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Mayor explains need for utility tax

Original post made by Renee Batti, associate editor of The Almanac, on Mar 20, 2007

The following guest opinion by Menlo Park Mayor Kelly Fergusson was published in the Almanac's March 21 print edition:
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.

Comments (3)

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Posted by Menlo Park resident
a resident of Menlo Park: Allied Arts/Stanford Park
on Mar 20, 2007 at 3:57 pm

After reading both the March 14 comment by Mr. Tolles and the rebuttal above by Ms. Fergusson -- and having some awareness of the city's financial situation -- I'd have to say that Ms. Fergusson comes across as more credible.

Mr. Tolles seems to be saying that there was intentional malfeasance. That I doubt. Ms. Fergusson responded with several good points.

In any case, we should not be running a city government that has no financial room to maneuver. Granted there was a bookkeeping error of $3.7 million and that was embarassing, but it has an explanation.

The idea that the momentum for this tax was completely misplaced because we were led down a garden path by various city officials is ridiculous.

The plan to levy the tax, see what it raises, and reassess the city's needs for utility tax moneies once we have this information is a very good way to handle this whole mess.

It's what I would do if I had the guts to run for the council.

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Posted by Oh Boy
a resident of Menlo Park: Central Menlo Park
on Mar 21, 2007 at 12:38 am

"The plan to levy the tax, see what it raises, and reassess the city's needs for utility tax moneies once we have this information is a very good way to handle this whole mess."

So what you're saying MP Resident - which seems to be the Mayor's position as well - is that we don't know how much this tax will really raise and we don't know how much we'll really need, but let's just go ahead and collect as much as we can and go from there.

Is that any way to run a railroad?

And speaking of railroads, if the mayor keeps this up, she may well find herself "on the rails" in 2 years just like 2 certain ex-council members found themselves this past November!

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Posted by Menlo Park resident
a resident of Menlo Park: Allied Arts/Stanford Park
on Mar 21, 2007 at 10:55 am

"Is that any way to run a railroad?" Oh Boy asks.

Uh, yes. I like the openess and honesty implied in Fergusson's approach and the backing I believe she has from a majority on the City Council.

I dislike the cagy and overly precise Tolles approach. There's something in me that does not love and never will love the way a banker, or former banker, thinks, particularly about public policy that affects the rest of us.

Sorry, but further commenting on this topic has been closed.

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