Palo Alto, CA— The City's proposed 2016 General Fund Operating budget of $185.1 million reflects a strong economy with an increase of $14 million from last year’s levels primarily due to an increase in infrastructure funding ($5 million) and salary and benefit costs ($5.9 million). Overall, the citywide expenditure budget of $553.7 million has increased by $83.1 million from FY 2015 primarily due to a change in carrying forward capital funds from one fiscal year to the next ($50.7 million), utility purchases ($9.3 million), salary and benefit costs ($8.8 million) and General Fund infrastructure funding ($5 million).
Citywide, full-time equivalent benefited positions are proposed to increase by a net 7.3 FTEs or less than one percent, for a total of 1,041 FTEs in FY 2016. Despite this increase, a decade ago, the City had 1,073 FTEs or 3.3 percent above 2016 levels during a time when the City’s population grew by 4,300 residents or seven percent.
"We assessed the positions in response to Council priorities," said City Manager James Keene. Specifically, the budget proposes to add positions to support parking and transportation programs, infrastructure, and increases library hours by 32 hours per week, an issue frequently asked for by the community. In addition, the budget proposes funding to support a new Council priority for this year, Healthy City, Healthy Community, code enforcement, greater use of information technology and special events and arts and science programs.
The 2016 expenditure budget of $185.1 million is balanced with $183.5 million in revenues and $1.6 million in FY 2015 carry-forward surplus funds. The General Fund Stabilization Reserve (BSR) is projected at 18.5 percent or $34.2 million by the end of FY 2016. These tax revenues are major contributors toward the $14.1 million increase in the General Fund budget. One-third of the increase is due to the voter-approved Transit Occupancy Tax rate increase from 12 to 14 percent.
The Finance Committee kicks off the first of its hearings on the budget on May 5 at 5:30 p.m. For a complete schedule, click here. For more details on the 2016 proposed budget, click here.