improvement, as well as reserves that were established in FY 2020 for recruitment and retention and budget operations. This Adopted FY 2021 budget includes various adjustments in the Non -Departmental section, such as aligning costs for the City's lease agreement with the Palo Alto Unified School District at the Cubberley Community Center, a litigation reserve proactively setting aside funds for dis- pute resolution, and funding for costs associated with the 2020 election. The election is admin- istrated by the County Clerk and the City is charged a proportional share of expenses. As a result of impacts from COVID-19, a number of actions were taken in the FY 2021 Adopted Budget to reduce costs as well as set aside funds to address needs related to COVID-19 city- wide. Cost savings are recognized through a reduced transfer to the Capital Improvement Fund and one-time reductions of several contingency accounts. Funding has been set aside for a number of COVID-19 Recovery activities including business and communications support, con- tact tracing, and workplace restoration. These items are discussed in further detail below. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 477 NON -DEPARTMENTAL 3udget Summary 7 Dollars by Category Cubberley - Lease Payments to PAUSD Contingent Accounts FY 2018 Actuals 5,737,855 FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget 5,830,103 6,284,437 3,694,522 FY 2021 Change $ (2,589,915) FY 2021 Change % (41.2)% City Manager — — 200,000 200,000 — —% City Council — — 125,000 — (125,000) (100.0)% City Attorney 100,000 (100,000) (100.0)% Human Resources 50,000 (50,000) (100.0)% Human Services Resource 10,000 — 50,000 50,000 — —% Allocation Process (HSRAP) Innovations & Special Events — — 50,000 — (50,000) (100.0)% Sustainability 100,000 (100,000) (100.0)% Budget Uncertainty Reserve 1,625,899 1,799,000 173,101 10.6% Other Contract Services 2,200 5,693,384 170,000 2,195,000 2,025,000 1,191.2% Debt Service 432,271 431,154 — — — —% General Expense 42,026 44,931 91,326 93,700 2,374 2.6% Operating Transfers -Out 4,674,446 8,298,952 4,990,118 4,333,734 (656,384) (13.2)% Rents & Leases 177,786 177,127 177,127 203,000 25,873 14.6% Transfer to Infrastructure 24,800,953 27,513,960 28,961,724 13,467,248 (15,494,476) (53.5)% Total Dollars by Expense 35,877,536 47,989,612 42,975,631 26,036,205 (16,939,426) (39.4)% 478 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET NON -DEPARTMENTAL 3udget Reconciliation Prior Year Budget 42,975,631 42,975,631 One -Time Prior Year Budget Adjustments Reserve: Budget Operations Reserve Residential Parking Permit Program Operating Deficit Transfer to RPP Fund Reserve: Recruitment and Retention Initiatives Airplane Noise Funding Sea Level Rise Study Funding Transfer to Business Improvement District Funding One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Traffic and Streetlight Electricity Costs Adjustment CPI Adjustment for El Camino Park Lease Transfer to University Avenue Parking Fund (Employee Parking Permits) Property Tax Administration Transfer to Public Art Fund Transfer to Technology Fund (Technology Surcharge) Sustainability Contingency Adjustments to Costs of Ongoing Activities - (1,125,899) (683,810) (500,000) (100,000) (50,000) (17,000) - (2,476,709) - (1,125, 899) - (683,810) (500, 000) (100,000) (50,000) (17,000) - (2,476,709) 62,472 62,472 25,873 25,873 16,470 — 16,470 2,374 2 (34,477) (100,000) — (27,326) 2,374 2 (34,477) (100,000) — (27,326) Total FY 2021 Base Budget 40,471,596 40,471,596 Budget Adjustments 1 Implementation Costs Associated with Balancing Strategy 2 Litigation Reserve 3 COVID-19 Council Reserve 4 COVID-19 Recovery: Contact Tracing 5 COVID-19 Recovery: Workplace Restoration 6 November 2020 Elections 7 COVID-19 Recovery: Business and 150,000 150,000 Communications Support 8 Human Resources Contingency (50,000) (50,000) 9 Innovation and Special Events Contingency — (50,000) — (50,000) 1,055,000 - 1,000,000 744,000 450,000 350,000 225,000 - 1,055,000 1,000,000 744,000 450,000 350,000 225,000 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 479 NON -DEPARTMENTAL Budget 'Reconciliation Positions Net Expenditures Revenues General Fund 10 Shift City Attorney's Contingency Funds to City Attorney's Budget 11 City Council Contingency 12 Cubberley Lease Adjustment 13 Reduce General Fund Transfer to Capital (100,000) (125,000) (2,589,915) (15,494,476) (100, 000) (125,000) (2,589,915) (15,494,476) Total Budget Adjustments — (14,435,391) — (14,435,391) Total FY 2021 Adopted Budget 26,036,205 26,036,205 Budget Adjustments ud•et Ad'ustu,e Positions Expenditures Revenues Net General Fund 1 Implementation Costs Associated with Balancing Strategy 1,055,000 0 1,055,000 This action appropriates $1.1 million in FY 2021 since some actions cannot be fully implemented immediately, especially it is expected that employee separations will continue into the first quarter of FY 2021. (Ongoing cost: $0) Performance Results This action bridges the cost associated with position reductions with employee separation dates. 2 Litigation Reserve 1,000,000 1,000,000 This action establishes a litigation reserve of $1.0 million in keeping with the City's practice of proactively setting aside funds for dispute resolution. (Ongoing cost: $0) Performance Results © 0 This action ensures adequate funding for dispute resolution and supports resources to minimize potential losses as a result of litigation. 3 COVID-19 Council Reserve 744,000 0 744,000 This reserve is to set aside funds for future COVID-19 impacts that are not yet addressed in the FY 2021 Adopted Budget. These funds require Council action to be utilized. Options will be presented to Council at a later date to determine their use, if needed. (Ongoing cost: $0) Performance Results © 0 This action establishes a reserve for future use to address COVID-19 impacts. 480 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET NON -DEPARTMENTAL 3udget Adjustments Expenditures Revenues 4 COVID-19 Recovery: Contact Tracing 0.00 450,000 0 450,000 This action recognizes $450,000 in one-time funding to support efforts in tracing the contacts of those who have been diagnosed with COVID-19 as requested by the Santa Clara County. The County has requested staffing assistance for these efforts as we move into the different phases of recovery. This estimate for funding equates to 50% of the most conservative cost estimate. (Ongoing cost: $0) Performance Results This action is to provide continued support to the COVID-19 pandemic. 5 COVID-19 Recovery: Workplace Restoration 0.00 350,000 0 350,000 This action appropriates funding for restoring the workplace to ensure it is a safe environment for customers and employees. These funds will ensure that the City can align with the directives of the County Health Order, including social distancing, to address the COVID-19 public health emergency. (Ongoing cost: $0) Performance Results This action supports employee safety when employees return to the workplace. 6 November 2020 Elections 1111 —N 225,000 0 225,000 This one-time action provides funding for the administration of the General FY 2020 Election. The City is responsible for paying the County for costs associated with the election. (Ongoing cost: $0) Performance Results This funding supports the City's efforts to conduct elections in an open and transparent manner, improving the quality of the election. 7 COVID-19 Recovery: Business and Communications Support 150,000 111 0 150,000 This action appropriates funding for three to six months of business and communications support to help navigate the expected near -term impacts of the COVID-19 Public Health Emergency. (Ongoing cost: $0) Performance Results This action supports community outreach efforts and is anticipated to result in a more informed community. 8 Human Resources Contingency 0.00 (50,000) This action eliminates the Human Resources Contingency for one year. (Ongoing savings: $0) Performance Results This action is anticipated to help contain costs for FY 2021. NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 481 NON -DEPARTMENTAL 3udget Adjustments ud•et Ad'ustmen Positions Net General Fund 9 Innovation and Special Events Contingency 0.00 (50,000) 0 This action eliminates the Innovation and Special Events Contingency for one year. (Ongoing savings: $0) Performance Results O 0 This action is anticipated to help contain costs for FY 2021. 10 Shift City Attorney's Contingency Funds to City Attorney's Budget 11 0.00 (100,000) a 0 (100,000) This ongoing action shifts the City Attorney's contingency funds from non -departmental into the City Attorney's departmental budget. This funding alignment will streamline operations and decrease administrative work associated with the movement of authorized funding to the City Attorney's departmental budget throughout the year. This change does not result in any increased cost; it is a technical adjustment. A corresponding action appears in the City Attorney's department section. (Ongoing savings: $100,000) Performance Results © O This action ensures the continued quality of work products from the City Attorney's Office and decreases the cycle time of those products. 11 City Council Contingency 0.00 (125,000) -1 0 (125,000) This action eliminates the City Council Contingency for one year. (Ongoing savings: $0) Performance Results © 0 This action is anticipated to help contain costs for FY 2021. 12 Cubberley Lease Adjustment 0.00 (2,589,915) 0 (2,589,915) The City leases 27 acres from the Palo Alto Unified School District (PAUSD) and offers various services and resources through those facilities including short term and long-term rentals, fields, gyms, and theater, as well as an auditorium. This would require the City and PAUSD to renegotiate the lease and reduce the City's payments and corresponding use of some of these facilities. The City has already begun initial conversations with PAUSD. Currently the balancing strategy is assuming a net savings of $2.5 million, however this is subject to conversations and final agreement between the two parties. (Ongoing savings: $2,500,000) Performance Results This action would result in ongoing savings and a corresponding reduction of space used at the facility. 13 Reduce General Fund Transfer to Capital .1.= 0.00 (15,494,476) This action reduces the General Fund Base transfer to Capital by approximately 50% and includes the additional $2.6 M in reductions in the General Fund Transfer to Capital directed by City Council during the Budget Hearings, as well as $0.7M for sidewalks program. Consistent with City Council actions on May 4, 2020, Transient Occupancy Tax (TOT) Transfer to Capital will be reduced with the reduced TOT revenue estimate. (Ongoing savings: $0) (15,494,476) Performance Results This action reduces the amount of funding available to maintain or rehabilitate the City's general infrastructure. 482 NON -DEPARTMENTAL • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 483 CITY OF PALO ALTO EMPLOYEE INFORMATION General Benefits Fund Overview The General Benefits Fund includes funding for employee pension benefits, health benefits (medical, dental, and vision) for current City employees and several other benefits, such as life insurance, the employee assistance program, and the employee commute program. Funding for retired employees' healthcare costs is reflected in the Retiree Health Benefits Fund, discussed elsewhere in this document. In FY 2021, there is a net $143,000 decrease, or -0.2 percent, in costs in the General Benefits Fund over FY 2020 Adopted levels of $76.4 million to $76.2 million. This decrease is primarily due to concessions taken in the Management and Professional Group in FY 2021, which gener- ated savings of $3.5 million ($2.3 million in the General Fund). Of this amount, $406,000 ($258,000 in the General Fund) is attributable to pension costs that are calculated as a percent- age of payroll, including normal cost, employee share of pension expense, and supplemental pension contributions. The General Benefits Fund acts as a pass -through for pension costs; therefore the department allocation and associated expenses for pension were reduced. Addi- tional actions are included in the FY 2021 Budget to freeze positions and recognize savings equivalent to holding positions vacant. In total, this generated an approximate $16.0 million in salary and benefit savings on a one-time basis in FY 2021 (primarily in the General Fund). The corresponding action to reduce the department allocations and the associated healthcare and pension savings in the General Benefits Fund is estimated at $3.2 million and is not included in the FY 2021 Budget. This action will be brought forward in a subsequent budget process and will not impact the fund balance since the fund acts as a pass -through. Additional information relating to position changes can be found in Attachment B of the Trans- mittal Letter and in the individual sections of the budget document where the transactions occur, including the Staffing Tables and Budget Adjustment sections of the respective depart- ments and the Citywide Table of Organization. PENSION COSTS The City of Palo Alto provides a defined pension benefit to its employees through the State of California Pension Retirement System (CaIPERS), which manages and administers the program. The CaIPERS program maintains two trust accounts: 1) a plan for safety employees (sworn fire and police personnel), and 2) a plan for miscellaneous employees (all other non -safety person- nel employed by the City such as field personnel, administrative support, and managers). With the passage of the California Public Employees' Pension Reform Act (PEPRA), the City has three retirement benefit tiers for Miscellaneous and Safety Plans. As of 2020, approximately 53 percent of the City's employees are either in Tier 2 or Tier 3, which confer a lesser benefit than Tier 1. EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 485 EMPLOYEE INFORMATION Annually, CaIPERS provides actuarial reports detailing the latest status of the City of Palo Alto Pension trust plans for employees and retirees. These actuarial reports are used to calculate the Actuarial Determined Contribution (ADC) which reflects the blended or combined cost of both the Normal Cost (NC) and Unfunded Accrued Liability (UAL) used in the annual billing of employer contributions to the trust for pension obligations. Staff transmits the CalPERS Annual Valuation Reports to the Finance Committee for review and discussion in the fall time -frame. The most recent report was brought forward to the full City Council in September 2019 for the valuation period ending June 30, 2018 (CMR 10641). The total ADC for FY 2021 is $50.1 million ($33.4 million for the Miscellaneous Plan and $16.7 million for the Safety Plan). This reflects the blended cost of both the NC (percentage of payroll) and UAL (flat -rate) as outlined in more detail below: • Miscellaneous plan: There is a blended cost increase of 2.8 percentage points, from an employer contribution rate of 35.6 percent to 38.4 percent (7.9 percent growth). • Safety plan: Blended cost increase of 5.9 percentage points, from an employer contribution rate of 59.4 percent to 65.3 percent (9.9 percent growth). Normal Costs: The NC reflects the employer contribution for the plan retirement benefits pro- vided to current employees assessed as a percentage of payroll. The CaIPERS calculated normal cost is increasing by 0.8 percentage points, from 10.7 percent to 11.5 percent, for Miscellaneous and by 1.4 percentage points, from 20.2 percent to 21.6 percent, for Safety. Unfunded Accrued Liability: The UAL represents the employer's amortization of unfunded accrued liability and is assessed as a flat rate. The City's current net UAL is $455.6 million ($284.9 million for the Miscellaneous Plan and $170.7 million for the Safety Plan), a $40.7 million, or 9.8 percent, increase over the prior year. The annual UAL payment calculated by CaIPERS and assumed in the development of the FY 2021 budget is $33.6 million ($22.7 million for the Miscellaneous Plan and $10.9 million for the Safety Plan). The budget assumes pre -payment of the UAL portion of the annual pension cost, which confers $1,150,000 in savings across the organization ($700,000 realized in the General Fund). These savings are calculated by CaIPERS. The City's current funded status is 65.8 percent for the Miscellaneous Plan and 62.2 percent for the Safety Plan. Timeline of the City's Pension Discussions: The City has been diligent in its discussion and planning efforts to address the costs both known and forecasted for pension benefits. Below is a brief timeline of notable discussions or actions CaIPERS and/or the City has taken in recent years. • In December 2016, the CaIPERS board voted to lower actuarial assumptions for the discount rate (assumed rate of return on investments) from 7.50 percent to 7.00 percent using a three-year phase -in beginning in FY 2019 and ending in FY 2021. The annual valuation report (using data as of June 30, 2018) was used for FY 2021 budget development and assumes a discount rate of 7.00 percent. ▪ During FY 2017 and FY 2018, the City staff and Council acted to establish an irrevocable IRS Section 115 Pension Trust Fund and began contributing funds above the ADC as additional 486 EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET EMPLOYEE INFORMATION funding was available. By the close of FY 2018, $5.4 million had been contributed to this trust citywide. • As part of the FY 2019 Adopted Budget, the City Council approved a reduction of $4.0 million in budgeted expenses in the General Fund to proactively address pension obligations by assuming the normal cost at a more conservative discount rate and contributing proceeds above the CaIPERS ADC to the pension trust fund. Staff developed two plans to address this referral: 1) "immediate action" and 2) "strategic action". The immediate action was completed in December 2018 with the approval of $4.0 million in one-time and structural reductions in the FY 2019 budget. • During FY 2019, the City Council directed staff to develop the Long Range Financial Forecast to include a base case that reflected a more conservative discount rate and adopted "Fiscal Sustainability" as one of four priorities in 2019, including initiatives to develop a policy that addresses unfunded liability. ▪ In April 2019, staff brought forward a Fiscal Sustainability Workplan that included strategic actions to address pension funding for review, feedback, and discussion. Included was a recommendation to use a 6.2 percent discount rate for the normal cost of pensions in financial planning and a referral for the Finance Committee to look at ways to address the unfunded pension liability portion of the budget. • Beginning with the FY 2020 Adopted Budget, staff implemented a practice to include a normal cost pension expense of 6.2 percent as part of financial planning. This resulted in budgeted retirement costs above required CaIPERS levels of $6.2 million ($3.8 million General Fund). An additional one-time contribution of $2.3 million was made in FY 2020 to align other funds with the General Fund's contributions to date. ▪ During FY 2020, Staff returned to the Finance Committee and the City Council to review and discuss the options for a Pension Funding Policy and elements to consider in the establishment of a Pension Funding Policy. Four scenarios were presented that included different timelines, mechanisms, and options available to reach a target funded status of 100 percent. Ultimately, the City Council recommended a draft policy that includes a fifteen -year time -frame to reach a 90 percent funding level. ▪ This FY 2021 Adopted Budget continues the practice to include a normal cost pension expense of 6.2% as part of financial planning for all funds. This results in budgeted retirement costs above required CaIPERS levels of $5.0 million ($3.0 million General Fund) in FY 2021. The contributions levels from FY 2020 to FY 2021 decreased by $1.2 million, from $6.2 million to $5.0 million, primarily due to the change in CaIPERS discount rate from 7.25 percent to 7.00 percent; narrowing the gap to meet the 6.2 percent target. Approximately $500,000 ($400,000 in the General Fund) of this decrease is due to management concessions and staff freezes. In total, planned contributions (principal) of $32.3 million to the pension Trust Fund will have been made since inception in FY 2017 through FY 2021 ($21.0 million, or 65 percent of the total, is from the General Fund), an average annual contribution of $6.5 million. As discussed above, one-time surpluses resulting from excess revenues or expense savings at year-end continue to be brought forward for City Council consideration as potential contribu- EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 487 EMPLOYEE INFORMATION tions to the Trust Fund. During FY 2020, a total of $5.2 million ($3.5 million General Fund) from FY 2019 savings was contributed to the trust. In the prior year, a total contribution of $2.0 mil- lion ($1.3 million General Fund) was made from FY 2018 savings. The City continues to strive to contain costs with measures such as cost -sharing with employ- ees. New labor agreements with the Safety Units that extend through FY 2021 include employee contributions up to 4.0 percent. It is anticipated that additional cost -share agreements with the miscellaneous units, who currently pick-up 1.0 percent of the employer share, will also be explored through current and future negotiations. Staff anticipates returning to the City Council to adopt and report back on the progress towards meeting the funding goals outlined in the Pension Funding Policy. This policy is an evergreen policy, subject to modification at the City Council's direction, and is intended to identify a path forward for the City to address its pension obligations on an ongoing basis, ensure prudent and proactive financial planning, and avoid service -delivery crowd -out. HEALTHCARE COSTS The FY 2021 budget for healthcare is based on the health plan choices employees made for Cal- endar Year 2020. Increases for the various bargaining units' healthcare costs are included in the memoranda of agreements and these costs are modeled appropriately throughout the budget per these terms. All bargaining units are now on a flat rate medical plan, with UMPAPA convert- ing from a 90/10 contribution structure to a flat rate plan in Fall 2018. The flat rate medical plan helps the City's efforts to contain benefit costs as it provides a maximum exposure level to ris- ing health costs. For the calendar year 2021, the budget models a four percent annual increase in flat rate medical costs. Consistent with the FY 2020 Adopted Budget and Government Accounting Standards Board pronouncements that require government agencies to recognize the true cost of medical health care by active employees and retirees, an implied subsidy for retiree healthcare was calculated. Health care premiums are contracted at a blended rate, they are the same regardless of age or active versus retired status, with the exception of Medicare premiums. Despite the contractually blended rate, the implied subsidy is calculated in order to recognize the higher cost of medical services for retirees, which is reduced from the active employees' health care costs and identi- fied as a retiree medical cost. In FY 2021, the City's full cost of active employee healthcare is budgeted in the various City departments and collected in the General Benefits Fund to be paid to CaIPERS. In order to account for the implied subsidy, health care costs for active employees have been reduced in the General Benefits Fund by $2.3 million, and a corresponding transfer from the General Bene- fits Fund to the Retiree Health Benefits Fund has been continued to reflect the full payment of the City's Actuarial Determined Contribution (ADC) for Retiree Healthcare in the Retiree Health Benefits Fund. Additional discussion of Retiree Healthcare costs and the ADC is located in the Retiree Health Benefits Fund section of this document. 488 EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET EMPLOYEE INFORMATION 3udget Summary Dollars by Category Salary & Benefits Healthcare Other Benefits Pension Salary FY 2018 Actuals FY 2019 Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change $ FY 2021 Change % 18,505,699 17,663,571 19,662,524 21,049,492 1,386,968 7.1% 611,652 588,334 1,118,496 1,118,483 (13) (0.0)% 32,031,449 35,854,780 53,141,658 51,462,822 (1,678,836) (3.2)% 570,924 274,627 23,882 22,963 (919) (3.8)% Total Salary & Benefits 51,719,725 54,381,312 73,946,560 73,653,760 (292,800) (0.4)% Contract Services 214,103 148,275 220,795 220,795 —% General Expense 14,110 115,507 —% Operating Transfers -Out 2,444,000 2,197,000 2,197,000 2,347,000 150,000 6.8% Supplies & Material — 3,540 — — — —% Total Dollars by Expense 54,391,938 56,845,634 76,364,355 76,221,555 (142,800) (0.2)% Category Revenues Charges for Services 535 —% Operating Transfers -In 1,427,044 5,991,729 —% Other Revenue 56,428,791 57,060,208 75,701,183 76,496,296 795,113 1.1% Return on Investments 197,653 152,730 433,000 362,600 (70,400) (16.3)% Total Revenues 58,054,023 63,204,667 76,134,183 76,858,896 724,713 1.0% EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 489 EMPLOYEE INFORMATION 3udget Reconciliation Prior Year Budget 0.48 76,364,355 76,134,183 230,172 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Salary and Benefits PARs Contributions and Expenses (Normal Cost Calculated at 6.2 Percent Discount Rate) Citywide Pension Citywide Vision Insurance Citywide Healthcare Insurance Return on Investments Citywide Dental Insurance Department Charges for General Benefits Adjustments to Costs of Ongoing Activities (931) (931) (3,005,290) (3,005,290) - 4,079,049 — 4,079,049 75,764 — 75,764 (842,549) (842,549) (70,400) 70,400 (43,248) (43,248) - 4,205,998 (4,205,998) — 262,795 1,130,308 (867,513) Total FY 2021 Base Budget 0.48 76,627,150 77,264,491 (637,341) Budget Adjustments 1 Health Benefit Expense 2 Retirement Expense/Charges to Other Funds 3 Transfer To Retiree Health Benefits Fund Total Budget Adjustments 37,000 (405,595) (405,595) (37,000) — (405,595) (405,595) 37,000 (37,000) Total FY 2021 Adopted Budget 0.48 76,221,555 76,858,896 (637,341) 490 EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET EMPLOYEE INFORMATION 3udget Ac justments Budget Adjustments Net General Expenditures Revenues Benefit Fund 1 Health Benefit Expense 0.00 ' 37,000 ___M -61M1 37,000 This action increases active employee healthcare costs in the General Benefit Fund to align the implied subsidy with the most recent actuarial valuation performed by Bartel Associates that reduced the subsidy from $2.38M to $2.35M in FY 2021 (CMR 11284). The implied subsidy recognizes the higher cost of medical services for retirees, which is reduced from the active employees' health care costs in the General Benefits Fund and transferred to the Retiree Health Benefit fund for retiree medical costs. A corresponding reduction to the transfer is also recommended in this budget. (Ongoing costs: $37,000) Performance Results This action aligns expenditures with more recent actuarial estimates and no performance impacts are anticipated. 2 Retirement Expense/Charges to Other Funds 0.00 I (405,595) (405,595) WI This one-time action decreases the estimate for charges to other funds by $406,000 due to labor concessions in the Management group in FY 2021. In total, the Management concessions generate salary and benefit savings of $3.5M ($2.3M in the General Fund). Of this amount, $406,000 ($258,000 in the General Fund) is attributable to pension costs that are calculated as a percentage of payroll, including normal cost, employee share, and supplemental contributions. The General Benefits Fund acts as a pass -through for pension costs; therefore, a reduction to the department allocation and the associated expense for pension is recommended. Corresponding actions distributed savings across the City. (Ongoing net savings: $0) Performance Results This action contributes to cost containment strategies in FY 2021. 3 Transfer To Retiree Health Benefits Fund (37,000) 0 (37,000) This action decreases the transfer from the General Benefit Fund to the Retiree Healthcare Fund to align the implied subsidy with the most recent actuarial valuation performed by Bartel Associates that reduced the subsidy from $2.38M to $2.35M in FY 2021 (CMR 11284). The implied subsidy recognizes the higher cost of medical services for retirees, which is reduced from the active employees' health care costs in the General Benefits Fund and transferred to the Retiree Health Benefit fund for retiree medical costs. A corresponding increase to active employee healthcare costs is also recommended in this budget. (Ongoing savings: $37,000) Performance Results This action aligns expenditures with more recent actuarial estimates and no performance impacts are anticipated. EMPLOYEE INFORMATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 491 RETIREE HEALTH BENEFIT FUND OVERVIEW Retiree Health Benefit Fund Overview In addition to providing pension benefits, the City participates in the California Public Employ- ees' Medical and Hospital Care Act (PEMHCA) program to provide certain health care benefits for retired employees. This fund reflects costs for this program as well as payments for the unfunded liability for future medical benefits that will be provided to current and future retirees. The City uses actuarial studies, completed on a biennial basis by Bartel Associates, to inform the development of annual operating budgets. The most recent report was completed in May 2020 to inform both the FY 2021 and FY 2022 Operating Budgets. This study captured investment gains for the Retiree Healthcare Trust Fund as of June 30, 2019, lowered the assumed invest- ment returns from 6.75 percent to 6.25 percent and restated the City's Fiscal Year 2021 annual Actuarial Determined Contribution (ADC). The City's ADC for FY 2021 is $15.9 million, or a 3.0 percent decrease from FY 2020 ($16.4 mil- lion). This decrease aligns with actuarial expectations in the most recent report. Though the ADC assumed for the FY 2021 budget is $15.9 million, the charges to the City's funds are bud- geted at $13.6 million. The difference of $2.3 million represents the City's implied subsidy for retiree healthcare. This is the same subsidy briefly mentioned in the General Benefits Fund Overview section preceding this. There is a requirement, first imposed in FY 2017, that govern- ment agencies must recognize the true cost of medical health care of active employees and retirees. The health care premiums are the same regardless of age or active status with the exception of Medicare premiums. The new requirement is intended to recognize that as people age, their medical costs increase; therefore, an actuarial calculation has been performed to rec- ognize the higher cost of medical services for retirees, which is reduced from the active employ- ees' health care costs. This difference is known as the 'implied subsidy'. In FY 2021, the full cost of active employee healthcare is budgeted in the various City departments and collected in the General Benefits Fund to be paid to CaIPERS. In order to account for the implied subsidy, healthcare costs for active employees have been reduced in the General Benefits Fund by $2.3 million, and a transfer from the General Benefits Fund of $2.3 million to the Retiree Health Ben- efits Fund has been established. This transfer reflects the full payment of the City's annual ADC for Retiree Healthcare in the Retiree Health Benefits Fund. 492 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET RETIREE HEALTH BENEFIT FUND OVERVIEW 3udget Summary FY 2018 Actuals Dollars by Category Salary & Benefits FY 2020 FY 2019 Adopted Actuals Budget FY 2021 Adopted FY 2021 Budget Change $ 1 FY 2021 Change % Other Benefits Retiree Medical Total Salary & Benefits Total Dollars by Expense Category 42,599 24,221 61,560 61,560 16,867,362 15,997,000 16,410,999 15,924,000 (486,999) (3.0)% 16,909,962 16,021,221 16,472,559 15,985,560 (486,999) (3.0)% -% 16,909,962 16,021,221 16,472,559 15,985,560 (486,999) (3.0)% Revenues Operating Transfers -In 2,444,000 2,197,000 2,197,000 2,347,000 150,000 6.8% Other Revenue 14,526,970 13,800,000 14,213,999 13,577,000 (636,999) (4.5)% Return on Investments 69,691 93,008 46,900 63,800 16,900 36.0% Total Revenues 17,040,661 16,090,008 16,457,899 15,987,800 (470,099) (2.9)% RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 493 RETIREE HEALTH BENEFIT FUND OVERVIEW 3udget Reconciliation Prior Year Budget 16,472,559 16,457,899 14,660 One -Time Prior Year Budget Adjustments None One -Time Prior Year Budget Adjustments Adjustments to Costs of Ongoing Activities Citywide Retiree Health Benefits Adjustment/ Charges to Other Funds Return on Investments Adjustments to Costs of Ongoing Activities 376,001 376,001 — 376,001 16,900 (16,900) 392,901 (16,900) Total FY 2021 Base Budget 16,848,560 16,850,800 (2,240) Budget Adjustments 1 Retirement Expense/Charges to Other Funds 2 Health Benefit Expense/Transfer From General Benefits Fund Total Budget Adjustments (826,000) (37,000) — (863,000) (826,000) (37, 000) (863,000) Total FY 2021 Adopted Budget 15,985,560 15,987,800 (2,240) 494 RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET RETIREE HEALTH BENEFIT FUND OVERVIEW 3udget Adjustments Budget Adjustmen 1 Retirement Expense/Charges to Other Funds Positions Expenditures Net Retiree Revenues Health Fund 0.00 I (826,000) I (826,000) illEME This action decreases the estimate for charges to other funds by $826,000 ($527,000 in the General Fund) to align department allocations for Retiree Healthcare costs with the most recent actuarial valuation performed by Bartel Associates. Consistent with the direction approved by the Finance Committee on May 5, 2020 the allocated charges will now be aligned with funding contributions presuming a 6.25 percent Discount Rate (CMR 11284). Corresponding actions are recommended in this budget to distribute savings across the City. (Ongoing net savings: $0) Performance Results This action aligns expenditures with more recent actuarial estimates and no performance impacts are anticipated. 2 Health Benefit Expense/Transfer From General Benefits Fund g0.00 (37,000) I (37,000) This action decreases the transfer from the General Benefit Fund to the Retiree Healthcare Fund to align the implied subsidy with the most recent actuarial valuation performed by Bartel Associates that reduced the subsidy from 2.38M to $2.35M in FY 2021 (CMR 11284). The implied subsidy recognizes the higher cost of medical services for retirees, which is reduced from the active employees' health care costs in the General Benefits Funds and transferred to the Retiree Health Benefits fund for retiree medical costs. A corresponding reduction to retiree healthcare costs is also recommended in this budget. (Ongoing net savings: $0) Performance Results This action aligns expenditures with more recent actuarial estimates and no performance impacts are anticipated. RETIREE HEALTH BENEFIT FUND OVERVIEW • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 495 CITY OF PALO ALTO Table of Organizations =I I FY 2018 Actuals FY 2019 Actuals TABLE OF ORGANIZATION FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Change % General Fund Administrative Services Account Specialist Account Specialist (Freeze) Account Specialist -Lead Accountant Administrative Assistant Administrative Associate II Administrative Associate II (Freeze) Administrative Associate Ill Assistant Director Administrative Services 4.88 0.00 3.05 3.00 1.00 1.00 0.00 1.00 1.65 4.63 0.00 3.45 3.00 1.00 1.00 0.00 1.00 1.65 4.63 0.00 3.45 3.00 1.00 1.00 0.00 1.00 1.65 3.13 1.50 3.45 3.00 1.00 0.50 0.50 1.00 1.65 Buyer 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Contracts Administrator 2.70 2.70 2.70 2.30 Contracts Administrator (Freeze) 0.00 0.00 0.00 0.40 Director Administrative Services/CFO 0.80 0.80 0.80 0.80 Director Office of Management and 1.00 1.00 Budget Director Office of Management and Budget (Freeze) Management Analyst 0.00 1.00 2.00 2.00 Manager Accounting 1.00 0.00 0.00 0.00 Manager Budget 1.00 2.00 2.00 2.00 Manager Real Property 1.00 1.00 1.00 1.00 Chief Procurement Officer 0.00 1.00 Manager Revenue Collections Manager Treasury, Debt & Investments Manager, Finance Payroll Analyst Performance Auditor II (Freeze) Principal Management Analyst Senior Accountant Senior Buyer Senior Management Analyst Storekeeper Storekeeper -Lead Warehouse Supervisor 1.00 0.00 0.00 0.00 0.62 0.62 0.62 0.62 0.60 0.00 2.00 0.00 0.00 3.00 1.00 4.90 1.00 0.20 0.20 0.60 1.00 2.00 0.00 0.00 3.00 1.00 2.30 1.00 0.20 0.20 0.60 1.00 2.00 0.00 0.00 3.00 1.00 2.30 1.00 0.20 0.20 0.60 1.00 2.00 1.00 0.00 3.00 1.00 2.30 1.00 0.20 0.20 -1.50 1.50 0.00 0.00 0.00 -0.50 0.50 0.00 0.00 0.00 0.00 -0.40 0.40 0.00 -1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (32.40) % 0.00% 0.00% 0.00% 0.00% (50.00) % 0.00% 0.00% 0.00% 0.00% 0.00% (14.81)% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Administrative Services 38.60 38.15 39.15 40.15 1.00 2.55% City Attorney Assistant City Attorney 3.00 3.00 3.00 3.00 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 497 TABLE OF ORGANIZATION Table of Organizations J Chief Assistant City Attorney FY 2018 Actuals 1.00 City Attorney 1.00 1.00 Deputy City Attorney 1.00 Legal Fellow 1.00 Legal Fellow (Freeze) 0.00 0.00 Secretary to City Attorney 1.00 0.00 Senior Deputy City Attorney 0.00 1.00 1.00 Claims Investigator Principal Attorney Senior Assistant City Attorney Senior Legal Secretary Senior Management Analyst FY 2019 Actuals 1.00 1.00 1.00 1.00 1.00 0.00 0.00 1.00 0.00 0.00 0.00 1.00 Total City Attorney 11.00 10.00 FY 2020 Adopted Budget 1.00 1.00 1.00 1.00 1.00 0.00 0.00 1.00 0.00 0.00 0.00 1.00 10.00 FY 2021 Adopted Budget 1.00 1.00 1.00 1.00 0.50 0.50 0.00 1.00 0.00 0.00 0.00 1.00 10.00 FY 2021 Change FTE 0.00 0.00 0.00 0.00 -0.50 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% 0.00% (50.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% City Auditor Administrative Assistant City Auditor Performance Auditor I Performance Auditor II Senior Performance Auditor 0.00 1.00 1.00 1.00 2.00 Total City Auditor 5.00 0.00 1.00 1.00 1.00 1.00 4.00 0.00 1.00 0.00 2.00 1.00 4.00 0.00 1.00 0.00 0.00 2.00 3.00 0.00 0.00 0.00 -2.00 1.00 -1.00 0.00% 0.00% 0.00% (100.00)% 100.00% (25.00)% City Clerk Administrative Associate Ill Assistant City Clerk City Clerk Deputy City Clerk Hearing Officer 2.00 1.00 1.00 1.00 0.75 2.00 1.00 1.00 1.00 0.00 Total City Clerk 5.75 5.00 2.00 1.00 1.00 1.00 0.00 2.00 1.00 1.00 1.00 0.00 5.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% City Manager Administrative Assistant Administrative Associate Ill Assistant City Manager Assistant City Manager/Utilities General Manager Assistant to the City Manager Assistant to the City Manager (Freeze) Chief Communications Officer 1.00 1.00 0.00 0.25 2.00 0.00 1.00 Chief Sustainability Officer 1.00 1.00 1.00 0.00 0.25 2.00 0.00 1.00 1.00 2.00 0.00 1.00 0.00 2.00 0.00 1.00 0.00 2.00 0.00 1.00 0.00 1.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 -1.00 1.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% (50.00)% 0.00% 0.00% 0.00% 498 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Table of Organizations I City Manager Deputy City Manager Executive Assistant to the City Manager Management Analyst Manager Communications Manager Economic Development FY 2018 Actuals 1.00 2.00 1.00 0.00 1.00 0.00 FY 2019 Actuals 1.00 2.00 1.00 0.75 1.00 0.00 TABLE OF ORGANIZATION FY 2020 Adopted Budget 1.00 1.00 1.00 0.75 1.00 0.00 FY 2021 Adopted Budget 1.00 1.00 1.00 0.00 1.00 0.00 FY 2021 Change FTE 0.00 FY 2021 Change % 0.00% 0.00 0.00% 0.00 - 0.75 0.00 0.00 0.00% (100.00)% 0.00% 0.00% Total City Manager 11.25 12.00 10.75 10.00 -0.75 (6.98) % Community Services Administrative Assistant Administrative Associate III Administrative Associate III (Freeze) Assistant Director Community Services Assistant Director Community Services (Freeze) Building Serviceperson 2.00 Building Serviceperson-Lead 2.00 Coordinator Recreation Programs 4.00 Director Community Services 1 .00 Division Manager Open Space, Parks and Golf 1.00 1.00 0.00 2.00 0.00 Heavy Equipment Operator Inspector, Field Services Junior Museum & Zoo Educator Junior Museum & Zoo Educator (Freeze) Management Analyst Management Assistant Manager Community Services Manager Community Services (Freeze) Manager Community Services Senior Program Manager Human Services Park Maintenance Person Park Maintenance -Lead Park Ranger Parks/Golf Crew -Lead Producer Arts/Science Program Producer Arts/Science Program (Freeze) 1.00 0.07 2.00 3.60 0.00 1.00 1.00 5.00 0.00 4.00 1.00 6.00 1.00 5.00 2.00 11.00 1.00 1.00 0.00 2.00 1.00 1.00 0.00 2.00 0.00 0.00 1.25 0.60 3.00 1.00 1.00 0.07 2.00 3.60 0.00 1.00 1.00 5.00 0.00 1.25 0.60 4.00 1.00 1.00 0.07 2.00 3.60 0.00 1.00 1.00 5.00 0.00 4.00 4.00 1.00 6.00 1.00 5.00 2.00 11.00 1.00 6.00 1.00 5.00 2.00 11.00 1.00 0.00 1.00 1.00 1.00 1.00 0.60 4.00 1.00 0.00 0.07 2.00 3.25 0.35 1.00 1.00 4.00 1.00 4.00 1.00 6.00 1.00 5.00 2.00 9.25 0.00 -1.00 1.00 - 1.00 0.00% (100.00)% 0.00% (50.00) % 1.00 0.00% - 0.25 0.00 0.00 0.00 -1.00 0.00 0.00 - 0.35 0.35 0.00 0.00 - 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 -1.75 (20.00)% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% (9.72)% 0.00% 0.00% 0.00% (20.00) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (15.91)% 0.00 0.00 0.00 1.75 1.75 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 499 TABLE OF ORGANIZATION Table of Organizations PM J Producer Arts/Science Programs Program Assistant I Program Assistant I (Freeze) Program Assistant II Project Manager Senior Management Analyst Sprinkler System Representative Superintendent Community Services Superintendent Recreation Superintendent Recreation (Freeze) Theater Specialist FY 2018 Actuals 0.00 8.00 0.00 4.00 0.10 1.00 4.00 2.00 1.00 0.00 2.00 FY 2019 Actuals 0.00 8.00 0.00 4.00 0.10 1.00 4.00 2.00 1.00 0.00 2.00 FY 2020 Adopted Budget 0.00 8.00 0.00 3.00 0.10 1.00 4.00 2.00 1.00 0.00 2.00 FY 2021 Adopted Budget 1.00 3.00 4.00 4.00 0.10 1.00 4.00 2.00 0.00 1.00 2.00 FY 2021 Change FTE 1.00 -5.00 4.00 1.00 0.00 0.00 0.00 0.00 - 1.00 1.00 0.00 FY 2021 Change % 0.00% (62.50) % 0.00% 33.33% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% Total Community Services 78.77 75.62 75.62 75.37 -0.25 (0.33)% Fire 40 -Hour Training Battalion Chief 40 -Hour Training Captain 40 -Hour Training Captain (Freeze) Administrative Assistant Administrative Associate II Administrative Associate II (Freeze) Battalion Chief Business Analyst Deputy Chief/Fire Marshal Deputy Director Technical Services Division Deputy Director Technical Services Division (Freeze) Deputy Fire Chief Deputy Fire Chief (Freeze) Emergency Medical Service Director Emergency Medical Services Data Specialist Fire Apparatus Operator Fire Captain Fire Chief Fire Fighter Fire Fighter (Freeze) Fire Inspector Fire Inspector (Freeze) Geographic Information System Specialist 1.00 1.00 0.00 1.00 2.00 0.00 3.00 0.80 0.05 0.20 1.00 1.00 0.00 1.00 2.20 0.00 3.00 0.80 0.05 0.20 1.00 1.00 0.00 1.00 2.20 0.00 3.00 0.80 0.05 0.20 1.00 0.00 1.00 1.00 1.20 1.00 3.00 0.80 0.05 0.00 0.00 0.00 0.00 0.20 2.00 0.00 1.00 2.00 0.00 1.00 2.00 0.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 30.00 26.00 26.00 26.00 21.00 21.00 21.00 21.00 1.00 1.00 1.00 1.00 41.00 34.00 34.00 29.00 0.00 0.00 0.00 5.00 0.80 0.80 0.80 0.40 0.00 0.00 0.00 0.40 0.50 0.50 0.50 0.50 0.00 -1.00 1.00 0.00 -1.00 1.00 0.00 0.00 0.00 - 0.20 0.20 - 1.00 1.00 0.00 0.00 0.00 0.00 0.00 - 5.00 5.00 -0.40 0.40 0.00 0.00% (100.00)% 0.00% 0.00% (45.45) % 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% (50.00) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (14.71)% 0.00% (50.00) % 0.00% 0.00% 500 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Table of Organizations TABLE OF ORGANIZATION Hazardous Materials Inspector Police Chief Senior Management Analyst Total Fire FY 2018 Actuals 0.30 0.00 1.00 FY 2019 Actuals 0.30 0.00 1.00 108.65 97.85 FY 2020 FY 2021 Adopted Adopted Budget Budget 0.30 0.00 1.00 97.85 0.30 0.00 1.00 97.85 FY 2021 Change FY 2021 FTE Change % 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% Human Resources Administrative Assistant Assistant Director Human Resources Director Human Resources/CPO Human Resources Representative Human Resources Representative (Freeze) Human Resources Technician Human Resources Technician (Freeze) Manager Employee Benefits Manager Employee Relations Senior Human Resources Administrator Senior Management Analyst 0.00 1.00 1.00 3.00 0.00 4.00 0.00 1.00 1.00 3.00 2.00 0.00 1.00 1.00 3.00 0.00 4.00 0.00 1.00 1.00 0.00 1.00 1.00 3.00 0.00 4.00 0.00 1.00 1.00 3.00 3.00 2.00 2.00 Total Human Resources 16.00 16.00 16.00 0.00 1.00 1.00 2.50 0.50 3.50 0.50 1.00 1.00 3.00 2.00 16.00 0.00 0.00 0.00 -0.50 0.50 - 0.50 0.50 0.00 0.00 0.00% 0.00% 0.00% (16.67)% 0.00% (12.50)% 0.00% 0.00% 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% Library Administrative Associate Ill Administrative Associate Ill (Freeze) Assistant Director Library Services Assistant Director Library Services (Freeze) Business Analyst Coordinator Library Programs Director Libraries Division Head Library Services Librarian Library Associate Library Associate (Freeze) Library Specialist Library Specialist (Freeze) Management Analyst Manager Library Services Senior Librarian Senior Librarian (Freeze) Supervising Librarian 1.00 0.00 1.00 0.00 1.00 1.00 1.00 1.00 7.00 7.00 0.00 12.50 0.00 1.00 4.00 9.00 0.00 2.00 1.00 0.00 1.00 0.00 1.00 1.00 1.00 1.00 7.00 7.00 0.00 11.50 0.00 1.00 4.00 9.00 0.00 2.00 1.00 0.00 1.00 0.00 1.00 0.00 0.00 1.00 1.00 1.00 1.00 1.00 6.00 7.00 0.00 11.50 0.00 1.00 3.00 8.00 0.00 4.00 1.00 1.00 1.00 1.00 6.00 6.00 1.00 10.50 1.00 1.00 3.00 6.00 2.00 4.00 -1.00 1.00 - 1.00 1.00 0.00 0.00 0.00 0.00 0.00 - 1.00 1.00 -1.00 1.00 0.00 0.00 -2.00 2.00 0.00 (100.00)% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (14.29)% 0.00% (8.70) % 0.00% 0.00% 0.00% (25.00)% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 501 TABLE OF ORGANIZATION Table of Organizations � J FY 2018 Actuals FY 2019 Actuals Total Library 48.50 47.50 FY 2020 Adopted Budget 46.50 FY 2021 Adopted Budget 46.50 FY 2021 Change FTE FY 2021 Change % 0.00 0.00% Office of Emergency Services Director Office of Emergency Services Office of Emergency Services Coordinator Program Assistant II Program Assistant II (Freeze) 1.00 1.00 1.00 0.00 1.00 1.00 1.00 1.00 1.00 1.00 0.00 0.00 Total Office of Emergency Services 3.00 3.00 1.00 1.00 0.00 0.00 0.00 -1.00 1.00 1.00 0.00% 0.00% (100.00)% 0.00% 3.00 3.00 0.00 0.00% Office of Transportation" Administrative Assistant Administrative Associate III Associate Engineer Associate Planner Chief Transportation Official Coordinator Transportation Systems Management Management Analyst Parking Operations - Lead Program Assistant II Project Engineer Senior Engineer Senior Planner Traffic Engineering -Lead Transportation Planning Manager 0.00 0.70 0.73 0.00 0.37 0.88 0.00 0.00 0.60 0.50 0.00 0.15 0.38 0.20 0.00 0.30 0.65 0.24 0.55 0.50 0.00 0.30 0.30 0.70 0.74 1.25 0.02 0.10 0.00 0.50 0.00 0.28 0.65 0.36 0.50 0.00 0.00 0.45 0.20 0.50 0.35 1.15 0.50 0.00 0.30 0.45 0.70 0.00 0.00 0.00 0.15 0.00 1.25 0.00 0.50 0.00 0.00 0.45 0.20 0.50 0.35 1.15 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 50.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Office of Transportation 4.51 4.39 6.20 6.35 0.15 2.42% Planning and Development Servicesc Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate III Assistant Chief Building Official Assistant Director PCE Associate Engineer Associate Planner Building Inspector Specialist Building/Planning Technician Building/Planning Technician (Freeze) Business Analyst 2.00 1.00 3.00 3.30 1.00 1.00 0.02 1.00 4.00 3.00 0.00 1.00 2.00 1.00 2.80 3.29 1.00 1.00 0.02 3.03 4.00 3.00 0.00 1.00 1.00 1.00 2.80 4.00 1.00 1.00 0.22 3.15 4.00 3.00 0.00 0.00 1.00 1.00 2.80 4.00 1.00 1.00 0.20 3.00 6.00 2.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.02 -0.15 2.00 -1.00 1.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (9.09) % (4.76)% 50.00% (33.33) % 0.00% 0.00% 502 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Table of Organizations 1� J Chief Building Official Chief Planning Official Chief Transportation Official Code Enforcement Officer Code Enforcement Officer (Freeze) Code Enforcement -Lead Deputy Chief/Fire Marshal Development Project Coordinator II Development Project Coordinator III Development Services Director FY 2018 Actuals 1.00 1.00 0.06 2.00 0.00 1.00 0.80 2.00 3.00 1.00 FY 2019 Actuals 1.00 1.00 0.09 2.00 0.00 1.00 0.80 2.00 3.00 1.00 Director Planning/Community 1.00 1.00 Environment Engineer 0.64 0.64 Engineering Technician III 1.78 1.78 Fire Inspector 3.20 3.20 Fire Inspector (Freeze) 0.00 0.00 Hazardous Materials Inspector 1.60 1.60 Industrial Waste Inspector 0.01 0.01 Industrial Waste Investigator 0.35 0.35 Inspector, Field Services 0.68 0.68 Landscape Architect Park Planner 0.00 0.50 Management Analyst 1.99 1.79 Manager Development Center 1.00 1.00 Manager Environmental Control 0.10 0.10 Program Manager Planning 4.00 3.00 Manager Urban Forestry 0.04 0.04 Planner 4.00 4.00 Planning Arborist 0.29 0.00 Planning Division Manager 0.00 1.00 Principal Management Analyst 0.00 0.00 Principal Planner 0.00 1.00 Principal Planner (Freeze) 0.00 0.00 Program Assistant I 0.00 0.00 Program Assistant I (Freeze) 0.00 0.00 Project Engineer 0.03 0.33 Senior Business Analyst 0.00 0.00 Senior Engineer 0.46 0.46 Senior Industrial Waste Investigator 0.01 0.01 Senior Management Analyst 2.00 1.88 Senior Planner 6.60 3.60 TABLE OF ORGANIZATION FY 2020 Adopted Budget 1.00 1.00 0.00 2.00 0.00 1.00 0.80 2.00 3.00 0.00 FY 2021 Adopted Budget 1.00 1.00 0.00 0.00 2.00 1.00 0.80 2.00 3.00 0.00 1.00 1.00 0.64 1.78 3.20 0.00 1.60 0.01 0.35 0.68 0.50 0.01 0.00 0.52 1.50 1.60 1.60 1.60 0.00 0.35 0.68 0.50 0.00 0.00 FY 2021 Change FTE 0.00 0.00 0.00 -2.00 2.00 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% - 0.12 - 0.28 -1.60 1.60 0.00 -0.01 0.00 0.00 0.00 -0.01 0.00 (18.75)% (15.73)% (50.00) % 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% (100.00)% 0.00% 0.10 0.00 -0.10 (100.00)% 5.00 4.00 -1.00 (20.00)% 0.04 0.00 -0.04 (100.00)% 4.00 4.00 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00 0.00 0.00% 1.00 0.00 -1.00 (100.00)% 2.00 1.00 -1.00 (50.00)% 0.00 1.00 1.00 0.00% 1.00 0.00 -1.00 (100.00)% 0.00 1.00 1.00 0.00% 0.13 0.10 -0.03 (23.08)% 1.00 1.00 0.00 0.00% 0.46 0.40 -0.06 (13.04)% 0.01 0.00 -0.01 (100.00)% 2.00 2.00 0.00 0.00% 3.60 2.60 -1.00 (27.78)% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 503 TABLE OF ORGANIZATION Table of Organizations Senior Planner (Freeze) Supervisor Inspection and Surveying Traffic Engineering -Lead Transportation Planning Manager FY 2018 Actuals 0.00 0.27 0.00 0.00 FY 2019 Actuals 0.00 0.27 0.00 0.05 Total Planning and Community Environment 62.23 62.32 FY 2020 Adopted Budget 0.00 0.27 0.10 0.00 62.45 FY 2021 Adopted Budget 1.00 0.25 0.10 0.00 FY 2021 Change FTE 1.00 -0.02 0.00 0.00 FY 2021 Change % 0.00% (7.41)% 0.00% 0.00% 61.60 - 0.85 -1.36% Police Administrative Assistant Administrative Associate II Administrative Associate II (Freeze) Animal Control Officer Animal Control Officer (Freeze) Animal Control Officer -Lead Animal Services Specialist II Assistant Police Chief Business Analyst Code Enforcement Officer Communications Manager Communications Manager (Freeze) Communications Technician Communications Technician (Freeze) Community Service Officer Community Service Officer (Freeze) Court Liaison Officer Crime Analyst Deputy Director Technical Services Division Deputy Director Technical Services Division (Freeze) Geographic Information System Specialist Police Agent Police Captain Police Chief Police Lieutenant Police Lieutenant (Freeze) Police Officer Police Officer (Freeze) Police Records Specialist II Police Records Specialist -Lead 1.00 3.00 0.00 3.00 0.00 1.00 2.00 1.00 1.20 1.00 1.00 0.00 1.00 0.00 7.50 0.00 1.00 1.00 0.80 0.00 0.50 19.00 2.00 1.00 5.00 0.00 50.00 0.00 6.00 1.00 1.00 1.00 3.00 3.00 0.00 0.00 3.00 3.00 0.00 0.00 1.00 1.00 2.00 0.00 1.00 1.00 1.20 1.20 1.00 1.00 1.00 1.00 0.00 0.00 1.00 1.00 0.00 0.00 7.50 7.50 0.00 0.00 1.00 1.00 1.00 1.00 0.80 0.80 0.00 0.50 19.00 2.00 1.00 5.00 0.00 50.00 0.00 6.00 1.00 0.00 0.50 19.00 2.00 1.00 5.00 0.00 50.00 0.00 6.00 1.00 1.00 2.00 1.00 2.00 1.00 1.00 0.00 1.00 1.20 1.00 0.00 1.00 0.00 1.00 5.63 1.87 1.00 1.00 0.00 0.80 0.00 -1.00 1.00 -1.00 1.00 0.00 0.00 0.00 0.00 0.00 -1.00 1.00 -1.00 1.00 - 1.87 1.87 0.00 0.00 - 0.80 0.80 0.50 0.00 19.00 2.00 1.00 4.00 1.00 39.00 11.00 6.00 1.00 0.00 0.00 0.00 -1.00 1.00 -11.00 11.00 0.00 0.00 0.00% (33.33) % 0.00% (33.33) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (100.00)% 0.00% (100.00)% 0.00% (24.93) % 0.00% 0.00% 0.00% (100.00)% 0.00% 0.00% 0.00% 0.00% 0.00% (20.00)% 0.00% (22.00)% 0.00% 0.00% 0.00% 504 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Table of Organizations IN J Police Sergeant Program Assistant II Property Evidence Technician Public Safety Communications Manager Public Safety Communications Manager (Freeze) Public Safety Dispatcher Public Safety Dispatcher (Freeze) Public Safety Dispatcher -Lead Public Safety Program Manager Senior Management Analyst Superintendent Animal Services Veterinarian Veterinarian Technician FY 2018 Actuals 14.00 1.00 2.00 1.00 FY 2019 Actuals 14.00 1.00 2.00 1.00 TABLE OF ORGANIZATION FY 2020 Adopted Budget 14.00 1.00 2.00 1.00 FY 2021 Adopted Budget 14.00 1.00 2.00 0.00 FY 2021 Change FTE 0.00 0.00 0.00 -1.00 0.00 0.00 0.00 1.00 1.00 16.00 0.00 4.00 2.00 1.00 1.00 1.00 2.00 16.00 0.00 4.00 2.00 1.00 1.00 1.00 2.00 16.00 12.00 0.00 4.00 4.00 4.00 2.00 2.00 1.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 -4.00 4.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% (100.00)% 0.00% (25.00)% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Police 155.00 155.00 149.00 149.00 0.00 0.00% Public Works Administrative Assistant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Director Public Works Associate Engineer Building Serviceperson Building Serviceperson-Lead Cement Finisher Cement Finisher -Lead Coordinator Public Works Projects Director Public Works/City Engineer Electrician Engineer Engineering Technician III Equipment Operator Facilities Carpenter Facilities Maintenance -Lead Facilities Painter Facilities Technician Heavy Equipment Operator Heavy Equipment Operator -Lead Inspector, Field Services 1.00 1.00 1.00 1.00 0.00 0.00% 0.60 0.60 0.10 0.10 0.00 0.00% 2.65 2.65 2.65 2.65 0.00 0.00% 0.01 0.01 0.01 0.01 0.00 0.00% 0.87 0.87 0.73 0.73 0.00 0.00% 0.30 0.30 0.00 0.00 0.00 0.00% 1.00 0.00 0.00 0.00 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 3.00 2.00 2.00 2.00 0.00 0.00% 0.26 0.26 0.26 0.26 0.00 0.00% 1.50 1.50 1.50 1.50 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 0.80 0.80 0.80 0.80 0.00 0.00% 0.66 0.66 0.36 0.48 0.12 33.33% 1.47 1.47 1.47 1.75 0.28 19.05% 3.46 2.46 2.46 2.46 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 1.85 1.85 1.85 1.85 0.00 0.00% 1.75 1.75 1.75 1.75 0.00 0.00% 4.05 4.05 4.05 4.05 0.00 0.00% 2.33 2.33 2.33 2.33 0.00 0.00% 0.85 0.85 0.85 0.85 0.00 0.00% 0.11 0.11 0.11 0.11 0.00 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 505 TABLE OF ORGANIZATION Table of Organizations Landscape Architect Park Planner Management Analyst Manager Facilities Manager Maintenance Operations Manager Urban Forestry Manager Watershed Protection Planning Arborist Project Engineer Project Manager Project Manager (Freeze) Senior Engineer Senior Management Analyst Senior Project Manager Supervisor Inspection and Surveying Surveyor, Public Works Traffic Controller Maintainer I Traffic Controller Maintainer II Tree Maintenance Person Tree Trim/Line Clear Tree Trim/Line Clear -Lead FY 2018 Actuals 0.10 0.70 0.90 1.20 0.96 0.05 0.71 0.50 2.65 0.00 0.79 1.11 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 Total Public Works 54.66 FY 2019 Actuals 0.60 0.70 0.90 1.20 0.96 0.05 0.00 0.50 2.65 0.00 0.79 1.11 0.10 0.10 0.33 1.94 2.00 1.00 7.00 1.00 51.45 FY 2020 Adopted Budget 0.60 0.70 0.90 1.20 0.96 0.05 0.00 0.00 2.65 0.00 0.59 1.11 0.00 0.10 0.33 1.94 2.00 1.00 7.00 1.00 49.41 FY 2021 Adopted Budget 0.60 1.45 0.90 1.20 1.00 0.05 0.00 0.00 2.00 0.65 0.60 1.11 0.00 0.10 0.33 1.94 2.00 1.00 7.00 1.00 50.61 FY 2021 Change FTE 0.00 0.75 0.00 0.00 0.04 0.00 0.00 0.00 -0.65 0.65 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 107.14% 0.00% 0.00% 4.17% 0.00% 0.00% 0.00% (24.53) % 0.00% 1.69% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.20 2.43% Total General Fund 582x8 574.93. Enterprise Fund Public Works Account Specialist Accountant Administrative Associate I Administrative Associate II Administrative Associate Ill Assistant Director Public Works Assistant Manager WQCP Associate Engineer Chemist Deputy Chief/Fire Marshal Electrician Electrician -Lead Engineer Engineering Technician III 0.30 0.40 0.10 2.15 0.10 1.30 2.00 2.99 3.00 0.07 3.00 2.00 0.90 0.25 0.30 0.40 0.10 2.15 0.10 1.30 2.00 2.99 3.00 0.07 3.00 2.00 0.90 0.25 0.30 0.40 0.10 2.15 0.10 1.30 2.00 2.99 3.00 0.07 3.00 2.00 0.90 0.25 0.30 0.40 0.10 2.15 0.10 1.30 2.00 3.00 3.00 0.07 3.00 2.00 0.90 0.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.33% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 506 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Table of Organizations R FY 2018 Actuals Environmental Specialist 2.00 Equipment Operator 0.54 Facilities Maintenance Lead 1 .00 Facilities Technician 1.50 Hazardous Materials Inspector 0.04 Heavy Equipment Operator 0.90 Heavy Equipment Operator -Lead 1.15 Industrial Waste Inspector 2.99 Industrial Waste Investigator 1.15 Laboratory Technician WQC 3.00 Landfill Technician 1.00 Management Analyst 2.30 Manager Airport 1.00 Manager Environmental Control 4.90 Program Manager Laboratory Services 1.00 Manager Maintenance Operations 1.96 Manager Solid Waste 1.00 Manager Water Quality Control Plant 1.00 Manager Watershed Protection 0.95 Plant Mechanic 7.00 Program Assistant I 1.00 Program Assistant II 2.00 Project Engineer 1.83 Project Manager 1.35 Senior Accountant 0.30 Senior Buyer 1.00 Senior Chemist 1.00 Senior Engineer 3.76 Senior Industrial Waste Investigator 0.99 Senior Management Analyst 0.21 Senior Mechanic 1.00 Senior Operator WQC 6.00 Senior Technologist 1.00 Storekeeper 1.00 Street Maintenance Assistant 1.00 Street Sweeper Operator 1.63 Supervisor WQCP Operations 3.00 Surveyor, Public Works 0.12 Technologist 1.00 FY 2019 Actuals 2.00 0.54 1.00 1.50 0.04 0.90 1.15 2.99 1.15 3.00 1.00 2.30 1.00 4.90 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 0.99 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 0.12 1.00 TABLE OF ORGANIZATION FY 2020 Adopted Budget 2.00 0.54 1.00 1.50 0.04 0.90 1.15 2.99 1.15 3.00 1.00 2.30 1.00 FY 2021 Adopted Budget 2.00 0.54 1.00 1.50 0.04 0.90 1.15 3.00 1.15 3.00 1.00 2.30 1.00 4.90 5.00 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 0.99 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 0.12 1.00 1.00 1.96 1.00 1.00 0.95 7.00 1.00 2.00 1.83 1.35 0.30 1.00 1.00 3.76 1.00 0.21 1.00 6.00 1.00 1.00 1.00 1.63 3.00 0.12 1.00 FY 2021 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.33% 0.00% 0.00% 0.00% 0.00% 0.00% 0.10 2.04% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 507 TABLE OF ORGANIZATION Table of Organizations Traffic Controller Maintainer I WQC Plant Operator II Zero Waste Coordinator FY 2018 Actuals 0.06 16.00 1.00 FY 2019 Actuals 0.06 16.00 1.00 Total Public Works 101.19 101.19 FY 2020 Adopted Budget 0.06 16.00 1.00 101.19 FY 2021 Adopted Budget 0.06 16.00 1.00 101.32 FY 2021 Change FTE 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% 0.13 0.13% Utilities Account Specialist 1.70 1.70 Accountant 0.60 0.60 Administrative Assistant 1.00 1.00 Administrative Associate II 7.00 7.00 Assistant City Manager/Utilities General Manager Assistant Director Administrative Services Assistant Director Utilities Customer 1.00 1.00 1.00 1.00 0.00 Support Services Assistant Director Utilities Engineering 1.00 1.00 1.00 0.00 -1.00 (100.00)% Assistant Director Utilities Engineering 0.00 0.00 0.00 1.00 1.00 (Freeze) Assistant Director Utilities Operations 1.00 1.00 1.00 1.00 0.00 0.00% Assistant Director Utilities/Resource 1.00 1.00 1.00 1.00 0.00 Management Business Analyst 7.00 6.00 6.00 5.00 -1.00 (16.67)% Business Analyst (Freeze) 0.00 0.00 0.00 1.00 1.00 0.00% Cathodic Protection Technician 1.00 1.00 1.00 1.00 0.00 0.00% Assistant 0.75 0.25 1.70 0.60 1.00 6.00 0.75 0.00 0.25 0.25 1.70 0.60 1.00 6.00 0.00 0.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Cathodic Technician 1.00 1.00 1.00 1.00 0.00 0.00% Cement Finisher 2.00 2.00 2.00 2.00 0.00 0.00% Contracts Administrator 0.70 0.70 0.70 0.70 0.00 0.00% Coordinator Utilities Projects 6.00 6.00 6.00 6.00 0.00 0.00% Customer Service Representative 7.00 7.00 7.00 7.00 0.00 0.00% Customer Service Specialist 2.00 2.00 2.00 2.00 0.00 0.00% Customer Service Specialist -Lead 2.00 2.00 2.00 2.00 0.00 0.00% Deputy Chief/Fire Marshal 0.08 0.08 0.08 0.08 0.00 0.00% Deputy City Attorney 1.00 1.00 1.00 1.00 0.00 0.00% Director Administrative Services/CFO 0.20 0.20 0.20 0.20 0.00 0.00% Electric Heavy Equipment Operator 0.00 0.00 0.00 2.00 2.00 0.00% Electric Project Engineer 2.00 2.00 4.00 4.00 0.00 0.00% Electric Underground Inspector 2.00 2.00 2.00 2.00 0.00 0.00% Electric Underground Inspector -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Electrical Equipment Technician 1.00 1.00 1.00 1.00 0.00 0.00% Electrician Assistant I 3.00 3.00 3.00 3.00 0.00 0.00% 508 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET Table of Organizations t_ J Engineer Engineering Manager - Electric Engineering Manager - WGW Engineering Technician III Gas and Water Meter Measurement and Control Technician Gas and Water Meter Measurement and Control Technician - Lead FY 2018 Actuals 4.00 1.00 1.00 3.00 FY 2019 Actuals 4.00 1.00 1.00 3.00 4.00 4.00 1.00 TABLE OF ORGANIZATION FY 2020 Adopted Budget 4.00 1.00 1.00 3.00 FY 2021 Adopted Budget 4.00 1.00 1.00 3.00 4.00 4.00 1.00 1.00 FY 2021 Change FTE 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% 0.00% 0.00 0.00% 1.00 0.00 Hazardous Materials Inspector 0.06 0.06 0.06 0.06 0.00 Heavy Equipment Operator 6.70 6.70 6.70 0.00 -6.70 Heavy Equipment Operator - Install/ 4.00 4.00 4.00 4.00 0.00 0.00% Repair Industrial Waste Investigator 0.50 0.50 0.50 0.50 0.00 0.00% Inspector, Field Services 5.00 5.00 5.00 5.00 0.00 0.00% Lineperson/Cable Specialist 11.00 11.00 11.00 10.00 -1.00 (9.09)% Lineperson/Cable Specialist -Lead 4.00 4.00 4.00 4.00 0.00 0.00% Maintenance Mechanic -Welding 2.00 2.00 2.00 2.00 0.00 0.00% Manager Communications 1.00 1.00 1.00 1.00 0.00 0.00% Manager Customer Service 1.00 1.00 1.00 1.00 0.00 0.00% Manager Electric Operations 1.00 1.00 1.00 1.00 0.00 0.00% Manager Treasury, Debt & 0.40 0.40 0.40 0.40 0.00 0.00% Investments Manager Utilities Compliance 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Credit & Collection 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Operations WGW 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Program Services 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Strategic Business 1.00 1.00 1.00 1.00 0.00 0.00% Manager Utilities Telecommunications 1.00 1.00 1.00 1.00 0.00 0.00% Meter Reader 6.00 6.00 6.00 6.00 0.00 0.00% Meter Reader -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Metering Technician 3.00 3.00 3.00 3.00 0.00 0.00% Metering Technician -Lead 1.00 1.00 1.00 1.00 0.00 0.00% Offset Equipment Operator 0.48 0.48 0.48 0.48 0.00 0.00% Overhead Underground Troubleman 2.00 2.00 2.00 2.00 0.00 0.00% Power Engineer 3.00 3.00 1.00 1.00 0.00 0.00% Principal Business Analyst 1.00 1.00 1.00 1.00 0.00 0.00% Program Assistant I 1.50 1.50 1.50 1.50 0.00 0.00% Program Assistant II 0.00 0.00 1.00 1.00 0.00 0.00% Project Engineer 5.00 5.00 5.00 5.00 0.00 0.00% Project Manager 0.75 0.75 0.75 0.75 0.00 0.00% Resource Planner 6.00 6.00 5.00 5.00 0.00 0.00% 0.00% 0.00% (100.00)% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 509 TABLE OF ORGANIZATION Table of Organizations FY 2018 Actuals Restoration Lead 1.00 SCADA Technologist 2.00 Senior Accountant 0.70 Senior Business Analyst 2.00 Senior Electrical Engineer 4.00 Senior Engineer 5.00 Senior Management Analyst 0.70 Senior Mechanic 1.00 Senior Performance Auditor 1.00 Senior Resource Planner 6.00 Senior Utilities Field Service 1.00 1.00 Representative Senior Water Systems Operator 2.00 2.00 Storekeeper 1.00 1.00 Storekeeper -Lead 0.80 0.80 Street Light, Traffic Signal & Fiber 5.00 5.00 Technician Street Light, Traffic Signal & Fiber -Lead 2.00 2.00 Substation Electrician 6.00 6.00 Substation Electrician (Freeze) 0.00 0.00 Substation Electrician -Lead 2.00 2.00 Supervising Electric Project Engineer 1.00 1.00 Tree Maintenance Person 1.00 1.00 Utilities Chief Operating Officer 1.00 1.00 Utilities Chief Operating Officer 0.00 0.00 (Freeze) Utilities Compliance Technician 2.00 2.00 Utilities Compliance Technician -Lead 1.00 1.00 Utilities Credit/Collection Specialist 2.00 2.00 Utilities Director 0.00 0.00 Utilities Engineer Estimator 5.00 5.00 Utilities Field Services Representative 5.00 5.00 Utilities Install Repair -Lead -Welding 2.00 2.00 Certified Utilities Install Repair -Welding 3.00 3.00 Certified Utilities Install/Repair 10.00 10.00 Utilities Install/Repair Assistant 1.00 1.00 Utilities Install/Repair-Lead 5.00 5.00 Utilities Key Account Representative 3.00 3.00 Utilities Locator 3.00 3.00 FY 2019 Actuals 1.00 2.00 0.70 3.00 4.00 5.00 0.70 1.00 1.00 6.00 FY 2020 Adopted Budget 1.00 2.00 0.70 3.00 4.00 5.00 0.70 1.00 1.00 6.50 FY 2021 Adopted Budget 1.00 2.00 0.70 3.00 4.00 5.00 0.70 1.00 1.00 6.50 1.00 1.00 2.00 1.00 0.80 2.00 1.00 0.80 5.00 5.00 2.00 6.00 0.00 2.00 1.00 1.00 1.00 2.00 5.00 1.00 2.00 1.00 1.00 0.00 0.00 1.00 2.00 1.00 2.00 1.00 5.00 5.00 3.00 1.00 2.00 1.00 5.00 5.00 2.00 2.00 3.00 3.00 10.00 1.00 5.00 3.00 3.00 10.00 1.00 5.00 3.00 3.00 FY 2021 Change FTE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00 0.00% 0.00 -1.00 1.00 0.00 0.00 0.00 -1.00 0.00% (16.67)% 0.00% 0.00% 0.00% 0.00% (100.00)% 1.00 0.00% 1.00 50.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00% 510 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TABLE OF ORGANIZATION Table of Organizations Utilities Marketing Program Administrator Utilities Safety Officer Utilities Supervisor Utilities Supervisor (Freeze) Utilities System Operator Utility Engineering Estimator - Lead Warehouse Supervisor Water System Operator II WGW Heavy Equipment Operator FY 2018 Actuals 3.00 FY 2019 Actuals 3.00 FY 2020 Adopted Budget 4.00 FY 2021 Adopted Budget 4.00 1.00 1.00 1.00 1.00 12.00 12.00 12.00 11.00 0.00 0.00 0.00 1.00 5.00 5.00 5.00 5.00 1.00 1.00 1.00 1.00 0.80 0.80 0.80 0.80 4.00 4.00 4.00 4.00 0.00 0.00 0.00 4.70 FY 2021 Change FTE 0.00 0.00 -1.00 1.00 0.00 0.00 0.00 0.00 4.70 FY 2021 Change % 0.00% 0.00% (8.33) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Total Utilities 256.67 256.67 257.42 257.42 0.00 0.00% 357.86 357.86 358.61 358.74 0.13 0.04% Other Funds Capital Project Fund Administrative Assistant Administrative Associate I Administrative Associate III Assistant Director Public Works Associate Engineer Associate Engineer (Freeze) Associate Planner Building Serviceperson Building Serviceperson-Lead Cement Finisher -Lead Chief Transportation Official Contracts Administrator Coordinator Public Works Projects Coordinator Transportation Systems Management Engineer Engineer (Freeze) Engineering Technician III Facilities Technician Inspector, Field Services Landscape Architect Park Planner Management Analyst Manager Facilities Manager Maintenance Operations Parking Operations -Lead 0.00 0.00 0.15 0.15 0.00 0.80 0.80 0.80 0.80 0.00 0.89 1.09 0.89 0.89 0.00 0.58 0.58 0.72 0.72 0.00 2.96 3.04 2.50 1.50 -1.00 0.00 0.00 0.00 1.00 1.00 0.00 0.31 0.30 0.30 0.00 0.00 0.75 0.75 1.00 0.25 0.00 1.40 1.40 1.40 0.00 0.74 0.74 0.74 0.74 0.00 0.52 0.36 0.30 0.30 0.00 0.60 0.60 0.60 0.60 0.00 1.30 1.30 1.30 1.30 0.00 0.62 2.80 0.00 0.50 1.50 1.21 0.90 0.79 0.10 0.65 1.00 0.76 2.80 0.00 0.50 1.50 1.21 0.90 0.82 0.10 0.65 0.35 0.75 3.10 0.00 0.50 1.50 1.21 0.90 0.94 0.10 0.65 0.40 0.75 2.10 1.00 0.50 1.50 1.21 0.90 0.95 0.10 0.65 0.40 0.00 -1.00 1.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00% 0.00% 0.00% 0.00% (40.00) % 0.00% 0.00% 33.33% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (32.26)% 0.00% 0.00% 0.00% 0.00% 0.00% 1.06% 0.00% 0.00% 0.00% TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 511 TABLE OF ORGANIZATION Table of Organizations Program Assistant II Project Engineer Project Manager Project Manager (Freeze) Senior Engineer Senior Management Analyst Senior Planner Senior Project Manager Supervisor Inspection and Surveying Surveyor, Public Works Traffic Engineering -Lead Transportation Planning Manager FY 2018 Actuals 0.40 7.14 1.15 0.00 1.99 0.60 0.85 0.90 0.63 0.55 0.62 0.50 FY 2019 Actuals 0.00 6.84 1.15 0.00 1.99 0.72 0.72 0.90 0.63 0.55 0.35 0.35 Total Capital Project Fund 33.79 34.76 FY 2020 Adopted Budget 0.00 7.59 1.15 0.00 2.99 0.60 0.50 1.00 0.63 0.55 0.55 0.35 36.40 FY 2021 Adopted Budget 0.00 7.62 0.80 0.35 4.04 0.60 0.50 0.00 0.65 0.55 0.55 0.35 36.77 FY 2021 Change FTE 0.00 0.03 -0.35 0.35 1.05 0.00 0.00 -1.00 0.02 0.00 0.00 0.00 0.37 FY 2021 Change % 0.00% 0.40% (30.43) % 0.00% 35.12% 0.00% 0.00% (100.00)% 3.17% 0.00% 0.00% 0.00% 1.02% Printing and Mailing Services Manager Revenue Collections Offset Equipment Operator 0.10 1.52 0.10 1.52 Total Printing and Mailing Services 1.62 1.62 0.10 1.52 0.10 1.52 1.62 1.62 0.00 0.00% 0.00 0.00% 0.00 0.00% Special Revenue Funds Account Specialist Account Specialist (Freeze) Account Specialist -Lead Administrative Assistant Administrative Associate II Administrative Associate III Associate Planner Chief Transportation Official Community Service Officer 1.62 0.00 0.95 0.00 0.20 0.00 0.00 0.05 0.50 Community Service Officer (Freeze) 0.00 Coordinator Public Works Projects 0.20 Electrician 0.20 0.15 Facilities Painter 0.25 0.45 Management Analyst 0.02 Facilities Maintenance -Lead Facilities Technician Manager Community Services Senior Program Manager Maintenance Operations 1.00 1.87 0.00 0.55 0.00 0.20 0.21 0.42 0.00 0.50 0.00 0.20 0.20 0.15 0.25 0.45 0.17 1.00 0.19 0.19 Manager Revenue Collections 0.28 0.28 1.87 0.00 0.55 0.35 0.20 0.00 0.25 0.00 0.50 0.00 0.20 0.20 0.15 0.25 0.45 0.35 1.00 0.19 0.28 1.37 0.50 0.55 0.35 0.20 0.00 0.25 0.00 0.37 0.13 0.20 0.20 0.15 0.25 0.45 0.35 1.00 0.19 0.28 -0.50 0.50 0.00 0.00 0.00 0.00 0.00 0.00 -0.13 0.13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (26.74) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% (26.00) % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00 0.00% 0.00 0.00% 512 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET TABLE OF ORGANIZATION Table of Organizations I Parking Operations -Lead Senior Planner Street Maintenance Assistant Street Sweeper Operator Transportation Planning Manager FY 2018 Actuals 0.00 0.40 2.00 0.37 0.30 FY 2019 Actuals 0.55 0.40 2.00 0.37 0.24 FY 2020 Adopted Budget 0.60 0.40 2.00 0.37 0.50 FY 2021 Adopted Budget 0.60 0.40 2.00 0.37 0.50 FY 2021 Change FTE 0.00 0.00 0.00 0.00 0.00 FY 2021 Change % 0.00% 0.00% 0.00% 0.00% 0.00% Total Special Revenue Funds 9.13 10.20 10.66 10.66 0.00 0.00% Technology Fund Administrative Assistant Assistant Director Administrative Services Business Analyst 1.00 0.10 1.00 0.10 1.00 0.10 1.00 0.10 1.00 1.00 1.00 1.00 Desktop Technician 6.00 6.00 6.00 6.00 Director Information Technology/CIO 1.00 1.00 1.00 0.00 Director Information Technology/CIO (Freeze) Manager Information Technology Manager Information Technology Security Principal Business Analyst Senior Business Analyst Senior Management Analyst Senior Technologist Senior Technologist (Freeze) Technologist Technologist (Freeze) 0.00 0.00 0.00 1.00 0.00 0.00% 0.00 0.00% 0.00 0.00 -1.00 1.00 0.00% 0.00% (100.00)% 0.00% 4.00 3.00 3.00 3.00 0.00 0.00% 1.00 1.00 1.00 0.00 0.00% 1.00 1.00 2.00 1.00 17.00 0.00 1.00 0.00 1.00 2.00 1.00 18.00 0.00 1.00 0.00 Total Technology Fund 36.10 36.10 1.00 2.00 1.00 18.00 0.00 1.00 0.00 36.10 1.00 2.00 1.00 16.00 2.00 0.00 1.00 0.00 0.00 0.00 -2.00 2.00 -1.00 1.00 36.10 0.00 0.00% 0.00% 0.00% (11.11)% 0.00% (100.00)% 0.00% 0.00% Vehicle Replacement and Maintenance Fund Administrative Associate III Assistant Director Public Works Assistant Fleet Manager Equipment Maintenance Service Person 1.00 1.00 0.00 0.00 0.00 0.00% 0.25 0.25 0.25 0.25 0.00 0.00% 1.00 1.00 1.00 1.00 0.00 0.00% 2.00 2.00 2.00 2.00 0.00 0.00% Fleet Services Coordinator 2.00 2.00 1.00 1.00 0.00 0.00% 0.20 0.20 0.20 0.20 0.00 0.00% Management Assistant 0.00 0.00 1.00 1.00 0.00 0.00% Manager Fleet 1.00 1.00 1.00 1.00 0.00 0.00% Motor Equipment Mechanic ll 6.00 6.00 6.00 5.00 -1.00 (16.67)% 0.00 0.00 0.00 1.00 1.00 0.00% Motor Equipment Mechanic -Lead 2.00 2.00 2.00 2.00 0.00 0.00% Management Analyst Motor Equipment Mechanic II (Freeze) TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 513 TABLE OF ORGANIZATION Table of Organizations 1 FY 2018 Actuals FY 2019. Actuals FY 2020 Adopted Budget FY 2021 Adopted Budget FY 2021 Change FTE FY 2021 Change % Project Manager Senior Management Analyst Total Vehicle Replacement and Maintenance Fund 1.00 0.08 1.00 0.08 I 16.53 16.53 1.00 0.08 1.00 0.08 15.53 _di15.53 0.00 0.00% 0.00 0.00% 0.00 0.00% Workers' Compensation Program Fund Senior Human Resources Administrator 1.00 1.00 1.00 1.00 0.00 0.00% Total Workers' Compensation Program Fund 1.00 1.00 4 1.00 1.00 0.00 0.00% Total Other Funds 98.17 100.21 101.31 101.68 0.37 0.37% Total Citywide Positions 1,058.95 1,040.35 1,034.85 1,034.85 0.00 l 0.00% a. The Table of Organization includes position freezes recommended in the FY 2021 Adopted Oper- ating Budget memo (CMR 11330). These positions have been de -funded in FY 2021 and are identified in the Table of Organization with "(Freeze)" following the job classification title. Job classifications im- pacted by freezes are summarized in two rows, one to reflect the total FTE authorized (less freezes), and one to reflect the total FTE freezes. b. The Office of Transportation was created within the City Manager's Office in FY 2020 through the reallocation of staff and resources from the Planning and Development Services Department (previ- ously the Planning and Community Environment Department). For demonstrative purposes, prior years in the Office of Transportation have been restated to include Transportation staff. c. The Planning and Development Services Department was established in FY 2020 through the merg- ing of the Development Services Department and the Planning and Community Environment Depart- ment and the reallocation of resources to create a dedicated Office of Transportation within the City Manager's Office. For demonstrative purposes, prior years have been restated to include staffing of the prior Development Services Department and the Planning and Community Environment Depart- ment. 514 TABLE OF ORGANIZATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET ■ • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 515 CITY OF PALO ALTO BUDGET ADOPTION ORDINANCE 3udget Ado Dtion Ordinance As discussed in the `Budget Process' section of this document, the review of the operating and capital budgets is structured around public hearings conducted by the Finance Committee and City Council prior to adoption of the budget. These hearings are conducted in part to incorporate community input into the decision making process. The ordinance to adopt the Fiscal Year 2021 Budget is included below. This ordinance was approved and adopted by the City Council on June 22, 2020. BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 517 BUDGET ADOPTION ORDINANCE DocuSign Envelope ID: 4327A002-4DF6-4C8C-92FC-2ABC5C21AE8C ORDINANCE NO. 5499 Ordinance of the Council of the City of Palo Alto Adopting the Budget for Fiscal Year 2021 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 2021; and B. Pursuant to the provisions of Section 12 of Article I I I of the Charter, the Council did, on June 22, 2020, 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 22, 2020, 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 2021: (a) The budget document (Exhibit "1") containing the proposed operating and capital budgets submitted on April 20, 2020, by the City Manager for Fiscal Year 2021, entitled "City of Palo Alto - City Manager's Fiscal Year 2021 Proposed Budget" covering General Government Funds, Enterprise Funds, Special Revenue Funds, and Internal Service Funds, a copy of which is on file in the Department of Administrative Services, to which copy reference is hereby made concerning the full particulars thereof, and by such reference is made a part hereof; and (b) The Amendments to the City Manager's Fiscal Year 2021 Proposed Budget, attached hereto as Exhibit "2", Exhibit "3", and Exhibit "4" and made a part hereof; and (c) Changes and revised pages in the Table of Organization, as displayed on pages 339 through 356 in "Exhibit 1," and amended in Exhibit "5" made a part hereof; and (d) Fee changes of the Municipal Fee Schedule attached hereto as Exhibit "6". 1 200622 tlh 0140209 518 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET BUDGET ADOPTION ORDINANCE DocuSign Envelope ID: 4327A002-4DF6-4C8C-92FC-2ABC5C21AE8C 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 2020 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 2020 shall be carried forward and added to the fund or department appropriations for Fiscal Year 2021. 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", Exhibit "3", and Exhibit "4" and the Fiscal Year 2020 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 2021. SECTION 9. The Council of the City of Palo Alto adopts the changes to the Municipal Fee Schedule as set forth in Exhibit "6". The amount of the new or increased fees and charges is no more than necessary to cover the reasonable costs of the governmental activity, and the manner in which those costs are allocated to a payer bears a fair and reasonable relationship to the payer's burden on, or benefits received from, the governmental activity. All new and increased fees shall go into effect immediately; provided that pursuant to Government Code Section 66017, all Planning & Community Environment Department fees relating to a "development project" as defined in Government Code Section 66000 shall become effective sixty (60) days from the date of adoption. 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. 2 200622 tlh 0140209 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 519 BUDGET ADOPTION ORDINANCE DocuSign Envelope ID:4327A002-4DF6-4C8C-92FC-2ABC5C21AE8C SECTION 11. As provided in Section 2.04.330 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. SECTION 12. The Council of the City of Palo Alto hereby finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: June 22, 2020 AYES: CORMACK, DUBOIS, FILSETH, FINE, KNISS NOES: KOU, TANAKA ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: CgaDocuSigned by: d M.4.-04 City Clerk APPROVED AS TO FORM: CDocuSigned by: A1A. Fll&L Mayor DocuSgned by: EA 544414 APPROVED: City Manager L 114- City Attorney 3 200622 tlh 0140209 p-DocuSigned by: z./4-SOL Director of Administrative Services 520 BUDGET ADOPTION ORDINANCE • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION Fiscal Year 2021 Appropriations Limit 'Resolution and Calculation The City of Palo Alto complies with Article XIIIB of the Constitution of the State of California, which mandates that the City may not appropriate any proceeds of taxes in excess of its appropriations limit. The limit is calculated annually to adjust for inflation and population changes. The resolution determining the Cal- culation of the Appropriations Limit for Fiscal Year 2021 is included below. This resolution was adopted by the City Council on June 22, 2020. APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 521 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: 04452397-9721-4BD3-B416-DCO2AOACFOC1 RESOLUTION NO. 9900 Resolution of the Council of the City of Palo Alto Determining the Calculation of the Appropriations Limit for Fiscal Year 2021 WHEREAS, under Article XIIIB of the Constitution of the State of California, the City of Palo Alto (City) may not appropriate any proceeds of taxes in excess of its appropriations limit (Limit); and WHEREAS, since fiscal year 1991, the City is permitted to annually adjust its Limit in accordance with inflation and population adjustment factors; and WHEREAS, pursuant to Government Code Section 37200, the calculation of the Limit and the total appropriations subject to the limit were set forth in the annual budget of the City for Fiscal Year 2021, which was adopted by ordinance of the Council on June 22, 2020; and WHEREAS, pursuant to Government Code sections 7901 and 7910, the final calculation of the Limit has been determined, and the adjustment factors on which the calculation is based are a 3.73% percent change in California per capita income and a 0.37% percent change in the population growth for the County of Santa Clara; and WHEREAS, the documentation used in the determination of the Limit has been made available to the general public for fifteen (15) days prior to the date of adoption of this resolution; and WHEREAS, according to the final calculation, the City's net appropriations subject to limitation are approximately $113.06 million. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The Council of the City of Palo Alto hereby finds that, for Fiscal Year 2021, the final calculation of the Appropriations Limit of the City of Palo Alto has been determined in accordance with the adjustment factors referred to above, the documentation used in the determination of the calculation has been made available to the general public for the period of fifteen days as required by law, and the City's appropriations subject to limitation are under the Limit by approximately $66.81 million. SECTION 2. The Council hereby adopts the final calculation of the Appropriations Limit of the City for Fiscal Year 2021, a copy of which is attached hereto as Exhibit 1. // 1 522 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: 04452397-9721-4BD3-8416-DCO2AOACFOC1 SECTION 3. The Council finds that the adoption of this resolution does not constitute a project under the California Environmental Quality Act, and, therefore, no environmental assessment is necessary. INTRODUCED AND PASSED: June 22, 2020 AYES: CORMACK, DUBOIS, FILSETH, FINE, KNISS, KOU, TANAKA NOES: ABSENT: ABSTENTIONS: ATTEST: DocuSigned by: Egag 1444.04 City Clerk APPROVED AS TO FORM: CDocuSigned by: lith ► sip City Attorney 2 APPROVED: [ DocuSigned by: tau- Filnd, 2Bbi 2F-[UAb91t446 Mayor DocuSigned by: EA 94.1is.44 t1Uuh19000UU4F9 .. City Manager CDocuSigned by: U61.dU42i-.1:3H44,.9 Administrative Services Director APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET 523 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION DocuSign Envelope ID: 04452397-9721-4BD3-B416-DCO2AOACFOC1 Exhibit 1 APPROPRIAIIONSLIMITAIION COMPUANCECALCULAIION FOR FISCAL YEAR 2021 ADOPTED BUDGET ($ IN MILLIONS) Total Budgeted Appropriations General Fund FY2021 Adopted Budget Less: Interfund Transfers Allocated Charges Non -Proceeds Net Appropriations Subject to Limit CITY OF PALO A LTO Capital Projects Funds Special Revenue Funds Debt Service Fund $ 196.97 $ 179.05 $ 19.43 $ Combined Funds 7.56 $ 403.01 $ (17.80) $ 2.38 $ (12.87) $ - $ (28.29) $ (18.31) $ - $ - $ - $ (18.31) $ (49.20) $ (175.68) $ (10.98) $ (7.50) $ (243.35) $ 111.66 $ 5.75 $ (4.41) $ 0.06 $ 113.06 FY2021 Per Capita Income Change (CA Department of Finance) M. 3.73% FactorA FY2021 Population Change (Santa Clara County) Factor B 1.0373 _ 0.37% 1.0037 FY 2020 Adopted Appropriations Limit $ 172.76 FactorA x Factor B 1.0411 FY 2021 Adopted Appropriations Limit $ 179.86 Net AppropriationsSLbject to Limit $ 113.06 Amount Under the Limit 66.81 The City of Palo Alto remainswell within itsappropriationslimit in FY2021. Future year limit trendscan be made based on the average change in regional population and income growth. The appropriationssubject to limitation includesproceeds of taxesfrom the General Fund, Capital Projects Fund, and Special Revenue Funds. Fiscal Year Per Capita Income Factor Population Change Factor Total Adjustment Factor Appropriations Limit Appropriations Subject to Limit 2020 1.0385 1.0033 1.0419 $ 171.75 $ 127.42 2019 1.0367 1.0040 1.0408 $ 164.83 $ 114.94 2018 1.0369 1.0082 1.0454 $ 158.36 $ 131.49 2017 1.0537 1.0130 1.0674 $ 151.48 $ 109.51 2016 1.0382 1.0113 1.0499 $ 141.92 $ 100.60 2015 0.9977 1.0150 1.0127 $ 135.17 $ 82.93 2014 1.0512 1.0157 1.0677 $ 133.48 $ 90.28 2013 1.0377 1.0124 1.0506 $ 125.01 $ 96.73 2012 1.0251 1.0089 1.0342 $ 119.00 $ 89.00 2011 0.9746 1.0144 0.9886 $ 115.06 $ 78.94 Amount Under the Limit 45.34 50.87 26.88 41.97 41.31 52.24 43.20 28.28 30.00 36.12 On November6, 1979, California voters approved Proposition 4, an initiative that added Article X11113 to the state Constitution. The provisionsof thisarticle place limitson the amount of revenue that can be appropriated by all entitiesof government. The Appropriations Limit isbased on actual appropriationsduring the 1978-1979 fiscal year, asincreased each year using specified population and inflationary growth factors. 524 APPROPRIATIONS LIMIT RESOLUTION AND CALCULATION • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED BUDGET FINANCIAL POLICIES Reserve Policies One of the key components of a financially stable organization is the adherence to a policy of maintaining an appropriate level of reserves. The Government Finance Officers Association (GFOA) recommends, at a minimum, that general purpose governments, regardless of size, maintain reserves (unrestricted fund balance) in their General Fund of no less than two months of operating revenues or expenditures, or a minimum of approximately 16.6 percent of General Fund operating expenditures. The GFOA further recommends that reserve levels be directly related to the degree of uncertainty the local government faces; specifically, the greater the uncertainty, the greater the financial resources necessary. Since reserves are used to mitigate risk, during these uncertain economic times, it is crucial that the City continue its practice of adhering to this GFOA guidance. This will provide the City with resources to cope with unfore- seen expenditures, unanticipated events, or revenue shortfalls. General Func Buc c et Sta ailization Reserve The City's Budget Stabilization Reserve (BSR) serves as the primary General Fund reserve. By policy, the BSR is maintained in the range of 15.0 to 20.0 percent of General Fund operating expenditures, with a target of 18.5 percent. Any reduction to the reserve below 15.0 percent requires City Council approval. At the discretion of the City Manager, any BSR balance above 18.5 percent may be transferred to the Infrastructure Reserve (IR), which was established to provide funding for maintenance and rehabilitation of the City's capital assets. The BSR is used to fund unanticipated one-time costs as opposed to ongoing or recurring operating expendi- tures. The City's intent is to fund ongoing programs and services with ongoing dollars. The City has held a long-standing practice of maintaining a BSR balance of no less than 15.0 percent of General Fund operating expenses. The table below depicts the BSR balances for seven years, the last five years of actual ending BSR balances, and two years of budgeted end- ing BSR balances. As discussed in this document, the Fiscal Year 2021 Budget assumes a BSR ending balance of $33.0 million or 16.8 percent. This is within the targeted range of 15 to 20 per- cent, although it does remain below the City Council goal of 18.5 percent by $3.5 million. Ending BSR Balance (in millions) % of Total Expenses FY 2015 Actuals FY 2016 Actuals $48.2 $49.5 FY 2017 Actuals $48.1 FY 2018 Actuals FY 2019 Adopted FY 2020 Adopted $52.8 $41.0 $42.7 FY 2021 Adopted $33.0 25.96% 24.06% 22.87% 25.63% 19.16% 18.50% 16.75% Over the years, the City's BSR has served as a repository for unspent operating funds at year- end and to fund one-time unexpected needs that arise outside of the regular budget prepara- tion process. Prudent financial management practices dictate that the BSR not be used to fund or solve on -going, recurring financial needs. The City has adhered to this practice and has not used the BSR to provide ongoing budget stabilization during periods of economic downturns. FINANCIAL POLICIES • ,_ ITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 525 FINANCIAL POLICIES HUMAN SERVICES RESOURCE ALLOCATION PROCESS (HSRAP) RESERVE In Fiscal Year 2015, the City Council set aside an earmarked reserve for the Human Resource Allocation Process (HSRAP) in the amount of $50,000 to be used during future budget cycles. In FY 2019, $10,000 was spent on the Heart and Home Collaborative leaving $40,000 in this Reserve. These funds were unspent at the conclusion of Fiscal Year 2020, and it is recom- mended that this reserve be carried forward to Fiscal Year 2021 for future HSRAP needs. Credit Rating Agencies Credit rating agencies view General Fund reserves as a critical component of strong municipal management. According to Moody's Investors Service, reserves are an important factor in the analysis of a municipality's fiscal health and, therefore, a jurisdiction's fiscal policies should include a plan for maintaining reserves. Rating agencies view sound reserves favorably, thus improving a municipality's rating and its ability to obtain low-cost financing for important proj- ects. The City is proud to report that both Moody's and Standard and Poor's (S&P) awarded their highest credit ratings, Triple A, to the City's General Obligation Bonds for library and com- munity center capital improvements in 2010 and 2013, and reaffirmed those ratings in February 2019 by S&P and July 2019 by Moody's. These ratings demonstrate that Palo Alto's prudent financial management and fiscal strength are viewed most favorably by credit agencies. The four Utility bonds that are rated by S&P also received their highest credit rate of Triple A. Moody's has rated these Utility bonds with either their second highest (Aa1) or third highest (Aa2) ratings. Capital Fund Reserve Infrastructure Reserve (IR) The Infrastructure Reserve (IR) provides a mechanism for financing the City's infrastructure maintenance and rehabilitation requirements and allows the City to apply for reimbursable infrastructure grants and respond to urgent infrastructure needs. The primary purpose of the IR is to fund projects which are critical to the maintenance of existing infrastructure. Unspent mon- ies from General Fund capital projects are returned to the IR and retained within the Capital Fund along with investment income from this reserve to fund future capital project needs. Other Policies Debt Policy The City of Palo Alto recognizes the need for spending a prudent amount every year for ongo- ing capital replacement and rehabilitation needs. An ongoing capital improvement plan is vital to ensuring the future viability of services. To achieve this priority, the City funds its regular and ongoing capital needs primarily on a "pay-as-you-go" basis. There are, however, special or extraordinary capital improvement projects, refinancing of existing debt, and purchase of major and multiple pieces of equipment in which it is appropriate to consider debt financing. 526 FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET FINANCIAL POLICIES The City's Debt Policy establishes the guidelines to support the decision -making process for issuing debt. These guidelines were adopted by the City Council on May 13, 1997 (City Man- ager's Report 210:97). Staff revised the guidelines at the April 11, 2017 City Council meeting to explicitly comply with the recently passed SB 1029 amendments to Government Code section 8855. A summary of the Debt Service guidelines, including more information on the new report- ing requirements, is in the Debt Service Fund Overview section. Investment Policy The basic principles underlying Palo Alto's investment philosophy are to ensure the safety of public funds, provide that sufficient money is always available to meet current expenditures, and achieve a reasonable rate of return on its investments. Safety is the top priority, followed by liquidity, and yield. The City pools cash from all sources and funds - except restricted bond proceeds with fiscal agents and/or with a trust - and invests its pooled idle cash in accordance with state law and the City's charter. The City follows the "Prudent Investor Standard" cited in State Government Code (Section 53600.3). Under this standard, all governing bodies of local agencies or persons authorized to make investment decisions on behalf of the City are trustees and, therefore, fidu- ciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling or managing public funds, a trustee shall act with the same care, skill, prudence and diligence under the prevailing circumstances that a prudent person acting in a like capacity and familiarity with those matters would use in the same circumstances to safe- guard the principal and maintain the liquidity needs of the agency. Prevailing circumstances include, but are not limited to, economic conditions and the anticipated needs of the agency. The City's preferred and chief practice is to buy securities and to hold them to their date of maturity rather than trade or sell securities prior to maturity. The City may, however, elect to sell a security prior to its maturity date should there be a significant financial need. If securities are purchased and held to their maturity date, then any changes in the market value of those secu- rities during their life will have no effect on the principal value. Under a buy and hold philosophy, the City is able to protect its invested principal. The economy, money markets and various finan- cial institutions (such as the Federal Reserve System) are monitored carefully to make prudent investments and assess the condition of the City's portfolio. A detailed explanation of investment objectives, applicability, and general investment guidelines can be found on the City's website. The Investment Policy also delineates authorized invest- ments, authorized investment personnel, and administrative procedures. City staff is evaluating possible recommendations to the City Council for changes to the Invest- ment Policy and other financial practices to encourage investments that support sound envi- ronmental, social, and governance (ESG) investing. This includes encouraging investments in entities that support community well-being through safe and environmentally sound practices and fair labor practices and equality of rights. Also, administratively, staff doesn't invest in enti- ties that manufacture tobacco products, firearms, or nuclear weapons and production and/or drilling of fossil fuels. Staff will be looking at making a recommendation to formalize this prac- tice in the Investment Policy. FINANCIAL POLICIES • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 527 CITY OF PALO ALTO GLOSSARY Key .budget Terms Accrual Accounting: A method of accounting that recognizes expenses when incurred and revenues when earned rather than when payment is made or received Adopted Budget: The budget that is approved and enacted by the City Council annually on before June 30th. Appropriation: The allocation of an expense budget for a particular project or program usually for a spe- cific period of time. Balanced Budget: A balanced budget exists when total revenues are equal to, or greater than, total expenses. Bond: A debt investment in which an investor loans money to an entity (governmental or otherwise) that borrows the money for a defined period of time at a fixed interest rate to pay for a variety of projects. Budget Stabilization Reserve (BSR): The BSR was established as a prudent measure to maintain the City's fiscal stability in the event that unanticipated events reduce revenue or create obligations that significantly impact the current -year budget. Examples of such events include a downturn in the economy, a natural disaster or actions that may be taken by another governmental agency that reduce revenues and/or increase expenses for the City. Capital Budget: A plan of proposed capital outlays and the means of financing them for the current fiscal period. In a two-year budget, the second year of the Capital Improvement Program is adopted -in -concept. Capital Improvement Program (CIP): The City's plan for current and future projects related to the acquisi- tion, expansion, or rehabilitation of buildings, equipment, parks, streets, and other public infrastructure. Capital Projects Fund: A fund created to account for all resources to be used for the construction or acquisition of designated fixed assets by a governmental unit except those financed by proprietary or fidu- ciary funds. City Manager's Report (CMR): Staff reports for City Council meetings as well as boards and commissions that are prepared by City staff and submitted through the City Manager's Office. Comprehensive Plan: The Palo Alto Comprehensive Plan contains the City's official policies on land use and community design; transportation; natural environment; safety; community services and facilities; and business and economics. Its focus is on the physical form of the City and is applicable to both public and private properties. The Budget integrates the 2030 Comprehensive Plan into the budget process. Cost Accounting: The branch of accounting that provides for the assembling and recording of all the ele- ments of cost incurred to accomplish a purpose, carry on an activity or operation, or complete a unit of work or a specific job. Enterprise Funds: Funds used to account for services that are provided to the public on a user charge basis, similar to the operation of a commercial business. The City's enterprise funds include the gas, elec- tric, water, fiber optics and wastewater collection and treatment funds. GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 529 GLOSSARY Fiduciary Fund: A fund used to account for assets held by the City acting in a fiduciary capacity for other individuals or entities. These funds are operated to carry out the specific actions required by the trust agreements, ordinances and other governing regulations. Fiscal Agent: A bank or other corporate fiduciary that performs the function of paying, on behalf of the governmental unit, or other debtor, interest on debt or principal of debt when due. Fiscal Year: A 12 -month period of time to which the annual budget applies and at the end of which a gov- ernmental unit determines its financial position and the results of operations. Palo Alto's fiscal year begins on July 1st and ends on June 30th. Fixed Assets: Assets such as land, structures and improvements, furniture and/or equipment that are expected to last and/or be used for more than one year. Full -Time Equivalent (FTE): Used to quantify staffing hours for permanent and temporary employees. A 1.00 FTE employee works full time; a 0.50 FTE employee works half-time. Fund Balance: An excess of the assets of a fund over its liabilities. General Fund: The primary fund used to account for the City's general purpose revenues such as sales, property, utility users and transient occupancy taxes. General Fund revenues typically pay for citywide ser- vices such as public safety, community development, recreation, libraries and parks. The General Fund is distinguished from Special Funds in that the latter are used to account for revenues that have restricted uses (e.g. gas tax funds that must be used for street maintenance or repair). Governmental Funds: A generic classification used to refer to all funds other than proprietary and fidu- ciary funds. Governmental funds include the general fund, capital fund, special revenue funds and debt service funds. Infrastructure Assets: Roads, bridges, curbs and gutters, streets, sidewalks, drainage systems, and lighting systems installed for the common good. Infrastructure Management Plan (IMP): A portion of the General Fund capital improvement program which focuses on rehabilitating the City's infrastructure. In 1998-99, an outside consultant on the City's infrastructure prepared a report known as the Adamson report. Within this report the City's infrastructure was cataloged and ranked based on when the infrastructure needed to be upgraded or replaced and the cost for each item. At that time, the City Council decided to establish a plan using the Adamson report as a guide for both timeline and cost. Internal Service Funds: These funds provide services to City departments and recover their costs through user charges. For example the Vehicle Replacement Fund is an Internal Service Fund managing the replacement and maintenance of the City fleet. Method of Accounting: The City's General Fund budget is developed using a modified accrual basis of accounting, with revenues being recorded when measurable and available, and expenditures recorded when the liability is incurred. Enterprise Funds and Internal Service Funds are budgeted on a generally accepted accounting principles (GAAP) basis, which for Proprietary Funds is on a full accrual accounting basis. 530 GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET GLOSSARY Operating Transfer: Amounts transferred between funds, not considered a revenue or expense. For exam- ple, legally authorized transfers from a fund receiving revenue to the fund through which the resources are to be expended. Pay -As -You -Go -Basis: A term used to describe the financial policy of a governmental unit that finances all of its capital outlays from current revenues rather than by borrowing. Proposed Budget: The proposed budget is the preliminary version of the budget that is sent to the Finance Committee and City Council by the City Manager. The proposed budget is reviewed by the Finance Committee and the City Council, updated with any changes, and then adopted by the City Council prior to the beginning of the next fiscal year. Proprietary Funds: A generic classification used to refer to all funds other than governmental funds or fiduciary funds. Proprietary funds include internal service funds and enterprise funds. Reimbursements: Inter -fund transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it but that properly apply to another fund. For example, the Enterprise Funds reimburse the Technology Fund for CIP projects from which the Enterprise Funds benefit. Reserve: Represents the portion of fund balance set aside for financing future financing needs and addressing one-time emergency or unanticipated events. Revenues: Revenues include compensation received by the project for specific services to the public (external revenues), as well as revenues received from other funds (internal revenues). Special Revenue Funds: These funds account for the proceeds derived from specific revenue sources that are legally restricted to expenditures for specified purposes. The Street Improvement Fund (SIF) is a Spe- cial Revenue Fund that derives its funding from state gas tax revenues. Capital appropriations from the SIF must be spent on the construction and maintenance of the road network system of the City. GLOSSARY • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 531 CITY OF PALO ALTO AMERICANS WITH DISABILITIES ACT CITY OF PALO ALTO IN COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT (ADA) OF 1990, THIS DOCUMENT MAY BE PROVIDED IN OTHER ACCESSIBLE FORMATS. For information contact: ADA Coordinator City of Palo Alto 285 Hamilton Ave (650) 329-2550 AMERICANS WITH DISABILITIES ACT • CITY OF PALO ALTO FISCAL YEAR 2021 ADOPTED OPERATING BUDGET 533 CITY OF PALO ALTO PALO ALTO Spanish explorers named the area for the tall, twin-trunked redwood tree they camped beneath in 1769. Palo Alto incorporated in 1894 and the State of California granted its first charter in 1909. The City has long been known for its innovative people and its exploration of ideas that have changed the world. In Palo Alto, our history has always been about the future. CITY OF PALO ALTO 250 HAMILTON AVENUE, PALO ALTO, CA 94301 P 650.329.2100 W CITYOFPALOALTO.ORG