Wealthy community’s city government is running out of money – Palo Alto Daily Post

This story originally appeared in the October 16 Daily Post. To get all your local news first, pick up the mail in the morning. Our competition does – that’s where they get their story ideas.

BY AMELIA BISCARDI
Daily mail employee

Officials in Portola Valley — one of the wealthiest cities in the United States — will have to make some quick decisions as the city’s spending outpaces the government’s revenue.

One possible way to prevent the city from going bankrupt by 2028 could be to raid the city’s open space fund, committee members suggested at an Oct. 15 Finance Committee meeting.

The open space fund is a fund intended to preserve the idyllic open spaces the city is known for and to prevent overdevelopment. It has about $8 million in the bank. In order to transfer the money to the city’s main bank account, called the General Fund, two-thirds of voters would have to approve, according to Finance Director Anthony McFarlane.

The city is looking for cash because taxes and fees can’t keep up with external costs. According to McFarlane, the city has rehabilitated its finances with one-time funds. The city has also missed years of testing.

Finance Committee Chairman George Savage said the city does have some money, but most of it is reserved for a specific purpose, such as housing or open space. Some of these resources, such as Some funds, such as state grants, can only be used for certain purposes, but others can be transferred to the general fund with a two-thirds vote of residents.

Another option was the idea of ​​taking out short-term loans from committee member Michele Takei. However, McFarlane said this will not solve the problem.

McFarlane said the city has been able to cut spending, but one of the city’s largest expenses, the contract with the San Mateo County Sheriff’s Office, has increased by $419,521 since 2020 and will continue to increase.

Residents couldn’t vote on the proposed options until March at the earliest, but McFarlane said the council would have to decide what to put on the ballot. The city must submit election proposals to the district by December 6th.

The city employs 15 people. However, some high-level positions are currently vacant, such as city manager, city clerk and city engineer.

Savage said the city’s revenue is typically at least 2.5% higher than its expenses, but now the city is facing a huge hole because they didn’t follow that policy.

The committee discussed yesterday how to balance the budget and whether or not to keep money in reserves. The committee will send a summary of options to the City Council for its Oct. 23 meeting.

Councilor Craig Taylor said the council was looking at short-term options with pros and cons to each option it would consider.

Committee members and residents disagreed about whether or not they should continue to have reserves in the future. Member Mark Waissar said he believes the city was able to get into this hole because it had the reserves to fall back on.

“I understand people whining about their taxes,” said resident David Cardinal. “But we are the second richest zip code in the country and perhaps the world.”