City administrators have done a good job of outreach, in a series of neighborhood informational meetings preceding or paralleling the official City Council Finance Committee meetings in May and June. The committee wrapped up its exhaustive — and exhausting — marathon of wading through budget details this week and has sent its recommendations to the full council.
A council-level public hearing has been set for next Monday night on the city's overall $139 million General Fund budget for fiscal year 2010-2011, starting July 1. This is the last opportunity for residents to provide feedback on the budget and cuts or new fees before the council adopts the final budget June 28, with possible spillover meetings June 29 and 30.
The committee in recent meetings removed or neutralized some of the more hot-potato issues. This week it rejected a $5 per vehicle admission fee to Foothills Park, the Baylands Preserve and Pearson/Arastradero Preserve. Earlier, proposals to cut a police high-tech-fraud investigations unit and traffic safety officers and crossing guards were also rejected, while still cutting a community-outreach officer and crime analyst.
The bulk of the $7.3 million gap-closure comes from cutting more than 60 staff positions, including outsourcing printing and park maintenance. Individual layoffs will hit nearly all departments. Most will be minimally visible, at least in the short term, to residents.
There are still some problematic cuts or fee increases among the $7.3 million. One is to bill homeowners for half the cost of sidewalk replacements in front of their homes for the estimated 100 or so homeowners affected each year, to save about $250,000 annually. Even so, this seems odd because most sidewalk damage is caused by roots of city-owned street trees, therefore rightly a city responsibility.
The committee also agreed to accept a $35,000 gift from the Friends of the Children's Theatre in lieu of implementing fees for participation in plays for young actors — a minuscule amount in the big picture of budget balancing. That also is an odd response for a community in which most sports and other activities for young persons involve fees, with scholarships available for hardship cases.
But there is a broader significance to this year's budget cuts. That significance is that most are "structural," meaning long-lasting — an approach that in our opinion is long overdue despite some attempts to do so in past years, without which Palo Alto would be in far worse shape than it presently is.
If the council accepts the Finance Committee's recommendations, instead of facing a $10 million deficit next fiscal year the city will face only an estimated gap of about $1.7 million.
The budget does not include the separate Utilities Department budget, and the $7.3 million in cuts does not reflect a deferral (for the second year) of an 8 percent raise by the Palo Alto Police Officers Association (PAPOA), saving an estimated $800,000 this year. City employees represented by the Service Employees International Union (SEIU) and employees in management position will contribute another 4 percent for another $1.2 million savings.
City officials hope for an equivalent savings of about $820,000 from Palo Alto firefighters, with whom management began new-contract negotiations this month. But the combative leadership of the union local has so far shown scant interest in helping the city weather this financial downturn.
As for the present budget, it is difficult to second guess the cuts and fee increases proposed after many hours of effort by the city staff and Finance Committee members.
There is a universal concern about the cost of retirement and health benefits. It is clear that earlier, during flush times, councils and staff were overly generous with employee-retirement benefits, now threatening to cripple or bankrupt public agencies statewide.
Yet Palo Alto, with about $23 million in available General Fund reserves (untouched this year) is not in a desperate fiscal crises, now. But the long-term benefits issue is a major challenge that must be addressed — we hope starting with the Fire Department when its contract expires June 30.