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November 27, 1991
HONORABLE CIT¥ COUNCIL
Palo Alto, California
Attention; Finance committee
Members of the Council:
The following are proposed as guidelines fer staff in preparing the
1992-94 operating budget:
1. The City operating bUdget ~ill be prepared on the basis of a
two-year pla:1, \olith the first year being appropriated and the
second year approved in concept. The Capital Improvement
Program (eIP) 'Will cont.inue to be prepared as a five-year
plan, with the first two years treated in the same manner as
the operating budget. Changes to the second-year plan will be
limited to priority changes, new mandates, health and safety
needs .. or signiflcarlt changes in projecte.d expenditures or
revenues.
2. The City enters the t~o-year budget process in the middle of
an econorrtic dO\olnturn. Service levels in the General Fund F,ust
reflect the realit.ies ot ongoing revenue sources.
3. New revenue sources and increa.ses tc existi:1g revenue sources
will continue to be aggressively investigated 1 keeping in mind
the restrictions imposed by the City's Gann limit.
4. Municipal fees and charges shall be determined in accordance
with the methodology approved by the City Council in the 1989
Cost Allocation/User Fee StUdy. Except cases where it ~ould
cause financial hardship on Palo Alto r!=>sidents 1 fee recovery
goals will be set at ranges ... ·hich approach 100 percer-.t
recovery of total ccsts.
5. No net increase in the number of General Fund positions will
be proposed unless the position can generate sufficient
revenue to meet or exceed its costs,
CHR: 524: 91
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6.
7.
e.
Salaries ana. benefits 'Will be established with the. goal of
keeping the City a competitive employer with surrounding
juri9dictions~ However, this does not guarantee that salaries
~ill Keep up with the Bay Area inflatiG~ rate.
The use of volunteers \,Ii11 continue to be encouraged to the
fullest extent possible.
The budget 'Will continue to refl",",ct an effort to identify
improvements through more efficient organization and use of
City staff and resources.
9. Any net non-salary expenditut'e increases or additions in the
General Fund must be offset by either equivalent ongoing
revenues or expenditure reductions. No increase in City
General Fund non-salary expenditures 'Will be made to adjust
for inflation.
10. Community input on levels of service, given changing economic
conditions, shall be used to nelp prioritize funding levels.
Ho~ever, community input on the prioritizing of servi~es is to
be distinguished from lobbying by citizens for continued or
increased funding for the programs that the.y support.
11. The General Fund CIP sh-=-uld focus primarily on existing
commitments, and secondarily on any ne~ City priorities. The
Enterprise Fund CIP, relying as it does on a rate structure to
fund both capital and maintenance and operations costs, needs
to be prepared ~ith reference to the adopted long-term
infrastructure plan for each separate utility.
Respectfully submitted,
~~
Budget Manager
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Finance Director
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WILUIAM Z1ER
Clty\Manager
Relat~d Staff Reports: CMR:491:91
CMR:524:91 2