HomeMy WebLinkAbout0247.092.,
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May 7, 1'392
HONORABLE CI'I''i COUNCIL
Palo Alto, California
aUDGEr
SVlOlARY -JQ.JOR POLlr.:y lSSUE~~IN 1992--94 ElUO'3ET
Attention: Finance Co~~jttee
Y.~mbers of the council:
~_<;:rt in Brie!
The city Manager's reco;nrnended budget document for 1992-94 is in
this week's City Counci 1 packet. This report responds to the
Finance committee's request that staff highlight key policy issues,
to allow the Finance Cornrr.ittee to focus at a policy level during
its deliberations. Major policy issues are listed below by
departlr.ent.
community Services Department
Human services --Contr~ct f'c.mdirlg has been reduced by $42,000 for
both years.
Cubberley --Strategy for funding the Cutberley Master Plan.
Refuse Fund
A 10 percent rate increase is prop'::.sed for 1992-93 in order to meet
costs for expanded environmental progra1':1S 2!"ld recycling mandates.
A 30 percent rate ir:crease is proposed for 199]-94 in order to
meet: additional source redu~tion costs, long-tern hauling costs
L-_____ C_MR ___ :2_4_7 __ :9_2 _________________________________________________ ~
L
L
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~s Palo Alto camrr,er':€'3 delivering solid ',,'ast"e to the SH-3RT transfe.r
station i~ sunnyvale, ~he proposed San Jose busi~ess tax increase
on landri I1s, ar.d tdgher State-~ardated pa)l::',er>.ts into thE-La:!1df ill
Clo;:ure Environmental Care Trust Fund.
Reserve balances '"rill remain 'Within tbe ranges approved by the
Council~
et~rm Drainage Fu~d
No rate increase is proposed.
Reserve levels -.:ill drop belm, CDuncil-appro-.red levels in 1993-94.
Electric Fund
No rate increase is proposed for 1992 -93, a:nd an a percent increase
is proposed for 1993-94 in order tc offset: increases in po~er
purchases, higher capital expenditures, and a ne ..... Demand Side
Management p!'ogran". :""'hich will focus on t.he use of supply side
resources as a cost-efficient source of electcicity.
Reserve balar,ces wi 11 rel"lain if,.'! thil"'. the ranges approved by the
Council.
Water F\1nc!
The 1992-93 budget assumes the continuation of the drought, and a
30~6 percent rate increase is proposed in ~rder to add $1.1 million
to the water Fund reserves and help make up for the revenue
shortfall of recent yeaTS that is due to the drought, higher
operating costs, and higher-than-forecasted custor;',er conservation
efforts. A 14 percent rate increaSE is proposed fer )993-94 to
fund the increased infrastructure replace~ent plan.
Reserves 1Jill be belo·.' Council-approved le"fels.
Gas Funod
A 9 percent increase is proposed for-1992 -9 3 to fund operating
costs and the acceleration of the infrastructure progra~. NO rate
increa3e is proposed for 199J-94~
Reserves will remain ~ithin the ranges appro~~d by the council,
with the excep~ion of the Transfer Stabilization Reserve, whic~
~i11 be slightly below the Council-a~proved target.
CMR:247:92 2
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Wastewater Fund
A 9.9 percerlt rate increase is proposed for 1992-93 in orde::.-to
fund Ccllectjo~ reserves. No rate increase is proposed for 1993-
94.
The Waste .. 'ater Fund i~ made up of the Collection subfund, managed
by the Utilities Departnent, and the Treat:rnent subf·.1nd/ ma.naged by
Public Works~ I'lhile the Waste.""'2ter Fund rese"eves as a · ... ·hole are
above the limits set by CouDci1, the Cc-llection st.:bfuno has had low
reserve balance.s in recent years as a re::".J.l t. of reduced. ~·a.t.et" usage
by City custo::-=ers dLlri~g the drought.
Respectfully submitted,
~_-Vf-~
W~LIAM ZANER
City Manager
Related Staff Reports:
CMR;247;92
CMR:235;92
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