Palo Alto City Council Candidate Statements:

Being part of the new high-tech generation with a background in Computer Engineering since i975, I want to offer fairness and effectiveness for people to get involved in issues that affect their neighborhood.

Both sides of an issue shall be offered.

1) Equal access to all the details of a project as soon as they are received by the City: a) All documents (including legal documents) shall be posted online. b) An online conference for Q&A for everyone shall be set up for each project when the application is submitted.
2) Fairness in expressing their opinions at each hearing: a) Both sides shall be allowed to respond to all staff comments before the fina1 vote. b) Taped hearings shall be available for viewing online for at least l0 years. c) Hearing notice shall be given at least 3 weeks ahead. d) Estimated starting time for each agenda item shall also be given 3 days ahead.

Statement of Mark Sabin, Candidate for City Council
Occupation: Sales Manager Age: 49
Education and Qualifications:
Born in Utah, Mark Sabin graduated with a B.A. in Political Science and Economics (Weber State University, Ogden Utah, 1976). Upon graduation, Mark served as a VISTA Volunteer in Arkansas. During the '70s he was also a political organizer.

Mark moved to the mid-peninsula in 1982. For the past ten years Mark has been national sales manager for The Patnaude Group, a corporate training company. Mark joined the Palo Alto Chamber of Commerce in 1991. As a member of their Government Action Council (GAC) he gained a deeper understanding of the community. Mark recently chaired the GAC and is currently the Chamber's Chair Elect.

When approached to run, Mark felt it important to answer two questions: "Has my experience and insight prepared me for the challenge?" and "Can I be of service?" From his experience in the Chamber and as a resident, Mark firmly believes Palo Alto is not just the environment, quality schools, Stanford, clean, quiet streets nor is it our dynamic history and far reaching contributions to the world. Palo Alto is the spirit, creativity and passion that created and sustains all of these things. This is the Palo Alto Mark is ready to serve.

Statement of Edmund Power, Candidate for City Council, City of Palo Alto
Occupation: Retired Age:83
Education and qualifications:
A.A. in Mechanical Engineering plus studies in Mathematics and Metallurgy.
I have been a close follower of the news regarding municipal politics for many years and an activist in seeking to bring about beneficial changes in local government with the aim of bringing a greater degree of democracy to the city by way of increasing the amount of honest intercourse between the city's government and it's citizens.

Statement of Victor Ojakian, Candidate for Palo Alto City Council member
Occupation: Project Manager, Hewlett Packard; Palo Alto City Vice Mayor Age:54
Married; four children; University of California, Berkeley, BA; Member/Liaison: Finance and Audit Committees; City/School Liaison Committee; Palo Alto Community Child Care; Park and Recreation Commission; East Palo Alto Liaison Committee; Planning Commissioner (1992-1997); Neighborhood Association Officer; Downtown Farmers' Market co-founder; youth athletic coach and commissioner (1981-1998). Check: http://www.nanospace.com/~ojakian/

As a.25-year resident and City Councilmember, I stand for strong neighborhood character, excellent services and programs, and fiscal responsibility. I've met, listened to, and worked with people of differing viewpoints. I supported: affordable housing; youth and senior services; cooperative city/school relations; traffic safety efforts; sound financial practices; emergency preparedness initiatives; public safety measures; energy reliability plans; and environmental policies.
With your vote, I'll continue working for: reliable energy sources; refurbished parks, buildings, and streets; more youth programs; better flood control measures; enhanced library services; a tree-lined E1 Camino Real; e-government services; improved open space trails; strong PAUSD relations; an updated Zoning Ordinance. I appreciate your support.

Statement of Jack Morton, Candidate for Palo Alto City Council member
Jack Morton, Phd, CPA
59, Owner, Morton & Associates, Inc., One son, 28-year resident of Palo Alto
Community Involvement: Founding Member, President, Palo Alto Recreation Foundation; Founder, President, Community Skating, Inc.; Board Member, Morissey-Compton Educational Center; Former Chamber of Commerce Board Member, Former member PAUSD Finance Advisory Committee, Former Youth Sports Coach.

In latest years, Palo Alto has struggled with fiscal issues that impact-both basic and special City services. I am running to help preserve the qualities that make Palo Alto unique. I will work to Improve the responsiveness of City government to Community interests while at the same time using my financial experience to provide the professional oversight needed to preserve the full range of services Palo Altans have historically enjoyed -- Parks, Libraries, Community Centers, Arts & Recreation Programs. As the accountant for many Community Organizations, I understand their needs and the importance of their services. I have demonstrated my leadership and effectiveness in Community Serving Organizations; and with your support, I will bring those qualities to the City Council to effectively address the key issues that we Palo Altans face -- Neighborhood Protection, Traffic, Housing and Environmental Preservation.

Statement of Yoriko Kishimoto, Candidate for Palo Alto City Council
Occupation: Management consultant and author of The Third Century: America's Resurgence in the Asian Era Age: 46
Education and Qualifications:
Like many of you, our family moved to Palo Alto for its unbeatable combination of world-class sophistication, generous open space, and a small-town environment for raising children and developing lifelong friendships and ties.

As a Council Member, I would work to protect these qualities of our community, as I have over the past 10 years as an active community leader. With two school age children, I have served on the Addison school site council, Girl Scouts as co-leader, and as treasurer of Hidden Villa Board of Trustees. I chaired the Transportation Committee of the city's Comprehensive Plan advisory group. Currently, I am President of University South Neighborhoods Group.

With my Stanford MBA and 15 years as a smal1 business owner, I will promote a common sense approach to government spending and accountability. My background in the US-Japan technology business gives me an understanding of the global and economic setting for Palo Alto and the Bay Area.
I have a passion for walkable neighborhoods, high environmental standards, and new approaches to old problems. With your support, I will put my experience, expertise and leadership in land use and transportation to work on our common visions for Palo Alto. www.Yoriko2001.org

Statement of Chris Kelly
B.A., Georgetown; M.A., Yale; J.D., Harvard
I have always felt a special connection to our community, which I made initially from accompanying my parents to work in Palo Alto while growing up. Before returning in 1998, I worked at the White House and the U.S. Department of Education. I practiced law at Wilson Sonsini Goodrich & Rosati before serving as Chief Privacy Officer at Excite@Home, and have participated in Rebuilding Together and the Palo Alto Rotary Club. As a member of the Council, I want to:

Build a livable community -- We must control traffic, protect neighborhoods, respect the environment, add affordable housing, and make the city more pedestrian/bicycle friendly.

Enhance the City-schools relationship -- I wil1 use my experience in education to build partnerships between the City and our schools.

Serve seniors -- Palo Alto's senior services must be modernized for our aging population.

Make government accountable to our citizens -- We need to review city processes and use technology to serve citizens affordably and quickly. Palo Alto should be a leader in electronic government, and I will work to make it happen. www.electchriskelly.org

Statement of Litsie Indergand, Candidate for Member, Palo Alto City Council
Occupation: Retired
Education and Qualifications: Attended Polytechnic High, San Francisco and UC Berkeley. Have lived in Palo Alto more than 20 years.

Homeowners Association, President l990-'94, board member to present, United Nations Association Northern California Division, Treasurer 1992-'95, 1996-'99, Mid-Peninsula Chapter, President 2000-'01, Palo Alto Human Relations Commission, member 1995-2001, Community Working Group for Homeless Services, board member 1998 to present, Treasurer 1999 - present, Member of Peninsula Interfaith Action (PIA), Santa Clara County Housing Coalition, Mid-Peninsula YWCA Public Policy Committee.

My diverse experience has included preserving the character of my neighborhood, being instrumental in launching a rotating homeless shelter, advocating for affordable housing, tenants' rights, anti-discrimination issues of all kinds, senior, teen, and children's issues, as well as traffic and housing. The Community Working Group is making great strides toward building the Opportunity Center of the Mid-Peninsula.

My voice on City Council wil1 be strong for the neediest people yet will be balanced by protecting the quality of life for all of us in this city we love.

Statement of Pria Graves, Candidate for Council Member, City of Palo Alto
Occupations: Community Activist, Artist Age: 49
Education and Qualifications:
B.A., UC Santa Cruz; M.B.A., University of Santa Clara; Leadership Mid-Peninsula; Palo Alto Neighborhood Disaster Assistance (PANDA). College Terrace Residents' Association, Coordinator & Webmaster (1996-2001); Future of Single Family Neighborhoods Advisory Group (2000-2001); Share Our Streets steering committee (2000-2001).

Palo Alto has always had a reputation for our wonderful quality of life. Yet currently many of the things that make our city so special are being lost.

We need to find creative ways to protect the unique character of our neighborhoods, to preserve our community services and our vibrant local retail areas. We need to make our streets safe and inviting for walkers and cyclists, to calm traffic and expand transportation alternatives. We must address the balance between jobs and housing, considering ways both to control job creation and to increase our available housing. And we need to plan in a way that will allow Palo Alto to thrive in a sustainable way well into the future. I am committed to this task.

Please visit my web site: www.PriaForCouncil.org. Your vote will allow me to work for you and for Palo Alto, protecting our quality of life. Thank you.

Statement of Victor Frost, Candidate for Palo Alto City Council
Occupation: Homeless Advocate, Underwater Miner, TV Producer, Panhandler
Education and Qualifications:
Foothill College, College of San Mateo, Humboldt State University, Sony Technology Center, Mainstream Coordinator, Quality Control Engineer, Japanese Management Disciplines, Internet Law.

A common man, for common people, with common sense. Fighting for a better Democracy in Palo Alto. Fighting for the rights of the Homeless and a New Homeless Center. Fighting Corruption and Indifference in City Hall. Will Install binding Internet elections for public office, and issues (solar and wind living, education, traffic, etc.). This Is the only way that infocus transparencies can make for a deeper meaning in our lives. In our Democracy we must look to the future and not the past for answers. If elected, I will uphold my oath of office and defend our constitutional rights!
To this I do swear, Victor Frost
www.votepaloalto.com
Note: A free Bar-B-Q for all Palo Alto voters.....(yes)

Statement of Hillary Freeman, Candidate for Council Member, City of Palo Alto
Occupation: Business Manager Age: 44
Education and Qualifications:
B.S., Marine Biology, Florida Institute of Technology; all coursework for M.S., Fisheries Biology, Iowa State. Married, 2 school-age children. Board of Directors, YMCA Palo Alto; Founder, Libraries Now!; youth athletics coach; Board of Directors, Children's Theatre; University South Neighborhood Group; Parent Network Coordinator; Chair, School Site Council; Executive Board, PTA & PTA Council.

I am committed to serving our community. I will strive to: (1) balance competing jobs, housing and services demands, including impacts on traffic, overcrowded schools/community facilities, and retail loss; (2) protect and Improve community assets and quality of life like libraries, parks, trees, open space and walkable neighborhoods; (3) support appropriate affordable housing; (4) create mutually beneficial and sustainable solutions through partnerships with schools, Stanford, nonprofits and business; (5) proactively solicit citizen's input; (6) advocate for seniors, families and youth.

Your input will shape the future of our Palo Alto. I appreciate your support. www.hillaryfreeman.org

Statement of Sandy Eakins, Candidate for Member, Palo Alto City Council
Occupation: Co-owner and Manager, EOS (Computer Sales) Age 63
Education and Qualifications:
B.A., Wellesley College; M.S.S.W, Boston University; M.B.A, University of Santa Clara; Palo Alto Mayor and Councilmember; Santa Clara Valley Transportation Authority Board, regional rail boards; Planning Commission Member: Comprehensive Plan Advisory committee Co-chair; Public Art Commission Chair; California League of Cities revenue and Taxation Policy Committee.

I have listened and learned during my first term. My first goal for Palo Alto is to promote community vitality with enhanced neighborhood and retail protection, improved alternative transportation as well as robust community services and fine schools. Additionally, I will concentrate on fiscal challenges including our long-range financial plan, revenues and investments, to keep the city strong. We need to care for our parks, civic buildings, and libraries as well as streets, sidewalks and sewers. Third, I will continue to work for Palo Alto regionally for improved transportation, affordable housing and treasured natural resources, especially the Hetch Hetchy water system.

Because our fine city continues to experience pressures for change, it needs leaders with vision, knowledge, experience and commitment. I have these attributes. I ask for your vote so that I may work with you for the city's future.

Creating a sustainable, livable, and vital Palo Alto is my first priority.

I will continue promoting "green" buildings and renewable energy, protecting our environment, fighting to retain open space, and working hard for new initiatives -- the library master plan, expanding the shuttle, and-seeking housing for teachers and city workers. I'll make sure that our streets, parks and facilities are renewed on schedule, speak out against the idea that "bigger is always better," and look for innovative ways to help solve problems with traffic and residential development. With your support, I'll continue to work fulltime for a Palo Alto that is worthy of all its citizens.

Q&A with Palo Alto City Council candidate Yoriko Kishimoto

WEEKLY: Why are you running for council?

KISHIMOTO: I'm running for re-election and the reason -- what I tell people is that I'm confident I'm the candidate that is most qualified to help Palo Alto meet its future challenges without sacrificing its environmental community values. What I mean by that is that it's easy to sit still and not change Palo Alto -- but, of course, Palo Alto's always changing.

It's also easy to approve development or make changes without fully compensating or mitigating the impact. So what I really focus on is looking ahead to Palo Alto's future and anticipating any needs that need to be addressed. As we make changes in one area since -- we're a pretty well built-out city -- you have to make other compensating changes, and that's quite a bit of hard work. So change engenders change.

So when we want to add more people, if we're talking about adding more density anywhere in the city, if you have density combined with doing business it's a formula for Los Angeles.

I've been concentrating on getting the city to focus in on transportation demand management, walk-able/bike-able city, (to) basically gradually transform into a city that keeps the best part, the best assets of what Palo Alto is most proud of while kind of moving ahead into the future. So there's the environmental issues and community values in terms of the libraries and parks and all the assets that we care for.

What in your background should supply the public confidence you know how to lead?

I stand on my background over the last four years. I'm proud to have all the endorsements of all my colleagues who are not running, and 100 percent of the school board members as well who are not running this time. I also serve as the chair of the VTA (Valley Transportation Authority) Policy Advisory Committee, where you have to receive recognition from the other cities to do that.

What one latest council decision would you overturn, and why?

I put a lot of thought into all my votes. So I think I feel pretty good about almost every vote that I've taken.

What about something that you were on the minority side on that would like to revisit? That would also fall into this category.

Let me think about this for a minute. I can talk about a couple latest ones. There was one, which was 2300 East Bayshore (Road).  

That was actually not one that I regret, but I kind of led the vote on, which was to approve it with one important condition which was to make medical/dental high-impact uses a separate conditional use permit. The reason was that particular zone allowed a wide variety of uses, which extrapolated itself to a very wide variety of traffic impacts. So the EIR allowed only for a kind of middle of the road one, whereas some of the allowable uses like medical/dental, which is a very viable use for the area, would have led to much more increased traffic. So that one was where I was able to avoid voting no on it by proposing a condition to mitigate for that.

What specifically would you like to revisit about that?

Well, that's not exactly one I would like to overturn. But it's one I would have overturned, I would have voted no unless I had been able to propose that condition, which was acceptable to me and probably to the community.

Well, let's see. I guess I would have overturned that whole process which led to the whole ESC (Environmental Services Center) discussion. The problem I had with it was that it was a very backward process. Staff came to us with a solution for a policy question, which we had not discussed overall. We ended up turning that down. What should have happened instead was that they should have come to us and said, "The landfill is scheduled to close in 2011. What would you like us to do?" So I felt that process was totally wrong.

This question comes from reader Elisabeth Seaman: "What do you suggest will Improve communication among council members and between council members and the public?"

I believe communications among the council members have become better. Of course, the problem is you have to balance that against the Brown Act regulations. So this year, the mayor has hosted these occasional lunches and such where people can get together socially without talking about agenda items. So just better human relationships is kind of the underpinning for us working together as colleagues.

Then with the public, the use of e-mail has tremendously facilitated that communication. We get dozens and hundreds of e-mails and they are so much easier to respond to than phone conversations. So yeah, I would definitely encourage (people) to keep sending in their comments and questions by e-mail. ... I read them very carefully and often I'll respond.

Real estate development is typically the most controversial issue in the city. Do you consider yourself more "slow growth" or "pro-growth"?

I would put myself more in the slow-growth area. I'm definitely not anti-growth. I'm the chair of the VTA Policy Advisory Committee and so I do see kind of the trends regionally. Of course, it's interesting. They're 15 cities in Santa Clara County and we're all very different. But Palo Alto tends to be a little bit in the middle or middle-slow growth because we are a built-out city. But we are more pro-change than other cities are because we have El Camino, we have the transit centers.

So I would say slow-growth. I don't think Palo Alto can handle a lot more growth because of the impacts on schools and parks and libraries and fire and police stations. We're all very aware that we just can't come up with we're not able to accommodate that much more growth. But some change, yes. And the changes we will see more in the downtown area and certain parts of the area which are able to accommodate it. But as I said earlier that has to be accompanied by a very thoughtful follow-up to see, "OK, if we are putting more housing in south Palo Alto, we need to see, 'Do they need another park?' 'Do they need another elementary school?' If there's more kids on the streets, we need that Charleston/Arastradero Corridor project to go through.

At controversial sites like Alma Plaza, should the city encourage or discourage high-density housing?

Alma Plaza is, in the Comprehensive Plan, it is designated a neighborhood commercial site. So the first priority should be to ensure that that neighborhood is covered for its neighborhood commercial needs. Once we agree that those needs are covered, we can talk about adding housing to that site. But I think it would be secondary.

Is the city doing enough to protect its economic base? If no, what specifically should be done?

I think Palo Alto does need to do more to protect its economic base. I'm the liaison to the California Avenue business district. So we're actually putting together some ideas for them to come up with a master plan and the city could work with CAADA to help them to Improve their shopping district, basically, for a stronger mix of businesses and to Improve the pedestrian/shopping environment with better trees and better lighting.

They talked about just the quality of pedestrian and the experience which will Improve the shopping district there.

One of my favorite little economic initiatives is actually fiber to the home -- because I think Palo Alto can't rest on its laurels. I mean, we need to keep anticipating future needs. I agree with people who say that kind of a networking utility is kind of one of the future utilities of the future.  

I think overall we should be spending more resources on thinking about our economic base. Not necessarily to willy-nilly approve any development application that comes along, but to think about how our economic base is changing.

At the state and federal level, I've always been a fan of reforming our tax base so we're not so dependent on sales tax, which is a smaller and smaller percentage of our economy. Since we're a service economy it makes sense to reform the tax system so that we have a much smaller tax on the broader range of transactions.

I think the overall tax system needs some reform, actually.

The other idea I've been thinking about for economic development is ... people have talked about ... we're talking about possibly increasing the TOT (transient occupancy tax, or hotel-room tax), we're talking about the possible business license fee. And people say "Well, we might support but we'd like some of it to come back to support the business environment." And I would agree with that, that some of it should be if not earmarked at least for the city to be more aware of investing back into the business environment.

When it comes to balancing the city's budget each year, there are two fundamental places to cut spending. What's more important to maintain in tight budget times: spending on infrastructure repairs or services?

Well, both, obviously. Well, I would say that the approach I've been talking to (the) budget is I look for ... the framework that I use is like 80 percent ... basic maintenance. Another is productivity investments. And the third is strategic investments for the future.

Most of the budget is kind of maintaining what we have, and I think that is pretty basic. I think that probably is the infrastructure that you're talking about. Another part is productivity investment, in terms of whether it's streamlining process or investing in, for example, the self-check-out machines at the library so that our valuable librarians don't spend their time checking out books, but they're ordering books for us instead.

So that's one way I hope to kind of keep the infrastructure investment but keep the service up by kind of looking at new ways to deliver services.

In the private sector, people reinvent their business process every day and we have to do the same in government. I definitely believe we need to increase our investment in infrastructure as well as be very innovative so that we can keep our services up.

When it comes time to cut the budget, which current service or program would you first look to cut?

I think all four years I've been on the council we've been cutting and cutting. I don't think there's any services that I would cut <I>per se. I think there's still room for improvement in us taking the time, either with the auditor or the Administrative Services Department, to really scrutinize each department one at a time and basically help reform/reorganize each department to see what efficiencies we can gain or how we can Improve the business process -- and almost on a zero-base basis, to kind of rethink what are the most important of our services we can deliver.  

Some of them we could deliver partially through partnerships. A good example of that (is) a long time ago we decided ... we were going to deliver (our senior services) through Avenidas. And (for) child care we have PACCC (Palo Alto Community Child Care). So there might be some areas that we could think about kind of doing in partnership with nonprofits.

Any examples of ones that haven't happened yet?

Well this last year, we went through the process of implementing a decision that the city evidently made even before I got on the council, which was to spin off the Family Resources Center. That's a small example.

What service or program would be untouchable?

Definitely, basic infrastructure investments. I think you do pay later. All the services are pretty essential. It depends on what you mean by essential. Of course, when people think of government, the most basic (services) of course are public safety. If you have nothing else, you have fire and police, obviously. But we're much higher on the Maslow (hierarchy of needs scale) ranking there. ...

I think my guide there would be the five priorities that the City Council has set in the last four years, which is, let's see if I can remember them: alternative transportation, affordable housing, long-term finance, infrastructure and --- I can't think of the fifth one.

Land use, I think.

Oh yes, good, yes. Thank you. That's right, because we've been working hard on the zoning.

The city has a large backlog of capital projects to repair and upgrade. What's the most important unfinished infrastructure project in the city? How would you pay for it?

Well, there's two big ones on the horizon right now: ... the libraries and the police building.

So I actually ended up voting against this last police proposal and the reason I did that was I said we don't want to make the same mistake of going really far down the path and then approving a building which they expect will cost at least $40 million -- $40 to $60 million -- and then we look at libraries and we know libraries could cost $20 to $80 million.

So I thought we should actually take the time to at least look at the next two to five years and prioritize, because we might say the residents probably don't want to pay for more than, say, $60 million in total. So what would be our priority and how do divvy up that money? So I would have preferred to do that. Then if we had done that we might say of that $60 million we can only afford to spend $25 million on the police building.

I know the police desperately need improvement in their facility. But I don't know if its $40 to $50 million worth. I know they need a new evidence room. They definitely need better facilities. But I don't know if we've explored what we can do with, say, "You only have $25 million -- tell me what you can do to Improve you facilities."

Can I go back to that question you just asked earlier about what would you not touch, because there are so many ways to slice and dice? In a way, you're kind of asking what my top priorities are.

Of course, my personal top priorities are in environmental issues, environmental leadership. So I would make sure that of course we don't touch our open space and that we maintain our commitment to environmental values. Because I think that's pretty basic to us going forward into the future. And alternative transportation is also very important to me. It's also a basic condition for us moving successfully into the future.

The Library Advisory Commission is currently considering the future of the city's library service. What changes, if any, should occur?

The library issue has been really one of the toughest over the last four years. So personally I'm open looking at various innovations. Because I'm delighted in the new software the library is using. You can go on there and you read reviews of books. The delivery of service, that's basically what you're interested in, the delivery of service. So we need to look at how we can get the right book into the person's hands the best way.

Then the other thought is really almost physical spaces because people are interested in just a nice place to go, sit and read for a while, study or meet their neighbors, etc. So they can be very important neighborhood kind of social centers as well.

On the first front, which is really the delivery of library services, I think we can be very innovative, in terms of partnerships with other cities. I'm open to looking at how we can work better with the county, in terms of at least the more obscure books to make sure everybody doesn't have to have an inventory of the less-used books. We can share those.

I'm interested in that distributed model, having some drop-off points, some pick-up points. I'd like to see every neighborhood have some center. In some cases, it'll a library, in some cases it'll be like a community center, in some cases it might be a -- I've even thought of, you know, we have fire stations everywhere. Actually, I think some communities have even used the fire stations facilities and combined them with other services.

Or I've even thought of using the fire stations, you could have a recycling drop-off, now that we have single-stream, so that you don't have to have one center for drop-off. Then you could also have that as a neighborhood hub for picking up your library book, or dropping it off.   So I think we can be pretty innovative in that.

But I also am a believer in keeping the Downtown Library and the College Terrace Library, which are established as neighborhood centers. The downtown area is absolutely going to see an increase in population and it used to be like up to 60 percent of the total library circulation. It's declined because we've let it go. But I think it could be a huge part of the circulation and a very, very successful branch library. And the same for College Terrace. It's already extremely successful. So there's no point ... in letting go of the tremendous assets we have already. But I think we can Improve service to the rest of the city and Improve the Main Library.

In terms of policy-making style, the current council has been divided between those who challenge staff with tough questions and those more trusting of staff's professional expertise. Where do you see yourself in that dichotomy?

I definitely do ask questions but I also have a lot of respect for staff. I have a lot of respect for them as the professionals that we count on. So I do do my homework. I read the staff reports very carefully and if I have questions, we actually instituted this process of sending the questions in beforehand so most of them can answered before the council meeting. Because I also believe in efficiently getting through the meeting.

I think I'm both. I'm respectfully challenging.

What kind, if any, of police oversight should the council set up?

I think the council does need to have some tools for oversight. There was a little bit of you know a flurry of debate at one of the latest ones about whether the council can have any role in, for example, the camera policy. It was extremely frustrating for me to be told, "Well, you only have budgetary policy or hire or fire the manager. Those are the two tools you have."

I used as an example the other departments. It's not that way. Like, for example, in Utilities. I would be very frustrated if they came to us with a dozen contracts for gas and electric without a policy framework. Instead, they come to us with a framework of a strategic plan and kind of goals. ... They ask the council what goals, what policies you want us to set and we set a goal of 20 percent renewables by 2017, I think. That was in Utilities.

Then in for example, waste management, the example I used earlier. It should be that they come to us and we together kind of figure out the major policy questions. Then the council sets the policy and staff implements it.

In police, they should do the same -- working with the council to define what the key policies are and then coming to HRC (Human Relations Commission) and, if necessary, the council to have us discuss that policy.

What issue is ripest for more regional cooperation and how would you approach it?

As you know, I'm very active in transportation. I'm the chair of the Policy Advisory Committee for VTA, which has been very interesting over the last two to three years. And I'm very glad I've been involved.

What's been happening there is this huge debate about (the) Measure A expenditure plan. In 2000, the voters voted in Measure A. It's a 30-year plan. The first proposal that came out -- this is almost a year and a half, almost two years ago -- would have seen 100 percent of spending, capital spending, on BART and one light-rail project in San Jose and nothing else for the next 25 years, which was very alarming to me.

Because of course, if you look at the data forecast, which VTA also came out with, some of the greatest demand is in our part of the county. We already have existing tremendous demand for transit services.

So I've been working hard to organize the North County cities to advocate for not just North County but to make sure there's a rational countywide distribution. We're actually approaching that pretty soon. Our new general manager has come up. So transportation is one that I've been involved (in) and actually that will continue to be important regional questions.  

There's the high-speed rail issue coming up, there's Dumbarton Rail that should coming to probably Redwood City. Palo Alto has to decide how big of a regional hub we want to be. We're already the second busiest station on the Caltrain.

There (are) many other regional issues. There's the water, the Hetch Hetchy system is one, which Bern Beecham has been kind of taking the lead on. There's the baylands and the salt ponds-restoration project. And especially since Palo Alto is part of the San Francisquito Creek JPA (Joint Powers Agency), and that's kind of becoming tied with the whole tidal-flooding issue.

The longer I'm on the council, of course, the greater interconnection I see between everything, every decision we make. Like all the storm-drains decision and the creek issues, they're just so interrelated. So both the more education we can do of all of us as well as cooperation, the better.

Open space might be another one. We talk about having the initiative for preserving the open space regionally, which I think is very important.

Are you thinking of the nine counties Bay Area?

However you interpret regional.

Yeah, well I guess the big picture is as the Bay Area is continuing to evolve we want to make sure that (we have) the right regional transit lines and I think it's important that the identity of each city is kept. I think it's one of the great things about the Peninsula. It's almost like a necklace of jewels, in a way. Each city is really has it's own identity and character. It's pretty cool. We want to keep that identity but we need to keep talking to each other because we need to cooperate on these regional investments.

How would you rate the performance of City Manager Frank Benest?

I think overall he's been a very good manager. I think some of his best attributes are he works very hard, he's been successful in developing a strong executive team. I think that manifested itself, kind of showed itself during the time when he was out himself. It was pretty amazing to see how well City Hall functioned with his absence for awhile because he did have a strong ... executive team in place. I think it's a good sign that he does surround himself with some very smart people. He has his strengths and weaknesses, but I think he does cover any weaknesses he has fairly well with people that he hires around him.

I wish that he would ... pay (a little more) attention to the important details. He prides himself on being a big-picture person but I do believe he needs to pay closer attention to the important details. I've talked to him about that.

Basically, I've been supportive of his role overall. The other thing I like about him is his emphasis on constant training and education and his belief in the pride in public service. I think he has integrity and the right values. The biggest deficiency that I'm always talking to him about is (to pay) more attention to the smaller things and better evaluations of departments -- more regular and more detailed evaluations of the departments -- because I think it's needed.

What will be your pet project?

One of them would be continuing attention to the Safe Routes for School. One of my original goals has been a city where kids could walk and bike to school. It's one of these canary-in-the-mine indicators. I just remember a friend telling me years ago, "I don't necessarily like driving in Palo Alto but I moved here because my son can bike to school." I think it's such an important (measure) of the value of our community. And part of that will be the Charleston/Arastradero Corridor. I think it will be a very important step for the city to take.

I've been pushing -- I think pretty successfully -- for greater attention to be paid for every new project that comes along to mitigate itself as fully as possible, including with Transportation Demand Management programs and more shuttles to Caltrain. I always use (the) Stanford campus as an example. They do a great job of creating a really great set of alternatives for people to use, in terms of frequent shuttles and using technology.

For example, I think one of their best parts is the GPS system that they have on their Marguerite. I think that is the only way that makes infrequent shuttles easy to use. Because you sit in your house and you look on the Web to see where that shuttle is and five minutes before the shuttle comes you run out to the shuttle and you never have to worry about "Did I just miss it?" I'm definitely into applying technology. We are in Silicon Valley after all.

What's the most important environmental issue facing the city and how would you address it?

The one important issue, huh? Well, I'd say the two biggest impacts on the environment (are) transportation and energy. And we have control over both, which is good.

Nationally, if you look at the total pollution, at least ... half of it comes from transportation, half of it comes utilities. Happily in Palo Alto, we do have somewhat control over both.

I think it's those two. Transportation -- successful alternative transportation. And second is using the fact that we control our utilities to move us towards energy conservation as well as alternative energy.

This question comes from reader Ed Laak. Do you participate in PaloAltoGreen?

Yes.

Palo Alto (pronounced /ˌpæloʊˈæltoʊ/, from Spanish: palo: "stick" (or "branch") and alto: "high") is a California charter city located in the northwest corner of Santa Clara County, in the San Francisco Bay Area of California, USA. It is named after a tree called El Palo Alto. The city includes portions of Stanford University and is headquarters to a number of Silicon Valley high-technology companies, including Hewlett-Packard, VMware and Facebook. As of the 2000 census, the city had a total population of 58,598 residents.

Earliest recorded history stems from 1769, when Gaspar de Portolà noted an Ohlone settlement. This remains an area of known Indian mounds. A plaque is erected at Middlefield Road and Embarcadero Road to commemorate this area.

The city got its name from a tall tree, El Palo Alto, by the banks of the San Francisquito Creek bordering Menlo Park. You can still find half of this tree (the other half was destroyed when the creek flooded) along the foot bridge on Alma Street. A plaque recounts the story of a 63 man, 200 horse expedition from San Diego to Monterey from November 7–11, 1769. The group overshot and reached the San Francisco Bay instead. Thinking the bay was too wide to cross, the group decided to turn around near 'el palo alto.'

Jason Green is a breaking news reporter for the Bay Area News Group. He works week nights and spends most of his time covering crime and public safety; reviews videogames now and then, too. He is a graduate of UC Santa Barbara, with a BA in Communication; and the University of Southern California with a MA in Print Journalism.

Introduction

As a dividend growth investor, I seek new investment opportunities in income-producing assets. I often add to my existing positions when I find them attractive. I also use market volatility to my advantage by starting new positions to diversify my holdings and increase my dividend income for less capital. Sometimes I look at prospects that can turn into dividend-growth companies in the future. These companies offer strong cash generation and enjoy a strong position in their realm.

The information technology sector is attractive, and Palo Alto Networks (NASDAQ:PANW) in particular. 2022 was harsh for many IT companies as the interest rates increased and valuations decreased as a response. In 2023, we see recovery across the board as the Nasdaq is climbing. I always seek individual opportunities with high-quality companies that I try to acquire for a reasonable and fair price.

I will analyze Palo Alto Networks using my methodology for analyzing dividend growth stocks. I am using the same method to make it easier to compare researched companies. I will examine the company's fundamentals, valuation, growth opportunities, and risks. I will then try to determine if it's a good investment.

Seeking Alpha's company overview shows that:

Palo Alto Networks provides cybersecurity solutions worldwide. The company offers firewall appliances and software, Panorama, a security management solution for the control of firewall appliances and software deployed on a customer's network, as well as their instances in public or private cloud environments, as a virtual or a physical device, and virtual system upgrades, which are available as extensions to the virtual system capacity that ships with physical appliances. It also provides subscription services covering the areas of threat prevention, malware, and persistent threat, URL filtering, laptop and mobile device protection, firewall, and DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. In addition, the company offers cloud security, secure access, security operations, threat intelligence, and cyber security consulting, professional services, including architecture design and planning, implementation, configuration, and firewall migration, education services, such as certifications, as well as online and in-classroom training; and support services.

Fundamentals

The revenues of Palo Alto Networks have increased by 1380% over the last decade. The company grew its sales more than ten times over by improving its product, selling it to more clients, and gradually increasing prices. The company also engaged in M&A (mergers and acquisitions), which allowed it to grow its sales and offer a more comprehensive cybersecurity platform, thus increasing the value and price for the entire suite. In the future, as seen on Seeking Alpha, the analyst consensus expects Palo Alto Networks to keep growing sales at an annual rate of ~20% in the medium term.

The EPS (earnings per share) of Palo Alto Networks has grown at an even faster pace. The company's EPS increased by 1720%, and as the graph below shows, the growth was steady and consistent. The company is basing its offering on the cloud. Therefore, more clients using more services doesn't increase expenses much, thus allowing the company to grow its EPS even faster despite a higher number of shares. In the future, as seen on Seeking Alpha, the analyst consensus expects Palo Alto Networks to keep growing EPS at an annual rate of ~16% in the medium term.

As the company, which bases its offering on the cloud, kept growing with limited growth in expenses, the margins have improved. The company has posted positive GAAP operating margins. As the company keeps expanding its client base and the services each client buys, its margins will improve. The company is already generating cash and has already generated over $2B in free cash flow over the last twelve months. The fact that the company generates cash and enjoys growing margins is positive for investors.

The number of shares has increased by 42%. Companies tend to return capital to shareholders via buybacks and dividends. When companies are still growing, these two methods are less popular. The increase in the number of shares has diluted existing shareholders significantly. The company doesn't need to issue shares to raise capital. It issues shares to reward its employees. SBC stock-based compensation has increased, and it now stands above $1B. Therefore, the current free cash flow and profitability may be skewed. At some point, the company will have to consider buybacks or limiting share issuance.

Valuation

The P/E (price to earnings) ratio of Palo Alto, when looking at the EPS estimates for the next fiscal year ending on July 2024, stands at 44. The valuation decreased as the projection for the current year is for strong EPS growth. However, 44 times forward earnings is still an extremely high valuation. The company didn't trade for a forward P/E ratio below 30 in the last twelve months. When considering the higher interest rates environment, shares of Palo Alto Networks are selling for a significant premium as investors see strong growth with high probabilities of success.

The graph below from Fast Graphs emphasizes the unique situation that Palo Alto Networks is in. The company's average P/E ratio since its IPO stands at 107. The current P/E ratio stands at 44. While it seems attractive, we need to look at the growth rate. The CAGR (compound annual growth rate) in the past was 40%, compared to the current 17%. Therefore, a lower valuation makes sense. Over time, the growth rate is unlikely to match the past growth rate. I believe that the current valuation still includes a significant premium.

Opportunities

Palo Alto Networks' shift towards a cybersecurity platform is a crucial growth opportunity. A platform allows clients to "plug and play" different security products using a single platform. They do not need to buy additional services, hardware, and products to protect the organization. Palo Alto Network can offer various services on its platform to cater to every need and enjoy a higher stickiness.

The combination of a platform capable of giving a variety of high-quality services, as today Palo Alto Networks leads in 10 Gartner Magic Quadrants and Forrester Waves, together with the trend of cloud migration, supports growth. Cloud migration means more businesses will need cyber protection, and corporations will need more services with higher usage. Therefore, we see an increase in the number of large accounts and these accounts buying more services.

Russia and China are a significant cyber threat to many governments and corporations. These countries are trying to hinder Western interests. Russia is doing this to hurt Western countries over the sanctions imposed after it invaded Ukraine. China is attempting to gain knowledge and information mostly. These risks increase the value of a solid cybersecurity platform Palo Alto Networks offers.

Risks

The first risk is competition concerns. Palo Alto's investment landscape is dealing with intense competition. The cybersecurity sector is full of startups aiming to disrupt the market, established peers like Check Point (CHKP) pose stiff competition, and even tech giants like Microsoft (MSFT) are entering the realm of software cybersecurity. This crowded and evolving competitive landscape could potentially erode Palo Alto's market share and force the company to invest heavily in innovation and marketing to maintain its current platform's edge.

In addition, the lack of margin of safety is even riskier. With a P/E ratio of 44, Palo Alto's stock appears to be priced for perfection. Such a high valuation leaves little room for error and raises concerns about an overvaluation bubble that could burst if the company fails to meet optimistic growth expectations. Investors should be cautious as this elevated valuation leaves little buffer for challenges or market downturns.

Investors should also consider reputation vulnerability. Palo Alto's reputation is a valuable asset, and any breach or penetration of its clients' systems could severely damage its standing in the cybersecurity industry. A significant security incident could erode customer trust, leading to client loss and investments in remediation efforts. The time required to restore the company's reputation might hinder growth and limit its ability to capitalize on opportunities during recovery.

Conclusions

To conclude, Palo Alto Networks is a fantastic company that grows across the board. Its sales and EPS are growing and generating cash. It leverages its business model to increase free cash flow as the margins improve. Investors in the company will capitalize on significant growth opportunities, including the superb platform it offers and the cloud migration trend.

While there are risks to Palo Alto, mainly regarding the competition and a dent in its reputation, these are manageable risks. However, the company valuation is a problem for me with an investment in the company. At 44 times earnings, that company leaves investors no margin of safety. If growth slows down, the valuation will decrease, which is a significant risk. Therefore, I believe the shares are a HOLD, and I'd consider buying them when the forward P/E is around 30 and the growth rate is still above 12%.

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After spooking Wall Street for weeks with its plans to report earnings after Friday’s closing bell, Palo Alto Networks Inc.’s mysterious move turned out to be much ado about nothing. 

Some analysts were fearing trouble at Palo Alto Networks PANW, +0.47%, especially after fellow cybersecurity company Fortinet Inc. FTNT, +1.49% delivered a downbeat report earlier in the cycle and Palo Alto teased that its own call would last about two hours. Wedbush analyst Daniel Ives didn’t mince words in his preview note, writing that the decision to post results late Friday was “one of the biggest PR disasters and black eyes we have seen in decades of covering tech.”