Palo Alto Weekly

News - April 20, 2012

Palo Alto housing, service agencies could see drop in funding

Sharp decrease in federal dollars means less community-development funding

by Eric Van Susteren

The City of Palo Alto's funding for planning and administration and for public services may be reduced next year in response to a decrease in federal funding.

During the City Council Finance Committee's meeting Tuesday night, April 17, members recommended the city adopt a plan that includes reducing funding for public-service agencies such as Project Sentinel, InnVision Opportunity Center and the Palo Alto Housing Corporation.

The committee voted 3-1 to recommend the plan, with Councilman Pat Burt dissenting. Burt said he'd want to look for funds in the general budget to help cover the lost money.

Palo Alto receives annual allocations from the U.S. Department of Housing and Urban Development under the Community Development Block Grant Program. The city will receive an estimated $429,304 from the program for the fiscal year of 2013 — a 29 percent decrease from last year's $606,566. The drop is the result of the completion of the 2010 Census, which is used as the basis for the allocations.

Federal regulations require that the funds benefit low- and very-low-income persons, aid in preventing slums or blight, and meet other urgent community-development needs. Much of the funds are allocated as grants to nonprofits with goals of improving community conditions.

The federal funds along with money reallocated from past programs with unspent balances, loan repayments and income from current and future programs make up the $719,677 in estimated total funds available to allocate.

City planner Consuelo Hernandez said the community-development money represents a small portion of the nonprofits' budgets, but Phillip Dah, program director for InnVision Opportunity Center, said funding reductions would have a significant impact on the center's work with homeless people.

"It's been evident that the services we provide are not seen or considered to be essential," he said. "A $12,000 or $15,000 (grant) is a small portion of our budget, but without it we wouldn't be able to serve the people of Palo Alto."

The Opportunity Center, which received $50,000 in the 2011-12 fiscal year, would be one of the agencies that stands to lose the most from funding reductions. The plan cuts program funding for 2012-13 to $37,175.

Federal regulations state that of the city's entitlement grant and program income, only 15 percent — $95,600 — may be used on public services such as the Opportunity Center. The recommendation allocates the reduced funding proportionally among five agencies: InnVision, Project Sentinel, YWCA, Palo Alto Housing Corporation and Catholic Charities.

Similarly, only 20 percent of the funds and program revenue may be spent on planning and administration. That formula shrinks the $133,311 allocated to administration last year to $97,861 this year.

The remaining $526,215 is to be used on other projects — workforce development for the Downtown Streets Team, new windows for the Cal Park Apartments and a heating, ventilation and air-conditioning system for Avenidas, an organization serving seniors.

The City Council will review the committee's recommendations at a public hearing scheduled for May 7.

In other business, the committee recommended a plan that would increase residential refuse rates without increasing commercial refuse rates. The increases would be phased in over a maximum period of three years.

The plan would increase the fixed cost for street sweeping from $4.62 to $6.66, while adding a $1.07 fixed rate for household hazardous-waste service and a $2.17 fixed rate for the city's annual clean-up day.

Under the new plan, rates for minican and 32-gallon trashcans would rise by $3.17 and $4.06 respectively — a 15 and 11 percent increase. Rates for 128-gallon, 96-gallon and 64-gallon trashcans would each increase by $5.28, a 7, 5 and 4 percent increase respectively.

The public-works department estimates the increases will generate $850,000 in incremental revenues next year. The rate increase was based on a recent refuse cost-of-service study, which showed a projected imbalance between commercial and residential ratepayers.

Editorial Assistant Eric Van Susteren can be emailed at ericvansusteren@paweekly.com.

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