City Council approves rosy budget for better year

The City Council on Tuesday approved the city’s new budget for the upcoming fiscal year — but not without some controversy on utility-rate hikes and some pet projects for discretionary spending.

The 2016-17 budget lays out the city’s master plan for what looks to be an auspicious year. City officials are optimistically projecting a total of $118.7 million in revenues — a 10.8 percent increase over the current year.

Based on that picture, city staff laid out a spending plan to bring back an assortment of staff positions across various city departments, and to attempt to make current employees more less inclined to leave Mountain View for other jobs. In previous meetings, City Manager Dan Rich portrayed these steps as necessary to restore the city’s workforce to its status prior to the 2008 recession. Since that year, many city workers have had to carry extra work, and morale could use a boost, he said.

Originally, Rich proposed a plan to bring back the equivalent of 20 full-time positions. At the June 21 meeting, he presented an expanded plan that increases staffing to about 24 new full-time employees.

“From my perspective the biggest challenge we’ve faced has been the tremendous strain in the workforce and workload,” he said. “The intent of this is a token of appreciation for the employees for the hard work and significant workload we’ve had over the last year or two.”

In recent budget meetings, much of the council discussion has focused on what to do with a $2.5 million fund earmarked for future property acquisitions but available other projects the council wants to undertake.

In an idea pitched by Councilman Ken Rosenberg, the city would give its full workforce a pay bonus as a reward for what city officials describe as an overwhelming workload over recent years. Rosenberg originally proposed allocating $500,000 toward this goal, but by this week the amount had dropped to about $262,000. That amount should provide enough funding for every full-time employee to receive $500 while part-time workers would get a lesser prorated amount.

Council members asked for new tools to help in hiring new talent after hearing in recent months that city departments are struggling to attract and retain experienced workers. Currently, the city has 39 vacant positions.

On Tuesday, the council approved plans to add $100,000 for potential rewards in bonuses for referrals and new hires. An additional $50,000 would go toward unspecified “employee empowerment,” “learning and development,” and “senior management relations.” For now, this fund is being treated as a placeholder budget for priorities that are still being discussed, staff noted.

The discretionary funds were also tapped for $250,000 for the council’s efforts dating back to earlier this year to address the rise in the number of homeless people living in their cars on city streets. City officials are investigating plans to keep public restrooms at Rengstorff Park open until midnight. Around the same time, the city is looking into hiring a mobile shower service for people living in their vehicles and a portable pump truck to collect waste. The council will review possible measures to aid the homeless sometime in the fall.

Councilman John McAlister expressed frustration that the budget didn’t include money for some kind of scholarship program for youth summer camps. Just $11,000, could send 50 children to summer camp; if the city redirected the $250,000 for employee bonuses, more than 1,300 youth could benefit, he said.

Repeating a previous criticism, he blasted his colleagues’ decision to budget $93,000 to continue the local Bike Share program through November despite dismal ridership numbers.

“Our priorities should be to help the quality of life; we need to put a little more money where the real need is,” McAlister said.

He made a motion to draw $20,000 from the employee-bonus spending and reallocate it for youth camp scholarships, but it died without a second.

Other council members said McAlister’s scholarship push felt like a “willy-nilly” spending decision made at the last minute. Councilman Mike Kasperzak said he didn’t see evidence that there is a clear need or the desire among local children to participate.

“We do have subsidies for the day camp, but my impression is it’s not fully used,” he said. “We could spend for 1,000 children, but there may not be 1,000 free kids who’d (participate.)”

In its budget report, the city Recreation Division noted that it has an active financial aid program to subsidize 75 percent of activity costs for qualifying children. In the 2014-15 fiscal year, about two-fifths of the children in summer camps received city financial aid. The city has no cap on how much it will spend for these programs.

The council approved the 2016-17 budget in a 6-1 vote with McAlister opposed.

Utility rates to rise

In a related agenda item, the council also approved a series of utility-rate increases, including a 19 percent hike in sewer rates, a 10 percent increase for water service, and an additional surcharge that could go as high as 20 percent for garbage bins.

City officials say the sharp increase in sewer costs came as something of a surprise. Public works employees say they learned recently that the Palo Alto Regional Water Quality Control Plant is hiking its fees by about 26 percent, or about $1.3 million more than they originally budgeted. The cause for this was partly due to the state’s ongoing drought — more ammonia has been appearing in the wastewater stream, forcing the utility to purchase more cleansing chemicals. The treatment plant also reportedly hired new staff and repaired aging infrastructure, including pipes that were originally installed in the 1950s.

The water rates come primarily as a result of cost increases from the Hetch Hetchy water system, which provides about two-thirds of the city’s water supply. As Mountain View and other cities have conserved water during California’s drought, the San Francisco Public Utility Commission, which sells water wholesale throughout the Bay Area, has notched up its prices to counterbalance the diminished revenues.

City Manager Rich said Mountain View had little power to protest the higher rates.

“They’re the operator, and they have the ultimate control,” he said.

A small group of local ratepayers felt similarly powerless to protest the city’s plan to push those higher rates onto water-users’ monthly bills. Reading his protest letter before the council, Bindu Madhavan, an electrical engineering professor, said the current system is effectively punishing consumers for making good-faith efforts to conserve. Ratepayers in Mountain View have limited authority to protest infrastructure upgrades made by outside agencies, he said.

“Conservation is a bit of a fallacy; you conserve and consume, but the economics are based on the amount brought in by volume,” he said. “There’s a trend at play and it needs to be arrested or reserved.”

Under the provisions of California Proposition 218, the city would be unable to increase utility rates if a majority of ratepayers — approximately 8,000 — wrote formal protest letters to oppose the increase. Counting Madhavan, only four residents had submitted letters.

The increase in garbage rates stems from a three-year plan made in 2015 to bring service charges into alignment with what officials say are the actual costs of collection. Per that agreement with Recology, the city agreed to notch up rates by 10 percent for this year, starting in July.

City officials have also discussed a food-composting program that could bring the total increase to 20 percent if the council approves weekly pick-up service, the most expensive plan. The city will review the options for trash service sometime in the fall.

The higher utility rates would result in an increase of $14.85 on an average monthly household bill, according to city staff.

Email Mark Noack at mnoack@mv-voice.com