BY DANIEL SCHRAGER
Daily Post Staff Writer
Palo Alto City Council is frustrated with costly consultants who have never set foot in town.
Council tonight (Oct. 22) reviewed the city’s liberal use of consultants last night, with the discussion focusing on when to hire outside help and when to rely on city employees and local expertise.
The city of Palo Alto spent $27 million on consultants for 44 projects last year, but the city council is frustrated with the results.
Much of council’s frustration with consultants comes from their lack of local knowledge and tendency to ignore recommendations from locals.
“It appears as if that input from the public, boards, commissions and even the council is largely disregarded,” Councilman Pat Burt said. “Then we get a product at the end that inadequately reflects a lot of the input that is based upon context knowledge and not just the important domain expertise of the consultants. And we’ll get a product that we disagree with fundamentally at the end even though we’ve put in a year or two and hundreds of thousands of dollars.”
Mayor Ed Lauing pointed to one example, where consultants wrote a report saying the city had too much retail and, even after the planning commission disagreed, the report was still presented to council. “The error was, they were putting all of Stanford (Shopping Center) into the little bit of retail we have everywhere else and doing some sort of division by per-capita person and saying you have too much retail,” Lauing said. “If they had walked around town they would have figured that out.”
Councilman Greer Stone said he’s noticed consultants tend to get defensive when their recommendations are met with feedback from locals. Stone suggested reaching out to local experts instead of consultants in some cases.
Vice Mayor Vicki Veenker pointed out that some issues require local knowledge while others don’t.
“If you’re doing construction management, you may not need to know whether you’re in Palo Alto or Mountain View, but if you do more high-touch things, you might,” Veenker said.
Money pit?
The council was more concerned with getting its money’s worth on consultants than on its spending as a whole.
Councilman George Lu said that council wouldn’t be as frustrated with the amount of money spent on consultants if there were better results, and asked City Manager Ed Shikada to look into a system for evaluating consultant performance.
The city’s most expensive consulting project last year cost $4 million for consultants to help with inspections and plan reviews. It spent $2.7 million for consulting on a water quality control plant and $2.4 million for a downtown parking garage design.
But council agreed that consulting contracts can be worthwhile when they’re happy with the final product.
Or money saver?
Stone asked Shikada if he had an estimate of the amount of money the city saves by using consultants as opposed to full-time city employees.
“I think it would be helpful for us and for the public to understand the benefit of consultants and even when we see these really high price tags, it might be both cost-saving and an opportunity for us to be able to get greater expertise than we might actually have on our own,” Stone said.
Shikada said he didn’t have an exact estimate but that he believes the use of consultants save the city money overall.
“In general, I think it is fair to say that it’s at least break-even overall for us to do the type of outsourcing that we are doing, if not a savings in the long term,” Shikada said.
Discussion isn’t over
Council will continue discussing the issue and aims to put together a guide of best practices when using consultants. Shikada said that he’s had trouble finding other cities that have published something similar.
According to Shikada, the goal of the project is to streamline the processes the city uses to decide when to bring in outside consultants.
“I think it’s appropriate to claim that our goal here is to reinforce the city of Palo Alto as a leader in ensuring and producing innovative and accountable consultant services,” Shikada said.
The project is expected to last into 2026. The city will ask for input from consultants as well.
I expect that Shikada will propose hiring a consultant to help with putting together best practices for hiring consultants
Some believe “consultants save the city money overall”, but Shikada believes “the use of” consultants “saves” the city money overall.
Why does the City Council allow Mr. Shikada so much flagrant abuse of the City’s money? Are they intimidated by him? Mr. Shikada resigned from his position as City Manager of San Jose, to preempt being fired by the San Jose City Council, which had had more than enough of his abuse. So Palo Alto hired him despite that history. He wastes tens of millions on useless consultants; meanwhile Fire Station 4 has not had full fire coverage since 2000. Hire firefighters; fire the consultants; dismiss Mr. Shikada. He will not suffer, as he was awarded, when hired, an amazing package of benefits for when he departs his position.
Will Mr Shikada’s plan to create a “best practices” guide mean hiring more con$ultantS? I ask because a friend with LOTS of real-world experience and patience has been tracking the consultant issue. Her description of changed schedules, agendas etc are straight out of Kakfa.
Another compiled a list of 12+ “areas for improvement.”
While PA’s “retail consultants were recommending sleeping pods and streetscape/signage surveys for $$$$$, we the unpaid residents pushed for Asian markets, ethnic and night markets etc and were ignored. For decades — literally — we contacted City Council and the PTC. We commented on articles , sarcastically suggesting PA should wire payment for our FREE advice to our Swiss bank accounts.
Kudos to the Daily Post for covering City Council’s belated frustration with consultants with little or no local knowledge but LOTS of disdain resident feedback that might undercut their gravy trains.
Perhaps we — the unpaid residents — could have a forum to share OUR Best Practices documented with examples of costly mistakes made by oblivious, unresponsive consultants and the staff “managing” them?