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By Diana Diamond

Big changes needed in Palo Alto -- including spending control

Uploaded: Jan 4, 2022

For your consideration, Palo Altans: We need a change in the way this city is governed. Given our gigantic city budget, our thousand-plus employees and the increasing amounts of money the city brings in most years, we’ve become an economically significant city.

My first inclination was to change from a “weak mayor” to a “strong mayor” form of government. One advantage with a strong mayor approach is that residents could vote who our mayor should be – not just the seven members of the city council, as happened Monday night when Pat Burt was reelected mayor again, and Lydia Kou vice mayor – by other council members.

But the more I looked into a strong mayor, I tossed that idea aside thinking it probably wouldn’t be suitable for this city, in part because it would be too drastic a change. So, I want to look for other options.


For years, we’ve had a weak-mayor council-manager form of government, where the mayor is a titular head of the city, leaving most of the decision-making and control to the city manager.

But the last couple of years I have increased concerns. For one, it seems to take the staff, under the city manager, a long time to get things done. The council seemingly has no control over the speed of activity within city hall. Think of the time Council member Liz Kniss, nearly seven years ago, asked City Manager Ed Shikada when the parking garage on Bryant Street would finally get a system installed that lets parkers how many spaces are available inside the garage. “We’re working on it,” Sikada told the council. Guess they are still working on it.

Or there are the sorely needed traffic flow improvements on Embarcadero Road by the Town and County shopping center that have existed since 2009, with the roads still clogged with traffic, in part due to two traffic lights (one by Paly and one by the shopping center entrance) that are not synced. The traffic flow, delayed by the lights, has also not been fixed.

Seems to me a mayor, with additional authority, could just insist the traffic department staff figure out what to do. They’ve had enough time (12 years) to ponder over it.

Another major reason for some change is the expanding budget. According to the official 2022 budget, “Budget totals (are)$703.5 million and the capital budget totals $174.3 million in FY 2022 and $747.2 million over the five-year CIP (Capital Improvement Program).”

The operating budget of $703.5M includes 1) general fund (it covers police, fire, libraries and most city services not relating to utilities) and 2) enterprise funds (which mostly pertain to municipal utilities but also include things like operation of Palo Alto Airport and stormwater management).

The general fund in FY 2022 is about $209.2M; the rest of the operating budget is enterprise funds.

This is a lot of money that is being spent for a city of about 65,000 residents.

Palo Alto has grown too big to maintain a small government structure of a weak mayor – similar to the form that Atherton, Portola Valley, Los Altos Hills and Woodside have. Their general fund budgets don’t soar to $200 million the way Palo Alto’s does.

So, Palo Alto is no small town financially.

However, the way our council-manager form of government works, the mayor has no more voting power than other council members (in fact the majority can override his vote), and he, alone, cannot veto a proposal. I suggest the mayor needs more authority. The council also needs to tell the city manager (more than it currently does) what it wants done, not just ask if something is possible to do.

The council members, in my opinion, are not really savvy about the city’s economy and its expenditures. They are good, concerned people who want their town to run right, but given their backgrounds (a teacher, a realtor, a community volunteer, etc.), budgets, I suspect, are not their trump suit.

At each council meeting, there is a “consent agenda” in which several items and expenditures are lumped together for a singular council vote. From time to time, an agenda contains $5 to $10 million-plus-plus in expenditures which typically get unanimous council approval without any discussion.

All this makes me feel uncomfortable – that not-so-vague feeling that what happens at the city level lacks thoughtful oversight.

What to do?

Perhaps create a new council-appointed staff member who will provide an overview over the budget expenditures and report directly only to the council. By that I am referring to all the ongoing contracts to consultants, suppliers, services that gt automatically approved -- some for large sums. This person's examination of money matters would be reported directly to the council.

Or the council may want to hire an internal in-depth auditor who will overview the progress of projects, and work to improve delays. Yes, it took more than 10 years to build a small bicycle bridge across 101 for a whopping $23 million. Some of that was due to council delays, but the auditor could advise council (with a concurrent report to the public) that delays in the city are costing money.

Palo Alto presently has an outside auditor for $750,000 a year. After years of complaining about internal strife and subpar performance in the Office of the City Auditor, the city council decided to cut every position in the small office and to outsource its operations to the Chicago-based consulting firm Baker Tilly US.
The council also moved to cut all four auditing positions at the Office of the City Auditor, effectively dismantling an office that had a budget of about $1.2 million. These include the three senior auditor positions as well as the position of the city auditor,

So, we have no internal auditor. The job I envision is a person who has the authority to delve in to all the financial activities within the city, a person to who will question delays, help move projects forward, in order to create a financially functioning city and curb expenditures—and maybe even control the consent agenda.

Do we have a council ready to take this on? I hope so, and if the first two steps are two new hires, as described, then Palo Alto is on its way!