Financial Forecast
On February 2, the City Council will be reviewing an update to the City’s Long Range Financial Forecast, which shows a $5.8 million deficit for FY 2009 (current year ending June 30, 2009) and an $8.0 million deficit for FY 2010. How might the City address these financial challenges? Public comments as of February 2, 2009, 12:02 PM from all participants.
www.PeakDemocracy.com/231
Financial Forecast
On February 2, the City Council will be reviewing an update to the City’s Long Range Financial Forecast, which shows a $5.8 million deficit for FY 2009 (current year ending June 30, 2009) and an $8.0 million deficit for FY 2010. How might the City address these financial challenges?
Public Comments as of February 2, 2009, 12:02 PM from all participants.
As with any public comment process, participation in Palo Alto Open City Hall Forums is voluntary. The statements in this record are not necessarily a representative sample of the whole population.
www.PeakDemocracy.com/231
Public comments as of February 2, 2009, 12:02 PM from all participants. 1 of 5
Financial Forecast
On February 2, the City Council will be reviewing an update to the City’s Long Range Financial Forecast, which shows a $5.8 million deficit for FY 2009 (current year ending June 30, 2009) and an $8.0 million deficit for FY 2010. How might the City address these financial challenges?
All Statements
Richard Placone in Palo Alto January 31, 2009, 6:20 PM When Victor Ojakian was mayor several years ago, he challenged me to demonstrate my actual knowledge of the city's budget and services it provided. This was his answer to my question to him asking that he list the special services Palo Alto offered its residents that other cities did not, hence justifying a higher level of spending. I accepted the challenge and presented a detailed study comparing the budgets and services provided by two similar cities - Palo Alto and Mt. View. Too long to present here, I will give a few highlights, which still hold today, that demonstrates that Palo Alto not only spends far more per resident for its serivces, but does not provided any higher level of services than most of our neighboring cities. My data revealed that Palo Alto employs nearly twice the number of staff per 1000 residents than any other city in the Bay Area including Mt. View. At the same time the analysis showed that the revenue per resident was also significantly higher than Mt. View. At the same time a physical review of services and facilities showed that Mt. View had as many high quality ready to use parks as Palo Alto, but not as much acreage when all the open space of Bixby and Foothills is taken into account; an outstanding performing arts center; a state of the art library which offers mobile service throughout the city, a quicker response time for the fire department based on each department's own statistics, well paved streets and maintained infrastructure and more. I concluded that if Palo Alto emulated Mt.View's employee efficiency, we could save about $60M dollars per year. Ojakian countered saying that my financial figures were wrong and presented me with a different set of data. I used his data and redid my analysis and came up with the fact that if he was correct, then Palo Alto would only save $32M dollars per year. Going further, I suggested to Ojakian that even if both of us were wrong, and the savings was 50%less than my altered calculations indicated, the city would save $15 million dollars per year. And Yes, my analysis did take into account the fact that Palo Alto owns its utilities services. ( I personally believe that the council views the Utility Department as a readily available cash cow, which accounts in part for the somewhat cavalier attitude it has about revenues and surpluses up to now.) The secret is reducing the level of staff FTEs per thousand residents and the sky high and totally out of line benefits that exist, refrain from spending on such foolish items as I note that another poster to this forum has listed so I will not repeat here, and to get real about the so called special services that, with the exception of the Children's Theater (program, certainly not performing center)Palo Alto cannot, and has not to this day listed any superior service that exists here and nowhere else. In fact, though I have asked at least six council members over the years to identify these added cost services for me, not one, that's right, not one has ever given me an answer. Frank Benest, former city manager, however, did attempt to indirectly respond to my request by issuing his Five City Report, in which he attempted to do the same kind of analysis that I had just completed for Mayor Ojakian. The report was a whitewash and had little relation to reality, which I carefully demonstrated in a point by point rebuttal to him, with copies to council members. At the time I made all these analyses of mine available to Palo Alto residents, many
www.PeakDemocracy.com/231
Public comments as of February 2, 2009, 12:02 PM from all participants. 2 of 5
Financial Forecast
On February 2, the City Council will be reviewing an update to the City’s Long Range Financial Forecast, which shows a $5.8 million deficit for FY 2009 (current year ending June 30, 2009) and an $8.0 million deficit for FY 2010. How might the City address these financial challenges?
All Statements
of whom requested copies. My point: the city staff and the council have known for many years that this city was spending its way to potential oblivion, and now the inevitable coming home of the roosters to roost is upon us. We cannot solve the present deficit without serious cuts in staff and services. This must be done. However, I note that our new city manager has said that we can manage now without layoffs. I say: "No we cannot". The city staff increased by 40% during the reign of city manager June Flemming, and in spite of a very low growth rate of the city, staff levels have never gone down much since then. It will take courage to face and bring under control the financial demons staff and past and present councils have unleashed. It will also take a strong dose of facing reality on the part of Palo Alto residents, who must demand that our leaders perform at least as well as those of our neighbors. Palo Alto is a great city, and I have enjoyed living here these past 47 years, but frankly, my fellow citizens, absent Stanford University, we are no better than most other cities around here and we should start manageing ourselvs accordingly and stop pretending we are some gold standard that all should be emulating. Richard C. Placone Chimalus Drive Palo Alto David Lieberman in Palo Alto January 31, 2009, 10:17 AM City employees retire after 30 years at 90 percent of final salary with free health care for life. This is unsustainable. It is a variation of the classic Ponzi scheme. In the not too distant future 100 percent of revenues will be used to fund retirement without a penny left for the provision of services. It is time for our famously confrontation averse city council to display some intestinal fortitude and confront the unions. New employees must be put on a 401K/403B retirement plan just like the rest of us. Those who are currently employed by the city must have their retirement cashed out and told to buy themselves an annuity. There is no other way. Business tax, hiring freeze, etc., won't solve the problem. Charles Piercey in Palo Alto January 30, 2009, 9:55 PM The apparent size of the deficits will require reductions in staff and/or salaries and thus services to the residents. We can survive intelligent reductions. What we cannot do is emulate the state and do nothing serious to keep our finances in good order. Anonymous in Palo Alto January 30, 2009, 5:59 PM A June 10, 2008 headline in the Weekly said "$146 million budget sails through City Council."
www.PeakDemocracy.com/231
Public comments as of February 2, 2009, 12:02 PM from all participants. 3 of 5
Financial Forecast
On February 2, the City Council will be reviewing an update to the City’s Long Range Financial Forecast, which shows a $5.8 million deficit for FY 2009 (current year ending June 30, 2009) and an $8.0 million deficit for FY 2010. How might the City address these financial challenges?
All Statements
Supposedly it “sailed through” because there was a $300K surplus. Council followed then-city manager Benest's suggestion that no study session was required because presented a "status quo budget." But here we are, just 6 months later, looking at a huge deficit. Perhaps if Council spent as much time on the budget as it does on "civic engagement," we’d be in better shape. Council must set REAL priorities, e.g., public safety and infrastructure at the top and nonessentials like the Children’s Theater, the Zoo, art and fountains near the bottom. Then draw a line under the essentials to show how much money the city (and taxpayers!) could save if the non-essentials were cut. This would include cutting headcount. We have about twice as many employees/resident as neighboring cities. Salaries and benefits for the city’s 1,074 employees will cost $600,000 more in 2008-09. This would not be a popular exercise. There would be weeping & wailing about cutting “nonessentials.” But it’s past time for this kind of serious discussion. For too many years, council members have made emotional decisions and/or have not exercised oversight on how money was spent, e.g., ?$5K for “The Color of Palo Alto” buttons ?$10K for a Martin Luther King plaque ?$56K for a fence at the Jr. Museum & Zoo ?$65K for “The Color of Palo Alto” ?$178K for a staffer to fix the city website (after wasting $250K on the original site) ?$450K to promote tourism ?$500K for Senior Games ?$1 million for the Children’s Theater ?Untold dollars investigating the Children’s Theater fiasco (and we have yet to see the report) Most of us manage our home budgets by figuring out what we can afford short- and long-term. We take care of the essentials—pay the mortgage, insurance and college tuition; get the car serviced, fix the leaky roof. IF there’s money left over, we might buy a fountain. It’s time to demand that our city council manage our tax dollars the same way. george browning in Palo Alto January 30, 2009, 5:27 PM When the private sector has a revenue short fall, it reduces payroll. Consider this for City employees. We can't continue to offer unlimited service and programs at this time. Reduce them also. Bob Wenzlau in Palo Alto
www.PeakDemocracy.com/231
Public comments as of February 2, 2009, 12:02 PM from all participants. 4 of 5
Financial Forecast
On February 2, the City Council will be reviewing an update to the City’s Long Range Financial Forecast, which shows a $5.8 million deficit for FY 2009 (current year ending June 30, 2009) and an $8.0 million deficit for FY 2010. How might the City address these financial challenges?
All Statements
January 30, 2009, 2:02 PM I would suggest better use of enterprise funds that the city operates. It would seem reasonable to consider placing greater demands on the funds, and allow them to help bridge the funding gaps. This is an attribute that Palo Alto because we maintain many of our services, and fairly can use them toward general fund uses. I would also invite the use of more contracted services. The city could shift to more of a contract management strategy rather than an employee management service, and procure many services that are conducted by employees. The city could also examine where dual services are being provided by the City and private third parties. In the area of recreation, we enjoy many club programs that might allow the reduction of city recreation services. I view these as ideas, and obviously each carries pro's and con's. Anonymous in Palo Alto January 30, 2009, 1:01 PM Put a busines license tax on the Nov.ballot, structured to tax for total employees plus gross reciepts so that we'll finally know how many people work here in what jobs, how many businesses there are. Open negotiations with the unions to reduce pension benefits and/or have workers pay more for health insurance. Look at cutting costs for maintainance of school fields. Anonymous in Palo Alto January 30, 2009, 12:04 PM The city needs to do a review of how efficient its delivery of services is, and whether pay & benefits are positioned correctly for all employees. My sense is that for the services delivered, Palo Alto is top-heavy with managers and administrators relative to best in class cities. Also, at least for managers and above, salary and associated benefits (holidays, retirement,etc.) have been much more generous than the comparable private sector, or than is necessary to attract top talent to a very desirable city. First get your own house in order before you cut services or ask to rasie taxes. Anonymous in Palo Alto January 30, 2009, 11:12 AM Cut salaries. We have police making hundreds of thousands, hundreds of workers making over $100K and a spending level per resident that has consistently been too high. A long history of excessive spending makes city council look like they are way out of touch. And Mr. Morton's idea to tax-tax-tax us more is rather ingenuous in this environment. The unspoken word: you have to take on the union(s).
www.PeakDemocracy.com/231
Public comments as of February 2, 2009, 12:02 PM from all participants. 5 of 5