City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: May 20, 2024
Report #:2404-2888
TITLE
Approval of a Budget Amendment in the General Fund for the Planning and Development Services Department’s Deposit Based Fee Program for Private Development Studies in the Amount of the Net Zero $300,000: CEQA – Not a Project
RECOMMENDATION
Staff recommends that the City Council amend the Fiscal Year 2024 Budget Appropriation Ordinance (Requires 2/3 Vote) for the General Fund by:
a. Increasing Permits and Licenses in the Planning and Developments Services Department by $300,000; and
b. Increasing Contract Services Planning and Developments Services Department by $300,000.
BACKGROUND
The Planning and Development Services Department provides a service for private development projects using full cost recovery deposit-based contracts. The department utilizes the expertise of outside consultants to augment and expedite entitlement studies such as historic, environmental, and zoning compliance. Applicants pay upfront for contract services related to their project, and funding is held in a deposit account until services are performed. The number of projects that use this program fluctuates annually, and associated revenue and expense are realized in the Planning and Development Services operating budget when incurred.
Due to the highly specialized nature of these studies, City employees lack in-house expertise, necessitating a net zero budget action to ensure continuity of service. No general fund monies are utilized for this program and all expenditures are supported by offsetting revenue.
ANALYSIS
The planning review application 1 outlines the City’s cost recovery policies and procedures. This program provides the City with additional resources to meet the development needs of the community by offering applicants the option to use outside consultant services related to 1 Application: https://www.cityofpaloalto.org/files/assets/public/v/7/development-services/planning-review/1.- single-family-and-duplexes/planning-app-form_07122023.pdf
historic, environmental, and compliance review studies for private development projects.
Applicants opting for the program submit funds to cover anticipated program costs, including a twenty-five-percentage charge for the City’s administration of the program. Private development services related contracts are exempted from competitive solicitation per Municipal Code Section
2.30.3602 as they are funded wholly by private developers. Therefore, contracts do not come before the City Council. Firms conducting these studies are selected based on their experience and expertise, with the City receiving approximately 50 to 75 projects annually, ranging from single-family dwellings to mixed-use projects.
This action is needed now as several recently submitted development projects require environmental reviews which were not anticipated during the annual midyear budget review.
These include 3265 El Camino Real, 3980 El Camino Real, 4074 El Camino Way, 824 San Antonio Road, and 3150 El Camino Real.
FISCAL/RESOURCE IMPACT
Staff is requesting City Council approval of a net zero budget amendment in the General Fund to increase both revenue and expenses by $300,000. Funds to cover all costs are received from applicants utilizing the program, resulting in no impact to the General Fund. This amendment requires a 2/3 approval vote by the City Council, as stipulated by Municipal Code regulations.
STAKEHOLDER ENGAGEMENT
Given that this is an internal budgeting action, stakeholder involvement has primarily been limited to the Planning and Development Services and Administrative Services departments.
ENVIRONMENTAL REVIEW
Action on this item does not constitute a project.
APPROVED BY:
Jonathan Lait, Planning and Development Services Director 2 Exemptions: https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0-0-0-61990