News Digest | February 12, 2021 | Palo Alto Weekly | Palo Alto Online |

Palo Alto Weekly

News - February 12, 2021

News Digest

City prepares for $7M budget shortfall

As the COVID-19 pandemic continues to batter the local economy, the Palo Alto City Council is preparing for a fresh round of budget cuts in the coming months to account for a sharp drop in sales and hotel tax revenues.

The council is expecting to see a budget shortfall of nearly $7 million in fiscal year 2022, which begins on July 1. The estimate is based on an admittedly uncertain assumption by city staff that the economic recovery will proceed at a moderate pace over the next few years.

In its first major discussion of the city's budget, the council agreed on Monday night to adopt this "moderate" scenario for planning purposes and to take a fresh look at the city's list of infrastructure projects to see which can be deferred or scrapped.

By a 6-1 vote, with council member Greg Tanaka dissenting, the council adopted the economic forecast from the Administrative Service Department, which assumes a $6.8 million shortfall in 2022.The scenario estimates that the city will see about $30 million in sales tax revenues and $10 million in transient occupancy tax revenues in 2022. That would be up from the current year, in which the city is projecting $25 million and $4.8 million in these two categories, respectively.

While the council didn't discuss specific projects that would be deferred, it directed staff to return with some options for dropping or deferring capital expenditures.

—Gennady Sheyner

Levi's Stadium opens as vaccination site

The largest COVID-19 mass vaccination center in the state opened Tuesday at Levi's Stadium in Santa Clara, and Gov. Gavin Newsom and local officials took to the field to celebrate the kickoff.

The vaccination site, which opened for appointments at noon Tuesday, currently has the capacity to vaccinate 5,000 people per day, with plans to increase capacity to 15,000 people per day.

The stadium is only open to county residents or health care workers who work in the county. Currently, residents 65 years and older in addition to health care workers are eligible for the vaccine.

County Supervisor Susan Ellenberg, who attended the opening, said the site will help get residents across the county get vaccinated quicker and ensure more equitable access to the vaccine.

The Santa Clara Valley Transportation Authority as of Monday started providing front-door services to the stadium and suspended fare collection on all buses and light-rail vehicles in the system.

So far, the county's health system has provided more than 113,000 first doses and has more than 40,000 vaccine appointments scheduled in the week ahead.

—Bay City News Service

Town & Country wants medical offices

Even before the COVID-19 pandemic began to shut down local businesses last March, Town & Country Village was staring into a murky future. With online shopping on a steady rise, the shopping center's boutique shops have taken a hit and the shopping center's retail vacancy rate had risen from 1.4% in 2018 to 8.2% in 2019, according to Jim Ellis, whose company, Ellis Partners, owns the mall. The economic shutdown that began in March has since forced many retailers and restaurants to shut down. Mayfield Bakery & Café, GNC, Patrick James, Sweaty Betty, SpaceNK and Ella are among the businesses that have shuttered during the pandemic.

Today, the vacancy rate is at about 21% and is expected to rise, Ellis said.

To address this trend, Ellis Partners is proposing a change that could permanently transform the popular shopping center: converting some of the retail spaces into medical offices. Last December, it requested that the city allow up to 20% of its ground-floor retail space to become medical offices, a use that is currently prohibited by the zoning code. It also requested that the city allow up to 30% of the shopping center's total space to be used for medical offices.

On Wednesday, the Planning Commission supported a zone change that would provide some flexibility for Town & Country, though not as much as the mall owners had hoped for. By a 3-2 vote, with commissioners Ed Lauing and Doria Summa dissenting, the commission recommended allowing up to 15% of the ground-floor retail area to switch to medical offices and specified that no more than 25.8% of total mall space can be used for office space.

If the council adopts the commission's recommendation, Town & Country would be able to lease space to medical practices such as clinics, dental offices and acupuncture specialists, among others.

—Gennady Sheyner

Comments

Posted by Resident
a resident of Another Palo Alto neighborhood
on Feb 10, 2021 at 10:33 am

Resident is a registered user.

$7million--about the amount that extra, unneeded level of auto parking under the recently approved public safety building will cost. Cut that.

In fact, delay the project for six months to see if construction costs will drop as the economy enters recovery--as usually happens.


Posted by Resident8
a resident of Duveneck/St. Francis
on Feb 10, 2021 at 10:45 am

Resident8 is a registered user.

So the city has not yet tapped into its budget stabilization fund...? Seems like an obvious solution along with deferring some maintenance.


Posted by commonsense
a resident of Professorville
on Feb 10, 2021 at 11:10 am

commonsense is a registered user.

Perfect time for a new $100,000,000 public safety building. Maybe pause?


Posted by Taylor Greene
a resident of another community
on Feb 10, 2021 at 2:36 pm

Taylor Greene is a registered user.

Tough times call for certain austerity measures and alternative billings.

Libraries are not that important as everything is online now and art programs for children are a luxury expenditure at best.

Since Palo Alto is considered one of the more wealthier California communities, increasing the utility rates for both commercial and residential customers could parlay the lost tax revenue.

Cutting the police force budget also makes sense as Palo Alto has a very low crime rate to begin with and defending law enforcement is the modern political buzzword anyway.

The rainy day fund should be depleted before any of these suggested changes are implemented. That is what a slush fund is for.


Posted by Aaron Wiseman
a resident of Stanford
on Feb 10, 2021 at 3:02 pm

Aaron Wiseman is a registered user.

@Taylor Greene

Did you mean to say or write...'defund' the police rather than 'defending' law enforcement?

Many progressives are in favor of of the former as it would save federal funds that could be utilized far more productively.


Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Feb 10, 2021 at 3:05 pm

Online Name is a registered user.

Sorry, but libraries are VERY important and our librarians are incredibly competent. They also provide info for the covid newsletter which.

Not all of us are wealthy, especially after paying our utility bills.

As for utility rates, the city already overcharges us by $20,000,000 and we are STILL waiting for the refunds from the lawsuit they lost. Still grateful to the citizen who filed to stop this egregious practice which has gone on for many many years netting the city $100,000,000 over 5 years.

Re the police force, the city's already cut traffic enforcement and community policing. Read the police blotter if you think crime is low. Not a day passes without bikes and catalytic converters being stolen.

Cut the police BUILDING and use the money for POLICING.


Posted by Bystander
a resident of Another Palo Alto neighborhood
on Feb 10, 2021 at 4:54 pm

Bystander is a registered user.

For once, I would say that Alison Cormack has it right. People do think that things like the shuttle will automatically return when the pandemic is over but it will not.

In fact, the shuttle is a big issue. It is the sole reason why VTA has removed and reduced service in Palo Alto (as well as Mountain View).

When children have to get to school, whenever that will be, the lack of shuttles will put more traffic on the roads. Investing money into public transport is very necessary, particularly if all the building of homes goes through bringing more people who need to get to wherever they need to go. People will not go grocery shopping on bicycles in the main.

If we are talking about refraining from city expenditures, then more senior staff positions will be necessary. Any type of new bicycle promoting road changes should also be eliminated. Anything other than quality of life for Palo Alto present residents, rather than potential residents should be priority rather than anything that may cause an influx of new residents. As it is, the workforce are in the main working from home and we have no idea if this is something that will continue post-pandemic.

And of course, it goes without saying that the Foothills Park fiasco is costing the City money. Unless a large fee is put on Preserve visitors, then this will continue to be a money pit. The mistakes made here are very expensive.


Posted by Anonymous
a resident of Duveneck/St. Francis
on Feb 10, 2021 at 11:25 pm

Anonymous is a registered user.

Do not cut Library budgets.
Do not cut Police/Public Safety.
Do focus on fundamental city operations/services to current residents.


Posted by Annette
a resident of College Terrace
on Feb 11, 2021 at 6:45 am

Annette is a registered user.

Burt asked the right questions last week.

This should have been agendized before CC reviewed and voted on the public service building. It's pretty clear that the City Manager teed this up as he did so that the PSB would be approved despite the now fully public fact that the City cannot rely on the revenue stream, TOT, that was used to justify the recommendation that Council approve the contracts. If the City Manager didn't rush out and ink those contracts, or if the closing date has not yet passed, it would be prudent to pause those contracts. And I'll bet there's a seismically safe, vacant commercial space that could be repurposed as an interim home for the EOC until the City's coffers are full. Maybe relocate the EOC to one of the periodically browned out fire stations.

City Council: the tail wagging the dog dynamic has got to stop so that essential services aren't further eroded. The City Manager is, obviously, not elected. The person in that position should be acting at Council’s direction, not the other way around. CC has ceded too much power and influence to the City Manager. This started several city managers ago and got well out of hand under Shikada’s predecessor. When issues are agendized is critical. Ditto the use of the Consent Calendar. Ditto how many items are on any given agenda. It’s ludicrous that public participation is limited to 1 or 2 minutes b/c Council has an impossibly packed agenda to get through. It’s time to clean house.


Posted by Annette
a resident of College Terrace
on Feb 11, 2021 at 6:50 am

Annette is a registered user.

Question for @Bystander who wrote:

"If we are talking about refraining from city expenditures, then more senior staff positions will be necessary."

Why would more senior staff be needed? Is the word "not" missing?

I fully agree with your observation that the mistakes are expensive; Palo Alto should be managed better.


Posted by JuJu Wang
a resident of Old Palo Alto
on Feb 11, 2021 at 6:57 am

JuJu Wang is a registered user.

It would be a shame to close the libraries or reduce fire stations.

The police department is another story. Defunding of police departments has become a nationwide topic because the police often costs cities more money in lawsuits than in actual crime prevention.

Systemic racism in police departments accounts for many of the lawsuits.

A neighbor told me that the Palo Alto police used to use racial profiling to harass African American non-residents.

This illustrates the racism within the city that some equality advocates speak of.

As a recent and newly arrived Palo Alto
resident, I sometimes sense the prejudice from older Palo Alto residents who are resentful of my family's wealth.


Posted by Bystander
a resident of Another Palo Alto neighborhood
on Feb 11, 2021 at 7:40 am

Bystander is a registered user.

@Annette. Thank you for pointing out my error in that rambling sentence. Obviously not well edited on my part.

I think you and I are on the same page about this.


Posted by Elinore Rosenstein
a resident of Atherton
on Feb 11, 2021 at 8:41 am

Elinore Rosenstein is a registered user.

The City of Palo Alto apparently cannot live within it's means.

An expensive new police station was an unnecessary expenditure.

And the city relied too much on its hotel/motel tax base. When the coronavirus stifled these anticipated revenues, fiscal problems further ensued.

Some call it getting too big for one's britches or living within one's means.


Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Feb 11, 2021 at 8:41 am

Online Name is a registered user.

To amplify Annette's points, not only is the City Manager not elected, but he was the only candidate interviewed and was granted a huge compensation package that includes an extra year's worth of salary and benefits if he's fired for cause. When Ms. Kniss pushed his candidacy, she said the city had to rush to grab him up and didn't need to interview anyone else AND deserved his comp package that puts him in the top 5 for ALL local officials.

His office keeps growing with very highly paid assistant city managers and communications/pr staff who've notably failed in their outreach efforts.

Why are his 2 big projects improving City Hall's heating/air conditioning systems -- jokes here deleted -- and building a new police station while cutting community services like traffic enforcement that would benefit us all?

High time for the City Council to rein him in.


Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Feb 11, 2021 at 9:42 am

Resident 1-Adobe Meadows is a registered user.

I always thought that that the property on Fabian Way would be the perfect place for a new police/fire/administrative station. Why did the city let that get away? It has a huge parking lot, existing buildings that could be refreshed, and could house both the police, fire, utility, and administrative office of the city that are currently in the Palo Alto Business park on Elwell Court. The zoning is correct for that location. Also access to 101 and the Utility property across the freeway. I am talking about the location that now houses a drug company. And the area that is now planned for housing would be associated with those services. That is lost opportunity. Possibly the property on the corner of Charleston and Fabian can be built for some of those services. We have established a priority for those services so politically a less costly opportunity.


Posted by Jacob Tseglin
a resident of Menlo Park
on Feb 11, 2021 at 10:08 am

Jacob Tseglin is a registered user.

The area you speak of is best suited for providing additional cost-effective housing...to accommodate those of color with less financial resources.

Time for Palo Alto to step up to the plate and do the right thing.

The new police department building is already underway so there is no need to allocate this particular area for frivolous municipal services.

Palo Alto creates its own problems and must deal with them accordingly.

Maybe even look at how other cities successgully address their civic issues.

Palo Alto just hires consultants at tax-payer expense to point out the obvious or to find more ways of spending money that isn't there.

How inept.


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