Palo Alto may be in the midst of a revenue boom, but officials are in no rush to share the newfound wealth with local nonprofits.
After a lengthy discussion Monday, the City Council balked at a proposal from its Finance Committee to raise the city's grant allocations to nonprofits by up to $200,000 in the coming fiscal year. Instead, council members opted to take a more cautious approach to changing the allocation process and voted 5-4 to raise grant amounts for the 16 organizations that receive local funds by a combined $31,620.
Council members Pat Burt, Karen Holman, Gail Price, Greg Schmid all lobbied for the largest increase and voted against a proposal by Councilman Marc Berman to keep the increase modest. Berman, who chairs the council's Finance Committee, voted along with the committee on April 15 to support raising the funding in what's known as the Human Services Resource Allocation Process (HSRAP) by $200,000. But on Monday night, both he and Vice Mayor Liz Kniss (who also sits on the Finance Committee), changed course and proposed restricting the hike to the smaller amount, which corresponds to changes in the consumer price index.
The program, which has seen two funding reductions in the past decade, supported 16 nonprofits this year. The lion's share of the $1.2 million allocations went to Avenidas and Palo Alto Community Child Care, which operate on six-year contracts (every other agency is on a two-year contract). The two nonprofits are set to receive $868,014 of the $1.2 million. Last week, the council voted to remove them from the competitive grant process, thereby insuring that their funding would remain stable.
Other local nonprofits that benefit from the program include Abilities United, Adolescent Counseling Services, Downtown Streets Team and InnVision Shelter Network.
In rejecting the Finance Committee's proposal to add up to $200,000 to the funding program, council members focused on the process that led to that figure, with Berman, Kniss and Larry Klein all argued that the council has not proceeded as methodically as it should have.
"We might decide that we want to increase the funding to these agencies but it needs to be a bit more strategic of a decision," Berman said.
Klein called the process "flawed." He also noted that the city continues to have funding challenges in areas such as infrastructure, employee pensions and health care.
"If we're going to have increases, they need to be much more carefully considered," Klein said.
But Burt and Holman, who also serve on the Finance Committee, highlighted the fact that the city's funding for the grant program remains below where it was in 2003. This is despite a recent influx in tax revenues and consecutive years of budget surpluses, which have prompted City Manager James Keene to propose hiring 17 new employees in the coming fiscal year and which have already translated to raises for more than half of the city's workforce. The $200,000 addition would still keep the city's allocation for nonprofits at well below 1 percent of the General Fund.
"Even with this proposal, we would not be approaching the proportionate share of our budget for HSRAP where we were a decade ago," Burt said.
Holman was more blunt and said she found the entire conversation "very frustrating." The council, she said, routinely approves six- and seven-digit expenditures with far less discussion.
"It's almost embarrassing that we are haggling over $170,000 when we approve larger dollar amounts on (the) consent calendar regularly," Holman said, referring to the schedule of items that the council approves with a single vote and with no discussion.
Councilwoman Gail Price also lobbied for a more substantive contribution.
"If we're really serious about providing services that are needed, this kind of an adjustment in my opinion is important, necessary and way, way overdue," Price said.
After the smaller increased passed by a bare majority, the council voted 8-1 (with Price dissenting) to forward the item to the Human Relations Commission, which is now charged with allocating the $31,620 to the nonprofits.