HomeMy WebLinkAbout0421.094••
TO:
ATl'ENTION:
FROM:
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City of Palo Alto
._ City Manager's Report
HONORABLE CITY COUNCIL
FINANCE COMM1TIEE
CITY MANAGER DEPARTMENT: Finan""
AGENDA DATE: September 13, 1994 CMR: 421:94
SUB.TECT: Review of J'rellmlnary Staff Recommendations for 1995-96 Budget
Pr'parlltion Guidelines
POLICY IMPLICATIONS
Guidelines adopkd for preparation of the budget shuuld reflect the Council's priorities,
allowing staff to carry those through in constructing the budget.
EXECUTIVE SUMMARY
Staff !IllS updated the Economic Future Study, which foreeast, General Fund rovenues and
expenditures for fiscal year 1995-96. That forecast, with assumptions, is attached and shows
the General Fund somewhat out of balanoe for 1995-96. During the budget process, staff
Gqvmal Guiciclines
o 'Tho budget formal will be C<)nsistl!nt with the recommendations approved by Council
in CMR:374:~ • ApproI'sl of Proposed Ponna! and Content for New Mission Driven
J3udget Document'. The proposed budget will be • ore-year funding request.
o Reorganization recommenOalion< approved by Council will be implemented in the
1995-96 Rudget to the exlent f ... ible, given the need for further study of some
recommendalions, as. well as the goal 10 avoid employee Jayoffs wherevo:r possible t
lnO to re<luce 'lamng Ihrough attrilion.
o If rev."ues pemlit, sal !!ric, anO benefits will be established for Ihe 1995·96 budget
with the goal of kceping the Cily • compelitive employer with surrounOing
jurisdictions, allhoogh there would be no guarantee that salaries would keep up with
the Bay Area rale of inflation.
a Human Service conlract funOing will be increased by the amounl of the Bay Area
Consumer Price Index (CPl). All other prop<lS¢d non-salary expenditure increases
will be carefully scrutinized for meril within the constraints of sufficient overall
revenues,
o StAff will be prepared 10 present a 1995-96 budget C<)ntingency plan, identifying
po<ential expenditure reductions. The contingency plan wi II be available in the event
that revenues faU short of projections, or if Ihe Stale', 1994-95 budget is reopened.
('Tho current year's State budget has a 'trigger" provision. If Slate revenues fall
short of projections, the 'trigger" provides Ihat eilher legislation correcting the
shortfall be rruuJe by February IS, 1995 or, barriog H'.<I, ,~at the State Director of
Pinance wiU reduce appropriations by an amoont sufficientioclose the revenue gap}.
o Support for East Palo Alto will C<)ntinue. As discussed in CMR:268:94, "Propcsed
PoUcc Assistanoc in East Palo .11110 -Fiscal Year 1994-95,· it is expected thai all
assistan~ 10 Easl Palo Alto will end as of June 30, 1997. Proposed Police
Department funding for 1995-96 will be consistenl wilh this phasing down approach.
CMR:411~ "",10(4
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o A proposal for mainlel\anCe of Palo Allo U ni ned School District (PAUSD) fields will
be included in. the 1995-% operating budge!. This propoW will ;n<:lude options for
bod! oae-time etpilal needs, as well as maintenance of .!Chool fields. The proposal
.wiII include join! funding wilh PAUSD.
o Any Cubberley Masler Plan improvements pt<l!Xl5Cd for iundin&-will <»ntain input
from !he Cubberiey Citiuns AdvUory Committte, and staff will: review and to
prioritb:e improvemcnls, identify alternative SOIme$ of funding, or make altemotive
Cubberley sWling and operations propouI!.
o Rate increases will be consid<re<l with the need for ongoing operating and capital
needs. Preliminaty proje<;tions show Ih!l rale increase, of approximalely 5 percent
may be required for lbe Refuse and W",I,,,.,,ater Funds for 1995-96.
o Water rates will continue to lransition towards a morenonnaJ pridng schedule, j, e.,
will be Ie .. inverted, unless a drought ""'ll ....
Capilli] lmprovemen] Pmwm (crp)
o Given sufficient revenues, it will be tho City's intent to maintain a $4.0 milUon
General Fund CIP ($1 million in streets and sidcwalb projects fur.ded by !be Utility
Users Tax and $3 million in oilier ~neral fund projects) while shifting $.5 million
!lt~;l!:@:~ to !be operating budget in 1995-%. This shift will ensure that
OIII1ntena~ and minor efjuipment rcpIacement experues are appropriately accoontcd
for in !be operating budget. The openting budget will ~f!i.ij include
IpptOximately $.5 million in maintenance and minor equipment rep]aeementa shilled
from the capital budge!.
o To addte$S Council's eoo<em aboul long-term funding for the City's infrastructure
and to assess the condition of the City's infrastruc~lre, the 1995-95 CIP will include
funding for a long-term infrastructure study and plan. The plan is intended (0 cover
such items as City buildings. roofs, and major building systems (such as heating And
air conditioning), in order to predict replacement dates for the infrastructure, and
recommend a multi-year plan for replacement.
Pa,eJol4
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o In rispo!\S!O to issues raised in 1994-95 concerning the aesthetic impact of capital
projects, the City will inrorponte aesthetic and design imprO'iement expen>eS
associated with a capital project in each project's total budgel.
mCAL IMPACT
The fiscal impact of the guideline. is unknown at thi, time.
MYJRONMRNTAL ASSESSMENT
There is no Environmental Assessment required to adopt the guidelines.
ATIACHMENTS
Preliminary Projections for 1995·96 General Fund Budgel
PREPARED BY: Jim Steele, Budgel Manager
DEPARTMENT HEAD APPROVAL:
ClTY MANAGER APPROVAL:
CC: nla
CMlt:411:!U
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~nomlc Future Study A<sumpti£~'
yariable
CPI
Salaries, Retirement and Misiella~us
Benefits
Health and Denial
Sumford Shopping Center Expansion
Busi~T<>-Business Sales Growth
1995-97
1997-2002
Retail Sales Growth
1995-97
1997-2002
Aerospace Decision
Property Tax Growth
Utility sales increase
Property Transfer Tax
Interest Earnings
1995-96
19%-2002
Enterprise Fund Rent
1995-96
1996-2002
Enterprise Fund Eq ui ty Transfer
PAUSD Lease
CIP Spending
Steady Staf, Assymprjoo
2.0%
3.0%
0.5% above CPI
4.0 % above CPI
No fuparuion
2.0 % total growth
5.4 % total growth per year
2.5 % tolal growth
3.3% total growth per year
Net loss of $125K per year for 6 years
2.9% above CPI
Consistent with latest projected Utility
rate changes
Same growth as Property tax
5.5% annual yield
6.0 % annual yield
$7.6 million
CPI growth
Consistent with latest Utility financial
projections
Grows by CPl
$4.0 million per year, plus movement of
$500,000 in maintenance projects to the
operating budget.
EconomlcF_81udy
fund 1IYIMIAQ: • .-.Iy 8la!a
""""'"'" --JlIlI!!,iZ liWllI llIl'D-J!! -~ -. --_7_
14,574 1<.733 15-,051 15,$34 16,240 16.*-17,949 18,m
Propto.:'ty Taxes 1."'" a,1t18 8,570 9.003 _.W 10= 1-0,811 11,0457
VdIIty u....Tax &.730 M?!I ~.7S2 8,04.1 6.213 """ 6."" 7.as
T~ Occupenc:y TD 3.'218 3.3« 3,410 3.513 3,618 3."Z; 3.fJ38 3.i64
OhtT .... Anca & P1rIII'6ea U9. ~ "-lI31 .~ !.22Z ~ a!II U1IQ
SOOtoIaI: Taxes 36,(".040 38.~ 37,$1. 3II.m <0 .... >42.083 .... ,.. .te,SJ104 , ~~t~fiR;):i;~~ SeMc:e Fees .& Pttrmit& 7.t4i 8,101 ~ .... 8.~H o.m 9.036 .~ ..... ---'.025 4,121 .... 219 ",36' 4.508 4.6IJO ".817 '.900 ® (S_""_) ,j);.
Interest Earnmoa 1.~ 1.803 1.719 1.1109 '.039 1.865 1.M 1.929
00>0<_ lJ!!I! 3JIl:i 3J>JiO 3..11rl am ~ a.m UB1
Tctaf ~tver!ue& ... 031 ~,36Q 54,971 57,'68 $0.323 61,~4 "$I ......
PIUIII ~ Transfrn In 18,123 18870 19,157 1~V80 ~~-20,982 21,&13 22.~
TOrAL SOURCE OF FUNDS 70,760 12.048 74.12& 18.946 79 .... 62,«18 85.900 89,314 --Salaries & Btnffib -49,165 3Ci,374 51,751 ".686 55,698 57,789 59.966 62,229 eonna_ 5,789 &.171 6.254 •. "63 6.677 6.677 1.083 7,295
~&MetCIIMI!. 2.397 2.31»1 ~,439 2,512 2.587 2.1.65 2.745 2.!IV --1.730
,_
8.082 8,517 8»97 8.958 9,238 9= "",.,"-.&E_ 1,132 1,132 1,155 1,190 1.226 1.263 1,301 1.3<0 I"r: .,-,'
AlIoC8tfIcf Charges (Net) (940) (937) (069) (98') (1,~) (1.C19) (1 ,OM) \982l [f' ContinQl'Hlt Account 3117 "'" 381 '"'' "", 387 381 381 ® . ~': . ' ,~ 0" .. _ ........
(481) ~ (493) (51.4) (527) ( .... ) (500) ($80)
r oml E?Jq:IenditUm5 65,186 67,414 ...... 11.280 73,720 16,376 79,103 82.009
Plus OperatIng T~~ Out "-lII!1 •• §.Jm ~ ~ Wl ~ 'I.Ii5I
TOTAl, use OF FUNDS 70,579 721383 !teoo 76,238 i8,trn 81,341 841067 ee,996 [". .. .' .... _ ..... _11) ,., '33$) 51. 108 1016 _'~5S9 __ 1.838 2,318
Amouat of SurpJU$ gtti:ag 10 uur Rc:!ttw 28 (213) 11 150 1fl() 410 421 n<
• NoJI,....Ir\ICtIlW~,.-M:! cMIp t¥~ oMNCfl_ not irIClkIaean'IMacIOI*d'~ GM.tlII fUlWOl ~