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Publication Date: Wednesday, May 14, 2003
Layoffs, spending cuts proposed in Menlo Park city budget
Layoffs, spending cuts proposed in Menlo Park city budget
(May 14, 2003) ** Library would have shorter hours, fewer new books.
By Rebecca Wallace
Almanac Staff Writer
Bracing against bite-the-bullet economic woes, a plan to overcome Menlo Park's budget shortfall calls for layoffs and leaves no city department unscathed.
As part of a continuing effort to slice about 14 percent off the city's budget, cuts large and small pack the plan for fiscal year 2003-2004 that the City Council will discuss on Tuesday, May 13.
Library open hours would be reduced from 65 to 52 per week, the police department's traffic unit would be abolished, and after-school programs in Belle Haven would be consolidated. In several areas, including planning, the city will bring services in-house and rely less on pricier contractors. But there could be fewer city employees to perform those services.
The proposal recommends cutting the equivalent of 12 full-time positions, which means that about 16 employees, some full-time and some part-time, would lose their jobs or have their hours greatly reduced, City Manager David Boesch said. The positions include office assistants, library workers and an aquatics coordinator.
The plan would also eliminate the equivalent of 13 full-time jobs that are now vacant. Currently, the city employs the equivalent of 261 full-time employees.
"By and large, we will be able to maintain services, but some of the service levels will decrease. It may take longer to get a building inspection, for example," Mr. Boesch said.
In February, city staff estimated that Menlo Park was facing a budget deficit of $3.6 million, or 14 percent of the budget. Staff from all departments studied ways to close the gap, knowing that more economic pain could be just ahead if the cash-strapped state government reduces payments such as police training reimbursements to cities.
Since then, the City Council approved a sweeping package of fee increases for city services such as parking permits, Internet use in the library, building licenses and use permits. Staff estimated that these increases could bring in as much as $500,000 annually.
The new spending cuts proposed for 2003-2004 would close the rest of the gap and allow for a $1.6 million surplus that could become necessary if state-related revenues are reduced.
Systemic problems
This report focuses on Menlo Park's general fund, which includes most city services. While the fund is currently being walloped by a downturn in sales tax revenues, Mr. Boesch said Menlo Park's budget problems are more fundamental than a passing recession; a one-time fix such as selling a piece of land won't be enough.
He said "built-in" costs such as salaries, benefits and retirement costs will dwarf revenues more and more unless longer-lasting cuts are made now.
City Councilman Chuck Kinney agreed that a long-term strategy was prudent. While he said he was concerned about the proposed layoffs, he complimented the plan, saying: "It's a stimulus to look down the road. It's not just to solve one shortfall, one year."
The council will give preliminary direction to city staff on the plan on May 13, and is expected to hold another public hearing on the budget in early June and adopt it on June 24.
Library cuts
Some of the most visible cuts would be to Menlo Park's main library, which is already taking steps to raise funds by adding fees for Internet use and DVD rentals.
Susan Holmer, director of library services, said she's studying circulation records to determine the least painful time to cut open hours, which would save an estimated $25,000 a year. So far, it looks like Thursday evening is one of the slowest times, she said.
In addition, the budget plan includes staff cuts, less money for new books, magazines and other materials, and closing the library altogether for two weeks at some point during the year to limit overhead costs.
"It's a dramatic step, but if we take it, we're saving money by closing in one fell swoop," Ms. Holmer said.
At this point, the cuts are only planned for the main library, not the Belle Haven branch, she said.
Tim Goode, vice president of the Friends of the Menlo Park Library, said he was "sick and angry" over the proposed cuts, and that he didn't think any could be staved off by fundraising.
"I know it's a losing fight. I can't come up with anything that will bring the dollars necessary," he said.
After school
In the community services department, staff recommends eliminating the equivalent of nine and a half full-time positions.
The report also advises combining an after-school program at the Belle Haven Elementary School campus with one at the Onetta Harris Community Center, and cutting program staff, for a net savings of $140,000.
Because the city owns the Onetta Harris center, it makes sense to hold both programs together and rent-free there, community services director Curtis Brown said. About 55 children are in the Belle Haven Elementary program, and 30 are at Onetta Harris, he said.
Parks, recreation
Though city officials are hard-pressed to find good news in this budget, Mr. Brown said he was grateful that many parks and recreation projects are funded by Measure T, a 2001 bond initiative, and not the city.
Among these projects are improvements at Burgess Park, including a new pool, renovated turf, and equipment for baseball and soccer.
"Of course it's tough. But some other cities have eliminated half their departments," Mr. Brown said. "We have lots of Measure T projects still going ahead."
Other recommended cuts include removing four currently vacant police positions and moving the four-officer traffic unit into them. Consequently, the department would do less traffic enforcement and have fewer drunken-driving checkpoints and speed trailers. Those moves will save the police department budget about $500,000.
If the budget plan is approved, Planning Commission watchers will also notice that the city attorney will no longer regularly attend commission meetings, saving the city $25,000.
Retirement costs
Besides pricier salary and benefit packages, the city is facing steeper expenses in retirement benefits.
City employees belong to the state Public Employees Retirement System (PERS), and investment income from PERS once paid for retirement benefits. Now, with the economy flagging and investment returns dwindling, the city must pick up the slack.
Menlo Park is expected to pay $260,000 in retirement benefits in 2003-2004 and $1.75 million the next year, Mr. Boesch said. The numbers are so dramatic in part because higher benefits negotiated with the police department a few years ago don't take effect until 2004, he said.
Budget trends
The city is also concerned about the effects of the state's economic woes on city budgets. For instance, California might stop paying local governments the money lost by a 1998 decision to reduce vehicle license fees. That could cost Menlo Park $1.7 million next year.
Overall, Menlo Park's general fund budget was estimated to have $27.5 million in revenues and $27.4 million in expenditures in fiscal year 2002-2003, which ends June 30.
In 2003-2004, city staff expect revenues to drop to $26.8 million. Their plan helps close the deficit by holding expenditures to $25.3 million, according to Mr. Boesch's report.
Mr. Boesch emphasized that the 2003-2004 figures are subject to change as the City Council eyes the plan and the year progresses.
The city also has about two dozen other funds, such as the water fund, which are self-supporting. Adding those to the general fund yields a total budget of about $100 million, Mr. Boesch said.
MEETING
The Menlo Park City Council will discuss the staff's budget plan at a meeting beginning at 7:30 p.m. Tuesday, May 13. The meeting will be held in the council chambers at 801 Laurel St.
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