In an Almanac story last week, Staff Writer Rory Brown reported that as of May 2005, the city's 2006-07 budget was projected to virtually break even, with a negligible shortfall of $8,000. At the time, money to pay for work on streets, sidewalks, storm drains and other public works projects was expected to come from a separate capital improvement fund.
But in late May or early June, city staff apparently decided to forecast pulling $2 million a year from the general fund and putting it in the capital improvement fund — the primary cause of the jump in the projected deficit to $2.9 million.
A July 7, 2005, presentation to the city's newly appointed budget advisory committee pegged the expected deficit at $2.9 million, the first time the amount was mentioned in the city's $80,000 public outreach program "Your City/Your Decision" that sought to involve residents in the budget-balancing process.
But throughout the "Your City" exercise, the public wasn't told that at least two-thirds of the deficit was based on an annual payment for infrastructure improvements. Nor were the infrastructure improvements mentioned in the thousands of budget surveys mailed to every Menlo Park household, or later at workshop meetings.
Why weren't residents participating in the budget-cutting program told that $2 million of the deficit was going to pay for facility upgrades or road or street improvements, projects that could be postponed if necessary to avoid cutting police or social services, and laying off personnel? No city official ever explained how the last-minute "infrastructure" expense was approved or was inserted into the budget.
This behind-the-scenes management style, with no explanation to the public about why such a major expense was added, raises a serious question. Why did the city waste more than $80,000 for a survey and workshops asking citizens where to cut expenses, without mention of the infrastructure maintenance plan in the Public Works Department?
And at the very least, why wasn't the decision to jump the budget deficit from $8,000 to more than $2 million put in front of the City Council for public discussion? This was a huge change in policy, not a simple budget adjustment made by city staff members.
The recommendation to add $2 million to the budget for infrastructure apparently came from Public Works Director Kent Steffens, who said he did not consult with individual council members before recommending the addition. He says he did not, but we question whether such a huge budget decision would have been approved by City Manager David Boesch without the knowledge of some council members.
The city staff and the City Council frequently have pointed to the $2.9 million shortfall as the major reason to consider cutting significant city services or imposing a new tax. There has been absolutely no discussion of how badly the city needs the $2 million in infrastructure improvements, or whether such projects could be funded another way, perhaps from the city's $21 million in unrestricted reserves.
In addition, the council majority of Mayor Nicholas Jellins, Mickie Winker and Lee Duboc have referred to the $2.9 million shortfall as a reason to privatize city services, including operation of three swimming pools and an ill-fated attempt to install a private golf course at Bayfront Park. The after-school child care program may be the next to be farmed out, which could mean handing over the city's newly remodeled child care center to a for-profit operator.
If the city postponed the $2 million in infrastructure work or decided to take the money from another fund, the 2006-2007 budget would come close to breaking even. As Silicon Valley's economy picks up, it is possible that the city will actually ring up a budget surplus next year, which then could be funneled into infrastructure projects.
The budget process is the most important and far-reaching action taken by the City Council every year. And this year, hundreds of residents responded to the council's outreach effort to include the community in the budget-balancing decision.
But the revelation that virtually the entire deficit was based on a staff decision to add $2 million for infrastructure upgrades means that residents who sent in worksheets or attended workshops did not have all the options before them. They simply were told to cut $2.9 million of city services and/or raise taxes and fees to reduce the deficit to zero.
Most residents would agree that Menlo Park needs to continue its effort to upgrade roads, sidewalks and other infrastructure. But after inviting the public to take part in the budget-cutting process, at the very least the city needed to put all its cards on the table. Unfortunately, the most important budget decision was made by city staff, behind closed doors and without a City Council discussion or vote.