As Palo Alto seeks to infuse its aged but popular animal shelter with new life, city workers who staff the East Bayshore Road facility are increasingly wondering what role -- if any -- they'll get to play.

That's the concern that some expressed Tuesday night, when the City Council considered a proposal to have a nonprofit group, Pets in Need, take over the operation of what is currently a city-run facility. Under a plan now being negotiated, Pets in Need would also lead the effort to significantly upgrade and enlarge a building that a 2015 report from the city auditor described as "outdated and inadequate to meet modern animal-care standards."

While some problems with the existing shelter are physical (cramped kennels, porous flooring and small animals sheltered in staff's lunch room, according to the audit), others are fiscal. Since the City of Mountain View pulled out of its longstanding contract with the facility in 2012, thus ending its annual financial contribution, the animal-services operation has been costing Palo Alto more than $900,000 annually.

The mounting losses have given rise to radical proposals for the shelter's future. In 2012, city staff and the council briefly flirted with the idea of closing the facility and outsourcing animal services, a proposal that fizzled in the face of community opposition. More recently, the council shifted its focus to forming a partnership with a nonprofit, which would run and improve the local shelter.

Pets in Need, a Redwood City-based agency that prides itself on being northern California's first "no-kill" shelter, was the obvious choice in large part because it was the only choice. In October, the Cityof Palo Alto issued a request for proposals for a possible partner and Pets in Need was the only group that submitted an offer (several other groups sent in letters with varying degrees of interest). Hoping to get more options, the city issued another request in January, which netted the same results.

Under the terms that both sides have tentatively agreed to, Pets in Need would take over almost all animal services, including spaying and neutering, vaccinations, adoptions and foster care. The city would remain responsible for animal control, which is operated by the Palo Alto Police Department.

But some city workers question whether Pets in Need will be able to match the current shelter's high quality of service. Joann Dixon, a registered veterinary technician at the shelter, noted that the Palo Alto shelter has an "open-door" policy in which all animals, regardless of age, health or temperament, are taken in and cared for. She alleged that Pets in Need has the luxury of choosing to accept only "the most adoptable animals" (an allegation that didn't entirely square with Pets in Need Executive Director Al Mollica's assertion that some of the animals in the Pets in Need shelter have been there for seven years, largely because of the no-kill policy).

Joseph Durant, vice chair of Service Employees International Union, Local 521, called the proposed transition "unwise and unlikely to be executed in an effective manner."

"While honorable and well-intentioned, the proposal for the nonprofit falls short of the necessary operative capabilities currently in place at the animal shelter," he said.

Durant said the workers have been informed that while the city will continue to budget for four animal-control officers (a service the city is required to provide by state law), other employees in the shelter have been encouraged to look for jobs elsewhere in the organization.

Meanwhile, animal-control officer William Warrior, a 37-year veteran of Palo Alto Animal Services (and, before that, a volunteer for five years), suggested that the shift may have additional, less tangible, costs, both for the employees and for the community. He asked the council to think about Palo Alto's long history of running animal services before it makes its vote.

"Where is the venerable spirit of Palo Alto in this? And where is the intrinsic value?" Warrior asked.

Resident Faith Brigel, a long-time customer at Palo Alto Animal Services, made a similar point and urged the council to "find the money" to keep the facility city-run.

"Palo Alto Animal Services does a wonderful job," Brigel said. "Any time I needed them, they've been available. Please keep the animal services run by people in Palo Alto."

In addition to animal services, the city's term sheet with Pets in Need calls for the nonprofit to commission an architect to work on improvements to the shelter, which it will be able to use at no lease cost. The terms also call for Pets in Need and the city to consult on more long-term improvements within a year of the partnership's commencement.

"It is the intent of the parties that, either through remodeling of the current building or construction of a new building, the shelter will meet industry and community standards," the term sheet states.

In making a case for his group's qualifications, Mollica noted Tuesday that the group had recently completed a $6 million shelter in Redwood City, a former warehouse site that today houses 160 animals.

Frank Espina, the nonprofit's treasurer and board member, said Pets in Need is "looking forward to trying to help and work with the City of Palo Alto in a partnership."

"And we feel that not only do we have the experience to do it -- from the standpoint of building a shelter, taking care of animals, seeing that they get adopted -- but also the financial wherewithal to hang in there and do the job," Espina said.

The council has yet to sign off on the deal, and on Tuesday, Councilmen Marc Berman and Cory Wolbach each said they have some reservations about the operational switch, based on public comments. Berman stressed the importance of making sure that the level of services would not diminish after the transfer.

"It's important that we don't fix one problem (reducing expenses) and create another problem -- dramatically reduce services that our community has come to know and love," Berman said.

Others were more enthusiastic, however. Vice Mayor Greg Scharff made the motion to direct staff to continue its negotiations with Pets in Need.

Councilwoman Karen Holman seconded it, and added a provision calling for staff to also include the shelter's adjoining lot, which is currently being leased to Anderson Honda, as a site for shelter expansion.

"I want to see the opportunities maximized for this facility to be more successful and provide additional services for that extra space," Holman said.

While Holman's provision failed to win her colleagues' support, a less prescriptive amendment from Mayor Pat Burt moved ahead. He directed staff to evaluate the site as part of the discussion of long-term improvements to the animal shelter. By a unanimous vote, the council directed staff to continue its negotiations with Pets in Need and return before the end of the year with a proposed contract.

"I definitely see it as a path to keep services in Palo Alto," Councilman Tom DuBois said near the conclusion of the discussion.