City of
Palo Alto
CALIFORNIA
2007- 09
ADOPTED
Operating
Budget
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continued
2006- 07 Budget City of Palo Alto 1
I am pleased to transmit to the City Council and our Palo Alto
community the following budget- related documents:
• City Managers' Proposed Operating and Capital Budgets for
2007- 09
• The City Manager's Budget Adoption Report incorporating
recommendations from the Council's Finance Committee
• The Council- adopted Operating and Capital Budgets for 2007- 09.
Of course, any successful local government budget effort is a large
collaborative effort involving operating departments, finance staff,
community stakeholders, as well as the Council.
I would, however, like to especially highlight the contribution of
Carl Yeats, Administrative Services Director, who has successfully
guided the preparation and adoption of annual budgets since he was
hired as our chief financial officer in 1998.
Under Carl's leadership, our annual budget has been recognized
each year with the top financial reporting and budget awards from
the national Governmental Financial Officers of America and the
California Society of Municipal Financial Officers.
Carl should also be recognized for his tutelage of our Budget
Managers. In the past nine years, the three past Budget Managers
— Gigi Harrington, Lalo Perez, and Charles Perl — have all been
promoted to higher senior manager roles in Palo Alto or other local
governments in the Bay Area.
Carl will be retiring from local government service by the end of
2007. On behalf of the City Council and our organization, I would
like to thank Carl for his exemplary service.
Frank Benest
City Manager
Special Acknowledgement
2 City of Palo Alto 2006- 07 Budget
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2007- 09 Budget City of Palo Alto i
CITY OF PALO ALTO
2007- 09
City Council
Yoriko Kishimoto, Mayor
Larry Klein, Vice Mayor
John Barton
LaDoris Cordell
Judy Kleinberg
Bern Beecham
Peter Drekmeier
Dena Mossar
Jack Morton
Frank Benest
City Manager
Emily Harrison
Assistant City Manager
Carl Yeats
Director of Administrative Services
Lalo Perez
Assistant Director of Administrative Services
Jack Morton
Finance Committee Chair
ii City of Palo Alto 2007- 09 Budget
The City of Palo Alto's Values:
Quality - Superior delivery of service.
Courtesy - Providing service with respect and concern.
Efficiency - Productive, effective use of resources.
Integrity - Straight- forward, honest and fair relations.
Innovation - Excellence in creative thought and implementation.
It’s a Matter of Pride!
The government of
the City of Palo Alto
exists to promote
and sustain
a superior quality
of life in Palo Alto.
In partnership
with the community,
our goal is to deliver
cost- effective services
in a personal, responsive,
and innovative manner.
2007- 09 Budget City of Palo Alto iii
Department Budget Coordinators
Administrative Services Department
Libby Dame
City Attorney's Office
Stacy Lavelle
City Auditor's Office
Patricia Hilaire
City Clerk's Office
Kathy Brouchoud
City Manager's Office
Chris Mogensen
Community Services Department
Lam Do
Fire Department
Melinda Cook
Human Resources Department
Erica Gindraux
Library Department
Susan Bodenlos
Planning and Community Environment Department
Jon Abendschein
Police Department
Pete Hazarian
Public Works Department
Judy Hejza/ Sharon Macway
Utilities Department
Rosemary Ralston
Budget Document Producers
Budget Staff
David Ramberg, Manager
Sharon Bozman
Mary Figone
Amy Javelosa- Rio
Cherie McFadden
Dale Wong
Dave Yuan
Technical Advisor
Myrna McCaleb
Special Contributors
Joe Saccio
Nancy Nagel
Graphic Design, Cover Photos
Cherie McFadden
Printing
Joyce White
Ty Campbell
Rui Pereira
John Sanchez
Visit the City’s Website at:
www. CityofPaloAlto. org
CITY OF PALO ALTO
2007- 09
Budget Acknowledgements
iv City of Palo Alto 2007- 09Budget
Budget Awards
BUDGET AWARDS CONTINUED
2007- 09Budget City of Palo Alto v
vi City of Palo Alto 2007- 09 Budget
THIS PAGE IS INTENTIONALLY LEFT BLANK.
Message
ix
2007- 09 Budget City of Palo Alto
Frank Benest, City Manager
May 1 2007
Honorable City Council
Palo Alto, California
Attention:
Dear Mayor and Council Members: Finance Committee
I am pleased to present for City Council's consideration a balanced budget Introduction
proposal for fiscal years 2007- 09. Along with the current budget, it
represents the culmination of years of painful, but necessary adjustments to
align revenues with expenditures as a consequence of the " dot- com"
collapse. This alignment included the reduction of 70 General Fund
positions and $ 20 million in expenditures. The community, Council, and
staff should pause to acknowledge the achievement of eliminating a
significant structural deficit. Now, the City is faced with new fiscal
challenges and we must work together, once again, to solve them. The
Proposed Budget represents a major step in that endeavor.
Immediate Challenges
As highlighted in the 2007- 17 Long Range Financial Forecast
( December 2006), the City confronts issues that, if not addressed, will
again threaten our fiscal balance and the continuity of service
delivery. One of these issues is the City's sizeable retiree medical
liability which we have discussed at length with Council. Compared
to other jurisdictions, the City of Palo Alto has wisely set aside a
$ 26.5 million reserve to partially address the liability. Moreover, the
City is moving ahead with establishing a Trust Fund with PERS to
assure a rate of return that will pare the actuarially determined annual
required contributions. This action, combined with the funding
identified in this budget to fulfill our annual obligation, will
substantially address the retiree medical liability issue. As one reads
about the woeful condition of State and local jurisdictions in dealing
with their medical liability, we should be especially pleased with our
efforts to deal with this daunting problem.
As in 2006- 07, Council rightly has made infrastructure funding one of its
top priorities. A necessary, but tough assignment from Council is to
Transmittal Letter
x
City of Palo Alto 2007- 09 Budget
identify an additional $ 3 million for existing infrastructure rehabilitation and
replacement. This infusion of additional funding will enable the City to
sustain a reserve balance sufficient to fund a minimum of $ 7 to $ 10 million in
existing infrastructure projects annually. After a series of meetings with
Council and considerable staff work, a list of potential revenue enhancements
and expenditure reductions has been identified to achieve the $ 3 million goal.
On March 14, 2007, Council provided valuable feedback on a proposed list that
staff has now incorporated into the 2007- 09 Proposed Budget. I am
proposing to increase infrastructure funding by $ 2 million in 2007-
08 and by a total of $ 3 million in 2008- 09. ( These increases are in
addition to the existing $ 5.6 million that we infuse into the
infrastructure reserve.) Individual changes to achieve the $ 3 million
goal are listed in each City department's budget and are labeled "$ 3
Million Challenge."
Included in the $ 3 million plan is $ 100,000 for an Innovations Fund.
The fund provides support for new ideas that will yield net cost
savings or net revenue gains through efficiency and process
enhancements or entrepreneurial ideas. This funding is provided
over two years to test and implement productive proposals.
A third challenge is to meet new facility needs such as the
upgrading, expansion, and replacement of our libraries as well as
constructing a new public safety building. Per Council policy, new
revenue sources must be identified to fund these proposals and discussion of
placing General Obligation bond measures on a 2008 ballot has occurred. The
current and 2007- 09 Proposed Budget include the required funding for
planning and design costs as we move forward toward a ballot measure.
Local Economy and City's Budget
The City's ten- year Long Range Financial Forecast reported that the local
economy was on a trajectory of steady, but slow growth. This projection has
held in spite of real threats from rising gasoline prices, real estate and loan
concerns, and relatively high interest rates. City sales and transient occupancy
tax revenues have moved modestly upward, although the rate of sales tax
growth moderated in the fourth quarter of 2006. It is important to note that a
consensus is developing among economists that a general economic slowdown
Gamble Gardens
xi
2007- 09 Budget City of Palo Alto
is expected in 2007 and that this may affect our economically sensitive and
critical revenue sources. Prudent and disciplined spending is advisable in
light of these forecasts and the City's priorities. Modest surpluses are
projected in 2007- 08 and 2008- 09 after including retiree medical liability
payments and after identifying $ 3 million in resources for infrastructure
work.
Revenue and
Expense Highlights
The following represent key changes between the 2006- 07 Adjusted
Budget and the 2007- 09 Proposed Budget:
Revenues
• Overall General Fund revenue is increasing by an additional $ 8.6
million ( 6.5 percent) in 2007- 08 and by an additional $ 2.7 million ( 1.9
percent) in 2008- 09
• Sales tax is rising by $ 0.8 million ( 3.6 percent) in 2007- 08 and $ 0.7
million ( 3.4 percent) in 2008- 09
• Property tax is increasing by $ 1.0 million ( 4.5 percent) in 2007- 08 and
$ 1.0 million ( 4.4 percent) in 2008- 09
• Utility Users Taxes are expected to grow by $ 0.4 million ( 4.2 percent) in
2007- 08 and $ 0.7 million ( 7.5 percent) in 2008- 09
• Transient Occupancy Tax ( TOT) increases by $ 0.2 million ( 3.6 percent)
in 2007- 08 and $ 0.3 million ( 4.1 percent) in 2008- 09
Expenses
• Overall General Fund expense increases $ 10.4 million ( 8.1 percent) in
2007- 08 and $ 1.8 million ( 1.3 percent) in 2008- 09.
• Salary expense increases by $ 1.0 million ( 1.7 percent) in 2007- 08 and
$ 0.7 million ( 1.2 percent) in 2008- 09. The change is primarily due to
negotiated salary agreements with specific bargaining groups.
• Overall benefit costs increase by $ 4.4 million ( 17 percent) in 2007- 08
and remain stable in 2008- 09. The increase in 2008- 09 results from:
inclusion of $ 2.9 million in retiree medical liability costs; the
inclusion of the 2.7 percent at 55 pension plan; and an increase in
employee medical premiums. The ongoing cost of the 2.7 percent at
55 pension plan is offset by employee contributions and by the recent
caps or limits on employee ( active and retired) health care plans and
eligibility that have been negotiated with employees.
xii
City of Palo Alto 2007- 09 Budget
• The base General Fund transfer for capital projects remains at $ 5.6 million
and will be increased by an additional $ 3 million over two years for a total
transfer of $ 8.6 million. The transfer amount is further increased by $ 1
million by building the year- end transfer to the Infrastructure Reserve into
the budget rather than making it contingent on year- end surpluses.
• The $ 6.2 million Covenant Not to Develop payment to Palo Alto Unified
School District ( PAUSD) is maintained as are funds for field maintenance,
school resource officers, theater programs, after school athletics, and
crossing guards.
I am proud to report our General Fund Budget Stabilization Reserve remains
healthy and is slightly above the 18.5 percent of expenditures target set
by Council policy. This provides a sound buffer for emergencies.
Continuing Challenges
While the City is addressing our most pressing challenges, others
continue or are on the horizon. On the revenue side, for example, there
are regulatory, legal, and economic threats to revenue sources such as
the telephone Utility Users Tax ($ 2.3 million) and the Sales Tax. The
former faces legal and technological onslaught and the latter faces
erosion through internet sales and local businesses leaving town. On the
expense side, the City faces volatile health care and construction costs.
To maintain a sustainable budget, another Top Priority for Council,
closely controlled spending and exploration of new revenue sources is
recommended.
Above, we have discussed how the 2007- 09 Proposed Budget addresses two of
the Council's Top 4 Priorities - Sustainable Budget and Library Facilities/ Public
Safety Building. The two remaining and equally important priorities,
Emergency Planning and Global Climate Protection are attended to in the
proposed budget. These commitments are highlighted in department budget
sections and summarized on page 23 of the document. Some of the major
projects for these two priorities include the Emergency Water Supply Project,
the Public Safety Facility ( which will be a “ green” building), and the Recycled
Water Distribution System Extension which decreases the need for reservoir
water.
Lucie Stern Benches
xiii
2007- 09 Budget City of Palo Alto
To manage commodity and distribution costs as well as fund continuing Enterprise Overview
capital improvements, the following utility enterprise rate changes are
proposed for 2007- 08 and 2008- 09:
• Gas service rate increase of 9.5 percent in 2007- 08 and 9.1 percent in
2008- 09 due to increased commodity costs.
• Electric service rate increase of 5 percent in 2007- 08 and 10 percent in
2008- 09 due to increased supply and transmission costs.
• Water service rate increase of 10 percent in 2007- 08 and 10 percent in
2008- 09 due to infrastructure needs and wholesale water rate increases.
• Wastewater collection service has no proposed rate changes.
• Refuse rate increase of 13 percent in 2007- 08 due to increased operating
costs.
• Storm Drainage rates are increasing based on the consumer price index as
prescribed in the voter- approved fee increase.
Although rates are moving higher, principally due to outside cost pressures
( e. g., Hetch Hetchy distribution/ capital improvement costs), the Palo Alto
Utilities continue to provide good value and reliable service delivery for
residents and businesses. The cited rate changes will increase the overall
average residential utility bill by 8.9 percent.
Finally, let's linger for a moment on just a sample of the accomplishments of Conclusion
the past year. These include:
• Impressive and favorable scores for City services in the annual citizen
survey
• " Green Power City" designation for the City of Palo Alto by the U. S.
Environmental Protection Agency
• Successful applications for Department of Energy grants and Clean
Renewable Energy bonds for photovoltaic projects
• The opening and public use of the new Stanford- Palo Alto playing fields
• Maintenance of the General Fund’s triple A credit rating
• Negotiated labor agreements that include health care cost containment
measures and employee contributions to PERS retirement plans
• Solutions to the City's Retiree Medical liability
• Completion of the Library Service Analysis and the Public Safety
Building Blue Ribbon Task Force Report
xiv
City of Palo Alto 2007- 09 Budget
• Authorization to negotiate an expansion of Stanford Shopping Center
• Recommendations from Green Ribbon Task Force on Climate Protection
• Approval of " Campus for Jewish Life" project
• Achievement of full staffing in Police Department
• Completion of Baby Boomer study
• Support of auto dealers so they stay in Palo Alto and " grow in place"
• Initiation of Succession Planning to address the retirement of a large
number of Senior Managers and professionals
These noteworthy achievements represent the " can do" and ambitious
spirit of our community, Council, and dedicated staff. As we venture
forth into a new budget year, let's renew this spirit.
Acknowledgments
Our appreciation goes to the entire City staff team involved in preparing
the 2007- 09 Proposed Budget. Carl Yeats, Director of Administrative Services;
Lalo Perez, Assistant Director of Administrative Services; and Joe Saccio,
Deputy Director of Administrative Services have coordinated a wonderful team
through an especially challenging task. Special acknowledgement goes to the
Budget Team and their countless hours of analysis and creative thought. They
include David Ramberg, Budget Manager, and his staff Mary Figone, Amy
Javelosa- Rio, Dale Wong, Cherie McFadden, Dave Yuan, and Sharon Bozman.
Staff throughout the city, in particular the Department Budget Coordinators ( see
acknowledgment page for names), are recognized for their hard work in
developing the 2007- 09 Proposed Budget.
Frank Benest
City Manager
Palo Alto City Hall
Table of Contents
2007- 09 Budget City of Palo Alto xix
Item Description Page Number
Table of Contents
Budget Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Budget Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
Transmittal Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
City of Palo Alto Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Budget Process and Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GENERAL FUND
General Fund Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
General Fund Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Budget Implications of City Council's Top Four Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
General Fund Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
General Fund Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
General Fund Revenues by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
General Fund Expenditures by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
General Fund Long Range Financial Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2007- 08 Projected Operating Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2008- 09 Projected Operating Fund Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Total Citywide Revenues by Category. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Total Citywide Expenditures by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
City Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
City Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
City Clerk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
City Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
City Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Community Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
Library . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Planning and Community Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Police . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Public Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
ENTERPRISE FUNDS
Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
2007- 08 Enterprise Funds Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
2008- 09 Enterprise Funds Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
xx City of Palo Alto 2007- 09 Budget
Page Number
Table of Contents
Item Description
Enterprise Fund Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
Enterprise Fund Revenues by Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Enterprise Fund Expenditures by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Average Residential Monthly Utility Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229
Electric Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Gas Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
Wastewater Collection Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
Water Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
Refuse Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Storm Drainage Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
Wastewater Treatment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
CPA External Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329
CROSS DEPARTMENTAL PROGRAMS
Cross- Departmental Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337
Cubberley Community Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Development Center Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341
Parking Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343
Special Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345
Traffic Management and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346
Youth Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348
Emergency Preparedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351
Environmental Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354
Natural Resource Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
Special Revenue Funds
Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365
2007- 08 Special Revenue Funds Summary by Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367
2008- 09 Special Revenue Funds Summary by Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369
Consolidated Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371
2007- 08 Community Development Block Grant Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372
Debt Service Funds
Debt Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377
General Debt Service Fund Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381
Special Assessment Debt Service Fund Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382
Internal Service Funds
2007- 09 Budget City of Palo Alto xxi
Item Description Page Number
Table of Contents
Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
2007- 08 Internal Service Fund Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387
2008- 09 Internal Service Fund Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388
2007- 09 Internal Service Funds — Unrestricted Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389
Vehicle Replacement Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390
Technology Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396
Printing and Mailing Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404
General Benefits and Insurance Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408
Retiree Health Benefit Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409
Average Salary & Benefit per Employee — by Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410
STAFFING
2007- 09 Summary of Position Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415
2007- 09 Table of Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418
MISCELLANEOUS
Palo Alto: The City. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441
Reserve Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442
Demographic Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445
2007- 08 Estimated Appropriations Limitation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446
2007- 09 Budget Adoption Ordinance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 447
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451
Americans with Disabilities Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454
xxii City of Palo Alto 2007- 09 Budget
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Table of Contents
Item Description
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2007- 09 Budget City of Palo Alto 1
City of Palo Alto Organization Chart
Palo Alto Residents
City Council
CITY ATTORNEY
Gary Baum
CITY MANAGER
Frank Benest
CITY AUDITOR
Sharon Winslow Erickson
CITY CLERK
Donna Rogers
Assistant City Manager
Emily Harrison
Administrative Services Department
Carl Yeats, Director
Community Services Department
Richard James, Director
Human Resources Department
Russ Carlsen, Director
Planning & Community Environment
Steve Emslie, Director
Fire Department
Nick Marinaro, Chief
Library Department
Diane Jennings, Director
Public Works Department
Glenn Roberts, Director
Police Department
Lynne Johnson, Chief
Utilities Department
Valerie Fong, Director
City of Palo Alto Organization Chart
continued
2 City of Palo Alto 2007- 09 Budget
THIS PAGE IS INTENTIONALLY LEFT BLANK.
2007- 09 Budget City of Palo Alto 3
An Overview he budget is a spending management plan for the City's financial
resources. Through the use of these resources, services are provided to
meet the needs and desires of Palo Alto's residents and businesses. The
budget is also at the heart of the political process, in which resources are
allocated based on City Council priorities. The review of the proposed budget is
structured around public hearings by the Finance Committee, which further
incorporates public opinion into the process. The budget is therefore the vehicle
for responding to the community's wishes, as well as an instrument for balancing
inflows and outflows ( revenues and expenditures) of funds.
City Council Top Four Priorities
At the start of the City's budget process, the City Council determines its main
focus for the following one- year period. Through an open Council dialogue, the
priorities guide both budget development and department priority- setting. The
public has the opportunity to provide input into this process as well as during the
budget review by the Finance Committee. The following are the Top Four City
Council priorities for 2007- 08:
• Global Climate Protection
• Library Plan/ Public Safety Building
• Sustainable Budget
• Emergency Planning
Operating Budget
Process
Budget Preparation
The City's annual budget process begins in November and concludes in June. The
operating and capital budgets are developed by the City Manager, in consultation
with senior management and the Director of Administrative Services, utilizing the
following main sources of information:
• Community input
• City Council Top Four Priorities
• Findings from the City's Long Range Financial Forecast, which is updated annually
and presented to the Finance Committee prior to the budget process
• Comprehensive Plan containing the City's official policies on land use and
community design, transportation, housing, natural environment, business and
economics, and community services
T
The Budget Process and Document
Top Four Priorities
The Budget Process and Document
continued
4 City of Palo Alto 2007- 09 Budget
This information is used to develop the budget request guidelines, which provide
direction to City departments as they prepare their budget requests.
Operating Budget Calendar
November: Operating budget preparation begins with determination of the base
budget for the following year, which excludes one- time revenue and expenses
from the prior year. Input from the Long Range Financial Forecast ( LRFF)
determines the broad financial picture facing City operations in the upcoming
period. Budget guidelines and instructions are finalized and distributed. Municipal
Fee Schedule change parameters are also provided.
December: Critical to their planning process for the upcoming year, departments
are allowed to reallocate staffing and non- salary resources to meet the changing
demands placed on service delivery. This step results in no net change to the
amount of resources allocated to the department overall.
January: Changes to the base budget are submitted to the Budget Division for
analysis and may include requests for additional funding to meet program needs
for the upcoming year. Textual elements of the budget document, including
benchmarking measures are also finalized.
February: Recommendations on the base budget requests are made by Budget
Division staff to the Director of Administrative Services, both in terms of their
conformance to budget guidelines as well as their individual merits. Internal
budget hearings are held to discuss Budget Division analysis of department
funding requests, along with alternative funding options to meet the department's
needs. Cost- benefit analysis is performed on both base operations as well as new
funding requests.
March/ April: Final decisions are made by the City Manager, on the proposed
operating budget requests, along with the general message to the City Council. The
adopted budget document is compiled, edited, and forwarded to the Council
members. Adopted changes to the Municipal Fee Schedule are finalized and
reviewed by the Office of the City Attorney.
May/ June: The City Manager formally presents the proposed budget to the
Finance Committee in a series of public hearings. The Finance Committee
prepares its recommendation to the City Council. Final adoption occurs at a final
public hearing in June. All changes made during the public process are
incorporated into the adopted budget document which is distributed to City
libraries as well as posted on the City's website.
The Budget Process and Document
continued
2007- 09 Budget City of Palo Alto 5
Changing the Budget Level of Control and Changes to the Adopted Budget
Budgetary control, the level at which expenditures cannot legally exceed the
appropriated amount, is implemented at each expense item at the cost center level,
the department level, the fund level, and the capital project level. Administrative
policies provide guidelines on budget transfers; the authorization necessary to
implement transfers and appropriations after the budget is adopted. Generally there
are two types of budget transfers:
Budget Adjustment: Budgetary control, the level at which expenditures cannot
legally exceed the appropriated amount, is exercised at the fund level, the
department level, and the capital project level.
Budget Amendment: This is an adjustment to the total appropriated amount
within a fund or department which was not included in the original adopted
budget. These supplemental appropriations are presented to City Council in an
agenda report and require for approval, the passage by a two- thirds vote of the City
Council. Unexpended appropriations automatically lapse at the end of the fiscal
year and are included in the ending fund balance calculations within each fund.
Reasons for initiating a Budget Amendment Ordinance ( BAO) include:
• Recognizing unanticipated revenue, which was not projected in the budget, and to
appropriate associated expenditures in the year received
• Appropriating additional funds from reserves
• Transferring dollars from the operating budget to the capital budget or vice versa
• Transferring between funds, departments, or projects
• Amending the official “ Table of Organization” ( staffing changes) during the year
• Amending the Municipal Fee Schedule during the year
Understanding the
Document Layout
Document Organization
The budget document contains the General Fund, Enterprise Funds, Internal
Service Funds, Debt Service Funds, and Special Revenue Funds.
Funds: Local government budgets are made up of funds which help to organize
and account for restricted resources. Each fund is considered a separate accounting
entity. Enterprise Funds are set up as self- supporting units similar to those in a
business. They account for the operation and maintenance of facilities and services
that are entirely paid for by rates charged to residents or, in the case of Internal
Service Funds, to City departments. The City of Palo Alto owns and operates its
own utilities, with the exception of refuse hauling and collection, which is
The Budget Process and Document
continued
6 City of Palo Alto 2007- 09 Budget
contracted with an outside firm. The budget document is divided into fund and
department sections, each containing the following components:
• Fund/ Department Overview - identifies key goals to be achieved during period
• Program Update - reports on accomplishments in any new program/ activity
undertaken during the past two years
• Financial Summaries - revenues and expenditures by functional area and expense
category
• Council Priority Implementation - specifically cites activities related to City
Council's top four priorities
• Resource Level Changes - identifies major resource changes from the base budget
• Service Level Changes - describes changes to service delivery in the upcoming
period
Financial and narrative information is provided in each of these areas. This format
allows the reader to review a fund budget at different levels of detail ranging from
an overview of the fund as a whole, to specific department program funding
requests.
Positions: Specific information related to the number of positions within a
particular department or fund, can be found on the Full Time Equivalent ( FTE)
line of each financial summary. Historical information on how these numbers have
changed is detailed under the Staffing tab and within the Table of Organization. At
the fund and department levels, the number of personnel in each functional area is
shown. A detailed listing of regular, permanent positions and total cost is shown at
the beginning of each department/ fund, with the specific classifications noted in
the Table of Organization at the end of this document.
Understanding the
Details
Financial Summaries
Reflected in this document are actual revenues and expenditures for 2005- 06; the
2006- 07 Adjusted Budget; the 2007- 08 Adopted Budget; and the 2008- 09
Adopted- In- Concept Budget. The main focus of this discussion along with the
dollar amounts in the “ Budget Change” column is to compare the 2006- 07
Adjusted Budget with the 2007- 08 Adopted Budget. This describes the changes
from the prior year's numbers and is the recommended method of showing
budgetary change by the Government Accounting Standards Board ( GASB).
Revenues: Total revenues are displayed for each department and fund. In each
department, revenues are shown as either internal or external depending on their
source. Revenues include fees collected for cost- recovery purposes by the
department or fund for specific services to the public ( external revenues), as well
The Budget Process and Document
continued
2007- 09 Budget City of Palo Alto 7
as revenues received from other funds ( internal revenues). An example of internal
revenue includes the Electric Fund reimbursing the Attorney's Office for legal
services. The principal sources of external revenues are described in the Resource
Level narratives within each department.
Expenditures: Expenditures are displayed at the fund summary as well as the
department summary level. For example, the budget shows funding dedicated to
the Building Division in the Planning and Community Environment Department.
Basis of Accounting: The City's Governmental Fund ( General Fund, Special
Revenue Fund, and Capital Project Fund) and Proprietary Fund Budgets
( Enterprise Fund and Internal Service Fund) are developed using a modified
accrual basis of accounting. While the Governmental Fund is accounted for using
the modified accrual basis, the Proprietary Fund is accounted for using the full
accrual basis of accounting. Both of these bases are generally accepted accounting
principles ( GAAP).
Modified accrual basis of accounting recognizes revenues when measurable and
available and records expenses when incurred, while the full accrual basis of
accounting, records revenues when earned and recognizes expenses when
incurred, regardless of when the related cash flows take place.
Fund/ Department Administration: The budget document includes an
administration function within each department- level financial summary. Typical
administrative expense includes core staff that work on department- wide priorities,
as well as allocated costs from internal service funds.
The Budget Process and Document
continued
8 City of Palo Alto 2007- 09 Budget
Rates and Reserves
The General Fund ( GF) has one main reserve - the Budget Stabilization Reserve
( BSR). City Reserve Policy has placed a cap of 18.5 percent of GF Expenditures
on the BSR, with any excess going to the Infrastructure Reserve ( IR). Financial
Policy allows flexibility in determining the BSR cap amount within a range of
between 15 and 20 percent of expense.
In the Enterprise Funds, rates are the charges to customers for services provided,
such as electric and gas services. The total revenue generated by the rates covers
expenditures on an ongoing basis. Utility rate increases or decreases are typically
staggered to minimize volatility from one year to the next. When budgeted
revenues are not sufficient to cover budgeted expenditures in years between
planned rate increases, or in the case of emergencies or unforeseen changes in
either revenues or expenses, reserves are used to cover the difference. Council has
adopted a policy specifying the appropriate levels of reserves in each Enterprise
Fund. Typically, the budget will reflect either increasing or decreasing the reserves
to within Council- approved ranges. A reserves summary table is located at the
beginning of the Enterprise Funds section and within each individual fund
summary.
Special Revenue Funds
Special Revenue Funds account for revenues with certain restrictions on their
usage. These funds include gas tax funds from the state, in- lieu housing fees
assessed for the City's Below Market Rate housing projects, and transportation
mitigation fees paid by developers. Other funds in this category include:
assessments for parking lot bond payments, parking permit revenues, and
Community Development Block Grants ( CDBG) from the federal government.
Also included are development impact fees related to libraries, parks, and
community centers.
Internal Service Funds
Internal Service Funds provide printing and mailing, vehicle replacement and
maintenance, technology, and general benefits administration services to City
departments. These services are rendered on a cost recovery basis through user
charges. The Vehicle Replacement and Maintenance Fund manages citywide
maintenance and replacement of vehicles and equipment. The Printing and
Mailing Services fund accounts for central duplicating and printing/ mailing
services, while the General Benefits and Insurance Fund accounts for the
administration of employee benefits, the City's self- insured workers'
compensation, payroll, and general liability programs. The Technology Fund
The Budget Process and Document
continued
2007- 09 Budget City of Palo Alto 9
includes activities such as personal computer desktop, software application, and
technology infrastructure replacement and maintenance.
Key Budget
Terms
Adjusted Budget:
Represents the adopted budget as modified by changes made during the fiscal year.
Adopted Budget:
Annual City budget approved by the City Council on or before June 30.
Benchmarking Measures:
Benchmarks are included in the budget document and replace the former impact
measures. Benchmarks are shown for each department and, where available, at the
division level in each department. The benchmarks show input, output, efficiency,
and effectiveness measures. Where possible they are related to the City Auditor's
Service Efforts and Accomplishments report.
Capital Improvement Program ( CIP):
Accounts for projects related to the acquisition, expansion, or rehabilitation of the
City's buildings, equipment, parks, streets, and other public infrastructure.
Funds:
Used by local government budgets to organize and account for restricted resources.
Each fund is considered a separate accounting entity.
Infrastructure Management Plan ( IMP):
Subset of the capital improvement program with the focus of rehabilitating the
City's infrastructure on a continuing basis.
Proposed Budget:
The budget that is sent to the Finance Committee by the City Manager. The
proposed budget as modified by changes made by the Finance Committee during
their review is approved by the Council and then becomes the adopted budget.
The Budget Process and Document
continued
10 City of Palo Alto 2007- 09 Budget
General Fund
2007- 09 Budget City of Palo Alto 15
General Fund Revenues
An Overview he City's “ 2007- 17 Long Range Financial Forecast” ( LRFF) was presented
to the Finance Committee in December 2006 ( CMR: 431: 06). The LRFF,
with its ten- year revenue and expense forecast, is the foundation upon
which this budget is constructed.
As stated in the LRFF, the forecast assumes continued slow but steady economic
growth over the next few years, based on both the economy's recent performance
and on outside expert forecasts. For 2007- 08, the Bay Area may expect slow job
growth and moderate gains in real income. Santa Clara County's economic
recovery finally caught up with that of the state and the nation. Risks to the City's
financial health include high energy costs, the possibility of continued weakness in
the housing market, strong competition for sales tax dollars from neighboring city
retail outlets, legal developments which bode ill for our future UUT revenues, and
new GASB rules which require the City to set aside funds to cover future retiree
medical premiums, among other issues.
Overall, City revenues are expected to increase by $ 8.6 million ( 6.5 percent) in
2007- 08 and then by $ 2.7 million in 2008- 09. The following sections discuss the
City's major revenue sources and their projected levels for 2007- 09.
Sales Tax
Sales tax revenues are expected to reach $ 22 million in 2007- 08. This represents a
$ 0.8 million or 3.6 percent increase over the 2006- 07 adjusted budget of $ 21.2
million.
Heavily dependent on Bay Area job and income growth and consumer spending,
sales tax performance is closely tied to the health of the local economy. Although a
reasonable growth rate for 2007- 08 and 2008- 09 is anticipated, there are concerns
about the potential for a weakening economy, lower consumer confidence, a slide
in home prices, and the loss of key sales tax revenue generators within City
boundaries.
Property Tax
For 2007- 08, property tax revenues are anticipated to reach $ 22 million, a $ 1
million or 4.7 percent increase over the 2006- 07 adjusted budget. Due to the
downturn in the housing market and the decline in assessed value growth rate for
2006- 07, staff foresees property tax revenue growth moderating the next few
years. A growth rate of around 4.4 percent in property tax revenues is estimated for
2008- 09.
T
General Fund
General Fund Revenues
continued
16 City of Palo Alto 2007- 09 Budget
Transient Occupancy Tax ( TOT)
The TOT is projected to grow by $ 0.24 million or 3.6 percent in 2007- 09 for a total
of $ 7 million in revenue. During the first two quarters of fiscal year 2006- 07, the
average citywide occupancy rate exceeded 70 percent and average daily room rates
rose by 4.5 percent. The growth rate in 2007- 08 is expected to be 4.1 percent.
Utility Users Tax ( UUT)
UUT revenues are anticipated to increase by $ 0.38 million in 2007- 08, a 4.2
percent increase over the 2006- 07 adjusted budget. Most of the increase is
attributable to higher Utility rates due to higher electric and gas commodity costs.
Of the $ 9.4 million, $ 2.3 million is derived from the tax on telephone use. This
amount includes payments from Verizon Wireless whose legal dispute with the
City has been placed on hold for several years. Between changes in
communication technology e. g., Voice Over Internet Protocol ( VOIP) and
potential legal and regulatory challenges, this revenue source is open to risk.
Other Taxes and Fines
This revenue category is comprised of motor vehicle in- lieu fees, documentary
transfer taxes, and fines and penalties.
Documentary Transfer taxes are anticipated to rise from $ 4.9 million in 2006- 07 to
$ 5.1 million in 2007- 08. Projecting transfer taxes is somewhat difficult in that the
mix, volume, and size of transactions which drive revenues can change from year
to year. Based on historical performance and the steady flow of property
transactions to date, the $ 5.1 million target in 2007- 08 appears achievable.
Charges for Services
This revenue category is mainly comprised of external reimbursements and fee-for-
service payments generated by General Fund departments such as Stanford
University's payment for fire protection services ($ 6.9 million), paramedic fees
($ 1.7 million), and plan checking fees ($ 2.3 million). As compared to the 2006- 07
adjusted budget, this category is projected to increase $ 1.3 million mainly due to
an increase in the Stanford fire contract and plan checking revenue from higher
construction activity.
Fees, Permits and Licenses
Revenue in this category is primarily derived from construction- related activity. In
2007- 08, revenue in this area is increasing $ 1.5 million due to increased
construction activity.
General Fund Revenues
continued
2007- 09 Budget City of Palo Alto 17
Return on Investment
During 2006- 07, the City's portfolio yield has stabilized around 4.3 percent. Staff
projects interest income of $ 2.2 million in 2007- 08, a $ 0.09 million or 4.3 percent
increase over the 2006- 07 adjusted budget. Although yields on new investments
have risen in the past year due to the Federal Reserve Board's spate of rate
increases, the City's older, lower yielding investments ( which are gradually
maturing) have been a drag on yield. This is an expected result from a “ laddered”
portfolio.
Rental Income
Primarily comprised of rent charged to enterprise funds for use of City land, this
revenue category is increasing $ 0.7 million in 2007- 08 as compared to the 2006- 07
adjusted budget. This is due to revised rental values as updated annually.
Charges to Other Funds
This revenue category is the reimbursement received by the General Fund for the
provision of administrative services to enterprise and internal services funds. The
General Fund charges these funds for legal, human resources, finance, and general
administration services. This revenue is increasing $ 0.2 million in 2007- 08
compared to the 2006- 07 adjusted budget.
Operating Transfers- In
The equity transfer from the enterprise funds is the largest component of this
revenue category, totaling $ 14 million. The equity transfer represents the return on
the initial investment the City made when the Utility Department, and its utility
business, was created more than 100 years ago. This transfer increases 3 percent
annually, representing a $ 0.6 million increase in 2007- 08 over 2006- 07.
Other Revenue
This revenue category is mainly comprised of Animal Services revenue from
neighboring cities, Palo Alto Unified School District's ( PAUSD) share of
maintenance for athletic fields, and one- time revenue sources. This revenue is
decreasing $ 3.2 million in 2007- 08 compared to the 2006- 07 adjusted budget. The
decrease is attributed mainly to the revenue received to support the purchase of the
Bressler property.
General Fund Revenues
continued
18 City of Palo Alto 2007- 09 Budget
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2007- 09 Budget City of Palo Alto 19
General Fund Expenditures
An Overview otal General Fund expense is projected to be $ 138.9 million in 2007- 08,
a $ 10.4 million ( 8.1 percent) increase from 2006- 07 adjusted budget
figures. In 2008- 09 General Fund expense will increasing $ 1.8 million
( 1.3 percent). The main elements of these changes include:
• $ 1.0 million ( 1.7 percent) increase in 2007- 08 and $ 0.7 million ( 1.2 percent) in
2008- 09 for negotiated salary increases for certain bargaining groups.
• Overall benefit costs increase by $ 4.4 million ( 17 percent) in 2007- 08 and remain
stable in 2008- 09. The increase is primarily due to the inclusion of the cost for
the future retiree medical liability ( GASB 45), an addition of $ 2.9 million; the
increase in pension cost resulting from the 2.7 percent at 55 pension plan; and an
increase in employee healthcare premiums. The cost of the 2.7 percent at 55
pension plan is offset by employee contributions and from long- term cost
avoidance in employee healthcare costs due to recent limits enacted on employee
healthcare plans.
• The Capital Fund transfer of $ 5.6 million remains and is increased by an additional
$ 3 million ( Council Top Priority) over two years for a total transfer of $ 8.7
million in 2007- 08 and $ 9.3 million in 2008- 09. The transfer amount includes
the $ 1 million year- end transfer to the Infrastructure Reserve that is now built
into the budget rather than making it contingent on year- end surpluses. This
approach is consistent with the 2007- 17 Long Range Financial Forecast.
Departments were given the opportunity to reallocate resources within department
budgets which addressed the need to adjust spending in certain areas as a result of
shifting operational needs.
Increasing Employee Benefit Expense - Retiree Medical, Pension ($ 5 million
GF increase)
The 2007- 09 Adopted Budget includes expense for funding the future liability for
retiree medical costs. In 2007- 08, General Fund expense is increased by $ 2.9
million for the future retiree medical liability ($ 3.3 million citywide). The funds
will contribute to the City's reserve for retiree medical and will satisfy the
Governmental Accounting Standards Board's requirement for realizing the
expense, known as GASB 45. In addition, General Fund benefit expense is
increasing by approximately $ 2.0 million ($ 3.2 million citywide) for the 2.7 at 55
retirement plan approved in 2006. The ongoing cost of the retirement plan is offset
by employee contributions and ongoing employee ( active and retired) health care
cost avoidance. Health care cost avoidance is achieved from placing a limit on
employee medical plans. These amounts hold constant in the 2008- 09 adopted- in-concept
budget and will be reviewed as part of the 2008- 09 budget process in
2008. The 2007- 08 budget also incorporates a $ 0.6 million contingency for the
T
General Fund Expenditures
continued
20 City of Palo Alto 2007- 09 Budget
year- end transaction for workers' compensation and liability adjustments, know as
the incurred but not yet realized ( IBNR) adjustments. The IBNR contingency
amount is an initial effort to address the annual unfunded liability and will likely
be increased in future budgets to reflect actual expense.
Increasing Salary Expense - Negotiated Contract increases ($ 1.1 million)
The 2007- 09 Adopted Budget contains funding for previously negotiated salary
increases for the following labor groups:
• International Association of Fire Fighters ( IAFF) negotiated salary increase - ($ 0.3
million in 2007- 08 and 2008- 09). The budget includes the negotiated increases
of 3 percent in 2007- 08 and 3 percent in 2008- 09. The four year contract,
renewed with an effective date of July 2006, will expire in 2010. Future year
increases include 3 percent in 2009- 10 and 4 percent in 2010.
• Service Employees International Union ( SEIU) negotiated salary increase - ($ 1.1
million in 2007- 08 and $ 1.4 million 2007- 09). The budget includes the
negotiated increases of 3.5 percent in 2007- 08 and 3 percent in 2008- 09. The
four year contract, renewed with an effective date of July 2006, will expire in
2010. Future year increases include 3 percent in 2009- 10 and 3 percent in 2010.
A portion of the salary increase goes towards paying for the increased pension
benefit of 2.7 percent at 55.
• The Palo Alto Police Officer's Association ( PAPOA) labor contract expires June
30, 2007.
Internal Service Fund Allocation
In 2007- 09, the General Fund is covering its full share of Technology Fund
operating costs of $ 5.2 million. These costs are also allocated to the enterprise
funds and include application support and maintenance, network infrastructure
replacement and maintenance, and desktop replacement. The Technology Fund
reserve balance is projected to be $ 3.8 million in 2007- 08 and $ 2.1 million in
2008- 09. Costs for the planned SAP upgrade are reducing the fund’s balance as
anticipated.
Non- Departmental Expenditures
This category involves costs not associated with a particular department such as
the support of the Palo Alto Unified School District ( PAUSD) of $ 6.2 million as
part of the lease and covenant not to develop the Cubberley Community Center.
General Fund Expenditures
continued
2007- 09 Budget City of Palo Alto 21
Contingency Spending:
Contingencies are budget dollars eventually transferred to another department in
order to fund unexpected expense. These include the City Manager and City
Council contingencies as well as compensation adjustments to be allocated to
department budgets later in the year.
Operating Transfers- Out
The General Fund maintains obligations to other funds such as the Storm Drainage
Fund, Capital Project Fund and Debt Service Funds. Operating transfers are a
means of moving resources between funds. General Fund operating transfers out
are projected to be $ 10.7 million in 2007- 08. Some of the larger transfers include
$ 8.7 million to the Capital Project Fund for infrastructure, $ 1 million to the Debt
Service Fund for debt financing expense, and $ 0.9 million to the Storm Drainage
Fund for the General Fund's pre- payment of its share of the Storm Drain fee
increase passed in 2005- 06. The General Fund's pre- payment obligation ends with
the 2007- 08 payment and a corresponding expense reduction is realized in the
transfer in 2008- 09.
Reserves
The Budget Stabilization Reserve ( BSR) is projected to remain at stable levels near
its target of 18.5 percent of expenditures, approximately $ 26 million in 2007- 08
and $ 27 million in 2008- 09. This is within the 15 to 20 percent reserve policy
guideline range.
Long Range Financial Forecast ( LRFF)
As presented to the Finance Committee in December 2006, the LRFF plays a
critical role in the development of much of the fundamental analysis in this budget
presentation. The model is included in this document with the 2005- 06 year
updated with actual expenditures. While continuing a careful balance between
projected revenues and expenditures, the model continues to indicate General
Fund stability for the next several years. The model will be updated again in
December 2007.
General Fund Expenditures
continued
22 City of Palo Alto 2007- 09 Budget
Citywide Operating Fund Balances Statement
An organization- wide operating fund statement is included in the financial
summaries that follow this discussion. Internal service fund activities are not listed
separately as the expenses surrounding these activities have been allocated to all
funds receiving the service and included as expense within those funds. Capital
Project Fund activities are captured as a net transfer of fund balance and also are
not included in this operating statement. Here are the highlights from the 2007- 09
summary:
• Total City revenues are projected to be $ 393 million in 2007- 08 and $ 467 million in
2008- 09
• Total City expenditures are projected to be $ 416 million in 2007- 08 and $ 444
million in 2008- 09
• Total fund balances are projected to be $ 262 million in 2007- 08 and $ 286 million in
2008- 09
2007- 09 Budget City of Palo Alto 23
Budget Implications of City
Council's Top Four Priorities
An Overview epartment budget sections include a list of specific programs and/ or
services that further the Council's top- four priorities. The following is a
summary of these services, programs and activities included in the
2007- 09 Adopted Budget. Along with these items are estimates of budget dollars
dedicated to delivery of the service or the performance of the activity. As the
budget is structured around specific department missions, staff time and other
costs related to the delivery of Council priority- related services are therefore
estimated.
This summary is meant to depict the commitment of resources where estimates are
available. Additional department activities for which dollar estimates are not easily
obtained can be found in the individual department sections. A summary of CIP
expenses related to the Council's Top- Four Priorities can be found in the 2007- 09
CIP Adopted Budget document.
Global Climate
Protection
$ 36,383,000
City Attorney's Office - $ 91,000
Analyze green building issues and legal approaches to encourage climate
protection.
City Manager's Office - $ 130,000
Oversee the implementation of Green Ribbon Task Force recommendations and
lead in the development of an Urban Forest master plan.
Planning and Community Environment Department - $ 676,000
Promote alternative transportation options by maintaining the City's shuttle
program, implementing the Bicycle Plan and administering the commute
alternatives program.
Public Works Department - $ 166,000
Provide on- going maintenance to City facility systems to obtain optimal and
efficient conditions.
D
Top Four Priorities
Budget Implications of City Council's Top Four Priorities
continued
24 City of Palo Alto 2007- 09 Budget
Electric, Gas and Water Departments - $ 18,000,000
Implement Green Ribbon Task Force recommendations for renewable energy
goals which include the purchase of renewable energy generated by landfill gas
and wind power.
Expand and enhance energy efficiency programs. Promote local small- scale and
ultra- clean distributed generation and cogeneration.
Implement and administer residential and commercial programs some of which
include Smart Energy, refrigerator recycling, efficiency assistance programs, PV
Partners with photovoltaic installations, PAUSD grant programs for efficiency
education and retro- commissioning training for City staff.
Refuse Fund - $ 1,300,000
Develop implementation plan for zero waste goal.
Minimize hazardous waste through collection efforts. Minimize solid waste
through waste reduction and recycling programs.
Water Quality Control Plant - $ 16,000,000
Continue CIP work on the Disinfection Facility improvement program project.
Other City Department Contributions:
Administrative Services Department - $ 4,000
Community Services Department - $ 13,000
Human Resources Department - $ 3,000
Library Plan/ Public
Safety Building
$ 955,000
City Attorney's Office - $ 95,000
Review public works contract and continue to implement the contract streamlining
process.
Support staff on efforts related to the potential acquisition and development of a
new public safety building.
Respond to legal questions relating to libraries and work on ballot measures for the
library plan and public safety building.
Budget Implications of City Council's Top Four Priorities
continued
2007- 09 Budget City of Palo Alto 25
City Manager's Office - $ 145,000
Lead in the development of 2008 financing measures for library and public safety
facilities.
Administrative Services Department - $ 20,000
Evaluate the funding requirements for the new library and public safety facilities.
Library Department - $ 65,000
Work with other City Departments to implement the Library Plan.
Police Department - $ 30,000
Continue staff support on the Public Safety building CIP.
Public Works Department - $ 600,000
Continue CIP work on the Public Safety Building project.
Sustainable Budget
$ 1,430,000 City Attorney's Office - $ 80,000
Continue to evaluate the legality of proposals for revenue increases and
enhancements, and review issues related to the reduction of General Fund
expenditures.
Continue to reduce outside council expense and cost recovery efforts for legal
services provided for the benefit of third parties.
Administrative Services Department - $ 600,000
Facilitate an increase of $ 3 million per year in infrastructure funding by
recommending new revenue sources and enhanced revenue sources, and specific
expenditure reductions.
Incorporate all future liabilities into the budget and forecasts.
Community Services Department - $ 65,000
Seek public and grant funding for infrastructure, park and community center
enhancement, and program support.
Implement a new cost recovery policy for fee- based classes and explore new
models of service delivery to lower costs and maintain high quality.
Human Resources Department - $ 675,000
Budget Implications of City Council's Top Four Priorities
continued
26 City of Palo Alto 2007- 09 Budget
Assist in cost containment through employee training, effective labor and
employee relations and reducing workers compensation claims.
Other City Department Contributions:
City Manager's Office - $ 10,000
Emergency Planning
$ 17,236,000
City Manager's Office - $ 64,000
Oversee the City's emergency planning efforts as they relate to preparedness,
response, recovery and emergency planning resource needs.
Serve on the Palo Alto/ Stanford Red Ribbon emergency planning task force.
Community Services Department - $ 87,000
Update the Wildland Fire polices and procedures in collaboration with the Fire
Department.
Continue to provide specialized training for park rangers in law enforcement, fire
fighting and emergency response techniques.
Review, update and disseminate the Arts and Sciences Division emergency plans
and procedures to staff. Revise the emergency plans and procedures for children's
programs to be compatible with the Palo Alto Unified School District ( PAUSD).
Orientate and train community theatre contract groups in appropriate emergency
plans and procedures.
The Cubberley Community Center ( CCC) is a planned emergency response center.
CCC will be made ready “ as a shelter” at all times to respond to any disaster or
emergency.
Fire Department - $ 700,000
Lead in the efforts for emergency preparedness, response and recovery in
collaboration with other City departments, community groups and public entities.
Provide training in emergency planning to community volunteers, City Council
members and the Emergency Stand- by Council.
Provide citywide training for all legally mandated instruction.
Budget Implications of City Council's Top Four Priorities
continued
2007- 09 Budget City of Palo Alto 27
Implement the recommendations of the City Manager that were the result of the
2005 storm events.
Identify a workable planning process for disaster recovery efforts.
Police Department - $ 1,300,000
Continue to coordinate the City's homeland security planning, training and
regional interactions.
Deploy a mobile command vehicle which will enhance field operations and
communications, CIP Project.
Deploy a mobile data computer system for the Fire Department, which will
provide dispatch and hazardous materials information, CIP Project.
Electric, Gas and Water Departments - $ 14,500,000
Continue CIP work for the Water System Portable Emergency Generators and
Emergency Water Supply projects.
Technology Fund - $ 400,000
Continue CIP work for the Radio Infrastructure Replacement and the Fire Radio
Communications equipment projects.
Water Quality Control Plants - $ 160,000
Purchase critical spare parts for major pipelines and CIP projects.
Other City Department Contributions:
City Attorney's Office - $ 12,000
Administrative Services Department - $ 4,000
Human Resources Department - $ 9,000
Budget Implications of City Council's Top Four Priorities
continued
28 City of Palo Alto 2007- 09 Budget
Summary Overall, the 2007- 09 Adopted Budget includes committed estimated resources
related to Council's Top- Four Priorities as follows:
Global Climate Protection: $ 36.4 million
Library Plan/ Public Safety Building: $ 1.0 million
Sustainable Budget: $ 1.4 million
Emergency Planning: $ 17.2 million
TOTAL: $ 56.0 million
2007- 09 Budget City of Palo Alto 29
GENERAL FUND SUMMARY
($ 000)
2005- 06
Actual
2006- 07
Adopted
Budget
2006- 07
Adjusted
Budget
2007- 08
Adopted
Budget
2007- 08
Budget
Change
2008- 09
Adopted- in-
Concept
Budget
2008- 09
Budget
Change
REVENUES
Sales Tax 20,316 21,133 21,283 22,045 762 22,789 744
Property Tax 18,754 20,368 21,084 22,034 950 23,014 980
Transient Occupancy Tax 6,393 6,400 6,743 6,985 242 7,272 287
Utility Users Tax 8,759 9,151 9,025 9,402 377 10,110 708
Other Taxes and Fines 9,265 7,438 7,757 8,181 424 8,480 299
Charges for Services 18,490 19,053 19,062 20,383 1,321 20,229 ( 154)
Permits and Licenses 4,693 4,218 4,487 6,044 1,558 5,449 ( 595)
Return on Investment 241 2,048 2,100 2,191 91 2,191 0
Rental Income 12,273 12,951 12,951 13,037 86 13,037 0
From other agencies 895 81 169 118 ( 51) 81 ( 37)
Charges to Other Funds 9,426 9,084 9,084 10,650 1,567 10,647 ( 4)
Other Revenue 4,295 1,292 1,440 1,432 ( 8) 1,432 0
Total Revenues $ 113,798 $ 113,216 $ 115,185 $ 122,503 $ 7,318 $ 124,731 $ 2,228
Operating Transfers- In 15,385 15,781 15,781 17,207 1,425 17,537 330
TOTAL SOURCE OF
FUNDS
$ 129,183 $ 128,998 $ 130,966 $ 139,710 $ 8,744 $ 142,268 $ 2,558
General Fund Summary continued
30 City of Palo Alto 2007- 09 Budget
EXPENSES
City Attorney 2,573 2,643 2,726 2,746 20 2,746 0
City Auditor 880 837 855 887 32 887 0
City Clerk 952 932 952 1,440 488 1,032 ( 407)
City Council 142 179 179 190 10 190 0
City Manager 1,345 1,803 1,869 2,002 132 2,006 5
Administrative Services 6,593 6,770 6,995 7,374 379 7,181 ( 193)
Community Services 19,479 19,881 20,260 21,212 952 21,023 ( 189)
Fire 20,168 22,201 21,773 22,868 1,094 23,515 647
Human Resources 2,532 2,594 2,713 2,703 ( 10) 2,706 3
Library 5,664 5,800 5,978 6,484 506 6,545 60
Planning and Community
Environment
9,397 8,762 9,411 10,137 726 10,191 53
Police 24,408 25,686 26,130 27,981 1,850 28,179 199
Public Works 11,321 12,412 12,675 13,225 551 13,407 181
Non- Departmental 13,653 9,770 8,185 9,229 1,045 10,915 1,686
Total Expenses $ 119,106 $ 120,270 $ 120,701 $ 128,478 $ 7,777 $ 130,524 $ 2,046
Operating Transfers Out 1,756 2,040 2,040 2,030 ( 10) 1,094 ( 936)
Transfer to Infrastructure 6,212 5,399 5,736 8,677 2,941 9,247 570
TOTAL USE OF FUNDS $ 127,075 $ 127,709 $ 128,477 $ 139,185 $ 10,708 $ 140,865 $ 1,680
Net Surplus ( Deficit) $ 2,108 $ 1,289 $ 2,489 $ 525 $( 1,965) $ 1,403 $ 878
Expenditures by Category
2005- 06
Actuals
2006- 07
Adjusted
Budget
2007- 08
Adopted
Budget
2007- 08
Budget
Change
2008- 09
Adopted- in-
Concept
Budget
2008- 09
Budget
Change
Salaries and Benefits 82,928,756 84,486,326 89,853,757 5,367,431 92,107,693 2,253,936
Contract Services 8,658,694 10,068,975 10,408,562 339,587 10,307,818 ( 100,744)
Supplies and Materials 2,699,920 3,193,447 3,573,441 379,994 3,536,127 ( 37,314)
General Expense 8,588,023 8,800,667 9,910,136 1,109,469 9,576,647 ( 333,489)
Rents and Leases 611,272 729,499 725,058 ( 4,441) 725,058 0
Facilities and Equipment Purchases 3,828,918 495,317 513,777 18,460 501,977 ( 11,800)
Allocated Charges 11,790,817 12,926,913 13,493,060 566,147 13,768,838 275,778
Operating Transfers Out 1,756,411 2,040,097 2,030,166 ( 9,931) 1,094,086 ( 936,080)
Transfer to Infrastructure 6,211,923 5,735,562 8,677,023 2,941,461 9,247,023 570,000
TOTAL EXPENDITURES $ 127,074,734 $ 128,476,803 $ 139,184,980 $ 10,708,177 $ 140,865,267 $ 1,680,287
($ 000)
2005- 06
Actual
2006- 07
Adopted
Budget
2006- 07
Adjusted
Budget
2007- 08
Adopted
Budget
2007- 08
Budget
Change
2008- 09
Adopted- in-
Concept
Budget
2008- 09
Budget
Change
2007- 09 Budget City of Palo Alto 31
GENERAL FUND RESERVES
($ 000)
2005- 06
Actual
2006- 07
Adopted
Changes
2006- 07
BAO’s
Projected
06/ 30/ 07
2007- 08
Projected
Changes
Projected
06/ 30/ 08
2008- 09
Projected
Changes
Projected
06/ 30/ 09
RESERVES
Budget Stabilization Reserve ( BSR) Activity:
BSR 22,731 1,289 1,200 25,220 525 25,745 1,403 27,148
Other Reserve Activity:
Encumbrance & Reappropriation 4,029 4,029 4,029 4,029
Equity Transfer Stabilization 3,405 3,405 3,405 3,405
Inventory of Materials & Supplies 2,539 2,539 2,539 2,539
Notes Receivable & Prepaid Items 1,513 1,513 1,513 1,513
TOTAL RESERVES $ 34,217 $ 1,289 $ 1,200 $ 36,706 $ 525 $ 37,231 $ 1,403 $ 38,634
32 City of Palo Alto 2007- 09 Budget
GENERAL FUND REVENUES BY TYPE
$ 139.7 Million / Adopted 2007- 08
Charges to other
Funds
8%
Return on
Investment
2%
From other
Agencies
Less than 1%
Utility Users Tax
7%
Other Taxes and
Fines
6%
Transient
Occupancy Tax
5%
Property Tax
15%
Rental Income
9%
Permits &
Licenses
4%
Charges for
Services
15%
Other Revenue
1%
Operating
Transfers- In
12% Sales Tax
15%
3 Year Trend - Revenues ($ Millions)
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
Sales Tax
Property Tax
Transient Occupancy Tax
Utility Users Tax
Other Taxes and Fines
Charges for Services
Permits & Licenses
Return on Investment
Rental Income
From other Agencies
Charges to other Funds
Other Revenue
Operating Transfers- In
2006- 07 Adjusted
2007- 08 Adopted
2008- 09 In Concept
2007- 09 Budget City of Palo Alto 33
GENERAL FUND EXPENDITURES BY TYPE
$ 139.2 Million / Adopted 2007- 08
Non-
Departmental
7%
Operating
Transfers- Out
8%
Police
20%
Community
Services
15%
Administration
12%
Public Works
10%
Planning
7%
Library
5%
Fire
16%
3 Year Trend - Expenditures ($ Millions)
$ 0
$ 5
$ 10
$ 15
$ 20
$ 25
$ 30
Administration
Community
Services
Fire
Library
Planning
Police
Public Works
Non-
Departmental
Operating
Transfers- Out
2006- 07 Adjusted
2007- 08 Adopted
2008- 09 In Concept
34 City of Palo Alto 2007- 09 Budget
GENERAL FUND LONG RANGE FINANCIAL
FORECAST
($ 000) 2005- 06 2006- 07 2007- 08 2008- 09 2009- 10 2010- 11 2011- 12 2012- 13 2013- 14 2014- 15 2015- 16 2016- 17
REVENUES
Sales Taxes 20,316 21,283 22,045 22,789 23,535 22,894 21,813 22,364 23,097 23,935 24,899 25,963
Property Taxes 18,754 21,084 22,034 23,014 24,021 24,089 23,918 25,268 26,786 28,515 30,388 32,444
Utility User Tax 8,760 9,025 9,402 10,110 10,161 10,582 10,796 11,030 11,287 11,542 11,851 11,851
Transient Occupancy Tax 6,393 6,743 6,985 7,272 7,562 7,853 7,704 7,480 7,861 8,293 8,757 8,757
Other Taxes, Fines & Penalties 9,265 7,757 8,181 8,480 8,825 8,768 8,582 8,473 8,654 9,069 9,511 13,029
Subtotal: Taxes $ 63,488 $ 65,892 $ 68,647 $ 71,665 $ 74,105 $ 74,186 $ 72,813 $ 74,615 $ 77,685 $ 81,354 $ 85,406 $ 92,044
Service Fees & Permits 16,616 16,549 19,091 18,341 19,145 19,567 19,762 19,854 20,429 21,231 22,064 22,066
Joint Service Agreements 6,489 6,921 7,260 7,260 7,552 7,902 8,138 8,424 8,857 9,286 9,722 10,180
( Stanford University)
Interest Earnings 2,247 2,100 2,191 2,191 2,283 2,243 2,180 2,268 2,362 2,473 2,594 2,720
Other revenues 15,479 14,639 14,664 14,626 14,991 15,292 15,673 13,977 14,396 12,758 13,141 13,535
Reimbursements from Other Funds 9,479 9,084 10,650 10,647 11,020 11,371 11,537 11,710 12,102 12,559 13,041 13,531
Total Revenues $ 113,798 $ 115,185 $ 122,503 $ 124,730 $ 129,096 $ 130,560 $ 130,104 $ 130,847 $ 135,830 $ 139,663 $ 145,968 $ 154,077
Transfers from Other Funds 15,385 15,781 17,207 17,538 18,151 18,734 19,004 19,290 19,935 20,688 21,481 21,481
TOTAL SOURCE OF FUNDS $ 129,183 $ 130,966 $ 139,710 $ 142,268 $ 147,247 $ 149,294 $ 149,108 $ 150,137 $ 155,765 $ 160,350 $ 167,450 $ 175,560
EXPENDITURES
Salaries & Benefits 82,929 84,486 86,914 89,168 92,515 95,970 97,803 99,651 103,639 108,219 112,909 117,821
Retiree Medical 0 0 2,940 2,940 3,028 3,119 3,213 3,309 3,408 3,511 3,616 3,724
Contract Services 8,659 10,069 10,409 10,308 10,669 10,909 10,963 11,018 11,183 11,496 11,864 12,220
Supplies & Materials 2,700 3,193 3,573 3,536 3,660 3,742 3,761 3,780 3,837 3,944 4,070 4,192
General Expense 8,578 8,803 9,910 9,577 9,864 10,135 10,380 10,639 10,923 11,231 11,492 11,759
Rents, Leases, & Equipment 4,440 1,224 1,239 1,227 1,270 1,298 1,305 1,311 1,331 1,368 1,412 1,454
Allocated Expenses 11,791 12,927 13,493 13,768 14,250 14,571 14,644 14,717 15,085 15,537 16,004 16,484
Total Expenditures $ 119,097 $ 120,702 $ 128,478 $ 130,524 $ 135,256 $ 139,744 $ 142,069 $ 144,425 $ 149,406 $ 155,306 $ 161,367 $ 167,655
Transfers to Other Funds
GF transfer for non- IMP capital 1,182 1,322 1,372 1,232 1,270 1,304 1,336 1,368 1,409 1,458 1,458 1,458
GF transfer for IMP capital projects 4,030 4,414 6,305 7,015 7,015 7,015 7,015 7,015 7,015 7,015 7,015 7,015
Infrastructure Reserve 1,000 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Debt Service 1,200 1,092 1,082 1,081 1,177 1,173 929 752 749 649 763 763
Other 566 947 948 13 13 14 14 15 15 15 15 15
TOTAL USE OF FUNDS $ 127,075 $ 128,477 $ 139,185 $ 140,865 $ 145,730 $ 150,249 $ 152,362 $ 154,575 $ 159,594 $ 165,444 $ 171,618 $ 177,905
Net Operating Surplus/( Deficit) $ 2,108 $ 2,489 $ 525 $ 1,403 $ 1,516 $( 955) $( 3,255) $( 4,439) $( 3,829) $( 5,094) $( 4,168) $( 2,346)
Year- end Transfer to Infrastructure ( 1,000)
Net of Reserve Transfer 1,489
* The 2007- 17 Long Range Financial Forecast ( December 2006) incorporated the year- end transfer to the Infrastructure
Reserve as a dedicated part of the budget starting in 2007- 08. The transfer will still occur at year- end in 2006- 07.
2007- 09 Budget City of Palo Alto 35
2007- 08 PROJECTED OPERATING FUND
BALANCES
($ 000)
Projected
Ending Balance
06/ 30/ 07
Estimated
Revenues
Net Fund
Transfers
Estimated
Expenditures
Projected
Ending Balance
06/ 30/ 08
GENERAL FUND $ 36,706 $ 122,503 $ 6,500 $ 128,478 $ 37,231
CAPITAL FUND $ 12,826 $ 2,414 $ 10,549 $ 13,626 $ 12,163
DEBT SERVICE
Golf Course Debt 783 32 528 560 783
Civic Center Debt 363 12 409 421 363
Parking 2002 COPS ( Taxable) Debt 245 9 226 235 245
Special Assessment Debt 116 119 0 119 116
Subtotal $ 1,507 $ 173 $ 1,162 $ 1,336 $ 1,507
ENTERPRISE
Electric Fund 136,074 114,021 ( 10,836) 116,881 122,378
Gas Fund 8,566 47,463 ( 3,962) 43,653 8,414
Wastewater Collection Fund 4,995 15,444 ( 268) 14,715 5,456
Water Fund 14,179 26,671 ( 3,352) 29,777 7,721
Refuse Fund 10,561 29,849 ( 663) 30,400 9,347
Storm Drain Fund 2,437 6,607 ( 70) 8,517 457
Wastewater Treatment Fund ( 1,282) 21,015 ( 363) 19,683 ( 313)
External Services Fund 35 1,243 ( 36) 1,190 52
Subtotal $ 175,565 $ 262,313 $( 19,550) $ 264,816 $ 153,512
INTERNAL SERVICE
General Benefits and Insurance Fund 3,669 * 0 * 3,669
Retiree Health Benefit Fund 26,505 * 0 * 26,505
Printing and Mailing Fund 459 * ( 33) * 426
Technology Fund 5,834 * ( 2,024) * 3,810
Vehicle Replacement and Maintenance 1,656 * ( 1,009) * 647
Subtotal $ 38,123 $ 0 $( 3,066) $ 0 $ 35,057
SPECIAL REVENUE
Community Development Fund 1,331 714 ( 702) 0 1,343
Street Improvement Fund 323 1,153 ( 1,463) 0 13
Federal and State Revenue Funds 6,064 779 ( 5) 838 5,999
Housing In- Lieu and Public Benefit Fund 10,849 934 0 955 10,828
Special Districts Fund 893 1,082 ( 1,196) 0 779
Traffic Mitigation & Parking In- Lieu Fund 1,470 548 0 0 2,018
Downtown Business Improvement District 71 164 0 160 75
Subtotal $ 21,001 $ 5,372 $( 3,365) $ 1,953 $ 21,055
TOTAL OPERATING FUNDS $ 285,728 $ 392,775 $( 7,769) $ 410,209 $ 260,525
* allocation to/ from other funds
36 City of Palo Alto 2007- 09 Budget
2008- 09 PROJECTED OPERATING FUND
BALANCES
($ 000)
Projected
Ending Balance
06/ 30/ 08
Estimated
Revenues
Net Fund
Transfers
Estimated
Expenditures
Projected
Ending Balance
06/ 30/ 09
GENERAL FUND $ 37,231 $ 124,731 $ 7,196 $ 130,524 $ 38,634
CAPITAL FUND $ 12,163 $ 1,703 $ 10,819 $ 16,906 $ 7,779
DEBT SERVICE
Golf Course Debt 783 32 523 556 783
Civic Center Debt 363 12 412 424 363
Parking 2002 COPS ( Taxable) Debt 245 9 226 235 245
Special Assessment Debt 116 0 0 0 116
Subtotal $ 1,507 $ 54 $ 1,161 $ 1,215 $ 1,507
ENTERPRISE
Electric Fund 122,378 122,692 ( 10,532) 117,940 116,598
Gas Fund 8,414 51,922 ( 3,783) 45,139 11,414
Wastewater Collection Fund 5,456 15,454 ( 178) 14,959 5,773
Water Fund 7,721 64,122 ( 3,294) 32,730 35,819
Refuse Fund 9,347 29,851 ( 509) 29,968 8,721
Storm Drain Fund 457 5,584 ( 54) 5,304 683
Wastewater Treatment Fund ( 313) 44,315 ( 270) 42,923 809
External Services Fund 52 1,211 ( 11) 1,183 69
Subtotal $ 153,512 $ 335,150 $( 18,631) $ 290,146 $ 179,886
INTERNAL SERVICE
General Benefits and Insurance Fund 3,669 * 0 * 3,669
Retiree Health Benefit Fund 26,505 * 0 * 26,505
Printing and Mailing Fund 426 * 41 * 467
Technology Fund 3,810 * ( 1,681) * 2,129
Vehicle Replacement and Maintenance 647 * 164 * 811
Subtotal $ 35,057 $ 0 $( 1,476) $ 0 $ 33,581
SPECIAL REVENUE
Community Development Fund 1,343 714 ( 402) 0 1,655
Street Improvement Fund 13 1,153 ( 1,462) 0 ( 297)
Federal and State Revenue Funds 5,999 779 ( 5) 845 5,928
Housing In- Lieu and Public Benefit Fund 10,828 934 0 904 10,858
Special Districts Fund 779 1,082 ( 1,206) 0 656
Traffic Mitigation & Parking In- Lieu Fund 2,018 548 0 0 2,565
Downtown Business Improvement District 75 164 0 160 79
Subtotal $ 21,055 $ 5,372 $( 3,075) $ 1,909 $ 21,443
TOTAL OPERATING FUNDS $ 260,525 $ 467,010 $( 4,006) $ 440,700 $ 282,829
* allocation to/ from other funds
2007- 09 Budget City of Palo Alto 37
TOTAL CITYWIDE REVENUES BY CATEGORY
The revenue table above shows total City revenues from all City funds as follows: general fund, enterprise funds, capital
fund, internal service funds, debt service, and special revenue funds.
2005- 06
Actuals
2006- 07
Adjusted
Budget
2007- 08
Adopted
Budget
2007- 08
Budget
Change
2008- 09
Adopted- in-
Concept
Budget
2008- 09
Budget
Change
Net Sales 216,435,514 205,172,583 226,279,965 21,107,382 240,696,412 14,416,447
Sales Taxes 20,315,613 21,283,000 22,045,000 762,000 22,789,000 744,000
Property Taxes 19,020,629 21,360,664 22,313,313 952,649 23,174,000 860,687
Transient Occupancy Tax 6,392,715 6,743,000 6,985,000 242,000 7,272,000 287,000
Utility Users Tax 8,759,306 9,025,000 9,402,000 377,000 10,110,000 708,000
Other Taxes and Fines 9,276,655 7,766,600 8,190,500 423,900 8,489,500 299,000
Charges for Services 19,533,364 21,394,472 21,819,220 424,748 23,070,220 1,251,000
Permits and Licenses 5,616,355 5,360,721 7,088,499 1,727,778 6,493,499 ( 595,000)
Return on Investments 4,987,146 12,017,700 13,882,600 1,864,900 13,882,600 0
Rental Income 12,278,559 13,019,638 13,045,861 26,223 13,045,861 0
From Other Agencies 5,343,880 4,067,149 2,721,741 ( 1,345,408) 1,927,632 ( 794,109)
Charges to Other Funds 22,342,991 23,188,780 25,465,439 2,276,659 25,718,230 252,791
Other Revenue 19,842,717 17,439,985 13,535,589 ( 3,904,396) 70,340,807 56,805,218
Total Revenues $ 370,145,444 $ 367,839,292 $ 392,774,727 $ 24,935,435 $ 467,009,761 $ 74,235,034
38 City of Palo Alto 2007- 09 Budget
TOTAL CITYWIDE EXPENDITURES BY
CATEGORY
The expense table above shows total City expenditures from all City funds as follows: general fund, enterprise funds,
capital fund, internal service funds, debt service, and special revenue funds. The line above labeled " To/( From) Reserves"
shows funding from reserves that is used primarily for rate stabilization in the enterprise funds as well as for capital
improvement program ( CIP) funding.
2005- 06
Actuals
2006- 07
Adjusted
Budget
2007- 08
Adopted
Budget
2007- 08
Budget
Change
2008- 09
Adopted- in-
Concept
Budget
2008- 09
Budget
Change
Utility Purchases and Charges 97,799,980 108,477,752 118,511,785 10,034,033 122,057,223 3,545,438
Salaries and Benefits 115,135,311 116,847,790 125,154,712 8,306,922 127,843,460 2,688,748
Contract Services 15,144,579 21,138,062 25,467,151 4,329,089 24,563,507 ( 903,644)
Supplies and Materials 7,377,612 6,735,087 7,248,909 513,822 7,191,595 ( 57,314)
Facilities and Equipment Purchases 3,920,833 2,153,231 1,059,628 ( 1,093,603) 1,045,728 ( 13,900)
General Expense 11,974,634 14,893,017 14,976,855 83,838 15,180,592 203,737
Rents and Leases 10,252,843 11,123,863 11,101,145 ( 22,718) 11,101,145 0
Allocated Charges 33,636,150 33,728,242 36,795,659 3,067,417 37,442,748 647,089
Debt Service 12,435,765 14,216,457 14,388,921 172,464 14,269,367 ( 119,554)
Capital Improvement Program 36,016,410 53,116,723 55,503,037 2,386,314 80,004,188 24,501,151
Net Transfers 5,488,795 3,472,634 7,770,813 4,298,179 4,005,998 ( 3,764,815)
Total Expenditures $ 349,182,912 $ 385,902,858 $ 417,978,615 $ 32,075,757 $ 444,705,551 $ 26,726,936
To/( From) Reserves 20,962,532 ( 18,063,566) ( 25,203,888) ( 7,140,322) 22,304,210 47,508,098
City Attorney’s Office
CITY ATTORNEY
Gary Baum
Fiscal Year 2007- 08 Position Totals: 10.60 Full- time
0.95 Hourly
2.0- Sr. Deputy City Attorney
City Attorney’s Office
Organizational Chart
2.0- Senior Asst City Attorney
1.0- Assistant City Attorney
1.0- Legal Administrator
2.0- Senior Legal Secretary
1.0- Secretary to City Attorney
0.6- Claims Investigator
2007- 09 Budget City of Palo Alto 41
City Attorney
OVERVIEW
In 2007- 09, the City Attorney's Office will strive to maintain the high level of customer service it has achieved through
its reorganization. The Office's focus will be on providing quality legal advice in a timely and cost- effective fashion.
The City Attorney's Office will continue to focus on reducing it’s share of department expenditures by formalizing the
outsourcing of City defense litigation, including adopting internal processes for forwarding cases, and monitoring the
department budget. The City Attorney's Office will continue to formulate approaches for full cost recovery for
extraordinary legal services provided for the benefit of third parties.
The Office of the City Attorney will work on legal issues related to emergency preparedness. Some of the large projects
for which the Office will provide legal advice during 2007- 09 are the Public Safety Building, Mitchell Library,
Children's Library, Junior Museum and Zoo, the Emergency Water Supply Project, Comprehensive Plan Update, and
the Stanford Hospital Expansion and Stanford Shopping Center projects.
In order to ensure the highest level of legal services, the Office of the City Attorney will continue to develop staff skills
by encouraging continuing education and regular reporting to the City Council of updates on legal developments and
new laws that affect City business.
COUNCIL PRIORITY IMPLEMENTATION
In 2007- 09, the City Attorney's Office will continue to support implementation of the following City Council's Top 4
Priorities:
Global Cimate Protection
• Analyze legal approaches to encourage climate protection
• Draft appropriate ordinances to implement Council Direction
• Analyze green building issues to determine legal methods of regulation and implementation
Library Plan/ Public Safety Building
• Continue implementation of contract streamlining process by revising contract forms and training staff on new
processes
• Continue review of all public works contracts
• Support staff on all efforts related to potential acquisition and development of a new Public Safety Building
• Respond to Council and staff on legal questions relating to library enhancement or construction
• Work on potential ballot measures for the library and public safety building
Sustainable Budget
• Evaluate from a legal perspective proposals for revenue increases or enhancements
• Continue monitoring of City Attorney outside counsel expenses
• Continue review and suggestions on issues related to reducing general fund expenditures
• Continue efforts for cost recovery for legal services provided for the benefit of third parties
City Attorney continued
42 City of Palo Alto 2007- 09 Budget
Emergency Planning
• Draft applicable ordinances, policies and procedures, and additional contracts related to emergency preparedness
• Attend training and exercises
DEPARTMENT
SUMMARY
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2007- 08
BUDGET
CHANGE
%
CHG
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
2008- 09
BUDGET
CHANGE
%
CHG
Administration 193,947 225,607 189,350 ( 36,257) ( 16%) 189,504 154 0%
Consultation and Advisory 1,737,428 1,717,058 1,967,981 250,923 15% 1,968,128 147 0%
Litigation and Dispute Resolution 325,366 444,068 447,435 3,367 1% 447,448 13 0%
Official and Administration Duties 316,157 338,769 141,039 ( 197,730) ( 58%) 141,057 18 0%
TOTAL EXPENDITURES $ 2,572,898 $ 2,725,502 $ 2,745,805 $ 20,303 1% $ 2,746,137 $ 332 0%
TOTAL REVENUES $ 1,211,818 $ 1,186,063 $ 1,216,015 $ 29,952 3% $ 1,209,430 $( 6,585) ( 1%)
INTERNAL REVENUES 1,189,818 1,136,063 1,131,015 ( 5,048) 0% 1,124,430 ( 6,585) ( 1%)
EXTERNAL REVENUES 22,000 50,000 85,000 35,000 70% 85,000 0 0%
City Attorney continued
2007- 09 Budget City of Palo Alto 43
BENCHMARKING MEASURES
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 2,001,276 1,802,387 1,848,079 1,848,226
Contract Services 445,625 744,730 735,959 735,959
Supplies and Materials 29,169 38,000 38,000 38,000
Facilities and Equipment Purchases 0 2,000 2,000 2,000
General Expense 18,584 24,980 24,980 24,980
Rents and Leases 5,363 3,500 3,500 3,500
Allocated Charges 72,881 109,905 93,287 93,472
Total Expenditures $ 2,572,898 $ 2,725,502 $ 2,745,805 $ 2,746,137
Total Revenues $ 1,211,818 $ 1,186,063 $ 1,216,015 $ 1,209,430
Total Full Time Positions 11.80 10.60 10.60 10.60
Total Temporary Positions 0.51 0.96 0.95 0.95
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
Workload Outputs:
1. Number of work requests processed 2,127 2,184 2,184
2. Number of claims opened and handled ( SEA) 107 150 125
3. Number of code enforcement matters referred to City Attorney 7 8 8
Efficiency:
1. Ratio of work requests per attorney 304 364 364
0 500 1000 1500 2000 2500
FY01- 02
FY02- 03
FY03- 04
FY04- 05
FY05- 06
Annual Number of Assignments
City Attorney continued
44 City of Palo Alto 2007- 09 Budget
2. Percent of claims investigations commenced within 7 days of receipt of claim by
department
86% 90% 90%
3. Percent of requests for code enforcement legal support responded to within 10
working days
100% 100% 100%
Effectiveness:
1. Percent of work requests completed within established time frames - time frame
varies based on type of work request
97% 97% 97%
2. Percent of claims resolved within 9 months 83% 85% 85%
3. Percentage of code enforcement matters referred to City Attorney for enforcement
that are closed within 6 months of referral
N/ A 50% 50%
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
City Attorney continued
2007- 09 Budget City of Palo Alto 45
RESOURCE LEVEL CHANGES
RESOURCE LEVEL NOTES
Note 1: Adjustments include one- time budget changes from the prior year that were removed from this year's budget as
planned.
Note 2: Personnel benefit costs are increasing due primarily to the inclusion of future retiree medical costs ( GASB 45)
and the inclusion of the 2.7 percent at 55 retirement plan. The cost of the 2.7 percent at 55 plan is offset by employee
contributions and long- term savings in medical costs resulting from recent limits placed on employee health benefits.
SERVICE LEVEL CHANGES
The Office of the City Attorney completed its restructuring effort during 2006- 07. The restructuring effort resulted in a
21 percent reduction in staffing from the 2002- 03 staffing level. This represents a substantial contribution from the City
Attorney's Office to reducing general fund expenditures. The Office does not anticipate any other service level changes
at this time. In order to maintain a high level of accurate legal services in a timely fashion, additional service level
changes are not recommended.
2007- 08
ONGOING
2007- 08
ONE- TIME
2007- 08
TOTAL
2008- 09
ONGOING
2008- 09
ONE- TIME
2008- 09
TOTAL
REVENUE CHANGES
Decrease allocated revenue- internal ( 5,048) ( 5,048) ( 6,585) ( 6,585)
Increase Stanford projects reimburse-ment
($ 3 Million Challenge)
35,000 35,000
TOTAL REVENUE CHANGES $ 29,952 $ 0 $ 29,952 $( 6,585) $ 0 $( 6,585)
EXPENDITURE CHANGES
Salary and Benefits
Personnel Benefit Costs Increase ( Note 2) 58,788 58,788 145 145
Total Salary and Benefits Increase $ 58,788 $ 0 $ 58,788 $ 145 $ 0 $ 145
Adjustments ( Note 1) ( 13,095) ( 13,095)
NET SALARY AND BENEFITS CHANGES $ 58,788 $( 13,095) $ 45,693 $ 145 $ 0 $ 145
Non- Salary
Increase legal contract assistance 270,000 270,000 270,000 270,000
Allocated Charges ( Decrease) Increase ( 16,620) ( 16,620) 187 187
Total Non- Salary Changes $( 16,620) $ 270,000 $ 253,380 $ 187 $ 270,000 $ 270,187
TOTAL EXPENDITURE CHANGES $ 42,168 $ 256,905 $ 299,073 $ 332 $ 270,000 $ 270,332
Adjustments ( Note 1) ( 278,770) ( 278,770) ( 270,000) ( 270,000)
NET EXPENDITURE CHANGES $ 42,168 $( 21,865) $ 20,303 $ 332 $ 0 $ 332
City Attorney continued
46 City of Palo Alto 2007- 09 Budget
COMPREHENSIVE PLAN OVERVIEW
The 2007- 09 City Attorney's Office Budget does not request specific resources devoted to implementation of the
Comprehensive Plan as it will be accommodated within the Office’s existing workplan. Implementation of the Zoning
Ordinance Update will be a major activity funded through the Department of Planning and Community Environment.
City Attorney continued
2007- 09 Budget City of Palo Alto 47
CONSULTATION AND ADVISORY
To provide legal advice to the City Council, boards, commissions, and City officers and employees acting in their
official capacities.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 1,262,763 1,241,389 1,501,378 1,501,496
Contract Services 429,305 428,215 416,444 416,444
Supplies and Materials 28,293 34,600 34,600 34,600
General Expense 10,539 7,500 9,500 9,500
Rents and Leases 5,363 3,500 3,500 3,500
Allocated Charges 1,165 1,854 2,559 2,588
Total Expenditures $ 1,737,428 $ 1,717,058 $ 1,967,981 $ 1,968,128
Total Revenues $ 0 $ 0 $ 0 $ 0
Total Full Time Positions 7.26 7.20 8.45 8.45
Total Temporary Positions 0.51 0.96 0.95 0.95
City Attorney continued
48 City of Palo Alto 2007- 09 Budget
LITIGATION AND DISPUTE RESOLUTION
To provide civil and administrative representation on pending litigation, disputes and claims for the City, City Council,
boards, commissions, and City officers and employees acting in their official capacities.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 324,891 146,841 150,620 150,633
Contract Services 0 292,735 292,735 292,735
Supplies and Materials 475 3,400 3,400 3,400
General Expense 0 680 680 680
Allocated Charges 0 412 0 0
Total Expenditures $ 325,366 $ 444,068 $ 447,435 $ 447,448
Total Revenues $ 0 $ 0 $ 0 $ 0
Total Full Time Positions 2.18 1.31 1.04 1.04
Total Temporary Positions 0.00 0.00 0.00 0.00
City Attorney continued
2007- 09 Budget City of Palo Alto 49
OFFICIAL AND ADMINISTRATION DUTIES
To fulfill the independent official and administrative duties of the Office of the City Attorney on behalf of the City.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 291,497 305,516 104,753 104,762
Contract Services 16,320 21,180 24,180 24,180
General Expense 6,490 11,300 11,300 11,300
Allocated Charges 1,850 773 806 815
Total Expenditures $ 316,157 $ 338,769 $ 141,039 $ 141,057
Total Revenues $ 22,000 $ 50,000 $ 85,000 $ 85,000
Total Full Time Positions 1.78 1.51 0.61 0.61
Total Temporary Positions 0.00 0.00 0.00 0.00
City Attorney continued
50 City of Palo Alto 2007- 09 Budget
City Auditor’s Office
CITY AUDITOR
Sharon W. Erickson
2.0- Senior Auditor
1.0- Administrative Assistant
Fiscal Year 2007- 08 Position Totals: 4.00 Full- time
0.12 Hourly
City Auditor’s Office
Organizational Chart
2007- 09 Budget City of Palo Alto 53
City Auditor
To promote honest, efficient, effective, and fully accountable City Government.
OVERVIEW
The City Auditor's Office conducts performance audits and reviews of City departments, programs, and services.
Performance audits provide the City Council, City management, and the public with independent and objective
information regarding the economy, efficiency, and effectiveness of City programs and activities. The Office
coordinates the annual citizen survey and issues the annual City of Palo Alto Service Efforts and Accomplishments
report summarizing costs, workload, and performance results for City services for the last five years.
In the first month of each fiscal year, the Auditor's Office presents an annual audit work plan for City Council approval.
The Office will continue to report quarterly to the City Council on the status of audit projects and annually on the status
of open audit recommendations.
The Office contracts with an independent certified public accountant for the City's annual external financial audit. The
Office also conducts and coordinates audits of sales tax, property tax, transient occupancy tax, utility user’s tax, and
other revenues.
COUNCIL PRIORITY IMPLEMENTATION
In 2007- 09, the City Auditor’s Office will continue to support implementation of the following City Council’s Top 4
Priorities as follows:
Sustainable Budget
• Continue to provide independent, impartial assessment of City government performance through the Service
Efforts and Accomplishments report
• Conduct on- going audits of sales, property, documentary transfer, and utility user's taxes
• Conduct performance audits
• Continue to ensure the accuracy of financial information through the annual external financial audit
DEPARTMENT
SUMMARY
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2007- 08
BUDGET
CHANGE
%
CHG
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
2008- 09
BUDGET
CHANGE
%
CHG
Audit Services 879,981 855,232 886,994 31,762 4% 887,176 182 0%
TOTAL EXPENDITURES $ 879,981 $ 855,232 $ 886,994 $ 31,762 4% $ 887,176 $ 182 0%
TOTAL REVENUES $ 1,598,557 $ 853,259 $ 566,755 $( 286,504) ( 34%) $ 566,805 $ 50 0%
INTERNAL REVENUES 680,960 618,259 331,755 ( 286,504) ( 46%) 331,805 50 0%
EXTERNAL REVENUES 917,597 235,000 235,000 0 0% 235,000 0 0%
City Auditor continued
54 City of Palo Alto 2007- 09 Budget
BENCHMARKING MEASURES
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 643,765 560,346 607,126 607,174
Contract Services 192,574 234,832 234,832 234,832
Supplies and Materials 3,232 4,000 4,000 4,000
General Expense 9,664 1,500 1,500 1,500
Allocated Charges 30,746 54,554 39,536 39,670
Total Expenditures $ 879,981 $ 855,232 $ 886,994 $ 887,176
Total Revenues $ 1,598,557 $ 853,259 $ 566,755 $ 566,805
Total Full Time Positions 4.00 4.00 4.00 4.00
Total Temporary Positions 0.12 0.12 0.12 0.12
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
Workload Outputs:
1. Number of audit reports 17 10 10
2. Number of audit recommendations ( SEA) 45 40 40
3. Revenue audit recoveries ( SEA) $ 917,597 $ 235,000 $ 235,000
Effectiveness:
1. Percent of revenue audit cost recovered 644% 200% 200%
2. Percent of open audit recommendations implemented 54% 40% 40%
Revenue Audit Recoveries - ($ 000)
$ 0 $ 200 $ 400 $ 600 $ 800 $ 1,000
2001- 02
2002- 03
2003- 04
2004- 05
2005- 06
City Auditor continued
2007- 09 Budget City of Palo Alto 55
Efficiency:
1. Percent of workplan completed 62% 70% 70%
2. Ratio of audit reports per auditor 5.7 3.3 3.3
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
City Auditor continued
56 City of Palo Alto 2007- 09 Budget
RESOURCE LEVEL CHANGES
RESOURCE LEVEL NOTES
Note 1: Adjustments include one- time budget changes from the prior year that were removed from this year's budget as
planned.
Note 2: Personnel benefit costs are increasing due primarily to the inclusion of future retiree medical costs ( GASB 45)
and the inclusion of the 2.7 percent at 55 retirement plan. The cost of the 2.7 percent at 55 plan is offset by employee
contributions and long- term savings in medical costs resulting from recent limits placed on employee health benefits.
SERVICE LEVEL CHANGES
The summer intern program will be funded by the City Manager’s citywide seasonal intern program.
2007- 08
ONGOING
2007- 08
ONE- TIME
2007- 08
TOTAL
2008- 09
ONGOING
2008- 09
ONE- TIME
2008- 09
TOTAL
REVENUE CHANGES
( Decrease) Increase allocated revenue -
internal
( 286,504) ( 286,504) 50 50
TOTAL REVENUE CHANGES $( 286,504) $ 0 $( 286,504) $ 50 $ 0 $ 50
EXPENDITURE CHANGES
Salary and Benefits
Personnel Benefit Costs Increase ( Note 2) 65,327 65,327 48 48
Total Salary and Benefits Changes $ 65,327 $ 0 $ 65,327 $ 48 $ 0 $ 48
Adjustments ( Note 1) ( 18,546) ( 18,546)
NET SALARY AND BENEFITS CHANGES $ 65,327 $( 18,546) $ 46,781 $ 48 $ 0 $ 48
Non- Salary
Allocated Charges ( Decrease) Increase ( 15,019) ( 15,019) 134 134
Total Non- Salary $( 15,019) $ 0 $( 15,019) $ 134 $ 0 $ 134
TOTAL EXPENDITURE CHANGES $ 50,308 $( 18,546) $ 31,762 $ 182 $ 0 $ 182
City Clerk’s Office
CITY CLERK
Donna J. Rogers
3.0- Admin Associate III
1.0- Assistant City Clerk
Fiscal Year 2007- 08 Position Totals: 6.75 Full- time
0.48 Hourly
1.0- Deputy City Clerk
City Clerk’s Office
Organizational Chart
0.75- Parking Examiner
2007- 09 Budget City of Palo Alto 59
City Clerk
To foster community awareness and civic involvement by providing timely and accurate records of the activities of City
Policy makers.
OVERVIEW
In 2007- 09, the City Clerk's Office will continue to meet the needs of the public, the City Council, and staff in the
following areas: City Council support services, agenda packet process, board and commission recruitment, City
Council events, City Council minutes, elections, conflict of interest, legislative records management, and oversight of
the Administration Hearings. The City Clerk's Office maintains information provided to the City's web- site regarding
the Clerk's Office and the City Council.
COUNCIL PRIORITY IMPLEMENTATION
The City Clerk’s Office is not directly involved in the City Council’s Top 4 Priorities. In an administrative capacity, the
Clerk’s Office will work closely with City staff to ensure the agendas, minutes, packets, and public hearing notices
reflect those priorities.
DEPARTMENT
SUMMARY
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2007- 08
BUDGET
CHANGE
%
CHG
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
2008- 09
BUDGET
CHANGE
%
CHG
Administration 92,743 100,410 104,384 3,974 4% 104,507 123 0%
Public Information 84,639 84,827 106,526 21,699 26% 107,927 1,401 1%
Council Support Services 468,640 470,497 500,670 30,173 6% 504,180 3,510 1%
Election/ Conflict of Interest 220,578 86,427 507,411 420,984 487% 94,157 ( 413,254) ( 81%)
Legislative Records Management 85,608 88,285 94,574 6,289 7% 95,417 843 1%
Administrative Citations 0 121,479 126,101 4,622 4% 126,108 7 0%
TOTAL EXPENDITURES $ 952,208 $ 951,925 $ 1,439,666 $ 487,741 51% $ 1,032,296 $( 407,370) ( 28%)
TOTAL REVENUES $ 259,558 $ 241,643 $ 445,330 $ 203,687 84% $ 312,465 $( 132,865) ( 30%)
INTERNAL REVENUES 257,997 239,693 443,380 203,687 85% 310,515 ( 132,865) ( 30%)
EXTERNAL REVENUES 1,561 1,950 1,950 0 0% 1,950 0 0%
City Clerk continued
60 City of Palo Alto 2007- 09 Budget
BENCHMARKING MEASURES
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 680,786 744,844 811,792 817,428
Contract Services 41,939 70,829 70,829 70,829
Supplies and Materials 5,285 6,696 6,696 6,696
General Expense 157,738 39,780 453,319 39,780
Rents and Leases 0 0 1,200 1,200
Allocated Charges 66,460 89,776 95,830 96,363
Total Expenditures $ 952,208 $ 951,925 $ 1,439,666 $ 1,032,296
Total Revenues $ 259,558 $ 241,643 $ 445,330 $ 312,465
Total Full Time Positions 6.00 6.75 6.75 6.75
Total Temporary Positions 0.10 0.58 0.48 0.48
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
Workload Outputs:
1. Number of City Council agendas posted with City Manager Reports to the website
four days prior to council meeting
50 50 50
2. Number of formal public records requests 52 60 60
3. Number of City Council minutes finalized ( SEA) 38 40 40
Efficiency:
1. Average time to post City Council agendas 4 days 4 days 4 days
Average Time to Finalize Council Minutes
0 1 2 3 4 5 6
1999- 00
2000- 01
2001- 02
2002- 03
2003- 04
2004- 05
2005- 06
Number of Weeks
City Clerk continued
2007- 09 Budget City of Palo Alto 61
2. Average time to address formal public records requests 10 days 10 days 10 days
3. Average time to finalize City Council minutes ( SEA) 4 weeks 4 weeks 4 weeks
Effectiveness:
1. Percent of City Council agendas posted 98% 98% 98%
2. Percent of formal public records requests addressed within 10 days 98% 98% 98%
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
City Clerk continued
62 City of Palo Alto 2007- 09 Budget
RESOURCE LEVEL CHANGES
RESOURCE LEVEL NOTES
Note 1: Adjustments include one- time budget changes from the prior year that were removed from this year's budget as
planned.
Note 2: Personnel benefit costs are increasing due primarily to the inclusion of future retiree medical costs ( GASB 45)
and the inclusion of the 2.7 percent at 55 retirement plan. The cost of the 2.7 percent at 55 plan is offset by employee
contributions and long- term savings in medical costs resulting from recent limits placed on employee health benefits.
COMPREHENSIVE PLAN OVERVIEW
The City Clerk’s 2007- 09 Budget includes the following resources directed toward implementing the programs and
policies of the Comprehensive Plan:
2007- 08
ONGOING
2007- 08
ONE- TIME
2007- 08
TOTAL
2008- 09
ONGOING
2008- 09
ONE- TIME
2008- 09
TOTAL
REVENUE CHANGES
Increase ( Decrease) allocated revenues-internal
203,687 203,687 ( 132,865) ( 132,865)
TOTAL REVENUE CHANGES $ 203,687 $ 0 $ 203,687 $( 132,865) $ 0 $( 132,865)
EXPENDITURE CHANGES
Salary and Benefits
Personnel Benefit Costs Increase ( Note 2) 77,236 77,236 5,616 5,616
Decrease Temporary Salaries ($ 3 Million
Challenge)
( 10,290) ( 10,290)
Total Salary and Benefits Changes $ 66,946 $ 0 $ 66,946 $ 5,616 $ 0 $ 5,616
Non- Salary
Increase inter- agency expense for elec-tions
413,539 413,539
Increase in rents and leases 1,200 1,200
Allocated Charges Increase 6,056 6,056 553 553
Total Non- Salary Changes $ 7,256 $ 413,539 $ 420,795 $ 553 $ 0 $ 553
TOTAL EXPENDITURE CHANGES $ 74,202 $ 413,539 $ 487,741 $ 6,169 $ 0 $ 6,169
Adjustments ( Note 1) ( 413,539) ( 413,539)
NET EXPENDITURE CHANGES $ 74,202 $ 413,539 $ 487,741 $ 6,169 $( 413,539) $( 407,370)
City Clerk continued
2007- 09 Budget City of Palo Alto 63
GOVERNANCE
The City Clerk's Office provides the following information to the public on the City's website: City Clerk Reports; City
Council agendas and minutes; Board and Commission information; the Municipal Code; the City Roster; the State of
the City Address; and the City’s meeting schedules.
City Clerk continued
64 City of Palo Alto 2007- 09 Budget
PUBLIC INFORMATION
To foster awareness and civic involvement in Palo Alto by bringing the community and government closer in
partnership.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 84,639 81,779 103,478 104,879
Contract Services 0 3,048 3,048 3,048
Total Expenditures $ 84,639 $ 84,827 $ 106,526 $ 107,927
Total Revenues $ 630 $ 0 $ 0 $ 0
Total Full Time Positions 0.90 0.90 0.90 0.90
Total Temporary Positions 0.00 0.00 0.00 0.00
City Clerk continued
2007- 09 Budget City of Palo Alto 65
COUNCIL SUPPORT SERVICES
To support the administrative needs of the Council: to ensure timely delivery of Council meeting materials, including
preparation of minutes, and to administer the boards’/ commissions’ recruitment outreach.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 375,832 349,239 372,508 375,604
Contract Services 26,510 46,381 46,381 46,381
Supplies and Materials 4,848 5,736 5,736 5,736
General Expense 36,731 36,620 36,620 36,620
Allocated Charges 24,719 32,521 39,425 39,839
Total Expenditures $ 468,640 $ 470,497 $ 500,670 $ 504,180
Total Revenues $ 0 $ 0 $ 0 $ 0
Total Full Time Positions 3.30 3.30 3.30 3.30
Total Temporary Positions 0.10 0.10 0.00 0.00
City Clerk continued
66 City of Palo Alto 2007- 09 Budget
ELECTION/ CONFLICT OF INTEREST
To administer municipal and special elections and the conflict of interest code ensuring impartiality in the processes.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 93,318 81,877 89,322 89,607
Contract Services 7,312 3,000 3,000 3,000
General Expense 119,948 1,550 415,089 1,550
Total Expenditures $ 220,578 $ 86,427 $ 507,411 $ 94,157
Total Revenues $ 237 $ 0 $ 0 $ 0
Total Full Time Positions 0.70 0.70 0.70 0.70
Total Temporary Positions 0.00 0.00 0.00 0.00
City Clerk continued
2007- 09 Budget City of Palo Alto 67
LEGISLATIVE RECORDS MANAGEMENT
To manage City and legislative records as required by State Law, City Charter, or City Ordinance in accordance with
approved retention and destruction schedule.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 77,296 72,381 78,670 79,513
Contract Services 8,117 15,694 15,694 15,694
General Expense 195 210 210 210
Total Expenditures $ 85,608 $ 88,285 $ 94,574 $ 95,417
Total Revenues $ 0 $ 0 $ 0 $ 0
Total Full Time Positions 0.75 0.75 0.75 0.75
Total Temporary Positions 0.00 0.00 0.00 0.00
City Clerk continued
68 City of Palo Alto 2007- 09 Budget
ADMINISTRATIVE CITATIONS
To provide a community venue for the unbiased adjudication of Municipal Code violations.
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 0 116,499 120,921 120,928
Contract Services 0 2,100 2,100 2,100
Supplies and Materials 0 500 500 500
Rents and Leases 0 0 1,200 1,200
Allocated Charges 0 2,380 1,380 1,380
Total Expenditures $ 0 $ 121,479 $ 126,101 $ 126,108
Total Revenues $ 0 $ 1,000 $ 1,000 $ 1,000
Total Full Time Positions 0.00 0.75 0.75 0.75
Total Temporary Positions 0.00 0.48 0.48 0.48
City Council
2007- 09 Budget City of Palo Alto 71
City Council
OVERVIEW
In 2007- 09, the City Council will continue to address the needs of the community through various public meetings and
activities. Much of the focus will be on the City Council’s Top 4 Priorities which include: Global Climate Protection,
Library Plan/ Public Safety Building, Emergency Planning, and a Sustainable Budget.
The 2007- 09 City Council Budget is primarily comprised of City Council salaries, healthcare benefits, and general
expense.
DEPARTMENT
SUMMARY
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2007- 08
BUDGET
CHANGE
%
CHG
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
2008- 09
BUDGET
CHANGE
%
CHG
City Council Operations 141,986 179,228 189,529 10,301 6% 189,529 0 0%
TOTAL EXPENDITURES $ 141,986 $ 179,228 $ 189,529 $ 10,301 6% $ 189,529 $ 0 0%
TOTAL REVENUES $ 56,870 $ 59,944 $ 82,989 $ 23,045 38% $ 81,885 $( 1,104) ( 1%)
INTERNAL REVENUES 56,870 59,944 82,989 23,045 38% 81,885 ( 1,104) ( 1%)
EXTERNAL REVENUES 0 0 0 0 0% 0 0 0%
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 96,503 98,843 105,144 105,144
Contract Services 18,014 30,000 30,000 30,000
Supplies and Materials 1,459 2,930 2,930 2,930
General Expense 25,870 47,455 51,455 51,455
Allocated Charges 140 0 0 0
Total Expenditures $ 141,986 $ 179,228 $ 189,529 $ 189,529
Total Revenues $ 56,870 $ 59,944 $ 82,989 $ 81,885
Total Full Time Positions 9.00 9.00 9.00 9.00
Total Temporary Positions 0.00 0.00 0.00 0.00
City Council continued
72 City of Palo Alto 2007- 09 Budget
RESOURCE LEVEL CHANGES
RESOURCE LEVEL NOTES
Note 1: Adjustments include one- time budget changes from the prior year that were removed from this year's budget as
planned.
Note 2: Personnel benefit costs are increasing due primarily to the inclusion of future retiree medical costs ( GASB 45)
and the inclusion of the 2.7 percent at 55 retirement plan. The cost of the 2.7 percent at 55 plan is offset by employee
contributions and long- term savings in medical costs resulting from recent limits placed on employee health benefits.
2007- 08
ONGOING
2007- 08
ONE- TIME
2007- 08
TOTAL
2008- 09
ONGOING
2008- 09
ONE- TIME
2008- 09
TOTAL
REVENUE CHANGES
Increase ( Decrease) allocated revenues-internal
23,045 23,045 ( 1,104) ( 1,104)
NET REVENUE CHANGES $ 23,045 $ 0 $ 23,045 $( 1,104) $ 0 $( 1,104)
EXPENDITURE CHANGES
Salary and Benefits
Personnel Benefit Costs Increase ( Note 2) 6,300 6,300
Total Salary and Benefits Changes $ 6,300 $ 0 $ 6,300 $ 0 $ 0 $ 0
Non- Salary
Increase travel and meetings 4,000 4,000
Increase other contract services 20,000 20,000
Total Non- Salary Changes $ 24,000 $ 0 $ 24,000 $ 0 $ 0 $ 0
TOTAL EXPENDITURE CHANGES $ 30,300 $ 0 $ 30,300 $ 0 $ 0 $ 0
Adjustments ( Note 1) ( 19,999) ( 19,999)
NET EXPENDITURE CHANGES $ 30,300 $( 19,999) $ 10,301 $ 0 $ 0 $ 0
City Council continued
2007- 09 Budget City of Palo Alto 73
CITY COUNCIL OPERATIONS
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 96,503 98,843 105,144 105,144
Contract Services 18,014 30,000 30,000 30,000
Supplies and Materials 1,459 2,930 2,930 2,930
General Expense 25,870 47,455 51,455 51,455
Allocated Charges 140 0 0 0
Total Expenditures $ 141,986 $ 179,228 $ 189,529 $ 189,529
Total Revenues $ 0 $ 0 $ 0 $ 0
Total Full Time Positions 9.00 9.00 9.00 9.00
Total Temporary Positions 0.00 0.00 0.00 0.00
City Council continued
74 City of Palo Alto 2007- 09 Budget
City Manager’s Office
CITY MANAGER
Frank Benest
ASSISTANT CITY MANAGER
Emily Harrison
1.0- Assistant to the City Manager
1.0- Administrative Assistant
1.0- Senior Administrator ( Sustainability)
1.0- Exec Asst to the City Manager
1.5- Administrative Associate I
1.0- Administrative Associate II
1.0- Assistant to the City Manager
PUBLIC COMMUNICATIONS MGR ( FROZEN)
1.0- Utilities Communications Manager
Fiscal Year 2007- 08 Position Totals: 10.50 Full- time
1.00 Public Communications Manager ( Frozen)
0.25 Hourly
City Manager’s Office
Organizational Chart
2007- 09 Budget City of Palo Alto 77
City Manager
To lead City staff in implementing City Council policies and priorities and providing efficient, quality services to the
community.
OVERVIEW
In 2007- 09, the City Manager's Office will oversee efforts to implement the City Council's Top 4 Priorities: Global
Climate Protection, Library Plan/ Public Safety Building, Emergency Planning, and Sustainable Budget.
Global Climate Protection: The Manager's Office will lead the City's efforts in this area which include: preparing
climate action plan recommendations, developing a City Climate Action Plan, and creating a greenhouse gas baseline
inventory. The Office will continue to work on the implementation of the Zero Waste Operational Plan, long- range
solid waste planning, Green Power, and the incorporation of green building principles in City facilities.
Library Plan/ Public Safety Building: In addition to overseeing the General Fund Infrastructure Management Plan
implementation, the Manager's Office will provide leadership for potential 2008 financing measures for library and
public safety facilities and any related educational outreach.
Emergency Planning: The Manager's Office will provide leadership to the Emergency Preparedness Steering and
Working Committees, and work on joint emergency preparedness planning with the Palo Alto/ Stanford Red Ribbon
Task Force and the Palo Alto Unified School District. In addition, the office will continue to oversee work on the City's
Emergency Plan and will oversee a comprehensive evaluation of emergency planning resource needs.
Sustainable Budget: The City Manager's Office will assist in the development of a spending plan that balances
infrastructure spending needs with ongoing general fund operations. Council has directed staff to fund infrastructure by
an additional $ 3 million. To accomplish this, the Manager's Office will assist the Administrative Services Department
in an effort to identify revenue enhancement opportunities and expense reductions.
Finally, the Manager's Office will continue its leadership on three key projects; negotiating the expansion of the
Stanford Medical Center, negotiating the expansion of the Stanford Shopping Center, and guiding city- wide leadership
development and succession planning efforts.
COUNCIL PRIORITY IMPLEMENTATION
In 2007- 09, the City Manager's Office will continue to support implementation of the City Council's Top 4 Priorities as
follows:
Global Climate Protection
• Oversee efforts to implement Green Ribbon Task Force recommendations and Council milestones related to this
priority
• Lead effort to develop urban forest master plan
Library Plan/ Public Safety Building
• Lead development of 2008 financing measures for library and public safety facilities
Sustainable Budget
• Identify appropriate budget reductions and revenue enhancements to identify a $ 3 million increase in
infrastructure funding
City Manager continued
78 City of Palo Alto 2007- 09 Budget
Emergency Planning
• Oversee the City’s emergency preparedness efforts as they relate to preparedness, response, and recovery
• Serve on the Palo Alto/ Stanford Red Ribbon Task Force for emergency planning
• Oversee comprehensive evaluation of emergency planning resource needs
BENCHMARKING MEASURES
DEPARTMENT
SUMMARY
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2007- 08
BUDGET
CHANGE
%
CHG
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
2008- 09
BUDGET
CHANGE
%
CHG
Administration 180,611 323,730 244,555 ( 79,175) ( 24%) 244,735 180 0%
City Management 919,590 1,358,528 1,503,427 144,899 11% 1,507,695 4,268 0%
Public Communication 244,338 187,006 253,751 66,745 36% 254,011 260 0%
TOTAL EXPENDITURES $ 1,344,539 $ 1,869,264 $ 2,001,733 $ 132,469 7% $ 2,006,441 $ 4,708 0%
TOTAL REVENUES $ 443,458 $ 361,899 $ 626,761 $ 264,862 73% $ 624,785 $( 1,976) 0%
INTERNAL REVENUES 443,458 361,899 626,761 264,862 73% 624,785 ( 1,976) 0%
EXTERNAL REVENUES 0 0 0 0 0% 0 0 0%
INPUTS
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
2008- 09
ADOPTED- IN-CONCEPT
BUDGET
Salaries and Benefits 1,114,449 1,399,178 1,650,200 1,654,449
Contract Services 114,948 283,750 186,750 186,750
Supplies and Materials 3,660 10,278 10,278 10,278
Facilities and Equipment Purchases 0 300 300 300
General Expense 32,261 54,928 54,928 54,928
Rents and Leases 5 500 500 500
Allocated Charges 79,216 120,330 98,777 99,236
Total Expenditures $ 1,344,539 $ 1,869,264 $ 2,001,733 $ 2,006,441
Total Revenues $ 443,458 $ 361,899 $ 626,761 $ 624,785
Total Full Time Positions 8.50 8.50 11.50 11.50
Total Temporary Positions 0.25 0.40 0.25 0.25
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
Workload Outputs:
1. Number of City Council agenda reports ( CMRs) issued ( SEA) 336 350 375
City Manager continued
2007- 09 Budget City of Palo Alto 79
Effectiveness:
1. Percent rating public information services as good or excellent ( SEA survey) 72% 74% 75%
2. Percent respondents read Palo Alto newsletter in last 12 months ( SEA survey) 84% 86% 88%
2005- 06
ACTUALS
2006- 07
ADJUSTED
BUDGET
2007- 08
ADOPTED
BUDGET
City Manager continued
80 City of Palo Alto 2007- 09 Budget
RESOURCE LEVEL CHANGES
RESOURCE LEVEL NOTES
Note 1: Adjustments include one- time budget changes from the prior year that were removed from this year's budget as
planned.
2007- 08
ONGOING
2007- 08
ONE- TIME
2007- 08
TOTAL
2008- 09
ONGOING
2008- 09
ONE- TIME
2008- 09
TOTAL
REVENUE CHANGES
Increase ( Decrease) Allocated revenue -
internal
264,862 264,862 ( 1,976) ( 1,976)
TOTAL REVENUE CHANGES $ 264,862 $ 0 $ 264,862 $( 1,976) $ 0 $( 1,976)
EXPENDITURE CHANGES
Salary and Benefits
Transfer of Economic Development Divi-sion
to Planning Department
( 170,059) ( 170,059)
Transfer of 1.0 FTE Staff Secretary from
Utilities Department
88,832 88,832
Transfer of 0.50 FTE Manager Communi-cations
from Utilities Department ($ 3 Mil-lion
Challenge)
75,520 75,520
Freeze 1.0 FTE Public Communications
Manager - retirement ($ 3 Million Chal-lenge)
( 151,040) ( 151,040)
Add 1.00 FTE Sr. Administrator ( Sustain-ability)
151,040 151,040
Personnel Benefit Costs Increase ( Note 2) 106,481 106,481 4,250 4,250
Total Salary and Benefits Changes $ 100,774 $ 0 $ 100,774 $ 4,250 $ 0 $ 4,250
Adjustments ( Note 1) 5,189 5,189
NET SALARY AND BENEFITS CHANGES $ 100,774 $ 5,189 $ 105,963 $ 4,250 $ 0 $ 4,250
Non- Salary
Transfer of Economic Development Divi-sion
to Planning Department
( 17,393) ( 17,393)
Increase contract services ( Sustainability) 30,000 30,000
Allocated Charges ( Decrease) Increase ( 21,553) ( 21,553) 458 458
Total Non- Salary $( 8,946) $ 0 $( 8,946) $ 458 $ 0 $ 458
TOTAL EXPENDITURE CHANGES $ 91,828 $ 5,189 $ 97,017 $ 4,708 $ 0 $ 4,708
Adjustments ( Note 1) 35,452 35,452
NET EXPENDITURE CHANGES $ 91,828 $ 40,641 $ 132,469 $ 4,708 $ 0 $ 4,708
City Manager continued
2007- 09 Budget City of Palo Alto 81
Note 2: Personnel benefit costs are increasing due primarily to the inclusion of future retiree medical costs ( GASB 45)
and the inclusion of the 2.7 percent at 55 retirement plan. The cost of the 2.7 percent at 55 plan is offset by employee
contributions and long- term savings in medical costs resulting from recent limits placed on employee health benefits.
SERVICE LEVEL CHANGES
Transfer of Communications Manager position from the Utilities Department to the City Manager's Office. This
position will assume some of the duties of the Public Communications Officer