The city of Menlo Park’s process for soliciting public opinion about how to balance the budget failed “to address the core issues that created the deficit,” says budget advisory committee member Mike Gullard in a recent memo to the City Council.
Nine committee members emphasized those issues in another memo to the council, dated March 27. Among their points:
• A significant drop in sales tax revenues and the need to substantially expand business development efforts in town.
• The rapidly rising costs of city employee benefits, particularly for pensions and health insurance.
• The need to define what services the city of Menlo Park should provide. “Do we want a city that offers many services, like Palo Alto, or a city that offers few nonessential services, such as Atherton or Woodside?”
Although the committee’s original role was limited to helping structure the community-wide budget survey and budget workshops, committee members are seeking the council’s go-ahead to look into the bigger budget issues and recommend long-term solutions to the city’s projected $2.9 million shortfall.
Original plans called for the committee to be dissolved following the public-outreach program.
The council will decide the fate of the committee and the scope of its work at a special meeting April 19, devoted to discussing the budget.
Sales taxes
The committee says the city needs to reassess how it approaches falling sales tax revenues. “Much discussion has focused on the issues related to car dealerships, but the issue is much broader than that,” says the memo.Committee members say the city should look at such areas as potential tax revenue along Sand Hill Road and expanding the business development staff.
Committee member Mike Gullard urges the council to make the creation of an economic development plan a priority. The plan must be comprehensive, not piecemeal, to assure the city’s “financial and quality-of-life objectives can be met,” he says.
“Business, real estate developers and residents need a better understanding of what the City expects from them and what they will be allowed (to do) in the City,” he says.
Employee benefits
It may be time for the city to “consider doing something dramatically different in the nature of employee benefits,” says the committee, as city employees “receive benefits that are no longer prevalent in the private sector.”Members of the committee say that although the city must be able to provide wages and benefits competitive with other cities, the city is reaching a point when employee costs could outgrow revenue increases, leading to inevitable service reductions, layoffs and consideration of privatization.
City services
Committee members say the city needs to establish a framework to help determine the level of city services Menlo Park should provide to its residents.“Do we expect residents to fund services, or do we want businesses to subsidize resident services?” says the memo.
Under different models of service levels, residents could be asked to fully fund some services through fees, eliminating the need for some city subsidies.
