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The Menlo Park City Council is considering ending the annual holiday tree-lighting event and scaling back maintenance work as the city grapples with a structural budget deficit which threatens to deplete its already-diminished reserve funds.
City staff projects a growing revenue shortfall over the next five fiscal years, including a proposed $2.8 million deficit in the city’s $90.5 million budget for the next fiscal year, starting July 1. To help reduce the gap, city staff are recommending the Menlo Park City Council approve an additional $700,000 in cuts at its June 9 meeting. On the chopping block is the annual winter tree-lighting event at Fremont Park, as well as the holiday tree at the Belle Haven Community Campus, for a combined savings of $70,000.
Staff also recommend ending a $43,000 contract to maintain decorative string lights on trees in downtown Menlo Park. While the existing lights would remain in place, a city contractor would no longer repair or replace them when they fail.
Additional reductions include cutting contracts for maintaining city medians, right-of-ways and weed removal by 20%, saving $210,000. Recreation and library programs would be reduced, saving more than $270,000, and a half-time consultant position supporting the Safe Routes to Schools program would be eliminated, saving $105,000.
If approved by the City Council, the city would still have a projected deficit of $2.1 million next year. Menlo Park planned for a $2.5 million deficit in the current, 2025-26 fiscal year.
A potential $2.1 million deficit would be a significant improvement from what Menlo Park staff projected earlier this year. Staff expected a nearly $7 million deficit for fiscal year 2026-27, so the City Council agreed in April to raise fees for city services, which will generate an estimated $4.3 million in additional revenue. The council also elected to make a million-dollar reduction in general fund contributions to the city’s capital improvement fund, from $4.9 million to $3.9 million.
Other cost saving measures that have already been rolled out include cutting back on staff travel and professional conferences, replacing computers and other technology less frequently and suspending the city’s grants to local nonprofits.
Staff said the City Council could consider additional cost-cutting measures, like reducing funding for aquatics programs at the Belle Haven Community Campus. The city recently approved a $400,000 subsidy to keep the pools open longer after Team Sheeper, the contractor running aquatics facilities at Belle Haven and Burgess Park, warned it could become insolvent without the city’s help.
Menlo Park’s reserves are already below its target. Combined, the city’s two general fund reserves are supposed to equal 35% of the city’s general fund expenditures. However, Menlo Park has already been dipping into the reserves, which are expected to total $24.3 million, or 29% of the city’s annual expenditures, when the current fiscal year ends on June 30.
City staff are already signaling that tax increases may come before voters in 2028. A City Council study session this fall is planned to consider ideas that include a half-cent sales tax increase and updates to the city’s utility and business license fees.
The City Council will discuss the fiscal year 2026-27 budget at its June 9 meeting in the City Council Chambers and via Zoom.
The Christmas Tree Lighting is one of the nicest things the city does for our community, not only because it’s a beloved traditional event, but the festive tree, along with decorations on Santa Cruz Avenue, lights up downtown during December.
Reducing library and recreational services, street median repair and string lighting on our main street downtown? That’s cutting bone, not fat. Saving money by stinting on weed removal? That sends a message that we don’t take pride in our town–in fact most of these cost-cutting measures attest to the Council’s skewed priorities. At least they’re also cutting paid staff travel and conferences.
But what about the $11 million the city spent in the last few years on some arguably unnecessary consultant fees, up from $8 million in 2021-22. We already pay the staff some $45 million. Why does the city need all this outsourcing?
But one thing is now indisputable: the city clearly cannot afford to move forward with the downtown parking lot housing plan, as it would likely put us on the hook for a $30 million parking structure, plus its annual maintenance.
Left to their own, city employees always start with cutting highly visible low dollar “fluff” so they can then justify ratcheting up fees and taxes. Tried and true bureaucratic playbook nonsense. A better start is cutting 25% of the city employees. Then watch how fast they cut outside consultant dollars to try and keep their cushy jobs.
If every person that parked in two spaces, illegally parked in the handicap spots, or stayed longer than three hours in those parking lots got a ticket, we’d be out of this deficit tomorrow. We need to fund parking enforcement.