City Manager’s Proposed Budget for Fiscal Years 2010 and 2011 City of Palo Alto Finance Committee May 19, 2009 Public Works Department- Enterprise Funds City Attorney’s Office Public 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 Fund FY 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 Fund FY 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 Fund Capital Improvement Program FY 2010 Expenditures – $1.4 million  SD Channing Avenue/Lincoln Avenue Storm Drain Improvements $820,000  SD Storm Drain System Replacement and Rehabilitation $550,000 FY 2011 Expenditures – $1.5 million  SD Channing Avenue/Lincoln Avenue Storm Drain Improvements $895,000  SD Storm Drain System Replacement and Rehabilitation $567,000

6 Proposed Budget FY 2010 & 2011 Department Changes - Operating Public Works Department - Refuse Fund FY 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 Fund FY 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 Fund Capital Improvement Program FY 2010 Expenditures  No planned projects FY 2011 Expenditures – $7.7 million  RF Landfill Closure $6.7 million  RF Drying Beds, Material Storage, and Transfer Area $750,000  RF Flare Relocation Project $200,000

9 Proposed Budget FY 2010 & 2011 Department Changes - Operating Public Works Department – Wastewater Treatment Fund FY 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 Fund FY 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 Plant Equipment Replacement $1.1 million  WQ Plant Master Plan $500,000  WQ System Flow Meter $100,000 FY 2011 Expenditures – $2.6 million  WQ Facility Condition Assessment & Retrofit $1.0 million  WQ Plant Equipment Replacement $1.5 million  WQ System Flow Meter $100,000

12 Proposed Budget FY 2010 & 2011 Department Changes City Attorney  Continuation from May 5 th Budget Hearing

13 Proposed Budget FY 2010 & 2011 Department Changes - Operating Public Works Department – Vehicle Replacement Fund FY 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 Fund FY 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 Fund Capital Improvement Program FY 2010 Expenditures – $0.7 million  VR Automated Motor Pool Reservation and Vehicle Key Management System $25,000  VR Diesel Truck Engine Emissions Retrofits $360,000  VR Replace Citywide Fuel Transaction and Inventory Management System $85,000  VR 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