Menlo Park's Future
Budget Update: Are We Headed In the Wrong Direction?
Fellow Residents,
By now you may have received a City-issued Menlo Park Budget Update in the mail. I’ll quote from this report and then offer some insights:
“Although the City continues to work hard to restrict cost increases and find savings, the 2008-09 budget calls for using slightly more than $1 million, of the $25 million in reserves, to cover operating expenditures in the coming year” (which means that the estimated reserve at the end of this budget year is $23,565,000.)
o In Budget Year 2006-07 (the last budget I oversaw) the City’s reserves were $35.7 million. Recently, $10 million was transferred to partially fund retiree health care benefit costs.
o Budget deficits of at least $1 million per year are projected for the next decade. http://service.govdelivery.com/docs/CAMENLO/CAMENLO_104/CAMENLO_104_20080603_010000_en.pdf
o This year’s budget is counting on $1,803,507 of “Intergovernmental Transfers”.
o These come mostly from the State and it’s anyone’s guess if these will be delivered this year.
o The cost of the El Camino Real/Downtown Plan (estimated at $250,000 to $500,000) has not been included in this year’s budget.
Quoting more from the Menlo Park Budget Update:
“Given that the biggest costs in the city are staff related, one way to balance the budget is to reduce these costs. This has been especially challenging in recent years as personnel costs, including the cost of retirement and health care benefits, have risen significantly.”
o This is reinforced by a graph showing that 71% of the City’s expenses are personnel.
o Recent employee contracts give all employees pay increases as well as pension and benefit increases. Assuming no new staff is added, employee costs will increase $5 mil in the next 5 years.
o Bottom line: Considering the news that is found in this report, I am wondering ifthis council has foregone one of its goals – to implement strategies that would provide for a sustainable budget.
As always, I welcome your comments. So please write to me at:[email protected]
If you would like to read my previous email newsletters, you can go to – http://menlofuture.weebly.com
Thanks,
Lee Duboc
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