In the early 1970s, the Sonoma County town of Petaluma solidified its place in urban planning history by becoming one of the first cities in the country to implement a growth-control policy. Last spring the city made news again when, struggling with revenue shortfalls, it laid off most of its planning staff in favor of a team of consultants. Since then, planners, architects and residents have been watching closely to see if this extreme measure works, and whether it might be repeated across the country.

As far back as April 2008, shortly after he took office, Petaluma City Manager John Brown said, “We considered an alternate solution using in-house staff, but the privatized solution offered more flexibility.” On July 9, a one-year consulting contract was awarded to the Metropolitan Planning Group (M-Group). Brown said the firm was selected because of its extensive experience with nearby municipalities—the firm consults with about a dozen Bay Area cities, including Cupertino and Santa Clara.

The move is still fodder for local discussion, as well as for the larger planning community. Petaluma-based architect Mark Albertson, who sits on the board of directors for the Redwood Empire Chapter of the American Institute of Architects, said the changes caused consternation in the tightly knit community of nearly 60,000.

“An original concern was the loss of institutional memory,” he said. But it’s still too soon to make an assessment, he noted. “As new projects move into the pipeline that rely on historical understanding, we’ll see if that materializes as an issue.”

Steven Preston, city manager of the city of San Gabriel and former president of the California Chapter of the American Planning Association, agreed that institutional memory is often at risk with contractors. “Most communities operate off complex city codes, in some cases hundreds or thousands of documents that require interpretation, and when you lose staff, all of the memory is lost,” he said.

M-Group principal Geoff Bradley, now serving as Petaluma’s contract planning manager, acknowledged that understanding Petaluma’s peculiarities is a challenge. His firm has seven people assigned to the city, including three former city staffers (two senior planners and one technician). “We’re relying on them to learn how things were done in the past and what issues were important,” he said, adding that he also attends city council meetings and references city policy documents for guidance.

Developers are worried, too. “There was concern that they were not going to get the same level of service,” Brown said. Improving customer service was an easy challenge for M-Group. At one point, counter hours at the planning department were available by appointment only. M-Group has restored regular counter hours, has hosted a community meet-and-greet, and tried to familiarize local businesses with its online planning tools.

San Gabriel’s Preston said it is fairly common for cities to experiment, relying more on contractors during periods of economic turmoil, though he added it is “exceedingly rare” to dismantle virtually all community development operations and substitute contract staff. In the early 1990s, Irvine implemented a plan similar to Petaluma’s, and a couple of years ago San Gabriel tried contracting out its building and safety work before returning to an in-house staff. “We found the costs with consultants skyrocketed over a period of years,” Preston said, owing largely to contract renewals.

M-Group is working on a cost-recovery basis, with Petaluma paying for non-reimbursable planning services from its general fund. The firm estimates it needs to generate $300,000 in development fees to make a profit. But media reports peg the city’s fee revenue in 2008 at just over $150,000.

With M-Group focused only on current planning, Petaluma has just one city employee dealing with advanced planning. “That is an awfully thin level of support,” Preston said, noting that components of any city’s general plan require periodic revisions by state law.

While admitting the difference between a staff and having one planner looking at one plan at a time, Brown said he is pleased with the arrangement because the planning firm has restored customer service and has been flexible in its approach. Though the contract is not yet renewed, he expects the arrangement to last for a couple of years. “We’re not in a position to hire city staff right now, even if we wanted to,” Brown said.