Palo Alto would reduce police and fire staffing, close a library branch, pare down its recreation classes and cut more than 100 positions under a new proposal from City Manager Ed Shikada, which aims to reduce expenses by more than $40 million.
The budget plan, which the city released late Thursday, responds to the City Council's direction to assume a shortfall of $38.8 million in fiscal year 2021, which begins on July 1. The proposed budget cuts offer a first look of what a "new normal" will look like in Palo Alto, where the COVID-19 pandemic has decimated key revenue sources, including sales- and hotel-tax receipts. Even with recent efforts in California and elsewhere to start reopening parts of the economy, the city budget assumes a long and painful recovery stretching well into next year.
The council will discuss the proposed budget cuts over three meetings, which be held on May 11, May 12 and May 13. It is scheduled to adopt the budget on June 22.
"We recognize that times are unprecedented, and the details contained in this staff report are tough choices that we would prefer not to be outlining," Shikada's report states.
He noted that the budget includes "creative strategies" in staffing models and provision of services, but acknowledged that service impacts are unavoidable, given that 60% of the general fund expenses pertain to services. The cuts represent a nearly 20% reduction in expenses to the general fund, which would go down from $241.5 million in the prior, pre-pandemic proposal to $195.4 million in the current one, according to Shikada's report.
The actions in the report, he said, would result in a reduction of 91 full-time positions and more than 33 part-time positions.
If accepted by the council, the cuts would represent by far the biggest contraction in city services in recent history. Popular community programs would take a major hit, with the College Terrace Library and the Baylands Interpretive Center shuttering entirely and the Children's Theatre offering no productions. Hours at the Children's and Rinconada libraries and at the Palo Alto Art Center would be reduced and the Junior Museum and Zoo would charge $18 for entry under a new cost-recovery model.
The Police Department would see across-the-board cuts, with reductions in detective services, patrol and public outreach. The traffic team, which the city reintroduced in 2018 based on popular demand, would be eliminated and there would be reduced funding for Animal Control, which would no longer offer overnight services. The city also plans to shift the cost of one school resource officer to the school district.
The Fire Department would see reductions in fire inspections and support services, as well as "brownouts" during periods when firefighters are on leave and staffing levels are reduced. This would be a shift from the current model, when units are staffed with overtime.
"Response times and ability to handle concurrent calls will be reduced evenings and weekends, resulting in some calls being handled by the County mutual aid partners," Shikada's budget proposal states.
This change, like many others in the budget, would require renegotiations with labor unions. When it comes to changes in fire staffing, the city would also need to renegotiate with Stanford University, which also is served by the Palo Alto Fire Department.
The budget proposal slashes funding for the maintenance of city parks and facilities by 50%. This would effectively eliminate preventative maintenance and focus resources exclusively on safety-related concerns, according to the budget. It would also trim more than $2 million from the Planning and Development Services Department, resulting in cutting staffing in long-range and current planning, a reduction in code-enforcement services and longer wait times for building inspections and fire inspections.
The budget reflects the council's May 4 directive to Shikada, who had initially proposed a scenario that reflects a reduction of about $20 million. The council decided that the most realistic scenario is one that staff had framed as the most dire option on the table, which assumes a $38.8 million reduction. While Councilman Eric Filseth called the prospect of making these kinds of cuts "appalling" and Mayor Adrian Fine called the numbers "pretty brutal," the council unanimously agreed that the economy is unlikely to return to normal, even if the public health officials allow more businesses to start reopening.
Councilman Greg Tanaka suggested that the loss can be even greater and called the projection of $38.8 million in lost revenues "optimistic."
"While we may wish for better numbers, we can't plan for a wish," Tanaka said. "We have to be realistic."
Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.