New Menlo Park city budget holds the line New Menlo Park city budget holds the line (May 18, 2005)

** Plan of "continued restraint" includes no new services, but no major cuts, either.

By Rebecca Wallace

Almanac Staff Writer

The strategy for Menlo Park's city budget for the coming fiscal year: hold the line.

The approximately $29 million general fund budget for fiscal year 2005-06 keeps its resource allocations much the same as that of its predecessor, according to a proposal coming to the City Council on May 17.

City services are kept basically intact, and no service enhancements or increases in staff are proposed, City Manager David Boesch wrote in a staff report.

The city estimates that general fund revenues will total $27.5 million and spending, $29.2 million, in the fiscal year that ends June 30. The proposed 2005-06 budget includes $28.2 million in revenues and $28.9 million in spending for the year that ends June 30, 2006.

Holding steady may be preferable to the cuts of recent years; in the past four fiscal years, the city has cut its workforce by the equivalent of about 30 full-time positions (eliminated positions include some part-time jobs), and has trimmed costs by about $4 million, Mr. Boesch wrote.

No staff cuts are listed in this year's budget proposal.

Some increases have come, though. In April, a divided council approved salary increases ranging from 7 to 15 percent for its top managers. Mr. Boesch said at the time that the managers hadn't gotten raises since 2002. (His own $159,000 annual salary was not affected by this move.)

Lower-level workers represented by unions have been receiving annual raises ranging from 1.5 to 5 percent.

Overall, city spending is still outpacing revenues, so Mr. Boesch is projecting a $673,000 budget deficit for 2005-06. He is proposing drawing that amount from general fund reserves to cover the gap.

Fortunately, the reserves include designated balances of $1 million for "fiscal uncertainties" and $2 million for retirement costs, which will cover the $673,000 shortfall, as well the deficit of $1.66 million in the current budget, Mr. Boesch wrote.

Overall, the general fund reserves are estimated to be $27 million at the end of 2005-06, he wrote.

Increasing retirement costs for city employees are among the main reasons that spending keeps outpacing revenues, Mr. Boesch wrote. Other stated reasons include rising health-care and workers' compensation costs and lower sales-tax revenues.

Mr. Boesch estimates that the city's budget shortfalls will continue until 2012-13.

This year's budget process will be abridged: Rather than having more than one formal hearing, the council is expected to hold the hearing and adopt the budget on the same night.

This schedule is in preparation for a different and longer approach to the 2006-07 budget. Mr. Boesch wrote. The new "bottom-up" budget method will include much public outreach and the help of a citizens' group, as city officials work to find out which services residents will be willing to support and by how much.

While this budget contains no service increases, council members did ask city staff to break out the costs for bringing back a special Menlo Park Police Department traffic unit, which fell prey to budget cuts two years ago. Staff members estimate that a two-officer unit would cost about $333,000 and a full unit of one sergeant and four officers would cost about $842,000.

The hearing begins at 7 p.m. in the council chambers at 701 Laurel St. For the staff report, go to menlopark.org, click on "City Council" and go to the May 17 agenda.

E-mail a friend a link to this story.