The balancing act
The adjusted budget for fiscal year 2010-11 shows a $571,675 deficit between revenue and expenses; the proposed budget resets that difference to zero. City Manager Glen Rojas' presentation during the May 23 council meeting drilled down into the details of how the city can force expenditures back into line with revenue. The report cautioned the council that a balanced budget doesn't equal a sustainable budget, at least in part due to short-term strategies no one wants to resort to forever. Highlights:
• Paying off $7.16 million unfunded public safety pension liability with CalPERS, at the suggestion of Councilman Peter Ohtaki, saved $828,000 for the fiscal year 2011-12, and $3.6 million in interest overall.
• Fee increases expected to boost general fund revenue by $212,000 for the coming fiscal year.
• Converting two sworn police officer positions to less-costly community service officer slots, to save $220,000.
• Labor negotiations that the city hopes will follow in the footsteps of the newly approved police sergeants contract.
• Outsourcing one custodial position to save $27,000 and contracting with Team Sheeper for pool operations, and considering doing the same for grounds maintenance.
• Transferring a half-time position from business development to engineering, saving $60,000, and freezing a part-time teacher position at the Menlo Children's Center.
• Short-term maneuvers such as buying fewer library books and cutting back staff training. Slashing library support inspired the library commission to protest. In a letter to council on May 24, the commission listed five funding sources that will either dry up or reduce contributions by as much as 77 percent to a library system already struggling with limited hours, materials, and programs.
Safe for now
Breakfast with Santa dodged the budget bullet, as staff recommended leaving "special events" alone, which run up an annual tab of $105,000.
So did a 3 percent pay cut for the 77 city employees earning more than $100,000 — which drew criticism from Councilman Andy Cohen, who said sacrifice and leadership need to start at the top. Joining colleague Kelly Fergusson, he stated his opposition "taking people at the bottom of the ladder and dumping them by privatizing or contracting them out."
Staff considered reducing the $25,000 budgeted to support the city's use of the Menlo-Atherton Performing Arts Center — Menlo Park contributed $2.6 million to build the center in 2008 — because of problems coordinating events with the school and unanticipated costs, such as paying custodians, technicians, and school staff. Instead, they recommended using an events planner to better leverage the property.
The city's high-speed rail lobbyist, Ravi Mehta, was less fortunate. After a spirited council debate, with Vice Mayor Kirsten Keith leading the charge for defunding the position, the council voted 3-1, with Ms. Fergusson dissenting and Mr. Cohen recused, to slice the budget in half to $50,000. Menlo Park and Palo Alto share expenses for the lobbyist.
Finer points of budgetary tweaking remain up for negotiation. Menlo Park may or may not adjust the utility users and transient occupancy taxes, for example. The city may or may not take Flood Park from the county, but now that the county has extended its deadline for closing the park by six months, both sides have time to plan a transition.
Those fine points may provoke discussion again when the proposed budget returns to the council on June 14 for adoption.