Palo Alto will have almost $40 million at its disposal to spend on health programs, affordable housing, infrastructure and green initiatives as part of its recently approved agreement with the Stanford University Medical Center.
Tonight, the City Council will consider ways to spend these funds, which Stanford had agreed to provide in order to get the city's permission for a massive expansion of its hospital facilities.
Under a development agreement the council approved last month, Stanford will provide payments in three installments, with the first $15.7 million payment due this summer. Future payments are scheduled for January 2012 and January 2018.
The agreement was designed to give the city flexibility on what kind of projects to spend the money on. The council, for example, could use the $7.7 million earmarked for "infrastructure, sustainable neighborhoods and affordable housing" to subsidize low-income housing or to address the city's gaping infrastructure backlog, currently estimated at about $500 million.
Stanford is scheduled to contribute $4 million for "community health and safety programs"; $23.2 million for "infrastructure, sustainable neighborhoods and affordable housing"; and $12 million for "sustainability programs" relating to climate change.
Palo Alto officials have already committed to spending $2 million from the community-health fund to support Project Safety Net, a project aimed at promoting youth well-being.
The Stanford funds are flowing into the city's coffers at a time when the city remains mired in budgetary uncertainty. Though the council balanced the fiscal year 2012 budget last month without cutting any popular programs, officials predict budget deficits of close to $7 million in each of the next two fiscal years.
Deputy City Manager Steve Emslie wrote in a new report that Stanford's contributions "provide the city with an exceptional opportunity to begin to address its overall infrastructure and sustainable goals." Emslie noted that while the timing of the money will give the council an "immediate opportunity to initiate projects," staff is recommending a "strategic approach" to spending Stanford funds.
To get the strategic discussion rolling, staff has proposed appointing two council members to a joint committee that would also include Stanford officials. The committee would review possible uses for the community-health funds. The council would then make the final decision on how to spend the money. Under the proposal, the council's Finance Committee would also consider various projects and programs that could be funded before the full council finalizes the spending programs.
Stanford's hospital-expansion program includes reconstruction of Stanford Hospital & Clinics, an expansion of Lucile Packard Children's Center and renovations to various Stanford University School of Medicine buildings.
The council meeting will begin at 6 p.m. in the Council Chambers at City Hall, 250 Hamilton Ave.