Summer has arrived - but the work of the City continues! Lots of big agenda items this week, including the Budget Adoption and updates to the Housing Element. As always, feel free to reach out, and have a great week.
Warmly,
City Council Meeting on Tuesday, June 27th at 5pm Closed Session will begin at 5pm, Open Session will Directly Follow
The meeting agenda includes:
Staff reports for each item
Login/call-in information
How to weigh in on the issues being discussed
Agenda items include (Please note that only a few of the many agenda items are featured below. For all items, please refer to the agenda.):
As outlined in the staff report for this item, "In 1983, the City of Menlo Park established a District for the proper care and maintenance of city street trees. In 1990, the city added an assessment for the repair and maintenance of sidewalks, curb, gutter, and parking strips in the public right-of-way that are damaged by city street trees." This item contains a resolution, "overruling protests, ordering the improvements, confirming the diagram/area of assessment, and ordering the levy and collection of assessments. The tree assessment would increase by 3% to $91.38 per single family equivalent (SFE) per year and the sidewalk assessment would increase by 3% to $48.82 per SFE per year for the Landscaping Assessment District (District) for fiscal year 2023-24."
Agenda Item J1 is to adopt the Fiscal Year 2023-24 city budget. As I outlined in a previous newsletter ahead of the June 13th public hearing on this topic, the City's financial position, especially looking at the 5-year forecast, isn't great. Without new revenue sources and/or major service cuts, the City is forecasted to have a structural deficit, that is, expenses will outpace revenues, for years to come. Without structural changes to our finances, the City will be forced to draw down on its reserves.
Trade Offs
As an example of the challenging budgetary trade-offs the Council is facing, the staff report provides various options for this upcoming fiscal year (2023-24):
Reduce staffing in Library and Community Services, which would impact service levels
Reduce payments to the Strategic Pension Fund, which would veer from previous Council policy of paying down the City's Unfunded Accrued Liability (UAL)
Maintain the service levels and UAL payments, but further draw down the City's reserves to cover the amounts.
Another illustration of the precarious financial situation is related to transfers to the Capital Improvement Program (CIP) over the next 5 years. As a reminder, the CIP maintains and improves our City's infrastructure. Without proper funding, we could face major issues around deferred maintenance. Two scenario options with regards to CIP funding are shown in Attachment K to the agenda item (see also charts below):
The Council policy of annually transferring $3 million to the CIP is maintained, but reserves are even further drawn down.
The policy is modified to be an annual transfer of only $1 million to the CIP, the reserves are less impacted, but less money is available for CIP projects.
General Fund 5 Year Forecast (FY 2023-24 thru 2027-28): Economic Reserves
$3 Million Annual CIP Transfer = 2% Reserves in 2028
General Fund 5 Year Forecast (FY 2023-24 thru 2027-28): Economic Reserves
$1 Million Annual CIP Transfer = 13% Reserves in 2028
I do want to point out that the reserve draw downs show above are specific to the City's Economic Reserves (which as shown in the two scenarios, will fall below the policy level minimum of 20%, either to 2% or 13%). The City also has an Emergency Reserve that would stay intact and at the minimum policy level of 15%, in either scenario, during the period covered by the 5-year forecast.
What Level of Service Do We Want and How Do We Pay for It?
The City of Menlo Park is an incredible place to live and we are so fortunate to have such a high quality staff, services and amenities. The question ahead of us is how to pay for the level of service that we have come to expect and treasure, and/or whether we are willing to forgo certain municipal services and programs to avoid the need for additional revenue. A continued draw down of City reserves is not a sustainable fiscal policy.
Stay tuned for a community conversation about what we want and how to pay for it. This will be an ongoing discussion and may likely culminate in a revenue-generating ballot measure on the November 2024 ballot (in particular, staff has been directed to analyze a potential Transient Occupancy Tax [TOT] increase). The staff report for this this item also includes other revenue-generating ideas, particularly for capital projects.
As stated in the staff report for Item J2, "On April 7th the City received a letter from the California Department of Housing and Community Development (HCD) acknowledging the city’s adopted Housing Element addresses many statutory requirements, but requesting additional changes to the document. Among the topics in the letter were requests for additional analysis of housing needs, resources and constraints; additional information to support the inclusion of sites in the inventory; and further evaluation of governmental constraints on housing development in the city. Nearly all of the requested changes were for additional narrative, increased specificity, and more data to support the information in the adopted Housing Element, and not requests to substantially alter adopted inventory sites or programs."
Updates to Adopted Housing Element
This agenda item outlines the staff revisions to the Housing Element, previously adopted on January 31, 2023. An updated Housing Element draft, with tracked changes, is provided as an attachment for review. In additional to narrative and textual changes to the document, staff does highlight in the staff report several substantive changes, including:
Reduce/Eliminate Parking Standards. Program H4.M (Housing Element page 8-28) commits to specific parking reductions for multi-family residential uses, and a study of other ways to reduce or eliminate parking.
Concerns Regarding the Realistic Development Potential of Sites. To ensure a stronger commitment to providing transparency on the city’s progress toward meeting its RHNA, Program H1.H (Housing Element pages 8-6 and 8-7) commits to annual monitoring of pipeline projects that are not currently under construction and an evaluation of build-out progress. The program also commits to a mid-cycle review with the City Council in 2027 to evaluate overall progress on meeting the city’s RHNA. If the city is falling significantly short of its goals, additional sites and/or increased residential densities will be identified and the City Council will consider and take action on proposed zoning changes that may improve RHNA progress.
Programs with Vague Commitments. Chapter 8 has been updated throughout with more specificity and firmer commitments for a variety of programs. As an example, Program H2.E (Housing Element pages 8- 10 and 8-11) regarding the city’s proposed anti-displacement strategy has incorporated feedback from community members and organizations to enhance the range of options that could be implemented.
Removal of one site from Housing Opportunity Site Inventory List. Staff is recommending that Site #63, the post office on Bohannon Drive be removed due to limited evidence to suggest that the United States Postal Service is interested in disposing of the property during the 2023 to 2031 planning period. The change would result in a loss of 85 potential moderate-income units from the site inventory, but would not impact the city’s ability to meet its Regional Housing Needs Allocation (RHNA) during the planning period.
Next Steps
The remainder of the year, including this summer, will be a busy time for Housing Element-related activity (please note that the timeline below is subject to change):
Council to readopt the Housing Element: Fall 2023
Changes to the El Camino Real/Downtown Specific Plan to increase densities and other related development regulations: Study sessions in Summer 2023, Adoption in late Fall/early Winter 2023
Changes to commercial zoning districts, the R-3 district and the Affordable Housing Overlay (AHO), and associated General Plan amendments: Study sessions in early Fall 2023. Adoption in late Fall/early Winter 2023
As highlighted in the staff report, depending on the direction of the study sessions above, "additional environmental review may be necessary to study increased densities beyond those evaluated in the certified subsequent environmental impact report (SEIR) for the project. Staff is working closely with the project environmental consultant to evaluate the potential timing of any necessary modifications to the SEIR, and would integrate environmental work into the project schedule so that the major tasks can be completed no later than January 31st, 2024.
At the January 13th meeting, the City Council "approved introducing proposed rules that would regulate five types of gasoline-powered gardening equipment by a certain date, starting with prohibiting use of gasoline powered leaf blowers and string trimmers July 1, 2024, and gasoline-powered walk-behind lawnmowers, hedge trimmers and chainsaws January 1, 2029." However, after the meeting, staff identified a textual change that is necessary to prevent confusion between the Zero Emissions Landscaping Equipment (ZELE) ordinance and the city’s existing noise regulations, requiring the City Council to reintroduce the ordinance. The staff report outlines the wording changes, and other direction that the City Council provided to the staff related to this item.
On June 13th the City Council approved the first reading of an Administrative Citation Ordinance (added to Menlo Park Municipal Code Chapter 1.15). The ordinance is an enforcement tool that outlines procedures for imposing fines and charges for violations of the municipal code. In conjunction with that process, and as provided in the ordinance, the fines to be imposed by the administrative citation ordinance shall be established by City Council resolution. This agenda item sets the fines, charges and interest rates for violations of the municipal code, and the staff report also outlines the differences between misdemeanors and infractions. Please note that even though fines will be available as a tool, City staff will continue to prioritize the principle of working with community members to address issues and seeking voluntary compliance with the Menlo Park Municipal Code and regulations.
Other Item of Interest
Below is an additional item of interest.
Willow Village Use Permits and Architectural Control at the
Planning Commission on Monday, June 26th at 7pm
As the staff report for this item states, "The masterplan project provided illustrative and conceptual plans for potential designs of each portion of the project site, however the Conditional Development Permit (CDP) mandates that specific architectural control plans (ACPs) be submitted for review of the detailed designs of the new buildings by the Planning Commission. At this time the Planning Commission will need to determine whether the specific ACPs are consistent with the approved masterplan, including the adopted CDP, development agreement, and certified environmental impact report and consider the merits of the use permit requests to further modify Zoning Ordinance development standards associated with each ACP. The Planning Commission is the decision making body on the ACPs and use permit requests to carry out the masterplan development project.
