Service cuts, but no tax hike in Menlo Park budget

"The city expects a 3.1 percent rise in revenue from the current fiscal year, with receipts of property tax, sales tax and hotel tax all projected to increase."

Somebody isn't paying attention. The San Mateo County Tax Assessor has already told the cities that property tax revenues will go DOWN. The City will have a much bigger deficit than $470,000.

Here is what the County Assessor states is the DECLINE in Menlo Park assessed values:

MENLO PARK 11,451 total parcels
936 number of parcels that declined
8% percentage of properties which declined
$ 165,300 average reduction per parcel
$ 154,700,000 total reduction is assessed value
$ 1,547,000 estimated REDUCTION in property taxes

It is very frustrating that services will be cut when almost every for-profit and nonprofit organization has cut salaries before cutting services. Most have had to do both, but the city management is not showing much leadership or foresight.

What's wrong with the Council and Rojas. Lots!!!

Why are we discussing an overhaul of Menlo Park when we cut personnel, etc. like the police.

I'd like a reply from the 6 or preferrably one EACH of you. For sure, I'll not vote for those running again soon.

It's like the smoking that you passed and reneiged on and haven't brought it up again as you sdaid you would before June.

It's a health issue!!!!~

Peter - Ms. Augustine said 3.1% increase in all revenue. Do you really think she pulled 3.1% out of a hat? She's a financial planner. I'm sure she took all factors into consideration not just one single factor. As I recall her past forcasts have been pretty accurate. Even if she were off by a percentage point or two, there were not very many financial experts on the planet who predicted the latest financial trouble. I didn't. Did you? I like her track record.

Mike asks:"there were not very many financial experts on the planet who predicted the latest financial trouble. I didn't. Did you?"

Yes I did. Here is my prediction made in 2008:

Palo Alto Weekly
Spectrum - Friday, December 5, 2008

Guest Opinion: Economic 'perfect storm' is brewing for local agencies

by Peter Carpenter

For many years I have been directly involved in local government agencies or in federal programs designed to support local and state agencies.
Never in that period have I seen such financial storm clouds as now appear on the horizon of local governments.
For the last eight years I have had the privilege and the responsibility of serving the citizens as an elected director of the Menlo Park Fire Protection District (which serves Menlo Park, East Palo Alto, Atherton and parts of San Mateo County) — one of the finest fire districts in the country.
Previously, I served as a Planning Commissioner in Palo Alto and, many years ago, as the federal official in the Office of Management and Budget who was responsible for coordinating all federal assistance to state and local governments.
With falling property values yielding less property-tax revenues, falling consumer and business spending yielding less sales taxes, increased retirement costs (because CalPERS has suffered significant loss of capital in the current financial downturn), continued demands for well-above-average salary increases by public employees, and the governor declaring a financial emergency, local governments in California are facing a Perfect Storm.
Unless local governments act promptly to respond to these dramatic changes we will see more of them joining Vacaville and Rio Vista in being forced into bankruptcy.
Housing prices and hence property taxes will be depressed for at least another two years — just about everywhere except the Palo Alto area, it seems.
And if a lot of the current homeowners request reassessments the decreases will be dramatic.
Similarly consumer and business spending are forecast to be depressed for the next two years.
And CalPERS, which is obligated to continue to pay out fixed-benefit retirement payments and which has seen huge losses in its capital, can only turn to local governments to make up the difference.
And local governments have no choice but to pay what CalPERS will demand.
And while this is all happening local-government unions are continuing to ask for significant increases in both salaries and benefits.
The total labor costs for most local governments are between 60 and 80 percent of their total budgets. While California's local governments are blessed with very talented and capable employees, the current process of salary-and-benefit negotiation has gotten out of hand.
Local-government employee unions insist that the standard for setting their pay be that they be above the average of other public employees. But if everybody is above average then the average goes up very quickly.
While we have many superb employees working for local government, those employees should not expect to receive salaries and benefits that are inconsistent with those of the citizens whom they serve or that will bankrupt their employers.
And in most cases those inflationary-spiral labor agreements are being approved in secret without any public input or scrutiny.
As an elected member of the Board of Directors of one of the finest fire districts, what do I think should be done to respond to this Perfect Storm?
First, local governments need to recognize that there is a crisis and act now.
Second, they need to involve their citizens in a careful look at each of their programs to determine which programs are no longer affordable — however nice or special they might have been in better times, or even how worthy any single program might be.
Third, they need to plan now for hiring freezes, elimination of overtime, reduction in services, layoffs, renegotiated labor agreements and, in the extreme, bankruptcy.
Fourth, they should consider accelerating essential capital-improvement projects (the operative word is essential), as construction costs during this downturn will be substantially less than if the projects are delayed until the recovery begins.
Finally, they need to move the review and approval of new labor agreements out from behind the current wall of secrecy from which the public is excluded.
Once new labor agreements have been agreed upon by the negotiators then those agreements should be simultaneously submitted to both the union members and to the public that will bear the costs well before the city councils and special district boards meet in public session to vote on those agreements.
The Perfect Storm can be weathered but not by sunbathing on the deck.

Mike states:"Ms. Augustine said 3.1% increase in all revenue."

My response, the first in this thread, stated:

"The city expects a 3.1 percent rise in revenue from the current fiscal year, with receipts of property tax, sales tax and hotel tax all projected to increase."

Somebody isn't paying attention. The San Mateo County Tax Assessor has already told the cities that property tax revenues will go DOWN. The City will have a much bigger deficit than $470,000.

and my second post provided this data to substantiate my assertion:
Here is what the County Assessor states is the DECLINE in Menlo Park assessed values:

$ 154,700,000 total reduction is assessed value

$ 1,547,000 estimated REDUCTION in property taxes

The proposed budget has property taxes going UP by $298k. That is hard to reconcile with the data from the Tax Assessor.

In addition to the loss in property tax revenues from reassessed properties, we also know that the 'usual' 2% increase for other Menlo Park properties which have not be reassessed, transferred ownership or were newly built will, because of the decrease in the CPI, actually go down very slightly.

I seriously doubt that the increases from transferred ownership and new construction, a very small fraction of Menlo Park properties, will be sufficient to offset these two declines.

[This post and a response to it removed. Stick to the issue and don't attack other posters]