1. 1 City Manager’s Proposed Budget for Fiscal Years 2010 and 2011 City of Palo Alto Finance Committee May 13, 2009 General Fund Capital Improvement Program Public Works Department – General Fund Administrative Service Department

2. 2 Proposed Budget FY 2010 & 2011  CIP Committee Process CIP Committee began meetings in September 2009  Identified completed projects in the current year that had remaining appropriations that could be returned to reserves $4.5 million returned to reserves $2.9 million returned to Infrastructure Reserve  Reviewed prioritization criteria  Reviewed of projected Infrastructure Reserve Balance  Reviewed current capacity-staff’s ability to start and complete projects as budgeted

3. 3 Proposed Budget FY 2010 & 2011 CIP Prioritization Criteria  Council direction  Leveraged funding (Public/Private Partnership/Grants/Impact Fees)  Health and safety requirements  Code/legal requirements  Operational needs and efficiency  Sustainability  Community Priorities

4. 4 Proposed Budget FY 2010 & 2011 Staffing Capacity to accomplish Projects  Committee evaluates proposed program to ensure staff’s capacity to accomplish projects is not exceeded  Current capacity is $10 to $14 million in capital projects each year  When new projects are added other projects are deferred

5. 5 Proposed Budget FY 2010 & 2011  FY 2010 General Fund CIP Budget Buildings and Facilities $ 5.3 million Parks and Open Space$ 0.7 million Street and Sidewalks$ 2.1 million Miscellaneous$ 2.9 million  Total FY 2010 General Fund Projects$ 11.0 million (includes $55.8 million reimbursements) Proposed Project Budgets$ 67.2 million Less reimbursements ($ 56.2 million)  Total Net General Fund CIP$ 11.0 million

6. 6 Proposed Budget FY 2010 & 2011  FY 2011 General Fund CIP Budget Buildings and Facilities $ 6.3 million Parks and Open Space$ 2.0 million Street and Sidewalks$ 2.5 million Miscellaneous$ 2.2 million  Total FY 2011 General Fund Projects$ 13.0 million (includes $4.5 million reimbursements) Proposed Project Budgets$ 17.5 million Less reimbursements ($ 4.5 million)  Total Net General Fund CIP$ 13.0 million

7. 7 Proposed Budget FY 2010 & 2011 Infrastructure Reserve (IR) Five year projection

8. 8 Proposed Budget FY 2010 & 2011 Major Projects - FY 2010  Downtown Library Improvements (Measure N): $3.5 million  Mitchell Park Library & Community Ctr(Measure N): $47 million  Civic Center Improvements: $4.2 million  Annual Street Maintenance: $1.8 million  Annual Sidewalk Repairs: $0.8 million  Jr. Museum & Zoo New Bobcat Habitat: $0.5 million  Downtown Tree Grates: $0.3 million  Ventura Community Ctr. & Park: $0.2 million  Rinconada Pool Plaster: $0.2 million  Baylands Emergency Access Levy Repair $ 0.2 million

9. 9 Proposed Budget FY 2010 & 2011 FY 2010 - Other General Fund Projects  Art in Public Places - $50,000  Fire Apparatus Equipment - $69,000  Replacement of Gym B Bleachers (Cubberley) - $56,000  Building System Improvements - $100,000  Dimmer and Lighting System Replacements - $145,000  Children’s Theater Audio/Visual/Monitoring System Replacements - $100,000  Roofing Replacements - $150,000  Ted Thompson Garage Improvements - $67,000  Open Space Lakes/Ponds/Trails Maintenance - $166,000  Street Light Improvements - $120,000  Los Altos Treatment Plant site 3 rd and final payment -$2.2 million

10. 10 Proposed Budget FY 2010 & 2011  Proposed Project Funding Sources FY 2010 Measure N Library Bonds: $50.5 million General Fund: $3.7 million Infrastructure Reserve: $11.0 million Enterprise Funds: $0.1 million Gas Tax: $0.8 million California Ave Parking District: $0.1 million Others: $0.6 million

11. 11 Proposed Budget FY 2010 & 2011 Infrastructure Reserve  FY 2010 General Fund contributions - $10.9 million $8.7 million for on-going replacement and rehabilitation  $2.5 million designated for individual projects  $1.2 for Salary and Benefits $2.2 million for 3 rd and last payment on LATP site  FY 2011 General Fund contributions - $10.2 million $10.2 million for on-going replacement and rehabilitation  $0.5 million designated for individual projects  $1.2 for Salary and Benefits  IR can support the current five-year plan $1 million year end budgeted transfer suspended in FY 2009 and FY 2010, resumes in FY 2011 Infrastructure Reserve is projected to be below $3 million in FY 2011

12. 12 Proposed Budget FY 2010 & 2011 Update to Backlog Report  Initial Backlog Report Total Backlog (20 years)$ 455,220 2008-12 GF CIP appropriations ($ 50,622) Total Unfunded Backlog 2008-12$ 404,598  Updated Backlog Report Total Backlog (20 years)$ 449,949 2009-13 GF CIP appropriations ($ 64,164) Total Unfunded Backlog 2009-13$ 385,785

13. 13 Proposed Budget FY 2010 & 2011 Questions

14. 14 Proposed Budget FY 2010 & 2011 Department Changes Public Works Department Revenue Increase Plan Check Fee: $ 52,500 Increase Building/New construction permit revenue$ 30,000 Decrease street opening permit revenue ($122,000) Allocated Revenue Decrease in FY 2010 ($138,000) and increases in FY 2011 $46,000

15. 15 Proposed Budget FY 2010 & 2011 Department Changes Public Works Department Citywide Changes Personnel Benefits Costs increasing $325,000 in FY 2010 and $178,000 in FY 2011 Allocated charges decrease ($304,000) in FY 2010 and increase $106,000 in FY 2011 Expense Reallocate 4.0 FTE to Capital and Storm Drain Fund ($414,000) Increase salary/benefits expense 0.24 FTE ASD personnel reallocated to PWD $ $32,000 Increase supplies/materials for graffiti removal $4,000 Increase facility maintenance for backflow device testing & repair $15,000 Increase facility maintenance supplies $67,500

16. 16 Proposed Budget FY 2010 & 2011 Department Changes Public Works Department Service Level Reductions Elimination of 1.9 FTE Engineer, Engineering Technician III ($226,000) Savings strategy#1  Impact: Service level impacts for these eliminations are expected to be mitigated by reduced service demands due to the current recession Second Tier Reductions Elimination Tree Trimming Contract ($379,000)  Impact: May result in transferring responsibility for routine tree trimming in parking strips to property owners. Would require a change to policy and municipal code. This would not impact Utilities line clearing or emergency tree trimming/clearing OR Contract Out Tree Trimming  Net Expense Reduction: ($46,000)  Elimination of 1 FTE

17. 17 Proposed Budget FY 2010 & 2011 Department Changes Administrative Services Citywide Changes Cost Plan Revenue decreasing ($588,000) in FY 2010 and increasing $131,000 in FY 2011 Personnel Benefits Costs increasing $134,000 in FY 2010 and $128,000 in FY 2011 Expense Eliminate 2 FTE –Accounting Specialist & Storekeeper ($177,000)- Savings strategy#1 Reallocate 5.2 FTE to Enterprise Funds ($625,000) Increase temporary salaries $30,000 Decrease non-salary expense ($101,000)– Savings strategy #1

18. 18 Proposed Budget FY 2010 & 2011 Department Changes Administrative Services Printing and Mailing Internal Service Fund Citywide Changes Cost Plan expense decreasing ($17,000) Personnel Benefits Cost decreasing ($49,000) Revenue Decrease printing/mailing service revenue ($52,000)

19. 19 Proposed Budget FY 2010 & 2011 Department Changes Administrative Services Technology Internal Service Fund Citywide Changes Cost Plan Expense decreasing ($49,000) in FY 2010 and ($84,000) in FY 2011 Personnel Benefits Costs increasing $33,000 in FY 2010 and $5,000 in FY 2011 Revenue Increase reimbursements from City departments $217,000 Reimbursements for CIP decreases ($6.1 million) in FY 2010 and increases $1.1 million in FY 2011 Expense CIP expense decreases $2.8 million in FY 2010 and increases $2.5 million in FY 2011 Decrease in non-salary expense ($531,000)- Savings strategy#1

20. 20 Proposed Budget FY 2010 & 2011 Department Changes Administrative Services General Benefits/Insurance and Retiree Health Internal Service Funds Increase in pension expense $0.5 million Increase in medical expense $1.2 million Increase in other benefits $0.5 million Increase in citywide retiree medical $0.7 million  General Fund contribution suspended $ 2.1 million in FY 2010 and resumes in FY 2011

21. 21 Proposed Budget FY 2010 & 2011 Next Meetings May 19 – Public Works Enterprise Funds, Attorney’s Office, PWD Internal Service Funds, and related CIP May 26 – Municipal Fee Schedule, Contracts greater than $85k, Wrap-up