Pamela Cruz. Peninsula 360 Press [P360P].
The Palo Alto City Council has given nonprofits that rent space at the Cubberley Community Center a break by granting them three months of rent relief to help them restart operations that had been slowed by the COVID-19 pandemic.
During a discussion last Monday, the city council also directed its Policy and Services Committee to explore more measures that could support businesses that provide services such as child care or music lessons.
Notably, Palo Alto anticipates a budget deficit of about $7 million in fiscal year 2022, which begins July 1; meanwhile, it already suffers from $4.8 million in debt.
The gap between the two fiscal years is intended to be reduced, in large part, by drawing resources from a special reserve the city had established last year to deal with unforeseen impacts of the pandemic, as well as by eliminating the travel budget for city staff and reducing administration expenses.
During the same session, the council ratified eliminating dozens of positions at City Hall due to falling revenues, so 83 full-time and 107 part-time positions across the organization will not be returning anytime soon.
However, despite the shortfall, council members agreed to waive about $203,000 in rent payments for the 19 tenants who qualify for relief under the approved rules.
The exemption will apply only to "small organizations," those that had revenues of less than $2.5 million in 2019, and those that were forced to stop operations due to the pandemic.
"We've asked other landlords to be flexible; I think we have a responsibility to do it ourselves," Councillor Alison Cormack said at the time.
Faced with divided opinions over the eligibility of businesses to qualify for the aid, Councilman Greg Lin Tanaka suggested the city delay approving the aid program and spend more time determining who should qualify.
During the meeting he pointed out that the revenue cap is only one criterion to be considered, as the city should also consider is the scope of these organizations, the services and needs they provide and are used by residents.
It should be noted that any additional action taken by the city council would add to the city's budget deficit, so approving three months of rent forgiveness for the 68 tenants would cost the city about $875,000, according to staff.
While limiting aid to the 58 tenants who have had to stop operations during the pandemic would add 751,000 to the revenue shortfall.
The measures to get support for the nonprofits include deferring infrastructure projects for several city parks and repairing some streets. The request came exactly one month after the council approved a construction contract for a public safety building expected to cost $118 million.
