News

Palo Alto prepares to tap into federal funds, reserves to avoid budget cuts

Committee recommends keeping libraries open, foregoing additional police staffing reductions

The Palo Alto City Council is expected to approve the city budget on June 21, 2021. Embarcadero Media file photo.

Bolstered by federal funds, Palo Alto's elected leaders moved this week to reverse most of the cuts to city services in City Manager Ed Shikada's proposed budget, which included library closures, a "brownout" of a fire station and the elimination of police positions.

Over a course of two marathon meetings on Tuesday and Wednesday, the City Council's Finance Committee reviewed the budget of every department before voting on Wednesday afternoon to nullify most of the program cuts that Shikada proposed in his budget, which for the second straight year included cuts to a host popular programs and critical public-safety services. These included closing the Downtown, College Terrace and Children's libraries; significantly reducing city support for the Palo Alto Art Center and the Children's Theatre; and cutting five more patrol positions in the Police Department, on top of the 11 that the city had eliminated last year.

To avoid making these cuts, the committee agreed Wednesday to tap into additional revenues from the American Rescue Plan Act, which provides about $13.7 million in stimulus funds to the city over a two-year period — up from the initial allocation of $12.5 million. While Shikada's budget proposes using only $3.2 million in fiscal year 2022, which begins on July 1, leaving an additional $3 million to the council's discretion, and saving the remainder for 2023, the committee voted for a 50-50 split in federal funds, which would allow it to tap into about $6.8 million this year.

The committee also agreed to withdraw an additional $2.5 million from the city's budget stabilization reserve to plug the budget hole in the coming year. While some council members expressed concerns that this would increase the city's future risks in the coming years, the additional withdrawal would still leave the reserve with about $35 million in funding — about 17% of the city's total expenses and well within the council's target of 15% to 20%.

Vice Mayor Pat Burt, who sits on the committee, argued that the city should go even further and restore some of the cuts that the council made last summer, when plummeting revenues from hotel- and sales tax revenues promoted the council to slash about $40 million from the city budget. He suggested using about two-thirds of the federal stimulus funds this year, though his two colleagues on the committee — Chair Alison Cormack and Eric Filseth — both favored the more conservative approach, with less reliance on federal funding and local reserves.

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Burt argued over the course of both hearings that the city has "exceptional needs" right now and that both the federal funds and the city's budget stabilization reserve were intended precisely for the types of situations that the city is currently experiencing.

"I think it's important to be looking at our long-term structural circumstances, but I think it's even more important is to not attempt to resolve those in the middle of the biggest emergency we've had in decades," Burt said at the Tuesday meeting.

Filseth countered that while the federal funds may help the city in the near term, they represent a one-time source that would not address the broader problem of city expenses rising faster than revenues. Avoiding most of the cuts, he suggested, amounts to simply "kicking the can down the road."

The committee's recommendations will go to the full council, which is set to review them on May 17 and approve the budget on June 21.

In deliberating Shikada's budget proposal, the council heard from several department heads who warned that further cuts would significantly diminish the services that residents are accustomed to. Police Chief Robert Jonsen noted in his Tuesday presentation that the department has already eliminated all of its discretionary programs and has cut back on, among other areas, public communication and specialist positions.

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The department's staffing, which included 92 in the 2020 budget, went down to 78 positions last year. The proposed budget would have brought it to 73 by eliminating five more officers from patrol. With the city's typical attrition rate of three to four officers — and a hiring freeze in place — Jonsen warned that the department could drop to about 65 in 2023, giving the city one of the highest officer-to-resident ratios in the area.

"These are impacts that are going to compromise our ability to serve this city at (the) level (residents) are accustomed to," Jonsen said.

A Palo Alto Police Department vehicle heads down Hamilton Avenue on Sept. 11, 2019. Photo by Veronica Weber.

The city's two police unions, the Palo Alto Police Management Association and the Palo Alto Police Officers Association, made the same argument in a letter to the council, noting that most other cities are retaining — and in some cases, bolstering — their police forces while Palo Alto is slashing its public safety funding.

Reduced staffing, the letter states, "results in extended police response times, or even non-response, to 'everyday' calls for service, and the likelihood of inadequate resources in the event of critical incidents." It also precludes the department from staffing detective positions and dedicated traffic enforcement teams, among other services.

"Staffing reductions also have a substantial negative impact on employee morale, retention and recruitment," states the letter from Lt. James Reifschneider, president of Palo Alto Police Management Association and Sgt. Ken Kratt, president of Palo Alto Police Officers Association. "When most Bay Area agencies are actively hiring, even officers who truly want to remain a part of the Palo Alto Police Department family are being forced to reconsider leaving for a more financially stable agency with opportunities for advancement and special assignments."

If the council adopts the Finance Committee's recommendation, the five positions that were on the chopping block for the coming year would be maintained. The city would also keep Fire Station 2 staffed on most days, though the station would continue to see "brownouts" on nights and weekends, much like it had over the past year. Shikada's budget called for keeping the station in brownout mode every day, a proposal that was strongly opposed by College Terrace residents and those who live near the foothills.

Linda Faste, a resident of Peter Coutts Circle, which is on Stanford University land, noted that the area is both heavily populated and particularly vulnerable to fire risk.

"In our new era of yearly wildfires and very dry winters, these decisions to reduce services are not only short-sighted, they are indeed a bad and potentially dangerous one," Faste wrote to the council.

College Terrace Library is one of three branches eyed for closure under City Manager Ed Shikada's budget, but the City Council's Finance Committee recommends keeping all locations open. Photo by Magali Gauthier.

Most of the public speakers at the two committee meetings were particularly alarmed about proposed cuts to community services, including libraries, arts and theater programs. Parents of children who had participated in Children's Theatre productions urged the council to maintain funding for the popular theater.

"As our economy is staring to reopen and we know the toll the pandemic has taken on our youth, now is not the time to not cut but to restore funding to these precious city gems," said Michelle Wang, whose 16-year-old daughter has been patronizing the Children's Theatre since she was 8.

Others residents took issue with the planned cuts to the Palo Alto Art Center, which would lose all city support for its exhibition programs and see a reduction in hours. Nicki Moffat maintained that going through with this proposal would be "a grievous mistake, a giant step backward and a black mark on our community."

"The Palo Alto Art Center not only puts on thoughtful, cutting edge exhibitions but is also at the forefront of engaging members of our community, adults as well as children, in finding the joy in making and appreciating art," Moffat wrote to the council. "This is an invaluable addition to our community, and to lose it would be a major loss."

The committee also began to backtrack Wednesday from its initial recommendation to institute a $18 entrance fee for the Palo Alto Junior Museum Zoo, which is set to reopen in October after three years of renovation and expansion. The proposed fee to the museum — which historically offered free admission — rankled museum advocates, including the group Friends of the Junior Museum and Zoo, which spearheaded the effort to raise $25 million in private funds for the new museum. Group members suggested that the $18 fee would deter people from visiting and cause the museum's revenues to plunge.

Lauren Angelo, co-president of Friends of the Junior Museum and Zoo, suggested at the Wednesday hearing that a $10 fee to the museum should be the "ceiling."

"Going from free to fee is a significant hurdle and there is a catastrophic downfall to setting the price of admission too high," Angelo said.

The committee's budget recommendation assumes a $10 fee. It also recommends keeping all library branches open, effectively reversing Shikada's proposal to close three branches and focusing most library services at the Mitchell Park and Rinconada libraries. While Filseth and Burt both suggested that the Children's and College Terrace libraries stay open, they were more open to the idea of temporarily shuttering the downtown branch. Cormack strongly opposed the idea of closing any branches and noted that many seniors, including residents of Channing House, use the Downtown Library.

"I expect our libraries to be fully funded at the end of the day," Cormack said.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.

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Palo Alto prepares to tap into federal funds, reserves to avoid budget cuts

Committee recommends keeping libraries open, foregoing additional police staffing reductions

by / Palo Alto Weekly

Uploaded: Thu, May 13, 2021, 9:12 am

Bolstered by federal funds, Palo Alto's elected leaders moved this week to reverse most of the cuts to city services in City Manager Ed Shikada's proposed budget, which included library closures, a "brownout" of a fire station and the elimination of police positions.

Over a course of two marathon meetings on Tuesday and Wednesday, the City Council's Finance Committee reviewed the budget of every department before voting on Wednesday afternoon to nullify most of the program cuts that Shikada proposed in his budget, which for the second straight year included cuts to a host popular programs and critical public-safety services. These included closing the Downtown, College Terrace and Children's libraries; significantly reducing city support for the Palo Alto Art Center and the Children's Theatre; and cutting five more patrol positions in the Police Department, on top of the 11 that the city had eliminated last year.

To avoid making these cuts, the committee agreed Wednesday to tap into additional revenues from the American Rescue Plan Act, which provides about $13.7 million in stimulus funds to the city over a two-year period — up from the initial allocation of $12.5 million. While Shikada's budget proposes using only $3.2 million in fiscal year 2022, which begins on July 1, leaving an additional $3 million to the council's discretion, and saving the remainder for 2023, the committee voted for a 50-50 split in federal funds, which would allow it to tap into about $6.8 million this year.

The committee also agreed to withdraw an additional $2.5 million from the city's budget stabilization reserve to plug the budget hole in the coming year. While some council members expressed concerns that this would increase the city's future risks in the coming years, the additional withdrawal would still leave the reserve with about $35 million in funding — about 17% of the city's total expenses and well within the council's target of 15% to 20%.

Vice Mayor Pat Burt, who sits on the committee, argued that the city should go even further and restore some of the cuts that the council made last summer, when plummeting revenues from hotel- and sales tax revenues promoted the council to slash about $40 million from the city budget. He suggested using about two-thirds of the federal stimulus funds this year, though his two colleagues on the committee — Chair Alison Cormack and Eric Filseth — both favored the more conservative approach, with less reliance on federal funding and local reserves.

Burt argued over the course of both hearings that the city has "exceptional needs" right now and that both the federal funds and the city's budget stabilization reserve were intended precisely for the types of situations that the city is currently experiencing.

"I think it's important to be looking at our long-term structural circumstances, but I think it's even more important is to not attempt to resolve those in the middle of the biggest emergency we've had in decades," Burt said at the Tuesday meeting.

Filseth countered that while the federal funds may help the city in the near term, they represent a one-time source that would not address the broader problem of city expenses rising faster than revenues. Avoiding most of the cuts, he suggested, amounts to simply "kicking the can down the road."

The committee's recommendations will go to the full council, which is set to review them on May 17 and approve the budget on June 21.

In deliberating Shikada's budget proposal, the council heard from several department heads who warned that further cuts would significantly diminish the services that residents are accustomed to. Police Chief Robert Jonsen noted in his Tuesday presentation that the department has already eliminated all of its discretionary programs and has cut back on, among other areas, public communication and specialist positions.

The department's staffing, which included 92 in the 2020 budget, went down to 78 positions last year. The proposed budget would have brought it to 73 by eliminating five more officers from patrol. With the city's typical attrition rate of three to four officers — and a hiring freeze in place — Jonsen warned that the department could drop to about 65 in 2023, giving the city one of the highest officer-to-resident ratios in the area.

"These are impacts that are going to compromise our ability to serve this city at (the) level (residents) are accustomed to," Jonsen said.

The city's two police unions, the Palo Alto Police Management Association and the Palo Alto Police Officers Association, made the same argument in a letter to the council, noting that most other cities are retaining — and in some cases, bolstering — their police forces while Palo Alto is slashing its public safety funding.

Reduced staffing, the letter states, "results in extended police response times, or even non-response, to 'everyday' calls for service, and the likelihood of inadequate resources in the event of critical incidents." It also precludes the department from staffing detective positions and dedicated traffic enforcement teams, among other services.

"Staffing reductions also have a substantial negative impact on employee morale, retention and recruitment," states the letter from Lt. James Reifschneider, president of Palo Alto Police Management Association and Sgt. Ken Kratt, president of Palo Alto Police Officers Association. "When most Bay Area agencies are actively hiring, even officers who truly want to remain a part of the Palo Alto Police Department family are being forced to reconsider leaving for a more financially stable agency with opportunities for advancement and special assignments."

If the council adopts the Finance Committee's recommendation, the five positions that were on the chopping block for the coming year would be maintained. The city would also keep Fire Station 2 staffed on most days, though the station would continue to see "brownouts" on nights and weekends, much like it had over the past year. Shikada's budget called for keeping the station in brownout mode every day, a proposal that was strongly opposed by College Terrace residents and those who live near the foothills.

Linda Faste, a resident of Peter Coutts Circle, which is on Stanford University land, noted that the area is both heavily populated and particularly vulnerable to fire risk.

"In our new era of yearly wildfires and very dry winters, these decisions to reduce services are not only short-sighted, they are indeed a bad and potentially dangerous one," Faste wrote to the council.

Most of the public speakers at the two committee meetings were particularly alarmed about proposed cuts to community services, including libraries, arts and theater programs. Parents of children who had participated in Children's Theatre productions urged the council to maintain funding for the popular theater.

"As our economy is staring to reopen and we know the toll the pandemic has taken on our youth, now is not the time to not cut but to restore funding to these precious city gems," said Michelle Wang, whose 16-year-old daughter has been patronizing the Children's Theatre since she was 8.

Others residents took issue with the planned cuts to the Palo Alto Art Center, which would lose all city support for its exhibition programs and see a reduction in hours. Nicki Moffat maintained that going through with this proposal would be "a grievous mistake, a giant step backward and a black mark on our community."

"The Palo Alto Art Center not only puts on thoughtful, cutting edge exhibitions but is also at the forefront of engaging members of our community, adults as well as children, in finding the joy in making and appreciating art," Moffat wrote to the council. "This is an invaluable addition to our community, and to lose it would be a major loss."

The committee also began to backtrack Wednesday from its initial recommendation to institute a $18 entrance fee for the Palo Alto Junior Museum Zoo, which is set to reopen in October after three years of renovation and expansion. The proposed fee to the museum — which historically offered free admission — rankled museum advocates, including the group Friends of the Junior Museum and Zoo, which spearheaded the effort to raise $25 million in private funds for the new museum. Group members suggested that the $18 fee would deter people from visiting and cause the museum's revenues to plunge.

Lauren Angelo, co-president of Friends of the Junior Museum and Zoo, suggested at the Wednesday hearing that a $10 fee to the museum should be the "ceiling."

"Going from free to fee is a significant hurdle and there is a catastrophic downfall to setting the price of admission too high," Angelo said.

The committee's budget recommendation assumes a $10 fee. It also recommends keeping all library branches open, effectively reversing Shikada's proposal to close three branches and focusing most library services at the Mitchell Park and Rinconada libraries. While Filseth and Burt both suggested that the Children's and College Terrace libraries stay open, they were more open to the idea of temporarily shuttering the downtown branch. Cormack strongly opposed the idea of closing any branches and noted that many seniors, including residents of Channing House, use the Downtown Library.

"I expect our libraries to be fully funded at the end of the day," Cormack said.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.

Comments

Money For Nothing
Registered user
Barron Park
on May 13, 2021 at 10:07 am
Money For Nothing, Barron Park
Registered user
on May 13, 2021 at 10:07 am

>>the council agreed Wednesday to tap into additional revenues from the American Rescue Plan Act, which provides about $13.7 million in stimulus funds to the city over a two-year period — up from the initial allocation of $12.5 million.

Might as well spend ALL of the allocated free federal money over a reasonable period of time.

That's what it's there for.

Besides, an opportunity to receive easy cash from the federal government may never come again.

Now the next step is for the administration to approve and issue another stimulus check to qualified American citizens.


Bystander
Registered user
Another Palo Alto neighborhood
on May 13, 2021 at 10:39 am
Bystander, Another Palo Alto neighborhood
Registered user
on May 13, 2021 at 10:39 am

Good.

Now bring back the shuttle. But don't make it free, implement a small fare or annual use card. This will enable our school children to use the shuttle for school and help to keep our school commutes safer for those on bikes. Without the shuttle, many will be driven to school rather than use bikes.

We definitely need some common sense implementations.


The Lawman
Registered user
Charleston Meadows
on May 13, 2021 at 10:39 am
The Lawman, Charleston Meadows
Registered user
on May 13, 2021 at 10:39 am

Palo Alto is a relatively safe community and the officers are rarely in any real danger.

In larger urban cities, the potential for crime is far more serious and police defunding possibly unwarranted.

A reduction in PAPD staffing would create no encumbrances to the citizens of Palo Alto as police services are reactive rather than preventative law enforcement measures.


Eric Nee
Registered user
University South
on May 13, 2021 at 11:23 am
Eric Nee, University South
Registered user
on May 13, 2021 at 11:23 am

Thank you Pat Burt for helping lead the efforts to tap more of the federal money and reserves this year. As you point out, that is exactly what the money is for, to help out now. Not to hold back for the next year or two.


Spend The Money
Registered user
Charleston Gardens
on May 13, 2021 at 11:50 am
Spend The Money, Charleston Gardens
Registered user
on May 13, 2021 at 11:50 am

*Besides, an opportunity to receive easy cash from the federal government may never come again.

*tap more of the federal money and reserves this year. As you point out, that is exactly what the money is for, to help out now. Not to hold back for the next year or two.

Absolutely. Spend the free federal money on whatever is needed to improve projected civic expenditures.

The Republicans along with their inane conspiracy theories (and tight-fists when it comes to the dollar sign) are no longer taken seriously by most Americans.

Let's rejuvenate America and spend all of the money that has been bequeathed upon us.

More is needed and inflation fear is not a viable concern at present.


Online Name
Registered user
Embarcadero Oaks/Leland
on May 13, 2021 at 11:55 am
Online Name, Embarcadero Oaks/Leland
Registered user
on May 13, 2021 at 11:55 am

How about the city doing some cutbacks of the $500,000+ pr staff that can't be bothered to respond to media inquiries about power outages, the VA leaks, etc. How about cutting some of the executive staff that don't understand the concept of price elasticity when assuming projected attendance at the Junior Museum/Zoo will stay constant regardless of how much the fee is?

How about cancelling some of the grandiose and COSTLY plants for FIber-to-The-Home and for the "Climate Sustainability" Program to force us into higher electrical costs, to deal with more traffic-clogging and frustrating road furniture and to push up PA's already high construction costs by forcing us to renovate houses for a pipe dream that PA can single-handedly stop climate change? By the way, USED cars are now at a huge premium so forcing us to upgrade our cars may not be something people can afford along with new appliances, new furniture etc./

By the way, if PA can't provide outage updates or otherwise respond to major problems, HOW are they going to provide customer service for Fiber-to-the-Home??

Enough with the consultant gravy train to service these 2 initiatives!


Mondoman
Registered user
Green Acres
on May 13, 2021 at 12:01 pm
Mondoman, Green Acres
Registered user
on May 13, 2021 at 12:01 pm

@The Lawman
Actually, having a robust police presence is proactive. The presence of officers in the community and the knowledge that lawbreaking will be quickly addressed serves to deter people from committing crimes here. Further reducing the count of officers is like cutting back on vaccination because there's little visible disease.


Spend The Money
Registered user
Charleston Gardens
on May 13, 2021 at 12:05 pm
Spend The Money, Charleston Gardens
Registered user
on May 13, 2021 at 12:05 pm

@Mondoman

The PAPD does not deter crime in Palo Alto. They only respond to calls after the fact...be it a burglary, assault or what not.

Now if they were actually to be seen (e.g. walking patrols) I might agree with you
but most of them are too busy either on extended coffee breaks or issuing petty speeding tickets (doing 35 in a 25).


fred
Registered user
University South
on May 13, 2021 at 12:20 pm
fred, University South
Registered user
on May 13, 2021 at 12:20 pm

The headline about libraries closing is contradicted by the article.


Gennady Sheyner
Registered user
Palo Alto Weekly staff writer
on May 13, 2021 at 12:32 pm
Gennady Sheyner, Palo Alto Weekly staff writer
Registered user
on May 13, 2021 at 12:32 pm

@fred. Thank you for pointing that out and sorry for the error. While the budget recommended keeping libraries closed, the committee voted to recommend keeping them open.


BLM Advocacy Center
Registered user
East Palo Alto
on May 13, 2021 at 3:33 pm
BLM Advocacy Center, East Palo Alto
Registered user
on May 13, 2021 at 3:33 pm

Perhaps some of these financial resources could be utilized to create a series of mandatory police training seminars on how to better respond and react when it comes to interactions with black people.

Other topics to cover should include probable cause, illegal search and seizure, and the unwarranted use of firearms when detaining someone for questioning.


TimR
Registered user
Downtown North
on May 13, 2021 at 4:18 pm
TimR, Downtown North
Registered user
on May 13, 2021 at 4:18 pm

Does Ed know something we don't, about a future that's even more dire than things are right now? Or does he just enjoy making cuts and seeing people suffer, instead of using reserves for their intended purpose? As for rejecting Federal funds, I thought only very red states did that because they don't trust the Feds.


Lost In America
Registered user
Another Palo Alto neighborhood
on May 13, 2021 at 4:19 pm
Lost In America, Another Palo Alto neighborhood
Registered user
on May 13, 2021 at 4:19 pm

Providing a safe and clean homeless encampment in Palo Alto for those less fortunate would also be a good use of the surplus federal funds.

I enjoy the PA public libraries as they provide a place to sleep during their hours of operation and I can use the restrooms to bathe myself.


Annette
Registered user
College Terrace
on May 13, 2021 at 6:09 pm
Annette, College Terrace
Registered user
on May 13, 2021 at 6:09 pm

Thank you to all who had a hand in addressing the flaws in the City Manager's proposed budget. I hope part of the process includes a blunt discussion with the City Manager, his Executive Team and other Senior Staff about what it is that Palo Altans value. The proposed cuts suggest that there's an "understanding gap" that is begging to be closed.

I have aged out of the years when my children benefitted from the wonderful child-centric institutions in this town, but I am grateful that generations of Palo Altans who preceded me made certain that this community defined itself as it did. It is important that this continue.


Nancy Lowe
Registered user
College Terrace
on May 13, 2021 at 6:50 pm
Nancy Lowe, College Terrace
Registered user
on May 13, 2021 at 6:50 pm

During a time when bribery is pretty ubiquitous, it occurs to me to wonder what, if anything, did the city have to agree to do in order to receive the Federal Funding?


Marie
Registered user
South of Midtown
on May 14, 2021 at 2:32 pm
Marie, South of Midtown
Registered user
on May 14, 2021 at 2:32 pm

By threatening a $18 fee for the Junior Museum, the city administration has tacitly approved a $10 fee. That is $30 for a parent and 2 toddlers to spend one or two hours in the museum. As we debate how to have more diversity in Palo Alto, the city administration are at the same time reducing access to a popular institution for children only to those for whom $30 is a minor charge. This is not true for many families. The Junior Museum, when free, was one of the few places I could take my grandchildren that was truly diverse. Classes attended at fairly high prices through Palo Alto Recreation, invariably had few people of color. If Palo Alto must charge such high fees, there needs to be a way to offer waivers for those who cannot afford these high fees.


ferris young
Registered user
Downtown North
on May 14, 2021 at 4:43 pm
ferris young, Downtown North
Registered user
on May 14, 2021 at 4:43 pm

Why initiate municipal cutbacks when there is free federal money to spend?

Use it or lose it.


chris
Registered user
University South
on May 14, 2021 at 9:51 pm
chris, University South
Registered user
on May 14, 2021 at 9:51 pm

Nancy,

The Federal money is based on formulas.


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