Palo Alto Weekly

News - June 4, 2010

Around Town

MAJOR WASTE ... Not all budgets deficits are created equal. Some, like Palo Alto's projected $7.3 million budget gap, creep up slowly and give city officials plenty of time to brace themselves for the cuts ahead. Then there's the $6 million shortfall in the city's Refuse Fund, which cascaded on the City Council faster than a trash bag rolling down a garbage chute. The council's Finance Committee was surprised to learn on May 27 that the Refuse Fund (which is not part of the city's General Fund) is projected to lose $6 million by the end of fiscal year 2011. As a result, residents may find their garbage rates rising starting in July. The City Council will consider the size of the increase on June 14. Public Works Director Glenn Roberts attributed the budget gap largely to a drop in refuse revenues, which he estimated at a jaw-dropping $7.2 million. This includes a $6 million drop in industrial- and commercial-waste revenues. As things stand, the Refuse Fund is on course to end fiscal year 2011 with a mere $400,000 in the bank — far short of the $6.1 million that is needed to pay off the state-mandated "landfill closure liability." The committee was not at all pleased with the news. "It's just surprising to me that I'm learning about this now, at the end of the entire (budget review) process," Vice Mayor Sid Espinosa said. "There's no way, with a $6 million shortfall, that people did not realize this a month ago, as we were starting this process." Councilman Larry Klein agreed and called this surprise "just not good form." He also suggested that the city carefully consider expense reductions in the Refuse Fund, rather than simply look at increasing revenues through rate increases. "We've been telling people — and I think the administration has been saying — that we won't be having to increase utilities this year," Klein said. "Obviously, we are now."

GAMING THE SYSTEM ... State Sen. Joe Simitian has a new target on his legislative agenda: public employees who pad their salaries just before retirement to ensure larger pension payments. The Palo Alto democrat announced this week that his bill to address this issue of "pension spiking" sailed through the state Senate by a 34-0 vote and is now bound for the state Assembly. The goal of Senate Bill 1425, Simitian said, is to curb the rising pension costs by setting new criteria for calculating pension payments. The criteria would exclude such factors as one-time bonuses, end-of-career promotions and accrued vacation time. Simitian said in a statement that the current system, which bases pensions on final year salaries, encourages workers to boost their salaries and, essentially, "game the system." A study in 2007 by the Pacific Research Institute estimated that this practice costs taxpayers about $100 million annually. "Pension spiking does a disservice to the public, who ultimately foots the bill; and it does a disservice to other public employees who rely on the resources and solvency of the system for a secure retirement," Simitian said in a statement.

A COMMON MESSAGE ... More than a year ago, leaders from five Peninsula cities came together to share complaints and information about California's proposed high-speed-rail project. Now, Palo Alto, Menlo Park, Atherton, Belmont and Burlingame — the members of the Peninsula Cities Consortium — are crafting a "core message" that captures the cities' position on the controversial 800-mile project. The consortium cities, according to the proposed message, "believe that the rail system should be built right — or not at all." "By 'right' we mean that the rail line should integrate into our communities without disrupting their current livability," and should be designed through a "collaborative process." The cities are also calling for the High-Speed Rail Authority to provide a valid business plan and a valid ridership study; fill all the positions on the Proposition 1A-mandated Peer Review Committee; allow more time for review of rail-related studies; "empower community leaders" to help select the final alternative for the rail line; and "treat community members with respect and refrain from labeling them." "Until these principles are in place, we believe high-speed rail should be put on hold," the proposed core message states. The Palo Alto City Council is scheduled to discuss, and possibly endorse, the core message at its meeting on Monday.

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