Virtually every resident and business in town will face rate hikes of between 10 percent and 25 percent on monthly bills that are already high compared to other area cities.
Some City Council Finance Committee members said last week they were surprised by news of the shortfall, especially not being told that the state requires that a $6.1 million reserve fund be maintained to pay for closure of the city dump within the next two to four years — meaning the funds are unavailable to soften rate increases.
The city's Public Works Department did issue a report last April 6 that informed the committee there would be a multi-million-dollar shortfall without some added revenues. But it didn't mention the state restriction on the reserve funds. (See staff report: CMR 195.10 on www.CityofPaloAlto.org.)
It is ironic that as City Manager James Keene, staff and committee were struggling to close a $7.3 million gap in the city's General Fund budget that a shortfall of nearly the same magnitude was lying there overshadowed and virtually unnoticed in the separate "Enterprise Fund" that encompasses refuse operations.
But the irony won't mean much to residents and businesses when they start receiving higher bills — some still rankle from a 17 percent increase in June 2009 due to the then-new contract with GreenWaste and increased costs of preparing to close the landfill.