2022 Palo Alto Budget Priorities

The City recently released the City of Palo Alto's Fiscal Year 2022 Proposed Operating Budget and Fiscal Year 2022 Proposed Capital Budget along with the 2022-2026 Capital Improvement Plan (CIP). The Proposed Budget reflects our current fiscal reality as a result of the ongoing, extended pandemic, related economic challenges and continued resource limitations. The proposed balancing strategy addresses the community’s immediate core service needs, while positioning Palo Alto to restore services and evolve as recovery takes shape. The proposed budgets are based on City Council direction to use the Long-Range Financial Forecast (LRFF) Scenario B for financial planning, which outlines a conservative financial balancing approach assuming an extended community recovery from the current pandemic over a three to five-year period.

This proposed budget does not assume restoration of the approximately $20 million in service level reductions experienced in the prior year that addressed the nearly $40 million loss in General Fund revenues in FY 2021.

Following an extremely difficult year, balancing strategies to address the City's continued fiscal challenges, are neither recommended nor sustainable. Unfortunately, the FY 2022 Proposed Budget includes a $13 million gap, and the balancing strategy includes $7.7 million in net service and capital improvement investment reductions, $1.0 million use of program specific reserves (e.g. Development Center), an assumed $1.6 million in labor concessions, and use of $3.1 million in ARPA funds. The Proposed Budget includes difficult service reductions to address the budget gap including impacts to all areas of City service delivery.

However, the proposed budget funds immediate service needs and essential services including:

• Police & Fire will respond to all priority emergency calls ensuring health and safety
• Utility services including water, electric, gas, and sewer services will continue including necessary maintenance for safety
• Parks, open spaces, recreation areas and trails will be available for the community to enjoy
• Two libraries will remain open welcoming patrons six days of the week
• Ensure health and safety measures are addressed on our neighborhood streets & roads, sidewalk and trees
• Keep three community centers open with modified classes and programming continuing
• Continue to support the Development Center and requests for planning, building permits
• Manage traffic signals maintenance and timing and continue youth education through safe routes to school

The budget process proposed provides an opportunity to advance public discussions on how to most effectively resource services that have the greatest impact on the community. To that end, this survey is intended to help inform upcoming budget conversations taking place with the Finance Committee and City Council.

Thank you for sharing your input through this iterative budget process. Before you take this survey, please read some of the budget materials offered online to help familiarize yourself with the City’s challenging fiscal position.

Watch the Budget Town Hall from May 6, 2021

Read a recent blog post.

Read the City Manager's Budget Message.

Read the Proposed Operating Budget.

Read the Proposed Capital Budget.

Thank you again for your input and feedback.