Palo Alto plans to beef up enforcement of new business registry | News | Palo Alto Online |


Palo Alto plans to beef up enforcement of new business registry

City Council looks to add teeth, clarity to fledgling program

Palo Alto's new business-registry program rolled off to a rocky start in March, with meager participation and widespread confusion about various questions on the city's registration survey.

Despite the fact that it's a mandatory program, only about 30 percent of the companies had registered by June 1 and only 69 percent had done so by the end of August, according to city staff.

Some business owners complained that the questions about parking allocations are too difficult to answer, particularly when shared parking arrangements and parking-district assessments are taken into consideration. Sole proprietors, meanwhile, protested the city's requirement that they provide their Federal Employer Identification Number (FEIN). Though this is a standard feature of business registration, sole proprietors often use their social security number for their federal identification.

These obstacles notwithstanding, the program has seen a dramatic turnaround at the end of the year, with an estimated 86 percent of local businesses participating as of Nov. 15, according to the city's Economic Development Manager Thomas Fehrenbach. And with the city preparing to launch the second phase of the program next March, officials hope to boost the participation rate even further by making survey questions clearer and increasing penalties for non-compliance.

The City Council and city planners have long lauded the business-registry program as a key tool for answering critical questions about local employees, their commuting habits and parking needs. After discussing it for several years, the council officially launched the program in March and staff has been considering refinements ever since.

Last week, the council's Policy and Services Committee recommended a series of changes that they hope will make it clearer than ever that participation is mandatory. Currently, the city charges a $25 penalty to businesses that are 30 days late with their payments (a flat fee of $50 to cover administration expenses) and an additional penalty for those that are 60 days late. The city has also recently established an administrative penalty of $250 for businesses that don't comply with the registry.

According to a recent staff report from the City Manager's Office, 401 businesses were late by more than 60 days as of Nov. 15. Earlier this month, each received a letter notifying them of their tardiness and informing them that they may be subject to an administrative penalty.

Until now, staff wasn't clear on whether to take an aggressive stance on enforcement or to base it on complaints. During its Dec. 15 discussion, the committee leaned heavily toward the former option and made a case for clearly defined penalties that would include late fees and, if necessary, referral to a collection agency.

Committee members also indicated that in future phases of the program they would be interested in tying the business registry to use permits, which local businesses are required to obtain to legally function in Palo Alto.

Councilman Pat Burt, who chairs the committee, argued that simply charging a late fee would be a "hollow enforcement mechanism" in dealing with large companies. Telling companies that they cannot legally occupy a premise without a use permit (which would not be issued if they don't register) would, by contrast, be a "pretty big hammer."

"All we're saying is that we want compliance," Burt said. "We're not trying to put anyone out of business. We're not trying to make money off it. We just want them to fill out the form."

Burt also argued that if enforcement were based on complaints, there would essentially be no enforcement because they would probably be no complaints. Few people, if any, would ever go through the trouble of reporting to the city the fact that some businesses didn't register.

"If you've got leaf blowers, you've got complaints," Burt said. "But to look at a data list and try to find someone who didn't register and then file a complaint? That doesn't make good sense to me. I don't think that's effective.

"We really run the risk of people realizing that it's not being enforced and not complying," he added.

Councilman Tom DuBois also agreed with Burt that enforcement of the program should be consistent and not based on complaints.

"We've been very cooperative in the first year," DuBois said. "We did a lot of encouraging. I don't think we were very heavy-handed at all. I think we need some clear, consistent policies that we'd implement in (the second phase) and it should just be the same for everybody and not complaint based."

Even as it looks to clamp down on the large businesses, the city also plans to back off the smallest ones. The new revisions include exemptions for very small businesses (those with fewer than one full-time employee), very small nonprofits and religious organizations with no ancillary business on site. These exemptions were proposed by the City Council in mid-September, when the council discussed the next phase of the business-registry program.

The next phase of the program is set to launch in March, when all businesses will be required to either register for business certificates or renew their existing registration. As of mid-November, about 2,355 businesses have registered out of an estimated pool of 2,955.

In discussing the next phase, the committee agreed that despite the confusion, the parking questions need to remain in the questionnaire.

DuBois noted that the goal of solving the problem of inadequate parking was one of the drivers behind the business-registration program. The city needs to keep these questions in the survey and figure out why they're causing confusion, he said.

Councilman Marc Berman agreed and suggested that while there might be a way to word these questions more clearly, they should not be abandoned.

"I don't want to give up on questions because they're difficult for people to answer if those questions yield valuable information for us," Berman said. "And I think parking is definitely one of the most valuable pieces of information that we can get."

Councilman Cory Wolbach concurred and suggested that the questionnaire also ask businesses whether they are undertaking any transportation-demand management policies (incentives for workers to give up cars for other modes of transportation) and whether they participate in the city's Transportation Management Association, a newly formed nonprofit that aims to shift people from cars to other modes.

Wolbach also suggested that the city consider other questions about employee numbers, including the maximum number of workers that are typically on site throughout various times of the day. He acknowledged, however, that the city should avoid making the list of questions too long.

"We want people to fill it out and not just throw up their hand in frustration," he said. "But having a sense of the number of employees in a couple of different ways I think is important."

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14 people like this
Posted by Joe Commentor
a resident of another community
on Dec 26, 2015 at 12:30 pm

Seems like you have a remarkably repressive government.

8 people like this
Posted by Merry
a resident of Palo Alto Hills
on Dec 27, 2015 at 12:52 pm

Crush business one question at a time!

2 people like this
Posted by Mr.Recycle
a resident of Duveneck/St. Francis
on Dec 27, 2015 at 12:54 pm

Maybe crushing businesses will help reduce traffic and ease parking problems.

8 people like this
Posted by Curmudgeon
a resident of Downtown North
on Dec 27, 2015 at 1:31 pm

"Crush business one question at a time!"

If they're that fragile, they should re-examine their presence in the celebrated cutthroat competitive Silicon Valley environment.

10 people like this
Posted by Reader
a resident of another community
on Dec 27, 2015 at 7:12 pm

Business owners: come to Mountain View.

3 people like this
Posted by MountainView
a resident of Greendell/Walnut Grove
on Dec 27, 2015 at 8:48 pm

Come to Mountain view - where we have an actual business license tax....

8 people like this
Posted by Paco
a resident of Old Palo Alto
on Dec 29, 2015 at 9:51 am

Kinda funny how the City of Palo Alto itself has not submitted their business registry application. What is their parking plan or answer to the many other questions on the registry for their facilities? The City of Palo Alto proudly proclaims that their "fees" are not taxes. I would say that if you charge a fee for a service you are a business. The city, while operating many separate fee generated business', are delinquent and are in noncompliance of the current "law". The City Manager, City Council, and the ever increasing city management staff (who have forgotten what public sevice means or have been sorely misled) have repeatedly announced that the city should be run "more like a business" forgetting that their employment is solely based on serving the public. So what is it? Is the city a money generating business motivated by increasing their profit margin or a public agency serving the public and needs of the citizens of Palo Alto?

6 people like this
Posted by City creates complexity
a resident of Crescent Park
on Dec 29, 2015 at 12:47 pm

Paco says the City Manager and staff
>have repeatedly announced that the city should be run "more like a business" forgetting that their employment is solely based on serving the public.<

When the City Manager doesn't want to do something they make it complicated and difficult to enforce. (Like the Residential Parking morass. Even people who want to conform can't figure out the complex regulations.)

Like this comment
Posted by Longtime resident
a resident of Leland Manor/Garland Drive
on Dec 29, 2015 at 2:54 pm

It still seems like a tax. Alternatives to get information already exist.

Like this comment
Posted by SteveU
a resident of Barron Park
on Dec 30, 2015 at 1:00 pm

SteveU is a registered user.

Massive non-compliance may really be massive incompetence. (But they are not alone.)
We received a notice for a home based business that had been closed for 5 years.
Comcr*p sends 'Get Business Class.." mailings almost weekly . (Nobody vettes mailing lists... not when you can get paid... even for bad entries)

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