News

New projects, rising salaries fuel budget growth

City Manager James Keene's proposed budget would increase General Fund by 8.2 percent

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.

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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.

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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.

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New projects, rising salaries fuel budget growth

City Manager James Keene's proposed budget would increase General Fund by 8.2 percent

by / Palo Alto Weekly

Uploaded: Thu, Apr 27, 2017, 8:51 am

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.

Comments

Annette
Registered user
College Terrace
on Apr 27, 2017 at 11:00 am
Annette, College Terrace
Registered user
on Apr 27, 2017 at 11:00 am
11 people like this

Investing in the Track Watch app sounds like a good idea, but I am not sure about eliminating the guards. Does Track Watch signal trains to stop? My consciousness on this was raised just last week when I found myself in a conversation with a parent who, during a volatile time in her teen's life, was grateful for the presence of the guards and would personally thank them. There isn't an app for everything; sometimes we need real people.


concerned
Barron Park
on Apr 27, 2017 at 11:21 am
concerned, Barron Park
on Apr 27, 2017 at 11:21 am
10 people like this

Don't they realize that there is an economic crisis coming and their demands for higher salaries and more employees are unreasonable?

When I walked by the track watch, there was no one to be seen except for possibly an unseen person in a car


38 year resident
Old Palo Alto
on Apr 27, 2017 at 11:26 am
38 year resident, Old Palo Alto
on Apr 27, 2017 at 11:26 am
Like this comment

@ concerned...Economic crisis coming? What are you talking about and where did you get that information? Please be specific.


Beltway Bandits
Greenmeadow
on Apr 27, 2017 at 11:55 am
Beltway Bandits, Greenmeadow
on Apr 27, 2017 at 11:55 am
33 people like this

Enough already with the increased spending while our quality of life declines as they turn PA into an office park and Palantir HQ to find excuses to charge us for parking, parking permits, to pay commuters to over-run us, etc. etc.

When was the last time YOU got am 8.5% raise? An 8.5% annual Social Security increase per year? Per DECADE?

I'm tired of them dreaming up new ways to charge us! Not every employee needs the maximum raises and benefits. I'm tired of the constant utility increases. I'm tired of seeing our quality of life decline to fuel all this blind ambition.

What's next? A $2M expenditure for Tanaka's drones? Another $4.5M "wayfinding" system?


[email protected]
Registered user
Another Palo Alto neighborhood
on Apr 27, 2017 at 12:19 pm
[email protected], Another Palo Alto neighborhood
Registered user
on Apr 27, 2017 at 12:19 pm
8 people like this

So 43 million in increased salaries and benefits over 3 years? Have you fixed the problem of affordable housing for all the people that commute daily to their jobs in Palo Alto to provide services to everyone that lives here? It seems that that would be the American thing to do. Don't worry you don't have to build them in the good neighborhoods, they'd be happy just to have them in any neighborhood!


Barron Parker
Barron Park
on Apr 27, 2017 at 2:05 pm
Barron Parker, Barron Park
on Apr 27, 2017 at 2:05 pm
25 people like this

Just digging deeper into that hole.

Salaries, benefits, unfunded liability from CALPers pensions -- this has been out of control for a decade.

And look what Keene has done with salaries and benefits in just the last 3 years alone:
2015: $157 M
2016: 162 M
2017: 188 M
2018: 200 M

And this is happening in an era of 2% inflation, with essentially no increase in the number of city workers. Just more money that we don't have down the rat-hole, and more pension promises that others will be paying for the next 60 years.


Gordon Gecko
Barron Park
on Apr 28, 2017 at 10:21 am
Gordon Gecko, Barron Park
on Apr 28, 2017 at 10:21 am
8 people like this

Maybe they wouldn't need to keep increasing rates for everything if they took a stab at controlling develppers and Palantir and its growth that WE pay for.

Charging them a mere $61,000 for taking away our park for more than a week while flooding our streets with 1500 is an absurdly low price. Plus it's illegal for a corporation to rent public property so fire the people who approved the Cubberly deal and save US some money for a change.


Marc Vincenti
Gunn High School
on Apr 28, 2017 at 4:50 pm
Marc Vincenti, Gunn High School
on Apr 28, 2017 at 4:50 pm
2 people like this

Wow.

In one of the richest communities in the nation, with one of the worst records on teen suicide in the nation, we are simultaneously moving to cut psychological counseling costs in our high schools, at the expense of deeper, longterm treatment relationships, and to cut the safety costs along our railroad tracks at the possible expense of saying goodbye to another young life.

Please tell me: why does this not add up to a horrible miserliness mixed with a horrible lack of compassion mixed with a horrible lack of good sense?

There's a difference between using electronic monitoring to prevent crime, say, and using it to stop young people from ending their lives.

Hour after hour, and in the middle of the night with no human in sight, is a would-be suicide as discouraged by the obscure presence of a machine as by the presence of a human being?

Can these monitoring machines chat with the kids day after day, as they go back and forth to school across the rails, forming at least a semblance (or more) of the kind of human connection that may help re-direct a teen's actions in a moment of despair?

Can a machine make an anguished plea to "Stop!" to a child running toward the tracks, as a human being can?

And for example, which one of us, as an ill child, was ever as reassured back to sleep by the presence of a nightlight, say, as by the warm presence of mom or dad at our bedside? People simply do not feel about insentient mechanisms as they feel about people—especially those people who are extending themselves to be extra vigilant.

I repeat: in any other community—bereft of financial resources and with no national reputation for teen self-destructiveness—these measures might make sense.

But in ours we have to ask ourselves: who are we? And what are we doing?

Marc Vincenti
Gunn English Dept. (1995-2010)
Chairman, Save the 2,008 — "creating hope for Palo Alto's high-schoolers"
Alliance website: savethe2008.com


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