Consultants costing city $27 million a year; councilwoman says they’re overused ‘a bit’

BY BRADEN CARTWRIGHT
Daily Post Staff Writer

City Manager Ed Shikada and Palo Alto City Council are taking a closer look at their use of consultants, who cost the city $27 million last year.

“I think we have lost some trust in the community with how we have been using them,” Vice Mayor Vicki Veenker said at a Policy and Services Committee meeting on Wednesday. “I’m sure everybody is kind of in agreement: We probably over-utilize consultants a bit,” Councilman Greer Stone said.

Stone said he wants to make sure consultants are objective and willing to pivot when council members question them. He said he’s been frustrated several times by consultants taking a position and defending it, even when council wants something different.

“Ultimately, we’re hiring them to do the job that we want to do, and it’s not for them to really sell us on their plan,” Stone said. For example, council and residents were frustrated by recommendations from consultants Streetsense and Michael Baker International, who were hired to improve conditions for retailers in Palo Alto.

Both consultants said Palo Alto has too much retail space and recommended ending the city’s requirement for retail on the ground floor, allowing more types of businesses to move into commercial areas.

Planning commissioners at a January 2024 meeting said the consultants didn’t show they understood Palo Alto.

“There are also mistakes and redundancies that we should be careful not to have in the next round of discussion,” former Commissioner Doria Summa said at the meeting.

Streetsense said in its report said Palo Alto has an oversupply of retail because more people are shopping online.

But Annette Glanckopf, co-chair of the Midtown Residents Association, said residents have consistently ranked the lack of retail as their top concern in surveys.

Residents displeased

Residents were also frustrated last year by a plan from Centurion Planning and Design to potentially expand the Palo Alto Airport into the Baylands.

Residents overwhelmingly opposed the expansion, with more than 70 public speakers at a council meeting in September.

“We’re going through a process that is actually creating a backlash in the community rather than moving the ball forward,” Councilman Pat Burt said at the time.

Operations Manager Michael Luetgens announced the airport plan would be shelved in March.

Important topic

Shikada said on Wednesday that improving relationships between consultants and public agencies is an important topic to him because he started his career at a consulting firm in Southern California.

Shikada said he was surprised and disappointed to see that public agencies haven’t looked deeper into how they use consultants, and Palo Alto will need to lead the way.

City management fellow Kathryn Fortenberry made a list of 44 consulting contracts approved by council in 2024.

For example, Watry Design is designing a downtown parking garage for $2.4 million, Concordia is updating a plan for the Cubberley Community Center for $631,966 and A3 Immersive is projecting artwork onto City Hall during an art festival in October for $275,692.

The most expensive consultants, totaling $4 million, are to help city planners with inspections, plan reviews and building codes.

The city also uses consultants for lawsuits, tax administration, engineering, IT and construction management.

“The use of consultants is critical to the city’s ability to produce the volume and range of services expected by the community,” Shikada said in a report for the committee.

Stone and Veenker agreed that consultants are important for keeping the city’s long-term costs down and for their outside expertise. The city already has over 1,000 employees, and without consultants that number would be much higher, Stone said.

“Refining how we use them is great, because they’re not going anywhere,” Stone said.

During his campaign last year, Stone said he wanted a second four-year term to make sure consultants don’t put their hand on the scale.

“You’ve got to get through enough of these to realize, ‘OK this is the culture.’ Then you have to understand the culture to be able to understand how you fix it. And that takes a little while,” Stone said in a campaign interview.

Summer project

Over the summer, Shikada said he will get feedback from each department on how to improve their use of consultants, with a goal of improving the quality and value of their work.