The City Council's Finance Committee reviewed and tentatively approved the proposed budget over two long meetings in early May, with council members agreeing to City Manager Ed Shikada's proposals to add police officers and expand hours at local libraries — part of the effort to restore services that were cut back in 2020 during a period of plunging revenues and fiscal austerity.
Even so, the three committee members acknowledged that even with the recent economic recovery they may not be able to find the funds for key initiatives, such as the development of "coordinated area plans" for the San Antonio Road area, electrification of the city's vehicle fleet and creation of "car-free streets" in prime commercial areas.
Assistant City Manager Kiely Nose said staff's priority this budget season is to bring some stability to the workforce and the community after a few years of peaks and valleys.
"It does mean we're moving at a measured pace, and we may not be moving as fast as some people would like but it is important for our workforce and our attraction and retention of them and the community to try to manage a stable pace so that they're not looking at layoffs one year and then adding a bunch of positions and then looking at layoffs again," Nose said at the May 5 meeting.
The city slashed the budget by $40 million in 2020 in response to plunging revenues during the pandemic, a move that eliminated 79 full-time and 102 part-time positions. But with revenues once again on the rise, Shikada unveiled earlier this month a $975.3-million budget that represents a 1% increase from the prior year and that continues the city's period of restoration.
The budget request includes a general fund of $274.9 million, which is used to fund most basic services not related to utilities, up from $247.2 million last year. It also proposes a five-year plan to spend $1.2 billion on capital projects, which includes about $170 million for grade-separation work on the Churchill Avenue, Meadow Drive and Charleston Road rail crossings.
The new budget for fiscal year 2024, which begins on July 1, would continue increases in the budget of the Police Department, which eliminated all of its special detail assignments during the recent period of austerity and which is now restoring some of them.
The proposed budget would bring back the traffic-enforcement division that consists of two officers on motorcycles patrolling major commute corridors. The Police Department is also looking to expand its Psychiatric Emergency Response Team (PERT) program, which partners an officer with a clinician to respond to calls involving mental health issues. The city launched the program in late 2021 as part of a partnership with Santa Clara County, which provided the clinician.
Now, the city is looking to both recruit a new clinician (the one that the county had provided left last October) and to expand the program by adding another PERT team.
"We want to not only pair (the officer) with a PERT clinician here, we're dreaming big. We want two PERT clinicians that would give us two teams, with seven-day-a-week coverage," Police Chief Andrew Binder said during the Finance Committee's May 5 review of the police budget.
While the city is hoping that the county will continue to fund the medical clinician position, Binder said that he hopes the program will remain even without county funding. Another potential source of funding is the city's development agreement with Stanford University Medical Center, which earmarks funds for health programs.
"If the county wants to come forward with funds to support that, great. If not, we took the initiative to earmark those funds from Stanford, and we want to move that ball forward and get it going," Binder said.
Even with the recent growth in revenues, the department staffing would remain below the pre-pandemic level, when it had 92 sworn positions. The new budget proposes to bring the number of sworn positions in the department to 86.
Library users will also see expanded services, with the Finance Committee approving a budget with increased hours of operation at all branches. Under the budget proposal, the city's two large libraries — Mitchell Park and Rinconada — would be open seven days per week (up from six), while the remaining branches would be open five days per week (up from four). This is an increase from pre-pandemic levels, when the College Terrace Library was only open four days per week.
"We are proposing to increase it to five days because there are not that many activities available in that part of the city and we think it will be a great opportunity for us to bring more activities as well as more programming in that area," Library Director Gayathri Kanth said during the May 5 budget review.
The challenge of area planning
But even with the recent growth in revenues, city staff and the committee acknowledged that they would not have the funding or the staff capacity to meet some of the council's most ambitious goals. These include creation of coordinated area plans around San Antonio Road, an area that the city is leaning on to meet its housing goals, or other districts that the city has identified as ripe for redevelopment.
Planning Director Jonathan Lait had identified as his top priorities this year an addition of a planning review engineer who would help improve the city's permitting process and additional resources for revisions to the zoning code, a complex multiyear endeavor that the city will have to undertake to meet the obligations in its Housing Element. Staff had little appetite, however, for launching another coordinated area plan, a tool that cities such as Mountain View and Redwood City have used to spur redevelopment in recent years.
One reason is the length of time and effort that these plans entail. Shikada suggested taking a look at the city's process for adopting coordinated area plans. He cited the city's experience in putting together with the North Ventura Coordinated Area Plan, a new vision document for a portion of the Ventura neighborhood that includes the site that was formerly occupied by Fry's Electronics.
The city completed the last year and is now advancing a development agreement with The Sobrato Organization, owner of the Fry's site, that includes as its major components the preservation of the former cannery building at 340 Portage Ave. for commercial use; the city's approval of a 75-townhome development next to the cannery; and Sobrato's dedication of land to the city for a future park and affordable-housing project.
The process took more than two years and left most participants feeling underwhelmed with the outcome. The working group that spearheaded the effort did not reach a consensus on any alternative and most members rejected the only scenario that staff and consultants had identified as financially feasible.
The work also wasn't particularly satisfying for city staff, Shikada said. Not mincing words, he called the process "a bit of a meat grinder."
"It makes it very difficult to attract and retain staff to see through an effort like that when the effort could be so daunting," he said.
In response, the Finance Committee agreed to direct the council's newly formed Housing Ad Hoc Committee to take a fresh look at how the city puts these plans together. Council member Julie Lythcott-Haims suggested that a San Antonio Road plan would be particularly critical given the important role that this part of the city has in the Housing Element, which envisions about 2,000 new housing units built there between 2023 and 2031.
"If we don't have a coordinated plan approach, do we then have an ad hoc approach of approving things on a one-off basis and then failing to create a neighborhood that is akin to the beautiful neighborhoods that we have here?" Lythcott-Haims asked.
The Finance Committee — which consists of Chair Pat Burt, Vice Mayor Greer Stone and Lythcott-Haims — voted unanimously during its May 9 meeting to tentatively approve each department's budget and to add a list of additional items that are not currently in the budget but that could be considered for inclusion before the full council adopts the document next month. Items on that list include $400,000 for removing eucalyptus trees to mitigate fire risk, $200,000 for youth mental health programs, additional staffing at the Palo Art Center and a Sea Level Rise Adaptation Plan.
The full council will consider these items on May 22 and consider which should remain in the funding plan for the coming year and which should be scaled back, deferred or scrapped altogether. The council is scheduled to formally approve the final budget on June 19.