But the proposed budget avoids increasing another tax that already has the voter stamp of approval. The utility users tax (UUT) remains at 1 percent, a reduced rate passed by the 2007 city council after voters approved a higher rate in 2006. Staff argued that since the budget doesn't draw on general fund reserves, and raising the tax would require substantial administrative time, there's no reason to change it right now. Given that the higher 3.5 percent rate would add about $2.3 million in annual revenue, at least one council member — Kelly Fergusson — found staff's reasoning unconvincing. The UUT will return to the council for reconsideration in October.
No discussion of Menlo Park's budget would be complete without mention of Facebook, the company that "saved us," according to Mr. McIntyre. Thanks to the city's developer agreement with the social networking giant, Menlo Park will see a bump of at least $800,000 in annual revenue.
Between Facebook and the anticipated hike to the hotel guest tax, the budget avoids service reductions for the next fiscal year. It does propose some cost-cutting measures such as eliminating paper council agenda packets to save $10,000 a year, sharing vehicle and median maintenance services with other city entities, and delaying the replacement of $100,000 worth of police cars for one year.
The budget returns to the council for approval on June 12.
This story contains 344 words.
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