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Uploaded: Tuesday, December 23, 2008, 9:44 AM
City $$ shortages threaten public safety building
City may also start slashing programs, services
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A gloomy financial forecast could force Palo Alto to begin slashing programs and services and may delay — or even derail — the city's quest for a new public safety building, city officials are warning.
A new 10-year financial forecast projects that the city will face a budget gap of $2.6 million in the current fiscal year and a deficit of $5.3 million for 2010. The City Council's Finance Committee discussed this forecast last week and members agreed that city residents need to brace for some tough times in the next few years.
"Obviously, we weren't going to be able to stay immune to what is happening all around us, both in the private sector and in our governmental neighbors," City Manager James Keene told the committee on Dec. 16. "The downturn obviously is having an impact on the revenue stream for the city."
Figures for the first quarter of fiscal year 2009, which includes the three months leading up to September 30, show most of the city's revenue sources underperforming and the forecast predicts that "things will get worse before they get better," Keene said. Sales tax receipts are expected to be below budget by up to $1.5 million, as department store and auto dealership sales have become "noticeably weak," the report states. Meanwhile, revenues from the documentary transfer tax--paid when a residential or commercial property is sold--are expected to fall short of budget by about $1 million.
"We really need to start to look at what we're going to do about the budget gap and a deficit that we certainly see lasting for the next two budget years, at least," Keene told the committee.
Keene has already asked each city department to trim its 2009 budget by 2.5 to 5 percent. And council members said the city will soon need to start prioritizing city programs and services in anticipation of cuts. Several councilmen said they would like the public to participate in setting the city's priorities.
"This might be the time to communicate to the public that this might be the end of certain programs or services as we know it funded through city financing," Councilmember Yiaway Yeh said at the meeting. "The reason I say that is it will contribute to the discussion with the public, knowing that there will be opportunities to help prioritize programs and services and to get creative about what are the leveraging opportunities."
Yeh also recommended that the city reconsider its proposed new public safety building, which has a tentative price tag of about $81 million. The city has yet to agree on a way to fund the new building, which would serve as the new police headquarters. The design for the new police building has been going through preliminary reviews at city commissions in recent months.
"It's a new cost that we cannot assume at this point, looking at this forecast," Yeh told the committee. "Knowing that, I'd be very clear about it, that it's 12 on a 1-to-10 wish list."
Committee Chair Jack Morton agreed.
"I have great concerns that we go forward with the public safety building without knowing we have the financing," Morton said. "There's no way the General Fund can spare that."
But Councilmember Pat Burt said the city should be careful not to lose sight of its responsibility to residents during an emergency. He called the council's responsibility for public safety its "highest responsibility" and said the city's current emergency facilities are inadequate.
"We think of this financial issue as a crisis," Burt said. "How would we think about a local 8.0 earthquake compared to this?"
The committee's comments will now be forwarded to the full council, which is scheduled to discuss the design of the new police building at its Jan. 12 meeting. Staff will return to the committee in February with a series of recommended budget reductions and other adjustments. — Gennady Sheyner Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.
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Posted by YouShouldKnow, a resident of the Old Palo Alto neighborhood, on Dec 23, 2008 at 10:59 am Aw gee, well there's a major shocker! Whydontcha spend a few MORE thousand dollars on auditors and City employee overtime plus extra staffing and security measures for Marches! What WAS the actual cost of the March anyway? Haven't seen that published.Gee, the cops were looking to talk to people who matched certain victim descriptions. The temerity! In answer to such outrageous (unfounded) conduct (no one ever gave individual cops enough credit they would take the Chiefs words as actually intended and use personal discretion) we had to throw God knows how much money away so we could appear to be PC and 'responsive' to the demands of a Mayor from another City who proclaimed herself Queen of all Minorities. If Palo Alto really thought there was a problem the bruhaha and subsequent fallout was education enough without wasting money on that auditor. Think how many programs or middle school athletic scholarships that money could have gone to. Hmmm, maybe we should bill Aram James for some of the Cities financial outlay. Words have power. He kept hurling words (garbage) at the wall until something finally stuck. Maybe former Mayor Foster can chip in a few bucks.
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Posted by Marvin, a resident of the Charleston Gardens neighborhood, on Dec 23, 2008 at 11:18 am well, it's a good thing the Council decided to get that big ticket sponsorship for the Senior Games, fund The Color of Palo Alto, put money into the "Destination Palo Alto" push, vote in favor of all those bonuses to city employees and isn't the council going to give a few million to the library folks so they won;t have to wait until they can actually sell the bonds we voted for. Also aren't they going to hire a full time person to spearhead our climate change initiative? Plus all the consultants, auditors and experts we have on salary.
Well, don't expect any infrastructure repairs or funding of anything that the city really needs in the near future.
Yep, I completely agree with Mayor Klein that he fulfilled his mandate for 2008 of "taking Care of Business"!!!
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Posted by YouShouldKnow, a resident of the Old Palo Alto neighborhood, on Dec 23, 2008 at 11:35 am Ha! You mean HIS business.I guess they think nobody's paying attention! Sometimes when you out your political enemies you out yourself.
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Posted by Carol Gilbert, a resident of the University South neighborhood, on Dec 23, 2008 at 11:38 am This message is no surprise. So now could we bring some economic sense to this community?
1. Abandon the bonus policy.
2. We don't need a "Green Queen" right now. It was decided in August that we wouldn't have one.
3. I think consultants have previously studied the feasibility of running the airport. Let's use the last report or two instead of doing another one.
4. Do not proceed with the library until we can actually fund it.
5. Move along with the Stanford expansions. Any other city would be kissing the ground to have such a source of income.
6. Time to implement the Edgewood and Alma redos. Or, should we wait a few more years and leave those neighborhoods without a market?
I invite anybody else to fill in a few here too like Letterman's Top 10!
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Posted by Resident, a resident of Another Palo Alto neighborhood, on Dec 23, 2008 at 11:39 am City officials are warning us?
Haven't they been listening as we have been warning them? Every time a proposed spending of City money on some feel good topic comes along, there are many of us telling them that we want the money put to better uses. Once again, some budget restraints are called for and once again it is necessary improvements that are put on the back burner while the feel good issues get consultants and money thrown at them.
When will our City officials realise that we know times are hard, money is tight. We know that it is now time to pull in the reins and leave some of the art projects and plaques and name changes until such time as we have a budget surplus. In the meantime, we would like the bread and butter issues included in the budget and the jam can wait.
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Posted by YouShouldKnow, a resident of the Old Palo Alto neighborhood, on Dec 23, 2008 at 11:43 am Ha! You mean HIS business.I guess they think nobody's paying attention! Sometimes when you out your political enemies you out yourself.
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Posted by common sense, a resident of the Midtown neighborhood, on Dec 23, 2008 at 11:47 am Marvin,
Let's add up the money:
Senior Games - $500,000
Destination Palo ALto - $240,000
Environmental Coordinatr - $150,000 (doesn't include benefits)
City staff Bonuses - $1,300,000
So far that adds up to $2,190,000 - Wow! isn't that close to the "deficit" of $2.6 million? I'm sure with a review of some of the other spending, it the deficit needn't have happened at all.
There's a city council resolution scheduled in Jan 2009 to congratulate Larry Klein for his work!
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Posted by Marvin, a resident of the Charleston Gardens neighborhood, on Dec 23, 2008 at 11:56 am Common Sense--thanks for doing the math.
Do not forget that the city may "loan" the library people another $4 million, so that the library bond does not have to be funded before the work on the libraries can begin (this is after all the most important issue facing our city today--keeping 5 branches going):
Web Link
Also don't forget the money being spent on the investigation of how the police dared to investigate personal friends of certain city council members during the PACT scandal.
the fact that the council will pass a resolution praising Klein is not
surprising--if there is one thing the council is better at than wasting our money it is patting themselves or one another on the back and cooing about the great job they have done
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Posted by Kate, a resident of the Duveneck/St. Francis neighborhood, on Dec 23, 2008 at 12:28 pm Is there some hope that the new city Mgr. has some fiscal sense? Many on THIS council do not, Larry Klein ran on a platform of fiscal prudence and restraint. That is a real JOKE.
There's $43M in the utility reserve. Use some of that....., and speaking of utilities. PG&E announced a 22% DECREASE in natural gas rates this winter -- and Palo Alto is talking about another rate increase. Please keep the libraries open so seniors have a place to go to keep warm. That 'fixed' part of 'fixed income" is about 1% now. Seniors in this town are hurting.
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Posted by Deep Throat, a resident of Another Palo Alto neighborhood, on Dec 23, 2008 at 12:39 pm Don't forget to include the $707,000 loan extension to former Director of Administrative Services Carl Yeats that was supposed to be paid at the end of this year that the city just extended for six months with the City Manager given the right to extend it for another six months. See the staff report at:
Web Link
and the attachment to the staff report at:
Web Link
Almost two years ago Frank Benest told the City Council that Yeats would be retiring at the end of last year, so Yeats had a lot of time to arrange to sell his house in San Jose or refinance it.
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Posted by John, a resident of the College Terrace neighborhood, on Dec 23, 2008 at 1:34 pm How much will we now be pouring into the Opportunity Center? As I recall, PA agreed to back it up, if it got into financial trouble, as it now is. This could amount to millions. This does not include the cost of increased police services or the degradation of our downtown business district by the bums that are attracted to our streets.
We are being asked to build over one thousand new welfare housing units by ABAG. How much will that turkey cost us in social services, and decreased tax base?
Why does PA subsidize PACT to the tune of $1M per year?
The hidden costs of various 'green' regulations, like CEQA, are substantial. Put together with the Palo Alto Process, it is an enormous hidden negative tax.
This city budget is so full of PC fat. It is very easy to cut that fat, if we simply said "NO".
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Posted by Current Budget, a resident of Another Palo Alto neighborhood, on Dec 23, 2008 at 1:56 pm For those interested, the current budget can be found here: Web Link
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Posted by fireman, a resident of another community, on Dec 23, 2008 at 2:00 pm Common Sense'
How much in legal settlements and legal fees
How much lost on 2 fire engines, At least 1 million$$
How much $$$ to people for creating a culture of fear? or does that fall under bonuses. Bonus to leave town?
And you refuse to see the whole picture or anything that is real. Just hold on to made up BS. To make you think, you are smarter and better for this world then the rest. More GREEN.
You have been blind and lacked any real action, so now you all pay the NO MONEY, for your services price.
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Posted by YouShouldKnow, a resident of the Old Palo Alto neighborhood, on Dec 23, 2008 at 4:45 pm You want to know about the Childrens Theater? Look who had friends threatened by that debacle. Look who was in a political race that year. Look who came too close to the truth. Look who is now retiring. Look what agency is now under fire. Look who is the first to fulfill his own agenda, virtually putting Palo Alto into motion circling the drain...then as the last bit of our City spirit is sucked into the sewer, look who is going to be basking under the praise of his cohorts...Palo Alto FIRST! Not special interests.
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Posted by Unspeakable, a resident of the Duveneck/St. Francis neighborhood, on Dec 23, 2008 at 5:10 pm Tax property at 0.5% of the market value???
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Posted by anonymous, a resident of the Duveneck/St. Francis neighborhood, on Dec 23, 2008 at 5:53 pm Carol writes, above, in her suggestions: "#4 Do not proceed with the library until we can actually fund it"
Just a FYI I have seen that the Library Friends has sent out a solicitation letter, and this makes reference that the recent bond does not cover "everything" and that Palo Altans are requested to give more money!
The letter notes "First, there are the bricks and mortar, and second, the funding of the items for which the bond measure cannot pay, such as furniture, books, audio books, computers, foreign language collections, DVDs and programs such as Palo Alto Reads and the summer reading program. Even before the new construction there is much to do. This is where Friends of the Palo Alto Library, a membership organization, can and does provide ongoing financial support.
What about the REGULAR library budget that we citizens pay for??
All I can say, as a newer homeowner in Palo Alto, is that this is an EXTREMELY expensive city to live in. I really cannot afford to contribute yet more to the library system.
I think it's time to go back to basics, and operate more like neighboring cities, and that includes more than just with the city library system.
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Posted by Rick, a resident of the Charleston Gardens neighborhood, on Dec 23, 2008 at 11:26 pm One of the major reasons this city is always "broke" is that the large corporations and businesses in town pay almost nothing to the city in property taxes. Also the mfg is gone and this produced sales taxes.
Prop 13 was written so that business property, no matter when it changes ;hands does not in many or most cases get a increase in taxes as houses do when sold.
Prior to prop 13 the big or all business contributed much to the city in taxes and the city could afford great services, parks, etc..
Now they are probably subdized by home owners. ie the special fire tru;cks, inspections etc are in no way covered by taxes from them.
Homes are two stories and don't require special ladder trucks for instance. Firemen are constantly inspecting busisness and this costs a gread deal of $$.
The same applies to police services to businesses. You can sometimes see many police cars parked at the Stanford shopping center, but none in residential areas.
The police crowding conditions could have been solved years ago at little cost by spreading out the functions at various locations, such as storage of records.,evidence.
The new proposed bldg is a massive,oversized and gold plated bldg.
Also $8 million an acre for that location is crazy. Who exactly is getting that money. Needs to be revealed!!
The tiny neighborhood of College terrace has four parks. They could sell at least one to pay for their library improvement. How many neighborhoods have four parks within blocks of each other?
If they have four parks and a library every area that size should also have four parks and a library.
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Posted by common sense, a resident of the Midtown neighborhood, on Dec 24, 2008 at 12:51 am Rick,
The city gets about 8% of every property tax dollar paided. 46% goes to the schools, and the rest to the county.
If you think businesses are getting a deal, you should be outraged that all the BMR rental units pay no property taxes.
Manufacturing doesn't produce revenue to the city, retail sales does, as does hotels occupancy.
When a business renovates a building, it gets reasessed for it's improvements.
The city budget this year is $147 million dollars, and it spends roughly twice per citizen compared to our neighboring cities.
This city doesn't have a revenue problem, it has a spending problem - $500,000 to sponsor the Senior Games, $240,000 to promote Palo Alto as a tourist destination, $1.3 million for bonuses to city staff, and the list just keeps going.
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Posted by YouShouldKnow, a resident of the Old Palo Alto neighborhood, on Dec 24, 2008 at 1:17 am Prop 13 is lost when the homeowner sells. Are you saying the same doesn't apply to commercial property? I didn't realize commercial property fell under the guidelines in the first place.
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Posted by Parent, a member of the Jordan Middle School community, on Dec 24, 2008 at 2:35 am Home prices will not increase because we have a new police station or new libraries, high speed rail, and massed housing. Home values may actually decrease over time (over the 30 year bond).
Our city manager and other key managers will not be around in 30 years to see this.
Look at property values in Woodside, Atherton, Los Altos Hills, Portola Valley, and Menlo Park. Did the people buying homes in these areas analyze the police station, library (old vs new), and does the city compost on site or send it to a regional composting facility?
Did they move here to live in a tourist destination?
Many residents are employees of Stanford, or employed in the Research Park area - they moved here because the quality of life.
PAUSD is not the only reason why families move here. We have quite a few excellent private schools in the area.
People want to get away from chaos.
We have heard families speaking of moving to Utah and Idaho.
There are jobs there, and they believe that the quality of life may be better to raise their children.
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Posted by fireman, a resident of another community, on Dec 24, 2008 at 7:52 am Rick, The city is in the shape it is, because. For starter The leaders of this city. First lead themselves into a position or deal, where they reward themselves first. With huge saliries$$$ and benefits$$$$. Then compare themselves to private business. Forgetting private business and the leaders in this area. NEED to produce! Not the city of palo alto. The money is given to them. billions and these leaders are Inept and incompotent, but who is going to make them accountable? The Citizens? That's a joke.
These people waste and give themseleves millions and the citizens get the bill, the cover up and the blow off.
Attacked and abused.
Most, not all the leaders of this city get their peice of the pie and the rest. Get the empty pie tray as the fat city leaders and council memebers sell you some BS paid for with citizens money story. About how there is no money for pie this year. hey next years pie will cost 1 billion more. So get ready to pay MORE to the city.
Oh the mess on their face? Is all the pie they consumed,that was paid for and headed to the citizens. The crums lead to there bank accounts and their friends houses.
While the citizens get empty paper plates with reused plastic spoons and a few crums to split up with the stupid do nothing citizens that protect the people who are screwing them over. Thinking that they are protecting Truth and justice.
Truth and justice in the city of palo alto. No it dies with all the other services and rights that this city takes away and destrorys fom all.
Add up the facts this city has lots of money. this city has wasted lots of money(spent). This city has gotten very little real services for the huge amount of money it did spend/waste. This city and its leaders have been caught breaking the law many times in many ways. The city pays millions in legal fees an settlements to keep some of its leaders safe from the public and the laws of this nation.
This city has all the peices to be someting special.
[Portion removed due to disrespectful comment or offensive language]
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Posted by chrisk, a resident of the University South neighborhood, on Dec 24, 2008 at 12:13 pm Why not have a vote to decide whether the voters want the bond issue passed on November 4 to be used for libraries or the police station?
The cost is about the same.
Also, why not start begging Obama for some infrastructure money?
Let's see how good Eshoo is at bringing home the pork.
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Posted by alex, a resident of the Midtown neighborhood, on Dec 25, 2008 at 6:11 am Great! Time to nix the 80 million dollar building. Drugs will be legal soon, so much less need for it. Very little need for it now, obviously.
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Posted by Public Safety Building is a Must, a resident of the Charleston Meadows neighborhood, on Dec 25, 2008 at 6:51 am Well, if we don't build the Public Safety Building we can start paying the ongoing fines for having a non-compliant Police Building. By State law we must now provide different holding facilities for men and women and for juveniles with separate toilet facilities. We must also provide secure in house facilities to store evidence - that includes large items like vehicles.
There are several other violations in our present Police building which are subject to fines by the State. How do we satisfy State law if we don't build a new facility?
While we're about it we need a large enough facility to accommodate the inceasing number of officers we will need for our inceasing population over the next 30-40 years.
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Posted by Sun and Sand, a resident of the College Terrace neighborhood, on Dec 25, 2008 at 4:56 pm SELL PAU! - bring in a consultant to value this asset - use the asset to pay for needed infrastructure, invest the rest to feed the general fund and solar-enable Palo Alto. I've heard estimates as high as $1B. Our city is fiscally negligent for not valuing and leveraging this asset.
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