Facing an unexpected revenue boost, the Palo Alto City Council began to pivot on Monday from a protracted period of budget pain and reductions in services to restoration and recovery.

With its budget staff reporting an uptick in sales- and hotel-tax revenues, the city is projecting that its budget reserve will be about $3.7 million above the city's prior estimations. In addition, the city has received a federal grant of $3.66 million to restore five firefighting positions that were eliminated as part of the council's 2021 effort to cut the budget by $40 million.

While the council has yet to formulate a plan for restoring services, it took a small step in that direction on Monday, when it approved City Manager Ed Shikada's request for four new positions: two assistants in the city manager's office, an administrative associate to staff the Development Services Center and assist customers seeking building and planning permits, and a public safety communication officer to manage police dispatch staff and operations.

The council also approved spending $250,000 for consultants and legal counsel relating to its plan to place a business tax on the 2022 ballot, $150,000 for economic development management and $550,000 for services for unhoused people and for emergency shelter operations.

The council stopped just short, however, of restoring one position that residents have been clamoring for: a code enforcement officer who would ensure the city's ban on gas-powered leaf blowers is being followed. More than a dozen residents urged the council Monday to beef up code enforcement and to start putting teeth to the city's prohibition, which has been on the books since 2005 but that largely has not been carried out.

Helene Grossman, whose petition against gas-leaf blowers has garnered more than 170 signatures, recited a list of grievances against gas-powered leaf blowers, including noise, pollution and negative health impacts. State lawmakers recognized these impacts earlier this year when they passed AB 1346, a bill that effectively outlaws purchases of new gas-powered leaf blowers by 2024.

Grossman and others argued that the city shouldn't wait for the state law to kick in but rather proceed expeditiously to start enforcing the local law against gas leaf blowers. She suggested that the city launch an education campaign to inform property owners about the effects of gas leaf blowers and to fine them if they persist with using the polluting devices. This would require reinstituting one of the two code enforcement positions that had been cut.

"In the beginning this person can focus on getting gas leaf blowers under control, and later they can focus on other code enforcement issues in the city," Grossman said.

Jeffrey Hook, who represented a group of five residents, made a similar plea for enforcement and suggested that Palo Alto has fallen behind other cities when it comes to citing those who use gas leaf blowers in spite of the law.

"It's the worst invention that I am in daily contact with that affects my daily life," Hook said.

The council shared the residents' sentiments and directed staff to develop a plan for various budget adjustments, including a restoration of a code-enforcement position, to reflect the brightening budget picture. Council member Greer Stone and Vice Mayor Pat Burt had initially suggested going even further and restoring the code-enforcement position immediately.

"Hiring a code enforcement officer won't be the panacea to solving this issue but it is a step in the right direction," Stone said.

Burt said that given the revenue boosts and the various salary savings that the city is seeing because of staff vacancies, the city will be looking at about $10 million in extra funding. It makes no sense, he argued, to still have insufficient staffing in areas like libraries, code enforcement and emergency response.

"Why are we sitting on all these dollars? … For us to do almost nothing in the reallocation and come at the end of this year with a big surplus, that just makes no sense to me," Burt said.

The council voted 6-1 to approve the budget adjustments proposed by staff, with council member Greg Tanaka in dissent. Tanaka said he objected to the city's plan to spend $250,000 on crafting a business tax measure, which he has consistently opposed.

"I don't think we need to poll lots of people, hire a bunch of campaign consultants and figure out how to engineer the language just right so that people will vote for it," Tanaka said.

Others supported the staff's plan for budget adjustments, which include raising the salary of the utility safety officer position from $138,528 to $154,586. The move is intended to address the city's struggles to recruit and retain employees, according to staff. Chief Financial Officer Kiely Nose said the city currently has about 100 vacancies, which constitute about 10% of the approved staffing levels.

Despite the challenges on the staffing front, the council welcomed the latest revenue numbers, which suggest that the budget crisis that began in March 2020 may be coming to an end.

"This is good news," council member Eric Filseth said. "We are getting back to a state of normality and out of emergency operations. As we do that, we've got to … go back to the places where we've been stretching and fill that back in."