News

Revenues falling, Palo Alto prepares for cuts

Sales, hotel, property-transfer taxes continue to slip

Dwindling revenues and stalled labor negotiations may force Palo Alto to shelve its emergency-preparation program, eliminate police-department traffic teams and contract out maintenance for its parks and golf course, city officials said Monday night.

The grim news about the city's latest budget figures and its options for closing a structural $10 million deficit was discussed at Monday night's City Council meeting, at which council members and staff warned that the ongoing recession would soon force Palo Alto to start eliminating programs and services.

City Manager James Keene told the council that though the national recession may be coming to an end, the city's precarious financial situation has not improved. Earlier in the year, Keene and the council grappled with a budget deficit of $10 million, but ultimately managed to close the gap through deferred contributions to the capital-improvements program, cost-cutting within departments and eliminating already-vacant positions.

A new staff reported showed hotel- and sales-tax revenues continuing to slip. Sales-tax revenues in fiscal year 2009 fell by 11.2 percent, or $2.5 million, from the prior year: In the first quarter of this year (January to April), sales-tax revenues fell by 14.9 percent; in the second quarter, sales-tax revenues dropped by 7.2 percent. Results from the third and fourth quarters this year "are projected to be relatively weak," the report states.

The report also noted that hotel-tax revenues dropped by 11.3 percent -- or $0.9 million -- from fiscal year 2008 to fiscal year 2009. Documentary-transfer-tax revenues (which are paid when property transfers ownership) fell from $5.4 million in fiscal year 2008 to $3.1 million in fiscal year 2009. The documentary-transfer-tax revenues were also 36 percent lower in September of this year than in September 2008.

Palo Alto's budget difficulties are further compounded by its inability to win concessions from its employees.

The fiscal year 2010 budget, which the council approved in June, banked on saving $3 million through reductions in employee salaries and benefits -- reductions that have failed to materialize because of intense opposition from workers. City officials have been mired in contract negotiations with the Service Employees International Union since May.

The current deficit -- coupled with the city's $450 million backlog in infrastructure maintenance, its bond obligations for the library-renovation project and its growing contributions to the California Public Employees' Retirement System -- means the city will have to rethink what services and programs it can provide, Keene said.

A new staff report points to the infrastructure backlog as a particularly dire indication of the city's teetering financial standing.

"The staggering estimate of $450 million in infrastructure rehabilitation and replacement needs reinforces the severity of the city's 'structural' deficit," states the report prepared by Joe Saccio, deputy director of the city's Administrative Services Department.

As a result, city officials intend to take a fresh look at the programs and services that were on the chopping block during the spring and summer but remained intact. The report identifies a list of "Tier 2" reductions, which include eliminating the current disaster-preparedness program; scrapping the city's shuttle service; contracting out parks and golf-maintenance work; and eliminating the Police Department's four-officer traffic team, a school-resource officer and a crime analyst. Cutting the Tier 2 items from the budget would result in elimination of 21 positions, 20 of which are currently occupied.

"Layoffs could result with these recommendations, which the City has sought to avoid," the report stated.

Keene told the council Monday that staff will return to the Finance Committee in November to discuss which programs and services to eliminate. Earlier in the year, the council chose not to cut programs that would result in layoffs, Keene said. But that may soon have to change.

"If we're not successful on balancing some of these things, we're going to have to be looking at these kinds of issues," Keene said.

Councilman John Barton called the projected deficits "phenomenal" and said he can't imagine a scenario -- short of another dot-com boom -- in which the city wouldn't have to cut services.

"We have to have an obligation, as a city, to prioritize -- to talk to the community and what they value more or less," Barton said.

"We're beginning a formalized, very public process that asks, 'Do you like the zoo more than animal services? Do you like your fire stations and libraries?'"

Vice Mayor Jack Morton said city officials will have to more effectively communicate to the residents the severity of the city's economic predicament. The city, he said, is looking at a grim future and "massive cuts" unless it manages to both control worker compensation and find new revenue sources.

"We're trying to negotiate with, I think, a labor force that does not really understand the predicament the city is in and we're trying to get the community to understand the importance of asking for a business-license tax that every other community needs," Morton said at Monday's sparsely attended discussion. "We're dealing with a crisis the city is facing and there's no audience."

Comments

Posted by Publicus, a resident of Midtown
on Oct 9, 2009 at 8:46 am

Layoff the guy who investigates the investigators in all the investigations at Palo Alto City Hall.


Posted by lazlo, a resident of Old Palo Alto
on Oct 9, 2009 at 9:15 am

so what is the city doing to find new revenue besides sitting on their hands and whining? Combined with an ineffective city council and a city manager who shoots numbers and figures out both sides of his mouth and who has lost the confidence of his own employees it is no wonder they can't come up with a valid constructive plan to increase revenue. Hopefully the new council will hire a new experienced city manager.


Posted by Resident for reason, a resident of Midtown
on Oct 9, 2009 at 9:34 am

IT'S THE ELEPHANT IN THE COUNCIL CHAMBERS.
The city has 70 FUNDED positions that are frozen and unfilled...the city also has had almost 60 retirements this year. 4.5 million dollars worth of potential money YEARLY would be saved by eliminating NOW EMPTY and FUNDED POSITIONS - not people..
Why aren't the frozen funded positions eliminated? Why won't the city reorganize around these positions?
And why would you threaten to lay people off? If not for fear and the organizations inability (to function) to reorganize?

REGARDING FACILITIES...The majority of this same council refused to fund basic (building) facilities maintenance positions last year to maintain our city buildings. The infrastructure building issues are also driven by years of negligence by the city ..in part because if were they to admit to the public that these costs were pending it could drive down the appeal of Palo Alto Real Estate, and Palo Alto politicians.

Joe Saccio is also on the city's negotiating team and has every reason to paint SEIU employees as the problem rather than the city's inabiltiy to reorganize. politicizing the budget is a Palo Alto Government long time forte'.





Posted by Joe, a resident of Evergreen Park
on Oct 9, 2009 at 10:42 am

Throughout the US, and the industrialized world, job losses and pay cuts at times like these are common place:

Web Link

Yet, here in Palo Alto, the unions and their supporters seem unable to grasp basic economics. For instance, an across-the-boards 5% pay cut would reduce the need for revenue by $4-5M a year. Certainly people making more than $100K could absorb a 10% pay cut, which would reduce the problem even more (with over 400 employees making more than $100K, it's possible that the $10M deficit could be made up with this simple reduction.

Closing down poorly utilized facilities, like the Downtown library and the College Terrace library, would also help. Outsourcing all of the low/no-skill jobs, like gardening and grounds keeping, would be a move in the right direction.

The issue of reorganizing should be very near the top of the City Manager's list of things to investigate. Many people have suggested merging some of the administrative offices of neighboring towns, such as Finance, HR and Administrative Services—just to name a few. Police and Fire Departments should also be considered for consolidation—particularly since police and fire employees now cost between easily over $150K per person in most towns.

Not doing anything but screaming "more money, more money" is a recipe for fiscal disaster.


Posted by Trouble ahead, a resident of Another Palo Alto neighborhood
on Oct 9, 2009 at 11:02 am

This is very interesting and scary! People on this board take pot shots at the people who operate the city, but that is just a smoke screen. Our City Manager and City Council are not perfect, but they are a bunch of folks who work hard and overall do an excellent job.

The real issue here is that like any city in California, Palo Alto has serious financial issues created by the recession and prop 13. And the reality is that unless we make some cuts, get concessions from the union and pass the business license tax, there are going to be REAL cuts to REAL services. So all the whiners who are opposing the union concessions and the BLT, be prepared for cuts to your favorite services!! WAKE UP PEOPLE. WE ARE IN TROUBLE!!


Posted by Resident for reason, a resident of Midtown
on Oct 9, 2009 at 11:02 am

1. SAVE MONEY - ELIMINATE THE FUNDED UNFILLED POSITIONS.
These are positions budgeted for in departments and no one is in or doing that job. Funding for what? The money is there to be saved...4.5 million every year ongoing funds saved IF the city reorganized and eliminated the "70 frozen FUNDED UNFILLED positons" and "60 retirements"..why are those positions still funded? eliminate that funding. Save money.

2. THE PROPOSED JOBS TO ELIMINATE ARE AMONGST THE LOWEST PAID EMPLOYEES...What is the logic of that? These employees do the work.
They are the least paid. How are we saving money withso many managers to employees?


Posted by Joe, a resident of Evergreen Park
on Oct 9, 2009 at 11:10 am

> People on this board take pot shots
> at the people who operate the city

No .. they are critiquing are failed management philosophy that has poorly managed billions of dollars of public funds over the past 30-odd years. Given the current income, the City will receive over 1B in just 7-8 years. Yet, this management team and philosophy claims it can not get the job done, nor can tell us why not.


Posted by Millie Enron, a resident of Embarcadero Oaks/Leland
on Oct 9, 2009 at 11:24 am

Of course sales tax revenues are falling. We're spending that money on increased utility rates.

If they want to cut the budget, how about if they start with firing the idiots who cut the trees on California Avenue?

Then they can move on to the idiots who keep commissioning studies on putting bike lanes on busy shopping streets?

Then they can fire all the people involved in delaying JJ&F's ability to move forward.

Then they can fire the people who wouldn't let Hyatt Rickey's upgrade its facilities and THEN decided we needed more hotels, resulting in lost revenues from Rickey's and more stupid studies on the need for more hotels.

Then they can fire the rude police dispatcher who makes $90,000 in overtime, giving her an annual fully loaded salary probably approaching $300,000.

Then they can fire the parks manager who spends money closing half of the Mitchell Park dog park every year while the reseed it and then NEGLECT TO WATER it so the grass dies EACH YEAR.

Then they can fire the people who want to get rid of the lowest paid workers instead of the managers who make refuse to listen to their workers, like the Parks employees who keep telling their managers that reseeding is stupid and unnecessary.

Then they can fire the lazy traffic manager who's too lazy to respond to repeated complaints about the poorly timed traffic lights at Middlefield and Embaradero because his "secretary's out."

How much can you save here???


Posted by Concerned Retiree, a resident of Midtown
on Oct 9, 2009 at 11:33 am

On the positive side of all this, Palo Alto has a talented and willing cadre of volunteers who would be willing to step in and cut the grass in the public parks, shelve books at the library, paint mailboxes, etc. Look at the wonderful work Canopy does for example.

Let's utilize these positive resources and stop sitting around wringing our hands and moaning.


Posted by ostrich, a resident of Crescent Park
on Oct 9, 2009 at 11:45 am

It was obvious to anyone with an IQ higher than their shoe size that the choice was going to come down to jobs or benefits. The money just isn't there.
The irony of the posts supporting SEIU is the city workers who will now lose their jobs are the lower salaried employees. Nice one, guys!


Posted by Resident for reason, a resident of Midtown
on Oct 9, 2009 at 11:57 am

IT'S THE ELEPHANT IN THE COUNCIL CHAMBERS.
IT'S STILL THERE FOLKS
The city has 70 FUNDED positions that are frozen and unfilled...the city also has had almost 60 retirements this year. 4.5 million dollars worth of potential money YEARLY would be saved by eliminating NOW EMPTY and FUNDED POSITIONS - not people..
Why aren't the frozen funded positions eliminated? Why won't the city reorganize around these positions?
And why would you threaten to lay people off? If not for fear and the organizations inability (to function) to reorganize? Why would you decide to lay off the least paid to save money?

REGARDING FACILITIES...The majority of this same council refused to fund basic (building) facilities maintenance positions last year to maintain our city buildings. The infrastructure building issues are also driven by years of negligence by the city ..in part because if were they to admit to the public that these costs were pending it could drive down the appeal of Palo Alto Real Estate, and Palo Alto politicians.

The article fails to mention that Joe Saccio is also on the city's negotiating team and has every reason to paint SEIU employees as the problem rather than the city's inabiltiy to reorganize. politicizing the budget is a Palo Alto Government long time forte'.

How do you feel about eliminating the 70 frozen FUNDED positions?


Posted by Leslie, a resident of Another Palo Alto neighborhood
on Oct 9, 2009 at 12:11 pm

It's time to donate Foothill Park, the Arastra Property and Ester Clark Park to the Peninsula Open Space Trust (POST). The maintenance of these open spaces costs Palo Alto too much. They would be well taken care of by people who are really in the business of caring for open space.


Posted by ostrich, a resident of Crescent Park
on Oct 9, 2009 at 12:15 pm

Resident for reason,

"How do you feel about eliminating the 70 frozen FUNDED positions?"

About the same as the rest of SEIU's claims - Web Link
SEIU has difficulty handling the truth.


Posted by Resident for reason, a resident of Midtown
on Oct 9, 2009 at 12:32 pm

OK, Just call up Human Resouces and ask...How many city positions are currently funded and frozen? and ask how many people have or will retire this year. That simple.


Posted by ostrich, a resident of Crescent Park
on Oct 9, 2009 at 1:03 pm

OK, for a laugh, I did and what were the open positions?

1 full time position
7 part time positions, which come with no benefits

Oh, well, more SEIU lies. Ho hum.


Posted by Resident for reason., a resident of Midtown
on Oct 9, 2009 at 1:08 pm

THOSE ARE THE POSITIONS "OPEN FOR HIRE" ... not this years retireees and frozen funded positions.


IT'S THE ELEPHANT IN THE COUNCIL CHAMBERS.
IT'S STILL THERE FOLKS
The city has 70 FUNDED positions that are frozen and unfilled...the city also has had almost 60 retirements this year. 4.5 million dollars worth of potential money YEARLY would be saved by eliminating NOW EMPTY and FUNDED POSITIONS - not people..
Why aren't the frozen funded positions eliminated? Why won't the city reorganize around these positions?
And why would you threaten to lay people off? If not for fear and the organizations inability (to function) to reorganize? Why would you decide to lay off the least paid to save money?


Posted by The American way, a resident of Midtown
on Oct 9, 2009 at 2:20 pm

[Post removed by Palo Alto Online staff.]


Posted by Wha?, a resident of Another Palo Alto neighborhood
on Oct 9, 2009 at 2:44 pm

How does the public find out about the funded frozen positions? If it is 70, something should be done about it or at least discussed.


Posted by ostrich, a resident of Crescent Park
on Oct 9, 2009 at 3:42 pm

"How does the public find out about the funded frozen positions? If it is 70, something should be done about it or at least discussed."

You can't. They don't exist. It's a red herring, not an elephant. Like the $22mil that SEIU claims was being hidden in a shell game.


Posted by I Love Palo Alto, a resident of Barron Park
on Oct 9, 2009 at 3:54 pm

You can find out by putting a request in writing to James Keene via e-mail.
Ask specifically for the list of:
1.City wide Funded (budgeted) unfilled and frozen employee positions
2.Currently unfilled positions of any type
3.Number of retirees for 2008 October - 2009 October
4.Retireee requests currently submitted for future retiree dates.


Posted by Herb Borock, a resident of Professorville
on Oct 9, 2009 at 3:58 pm

Posted by Leslie, a resident of Another Palo Alto neighborhood, 3 hours ago

It's time to donate Foothill Park, the Arastra Property and Ester Clark Park to the Peninsula Open Space Trust (POST). The maintenance of these open spaces costs Palo Alto too much. They would be well taken care of by people who are really in the business of caring for open space.

--------------------

The Midpeninsula Regional Open Space District is the appropriate owner and manager for these public open spaces, because the City of Palo Alto no longer has the money to adequately maintain and patrol them. Instead of donating them to MROSD or POST, the City should sell them for the amount paid to acquire them, which would be a bargain for MROSD. When Foothills Park was purchased by the City, MROSD did not exist. If it had existed at that time, MROSD would have been offerred the land instead of the City of Palo Alto.


Posted by ostrich, a resident of Crescent Park
on Oct 9, 2009 at 4:42 pm

I love this. Let's sell off the Baylands & Foothills to fund exploding employee benefits. We can also re-zone the city parks and develop the land. Excellent out of the box thinking.


Posted by ostrich, a resident of Crescent Park
on Oct 9, 2009 at 4:45 pm

ILPA, what about showing something supporting your premise? Don't just blow smoke.


Posted by I Love Palo Alto, a resident of Barron Park
on Oct 9, 2009 at 4:50 pm

Ask for these human resources reports:
City of Palo Alto Vacancy Report (current date)
City of Palo Alto Retirements ( 10/2008 - 10/2009 date)


Posted by Oldtimer, a resident of another community
on Oct 9, 2009 at 5:00 pm

It's obvious that this is just another example of institutional racism in Palo Alto. Fabricate a labor impasse and use it as an excuse to rid the community of immigrant, latino workers.


Posted by Joe, a resident of Evergreen Park
on Oct 9, 2009 at 5:33 pm

> It's obvious that this is just another example of
> institutional racism in Palo Alto

What gobbledygook!

Comments like this are an embarrassment to intelligent conversation and what passes for the ups and downs of self-government.


Posted by Retired Staffer, a resident of another community
on Oct 9, 2009 at 8:30 pm

I Love Palo Alto--

There were many other retirements in earlier in 2008 in anticipation of the current negotiations. For example--Frank Benest and Carl Yates.


Posted by chris, a resident of University South
on Oct 9, 2009 at 9:14 pm

Let the workers strike. The city can outlast the workers and save a lot of money in the meantime.


Posted by Nora Charles, a resident of Stanford
on Oct 10, 2009 at 12:58 am

Joe of Evergreen Park,

Great comments. I wish you were in charge!


Posted by wow, a resident of Fairmeadow
on Oct 10, 2009 at 2:11 am

the salaries for cops ar more than twice than the salaries at other cities...they need to be capped cause this is ridiculous..just enjoy cause these departments will be doing some cost cutting moves soon, i understand they are running towards teamsters...and the people earning less are being laid off..i noticed there are too many cops in palo alto, for a city thats safe already..


Posted by new recruit, a resident of Palo Alto Hills
on Oct 10, 2009 at 2:14 am

[Post removed by Palo Alto Online staff.]


Posted by Patty, a resident of Meadow Park
on Oct 10, 2009 at 7:08 am

Good job Lynn.


Posted by Jon Parsons, a resident of Duveneck/St. Francis
on Oct 10, 2009 at 12:21 pm

Part of the problem is the City tries (and is permitted) to do too much. The city should provide police, fire, and other basic municipal services like water and sewage. It should not sponsor endless "quality of life" programs. Cities (like all entities) seek first to entrench and expand their power. If a city could talk, it would be heard to say, like Johnny Rocco in Key Largo, "More. That's right! I want more!" More money, more employees, more programs, more information about local businesses, more intrusion into every citizen's life. We do not need pictures of every house in town, world music days, or similar nonsense. We still have not grasped that everything comes with a price tag. Less government means more freedom. To the lantern with needless programs! An ax for every long-necked budget!


Posted by bill, a resident of Barron Park
on Oct 10, 2009 at 7:38 pm

Well said Jon Parsons. The City has wasted money on many silly things like the Color of Palo Alto. Past council members have too often used our money on such programs instead of focusing on needs.

Ostrich. Selling Foothills does not fund employee benefits. It reduces maintenance costs substantially by transfering that cost to an organization that can support it.

Wow. The salaries for police (and firemen) are comparable to other peninsula communities, not twice their amount.

Most interesting are the comments by people who obviously have no background on the subjects they rant about. Thanks Joe for your comment.


Posted by Got Out of Dodge, a resident of another community
on Oct 11, 2009 at 2:23 pm

Retired Fiannce Director Carl Yeats and retire City Manager Frank Benest retired soon after they got the 2.7% per year of service retirement deal in place, leaving Palo Alto taxpayers holding the bag. Roll back the retirement to 2.0% per year of service and broom the Benest top lieutenant holdovers out of City Government before they bankrupt the City.


Posted by common sense, a resident of Meadow Park
on Oct 12, 2009 at 2:19 pm

Always remember: "Revenues" when spoken of in context of money coming into ANY government entity, including this city, means : MONEY TAKEN FROM THE POCKETS OF PRODUCTIVE MEMBERS OF SOCIETY.

When we take from productive members, we lower incentive to produce. Which lowers production,( drives producers away) and lowers the amount a government entity can take for "revenue" to spend.

Answer? You tell us.

In the meantime, the way to stop spending money is to..stop spending money. The way to encourage productive members to come back is to...stop driving them to friendlier places.

And here we are...time to pull a Reagan and fire the Unions, cut whatever City staff is non-essential, keeping the legitimate functions of City Govt intact such as Fire and Police, and start with a clean slate and contract out any services that MUST be done, not that we would LIKE done in a perfect world.


Posted by pat, a resident of Midtown
on Oct 12, 2009 at 2:20 pm

Amen, Jon Parsons!

And thank you, Millie Enron, for your suggestions on cleaning out the dead wood.

The city just doesn't know how to prioritize. It should provide services that are ESSENTIAL to ALL residents, e.g., public safety.

Taxpayers should not be funding a Children's Theatre, a "zoo," five library branches, Color of Palo Alto and other inane projects the city council likes to approve.

Several years ago a private group wanted to take over the Junior Museum and Zoo:
Web Link

This Colleagues Memorandum from Klein, Beecham and Mossar said, "Given the City General Fund's significant financial challenges, we believe it is incumbent on the City to identify and pursue opportunities such as this proposed partnership, a public nonprofit partnership, allowing the citizens of Palo Alto to continue to enjoy the same or an enhanced level of services, but relieving the General Fund of future escalating costs."

However, The Daily reported that some council members said, "Retaining city staff must be a top priority when forging public-private partnerships. Councilwoman Cordell is credited with leading the effort "to insert language into the new public-private partnership guidelines under development that would highlight the importance of keeping city employees rather than outsourcing or hiring new, cheaper staff."

Seems like some city "leaders" have a stronger obligation to full employment than to the taxpayers who elected them.


Posted by Common Sense, a resident of Meadow Park
on Oct 12, 2009 at 6:00 pm

Pat said "Taxpayers should not be funding a Children's Theatre, a 'zoo,' five library branches, Color of Palo Alto and other inane projects the city council likes to approve."

This happens because we forget the function of government, as opposed to the function of private good will donations of time and money, or even businesses banding together to do whatever they think will help improve business in Palo Alto.

We could argue that it behooves Palo Alto to have any or all of the above, but the problem is that there is no rational way to determine what is "worth" continuing and what isn't, whereas if all were run on donations or through private businesses banding together, individuals would continue to decide whether or not it is worth continuing their support for the benefits receieved.


Posted by John, a resident of Meadow Park
on Oct 12, 2009 at 6:03 pm

It's about a certain segment of society - tax spenders taking from another segment of society - taxpayers, until the producers say enough already. Ever hear of the Boston tea party?

I don't mind paying taxes, but funding fat pensions and early retirements?

Vote for council people that aren't endorsed by the unions. Go back to civil service.


Posted by peter, a resident of Adobe-Meadows
on Oct 13, 2009 at 8:55 am

When a policeman gets paid 140,000
When a drama teacher gets 160,000

What makes them better than people at other cities.

Nothing. There jobs are easier.

dont pay them!


Posted by Anon, a resident of Fairmeadow
on Oct 13, 2009 at 10:50 am

Given the general *deflation* that we have experienced recently, I suggest a temporary salary cut on a sliding scale for city employees.
How about a 5% cut at the bottom of the pay scale, up to, say 30%
at the top. If we cut an average of 20%, that should just about
close the gap. As revenue increases, salaries could be restored
gradually to their former level. My perception is that the city
bumbled into this unsustainable situation during a period of labor
shortages and high revenue. Salaries are high across the board,
but especially in top management positions. If I were a city
manager, I would be very happy to have my job right now, and,
very happy to have my health benefits, which I would prefer to keep.
So, I might have to give up my cabin at Bear Valley or my Hawaii vacation or my new car.


Posted by More Bonuses, a resident of another community
on Oct 13, 2009 at 10:56 am

Aww, you wouldn't take away their cabins at Bear Valley away, would you? They do such an outstanding job. Instead, double their management bonuses. To pay for that just reduce the infrastructure budget. Keep the top management talent happy.


Posted by Facts, a resident of another community
on Oct 13, 2009 at 11:11 am

To "More bonuses" -

Uh, if you were paying attention to the facts you'd already know that there are more "bonuses" THEY'RE GONE OUT OF THIS YEAR'S BUDGET, ALREADY CUT TO HELP BALANCE THE BUDGET!
Also, be prepared to see some very interesting data that will contradict a lot of preconceived notions and unjustified biases - the survey of comparable managemnt postion in Palo Alto to other cities shows that on average Palo Alto managers make around 10 less than their counterparts in other Cities. Even if you think all public employees are overpaid, it appears that Palo Alto mamagers are 10% less overpaid than their local peers.
So, sure, fire 'em all - but then be prepared to ask yourself what qualified prson would take the job when they could make more money in a less contentious atmosphere (read community, resients, and media) elsewhere?
Maybe they'll do it just for the priviledge and cachet vof working for Palo Alto?
Dream on!


Posted by Facts, a resident of another community
on Oct 13, 2009 at 11:13 am

Correction:

That should have read "there are NO more bonuses".


Posted by Norm, a resident of Midtown
on Oct 13, 2009 at 2:48 pm

Maybe it's the cynic in me, but funding the frozen positions is political placation at its best!
"Me need more police on the street!" is the emphatic stance at the public safety forum.
"We can't go beyond our current payroll, so we will freeze open positions." So said at the budget meeting.
The cop positions were created - hard on crime. Vacant postions not filled -good on budget. Empty police positions - what the public wanted to cut budget.


Posted by Anon, a resident of another community
on Oct 13, 2009 at 4:33 pm

Blah blah blah.

The one comment that did stand out here for me was

"Ask for these human resources reports:
City of Palo Alto Vacancy Report (current date)
City of Palo Alto Retirements ( 10/2008 - 10/2009 date)"

What good would that do anyone? What you actually need to do, if you are actually trying to make a valid point, is look at those reports for the last 10 to 20 years. That way you can determine a trend, and have actual information instead of rhetoric.

The problem is that would make you see the truth, which might not be bendable to your cause. Retirements, for example, are actually on trend this year at the city. Despite what people keep saying, they aren't leaving like a pack of wild elephants. Most city workers are just trying to hang on tight and do their jobs.


Posted by New Revenue, a resident of Triple El
on Oct 13, 2009 at 5:54 pm

We need to wake up and realize that the United States now boasts that it has matured into a service economy. We need a gross receipts tax on fees obtained for services to replace the taxes once paid on the sales of products manufactured in our country.

The Stanford Industrial Park was once home to serious technology companies that sold their products from sales offices in Palo Alto and generated significant sales tax revenues.

Today, the Stanford "Industrial" Park has been taken over by huge firms offering legal services. The revenue stream from their businesses is not subject to state sales tax. They do, however, rely on the City of Palo Alto for fire and police protection.

There was a brief moment when the Palo Alto City Council considered a gross business receipts tax that might have tapped the legal services revenue stream. Perhaps we really need to revisit this possibility.

Here is a way to arrive at a reasonable rate of taxation.

Step 1: Calculate the contribution of Varian, Hewlett Packard, Watkins-Johnson, Beckman Instruments. Eastman Kodak, Syntex, and others at the height of their local sales.

Step 2: Apply a reasonable multiplier to convert these values into 2009 dollars.

Step 3: Use that information to strike a tax rate on legal fees that would replace the income lost by their invasion of the Sanford Industrial Park.

I would not restrict the gross receipts tax to the Industrial Park alone, but apply it equally to presently untaxed service providers all over Palo Alto.


Posted by Thomas, a resident of Embarcadero Oaks/Leland
on Oct 13, 2009 at 7:08 pm

Wow... It's insightful reading this story and all of your posts. I've been traveling on business and am back home for the winter... A few impressions from my experiences traveling and playing catch up reading about this and other local stories online during the rains today...

1. It is amazing what a pickle we've got ourselves in to...
2. Seems like very few people are interested in what got us to this point and what we can do {what we could have done over the last DECADES to prevent this}.
3. Seems like there is a great deal of anger and scarcity thinking in our community.
4. We are really beating up on the city employees... Can't tell if we are envious or jealous of them... Did you see them out working in the rain today... the public works... the police... the firefighters...
5. Not to beat up on the school district, but we are choosing to transfer approximately $ 9,000,000.00 a year out of the general fund to the PAUSD - hmmm, that pretty much covers this new budget.
6. Checking in with my neighbors, seems like the firefighters come to our neighborhood frequently to take care of both the young families and the older residents. Thank you!
7. One of my friends lives on Maureen, the street where the house exploeded a couple of weeks ago... She was impressed by the fast impressive response of police, fire and city work crews to stop the fire, and investigate the cause of the fire. THANK YOU!
8. OUR CHOICES! We haven't been making effective and sustainable choices for many, many years... It's kind of humbling to me, to see the community that has spawned so many world class ideas, contributions and companies... that we aren't doing a very good job of developing and nurturing our community and the people who provide services to us and protect us...
9. Living with our means is important and vital... It's equally important to be doing what we can to generate the funds necessary to fund existing programs both today and into the future...
10. I support green programs, housing and business... It humbles me to see that other communities are doing a much better job of developing revenue and their community than Palo Alto is!
11. There is so much wealth in this community, we were so generous to the seniors who came to play and compete this summer... we spend so much to be "GREEN"... we spend so much to protect the environment, plants and critters....
12. WHY THEN are we pounding so hard on the city employees..... It sure seems like the leadership in our council, city manager, and HR department have choosen to point the fingers at the city employees, versus taking responsibility for creating this situation over years and years {go look at the Mountain View Community Center, down through downtown Mountain View, Redwood City, why is it that all the surrounding communities have rebuilt and replaced so many fire stations, police stations, etc and Palo Alto hasn't replaced a single one? Why are we taking better care of the animals / plants out at the Baylands and the Foothills thank we are of our police officers and firefighters?
13. The quality of the thinking and the quality of the leadership in this community, our state, and our country is pretty dismal...
14. WHY NOT, change our thinking... change the leadership... Develop HEALTHY, Sustainable Effective local businesses, community and government services that work together and support each other.
15. There is so much prosperity and wealth in this community... Why not use the same thinking, action and choices to develop business, community and government services.
16. A measure of a culture, a society is not how well the people at the top live... It is also how well we take care of all of the people, all of the beings... from the top... to the bottom...
17. Our greatest resources are the people who live and work here... Please be kind... Be gentle... Be supportive... How would you feel if you were one of them...
18. I'm amazed at what's being written and what's not being written... Somehow it seems like people / parties are taking advantage of the situation...
19. Yes, were are going through a cycle of contraction right now... perhaps a correction too. Still there is great opportunity... We can also expand...
20. Change is constant, let's create healthy, positive, sustainable change...


Posted by Anon Z, a resident of Palo Alto Hills
on Oct 13, 2009 at 8:30 pm

It's amazing. So many City residents are so SPOILED! They have no
idea how life would be for them if the city employees went on strike
or were all fired and just got replaced with others that are out of work. Do they think that providing city services is a "no brainer" that requires no skills, knowledge and know-how? That's laughable.

They have been so spoiled with great service from devoted, dedicated
emoloyees, for so long, they don't know any better.

Sure, there's those that find negative circumstances all the time, but they are ususally the people who live to complain, (that's THEIR job!) and never appreciate a job well done.

The financial problems of the City don't fall on the shoulders of the
employees. They've tried to make concessions and help out with the
budget, but the City's not interested.

City employees aren't getting anything they haven't earned, except maybe a bad rap.


Today would have been the perfect day for the city workers to go on
strike! Then lots of you would be sitting in your living room with
no lights, no heat, downed trees in your yards and flooded creeks.


Posted by you'll learn, a resident of Crescent Park
on Oct 14, 2009 at 9:43 am

"Then lots of you would be sitting in your living room with no lights, no heat, downed trees in your yards and flooded creeks."

All of which can be fixed by contracting out the services. No, we don't need city employees.


Posted by palo alto mom, a resident of Embarcadero Oaks/Leland
on Oct 14, 2009 at 10:02 am

The one thing that seems to resonate thru many of these threads is that the city is perceived to be focused on non-essential services and instead spends lots of time/money/energy/15 minutes of fame moments on the arts, being green, being trendy.

I like the comment about focusing on the needed services (fire, police, safe streets, sewers that drain) and letting the volunteers and community support the art center, children's theater, the zoo, the rec department, etc. While those thing certainly add value to our city and lives, they should be the first to be cut. In this generous community, people will step up to support the "non-essentials" that they value.

Contracting many services would probably save money. While I believe most of our City employees are hard workers, have you even seen the street sweeper napping in his vehicle? Or the 2 guys watching the one guy dig in the street?

From the CIty's standpoint though, I'm sure the threat of cutting the police department makes a better sound-bite.


Posted by Timothy Gray, a resident of Charleston Meadows
on Oct 14, 2009 at 10:05 am

We keep borrowing from our future (redirecting infrastructure spending to operations) and trying to put our hands in someone's pocket (The downward spiral of the Business Licence Tax at the time we should be rolling out the red carpet, not taxing again those that feed us the sales tax and the hotel occupancy tax.)

Truly living within our means means adopting structural adjustments that will deliver sustainable financial balance. We can't just keep patching. Patching is anything that doesn't address the structual basis of our spending. This requires independence, and absolute loyalty to the residents of Palo Alto by our elected leaders.

Please see the two other Town Scquare Forums where outside Influence Peddling is discussed. Web Link

The California Fair Political Practices Commission has described the tactic used for three Palo Alto Candidates as "thwarting the Will of the people."

and a discussion about how A Conflict of Interest can override the will of the voters: Web Link

This is not Pro-Union or Anti-Union: It is simply a calling out of a Conflict of Interest that has found some "legal" loopholes in election law. We must have leaders that "in fact" and "in appearance" are free from special interests and are loyal to the greater good. We must look to Social Justice as our guide and ask: "Does preserving a market-rate advantage for the few at the detriment of the many represent social justice?"

No. And just say no to special interest. Let's open our eyes together and see this manipulation. Vallejo was too late to say NO!

Timothy Gray (I am more interest in the public good of this truth being distributed than I am about gaining votes. I am not accepting contributions or endorsements.)


Posted by Anon Z, a resident of Palo Alto Hills
on Oct 14, 2009 at 11:26 am

To posted by you'll learn....that's where you're wrong.

If those services were contracted out and needed after a storm
like yesterday, it would take DAYS or longer before you'd see things
taken care of. City employees respond immediately to citizen complaints. Think that would come from a contractor? You're dreaming.


Posted by you'll learn, a resident of Crescent Park
on Oct 14, 2009 at 12:40 pm

To posted by Anon Z...city workers take sick-outs, don't bother turning up for work and threaten strikes. These services are essential and should not be up for debate.
Your above post is a classic example of the need to contract out these services "Today would have been the perfect day for the city workers to go on strike!"
City workers have shown their contempt. It is time to contract out essential services.


Posted by Wha?, a resident of Another Palo Alto neighborhood
on Oct 14, 2009 at 1:13 pm

Dear Thomas,
Where have you been all my life! Your 20 sound points are falling on deaf ears for the most part, but some of us think looking at the top as those responsible for revenue generation as the ones who should be solving the problems, not pushing them down the organization.

The issue of whether the city should finance the Children's Theater, libraries, recreation programs, the pools and parks is not an issue to a city that values the residents and where the residents value the city they live in.

Fear not Thomas, there are only a handful that don't value the city. Luckly for them, the city will treat them as if they did.


Posted by Wayne Martin, a resident of Fairmeadow
on Oct 14, 2009 at 1:56 pm

> but we are choosing to transfer approximately $ 9,000,000.00 a
> year out of the general fund to the PAUSD - hmmm, that pretty
> much covers this new budget.

As stated, this is not true. There are two kinds of expenditures made to the schools—"funded" and "unfunded". Let's not forget that the voters approved a Utility User's Tax (UUT) in 1988 which was "sold" at that time as a way to "preserve Cubberley from development". The City this year is transferring $4.3M in lease fees, and $2.2M in "Covenant Not To Develop" fees to the PAUSD. The UUT for the FY 2010 budget is estimated at $11.25M. The City generates somewhere between $2.5M and $3.5M in lease revenues from the tenets. The City Council has directed the City Real Estate management folks not to charge market rates to the tenets (many of whom are not Palo Alto residents)—so the City has left until millions on the table over the years, money that could have been used to deal with the ever-growing $450-$500M backlog of infrastructure projects that are now in need of rehab.

There are also some "unfunded" expenditures for the schools (money which comes from the General Fund). For instance, the City pays over $300,000 a year for the 25-odd crossing guards that can be found at various intersections around town. In the past, City has also assigned 1-2 police officers (to more-or-less full time duty) at various schools. This expenditure comes to between $200K and $400K (depending on the number of hours the officers actually spend on PAUSD sites. During the past couple of years, there has been a full-time librarian paid by the City to "liaison" between the schools and the PA Library. (It would be really nice if the City would itemize these expenditures in its yearly budget, so that we residents would not have to do some much "dumpster diving" to find out where the City's money is going.)

When all of these visible, and not-so-visible, expenditures are tallied, it's possible that the City is spending upwards of $9M "for the schools". But, there is almost $14M in revenue linked to the Cubberley Center (UUT and tenet rents) which more than will easily cover the payments promised to the PAUSD.

The City's failure to manage this property intelligently should not be rewarded with another "hidden tax"--such as Measure A's Business Tax.

Vote NO on Measure A!
----


Posted by pat, a resident of Midtown
on Oct 14, 2009 at 2:55 pm


In the business tax debate with Skip Justman, Mayor Drekmeier guarantees that the city has absolutely no intention raiding the homes of those who don't pay the business tax. He says, "I'll go on record saying that's never going to happen."

Will every future mayor and city council buy into this guarantee?

Drekmeier says only "two or three" employees will be hired to administer the tax, at a cost of $250,000. Does this include benefits and pensions? Will this little department grow in the future to include auditors and others?

While Drekmeier accuses anti-tax proponents of scare tactics, what about the city threatening to cut support of the Cubberley Center if Measure A doesn't pass? (See Wayne Martin's post above.)

Drekmeier also says city officials are working to "clean up" the language of the 15 page ordinance to make it clear that teens are exempt from the business tax. Are we expected to vote for a law that is still being revised?

A new tax is not the answer to Palo Alto's budget problem. The more we give them, the more they will spend. Vote NO on Measure A.


Posted by Anon Z, a resident of Palo Alto Hills
on Oct 14, 2009 at 3:50 pm

To you'll learn---The workers have to threaten strikes to get their point across!

This financial mess isn't their fault! You can bad-mouth them all
you want, but you'll never get the level of service from a contractor
that you've gotten from City workers.

Maybe you've lived in Palo Alto a long time and are so used to the good service that you're out of touch with how it really is in other communities?

Maybe the essential services shouldn't be up for debate, but neither
should the employee salary's and benefits.

It seems to me that there is an attitude out there that City employees are mere servants. That they shouldn't make a decent wage or have better benefits than the next guy. Why is that? They pay taxes, too. They have families to feed, clothe and house. Yet because they are City workers they are peons?

I, for one, value very much their devotion and dedication to the
excellent service they provide. And isn't service what we're talking about here? I'm done.





Posted by Dave G., a resident of Monroe Park
on Oct 14, 2009 at 3:54 pm

excellent service they provide. And isn't service what we're talking about here? I'm done.


Posted by Dave G., a resident of Monroe Park
on Oct 14, 2009 at 3:56 pm

I agree, Contracting many services would probably save money. While I believe most of our City employees are hard workers, have you even seen the street sweeper napping in his vehicle? Or the 2 guys watching the one guy dig in the street?




From the CIty's standpoint though, I'm sure the threat of cutting the police department makes a better sound-bite.


Posted by Cicero, a resident of Duveneck/St. Francis
on Oct 14, 2009 at 4:06 pm

New leaderhip is needed to restore City Hall back to those glory days when there were no scandals, investigations, budget deficits, strikes, or tree clearcutting.


Posted by you'll learn, a resident of Crescent Park
on Oct 14, 2009 at 4:51 pm

Dear Anon Z,
"Maybe the essential services shouldn't be up for debate, but neither should the employee salary's and benefits."
Of course employee salary and benefits are up for debate. Why do you think they've increased year after year?
Get a clue!


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