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About this blog: So much is right — and wrong — about what is happening in Palo Alto. In this blog I want to discuss all that with you. I know many residents care about this town, and I want to explore our collective interests to help ...  (More)

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Do city officials ever consider giving taxpayers a break?

Uploaded: Dec 2, 2019
Advice to new government officials: Spend! And then, get more money from taxpayers! Get it again! And again

Keep on asking!

Fellow taxpayers, I think we are simply a convenient cash box for our local government districts. They spend and spend, and then want money to pay for things that they should have budgeted for. And this “ask” seems to be an annual refrain.

Palo Alto has an unexpected $76 MILLION budget surplus this year, due to increases in sales and property taxes, more taxes from hotel visitors, and selling off former City Manager Jim Keene’s home, for which the city paid about 2/3rds of the cost.

Included in that whopping $76million surplus is an increase of $19 million over last year in its electric fund in the utilities department revenues, and a $5.3 million jump in its natural gas fund. These increases come from the money you and I pay each month on our utilities bills. My November bill was $450, and it will probably soar to $600 during the winter months because I have electric heating. My summer bill is about $225. BTW, we only heat the family room, and only one of our four bedrooms in winter months, not the living and dining rooms. (Yet the city is getting on the bandwagon requiring all new houses to use only electricity, not gas, to heat these homes. Have they considered how much more electricity-heated houses will cost people?)

But what really rankles me is, that despite the huge and unexpected surplus, Palo Alto is planning again to increase its utility rates. The department is looking for a 3 percent electricity increase and a 5 percent natural gas hike – even though this past year it had a combined $24.3 million Utilities Department in income increase. Two fiscal years ago, in June 2018, the city raised its electricity rates by 6 percent and gas by 4 percent. Rates were also increased again this past June, according the Palo Alto Weekly and the Palo Alto Daily Post.

Do city officials ever say, enough, we can make it this year and next, and let’s give taxpayers a break?

Do they ever consider it would be okay with all of us if our rates did not increase every year? And what about that utilities surplus – do council members ever think that could be used to pay for escalating gas and electric costs, since it is our dollars for utilities rates that contributed to the city’s surplus? A deliberately avoided discussion, I guess.

Of course the Utilities Department always has a reason for more, more, more – and our council members silently nod in acceptance except for member Greg Tanaka, who does a great job looking at the numbers and asking why the increases. He gets little support from his noninquisitive council members.

And still the city wants more taxes! Palo Alto is again exploring the idea of levying a business tax in March on the commercial sector, to pay for as yet undefined transportation and housing projects. It’s been trying for years, unsuccessfully, to raise taxes from businesses in town.

But it’s not only the city that is on this constant “ask” track.

The Foothill-DeAnza College District two weeks ago decided to ask taxpayers this coming March for two tax increases -- an $898 million facilities bond, the largest in Santa Clara County’s history, which would cost taxpayers an average of $16 per $100,000 of assessed valuation ($160/year for a home with a $1 million AV along with a $48 parcel tax (levied on each property owner’s home) that would generate $5.5 million for each of five years. If taxpayers approve, some of that money may go, not for education, but for providing affordable student and staff housing. Many of the students have financial difficulties. And enrollment has declined in the 20 percent range, which, ironically, lowered state funding of the district, which is based on student enrollment.

And the Palo Alto School District? Well, their turn will come up next June, when they consider the money the state is giving them. PAUSD is one of the wealthiest districts in the country, but why shouldn’t they also enjoy the asking game.

After all, all that new money comes from us, not from their careful budgeting.

P.S. I forgot to add that each year the city's Utilities Department must urn over a substantial sum (typically about $16 million) of the utilities rates we've paid to the city's general fund. Originally, this turnover was considered as a "finder's fee" for the city which started its own Utilities Department. Other rationales for this turnover have subsequently been rationalized.

What is it worth to you?


Posted by Council is cueless, a resident of Embarcadero Oaks/Leland,
on Dec 2, 2019 at 6:10 pm

Well, the city does need the money to pay out all the settlements to,people brutalized by the PAPD. BTW, today's daily post has an editorial about all the recent acts of villainy by our local cops and the failure of the council to address the issue.
But the council is also doing much more important work- trying to ban all vaping products from the public. The council, over the years , have never demonstrated fiscal responsibility. Why start now????

Posted by R. Ortiz, a resident of Menlo Park,
on Dec 3, 2019 at 6:54 am

The query: Do city officials ever consider giving taxpayers a break?

^^^ Obviously not...regardless of political affiliation. Just different 'target zones' from which to spend this ever-increasing windfall.

Ironic that in addition to its other dubious expenses, Palo Alto has been held liable for a number of law enforcement indiscretions.

This from a so-called liberal, forward-thinking, predominantly Democrat registered community?

Palo Alto is not your mother's Mill Valley...just another once small community that got too big for its britches.

Menlo Park is following the same pattern & becoming as distasteful an environment as PA town.

The more recent wealthy newcomers/residents don't seem to notice or care because they have no reference point(s) of the past. To many of them, the SF mid-peninsula
is a mecca compared to where they originally relocated from.

Posted by Resident, a resident of Another Palo Alto neighborhood,
on Dec 3, 2019 at 8:25 am

The City and the School Board both feel that anything they ask for we will willingly give. From bonds to parcel taxes with excuses that "think of the children", we get put on the guilt trip if we ever vote against them taking more money from us regardless of whether they are building a library, or supposedly improving bike safety to make it safer for our children on bikes going to school.

Mitchell Park library was a big guilt trip for those of us who felt that the scale of the project was wrong. I still don't like the design and feel that it is very poorly designed with a poorly designed parking lot and kids on bikes nearly knocking down pedestrians as they whiz on the sidewalk past the entrance.

The Ross Road and Arastradero/Charleston mess as far as traffic is concerned does little to make us feel better about the way our money is being spent.

The bike bridge is costing so much more because of all the ridiculous delays and now we have lost the tunnel until the bridge is built. Does anyone actually think the bridge will be built on schedule and we will be able to cross 101 within 18 months?

As for our utilities bills. The fact that we have just one bill for all our utilities means that most residents don't look at the breakdown. As an example, why can't we reduce our garbage pick up by choosing to only have pickups every other week, or put a vacation hold on our pickup. The arguments made about the cost of doing this would be moot if we had a better system with chips in our cans that billed us for our actual usage rather than a flat fee with no means of reducing our costs. They want us to reduce our waste, but then they put the charges up for doing so. What backward thinking?

We will soon (?) have toll lanes on 101, but will any of us in Palo Alto really be able to take advantage of these since the entrance and exits of the toll lanes won't suit us? We will just pay the price of the extra traffic on our regular lanes.

Our public transport is almost non-existent as efficient alternatives to driving for regular commuting. We have no efficient methods of getting to airports and yet our wonderful City Council just wants us to give up our cars and bike everywhere.

We are not amused!

Posted by musical, a resident of Palo Verde,
on Dec 3, 2019 at 9:46 am

Around here, I never cease to be amused!

Posted by Citizen, a resident of Community Center,
on Dec 3, 2019 at 10:06 am

No more taxes. And the City of Palo Alto is doing an end around by raising utility fees, and then dumping the money into the General Fund, without placing a tax on the ballot. This is sly and deceitful and all of them are complicit.

Current consumption is beyond their means, as the unfunded pension liability grows rather than shrinks. Why not devote surpluses to reduce pension liabilities, which will ultimately come back to bite property owners.

Posted by Sherry Listgarten, a resident of Greenmeadow,
on Dec 3, 2019 at 11:58 am

Sherry Listgarten is a registered user.

@Diana, I love your blog, you ask great questions! Luckily there is one in here that I can answer :) You say: “Yet the city is getting on the bandwagon requiring all new houses to use only electricity, not gas, to heat these homes. Have they considered how much more electricity-heated houses will cost people?" The answer is “Yes"! In fact, a building “reach code" like this cannot add a financial burden, so cost studies have been done and they show that electric heat is not more costly. In fact, it often saves money. You can read about it in all its detail on the City's website (Web Link especially pages 36+, but it's a pretty long document.

Something that's confusing is that the traditional kinds of electric heat are really inefficient and expensive. They use “electric resistance" and operate kind of like a big hair dryer. The newer kinds (new to our area, anyway), called heat pumps, are much more efficient. They move heat rather than generate heat, sort of like a refrigerator in reverse. Your electric bill in winter would drop a lot! I imagine they are not cheap to install, but if you want to find out more, you can call Palo Alto's Home Efficiency hotline at 713-3411 and they can answer a lot of questions.

Posted by Anon, a resident of Another Palo Alto neighborhood,
on Dec 3, 2019 at 12:32 pm

(I'm not worried about the migration away from fossil fuels. Yes, that is necessary.) But, I am worried about the "surplus". It isn't really a surplus-- we just don't want to fully fund projected retirement costs. IMHO, the city should fully fund all of its projected retiree costs. It will take a while to catch up. Let's start now.

Posted by mjc, a resident of College Terrace,
on Dec 3, 2019 at 2:06 pm

Because commercial property seldom sells, and when it does there are loopholes in Prop 13 to allow a change in ownership without triggering a new property tax assessment, residents now pay almost 75% of the property tax, with the percentage paid by commercial property steadily declining year on year. In addition, as the Research Park has gradually moved away from manufacturing companies, the offices that have replaced them do not produce a product for which sales tax can be charged. So while I hear comments at council about how important the companies that occupy Palo Alto offices are to the local economy, even our past city manager, Jim Keene, a great proponent of the commercial sector, admitted to council at one point that they do not produce enough revenue to cover their share of the services the city provides. cost to the city!

Posted by Bloody WAKE UP, a resident of Stanford,
on Dec 3, 2019 at 10:38 pm

So, take time to understand the proposed Palo Alto business tax. This is a tax on the big businesses in Palo Alto which has impacted quality of life for its residents, the need for expanded infrastructure and services. Big businesses need to pay their fair share, they should pay the tax.

Palo Alto voters also need to be attentive to regional taxation which never tends to benefit Palo Alto. Perfect example is VTA's 2016 Measure B tax. Perfect example, the 88 bus which services many students and seniors is going to be only in service during school start and end times. Palo Alto is going to have to consider its own shuttles for expanded times and guess what, that is going to be your tax dollars. Essentially, we are all double paying.

Track 2016 RM3, toll bridge fee increases, the money is funding the toll lanes for the big company buses so that it can have its own lane.

MTC is looking into a regional tax for the 2020 ballot that we will never know what the money would have been spent on.

Regionalism benefits special interest groups/big corporations and the subsidizing of agencies that are formed by legislation, such as MTC and ABAG, which is instructed by developers and real estate interests. They operate under the guise of being environmental stewards.

Posted by Ricardo Santiago, a resident of Duveneck/St. Francis,
on Dec 4, 2019 at 11:55 am

Here's to Diana Diamond for once again raising a good question. She describes another local example of the fuzzy thinking and lack of spending discipline by elected officials that brought us the sub-prime mortgage disaster. Please replace the Chaucer Street bridge and do something about pension costs and stop building more bridges across 101. Don't say that is a separate pot of is all the public's money. Diana Diamond for City Council.

Posted by Anon, a resident of Another Palo Alto neighborhood,
on Dec 4, 2019 at 1:14 pm

The utility department has a large "surplus", but, most of the city should have underground utilities by now, and, doesn't, and, the city also needs a second grid power feed. Currently, there is no redundancy, and, as was seen when the private airplane crash took out the power lines on the north side of the airport runway. The entire city went down. There should be a second feed from the west side to avoid this single point of failure. Why doesn't the city utilities spend the surplus on fixing this single point of failure, and, get going on undergrounding the rest of the power delivery?

Posted by Novelera, a resident of Midtown,
on Dec 4, 2019 at 3:50 pm

Novelera is a registered user.

When I was looking at houses in Palo Alto, one of the realtors representing a seller had displayed and pointed out a City of Palo Alto utilities bill that showed how much better off a Palo Alto resident would be than someone who lived where PG&E rates were in effect. This was in 1982.

For quite a few years after that I was mostly satisfied with what I was paying for heat, light, water and garbage. But that is no longer the case. Doing the math on the therms and KW hours compared to, say, a couple of years ago, one can see how they are jacking things up.

I live alone and used to be able to get a break on a smaller garbage can. I still have a smaller black can that I put out, maybe, once a month because I'm a devoted recycler and composter. Do I get a break for this? Why no.

Posted by Online Name, a resident of Embarcadero Oaks/Leland,
on Dec 4, 2019 at 8:07 pm

Online Name is a registered user.

Thank you for this column. For too many years PA Utilities has run a $20,000,000 annual surplus yet they keep raising rates every year -- while telling us to use even more energy / water by cleaning our trash / recyclables for THEIR convenience while continuing to ignore OUR convenience by letting us put vacation holds on our trash pickup because that might cost THEM money.

PA has the highest per square foot construction costs in the area and now they want us to pay even more for all-electric utilities even though many municipalities are being sued by Restaurant Associations and others for forcing this more expensive solution down everyone's throats.

Maybe the City Council could consider US instead of treating us like cash cows while ignoring our complaints. Enough already.

Posted by Citizen, a resident of Community Center,
on Dec 4, 2019 at 9:29 pm

No to a parcel tax for PAUSD. Enrollment has declined and projected to decline further through 2023. Just because we're used to it is not a good reason to add an extra $1000 on to property taxes, when property taxes have gone up at a very healthy rate (up over 40% in 5 years, and we are the richest district by property taxes in the state, and the highest paying salaries for a unified district of its size). Enough. It's not an employment program; it's supposed to be educating our students.

Posted by Council is clueless, a resident of Embarcadero Oaks/Leland,
on Dec 5, 2019 at 9:40 am

Speaking of excess money- I just got another “gimme money" email from the PA weekly. I would think from these emails that the weekly is n dire financial straits. Perhaps the city can allocate some funding for the weekly,.
The email does end with the statement “ and fight to keep your first amendment in play".
Since you are with the weekly, Diana. I am wondering if you know which government entities are trying to silence the weekly. And if the weekly wants to mention the first amendment, then maybe the weekly should cut back on the censorship of their forums.

Posted by mjh, a resident of College Terrace,
on Dec 5, 2019 at 1:28 pm

mjh is a registered user.

The utility department has a large "surplus"
For too many years PA Utilities has run a $20,000,000 annual surplus

A decade or so ago the city council decided that if they charged more for utilities they could made a profit and transfer the profits to the city's general fund. Which they do and which amount increases year on year.

And our rates are steadily increasing. Hidden tax.

Posted by mjh, a resident of College Terrace,
on Dec 5, 2019 at 2:30 pm

mjh is a registered user.

"I am wondering if you know which government entities are trying to silence the weekly."

The city manager may or may not be trying to silence the Weekly, but last year the city manager did not renew the contract with the Weekly to publish the weekly notices for upcoming public city meetings and what is on the agenda, such as council, planning commission, architectural review board, utilities commission, library commission, parks and recreation, etc. etc. and which was available in the kiosks all week. Instead this contract was given to the Post.

However, the Post only publishes the city notices in one daily edition, not sure which day, only print about 6-8K copies I believe, which are only available in a limited number of kiosks for a few hours a week which are kiosks are mostly empty by early afternoon, and many of the copies picked up by non-residents anyway.

The city manager came up with a very effective way of making sure as few of those darn pesky residents as possible are alerted as to when public city meetings are and what is on the agenda while still meeting the requirement that they must be noticed in a publicly available print edition.

Posted by Anonymous, a resident of Duveneck/St. Francis,
on Dec 7, 2019 at 11:56 am

I agree with Diana Diamond. Please be active and encourage others to participate in government and politics. Show this thread to others. Make a point to bring up a local topic to help reach other voters. I refer to city, county, and state issues, proposals, proposed bonds, etc.
Some people are “busy" or prefer to keep their heads in the sand, and this is a mistake. All of us are then affected by politicians who DO get lobbied by special interests. Yes, they are active.
Silicon Valley Leadership Group, for example, represents large industry interests and results in Palo Alto residents funding County interests. San Jose is where Santa Clara County is HQ; Palo Alto, way up at the north end of the county, is a cash cow for them.
Government is NOT “economical!" The more members of the public engage meaningfully with government, the better. Venting on social media does little. Emailing or phoning elected officials gets COUNTED. One topic per email, clear pro or con and reasoning. Thanks!

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