Los Altos residents may have to cough up additional money if they want more than basic services in town. City staff is recommending that the Los Altos City Council ask voters to go to the ballot every two years to decide whether they want to fund any new or expanded services.
The idea of asking voters to "pay-as-you-go" was among the suggestions in this year's budget that the council was scheduled to approve Tuesday after the Town Crier's press deadline.
"No additional funding should mean no additional service," City Manager Phil Rose said in his budget message to council. "It is clearer than ever before that steps must be taken to ensure our financial health. We cannot expand or create new businesses without defining a revenue stream to support them. We should ask citizens whether they are willing to pay for additional services and respect whatever decision they make."
The preliminary budget proposes committing all available resources to maintain basic service levels only over the next two years. Rose admitted that his budget suggestion "will not be a popular action," but the city can only afford to commit revenues to essential services at this time.
He said the uncertain economy, possible state government takeaways and anticipated increases in fire services next year won't leave enough funding for any extras. This includes even minimal service increases, such as powerwashing downtown sidewalks annually. Everything adds up, Rose warned the council last month.
Reviews of each city department show that the city is understaffed and basic services are strained.
"At this point in time, we don't know how much the combination of these factors will impact us. Should it be significant, we may have to scale back on future capital improvements or continue to understaff for the basic services we are expected to provide," Rose said.
Creating assessment districts to fund specific neighborhood projects, such as traffic calming, is another option for alternative funding sources, Rose added.
Police and fire may be the only city services not impacted, said Rose who called both departments the city's No. 1 priority.
The city typically commits 65 percent of its discretionary budget to fire and police. It has earmarked more than $21 million for fire and police services over the next two years.
Despite financial concerns, city staff predicts that revenues will be greater than expenditures over the next two fiscal years. The city's projected General Fund revenue for next fiscal year is $23 million.
That amount is expected to be $24.5 million the following year. Total operating expenses are estimated at $21.5 million for 2005-'06 and $22.2 million for 2006-'07.
Revenues will increase 30 percent, according to the budget. In fiscal year 2005-'06, the city anticipates a 12 percent, or $3.57 million increase from last year and a 19 percent, or $6.8 million increase in 2006-'07.
Property taxes account for most of the increased revenues, staff said in the report.
Expenditures are proposed to increase 39 percent over the next two years, primarily due to the inclusion of the $6.3 million community swim center in the 2006-'07 Capital Improvement Program. The city anticipates paying $1.2 million of those costs, including engineering and inspection fees. The fund-raising group SPLASH plans to raise the remaining $5.1 million.
The project is tied up in court, but staff said, "We thought the project should be funded and ready to go as soon as feasible."
The city council was scheduled to approve the budget Tuesday after the Town Crier's press deadline.