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irresponsible deficit spending

From: domainremoved <Heyward>
Date: Tue, 16 Jun 2015 17:44:34 -0700
Council Members,

It is beyond belief that you are considering invading City reserves and expanding City staff in order to accelerate real estate development in Menlo Park.  Why is Menlo Park racing to accommodate developers while other cities are enacting development limits?  Why are we using our precious reserves - increasing the city's headcount by 11.5 PERMANENT FTEs (for a total of 20.25 FTEs since April 1, 2015) - for this purpose?  Why are City Council members who boast of their fiscal conservatism, financial acumen, and history of balancing budgets supporting this budget?

Its important to remember why City revenues have been so strong in recent years.  In 2006, voters approved the City's first ever Utility Users Tax (UUT)*.  Since then, the rate has been set at 1% and generates over $1.2 million in general fund revenues annually.  Voters were told that the UUT was necessary to "to alleviate an ongoing general operating budget deficit." and that "all revenue generated by the tax would go to the City's general fund to provide general city services including police, emergency preparedness, street and storm drain maintenance, libraries, youth and senior services."

In 2012, residents voted to increase the City's Transient Occupancy Tax (TOT)** rate from 10% to 12%.  Next year, nearly $5 million in TOT revenues are projected.  For comparison, TOT revenues in 2008-09, in the depth of the recession, were $1.35 million.  Voters were told that "without an increase in revenues the City may have to reduce services" "to make up the annual loss in excess of $1.2 million" "caused by "the State of California's decision to eliminate redevelopment agencies."  "Increased revenues would assist the City in maintaining current service levels for public safety, street and sidewalk maintenance, recreation facilities, parks and other services that benefit residents and businesses."

Recognizing the importance of a balanced budget and maintaining City services that benefit residents, I and other Menlo Park residents supported both of these tax measures.  Now I feel duped.  Instead of using this money responsibly, the City plans to use these revenues (and then some!) for the benefit of developers.  I do not recall seeing "accelerate the processing of real estate development projects" included in the ballot arguments supporting either the UUT or TOT measures. 

The most responsible action the Council can take is maintain staffing levels at those approved just this past April 1 (a generous increase of 8.75 FTEs) and LOWER the UUT to 0% in order to provide resident's and businesses a small bit of tax relief.

Please reject staff's recommendation to increase the City's headcount and run a budget deficit. 

Thank you.

Heyward Robinson

*Text of 2006 UUT:
"To fund general city services, including police, emergency preparedness, street and storm drain maintenance, and libraries, shall the City of Menlo Park impose a 3.5% utility users tax on electricity, natural gas, and water and a 2.5% tax on communications to address a budget imbalance and to be reviewed by the City Council every two years and terminated if findings are not made that the tax is necessary for the City's financial health?"

**Text of 2012 TOT increase:
"To partially restore the annual revenue loss of $1.2 million caused by the State's dissolution of the City's redevelopment agency, to maintain current City service levels for police, library, streets, sidewalks, storm drains, and parks and recreation facilities and programs, and to keep parity with neighboring cities' hotel tax rates, shall the City of Menlo Park adopt an ordinance to increase the transient occupancy tax on hotel guests from 10% to 12% effective January 1, 2013?"
Received on Tue Jun 16 2015 - 17:41:13 PDT

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