Fiscal year 2020-21 proposed budget

City Manager's transmittal letter and budget discussion

Resilient Community

Dear Honorable Mayor Taylor and Members of the City Council,


It is with mixed emotions that I present to you and the community my proposed budget for fiscal year 2020-21. My first full fiscal year as the City Manager presented a number of substantial accomplishments, and as the novel coronavirus threatened the community and prompted a proclamation of local emergency, a number of considerable challenges. From impacts on lives as members of the community were subject to a stay-at-home order and the financial effects of rapidly adapting service provision, fiscal year 2020-21 is shaping up to be fundamentally different than any in recent memory. The City faced significant challenges during the Great Recession nearly a decade ago, but even those may pale in comparison with the dual threat of a global pandemic and financial crisis. I am confident in the ability of the City Council, the community, and the City staff to meet this challenge head-on, but it will not be without pain and sacrifice. The theme of this year’s budget, “Resilient Community,” reflects the changes already seen throughout the City, the Bay Area, the country, and even the world in recent months, and, perhaps most importantly, the expectation that things will not change overnight and that resilience will be needed for many months to come.


As I stated in the fiscal year 2019-20 transmittal letter, change is inherently difficult to manage, and the magnitude of the changes required this year make that statement even more true. The proposed budget includes a number of these difficult changes in order to remain fiscally prudent, financially stable, and capable of demonstrating resilience. Discussed in greater detail throughout this document, the General Fund expects to see unprecedented changes in the composition of its revenue and expenditure mix, and will require the City to offer lower levels of service to the community in order to balance the budget. The changes in service level will result in an overall reduction in the City’s staffing level, and it is with a heavy heart that this proposed budget includes the layoff of 22 regular and over 50 temporary staff, necessary but agonizing measures which follow the City Council’s deliberations over the months leading up to the beginning of the fiscal year. In the face of such challenges, our community must remain resilient and prepare to maintain the difficult measures enacted to safeguard health while simultaneously preparing to endure a daunting economic situation.


Starla Jerome-Robinson, City Manager

Service level changes

As the effects of the COVID-19 pandemic became clear and the implications on City services became more quantifiable, the City Council deliberated about a number of potential service level changes to offset an approximately $12.7 million revenue deficit. The following service level changes are those that were reached by City Council consensus over a number of public meetings available to watch on the City's website. The changes are ordered by department and quantified by expected impact available at the time of publication. The fiscal impact of each service level change is expressed as a net impact, or the resultant tax subsidy reduced after considering both expenditures and revenues.


Changes to the baseline budget to incorporate new information or conditions - $0.80 million

Affecting all departments, categories of flexible expenditures including overtime, temporary help, employee training, and participation in conferences and seminars were consolidated and reduced by 50 percent. Additionally, changes to the rate paid to the California Public Employee Retirement System (CalPERS), the organization which administers the City's retirement contract, were added as a result of assumption changes beginning in December of 2016. The City also has closed contracts with each of its four collective bargaining units which include provisions for cost of living adjustments, increasing the baseline personnel expenditures with respect to the fiscal year 2019-20 adopted budget. Finally, one provisional management analyst position is set to expire on June 30, 2020 and therefore is removed from the fiscal year 2020-21 proposed budget.


Changes to unrepresented management - $1.14 million

Following the City Council's desire for the management of the City organization to lead the way in reductions, a 25 percent overall reduction goal was identified for this group. Changes include suspension of merit-based pay increases in fiscal year 2020-21, suspension of the bonus program for unrepresented management staff, and the freezing of vacant positions including the Community Development Director, the Administrative Services Director, and the Assistant Public Works Director - Transportation position. This change also resulted in a reorganization which consolidated the Library department with the Community Services Department under a single department head and formed the Library and Community Services Department, also resulting in the layoff of one former department head.


Changes to general administration - $0.95 million

Supporting the organization through policy analysis, internal services, and special projects, freezing the positions of Administrative Services Director, management analyst, human resources technician, information technology support specialist, and a partial accounting assistant vacant position, as well as reduction in contract service support and the roll-back of accounting support by eliminating the senior accountant position scale the general administration to the new level of the organization as a whole. These changes result in the layoff of one regular staff.


Changes to the Police Department - $2.46 million

Elimination of the traffic unit, proactive gang and narcotics investigations, and daytime parking enforcement - $1.88 million

These changes include the elimination of the unit dedicated to traffic enforcement, the officers assigned to proactive investigations, and the parking enforcement operations during daytime hours. These operations will continue on an as-needed basis from the ongoing patrol operations. These changes result in the layoff of six sworn officers and one non-sworn officer.


Elimination of community engagement programs, proactive code enforcement, administration, and police records - $0.58 million

Community engagement programs such as National Night Out, crime prevention services, and proactive code enforcement operations will cease. These changes will result in longer wait times for code violation investigations, requirements that misdemeanor property crimes be reported online, and fewer outreach programs for the community. In addition, capacity for administrative programs such as budgetary preparation and control and in police records will be reduced. These changes result in the layoff of four non-sworn staff.


Changes to the Library and Community Services Department - $2.70 million

Withdrawal from the Peninsula Library System - $0.14 million

Menlo Park will no longer participate in the Peninsula Library System, reducing the need to share resources between libraries in different jurisdictions and requiring residents to use alternate methods to request from outside the collection.


Reduction of library open hours by 25 percent and books and e-resources by 75 percent - $0.58 million

Open hours at the Main and Belle Haven Branch Libraries will be reduced by 25 percent overall, resulting in fewer evening and weekend hours. In addition, the book purchases made and e-resources available will be reduced by 75 percent, substantially lowering the overall cost of operating the library system.


Suspension of the gymnastics program - $0.76 million

Unable to operate under the current social distancing and sanitation requirements, the gymnastics program will be suspended until a model can be identified which meets the City Council's cost recovery policy for operations. This change results in the layoff of seven regular staff.


Closure of the Onetta Harris Community Center (OHCC) - $0.30 million

With the pending construction of the Belle Haven Community Center and Library (BHCCL), this change closes the OHCC facility until completion of that project, resulting in a reduction in programming and available hours at the OHCC facility through an estimated time of July 2022. This change results in the layoff of two regular staff.


Other operational changes - $0.80 million

Freezing a management analyst position assigned to special projects, reduction in temporary staff and supplies due to anticipated service reductions, and the roll-back of special events programs combine to form an additional reduction in service level for the Library and Community Services Department.


Changes to the Community Development Department - $1.04 million

Freezing an inspection position and reduction of on-call contract building and planning services, in addition to the reduction in planned development review and long range planning projects results in a reduction in capacity for the Community Development Department and results in an increased wait time for applicants.


Changes in the Public Works Department - $1.33 million

Reductions in fleet maintenance and transportation - $0.51 million

The elimination of maintenance support for the West Bay Sanitary District, deferral of 25 percent of new vehicle purchases, the suspension of the Caltrain Go Pass program for City staff, and the roll-back of events and encouragement activities for transportation demand management and Safe Routes to School programs reduces expenditures in a variety of transportation-related programs.


Reductions in park, tree, and landscape maintenance - $0.64 million

This change results in fewer park cleanings, landscape maintenance for the Sand Hill Road median, and tree trimming frequency. This change also includes deferring implementation of the updated Heritage Tree Ordinance. Overall changes result in the layoff of one regular staff.


Reductions in land development and administration - $0.28 million

Land development, public right-of-way permit reviews, and building permit reviews results in increased wait times for utility, telecommunications, and private development applications. Additionally, the reduction in administrative support reduces the ability to support electronic bid and contract management support and increases general customer service wait times.


Additional changes - $4.0 million

Other changes to the baseline budget include elimination of the contingency budget added in fiscal year 2019-20 to consider service level enhancements, consolidation of contract services between departments, freezing of additional vacancies in the Community Development, Library and Community Services Department, and Public Works Department, and reduction of the annual pay-as-you-go payments toward other post-employment benefits (OPEB) and replacement with a withdrawal from the OPEB trust fund. These changes reduce available future capacity and require that departments return to City Council for review of requests for additional resources.

Authorized staffing levels

The chart below compares authorized staffing levels, expressed as full-time equivalent (FTE) employees, between the fiscal year 2019-20 budget and the 2020-21 proposed budget. Notable changes include the retirement of the City Attorney (1.0 FTE), replaced by a contract with the Interim City Attorney, and the expiration of the provisional management analyst position (1.0 FTE) as of June 30, 2020. All other changes are the result of service level reductions in each City department.

Revenue and expenditure summaries

The City utilizes fund accounting, separating available resources and expenditures according to their intended use. Charts below present the City Manager's proposed budget for fiscal year 2020-21 in two levels, All Funds, and General Fund.


All Funds

This presentation discusses revenues available and proposed expenditures across all funds, including operating, capital, and special revenue funds with prior year actuals and budgeted expenditures displayed. Users are able to click a report to see a variety of report presentations and drill down to lower levels of planned revenues or expenditures.


General Fund

The largest and most active of the City's funds, the General Fund represents the most discretionary of the City's available revenues and expenditures. Available for a wide variety of uses from recreation classes to public safety and funded by sources ranging from property taxes to franchise fees, the General Fund spending plan represents many of the City's priorities outside capital investment.


Navigation

The charts presented below are available to view embedded in this page or available through the City's transparency portal. To view the reports on the transparency page, follow the link in the title of each report.

Departmental Summaries

The City's revenues and expenditures are also presented below by department, reflecting the functional organization of the City's services. Please note that the embedded reports only show actual revenues and expenditures, data for which is only available through fiscal year 2018-19, the last completed audit and publication of the City's Comprehensive Annual Financial Report (CAFR). Clicking any of the reports below will take you to an expanded report page which includes the proposed budget by department.