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'HARD CHOICES': A Palo Alto budgeting tool

Original post made on Jun 7, 2010

In the interest of engaging Palo Alto residents in the budget crisis facing the city, Palo Alto Online has posted an interactive tool that invites people to choose how they would close the city's projected $7.3 million budget gap in the fiscal year that begins July 1.

Read the full story here Web Link posted Thursday, June 24, 2010, 12:11 PM

Comments (29)

Posted by ronald koch
a resident of Crescent Park
on Jun 7, 2010 at 12:50 pm

1) Reduce head count in the fire department, close firehouse at Embarcadero and Newell, cut out 50% of overtime, require fire dept personel to be more productive instead of sitting around most of the time.
2) We do not need a multimillion dollar new police facility. Make do like the citizens of Palo Alto are doing.
3) Cut 20% of fat out of the bloated city personnel departments. Cut O/T by 50%. Cut capital equipment spending by 50% for three years. Joint other cities for more purchasing power
4) Freeze spending for updating and remodeling of city offices. Buy second hand furniture, partitions, cubicles, etc. We did for our business.
5) Hire me for $1.00, and I can cut the budget by 10% of this city in 30 working days by walking around and asking questions.


Posted by palo alto mom
a resident of Embarcadero Oaks/Leland
on Jun 7, 2010 at 1:35 pm

I personally would like WAY more choices than Keene has given us, why not put the whole budget up for our opinion. What about cutting city hall employees, eliminating the whole subsidy to the junior museum, zoo, etc. Closing 2 libraries. Cutting OT period. Eliminating all consultants. Freeze hiring. Stop spending on any non-public safety and non-infrastructure items.


Posted by CraigCargo
a resident of Crescent Park
on Jun 8, 2010 at 11:48 am

If we want to maintain quality of life in Palo Alto the conversation needs to include saving programs that funded by interested users. For instance, the summer concert series has been wildly popular in the past and the cost was reasonable. A few years ago we passed the hat at the concerts to fund them in subsequent years. It seemed to work. Are there other efforts that can be supported by users to help maintain what makes Palo Alto, Palo Alto?


Posted by Bloated
a resident of Professorville
on Jun 8, 2010 at 1:25 pm

Cut the bloat.


Posted by Longtime Resident
a resident of Midtown
on Jun 8, 2010 at 7:12 pm

In the current budget situation the city is looking for long term savings, and, as a Palo Alto resident and city employee for a number of years, I'd like to suggest an idea which I haven't heard mentioned yet:

-- Jobs for city workers are being cut from the bottom, and there are more than one hundred positions that will be eliminated if the budget proposal from the city manager is approved by the PA city council as it is right now. If I understand correctly, a little less than half of these positions are currently vacant, which means that over 50 positions will be cut -- some full time and some part time.

Why not have pay cuts at all levels of city government and staff with those at the top having a greater percentage reduction. It could be short term, or it could be permanent. As I understand it - no pay cuts for higher paid employees were proposed in the current budget. Maybe those scheduled to lose their jobs wouldn't have to lose them, and, some services could continue to be funded, at least partially, by the city. This would mean that employees at the bottom of the pay scale might be able to keep their jobs. Many of these lower paid employees are the ones who have direct contact with the public on a weekly and even daily basis. Shouldn't these employees be recognized and honored for the services and dedication they have provided to the citizens of Palo Alto over the years?

The city in the past has been committed to providing quality services for its citizens and employees and making Palo Alto a special, unique place to live. Yes, we're going through difficult times, but is the answer in permanently reducing services and laying off city workers to use contract workers who may have no loyalty or commitment to their jobs? Part of what makes a city a desirable place to live is a sense of community and having employees who truly care about what happens to the community.



In the short term:

-- What about proposed fees for some services being collected as a temporary measure with the stipulation that the need for fees would be reassessed in a year or two? Have it in writing.

-- What about temporary furloughs for employees? What if employees took off one day per month for the next year? How much could be saved this way? Would this help save some services also?

-- Have all employees pay a little more toward their medical benefits. This is often done in the private sector, isn't it -- both employer and employee contribute toward medical benefits -- but with the understanding that this could be looked at again in future contract negotiations and the need for it reassessed also.


Also long term --

What can the city do to bring in more revenue? This is REALLY the long term solution, isn't it?


We need to protect the quality of life here in Palo Alto, for everyone -- residents - employees - visitors ---- for all.


Posted by Garden Gnome
a resident of Crescent Park
on Jun 9, 2010 at 10:49 am

palo alto mom is right - there are plenty of other things that can be cut that are not mentioned.

If you look at the City Hall salaries article in yesterday's Daily Post, you will have a look at where $103.3 million is going this year. A 10% across the board cut there would reach the goal.

I'm happy to chip in the $1.00 for Mr. Ronald Koch services.


Posted by Al Henning
a resident of Duveneck/St. Francis
on Jun 9, 2010 at 12:40 pm

Council continues to shunt costs to the Utilities Dept. Transferring four workers from General Fund to Utilities just has us pay via a means (CPAU) over which citizens have zero control.

The General Fund already benefits from a Utilities Tax (8% of GF revenues), and from transfers allowed by the CA Public Utilities Commission (15% of GF). Which is to say: utility ratepayers already subsidize the GF by 23%.

Mayor Burt and City Mgr Keane both believe these numbers are transparent, and fully understood by PA residents. I think they are not.

IMO, given the crisis we don't have much of a choice right now, in terms of changing the financial coupling between Utilities and the GF. But down the line, I would like to see the two decoupled: it's a more honest way of doing business. And, without going into details, I think it could end up increasing GF revenues, if managed correctly.


Posted by concerned resident
a resident of Greenmeadow
on Jun 9, 2010 at 1:29 pm

I'll add my $1 for Richard. The items on the city's list seem nit-picky, with no context to judge them. What about overhead costs? The private sector has seen a steady erosion of health care and retirement benefits: how much is the city saving through these means?

A few real changes will address the situation. Go for it!


Posted by Robert Goldin
a resident of Crescent Park
on Jun 9, 2010 at 5:35 pm

It is my understanding that management staff in the city receives every other Friday off. These are management personnel that are highly paid. If you add those 26 days per year to vacation, sick time, holiday it is both wasteful and sets a very poor example for concern about costs. This was done years ago under the guise that they had after hour meetings to attend, and this was a method to compensate them for those "additional" hours.

They are management, and need to work the required hours to do there jobs. This policy should be eliminated immediately, and then perhaps some of the positions could be cut with extra personnel available. I think everyone would likely agree that there are many well qualified personnel who would happily take their jobs and work a full week.

There are certainly other areas to cut, but this would be a good start, and long overdue.


Posted by just wondering
a resident of another community
on Jun 9, 2010 at 8:14 pm

Has anyone really looked at how the City Manager's staff continues to increase while he keeps decreasing other department's positions? It amazes me that they have so many assistant to the City Managers, Deputy City Managers, Assistant City Managers, management specialists, etc. And, I'm told he's hiring another person up on that floor!


Posted by Bloated
a resident of Professorville
on Jun 10, 2010 at 8:22 am

Just Wondering - Political logic dictates that you have to lay off people who do useful work like janitors, library clerks, and pothole fillers in order to hire more spin doctors or managers so that the guys at the top can look good.


Posted by pat
a resident of Midtown
on Jun 10, 2010 at 1:31 pm

palo alto mom, you are absolutely right, but your suggestions are way too logical for the city to pay attention to.

>”Stop spending on any non-public safety and non-infrastructure items.”

EXACTLY! Those are the top two priorities in any city.

> “…why not put the whole budget up for our opinion.”

Good question. The Weekly is the only place to “vote” on cuts – AFTER the fact.

Keene’s list of cuts came from the city’s managers. It’s a bottom-up list vs. a strategic top-down look at city finances and priorities. The city council should have given direction to the city manager and staff before any cuts were proposed.

The Jr. Museum and libraries are sacred cows. The city council will never risk offending the small number of residents who cherish those beloved institutions.

>”The city in the past has been committed to ... making Palo Alto a special, unique place to live.”

Why do you think Palo Alto is so special and unique compared to near-by cities? Is it the pot-holed streets? The crumbling old public buildings? Take a look at Mountain View: relatively new fire and police buildings, a theatre, a revitalized downtown, a beautiful city hall...

>”Yes, we're going through difficult times, but is the answer in permanently reducing services and laying off city workers ...?”

The city has a STRUCTURAL deficit. It’s not a temporary situation that will get better any time soon.

>"... to use contract workers who may have no loyalty or commitment to their jobs?"

What makes you think contract workers are not committed to their jobs?

Al Henning, thanks for pointing out the Utilities to General Fund transfers. There’s no PUC oversight of the city's utilities department. Our rates go up steadily and about $15M was transferred to the general fund in 2009. The amount will be higher in 2010.

Since 1910, total transfers from Utilities to the City amount to $351M.

Be aware that the budget cuts under discussion do NOT include any cuts in the Utilities Department, which has about 250 full-time employees with annual salaries of roughly $21.5M in 2009.

I'm happy to pay Mr. Ronald Koch a bonus!


Posted by Retired Staffer
a resident of another community
on Jun 13, 2010 at 12:15 am

Mr. Goldin

City staff works 80 hours over a nine-day period. The tenth day is the Friday off. It makes for a long work day, but the reason for it is to improve air quality since so many people drive to work. Working the Friday off would result in an 88-hour pay period which would increase payroll costs substantially.


Posted by George Kaiser
a resident of Palo Verde
on Jun 15, 2010 at 2:24 pm

Short term: 10% across the board - everyone shares the pain. No "special" cases.
Long term: Get the unions out of our city government.


Posted by Bloated
a resident of Professorville
on Jun 15, 2010 at 6:21 pm

Short term: 20% off the top from the City Manager and department heads and 10% off the top from middle management. 5% off the top from everyone else.

Long term: consolidate departments and severely downsize the City Managers office.


Posted by johndoe
a resident of Fairmeadow
on Jun 16, 2010 at 9:04 am

What are we paying the City manager and his 3 assistant city managers ? around one million for ( 4 ) people. how about we just have one city manager . that would save 700k right there !!!! Fire the city council. Get people in here with business sense !!!! what about a freaking business tax ?????? come on people wake up!!!!


Posted by Senor Blogger
a resident of Palo Verde
on Jun 16, 2010 at 10:27 am

MR. KEENE,

THESE ARE SOME PRETTY GOOD IDEAS.

THERE ARE ALSO SOME COMMON THREADS IN THESE IDEAS.

IS ANYBODY FROM CITY HALL READING THESE?

IS ANYBODY TAKING NOTES?

SENOR BLOGGER


Posted by peter carpenter
a resident of Atherton
on Jun 16, 2010 at 10:41 am

peter carpenter is a registered user.

The two biggest opportunities for savings would be to contract with the Sheriff for police services ( which could be tailored to Palo Alto needs and budget) and consolidating the Palo Alto and Menlo Park Fire Protection District into a single entity.

Here are some comparative costs per capita for police services:
Agencies which have their own Police Department:



Atherton

As of the census of 2000, there were 7,194 people

4.9 square miles (12.8 km²)

Police budget $4.9 M

$681 per capita



Redwood City

As of the census[1] of 2008, there were 75,508 people

34.6 sq miles

Police budget $31.7

$419 per capita



Palo Alto

As of the census of 2000, there were 58,598 people

23.7 sq miles

Police budget $29M

$494 per capita



Foster City

As of the census[4] of 2000, there are 28,803 people

The city has a total area of 19.9 square miles (51.6 km²), of which 3.8 square miles (9.7 km²) is

land and 16.2 square miles (41.9 km²) is water.

Police budget $9.6 M

$333 per capita



Burlingame

As of the census of 2000, there were 28,158 people

The city has a total area of 15.6 km² (6.0 mi²).

11.2 km² (4.3 mi²) of it is land and 4.4 km² (1.7 mi²) of it (28.19%) is water.

Police budget $9.5M

$337 per capita



Hillsborough

As of the census[5] of 2000, there were 10,825 people

The town has a total area of 6.2 square miles

(16.1 km²), all of it land.

Police budget $8M

$739 per capita



Los Altos

The population was 27,693 according to the 2000 census.

6.3 square miles (16.4 km²).

Police dept budget $13,456,595

$485 per capita


Agencies which contract out their police services:



Saratoga

The population was 30,318 at the 2007 census.

The city has a total area of 12.1 square miles (31.4 km²)

Police costs via County Sheriff $4.34 M

$143 per capita



Woodside

11.8 square miles (30.5 km²)

As of the census[9] of 2000, there were 5,352 people

Police services via County Sheriff $1.3 M

$242 per capita



Portola Valley

The population was 4,462 at the 2000 census

9.2 square miles (23.7 km²)

Police services via Sheriff $498,601

$111 per capita








Posted by Deep Throat
a resident of another community
on Jun 16, 2010 at 2:38 pm


"City staff works 80 hours over a nine-day period. The tenth day is the Friday off. It makes for a long work day, but the reason for it is to improve air quality since so many people drive to work. Working the Friday off would result in an 88-hour pay period which would increase payroll costs substantially."(Posted by Retired Staffer, a resident of another community, on Jun 13, 2010 at 12:15 am)

-----------------

Really? I thought the reason for creating the 9/80 schedule with alternate Fridays off was to enable Frank Benest to earn consulting income on those long weekends.

The eight hours lost on alternate Fridays are currently reclaimed on Mondays through Thursdays of both weeks by adding a half hour at the beginning of each day, and by adding a half hour at the end of each day.

If we return Mondays through Thursdays to eight-hour days and keep the alternate Friday off, that would result in a 72-hour work schedule every two weeks, or 10% less than two 40-hour weeks.

The City of Palo Alto can reduce everybody's pay by 10% in exchange for 10% less hours every two weeks.

We will get 10% less work from those employees who are actually working that extra half hour at the beginning and end of every day now, but we won't lose anything from those employees who use that extra time for a coffe break.

Managers and others exempt from overtime pay would still be required to do their work, whatever that is, for 10% less pay.


Posted by Mid Town Long Time Resident
a resident of Midtown
on Jun 16, 2010 at 7:59 pm

Palo Alto Mom is right we need to see the full budget in order to rationalize the budget. Seeing a small subset is somewhat useless because it is biased from the start. All budgeting needs to be zero based (bottoms up) not run rate based on the past. There are no more sacred cows. Get on with it.


Posted by GougedInMidtown
a resident of Midtown
on Jun 17, 2010 at 11:38 am

One of the other irritants was the fact that while salaries and benefits were not shown as alternatives shifting more of a burden on current residents - such as charging for parks and sidewalk maintenance was very much shown! It is a shame that we as a community even allow for these to be considered viable options. Have we not already paid our taxes? Have we not already paid for the library by way of a library bond? How can the city seriously consider these as options for plugging a gap without allowing a more in-depth discussion on alternatives such as:
- Consolidating fire services with neighboring cities
- Bringing benefits for city employees on par with the private sector (by the way if unionized city employees dont want those jobs, there are plenty of other people waiting who would be very happy to have them)
- Consolidating libraries into a one or two locations (like Mitchell Park and Main - why does such a small city need 5 locations?)
- Putting on hold "beautification" and vanity projects (that way the focus can be on basic infrastructure and maintenance of public utilities)
- Scale back or eliminate city support for Children's Theater and the Jr. Museum (it is clearly not something used by the majority of city residents)

The goal has to be to make structural changes that will ensure a financially viable city where the average resident will be able to afford living.


Posted by pat
a resident of Midtown
on Jun 18, 2010 at 9:47 am

>”… we need to see the full budget in order to rationalize the budget.”
The full budgets have always been available on the city website. Web Link

Problem is the cuts were proposed by department managers. THEN residents were asked for input.

>”Have we not already paid for the library by way of a library bond?”

The bond money only pays for buildings. The buildings have to be stocked and staffed. More library branches, more staff. This was pointed out before the vote on the library bond, but at that time there was no budget deficit.


Posted by GougedInMidtown
a resident of Midtown
on Jun 18, 2010 at 12:07 pm

Pat,

Thanks for the clarifications on the library bond measure. My point still stands - why did we pass a bond measure for buildings to be staffed by staff and supported by more city staff that are all together super expensive?
People of Palo Alto - unless you are all rolling in the dough, wake up and realize that these structural changes are necessary. Asking for more money from residents is not going to be feasible. Perhaps some old time residents that pay almost nothing by way of property taxes can afford to take a sanguine view of things but for those of us that moved in to Palo Alto in the past decade we already pay sky high property taxes and it is adding insult to injury if the city asks for more money than we already pay.


Posted by Marie
a resident of Midtown
on Jun 18, 2010 at 1:24 pm

Let me say that I really appreciate Palo Alto's city staff. My contacts with actual workers have always been positive. I think our police do a great job. However, we are in a fiscal crisis. Our budget has increased far greater than population and cost of living. The only way I see to reduce spending significantly without raising funds from citizens and cutting basic services is to reduce the bloated management structure and to bring the benefits structure closer to that of US industry and/or the city of Palo Alto 20 years ago.

1. Rationalize the organizational structure by reducing the span of control. I would propose the following (there are many other valid approaches.) Review the organizational structure with a goal of a management to worker ratio averaging 1 manager for every 6-8 workers, with no more than 5 layers of management. Ensure all managers have at least 5 direct reports, including outside contractors. Publish an org chart or at least provide it to the council so they can evaluate the management structure.

Reducing the number of managers would reduce the budget without impacting the actual day to day work being done. Congrats to the fire chief for proposing the elimination of one deputy fire chief.

2. Compare the number of workers today with the number 15 years ago. City population has grown from 60K to 63K. or roughly 5% in that time I believe. Somebody may have better numbers than me as I'm relying on memory. If the number of staff has increased more than that %, reduce it. The tricky part is how to count out-sourced programs and consultants, but it can be done.

3. Renegotiate benefits to increase cost-sharing for employees and modify pension and retiree medical benefits. My personal proposal is the following: Pension payments should be based on the last 3 years (in industry it is usually 5), not including any overtime (also standard in industry). Minimum retirement age should be 55 with 15 years experience. Maximum payments should require 30 years and age 65. Maximum payment should be 2% of average base salary over the previous 3 years for regular employees and 2.5% for public safety officers. This is still far better than most private pensions. Medical: typically companies pay 80% of an employees total medical expense and 50% of dependent coverage. Much of the 20% and 50% is in copays. It isn't just the cost of the insurance itself.

Consider switching to a 401K approach for new employees as most of U.S. businesses have. It would save millions. Match 5% instead of 3% so as to offer a better plan than industry - much of which today matches only if the company results meet certain confidential goals.

4. Reduce the Green Waste budget of $1.8M sufficiently to continue paying for the shuttle. Whenever there are large budget cuts to be made, the staff always seems to include relatively low cost but high impact to the public programs such as the May Day parade, the shuttle, reduced hours at the libraries. These do little to reduce the deficit but certainly get the public's attention that we are in a budget crisis. In addition, some of these projects require little city staff time and so won't cause any reduction of staff pay.


Posted by JA3
a resident of Crescent Park
on Jun 18, 2010 at 3:30 pm

Peter writes:

"The two biggest opportunities for savings would be to contract with the Sheriff for police services ( which could be tailored to Palo Alto needs and budget) and consolidating the Palo Alto and Menlo Park Fire Protection District into a single entity."

+1; the cost savings would likely be significant and long-lasting.

In particular, consolidation of fire departments is a wise and prudent idea.


Posted by peter carpenter
a resident of Atherton
on Jun 18, 2010 at 3:33 pm

peter carpenter is a registered user.

Note that the last MPFPD firefighters contract expired almost two years ago and the MPFPD Board has refused its union's demand for an 11% increase.

The PAFD firefighters contract expires this month.

PAFD doesn't have either a Chief or a Fire Marshall right now, MPFPD has both.

PAFD gave up its water rescue and has to ask MPFPD when it needs MPFPD's water rescue.

PAFD has a superb ambulance service while MPFPD has none.

Both PAFD and MPFPD need new training facilities - why build two poor ones rather than one good one for less total cost?

And the list goes on....


Posted by peter carpenter
a resident of Atherton
on Jun 18, 2010 at 3:57 pm

peter carpenter is a registered user.

An interesting report on fire agency consolidation:

Web Link

Also look at Orange County and SacMetro - both superb consolidated fire agencies with a fully integrated ambulance system.

************************

Here is the Orange County Fire Authority story:

Prior to May, 1980, fire service for the cities of Cypress, Irvine, La Palma, Los Alamitos, Placentia, San Juan Capistrano, Tustin, Villa Park, and Yorba Linda along with the County unincorporated areas was provided by the California Department of Forestry (CDF)*. However, on May 16, 1980, the Orange County Fire Department (OCFD) was formed as a county department reporting to the Board of Supervisors. It's first Fire Chief was Larry Holmes. Fifty-two percent of the 518,483 residents served by the OCFD lived in unincorporated areas of the County.

However, over the course of the next decade, five new cities were formed from unincorporated territory and two additional cities decided to contract with OCFD for fire service. As a result, by January 1, 1991, over 80% of OCFD's service population of 808,139 lived within these sixteen cities. Yet their fire service was still governed by the Board of Supervisors. The cities wanted greater input into how their emergency services were provided. Clearly a new form of governance was needed for these new circumstances.

During 1991, the OCFD was on its way exploring the possibility of forming a special district as an independent entity governed by a board of directors representing the member cities and the County. The California Government Code dealing with special districts was studied, other fire protection districts were contacted, and services the new agency would need to provide were identified (i.e. investment services, employee benefits, payroll, and purchasing). Discussions had begun with the County about transferring title of the fire stations to the new organization. However, although a great deal of enthusiasm and effort was poured into this project, unforeseen difficulties prevented the formation of a special district.

Nevertheless, the dream did not die and the momentum was soon recaptured. A new governance structure, a Joint Powers Authority (JPA), was selected. Much of the previous work was used in this endeavor. By 1994 the plans and structure of the new agency were well underway. The County Board of Supervisors, the various City Councils, the OCFD labor groups, and management were all pulling together to launch the new JPA. Then on December 6, 1994, the County of Orange declared bankruptcy. Yet, inspite of this almost insurmountable obstacle, the dreams and plans were brought to fruition and the Orange County Fire Authority (OCFA), under Interim Fire Chief Ken Mcleod, was formed on March 1, 1995. The County bankruptcy, which was merely coincidental to the JPA formation, had not derailed the efforts.

Since then, the OCFA has continued to grow. Three more cities contracted with the OCFA for service and three new cities incorporated. The helicopter program was begun in 1995 and in 1997 Chip Prather was appointed the new Fire Chief. The move to the recently completed Regional Fire and Operations Training Center (RFOTC) finished in May of 2004 and in 2009 Keith Richter became the OCFA's third Fire Chief.

* - In 1980, the cities of Anaheim, Brea, Buena Park, Costa Mesa, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, Laguna Beach, La Habra, Newport Beach, Orange, San Clemente, Santa Ana, Seal Beach, Stanton, and Westminster had their own municipal fire departments. Since then, Buena Park, San Clemente, Seal Beach, Stanton, and Westminster joined the OCFD/OCFA.

*****************

Here is the Sac Metro Fire story:

On December 1, 2000, two local fire districts came together and formed the Sacramento Metropolitan Fire District. From public education and training to firefighting, emergency services, search and rescue and more, your Metro Fire professionals stand ready to serve the greater Sacramento region. We invite you to visit this site often and let us know what we can do to improve our partnerships with you, our community.

The highly skilled firefighters and support personnel of Metro Fire serve nearly 640,000 citizens over a 417-square-mile area, serving Sacramento & Placer counties including the City of Citrus Heights and the City of Rancho Cordova.

Historically, Metro Fire represents 16 former fire agencies, some of which were founded more than six decades ago. Today, Metro Fire is the seventh-largest fire district in California with 42 strategically located fire stations.

Thanks to fire district consolidations, we are more effective than ever. We operate a central 911 dispatch center and a unified communications system that keeps all our fire companies informed and connected. Mergers have also enhanced the consistency of our training and operations, helping us maintain our reputation as a respected leader in firefighting and emergency services.


Posted by Dave from P.A.
a resident of Palo Verde
on Jun 25, 2010 at 2:55 pm

keep on making cut from the buttom up and soon the Managers are going to have no one to manage but them selfs.


Posted by Patrick Jimenez
a resident of Palo Verde
on Jun 25, 2010 at 2:56 pm

[Post removed due to disrespectful comment or offensive language]


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