City Overview
The Community
Menlo Park is a city of beautiful, tree-lined neighborhoods and active commercial districts. Located conveniently between the major metropolitan areas of San Francisco and San Jose, Menlo Park is home to a little over 32,000 residents in its 19 square miles. The stunning natural surroundings of the city afford views of the San Francisco Bay to the east and the Pacific Coastal Range to the west. Menlo Park’s climate is moderate to warm, with an average of 265 sunny days a year.
Menlo Park’s residents reflect a range of backgrounds and interests who tend to be well educated and actively engaged in community life. Excellent public and private schools serve its many young families, while residents of all ages enjoy the City’s numerous parks and recreational facilities. The city’s close proximity to Stanford University and Menlo College provide a multitude of academic, cultural and athletic event opportunities. The arts and leisure activities of the major urban areas of San Francisco and San Jose are close by. These and many other amenities contribute to Menlo Park’s outstanding quality of life.
Location
Located in the heart of Menlo Park is a downtown featuring unique and upscale shops and restaurants. Set in a pleasant, pedestrian-oriented atmosphere, Menlo Park’s downtown area attracts locals and visitors alike. Known worldwide as the “Capital of Venture Capital,” Menlo Park is well situated to benefit from and help shape new technologies and markets originating from the Silicon Valley. The city hosts such major employers as SRI International, Facebook, Pacific Biosciences, E*TRADE Financial Corporation and CS Bio Co.
City Government
Menlo Park is a General Law City under the State of California, and operates under the council-manager form of government. The City Council appoints the city manager and city attorney as well as members of a variety of commissions and committees. The City is organized into operating departments, including General Administration, Community Development, Library and Community Services, Police, and Public Works. In addition to its many attributes, Menlo Park has one of the most beautiful civic center campuses in the Bay Area. Lush landscaping, including heritage trees, a running fountain and a duck pond, surround the City Hall. The campus also includes a nine-acre park, recreation facilities and the main library. These civic amenities make the campus a noted destination for residents, local employees and visitors. Conveniently located, the campus is a short walk to the Menlo Park Caltrain Station and Menlo Park’s downtown retail district. The City’s website, menlopark.org, is the source for information about services, programs, projects, events, meetings, policies, employment and volunteer opportunities.
City Council
The City Council is the City's five-member governing body whose members are elected for overlapping four-year terms. Effective November 2018, the City began the transition from at-large elections to by-district elections. Three of the five councilmembers were elected at-large in November 2018 to four-year terms expiring in 2022. The transition to by-district elections was completed in November 2020 with the final two councilmembers elected to four-year terms expiring in 2024. The City Council selects from among its members, the Mayor and Vice Mayor to one-year terms at its first meeting in December of each year. The Mayor, who represents the City of Menlo Park, serves as the presiding officer of the City Council and signs enacting ordinances and contracts. The Menlo Park City Council meetings are generally second and fourth Tuesdays at 7 p.m. at the City Council Chambers located at 701 Laurel Street. In response to public health official social distancing orders in response to the COVID-19 pandemic, City Council meetings are temporarily held virtually. Meeting agendas, minutes, and connection information for virtual meetings are available from the City's website. Menlo Park’s City Councilmembers serve part-time, retaining their positions in private industry, personal enterprise, business or the professions.
Budget Process
Annual Budget Calendar
Like any complex organization with an annual budget of over $120 million, the process to develop and produce the budget is continuous throughout the fiscal year, which runs from July 1 to June 30. The conditions presented for the pandemic event of 2020 and beyond have necessitated modified approaches to budget development, but a typical budget development cycle follows this schedule:
July through September
• Departments report on performance from prior fiscal year
• Encumbrances and project carryovers incorporated into budget
• Scoping meetings for the five-year Capital Improvement Plan (CIP)
October through December
• Five-year CIP drafted and prioritized
• Operating budget schedule developed
January through March
• Budget schedule, directions, and budget guidance provided to departments
• Annual City Council Work Plan Session
• Annual midyear financial report presented to City Council
• Department operating budgets drafted and reviewed with City Manager
April through June
• Revenue projections finalized
• Ten-year forecast developed
• Annual budget workshop/study session
• Public hearing on budget and five-year Capital Improvement Plan
• Budget adoption
FISCAL YEAR 2021–22 BUDGET PREPARATION PROCESS
The fiscal year 2021–22 budget marks the eighth year of the City’s department-based budget structure and document and the second year of an online-first presentation. Before fiscal year 2014–15, the City budgeted by program and service as opposed to department and division. The program/service budget structure allocates resources to specific services provided by the City, which ideally allows users of the budget to understand what services the City provides and how much it spends on them. While this can be a great way to present budget information, from a practical perspective, it made the City’s budget difficult to understand. With 30 distinct programs and over 110 services, the fiscal year 2013–14 budget was so finely parsed that the answers to typical budget-related questions such as “How much does it cost to run the Police Department?” or “How many employees are there in Public Works?” were very difficult to provide. Further, the number of programs and services made budget management difficult and time-consuming, taking time away from other tasks.
With the introduction of the City's new budget development software, both the department-based and program-based budgets are available for inquiry and review by members of the community. The dynamic online reports created as part of the budget preparation process allow users to filter by a number of categories including departments, programs, projects, and type of revenue and/or expenditure. Additionally, users may drill down in these reports to the object-level of budgeting and accounting, so users may view any level of detail or aggregated budget.
The development of the fiscal year 2021–22 operating budget began in February with departments updating revenue and expenditure estimates for the current year, as well as developing next year’s budget proposals. The substantial changes to services offered in fiscal year 2020-21, combined with the desire expressed by the City Council to have a holistic view of potential budget changes results in a proposed budget which is largely a carryover budget but with a wide range of potential changes as directed by a majority of the City Council during the budget consideration and adoption process.
BUDGET POLICIES & PRACTICES
Budget management and appropriations control
The City Manager has responsibility for management of the overall City budget and maintenance of appropriations control. The City Manager is authorized to transfer budgetary amounts within a single fund; however, any revisions altering the total expenditures of any fund must be approved by the City Council. Appropriations, which become effective each July 1, lapse at the end of the fiscal year, with the exception of appropriations for capital improvement projects. Due to the nature of these projects, which often span multiple fiscal years, unexpended capital improvement project funds are automatically carried forward to the following fiscal year as part of the project budget and do not require re-appropriation by the City Council.
Fund accounting
The City’s financial information is organized by fund, with each fund being a separate and distinct entity. There are three types of funds: governmental, proprietary and fiduciary. The General Fund, which is a governmental fund, is the City’s main fund that accounts for the vast majority of the City’s operations, including but not limited to: police services, recreation, planning, building inspection, library, engineering, parks maintenance, street maintenance and general administration. Other types of governmental funds include special revenue funds and capital projects funds, which, unlike the General Fund, account for specific revenues and are used for specific purposes. Proprietary funds are used to account for the City’s activities that are financed and operated in a manner similar to private business enterprises and include enterprise funds (water capital and operations) and internal services. The City’s fiduciary funds are agency funds that are used to account for certain assets held on behalf of others, and the City’s role in these funds is strictly custodial in nature. The City does not budget its fiduciary funds. More information on the City’s various funds will be available in the Budget Summary and Discussion section of this document later in summer 2021.
Basis of budgeting
Basis of budgeting refers to the method used to recognize revenues and expenditures in the budget, and in Menlo Park, the basis of budgeting is the same as the basis for accounting. For governmental and fiduciary funds, the modified accrual basis is followed. Under the modified accrual basis, revenues are recognized only when they become susceptible to accrual, which means when they become both measurable and available. Revenue is measurable when the amount of the transaction can be determined, and it is available when it is collectible in a manner that allows it to be used to pay for liabilities in the current period. Governments normally define an availability period for revenue recognition, and the City considers revenues related to a particular fiscal year available if they are collected within 60 days after that fiscal year’s end. Sixty days is a common revenue recognition period. Expenditures are typically recorded when the liability is incurred, with the exception of debt service expenditures. Debt service expenditures are recorded when payment is due.
The accrual basis is used for the proprietary funds, which includes the enterprise funds and the internal service funds. Under the accrual basis, revenues are recognized when they are earned, and expenses are recognized when the related liability is incurred.