City of Palo Alto to capture business info

Facing a job boom of immense but mysterious proportions, Palo Alto officials voted late Tuesday to create an online registry that will require all local companies to provide data about their employees to the city.

The business registry, which the City Council voted 7-0 to support (with Vice Mayor Liz Kniss and Councilman Greg Scharff absent), aims to fill an information gap that has hampered the city’s effort to address its growing traffic and parking problems. Though various estimates indicate that the city’s population doubles or triples during the work hours, no one knows exactly how many employees commute to Palo Alto every day. The lack of reliable data has become particularly problematic in the last few years, as downtown’s parking shortages hit critical levels and emerged as the council’s leading concern.

On Tuesday, the council agreed that finding solutions would be tough without more data about the city’s workforce. The idea for an online registry came out of a February memo from council members Marc Berman, Pat Burt, Karen Holman and Larry Klein, who noted that Palo Alto is “one of a few cities in the region without a business registry or a business license.”

“Most cities rely on these tools for obtaining and analyzing critical information about the characteristics of businesses in their communities for purposes such as informing zoning decisions and public-safety planning and service response,” the memo stated.

The new registry would differ significantly from the city’s last effort to collect data about employees. In 2009, with tax revenues plummeting, the city tried to institute a business-license tax based on companies’ gross tax receipts. Though that proposal was designed to raise revenues, data collection was a welcome bonus for officials eager to fill the information gap. Voters ultimately killed the proposal on Election Day.

This time, it’s not money that the city is after, but rather information, especially as employers buy parking permits from the city for parking structures downtown.

“Parking spots are the currency on the streets now,” Mayor Nancy Shepherd said. “We’re trying to get a handle on this.”

Annual fees for the new registry will be in the ballpark of $35 to $75 and structured only to recover the costs of administering the program, according to a report from Economic Development Manager Thomas Fehrenbach. On Tuesday, some council members indicated that they’d like to see different fees for companies of different sizes (with the idea that it takes more resources to enforce the rules with larger companies than smaller ones), though everyone agreed that fees should not exceed what it would take to pay for the online registry.

Fehrenbach said that while the main aegis of the registry is around transportation and land-use planning, it can also have implications for other city services like economic-development planning, public safety and emergency preparedness.

At the very least, it would strengthen a system that has been broken for years, council members agreed. Currently, companies setting up businesses in Palo Alto are required to obtain a one-time “certificate of use,” which includes a fee of $413. Many don’t bother to do even that, according to Fehrenbach’s report. Those businesses that comply are not required through any city mechanism to provide updates about employee figures or even their status of existence. The city also has no procedures in place for filtering out certificates of companies that no longer operate in Palo Alto. As Councilman Pat Burt observed, the city’s paper-based filing system would suggest that Google and Facebook are still local companies.

Staff had initially proposed using the current system as the backbone for the new registry. But on Tuesday, after discussing the many problems in the existing structure, the council backed away from this plan, directing staff to proceed with outreach to businesses on developing the new registry. On a separate track, staff will work to improve and automate its “certificate of use” system for future integration with the new business registry.

Though the registry idea hasn’t seen anywhere near the opposition that the tax proposal generated in 2009, a few speakers at Tuesday’s public hearing expressed concerns about the latest iteration. Attorney David Lanferman linked the new proposal to the failed effort in 2009 and said he was concerned about the registry ultimately turning into a tax.

“This has a strong similarity to something the voters turned down,” Lanferman said. “Their wishes should be respected before we do a run around that.”

Hal Mickelson, a board member at the local Chamber of Commerce, offered a small list of concerns that the business organization has about the new registry.

“Our central position has been that the business community is not calling for a business registry. There is no need for it within the business community,” Mickelson said. “But if it’s deemed necessary for effective city administration, we believe it should be revenue neutral, limited to cost recovery, as simple as possible, further simplified for small businesses and that home businesses should be exempt.”

He also asked the city to respect the confidentiality of high-tech companies with proprietary information. He voiced concern about some of the questions on the city’s proposed questionnaire for businesses, including ones relating to county health permits and tobacco sales. Mickelson said it looks dangerously like council members are “putting ornaments on a Christmas tree” with the questionnaire and urged members to avoid adding “avenues of wonderfulness” to the proposed registry.

Klein challenged the idea that this registry could somehow turn into a tax, noting that state law requires a vote of the people for a new tax. Klein also encouraged Mickelson to talk to other Chamber organizations to see how they dealt with the issues he laid out. During the 2009 campaign for a business tax, Klein said, many in the Chamber said they opposed the proposal but would support a simple registry.

“I’m just amazed, given what so many of your colleagues said during the business-license-tax campaign, for you to come in with, frankly, what I think are quibbles,” Klein said.

It would be nice, he added, to hear the Chamber say “yes” for once.

“It’d be nice (for the Chamber) to say, ‘This is something almost any city needs, and we’re anxious to work with you to get the best possible business registry we can,'” Klein said.