Wednesday May 7

Budget largely maintains status quo

Adjustments could mean losing two contract workers

By Kristina Peterson / Daily News Staff Writer

At the official budget process kickoff on Tuesday night, Palo Alto city staff presented a balanced "status quo" budget.

But even the relatively minor adjustments could entail laying off two contract workers and appealing to the council for one-time funds.

At the first Finance Committee budget meeting of the year on Tuesday night, City Manager Frank Benest and his staff presented the 2008-2009 budget, in which the city would bring in revenues of $145.6 million and spend $145.3 million, resulting in a tiny surplus. Because it is the second year of a two-year budget plan passed last year, the budget was already approved in concept last year.
However, small modifications are needed to adjust for actual costs as well as the slowing state economy, staff said.

Though the finance committee members unanimously approved tentative budgets for the offices of the city attorney, city auditor, city clerk, city council, and city manager, they did pause over the news that the city's administrative services department expected to lay off two contract employees.

For the past several years, the city has been staffing an external services fund that provided computer assistance to other cities, including Los Altos and East Palo Alto, among others. But when federal regulations forced the city to calculate their future retiree medical costs, Palo Alto had to raise its prices for the service - in some cases a 40 percent increase, Administrative Services Director Lalo Perez said.

When the cities decided not to renew the services, the city realized it had to eliminate five Palo Alto contract positions, Perez said. Due to a combination of vacancies and rearranging job positions, only two contract employees will be laid off, effective June 10, Perez said.

"These are contract employees hired with the understanding they would have a job so long as the contract continued," said Benest. In response to detailed council member questions, Benest said the city would provide services to help the employees transition.

Several questions also arose over the city manager's departmental budget, in which Benest asked the council to reach into the $250,000 council contingency fund for $30,000 to pay for Earth Month festivities and $15,000 to enable the new community environmental action partnership to continue next year.

"We've really struggled to keep the budget balanced," Benest explained.
"In both cases, these projects were related to council priorities" and were implemented at the direction of the council, he said.

Perez also requested $30,000 from the council contingency fund to pay for a consultant to develop a business plan for the Palo Alto airport.

While the night's discussion was largely limited to numbers, one new policy question did pop up in relation to the environmental coordinator position.

Though city staff budgeted the funds for one full-time person to serve as the city's environmental guru, Benest suggested the council employ two people part-time to fill the job.

The current roster of four employees working part-time on environmental projects has allowed "more resources to be devoted to this effort (and) more creativity. ..." Benest said.

Earlier in the night, resident Walt Hays, chair of the community environmental action partnership, urged the position to be consolidated under one person for maximum efficiency and coordination.

However, council members Pat Burt and Jack Morton thought Benest's proposal held water, but should ultimately be decided through a public process with the full council.

The finance committee will meet again to discuss the capital improvement program budget on Thursday.



E-mail Kristina Peterson at kpeterson@dailynewsgroup.com.