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April 22, 1;93
HONORABLE CI'I'Y cOmjCIL
Palo Alto, California
Members of the Council:
3UOGET 9:~-94
This is an infor~ational report and no council action is required.
The following are the guidelines adop~ed by the Council for staff
to prepa~e the 1992-94 operating budget (CMR:S5S:91): They include
the amendment recommended by the Finance Committee at its March 9,
1993 meeting (shown in bold) .
.1. The city operating budget 'Yliill be prepared on the basis of a
two-year plan, ..... ith the first year being appropriated and the
second year ap?roved in cor.cept. The Capital Impraver"ent
Program (CIP} "Wi 11 C'ontirtue to be prepared as a five-year
plan, with the first b,o years treated in the same manner as
the operating budget. Chan3~s to the second-year plan !Jill be
limited to priority changes, new mandates, health and safety
needs, or significarlt changes in projected expenditures or
revenues~
2. The. city enters the t'w'o-rear-budget process in the middle of
an economic dor ... ·nt-urn. Service 1 evels in the General Fund must
re:flect the real ities of ong'=ling revenue, sourco;.s.
J ~ New revenue sources and increases to exi stinq revenue sources
will continue to be aggr-€ssively investigated-, Jceeping in mind
the restrictions imposed by the City'S Gann limit.
CMR:217:9J
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4. Jolurdcipal f.:;;o,es and ch-:trges shall be determined in accordanc~
w .. ith the cethodology approved by the city cO',mcil in the 1989
Cost Alloc1:lit.ion/lis~r Fee Study. E:..:cept cases ""here it ..... ould
cause financial hardship 001. Falo Alto residE:nts, fee recovery
goals "IIIil1 be set at ranges whLch approach ]00 percent
rec·:}very of total ccsts.
5. No net increase in the number cf Gensz'al Fund positions will
be proposed unless th~ positior. can. generate sl..i.ftici""nt
revenue to meet or exceed its costs,
6. If revenues permitj salaries ar,d benefits 'oto'ill be established
~ith the goal of keeping the City a competitive employer ~ith
slJrroundinq jurisdictions. Ho\o'ever, this does not guarantee
that salari~s ,d 11 keep t,;p ' .... i th the Bai Area inflation rate.
7~ The use of volunteers '.will continue to be encouraged to the
fullest extent p02sible.
8. The blldget wi 11 continue to I-efl ect an effort to identify
improvements through IT'.Ol"e efficient organization and use of
City staff and resources.
9. P..ny T:et non-salary expenditure increases or additions in the
General Fund mllst be offset. by either equivalent ongoing
reve.nues or expenditure reductions. No increase in Cit~{
General Fund non-salary expenditures will be made to adjust
for inflation, with the exception of human service contraQts.
lO~ COID.'TIunity input on levels of service j given changing economic
conditions, shall be used to help prioritize f'..mding levels.
11. Tne General Fund eIP should foclls primar-ily on existing
ccmmitm~nt5, ar.d secondarily on any new City prioriti>?s. The
Ente.rprise Fund crp, relying as it does on a rate structure to
fur.d both capital and maintenanc-2 and operations costs, T"eeds
to be prepared w"i th r!2fe:rence to the adopted long-term
infrastructure plan for each separate ~tility.
Re.o;pectfully sl1bmitted,
~~IiLzu_D EMt.td HARRI SON
Finance Director
Related Staff Reports: Cl1R:491:91
CMR:217:93
CHR:524 :91
CMR: 5SE! 91
CMR:147:93
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