News Release News Release The City of Palo Alto
Communications Department
650-329-2607
250 Hamilton Ave
Palo Alto, CA 94301

4/8/2010

FOR IMMEDIATE RELEASE
PRESS RELEASE 04/08/2010
Subject :

City Manager Outlines Service and Staffing Cuts in Fiscal Year 2011 “Preview Budget”
Contact : James Keene, City Manager    650-392-2563
Palo Alto, CA –  City Manager James Keene has submitted a "preview" budget in advance of the City Manager's Proposed Budget that will be released on May 3, 2010. The preview budget, made available today to the City Council, public and City employees provides a summary of proposed program, service and staffing cuts under consideration to address the City’s General Fund structural budget gap, estimated at $8.3 million. This budget preview will be discussed by the City Council at its meeting on April 12.  Because the fiscal crisis hitting California cities is concentrated in the City’s general fund, the budget preview focuses only on the general fund.

“There are no easy choices and difficult decisions are unavoidable,” said Keene. “The City’s financial situation has continued to evolve and like most cities in California, our budget deficit has worsened. As City leaders, we have had to make some very difficult recommendations about staffing and service levels in each general fund department.”  The general fund includes departments such as Police, Fire, Community Services, Planning, Public Works, Libraries, and Administrative Services.

The City Council Finance Committee directed Keene to identify a range of budget reduction options and revenues larger than the deficit, in order to provide a range of choices for Council consideration. As a result, the Preview Budget for 2011 includes $10.3 worth of recommendations, with another potential $1 million that could be considered.

A combination of across the board reductions, targeted cuts and fee increases were proposed to close the gap. These reductions include program and service reductions that could eliminate the equivalent of 75 full-time positions in the City, representing 8.1% of full-time and 21% of temporary and part-time general fund employees. Because temporary and part-time positions are included, a total of 119 positions are affected, of which 70 are currently filled and 49 are vacant.

“Other cities are taking drastic measures to address their budget woes. Palo Alto is not exempt,” said Keene. “Because we are identifying a range of options greater than what is needed for closing our budget gap, more layoff notices have been sent than will eventually be necessary. We wanted to put this information out early, however, to provide as much flexibility in job reassignments as possible to minimize actual layoffs, and to inform the public about the challenging choices Council will be facing.” Still, Keene added, “given the magnitude of the budget gap, many layoffs will be unavoidable if the City wants to resolve its structural deficit. Nobody wants to see layoffs, as having to terminate even one job makes this the most painful and difficult part of the proposal.”

Over the next two months, the Council and staff will engage the community in candid discussions about the City’s financial situation and the difficult decisions that must be made. Keene acknowledged that many proposals will be unpopular.  In May and June, the Council Finance Committee will meet to review and discuss the proposals before making a recommendation to the City Council. The Council will adopt a Final Budget by the end of June.

For more information on the City’s preview budget, visit http://www.cityofpaloalto.org/civica/filebank/blobdload.asp?BlobID=19701.





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