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April 07, 2004

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Publication Date: Wednesday, April 07, 2004

Budget cuts rear their heads again in Menlo Budget cuts rear their heads again in Menlo (April 07, 2004)

By Rebecca Wallace
Almanac Staff Writer

Layoffs of city employees and cuts in services are looming again as gloomy possibilities in Menlo Park, with budget hearings for the 2004-05 fiscal year just around the corner.

This is the fourth straight year of budget cuts due to declining revenues, and at the moment city officials estimate the gap between revenues and spending in 2004-05 will be $2.2 million, roughly 8.4 percent of the $26 million general fund budget. That's a big hole to plug up, which means that a budget plan by City Manager David Boesch is riddled with reductions.

Under the plan, which the City Council will discuss on April 6, the equivalent of 10.5 full-time city positions would be cut, including the community relations manager, an aquatics maintenance person and various recreation personnel.

Community Relations Manager J. Michael Gonzales, whose salary is in the $80,000 range, works with the city Web site and creates city activity and class guides, newsletters and press releases, Mr. Boesch said. These written materials would also be reduced.

Mr. Boesch called the cut "tough," but said of Mr. Gonzales' position: "It's high-profile and happens to be in the City Manager's office. ... We need to lead by example."

In addition, service cuts would include: fewer transportation studies and grants to nonprofit groups, and closing the main library on the Saturdays and Sundays before Monday holidays.

"With each successive round, budget reductions become more challenging and have a more dramatic and direct impact," Mr. Boesch wrote in the report on his budget plan.

To help boost city income, which has sagged with declines in sales, hotel and property tax revenue, parking fines could increase, as well as fees for overnight parking permits and various planning department permits.

Overall, the plan includes reducing costs by $1.1 million, increasing revenues by $406,000, and making $725,000 worth of transfers from other city funds into the general fund. The transfers would include $150,000 from the city's general fund reserves to replace aging police cars and other city vehicles -- replacements that have been delayed for three years.

Under the plan, the reserves would end up with a balance of $27 million.

Because the 2004-05 budget is not set for adoption until June 22, this plan is still preliminary, and the council is scheduled on April 6 to give only general approval to the plan's approach. Council members will also decide whether to authorize layoffs, just in case they become necessary.

This year, the city has avoided layoffs by eliminating vacant positions and by allowing 11 employees to take early retirement, reduce work hours or resign with enhanced severance pay.

City officials are working with the unions to try to entice more employees to take such measures.

"If this voluntary process is not successful in identifying $692,000 in viable annual personnel savings, it will be necessary to proceed with layoffs," Mr. Boesch wrote.

Even with the cuts, personnel expenditures will still increase because of rising benefit costs for city employees, Mr. Boesch wrote. One way to reduce costs could be to renegotiate benefit provisions in employee contracts. Menlo Park's contracts with the police force expire June 30, and those with others workers expire October 30.

Another area of uncertainty is the state budget, which always includes the possibility of state "takeaways" of local funding, Mr. Boesch wrote.

Council members had discussed whether the city could help reopen the vacant Park Theatre, perhaps with a subsidy to owner Howard Crittenden, who shut the movie theater in 2002, or by allowing him to sell his unused building capacity on the site to an owner of another site.

City staff, though, recommend that no more city resources be spent on looking into the possibility. Mr. Boesch told the Almanac that more information is needed, including a historical assessment of the old theater. He said that it's Mr. Crittenden's responsibility to provide it.

The meeting begins at 7 p.m. in the council chambers at 801 Laurel St.

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