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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

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Public Investments for Palo Alto's Future

Uploaded: Oct 10, 2013
The Palo Alto city council is reviewing infrastructure investment priorities in anticipation of asking voters to approve new funding measures in 2014. The largest projects include a new public safety building, renovations to two fire stations, and new parking garages in downtown and the California Avenue area. Other projects under consideration are park bike path, a new Animal Services center and various projects to catch up on deferred maintenance.

One characteristic of these investments is that they last a long time. They will serve current residents and businesses and those in the future. And in terms of any public funding they will be paid for over time by new bonds, taxes and fees.

These investments cross generations. There were schools, libraries, parks and other public facilities here when Nancy and I moved to Palo Alto. They were started and substantially paid for by an earlier generation who made investments that improved their quality of life but also that of the next generation. In the past decade majorities of voters nearing 70% approved bonds and the associated taxes for school and library improvements though most would not directly use these services.

Growth in population and jobs is one driver of the need for new facilities as, for example, in the need for more parking facilities. But growth is actually not the main reason for most of Palo Alto's upcoming infrastructure needs and is only part of cause of parking shortages. Facilities age and wear down, there are new technologies (think of adapting schools and libraries to the opportunities of the Internet age), residents want new facilities at schools and libraries (labs, theatres, sports facilities, community spaces) and there are new requirements such as for earthquake safety and access for disabled residents. And for parking the growth in CalTrain ridership by residents is one of many causes of parking shortages not caused by new office developments.

While there is often broad agreement on the need for infrastructure investments, there is usually less agreement on how to pay for them. Palo Alto is now dealing deciding among multiple options for funding new investments and, often, the feasibility of how to pay determines which investments are brought forward for voter approval.
To keep it simple at first, the two main ways to finance these long-term investments are bonds or major one-time capital contributions. Most city/school bonds run for thirty years and need a revenue stream to fund the annual principal and interest payments. There are two major types of bonds that the city is considering currently—general obligation (G.O.) bond and certificates of participation (COPs). The city is also considering as assessment district for parking structures whereby property owners in the immediate area would vote to assess themselves to pay for the new structures.

G.O. bonds like the ones used for recent school and library investments are funded by a direct property tax assessment paid annually by the city's resident and business property owners. COPs are funded from city revenues. Palo Alto is considering a variety of sources to fund new COPs—including a transient occupancy (hotel) tax increase and revenue from leasing the old public safety building, The citizen's infrastructure commission suggested considering a small sales tax increase to fund COPs but currently the city is not evaluating this option.

One-time funding options include receiving partial payment for the public safety and California Avenue parking facilities in exchange for allowing a private developer to expand office facilities in that area, using part of the infrastructure funding provided by Stanford as part of the Medical Center expansion, and using a direct allocation from the city's infrastructure reserve. The last two options would preclude other future uses of these funds.
There are four other differences between G.O. bonds and COPs that are worth mentioning. The first is that G.O. bonds require a vote of residents tied directly to the proposed investments. COPs, if funded by new taxes, do require a vote but it does not usually tie the funding directly to these investments—the money could be used for other purposes. The second is that G.O. bonds require a 2/3 vote for passage while hotel or sales taxes tied to general uses require only a majority (50%) approval and are thought to be easier to pass. The third difference is that the interest rate on G.O. bonds is less than on COPs.

The last and perhaps most important difference is in who pays. For G.O. bonds resident and business property owners pay. These costs are passed on to residential and business renters. Nonresidents do not contribute directly. For COPs it depends on how they are financed. One appeal of the hotel tax is that it supposedly gets "others" to pay for our infrastructure investment although the connection between paying and benefits is loose. A sales tax increase would be paid by residents and visitors alike. If COPs are financed from other city revenues or reserves, the cost would be borne by people whose projects did not get funded or by the taxpayers involved in making up for the lost revenues by new taxes.

How do you feel about these investments in Palo Alto? Do you share my conviction that we have a responsibility to pass on to future generations the gift of good schools, libraries, parks and other public facilities that was here when we arrived? And is there some part or all of these investments that you are willing to fund?

Local Journalism.
What is it worth to you?


Posted by Maybell neighbor, a resident of ,
on Oct 10, 2013 at 3:51 pm

The school districts are autonomous governmental bodies; schools are not funded through taxes to the City.

If this City Hall asks me for money, I want to see that they are willing to give up on spending $2.1 million for a cosmetic facelift of Council chambers, and $8million for a city gym we don\'t need. I want to see that they are listening to what residents want for their City, and not using our money to steamroll us.

i.e., I will be spending my money on legal fees to fight the overdevelopment of my neighborhood and to protect the safety of the children who travel to school on substandard and overburdened streets that won\'t be improved by an additional tax. I will not take kindly to being asked for money that will be used to cause more problems in my neighborhood, or money that is needed because the City was prioritizing developers over residents and basic infrastructure and safety needs.

First I want these guys to show me they prioritize the community and make wise decisions, rather than that they need money to mitigate problems from years and years of bad decisions, so they can keep on making those bad decision. They can solve a lot of the problems by remembering who they work for, first.

P.S. I supported the school bonds. Giving the City money does not support the schools, our school bonds and property taxes do. The City transportation people have been unwilling to revisit their Arastradero restriping or look at the consequences of high-density development in the middle of residential neighborhoods, and have blamed the traffic on the Arastradero corridor on moving the start time at Gunn. (I wonder what their explanation is for the traffic problems there the rest of the day?)

Posted by resident, a resident of ,
on Oct 10, 2013 at 10:04 pm

The City Council has a responsibility to serve the residents and maintain
the quality of life, character of the City. Just when we needed strong
government and land use control with strong market pressures we got the
opposite. The Council and staff have lost the trust and confidence of residents to do anything right. This is a non-starter for funding of

Posted by Michael, a resident of University South,
on Oct 11, 2013 at 12:23 pm

Parks certainly. I think our city ought to spend some of the housing bucks it extracted from Stanford on creating quality of life as well as quantity. Here's an opportunity.

City Hall has been vigorously packing ever more people into our University South neighborhood, with no on-site open space. There is a sizable empty parcel at 901 High (corner of Channing) that would make a perfect and very welcome park for those high density "family" developments, as well as for the children aready in the neighborhood.

How about it, City Hall?

Posted by Steve Levy, a Palo Alto Online blogger,
on Oct 11, 2013 at 12:58 pm

Steve Levy is a registered user.

Previously there were two other comments.

I did not delete them and have no explanation yet for why they disappeared. I am working to get them reposted.

Posted by Anon, a resident of Another Palo Alto neighborhood,
on Oct 11, 2013 at 5:20 pm

Why should other residents and businesses have to pay for parking necessitated by new high-density developments? The developments themselves should be required to pay for the necessary new parking structures.

Posted by Taxpayer, a resident of Crescent Park,
on Oct 12, 2013 at 12:42 am

One key funding source for infrastructure repairs and improvements is omitted: trimming the city bureaucracy and reducing the ridiculous 6-figure pensions that have us buried in debt to CALPERS. Layoffs + outsourcing + private sector type accountability to perform (IE, lazy, do-nothing city bureaucrats would be fired, while ambitious, effective public servants would be promoted and given raises/performance bonuses).

Clean up the government and stop wasting money before looking back to the taxpayer trough. Do we really need to shell out a quarter million taxpayer dollars for a PR chief to tell us what a great job the city is doing managing our money? I think not. No support for any kind of revenue increase from this voter.

Posted by Steve Levy, a Palo Alto Online blogger,
on Oct 12, 2013 at 11:25 am

Steve Levy is a registered user.

To Anon, I have two questions.

One, how would you handle the public safety and fire station investments of any of the non parking investments/

Two, with regard to parking whose responsibility and what is the most feasible way to handle increased parking demand caused by 1) a large increase in CalTrain ridership exceeding existing parking capacity, 2) increased downtown or CA Avenue traffic from existing and new residents for already built non office structures like, for example, the new ice cream sandwich store or a new adult sex store, 3) conversion of existing downtown space to handle more workers or 4) any cause of increased retail/restaurant/entertainment traffic in downtown or CA Avenue.

Especially since these are non office uses going on in buildings constructed a long time ago by owners who may well not be the current owners.

I agree that new developments should provide adequate parking but that is by no means the only cause of increased parking demand--much of which, I think, requires a shared responsibility.

Posted by honest skeptic, a resident of Barron Park,
on Oct 12, 2013 at 12:20 pm

Residents are appropriately concerned over Palo Alto's policy makers and government leaders ability to make wise decisions on capital improvements
Watching the finger pointing and blundering over the new Mitchell Park Library, its delays and ballooning costs, makes many wonder who in the City Hall can be trusted to oversee large capital building investments.
Creating an 'insider's group' to determine the requirements of a public safety building leaves many to wonder if the large size and expensive bells and whistles of this facility are all really necessary, or are they overly lavish and wasteful, and the City should opt for a smaller and more spartan facility instead.
And seeing some Council members trip over themselves, willing to prostitute City's zoning laws in return for their support of the obscene Jay Paul project that is out of scale and will cause major traffic jam and destroy the nearby neighborhoods in return for a skeleton of a building leaves many others to scratch their heads in wonder about whether these people have the good sense necessary to lead our government.
Summary - people are not opposed to appropriate and well managed and well thought out capital projects, but they are not willing to support projects that are poorly designed and in inappropriate location that would be managed and overseen during their construction by a bumbling and fumbling City department with a terrible track record.

Posted by realist, a resident of Another Palo Alto neighborhood,
on Oct 12, 2013 at 5:48 pm

honest skeptic has it exactly right. Mr. Levy is ignoring the last ten
years as if we are starting with a clean slate with a competent, trustworthy
and responsible City government. So in refusing to provide funding the
voters would be acting out of anger and pragmaticism. The magnitude of
what has taken place here is the frame of reference for any discussion.

Posted by palo alto resident, a resident of another community,
on Oct 13, 2013 at 5:39 pm

Steve -

To answer a few of your questions of how these issues should be handled:

"a large increase in CalTrain ridership exceeding existing parking capacity", RPPP for the area, parking meters for downtown and a push for CalTrain to build garages on their current lots.

"increased downtown or CA Avenue traffic from existing and new residents" see above

"conversion of existing downtown space to handle more workers" a requirement to either build or pay for garage parking for their workers

As far as the public safety/police building, is there are reason we can't use the existing location? Knock it down and build new? And as far as financing, if the City had most of its niche/non-essential services set up to be mostly self-funding or paid for thru fundraising, I would be much more willing to consider a bond for a public safety building.

Posted by resident, a resident of Another Palo Alto neighborhood,
on Oct 13, 2013 at 9:49 pm

Deleted as post meant for Maybell blog

Posted by resident, a resident of Another Palo Alto neighborhood,
on Oct 13, 2013 at 9:53 pm

Deleted apology for previous post.

Posted by the price, a resident of Another Palo Alto neighborhood,
on Oct 14, 2013 at 10:37 pm

Steve Levy,

I'm noticing nobody is jumping up and down to say what they would fund. One person said ok to parks. I agree that funding any open space is a great thing. But not to confuse parks with parking, please.

you said
"I agree that new developments should provide adequate parking but that is by no means the only cause of increased parking demand--much of which, I think, requires a shared responsibility."

Are you saying paying for parking should also be a shared responsibility?


Parking for your employees and customers is the price of doing business.

I wonder if in London or NY they ask residents to pay for the additional parking needs resulting from new bank buildings for example. Or in San Francisco.

Residents by the way are already paying for parking because we cannot find any when we need it.

As to your original question, the problem is the middlemen, City Council, and the City, which time and again cannot get anything right. Whether it's a City website, or keeping their hands off zoning.

I happen to be scared to death of the underpass between Stanford and downtown Palo Alto. That little stretch has trains, buses and cars on top of at it all day long, and I just wonder what an engineering marvel it must be to hold up, with all the increased traffic. I keep hoping someone is checking that it will hold up. You never know, maybe it was intended to hold up under different assumptions, horses or something.

So, besides open space, I would pay for safety, but I think the only way for the City to do a better job is if it would stop reacting to developers and worrying about office development problems. Office space brings money only to developers.

Has anyone for example bothered to see what types of developments make more sense for the CIty ie retail vs office space. Oh there is the other Council obsession, affordable housing, again about developers.

Posted by Steve Levy, a Palo Alto Online blogger,
on Oct 15, 2013 at 3:04 pm

Steve Levy is a registered user.

Most posters are distrustful of the current city government, particularly the council and a few of these claim to speak for residents, not just themeselves. There is also talk of waste and niche funding (that means spending the poster does not approve of).

In the last council election the results were

Kniss 12,737
Schmid 9,984
Burt 9,651
Berman 9,557
Gray 5,519 (representing some of the views of these posters
Weiss 4,316

Elections before that had similar majorities for the council that is claimed to disregard the views of residents and pack the city with overdevelopment and wasteful spending--at least in the eyes of these posters.

These posters who have been respectful in their posts are clearly entitled to their views but at some point should move beyond protest and deal with the reality that they will have to decide on upcoming infrastructure investments with the choices at hand and not their hoped for list that has been repeatedly rejected.

In this blog I was trying to explore the alternatives for funding that will likely be before voters. So I ask readers to put aside their choices that will not be presented and select among the likely options for funding (let's just focus here) the public safety building. If you don't want to accept Jay Paul's offer tied to his development, how would you like to pay for it (cutting other programs is not an option in this vote)?

I am told I made an omission and the council may consider a small sales tax icrease.

And I invite other readers to weigh in on funding the public safety building. FYI, I served on the recent infrastructure commission and there are good reasons (you can read the report) why the current site is not a good option for rebuilding.

Posted by Steve Levy, a Palo Alto Online blogger,
on Oct 15, 2013 at 3:43 pm

Steve Levy is a registered user.

Some posters have identified situations in which they would support participating in funding infrastructure investments.

But most people so far who choose to post here put a great deal of energy into their ABM policies (anybody but me).

I think there is a good interchange here relative to expanding parking spaces in Palo Alto. Posters and I agree that, at least in theory, new developments should provide appropriate parking.

Let none of us be under the illusion that this is "free" anymore than parking at schools or Stanford Shopping Center is "free" or that new parking paid for by developers is "free". Parking space is increasingly expensive and it is paid for by users and the public no matter who pays for the original cost. A private developer will include the costs in the rents charged to occupants who will in turn include it in the cost to customers.

But not all parking demand increases are tied to new developements and yes, in response to the question above, I think these parking increases are a shared responsibility for three reasons--1) they bring benefits to residents 2) they are the practical solution to solving the problem and 3) developers did not cause them.

Take the CalTrain example. Residents have increased their use of the system. There is limited parking spaces near the Palo Alto stations and parking is spilling over into adjacent areas. One poster suggested CalTrain provide more parking. Well, Caltrain might be willing to do that if the poster and others would agree to increase their public funding, even give them a dedicated funding stream. Otherwise this seems like wishful thinking.

But why isn't the easier solution for all of us to pitch in and build more parking. The users are Palo Alto residents and their spilling over into the neighborhoods gives us a mutual interest in solving the problem rather than (look at Congress) endless fights to get anybody but me funding?

And why isn't the same approach the most realistic way to solve the problem caused by increased parking demand at existing, not new venues in downtown?

Why is it the current landlord's problem is the city has more residents and visitors and a hot new store opens up? How is that supposed to work at a practical level or a legal level given that these are not new developments?

Part of the increased demand comes in little bits--a little more demand for the new ice cream store (taking over an existing storefront) a little more from a new restaurant or a startup using existing space for more workers.

Why not actually expeditiously build new space and charge a fee to partially offset the cost?

We pay to park at the airport, at most sports venues, and in most areas of San Francisco. Parking land is increasingly expensive in Palo Alto and the surrounding area. We are going to pay more for parking and more parking is going to be in multi-story facilities.

We have underground parking at our residence and do not have to drive to utilize downtown but we are willing to pitch in and solve this shared community problem for our neighbors and downtown establishments.

Posted by resident, a resident of Another Palo Alto neighborhood,
on Oct 15, 2013 at 9:34 pm

The problem in Mr. Levy's analysis is that it ignores the fact that a
huge parking deficit was created and compounded over many years by under-parked projects approved by the City Council. A marginal increase in parking demand created by changing uses or better marketing, or a better economy or whatever, does not mean that the residents should then have the burden of paying for new garages to deal with the overall problem. The
developers who benefitted from the largesse of the City Council need to
shoulder the burden. The residents have already suffered from increased
congestion, cut-through traffic, the degradation of the visual qualities
and character of the City. And building new garages itself creates more
negative visual impacts. Although it is impossible to quantify all these negative impacts they need to be considered in any recommendations as to who pays for new measures to deal with parking problems.The residents have already paid and can never be reimbursed.

Posted by the price, a resident of Another Palo Alto neighborhood,
on Oct 15, 2013 at 11:35 pm

Steven Levy,

Why is it that certain opinions have to be reduced to acronyms, NIMBY, ABM?

You asked a question, I provided my answer. Safety yes, open space yes. Parking no.

But let's say I would "share" into paying for parking at Caltrain, who is sharing this cost with me, and at what ratio?

And what about priorities. There may be stuff really falling apart, and parking needs to be at the top of the list? Why?

You say

"not all parking demand increases are tied to new developments."

I'm very interested to learn what else it could be.

Posted by Steve Levy, a Palo Alto Online blogger,
on Oct 17, 2013 at 3:13 pm

Steve Levy is a registered user.

Jay Thorwaldson also has a good blog on the parking issues.

I am interested in solving the infrastructure funding issues and not interestes in solutions that put all the responsbility on others.

To the poster above who asked "what else it could be" i have posted several examples above. But if you do not have time to read the thread here are two 1) more residents wanting to park at CalTrain where there are no spaces and no likely way for CalTrain to expand capacity or the larger example of downtown just gets more interesting to people because EXISTING SPACE BUILT A LONG TIME HAS MORE INTERESTING SHOPS--nothing to do with new structures.

Wayne Martin has some interesting ideas on Jay's blog and here is what I wrote in response.

I like some of Wayne's proposed solutions.

But there are three kinds of parking problems--1) how to allocate or ration the existing spaces, 2) how to provide options for longer term parking in existing spaces and 3) how to provide more capacity.

I think existing spaces should be metered with some technology where businesse can pay/reimburse drivers.

But except for new developments, I see no way practically to expand capacity unless we do it as a city. Blaming other people and talking about what coulda, shoulda happened in the past is not going to get new capacity for all the parking deficiencies that are not caused by pending new developments such as the example of greatly increased use of CalTrain by residents that exceeds the parking available at stations.

I think if we want to solve the problem, then WE need to step up and do it and not waste more time dreaming up unrealistic ways that other people should pay for new capacity.

In any event new capacity should come with a charge for users and, again, busiensses are free to reimburse customers or employess. And I think we mostly agree that brand new proposed developments should provide adequeate parking.

Posted by bobgnote, a resident of Mountain View,
on Oct 18, 2013 at 1:58 pm

Deleted. Off point and unsubstantiated claims of corruption.

Posted by Leo Tolstoy, a resident of Midtown,
on Oct 26, 2013 at 1:48 am

Deleted. Not related to the topic.

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