New study on revenue potential from 2020 tax ballot measures

August 17, 2019 – Palo Alto Matters

On August 20, the Council Finance Committee will take a deeper dive into potential Tax Measures to place on the 2020 Ballot. The latest analysis describes the process and revenue potential for a General Bond or a Parcel Tax and a commissioned study on Business Tax measures in the Bay Area over the past 10 years, including comparative research across municipalities and analysis and modeling of the range of potential revenue the city might generate via a business tax vehicle (based on employee head count, square footage, or payroll expenses).

There are a lot of variables that can impact how much revenue a given tax might generate, including potential exemptions and different pricing levels and structures. In selecting an appropriate vehicle, the city must also consider “potential areas of tax leakage” and impacts on the economic environment and tax ecosystem. With further Finance Committee and council direction to narrow the focus, more complex scenarios will be modeled. Meanwhile, In a nutshell, the initial analysis modeled the following including initial, general assessments of impacts on equity, administrability, stability, and economic benefits:

  • General Obligation Bonds ranging from $100 to $500 million in debt issuance. These would require 2/3 voter approval.
  • Parcel Taxes of either a flat $350 per parcel or a $1 per square foot per eligible parcel, yielding between $7 million and $25 million per year. City parcel taxes typically require 2/3 voter approval.
  • Business license taxes, whether based on employee headcount, square footage, or payroll size, could potentially generate $1 million to $15.5 million annually, depending on the tax rate. If the tax is considered a “general tax”, it requires only majority voter approval. If a “special tax” it would require 2/3 voter approval. Whether “general” or “special” depends on the level of specificity regarding what the revenues will be spent on.

Following the Finance Committee meeting, staff will return to City Council with an update and confirm timing for next steps, including polling and stakeholder outreach, with an eye toward a decision about the type of measure to pursue by October/November. Click here for the staff report. 

Council may turn to strategic Blue Ribbon Committee to speed action on grade separations

August 15, 2019 – Palo Alto Matters

The ongoing saga of deciding how best to separate roadways from the train tracks may see a new player as City Council considers appointing a Rail Blue Ribbon Committee, comprised of former Palo Alto mayors and city council members. On August 19, council will consider staff’s recommendation to appoint a politically savvy group to supplement the work of the Expanded Community Advisory Panel, or XCAP, that took over from the original Community Advisory Panel earlier this year. As proposed, the new group of former electeds may be joined by non-voting representatives from the Palo Alto Chamber of Commerce, Stanford University, Caltrain, Valley Transportation Authority, and the Silicon Valley Leadership Group. The RBRC’s primary role would be to advise council on the selection of grade separation alternatives, but may also extend to development of a funding strategy for implementation – a function of increasing urgency as Palo Alto’s allotment of Measure B grade separation funds may be reduced by a delayed decision, contrary to the expectations of many. 

The XCAP (comprised of neighborhood members, and representatives from the Chamber of Commerce, the Planning and Transportation Commission, PAUSD, and Friends of Caltrain), would continue its work to help staff “increase awareness and understanding of the options and complex trade offs that must be considered in the decisions ahead for the city” and ensure that “neighborhood perspectives are reflected in the development and evaluation of grade separation alternatives.

In contrast, the Rail Blue Ribbon Committee, or RBRC, would provide strategic recommendations directly to the council regarding “community-wide benefits and impacts, local and regional political considerations, and financing strategy for implementation.” Looking beyond neighborhood concerns, the RBRC will focus on how to build citywide voter support and compete for regional funding and project commitments. Staff hopes that former electeds will bring an understanding of both “the political environments locally and regionally” that will inform their recommendations regarding the viability of the various alternatives.

Beyond grade separation alternatives, staff recommends a range of RBRC involvement in funding strategy for the selected alternative:

  1. Limited to making recommendations on dollar amounts to be targeted via a tax ballot measure (regardless of the tax vehicle);
  2. Recommending a dollar target, timing, and the parameters of a specific tax vehicle; or
  3. All of option 2 plus design of polling and a community awareness campaign leading to decisions on a ballot measure.

This item is scheduled for council action on August 19, beginning at 9:15 pm. Click here for the staff report. 

City pushes for fair representation on VTA in response to Civil Grand Jury

August 15, 2019 – Palo Alto Matters

In June 2019, the Santa Clara County Civil Grand Jury released a highly critical report regarding the operations and governance of the Valley Transportation Authority and asked cities within the VTA service boundary to respond to specific recommendations regarding VTA Governance. City Council will discuss and approve a draft response on August 19.

The Civil Grand Jury report stated that “year after year, VTA operates one of the most expensive and least efficient transit systems in the country.” Despite a series of critical civil grand jury reports dating back to 2004, the VTA continues to veer from one financial crisis to another, while also perpetuating a structural deficit of $50 to $60 million per year. Regular users represent fewer than 5 percent of the county’s commuters despite continuous, significant increases in operating costs, 90 percent of which are subsidized by taxpayers. 

Overall, the jury concluded that radical changes in policy and strategic oversight are needed, but that the VTA Board as currently structured and operated, lacks the capability to accomplish that change. Key findings point to lack of experience, engagement, continuity and leadership on the board; insufficient time investment due to other duties as elected officials; domination of the board by representatives of San Jose and the Santa Clara County Board of Supervisors “in terms of numbers, seniority and influence;” and frequent tension between directors’ fiduciary duties to the VTA and the political demands (and interests) associated with their local elected positions.

Key jury recommendations include calls for the VTA and the county to commission separate studies of successful transportation agency governance structures, reports from each city on its views regarding VTA governance, and consideration of such things as duration of directors’ terms, appointing directors who are not actively serving elected officials, and extending the chairperson’s term to two years.

Palo Alto’s draft response requests that the studies of successful governance include, not just “large city” agencies, but specifically those in metropolitan areas where service boundaries span multiple municipalities. The city cautions that small cities, and especially those without representation on the VTA Board, will need time and resources to meaningfully weigh in on alternative governance structures for the VTA, including strategies to sustainably represent the interests of multiple municipalities. Specifically, the city proposes evaluating VTA governance (and representation) based not only on population distribution, but also such things as employment and sales tax generation (a primary source of VTA revenues) or communities with direct interest in shared permanent transportation issues, such as Caltrain and High Speed Rail. Palo Alto urges that VTA provide funding to an organization such as the Cities Association of Santa Clara County to facilitate that work. 

The city is open to participating in legislative reforms pertaining to governance structure, but cautions that they must address the root concerns that lead to underrepresentation of smaller cities, particularly those bordering other counties. In particular, it may be premature to commit to extending the Chairperson’s term prior to resolving issues of fair representation across constituent agencies. 
This item is scheduled for council action on August 19, beginning at 7:50 pm. Click here for the staff report.

New impact report offers data and analysis to inform contentious debate over Castilleja’s redevelopment

August 5, 2019 – Palo Alto Matters

Editors note: This story has been updated to clarify the DEIR’s conclusions regarding net new daily car trips and distinguish between total daily trips and new trips on specific roadways.

The City of Palo Alto will finally enter the fray after standing on the sidelines of a multi-year public relations battle between Castilleja and its residential neighbors over the private school’s ambitious proposal to redesign its campus and expand enrollment to 540 students over the next four years (125 more students than allowed under their existing Conditional Use Permit). On August 14, the Planning and Transportation Commission will hold the first public hearing on a Draft Environmental Impact Report for the project. The DEIR, released on July 17, is subject to a 60-day public comment period, ending on September 16, 2019. The Historic Resources Board will hold another public hearing on September 12. Council action is not yet scheduled.

Two Stories

The sometimes fractious tale of two projects that has unfolded in recent years has the school touting its redesign as a much needed “modernization” that will expand access to “the unique transformational power of an all-girls education,” including to the 22 percent of students who receive financial assistance. (Tuition and fees for 2019/20 school year cost $49,900; current aid recipients represent incomes from below $20,000 to $300,000.) School representatives cite 30 community meetings held since 2012 to support their claim that the plan incorporates neighborhood input and was developed in consultation with the community in order to minimize, and even reduce, neighborhood impacts. 

Castilleja officials emphasize that the school’s above-ground building footprint will not increase and that their proposed enrollment growth will be incremental and closely monitored. If it results in an increase in car trips, the next increment must be delayed until the school can bring car trips back under a cap of 440 cars during peak commutes. Finally, they argue that a new underground garage (adding 68 additional parking spaces to the school’s inventory, for a total of 142 spaces) will not invite more driving, but rather is intended to reduce on-street parking and traffic spillover on neighborhood streets.

Neighbors, on the other hand, tell the story of commercial expansion by a tax exempt corporation in an R-1 residential zone, through redevelopment that would overwhelm the quiet neighborhood with traffic and noise, eliminate heritage trees, and violate the city’s municipal code by improperly excluding the underground garage from the site’s floor area limits, resulting in “30,000 more above-ground square feet than is allowed by current code.” 

They describe a process that ignored or misrepresented public input, a garage that will incentivize more driving as well as change the face of the neighborhood, replacing houses with a garage exit that will shine hundreds of headlights directly into neighboring property, disrupt traffic patterns, and cause cars to queue along Emerson and Bryant Streets as they wait to enter or leave both the parking garage and Embarcadero Road. 

The fact that Castilleja “increased enrollment from 415 to 450 over 12 years [in violation of the school’s Conditional Use Permit], starting 2 years after they agreed on 415,” looms large as a source of mistrust regarding Castilleja’s intentions, practices, and reliability for future compliance. 

The Project

Castilleja’s plan includes removing two school-owned houses, replacing five existing buildings with a single new, three-story academic building, eliminating 47 surface parking spots, freeing up green space (including a .33 acre “park” that neighbors would be permitted to access), adding a 50,500 square foot underground parking garage, lowering the pool below grade, and rebuilding basement classroom space. On net, above grade building area will be slightly reduced and below grade built area will increase, resulting in a total expansion of 77,784 square feet, a 47 percent overall increase.

Development will occur in four phases over three to four years, with student enrollment increasing to 490 students in phase one, 520 students in phase three, and reaching the maximum 540 students in phase four. If the school exceeds the car trip cap of 440 peak trips per day, subsequent enrollment growth will be put on hold until they return to compliance.

The DEIR

The Draft Environmental Impact Report noted that the project would “enable improved safety, sustainability and programmatic space” for Castilleja’s student population, and acknowledged features designed to minimize “school-related disruptions on the surrounding neighborhood,” such as new limits on special events, as well as amenities designed to benefit the community, including landscaping, preservation of mature trees, and .33 acre “park” that could be used by the school’s neighbors. 

On the other hand, the DEIR concluded that higher student enrollment could significantly increase daily car trips, from the current total of 1198 trips to 1477 total trips, despite Castilleja’s current Transportation Demand Management program. “The net new trips associated with the increased enrollment is 279 or an 18.9% increase from the existing conditions.” Citing a June 2019 analysis prepared by Castilleja’s TDM consultants, Nelson/Nygaard, the DEIR anticipates that the enhanced TDM program proposed in Mitigation Measure 7a could reduce car trips by 12 percent to 22 percent. At the high end of effectiveness, that could mean a net reduction of daily trips to 1152. However, if the enhanced TDM measures perform at the lower end, the project would still produce a net increase of 102 daily trips.

Importantly, even if a successful, enhanced TDM program results in a net reduction in total daily trips, the concentration of school-related traffic on specific roadways due to the consolidation of parking in the underground garage would create significant and unavoidable project-related traffic impacts. In particular, the project would significantly increase daily car loads on Emerson Street between Embarcadero Road and Melville Avenue, and cause considerable new delays at the intersection of Alma Street and Kingsley Avenue. The DEIR deems the enhanced TDM program in Mitigation Measure 7a insufficient to reduce those traffic impacts to less than significant levels. The resulting potential to exacerbate existing land use conflicts between the school and its residential neighborhood was deemed a further significant and unavoidable impact of the project that would “create land use incompatibility or physically divide and established community.”

DEIR analysis of estimated change in traffic volume at various roadway segments attributable to Castilleja’s proposed project

The DEIR also identified significant or potentially significant environmental impacts on noise, trees (biological resources), air quality and seismicity associated with the project, but concluded that mitigation measures could reduce those impacts to less than significant. 

Finally, the Castilleja project was found to be generally consistent with the city’s Comprehensive Plan. However, the DEIR’s zoning consistency analysis highlights that the proposed above-grade gross floor area represents a .41 Floor Area Ratio whereas the maximum FAR allowed on the site per city code would be .3026. Existing buildings on the site represent a FAR of .43 and Castilleja has requested a variance from the city to allow it to maintain its existing above-grade FAR. Because the proposed project results in a smaller non-compliance, the DEIR deems the proposed .41 FAR to present no new adverse physical environmental effects. The DEIR analysis does not count the project’s 128,166 below-grade basement square footage in the FAR calculation.

What’s next?

In addition to analysis of Castilleja’s proposed project, the Draft EIR analyzed three alternatives:

  • Alternative 1:  No project.
  • Alternative 2:  Moderate enrollment increase. Reduce maximum enrollment from 540 to 506 students, allowing for slight reductions in both the size of the new academic building and the number of off-street parking spaces.
  • Alternative 3:  Moderate enrollment increase with reduced parking. Reduce maximum enrollment from 540 to 506 and reduce on-site parking to 92 spaces (minimum required by city code), with 52 spaces in the below grade garage and the rest in on-site surface lot at the corner of Emerson and Kellogg.

The public has 60 days to comment on the DEIR. You can email comments to Castilleja.expansion@cityofpaloalto.org, offer oral comments at the August 14 Planning and Transportation Commission Hearing (6:00 pm, Council Chambers, City Hall) or the September 12 Historic Resources Board Hearing (8:30 am, Council Chambers, City Hall), or send them to: 

Amy French, Chief Planning Official, Planning & Community Environmental Department, City of Palo Alto, 250 Hamilton Ave, 5th Floor, Palo Alto, CA 94301

Following the public comment period, a Final Environmental Impact Report will be prepared, including responses to each submitted comment and any additional analysis conducted. The FEIR will also be subject to a public comment period and will provide the final analysis to guide City Council’s decision on whether to approve or deny the proposed project or an alternative. A Final EIR indicating significant and unavoidable impacts would require the council to make a finding of “overriding considerations” justifying approval of the project. 

Note: DEIR comments are most effective when they specifically address impacts identified in the report or gaps in analysis or offer additional relevant information that can inform the analysis.

For more information related to the project visit the following websites:

City of Palo Alto:  DEIR Executive Summary

City of Palo Alto:  Castilleja DEIR documents

Castilleja School:  Castilleja Re-imagined

Protect Neighborhood Quality of Life:  grassroots organization of Castilleja neighbors 

New grade separation work plan calls for new working group and decision by October

May 5, 2019 – Palo Alto Matters

An effort to eliminate the popular, but complex and expensive citywide tunnel option for rail grade separations failed on a 3-2 (Kou, Tanaka dissenting) vote on April 22. (Because Councilmembers Filseth and Kniss are recused from grade separation decisions, four out of the remaining five votes are required for a motion to pass.) Along with retaining the citywide tunnel option, the council approved an updated work plan targeting adoption of a preferred grade separation alternative this October and including steps to engage the business community in planning for a potential ballot measure to raise revenues.

Council also agreed to a new 18-member working group, to be appointed by the City Manager, to help guide progress toward a final decision. The group will include the 12 members of the current Community Advisory Panel plus one representative each from Stanford University, Stanford Research Park, the Palo Alto Chamber of Commerce, the Palo Alto Unified School District and the Friends of Caltrain board. The final member will be a representative from either Stanford Health or Stanford Shopping Center.

The citywide tunnel question will return to City Council on May 13 when the council will decide whether to abandon it, refine the alternative to include a shortened tunnel from Channing Avenue to the southern city limit, or leave the alternative on the table as is. At that meeting the council will also consider an initial weighting scale for evaluation criteria in order to create a more dynamic model to guide discussion and decision making. The May 13 discussion will begin at 8:30 pm. Click here to view the staff report.

Can transportation services and infrastructure meet the challenges of new growth? The staff-strapped Transportation Department will need help.

May 5, 2019 – Palo Alto Matters

Housing did not make the cut for City Council’s top four priorities this year, but a transportation priority was carried over from last year with an added focus on traffic. On Tuesday, May 7, the Council Policy and Services Committee will review the 2019 Transportation Work Plan and make a recommendation on City Council approval.

Given expectations for a growing resident population, existing public dissatisfaction with traffic and parking congestion, and continuing regional jobs growth, demand for transportation solutions is high. But with senior staff vacancies (including the Chief Transportation Officer) and a to-do list that already exceeds staff capacity, new big fixes will remain elusive.

In contrast to last year’s comprehensive Housing Work Plan, the Transportation plan is not chock full of ambitious new programs and strategies. Instead, the plan strives to complete a staff reorganization, address understaffing, and otherwise basically stay the course. That’s not to say they’re sitting idle, but rather indicates that resources are thinly stretched just to serve current needs. The department already has twenty items on this year’s council agenda related to parking, mobility, traffic engineering and rail. Big Initiative Activities will continue to include:

  • ongoing work on rail grade separation planning (another council priority, with a separate work plan approved on April 22);
  • evaluating and updating the residential preferential parking (RPP) permit program (see below);
  • instituting a revised community engagement process for transportation projects; and
  • considering opportunities to increase automated data collection systems.

The Council Policy and Services Committee will consider the Transportation Work Plan on May 7 at 6:00 pm in the Community Meeting Room at City Hall. Click here for the staff report.

SB-50 targets high quality school districts in renewed effort to limit local control over housing

Palo Alto Matters – December 8, 2018

Following the defeat of SB-827 in the 2018 legislative session, State Senator Scott Weiner circled the wagons and returned this month with a new proposal, SB-50, that adds some protections for existing rental housing sites and temporarily preserves local control for “sensitive communities” that are particularly vulnerable to displacement pressures. At the same time, however, SB-50 reaches far beyond the “transit-rich corridors” targeted for state mandates under SB-827.

SB-50 would require local governments to grant housing developers an “equitable communities incentive” not only for housing projects within a half mile of a major transit stop (rail station or ferry terminal) or a quarter mile of a stop on a high quality bus corridor, but also ANYWHERE that housing is allowed in an area deemed “job-rich” based on indicators such as “proximity to jobs, high area median income relative to the relevant region, and high-quality public schools.”  

At a minimum, the equitable communities incentive must include waivers of parking requirements greater than 0.5 spots per unit and any maximum density controls, as well as up to three additional incentives and concessions available under the existing State Density Bonus law. Those additional concessions include such things as increased height, site coverage, and Floor Area Ratio limits; reduced side- and rear- setback requirements; and reduced daylight plane requirements. 

Projects that are also close to transit and include a minimum, unspecified percentage of affordable units are then entitled to additional waivers as follows:

  • Within 1/2 mile, but more than 1/4 mile from a major transit stop: no height limits less than 45 feet, no Floor Area Ratio limits less than 2.5, and no parking requirements.
  • Within 1/4 mile of a major transit stop: no height limits less than 55 feet, no FAR limit less than 3.25, and no parking requirements.

The new, greater unit densities enabled by the waivers will form the baseline for calculating available additional concessions under the State Density Bonus law. 

SB-50 has only just been introduced and is likely to undergo some amendment before coming to a vote. However, if passed in its current form it would likely apply to all residential, mixed use, and commercial zones in Palo Alto, including every single-family neighborhood. Council members have already begun to weigh in with differing perspectives. On one hand Councilmember Adrian Fine expressed general support, saying “we need the state to step in … [l]ocal councils and the idolatry around local control are not going to solve our housing issues.” In contrast, Councilmember Eric Filseth said the bill was “horrible for voters” because it ignores that addressing the housing crisis depends on paying for all the infrastructure necessary to sustain regional growth. SB-50 “skips all that.” Whether City Council will take a position on SB-50 remains to be seen.

Plan for dedicated El Camino bus lanes fizzles out

Mountain View Voice – by Mark Noack / January 29, 2018

Unpopular BRT project called off after $10.5M in preliminary work

After years of spinning its wheels, the controversial proposal to build dedicated bus lanes along El Camino Real appears to be dead in the water.

Originally proposed more than a decade ago, the $223 million project known as Bus Rapid Transit has languished in recent years amid pushback from residents and many elected leaders. Valley Transportation Authority officials say they are now pulling the plug on the idea after gaining insufficient support from cities along the El Camino corridor, even for a scaled-down version to test out the idea.

North Palo Alto residents ramp up traffic battle

Palo Alto Weekly – by Sue Dremann / January 26, 2018

Neighborhood warms to new and creative activism to unclog residential streets

Riled by daily traffic snarls on their residential streets, about 70 Crescent Park residents met with Palo Alto police and transportation officials on Jan. 18 to discuss how to end commuters’ occupation of their neighborhood.

Greg Welch, a Center Drive resident, spearheaded the neighborhood advocacy.

“As our next steps, we will have almost weekly meetings and will be coordinating (with the city),” he said, noting they plan to form a stakeholder group to develop a pilot traffic-management program. The group would work with Palo Alto’s transportation department on creating the program.

The meeting, just the latest movement in a wave of neighborhood activism, covered the expected discussion of pavement markings, traffic circles and stop signs — but also ventured into the realm of politics, with residents talking about potential candidates to support during this year’s City Council election.

Pope-Chaucer bridge: Replacement hits a snag

Palo Alto Daily Post – by Allison Levitsky / January 25, 2018

Replacement of the Pope-Chaucer Street Bridge — which was blamed for much of the damage in the 1998 flood that inundated Palo Alto, East Palo Alto and Menlo Park — could be delayed by a bureaucratic snafu between the San Francisquito Creek Joint Powers Authority and the San Francisco Bay Regional Water Quality Control Board.

The creek authority plans to replace the bridge with one that doesn’t have concrete blocks that constrict the flow. Currently, so much sediment is built up at the bridge that there are large trees growing out of it, said Len Materman, the creek authority’s executive director.

Creek authority leaders are currently studying the environmental impacts that the project would have in accordance with the California Environmental Quality Act.
But on Jan. 18, the water board sent a letter to the creek authority, urging them to take into account the expected increase in sediment loads flowing from Searsville Dam, a 65-foot masonry dam on Stanford lands upstream in the foothills.