Palo Alto will eliminate jobs at City Hall

The cutbacks, the steepest in decades, are in response to $38.8M projected revenue shortfall

In the sharpest cutback of city services in decades, the Palo Alto City Council has decided to cut more than 70 full-time positions from City Hall in an effort to dig out of a financial hole left by the coronavirus pandemic.

The city’s Police Department, which is facing the biggest cuts, will lose 21 positions, seven of which are currently not staffed. Twenty-six full-time positions at the city also will be eliminated, and the city’s fire service also will see cutbacks, including a switch to a brownout that could see temporary closures of fire stations across the city when staffing is too low. That means the city will have to rely on private paramedics to pick up the slack.

“This isn’t anything that anybody likes to do,” said Council member Eric Filseth. “But it had to be done. And I think we got to a workable place here.”

Earlier this month, the council adopted the most pessimistic scenario to guide it in drafting the 2021 budget, an outlook that would see the city lose $39 million in revenue and that some council members still saw as too conservative.

The City Council in a 6-1 vote, with Council member Greg Tanaka dissenting, approved a budget with $196 million in general fund expenses, a 20% reduction from the budget the council expected to consider before the start of the pandemic.

The new budget, which the council expects to adopt June 22, has cuts much larger than those made in 2008 during the financial crisis. The cutbacks, city staffers hope, will generate a $744,000 surplus.

Even so, the proposed budget does not have as drastic cuts as the council was considering two weeks ago to stave off the economic repercussions the pandemic has had on Palo Alto’s local economy.

Cutbacks would have included the closure of the College Terrace

Library, eliminating dozens of jobs at the Police Department and doing away with Children’s Theatre productions. But that budget was deeply unpopular with many Palo Altans, who sent dozens of letters to the City Council before Tuesday’s meeting urging it to consider smaller cuts as it finished a series of public hearings on the issue.

Although the new budget heavily cuts the Police Department and dozens of full-time and contract jobs, it keeps some Children’s Theatre productions in place and the College Terrace library branch open, albeit only for three days a week.

The city’s top executives also saw cuts to their compensation that amount to about $3 million the city expects to put back in the general fund.

City Manager Ed Shikada expects that cuts to salaries and compensation also will continue throughout the budget process.

He also has noted that about 230 employees that make up the city’s managerial staff have agreed on 15% cuts to their salaries, including an additional 5% pay cut for Shikada, who will see his $403,000 annual salary reduced to about $322,000.

Shikada added that he is “proceeding positively” as he prepares to face the city’s labor unions and ask for similar cuts to their compensation.

“These are not impacts that we take lightly to bring forward,” Shikada said. “We recognize the significance of the impact to the community and to our workforce, quite frankly.”

Previously on the cutting room floor were six positions in the Police Department that the council restored in its new budget. The council also approved restoring positions in departments of animal services, investigations and information management.

The city also no longer plans to limit hours in the City Hall lobby or shut down weekend service for animal control, both measures the council had expected to approve before the public backlash led it back to the negotiating table.

Parks also will not be maintained as regularly with its budget cut by about 25% — a compromise from the originally proposed 50% funding reduction.

But despite less stringent cuts than initially proposed, Council member Greg Tanaka felt the budget was still too big and voted against it. He asked the council to consider making other cuts, including to the city manager’s office, but his colleagues rejected those proposals.

“We’re talking about a $39 million drop,” Tanaka said. “I’m looking at what other cities are doing and in Santa Monica their cuts are much larger. Their budget is about our size, so I do think that drop is optimistic. I worry about what we’re really going to see as time goes on. Even though the cuts are making fiscal sense, it looks like it’s going to be much, much worse.”