Paid parking on downtown streets, higher salaries at City Hall and a video system that will partially replace human guards along the Caltrain tracks are among changes that are included in City Manager James Keene's proposed budget for the coming year.
The budget plan, which the City Council's Finance Committee will begin reviewing this week, generally reflects the city's persistently sunny economic climate. It contains no major program cuts, few significant new initiatives and relatively modest staffing (it proposes adding 3.85 full-time equivalent positions, raising staffing to 1,058 positions).
It would also raise expenditures in the city's General Fund (which pays for most city services, not counting utilities) by 8.2 percent, from $194.2 million in the current year to $210 million in fiscal year 2018, which begins on July 1. When utilities are accounted for, the proposed budget represents $661.8 million in expenditures, an increase of 3.1 percent from $641.8 million this year.
The biggest factor behind the increase is the city's growing expenditures continues to be salaries and benefits, which comprise about 60 percent of the budget. The city had spent $157.5 million on salaries and benefits in 2015 and $164.2 million in 2016. The current budget includes $188 million for salaries and benefits. Keene's proposed 2018 budget would raise that figure to $200.5 million.
The budget also reflects the council's aggressive push to repair and build infrastructure. It calls for transferring $29.6 million from the General Fund to support the city's $196-million infrastructure plan, which includes among its components a new public-safety building, two garages, a bike bridge over U.S. Highway 101 and two rebuilt fire stations.
In discussing the budget last December, Keene told the council's Finance Committee that when it comes to infrastructure, "time is money." First, the city has infrastructure money to spend, thanks in part to voters' approval in 2014 of a new hotel tax to pay for the projects on the list. Second, construction costs are continuing to rise, putting further pressure on the city to lock in contracts as soon as possible.
"To accelerate the Palo Alto process on some of these capital projects would be important," Keene told the council.
Citywide, the budget calls for spending $139 million on capital improvements, a figure that is somewhat below the current year's budgeted amount of $188 million, but far above the $62.4 million and the $51.8 million that the city had spent in 2015 and 2016, respectively.
In addition to moving ahead with the design work on the new garages, Keene is proposing to raise the cost of parking permits for existing parking facilities. The budget calls for raising parking-permit revenues between 25 percent and 75 percent by increasing the price of parking permits and using these revenues to implement a "comprehensive parking management plan." The funds would be used to streamline the city's permit system, install parking meters and other paid-parking technology and support transportation initiatives that steer drivers to other modes of transportation.
In presenting the new budget, Keene wrote in his transmittal letter that the document "reflects a strong local economy that has led to stable revenues which support the wide array of programs and initiatives" that the city provides to its residents. It would maintain competitive wages for employees and a high level of services for the community, while providing funding for top council priorities, he wrote.
To pay for the rising expenditures, the budget relies on a combination of rising tax revenues (the budget projects a growth of 8 percent, or about $9.7 million, in major tax revenue receipts) and a $3.2 million withdrawal from the city's budget-stabilization reserve. The one-time withdrawal, Keene wrote, would still leave the reserve with $39.1 million, just above the council's threshold of having at least 18.5 percent of the budget in the reserve.
The proposal also "permanently addresses" the funding gap of more than $4 million that the Administrative Services Department staff had projected last December, Keene wrote. The gap was caused in large part by the increase cost of hiring track watch guards, assuming the costs of traffic signals and potential changes in the city's agreement with Stanford University over fire services.
To reduce the cost of the Track Watch program, which the city launched in response to several teen fatalities on the Caltrain tracks, Keene is banking on a new technology -- a $300,000 "video management system" to monitor the rail corridor.
By modifying the current Track Watch staffing, which currently calls for around-the-clock guard service, the city can save $450,000.
"The implementation of the video management system is intended to replace current guard services while allowing for continuous monitoring of persons and objects down the corridor, along the right of way and at intersections," the budget states.
The budget notes that the city has also taken other actions to limit access to the tracks, raise fencing and improve visibility along the rail line.
The release of Keene's budget kicks off a month-and-a-half long review process by the Finance Committee, which will meet on Tuesday to hear an overview. The full council is scheduled to adopt the budget in mid-June.