News

Palo Alto throws City Hall employees a lifeline as economy crumbles

Council agrees to pay employees who cannot work because of shutdown

After seeing the local economy collapse seemingly overnight, Palo Alto's elected leaders began to plan Monday for a grim "new normal" with fewer services, a leaner workforce and a retail sector decimated by the coronavirus pandemic.

The pandemic, which last month brought the local economy to a near halt, is expected to cost the city between $15 million and $20 million in lost revenues in the current fiscal year, Chief Financial Officer Kiely Nose said Monday night. At the same time, it is forcing the City Council to confront a myriad of complex and expensive issues, including a punctured safety net for vulnerable residents, uncertainty for city workers and a retail sector that has been brought to its knees by the economic shutdown.

Nose told the council that the impacts to the economy have been "very stark and very immediate." Downtown, she said, is "basically empty." And the city's daytime population has dropped significantly as everyone is sheltering in place or working from home, Nose said.

During a long and expansive discussion, the council took several steps Monday to ease some of the near-term impacts of the sudden recession caused by COVID-19. It unanimously agreed to extend payments to city employees, even those currently unable to work, until the end of June. It also directed staff to explore a program that would provide "life support" in the form of grants and utility relief to small businesses that have been devastated by the coronavirus shutdown. And it decided to explore another rent-relief program for residents who are currently protected from evictions by both local and county ordinances but who would be required to pay all the back rent once the emergency is over.

The shutdown has already rippled through City Hall, which has seen its staff of about 1,100 employees trimmed down to roughly 600 "essential" employees, including police officers, firefighters, rangers and workers from the Utilities and Public Works departments. While these employees continued to report to work, another 400 shifted to telecommuting and were able to perform their duties remotely. The remaining 100 have seen their hours reduced, in some cases down to zero, as the city shut down its recreational programs and closed all community centers and libraries.

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Chief People Officer and Human Resources Director Rumi Portillo told the council that the past few weeks have been "a period of great anxiety for our workforce." The current pay period at City Hall is winding down on April 10. Without the council's policy guidance, the city was preparing to start making significant changes in the following period, including reduction of hours and changes of employment statuses, she said.

At the same time, Portillo said, some employees are dealing with the fact that schools have closed and they don't have good child care.

"With each day, their anxiety increases. ... The idea of entering into a time of potentially not having health coverage and pay is something of increasing concern to the workforce," Portillo said.

For the council, the toughest decisions will be made in May, when the city refines and adopts its budget for fiscal year 2021, which begins on July 1. The Monday vote did not address the long-term impacts of the recession, though it did throw a lifeline to employees.

The council's action, which was championed by Councilwoman Liz Kniss, gives employees who are facing administrative leave a reprieve of sorts for at least the next two-and-a-half months. Kniss stressed the importance of taking care of city workers, telling her colleagues that "kindness starts at home." Others agreed.

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"I think given how quickly this crisis has come upon us and that we are approaching the end of fiscal year and we don't know all the needs we have for our nonessential workers in the coming months, this is the prudent action," Mayor Adrian Fine said.

Councilman Greg Tanaka spoke at length about the need to help local businesses. Many, he said, have already shut down and will not reopen after the emergency. In other cases, business owners are reaching deep into their own pockets to pay workers and keep their operations alive.

Tanaka urged his colleagues to follow the example of Mountain View, which has a program in place that allows private companies to contribute to a fund that provides grants to small businesses.

"There are people who are hurting big time and can really use this assistance," Tanaka said.

The council did not make any decisions about what types of businesses would get priority for grants under the new program or how much businesses would receive. It did, however, request that the city convene a roundtable of business owners to help put such a program together.

The council also agreed to abandon the city's traditional budget-setting process, which entails a review by the Finance Committee before the budget goes to the full council for adoption. Instead, given the magnitude of the changes that have to be made, it will be the full council that will make all the refinements and decisions on what to cut.

"We can't yet guess or put forward what those changes are going to be, but they're going to be significant changes in terms of service delivery in the city, for residents, for businesses and for city staff members," Fine said.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.

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Palo Alto throws City Hall employees a lifeline as economy crumbles

Council agrees to pay employees who cannot work because of shutdown

by / Palo Alto Weekly

Uploaded: Mon, Apr 6, 2020, 11:01 pm

After seeing the local economy collapse seemingly overnight, Palo Alto's elected leaders began to plan Monday for a grim "new normal" with fewer services, a leaner workforce and a retail sector decimated by the coronavirus pandemic.

The pandemic, which last month brought the local economy to a near halt, is expected to cost the city between $15 million and $20 million in lost revenues in the current fiscal year, Chief Financial Officer Kiely Nose said Monday night. At the same time, it is forcing the City Council to confront a myriad of complex and expensive issues, including a punctured safety net for vulnerable residents, uncertainty for city workers and a retail sector that has been brought to its knees by the economic shutdown.

Nose told the council that the impacts to the economy have been "very stark and very immediate." Downtown, she said, is "basically empty." And the city's daytime population has dropped significantly as everyone is sheltering in place or working from home, Nose said.

During a long and expansive discussion, the council took several steps Monday to ease some of the near-term impacts of the sudden recession caused by COVID-19. It unanimously agreed to extend payments to city employees, even those currently unable to work, until the end of June. It also directed staff to explore a program that would provide "life support" in the form of grants and utility relief to small businesses that have been devastated by the coronavirus shutdown. And it decided to explore another rent-relief program for residents who are currently protected from evictions by both local and county ordinances but who would be required to pay all the back rent once the emergency is over.

The shutdown has already rippled through City Hall, which has seen its staff of about 1,100 employees trimmed down to roughly 600 "essential" employees, including police officers, firefighters, rangers and workers from the Utilities and Public Works departments. While these employees continued to report to work, another 400 shifted to telecommuting and were able to perform their duties remotely. The remaining 100 have seen their hours reduced, in some cases down to zero, as the city shut down its recreational programs and closed all community centers and libraries.

Chief People Officer and Human Resources Director Rumi Portillo told the council that the past few weeks have been "a period of great anxiety for our workforce." The current pay period at City Hall is winding down on April 10. Without the council's policy guidance, the city was preparing to start making significant changes in the following period, including reduction of hours and changes of employment statuses, she said.

At the same time, Portillo said, some employees are dealing with the fact that schools have closed and they don't have good child care.

"With each day, their anxiety increases. ... The idea of entering into a time of potentially not having health coverage and pay is something of increasing concern to the workforce," Portillo said.

For the council, the toughest decisions will be made in May, when the city refines and adopts its budget for fiscal year 2021, which begins on July 1. The Monday vote did not address the long-term impacts of the recession, though it did throw a lifeline to employees.

The council's action, which was championed by Councilwoman Liz Kniss, gives employees who are facing administrative leave a reprieve of sorts for at least the next two-and-a-half months. Kniss stressed the importance of taking care of city workers, telling her colleagues that "kindness starts at home." Others agreed.

"I think given how quickly this crisis has come upon us and that we are approaching the end of fiscal year and we don't know all the needs we have for our nonessential workers in the coming months, this is the prudent action," Mayor Adrian Fine said.

Councilman Greg Tanaka spoke at length about the need to help local businesses. Many, he said, have already shut down and will not reopen after the emergency. In other cases, business owners are reaching deep into their own pockets to pay workers and keep their operations alive.

Tanaka urged his colleagues to follow the example of Mountain View, which has a program in place that allows private companies to contribute to a fund that provides grants to small businesses.

"There are people who are hurting big time and can really use this assistance," Tanaka said.

The council did not make any decisions about what types of businesses would get priority for grants under the new program or how much businesses would receive. It did, however, request that the city convene a roundtable of business owners to help put such a program together.

The council also agreed to abandon the city's traditional budget-setting process, which entails a review by the Finance Committee before the budget goes to the full council for adoption. Instead, given the magnitude of the changes that have to be made, it will be the full council that will make all the refinements and decisions on what to cut.

"We can't yet guess or put forward what those changes are going to be, but they're going to be significant changes in terms of service delivery in the city, for residents, for businesses and for city staff members," Fine said.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.

Comments

Resident
Midtown
on Apr 7, 2020 at 8:07 am
Resident, Midtown
on Apr 7, 2020 at 8:07 am
15 people like this

Michael Burry of the movie "The Big Short" who became famous for shorting the housing bubble criticizes the lockdown in a tweetstorm:
“Universal stay-at-home is the most devastating economic force in modern history,” Burry wrote in an email to Bloomberg News. “And it is man-made. It very suddenly reverses the gains of underprivileged groups, kills and creates drug addicts, beats and terrorizes women and children in violent now-jobless households, and more. It bleeds deep anguish and suicide.”

I whole heartedly agree! I have written this before and will do so again - this lock down is un-American and illegal. The city has brought this situation upon itself and on all the residents and businesses here in Palo Alto. The city officials all need to go! Completely criminal and disgraceful to put all of us in this dire economic situation.


Joe
Another Palo Alto neighborhood
on Apr 7, 2020 at 9:24 am
Joe, Another Palo Alto neighborhood
on Apr 7, 2020 at 9:24 am
45 people like this

This is the time for Palo Alto to seriously rethink the scope of government and look at reducing the employee headcount by at least 30%. There is no reason why services that can be outsourced to the private sector need to be performed by government employees whose salaries are uncapped, with associated pension liabilities that are not likely to be properly funded in the foreseeable future.


Marc
Midtown
on Apr 7, 2020 at 10:23 am
Marc, Midtown
on Apr 7, 2020 at 10:23 am
47 people like this

How about the city's management stepping up (like Stanford) and taking a pay cut? Enact a salary/hiring freeze for the next 5 years regardless of any union contracts, Plan on 20% reduction in workforce and NOT canceling services.

Be like every other organization, do more with less.

/marc


Anon
Another Palo Alto neighborhood
on Apr 7, 2020 at 10:28 am
Anon, Another Palo Alto neighborhood
on Apr 7, 2020 at 10:28 am
27 people like this

Posted by Resident, a resident of Midtown

>> I whole heartedly agree! I have written this before and will do so again - this lock down is un-American and illegal.

Sorry, but, viruses don't respect artificial boundaries. Feel free to tell viruses that the way they are behaving is un-American and illegal.

>> The city has brought this situation upon itself and on all the residents and businesses here in Palo Alto. The city officials all need to go! Completely criminal and disgraceful to put all of us in this dire economic situation.

How did the city bring this situation upon itself? Regardless, you probably can sneak through any roadblocks on dirt roads, and get yourself to rural Nebraska, where they aren't worried about coronavirus. Oh wait, even in Nebraska, which thought it didn't have a problem:

Web Link


Gale Johnson
Adobe-Meadow
on Apr 7, 2020 at 11:46 am
Gale Johnson, Adobe-Meadow
on Apr 7, 2020 at 11:46 am
37 people like this

Re “kindness starts at home”...it should mean your constituents, not primarily city employees. Maybe CC will finally get the message and have the courage to dramatically change hiring policies and pensions. There should be some guilt felt by unions that helped exacerbate the problem.


Bernard
Evergreen Park
on Apr 7, 2020 at 12:14 pm
Bernard, Evergreen Park
on Apr 7, 2020 at 12:14 pm
29 people like this

A couple of classic Liz Kniss moments via YouTube last night:

- questioning the guidance from the public health officer on COVID testing, saying "others cities are doing it, we should do." Who needs Dr. Cody? We've got Liz!

- saying that the bailout for city employees had to be approved right away, even though no one had bothered to figure out what it would cost. That's the kind of leadership that created our pension disaster.

[Portion removed.]


Be accurate
Charleston Meadows
on Apr 7, 2020 at 12:16 pm
Be accurate, Charleston Meadows
on Apr 7, 2020 at 12:16 pm
12 people like this

@Anon: thank you for being a voice of sanity.

For all who call the lock-down criminal and disgraceful (where did I hear that word before?): first, the state issued the SIP order, not the city. Thanks to the responsible adults up there.

Second, here is some sobering statistics:
Web Link

If the link gets deleted. look up the Johns-Hopkins university virus map. The US is at 383,256 - more than a quarter of the world's cases (1,407,123) with the population of about 1/20 of the world. It overtook China by a factor of almost five now. Than look at the fatality number. Than at the yellow curves on the lower right. They are called exponential functions. They go up and up with no slowing, so far.
If that is not convincing, then I do not know what is.


Paul
Mountain View
on Apr 7, 2020 at 12:21 pm
Paul, Mountain View
on Apr 7, 2020 at 12:21 pm
19 people like this

The city of Sunnyvale is paying furloughed workers to help staff the food bank. This is the right approach. City workers are part of the economy like everybody else. Now is the worst time to increase unemployment in the community by laying people off - that would only heighten the economic crisis. Instead the city should look for opportunities to apply its workforce to efforts related to the disaster. City workers are generally all contingent disaster workers, and now is the time.


rsmithjr
Duveneck/St. Francis
on Apr 7, 2020 at 1:57 pm
rsmithjr, Duveneck/St. Francis
on Apr 7, 2020 at 1:57 pm
27 people like this

As our resident/taxpayers prepare to send in their property taxes (due 4/10 for many of us), it is worth noting that the city's main priority seems to be its employees rather than its customers.

I don't have a ready answer to this and I am fortunate enough to have the money to both pay my taxes and pay for my own livelihood. I am not sure how those who are struggling with other expenses may be wanting to know where they fit in the city's priorities.

I am certainly glad that I am not a residential landlord, faced with not being able to collect the rents on my properties (even from tenants who could afford to pay) at the same time that I pay the city its taxes.


BP
Barron Park
on Apr 7, 2020 at 3:32 pm
BP, Barron Park
on Apr 7, 2020 at 3:32 pm
31 people like this

Definitely need to bring the size of the city work force in line.

No way we need twice the number of city employees per resident compared to the equally wealthy neighboring cities.

We all can no longer afford supporting such a bloated work force in the Palo Alto City Hall.


Family Friendly
Old Palo Alto
on Apr 7, 2020 at 3:43 pm
Family Friendly, Old Palo Alto
on Apr 7, 2020 at 3:43 pm
30 people like this

City Hall has a workforce of 1,100 employees?! For a small suburban town? You mean *our* city hall, right? Not New York City?

What the hell do they all do for us?


PAResident
Charleston Meadows
on Apr 7, 2020 at 3:53 pm
PAResident, Charleston Meadows
on Apr 7, 2020 at 3:53 pm
15 people like this

1100 employees and 600 of them are "essential". +1 to Family Friendly. What do they do? 1100 employees is a medium sized tech company.


Anon
Another Palo Alto neighborhood
on Apr 7, 2020 at 4:27 pm
Anon, Another Palo Alto neighborhood
on Apr 7, 2020 at 4:27 pm
8 people like this

Posted by Family Friendly, a resident of Old Palo Alto

>> City Hall has a workforce of 1,100 employees?! For a small suburban town? You mean *our* city hall, right? Not New York City? What the hell do they all do for us?

In your copious spare time, you can look them up. There are several websites that have this data. Here is one:

Web Link

There are a lot of employees who make a few bucks working as part-time temp summer camp counselors, tutors, and what not. We have librarians, some of whom don't have much to do right now. Used to have lifeguards, for example, before that was outsourced. But, if you start at the top, you will see that it pays especially well to be an administrator, or, a fireman. And, it really, really pays well to be a "battalion chief". But, keep in mind that the city has, in addition to police and fire, its own utility. And, IMHO, that is a good thing. In any case, police, fire, and utilities are generally considered "essential".


musical
Palo Verde
on Apr 7, 2020 at 4:42 pm
musical, Palo Verde
on Apr 7, 2020 at 4:42 pm
4 people like this

"... is expected to cost the city between $15 million and $20 million in lost revenues"

Isn't our budget like $230 million Operating plus $100 million Capital Improvement?
So a 5 or 6 percent hit? Am I reading this right? Are we expecting huge extra expenses?


Proud of bernard
Downtown North
on Apr 7, 2020 at 4:58 pm
Proud of bernard, Downtown North
on Apr 7, 2020 at 4:58 pm
5 people like this

[Post removed.]


amma
Charleston Meadows
on Apr 7, 2020 at 5:04 pm
amma, Charleston Meadows
on Apr 7, 2020 at 5:04 pm
2 people like this

Hotels are empty. How about utilizing their rooms to save long commutes for our city workers,emergency personnel and vulnerable residents?


chris
University South
on Apr 7, 2020 at 8:12 pm
chris, University South
on Apr 7, 2020 at 8:12 pm
1 person likes this

The Feds are dropping free money from a helicopter on small business. What useful role can the city play in shoveling its own money, which is needed to pay employees, and is funded by decreasing tax revenues?

Almost everybody is taking a haircut. If a small business cannot survive after availing themselves of the generous Fed handout and rent reductions, is the business really viable in the long term?

The city has a reserve fund which shouldn’t be squandered on businesses which are not viable.


PA1989
Southgate
on Apr 7, 2020 at 10:10 pm
PA1989, Southgate
on Apr 7, 2020 at 10:10 pm
3 people like this

@Be Accurate

US has tested nearly 1.9 million people for coronavirus as of today, by far the most tests conducted by any country in the world as of today. Italy #2 at 0.6 million. This is why the US has high number of positive coronavirus cases. The more you test, the more positive cases you will find. China did not release national numbers, but there have been leaked information saying the actual number of affected people and deaths was not accurately stated by the Chinese government. Dr. Deborah Birx stated today the US government reports all deaths as Covid-19 regardless of any underlying health issues that could have contributed to loss of someone’s life. This is not so with every country that reports results.


Greed
Community Center
on Apr 7, 2020 at 11:45 pm
Greed, Community Center
on Apr 7, 2020 at 11:45 pm
30 people like this

It is a hard day for me. This morning, I just got told over a zoom call that my entire team is getting laid off. Our VCs told the company that they can't back the company any longer. As a software engineer I never had a problem finding a job. However, as I started responding back to recruiters begging me to join their company even a week ago, they are now telling me there is a hiring freeze. My wife only works part-time, we have three kids, and a mortgage for a house we bought a couple of years ago that is now underwater. We are scared. I only got two weeks severance.

I see the city guaranteeing pay for employees, but what about the residents who are paying their salaries? Gale had it right, “kindness starts at home" should mean taking care of the people that live here. What are our city leaders thinking? Employees have already received a month's pay for no work and will be guaranteed their pay for another 2.5 months? No one I know in the private sector gets 3.5 months severance. Is the plan to keep paying non-working employees indefinitely at the expense of the people that live here?

Why does the city prioritize employees over the needs of the voters? Pure greed. Sad.

I know how I am voting in November.


Mark Weiss
Downtown North
on Apr 8, 2020 at 9:08 am
Mark Weiss, Downtown North
on Apr 8, 2020 at 9:08 am
5 people like this

I respect the guy or guys collecting our garbage more than I respect the millennials sitting around cafés yapping about their next round of funding.
Or I respected them even more when they were in-house and not outsourced, but maybe you guys should think about civil service if you survive the virus.
Thank you Ed Shikada for your leadership.
Thank you, Jim Keane.
Good luck, Adrian Fine.

Better: Why don’t you guys and girls run for public office instead of taking pot shots from behind the cloak of anonymous Internet message boards.


Mark Weiss
Downtown North
on Apr 8, 2020 at 9:27 am
Mark Weiss, Downtown North
on Apr 8, 2020 at 9:27 am
Like this comment

Maybe the Easter Bunny will save us, or Monty Python:

Web Link


Online Name
Embarcadero Oaks/Leland
on Apr 8, 2020 at 1:35 pm
Online Name, Embarcadero Oaks/Leland
on Apr 8, 2020 at 1:35 pm
11 people like this

Before the city starts pleading poverty, let's remember that each and every year Palo Alto Utilities has run and continues to run a $20,000,000 "surplus" from over-charging us and over which there's currently a lawsuit.

Ms. Kniss might give some thought to all the residents who are hurting, unlike the city employees with their lucrative pensions and benefits and raises regardless of performance.


Old Steve
St. Claire Gardens
on Apr 8, 2020 at 4:08 pm
Old Steve, St. Claire Gardens
on Apr 8, 2020 at 4:08 pm
2 people like this

Let's remember that by not guaranteeing public employee wages, they won't necessarily be available for work when they are able to go to work. PA pays more because you have to pay for long commutes, in order to get employees.

Unless you don't want police officers, fire fighters, and utility workers of course.


Share the pain
Midtown
on Apr 8, 2020 at 8:24 pm
Share the pain, Midtown
on Apr 8, 2020 at 8:24 pm
14 people like this

It has been a week since rent was due, and so far only one of four of our tenants has paid. While our own house is paid off, we do have a mortgage on this rental property that my wife, adult son (autistic) and I depend on for the main source of income. We have been retired for a while. The mortgage, property tax and maintenance represents about 80-90% of the rent when everyone is paying.

While our mortgage company is willing to allow us to defer the payments, we still owe the payments. Our tenants even when they are back on their feet are unlikely to be able to make up all the back rent. However, our mortgage company says that we will have to pay everything that we defer.

I've contacted at least a dozen banks to see if we can get an equity line or reverse mortgage without success. Apparently, too many people are not paying their mortgages and our rental income is too shakey to qualify.

What are we going to do? I don't see the city trying to help us. Is the city expecting us to sell our house? I'm not sure that is even possible right now.

I feel for the city employees, but I don't see them taking the steps like Stanford where the top execs cut their own pay and eliminated raises for everyone. Also, the city buying the city manager a $4M house seems totally out of place. Shouldn't the employees share some of the pain with everyone else?


Resident
Midtown
on Apr 8, 2020 at 10:15 pm
Resident, Midtown
on Apr 8, 2020 at 10:15 pm
5 people like this

We could have saved $8,000,000 on Ross Road bike blvd. Project, then another $12,000,000 on the upcoming bike bridge over 101.


Anon
Another Palo Alto neighborhood
on Apr 9, 2020 at 9:44 am
Anon, Another Palo Alto neighborhood
on Apr 9, 2020 at 9:44 am
Like this comment

I'm not sure where this hostility towards city workers is coming from. As I've commented before, arguably, firemen are paid "too much" (relative to market wages). Apparently, police are not (hasn't been easy filling all positions with qualified people). Not sure about utilities, but, most of the utility workers are not in the top ranks wrt compensation (see the website I've posted above.).

Well, guess what -- now, our public safety folks are on the front lines, are at risk, and are earning their at-risk pay. Want to lay them right now?!? Sheesh.


No service
Charleston Gardens
on Apr 9, 2020 at 11:52 am
No service, Charleston Gardens
on Apr 9, 2020 at 11:52 am
5 people like this

It is hard for me to feel sorry for the employees when they can’t bring themselves to monitor the parking lot at foothills park. I’m too old to bike to there and going there was one of my few enjoyments during this shutdown.

Also, I’ve been having problems with my utility bill but they don’t seem to pick up or return calls.

What are these employees busy doing? Why are we paying them full rate for cut rate service?


Golden Rule
Another Palo Alto neighborhood
on Apr 9, 2020 at 4:36 pm
Golden Rule, Another Palo Alto neighborhood
on Apr 9, 2020 at 4:36 pm
4 people like this

@Anon,
I think the majority of Palo Altans love our police, firefighters, and utilities professionals.

I think there is a great deal of enmity towards planning/traffic, because their salaries come from us but they don't think they work for us. Note the blackened jut-outs on Arastradero -- every black mark is someone's ruined tire/day. It's one of many places you can see the physical evidence of a City Hall full of employees who really could care less about the residents or may even look for ways to retaliate when residents thwart their plans. I would be the first to say our safety professionals deserve raises, but City Hall? Planning and Transportation? I think we should apply the Golden Rule...


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