Send this story Print this story

Adjust text size

Editorial: Tackling Palo Alto's city-budget crisis
Officials confront necessity of balancing millions of dollars worth of 'structural' cutbacks and new fees and assessments

Palo Alto faces one of its biggest challenges in decades: Closing an $8.3 million budget gap with cutbacks and new revenues.

The magnitude of the proposed cuts is staggering, as delineated in a "preview budget" report presented to the City Council Monday night by City Manager James Keene and budget staff. If "structural" (meaning permanent or long-lasting) cuts are not made now, there will be far worse deficits in years to come, they warn.

The report lists 32 specific items ranging from $27,000 saved by eliminating the summer Twilight and Brown Bag concert series to $894,000 saved by eliminating the Police Department's five-member "Traffic Team." The list is replete with items dear to some Palo Altan's heart, including some seen as important to public safety or "quality of life."

The bottom line is that the $8.3 million gap must be closed before July 1, the beginning of fiscal year 2011. This is on top of $16.2 million cut in the current fiscal year's budget. Gap-closing moves included one-time transfers from infrastructure reserves, suspending planning for a new public safety building, imposing benefit reductions on employees and eliminating 21 staff positions (20 of them vacant).

Keene's preliminary list to close next year's $8.3 million gap actually totals $10.3 million, with another $1 million to come after more staff review. This will provide the City Council by June with $3 million worth of flexibility in making the hard choices that need to be made in the face of an unprecedented economic downturn.

"These numbers reflect Palo Alto's continuing fiscal difficulties in the worst downturn since the Great Depression," the report correctly points out. "Cities across California are in a similar, or worse, condition," it adds.

While that may be true, the pain felt by the needed cutbacks and new fees will be felt by those whose positions are cut, those who must pick up the workload and by residents faced with new park-use fees or assessments for sidewalk repairs in front of their homes. Bringing back to voters a "business license tax" in an improved, streamlined form is still on the city's long-term agenda, but no active work on that is happening after voters defeated such a tax last November.

A significant difference this year that earlier budgets were balanced mainly with one-time cuts, deferrals of projects or transfers from reserve accounts. Past balancing acts, dating back into the 1990s, rested heavily on deferred-maintenance — which invariably comes back in more-expensive ways.

This year the city has run out of alternatives for short-term balancing moves, and must at last address substantial "structural" cuts, meaning permanent cuts that are unlikely ever to be restored.

The magnitude of the challenge for the city staff, council members and the community at large is beginning to be felt. Keene has embarked on a series of neighborhood-level meetings to outline the issues and scope of the dilemma. Tuesday night he noted at a meeting in Midtown Palo Alto that there are no perfect solutions or easy answers.

Keene and his staff are to be commended for taking an aggressive approach to informing the public about the complex issues. At the same time, reaching 30 people at a time, such as at the Midtown meeting, is frustrating at best. (The Weekly will be putting video highlights of Keene's presentation on its community website, www.PaloAltoOnline.com. The budget staff report is at www.CityofPaloAlto.org as CMR:208:10.)

It is vitally important for residents to become informed about the realities of city revenues and expenditures before they launch or join a crusade to "save" a favorite program — or before they sign any petitions to give special treatment to specific services, such as the firefighters' union initiative-petition drive now underway.

A huge factor will be the fortitude of City Council members. Past councils have been unable or unwilling to take the heat for cutting popular programs or services in the face of lobbying or criticism from community advocates for one thing or another.

The collective ability of the council members to agree upon hard choices, when the budget reaches them in June, and to select the least damaging of bad alternatives will be a test of the fortitude of this relatively new council.

We hope the council is up to the task. It will be measured by its success or failure in doing what must be done — now, this fiscal year.

Posted by pat, a resident of the Midtown neighborhood, on Apr 16, 2010 at 8:51 pm

Great editorial!

See Cities must define core services at

Web Link

Posted by Cut PACT, a resident of the Midtown neighborhood, on Apr 17, 2010 at 9:39 am

PACT funding has to be reduced. We are cutting police positions but funding our Children's Theater at a level beyond way beyond any town in the nation? It makes not sense and the council should do the responsible thing and make the cuts.

Posted by Crescent Park Dad, a resident of the Crescent Park neighborhood, on Apr 17, 2010 at 2:34 pm

How much would we save by closing the downtown and college terrace libraries? Instead of building a new safety services building, could they use the downtown library for expansion?

The shuttle service, whether it is cut or reduced, should charge riders some sort of fee.

PACT funding, as well as other similar programs (e.g., summer recreation, pools) will need to rely upon higher participation fees and a reduction in city funding. Further, charges for non-residents should be increased at a higher percentage as well. This should include the bus loads of non-PA summer camps that use Rinc pool.

No more six-figure free handouts for events such as the senior games...they were already committed to holding the event at Stanford - there was absolutely no need for the give-away of tax payer money.

I look forward to reading the city report/analysis now that it is available online.

Posted by George, a resident of the Midtown neighborhood, on Apr 17, 2010 at 3:34 pm

"eliminating 21 staff positions (20 of them vacant)"

The positions are vacant because they are not needed, they are just in a department budget so that they can hire without having to change their budgets. This is smoke and mirrors.

It may be mindless to make a 1% or 2% cut across absolutely everything, but it would do the job without the moaning and groaning and pseudo hand wringing by the city manager.

Posted by the watcher, a resident of another community, on Apr 22, 2010 at 4:18 pm

If someone would 'fess up and present information to the public about the missing $4.8million from the budget department then inquiring minds would finally be at rest.

a. Is there any investigation going on about the missing monies?

b. Has the money been recovered?

c. Who was/is responsible for the $$$ error in that department?

d. If the money is found would that lessen the city's budget crisis

e. Why has this issue (seemingly) been pushed under the carpet?

f. Has the council presented any answers to the above questions?

If anyone knows the answers to any of these questions please post.

Posted by City Employee, a resident of Another Palo Alto neighborhood, on Apr 27, 2010 at 9:14 am

What they are not mentioning are those who are losing their positions and what the public will lose on top of that. There are no resources for the community. There are no longer days at our schools to register bikes, and city council wants to take away the police traffic team. So parents, this mean that there will not be officers patroling the school for the "adopt a school program" which could mean an increase in traffic violations around schools. Those of you who are concerned with Demographic Data should no longer expect that data to be produced as they are getting rid of that positon. Durig storms don't expect the city to come and clear out debris or fallen trees as they are cutting 4 positions. And after 7 positions within parks in recs will be cut; who is going to take care of landscape of our city?

The people who work hard and make this city what it is are losing their jobs, while someone who makes more money and sits at the top of the city building is cutting those people. Those people at top have no idea what the people below them do. If it weren't for those people getting laid off, the Managers and City Council Members would not have a job.