Palo Alto's newest tool for parking management is expected to save money, provide data and help the city understand — and resolve — tensions between local employees and residents in neighborhoods next to commercial districts.

But some of these same residents also believe that the city's new technology — automated license plate readers — will also threaten their privacy and inadvertently worsen the very problem that the city is trying to alleviate: the number of employees who park their vehicles in residential areas, which was high before the COVID-19 pandemic and which is expected to return once the health crisis subsides.

The City Council tried to balance these two priorities — managing parking and managing privacy — on Monday night when it unanimously approved spending $140,000 to buy and install two automated license plate readers. The technology — cameras attached to parking-enforcement vehicles — will be rolled out in the city's Residential Preferential Parking districts and potentially implemented at a later date in public garages and lots.

The city has been considering implementing the technology since at least 2017, when a report by the city's consultant, Dixon Resources, recommended it as part of a broader plan to manage parking throughout the city, along with parking meters and new mobile apps to help visitors pay for spots. The city had recently put out a request for proposals for parking technology and had selected Duncan Solutions as the vendor.

Chief Transportation Official Philip Kamhi, who recommended purchasing the technology, said the license-plate reader program will bring two major benefits: It will reduce the city's reliance on contractors who enforce the city's Residential Preferential Parking programs; and it will allow the city to gather data about parking availability in neighborhoods around downtown and California Avenue.

"This means the city can use less resources and patrol areas more quickly, thus preventing illegal parkers from intruding into neighborhoods or attempting to circumvent rules by moving their cars a few blocks," Kamhi said.

Nathan Baird, the city's parking manager, said parking enforcement is projected to cost $756,159 in the current fiscal year. Installing license plate readers would provide immediate and ongoing cost savings: This fiscal year, the cost would be $329,159 — a savings of $427,000. In fiscal years 2022 and 2023, the switch to automated license plate readers would save $267,000 and $287,899, respectively.

In addition, the technology "provides invaluable data for understanding how well parking program measures are doing and addressing parking demand over time," he said.

Not everyone, however, is thrilled about the way the new technology is being rolled out. Several residents questioned the city's decision to debut the technology in residential neighborhoods rather than at garages and parking lots. John Guislin, a Crescent Park resident who served on a stakeholder group that helped establish downtown's residential parking program, suggested that the city should experiment with the technology in the business core, where garages and parking lots would benefit from improved capacity management.

"Surveillance technology use is acceptable in commercial areas because people have a lower expectation of privacy when engaged in commercial transactions," Guislin wrote to the council. "Surveillance technology is not acceptable in residential neighborhoods where families have a right to privacy."

Others suggested that, in debuting the technology, the city is straying from its broader effort to deter employees from parking in neighborhoods.

"Why are you surveilling residents and maximizing parking in residential areas if the need is elsewhere?" resident Carol Scott asked the council on Monday.

To assuage privacy concerns, council members approved staff's proposed policies on data collection. If a vehicle is not involved in a citation, the city would store its license plate image for a maximum of 96 hours before it is automatically deleted. However, images and license plate numbers attached to parking citations would be retained for five years.

The city's newly adopted policy also specifies that license plate data "shall be used only by the city and authorized vendors for parking enforcement and data collection purposes."

Parking occupancy data would be made available to the public, and it would "never include specific license plate numbers," according to the policy.

Council members generally agreed that the new technology is best suited for commercial districts and public parking garages, including the newly constructed garage on Sherman Avenue in the California Avenue business district. But as Kamhi noted, bringing the technology to city garages carries its own complications. Parking regulations in downtown, which is divided into "color zones" and which includes areas with varying time limits — are much more complex than they are in residential neighborhoods, making the use of license plate readers more complicated there. Another wrinkle is opposition from the city's employee unions, which have expressed their own privacy concerns about the license plate readers.

And while some residents and council members questioned the need to install the technology at a time when parking demand is unusually low, Kamhi stressed the need for the city to prepare for the return of commuters.

"It's going to take us some time to get it started out there," Kamhi said. "We anticipate parking demand is going to be low for a while, but that doesn't mean that we shouldn't be prepared for parking demand's return, and noting that, we're looking to restart commercial and residential enforcement."

Council members acknowledged the privacy concerns but concluded that the city's safeguards are sufficient to ensure that private information will not be collected or released. They also suggested that the city find ways to expand the use of automated license plate readers to other parts of the city. Council member Greg Tanaka suggested installing them at garage entrances so that the city will know exactly who is using these facilities. Council member Greer Stone and Mayor Tom DuBois also said they would like to see the technology in use elsewhere in the city.

"I understand the concerns we heard from the public," DuBois said. "I think the intentions are correct and the goals are correct. I support this and I hope we can get to the rest of the areas as quickly as we can throughout the city."