City's economic recovery slower than expected

Recovery from the global economic recession is coming along slower than expected for the city of Menlo Park, though the city's budget situation does not appear nearly as dire as that of some of its neighbors.

After adopting a balanced budget, the city now estimates revenue will come in $1.3 million lower than expected in the 2009-10 fiscal year, which ends June 30. Expenditures, however, have also been lower than expected, by about $750,000.

The city will look to make up the resulting deficit in its $38 million budget through stopgaps, such as delaying infrastructure projects, or use of the city's sizable general fund reserves, City Manager Glen Rojas and Finance Director Carol Augustine said in the mid-year budget report.

"The existence of ample reserves has allowed the city to take a long-term approach toward achieving a structural balance and a measured response to inevitable economic changes," the city writes in the report, arguing for a second consecutive year that such short-term measures will leave the city well prepared for an economic recovery.

Ms. Augustine said that municipal revenues typically lag those in the general economy.

Though the revenue projections are lower than the city had initially expected, the revised projection still represents an increase of about $850,000 over the previous fiscal year. Expenditures are expected to rise at about double that clip, by $1.6 million.

The city anticipates that sales tax revenue will fall to $6.0 million, reverting to its level in 2003-2004, after those revenues had more than halved following the dot-com bust. The city received about $6.9 million in sales tax revenue during the 2008-09 fiscal year, and $7.7 million during the 2007-08 fiscal year, according to the report.

The city is expecting to generate $320,000 less than initially expected through a tax on hotel guests, partly due to the Rosewood Sand Hill Hotel falling below projections made prior to the economic downturn.

Menlo Park shaves budget deficit.


Like this comment
Posted by Old timer
a resident of Menlo Park: Downtown
on Feb 26, 2010 at 11:06 am

The budget is only going to get worse. Our current council majority will not deal with this problem effectively because they depended so heavily on the unions backing to get elected.

Rojas is not getting the direction he needs to reduce staff.

Like this comment
Posted by halle
a resident of Menlo Park: other
on Feb 27, 2010 at 1:12 pm

Then stop the renovation of MKenlo Park that lots of us don't want anyway!!

Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.


Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

The Saddle Room – A True Friend of Kids
By Laura Stec | 2 comments | 2,043 views

The Four E's--Pope Francis and the Middle Class
By Steve Levy | 3 comments | 922 views

My College Mindset is Intrinsically Motivated
By John Raftrey and Lori McCormick | 1 comment | 777 views

I'm glad I turned on the TV
By Cheryl Bac | 0 comments | 271 views