Reference no: EM132860430

Downsizing in Menlo Park California

Menlo Park is modest-sized city of around 32,000 residents located in the San Francisco Bay area.  Like my California municipalities, Melo Park experienced challenging fiscal problems well before the global economic crisis erupted in 2008.  In 2004-2005, the city had an operating budget of $29.2 million and 230 full time equivalent (FTE) employees.  Over the previous four years, Menlo Park was forced to reduce spending in line with declining revenues.  Sales-tax revenue had dropped about 50% in two years from $12 million to six million and the state of California had diverted local government revenue to help balance its budget, worse yet, the city's costs had been rising significantly primarily because of retiree benefit expenses.

According to Audrey Seymour, the assistant city manager at the time.  Menlo Park moved strategically to remedy these fiscal problems.  It trimmed more than $4 million from its annual operating budget and reduced its workforce by about 12%, the equivalent of 30 FTE's.  to minimize the negative impact of these changes on the city and its employees, Menlo Park elected officials and administrators implemented the following downsizing initiatives.

• Involve employees early and often
• Work with unions to achieve common goals
• Seek community input
• Keep elected officials in the loop

For each of these four initiatives mentioned, explain in much details how these downsizing initiatives will help to guide a successful strategy for Menlo Park.