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Veronica Weber
Palo Alto firefighters Mark Shah and Dave Villarreal talk outside a fire-consumed home on Sept. 17, 2010. The city’s 2012 budget is dependent on the firefighters union making some salary concessions. report will offer the first glint of a solution. “This is one of the most important tasks our community will have for a long time,� Burt told the commission at the joint meeting. “You’re one of the most important bodies our community will have for a long time.�
W
hile the infrastructure group is hunting for revenue opportunities, Keene and his staff are adjusting to the post-recession world by slashing expenditures, both in the short and the long term. Balancing the books has been a delicate exercise over the past three years, with revenues falling but services generally remaining unchanged. Though sales-tax figures have edged up in recent months, they are still projected to be lower in the fiscal year 2011 than they were in 2006. The city’s latest Long-term Financial Forecast for 2011-2020 projects “slow growth assumptions in all revenue categories.� At the same time, the anemic growth is not without potential ben-
efits. “It’s like any sort of crisis,� Keene said. “It forces us to confront issues that have been around for a long time. “As they say, necessity is the mother of invention. The downturn clearly pushed governments to re-evaluate their assumptions — in some ways, that’s a good thing. There are profound changes in the works that have been forced upon us.� Though the budget deficit is much smaller this year than in the previous two, closing the gap remains a challenge given that most low-hanging fruit had already been picked. In fiscal years 2010 and 2011, the city made more than $14 million in permanent “structural� cuts in the General Fund. Vacant positions went unfilled, salaries were frozen and 58 positions were eliminated. Park maintenance, once the domain of the Community Services Department, was contracted out to private landscaping companies. The city’s print shop, once overseen by the Administrative Services Department, has been scrapped and its duties outsourced. The adjustments have put Palo
Alto in a relatively enviable position when compared with nearby communities, which are also struggling with weaker revenues. As Administrative Services Director Lalo Perez noted at a recent council meeting, San Jose is now in its 10th year of budget deficits. Perez said many agencies have been closing their budget deficits by making one-time budget adjustments — measures that address the immediate deficit but don’t address the structural gap between revenues in expenses. Palo Alto, Perez noted, has been addressing its deficits with “structural changes,� which leaves it in a “more fortunate situation.� Though it’s impossible to predict if and when the former levels of revenues will return, city officials assume many years of austerity ahead. The latest long-range forecast projects that under a “business-as-usual� scenario, the city’s budget deficits over the next 10 years would add up to close to $100 million, including gaps of about $7 million in fiscal years 2013 and 2014. As in previous (continued on next page)
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Menlo Park firefighters (from left) Eric Mijangos, Matt Dealba, John Wurdinger and David Dickinson rest following a house fire on University Avenue in Palo Alto on Sept. 17, 2010.
526 Waverley Street Downtown Palo Alto TOYANDSPORT COM s *>Â?ÂœĂŠ Â?ĂŒÂœĂŠ7iiÂŽÂ?ÞÊUĂŠ >ÞÊÓä]ÊÓ䣣ÊU Page 23