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Nose Under the Community Tent

By Paul Losch

About this blog: I was a "corporate brat" growing up and lived in different parts of the country, ending in Houston, Texas for high school. After attending college at UC Davis, and getting an MBA at Harvard, I embarked on a marketing career, mai...  (More)

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Get Ready for a Palo Alto Character Change

Uploaded: Oct 10, 2009

I write this with a heavy heart.

I think the vast majority of people who live in Palo Alto really love this place. Given how expensive it is on the one hand, and the great services and public education system it has on the other hand, people have chosen to live here.

There is a character to the City of Palo Alto that is going away. And I am not sure it can be stopped. Or brought back once it is gone.

The good news:

The school district still is first class, and will continue to be so thanks to the great parent involvement at all levels, the bond that will bring the schools up to date, and the terrific faculty and district administration

There are numerous volunteer and non-profit organizations that care deeply about certain things, such as open space and kids' recreation, who work well with the City of Palo Alto, and will operate as their resources enable them to, independent of dilemmas financial the City faces.

Stanford, which is facing its own challenges, is a great neighbor. Caveat: those who are responsible for Palo Alto affairs must see Stanford that way, or it leads to bad news.

The bad news:

A revenue strategy has not been developed, and the City has lost major revenue producing sources as retail areas remain unused, properties such as Hyatt Rickey's have converted to residential, and the best we can do is come up with Measure A to tax businesses here in town. (BTW, I don't have a problem with a business tax, the company I own and run in Fremont pays such fees, and it is a common thing around the Bay Area, Palo Alto is an exception here, not the rule.) The bigger problem is that places that have the potential to generate large sales and hotel tax revenue are leaving town, due to a lack of attention to revenue generation strategies.

Services will be cut and eliminated. I see no scenario where this will not be the case, and it leads me to the matter of Palo Alto employees?

In the current environment, there will be employees permanently laid off, in order to keep the City's finances balanced. I view this as a very sad thing, because I think that services will go away that will not come back, and because I perceive those representing a fine set of PA employees are doing them a dis-service. Keeping head count at current levels by adjusting benefit packages for health care and retirement does not appear to be something the worker leadership is willing to negotiate. Consequently, some people will lose their jobs, and those that remain will have to do the best they can. Even doing their best, less services will be available.

I predict that this will be a major source of complaint by the citizens of Palo Alto in the coming months and years.

I am not calling the shots, and the City has serious financial challenges. If I could dictate an approach, I would establish a permanent Commission that focuses on revenue strategy for a City that for too long has taken for granted the money that comes in.

I would keep all we have in services and require those who work for the City to take a lesser compensation package in light of the circumstances.

That appears to be an untenable option both for City leadership and those who represent the work force.

So, there will be permanent layoffs, major changes in services that Palo Altans have enjoyed for many years.

And, in my humble point of view, a change of the character of this City that is not for the better.

What is it worth to you?


Posted by Kenneth, a resident of ,
on Oct 10, 2009 at 4:27 pm


There are many cuts that can be made, without feeling the pain.

For example:

Fire all city arborists. They are not necessary. Also get rid of that absurd rule that oaks and redwoods cannot be removed...the consequences of doing so will mean that MORE, not less, oaks and redwoods will be planted by private property owners. A real win-win.

Force PACT to form its own non-profit Board, and raise its own money. Other youth activities do this, so why not PACT?

Fire all those associated with outdoor art in Palo Alto. This would save money, and improve our outdoor ambiance. Win-win.

Contract out ALL maintenance chores, including parks and janitorial services.

Contract out all money collection services.

Sell our utility department to PG&E. Bank the money as a perpetual fund, which can only be tapped through its earnings (not principal).

Require a two-thirds vote approval for any spending project, including the budget itself.

Consolidate all libraries into one central library.

Require that ALL infrastructure projects in Palo Alto be completed before ANY new social program be funded.

Close the Opportunity Center, thus improving the Dowtown.

There are so many more good ideas, all of which would save a ton of money and IMPROVE our PA lifestyle! No need to be sad, Paul, the future is very bright, if we have the will to make it so.

Posted by Walter_E_Wallis, a resident of ,
on Oct 10, 2009 at 7:42 pm

Walter_E_Wallis is a registered user.

Well said, Kenneth.
Paul, you could swap the total faculty of Paly with Overfelt in East San Jose with little change in the student performance at either school.

Posted by R Wray, a resident of ,
on Oct 11, 2009 at 9:44 am

I guess a "revenue strategy" is a plan for getting more taxes. Taxes are already too high. Let's reduce taxes and transfer city services to the private sector. Free trade is better than government forced collectivization. Keep the police department and the municipal courts and free up all the rest.

Posted by Anon., a resident of ,
on Oct 11, 2009 at 11:18 am

With the attitude and ideas offered here it is a wonder that the city can exist at all. You people won't seem to be happy until there are castles with walls for the billionaires, and the rest of us just living in the streets begging for handouts, like some Monty Python movie.

The one thing I hit on is the original poster's new information that city business taxes are common in other bay area cities. Yes, some businesses might be leaving town, funny how we don't seem to mind that when whole companies leave the country, or we at least assume it is inevitable. One thing I really dislike is that the experts testifying to these things always seem to be rubber stamping justifiers of whatever the money wants to do without presenting other alternatives and often just dismissing any other ideas.

I wonder what city services do we transfer to the private sector?

How are other cities handling these issues.

It seems to me that hotels cannot go to far away ... what hotels are leaving the city, and why, and where are they relocating. The only one I can think of is the little place by E. Meadow and El Camino that was just torn down.

There are lots more questions here than answers but so commonly all I hear is the same old refrain of the greek chorus above, cut taxes, cut services and everything will be fine, and when you examine who is saying this they are often crotchedy old people that just want to be left alone and not imposed on in their old age that don't care about anyone or anything else.

Posted by Kenneth, a resident of ,
on Oct 11, 2009 at 12:21 pm


Your assumptions and charges are worth as much, to you, as you determine them to be. However, the rest of us can, and will, have our own opinions.

I think a city government should be for the benefit of its taxpayers, not as a social experimment aimed at provdiding for the poor and disadvantaged, or focused on solving greater societal problems.

In the meantime, I add these good ideas to the list I have already provided:

Contract out street sweeping.

Contract out all street repairs.

Since PG&E would now own the utilities, all gas and electric hookups would be handled by them.

All payroll and HR responsibilities can be contracted out.

Police should be relieved of the role of constant patrolling. Private security people can be contracted to be the eyes of the community. The police can be called in to make arrests and mediate disputes.

Fire departments can easily be contracted out, possibly with better results, but certainly with lower costs.

All tree trimming can be contracted.

All BMR housing should be is a hidden tax, as well as a cost burden on PA citizens.

ABAG housing should be opposed, without apology. All we really lose is a state stipend to built even more "affordable" housing...and even more density.

All purchasing of city goods should be determined by the lowest cost available, without any bias against a particualar supplier, as long as they are legal.

There more good ideas, but I add them later, at request.

Posted by Good call, Kenneth, a resident of ,
on Oct 11, 2009 at 2:48 pm

Kenneth: You are absolutely correct about what the function of government should be, and why we are collapsing.

People have forgotten that "social good" should come from individuals choosing to band together to donate their own time and money to constructing whatever "social good" they wish to achieve. Using democracy as a weapon to take money from some in order to give to others is called theft, not democracy, and it is collapsing us in this State, and now in our nation. The same principals are collapsing our city finances.

I am 100% for donating time and money for any good anyone wishes to do, but 100% opposed to taking money from some to support programs they don't support.

You suggestions are good ones, but won't happen here until bankruptcy hits, and then the priorities will be interesting to watch.

Posted by Good Call, Kenneth, a resident of ,
on Oct 11, 2009 at 2:51 pm

Anon: May I recommend you go back beyond your own personal memory and learn the history of this city, this State, and this Nation. History actually begins before any one person's memory.

Posted by Anon., a resident of ,
on Oct 11, 2009 at 3:53 pm

First Kenneth, you are creating an argument I did not make in order to attack it.

I asked some questions and do not necessarily attack or agree with any, some or none of your suggestions.

But I would ask as this privatization fetish has exanded throughout the country to the noise of this kind of rabble and insults and self-congratulatory slaps on back - like we see here ... why do we have these problems ubiquitously rising along with the increase in your religion of privatization?

I don't think you'll have any answer to that but more of the same straw attacks.

Posted by Kenneth, a resident of ,
on Oct 11, 2009 at 4:35 pm


Palo Alto does not have enough private services. There has been a notion that we need to hire our own government workers, and provide extravagant benefits. Put simply, Palo Alto overspends on services. We are far from efficient. We also demand too many services, some of which are highly injurious to our own well being (e.g. arborists, arts czars, Opportunity Center).

"With the attitude and ideas offered here it is a wonder that the city can exist at all."

I would call that an attack on rationality. I have provided a number of ideas that can make this city much better, and run with MUCH less money. Perhaps you can respond to some of my suggestions. That would be a useful start to a rational discussion on your part.

A couple more good ideas:

Enforce parking permits by hiring low-cost contractors, using high tech devices. No need to have police employees doing this stuff. There is some room, here, for retired Palo Altans to walk around their blocks with a bar scanner...and make a few extra bucks.

Replace all trees in Palo Alto, with root systems that raise sidewalks, with species that do not (or do so much more slowly). Of course, use outside contractors to do the work.

Just as an example of how much better off we would be with outside private contractors, consider the debacle with the PA city website, developed internally. It was horrible, and cost a lot of money. This should have been contracted out from the beginning.

I am only scratching the surface....

Posted by Outside Observer, a resident of ,
on Oct 11, 2009 at 5:11 pm


The City website was contracted out, but decisions about content, format and layout were made by City managers.

While the City could save some labor money by contracting out, outcome will not improve as long as the City "manages" those contractors.

Posted by Kenneth, a resident of ,
on Oct 11, 2009 at 6:18 pm


I take your point, however, the answer is to contract out the entire thing, including decisions on how to present a reasonable website. This is no longer rocket science.

The CPA IT unit should also be contracted out. Many organizations contract out IT.

Start with the simple, then migrate to the complex, if necessary. Above all, have a simple search function that allows ctizens to determine answers to basic questions. Such packages are commercially available, and much cheaper than what we ended up with.

Posted by Outside Observer, a resident of ,
on Oct 11, 2009 at 8:03 pm


Yes, agree all of City IT should be farmed out. The website disaster is one example, and only one of two that the public has knows about.

The other is the two times normal costs for the phone system, which the City Auditor recently exposed. Over 200K/year in unnecessary expenditures.

Much more costly are the 15 million+ expenditures for the SAP Accounting system, and I think this could be a 2-fer. Farming out accounting functions would save the millions wasted on SAP, which is basically a financial system scaled to multi-national corporations.

Farming out accounting and IT functions would effectively eliminate the need for the Administrative Services Department, and 50+ (mostly management) positions could be cut.

This alone would balance the budget for years to come.

Posted by Kenneth, a resident of ,
on Oct 11, 2009 at 8:32 pm


Good idea. Add it to the list. A million here, a million there...we don't need Ev Dirksen to remind us that it adds up to real money. As importantly, we could have BETTER city services for MUCH LESS money!

Posted by Anon., a resident of ,
on Oct 11, 2009 at 10:10 pm

Kenneth, this is what is called "hand-waving", are you a politician, because it is what every politician says they are going to do, but its's not so easy. It's not so easy to prove that your ideas work, and it is not so easy to get buy in from everyone to change things. I suspect you'd like to run for dictator, so good luck on that.

I have worked in companies where they have tried to do the contractor thing. I have seen that turn into more of a costly debacle than anything you are suggesting. A more public example was KBR and Halliburton, millions and millions of dollars and not single building delivered in spec.

But really, you are using key words that appeal to some people, and when those people hear those words they chime in and pile on more of the same platitudes and before long some people are fooled by you guys talking and sounding like you are the know-it-alls that you claim to be.

I think one real good idea might be open some of the city decisions to the public in a more transparent way so that you could prove some of these great ideas right or wrong, then I'd be less in inclined to mock you and what I think are nickel ideas thrown out in en masse to sound like you know what you are talking about.

Posted by Me Too, a resident of ,
on Oct 11, 2009 at 11:48 pm

I actually am glad there will be cuts in services. Because right now, we spend like drunken sailors. We have taxes on high property values (at least some of us do), plus profit from the utility, plus cash cows like Stanford Mall. And still we send it all, and more, and don't put aside anything for infrastructure maintenance and repair. Shame on us.

I would love to see a dramatic reduction in the PA city budget and staffing - 10%? 20%? And yes, there would be many things not done any more - no more $1M / year for children's theater, no more staff to study plastic bag bans, no more innovation and invention - we would just be able to do the basics. Hopefully that would focus on us on doing it well.

And for the money saved? Put it into the infrastructure fund and invest it in our future - not our current consumption of services, but our future.

And if we do, while some may moan about this service or that, not like the good old days - in 10 years, our infrastructure will be improve, our city government tight, and our service level stable and efficiently delivered. Stanford, the schools, the neighborhoods - all still there. And the weather will still be pretty fine. That sounds good to me.

Posted by Kenneth, a resident of ,
on Oct 12, 2009 at 8:12 am


It is obvious. You don't need to do the entire list all at once. Start with eliminating the city arborist and city sustainability director and city art director(s). City council could eliminate those positions with a stroke of the pen.

Then we could work on the rest of the list, one at a time, Anon, so that you are not so overwhelmed.

Posted by more of the same, a resident of ,
on Oct 12, 2009 at 9:14 am

Anon, you have offered no counter-proposal. Keeping your head stuck in the sand isn't going to solve any of the issues. We have nearly 1/2 billion dollars in infrastructure backlog. A business tax will be introduced, city worker benefits or staff will be reduced. Within the next 5 years we will need a bond just to stay afloat.
What is your solution beyond "business as usual" while you watch the city slowly go bankrupt?

Posted by bill, a resident of ,
on Oct 12, 2009 at 9:32 am

Anon. I don't think Kenneth has proposed "nickle ideas". On the contrary most of them involve hundreds of thousands of dollars when you consider the abolition of extremely high paid employees and their perks.

Contracting out maintenance services for roads, sewers, trees, parks, etc. would be much more cost effective and efficient. I have seen on a number of occasions where 4 or 5 city workers do a job, and in an adjacent city a private contractor used 2 or 3 for essentially the same work.

Posted by Anon., a resident of ,
on Oct 13, 2009 at 11:20 pm

>>>Contracting out maintenance services for roads, sewers, trees, parks, etc. would be much more cost effective and efficient. I have seen on a number of occasions where 4 or 5 city workers do a job, and in an adjacent city a private contractor used 2 or 3 for essentially the same work<<<

How would you know that. How would you know the reverse situation is true, or assess the jobs done. I do not resist contractors, I resist this brainless insistance in a few slogan ideas, like privatizing everything. Everything needs to be looked at separately without a one size fits all solution.

I don't have a solution because I do not have the numbers or the data, and neither does the rest of the city. But doing nothing is better than hammering everything like everything is a nail.

As someone above said, there is a lot of money in this city, so why is it being mismanaged? Or is it? I don't hear any hard info on any of it for some people to offer know-it-all faith based solutions.

Posted by more of the same, a resident of ,
on Oct 14, 2009 at 8:52 am

"How would you know that. How would you know the reverse situation is true, or assess the jobs done."

If you look at what has already been privatized in the city, you already see the cost-savings. If the reverse was the case, the private companies would not keep their contracts.

"But doing nothing is better than hammering everything like everything is a nail."

No it's not. Doing nothing is exactly that - doing nothing! It is not a plan, it is not an option.

You need to consider your posts more carefully.

Posted by Crescent Park Dad, a resident of ,
on Oct 15, 2009 at 1:10 pm

CPA already subs out tree maint, large utilities and public works projects and road repairs...

Posted by Anon., a resident of ,
on Oct 15, 2009 at 8:41 pm

>>> If you look at what has already been privatized in the city, you already see the cost-savings. If the reverse was the case, the private companies would not keep their contracts. <<<

I just challenge that. You say that because it is what we all have come to hear all the time, yet what are the numbers and the real experiences of these cases.

When I see people out at the Baylands that are contractors they seem to not be interested in their jobs at all. The place is poorly maintained and falling apart. I guess if money is the only dimension you look you "could" be right, but you are taking even money for granted.

Competent management is what is missing in Palo Alto, and one can see it on levels from what is written here ... at least as much as anything you are saying about saving money. I am not against saving money, I am for doing a job right for a fair amount of money. I am for not doing things that are not consistent with city priorties, and those priorities should be reasonable and clear.

It's a bit trendy, but does Palo Alto government have a mission statement . Because current management of this city seems determined not to listen to people, or at least the opinions of people about the direction of the city.

Another thing to look at. Is there any attempt or concern that workers of the city or some proportion of them actually live in the city. Does our city care about giving jobs to Palo Altans, or is that something that could cost too much? Any numbers or previous discussion on that?

Posted by soooo, a resident of ,
on Oct 23, 2009 at 6:06 pm

Other easy fixes...........
Klein helped create the fiscal mess - vote him out

Posted by Outside Observer, a resident of ,
on Oct 23, 2009 at 9:16 pm

Former CM Benest is to blame for much of the fiscal mess. He's the one who gave the City the [email protected] Cadillac pension, even though SEIU didn't even want it at the time.

Well, he and other disgraced department heads (Yeats, Johnson, James) made out very well on that one.

To their credit, the unlikely partners of Klein and Morton were able to get Benest out. In indirect terms that was something they both campaigned on yet neither were able to get the majority of City Conucil to agree until the "oral report" fiasco.

Remember this one? An unnamed manager at Palo Alto was accused of harassment by 3 subordinates. Benest and City Attorney Baum hired a (supposedly) impartial investigator, but the investigator did not produce a written report of the findings. Benest and Baum justified that by saying it would save money, but when the City Council got wind of it, Benest was in closed door "performance evaluation" meetings with CC for hours.

Shortly after that Benest announced his retirement. Klein and Morton finally got the majority CC opinion on Benest that they wanted.

Shortly after that Benest exposed serious conflicts of interest with Klein and Morton through the Childrens Theater Witch Hunt - Well, I'll let you draw your own conclusions on that one.

Although Klein does have some culpability in the fiscal mess, particularly with all the "green" spending and hires, He did manage to get Benest out. Can you imagine where Palo Alto would be if Benest were still CM?

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