Revenue to Menlo Park and New Jobs
Businesses in Menlo Park pay numerous taxes and fees, which make up most of the City's overall revenue. These include:
- Property taxes
- Sales tax
- Transient occupancy tax (hotel guests)
- Utility users tax
- Business license fees
- Other revenues, such as franchise fees, permits, fines, forfeitures, and charges for services
City Budget Deficits
Revenue flows to the city's General Fund, out of which the city pays for programs and operational departments. In the current fiscal year, revenue sources have declined or remained flat while General Fund expenditures for services continue to increase. The General Fund pays for services including:
- Administrative services: City management, including the City Council, accounting, software, supplies, training and other costs
- Community development: Planning (short- and long-term), including current projects such as El Camino Real/Downtown Visioning Plan, Building, and Economic Development
- Community services: parks and recreation services including gymnastics, aquatics, After School, Senior Center, special events, child care, and facilities programs
- Library: Library programs
- Police: patrol and investigative staff, vehicle fuel, technical services, communications, ammunition, training, equipment maintenance
- Public works (infrastructure): street light repair and maintenance, utility costs, contract services for labor, staff costs
Despite efforts to cut costs, Menlo Park's existing budget deficit is growing worse, with deficits projected to run $1.25 million for fiscal year 08-09, and negative net operating revenue of $164,000. Inevitably, the city will have to either cut services, tap into reserves, or increase revenues to deal with these ongoing deficits.
Tax Benefits of Menlo Gateway to Menlo Park
Menlo Gateway is expected to deliver $1.67 million annually to the General Fund and property tax roll, as well as impact fees totaling $15.6 million.
Menlo Gateway vs. Existing Industrial Development
An extensive fiscal analysis, prepared by Brion & Associates, compared the financial benefit of Menlo Gateway with the financial benefits that are currently delivered by the existing industrial businesses on the proposed site. The analysis assumed a 90% occupancy rate (10% vacancy rate) for the office buildings and a 75% occupancy rate for the hotel.
Figure 1: Fiscal Contribution of Menlo Gateway to Menlo Park (2008 $)
Figure 2: Existing development fiscal contribution compared to proposed Menlo GatewaySource: Fiscal Impact Analysis of Proposed Development on Constitution and Independence Sites (July 2009) prepared by Bay Area Economics (BAE) for the City of Menlo Park.
New Jobs for Menlo Park
Menlo Gateway also would create a significant number of new jobs:
- Approximately 2100 professional and service office-related jobs
- About 212 hospitality jobs, many entry-level jobs with preference given to Menlo Park residents
- About 1900 construction jobs
Benefits to Schools
Menlo Gateway would generate approximately $1.4 million per year for local elementary, high school, and junior college districts. It would generate one-time impact fees totaling about $350,000, which would be divided between the local elementary and high school districts.