In its first round of city budget hearings, East Palo Alto City Manager, Magda Gonzalez, reported to the city’s 5 council members that East Palo Alto is projected to end the 2012-13 fiscal year with an operating deficit of $530,166, an increase of $157,787 from the adopted budget deficit of $372,379.
Gonzalez said this deficit results primarily from both a decline in the city’s property tax revenues and a drop in revenues the city would have received from licenses, fees and permits because of the delay in the development of the University Plaza Project.
The “Fiscal Year 2013-2014 Proposed Operating Budget” presented at the budget hearings, which took place from May 14-15, 2013, stated that the city’s expenditures are $128,300 lower than budgeted, due primarily to staff vacancies that occurred during the year.
Currently, East Palo Alto relies on five major revenue sources: its property tax, sales tax, Transient Occupancy Tax (TOT), and its Utility Users’ Tax, license fees, and permits to provide over 80% of the general fund revenues. The budget proposal stated, “... it is assumed that the FY 2013-14 revenue will increase $495,900 over the FY 2012-13 projected year-end position.”
In spite of the anticipated revenue increase, council members must decide at their next meeting whether to lay off at least 9 city employees.
The lay offs would include Russell Averhart, who has worked for the city before its incorporation and Sean Charpentier, who is responsible for the city’s recent “Award of Merit” which was presented to the city on May 17 (See article, “An “Award of Merit”… on page 3 of this issue of EPA Today.).
But the city’s budget team headed by Gonzalez and its Community Development Director, John Doughty, defended the proposed staff layoffs.
Gonzalez and her staff pointed out that the city council had chosen, as one of its number one priorities, to deal with the city’s inadequate water resources, which have thus far negatively impacted new developments, like the University Plaza Project and other capital improvement projects.
The council had cited such projects as critical in bringing in new and needed revenue. Gonzalez and her staff argued that restructuring would give the city an opportunity to hire new staff members who have the skills they said the city needs to effectively deal with the city’s pending water crisis, which would be triggered by a lack of an alternative water source, aging and inadequate water pipes and regional water allocations that would restrict the city’s water supply if a drought is declared.
Thus far, several city council members have expressedreservations about the proposed layoffs and discussed how the staff members, slated for layoffs, could be given first priority if the layoffs were made and the plans to hire city staff for new positions went into effect.
Final budget decisions can be expected at a special city council budget hearing slated for Wednesday, May 29 at 6:30 p.m. in the East Palo Alto City Council Chamber.*
*Correction: In the printed article which appears in the April - May 17, 2013 edition of East Palo Alto Today, the day of the city council budget hearing was mistakenly given as Tuesday, May 28 at 7 p.m.
The author of this article, Henrietta J. Burroughs, can be contacted by email at email@example.com.