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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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Registering businesses is a flop in Palo Alto

Uploaded: Sep 6, 2018
For years, the Palo Alto City Council has tried over and over again to either license or register all businesses in town for a variety of somewhat specious reasons. And in 2015 it inaugurated an actual business registry program, hired a firm to help ($85,000 for 2018-19), and charged businesses $54 a year to contribute information about their businesses.

It has really failed, according to a new report by the city’s own auditor. Some of the data is “inaccurate, incomplete, and inconsistent, and the registry data showed business trends that were inconsistent with comparable economic data,” the report said. The data showing a drop in business is also inconsistent with other census information and sales tax figures, the report said.

And I have to ask, is all this effort and money for a registry really worthwhile?

I doubt it. And now I wonder if we ever needed it. The city has had a Business Improvement District downtown for years that requires an annual fee from most businesses and is, in itself, already a registry of downtown businesses.

When four council members in 2014 wrote a colleagues memo on why the business registry was needed, the ideas presented were lofty and noble: to answer basic questions such as how many people work in town and for what kinds of businesses, to help tackle traffic and parking problems, perhaps by developing a Transportation Demand Management program, and to monitor progress.

When the council launched the business registry in 2015, it said the data could also be used for economic development, public safety and disaster preparedness, as well as reduce traffic congestion and coordinate with other transportation programs.

In other words, a kitchen sink full of worthy uses of the business registry data.

But Auditor Harriet Richardson’s report concluded that the city is not using any of the data collected and that the data “does not currently meet the city’s business needs to address its changing priorities.”

It’s been a failure.

I also wonder about some of the questions the businesses were asked to answer. In addition to the number of employees, the city also wanted to know the office square footage, how many parking spaces and parking permits the business has, among a few other questions. And once answered, the businesses have to each pay the city $54 to file the form – or get fined. The report did not indicate whether any businesses have been fined.

So why waste any more time and money on this registry? The council should first find out whether such a registry works for any other city – and in what way, and then have a good discussion to see if it is worth continuing in Palo Alto. Residents shouldn’t have to fork over their tax dollars for a worthless business registry.
What is it worth to you?


Posted by rita vrhel, a resident of Crescent Park,
on Sep 7, 2018 at 11:48 am

Thank you Ms. Richardson for another worthwhile and detailed audit, demonstrating again the value of an internal City staffed Audit team.

Yes, we do need the Business Registry and all the information the City Council asked be obtained by having a functioning Registry. How else do we know actual traffic demands,effectiveness of required traffic mitigation programs, emergency response needs,or the most basic information of all, how many employees are working daily in Palo Alto.

Then, please, use this basic information and apply a business head tax to offset increasing infrastructure demands caused by parking, street repair, sewers etc, all of which are used daily by these poorly identified employees.

How can a City function if this basic information is not known? Residents are tired of being asked to support infrastructure, i.e. parking garages at a cost of 65,000.000 a space which the resident may never use. Business needs to step up and pay their fair share. To do so, Palo Alto's City Council and Staff must gather accurate employee data, and legislate a fair and equitable business tax. Other cities have Registries and a tax. Palo Alto certainly needs the money.

So again, thank you Ms. Richardson for confirming what many of us have suspected for some time.

Posted by NeilsonBuchanan, a resident of Downtown North,
on Sep 7, 2018 at 12:03 pm

NeilsonBuchanan is a registered user.

This is a legit question and the answer is that everyone impacted by traffic and parking needs the registry information. Good data is essential for setting land use, transportation and zoning policy. This is in the auditor's report.

Under-budgeted staff has under-managed the registry to the point of collapse. Oversight by City Manager and City Council also collapsed. Now is not the time to throw the baby out with the bath water. Blame wont be productive. Honest admission of problem is half the battle.

Long-involved and informed citizens are preparing a positive report on this long-languishing problem. Our response will be delivered to Council on Monday night and to Policy/Service Committee on Tuesday night. Stay tuned and thank goodness for the City Auditor function.

Posted by Joe, a resident of Green Acres,
on Sep 7, 2018 at 1:59 pm

I agree fully with Rita and Neilson. Businesses didn't want it and the pro-business City Hall killed it by simply not properly implementing what was required of them. Are you surprised? My guess, without knowing more, is that larger business don't want the residents to know how many employees they have in their buildings. The following are valid questions: "In addition to the number of employees, the city also wanted to know the office square footage, how many parking spaces and parking permits the business has....". It lets the residents know if businesses are paying their fair share of the infrastructure costs in downtown and, conversely, how much we are paying, even though many of us avoid going there for obvious reasons. The data is needed and should be collected, and then used (!) by City staff and City Council for more effective planning purposes.

Posted by Resident, a resident of Another Palo Alto neighborhood,
on Sep 7, 2018 at 3:15 pm

There are good reasons for finding out the information but equally there are so many flaws in data collection as well as many unique reasons why the data can be wrong.

I know one person who telecommutes from his home in San Francisco 3 days a week and only visits his office 2 days each week. I know another business where in house meetings are only scheduled Mondays/Wednesdays/Thursdays to enable employees to telecommute or to work longer days so that they can either telecommute or take Fridays off. I know someone else who carpools (or maybe uses Caltrain - can't remember) 3 or 4 times a week and drives only on the day(s) he does the school run, one week one time and the next week 2 times. I also know that many people will ride bikes to work except on rainy days, or the days when they want a car for after work activities.

I also know a business owner who will keep employees below a certain number if the business is taxed per employee at that number and above. There are definitely ways around definitions of employee by calling them contractors, etc. There are other businesses where the busy times are evenings and weekends and they are largely staffed by students who only do a couple of shifts each week, so the number of employed staff is 2 or 3 times higher than the number of employees on site on any one shift.

Yes, businesses need to pay their fare share of tax. But taxing per employee does not always seem to make the most sense. A one size fits all approach can not and will not work. It is unfair to tax jobs or employees when one business may be doing a lot better than another at using the infrastructure better.

Likewise, what about such institutions as schools. Are they to be considered businesses? And the businesses that are serving the community with useful retail, services that residents want and need, etc. to be treated the same as a high tech company that just wants a Palo Alto address? Some of these businesses we want and need or else the average resident will be driving out of town to find someone to give legal or tax advice, or getting their teeth cleaned or eyes tested.

Posted by Nprman Beamer, a resident of Crescent Park,
on Sep 7, 2018 at 4:46 pm

Any organization worth its salt, especially a city, needs this type of data. Most cities around here do it, and so should we.

Posted by Not a mystery, a resident of Crescent Park,
on Sep 7, 2018 at 6:29 pm

Intrusive questions guarantee that response will be low.
Were the designers of the questionnaire ignorant about how to design a questionnaire, or were those questions purposely added to reduce response? There are lots of experts on these designs and the city just had to ask for help. It's not rocket science but a little education helps.

Ad the city CHARGED the respondents for answering? More professionally, you REWARD a respondent for taking the time and trouble to answer.

There is no mystery in this debacle. The City Manager doesn't want a registry. So it didn't happen.

Posted by Nayeli, a resident of Midtown,
on Sep 8, 2018 at 3:44 pm

Why can't there be some sort of reciprocity between Palo Alto, the State of California and the counties (Santa Clara and San Mateo) where most of these businesses are registered anyway?

There is no need to "register" dorm room, garage or apartment startups. They aren't contributing to traffic. The issue should always be businesses where people actually drive to Palo Alto to work.

Posted by Curmudgeon, a resident of Downtown North,
on Sep 8, 2018 at 9:05 pm

"Businesses didn't want it and the pro-business City Hall killed it by simply not properly implementing what was required of them. ... The data is needed and should be collected, and then used (!) by City staff and City Council for more effective planning purposes."

If you don't want the answers, don't ask the questions.

Posted by wayne douglass, a resident of another community,
on Sep 8, 2018 at 9:34 pm

wayne douglass is a registered user.

@Joe: "many of us avoid going there for obvious reasons." And what, pray tell, might those be?
And if @Not a mystery, a resident of Crescent Park, were a resident of Barron Park, it wouldn't take a rocket scientist to figure out who @Not a mystery is.
@Resident asks, "what about such institutions as schools. Are they to be considered businesses?" If you're the Baptist Church leasing space to a girls' choir, then the answer is yes, especially when the decision of the zoning inspectors is reviewed by, ta-da!, the Zoning Commission.

Posted by Annette, a resident of College Terrace,
on Sep 10, 2018 at 1:51 pm

Annette is a registered user.

The registry was doomed from the outset. I recall the CC meeting at which the person in charge, who was supposed to be presenting the registry to CC, essentially listened to Council's questions and took notes on what was required. Then he was on leave when it launched and the person left to handle the inevitable questions was in a spot b/c she was not as familiar with the project as the person in charge was. And to complete the registry online users had to agree to terms w/the company that ran the app. In short, it was not well executed. I hadn't concluded that this was b/c the City Manager didn't really want the registry but I can see where that explanation makes sense. Come to think of it, planned failure makes more sense than accidental failure b/c there's no good reason why something as simple as a business registry should fail in a city that prides itself on being smart and capable.

Posted by Not so evil, probably., a resident of Duveneck/St. Francis,
on Sep 12, 2018 at 11:41 am

Not so evil, probably. is a registered user.

Try not to assume evil. We can't know the motivation of others. It appears poor execution (probably related to incompetence and/or lack of adequate resources)was the cause.

It's clear we need a registry. How do we make this ?

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