Originally published May 15, 2023
By Elaine Goodman
Daily Post Correspondent
Publication: Daily Post (Palo Alto, CA)
Page: 1
Word Count: 681
The city of Menlo Park received $110 million in revenue last fiscal year and paid $82 million in expenses, meaning $28 million more came in than went out, according to a recent financial report.
Many people would regard the excess $28 million as a city surplus. But some city officials don’t like to use that word. They worry the public will think that excess money can be used for anything.
In Menlo Park’s case, residents have been asking for “quiet zones,” in which trains would no longer blow their horns as they travel through town. To do that, the city would have to spend $8.2 million to install special gates at the four railroad crossings in Menlo Park, or about $4 million for two crossings.
Councilwoman Betsy Nash last month suggested that the city look into forming an assessment district, in which residents would pay an assessment or tax for the quiet zone.
Menlo Park’s latest Annual Comprehensive Financial Report sheds more light on what city funds are restricted to certain uses vs. unrestricted. The report, released in March, covers fiscal year 2022, which ended on June 30, 2022.
The financial report looks at the city’s overall net position: the difference between its assets and liabilities. That includes the city’s governmental activities as well as its business-type activities, namely its water and trash services.
The $28 million surplus was added to the city’s net position at the end of fiscal year 2022, bringing the net position to $529 million. Of that, $358 million was tied up in capital assets such as land and buildings, $93 million was considered restricted and $78 million was unrestricted.
Drilling down into individual funds, the general fund, which is used for most of the city’s day-to-day operations, had an unrestricted balance of $34 million as of June 30.
Funds can be moved into different categories
The city breaks down the unrestricted money into categories called “committed,” “assigned” or “unassigned.” The financial report notes that the City Council or city management move funds into the committed or assigned categories, and they can also reverse those actions.
Within the $34 million general fund balance, committed funds included $3.2 million for strategic pension funding, $12 million for an emergency contingency and $16 million for economic stabilization. The city has a policy to set aside money in the general fund to use in case of an emergency or economic troubles.
“Assigned” money in the general fund included $1 million for Menlo Park City School District and $540,000 for “other purposes.” Another $930,000 was “unassigned” as of June 30.
The general fund isn’t the city’s only governmental fund. A general capital improvement fund included $20 million that was assigned to capital projects. A group of so-called “non-major” funds included $3.3 million in American Rescue Plan money, $4.4 million committed to streets, sidewalks, and parking, and $4.6 million assigned to capital projects.
Previous surpluses
The city’s $28 million surplus for fiscal year 2022 – defined as revenues minus expenses – follows surpluses of $1.7 million in fiscal year 2021 and $17 million in fiscal year 2020.
In fiscal year 2022, property tax revenue was $33 million, up from $28 million in the previous year. Property tax is the city’s largest source of revenue, followed by hotel tax and sales tax.
Hotel tax revenue was $8.4 million, rebounding sharply from $3.2 million in fiscal year 2021. But hotel tax revenue was still below pre-pandemic high of $10 million in fiscal year 2019.
Sales tax revenue dropped slightly, to $6.5 million compared to $6.6 million in the prior year.
Meta is largest employer
Menlo Park’s largest employer in fiscal year 2022 was Meta Platforms, which had 16,586 workers in the city, or 81% of its workforce. Meta was followed by SRI International, with 710 employees, and Grail Inc. with 497 workers. The city had the equivalent of 271 full-time employees in fiscal year 2022.
Hibiscus Properties paid the most in property tax to the city in fiscal year 2022. The taxable assessed value of its property was $2.1 billion. Facebook ranked second in assessed property value, at $1.3 billion.