SPRING | January 10, 2014 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

Cover Story - January 10, 2014


Key issue: Infrastructure funding

Key action: City Council decides on ballot measure to pay for infrastructure projects

Key question: Will the city make any progress on a new public-safety facility?

While the council's conversation over city growth is still in its seedling phase, its three-year-old debate over sprucing up Palo Alto's dilapidated infrastructure is poised to finally bear fruit in spring 2014.

That's when the council is to narrow its options for a revenue measure that would appear on the November ballot and launch an aggressive outreach campaign to raise support for the measure. If things go as planned, by the time the season concludes, some of the most pressing questions pertaining to the council's second priority of 2013 — "infrastructure strategy and funding" — should finally be answered, albeit with the glaring exception of a new police headquarters.

So far, an increase in hotel taxes is the most promising option on the table. The city's current rate of 12 percent is on par with the neighboring communities of Redwood City and Menlo Park but trails Oakland and San Francisco (which both have 14 percent rates) and Anaheim (15 percent).

A 2 percent increase in a hotel tax rate, also known as the transient-occupancy tax, combined with proceeds from new hotels that are scheduled to come online, could net the city about $4.6 million, which the city could leverage to obtain $64.4 million in infrastructure funding through a bond mechanism known as "certificates of participation."

A recent poll by the firm Fairbank, Maslin, Maullin, Metz & Associates showed that 77 percent of the voters would approve a 2 percent increase to the city's hotel tax, well above the two-thirds threshold a new tax would need for passage.

Other options that the council is considering for the November ballot include an increase in sales tax. Revenues from this increase, however, cannot be pegged specifically to infrastructure projects but would have to go to the city's General Fund, which pays for police, firefighters, libraries and most other basic services. Polls suggest a simple majority of voters, but not a supermajority, would approve of a sales-tax hike.

The council may also opt to pursue a "transportation bond" to fund a host of bike and pedestrian improvements, a package that polls suggest might barely win the needed supermajority.

According to the city's schedule, staff and its consultants will spend March, April and May conducting outreach meetings and collecting feedback about the potential ballot measure before the council makes an official decision in June about a ballot measure.

During the council's Dec. 9 discussion, Larry Klein called the potential measure a "complicated issue," with so many variables still "floating around." Yet there are plenty of positive signs on the infrastructure front. The city now has a sizable infrastructure reserve, thanks to robust growth in its tax revenues and a recent policy decision to allocate budget surpluses in the General Fund to infrastructure fixes. In the past two year alone, the council had transferred more than $16 million into its Infrastructure Reserve.

But things look as bleak as ever for a possible "public safety bond" that would pay for a new public-safety building and the reconstruction of two outdated fire stations. November polls confirmed what many have suspected based on prior surveys: While a simple majority of voters would be willing to pay for a new police building, the project probably wouldn't net the needed two-thirds to pass.

"Until there is a more fully developed package that the council has reviewed and signed off on, maybe more specific in its cost and lower amounts, it's hard to see this measure winning," pollster David Metz told the council on Dec. 9.

In December, the city's long quest toward a new police building suffered another hiccup when San Francisco developer Jay Paul Company withdrew a proposal that would have built the headquarters in exchange for the city's permission to build an office complex at 395 Page Mill Road. Though a public-safety bond remains a tough sell, the prospects of using proceeds from tax increases to build the new facility now look far brighter than ever. Councilman Greg Scharff, who served on the council's Infrastructure Committee this year, is optimistic that by the end of the year the city will have a clear path toward the new police building, which would replace the undersized and seismically deficient one at City Hall.

"I predict we will have a ballot measure that will fund infrastructure improvements and, as part of that effort, we will come up with a plan for a public-safety building," Scharff told the Weekly this week.

Key issue: Infrastructure projects

Key action: Dozens of small infrastructure projects move forward

Key question: What to build next?

While the police building remains a wild card, Palo Alto residents should see plenty of infrastructure action on the ground this spring. The city has more than doubled its street-repair budget in recent years (annual spending grew from $1.8 million in 2011 to $5.1 million in 2013), with the goal of giving every street a passing grade by 2019. A badly damaged portion of Greer Road — depicted in the Infrastructure Blue Ribbon Committee report as an example of the city's dilapidating infrastructure — is one of many that is now freshly paved. Sidewalk replacement is also proceeding apace. Keene noted this week that the city has replaced 98,000 square feet of sidewalks in 2013, almost double the 51,000 square feet replaced in 2012.

Spring will also see one high-profile infrastructure project kick into full gear and another possibly come to a close. The long-awaited streetscape project on California Avenue, which includes new plaza, new street furniture and a reduction of lanes from four to two, is expected get going in the spring after years of legal and political setbacks. The even-longer-awaited reconstruction of the Mitchell Park Library and Community Center, Palo Alto's largest infrastructure project in decades, is also scheduled to finally conclude, though after nearly two years of delays, construction errors and failed inspections, residents are advised not to hold their breaths. This week, Keene referred to the project's construction saga as an "extreme disappointment" and assured residents that it is finally nearing completion.

Palo Alto's golfers will also experience some disruption in April as the city shuts down the Palo Alto Municipal Golf Course and proceeds with a dramatic redesign that will shift just about every hole, emphasize the course's Baylands setting and make it compatible with a regional flood-control plan shepherded by the San Francisquito Creek Joint Powers Authority.

Another ambitious Baylands project that should see some progress come spring is the planned bike bridge over U.S. Highway 101, at Adobe Creek. The city is now completing an environmental review for this project and officials plan to launch a design competition for the new bridge in the spring. With a price tag of $10 million ($8 million of which is covered by grants), the bike-bridge project is one of the most dramatic and expensive components of Palo Alto's recently adopted Bike and Pedestrian Master Plan. But it is far from the only bike project on the council's immediate agenda. Keene said the city has as many as 18 bike projects on its annual to-do list. These include designing nine bike boulevards and five "enhanced bikeways."

Spring will also be the time for the council to consider its next steps on one of the city's most contentious infrastructure projects — a proposed waste-to-energy facility, which could be located on a 10-acre portion of Byxbee Park in the Baylands. Ever since voters agreed in November 2011 to "undedicate" this parkland site for a waste facility, the city has been soliciting proposals from companies willing to either build an anaerobic digester — a plant that converts food waste, yard scraps and biosolids into energy — or export these materials to a different site for processing.

The issue, often framed as a green-on-green feud between proponents of renewable energy and proponents of park conservation, had remained behind the scenes for most of 2013, with city officials surveying options and studying the costs and benefits of each. Community meetings on next steps, initially pegged for December 2013, are now planned for later this month. Public Works staff plans to present a recommendation to the council in March or April.


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