By Kelly Fergusson
Last week's guest opinion by former City Council member Dee Tolles contained significant misstatements of fact regarding Menlo Park's current financial status and history.
I appreciate Mr. Tolles for his long legacy of civic leadership, including his endorsement of Measure K last fall. Unfortunately, he now has incorrect information not substantiated by the city's financial and other public records, and regrets his support.
The need to close a $2.9 million annual gap between Menlo Park's expenditures and projected revenues in upcoming years was based on several years of financial history starting in 2000-01. This gap was estimated by allocating adequate general fund tax dollars to street and storm drain maintenance, modestly funding millions in known liabilities, and staffing city services like police and library at status-quo levels.
Fiscal year 2004-05 resulted in a $588,000 general fund deficit.
The 2005-06 "holdover" budget approach, essentially copying 2004-05, freed up staff time to define many deficit-cutting strategies for public evaluation in the Your City/Your Decision extensive public outreach process. This effort resulted in implementing $1 million in deficit-cutting strategies not reflected in the 2005-06 budget, but ultimately reflected in the end-of-year financial statements.
The 2005-06 budget contained no allocation of general fund tax dollars for street and storm drain maintenance, nor for known liabilities. In June 2006 the City Council was told explicitly that there would be one-year-only departmental personnel savings -- for example, because the police department was badly understaffed -- but that would not help close the ongoing year-to-year structural deficit.
The utility users tax was not based on projections of whether the 2005-06 finances would break even -- what responsible council member would endorse zero general funds for infrastructure maintenance, ignore millions in known liabilities, and condone a police force short-staffed by $750,000 in officer personnel cost?
On top of these three "bad" savings were $1 million in "good" permanent annual savings, identified by Your City/Your Decision effort. These were swiftly implemented during 2005-06 but obviously were not in the originally-approved budget, contributing further to the appearance of a "surplus."
Menlo Park received perfect marks in the professional, independent, certified audit of its 2005-06 financials. Claims of a "mistake" or delay are unfounded. I've invited Mr. Tolles to join me with staff to review all facts.
Today, the 2006-07 budget properly funds maintenance of streets and storm drains. Police and other staffing levels are up closer to par. Unfunded liabilities still loom. Like it or not, the UUT is needed, at least for now, to close Menlo Park's structural deficit.