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Menlo Park council flags $2.5M structural gap, directs staff to seek cuts and fee changes
Summary
Council reviewed a proposed FY 2026–27 budget showing a structural General Fund shortfall of roughly $2.5–2.8 million, asked staff to prioritize service‑level reductions that avoid layoffs where possible, and adopted technical amendments while requesting follow-up options for June 23.
Mayor opened a lengthy public hearing on the proposed FY 2026–27 budget and asked staff to present the city’s fiscal outlook. Assistant Administrative Services Director Feni Ley and interim finance manager Britney Keir Lee said the city faces a structural gap that could leave reserves below recommended levels without either new revenues or spending reductions.
"El equipo proyectó que en el año fiscal 2025–2026 vamos a terminar con un déficit de aproximadamente 2.6 millones de dólares," Feni Ley told the council, adding staff’s five‑year forecast shows reserves declining unless the city acts.
The presentation described the budget package: a $151.5 million total city budget, of which approximately $90.5 million is the General Fund; assumptions include modest sales‑tax growth and a hotel‑tax contribution beginning in FY 2027–28. Staff outlined possible savings—vacancy freezes, reduced frequency of library programs, scaling back some contractor services and pausing nonessential capital projects—and said the proposed vehicle‑replacement plan is underfunded.
Public commenters urged protecting Safe Routes and rapid, low‑cost bike/ped projects. Multiple residents and community advocates said trimming funds for school‑safety programs or the city’s safe‑routes coordinator would harm children. "This program ensures our kids can walk and bike to school safely," one commenter said during the public record.
Councilmembers pressed staff for detail on options and on the use of restricted funds. Discussion centered on short‑term steps the council can take for the June 23 meeting: (1) a prioritized list of discretionary program reductions and the likely dollar savings and community impacts, (2) identification of funds with fewer legal restrictions that could be used temporarily, and (3) revised fee or rate proposals where legally permitted.
Before the meeting’s end, the council voted to adopt staff’s technical amendments for the current fiscal year and directed staff to return with a menu of options and impact analyses on June 23. The motion to adopt the budget amendments passed unanimously.
Next steps: staff will present prioritized reduction options, fund‑transfer analyses and any available state/PLF (vehicle license fee) updates at the June 23 meeting, and will provide updated financial statements to the council in September when year‑end closes are complete.
