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Following a lengthy and sometimes philosophical discussion, Petaluma officials mainly rejected findings made by the current County Civil Grand Jury, but say the city has mostly put in place suggested reforms made by the same body. 

Earlier this year, the 2022/2023 Sonoma County civil grand jury issued a report digging in to a decision 14 years ago to have a private company take over the city's planning department.

The report says a promised review a year after the decision never occurred. Nor did reviews happen before repeatedly renewing the contract. Citing cost creep, loss of institutional memory, and a perception of conflict of interest, the jury recommends a re-assessment of the decision.

The report also urged officials to make it clear to the public that planning department staff aren't city workers.

The complaint that kicked off the investigation also noted that as the company staffing the office is paid in part through development fees, it creates a public perception that contract employees have an incentive to approve fee-generating projects.

In response, city administrators say they've had contractors change both their lanyards and email signatures to reflect their employment status. Officials say they have hired a director for the office, Brian Oh, who is a city employee. And that the city is committed to considering hiring more staffers in the future.

During public comment, more than one speaker defended the current set up. Local resident Chris Rebelew took issue with the report and apparently heated discussions on social media site next-door.

"For the most part, the grand jury report was a nothingburger," Rebelew  said  "The report concludes there was no conflict of interest in the M-Group providing staffing and services to the city. The grand jury had no findings or recommendations in this regard, which was the reason for the report in the first place. I am particularly disheartened and angry by the false and defamatory comments that have been posted on Nextdoor, the character assassination, the bullying and the downright lying have gone beyond the pale."

Several city council members said Oh's commitment to consider hiring more staffers wasn't enough--and expressed concerns that more rapid turnover since the M-Group took over had degraded the department's institutional memory.

A city cost-benefit study, however, determined it would be more expensive to directly staff the department.

Here's a brief exchange between council member Mike Healy and Community Development Director Brian Oh.

"it's cheaper to use private contractors, and that's kind of the end of the analysis? Yes, you're correct."

The main financial difference, Healy extracted from Oh, is that by using contractors, the city isn't on the hook for retirement benefits.

"We got this table showing the cost savings of using the M-Group versus in-house and it calculated 24 percent per year, which, it looks to me, based on that that response is basically, depriving our planning department employees of pension benefits, creating basically second-class employees within our planning department."

Oh, however, pointed to the upsides. Petaluma privatized the department in the wake of the 2008 housing collapse, when residential construction fell off the charts. Having a few city employees bolstered by contractors when needed, allows flexibility in expanding or trimming positions.

"That's the beauty of the hybrid workforce. As the need grows, when there's an uptick in development applications, processing, we're able to do that. As the demand decreases, we're able to," Oh said.

That resonated with council member Janice Cader-Thompson. She said she sees benefits to the current approach.

"I kind of like the hybrid model. When you need experts, you get the expert for those issues. Because, it's really hard to keep on top of everything," Cader-Thompson said.

Petaluma recently extended it's contract with the M-Group, which is set to expire in July 2026. The city has agreed to hold a new bidding process then and will consider competitors.

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