Riding the wave of a booming economy, City Manager James Keene on Tuesday unveiled a proposed budget for the coming year that adds 17 new positions to the city's workforce, including additional staffing in the Library, Planning and Community Services departments.
The proposed Fiscal Year 2015 budget, which the City Council received and briefly discussed Tuesday, further distances Palo Alto from the lean years of 2008 and 2009, when the city was freezing positions and trimming employee benefits. By contrast, Keene's budget for the 2015 includes both new positions and raises for existing employees.
Overall, expenditures in the city's General Fund (which pays for most basic city services not including utilities) would be 7.3 percent higher in 2015 than in 2014, or $11.7 million from the current fiscal year to the next. While the current budget includes expenditures totaling $159.7 million, Keene's new proposal would raise the amount by $11.7 million, to $171.4 million.
In his presentation, Keene attributed the increases to the robust economy, which is bringing in more revenues -- the city expects tax revenues to jump by $9.2 million between the current year and fiscal year 2015, which begins on July 1. The revenues are projected to grow from $83.8 million to $93 million.
Yet the economic growth has also brought new problems, chiefly a growing parking shortage and heavier traffic. Keene wrote in his transmittal letter that the healthy economy "has resulted in more jobs within the City and a higher demand for housing, parking and other City services." The budget includes new positions that directly address the recent growth, including a land use analyst who will coordinate the city's myriad planning studies and a new transportation planner.
Keene's Tuesday presentation kicked off a budget-adoption process that includes a series of Finance Committee reviews and will culminate in an official adoption of the budget by the City Council in June. Though the figures could still change in the coming months, members didn't express any major concerns with Keene's proposal at Tuesday's discussion. Councilman Greg Scharff called it a "well thought-out budget" and lauded the proposal to increase funding for the city's expanding public art program (which will now have a designated public-arts manager), library staff and transportation measures.
The lattermost category includes $1 million for new shuttle services; $150,000 for establishing a new Transportation Management Authority (which will coordinate the city's traffic-reduction efforts downtown) and $232,000 for various planning efforts relating to transportation and Safe Routes to School.
"I really think the priorities are the right ones," Scharff said. "I'm really pleased to see the transportation funding. It's critical."
Other new positions relate to the recently scheduled fall reopening of the Mitchell Park and the Rinconada (formerly Main) libraries. Staff is responding by unfreezing two positions in the Library Department and adding three new ones.
Under the proposed budget, Keene's own office wouldn't grow, but it would see one change. The budget proposes adding an assistant city manager position (raising the number from one to two) and eliminate an "assistant to the city manager" position. The goal of the change, Keene said, is to "provide a higher level of operational oversight."
Other new positions include management analysts in the recently formed Office of Sustainability as well as the Community Services and the Development Services departments. A management analyst would also be added at the Palo Alto Airport, which the city is in the process of taking over from Santa Clara County.
Keene said the new jobs would raise the city's staffing level from 1,019 to 1,036 full-time positions. He also noted that the number stood at 1,093 a decade ago.
The proposed budget also includes increased spending on compensation for current employees. It proposes a budget of $150.3 million for salaries and benefits in all funds, 7.3 percent more than this year's total of $140.1 million. The reasons, according to the proposal, include increased pension contributions from the city, increased retiree health care costs and increases to salaries and benefits, consistent with the raises that the council recently approved under a new contract with the Service Employees International Union.
The budget document cites the various reforms that the council undertook during the economic downturn of 2009 to curb employee costs, including requirements that workers pay a greater share of health care and pension costs. Yet it also notes that while these strategies served the city well during the downturn, "it is also imperative for the City to remain a competitive employer while reducing the impact of fast growing benefits costs."
To that effect, the budget sets aside "modest increases for salaries and benefits consistent with salary and benefits changes granted or agreed to across all employee groups during the last few years."