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Home My WebLink About0325.091t1 • I I . ., i j '. , q . ? 1 I I 1 I I - ~~~-----'-' BUDGET 91-92 June 10, 1991 HONORABLE CITY COUNCIL Palo Alto, California Attention: Finance and Public ~orks Committee RESPONSES TO FINANCE ~ PUBLIC W.9RJI:~ COMMITTEE QUESTIONS AT BOOOE~ HEARINGS OF JUNE 4 AND JUNJ 6. 199~ Members of the Council: Report in Brief BelQw are responses to questions raised and assignments given at the June 4: and June 6, ]991 Finance and Public Works committee ty,PW) budget hearings~ 9_eneral Questions Q; Review the estimates for General Fund tax revenue. A: The nation and state are still in recession. Until COnSUl'rier spenQing generally and retail sales specifically begin to turn upward, revenue estimates for FY 1991-92 that shov a percent age increase significantly less than inflation are appropri ate. Furthermore, 1990-91 sales tax receipts include some one-time monies that ~ill r.ot recur in 1991-92, which holds down further the year-to-year percentage increase projected for sales tax: 1.4, percent over t'he amount projected for 1990-91 in the Midyear Financial Report. For prOpErty taxes the anticipated increase is 2.6 percent over 1990-91, and for transient occupancy taxes~ that increase is 2.8 percent, reflectin9 the economic slowdo'olI'n in real estate and business and vacation travel. CMR:J25:91 -, r ... :j. , , ~ ! - Q: A: 'With n.aarly $35 udllion of tax revenue in FY 1991-92, an eventual s~in9 of several hundred thousand dollars up or down is not just possible, but probable~ Based on current knowl edge and receipts to date this ~iscal year, staff feels the budget estimates as presented are the best rev-':!nue projec tions. Explain why Utility Users Tax L'evenues are projected to be only 5.4 million, do~ from a $6 million estimate a year ago (pages 1 and 93 of the proposed 1991-92 budget). There are four major reasons. First, Sales to customers in those utility funds affected by the utili t}' users tax (Water, Gas, Electric) have decl ined by about $2. a million from estimates a year ago for fiscal year 1991-92. This is primarily due to the Gas Fund not needing the 15 percent rate increase originally projected a year ago. That results in a $100,000 reduction in utility users tax r-evenue. Second, another year's experience has shown that the previous estimate for phcne revenues was too high by about $200,000. This is an item for which there is limited d~ta for projections, as the City does not bill for phone usage. Third, the previous estimate assumed that -large users" ~ho pay at a discounted utility users tax rate make up 35 percent of total utility revenue. In fact~ they make up 38 percent of the total. Finally, the previous estimate assumed that the exemptions and large user discounts cor.tributed to an average tax rate of 3.8 percent for those users. Further review sho~s th~t average to be only 3.2 percent. The last two factors reduce revenue by about $350,000. Q: Please provide a summ~ry of proposed Ceneral Fund reductions by division. A: That table is listed in Attachment A. PLANNING OEP~rKENT Q: What is the cost recovery of the Inspection services Oi vision? A: Inspection Services reaches almost full cost recovery at the current level of fees ch~rged. In 1991-92, the Division is budgeted to have total costs of $1,391,000, and total revenues of $1,074,000. Historical1~~, the Division brings in more revenue than projected in the budget. COKHUlHTY SE_IlV~_CE8 Q: Can we temporarily close Terman Park Library until funding is available? CMR:32S:91 2 '\ :4 .. I ~ . , I I t - A: Yes. The building could be locked and left intact. Subscrip tions and 9quipment ~aintenance contracts would be canceled and janitorial and most utility services stopped. Minimal expenses (e. g., continuation of building intrusion alarm) ...,oul~ be incurred during the period of closure. Upon reopen ing, there .... ould be scme startup costs {e.g., cleaning of building, bringing collection up to date, etc.). Q: What Library fine/fee increases could be implemented? A: New income of $~O,O(lO can be generated with the following changes: 1) Eliminate fee and fine exemptions for seniors. 2) Increase the overdue fine for adult materials from $.15 per day to $.20 per day. (This rate \{ol..!ld be the highest on the peninsula, but is recommended by staff.) Children's fines ~ould remain at $.10 per day~ 3) Increase interlibrary loan fee from $.50 to $1.00. Q: What alternatives are there to closing Terman Library? A: Library services are primarily composed of two components: collections and service hours~ In addition~ minimal funds support children's programs and the volunteer program (which includes the homebound service). Because of the extremely high use of the collections~ it is not recommended that funds for new purchases and magazines be reduced any further~ The following alternative hour reductions are in priority order and were selected using three criteria: select periods of lowest use, spread reductions among the libraries and maximize number of open facilities at anyone time. =: 325: 91 3 . ::: '~ ... :' .. • ---.~ - Kitqhell ,ark CUrrent Hours Mon., Nocn-9pill TUes.-Th.,lOam-9pm Fri.& sat" 10~m~6p~ Sun., Ipm-4pm ~Il Library LIBRARY HOl'RS proposed ~rs Men. -Th., Noon-9p:m Fri., Noon-6pm sat., lOam-6p1n sun., 1pm-4pm Hours Reduced _j!ee'kly 8 • " ... (rK tLtR Dollar Savings $15,500 Closs hiD Library Friday niqbt '1-' p .•. ) and open one bour later lIoMa], through Frida]" CUrrent Hours. Mon.-Fri., 10am-9pm sat., loam-6pm sun., Ipm-5pm Proposed Ho~_~ Mon.-Thur., llam-9pm Fri., 11am-6pm sat., lOarn-6pm Sun., Ipm-5pm Close College Terrace Branch Monday: CUrrent Hours Mon.-Sat., 10am-6pm Closed Sunday C!!R:3lS:91 Proposed Hours Tue.-Sat., 10a~-6pm Closed Sun. , Mon. 4 Hours Reduced Dollar ___ Weekly sav~..ng!! • $ 5,S15 4 $ 6,400 *See last priority HOllrs Reduced Weekly 8 Dollar Saving§! $15,000 , . -', PoYntc.yn Close DovntOWD Branch saturday; current Hours Mon.-Sata, 10am-6pm CIa sed Sunday Childr.n'. Proposed HOU~ Kon.-Fri., lOam-6pm Closed Sat. , Sun. Clo.e Children'. Library priday: Current Hours Man. & ~;ed., Noon-Bpm T,Th,F,S lOam-Spm Closed Sunday kaio Library Proposed Hours Mon.' Weda, Noon-8pm T,Th,S, 10am-5pm Closed Fri. , Sun. open bin Librer]' one hour later 011 satur4.ays: CUrrent Hours *sat., lOam-6pm Total Reductions Proposed Hours Sat., llam-6pm Hours Reduced weekly s Hours Reduced Waekly 7 Hours Reduced Weekly 1 40 hours per week staff reductions amount to: 1.13 FTE Librarian (regular) .71 FTE Clerk (hourly .32 FTE page (hourly) Dollar savings $17,000 Dollar §.~ving~ $22,000 Dollar S a v.i"!,]9.§. $ 1,185 $83,000 paz year ~ FTE Professional (hourly) CMR: 325: 91 ":"".' = -".-.... --- Total 2.33 FTE 5 • \ , ! . i . : . -~.>. ···~~~~~~Jti __ ~ ___ ~~".1""'-__ -. - Q: EXpe~ience following the reductions of two years ago has sho~n that the public will adjust use to hours when libraries are open. However # as l:lore and more hours are rc-duced, this pattern may char.ge and overall circulation 105s should be anticipated~ The number of individual patrons ~ffected may vary by library and estimates for tbe specific periods identified above range from a low of 56 on Monday at Coll~qe Terrace to a high of 322 for Friday night hours and mornings at Main. could alternative staffing options be proposed to reduce the impact of prcposed cuts, e.g., volunteers, college interns, paying retirees lo~er wages. A: Community Services currently uses a variety of staffing options to provide departmental services. volunteers support many programs but co not assume complete responsibility for provision of an ongoing service# such as the entire operation of a library, without City staff supervision. As currently operated. the Terman Park Library requires background in the principles of public 1 ibrc;ry service~ including materials selection~ training in all functions of the computer system, implementation of consiste~t library-wide circulation poli cies, accountability for collection and deposit of -monies, following Library and Ci ty r-ules and security of property. Since volunteers ~ork short periods of time and focus on a specific task or project, and would require significant training and cannot be held accountable iTI several a::.:-eas, it is not feasible to staff the op~ration of the library solely ..-ith "\7olunteers. The Oepartment employs retired citizens to fill a variety of City positions. It is not possible to pay a senior a l~wer wage ~han another person performing the same duties~ College interns regularly provide assistance for special projects in Community Services, usually associated with class credit. By the ~ature of internship programs, students de not assume ongoing positions and are not fully trained able to ass-u-me responsibilities of an administrative position, such as the Manager of the Cultural Center. Q: How could the Palo Al to Historical Association Contract reduction of $2,500 be covered through additional revenue? A: Following discussions with Betty Roga~ay, t.he President of the Palo Alto Historical Association (PARA), a WdY has been identified to offset only $500 of the contract expense. The PARA will beqin a new charge for copying of photographs in the COllection. CMR:325:91 6 .if \ 1 Q: Provide more background on the Community Association for Retarded, Inc.'S (CAR) request for 1991-92 and on staff' 5 recommendation for funding. A! Staff's answer addresses three issues: fundir.g background, consistency in applying g'.Jidelines, and anci llary information. Funding Background: CAR received $31,000 last year for three programs: After School creative Recreation Proqram ($ic, 000), P\J.pil S'Wim ($14,000) and Educational OUtreach Program ,$5,000). City st~_.ff is recomme:1ding a total of $19,000, a reduction of $12,000 from 1990-91 funding, representing the amount th~t CAR reported they would receive from the state .fo['" its After school creative Recreation Progra~. Below is a summary table of CAR funding for 1990-91 and 1991-92 proposed: (000' 5) 1991-92 1991-92 1990-91 CAR staff Budget Request Recgromendgtion A.fter-School Creative program $12 Educational out- Reach program 5 $15 $ 5 Pupil Swim Proqr-am 14 [27 14 [ Therapeutic Swim r Program $31 $42 $19 In their proposal~ CAR stated the following: -In prior years, CAR has received support for its After-School creative Recreation program [in the amount of $12 ~ 000]. This past financial assistance from the City has helped CAR to expend funds on the 'Front End' vhich will, it is projected, result in more adequate state reimbursement rates being forthcoming in F~ 1991-92. [Due to more state funding in 1991-92,J .•.. no request is being made at this time to supplement funding for the creative Recreation Program from the City.- CMR:325:91 7 L .; On Ja.nuary 24, 1991 staff contacted CAR staff mem.ber Will Sanford, who said that CAR hoped for -full recovery of state fundinq-tor their Afte.r-School Creative Recreatio:1 Program by July 1, and he a130 was made aware of staff's funding recom memlations4 He had no problem with the city's recommendation and understood that no ne~ projects would be funded this year unless they tit under Council's Human Service pr-iority of ·People in crisis"~ Staff Consistency in Apclying Guidelines The City' s funding proposal is consistent with the recommenda tion ma~e by staff. A city staff memo dated January 29, 1991 regarding fundi~g recommendations was forwarded to CAR. It stated that due to the fact that one of the three programs funded historically by the City had received state funding, no funding was requested for that program, nor was any recom mended. The recomm~ndation reduced city General Fund support to $20,000, and staff's final recommendation is $19,000 to be consistent ~ith 1990-91 funding levels far Educational Outreach and Pupil S'a'i:m programs~ The .following ti:.J.eline sho...,s the funding process ~as not disrupted by staff vacancies in the Human Ser~ices Division: CHR:J2S:91 8 ... • I " Ii :j c 1 j 1 , - November, 1990 Dec.-Jan. January, 1991 February 15 March 1 April 4 April 11 April 19 May 9 May 20 May 20 ~equests for Propo~al (RFP) sent out Applications returned Review and initial reco~~€ndations by former Administrator Letter sent to agencies regarding vacancy of Human Services Administrator Informational staff report to Policy and Procedur9s committee regarding HSRAP as they considered People In Crisis Priority Recoromendations to HRC (memo dated 3/28) All agencies notified by phone regarding preliminary recommsndations Recommendations made to City ManaqE:r'5 Office Letters to all agencies advising them of recomll:lendations Letters to all agencies naming David Hartin as Acting Administrator of Human Services Staff report to Finance and Public Works commi ttee regarding HSRAP process with attachments: timeline. recommendations, RFP, Quarterly Report and Year-End Per formance Reports Anci llary Itlt,Q.nnatiCln Releval).~ to the Revie'W Prgce.,s5 1) Staff did not mean to imply at the budget hearings that the Therapeutic S'Wim Program ~as ne'W, only that the City had never funded it before, 50 it was a nev program from the City's funding gUidelines standpoint. 2) Although only 2g percent of CAR clients are from Palo Alto, C~~ has not sought funding from neighboring jurisdictions. and currently has no money in their budget from any neighboring cities • .3 > CAR continues to use Mitchell Park facilities at no charge from the city for tyO to tbree nights a week, as has been the practice for over fifteen years. CMR:325:91 9 • Q: A: SUmmary on CAB Funding Recomrn~ndatiQn In summary, City staff folloYed the process correctly and were consistent in followinq funding guidelines. Please look for "creative and neW' sources of revenue'" to forestall the elimination of certain arts programs. 1. Increase the administrative surcharge for arts classes from the present $6.00 to $12.00. The increase would result in $12,000 in new revenue. 2. Increase the charges fo~ facility rentals at the Palo Alto CUltural Center. Anticipated new reverlue 'Would be $2,000. Tt.e revised charqes would be as follows: sculpture Garden Current Proposed courtyard CUrrent Proposed Patio Room CUrrent Proposed Meeting Room CUrrent Proposed $50 per hour 60 30 40 20 30 30 40 Nqlt:-re.s ident $ 75 per hour 100 4S 60 30 45 45 60 3. Initiate a ne~ surcharge of $1.00 per ticket sold at the CAPA box office for performances that occur at the Lucie Stern Theatre. This proposal 'Will require the input of the prinCipal community theatre users (TheatreWorks, Falo Alto Players, and West Bay Opera) but preliminary disclJssions indi cate that they can support this proposal if the =: 325: 91 10 I , i - revenue from th9 surc.harge is applied tc arts p:-:ograrns. In addition, the City needs to be sensi tive to when this s'u.rcharge can begin since theatre ticKets have already bee!' printed. Anticipated income from the ticKet surcharge is $70. 000 per year. It is unlikely that the City will get a full year of revenue in FY 1992 sir.ce the earliest the City would start collecting the surcharge -.'ould probably be in the fall. Total new revenue .from these three proposed recommenda tions is $84,000. Q: What fee increases could be proposed to keep Mitchell Park and Lucie Stern offices open current hours? A: Staff does not recommend raising fees at this time. HO'.tr(ever, opening the Centers at 9 or lO a.m. instead of a a.m. and closing at 8 p.m. instead of 7 p.m. Monday through Friday would provide adequate coverage and preserve the $6,000 redu~tion previously recommended by staff. Q: What are the costs of the proposed budget reductions that the public requested be adde-3 back to t:'le Community services budget? A: Budge. t I tern &'11Q~ Closure of Terman Library Community Association for the Retarded (CAR) Palo Alto Historical Society CUltural Center Director Total REPOSB.FOND '$8],500 12,000 2,500 65,000 $163, 000 Q: Can staff propose a modified Refuse rate structure fer the 1991-92 budget that includes incentives for source reduction? A: Alternative rate proposals for one and two can residential refuse collections has been prepared. See the chart on page 13. In choosing Refuse rate structures, the different alternatives can be weighed using two criteria: the incentives for reducing the waste stream and the impact on revenues. The impact of a steeper rate structure on .... aste reduction cannot CKR:325:91 11 • , :~ r ! ,.-, :;.-: ~~~~:-~/ yet be predicted for Palo Alto. Impact on revenues from different rate structures can be forecast, using different refuse can reduction scenarios, hOl,{ever. The original proposal presented by staff is identified as Altern~tive #1 en the schedule belov ~nd proposes increasing the current one can rate from $9.25 per month to $12.05 per month and increasing the two can rate f:om $12.10 per month to $15.75 per month. Alternative 12 proposes leaving the one can rate at the current rate of $9.25 per month and increasing the tva can rate to $18.50 per i.!Ionth. Alternative #3 proposes the one can rate at $11. 00 per month, and increasing the t .. ·o can rate to $18.50. Onder each alternative, staff has estimated revenue incre~ses and decreases based on residents reducing their current s~rvice from two to one can# which is the desired outcome from proposing a steeper rate structure. The estimates are based on three scenarios: 25 percent, 33 percent and 50 percent reduction, and include the estimat.ed revenue under each scenario. Again, how residents respond to s~ee~er rates is unknown at this time. CKR:J.S:91 12 ~i~t • r I' t , , I \ I .~ ... --.;::;> [ 1 ~ ~ .• ,. I '- i., ~ 1 i~ . ~ , ~ ~ o:! ~'j Three Alternatives for Residential Refuse Rates Altel"l"!a tive No. o! !touseholds Monthly Rate 1 2 t-can 1,953 $12.05 2-can 13,997 15.75 l-can 1,953 $ 9.25 2-can 13,997 18.50 25\ Reduction from 2-can to I-can 33' Reduction from 2-can to I-can 50\ Reduction from 2-can to 1 can I-can 2-can 1,953 13,9Sn $11. 00 18.50 25\ Reduction from 2-can to I-can 33% Reduction from 2-can to l-can 50% Reduction from 2-can to I-can Alternatives: 1. Original Increase Proposed By Staff 2. council Member-Proposed Increase 3. Staff Alternative Rate proposal CIIR:325:91 13 Annual Bevenue (ODD'S) $ 282 ~ $2,927 $ 217 3,107 $3,324 $2,936 $2,811 $2,547 $ 258 3,107 $3,365 $),050 $',949 $2,735 Revenu-e Change from Original proposal (30\ Rate Incr€ase) (000'5) $396 $ 8 ($1.16) ($381.1 $437 $122 $ 22 ($193) -."'-.. • , i I I ! ", , i ! 1 i I I - staff recommends that Council approve alternative rate structur~ 13 for one and two can resj~ential service which is the least disruptive to the revenue stream under all three scenarios (25 percent, 33 percent and 50 percent residential chanq~ from t~o cans to oneJ and since it incorporates Council Me~rsl sugqestions: o Raising the one-can service rate above the current level of $9.25. C Raising the t~o-can rate to double the current level of the one-can rate~ o Increasing the difference between the one-can and the t'Wo-can rate. Public Works staff will return in the fall of 1991 with an inverted rate structure for all rate categories (residential, commercial, industrial, retail I etc.) of refuse collection services to be incorporated in the 1992-93 budget, to be effective July 1992. HOUSEHOLD HAZARDOUS WASTB BVENTS Q: What are the benefits of holding monthly Household Hazardous Waste events instead of quarterly events? A: Based on the Solid Waste Generation study; approximately 273 tons of household hazardous ~aste ace generated annually by Palo Alto residents; approximately 169 tons were collected through the program in 1989-90, leaving 104 tons of household hazardous ~aste that are still improperly disposed of each year in Palo Alto. seve~ty-eight tons (75 percent) of the household hazardous ~asta is improperly disposed of in residential garbage programs. Below is a schedule which compares the Household Hazardous Waste Events participation for the 1989-90 fiscal year when the events were held quarterly, and for the 199Q-91 fiscal year in ~hich the events have been held on a monthly basis. CMR: 325: 91 ~~~~- ::~~:"i -: ~:;-,--, t t. I·-, ! I t • c r" [ - HOUSEHOLD HAZARDOUS WASTE EVENTS FY 1989-90 AND FY 1991 i's;rticipaticn Households Represented Repeat participation New participation FY 1989-90 (4 Events) (6 Hours ~.r....Event) 2,107 SB2 947 F'i 1990-91 !] 1 EventsJ (3 Hours Per E_yen!;.) 2,555 1,047 1,162 -+2:1 +19 +23 Total cost $201,895 $'27,298 +62 Average CO$~~er Eyent $ 50,474 $ 29,754 -41 The increased program costs in the monthly program are due to more events and hiqher disposal costs per drum_ In 1989-90 disposal costs per drum ranged from $210 to $550 per drum; in 1990-91 the per drum costs ranged from $360 to $550, a substa~tial increase. staff believes the Household Hazardous waste program benefits public health and the bay environment, and is therefore a wise expenditure_ staff further believes the requested increases for the household hazardous .... 'aste budget are warranted due to increased program partiCipation, and due to the goal of further reductions in hazardous 'Waste entering the residential 'Waste stream. Staff w-ill investigate the sharing of this program's costs between the Refuse F'".Ind, Waste"'d.~er Fund, and the storm Drainage Fund, and ~ill return to Council in the 1992-94 budget process 'With a recommendation. trlrL!1'IBS D~_~~ Q: Why have Utilities Department rents charged by the General Fund increased since the estimate a year ago? A: The 1990-91 and initial 1991-92 rent a~ounts included less city Hall square .footage allocated to the Utilities Department because staff assumed Utilities engineering staff would move to leased space in late. 1990-91_ It is now apparent that engineering staff will not be moving in the near future, so CMR: '25:91 15 ;:~ ' . . , -, '\ , i - the new 1991-92 figures includ'2 fu.ll ct-.arges for city Hall square footage. Q: Why are surrounding commun it ies' cCn'.me:rcia liretail 'Waste'Water charges lower than Palo Alto's? A: Virtually every city subsidizes its residential customers to some degree. Palo Alto's pr';.posed rates have been structured in such a 'Way that its commercial and industrial customers will pay a laI'ger share of total .... 'astewater costs, based on the historical relationship between the custo~er classes and their given water consumption rates. Palo Alto"s propo~ed waEtewater rate increase falls more heavily on co~~ercial and industrial customers ($1.1 million) than on residential customers ($~4 million). It is difficult to compare commer cial rates between cities because of the number and mix of commercial and industrial custo-rners in each city, as ... ell a:; the related qualities of their effluent. Respectfully submitted, g~~ .. tH: STEELE &Udget Manager t;;~i 4:>'"" u. -/ EMILY HARRISON Finance ~~or /~~~ A.SSist~I~~t~nager J Attachment CMR:325:91 16 -"--,,,,---~.--~,-.-~"-F~ '. • AnACII£IIT A 1991"'-92 PROPlJSF..D GENE.RAL F\J-ml BUDGET REDUCTIONS Total DepartmenU' !>cpart1nent ~ of Division ROOuctiOlls ~ Manager S13,4GiJ 1.6% Clerk/Council $28,735 3.4% Auditor $\,500 0.2% Anorney 512,500 1.5% Human. Setvk-es $5,(,00 0.611> Information Resources. $1,250 0.1 % Firutnce Accounting $64.500 7.5% Public Works Facilities $25,000 Operations il.Q.J:QQ $<15 ,()(x) 5.:;% Planning Planning S21,()(X) 2.S% Polic< Police S\\9,4t"lO 13.9% Fire $\24,000 14.5% Communlty Services Human Services 56,000 Arts & C ul\ure $84,500 Recreation $lD,OOO Library $108,51);) Parks & Golf $108000 $420,000 49.0% TOIlt\ General Fund $856,345 1000% , , > , :-, ----~-'~(I ;_ • ..,.... ... ~~" ..... ·~"'w_-"-"' ............... ..---·-~· • t i I t ~. ~ ~ I , I l" I. ! -~.~