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Some city spending priorities don't seem fair

Original post made by Diana Diamond, Palo Alto Online blogger, on Dec 2, 2007

It's funny how Palo Alto city officials can come up with money to spend on the things they want rather than what some residents would like.

For example, the nonprofit Palo Alto Art Center Foundation wants to renovate the Art Center building next to the Main Library at Newell and Embarcadero roads. But the city is telling foundation board members that they will need to raise the money themselves -- approximately $4.5 million for a remodel or $8.5 million for a remodel and expansion (new galleries, classrooms and storage space).

The city has approved $1.75 million for replacing the electrical, heat and air conditioning systems at the center, part of an estimated $2.5 million cost for those basics. The air conditioning was last upgraded in the early 1980s, according to Carolyn Tucher, one the foundation's supporters. All design plans to date have been paid up front by the foundation, according to its President Jean Duisenberg.

That started me thinking about some other city buildings in town, such as our libraries, the Junior Museum, a new police station -- even City Hall. I started wondering why this city can spend $139 million this year from its general fund plus millions on capital-improvement projects and yet one of the community "gems," the Art Center, has to have its foundation raise its own money.

Keep in mind that the Art Center is a public building, and first served in the 1950s as the City Hall. That building has never been renovated, according to Tucher.

In other words, the renovation is needed because the city neglected to maintain its own building for years.

Yet just last week the City Council decided to explore funding a proposed new $61 million police facility -- not with bonds approved by voters, as had been planned but with "certificates of participation," basically a loan against future city revenues. Last year the estimated police station cost was $50 million.

To its credit, the council finally is realizing that Palo Alto residents probably will not approve bonds next June for library renovations ($50 million), a new police station ($61 million) and an even greater amount of school district renovation bonds. Surveys show there is not the needed two-thirds voter approval for either the libraries or the police station, although the libraries are closer.

But if the council decides to bypass voters by going the pay-from-future revenues approach, residents will have absolutely no say if they want their tax dollars spent on a $61 million police station.

We've been talking about new public safety building for years. If city officials can suddenly come up with a new plan to finance the building council members so desperately want why didn't they use the same approach a couple of years ago to fund a new Mitchell Park library? Or why aren't they considering financing library renovations instead of a police station through this pay-as-you-go approach? Is it because council members know a lot of residents don't want to pay for a new police station? Or because council members really want it?

I scouted around for other things the council recently decided to spend money on and found a number on the council's consent agenda. The "consent calendar" is a list of items that a few samples. For a more detailed list, please visit the printed version of this column (Web Link):

* $2.5 million in replacement of city vehicles -- an annual expenditure; vehicles are replaced about every six years, according to Auditor Sharon Erickson (more often that I replace my car).

* $6 million on City Hall upgrades -- so far $2.8 million has been spent for studies and elevator upgrades.

* On July 23, $3.8 million for gas main replacement; an additional $93,000 for Cambridge parking structure improvements; $238,322 for the Cambridge structure maintenance improvement program; $250,000 for a stump removal project; $65,000 for design for the Animal Services Center.

* On the regular agenda, of the council approved $2.9 million for storm-water pump station, and a $3 million loan to buy the Ole's Automotive Repair Shop parcel.

* On Oct. 29, on consent, council approved a $6.3 million upgrade at City Hall software for employees; $4 million annually for electric capacity projects; $316,000 for Web-based permitting applications; $20,000 toward the College Terrace library seismic upgrade.

* On Nov. 13, on the regular agenda, council authorized purchase the Los Altos Treatment Plant site for $6 million, with a $2.7 million appropriation.

* On Nov. 19, on the regular agenda the council authorized purchasing a 1.3-acre, $10.9 million site on Park Boulevard for, yes, the new police station.

Some of these items are capital improvements and the city needs to maintain its infrastructure. Some are not. I won['t even go into the cost of ABAG's demand that the city provide more low-income housing -- that's the subject of another blog.

But my point here is that a lot is spent each week, much without discussion. Granted, the council's Finance Committee annually reviews the capital-improvement budget, but this comes in a 200-plus-page binder filled with projects for the next five years. This budget is tedious and gets little analysis or prioritization from the council.

And that's why I feel sorry for the Palo Alto Art Center Foundation: No city money apparently is available to renovate a city building. That's why foundation board members will have to raise $4.5 million on their own, and only dream of expanding the art center for another (mere) $4 million.

It just doesn't seem fair.

Comments (21)

 +   Like this comment
Posted by MIke
a resident of College Terrace
on Dec 2, 2007 at 1:41 pm

"But if the council decides to bypass voters by going the pay-from-future revenues approach, residents will have absolutely no say if they want their tax dollars spent on a $61 million police station."

Cities and private industry pay for their capital improvements largely from bonds. So?

As I have stated before, there is a "Catch 22" at work re: our city's ability to pay for what's necessary, even when creative solutions are suggested.

Why characterize a creative solution as "going around" the voters?

Diana, please tell me how many other communities *vote* on bonds for things like public safety infrastructure. That we were even going to have this brought to a vote is ludicrous.

The *only* reason for that is because we're constrained by a virtually impossible 2/3 +1 bar to raise revenue. This lets every minikin thinking resident (from the minority) stick her two cents in - in the hope that a 1/3 +1 MINORITY will rule the day.

Palo Alto is going to get out of that constraint, and I applaud the City Council for its creative solution.

If we have to go that way for libraries, roads, schools, etc. so be it. We need to build this infrastructure.

If we take the private equity (certificates of participation) road, it will act as a stimulus to bring new revenue-generating activities into our community, and compel us to think in a more forward way about increasing our housing densities in ways that merge with retail and other revenue-generating activities.

As for the Art Center, my sense is that you have written this article, and framed it, in a way that gives you another opportunity to complain about spending - your virtual hobby?

Since when has Diana Diamond "felt sorry" for an institution that the city cannot afford to rebuild?

Thus, I suspect your blog entry is little more than a rhetorical device, used to trash other expenditures that are a necessary part of public operations.

I'm advising all who hthink they can do better, to please apply for the upcoming City Manager's position, or forever hold your tongue/pen. :)


 +   Like this comment
Posted by Tim
a resident of Crescent Park
on Dec 2, 2007 at 4:48 pm

Cities like Mt. View have no problems funding their city buildings. Why?? Because they don't scare big retail away like we have been doing for years -Car dealerships, hotels, box retail, supermarkets. Remember in the 1980's when Cost-co, Home Depot, OSH wanted to build in Palo Alto? I do. We said no thanks- were not that type of commuity.
No we build soccer fields on the most expensive land in Palo Alto- perfect for a five star hotel with easy access to HWY 101 or 280.
I have lived in Palo Alto for almost 27 years and I find myself shopping more (each year) outside the city.
Got to make money (tax base) to spend money.
Have to go now- need to shop for food at the new Safeway in Menlo Park. I hear it is very nice!


 +   Like this comment
Posted by Art's-Not-A-Priority
a resident of Another Palo Alto neighborhood
on Dec 2, 2007 at 7:43 pm

> How many cities put a police station up for a public vote?

A simple Google will produce a number of cities that in fact do put those decisions out to the public:

Web Link
New Fox Lake police station up for vote
Daily Herald (Arlington Heights, IL)

Web Link
Officials Optimistic About Vote (for Police Station)

Web Link
Voters reject tax hike for new station

(Just a couple from the search results.)

And yes, not all of these requests for funds are approved by the voters.


 +   Like this comment
Posted by Art's-Not-A-Priority
a resident of Another Palo Alto neighborhood
on Dec 2, 2007 at 7:56 pm

> And that's why I feel sorry for the Palo Alto Art Center
> Foundation: No city money apparently is available to
> renovate a city building.

Art can hardly be considered a critical, or even a non-critical, mission of a city government. Use figures from the Art Center show that many of the programs are attended primarily by non-residents. Why shouldn't the Art Foundation raise its own funds for a facility that has nothing to do with the business of a city government?

Someone just donated $6M for Astroturf for the local high schools. With that kind of money floating around, why can't the Art Foundation raise three-four times that much for an Art Center?


 +   Like this comment
Posted by Mike
a resident of College Terrace
on Dec 2, 2007 at 9:09 pm

Art's Not a Priority,

There are 19,355 incorporated cities as of Census 2000. Hard cash says the vast majority of public safety building rebuilds are not put to a vote. Larry Klein made the point that necessary infrastructure should not be a subject of community contention; it simply needs to be built. I agree.


 +   Like this comment
Posted by Art's-Not-A-Priority
a resident of Another Palo Alto neighborhood
on Dec 2, 2007 at 9:24 pm

> But my point here is that a lot is spent each week,
> much without discussion. Granted, the council's Finance
> Committee annually reviews the capital-improvement budget,
> but this comes in a 200-plus-page binder filled with projects
> for the next five years. This budget is tedious and gets little
> analysis or prioritization from the council.

Diana Diamond has managed to interlace a number of problems in to a single thought stream, it would seem. To keep the record straight, some of the items Diana has identified are associated with revenue streams that are outside the general fund. For instance, any expenses associated with the Utilities see revenues from the sale of utilities to offest the expenditures, or money is drawn from the reserves. While Council oversight is called for, given the low level of education (real world) required for a chair on the City Council, not many people understand the "nuts and bolts" of running a Utility, so it makes little sense to expect Council members to engage in cogent discussion about these topics. (That said--it also makes like sense for a City Council to be sitting in oversight of something that they do not understand.)

The rotation of vehicles at six years should be an actuarial decision. A six-year old vehicle has a certain book value, which will be less when the vehicle is older. Engines and Drive-Trains need to be repaired after some number of miles. If the people managing the vehicles are doing their job, they have figured out that this is the right time to swap out vehicles. It's the job of the Auditor to double check that the vehicle management people are doing their job. Has the Auditor actually verified that the vehicle people have the right numbers?

If Diana Diamond is concerned that the Council may not be doing anything by rubber-stamping the City Manager's people, they probably aren't. However, without a complete rethinkng of the City Charter, and a reorganization of the City government, it's going to stay this way for a while. Remember, although there were a number of meet-the-candidate sessions for City Council recently, there was virtually no discussion about problems related to City Management, financial management, or possible changes needed to deal with future problems. All that the candidates offered was a lot of "tap dancing" and "smoke-blowing", but nothing of substance -- and the voters elected them anyway!


 +   Like this comment
Posted by Mike
a resident of College Terrace
on Dec 2, 2007 at 9:39 pm

"Remember, although there were a number of meet-the-candidate sessions for City Council recently, there was virtually no discussion about problems related to City Management, financial management, or possible changes needed to deal with future problems. All that the candidates offered was a lot of "tap dancing" and "smoke-blowing", but nothing of substance -- and the voters elected them anyway!"

How can it be otherwise when our governance structure mandates consensual majorities to make policy? We don't have an "executive", to lead. So why should anyone go out on a l

There is simply *no way* that elections here will ever generate substantial debate, because *sitting, and potential* policy makers are compelled to "get along", lest their personal initiatives fail to obtain a needed majority.

We essentially have "government by large committee" in Palo Alto. That's neither here, no there - it's just the way it is.

The only way to change that would be to create an elected Mayor position, or migrate away from a Strong City Manager model - with the latter resulting in a guaranteed governance nightmare.

Elect a mayor, then you'll see real debate, and hear more meaty visions. Until then, forget it.





 +   Like this comment
Posted by Mike
a resident of College Terrace
on Dec 2, 2007 at 9:40 pm

above, it should read - - "How can it be otherwise when our governance structure mandates consensual majorities to make policy? We don't have an "executive", to lead. So why should anyone go out on a limb?"


 +   Like this comment
Posted by Art's-Not-A-Priority
a resident of Another Palo Alto neighborhood
on Dec 2, 2007 at 9:46 pm

> There are 19,355 incorporated cities as of Census 2000. Hard cash
> says the vast majority of public safety building rebuilds are not
> put to a vote.

[Portion removed by Palo Alto Online staff.] Cities generally are bound by state law/constitution relative to bond sales that require taxes to retire the bonds. So, if any public works projects are to be financed with bonds/new taxes, then the state laws of each of the fifty states would prevail. So, instead of tracking 20+ cities, we really only have about fifty states to track.

Cities, of course, do not have to sell bonds to finance new public works. They also can pass new taxes. Again, the state laws would prevail--not the whim of the 20K city councils.

A previous poster pointed out that Mountain View doesn't have any problem building public buildings. That point is probably not true, but does need some research. What is true about the Mountain View Library construction is that the project went to the voters in 1994 and lost. The Council cobbled together $24M by selling some land and "finding" some money in the general fund. The assets of the voters were used that were held by the Mountain View Municipal Corporation. In this case, the voters said NO and the City then went about finding public assets to build the project. Palo Alto could possibly sell some its vast assets without voter approval, depending on the asset. Same is true with "finding" funds for "public-private partnerships" (whatever those might be where public buildings are concerned).

Here in California, we had enough of irresponsible City Officials back in the late '70s, who raised taxes on a whim. Prop.13 now protects us from having to worry about having to leave our homes because of every increasing property taxes.

> Larry Klein made the point that necessary infrastructure should
> not be a subject of community contention; it simply needs
> to be built. I agree.

It's people like Larry Klein that drove the Founding Fathers to say: Enough! We have limited government in the US to protect us from people like Larry Klein--who has shown nothing but contempt for democracy over the years.


 +   Like this comment
Posted by Resident
a resident of Crescent Park
on Dec 3, 2007 at 8:04 am

If the City would start spending the money it was provided by the voters on valid governmental issues, i.e., street and sewer repair/upgrades, police officers walking the main downtown areas and upholding vagrancy laws, including removing those living on the street or yelling at shoppers as they attempt to use the downtown areas, etc., instead of dabbling in issues like global warming/environmental issues, traffic studies that allow some neighborhoods to essentially take over public streets, discretionary underpasses that cost millions, etc., our city would be much better off. If our city government cannot fit into one of the largest city halls I have ever seen . . . it's too big and needs to evaluate how it can be more responsive to legitimate government issues, while simultaneously reducing the number of employees on the payroll. Stop asking for more money and trying to bypass voters to get what you want. I hsve never lived in a town this poorly managed.


 +   Like this comment
Posted by Mike
a resident of College Terrace
on Dec 3, 2007 at 9:37 am

" Prop.13 now protects us from having to worry about having to leave our homes because of every increasing property taxes."

Really? What's been the true impact of Prop 13? We pay anyway, in ways that constrain our state that were never imagined when Prop 13 was passed.

Here's an excerpt from a piece written by someone at the Hoover Institution, not exactly a supporter of higher taxes.

"Another downside of some tax limitation measures, especially property-tax cuts such as Proposition 13, is that they have often contributed to a greater centralization of power at the state level. In California, for example, the state government assumed the burden of funding public schools after Prop 13. Since state funding came with strings and conditions, Prop 13 had the effect of enhancing the power of the education bureaucracy and eroding local control. "

So, what we have here is two independent sources (schools and city) going after the same money pot. How much inefficiency do you think that has caused?

And what has changed in government, since Prop 13? Not much. It's the same old, same old - with big money and egregious legislative stalls on both sides.


 +   Like this comment
Posted by Adam
a resident of Adobe-Meadows
on Dec 3, 2007 at 1:00 pm

I do not understand why Ms. Diamond repeats "$61 Million dollars for a police station/facility." I think she wants to force us into believing that a Public Safety Building (not simply a police station) is not needed at this price.

She apparently thinks that costs for infrastructure were frozen in the late 1990's. If the facility had been approved and built 10 or more years ago, it would have cost perhaps 2/3 of the present estimate. Further delay will only increase today's cost.

Has Ms. Diamond toured the present cramped space where our officers work? The police force is understaffed, and the existing facility is a poor recruiting tool.

Has she read the Blue Ribbon Task Force Report? If so, would she please refute the points made on why this Public Safety Building is badly needed?


 +   Like this comment
Posted by aw
a resident of Old Palo Alto
on Dec 3, 2007 at 1:35 pm

Adam,

I've read the Blue Ribbon Task Force Report and unfortunately it's impossible to tell from the report what's really going on. We certainly need a new Police building someday, but it's impossible to say if it's the most urgent capital spending priority. A lot of us are persuadable if someone will lay out a coherent fact based argument.

Couple examples: the BRTF report implies that the current building must be replaced because it doesn't meet State seismic standards. That's false; new buildings must meet stricter standards than our current building but there's no obligation to replace existing buildings. (And the BRTF report has no engineering analysis telling us what the expected performance of the 1980s retrofit to the current building is) The BRTF claims the building is a recruiting problem. But it offers no statistics on how many candidates have turned down a PA offer citing the current building as a reason. The BRTF claims evidence handling is a problem in the current building, but doesn't describe whether alternative mitigation strategies have been considered. I assume our Police have an evidence plan-B in place since the earliest date to occupy a new building is 2011.

It's dismaying to watch this slow-motion trainwreck. A bit more candor about what's needed and why it's a priority will go a long way toward building public support.

It's also dismaying that we're reversing an explicit adopted City policy against using COPS for nonrevenue projects with no real discussion. Is this a one-time reversal? What other projects are eligible for COPS financing? How will this policy reversal affect our ability to finance the rest of our capital backlog? If you believe the ends justify the means...


 +   Like this comment
Posted by No Prop 13
a resident of Professorville
on Dec 4, 2007 at 12:06 am

Some of the posting have it right! We all have to pay, the problem is that we do not all pay the same price. Commercial properties get away with the least payment as a result of Prop 13. Diana is off base once again. Like Maslow's hierchy of needs - do we really need to worry about an Art Center before a Public Safety Building????

There is a reason why Palo Alto is a desirable community, and believe me it is not because of the Art Center!!! Think about schools and other services. The commmunity should focue on basic essential services instead of trying to be a leader in the Arts.....it is not that they are not important....it is just not the most important item on the plate!!!

Let's get REAL!


 +   Like this comment
Posted by Dunner
a resident of Fairmeadow
on Dec 4, 2007 at 12:25 am

Tax the lawyers! They're getting away 'scot-free'! Seriously!

Web Link


 +   Like this comment
Posted by Lois
a resident of Midtown
on Dec 6, 2007 at 8:21 am

The Public Safety Building has to be built, it is long overdue. I am pleased the City can identify a revenue stream to pay for it without going to the voters for a bond measure.

Of course, our utility bills will probably increase so the City can transfer more money over to the general fund. We will have to replace the as yet unidentified revenue stream that will come from somewhere to pay for the Certificates of Participation. It will be a book-keeping juggling act.

The Mitchell Park Library could probably be built the same way by using Developer's Impact Fees which are supposed to be for Parks and Libraries.




 +   Like this comment
Posted by Making a Point
a resident of College Terrace
on Dec 6, 2007 at 3:07 pm

I know how we can solve this problem. Let's get rid of all our municipal employee unions! And if anyone tries to unionize let's fire 'em on the spot. There are plenty of hungry, jobless people we can hire to do all that work. They'd probably be willing to work for peanuts. Think of all the money we would save!


 +   Like this comment
Posted by Whizbang Blum
a resident of another community
on Dec 6, 2007 at 3:19 pm

If you outsource and offshore all of your city jobs you could build some really grand city buildings with all the money you save.


 +   Like this comment
Posted by Carol Gilbert
a resident of University South
on Dec 10, 2007 at 10:14 am

Thank you, Diana. As a member and volunteer at the Palo Alto Art Center, I can tell you that we run a world-class facility on peanuts. We bring outstanding touring shows to the center, host the Pumpkin Festival and the Art and Glass show annually. Family Days are provided free to the children of our community--491 just experienced the holiday one. This cultural center is another jewel in this city's crown.

Art, schools, libraries, public services all need financial support. It is up to our council and city manager to increase revenue, live within our budget, and spend our dollars more judiciously.

I submit that if the residents felt that wiser decisions prevailed than losing our hotels and businesses, paying $250,000 for a $10,000 Web site, not limiting golden parachute and pension demands, the populace would have no problem getting behind passing bond measures. The new non-bond possibility is an end-run around us and it is not appreciated by everyone.


 +   Like this comment
Posted by pat
a resident of Midtown
on Dec 16, 2007 at 11:34 am

Carol,
The Art Center is nice for what it is, but it is certainly not "world class." Do you consider it on a par with the Metropolitan in NY or the Louvre?

I do agree with you that we might be more inclined to vote for bond measures if the city spent our money wisely. However, as much as I love art, I would put the Art Center at the bottom of our priority list. We have far more pressing needs.


 +   Like this comment
Posted by PA Mom
a resident of Midtown
on Dec 18, 2007 at 4:48 pm

I agree that the Junior Museum & Zoo needs to be renovated too. The City has let that community gem deteriorate. It's a mess, and has so many building-related problems. I heard the employees talking about it the other day. Maybe the JMZ is not a City budget priority, but when will it ever be? If the City took better care of their buildings, then less repair work would be needed.


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