After two years of big budget cuts and a wave of employee retirements, Palo Alto’s shrinking staff is struggling to keep up with growing demands, City Manager James Keene warned the City Council Saturday at the council’s annual retreat.
Some staffing areas resemble Swiss cheese, with holes representing major staff vacancies, Keene said in one of several metaphors he used to describe the challenge. But an iceberg with a growing base best describes the increasing workload city workers face.
The retreat this year was held at the Baylands Nature Intrepretive Center at the end of Embarcadero Road, framed by the city’s marshlands.
Historically, the retreat is used to set priorities for the year. This year, the council decided to carry over all five 2010 priorities: city finances, environmental sustainability, emergency preparedness, community collaboration for youth well-being, and land use and transportation planning.
The council briefly discussed each priority and heard from Keene how staff is addressing them.
But the dominant theme of the day was how to get by with a smaller staff.
The city has cut 40 positions this fiscal year and 20 the year before, Keene said. The General Fund currently funds 579 positions, Keene said, compared to about 730 in 2003. In addition, 46 of the funded positions are vacant, he said.
“When we have budget problems, I do drag my feet on filling those to help us manage through the budget year,” Keene said.
The number of employees working on “strategic” issues has also shrunk. Keene said Palo Alto had about 66 such employees last year and 55 this year. Some opted to retire after the city modified its benefits to require greater pension and health-care contributions from employees.
“We have some shrinking capacity with the fiscal environment and we have a lot of demands,” Keene said. “How we manage these things and improve people’s perception is going to be a challenge.”
Council members suggested various ways to function with a smaller staff.
Gail Price suggested that Keene point out on each report how many people, hours and departments it would take to carry out a particular function.
Pat Burt said the city should consider which items on the city’s workload are true priorities and focus on those. He singled out the downtown farmers’ market, which the council initially subsidized at City Hall but later turned over to a nonprofit group.
“Try to identify what are the actions and activities by staff that had the least value,” Burt said.
Keene also pointed to the city’s many accomplishments in 2010. Those include improving labor relations, assisting with Project Safety Net, making progress with the Comprehensive Plan, and emerging as a regional leader on high-speed-rail concerns.
The city has had a very successful year, he said.
He highlighted some issues that will consume large chunks of staff effort and time this year. They include familiar topics such as the $3.5 billion expansion/rebuilding of Stanford University Medical Center, which the council plans to rule on in April.
He cited progress on the Comprehensive Plan (the city’s guiding land-use document), and continued support for Project Safety Net, the collaborative process to promote teen health and well-being.
Among the city’s greatest accomplishments was strengthening the city’s economic standing by making a series of ongoing “structural” budget cuts and labor reforms.
“In many ways, we’re leaders in Northern California in trying to make structural adjustments — not playing smoke-and-mirror budget games — and trying to reposition the city as best as possible,” Keene said.
The job isn’t done, he said. Next year the budget deficit is projected at $1 million to $2 million, far smaller than in the past two years. One of challenges will be to achieve savings in compensation for public-safety workers, he said.
“We need to bring public safety into alignment with the changes we’ve made with SEIU and management this year, at minimum,” Keene said.
The council also brainstormed other issues Palo Alto should focus on in 2011.
Councilman Larry Klein suggested that the city’s goals include preserving the Caltrain service, which is now going through a budget crisis and planning massive service reductions — echoing a “save Caltrain” summit Friday at Stanford University that he and other council members attended.
Councilman Greg Scharff encouraged his colleagues to look for energy-efficiency partnerships with Stanford, which could use the city as a testing ground for its scientific advancements.
“Having our own utility department and having Stanford out there — there should be opportunities for Palo Alto,” Scharff said.
There’s only so much you can ask of people.
Palo Alto has a shrinking budget so workers face a doubling or tripling of their work with no pay increases. Also, city workers can’t afford to live or even near PA, and face an evermore costly commute.
Furthermore, they face a hostile city constituency whose unpredictable temper tantrums can get them/their bosses fired at any minute.
Not a great work environment for the stayers or the job seekers.
This is no different from many corporations in the private sector. Look at all the corporate layoffs that have been announced in the last year.
Pat Burt says it all: Focus on priorities!
I agree with neighbor. The NIMBYs and whiners in this city cost a lot of staff time (and thus money) with little public benefit. If citizens just cooperate and focus on the common good, then city costs would go down. Everyone has to share in the cost cutting.
> Pat Burt says it all: Focus on priorities!
Yes .. this is always good advice. However, what to prioritize, and who to do that job?
The City management is always talking about how it delivers “so many services”. OK .. why not categorize these services, identify the costs in terms of staff hours, staff dollars, constituencies served, etc. Without this sort of basic organization, the whole City government is operating behind a translucent cloud.
In addition, there needs to be operational audits by an organization qualified to do such audits. One audit that the former Auditor (Sharon Erickson) delivered early in her tenure, was a study of the contract approval process that was most revealing. If memory serves, her study demonstrated that it took about 197 days for a contract to work its way through 250 Hamilton. Why? Erickson didn’t attempt to identify that question, unfortunately. Given that any City contracts use the same “boiler plate”, one would think that the process could be streamlined. But no! Furthermore, there is no evidence that this extended time-to-sign contracts results in lower prices for the taxpayers.
We, the taxpayers, are paying the City Manager, and two Asst. City Managers, over $1M a year in salaries and benefits. What are they doing for this money? We have a very powerful MIS system that should be able to provide vast amounts of information, if only called up to do so. What are these people doing with this IMS to make better, and timely, decisions?
Some private sector companies use “Objective Oriented Management” to focus their managers. Maybe its time to start using more effective management schemes than the ones that are currently “etched in stone” at City Hall. And one incentive that needs to be offered City managers is termination if they fail to perform.
There isn’t a lot that the City Council can do except “lean on” the City Manager, and then show him the door if he doesn’t do something meaningful within a year or so. We residents can “lean on” the City Council, however. There is no reason to elect people without business experience, or people who are “keen on government”, but have no idea about how to manage large organizations.
People in startups often put in 60 hours a week, being paid for 40. One can only wonder how many hours a week City workers actually work?
City of Palo Alto government workers who feel that you are underpaid, and overworked, are invited to look for gainful employment elsewhere.
An OP-Ed in the SF Chronicle, Cities must define core services, says, “It takes true leadership to define core services, fund them and then do them well. It demands that city leaders set specific goals and marshal all resources toward meeting them. It also requires telling citizens a painful truth – some services will be cut.” http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/03/08/EDL21CBFUP.DTL
IMHO, priorities are as follows:
1. Essential for the welfare of ALL residents, e.g., public safety, infrastructure
2. Not essential, but makes the city a good place to live and benefits the MAJORITY of residents, e.g., planning/zoning, parks/open space, library
3. Not at all essential and serves only SMALL NUMBERS of residents, e.g., Children’s Theater, Junior Museum & Zoo, Art Center
The first step in the budget process should be setting priorities. IMHO, Palo Alto’s budget process is backwards.
FIRST the Finance Committee asks the city manager to find some amount to cut. Last year it was $10M. The city manager and staff go off and prepare financials and a list of potential budget cuts. THEN the council provides input and direction.
There are several problems with this:
1. Council never gets deeply enough into the budget to know where the money is going.
2. Council only sees what staff presents as potential changes to the budget, so staff has all the power.
3. Staff wastes its time preparing financials that may be rejected by the council.
It should be the council, as elected representatives, to tell staff what the city’s priorities are, thus directing them where to cut the budget.
Welcome to reality….people are now working more and getting paid the same or less. Time for city employees to share the pain.
To the folks going after gov’t employees — if it’s so lucrative to work for government, next time a job opens in PA, apply for it and maybe you’ll get rich.
Agree with Pat
> 1. Council never gets deeply enough into the budget to know where
> the money is going.
This is true, but given that “democracy” allows anyone who is registered to vote to become a Council Member, how many people in Palo Alto are capable of reading budgets, or asking questions about operations that might lead to well-crafted cost controls?
What’s needed is a budget item for one (or more) consultants for Council to review the budget, and to counsel the Council about what all those numbers mean. As the budget grows in future years, and unless there is a real cutback of obligations to every special interest group between here and Mars, then this problem will just get to be worse than it is now.
The article says 46 funded jobs are vacant. Yet, the City of Palo Alto website lists only 5 job opportunities (one temporary). Are the rest hidden under the category “internal positions”? These are hidden from public view because, as the site says, “we have been receiving many applications from external applicants who are ineligible”. Doesn’t look like they’re trying too hard to fill the positions.
If you are so adept at running large organizations, why don’t you run for City Council? Take a course in civics, educate yourself about the issues, and then participate actively and productively in our democratic government.
Our council members work hard, spending countless hours with staff and representing our community on committees all over the region solving endless arrays of complex problems for us. What are you doing to help? You might think about saying an occasional thank you for their donation of their personal free time to running the community you live in. You also might consider STEPPING UP TO HELP if you don’t like how they are doing things. No doubt the entire community will gratefully step in line behind you as you are so perfectly wise.
Palo Alto does need to make some adjustments to its budget that is for sure, however, I am sure employees are doing the best that they can. It doesn’t help to constantly berate them for their benefits & great retirements because to get that they have made some sacrifices down the line – one for instance – dealing with a very demanding community and members of the community who have high expectations for a “picture perfect” neighborhood (private open space, 5 libraries, etc). Cut some slack “Mr. Demand…”
Jim Keene needs to examine some of the “downsizing” more closely. Greg Betts (CSD Director) has contracted out simple work from the employees. He has created more management positions. Why is Keene allowing him to create more management (costly) positions in the time of budget cuts? Keene might have been cut throat at first, but really he should have been eliminating certain managers not worker bees.
You might want to be cautious about what you wish for, what if essential services become contracted out… You’ll end up having a contractor doing a job he’s not truly invested in and in turn might affect the level of service you are accustomed to.
> “…given that “democracy” allows anyone who is registered to vote to become a Council Member, how many people in Palo Alto are capable of reading budgets, …?”
Good point. We do have Yiaway Yeh, an auditor in Oakland, on the council now. He’s also on the Finance Committee.
Just about every decision the council makes involves money, so council members should thoroughly review the entire budget–not just proposed changes. There’s a retreat every year to discuss priorities. Reviewing the budget should go hand-in-hand with that.
I have worked for the public and private sector. I believe the non union private sector is almost always more efficient, innovative, and effective than any union, or government work situation. I acknowledge there are dedicated hardworking employees in both sectors (and employees who do not work that hard in both sectors), but in the private sector there is an emphasis on profit. There is much more focus on being efficient and profitable. One of the favorite sayings of the union folks when I worked for the State of CA was “it all pays the same”. Folks who were efficient and worked hard were not well liked because they set the bar higher. They often left for the private sector. For me it was just a way of paying the bill while in college, but it was a lesson in work place envoronments.
Government spending tends to constantly grow unless there is a crisis that makes folks take a hard look at the spedning growth. Government functions should be limited to the bare minimum and most work should be contracted out to private contractors thru open bidding. Policing is a function that needs to stay local. Palo Alto has an efective PD and we are fortunate to be able to afford the services they provide. The PAFD is another matter. The PAFD employees are paid 2-3 times the national average. The city of PA has 30+ fire employees sleeping away every night. This is a tremendous waste of money. There are a variety of ways to resolve this problem including taking a regional approach, outsourcing to Cal Fire, or outsourcing to a private company.
Bringing the PAFD’s bloated budget under control should be the PA city council’s #1 finance priority.
midtown maven, says, “the City of Palo Alto website lists only 5 job opportunities (one temporary). Are the rest hidden under the category “internal positions”? These are hidden from public view.”
Jim Keene is the first City Manager to hide from the public the titles of vacancies the City is seeking to fill. Even Frank Benest disclosed those vacancies.
The public and the Council are entitled to know both the titles of jobs that are vacant and the titles of which ones the City is attempting to fill.
The job recruitment brochure for Library Director is hidden by providing a link from the City’s public website to the City’s internal web site that the public is prohibited from accessing. (Look for it at http://www.PeckhamandMckinney.com)
Here’s the above link for for Peckham & McKenney
with the correct spelling: http://www.peckhamandmckenney.com.
Pat has it pretty well scoped. The priorities of the council, however, seem reversed.
Taxpayer: Amen! Merit-based pay is the way to go. My dad worked for the postal workers union. He used to tell us that the philosophy of many (not all) workers was, “Do your 8 and vacate.”
To those who are confused why a community with such great intellectual resources has a hard time managing:
1. As long as the city council is considered a prized path on the way to some other elected office, the trophy-seekers will outspend the compentent community volunteers who simply want to do the work, and we will continue to elect show-boaters.
2. As long as City management avoids making a prioritized list of city services and soliciting sincere citizen participation on the prioritization, transparency to City spending decisions will not happen.
We have many citizens with executive experience working for companies much larger than the City, but as long as the budget is a political exercise, vs. a transparent business prioritization, those qualified voices with good business judgment will simply not offer their input. We need to create a more dignified and forthwright playing field for financial decisions, or we we will be perpetually caught in the current state where the best and the brightest that really know how to solve the City’s issues, will simply not participate.
Offered with respect:
Tim Gray (CPA and Financial Consultant)
Too funny! The reason for the city staff exodus is Keene and Klein. City staff has made its mission to exit the city as fast as possible other than to work for this dysfunctional management team. Forget pay and benefits, who wants to work for these nitwits. Keene claims among his accomplishments….”improving labor relations”, really? Guess if you live in a vacumn, life is so much easier.
Wasn’t it just last month the city claimed to have a great year and gave away the bonus for the needy. Perhaps it’s Spring again.
IMHO, if you have time for a ‘retreat’, you have enough staff.
Does anyone have a memory that’s longer than a week? Staff does this BS con job on council every year. They complain they don’t have enough people when times are good and times are bad. When they blow a deadline, it’s always because they’re understaffed. It’s never because they get 12 holidays a year (more than there are legal holidays), 4-6 weeks vacation and all sorts of other time off. Hopefully council won’t fall for it, but there are a couple of council members who are really naive and might think this is a mandate to grow the staff. I was discouraged to hear Sid Espinosa, in his state of the city, suggest that attempts to reduce benefits and compensation had concluded. Maybe I misunderstood, but he made it sound as if reducing payroll costs had already occurred and it was time to move on. The unions got him his job on council, so I worry when I hear things like that.
Tim Gray: I wish you had won a seat on the council. I voted for you.
JT: Yes, the staff is very good an managing the council. But it’s the council’s own fault. Council members give no direction, ask no questions, make no demands. They seem to forget they have oversight responsibility.
Why does the staff go off to review the budget every year and present cuts for council to consider? Council should be telling staff where to cut!
I work in High Tech private industry, you city workers are spoiled.
after 31yrs at HP I was laid off at age 51, found another job at a smaller company and now age 57. But I still put in those as needed
24hr days to get the job done (I am salaried) but I DO NOT complain because it is a living wage and this company gave a middle aged man a chance based on his skill sets.
I would enjoy working for the city of palo alto (where I grew up). I not only can do server administration on various platforms, but can also get dirty and do cabling, lifting, racking. So you city employees who think you are over worked, you need to prioritize and if possible fill open reqs with those from high tech who know how to work in high stress and long hours
“Pat Burt said the city should consider which items on the city’s workload are true priorities and focus on those. He singled out the downtown farmers’ market, which the council initially subsidized at City Hall but later turned over to a nonprofit group.”
There are two downtown markets. The Saturday market on Gilman, and the Palo Alto Farmshop on Wednesday afternoons. The Wednesday market was launched in the Spring of 2009, as a pilot program, by then Mayor Peter Drekmeier, at King Plaza.
Seems Pat Burt was missing in action when the council voted to cut funding for the Downtown Palo Alto Farmshop in December of 2009. At that time, support & funding was secured through the non-profit group, the Palo Alto Institute, who has been maintaining the market since.
“Taxpayer”
I see your at it again, you obviously know little about how FD’s operate and you call for “national average salaries” for the FD only. What about everyone else that works for public agencies? is the private sector off limits?
If you took one unbiased look at the PAFD budget you would clearly see they are actualy costing the taxpayer less than other fire depts.
You have no idea what the PAFD is doing or not doing. You are starting to sound more and more like you are a person who was unable to get the job they really wanted. Or you have an axe to grind with the PAFD.
Private FD?? good luck on that. Typical response from those who would trust their lives and country to the private sector. Corporate America is making huge profits while the working class race towards the bottom. Executive salaries are at their highest point ever in history.
“Jake”
Your posts continue to sound like they are coming from some one who knows he is in an organization that is grossly overpaid and underworked. I was hoping that after the shellacking the union took in the last election (when the feather bedding initiative was crushed) that you might be a little more humble.
There are many changes I would like to see including increasing the tax rates on the richest 5% of the US population. We need to eliminate deficit spending and preserve the fiscal futures of future generations. But that is not the issue I am discussing here.
I am talking about the exorbitant salaries and short working hours(not sleeping, shopping, cooking … working) of the PA ff’s. The competition for ff’s jobs is high. As you know the average salary for ff’s nationwide is $50K and in San Diego county they start at less than $40K. PA FF’s salary should top out at $80K, retirement age should be increased to 62, etc). But the union is going to fight it all the way so it will be easier to find another solution (outsourcing, regional services, private sector).
I’m sure you are following what is happening in San Carlos. The ff union is screaming but by switching to a more reasonable (but also too expensive service), San Carlos will save millions. Just a matter of time for PA to also find a more competitive scenario.
Most of the drops in staff are not ‘off’ the City budget. Technically, yes they are. But a large number of the reductions in City staff are simply transferred over to the City of Palo Alto Utilities. And CPAU siphons off a large chunk of money from the City, each and every year: a ‘transfer’ which is allowed under State law, which is justified as a ‘return on investment’, and which in effect allows CPAU to increase revenues in a manner akin to a tax, but without having to go to the voters to ask for it.
I do not wish to see the City add staff to ‘fill the holes’. Neither do I wish to simply see the City engage in a shell game. But for now, I’ll accept the shell game, if it means permanent reductions in City staffing levels.
We as a City also need to address the pension issue, which is a still-tougher nut to crack. Increasing retirement age, changing from pension to 403B/401K for new hires, and changing the way pension salary is tied to final year salary-plus-overtime, and taking FF and police managers out of the hourly-wage category, and making them ‘exempt’ (that is, they don’t get overtime pay), are all things which must be considered.
Today, Lowe’s Cos., the home improvement giant, announced that is would be laying off 1,700 middle managers across the country–
Investors cheer Lowe’s plan to lay off 1,700 middle managers:
http://www.charlotteobserver.com/2011/01/26/2011828/investors-cheer-lowes-plan-to.html
Wonder if City Manager Keene ever gets these kinds of news bulletins? Makes one wonder: “If Lowe’s can do it, why can’t the City of Palo Alto?”
Maybe Palo Alto should contact the Lowe’s Companies, and see if there is a management consultant in the wings that is looking for its next assignment.