Editorial: Hoping for goodwill and leverage, Stanford may wind up with neither

'Agreement' between Stanford and school district triggers strong objections from Simitian

The self-congratulatory press release issued late Monday by Stanford University and Palo Alto school Superintendent Don Austin brought the intended headlines, leading the public to believe that an actual deal had been reached to mitigate Stanford's future development impacts on the schools.

It boldly celebrated a tentative agreement, not yet approved by the school board, in which the university would pay an estimated $140 million over the next 40 years to mitigate the costs of the school district educating hundreds of students living in any newly built tax-exempt Stanford housing. Most of this would come from annual payments of about $6,000 for every additional student who enrolls in Palo Alto schools, a fraction of the actual $20,000 per pupil cost of operating the district.

To be sure, this is a positive development after many months of Stanford signaling no willingness to do anything like what they have now agreed to do.

But buried at the bottom of the press release was a zinger: The agreement was contingent on the county approving a development agreement governing Stanford's growth over the next 25 years that is acceptable to the university. In other words, by entering into a side agreement with the school district, Stanford bought itself not only a badly needed shot of good PR but a powerful bargaining chip to use in upcoming talks with the county over a development agreement.

Stanford obtained two other concessions from the school district in the agreement: The district is precluded from participating in or taking any position on any other matters involving Stanford's general-use permit application and it must resolve any disputes through binding arbitration instead of the courts. It also fended off the district's high priority request for a site on campus for a new elementary school.

The release of the tentative agreement brought an unusually strong reaction from Santa Clara County Board of Supervisors President Joe Simitian (a former Palo Alto school board member), who said it wasn't actually an agreement at all since it was conditioned on the outcome of the county's own negotiations with Stanford, which have not yet begun.

Simitian, who enjoys strong political support among the Palo Alto school community, told the Weekly the agreement was "unfortunate" and "regrettable" because it set the stage for Stanford using kids and schools as a political weapon in county-development agreement negotiations.

On Tuesday, he suspended talks between the county and Stanford on the development agreement and announced that negotiations would only resume if Stanford modified its deal with the school district to remove all conditions relating to the county's approval of Stanford's development application.

Simitian's strong rebuke of Stanford and the school board caught both by surprise, or so it seems. But Simitian says he had been very clear in discussions with school board members and Superintendent Austin that any deal between the district and Stanford had to be a bilateral agreement completely independent of the development agreement between the county and Stanford. Otherwise, he said, the county would be negotiating with Stanford on other important issues, such as housing and transportation, with a gun at its head.

Simitian's public ire is out of character for the supervisor, who is normally adept at bringing parties together to achieve successful outcomes, often through personal diplomacy and quiet pressure. And that may yet happen.

The school district brought much of the drama upon itself. The board held a closed meeting on Wednesday, April 10, which was listed on the agenda as "anticipated litigation" against Santa Clara County regarding the adequacy of the EIR on Stanford's development application. In fact, it appears clear that the closed session was to hear Austin describe the status of his negotiations with Stanford and obtain the board's advice and direction, with no public input.

Then on Monday afternoon, Stanford and the school district released a ready-for-signature formal agreement and press release announcing the deal and rushed to hold a special meeting on Tuesday night. These actions clearly communicated to the public that the agreement was a fait accompli, usually the kiss-of-death in an engaged community like Palo Alto.

There is no rush to approving a deal with Stanford and the school board should slow down its process, hear Simitian's concerns at a public meeting and give the proposed deal with Stanford the careful public airing that a $140-million, 40-year agreement deserves.

The community expects to see its elected officials working on the same team to ensure proper mitigation of Stanford's desired development over the next 25 years. And Stanford should be doing the right and fair thing to fully fund the education of students living in university housing without strings attached that seek leverage in negotiations with the county.


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46 people like this
Posted by Exactly Right
a resident of Barron Park
on Apr 19, 2019 at 6:58 am

This editorial is exactly right.

I watched the school board meeting Tuesday and was surprised at the Pollyanna attitude expressed by the 3 Board Members and the Superintendent as they extolled the merits but didn’t showed little critical thinking about the agreement or it’s relationship and impact on the rest of the negotiations and our town - their town.

And now and then, Jean McCown would pop-up to clarify and reinforce the fabulous munificence of Stanford - not.

None of this was a good model of critical thinking for our kids by adults who are to be in charge of their schools.

I sympathize with the District in wanting something more than the insulting $4 million from Stanford, but it cannot let itself be used in Stanford’s shameful game to now try to short shrift our town and others in the rest of the agreement.

Don’t rush to a vote on the deal. Stand united with our Supervisor Joe Simitian who continues to work in our best interests.

59 people like this
Posted by Board watcher
a resident of College Terrace
on Apr 19, 2019 at 7:28 am

What an odd editorial! It repeats an essentially incoherent argument from Joe Simitian that the school district’s successful negotiation with Stanford for $140 million in benefits is actually a negative development. It rests that argument on a Great Man theory: Simitian is known to be wise, so he must not be making a mistake. But he is making a mistake, and this editorial does a good job of illustrating way.

Let’s start with the admission: “To be sure, this is a positive development after many months of Stanford signaling no willingness to do anything like what they have now agreed to do”

So then why is this bad? Because there's a "zinger": Stanford can use the schools as a "political weapon" in negotiations with the county over the GUP. The county would be negotiating with a "gun to its head." And the threat? That if a development agreement isn't reached, the schools won't get the benefit.

But Stanford doesn't need an agreement with the school district to make this point. Everyone already knows that the development agreement is the only vehicle available for providing benefits to the schools.

The real significance of this agreement is that it puts a NUMBER on the benefits for schools. Simitian isn't unhappy that Stanford gets to use the schools as a bargaining chip - that was always the case. He's unhappy that HE can't use the schools as a bargaining chip. A separate agreement with public terms means that he can't trade off the schools' interests against others behind closed doors - and remember that the development agreement negotiations are confidential.

Observers of the process will know that Simitian has been saying publicly for months that the schools can't expect much from the GUP negotiations. Maybe that's because he badly misunderstood Stanford's resources. But another reason, more likely in my opinion, is that he wanted to lower expectations to free himself up to secretly negotiate away benefits for the schools in order to get concessions on other items, like housing, that would benefit his constituents outside the district.

In this context, stating as fact that Simitian "enjoys strong political support among the Palo Alto school community" reads like whistling past the graveyard. In fact, Simitian is the focus of real anger in the Palo Alto school community, particularly among PTA leaders who mobilized support to bring Stanford to the table and now feel (appropriately) betrayed by Simitian.

Simitian now seems to expect that Stanford and the district will respond to his "ire" (a fine word for public tantrum) by withdrawing their agreement and submitting to his closed-door process. I doubt it. Besides this editorial, no other public official in the county (including Simitian's sidekick in the negotiations, Supervisor Cindy Chavez) have endorsed his position. The school board shows no sign of knuckling under and giving up benefits for students. Simitian may have to figure out how to climb down from the lonely perch he finds himself on.

Perhaps he can take some inspiration from this puff piece, return to the negotiating table, and apply some "personal diplomacy and quiet pressure" to extract housing and other benefits from Stanford without sacrificing the interests of kids in Palo Alto schools. That would really justify the idea that he deserves the admiration he enjoys in the community - or at least in the pages of the Weekly.

45 people like this
Posted by County insider
a resident of College Terrace
on Apr 19, 2019 at 8:38 am

It is odd that in the same breath the Weekly excoriates the district for a supposed lack of transparency and also says that the district should have stayed on the sidelines so that Joe could use “quiet pressure” behind the scenes in his own closed door negotiation. Joe wanted to be able to trade away the quality of our schools and now he’s got an anchor point in the negotiations. There isn’t a single cogent reason that should end negotiations in this editorial. Furthermore you have opened the door to character evidence. If you are going to write a hortatory editorial about his personal characteristics you should be balanced and honest. Simitian is known to be emotional and to demand his own way. [Portion removed.] He is divisive. Blowing up the negotiations because he won’t be in control or get credit is entirely in character for him.

Your reporters should spend some time down on Hedding Street and outside Palo Alto. Your laudatory vision of Joe is not shared by anyone south of El Camino.

The myth of Joe Simitian elder statesman is limited to north Palo Alto elites over 50. This editorial is just campaign copy for his run for Congress—a hope He just flushed down the toilet with this tantrum.

Simitian needs to [portion removed] do his job which is negotiating with Stanford. If he was a skilled negotiator as you claim he would be sitting down and talking not preening for your paper.

29 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 19, 2019 at 8:44 am

The editorial makes a lot of sense to me. I don't understand why there is such a rush to grab onto this agreement with Stanford. I'm really disappointed in the school board for taking this approach.

55 people like this
Posted by Reality
a resident of Crescent Park
on Apr 19, 2019 at 9:18 am

It was funny reading in a related article Simitian say he understood why the school board was "anxious" - clearly he is the one with the jitters. And he should be. He encouraged the district to work out a deal - he congratulated them on going back to the table with Stanford - but then complained about the deal they worked out.

No one - not Simitian, not this editorial - has said a single word about why this deal is not good for the school district. Isn't their job to protect the interests of our community's kids? Not the interests of Joe Simitian, not the county's housing or traffic issues, etc. They've specifically said that housing decisions are none of their business. Is Simitian or his supporters saying he is going to get MORE than $140 million for the schools? I haven't heard that, and I don't believe it.

We'll see how this plays out, but in the end, Simitian will have to go back and work out an agreement with Stanford, same as before. The school district did its job, establishing a bar - now Simitian needs to do his.

42 people like this
Posted by Kudos to the school board
a resident of Downtown North
on Apr 19, 2019 at 10:15 am

Thank you school board members. You are doing your job of making sure that Stanford's development doesn't leave the district with many more students but no new revenues to pay for them. Housing is great and I support more but it can't lead to a decline in the quality of our schools. That would cost us all. Do we want to see property values go lower because of more students but no more funding? That could lead to a downward spiral of decreasing property values, decreasing property taxes, and lower quality schools.

Keep your eye on the ball, and don't let politicians trying to get their next job (yes I'm looking at you JOe) distract you from protecting students. Nice job!

72 people like this
Posted by Our buddy joe
a resident of Embarcadero Oaks/Leland
on Apr 19, 2019 at 10:45 am

Another one sided, biased editorial that relies on comment and quotes from their buddy du journalist, joe simitian, for their “ facts” . The first sentence f this editorial is a misrepresentation of the press release and the editorial continues to play fast and loose with the truth.
One has to wonder if joe, himself, did not pen this “editorial”.

24 people like this
Posted by The Public Interest
a resident of Charleston Gardens
on Apr 19, 2019 at 11:10 am

It was Joe Simitian who was exhorting the PAUSD community, including PTAC and PTAs to hold rallies against Stanford and ask for "full" mitigation, meaning housing (traffic too). It was never in PAUSD's or its students' interest to have extra housing over at Stanford, potentially yielding way more underfunded students to crash PAUSD's budget. Yet due to Joe's leadership, and his union patron base pushing it, which would benefit from the extra employee housing, there was the PTA and PAUSD calling for "full" mitigation, which was against their own interests. Joe Simitian used PAUSD and PTAC, etc. as a weapon against Stanford, using the students and families of PAUSD as a "bargaining chip" against Stanford. FYI

23 people like this
Posted by chris
a resident of University South
on Apr 19, 2019 at 11:37 am

If the PAUSD Agreement is a balanced agreement, there is no leverage with respect to the county. The county just needs to work out a fair deal for itself. Why is it so hard for Joe and his acolytes to admit that? The Weekly’s credibility takes a big hit by failing to explain why this is not a positive development. If there is no development agreement, that is on the county.

11 people like this
Posted by Novelera
a resident of Midtown
on Apr 19, 2019 at 11:38 am

Novelera is a registered user.

I really dislike the flavor of the commenting here. The anti-Joe Simitian ones appear to be an organized effort that favors Stanford.

5 people like this
Posted by County insider
a resident of College Terrace
on Apr 19, 2019 at 11:47 am

[Post removed.]

42 people like this
Posted by No to joe
a resident of Embarcadero Oaks/Leland
on Apr 19, 2019 at 11:51 am

Novelra— no organized effort favoring Stanford. Just people expressing their displeasure with joes showboating and this feeble attempt at an editorial that the weekly were told to publish.
Why do you doubt the fact that this is a good deal for PAUSD. Because joe and the weekly said so?

33 people like this
Posted by Citizen
a resident of Adobe-Meadow
on Apr 19, 2019 at 12:20 pm

Must be nice for Joe Simitian to have his own newspaper.

35 people like this
Posted by Board watcher
a resident of College Terrace
on Apr 19, 2019 at 12:24 pm

I care a lot about the schools. I don't give a fig about Stanford. They have an endowment of over $20 billion and a perpetual cash machine.

I hope that the Weekly is right about Simitian's skill set, and that he'll get to work on extracting the maximum concessions possible on housing, traffic, and whatever else people care about. Fortunately the school district has made it harder for him to do that by trading away the needs of students behind closed doors. That has made him (and maybe the Weekly) sad, but it should make the rest of us happy.

However, what I'm afraid we're learning about Simitian is that avuncular doesn't mean skilled, and that maybe he is taking his own press releases too seriously. He has made a significant error in attacking the school district for getting a good deal for students.

We all have a stake in him recovering from that and getting the job done. In my view, the Weekly would do us all a favor by giving him a shot of reality, rather than giving him a pass and blaming others for doing their jobs.

21 people like this
Posted by We're all in this together.
a resident of Duveneck/St. Francis
on Apr 19, 2019 at 12:38 pm

We're all in this together. is a registered user.

Anyone who has watched this process in detail from the beginning knows that the editorial is spot on. Stanford and PAUSD understood (or should have understood because it was made very clear in public process that I observed) from the beginning that the county's willingness to even consider a development agreement was CONTINGENT on a bilateral agreement completely independent of the rest of the environmental review process between the county and Stanford--as it should be.

Good grief.

2 people like this
Posted by Not A Simitian Staffer
a resident of Community Center
on Apr 19, 2019 at 12:54 pm

[Post removed.]

6 people like this
Posted by Not A Simitian Staffer
a resident of Community Center
on Apr 19, 2019 at 1:10 pm

Sorry, let me say it more politely. @all in this together, could you please rephrase your post? I'm having trouble parsing it. Thanks and have a great day! xoxoxo

41 people like this
Posted by Peter Carpenter
a resident of Atherton
on Apr 19, 2019 at 1:34 pm

Peter Carpenter is a registered user.

1 - Why should Stanford accept an agreement with the school district that was not contingent on getting its development plans approved?
If no development plans are approved why should Stanford pay a penny to the school district?

2 - If Stanford has a limit of how much it is prepared to spend to get a development agreement, as I suspect it does, then Simitian's concern may be the $140 million the school board took off the table means that much less that Simitian can get for other purposes.

So that begs the question - does Simitian want the school district to get less so that he can get more for other purposes? If not then why complain about this agreement?

43 people like this
Posted by Norman Beamer
a resident of Crescent Park
on Apr 19, 2019 at 2:39 pm

Keep in mind that Stanford has NO right to build a single square foot of facilities beyond the current permit. If they want more, they have to give both the county and the school board what it wants.

48 people like this
Posted by Land use person
a resident of Adobe-Meadow
on Apr 19, 2019 at 2:56 pm

" If they want more, they have to give both the county and the school board what it wants."

That's not correct. By state law, Stanford owes the schools about $3m in one time developer fees, they don't even owe property taxes. And the county can only require what CEQA allows;if they go to far, Stanford will get the courts to correct them. The schools in particular are vulnerable.

11 people like this
Posted by Bob
a resident of Downtown North
on Apr 19, 2019 at 3:56 pm

PAUSD agrees to let Stanford use our kids as bargaining chips in their negotiations with the county. Stanford then celebrates with a self congratulatory or puff release.

As a tax payer, I just checked to see where my wallet is because Stanford is a for profit institution, and the school board has not shown much care for who foots the bill here.

14 people like this
Posted by Peter Carpenter
a resident of Atherton
on Apr 19, 2019 at 4:07 pm

Peter Carpenter is a registered user.

Stanford has, as does every landowner, development rights consistent with the County's General Plan. The County can require that Stanford mitigate the demonstrated environmental impacts of its development but the County cannot prohibit Stanford from exercising its development rights any more than the city could prohibit a residential land owner from building a home that complied with its zoning ordinance.

Any attempt by the County to overreach on this issue will end up in court and will be resolved in Stanford's favor.

18 people like this
Posted by Thank you Joe
a resident of Old Palo Alto
on Apr 19, 2019 at 4:27 pm

Supervisor Simitian,
Thanks very much for your wise decision to suspend the talk with Stanford on the GUP for expansion. You are correct that Stanford is not being sincere in this negotiation process by trying to use the school as one of their bargaining chips. In addition to the school impact, Stanford's impact to traffic and housing are very major issues for the City. I hope the residents of Palo Alto can see the big picture and require a complete solution that will address all the impacts to Palo Alto

27 people like this
Posted by Father of two
a resident of Midtown
on Apr 19, 2019 at 4:34 pm

To whom who supports Joe,

Do you realize county does not need to get opinions from PAUSD when it approves the GUP?

Do you know Stanford does not need to pay PAUSD a penny for the new students because of the GUP?

Basically PAUSD/Palo alto has no say in this deal.

Then what's wrong to ask Stanford to make promise to mitigate PAUSD's needs?

Joe, you can make any deal with Stanford, but I am not sure PAUSD is among your top priorities. Seriously.
To prove that, find a better deal for us.

The editor-in-chief, please give me the answer to the above questions.

18 people like this
Posted by Rebecca Eisenberg
a resident of Old Palo Alto
on Apr 20, 2019 at 1:47 am

Rebecca Eisenberg is a registered user.

This was a bad deal on behalf of our school district and a naive unprofessional action for the Board to take. Receiving $6000/student from Stanford when costs are almost FOUR times that is a bad deal. Locking Stanford's payments into $140M over 40 years (aka $3.5M/year) in the context of unknown future costs is a bad deal. Worst of all is the PAUSD's concession not to object to ANYTHING ELSE -- no parking, no shuttles, no bike lanes, no pollution controls, no traffic calming, no NOTHING -- in Stanford's GUP in exchange for this small amount of money. I'm sure there are other weaknesses in this terrible deal. Honestly, our city is fortunate to have Tom Simitian on our side. The PAUSD would have countless leverage if it would work with the County rather than in opposition to it. This is a huge opportunity to work together for the public good -- Stanford has tons of money and a good agreement will benefit the county, our PAUSD students, and Stanford's greater community at large.

9 people like this
Posted by Senor blogger
a resident of Palo Verde
on Apr 20, 2019 at 8:35 am

If Stanford were talking to any other school district in the world, they would be talking around $30,000 per student.
Get Real

21 people like this
Posted by Board watcher
a resident of College Terrace
on Apr 20, 2019 at 8:36 am

Eisenberg's post mixes up several facts:

- the marginal cost to educate an additional student in PAUSD is much less than the average cost;
- the payment from Stanford is tied directly to the number of students, not fixed; and
- alas, our Simitian is Joe, not Tom.

But it does highlight that despite Simitian's attack on the school district, he has never claimed that the agreement is not good enough. To the contrary, as my first post recounted, Simitian has spent months insisting that the district would get far LESS from Stanford than it did. I believe he did so in order to give himself room to trade away, behind closed doors, the district's interests against others.

Simitian will realize at some point that the genie can't be put back in the bottle, and he'll be blamed if the schools end up with less than they agreed to with Stanford. At that point, I imagine he'll find a face-saving way back to the negotiating table, and (if he's as good a politician as the Weekly insists) also figure out a way to take credit for the deal that he's now blocking.

15 people like this
Posted by Resident
a resident of Community Center
on Apr 20, 2019 at 11:41 am

@Board Watcher - good point, I look forward to Joe's eventual press release announcing about half what this deal provides: "Despite to school district's foolish behavior, I, Joe Simitian, have been able to secure a deal to protect our children, that is nearly as good as what they negotiated themselves. You're welcome."

I wish Joe would just explain - to anyone - why the district should say no to this proposal, aside from that it upsets his well-laid plans. Even if the answer is "yes, they'll need to take less, maybe a lot less, but it will be worth it because we'll get these other things." At least that would be coherent and honest. Presumably he's spoken personally to every one of the school board members - whatever he told them hasn't worked so far.

16 people like this
Posted by Train Fan
a resident of another community
on Apr 20, 2019 at 12:34 pm

"If Stanford were talking to any other school district in the world, they would be talking around $30,000 per student."

$30,000 is complete fiction.

In 2014, the United States spent $12,300 per full-time-equivalent (FTE) student on elementary and secondary education, which was 29 percent higher than the OECD average of $9,600.

(source: Web Link)

Even if you tried to argue that global comparisons aren't relevant (then why did you bring it up????), PAUSD expenditures were $20,814/student in 2017-18, far less than the $30k argued above: (source: Web Link)

5 people like this
Posted by Nonsense
a resident of Crescent Park
on Apr 23, 2019 at 2:43 pm

>PAUSD expenditures were $20,814/student in 2017-18, far less than the
>$30k argued above

Ok, accepting your figures as costs $20K in today's dollars to educate a student in Palo Alto...whereas Stanford is offering $5K for the next 30 years to PAUSD...something doesn't add up and it sure doesn't make Stanford (or those at PAUSD supportive of this "deal") come off as reasonable and fair.

In short Stanford's plans to expand results in several (negative) externalities e.g., increased loads on housing, schooling, transportation, etc. Why should the rest of the community have to suffer the costs of those externalities? It is the entity responsible, Stanford, that should be required to square up within its own jurisdiction failing which affected entities such as Palo Alto or PAUSD or the County can demand how Stanford can remedy or account for the costs these entities would bear.

2 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 24, 2019 at 9:32 am

I find it very strange indeed that while people whine about the imperious Joe Simitian, nobody can justify the $5800 marginal cost per additional student. On the face of it, that number is -roughly- 1/3 of what it should be. PAUSD, like most districts, has a budget and that is mostly labor costs. I don't understand why the marginal labor cost of adding a student is not directly addressed.

4 people like this
Posted by Observer
a resident of Professorville
on Apr 24, 2019 at 9:41 am

"On the face of it, that number is -roughly- 1/3 of what it should be."

On what basis are you calculating that? The marginal cost of adding a student to a classroom with extra space is nearly zero. The marginal cost of adding a student when it triggers hiring a new teacher is very high, but also probably avoidable with planning. I expect that the school district, which has expertise in placing students and hiring teachers has evaluated these factors and come to the conclusion that this figure is approximately right.

By the way, $5,800 is year 1. There's a 2% annual riser, so fairly shortly it will be over $7k.

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Posted by Reality
a resident of Crescent Park
on Apr 24, 2019 at 9:52 am

First, I haven't seen anyone say $5.8K per student is the marginal cost - it was simply the highest amount they could get. It would be great if Stanford paid more - $20K per pupil would be ideal - but the law requires them to pay zero, so this is strictly a negotiation without a floor.

Second, if average class size is 25, then 25 * $6K = $150K. Average teacher pay is about $100K, which is about $125K fully loaded. So the $5.8K per pupil covers the average cost of a teacher (marginal teacher cost is probably lower, since newly hired teachers are usually paid less) with a little room to spare. That extra bit covers some of the marginal building level expenses - admin, janitorial, non-teaching staff - though certainly not all. It probably doesn't contribute at all to district office overhead.

So is $5.8K per student per year a "good deal?" Beauty is in the eye of the beholder, I suppose. The practical question is whether a "better deal" (more money) is there to be had? The school district appears to think not, after a year+ of wrestling with Stanford, which not too long ago was saying "not one penny." Simitian hasn't said he thought he could get the schools a better deal, btw - every indication is that he expects they would get less if it is left to him.

8 people like this
Posted by Peter Carpenter
a resident of Atherton
on Apr 24, 2019 at 9:56 am

Peter Carpenter is a registered user.

The County is the Lead Agency on the Stanford EIR and only the County can adopt a Final EIR. In adopting a Final EIR the County has to demonstrate that it has identified the CEQA specified impacts of the proposed development and has mitigated those impacts where possible.

However, CEQA does not include a requirement to mitigate impacts on schools. As Simitian himself has stated:
"Simitian said the lack is a function of state law, which limits the county's ability to address school impacts as part of its environmental-review process.

"We don't have as many tools as we would like in the land use process to help our schools," Simitian said at the rally. "We can address traffic, we can address housing, we can address open-space protection, but what we don't have by virtue of state law is a lot of tools to help us help our local schools and the kids they serve."

Therefore Stanford's willingness to reach an accommodation with PAUSD goes beyond what the law requires.

In short, PAUSD is getting a great deal and is wise to take it.

Stanford's rights to develop its land are guaranteed by the County's General Plan and those rights cannot be taken away as long as they comply with the General Plan and the impacts identified in the Draft EIR are, where possible, mitigated.

7 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 24, 2019 at 10:22 am

@Peter Carpenter. Thank you Peter for laying out the facts so clearly. I believe the required fees that Stanford would have been required to pay the schools absent an agreeement is just over $4M. This is a great deal for PAUSD. And, for the people who keep thinking that $5800 is not much, it's the equivalent of a single parcel/home paying almost $13K/year in property taxes. Note that Stanford would pay per student, not per housing unit. Also note that the number goes up 2% a year, whereas our property taxes can only go up 1% a year. There's already been a great deal written about how much the average home in Palo Alto pays into the school district - around $4K. It's unfortunate that the School District started at the ridiculously high number that they did.

2 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 24, 2019 at 10:44 am

Posted by Reality, a resident of Crescent Park

>> First, I haven't seen anyone say $5.8K per student is the marginal cost - it was simply the highest amount they could get. It would be great if Stanford paid more - $20K per pupil would be ideal - but the law requires them to pay zero, so this is strictly a negotiation without a floor.

OK. If that is the case, then, the School Board should just have said, "We're screwed. We have to accept whatever bones Stanford chooses to toss to us poor, starving dogs." Rather than include the SCC county GUP clause, and, issue a self-congratulatory press release. Or, were those part of the "deal"? I don't know if I believe that Stanford is dumb enough to try to destroy PAUSD, though. "Palo Alto schools" used to be part of the draw.

>> Second, if average class size is 25, then 25 * $6K = $150K.

I don't believe your back-of-the-envelope calculation is apropos, for two reasons. First, we know that PAUSD spends most of its budget on labor. That includes everything from janitors to counselors, but, most is classroom teachers. Including everybody's health benefits, as well as the CalSTRS contributions etc. Looking only at teacher's gross pay leaves out a huge amount. Second, adding students also increases demand for everybody from janitors to counselors. Add students and the support staff has to scale up proportionately.

>> So is $5.8K per student per year a "good deal?" Beauty is in the eye of the beholder, I suppose.

If we are screwed, let's just say so and move on. Just leave out the agreement clause which, as you and others imply, is an attempt by Stanford to twist SCC's arm. As for those self-congratulatory press releases? Maybe, on average, people are dumb enough to believe them, but, they also have a cost-- both Stanford and PAUSD lost credibility.

If anyone from Stanford reads this: Remember that PAUSD school excellence benefits Stanford in many ways. Don't cut a deal so "good" that it damages PAUSD.

4 people like this
Posted by Reality
a resident of Crescent Park
on Apr 24, 2019 at 11:38 am


Since nobody knows how many students will come from Stanford, or from the rest of the district, saying "we're screwed" would be inaccurate. The known fact is that they are way better off than they would have been otherwise.

Most people forget - the district TODAY enrolls about 400 students from Stanford rental housing for which is receives about $1K per student ($460K). And that hasn't "screwed" them.

If your statement is strictly true ("Add students and the support staff has to scale up proportionately") then indeed, the marginal cost is the average cost, which is $20K. I'd say it depends a lot on the number and distribution of the students. Adding 1 student to every elementary classroom in the district (~250 ) would be almost undetectable and costless - adding 250 kindergarteners in one place would be very expensive. The truth will be somewhere in between, which is why I think $5.8K is probably "good enough."

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Posted by More revolving doors
a resident of Downtown North
on Apr 24, 2019 at 8:47 pm

[Post removed.]

7 people like this
Posted by Wayne Martin
a resident of Professorville
on Apr 25, 2019 at 11:43 am

When Stanford opened in 1891, it paid property taxes. Just before 1900, its Santa Clara County property tax was about $225,000. A ballot question exempting Stanford from property tax was placed on the 1900 November State ballot. Stanford’s tax exemption was approved by about half of the 500,000 voting.

In 1900, Stanford was a very small operation--often referred to as “the farm”. There were no automobiles on the roads, no hospital daily drawing thousands to campus, few employees clogging the roads leading to campus, no helicopters flying to/from campus. Students did not have children needing schooling.

Stanford has grown so dramatically that it now casts a significant, costly shadow on Palo Alto—particularly where our schools are concerned. Today, the PAUSD is spending about $20,000 to educate each student. Assuming past growth, the cost-per-student could jump up to $30,000 in ten years, and over $50,000 in following decades. Currently, Stanford pays nothing to educate the hundreds of students that are enrolled in the PAUSD.

Stanford’s impact on our lives has changed so dramatically over the last one hundred years, that it’s time to reconsider its tax exemption—now over $7B. It’s time to require Stanford to contribute to the mitigation of its impacts on our communities and particularly our schools.

It’s time to put the matter to the voters again to allow taxing Stanford as other corporations are taxed.

4 people like this
Posted by More revolving doors
a resident of Downtown North
on Apr 25, 2019 at 12:13 pm

[Post removed.]

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Posted by Wayne Martin
a resident of Professorville
on Apr 25, 2019 at 2:12 pm

Using a modest 3% inflation factor, the following
is how education costs will increase over the
coming years:

Year...Cost-per-student ($$)

7 people like this
Posted by Peter Carpenter
a resident of Atherton
on Apr 25, 2019 at 2:45 pm

Peter Carpenter is a registered user.

"The Bay Area city of Palo Alto — with a 2015 median home price of $2.2 million — had an effective tax rate of 0.42 percent, the lowest in the state even after including special tax district assessments."

Web Link

So it looks like its Palo Alto residents who are not paying their fair share.

2 people like this
Posted by musical
a resident of Palo Verde
on Apr 25, 2019 at 3:50 pm

^ Nah, our property is just overvalued.

1 person likes this
Posted by Wayne Martin
a resident of Professorville
on Apr 25, 2019 at 4:25 pm

The flaw in this sort of analysis is the linkage of the actual taxes paid (per Prop.13) to a shifting goal—which is the regional, and differential, rise in housing prices. Even though Prop.13 sets the real tax rate at 1% of the assessed value of a property, market forces and regional preferences for choice of housing, leaves the market prices of homes all over the state in a flux.

The idea that people should pay according to the market value of a home sets the stage for an extremely unfair taxation system. California came to grips with that reality in the mid-1970s when Prop.13 was argued and voted into law. If Prop.13 had not become the law of the land, it would be very unlikely that anyone could predict what the taxation rates would be in all of the thousands of taxable jurisdictions in California (currently around 3,400). Given the lust for spending taxpayer dollars, it’s hard to believe that the “effective tax rate” for many districts would not be upwards of 3% with reassessments yearly.

Let’s do a little thought experiment. Let’s suppose that houses here in Palo Alto were reassessed yearly, and that we continued to pay the 1% Prop.13 rate. How much would people pay on a yearly basis? Well, we need one more number—the yearly increase in sale price of PA homes. Given its history, and other predictions by the PAUSD, let’s go with 7% annually.

Here’s what people buying a $3M property in Palo Alto would pay for base property taxes in the coming years:

Year….Tax ($$)

Now, people in other less desirable areas would also be paying more .. but it’s very unlikely that these people would be paying nearly as much as Palo Altans, who would be receiving no more in services for their taxes than people elsewhere in the state.

So—given that these numbers represent a possible “effective tax rate” for future residents of this City—how many people posting here feel that paying these taxes would be fair, and they would vote to overturn Prop.13 in order to pay these higher taxes?

6 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 25, 2019 at 4:44 pm

Mary O is a registered user.

@Peter Carpenter. Thank you for the link. I live in Palo Alto and benefit immensely from Prop 13 since we bought our home more than 30 years ago. I'm saying this for full disclosure. I became aware that 1/3 of our parcels only account for 7% of the tax roll when I started learning about the School's request. This is noteworthy because almost 50% of Palo Altans rent. "Aging in Place" is a great concept and Pro 13 enables that - all good. But it also enables people to move away, not deal with traffic, congestion, etc. and rent their home out for a crazy amount without any increase in taxes for the schools or other infrastructure. Given that Palo Alto was built out when Prop 13 passed, there are a lot of homes like this. Or, they can pass their home to a child who can live elsewhere and just collect the rent. Perhaps it's time Palo Alto considers a School Impact Fee on homes WHERE THE OWNER DOES NOT LIVE and haven't been reassessed in 30+years and are rented out. OR, the home can be exempt from the impact fee if they rent BMR to a teacher or fireman or PAMF worker... Just a thought.

3 people like this
Posted by Wayne Martin
a resident of Professorville
on Apr 25, 2019 at 5:01 pm

Half of the teachers in the PAUSD make more than $100K, and about 80% of PA Firemen make more than $100K.

One can only wonder then Palo Altans are going to start reading the budgets of their local governments, and understanding them.

1 person likes this
Posted by Bill
a resident of Midtown
on Apr 26, 2019 at 7:01 am

Dr. Don Austin, Superintendent of PAUSD School board, arrived May 2018, and is already pulling similar stunts as the prior Superintendent Max McGee.

It's no different that Max McGee keeping the parents in the dark about the sexual assaults at Palo Alto High School. Shame on you Don Austin.

Keeping the community in the dark and conducting meetings without the public's knowledge. What else has Don Austin done that the Palo Alto Community is not aware of. How can we trust Mr. Austin? Will we blindly keep Mr. Austin as the Superintendent of PAUSD School board?

Shame on the existing Palo Alto School Board for approving "the Agreement" with Stanford, which isn't an agreement.

Would any of these Board members, and Don Austin agree to an agreement to purchase a house, with the provision that the agreement will only be good if it rains on April 30, 2019? Sounds ridiculous, doesn't it? Well, this is essentially what the school board agreed to and it's an embarrassment. These school board members need to be fired.

1 person likes this
Posted by Bill
a resident of Midtown
on Apr 26, 2019 at 7:08 am

Over the years, Stanford has been buying homes in Palo Alto, and we can assume, Stanford will Never sell these homes, which means there are even less homes available for sale for the general population. Stanford has so much land, a huge endowment, tons of tax perks, can afford the best attorney's to fight and they are squeezing Palo Alto, and the kids, who are the future.

Don Austin appears to be in the hip pocket of Stanford, along with the rest of the School Board... need to fire all. Board members who have spouses, family members should not be on the board given the conflict. This Stanford matter has been going on for years...

Sorry, but further commenting on this topic has been closed.

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