City Manager’s Proposed Budget for Fiscal Years 2010 and 2011

City of Palo AltoFinance Committee

May 19, 2009Public Works Department- Enterprise FundsCity Attorney’s OfficePublic Works Internal Service Funds, and related CIP

2

Proposed Budget FY 2010 & 2011 Department Budgets

Citywide changes Allocated Charges

Cost Plan Revenue-Increase/Decrease in Department costs Decrease in Allocations from Internal Service Funds

Personnel Benefit Cost Increases – $2.2 million Medical Insurance premium: $1.2 million (10 percent) PERS: $0.5 million (2 percent) Employer Medicare contribution: $0.3 million (30 percent) Other Benefits: $0.2 million

Other Funds portion - $0.3 million Utilities Funds portion – $0.8 million General Fund portion - $1.1 million

In FY 2010 the General Fund also includes the resumption of full benefit allocations. In FY 2009 $2.5 million of General Fund benefits increases were not allocated

General Fund Retiree Medical Contribution resumes in FY 2011 $ 2.1 million

3

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department – Storm Drainage FundFY 2010 Changes

Citywide Changes Personnel Benefits Costs increase $50,000 Allocated Charges increase $18,000

Revenue decrease – ($34,000) No proposed rate increase Decrease Plan Checking Fee ($22,000) Decrease Interest Income ($12,000)

Expense decrease – ($79,000) Increase Operating Transfer to General Fund- repayment of loan and

interest $647,000 Decrease Capital Improvement Program ($786,000) Increase Storm Water Rebates- move from CIP budget to operating budget

$137,000 Decrease Operating Transfer to Technology Fund ($119,000)

Total FY 2010 reserves are projected to increase $27,000 or 6.8% to $427,000

4

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department – Storm Drainage FundFY 2011 Changes

Citywide Changes Personnel Benefits Costs increase $8,000 Allocated Charges increase $12,000

Revenue– no change Rate changes pending determination of 2009 local CPI changes

Expense increase – $38,000 Decrease Operating Transfer to General Fund ($99,000) Increase Capital Improvement Program $92,000 Increase Operating Transfer to Technology Fund $19,000

Total FY 2011 reserves are projected to decrease ($11,000) or 2.6% to $416,000

5

Proposed Budget FY 2010 & 2011 Department Highlights - Capital

Public Works Department – Storm Drainage FundCapital Improvement Program FY 2010 Expenditures – $1.4 million

SD-11101 Channing Avenue/Lincoln Avenue Storm Drain Improvements $820,000

SD-06101 Storm Drain System Replacement and Rehabilitation $550,000

FY 2011 Expenditures – $1.5 million SD-11101 Channing Avenue/Lincoln Avenue Storm Drain

Improvements $895,000 SD-06101 Storm Drain System Replacement and

Rehabilitation $567,000

6

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department - Refuse FundFY 2010 Changes

Citywide Changes Personnel Benefits Costs increase $390,000 Allocated Charges decrease ($30,000)

Revenue increase - $4.2 million 17% proposed rate increase

Expense increase – $1.5 million Increase Waste Hauling Contract- GreenWaste $4.6 million Decrease Capital Improvement Program ($2.1 million) Decrease Contract Services- share of SMaRT Station costs ($0.9 million)

Total FY 2010 reserves and fully-funded liability are projected to increase $0.6 million or 7.5% to $8.4 million

7

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department - Refuse FundFY 2011 Changes Citywide Changes

Personnel Benefits Costs increase $8,000 Allocated Charges increase $170,000

Revenue increase - $0.4 million Rate changes pending rate analysis Spring 2010 Increase Operating Transfer from Wastewater Collection Fund $0.4 million

Expense increase – $7.6 million Decrease Waste Hauling Contract- GreenWaste ($0.2 million) Increase Capital Improvement Program $7.7 million Increase Operating Transfer to Technology Fund $0.1 million Decrease Operating Transfer to General Fund ($0.1 million)

Total FY 2011 reserves and fully-funded liability are projected to decrease ($6.6 million) or (78.5%) to $1.8 million

8

Proposed Budget FY 2010 & 2011 Department Highlights - Capital

Public Works Department - Refuse FundCapital Improvement Program FY 2010 Expenditures

No planned projects

FY 2011 Expenditures – $7.7 million RF-11001 Landfill Closure $6.7 million RF-10003 Drying Beds, Material Storage, and Transfer Area

$750,000 RF-10002 Flare Relocation Project $200,000

9

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department – Wastewater Treatment FundFY 2010 Changes

Citywide Changes Personnel Benefits Costs increase $309,000 Allocated Charges increase $355,000

Revenue decrease – ($19.3 million) Decrease in CIP Reimbursements from State and Local Agencies ($20

million) Increase in Customer Revenues $0.9 million

Expense decrease – ($20.0 million) Decrease Capital Improvement Program ($20.8 million) Increase in Plant Operations Costs $0.1 million Decrease in Operating Transfer to Technology Fund ($0.1 million)

Total FY 2010 reserves are projected to increase $1.3 million or 31.3% to ($2.9 million)

10

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department – Wastewater Treatment FundFY 2011 Changes

Citywide Changes Personnel Benefits Costs increase $11,000 Allocated Charges increase $366,000

Revenue increase – $1.1 million Increase in Customer Revenues $1.1 million

Expense increase – $1.2 million Increase Capital Improvement Program $0.9 million Increase in Plant Operations Costs $0.1 million Decrease in Operating Transfer to General Fund ($0.1 million)

Total FY 2011 reserves are projected to increase $1.2 million or 40.4% to ($1.8 million)

11

Proposed Budget FY 2010 & 2011 Department Highlights - Capital

Public Works Department – Wastewater Treatment Fund

Capital Improvement Program FY 2010 Expenditures – $1.7 million

WQ-80021 Plant Equipment Replacement $1.1 million WQ-10001 Plant Master Plan $500,000 WQ-80022 System Flow Meter $100,000

FY 2011 Expenditures – $2.6 million WQ-04011 Facility Condition Assessment & Retrofit $1.0

million WQ-80021 Plant Equipment Replacement $1.5 million WQ-80022 System Flow Meter $100,000

12

Proposed Budget FY 2010 & 2011 Department Changes

City Attorney Continuation from May 5th Budget Hearing

13

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department – Vehicle Replacement FundFY 2010 Changes

Citywide Changes Personnel Benefits Costs increase $143,000 Allocated Charges increase $61,000

Revenue decrease – ($2.4 million) Decrease in Reimbursements from Other Funds for Vehicle

Maintenance and Replacement ($2.4 million) Includes prior year one-time and midyear reimbursements

Expense decrease – ($2.6 million) Decrease Capital Improvement Program ($2.2 million) Decrease in Operations and Maintenance Costs from midyear ($0.6

million)

14

Proposed Budget FY 2010 & 2011 Department Changes - Operating

Public Works Department – Vehicle Replacement FundFY 2011 Changes

Citywide Changes Personnel Benefits Costs decrease ($1,000) Allocated Charges increase $41,000

Revenue – no change

Expense decrease – ($0.7 million) Decrease Capital Improvement Program ($0.7 million)

15

Proposed Budget FY 2010 & 2011 Department Highlights - Capital

Public Works Department – Vehicle Replacement FundCapital Improvement Program FY 2010 Expenditures – $0.7 million

VR-07001 Automated Motor Pool Reservation and Vehicle Key Management System $25,000

VR-07002 Diesel Truck Engine Emissions Retrofits $360,000

VR-06801 Replace Citywide Fuel Transaction and Inventory Management System $85,000

VR-04010 Vehicle Maintenance Facility Upgrades $200,000

FY 2011 Expenditures No planned projects

16

Proposed Budget FY 2010 & 2011

Next Meeting

May 26 – Municipal Fee Schedule, Contracts greater than $85k, Wrap-up