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Town Square

Storm Drain Tax Shortfall: -- A Harbinger for Library and Police Building Bonds?

Original post made by RS Sampson on Mar 26, 2007

So it turns out that the city won't have nearly enough to fix the storm drains with the "Fee" (I.e. "Tax") increase the blue ribbon committe told us was desparately needed to be passed by the voters. They have all kinds of excuses for this - all of which seem to be somebody else's fault or something completely unpredictable that hit them out of the blue sky.

So they're looking into other options for getting more revenue, or for scaling back the "needed" projects to less than what they promised...and much less than what we desperately "needed" when they were campaigning for the tax.(Web Link)

We gave them their tax increase. Now they're saying the same things about the library system and the police building as they said about the storm drains. Are we going to be fooled again?

Comments

Posted by Not so fast, a resident of Duveneck/St. Francis
on Mar 26, 2007 at 2:30 pm

What do you think the City Council will do about this? My guess is nothing--it doesn't have to do with climate change so it is not on the agenda for this year.
I can assure you that I plan to vote against any bond measures placed on the ballot next year or any year after that until we get real leadership in our city.


Posted by Resident, a resident of Palo Verde
on Mar 26, 2007 at 4:53 pm

The certainly seem to have enough money to dig up Loma Verde and block it for a couple of weeks without giving the neighbors any idea of why or for how long. It is a mess and I for one am getting sick of having to remember to come home another way.


Posted by Not so fast, a resident of Duveneck/St. Francis
on Mar 26, 2007 at 7:11 pm

they also had lots of money to give to Enron, they have lots of money to give to the owners of the Briones house as a court ordered settlement and they seem to have a hidden cache of money they will use for the $3 million in budget cuts that they cannot seem to make (it may upset the unions in town). Anything to avois conflict and/or having to make a decision.


Posted by Walter_E_Wallis, a resident of Midtown
on Mar 26, 2007 at 9:11 pm

Ask for design-construct bids, and give the job to the contractor who offers the most.


Posted by Jeff, a resident of Midtown
on Mar 26, 2007 at 9:15 pm

I'm so glad I voted against the storm drains!!!!


Posted by Mary, a resident of Duveneck/St. Francis
on Mar 27, 2007 at 9:52 am

I also voted against the storm drains because they are under city-owned streets, do not connect to any property, and we don't own the rain or control it. We don't get that much rain per year. Most well run cities have the funds to pay for a project like this and don't let it (or the deteriorating streets) drag on for years without doing something. I also will not vote for a library bond or a public safety building bond until this city council, Public Works Department, and city manager show some fiscal leadership and responsibility. GLOBAL WARMING is "global". This council has its priorities mixed up. Pay attention to Palo Alto. Let's get back to basics and run the city efficiently....or a 'waking up' citizenry may just find those who will and can. And maybe it IS time to have a full time elected mayor responsible to the citizens.


Posted by anonymous, a resident of Duveneck/St. Francis
on Mar 27, 2007 at 9:54 am

Our taxes are very high for those of us who moved to Palo Alto within the recent past - with such a huge city budget they should not be asking us to pay for additional bond measures - it should be extraordinary not ordinary


Posted by Jeff, a resident of Downtown North
on Mar 27, 2007 at 10:30 am

This city's taxes and revenues are higher than surrounding cities, but they manage to build new libraries and keep their infrastructure maintained without all these extra fees and taxes. Mountain View recently built a great new library - without a bond. Somewhere I recall seeing an interview with a Mountain View official who said that the city keeps funds set aside to do infrastructure repair for the very reason that they don't want to have to rely on these special bonds every time they need to repair or build something.

I also will vote against every levy that comes down the pike until the city demonstrates some accountability with the money it already spends on our behalf.


Posted by George, a resident of Evergreen Park
on Mar 27, 2007 at 11:27 am

The Blue Ribbon Storm Drain Committee:
Larry Klein, Chair
Vivian Blomenkamp, Lorraine Brown, Elizabeth Dahlen, Walt Hays,
Leannah Hunt, Stephany McGraw, Skip McIntyre, John Melton,
Hal Mickelson, Trish Mulvey, John Tarlton, Joe Villareal

The Storm Drain Oversight Committee:
John Melton, Chair,
John Tarlton, Vice-Chair Stepheny McGraw Richard Whaley Rod McNall

Staff: Glenn Roberts Joe Teresi Matt Raschke Dale Wong Ted Hammond


Posted by Donnie, a resident of Charleston Gardens
on Mar 27, 2007 at 11:57 am

The Bush Administration garnered support for the Iraq war asserting we needed to go to war because of the existence of weapons of mass destruction. They either lied, or were grossly incompetent in relying on high order misinformation.

Now we have Palo Alto leaders, listed above who garnered support for a storm drain tax by asserting we needed the money to support desperately needed projects. [Portion removed by Palo Alto Online staff.]
It is quite true that the consequences of the war are orders of magnitude worse than the storm drain tax. But is the principle any different? Should not both these groups of civic miscreants be held to account?


Posted by Ben W, a resident of Midtown
on Mar 27, 2007 at 12:02 pm

I just read the linked story in the Daily News.

This is truly outrageous. Can't our city governement do ANYTHING right any more?

What a waste. I too will never vote to throw more money down the rat-hole of city hall again.

No more of these "needed" projects justified by phony analysis and ginned up evidence!!


Posted by natasha, a resident of Meadow Park
on Mar 27, 2007 at 12:11 pm

and justto beat a different -- but related -- drum, I will never vote for bond measures for the schools again until the BoE can get it right either. Sinecures, review of tangential projects, it's like they have money to burn. Clearly don't need mine.


Posted by Walter_E_Wallis, a resident of Midtown
on Mar 27, 2007 at 12:22 pm

To be fair, construction costs have jumped significantly in the past several years.


Posted by Geoff, a resident of Professorville
on Mar 27, 2007 at 12:39 pm

Construction costs HAVE jumped in the past several years. BUT this was not totally unpredictable - and should at the least have been explained to the voters when the so-called essential projects list was presented to the voters.

And was it not possible for the city to have hedged most of the risk of increased construction costs by (for example) signing contracts in advance (which they could have done since the list of projects was 100% known at the time the tax passed), or obtaining a bond to protect against rising costs - which are easily obtainable.

The fact is this appears to be another case of city officials wasting our money through either incompetence or inattention.

Add me to the list of "NO" voters on the library and police station. This has to stop.


Posted by Mike, a resident of College Terrace
on Mar 27, 2007 at 1:25 pm

Walter is right.

Here's some advice for those who want to continue to use unfounded innuendo as a rationale for delay in fixing our city's infrastructure "Pay me now, or pay me later"

Palo Alto has failing infrastructure that needs to be repaired, period. Construction inflation has zoomed far ahead of inflation, and will continue to do so; in fact, so have construction design costs.

Knowing that we need to fix things, the *absolutely* wrong thing to do would be to fix nothing, as most have suggested, above. Construction inflation WILL continue to impact what needs to be done here.

This latest development (about the storm drains) is the sort of thing that those who have a penchant for voting "no" on most city improvements love to see, because it provides grist for their mill - the mill that loves to grind out negative messages about elected city officials and city staff. What does that accomplish? We saw waht it accomplished a few years ago when they defeated the library bond. Now our libraries are in worse trouble, and will be more expensive to fix - all because a minority of persons here want nothing done to fix infrastructure.

If City Council members read these thread, I hope that they will notice that it is almost always the same group of individuals whoh come out in so vitriolic a way against our city, and its hope for the future. With that as a given, I hope our current Council will continue to lead on these issues, and help our community understand what it needs to accomplish to create a sustainable future for our city.


Posted by Maryanne, a resident of Crescent Park
on Mar 27, 2007 at 1:37 pm

I think mike misses the point. No one is arguing that we have lots of infrastructure updating to do. ($29 million of it is documented by the City Auditor in her Street Maintenance Report).

The contention is that city leaders are wasting the money they already have to spend in such eggregious ways that the system at city hall has to be reformed before it makes sense to send more money their way.

While it is true that the library bond was defeated and that this may mean that it will cost more if we decide to upgrade the libraries in the same way sometime in the future, based on the storm drain debacle, it's just as likely that had we passed the library bond, the same guys that told us yesterday that they goofed on the storm drain costs would be saying the same thing about the libraries. This may be a "Negative" message, but it's unfortunately part of Palo Alto's current reality.

It doesn't make sense to keep throwing good money after bad until something is done to address the apparently wasteful way city hall operates currently.


Posted by Mike, a resident of College Terrace
on Mar 27, 2007 at 1:48 pm

[Portion removed by Palo Alto Online staff.]

We *absolutely* NEED the libraries and the public safety bond uprgades. You can't argue about that with a straight face although the naysayers will try. To try to confuse the issue with petty distractions of storm drains is no different from what they have tried to do with the irrelevant street maintenance issue in other threads.

Palo Alto has plenty of money to fix the storm drains, repair the streets, build a fine library system and give the brave police officers a much NEEDED upgraded facility. Especially after proposition13, there is plenty of room for new property tax assessments. [Portion removed by Palo Alto Online staff.]

Let's not kowtow to fear any longer.


Posted by Mike, a resident of College Terrace
on Mar 27, 2007 at 2:00 pm

Maryanne, Please enlighten us about your assumption that city hall wastes money. How does city hall waster money? Can you explain in detail how our city wastes money to a degree that would otherwise make it possibile to use that money to *complete* infrastructure builds.

I must say, your argument sounds like the following: "I'm not going to fix the water pump on my car because my mechanic has just informed me that the manufacturer has increased the price of the water pump over last year's price. Also, even if I'mm willing to pay for the water pump, my mechanic has also informed me that I will soon need a new radiator, and that it would be better to fix it now because the cost of the radiator will soon increase as well."

Yoor, and the other assumptions in this forum are focused ONLY on cost. There is no talk of the BENEFIT of infrastucture sustainability.
Why not? Or, is there another agenda to all this?

I await a detailed response regarding your fundamental assumptions about waste at city hall. Please justify that assumption with credible detail, using examples that are comparable in revenue size to what's required to repair infrastructure here.


Posted by Paul Losch, a resident of Community Center
on Mar 27, 2007 at 2:09 pm

If I were on City Council, knowing what we have learned about our plans for Storm Drains and the costs in the last several days, I would move to halt any storm drain projects that have been planned, or scheduled to be planned, but not yet started. I would ask the City Manager to finish the projects already under way, including the efforts around the San Francsquito Creek pump station. I would move that the monies that are coming in from the storm drain parcel tax that are not going to cover those projects already started be put into a lock box reserve and not used for any other purpose until we get this whole thing sorted out.

There clearly are conditions presenting themselves that are different than what we voted for. So I think it is prudent to pause and assess the matter before anything more than what already is underway goes any further. By the same token, it would be irresponsible to put a stop to work that is started, and the creek pump project is such a unique and important item, I think we should lose no time moving forward on that specific initiative.

Our infrastrructure problems will not go away. There are some choices the community is facing around other infrastructure needs, and if we are prepared to finance a new library/commnity center, a public safety building or both.

Until we have a better understanding of just what the various factors are that got us to this position, the best thing we can do is keep our wallets in our pocket. We will have to take it out again, of that I am certain. But, the path forward looks like it will be different than we expected, and some serious review is in order before the march resumes.


Posted by Geoff, a resident of Professorville
on Mar 27, 2007 at 2:16 pm

Paul I think "keep[ing] our wallets in our pocket" is the consensus recommended course on this thread not only respecting the storm drains, but also for every other project that we're constantly told is needed by our community leaders and city bureaucrats.

Let's fix the system before we spend MORE money.


Posted by Maryanne, a resident of Crescent Park
on Mar 27, 2007 at 2:34 pm

Mike,

[Portion removed by Palo Alto Online staff.]

Whether the city wastes enough money to fund the infrastructure builds is not at issue. The argument that people on this thread are making is that the city is wasteful and that the system must be reformed before passing bonds giving the city more opportunity to waste money. The issue of whether the currently wasted money would be enough to obviate the need for passage of the bonds is (in your terms) a straw man. It has nothing to do with the argument at hand, and so proving or disproving it is totally irrelevant.

You can agree or disagree with that proposition that the city wastes inordinate amounts of money, and you can have your own opinion as to whether withholding votes on bond issues is an appropriate citizen response. But these are the topics of discussion - not what you seek to pervert them into.


Posted by old timer, a resident of Community Center
on Mar 27, 2007 at 3:08 pm

The city is doing it all it can to make sure any bond measure passes. With the restrictions they are operating under due to prop. 13, bonds are all they have to raise this sort of money. It is also the most "equitable" since it at least forces everyone to pay something and not only financed through those that have moved here in the last few years.
To do this, they seem to have adopted a "bait and switch" approach with the information they provide. Consider how the $20M Enron settlement was announced just after the utility increase was approved. They couldn't have announced this before the vote or it would never have been approved.

To get the Storm Drain through, they had to promise as much as they could to as many as they could for as little as possible or it wouldn't have been approved. ie: They had to balance the: "If you're not going to fix my storm drain problem, I'm not going to vote for it" crowd against the "It's costing too much, I'm not going to vote for it" crowd.

Are people really that surprised that it has run over budget?


Posted by aw, a resident of Old Palo Alto
on Mar 27, 2007 at 3:53 pm

Maryanne is right that we don't need to frame any of this as waste. It may even be true that our City is 100% efficient in everything they do, but chooses what to do... for hard-to-discern reasons.

For anyone who's interested, check out this 2001 City report on infrastructure: Web Link

It's probably fair to ask how we're doing on it. It pointedly cites a 1998 finding that our capital underfunding is a result of spending 65% more than the average city on program services.

What all this points to is that we have structural political problems, not waste and inefficiency problems.


Posted by Carol Mullen, a resident of Old Palo Alto
on Mar 27, 2007 at 6:35 pm

I believe the storm drain measure was an assessment, and only the owners of property were allowed to vote: one vote for each piece of property. It was a mail vote, and the City Clerk counted the ballots in the City Council chambers. She announced that it had passed, just barely.

I do remember that the City not only disclosed that the money was not enough to handle all the needed projects, but that we property owners were asked to agree on the basis that our properties would not be included if they were not in the mapped areas. It was openly acknowledged that the amount raised had been chosen because it would pass, and that it would be insufficient.

I certainly knew from my ballots that my properties would not be fixed. In fact, I think it said that the city would not do any storm drain work on the excluded areas for the next seven years.

Some people may have failed to understand the map. Some may have forgotten. It was less deceptive by far than the "public safety" campaign.

Many residents were angry at being in the excluded area. I wasn't happy about that myself.


Posted by Donnie, a resident of Barron Park
on Mar 27, 2007 at 6:50 pm

Carol,

I think you may have misread the stories about the storm drain. You are right that the promoters of the storm drain tax/fee indicated what would be fixed and what would not. However the information coming out of the oversight committee is that now - less than two years after the tax was passed - the fee/tax will not even be enough to fix what was originally planned (and promised.)

This doesn't necessrily mean the voters were sold a bill of goods by the promoters of the storm drain measure. But the reported shortfall is not minor. It's 58%. If in two years time after passage, we are told that only about half of the original projects can be paid for, the estimates were either dishonestly or grossly incompetently made.

Either way, they'll have to go a long way to get my vote on the library and police bonds == which you note seem to contain a degree of deception already.


Posted by Mike, a resident of College Terrace
on Mar 27, 2007 at 10:43 pm

This is really an interesting thread. There is an almost universally implied assumption of incompetence made about city operationn and policy-making personnel. These assumptions have as their foundation ideas like "things cost to much", or "the original estimate on 'x' was incorrect, but someone *must have known that", or "they 'deceived' us on the Enron project so they could get a rate hike in utilities", and on and on and on.

It's the same old Palo Alto "blame game" that has been going on forever [portion removed by Palo Alto Online staff.] I use the phrase "blame game" to point out that the dance that most on this thread are moving to *is* part of a "game of expectations" that past Council's encouraged by listening too hard to people who always thought they could do it better than someone else.

This is part and parcel of the culture of a city that could in the past *afford* to accomodate this kind of obsessive diligence. We can't afford it any longer.

It's high time that we take a hard look at our city's failing infrastructure - all of it. Then we need to find a way - as soon as possible - to repair that infrastructure.

If it takes $150M-200M, so be it. If we don't build it now, we will have to build it later, at higher cost.

[Portion removed by Palo Alto Online staff.]

I hope that our city officials aren't cowed by the seeming waterfall of negativity that they see in the press, or hear in oral arguments, and so on.

I hope they remember that our citizens are mostly happy with the way our city is run - even as the Chiken Little's find a way to put their negative spin on even the most successfu outcomes.

I hope they find a way to persistently frame our problems as problems that can be solved, instead of problems that will defeat us.

I hope they finally see the light about the fact thatt there *is* benefit to pubic infrastructure, and that those who focus only on cost are simply not doing proper municipal management diligence.

I hope they realize that we have to fix our infrastructure problems *now*, or it is going to cost a lot more later, with the same negative voices complaining about cost at that time, too.

We need hope, promise, and a call to pitch in and make our city work. We need to overcome the matras of "no", and "I know how to run the city better than you, even though I have no experience" fomented by those who will walk away satisfied if our city fails to fix its infrastructure, because all they *really* want is to be right, and have their way



Posted by pete, a resident of Barron Park
on Mar 27, 2007 at 11:04 pm

"Excessive Diligence" is not something I think most people would apply to city decisions on spending matters. But then I guess everyone has his or her on opinion on such matters.

Add me to the nattering nabobs. There's something wrong with a city that spends$127 million per year - almost double the amount per capita as most other cities nearby, has to pass a bond to take care of its sewers - somthing most cities do out of general revenues, and then still manages to miss the mark by half when it comes down fixing things.

IF they screw up someting as straightforward as the storm drains, what are we to expect on the library, the police station...and everything else that seems to be falling apart around here. We could be paying for their mistakes for generations if we give them that kind of dough.

$200 million?! If they can't spend the $30 million or so the storm drain fee gave them efficiently, what would they do with that kind of money.

Fool me once, shame on you...fool me twice....ain't gonna happen

Show some accountability and ability to spend what you already have efficiently. Stand up to the unions and other interst groups you keep caving in to. Then ask us again for more money and we'll think about it.


Posted by Mike, a resident of College Terrace
on Mar 27, 2007 at 11:53 pm

There is also something special about a city that offers the level of services to its residents that Palo Alto does. Our service level is something that Palo Altan's have ocme to take for granted.

Once the ruth gets out - i.e that we could lose our branch system; that we could be sued for 10's-of-millions of dollars because we have let public safety infrastructure decay; that our schools will lose if we don't increase money for public library collections; that more Palo Altans will suffer if we don't make up for the unexpected shortfall in storm drain money; that we need to be *proactive* in growing our city to collect more tax revenues; that we need to rethink what it has cost us by listening to those who want to "balme" instead of offering creative solutions. Once those truths get out - and they will - Palo Altans, *if* they are led forward, will respond in a way that will make our future residents proud. It's the latter we're building toward sustainability for.

This is a great city; we're up to the task of moving forward, instead of retreating out of fear.


Posted by George, a resident of Evergreen Park
on Mar 28, 2007 at 12:53 am

Mike, I heard the City Manager in his report on the budget say there there would be an added $167,000 for library collections next year - $100,000 from the city and $67,000 expected from the library Friends people. Didn't you hear the Library Director say it too at the Library Commission meeting? [Portion removed by Palo Alto Online staff.] Anyway, a bond issue is for construction, not for books.


Posted by Mike, a resident of College Terrace
on Mar 28, 2007 at 2:19 am

George, [portion removed by Palo Alto Online staff.]

What library meeting are you talking about? In any case, what what does the money for libraries that yuo mention have to do with building and refurbishing the physical library infrastructure the majority of our citizens clearly want? Please help me understand.


Posted by Dave, a resident of Professorville
on Mar 28, 2007 at 8:36 am

[Post removed by Palo Alto Online staff.]


Posted by Bill, a resident of Southgate
on Mar 28, 2007 at 8:39 am

[Post removed by Palo Alto Online staff.]


Posted by aw, a resident of Old Palo Alto
on Mar 28, 2007 at 8:58 am



Mike,

I agree there's a huge project backlog that needs to be attended to. With public building costs in California averaging $450 per foot, I suspect there's over $750M (in 2007 dollars) of City and School infrastructure that needs to be replaced over the next twenty years. None of this is new; much of it has been debated back to the 1980s.

My problem is that plan after plan and policy after policy have been proposed and enacted. In five minutes of searching I found Council declarations back to the mid 80s, Council direction from the late 90s, City Manager plans from 2001, etc. that suggested pathways forward.

I am not on the page that says everything here is perfect or the page that says we can't afford to move forward. We are starting off a strong legacy that we've let decay for 25 years. I also don't believe City Staff are the problem. They generally work hard. What I do suspect is that we are structurally stuck. What good will it be to approve $95M for a branch library and a Police HQ in 2008 if, as many of us fear, in 2011 we're told, "Only enough money to complete one of the projects." Or we're told, "Buildings are ready, but it'll cost another $20M to furnish them." Will we have a non-rancorous way to cover the shortfall?

It is fair to step back from our Muni budget and ask a few questions. Today $114M of our $128M General Fund budget is spent on services. The top five items, making up 74% of the budget are Police (20%), Fire (17%), Community Services (15%), Admin (12%) and Public Works (10%). The trend back to 1993 in General Fund Revenue growth is 2.9% per year. Some of our neighboring Cities appear to fund capital projects first and services second. It's a reasonable debate whether we have the right balance at 89% - 11%.

I'd be delighted if City and School leadership stepped forward and said, "Here's a 20 year plan to clear out the capital spending backlog. It'll cost $4800 per household per year and at the end we'll have replaced or renovated every facility in town. That's a $1.1B commitment in 2007 dollars at 10% inflation." But not sure if those initiatives could pass in today's political climate.


Posted by Kate, a resident of Duveneck/St. Francis
on Mar 28, 2007 at 9:23 am

This is from today's Weekly - March 28th.
"PASCO PASSE? . . . It's possible that PASCO Sam may not be picking up your trash in 2010. The city's contract with Palo Alto Sanitation Company, which has hauled the city's trash since 1951, expires at the end of June 2009. The city has hired a consultant for $225,000 to find the very best garbage service it can. PASCO Sam is still a community favorite but it's not quite as local as it once was. In 1998, it was sold to USA Waste of California (Waste Management), the world's largest trash picker-upper."

Why does it take $225,000 to a consultant to analyze trash hauling contracts? There were mega thousands to consultants for the Embarcadero roundabout fiasco - and the first Edgewood Plaza design debacle. And about $225,000 to redesign the city's web page recently. It all starts to add up - few $100K here, a few $100 K there. Where is the financial oversight? Our money is just frittered away.


Posted by Walter_E_Wallis, a resident of Midtown
on Mar 28, 2007 at 9:43 am

But the rain still will fall.


Posted by Paul Losch, a resident of Community Center
on Mar 28, 2007 at 10:12 am

To AW's point...

I think the revenues, infrastructure and services that in the last 30 years have contributed to the character of Palo Alto can be celebrated for what they have been, and we need to look out over the next 20-30 years and ask ourselves what those things need to look like to make the character of Palo Alto what we want it to be going forward.

There has been over time a bit of a piecemeal approach to various things, some of them big, some of them small, which finds us where we currently are. It is not a matter of assigning fault or taking credit, we are at a point of inflection, and we need to sort some things out, since some of the "models" we have become accustomed to either need to be replaced or adjusted signficantly.

As regards the Storm Drain matter specifically, we voted in favor of it with a certain understanding and set of expectations. Circumstances now present themselves differently. We need to understand how that happened, so we can minimize the chances of such things happening again. A 58% variance is huge! To just carry on without first getting our arms wrapped around why we are at this point is just plain irresponsible. Who in their right mind would agree to making several other significant expenditures on their personal property if the current project was costing that much more than was expected going in? Let's use a little common sense here, not get into a froth over ideologies or motives.


Posted by Bob Davis, a resident of Southgate
on Mar 28, 2007 at 10:21 am

Let's see...we started this thread with less than $100 million in bonds for libraries and the police, gone to $200 million via Mike and now are up to $1.1 Billion courtesy of aw.

Obviously there is no limit to our "needs", or our capacity to meet them. It's merely a matter of issuing enough bonds as some see it.

Obviously we need to repair the infrastructure, which has been neglected to an almost criminal degree by successive city councils. The question is how best to do that.

RS Sampson makes a good case that the storm drain fiasco is an indicator that the city currently is not currently capable of spending money on infrastructure projects in a responsible way. We had a blue ribbon committee on this task, and they blew it.

It's also apparent that the city wastes money or is unwilling to economize in other areas where it spends our money. Witness the council's recent capitulation on the city manager's proposal to save $400,000 by outsourcing some park maintenance after purple-shirted union members showed up in force at the city council meeting.

I like Paul Losch's idea of some sort of standstill on capital spending and new proposals for it until this all can be sorted out.

aw is right that there is no political will for the kinds of spending and new bonds that are being talked about. And the reason for this isn't that the nattering nabobs of negativism are fooling the electorate and cowing the city council. It's because they have some criticisms that seem valid to lots of people.

That's what needs to be addressed by our leaders.


Posted by aw, a resident of Old Palo Alto
on Mar 28, 2007 at 3:19 pm

Bob,

Good points. I was trying to estimate how much it would cost in current dollars to restore our community amenities to the 1980 level. Schools, parks, roads, sewers and drains, community centers, libraries, airport, golf course, playing fields, etc. $750M is just a guess with a 45% cushion for overruns. I know these are at least three different budgets, (schools, enterprise capital, general capital), but they all get paid by us together.

Just recently our council has discussed $45M for FTTH and $22M for emergency water storage.

I'm not advocating that we do all these things right now. But hard to see how we will get them done in our lifetime at $14.9M per year in the current General Fund Capital budget.

The time lag between project proposal, analysis, bond approval and implementation seems to guarantee that the estimates are always stale. The process doesn't seem to allow adequate cushions to be built into individual bonds.

How can we find a way forward? Our choices are to do nothing and let the infrastructure decay, approve bonds and find post-facto they don't pay for the promised scope, or choose what we want to do with a slightly more open-ended decision and funding process.

Anyone else willing to try the third way, with less Staff second guessing and more long-range political oversight?


Posted by Mike, a resident of College Terrace
on Mar 28, 2007 at 3:25 pm

There is no sense forestalling current efforts to move forward with *needed* infrastructure.

It's amazing to watch the Palo Alto Process get all wound up again, with all kinds of advice about how we need to "pull back", oro "wait to get our bearings" etc. etc.


We *know* that storm drains, libraries, roads, and the public safety building need to be fixed. We *know* that the majority of Palo Altans want to pass a bond to keep our streets safe, and create a sustainable library. We need to get on with that, and at the same time regroup for future plans to fix additional indrastructure.

If we wait, it will cost even MORE money in the future. What about latter statement do those who want to creatre more commissions, conferences,, committees, citizen meetings, etc. etc. not understand?

Palo Alto's infrastructure needs are large; it will take a large dose of leadership to move beyond those FEW who want to hold progress up, or think this problem to death (as construction inflation keeps on rising).

rPHv8


Posted by Paul Losch, a resident of Community Center
on Mar 28, 2007 at 3:56 pm

Mike,

I really wish you could try to be less strident in your tone. I am a vey strong believer that our infrastructure is in dire need of work across a number of measures, I am even willing to work toward efforts that help raise the money for such purposes, and I think the longer we wait, the worse and more expensive it will get. I don't need to be convinced, others do, but why am I suggesting we take a "time out?"

Because there is something terribly wrong when a capital improvement effort of the magnitude of the storm drains shows a variance of 58% just a couple of years into it. That is just a fact. Does it mean we should not work on fixing our infrastructure? Of course not. Does it mean that something is out of alignment between our going in assumptions and where we are now? Sure looks that way to me. And I think it is the height of folly and irresponsibility to merely keep our heads down and continue to plug away with the game plan that originally was put forth. It has us in a 3 and 25 situation, if you will, and we simply have to make sure we have a clear, reasonably objective understanding of what got us to that point, so we can manage our capital dollars and the community's expectations more realistically.

I point no fingers, I cast no aspersions. True for some others commenting on this thread as well. It may be after a review, the conclusion is that the approach is sound, and that we are caught up in factors that we could not have anticipated at the time, but we now face. Even if that turns out to be the case, we clearly will unable to pay for all the projects originally planned for with the monies that were earmarked. Something is going to have to change since we are working from a different set of numbers, at a minimum.

I would get very upset if we were to blithely carry on as if everything was just as we had been expecting it to be. Many of us know that we have this infrastructure problem. With this new information, I don't think anyone now has a clear idea yet of what specifically we should do about it. Until we do, I think it is reasonable to make sure we don't expend more than we have already have--that is what stewardship and fiduciary responsiblity are all about.


Posted by bikes2work, a resident of Mountain View
on Mar 28, 2007 at 4:10 pm

This whole problem is simply due to construction cost inflation outpacing general inflation. It isn't just a Palo Alto issue. Do a Google search on "construction cost inflation". It is a serious problem for schools, hotels, real estate developers, public works, and our own Santa Clara Valley Water District: Web Link (Nov 2006).

Too bad no one had a crystal ball to see this coming. Estimates are based on experience. When was the last time you experienced multiple years of double digit inflation? This change will ripple through other aspects of the economy very soon. Seen any gas prices below $3/gal lately? They seem to be getting closer to $4.


Posted by Mike, a resident of College Terrace
on Mar 28, 2007 at 5:20 pm

Paul,

My tone is direct, and to the point. In fact, it is as direct as it is to act as a foil to the established habit of elongated process that we have had for too long here. Please don't mistake directness, an impatience with unnecessary delay and process, and a refusal to any longer tolerate a very small, vocal group of individuals who seem to delight in the negative (you are not among any of those categories, btw).

While I respect your ideas about "looking into things further, in order to figure out how we got here" (to paraphrase), and so on, I believe that such an effort would cause more unneeded delay. If you think we might move forward with some of your odeas *as we repair needed infrsatructure, NOW*, then I'm all for a parallel effort to improve efficiencies.

Also, I see no reason to assume that we can't accomplish everything we need to withhout making draconian cuts in services or staff. You're an entreprenuer, and I would think that if your business was faced with constraints that you would do your very best to create new opportunities that generate new income. You would carry on your business, innovating *even as you continue operate*, adapting *even as you continue to operate*. This is what business and municipal management (at its best) is all about - executable innovation and *will*.' Lately - for the last decade - I haven't seen much "will" around here that's pointed in the direction of positive growth, and the generation of new revenue to help pay for services.

There is simply NO further time for delay. To do so would be the height of irresponsibility from a long-term municipal sustainability point of view


Posted by aw, a resident of Old Palo Alto
on Mar 28, 2007 at 6:32 pm

Mike,

I'd love to break the current impasse: not just regarding the storm drains, libraries and police; but about all the project backlog. I'd like to have thoughtful answers to convince the skeptics that "We can do it!" Here's some very quick budget analysis.

Between 00/01 and 06/07 the General Fund Revenue has grown from $110M to $129M. Property tax grew from $10.5M to $20.3M. Permits and Licenses grew from $11.2M to $23.2M. Utility User Tax grew from $5.9M to $9.1M. Other categories are flat or down. Sales tax was $21.3M in 00/01 and $21.1M in 06/07 budget. It would be great to find new sources of revenue. We're fortunate that Stanford Shopping Center generates two to three times as much revenue per square foot as a Target or Safeway, and unfortunate that we've lost a few auto dealers.

Capital programs have grown from $6.5M in 00/01 to $14.9M in 06/07.

I'd love to find a pointer to progress against the April 1998 $100M plan submitted to Council. It was the stated policy in 1998 that new facilities were to be funded by General Obligation bonds or a parcel tax.

I think there's some frustration out there that whatever we do approve, delays happen, another shoe drops and fingerpointing ensues.

It is completely fair to suggest we find new revenue sources. For example can we tax services or put transaction fees on the $B under management on University Ave? Our historic revenue growth rate has been a constant 2.9% per year since 1993. It's completely fair to ask whether our current spending model: 11% capital and 89% service is sustainable. It's also completely fair to ask to review our Muni balance sheet.


Posted by Mike, a resident of College Terrace
on Mar 28, 2007 at 11:32 pm

aw,

1) What kinds of services would you tax?

2) Transaction fee increases will contribute to rents climbing higher. Guess who ultimately pays for rent increases?

How about building lots more infill, transit-oriented housing?

How about working with neighboring municipalities to create large inter-municipal efficiencies - including the sharing of retail corridors?

How about being far more proactive with Stanford than we've heretofore been? (let's get beyond elementary co-promotions). For instance, is a Stanford-Palo Alto "Fine Arts" center completely off the table? Evenn if it is, let's revisit the possibility.

How about an aggressive plan to court R&D, including finding a way to fund fiber infrastructure?

How about staffing up the business development group at City Hall?





Posted by Mike, a resident of College Terrace
on Mar 28, 2007 at 11:48 pm

Further,

1) how about performance-based milestones for the business development group, and a few other groups. Let's reward efficient performance. btw, this doesn't mean setting draconian goals that are impossible to reach. Goals would be cooperatively set, and driven primarily by staff - who know more about running the city than anyone else. [only those who are paranoid enough to call this the "fox guarding the hens" will disagree with this - - the assumption that people *want* to do a bad job is a poor assumption. Our city employees want to do a *better* job - - give them the freedom to pursue that goal and watch things happen]

2) How about a very close look at PAU, for a long-term determination on whether it's worth keeping, or selling - all, or in part. btw, I love PAU, but one must ask whether it's day has come and gone. Would selling PAU generate sufficient funds to fill the revenue gap necessary to build and repair needed infrastructure? Would selling PAU be a net loss, allowing for higher utility rates from the buyer? Could the latter scenario be prevented?
[revenue from any sale would have to be enough to return revenue from re-invested sale funds] I have heard estimates from $800M to $1B for PAU. Is this accurate? If it is, we could take part of that money, bank it, and receive as much in yearly interest as PAU currently contributes to the General Fund, with enough left over to make much of Palo Alto energy independent via solar and other means.

There are many more ideas - some good, some not (mine may fall into either category). That said, *this* is the way forward - i.e. thinking about strategic growth, leveraging, cooperation (with other municipalities), and the creation of opportunity. That. as opposed to running away from our problems, delay, or turning PA into a cheap imitation of its former self as we cut services to the bone.


Posted by aw, a resident of Old Palo Alto
on Mar 29, 2007 at 7:09 am

Mike,

Again, good ideas. I estimate $100M to $1B in professional services (legal, accounting, etc) conducted in town. I also estimate $5B to $10B in assets under direct management in town.

Infill housing is a great idea, but we receive .1% of property value per year in City tax. We would need $10B of new property to generate $10M of new property tax. At $2M each, that's 5000 new units against a current base of 27,000. Doable, but we have to put a lot on the table to get there.

Completely agree about performance based milestones and more latitude for employees, coupled with more political accountability on goals.

Selling off assets is also reasonable to assess. In addition to PAU, we own 1000s of acres of land (which could help find sites for 5000 new housing units).

Baseline PV for the entire City would cost around $500M in equipment and require about 150 acres of land.

So all reasonable suggestions. I think we agree extensively on goals. My question is how do we get these things done in a setting where the same issues have been on the table with the same players for 20 years?


Posted by lwh, a resident of Palo Verde
on Mar 29, 2007 at 11:48 am

There are FOUR city council terms that expire 12/31/07, to be decided in the November 2007 election. Three council members are term-limited out, and a fourth has announced she will not run. --> We will have 4 new council members next Janaury.

If you are one of the many in this thread who blame all our financial (and other!) woes on the City Council - this is your chance to show how you can do a better job.


Start planning your campaign - and your policy statements - now.

(See Web Link)


Posted by Mike, a resident of College Terrace
on Mar 29, 2007 at 12:37 pm

The City Council is not responsible for our financial woes - nor isi the city staff. There is nobody blame for our financial woes but ourselves.

We have continues to permit a form of local governance that has is an antique, given the current and forward needs of our community. Thus, our probllems are more structural, than personal.

We have gotten ourselves into the habit of thinking that endless, non-time-limited debate on almost any issue will "turn out alright in the end". The latter works when a municipality (or a nation) have a reserve of position, power, capital, and unlimited opportunity on the horizon (this describes Palo Alto, from about 1965-1998).

However, a problem arises when the habits and structures (political, managerial, and personal) learned in fantastically hegemonic times don't change fast enough to create an adaptive pattern to new times - new times that compel large organizational structures to be able to change on a dime, and *constantly* adapt.

One thing I know for sure is that we have to go about the business of short-circuiting any more delay when it comes to repairing or replacing infrastructure, asap. We *have* to do that - and we have to do it in a way that doesn't cause us to lose the great service array that we enjoy today. We *can* do this; it will take political will, leadership, and grassroots determination.

So far; I'm encouraged



Posted by Mike, a resident of College Terrace
on Mar 29, 2007 at 12:40 pm

sorry for the repeat, the last post needed a few edits...

The City Council is not responsible for our financial woes - nor is the city staff. There is nobody blame for our financial woes but ourselves.

We have continued to permit a form of local governance that has beccome an antique, given the current and forward needs of our community. Thus, our probllems are more structural, than personal.

We have gotten ourselves into the habit of thinking that endless, non-time-limited debate on almost any issue will "turn out alright in the end". The latter works when a municipality (or a nation) have a reserve of position, power, capital, and unlimited opportunity on the horizon (this describes Palo Alto, from about 1965-1998).

However, a problem arises when the habits and structures (political, managerial, and personal) learned in fantastically hegemonic times don't change fast enough to create an adaptive pattern to new times - new times that compel large organizational structures to be able to change on a dime, and *constantly* adapt.

One thing I know for sure is that we have to go about the business of short-circuiting any more delay when it comes to repairing or replacing infrastructure, asap. We *have* to do that - and we have to do it in a way that doesn't cause us to lose the great service array that we enjoy today. We *can* do this; it will take political will, leadership, and grassroots determination.

So far; I'm encouraged


Posted by RS Sampson, a resident of Midtown
on Mar 29, 2007 at 2:25 pm

Some here seem to want to rush headlong into a big capital spending project without addressing the focal point of this thread: that is, the current process - as exemplified by the example of the storm drain tax - makes it appear like the usual methods we use in this town for capital projects aren't working.

We had a blue ribbon committee carefully analyze and promote the strom drain tax. We were told exactly how much it would cost and what we would fix. And now two years later....we find out that we were 58%(!) off mark. As Paul Losch says, this is huge.

Now maybe this was unavoidable "escalation". Or maybe, as another poster suggested above, the city should have protected itself with a completion bond or similar method. But either way, do we want to pass $100 million on bonds for libraries and police, and then find out in a couple of years that we need to find $6O million more to finish the job?! We don't have a lot of extra $60 million piles of cash sitting around here.

While Mike makes a good point that costs are escalating, I think Paul has the better of the argument: We need step back and analyze what went wrong here BEFORE committing more money to the same process that appears to have failed.


Posted by Mike, a resident of College Terrace
on Mar 29, 2007 at 5:10 pm

RS, how much will it cost to "step back and analyze", and are you willing to take responsibility for creating an additional forward burden on our residents - as construction and design inflation continue to accelerate?

A variable (construction inflation) got by the Blue Ribbon Commission; it also got by a lot of other municipalities that are in the same boat. Are they "stepping back to analyze". Nope. Mostly, they're taking the bull by the horns,, and *making* their future - an expansive future built on aggressive, executable innovation, something that - given the reputation we like to pat ourselves on the back about around here - we have seen to precious little of.


Posted by RS Sampson, a resident of Midtown
on Mar 29, 2007 at 6:32 pm

This is a matter of what is the best course of action for the city to take on expensive capital projects. There are arguments on both sides. Mike's argument is that inflation will drive the cost of construction higher while we wait. This may be true, and it certainly is a risk as he points out(but there is some chance that construction costs will fall if, as some predict, there is a building recession in China.) Either way, it certainly is a risk to be considered however.

The other side is that there is prima facie evidence in the storm drain case that the city either isn't analyzing capital projects efficiently and correctly using its current system, or isn't properly accounting for or anticipating inflation risk.

I think the second argument (Paul Losch's) is the better of the two, offers the city a way to possibly avoid the kind of situation that it faces with the storm drain situation, overall is less risky to the city, and offers the best chance of moving ahead with the needed infrastructure improvements in a way that will benefit the city most.

Others may disagree - Mike clearly does. But that's what horseracing and politics is all about.

I think on something as vitally needed as infrastructure improvements in Palo ALto, it makes sense to do it right and not rush headlong into a situation where there are problems, the genesis of which we're unsure about- especially when the argument on the other side is only that inflation might make the projects expensive if we wait a year or two.


Posted by Mike, a resident of College Terrace
on Mar 29, 2007 at 7:04 pm

RS, I woundn't bet on construction activity declining in China anytime soon. Do you play the lottery? :)

Also, figure in MORE construction inflation as materials get more dear due to increased costs from demand in other parts of the globe. Waiting = more cost, and more municipal frustration PLUS the risk of serious lawsuits coming from our lack of ability to properly care for trial evidence and ther >legally< required mandates.


Posted by RS Sampson, a resident of Midtown
on Mar 29, 2007 at 7:11 pm

Mike, you made your course, Paul Losch, I and others have made ours. Obviously, it's a matter of opinion with arguments on both sides. I guess we'll just see how it plays out in the political process.

By the way, there are a lot of articles in the press about overbuilding in China, and the government there is already taking steps to reign in some construction. And there have been MANY articles about a possible building or banking recession in China because of all the speculateive activity. I wouldn't plan our city's infrastructure projects around this, but I wouldn't discount it completely either.




Posted by SW, a resident of Midtown
on Mar 29, 2007 at 9:45 pm

I think Mike is actually trying to defeat the library and police bonds. His vehement support of these measures without any emperical evidence appears to be a ploy to mount support against them.


Posted by Forum Reader, a resident of Stanford
on Mar 29, 2007 at 11:28 pm

SW expresses a thought that has occurred to me too."I think Mike is actually trying to defeat the library and police bonds."

Mike and his many pseudonyms is a troll. For people unfamiliar with this term, Wikipedia offers some explanations.
In Internet terminology, a troll is someone who posts derogatory or otherwise inflammatory messages about sensitive topics in an established online community such as an online discussion forum, to bait users into responding.

Trolling is a game about identity deception, albeit one that is played without the consent of most of the players. The troll attempts to pass as a legitimate participant, sharing the group's common interests and concerns;

Trolls can be costly in several ways. A troll can disrupt the discussion on a newsgroup, disseminate bad advice, and damage the feeling of trust in the newsgroup community.


Posted by Dick, a resident of Another Palo Alto neighborhood
on Mar 29, 2007 at 11:30 pm

It sounds like Mike works for the city and is probably a union member that the city staff,council can do no wrong. The majority seem to think that there is something wrong in the way the city does business. It seems that if the bids for the work are way highet than planned go ahead and accept them today. We cant wait another day. Or were bids even obtained. I remember when the city built a space in one of the parking garages and the bids were all low for the rent,but the city council said they couldn't wait or have new bids come in and gave the place to a low bidder as several council members wanted a gym type of place that they could walk to and didn't want a resturant that had a higher bid. The city is loseing tens of thousands of dollars or much more with this low rent for a long term. Consultants are constantly hired so no one at city hall will be blamed for failures. Not saving the very old historic house is a total debachel on the citys part and cost hugh $$. The storm drain issue is turning out to be a gross debachel!!! The city of industry is going broke because the citys industries pay almost no taxes to the city on their property. They should levey a $1 or $2 fee per square ft of commercial office/etc space per year. They pay $3/ft/month for rent and a couple $/year would be insigificant to them. This would bring in $10 to $20 million/year to the city. Of course since the city is run by high level executives of these companies it will probably never happen. Unless regular residents/non-business connected people are elected to the council. I think the VP of HP was simply a agent of HP and other large co's looking out for their interests. Most on the council are there to represent their business interests and their own friends/neighbors. Large areas of the city don't even have storm drains of any kind and are not in the flood zone but are still charged the fee (over $10/month). The post card balloting was a hoax also and only a fraction of the people in the city voted and it passed as no doubt the post cards got lost along the way, etc.. This was also sold as a solution to flooding in the flood zones,areas of the city.. Is that real?


Posted by Howard, a resident of Crescent Park
on Mar 30, 2007 at 12:37 am

Scanning through this thread, I don't see any recognition of one of the big issues that was raised at the time of the bond vote. Namely, whether the money to be raised was better spent on flood control of San Francisquito Creek, rather than on storm drains. The two issues are entirely different. Given that the storm drain projects are now far more expensive than previously estimated, the city should go back and consider diverting this effort to flood control.


Posted by Mike, a resident of College Terrace
on Mar 30, 2007 at 1:51 am

Howard, there's no doubt that San Francisquito needs to be fixed (yesterday!). So do the storm drains. So do the library and public safety building. So let's raise the money from increased municipal revenue streams and bonds. Let's get busy, people. The time for analysis has come and gone; now it's time for action.

Forum Reader, "sticks and stones will break my bones" - you know the rest...you called me a name. Shame! ;)

I don't post derogatory content, unless you consider passionate and direct disagreement backed up by *facts* as derogatory.

btw, where do you stand on the infrastructure builds? 100-1 says you're against them...right? I'm waiting for a substantive response from you, on anything...


Posted by Chris, a resident of Palo Alto Hills
on Mar 30, 2007 at 7:36 am

"I don't post derogatory content, unless you consider passionate and direct disagreement backed up by *facts* as derogatory."

Anyone reading through the numerous posts by Mike on this Forum where he constantly calls into question the motives and good faith of posters who disagree with him, or who has seen how he excoriates Diana Diamond when she writes something critical of city management knows this statement is..um hyperbolic at best. (

Check out Mike's comments on the Emily Harris thread for some choice recent examples.)


Posted by Mike, a resident of College Terrace
on Mar 30, 2007 at 12:04 pm

Now things are really getting amusing. Diana can take care of herself; besides, she's the one who opened the Pandora's box - right?

Where's the beef? So far, there is very little but talk of panic and delay. Where is anything other than Chicken Little statements about how our City is poorly managed, and that we're going to hell in a handbasket?

Those who have been asked (with one or two exceptions) to provide detailed counter-studies, and other information to counter factual information that contradicts their positions have failed to do so. Instead, the tactic is to bring up a single negative and generalize from that. This is a very primitive debate technique, one that is most often used to mask a weak position. Thus, the accusations from Chris and a few others that people who are in disagreement with them have multiple identities, or they're trolling, etc.

This thread is winding down; thank goodness. It's running out of wind. There is hope on the horizon, here in Palo Alto, from the *majority* of voices that have already been heard,, and will be heard much louder at the polls, come election time.


Posted by veritas, a resident of College Terrace
on Mar 30, 2007 at 12:59 pm

Brilliant post, Mike. You have done it again--put the naysayers and anti-everything folks in their place. The train is leaving the station and your are the only one fit to run it.
I worship the fround you walk on and wait breathlessly for your next post.
Keep up the great work.


Posted by Chris, a resident of Palo Alto Hills
on Mar 30, 2007 at 1:22 pm

I didn't accuse Mike of trolling, nor did I say anything about how many identities he may be posting under.

I did present other readers of this thread a way to make their own judgement about Mike's statement that he doesn't post derogatory comment.

Readers may also wish to draw inferences about the rest of what Mike says if they follow the suggestion.

And by the way, Mike didn't say, "I don't post derogatory comment except when Diana Diamond who can take care of herself says something I don't like." He said "I don't post derogatory comment..." Changing the subject when you're caught in a rhetorical bind also is a weak debating tactic.


Posted by Mimi Butternut, a resident of Esther Clark Park
on Mar 30, 2007 at 1:31 pm

Final score:

Mike 100

Chris 0


Posted by Dada Applefritter, a resident of St. Claire Gardens
on Mar 30, 2007 at 1:37 pm

Mike 10000

Chris ZIP!


Posted by MoMo Orangeblossom, a resident of Leland Manor/Garland Drive
on Mar 30, 2007 at 1:41 pm

Mike: $100,000,000 (Library and Police Bond)

Chris: -$1000/month (Parcel Tax Amount)


Posted by Fifi Passionfruit, a resident of Monroe Park
on Mar 30, 2007 at 1:43 pm

Mike: Good

Chris: Bad


Posted by Carol Mullen, a resident of Old Palo Alto
on Mar 31, 2007 at 6:27 pm

Paloaltoonline staff: please clean up stuff like the scorecards. Did you check the verification codes to see if those might be spam?
This forum is a useful resource. Donnie; you're right. I had no idea it was that bad. 58%? Dick, you're right also, there were murmurs of disbelief all over the Council Chambers when the ballots were counted. The way it was done made me decide that I would vote "no" on any future assessment.
I don't think the people who live here are that naive; we expect some pork in every project. These massive multis have gone past the point where they are likely to pass in an unrigged election.
I understand the people who want a new Community Center in Mitchell Park. I'd rather see a clean library bond for MItchell Park; no meeting rooms in what would no longer be the "Main" library, no carpet (for God's sake) and then it would pass. These mega bonds profit no one but the firms hired to study why they're going to fail.
I'm opposed to the massive new police station because I want to see dispersed stations that could still function in case of earthquake, toxic spill, hillside fire. I think it's just a bad idea. I'd like to see higher wages for entering policemen, so we could pick the best, and put some training into it. I personally know someone stopped for "driving while black" who could not have fit any known or imagined profile of a dangerous person. If I hadn't been afraid he'd get picked on, I'd have filed a complaint.


Posted by Walter_E_Wallis, a resident of Midtown
on Apr 1, 2007 at 5:54 am

How about we sell the utilities, and use the proceeds to bring the infrastructure up to date, purchase annuities to cover retirement packages, then go on a strict cash basis from then on.


Posted by 14k/yr, a resident of JLS Middle School
on Apr 1, 2007 at 5:05 pm

I've seen numerous editorials over the years arguing that Palo Alto should sell its utilities.
It is beyond me why any company would be willing to purchase the PA utilities.
What exactly would be valuable to a purchaser? As far as I understand, the only assets are some energy contracts, pipes, office equipment, and transformer stations? What valuation model do you use for a non-profit?



Posted by Walter_E_Wallis, a resident of Midtown
on Apr 2, 2007 at 6:20 am

Future revenue.