News

Palo Alto braces for budget deficit

Growing expenses drive projected shortfall of $4 million to $6 million in coming year

Despite a thriving economy and growing revenues, Palo Alto is heading into the new year with a financial cloud on the horizon: a projected budget deficit that could be as high as $6 million.

The numbers, which are reflected in the latest projections from the Administrative Services Department, present an early challenge for the City Council, which will have three new members next year and which is scheduled to start reviewing the Fiscal Year 2018 budget in April.

The budget challenge comes at a time when the city's main revenue sources continue to show robust growth. Sales taxes revenues are expected to be $30.3 million in fiscal year 2017, $1.2 million more than the city budgeted for, and $31.8 million in 2018. Hotel tax revenues have also been increasing steadily since fiscal year 2015, going from $16.7 million in that year to $22.4 million in 2016, and to an expected level of $23.9 million in fiscal year 2017 (which ends on June 30). In 2018, the city expects to to collect $24.8 million from hotels.

Property-tax revenues are also showing healthy growth, going from $36.6 million in 2016 to a projected level of $39.1 million in 2017 and to $41.5 million in 2018.

Yet expenses are growing just as fast. The costs of salaries and benefits (which make up 61 percent of the General Fund) are expected to continue their growth, fueled in part by the city's recent efforts to align local salaries with the regional marketplace. In addition, the city has recently made new commitments to funding Project Safety Net (a program that promotes youth well-being). It is also facing a $1.1 million increase in its tree-trimming contract; a protracted negotiation with Stanford University over fire services; and a reallocation of electricity costs associated with streetlights and traffic lights from enterprise funds to the General Fund, which pays for most basic city services, not including utilities.

The result is a General Fund shortfall of $4 million to $6 million, according to staff projections. And the number doesn't include the additional funds that the city would spend if it wants to purchase the downtown U.S. Post Office, invest in improvements to its animal shelter and move along with a series of expensive planning efforts, including the new master plan for Cubberley Community Center and an update to the city's Comprehensive Plan.

Compounding the challenges is the rapidly rising cost of construction, which could lower the city's infrastructure ambitions. Given this trend, City Manager James Keene made the case Tuesday night for speeding up the city's process on major construction projects. The big items on the city's list include a public-safety building and new parking garages in downtown and around California Avenue.

"While the economy is doing well, that's why we need to be getting these projects done as fast as we possibly can ... To accelerate the Palo Alto Process on some of these capital projects would be important," Keene told the council's Finance Committee during a Tuesday night discussion.

The financial picture is by no means as alarming as it was six or seven years ago, when Palo Alto was slashing City Hall positions and flirting with outsourcing animal services. In addition to healthy revenue streams, the city has a Budget Stabilization Reserve that functions like a rainy-day fund. The council has a target of keeping the reserve funded at about 18.5 percent of the General Fund. Currently, it's at 21.4 percent, or about $5.7 million above target level, according to Chief Financial Officer Lalo Perez.

The money, Perez said, could potentially serve as a "buffer" should costs escalate further. It can also be used as a "temporary bridge" to delay eliminating programs and services that the council or the community feel strongly about.

Even so, the report from Administrative Services emphasizes the importance of prioritizing spending and containing escalating costs in current activities.

"A containment strategy is necessary to maintain a manageable financial position and to address future financial challenges such as rising pension, infrastructure and medical costs; unforeseen program needs; and the inevitable economic downtown," the report states.

The four members of the Finance Committee didn't take any votes on Tuesday, but they largely supported staff's strategy for dealing with the newly discovered deficit. This includes considering new public-private partnerships, creating fee structures that ensure cost-recovery and contracting out for services where doing so would save money.

Councilman Cory Wolbach urged staff and his colleagues to "keep an open mind" when it comes to looking for new revenues. He supported looking for ways to monetize the city's resources.

"If we have any land or office space we're not using, can we lease it out?" Wolbach asked.

His colleagues had other ideas. Councilwoman Karen Holman urged staff to look for cost-sharing opportunities with the Palo Alto Unified School District and to improve cost recovery in the city's code-enforcement program.

"There is a huge gaping hole there -- especially when it comes to repeat offenders," Holman said.

Councilman Greg Schmid pointed to Palo Alto's status as a regional job center and argued that a critical component of financial health is making sure that businesses pay their fair share to help fix the problems that they create.

"We need to grapple with the issue. How can businesses participate in at least covering the cost of mitigation of parking, traffic, congestion that they cause?" Schmid said. "It's crazy that they're not participating actively in a funding way."

---

Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

Comments

4 people like this
Posted by Impressive foresight
a resident of Crescent Park
on Dec 7, 2016 at 12:30 am

Councilmember-elect Tanaka was the only candidate campaigning on city finances. He made the right call on Maybell and now on finances.

I'm so glad that he is going to be serving!


34 people like this
Posted by Greenacres
a resident of Green Acres
on Dec 7, 2016 at 1:01 am

"Councilman Greg Schmid pointed to Palo Alto's status as a regional job center and argued that a critical component of financial health is making sure that businesses pay their fair share to help fix the problems that they create.

“We need to grapple with the issue. How can businesses participate in at least covering the cost of mitigation of parking, traffic, congestion that they cause?” Schmid said. “It's crazy that they're not participating actively in a funding way.”"

Absolutely. Greg Schmid, if only you could stay on Council!

We have never grappled with what happens in an emergency with three times the population here during the day. While the tragedy in Oakland is on everyone's minds, we should not simply allow the infrastructure equivalent here with no reasonable egress for example. Office businesses should be paying their fair share, for emergency services and infrastructure. Residents should not be subsidizing developers (as was previously reported).

Another priority should be protecting a healthy retail sector. Taxpayers were shaken down for the decimation of Cal Ave, which must be reversed. It may be necessary for us to turn to, basically, a BMR retail model like Los Altos has, although theirs seems to be sponsored by their resident billionaires through a community foundation.


57 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Dec 7, 2016 at 8:49 am

There is plenty of money, it is just how much is being wasted that is the problem. Administration costs and other suspicious financial expenses should start at the top of the list to identify where the wastage is centered.


87 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Dec 7, 2016 at 9:23 am

No surprise. This city wastes a ridiculous amount of money. Here's just a few examples:

$6,000,000 is about what the city wasted on the Cal Ave. "redesign" and that's not counting lost sales tax revenues.

And how much did the city waste on fiascoes like the unused, unwanted and unsafe Jordan School bike lane and the preparation of all those erroneous 3-day models and PowerPoints and the traffic surveys conducted at the wrong times of day?

How much does the city waste on unwanted bollards that slow down traffic?

How many city employees does the city pay more than $260,000 in straight salary?

How much money do we waste buying commuters unused bikes? (Check out the racks yourself.)

How much does the city waste on "community outreach" efforts that never alert residents to meetings of concern? Or those requests to comment on the city's comprehensive plan -- and other plans like parks etc. -- that yield nothing substantive because they never told respondents they could only vote for a few choices, hence invalidating the results.


18 people like this
Posted by Sue Allen
a resident of Adobe-Meadow
on Dec 7, 2016 at 11:00 am

Suggestion-- Stop snail mail. I'd be glad to receive my utility bill, mailings about neighbor house tear-downs, community meetings, etc. via email. But the city persists in the snail mail. I probably get 4-6 mailings/month. Let's do the math:
5 per month times:
$1.50 each for printing/postage, envelope stuffing, etc. (low ball) = $7.50/month times:
12 months = $90/year/household times
26,420 households (US Census 2010-2014 )= $2,377,800
Web Link

And that's just one easy thing!


36 people like this
Posted by Annette
a resident of College Terrace
on Dec 7, 2016 at 11:06 am

Annette is a registered user.

One can only hope that CC listens to Greg Schmid before he leaves office. He is smart and thoughtful and ALWAYS prepared.

Headcount is inevitably a major expense. Why isn't the City's org chart easily accessible on the City website? It once was, allowing residents to see who worked for us, who everyone reported to, etc. Now I think that information is buried in the annual report or some such place. If the City wants to claim to be transparent the org chart should be easily accessible. I suspect the practice of keeping it available ended when the administrative headcount started growing beyond what should be necessary for a city our size. And how it is that there can be a $2 million range on the deficit? Surely expenses and projections can be narrowed down better than that.


38 people like this
Posted by Tax payer
a resident of Barron Park
on Dec 7, 2016 at 11:25 am

This is the money black hole which no one seems to be addressing or trying to control yet continues to grow without commensurate growth in services:

"The costs of salaries and benefits (which make up 61 percent of the General Fund) are expected to continue their growth, fueled in part by the city's recent efforts to align local salaries with the regional marketplace."


5 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Dec 7, 2016 at 11:30 am

How do the bollards on Middlefield slow down traffic? Unless you were used to illegally driving in the bike lane to pass cars on the right at the N.Cal intersection - I don't see the issue. What am I missing?


39 people like this
Posted by Taxpayer
a resident of Barron Park
on Dec 7, 2016 at 11:34 am

Gee, what a surprise, our elected officials spending more than we have. This is all heading for an unpleasant surprise when the economy goes into another recession. So much waste, so many egos , make the council accountable, if they can't balance a budget they cannot be re-elected, very simple. Move on, find people who can.


17 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Dec 7, 2016 at 11:55 am

Crescent Park Dad asked how the bollards on Middlefield slow traffic.

They're placed at several random intersections between Embarcadero and Oregon and now prevent cars from going around gridlocked traffic to turn onto side streets on the drivers' side of the street.

They've also been placed in front of Jordan at the N. California light and prevent northbound traffic from going around cars stopped at the light waiting to turn left. Thus traffic backs up to and into Oregon Expressway.

The former is an unnecessary annoyance; the latter is annoying AND very dangerous when cars get stuck in the middle of Oregon as happens during rush hour. Since the 4-month-old "bike lane" is too dangerous to be used it also exemplifies the city's refusal to correct its own expensive mistakes and is to me a symbol of its arrogance.

We've had to deal with the unnecessary increased gridlock since August.


18 people like this
Posted by Trump for City Manager
a resident of Midtown
on Dec 7, 2016 at 12:03 pm

Get a leader in charge that knows how to run an organization/business that knows how to streamline and cut these outrageous salaries!!! We likely have the largest city general fund in California, but obviously no fiscal restraint, and it is not only salaries.........so many other areas that do not benefit the average homeowner/resident!!


34 people like this
Posted by SuperD
a resident of Community Center
on Dec 7, 2016 at 12:07 pm

How about we adapt a 'spend less' platform instead of a 'tax more and spend more than we bring in' platform? It ain't rocket science folks!


5 people like this
Posted by Robert
a resident of another community
on Dec 7, 2016 at 12:31 pm

It's a direct result of Palo Alto's extreme cost of living... but I suppose we can tell city workers to just move to Stockton, or Detroit...


16 people like this
Posted by ASHAMED
a resident of Downtown North
on Dec 7, 2016 at 12:39 pm

[Post removed.]


16 people like this
Posted by Garden Gnome
a resident of Crescent Park
on Dec 7, 2016 at 1:04 pm

I see that salaries/benefits total only 61% of the budget (interesting that the article fails to mention the actual budget). That leaves 39% of the budget to address the shortfall.

The solution is simple - cut unnecessary spending (e.g. road repair, police, fire) in order to ensure that our city workers have fully funded salaries, pensions, healthcare, etc.


27 people like this
Posted by senor blogger
a resident of Palo Verde
on Dec 7, 2016 at 1:31 pm

The City does not know how to track expenditures on any of its projects.
Hello City Manager, your staff has been working on a system to track these items for almost 4 yesrs. Show us something before you ask for more money


29 people like this
Posted by Madness
a resident of Crescent Park
on Dec 7, 2016 at 2:21 pm

All this while the city employs a chief PR officer at the cost of about 1/4 million per year to the taxpayers in salary and benefits (and more to our children when the pension bill comes due). Seems like a good place to start cutting.

Meanwhile, [portion removed] Cory Wolbach says we should get creative and find some new taxes.

This is ridiculous.


23 people like this
Posted by Mary
a resident of Old Palo Alto
on Dec 7, 2016 at 2:23 pm

It is obvious from the article that the budget - particularly on the spending side - is totally out of control. As the article details, we have rapidly increasing year-over-year revenues, but the budget is out of balance. The only rational conclusion to be drawn is that we spend too much.

As commenters here have pointed out, a lot of this is waste and a lot is trying to satisfy a non-satisfiable demand for more money from our largely unionized workforce.

That's something that only the City Council and the City Manager can address. Plainly, they haven't been doing their jobs at all. Our Council, being full of politicians have spent the last couple of years blissfully unaware of this problem while they were focusing on "more important" things like bike bridges and endless arguments about growth. (Not to suggest that these aren't important things - just that discussion of them shouldn't crowd out attention to fiscal health without which we can't do much of anything else that is politically popular.)

So did the City Council just ignore our budget problems hoping that no one would notice? Or did the City Manager - either through deviousness or incompetence - keep the matter hidden?

Had we known of this a month or so ago, it could have been discussed as part of the CC election campaign. But we didn't so now we are in this place (analogous to the School spending situation - ignored by the people who were supposed to be watchdogs over our money while special spending interest actors made out like bandits.)

If we are in this financially precarious place now when the economy is booming, what will happen when - inevitably - the economy and City revenues decline?


34 people like this
Posted by barron parker
a resident of Barron Park
on Dec 7, 2016 at 2:34 pm

Why is anyone surprised? We've been spending far beyond our means for 20 years, since the reign of Frank Benest. We promise huge retirement pensions for all city employees 50 years in the future, and the ones retiring now are already helping break the budget.

If we're running a deficit now, and unable to do basic infrastructure maintenance, just think of what will happen in the near future when the area goes into the next recession, CALPERS loses billions, and we (and every other city in California) have to make up the pension deficit immediately. That will be ugly.

But nothing like what will happen in the decades to come, when our kids and grandkids won't have the money to pay for the ridiculous pensions (at 81% and 90% of final salary, for life) that we've promised. The problem is us, folks -- we've taken services that we have never paid for, and them chickens will come home to roost.


13 people like this
Posted by Stew Pid
a resident of Community Center
on Dec 7, 2016 at 2:44 pm

Take a zero off the end of the budget number. What would we cut? What would we keep? Other than the rich pensions owed after a mere 10 years of service?

What a circus!


19 people like this
Posted by Stew Pid
a resident of Community Center
on Dec 7, 2016 at 2:51 pm

The solution is eminently simple -- if elected officials have the stones to implement it.

Lay off the staff who do "real work" and outsource their jobs to private companies via a competitive bidding process that encourages efficiency and uses defined contribution retirement plans instead of generous defined benefit plans with expensive healthcare.

Keep a small number of sharp managers who can effectively supervise, monitor and negotiate with the hired contractors.

That should reduce salary and benefit expenses by at least 25%.

So, City Council, got the stones?


33 people like this
Posted by resident
a resident of Midtown
on Dec 7, 2016 at 3:25 pm

In 2009, the general fund budget was around $140 million. This year it is $193 million. The budget is around 33% larger than 7 years ago.

What did the extra $53 million per year provide the residents of Palo Alto?

The police department staffing is less than what it was, services like street sweeping were moved to being billed on the utility bill rather than being paid for out of the general fund.

We did get a Chief PR Hack, a Chief Green Hack, a 2nd Assistant City Manager, a remodeled city hall lobby, a design competition to build a bike bridge over Highway 101 (in which the design was too expensive to build) and the list goes on & on.


2 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Dec 7, 2016 at 3:32 pm

38 year resident is a registered user.

[Post removed.]


24 people like this
Posted by Abitarian
a resident of Downtown North
on Dec 7, 2016 at 4:24 pm

Of course, I agree with Mr. Schmid that businesses should pay their fair share to fix the problems they create.

And yes, I agree with Ms. Holman that the city certainly should be collecting fees from violators of our city codes.

But these are just words. In reality, city leaders applaud businesses that make small contributions to an unproven Traffic Demand Management (TDM) program. The same officials don't even bother to staff the code enforcement department.

Palo Alto, one of most wealthy cities in one the most robust economies, has suffered from years of mismanagement led by City Manager Jim Keene.

Despite this dismal performance, City Council has rewarded Mr. Keene and his deputies with generous salary increases and additional top level hires.

There has been no accountablility by our elected and appointed leaders. No one accepts responsibility for the mess which has been so long in the making.

We can only hope the new City Council will be willing and able to select and control a competent replacement for Mr. Keene.


Like this comment
Posted by 38 year resident
a resident of Old Palo Alto
on Dec 7, 2016 at 4:28 pm

38 year resident is a registered user.

[Post removed.]


8 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Dec 7, 2016 at 4:32 pm

38 year resident is a registered user.

@ Abitarian... it started with Frank Benest.


41 people like this
Posted by Enough!
a resident of Old Palo Alto
on Dec 7, 2016 at 4:35 pm

Pensions, pensions, pensions. There bleeding cities to death. Time to stop paying employees 90 percent of their yearly salaries 20+ years after they have retired!


8 people like this
Posted by resident
a resident of Charleston Meadows
on Dec 7, 2016 at 5:56 pm

It is time to see the city budget posted so that we can understand what the city is paying for. Many times I see notifications about some "consultant" who has been hired for some "feel good" effort then we never see any update on the results of the feel good project. If no result then why are we paying for what ever it is. Hire the right people to do a job and let them do the job. The city needs to get down to the basics and learn how to do those basic functions well. We do not need to get sucked into the political hot topic of the day and throw money at it.


14 people like this
Posted by Resident 2
a resident of Barron Park
on Dec 7, 2016 at 6:01 pm

Pala Alto can start by not giving away fire equipment to Mexico for pennies on the dollar.


2 people like this
Posted by musical
a resident of Palo Verde
on Dec 7, 2016 at 7:27 pm

Links to the City budget appear on the City budget webpage -- Web Link

FY 2017 Adopted Operating Budget, 10 megabytes, 530 pages
FY 2017 Adopted Capital Budget, 16 megabytes, 766 pages

Not an easy read. Looks like around $642 million.


Like this comment
Posted by Curmudgeon
a resident of Downtown North
on Dec 7, 2016 at 9:42 pm

Geez, do you suppose we could cut the deficit if we actually reduced our carbon emissions instead of paying professional scapegoats to shoulder our guilt? Hmm?


8 people like this
Posted by stretch
a resident of another community
on Dec 7, 2016 at 10:09 pm

I retired after 25 years with 42% of my salary. Where the heck do you all get this 90% for life baloney? After ten years? Hahahahahahahahahahahaha! Get your facts straight, please.


14 people like this
Posted by huh?
a resident of another community
on Dec 7, 2016 at 10:36 pm


This has got to be a joke, Has anyone been to Downtown Palo Alto lately, It is the most vibrant city in the Bay Area w/ the most expensive homes producing property taxes, in the best economy in the last 3 decades producing sales taxes, next to the most well funded University in the country,

Someone has their hand in the cookie jar,

or too many non tax producing office spaces, pushed by a questionable building policy.

You might want to look at Menlo Park, w/ expensive homes, but none of the rest.


15 people like this
Posted by Bob gleason
a resident of Old Palo Alto
on Dec 8, 2016 at 7:49 am

Typical government response, Ok, let's find easy of generating more money. What the heck happened to why is this a surprise, who is responsible and where can we reduce cost. You watch, not only will there be no one reprimanded or fired but come review time will still get a raise...


9 people like this
Posted by Cal
a resident of Barron Park
on Dec 8, 2016 at 10:41 am

This is a smoke screen. Using the employees as a scapegoat. Nothing like talking about wages and pensions to get people's blood going. Wages and pensions are predictable and can be forcast very accurately. Human actions can not. One can easily pin this on one group. As we all know the reality is not that simple.


23 people like this
Posted by Gus
a resident of College Terrace
on Dec 8, 2016 at 10:45 am

My fried used to work for the city of Palo Alto. She would tell me that the office was empty half the time because employees don't show up because they think they can't be fired. The administration is draining the budget. And everything "Online Name" mentioned +1 to that. Air BNB your homes, the city or government does not care about you. Take care of your families and get money and screw everyone you don't love. One Love! lol


5 people like this
Posted by resident
a resident of Charleston Meadows
on Dec 8, 2016 at 11:18 am

Agree with above note on non-profits and foundations. For some reason non-profits are riding a wave of popularity but reality is they are avoiding taxes. One of the more famous political governor want-to-bees recently bought a huge amount of property in the Pescadero area with the result that they will not pay taxes which support the school system there. The newspapers often identify an organization as a non-profit as though that is a badge of honor but the proliferation of non-profits is a tax dodge. The tax base generated by the R-1 residential tax payer is what is supporting the school system and other vital services for the city and county. Be very careful of any candidate or city representative that is promoting acquisitions which do not support the tax base for the schools.


1 person likes this
Posted by Crescent Park Dad
a resident of Crescent Park
on Dec 8, 2016 at 11:23 am

sorry for the off-topic side discussion. It's illegal to enter a bike lane unless you are at a corner and turning right. So while it may be inconvenient for northbound traffic on Middlefield @ California --- you are not supposed to enter the bike lane to pass on the right.

I can see how it is a problem at the corner with N. California --- but generally traffic flows there and making a right turn doesn't inhibit flow unless someone is in the cross-walk.

Please stay out of the bike lanes except when turning right at corners!!! It's unsafe and it's a traffic violation.


7 people like this
Posted by 38 year resident
a resident of Old Palo Alto
on Dec 8, 2016 at 11:37 am

38 year resident is a registered user.

@ Crescent Park Dad....traffic no longer flows there. Northbound Middlefield Road is often backed up to Oregon several times a day. Turning left onto northbound Middlefield from N. California Avenue and then right onto N. Califiornia Ave. is like driving an obstacle course, even when deliberately careful. This is poor planning at it's best, perpetrated by the city's obsession with making Palo Alto a bike first commute culture.


14 people like this
Posted by court injunction
a resident of Another Palo Alto neighborhood
on Dec 8, 2016 at 1:20 pm

The streets are becoming more dangerous everyday
for drivers,bicyclists,pedestrians by an out of
control staff pursuing it's own agenda jeopardizing
public safety,degrading neighborhoods,and impeding traffic flow. The citizens need to obtain a court injunction immediately against the City Transportation staff to stop it.


11 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Dec 8, 2016 at 2:26 pm

@Crescent Park Dad -- Just to be perfectly clear, the area in front of Jordan is NOT now nor has it ever been a bike lane. The area in front of Jordan and on N. Cal Ave is just a row of plastic pipes.

It has NEVER been used as a bike lane because The school decided it was too dangerous, which they'd told the city before they wasted OUR money.

This supported what the 70 Middlefield-area residents told Mr. Mello when he tried to sneak through a plan to turn Middlefield into a bike lane. Fortunately, an alert resident heard about the plans and went door-to-door telling us about the meeting. 70 of us showed up and resoundingly killed the plan for the whole street.

[Portion removed.]


62 people like this
Posted by Marrol
a resident of Embarcadero Oaks/Leland
on Dec 8, 2016 at 2:34 pm

You knew a budget deficit would eventually roll back around. The persistent question is whether or not our city leaders and elected officials have planned for this inevitable development, set good financial priorities, and managed spending wisely.

I maintain that our city leaders continue to ignore vital infrastructure needs. They choose to spend on too many feel-good projects, niche activities, and buckling under to special interest groups. The priorities in spending must reflect common sense and logic.

For example, why does the city continue to fund an animal services department that is not self-sustainable. It has and will continue to cost taxpayers millions and lose money. Of course we shouldn't abandon providing animal services to our residents, but let's outsource it to the countywide organization. There's a reason other neighboring cities opted out of Palo Alto's animal services. It's too expensive to be a part of and certainly too expensive to manage. Outsourcing would save the city millions, especially when we won't have to cover the added employee costs of salary, benefits, and retirement. Again, I realize that it's nice to have ownership and control of these type of services, however, it's a luxury that we simply cannot afford.

Another example is the proposed bike bridge over 101. Another niche project that is slated to cost taxpayers several million dollars. If we have a deficit this type of vanity project should be among the first to be scrapped. For the relative number of people who need to traverse over 101 on a bicycle, they can use the tunnel when weather permits, and/or the existing freeway crossing that is centrally located on the east end of Oregon Expressway. It's functional enough and most importantly it's completely paid for. I realize it's not optimum for cyclists. I get it. But considering the pending budget deficit and greater good, I don't think it's too much to ask cyclists to take the extra five minutes and walk their bikes across if they have to. It would save millions so to me that's an easy one.


Posted by Fire the Guy
a resident of Old Palo Alto

on Dec 8, 2016 at 2:56 pm


Remember me?
Forgot Password?
Due to violations of our Terms of Use, comments from this poster are only visible to registered users who are logged in. Use the links at the top of the page to Register or Login.


17 people like this
Posted by Grrr
a resident of Professorville
on Dec 8, 2016 at 3:28 pm

Why don't we have a person who specifically manages the budget and finances for the city? We did up until the mid-nineties.

Keane and his two assistants are obviously not up to the task, no matter how overpaid they are!


9 people like this
Posted by Kenneth
a resident of Midtown
on Dec 8, 2016 at 3:58 pm

Endless 'good causes' that accrete to real money. How long have we been talking about a new public safety building, yet we instead get a thrill up our leg about a bicycle bridge over HWY 101? Putting money into saving a trailer camp, when the owner wants to move on? Useless security guards on the railroad tracks? Anaerobic digestion plants and endless 'new' ideas to save the planet? Save the old post office? Mental health support fiascos? And much, much more.

A sobering question: What is our unfunded mandate to CalPers? Very few want to talk about that one.

I have watched this thing develop for many years in Palo Alto. We no longer have tough leaders. We can only blame ourselves, because we want what we want NOW! A truly conservative city council would face a recall election very quickly.


15 people like this
Posted by Velcro Hands
a resident of Barron Park
on Dec 8, 2016 at 4:25 pm

Velcro Hands is a registered user.

Why have our local taxes gone up faster than both inflation or our GDP and with little to show for it?

Just wait until the city buys Buena Vista for $65M+ and turns it into a city owned BMR housing project. If it turns out like other examples in New York, Chicago and LA that will do wonders to our finances.


25 people like this
Posted by Online name is right
a resident of Old Palo Alto
on Dec 8, 2016 at 5:44 pm

Online name up above started a good list.
Another person added
> We did get a Chief PR Hack, a Chief Green Hack, a 2nd Assistant City Manager, a remodeled city hall lobby <

City Hall lobby cost 4.5 MILLION DOLLARS. And goofy art works in it. And silly signs in front of the building. Unneeded new carpets and unneeded new upholstery.
But NO improvement in the sound system.

And several PR staff.
And padded reports. Just wait for the 2015 Citizens Survey it usually comes out in January. You need hip boots to get through the PR mush in the bloated, expensive report, designed to make it hard to find what the people actually said.

Oops, sorry, no money for Code Enforcement. No money for traffic enforcement.
Where is the Grand Jury when we need them?


Like this comment
Posted by Member
a resident of another community
on Dec 9, 2016 at 11:41 am

Sue Allen, you can take responsibility for reducing at least some of the mail sent by the City by opting in to receiving Utilities bills online. Many folks do and it saves money, resources and energy.


8 people like this
Posted by PA Resident
a resident of Midtown
on Dec 9, 2016 at 3:49 pm

So why is it that the council will be voting a RAISE for city administrators at the next meeting? If it passes, the city manager and city attorney will each make rake in more than $300,000/year while we are stuck with a huge deficit. Shameful.


7 people like this
Posted by Neal
a resident of Community Center
on Dec 9, 2016 at 4:08 pm

Let's increase tax revenue by allowing recreational pot sales? Oops, I forgot, we have to save the children and keep the sky from falling.


4 people like this
Posted by Patrick Burt
a resident of Community Center
on Dec 9, 2016 at 4:13 pm

Patrick Burt is a registered user.

Unfortunately, the discussion of the 2017-18 fiscal year budget has been framed as if there is anticipated to be an anticipated deficit. That is not the case. Actually, the city manager has provided the council with a preview of alternatives to achieve a balanced budget for the coming fiscal year. A similar discussion occurred last year. By the time the budget was adopted there was a modest surplus rather than the shortfall that was initially discussed.
In addition, the staff report did not explain that a major part of the budget for this year and recent years is comprised of record dollars being invested in infrastructure maintenance and construction. For the past five years the city has achieved a very large reduction in the backlog of infrastructure needs that had received inadequate investment over three decades or more. Without that important increase in capital expenditures, the city would show a large surplus. In addition, the city does not typically end up spending all of the allocated capital improvement dollars which contributes to a rollover of those dollars to the following year even though they show up as projected expenses at the time the budget is adopted each June.
The staff reports and budgets (and summaries) for past years and the current year are available on the city website.


10 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Dec 9, 2016 at 5:24 pm

Just a question. Where's the money from the daily fine for Edgewood Plaza's lack of grocery store going?

This fine has to be an unexpected windfall for our CC.

Or is this lost in the accounting procedure somewhere?


9 people like this
Posted by court injunction
a resident of Another Palo Alto neighborhood
on Dec 9, 2016 at 9:23 pm

The first step in solving a problem is to recognize that there is a problem.


11 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Dec 9, 2016 at 10:23 pm

Mayor, Burt -- Thanks for responding. A few questions:

1) It was reported a few years ago that a $3 million contract had been awarded to fix the traffic light timing. Has that work been completed and in which year's budget does that fall under? I ask because the light timing is still problematic.

2) I know you were at the Middlefield Road meeting about a year ago Mr. Mello presented his bike plans that were so resoundingly dismissed.

My questions:

What does it take to get the mess in front of Jordan cleaned up? It's been an unused hazard for 4 months. Mr. Mello has left it to the poor police dept to deal with the complaints. They must have bettter things to do!

How much did all this cost and what will it take to get the plastic posts and bollards removed? It's very dangerous.


2 people like this
Posted by resident
a resident of Charleston Meadows
on Dec 10, 2016 at 9:49 am

Concerning tax revenue from pot sales what the newspapers do not tell you is that the requirement to provide over-site and the hiring of people to oversee the project ends up costing more than the tax revenue realized. So we add more people to the city budget that get pensions. Oh Yeah - I think that whole problem needs to be addressed correctly. On the great profit and loss statement there is no great bargain - only more costly overhead. And we do not have the ability to increase the police force to help monitor this so this is leading to an out-of-control situation.


10 people like this
Posted by Eric
a resident of Downtown North
on Dec 10, 2016 at 9:08 pm

Defined benefit pensions have by and large become excesses of a bygone era. Even the Federal Govt reduced their version of the 2% pension in the early 80's to a 1% plan, and Trump may try to eliminate that. Why are tax payers still on the hook for what are now considered overly generous 2% pensions in state and local governments?

This news is sadly no surprise, and reflects the lack of budget forecasting skills at City Hall.


6 people like this
Posted by Be Positive
a resident of Leland Manor/Garland Drive
on Dec 12, 2016 at 12:53 pm

Be Positive is a registered user.

To add to Online Names comments - I live near Middlefield and regularly walk and drive there. In the months since the goofy poles were installed on Middlefield, I have seen one family using the bike lanes. Everyone else I have seen biking down Middlefield STILL uses the sidewalks, often going the wrong way.


2 people like this
Posted by Confused resident
a resident of Charleston Meadows
on Dec 12, 2016 at 4:31 pm

Two articles on Palo Alto Online currently:

"Raises on the way for Palo Alto's top staff" ---this one indicates that PA has lots of money, at least not in a budget deficit.... A good news for Palo Alto

"Palo Alto braces for budget deficit" ---this one said that PA is short of money.

Now, which one should a regular resident believe??? Is the City out of money but still raise the salary of "TOP" staff??? If so, awful and speechless :-(


10 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Dec 12, 2016 at 5:16 pm

This budget deficit is a mere pittance compared to our unfunded pension liabilities which rose 14.8% in ONE year to $43,700,000 to a total of $338,000,000.

$43,700,000 is more than our sales tax revenue ($31.8 million) or property tax revenue ($39.1 million) but only 31% of what will be needed next year to pay retired city employees!

Ludicrous!


Like this comment
Posted by Local Resident
a resident of Community Center
on Dec 13, 2016 at 9:57 am

Most of the comments miss the point. The budget deficit is largely attributable to a decision to prepay retire Medical. That's a discretionary choice, not a requirement. Only recently has the comprehensive annual financial report shown retiree medical as a liability. There is a technical reason for this (GASB) which takes long to explain. As a result, decades of so-called retiree medical liabilities show up in the report when they did not do so previously.


2 people like this
Posted by resident
a resident of Charleston Meadows
on Dec 13, 2016 at 11:18 am

As we transition into the new year and new council members we should also consider more transparency on any new projects, how projects are funded, and what the end result of the project is suppose to be. Also the schedule and dead line for the results. Politically inspired actions of late are a time waster and money waster. People can do that on their own time - but the city needs to clean up their processes and work to eliminate useless actions to satisfy a small percentage of the politically motivated population. Please lets streamline our city processes so all of the loose strings are collected and tied up.


Like this comment
Posted by Local Resident
a resident of Crescent Park
on Dec 13, 2016 at 11:23 am

This is a follow-up to my last email. Don't believe the projected budget deficits are real. They are nothing more than a wish list. Check out the City's comprehensive annual financial report for last year. You can find it on the city's web site. The City's revenues last year increased by $8.3 million with the expenditures increasing by $6.4 million, all on approved balanced budget for the 2016 fiscal year. The City unrestricted general fund balance (assigned and unassigned) ended at $59.8 million or an extremely high 33.3% of total fund expenditures. Bottom line? The City of Palo Alto is very healthy in its general fund. The City is also extraordinarily healthy in its enterprise funds. The comprehensive annual financial report is not hard to read. Check it out.


6 people like this
Posted by Give him a raise
a resident of Community Center
on Dec 14, 2016 at 9:51 am

Unfunded liabilities? Planned deficit?
Give the manager a raise! And give his paid (bribed?) staff a raise!

No problem. He won't have to deal with the consequences. We will.


Like this comment
Posted by Kenneth
a resident of Midtown
on Dec 23, 2016 at 3:08 pm

Is there a line item in the budget that explains how much we do (and will) owe CalPers for the shortfalls that it has(and will continue to have)? If so, please direct me to that line item. Thanks in advance.


Like this comment
Posted by musical
a resident of Palo Verde
on Dec 23, 2016 at 11:23 pm

@Kenneth, I think that number is a moving target, since CalPers keeps overestimating their return on investment. They recently made a small adjustment towards reality, reducing forward annual expectations from 7.5 percent downwards to 7.0 percent -- Web Link -- a quote from that press release: "Additionally, many CalPERS employers will see a 30 to 40 percent increase in their current unfunded accrued liability payments."

Philip Morris would have helped them out.


Like this comment
Posted by Kenneth
a resident of Midtown
on Dec 25, 2016 at 8:35 am

@ musical: Thanks, but what I really want to know is how much, on average, should CPA be budgeting for CalPers underfunding. I understand that the real number will vary year to year. But what is the average line item assigned to cover the shortage? Beyond the actual number, I would like to have the underlying assumptions provided by CPA.


2 people like this
Posted by Paly Grad
a resident of Leland Manor/Garland Drive
on Dec 25, 2016 at 12:31 pm

The city should reconsider the proposed and very expensive $13 million dollar bicycyle bridge over highway 101.

The 2,460 feet- long Belmont Pedestrian/Bike Bridge over U.S. 101 at Ralston Avenue opened in November 2011. The total cost of the construction was $7.9 million, with $0.6 million coming from Measure A, and the remainder mostly from federal funds.

Here is an article about that award winning bridge: Web Link


Like this comment
Posted by Paly Grad
a resident of Leland Manor/Garland Drive
on Dec 25, 2016 at 12:34 pm

This is the correct web link with a photo of the Ralston / 101 bicycle and pedestrian bridge: Web Link


Like this comment
Posted by musical
a resident of Palo Verde
on Dec 25, 2016 at 4:29 pm

@Paly Grad, does Belmont enforce that 5 mph speed limit indicated in the photo?

I believe Palo Alto was trying to design for 20 mph.

Caltrans' design manual says "The minimum design speed for bike paths shall be 40 km/h" (25 mph).


Sorry, but further commenting on this topic has been closed.

El Camino: Another scheme to increase congestion?
By Douglas Moran | 10 comments | 1,654 views

Post-election reflections -- and sponges
By Diana Diamond | 13 comments | 1,614 views

Couples: Philosophy of Love
By Chandrama Anderson | 0 comments | 1,269 views

Trials of My Grandmother
By Aldis Petriceks | 1 comment | 792 views