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Portola Valley’s Town Council meeting on June 12 discussed the town’s preliminary budget for 2024-25 and how Town Manager Sharif Etman plans to reorganize the town to bring Portola Valley’s finances back on track.
Portola Valley is currently running at a loss of “$150,000 to $200,000 a month” and if the town runs at this current rate, the town has 26 to 30 months left before money runs out, according to the Finance Committee.
“If we stay at our current run rate, when do we run out of money?” Council member Craig Taylor asked Etman. Etman responded that the town has less than three years to get finances in order.
The Town Council voted unanimously to adopt the preliminary budget with amendments to freeze capital improvement program projects until final budget approval in September.
Etman is aiming to align with council goals, conserve revenues, recruit and fill vacant positions, provide stability and restore integrity of finances.
The town is now staffed with 17 employees, with plans to have a full staff of 20 full time employees. Expectations for the budget at in account construction in progress, general election costs, committee budgets and a $75,000 sustainability grant. Some $40,000 of the grant will be used for staffing toward sustainability efforts.
CIP projects include storm drain repairs, street resurfacing, and more. Newly added projects ask for a used vehicle of $35,000 to use for inspections and traveling to meetings and a replacement of the town hall boiler.
Funds for CIP projects are included in the town’s general funds, explained Etman.
Reorganization
Town officials are working on reorganization of staff. The makeup of the planning and building department is still in the works as they evaluate how many staff members and consultants they need as well as how to recruit and keep a permanent director.
Terrence Grindall is currently serving as the interim planning and building director and former interim Planning Director Jon Biggs will be returning in July to work on special projects. Etman said the staff aims to have a plan for the planning department in the next two to three months.
The town is also looking into possible revenue generation measures including, user and Nexus studies, utility user tax increase, parcel tax, annexation, land sale, impact fees on property developers and becoming a charter town.
“Some of these discussions, I think, could be very quick discussions. Other ones could be rather lengthy, but we really got to pick up every rock, take a look at it, put it back down and see if it works for our town moving forward,” Etman said.
He recommends that the council adopt a preliminary budget with revisions in September for the final budget. The current fiscal year ends on June 30 and a revision on the budget will need to be revisited for 2024-25. He also called for a user fee and Nexus study which will assess the reasonable cost for town services and tax obligations.
Etman also recommends continued engagement with the Finance Committee and to explore a fiscal emergency, which he explains may be declared by the staff in the future. A fiscal emergency would mark a lack of financial support for the town and will be brought back as a resolution to the council.
The presented changes are “new to the town of Portola Valley,” said Etman. “This is kind of a reality check for Portola Valley and we’re not used to that.”
In order to get the town in financial order, Etman is reorganizing the town and examining what roles are necessary. Each change will work toward lowering the town’s budget deficit, he explained.
“We’re losing kind of the small town. What we were here for is open space, for trails and to support nature and to restore our open spaces and that’s not coming through in this budget and our planning structure,” said Hufty in response to the budget presentation.
All of the council members’ concerns are being noted to be considered with the Finance Committee, said Etman.
Residents expressed concerns for the future of the town’s finances and asked for a balanced budget. Others have suggested that town staff ask qualified residents to pitch in when further assistance is needed.
“I’d say that we need to submit a balanced budget and reduce new contracts and halt the projects that bleed money,” said Portola Valley resident Rita Comes, who runs the organization Portola Valley Neighbors United, a volunteer-led group that started in response to Stanford University’s plan to develop land along Alpine Road known as the Wedge, which is opposed.
Council members agreed to freeze any spendings on CIP projects until September to save as much as possible. Council member Judith Hasko asked town staff for a budget scenario planning and a better platform for council members to review the budget to prepare for the decisions they will make for the final budget in September.
“I think we need to be thinking about this in terms of cutting what we can and living with some deficits in the short term,” said Council member Jeff Aalfs.
Mayor Sarah Wernikoff shared her gratitude for Etman and the work he has done since he started as town manager.
“You’re putting us on a path to integrity of our finances and so without you, we would not have known you, so I appreciate the work that you and your team and the resources that you’re bringing into the community,” said Wernikoff.
Also note to the article author: “CIP” means “Capital improvement project” not “Construction in progress”. The article kinda doesn’t make sense saying “construction in progress” — the town’s not currently building anything!