In May 2005, Menlo Park city staff projected a 2006-07 fiscal year budget shortfall of about $8,000. Several months later, city staff said the projected shortfall was $2.9 million. How did that figure jump so dramatically in a matter of months? The increase appears to be the result of a decision made by city staff regarding funding for infrastructure maintenance. Here’s a chronicle:
February 1, 2005
Council approves the “community outreach” budget process to let residents help determine the city’s spending priorities for the 2005-06 fiscal year. Financial projections in the staff report show a general fund shortfall of about $8,000 for fiscal year 2006-07. The same staff report projects no payments to be made from the city’s general fund for infrastructure maintenance costs until 2009. Instead, the city planned to fund the projects with remaining funds in the city’s capital improvement fund.May 17, 2005
The council approves the 2005-06 fiscal year budget, keeping city service levels and fees the same as the previous year. The staff report says there is a projected budget shortfall of about $8,000 for the 2006-07 fiscal year, and no payments to the capital improvement fund are planned until 2009.Summer, 2005
New financial projections by Public Works Director Kent Steffens call for a $2 million annual contribution to the capital improvement fund in order to keep up with the costs of maintaining the city’s infrastructure through 2015. City staff includes the $2 million annual projection in all materials relating to the city’s budget shortfall for the 2006-07 fiscal year. The infrastructure costs are projected as a general fund expense. No staff report was submitted to the council that reports the new projected budget shortfall.July 7, 2005
A presentation to the council-appointed budget advisory committee defines the budget shortfall at $2.9 million. Staff tells the committee that projected infrastructure maintenance costs account for $2 million of the shortfall.September, 2005
The “Your City/Your Decision” budget surveys are distributed to residents and business owners in Menlo Park. The survey pamphlet cites a $2.9 million budget shortfall. There are no options on the survey to increase or decrease infrastructure maintenance costs, or to use any of the city’s $21 million unallocated reserves to cover those costs.February 2006
The city holds three budget workshops. Materials distributed at the workshops site a $2.9 million budget shortfall. Participants are offered no options to increase or decrease infrastructure maintenance costs, or to use reserves to cover those costs.March 23, 2006
City staff releases a list of recommendations to mitigate the projected $2.9 million shortfall. Staff does not recommend decreasing infrastructure maintenance costs, or using reserves to cover those costs.
