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Coronavirus expected to cost Menlo Park $8.8 million in lost revenues

Original post made on Apr 9, 2020

The coronavirus pandemic and the community shutdown that it has caused are expected to cost the city of Menlo Park an estimated $8.8 million in revenue, according to Assistant City Manager Nick Pegueros.

Read the full story here Web Link posted Wednesday, April 8, 2020, 11:58 AM

Comments (23)

12 people like this
Posted by Member
a resident of Menlo Park: other
on Apr 9, 2020 at 9:54 am

How about Menlo Park starts collecting all the AirBNB taxes that AirBNB "hosts" have not been paying for years? Better yet, ban AirBNB from Menlo Park. Our hotels pay taxes, employ locals, and are bound to comply with hygiene regularions. AirBNB'ers host people in our residential neighborhoods from all over the world, with no hygiene regulations, exposing us all to diseases. It's time the city address AirBNB: either enforce the TOT taxes or close down the health risks! We don't pay exhobitant property taxes only to have an unregulated Motel 6 next door!


11 people like this
Posted by Supporter
a resident of Menlo Park: other
on Apr 9, 2020 at 10:08 am

AirBnB has a place in Menlo Park and the reast of the Bay Area. In addition to providing a great alternative to hotels it also helps property owners earn some extra income to help pay their mortgage or living expenses. With the cost of housing in this area people need to find ways to afford to live here and using AirBnB to help make ends meet is one way to get that done.


18 people like this
Posted by Not A Supporter
a resident of Menlo Park: Central Menlo Park
on Apr 9, 2020 at 10:17 am

Dear Supporter, do you pay the CIty of Menlo Park TOT taxes for your AirBNB business? Have you considered that you take business from hotels, likely don't pay requried TOT taxes, and help drive up housing costs b/c AirBNB makes residential housing more scarce? It's not a "great alternative to hotels" to cheat on taxes, drive up housing costs, and endanger yourself and your neighbors with disease-carrying "guests", while taking business from hotels who employ people in need of employment.


7 people like this
Posted by Supporter
a resident of Menlo Park: other
on Apr 9, 2020 at 11:35 am

You sound a littiel paranoid with your "endanger yourself and your neighbors with disease-carrying "guests"" Do you work in the hotel business? You seem to think they are the best option for everyone, they are not. People can choose what they want to do and where they want to stay, trying to force them into a single option is wrong. Most cities require AitBnB to report occupancy and they collect the taxes on that. I don't know if Menlo Park does or not because I do not use AirBnB to rent out my property/rooms, just to rent rooms when I travel. My experience is that the rooms and apartments I have rented have been as clean or cleaner than hotel rooms I have stayed in. The hosts have been very friendly and helpful and the accomodations larger than I could get renging a hotel room. If you don't like AirBnB that is fine, don't use them. But let others who rent out their property for extra income and to cover their mortgage decide for themselves.


11 people like this
Posted by Azale Jade
a resident of Menlo Park: other
on Apr 9, 2020 at 11:58 am

STOP AirBnB in Menlo Park now!

* It takes revenue away from legitimate tax paying businesses and thus harms the entire community. Menlo Park needs to track down every AirBnB host in town and make sure those running these operations are paying taxes as they are required to do.

* AirBnB turns our neighborhoods into unauthorized commerce hubs with strangers from-who-knows-where - increasing traffic and crime. As a property owner who pays a ransom in property taxes to live in Menlo Park, I am NOT paying this to see my neighborhood turned into an illegitimate hotel park, with strangers, suitcases and Uber rides coming and going at all hours of the day and night. Do your job Menlo Park City Council and get AirBnB out now!


12 people like this
Posted by Not A Supporter
a resident of Menlo Park: Central Menlo Park
on Apr 9, 2020 at 12:19 pm

Dear Supporter, no, I do not work in the hotel business. I am one of many Menlo Park home owners unhappy about AirBNB'ers. Maybe your AirBNB experiences have been good, but know that hotels and motels have health inspectors and laws on how hot, for example, bed sheets are washed, so they are actually sanitized. AirBNB'ers have no such oversight. In the time of this pandemic these sanitiation issues are not paranoia. They may save your life. You also might feel differently if there were a stream of tourists in ubers on your once quiet, residentially zoned street. I think AirBNB will not have such a robust future, post shelter-in-place.


9 people like this
Posted by kbehroozi
a resident of Menlo Park: Suburban Park/Lorelei Manor/Flood Park Triangle
on Apr 9, 2020 at 1:26 pm

How many people who really want to ban Airbnb in Menlo Park have, themselves, stayed in an Airbnb or VRBO or other vacation rental somewhere else? Beach? mountains? trip to Paris? I personally use Airbnb at least once a year while traveling. As a family we like staying in places with kitchens/separate sleeping quarters. I'd be a hypocrite if I didn't want to allow in my own neighborhood what I've so enjoyed using in other people's neighborhoods.

I also have friends in a different Bay Area city whose Airbnb revenue enables them to work as a professional musician and nonprofit executive (instead of banking/ad exec work, which is what they used to do). Their work adds value to their community and enables them to practice their chosen professions in one of the most expensive housing markets. Their community is richer for their (non-monetary) contributions.

That said, we have a shortage of affordable rental housing and it does seem unfair not to contribute ToT when you're running a mini Airbnb behind your home.

I'd personally rather see us keep the flexibility of Airbnb while making the economics work for our city. Surely we can be more nuanced in our approach and either provide economic incentives for folks who eschew the flexibility of Airbnb in exchange for providing much-needed longer-term housing (especially affordable housing)–or figure out how to appropriately tax Airbnb revenues. Here's a list of places in CA that are currently doing this: Web Link


21 people like this
Posted by Not A Supporter
a resident of Menlo Park: Central Menlo Park
on Apr 9, 2020 at 2:46 pm

Kbehroozi, you misread the AirBNB tax link you shared. It only lists cities and counties in California that tax the *Guest* directly. Menlo Park has a law that *host* (hotel/motel/AirBNB host) pay the CIty a transient occupancy tax of 10%. That's the law in Menlo Park, but very few hosts pay it. Palo Alto is collecting taxes on Airbnb rentals in the city and is reported to have collected between $800,000 and $1.6 million in transient occupancy taxes recently (Web Link). Menlo Park AirBNB hosts likely owe back taxes into the many millions.


7 people like this
Posted by new guy
a resident of Menlo Park: Downtown
on Apr 10, 2020 at 1:16 pm

Hey, guess what. I just sold something to someone and they paid me this thing called "cash" AND I am not going to report it as income or profit to anyone!!!! weird right?

Funny how this became about short term house rentals.

I do love how government gets to call money extracted from transactions (sales tax, TOT, etc) revenue, AND a "cost" if they don't get to extract it in the first place.


11 people like this
Posted by old guy
a resident of Menlo Park: Park Forest
on Apr 10, 2020 at 2:11 pm

> I do love how government gets to call money extracted from transactions...

Indeed. I rather love how government gets to build roads, regulate food and air safety, provide law and judicial services, etc..


7 people like this
Posted by new guy
a resident of Menlo Park: Downtown
on Apr 10, 2020 at 6:00 pm

Yep, happy about those things too, would love to see new roads though, instead we will see "Lexus lanes". Thanks for the sentiment though.


4 people like this
Posted by Brian
a resident of Menlo Park: The Willows
on Apr 10, 2020 at 9:57 pm

I have to agree with Kate, I have used AirBnB when traveling and like it alot. There are a few places in my immediate neighborhood that I know rent rooms through AirBnB and it doesn't bother me. Never had a problem with a renter and if I did I would talk to the property owner about it.

I think the AirBnB's are clean and well kept up, if they are not they get low ratings and bad reviews which AirBnB then addresses. As for the taxes, if the city doesn't feel it is worth their time to pursue them and the owners want to risk not paying them it is up to them.


3 people like this
Posted by Manlo Punk
a resident of Menlo Park: Central Menlo Park
on Apr 11, 2020 at 12:00 pm

What is amazing to me is everyone I see not wearing some form of protection. The last couple of days running out because I have to, the only people I see wearing any protection are those working at the stores.

I've seen runners, walkers, bikers, and the like, and not one person was wearing protective gear, face mask of any kind.

Yes, I was and will.


1 person likes this
Posted by ST Rental User
a resident of Menlo Park: Linfield Oaks
on Apr 13, 2020 at 8:26 am

The perception of short term renters being criminally motivated and diseased is preposterous. My family has rented many properties on AirBNB and VRBO. I can’t think of anyone in my peer group that has not. None fit the uninformed descriptions above. Many make hood use of properties like second homes that would normally be sitting idle. Without their use, regions like Tahoe would skyrocket in need for unnecessary hotels.

And also to dispel a myth, until this pandemic took place, the local PA-MP hotels we’re enjoying $500+ per night rates consistently due to the high demand. People in my company had moved to staying at AirBNB/VRBO properties due to lack of availability at these hotels and obscene rates. Again, professionals - not disease-laden criminals.

If owners are not paying the taxes required by law, then the city and rental platforms need to collaborate to ensure that happens.


5 people like this
Posted by what kind of parties?
a resident of Menlo Park: Menlo Oaks
on Apr 13, 2020 at 9:13 am

> Many make hood use of properties

Ahhh, got it.

;)


1 person likes this
Posted by Roy Thiele-Sardiña
a resident of Menlo Park: Central Menlo Park
on Apr 14, 2020 at 8:14 pm

So the title of the article was about MPK losing $8.8M in revenue.

The ONLY thing we should be asking our city leaders is how many employees will the city be laying off. Their variable cost is the pivot for balancing a budget, and private employers ALL over the Bay Area are reducing staff. I except our city council to do their fiduciary duty and reduce our employee costs NOW.

Time to redo the budget and cut expenses accordingly.

Roy Thiele-Sardina


Like this comment
Posted by Brian
a resident of Menlo Park: The Willows
on Apr 15, 2020 at 12:21 pm

Roy Thiele-Sardiña,

Did you read the full article? Some of the 8.8 million is offset by vacancies and reductions to contract and professional services which reduces the actual deficit to about 3.8 million. Menlo Park as a $14 million reserve which they can use to cover that amount for what is hopefully a one time expense.

Here is the relevant paragraph:

"Fortunately, Pegueros said, the city expects about $5 million of that to be made up through vacancy savings and reductions to contract and professional services and a $1.5 million budget contingency amount. More importantly, the city has about $14 million set aside in an economic stabilization reserve to cover the estimated $3.8 million net loss."


1 person likes this
Posted by Roy Thiele-Sardiña
a resident of Menlo Park: Central Menlo Park
on Apr 16, 2020 at 9:19 am

@Brian,

I read the WHOLE story and I stand by my assertion. the City needs to reduce it's workforce NOW>

That reserve is just that a reserve.....BTW the city is over $50 million in arrears on it's pension payments to CalPers....so that reserve is a drop in a very large bucket. Time to reduce costs.

Roy


Like this comment
Posted by what kind of parties?
a resident of Menlo Park: Menlo Oaks
on Apr 16, 2020 at 10:05 am

> and I stand by my assertion. the City needs to reduce it's workforce NOW>

Must be a day ending in 'y'.


2 people like this
Posted by Brian
a resident of Menlo Park: The Willows
on Apr 16, 2020 at 7:53 pm

Roy Thiele-Sardiña,

We are going to have to disagree then. The shelter in place is temporary and given how hard it is to find good employees to work for the city, letting any of them go would be shooting ourselves in the foot, not to mention terminating employees during this time is a pretty cruel thing to do. We should keep the employees, who are still working remotely, and see what happends over the new couple months before doing anything. The city manager should consider drafting a plan that might include plans to furlough some employees if necessary. Along with other cost cutting ideas if this Shelter-in-place continues into June and later.


5 people like this
Posted by Peter Carpenter
a resident of Menlo Park: Park Forest
on Apr 26, 2020 at 12:53 pm

A Tale of Three Cities and their utilization of citizen volunteers in response to the Covid 19 Pandemic


Here is what the City of Palo Alto did over a month ago:

City of Palo Alto Emergency Services Volunteer Activation Order 20200317-1

The City of Palo Alto is activating the ESV program in response to the COVID-19 emergency. A state of emergency has been issued at the National, State, County, and City level and extraordinary measures have been enacted to slow the spread of the coronavirus.

The intent of this activation is to promote public safety in our neighborhoods and to encourage a sense of normalcy in our community.

Actions all ESV Members should take:
1. Be visible in your neighborhoods. “Eyes and Ears”. Take periodic walks and wear your vest and hat and carry your City issued ESV ID Card. The current shelter in place order allows outside activity as long as you maintain a healthy distance from others – at least 6 feet.

2. Stay “in the loop”. Be aware of what is happening locally.
• Look for and read OES updates (via Veoci),
• Follow the City’s Coronavirus daily updates
• Point neighbors to the City’s Coronavirus website.
New features are being added weekly – Community Support, and Support Local Businesses
• Read and listen to trusted sources of information.

3. Check on your neighbors. On a routine basis communicate with your neighbors. Pass along information you receive from OES or help stop rumors.
• Send questions to the City’s Call-Center: 650-272-3181
• Provide electronic or hard copy public safety materials.
o The current Coronavirus flyer:
o Help / OK signs:
o Many others, ask us about them

4. Update/Create Contact Lists. If you already have contact lists via email, text, online – use those to make sure your neighbors are well. If you don’t, now is a good time to start. Remember that some members of our community may be at more risk with the imposed social isolation and lack of basic supplies.

5. Remember, solve problems at the lowest level. Some community resources are available:See: Web Link.
• Your closest resource is your best resource.
• Ask for help when you don’t have a local solution. Reach out for assistance if you need it. Contact your fellow BPCs, NPC, or OES.
If you have questions, work through your NPCs - follow the chain of command please.

Throughout this situation – have positive intentions, be respectful, and do no harm. Thanks for all you are doing and will do to assist our community.
Nathan Rainey
Emergency Services Coordinator

The Town of Atherton also activated their Atherton Disaster Assistance and Preparedness Team with a similar mission at the same time.

The citizen volunteers who Palo Alto and Atherton have activated include both individuals who are CERT trained and many who are not because these jurisdiction realize that the Covid 19 Pandemic requires very different skill sets than do other types of disasters. These Emergency Service Volunteers (ESV) are not roaming the streets, knocking on doors or doing search and rescue but rather bringing their neighborhoods closer together. And they are an incredible force multiplier for their very resource constrained local governments. As Palo Alto states ""The City needs information from the neighborhoods to know the big picture and focus on getting resources to where the need is greatest.”

In contrast the City of Menlo Park has refused to use its citizen volunteers.
I will leave it to our elected City Council to explain why.

Since the City of Menlo Park has designated citizens volunteers as YOYOs (You are On Your Own) some of us have decided to follow these Palo Alto instructions:

WHEN AND HOW TO ACTIVATE
• Self activate if the situation is known to you (you see, feel, hear, smell, etc.) without outside advice and affects your immediate area or neighborhood.

The Covid Pandemic is certainly known to us and it certainly affects our immediate neighborhoods.

Given this my Park Forest Plus neighborhood has Self Activated and we are in operation.

We are fully organized with an Area Preparedness Coordinator, three Neighborhood Preparedness Coordinators and 8 Block Preparedness Coordinators. Some are CERT trained but most are just very smart capable citizens. We have inventoried every residence in our neighborhood, have our own web site (Web Link), do continual check-ins, share scarce resources, help anyone who needs help and are bringing our neighborhood together as it has never been before. We haven’t seen a police cruiser in our neighborhood for over a month - but that is fine because we know that it does not take a badge and a gun to take care of our neighbors. And you do not need to be a CERT to be an impactful Emergency Service Volunteer in the age of Covid 19.

I am aware that other Menlo Park neighborhoods have also Self Activated.

Join us, you CAN make a difference. You do NOT need anybody’s permission.

Peter Carpenter
MPFPD CERT
Founding member of Atherton’s ADAPT
A currently Activated Palo Alto CERT
Park Forest Plus Block Preparedness Coordinator

" Life isn’t easy or simple, but it’s doable
Some people say life is easy. It’s not. Others say it’s simple. It’s not. Life is hard and confusing. But it’s doable. We can figure it out. We just have a way of overthinking it. Sometimes the hardest thing we do is cutting out all the nonsense and getting back to what’s possible.”



Ps. In an attempt to demonstrate his expert knowledge of the Incident Command System the Menlo Pak Police Chief has repeatedly stated that the ICS began as a result of the Oakland Fire. He was 20 years off - hopefully it won't take 20 years for Menlo Park to catch up with Palo Alto and Atherton in the wise use of volunteers.

The Incident Command System began LONG before the Oakland Fire - I know because when I was a US Forest Service Smokejumper 1958-1961 we were already utilizing the early versions of it in Region 5. Every fire had an Incident Commander and that Commander changed as a particular fire grew larger and more resources were assigned. We lived ICS every day.


"FIRST THERE WAS FIRE: THE 1970 FIRE SEASON AND THE BEGINNING OF FIRESCOPE

ICS was developed in the 1970s by an interagency group in Southern California called FIRESCOPE. FIRESCOPE stood for Firefighting Resources of Southern California Organized for Potential Emergencies and they set out to develop two interrelated, yet independent, systems for managing wildland fire. Those two systems were the:

Multiagency Coordination System (MACS)
Incident Command System (ICS)
The impetus for the development of these systems was the disastrous and devastating 1970 fire season in Southern California. At the time, the sky was full of giant smoke columns and fire apparatus were passing each other on their way to incidents, with some going north as others headed south. Individual Command Posts and fire camps were established by multiple agencies for the same incident. Response resource availabilities reached critically low levels. The number of fires burning at the same time taxed the organizational capability to protect lives, property, and the environment, especially where wilderness bordered urban communities, creating a dangerous wildland-urban interface. These fires, over 13 days, resulted in 16 deaths, 700+ destroyed structures, more than 500,000 acres burned, and over $234 million in damage.

As part of the after-action review, the U.S. Forest Service, with their partner response agencies in Southern California, examined the incident management efforts. They discovered the following issues:

At the incident or field level, there was confusion derived from different terminology, organizational structure, and operating procedures between the various response agencies.
Above the incident or field level at the agency or coordination level, the mechanisms to coordinate and handle competing resource demands and to establish consistent resource priorities was inadequate.
Based on the devastating fire season of 1970 and these findings, Congress allocated $900,000 to the U.S. Forest Service to develop a system to improve the capabilities of wildland fire response agencies to effectively coordinate multiagency, multijurisdictional response. Specifically, they were to “make a quantum jump in the capabilities of Southern California wildland fire protection agencies to effectively coordinate interagency action and to allocate suppression resources in dynamic, multiple fire situations” (FIRESCOPE Program Charter, 1973). The Congressional funding was used to establish a Research, Development, and Application (RD&A) program at the Riverside Fire Laboratory in Riverside, CA which eventually became known as FIRESCOPE.

It should be noted that at the beginning of this work, despite the recognition that there were incident or field level shortfalls in organization and terminology, there was no mention of the need to develop an on the ground incident management system like ICS. Most of the efforts were focused on the multiagency coordination challenges above the incident or field level. It wasn’t until 1972 when FIRESCOPE was formed that this need was recognized and the concept of ICS was first discussed."


1 person likes this
Posted by Stu Soffer
a resident of Menlo Park: Linfield Oaks
on Apr 26, 2020 at 9:54 pm

There is a very easy that MO. It’s can adapt. Look at your last CAFR financial report. There is one chart that provides historical revenues and expenses.

Locate a year on that chart that approximates the current expert teed revenues.

Then model your current expenses on the historic expenses when revenues last matches.


A good starting point.


1 person likes this
Posted by Stu
a resident of Menlo Park: Linfield Oaks
on Apr 26, 2020 at 9:58 pm

Big fingers small

There is a very easy that Model that the city can try. Look at your last CAFR financial report. There is one chart that provides historical revenues and expenses.

Locate a year on that chart that approximates the current expected revenues.

Then model your current expenses on the historic expenses when revenues last matches that prior year.

A good starting point.

I suggest that the city assemble a wokring group to work on this without staff bias.


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