ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
Administrative
Services
Division Manager Freeze
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant
and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organi
zational structure and service delivery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $166,000)
‐$ (
161,663)$
Attorney's Office General Expense Reduction
This action will reduce general support expenses which could be absorbed with the current complement of staffing. (Annual savings:
$25,000)
‐$ (25, 000)$
Auditor's Office General Expense Reduction
This action will reduce the contract value by a manageable amount and may impact task‐order assignments and/or scope of audits. (Annual savings: $25,000)
‐$ (
25,000)$
Clerk's Office General Expense Reduction
This action will reduce general expense by a manageable amount and may impact existing contracts and/or ge neral support expenses. (Annual savings: $25,000)
‐$ (
25,000)$
City Managers
Office
Senior Management Analyst Staffing
This action affects a filled position and freezes a dedicated citywide resource for Wellness and Belonging. With the Wellness and Belonging Action Plan still being implemented, the remaining work will be integrated between the City Manager’s O ffice and Human Services, advancing actions that align with existing programs, services, and other priorities as resources allow. This will result in an overall reduction in capacity and centralized focus to advance priorities, including discontinuance of regular reporting on the Action Plan. (Annual savings: $181,000)
‐$ (
176,081)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Community
Services
Junior Museum and Zoo (JMZ) Guest Services Staffing
This action will freeze 1.00 FTE Program Assistant I position at the Junior Museum & Zoo (JMZ) for three years. This position was added during the FY 2025 Mid‐Year Budget Review. The position was intended to support customer service, membership oversight, re
servation booking, event coordination, and admissions. To address these responsibilities, the Community Services Department will reassign another 1.00 FTE Program Assistant I from the Lucie Stern Community Center to the JMZ for up to 50% of their time.
The amount of time that the Lucie Stern position can devote to the JMZ is s
till to be determined, however; it can be expected that less revenue will be achieved through reservation bookings and membership oversight, and there will be less support for visitor services and events at the JMZ. (Annual savings: $133,000) ‐$ (125,612)$
Community
Services
Junior Museum and Zoo (JMZ) Access S taffing
This action freezes one 0.48 FTE Staff Specialist, working as the JMZ Access Coordinator, for three years. This position was originally grant funded for two years, starting in FY 2024, with an expected transition to General Fund support. With the grant period now concluded, the position will be eliminated. This action w ill reduce outreach capacity in underserved communities such as East Palo Alto, Menlo Park, and Redwood City. The role supported building relationships with community partners, developing inclusion strategies, and raising awareness of JMZ programs. Without it, these efforts may continue at a smaller scale or be shared among existing staff. (Annual sav ings: $42,000)
‐$ (41,716)$
Community
Services
Pets in Need (PIN) Contract Alignment
This action reduces the allocated funding for the Pets in Need (PIN) Contract within the Community Services Department. A review of the contract terms and corresponding budget determined that fewer resources are necessary for the City to uphol d its obligations to PIN and the community. This reduction will not impact the current service levels. (Annual savings: $50,000)
‐$ (50,000)$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Community
Services
Printed and Mailed Catalogs
This action eliminates the printing and mailing of recreation catalogs, phased over two years. In FY 2026, the frequency of printed and mailed catalogs will decrease from four times per fiscal year to twice. In FY 2027, the catalog will transition to an online‐ only format. Limited r emaining funds will be used to send postcards to residents as reminders about sign‐up periods and to direct them to the online catalog and potentially to print a limited number of catalogs for placement in City facilities. (Annual savings:
$80,000)
‐$ (60,000)$
Community
Services
General Expense Reduction
This reduction covers various program areas within CSD within the contract services, supplies and materials, and general expense groups. The impact is anticipated to be minimal, as many of these are adjustments align the budget with historical actuals. (Annual savings: $50,000)
‐$ (55,000)$
Fire Fire Fig hter Trainee Staffing
This action freezes two of the three Firefighter Trainee positions.
These positions were added in FY 2023 to create a hiring pipeline and allow for vacancies to be filled sooner, thereby reducing overtime costs and mandatory overtime for current firefighters.
However, these trainee positions have been vacant excep t recently when several current staff were temporarily on limited assignment duties. This action will retain one of the three trainee positions for flexibility and enable the Department to maintain current service levels while continuing to hire and train firefighters as needed to fill vacancies in the absence of these positions. (Annual ne t savings:
$343,000)
(76,143)$ (400,751)$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Human Resources Recruitment Division Staffing
This action freezes 1.00 FTE Human Resources Technician position in the Recruitment Division for three years. This action is anticipated to reduce capacity for ongoing work and for progress on strategic recruitment plan initiatives. As staffing levels decline, departments face increased pressure to expedite recruitment, which increases strai n on the recruitment team. This action is anticipated to result in longer recruitment timelines, reduced responsiveness to departmental needs and production of vacancy‐ related reports. The Recruitment Team, already supported by temporary staff, will experience an increased workload, raising the likelihood of burnout, reducing quality control, and limiting efforts to imp
rove process and data integrity. Careful monitoring, adaptive planning, and continued evaluation of staffing needs will be essential to minimize disruption and maintain core recruitment services during this period. (Annual savings: $137,000) ‐$ (133,640)$
Various Information Technology Manager Freeze
This represents the General Fund's portion of allocated charges funding the In formation Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual savings: $153,000)
‐$ (149,147)$
Human Resources Reallocation of Staff to Benefit Funds
This action reallocates 1.00 FTE Manager Employee Benefits and
1.00 FTE Senior Human Resources Administrator from the General Fund. The posi
tions will be allocated to the General Benefits Fund
and Worker's Compensation Fund 75%/25% respectively. This aligns positions with duties. General Fund savings presented here will be partially offset by allocated charges from these pass‐ through funds for the cost of employees. (Annual savings: $376,00) ‐$ (365,601)$
Library Library S taffing
This action freezes 1.00 FTE Library Associate in the Library Department. This action is anticipated to reduce staffing flexibility at smaller branches (e.g., Downtown, College Terrace, and Children's), particularly on weekends and during public programs.
Core functions like customer service, technology support, and facility oversight will be absorbed by flexing r esponsibilities among existing staff. This will stretch capacity and limit the Library's ability to maintain programming or respond quickly to community needs.
Library staff will continually assess staffing allocations to minimize visible service impacts. (Annual savings: $133,000)
‐$ (125,587)$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Library General Expense Reduction
This action will reduce general support expenses in collections which will result in fewer new materials and longer wait times for patrons to obtain popular print titles. (Annual savings: $50,000) ‐$ ( 50,000)$
Office of
Emergency Services
General Expense Reduction
This reduction will impact potential expenses related to the new Pub
lic Safety Building as it is anticipated that there will be a few expenses still needed for full functionality of the new space. The Department will absorb these anticipated expenses and work around any deficiencies during the budget reduction period. (Annual savings: $25,000)
‐$ (
25,000)$
Office of
Transportation
Use Measure B Funding for SRTS Planner
On June 16, 2025, Santa Clara
Valley Transportation Authority
(VTA) approved the use of Measure B Local Streets and Roads (LSR) funding for a Planner position working the elementary school Safe Routes to School (SRTS) program. Using LSR funding for SRTS has no direct service impact beyond the City hav ing less funding available for street maintenance. The City's average pavement condition index (PCI) is above 80, which allows LSR funds to be used for other transportation related programs. (Annual savings: $71,000) 66,754$ ‐$
P
lanning and
Development
Services
Planning Staffing Freeze
This action freezes 1.00 FTE Planner in Current Planning for three year
s and 1.00 FTE Planner in Long‐Range Planning for one year. In Current Planning, the freeze continues recent staffing vacancies, limiting the program to application processing and statutory deadlines while shifting code development and ordinance updates (e.g., SB9, telecom work) to Long‐Range Planning. In Long‐Range P
lanning, the freeze will delay or defer current and uninitiated Council priorities, with remaining staff focused on Housing Element implementation and state mandates. Impacts include reassignment or delay of projects such as Matadero Creek Affordable Housing Options, Innovative Housing Typologies, and ordinance updates for seismic safety and retail. (Annual net savings: $168, 000) (8,344)$ (333,771)$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Police Police Reserve Staffing
This action freezes 0.12 FTE Reserve Officer in the Police Department. Retired full‐time police officers can serve as part‐time reserve officers, benefiting the community with their experience.
These positions often handle tasks such as transporting prisoners to and from the jail in San Jose, which allows full‐ti me officers to remain available for service in the city. Additionally, they may work traffic roles during Stanford events. Eliminating one vacant reserve position is unlikely to significantly affect service levels or the quality of police services. However, there may be a modest impact on overtime costs for events like Stanford Athletics, whic h are subject to a cost‐sharing agreement with the University. (Annual savings: $14,900)
‐$ (
14,654)$
Police Hire Ahead Program
This action eliminates the Police Hire Ahead Program. This is a new program in FY 2026 and has no anticipated immediate impacts to current service level. Currently, there are seven (7 ) sworn position vacancies to focus on filling. (Annual savings: $150,000) ‐$ (
150,000)$
Police General Expense Reduction
This reduction covers several small programs that collectively represent a modest expense. The most significant program is the regular maintenance of a backup analog radio system, which the Department recommends pausing indefinitely. The primary di gital system already includes built‐in redundancy and is highly reliable.
Notably, most cities in the county do not utilize an analog backup system. Other affected programs include a scouting explorer program, citizens academy, and various community service initiatives that were offered pre‐pandemic, when the Department had more authorized p olice officers, but have not been offered since. Given that the Department does not expect to be able to restore authorized officer positions to pre‐pandemic levels in the coming years, these programs would be expected to remain unavailable. As a result, the community is not expected to experience any immediate changes in servi ce levels. (Annual savings: $90,000)
‐$ (
90,000)$
Public Works Fire Engine Purchase Adjustment
This represents the General Fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ ( 460,000)$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Public Works Tree Trimmer
This action freezes 1.00 FTE Tree Trimmer in the Public Services Urban Forestry Division. The division has seven tree trimmer positions and one lead position with two tree trimmer positions currently vacant. Freezing one of the positions while continuing to leverage the City’s tree trimming contract, currently through West Coast Arborist, shoul
d have only a modest impact on the annual
maintenance of the City’s trees. The contract term is through October 17, 2026. The tree trimming program has a goal of maintaining trees on a 7‐year cycle. While the position reduction can be expected to reduce the number of trees main tained annually, Urban Forestry staff will track the tree trimming cycle to ensure there are no significant negative effects. The reduction is also expected to have some impact on Palo Alto 311 tree‐related response times, staff availability for after‐hours emergency response, and tree planting. (Annual savings: $146,000) ‐$ (
138,110)$
Public Works Capital Program Staffing
This action freezes 1.00 FTE Engineer in the Engineering Services Division. This position is one of six positions involved in construction of streets, sidewalks, and transportation capital projects. As part of the overall $6 million reduction in FY 2026, $3.2 million of capital projects are r ecommended to be deferred from FY 2026 to future years of the 5‐year CIP, and the proposed FY 2026 capital budget included a one‐year reduction in the sidewalks project. Workload needs should not be impacted in FY 2026; however, impacts to projects in future years of the 5‐year CIP may happen due to re
duced staff capacity to manage projects. Recently,
staff determined this position is 100% funded by Fund 471. (Annual savings: $0)
‐$ ‐$
Non‐Departmental General Fund Op
erating
This action removes the $2.7 million placeholder reduction that had been included in the FY 2026 Adopted Operating Budge t. (Annual savings: $1.0 million)
‐$ 2,
744,000$
Fund Balance Adjustment to Fund Balance (Budget Stabilization Reserve) This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 419,
601$
GENERAL FUND (102 & 103) SUBTOTAL (17,733)$ (17,733)$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
ENTERPRISE FUNDS
AIRPORT FUND (530)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $1,900)
‐$ (1,876)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to offset ad justments recommended in this report.
‐$ 1,876$
AIRPORT FU
ND (530) SUBTOTAL ‐$ ‐$
UTILITIES ADMINISTRATION FU
ND (521)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $113,000)
0 (109,542)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments r
ecommended in this report.
‐$ 109,542$
UTILITIES
ADMINISTRATION FUND (521) SUBTOTAL ‐$ ‐$ ELECTR
IC FUND (513 & 523)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (82,341)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to o ffset adjustments recommended in this report.
‐$ 82,341$
ELECTR
IC FUND (513 & 523) SUBTOTAL ‐$ ‐$
GAS FU
ND (514 & 524)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (64,787)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 64,787$
GAS FU
ND (514 & 524) SUBTOTAL ‐$ ‐$
RE
FUSE FUND (525)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $9,000)
‐$ (8,725)$
Public
Works Fire Engine Purchase Adjustment
This represents the fund's share of the reducti on in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (21,214)$
Fund
Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 29,939$
RE
FUSE FUND (525) SUBTOTAL ‐$ ‐$
STORMWATER MANAGEMENT FUND (528)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $4,100)
‐$ (3,980)$
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges support
ing the fire engine purchase. For more details,
refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (32,446)$
Fund
Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 36,426$
STORMWATER MANAGEMENT FU
ND (528) SUBTOTAL ‐$ ‐$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET WASTEWATER COLLECTION FUND (527)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (42,304)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 42,304$
W
ASTEWATER COLLECTION FUND (527) SUBTOTAL ‐$ ‐$ WA
STEWATER TREATMENT FUND (526)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $20,000)
‐$ (19,082)$
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges
supporting the fire engine purchase. For more details,
refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (15,661)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 19,082$
W
ASTEWATER TREATMENT FUND (526) SUBTOTAL ‐$ (15,661)$ WATER FUND (522)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (52,329)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to o ffset adjustments recommended in this report.
‐$ 52,329$
WATE
R FUND (522) SUBTOTAL ‐$ ‐$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
SPECIAL REVENUE FUNDS
CALIFORNIA AVENUE PARKING PERMITS FUND (237)
Administrative
Services
Division Manager Freeze
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organizational structure and se rvice delivery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $11,000)
‐$ (10,430)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
‐$ 10,430$
CALIFORNIA AVENUE PARKING PERMITS FUND (237) SUBTOTAL ‐$ ‐ $ RES
IDENTIAL PARKING PERMITS FUND (239)
Administrative
Services
Division Manager
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organizational structure and service de livery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $24,000)
‐$ (23,467)$
Office of
Transportation
Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in th e Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (478)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
‐$ 23,945$
RESIDENTIAL PARKING PERMITS FUND (239) SUBTOTAL ‐$ ‐ $ CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
SPECIAL REVENUE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET UNIVERSITY AVENUE PARKING PERMITS FUND (236)
Administrative
Services
Division Manager
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organizational structure and service de livery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $40,000)
‐$ (39,112)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
‐$ 39,112$
UNIVERSITY AVENUE PARKING PERMITS FUND (236) SUBTOTAL ‐$ ‐$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
INTERNAL SERVICE FUNDS
GENERAL BENFITS FUND (687)
Non‐
Departmental
Reallocation of Staff to Benefit Funds
This action reallocates 1.00 FTE Manager Employee Benefits and
1.00 FTE Senior Human Resources Administrator from the
General Fund. The positions will be allocated to the General Benefits Fund and Worker's Compensation Fund 75%/25%
respectively. This aligns positions with duties. General Fund savings will be partially offset by allocate d charges from these pass‐through funds for the cost of employees. (Annual costs:
$282,000)
‐$ 274,201$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ (274,201)$
GENERAL BENFITS FUND (687) SUBTOTAL ‐$ ‐ $ PRINTING & MAILING FUND (683)
Administrative
Services
Division Manager
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing
organizational structure and service de livery models during this time, in order to maximize efficiencies while managing
operational risks. (Annual savings: $27,000)
‐$ (26,075)$
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings
: $1,000)
(984)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 27,059$
PRINTING & MAILING FUND (683) SUBTOTAL ‐$ ‐ $ CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
INTERNAL SERVICE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET WORKERS' COMPENSATION FUND (688)
Non‐
Departmental
Reallocation of Staff to Benefit Funds
This action reallocates 1.00 FTE Manager Employee Benefits and
1.00 FTE Senior Human Resources Administrator from the
General Fund. The positions will be allocated to the General Benefits Fund and Worker's Compensation Fund 75%/25%
respectively. This aligns positions with duties. General Fund savings will be partially offset by allocated charges from these pass‐through funds for the cost of employees. (Annual costs:
$94,000)
‐$ 91,400$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ (91,400)$
WORKERS' COMPENSATION FUND (688) SUBTOTAL ‐$ ‐ $ TECHNOLOGY FUND (682)
Information
Technology
Department
Information Technology Manager Freeze
This action freezes one vacant Information Technology Manager, which has been unfilled since May 2025 due to retirement. The recently filled Assistant Director will help mitigate some of the impacts related to IT government and project assignments. While overall capacity is reduced, some project timelines may be adjust
ed as workload is redistributed. Because the Technology Fund is an internal service fund that allocates costs to other departments, reductions are reflected in the funds receiving the allocations. (Annual net savings: $0)
(302,803)$ (302,803)$
Information
Technology
Department
Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (1,685)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
302,803$ 304,488$
TECHNOLOGY FUND (
682) SUBTOTAL ‐$ ‐$
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
INTERNAL SERVICE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Public Works Fire Engine Purchase Adjustment
This action includes the purchase of one (1) diesel fire engine instead of an electric hybrid engine in the FY 2026 vehicle replacement CIP project. In the FY 2025 project, the City’s first hybrid fire engine purchase is planned, although costs and equipment lead times remain under conside ration before finalizing the decision. The shift from hybrid to diesel in FY 2026 for the second apparatus would yield one‐time cost savings. Staff and Committee discussed current fire engine fleet (frontline and reserves) need while balancing fleet electrification and greater cost impacts. Alternatives include buying a used fire eng ine and/or deferring the purchase altogether for another year however, with current fleet inventory, staff maintains this recommendation of a diesel engine in FY26 while also actively working with other public agencies for the potential of acquiring a used fire engine. Because the Vehicle Fund is an internal service fund that allocate s costs to other funds, reductions are reflected in the funds receiving the allocations. (Annual savings: $0) ‐$ (780,000)$
Information
Technology
Department
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Se rvices Funds section of this Exhibit. (Annual Savings: $9,800)
‐$ (9,495)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 789,495$
‐$ ‐ $ VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL