Seeing a dip in demand for parking permits among downtown's workforce, the Palo Alto City Council made a move Monday to tighten the supply.

By a 7-1 vote, with Mayor Liz Kniss dissenting and Councilman Greg Scharff recusing, the council voted to reduce the number of employee permits that the city will be selling as part of the downtown Residential Preferential Parking (RPP) program.

When the program made its debut in fall of 2015, the number of worker permits was capped at 2,000. In April 2016, the council modified the program and capped worker permits at 1,400.

When the next phase of the program begins in April, the cap will be 1,000, though staff is authorized to sell up to 100 more if supply proves insufficient.

The council reached its decision after a long debate featuring deep divisions over details. Everyone agreed that the RPP has been, by and large, successful in addressing the parking shortage that has long plagued neighborhoods like Downtown North and Professorville. Streets that for many years had served as all-day parking lots for downtown employees now have open spots, though cars still tend to bunch on those blocks closest to the commercial core between Lytton and Forest avenues.

Parking occupancy surveys taken last November showed average occupancies in downtown ranging from 21 percent to 60 percent, with the largest concentration of cars occurring in zones closest to downtown's commercial core. In addition, the city has seen a 22 percent decline in the number of employee purchases of parking permits: from 1,335 in the period that began in April 2016 to 1,090 sold in the latest period, which began last October.

The city's transportation planners also concluded in their report that the downtown program has been "generally successful." Thus, they recommended that the council not make any adjustments to the program at this time. They also indicated that they will continue to explore changes to parking management in the commercial core, with the goal of steering employees from neighborhood blocks to public garages.

But the council sided with those who argued that the city should lower the number of employee permits it sells.

John Guislin, a Crescent Park resident who served on the stakeholder group that created the downtown program, told the council that he doesn't know of any other city that has solved the parking problem by overwhelming the residential neighborhoods. The city, he said, needs to have a better solution than the status quo. Speaking on behalf of more than a dozen residents, Guislin asked the city to lower the number of permits to 1,000, and to keep 100 in reserve.

"It's our contention that the city should spend its time filling up garages, before they fill up the neighborhoods," Guislin said.

Simon Cintz, whose family owns several commercial properties and who had also served on the stakeholder group, disagreed. Staff's characterization of the RPP program as "generally successful" actually understates its accomplishments, Cintz argued. He pointed to a survey the city conducted in 2015, before the program was implemented, showing 141 block-faces in the district area with occupancy rates of more than 85 percent. By contrast, the survey from last fall showed 40 residential block-faces with 85 percent occupancy.

In addition, the November survey showed that employees make up only a small proportion of people who park in the RPP zone. Even during business hours, fewer than 10 percent of the cars parked in the downtown zones have employee permits. Residents and general visitors (who can park without permits for up to two hours) occupy a much larger share of the parking spots, the survey found.

"The RPP has been a tremendous success," Cintz said. "Employees who park with RPP permits aren't the cause of over-parking in the neighborhoods. Cutting employee permits will not improve parking in the neighborhoods."

Council members agreed that the program is working well. But even as they acknowledged it isn't broken, they proceeded to fix it. Vice Chair Eric Filseth said leaving the employee permit count at the current level of 1,400 would be tantamount to declaring victory. That would be premature, he said.

"If we're going to keep the number flat or increase it, essentially we're saying our job is done," Filseth said. "I don't think we heard from the neighbors that our job is done. ... If we're trying to get people out of cars, increasing the number of permits is the wrong direction."

Others proposed even more dramatic cuts to employee permits. Councilman Tom DuBois and Councilwoman Karen Holman both supported reducing the number by 100 every year, unless staff recommends a different number (in which case it would return to the council for a fresh debate). That proposal failed by a 4-4 vote, with only Filseth and Councilwoman Lydia Kou joining them.

After more than three hours of debate, the council coalesced around the compromise of 1,100 maximum employee permits. Kniss was the only council member who thought the cut goes too far. But her proposal to give staff the authority to release up to 200 additional permits (for a maximum of 1,200) failed by a 3-5 vote, with only Councilmen Adrian Fine and Greg Tanaka joining her. After that vote failed, Kniss cast the sole dissenting vote against extending the parking program, with the lower permit amount.

"This looks to me as though we're really saying to businesses, 'We're going to make it even harder for you to find employees and to survive downtown,'" Kniss said.