In one word: Balance

I am committed to safeguarding the quality of life and the economic vitality of Palo Alto for future generations. My wife Susan and I have three small children in Palo Alto schools. We own a home in South Palo Alto. My office is one block from City Hall. I have a vested interest in keeping Palo Alto one of the best places on the planet to live and raise a family.

Based on my work as a Certified Pubic Accountant and Financial Advisor to Fortune 500 companies and major hospitals throughout the nation, fiscal balance plays a vital role in my vision for Palo Alto.

There are many complex issues that face our City. Making one good decision at a time is the only way to protect the solid foundation we enjoy. As an experienced financial leader, I will be a voice for fiscal discipline. I have no conflicting special interests. I am free to truly represent the best interests of our community.

I am advocating for us to take an Infrastructure first approach to budgeting so that we don't get further behind in maintaining our streets and sidewalks (fully fund "keep-up" and also set aside a few more million to the "catch-up" category. We should also set aside reserves for replacing our newer facilities from day one, so that we have a meaningful pool of money to repair and replace them as needed.

With the money that is left, we can, as a town inventory and prioritize City services and spend what is left according to a general consensus on what is important. If there is not enough money in the budget to spend on the least important, then those are the items subject to reduction. That kind of soul-searching requires the Council to engage the residents in sincere Citizen Participation. Even if I had an idea of the least important services, I could not act on my own opinion, because I am elected to be a representative of the Will of The People. Yes, even my own opinion can be a special interest that has to be set aside. (Read more about this at Web Link )

In lean times, we may decide that the cuts are too painful and we might choose not to fund some of the reserves. In times of plenty, we may fund extra. But the problem is that even for richer or poorer times, we have consumed our revenue on operations and failed to establish proper reserves. That is the concept: Just because you can put off fixing your roof until next year, does not mean that you spend the money now.

Now realistically, because our history of overspending, and not keeping up with prudent repairs, nor setting aside reserves, we may be in so deep of a hole that we have to ask for a "bailout" by borrowing in the bond market. I agree that we need a new Public Safety building, however there is this not-so-unwarranted belief by the residents that any amount of money put on the table would be spend by a City Structure that has an insatiable appetite for cash.

With that kind of skepticism and division between the voters and the City, acceptance of a big bond measure is unlikely and it would be unwise to spend cash on failed attempt. However, if the City demonstrated that it was willing to prioritize and make meaningful sacrafices in City operations, then some trust could be restored.

Demonstrating good financial stewardship is the key: As an example, when I worked for the Lucile Packard Children's Hospital, we needed millions to build new programs and to recruit new physician specialties. However, the Packard Foundation (the one with Billions) simply stated (and I paraphrase) "Before we give you this extra money to grow, you need to meet some spending benchmarks are prove your financial stewardship before we release the funds. It was painful on operations, but the organization reached consensus and achieve some meaningful spending reductions. With that trust, funds were provided, and the wonderful growth in services is a story that everyone knows.

We might even keep this story of earning trust in mind as we creatively pursue some public and private partnerships. Instead of cutting, there may be a way to gain some outside funding to provide the Infrastructure first budgeting balance.

There continue to be stories about how Palo Alto has an adminstrative budget equal to Cities two times the size. Let's get the numbers and either show that is untrue or face the reality that some reduction is appropriate. It is never painless, but we have to keep our eye on the greater prize of gaining community unity through increased trust, which will allow residents to more enthusiastically investment that the City needs for the future.

There are other factors like searching for cost savings through regional cooperation, and inspecting once more if there might be functions within the Public Safety Building that might be share with other agencies. For example, we know that disasters are no respecter of political boundaries. I can't say what this increased scrutiny will yield, but we owe it to the residents to vigorously explore every option and in doing that, the City will be rewarded with greater unity and trust.

Thank you again for sincere interest in thinking in a the bigger picture with a more expansive timeline, and seeing that what we choose today will really determine whether we have resources tomorrow to continue our path of being a place of innovation. The alternative is a future where a large amount of cash will have to dedicated to servicing debt, and that diversion of resources will limit our ability to create the future that we all want.

Best regards,

Timothy Gray

P.s. I believe that through citizen participation, we will gain greater community understanding of our costs to be governed.

After doing some reading in the City's 2-inch thick budget, I learned the following:

1. Each Palo Altoan pays a little more than $200 a month to be governed. (This fee excludes the cost for the Enterprise funds for utilities, garbage, etc.)

2. Depending upon the size of your family, that $200 a month multiplies quickly. For a family of five like mine, that's more than $1,000 a month or $12,000 a year. As a worker, the effort required to earn that amount sufficiently motivates me to gain a deeper understanding of the value I am receiving for that $12,000.

We can expand our understanding and learn from our neighbors. To develop a deeper understanding of our civic finances, I will start by comparing Palo Alto's cost to govern to that of some neighboring towns. We are then free to implement the best practices that apply, and sustain fiscal balance.

The following points may seem obvious, but I believe they are worth mentioning:

1. Building reserves in prosperous times is the best way to balance out unforeseen shortfalls in the future.

2. Even in balanced times, ongoing benchmarking (external efficiency comparisons) can point the way to opportunities. Why wait until the economic environment dictates spending choices? It is a moral responsibility to offer the best service at the lowest cost.

3. There is no question that we need to keep a balance with a focus on keeping our revenue base healthy. I have a bias toward development choices that can build our tax base with hotel, sales and high value property tax revenue, so as to help pay for improvements in services and infrastructure, which will minimize and reduce the incidence of special taxes on homeowners and renters. (Of course this must be done within the context of the Comprehensive Plan, which is intended to provide a fair and consistent level playing field.) See the Comprehesive Plan tab at the left.