House to rich Silicon Valley executives, the quiet “bedroom community” of Portola Valley is grappling with a monetary disaster so deep that some are searching for donations for city enhancements.
From a potential new sheriff’s desk on the group corridor to rest room renovations and velocity bumps, the City Council gathered late into the evening final week to meticulously scrutinize proposed capital enhancements for the upcoming fiscal 12 months.
The small city famed for its wealth is aiming to go a finances by June 30 — a plan that may form its monetary future.
“My perspective, we’re in an existential crisis. We’ve got to get this right,” Mayor Judith Hasko declared on the Might 28 assembly.
Portola Valley, which has a inhabitants of lower than 4,500 folks, is nestled on the jap slopes of the Santa Cruz Mountains, and is thought for its sprawling estates and mansions. It’s largely reliant on property taxes and has little or no gross sales tax income.
To avert a structural deficit or outright fiscal collapse, the city is evaluating a variety of revenue-raising measures, together with a poll initiative that would seem earlier than voters in November 2026. Potential choices embrace a parcel tax, switch tax, up to date consumer charges, a utility consumer tax or new gross sales taxes.
Hasko’s pressing tone on the assembly centered on the proposal for potential new taxes or different revenue-generating measures. To organize, the council mentioned hiring consulting corporations to conduct polling and academic outreach, although even the less-than-$70,000 price ticket drew sharp scrutiny.
Whereas the present finances was balanced by staffing and repair cuts, city leaders are actually trying to find longer-term options that gained’t compromise public companies. They’re notably eager to take care of the standard of life on this Peninsula group, recognized for its rural ambiance, open areas and in depth path community.
“We are currently operating a balanced budget by pausing most capital expenses and not filling vacant positions, scrutinizing all consultant spending,” stated Councilmember Rebecca Flynn.
Finance Director Tony McFarlane added, “We’re operating under a balanced budget by not using reserves — but over the past three years, we spent down about $2 million, largely related to implementing the housing element, and we had a 58% increase in just one year with our sheriff’s contract.”
The city’s money reserves are underneath mounting strain, strained by rising prices — notably a $2.6 million San Mateo County Sheriff’s Workplace contract that has greater than doubled from final 12 months and now makes up practically 30% of the finances — and greater than $1 million spent on housing consultants to safe state approval of the city’s housing plan.
California housing regulators decertified Portola Valley’s housing plan final 12 months for allegedly stalling on required rezoning, forcing the city to spend extra money on consultants.
Though Portola Valley is now in compliance with state housing legal guidelines — as confirmed by the California Division of Housing and Neighborhood Improvement’s tracker — and has achieved over 20% of its required 253 reasonably priced models, residents and critics argue that the city’s steep terrain and restricted infrastructure make main rezoning for multi-unit housing unrealistic.
As state regulators crack down on slow-moving cities, housing component critics in Portola Valley have pushed again in opposition to what they name a “one-size-fits-all” method.
One other monetary lifeline has emerged within the type of the Portola Valley Fund, a brand new nonprofit group based by residents Jon Goulden, John Richards and Sarah Dorahy to help sure public initiatives by personal fundraising.
Earlier in Might, the council formally authorised the fund and handed a decision establishing a donation and reward acceptance coverage, a mandatory step to channel group contributions.
“Portola Valley has a long history of donations supplementing town finances,” Flynn stated. “Our residents raised $20 million to rebuild our town center further off the San Andreas fault. The idea is not new, but the nonprofit will now take on more of the administrative and fundraising work.”
Portola Valley counts amongst its residents figures like LinkedIn co-founder Reid Hoffman and Nike CEO John Donahoe. But, in October 2024, the finance committee revealed money reserves had fallen to simply about $3.8 million, a lot of it already earmarked for salaries and public security.
“A majority of our budget comes from property taxes,” Flynn stated. “Although tax revenue has reliably gone up about 5% a year, our general expenses are rising far faster — benefits, insurance, maintenance, consultants.”
McFarlane stated the city is “taking a comprehensive look” at its monetary mannequin, launching a consumer payment research, planning a research for growth impression charges, and exploring various service supply strategies.
“We’re working closely with our consultants to keep costs in check, define how much service we need, and find the most cost-effective methods for delivery,” he stated. “That could include revenue enhancements, cost-sharing with neighboring jurisdictions, and other possible approaches.”
Greater than 70% of the city’s workers have already left. To outlive the present fiscal 12 months, the council slashed the $10 million finances by 25%, slicing deep into operations.
Regardless of the difficult fiscal outlook forward, city leaders stay cautiously hopeful. Within the coming weeks, the finance committee and council will evaluation the proposed finances and weigh subsequent steps.
“Solutions for our structural deficit will become clear in two weeks during the finance presentations at the next town council meeting,” Flynn stated.
