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HomeMy WebLinkAbout2008-02-11 City Council Agenda Packet 1 02/11/08 Agenda posted according to PAMC Section 2.04.070. A binder containing supporting materials is available in the Council Chambers on the Friday preceding the meeting. Special Meeting February 11, 2008 6:00 p.m. ROLL CALL COUNCIL CONFERENCE ROOM STUDY SESSION 1. Joint Meeting with the Human Relations Commission to Discuss City Human Relation Issues REPORT COUNCIL CHAMBERS SPECIAL ORDERS OF THE DAY 2. Appointment of Four Library Advisory Commission Members REPORT 3. Appointment of Two Storm Drain Committee Members REPORT ORAL COMMUNICATIONS Members of the public may speak to any item not on the agenda; three minutes per speaker. Council reserves the right to limit the duration or Oral Communications. APPROVAL OF MINUTES CONSENT CALENDAR Items will be voted on in one motion unless removed from the calendar by two Council Members. 02/11/08 2 4. Utilities Advisory Commission Recommendation to Approve Gas Utility Long-Term Plan (GULP) Guidelines and Implementation Recommendations CMR:134:08 ATTACHMENT 5. Adoption of a Resolution Establishing One or More Dedicated Sources of Revenue for Repayment of Funding Pursuant to the Federal Clean Water Act Amendments and Adoption of a Resolution for Establishing a Wastewater Capital Reserve Fund in Accordance with the State Water Resources Control Board’s Requirements of the State Revolving Fund Program for the Construction of the Ultra-Violet Disinfection Facility at the Palo Alto Regional Water Quality Control Plant CMR:131:08 ATTACHMENT 6. Approval of Amendment No. One to Contract No. C07116703 Between the City of Palo Alto and C-Way Custodian Services to Increase the Annual Compensation Amount by $37,178 for a Total Annual Compensation Amount of $525,629 to Provide Custodial Services at Selected City Facilities and Authorization to Enter into 3 Additional One Year Extensions CMR:137:08 ATTACHMENT 7. Finance Committee Recommendation to Accept the Auditor’s Office Quarterly Report as of December 31, 2007 REPORT 8. Approval of Amendment No. One to Contract No. C05110846 with Maze and Associates in an Amount Not to Exceed $426,052 for External Audit Services for Fiscal Years Ending June 30, 2008 through June 30, 2010 REPORT AGENDA CHANGES, ADDITIONS, AND DELETIONS HEARINGS REQUIRED BY LAW: Applications and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and put up to three minutes for concluding remarks after other members of the public have spoken. OTHER AGENDA ITEMS: Public comments or testimony on agenda items other than Oral Communications shall be limited to a maximum of five minutes per speaker unless additional time is granted by the presiding officer. The presiding officer may reduce the allowed time to less than five minutes if necessary to accommodate a larger number of speakers. PUBLIC HEARINGS 9. Adoption of a: 1) Mitigated Negative Declaration for 1001 San Antonio Avenue (Ciardella’s), 2) Resolution Approving a Comprehensive Plan Land Use Designation of Light Industrial for 1001 San Antonio Avenue; 02/11/08 3 and 3) Ordinance Rezoning Approximately 1.81 Acres of Caltrans- Owned Land, Located at the Southwest Corner of Caltrans Right-of- Way at San Antonio Avenue and U.S. 101 (Bayshore Freeway) North of the Terminus of Transport Road, from Public Facilities District (PF) to General Manufacturing District (GM) for 1001 San Antonio Avenue (Ciardella’s) CMR:139:08 ATTACHMENT REPORTS OF OFFICIALS UNFINISHED BUSINESS 10. Finance Committee Recommendation that Council Review and Comment on the Update to the Long Range Financial Forecast and “Sustainable Budget” Reports CMR:128:08 ATTACHMENT 11. Policy and Services Committee Recommendation to City Council for Discussion of Whether the Existing Policy for Naming City-Owned Land and Facilities Should be Modified to Accommodate Naming Opportunities for Major Donors to Capital Campaigns that Raise Funds for the Construction or Renovation of City Facilities CMR:133:08 ATTACHMENT REPORTS OF COMMITTEES AND COMMISSIONS 12A. Summary of Finance Committee Discussion of Financing Options for the Public Safety Building and Library/Community Center Projects CMR: ATTACHMENT 12B. Request for Council Direction on Schedule for the Public Safety Building (continued from February 4, 2008) CMR:135:08 ATTACHMENT ORDINANCES AND RESOLUTIONS COUNCIL MATTERS COUNCIL COMMENTS, ANNOUNCEMENTS, AND REPORTS FROM CONFERENCES Members of the public may not speak to the item(s). CLOSED SESSION This item may occur during the recess or after the Regular Meeting. Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. ADJOURNMENT 02/11/08 4 Persons with disabilities who require auxiliary aids or services in using City facilities, services, or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact 650-329-2550 (Voice) 24 hours in advance. CMR: 134:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: UTILITIES DATE: FEBRUARY 11, 2008 CMR: 134:08 SUBJECT: UTILITIES ADVISORY COMMISSION RECOMMENDATION TO APPROVE GAS UTILITY LONG-TERM PLAN (GULP) GUIDELINES AND IMPLEMENTATION RECOMMENDATIONS RECOMMENDATION The Utilities Advisory Commission (UAC) and staff recommend that the City Council approve two new guidelines and three implementation recommendations for the Gas Utility Long-Term Plan (GULP). DISCUSSION The attached report to the UAC (Attachment A) discusses GULP and the following proposed two new GULP guidelines: 1. Fund innovative programs that promote and facilitate deployment of all cost-effective, reliable and feasible energy efficiency and solar heating opportunities as high priority resources consistent with the Ten-Year Efficiency Plan (CMR:216:07); and 2. Develop alternatives to reduce the carbon intensity of the natural gas portfolio consistent with the Climate Protection Plan (CMR:435:07). In addition, the report discussed the following three new proposed GULP implementation recommendations: 1. Reduce the carbon intensity of the natural gas portfolio by: a. Designing and implementing a voluntary retail program using non-fossil fuel gas resources; b. Evaluating the participation of City facilities in the voluntary program; and c. Evaluating portfolio targets for non-fossil fuel gas resources; 2. Pursue cost-effective opportunities for natural gas storage capacity; and 3. Take steps to analyze Palo Alto’s tax-exempt status to realize a discount to the City’s gas cost by: 4 CMR: 134:08 Page 2 of 2 a. Identifying risks and costs associated with prepay transactions including required modifications to City policies and operating procedures; and b. Exploring alternative prepay structures. BOARD/COMMISSION REVIEW AND RECOMMENDATIONS The UAC reviewed these recommendations at its January 9, 2008, meeting. The two guidelines and implementation recommendations # 1 and # 2 were approved unanimously. Implementation recommendation #3 was approved by a 3-1 vote with Commissioner Rosenbaum voting “no,” with the comment that the gas prepay transaction is very complicated and needs further explanation before proceeding. Other commissioners felt that the recommendation to explore prepay structures was acceptable as any recommendation to proceed with such a transaction will return to the UAC and Council. RESOURCE IMPACT Implementation recommendation #3 regarding prepay transactions requires consulting costs of $50K to $100K. These funds are available in the existing FY 07/08 budget. POLICY IMPLICATIONS This recommendation is consistent with the Council-approved Utilities Strategic Plan to: 1. Preserve a supply cost advantage compared to the market price; 2. Deliver products and services valued by our customers, and continue to build the City of Palo Alto Utilities brand presence; 3. Maintain stable General Fund transfers, and maintain financial strength ; and 4. Implement programs that improve the quality of the environment. ENVIRONMENTAL REVIEW Approval of the Gas Utility Long Term Plan Guidelines and implementation recommendations does not constitute a project pursuant to Section 21065 of the California Environmental Quality Act (CEQA), thus, environmental review is not required. ATTACHMENTS A: UAC Report dated January 9, 2008: Gas Utility Long-Term Plan (GULP) Guidelines and Implementation Recommendations (with no attachments) B: Proposed Complete GULP Guidelines and Implementation Recommendations C: Excerpted minutes from UAC January 9, 2008, meeting PREPARED BY: KARLA DAILEY Resource Planner DEPARTMENT APPROVAL: ________________________________ VALERIE O. FONG Director of Utilities CITY MANAGER APPROVAL: ________________________________ EMILY HARRISON Assistant City Manager CMR:342:01 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: FEBRUARY 11, 2008 CMR:131:08 SUBJECT: ADOPTION OF A RESOLUTION ESTABLISHING ONE OR MORE DEDICATED SOURCES OF REVENUE FOR REPAYMENT OF A LOAN PURSUANT TO THE FEDERAL CLEAN WATER ACT AMENDMENT AND ADOPTION OF A RESOLUTION FOR ADMINISTERING A WASTEWATER CAPITAL RESERVE FUND IN ACCORDANCE WITH THE STATE WATER RESOURCES CONTROL BOARD’S REQUIREMENTS FOR THE STATE REVOLVING FUND LOAN PROGRAM FOR THE CONSTRUCTION OF THE ULTRA-VIOLET DISINFECTION FACILITY AT THE PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT RECOMMENDATIONS Staff recommends that Council: 1. Adopt a resolution (Attachment A) establishing one or more dedicated sources of revenue for the repayment of the State Revolving Fund (SRF) loan from the State Water Resources Control Board (SWRCB) for the construction of the ultra violet (UV) disinfection facility at the Palo Alto Regional Water Quality Control Plant (RWQCP); and 2. Adopt a resolution (Attachment B) administering a wastewater capital reserve fund in accordance with the SWRCB requirements of the SRF program. BACKGROUND On August 6, 2007, Council adopted Resolution 8742 authorizing the City Manager to file an application for a SRF loan for the UV disinfection facility project, CMR:322:07 (Attachment C). Subsequently, staff submitted the application, which initiated the SRF loan process. DISCUSSION The next step in the loan process is the submittal of the attached resolutions, Attachments A and B. These resolutions are required by the SWRCB for a low-interest SRF loan. Submittal of these resolutions does not complete the loan process. There are several remaining steps in the loan process and Council will be making decisions on the remaining steps before the SRF loan can be secured. In the future steps of the loan process, Council will make final decisions on the following: • Decision on specific project funding strategy; • Decision on the project and the bids; and CMR:342:01 Page 2 of 2 • Decision on the specific amount from each funding source. The SWRCB will not execute any loan contract until the above steps are completed, and until Council awards and executes a construction contract with a contractor for the project. Staff is working with the RWQCP partners on the details of the funding strategy and agreements for the loan repayment. Staff plans to obtain a preliminary loan commitment from the SWRCB prior to solicitation for bids. Submittal of the resolutions is required in order to obtain a preliminary commitment. Staff will return to Council with the detailed funding strategy and the partners’ agreement on loan repayment prior to the bid opening date. PROJECT SCHEDULE Preliminary loan commitment from SWRCB May 2008 Bid issuance July 2008 Bid opening September 2008 Firm loan commitment from SWRCB October 2008 Council decision on project November 2008 Complete SRF contract with SWRCB if project is awarded December 2008 – April 2009 RESOURCE IMPACT Funds for the project have been appropriated in the Wastewater Treatment Enterprise fund. It is expected that grants and the SRF loan will fund the estimated total project cost of $21.3 million. POLICY IMPLICATIONS Recommendations of this staff report are consistent with City Council’s Sustainability Policy by reducing toxins discharge and greenhouse gas emissions. ENVIRONMENTAL REVIEW Adoption of the resolutions does not constitute a project under the California Environmental Quality Act. ATTACHMENTS Attachment A: Resolution Attachment B: Resolution Attachment C CMR:322:07 PREPARED BY: ____________________________ RICK WETZEL Manager, RWQCP DEPARTMENT HEAD: ____________________________ GLENN S. ROBERTS Director of Public Works CITY MANAGER APPROVAL: ____________________________ EMILY HARRISON Assistant City Manager CMR:137:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: FEBRUARY 11, 2008 CMR: 137:08 SUBJECT: APPROVAL OF AMENDMENT NO. ONE TO CONTRACT NO. C07116703 BETWEEN THE CITY OF PALO ALTO AND C-WAY CUSTODIAN SERVICES TO INCREASE THE ANNUAL COMPENSATION AMOUNT BY $37,178 FOR A TOTAL ANNUAL COMPENSATION AMOUNT OF $525,629 TO PROVIDE CUSTODIAL SERVICES AT SELECTED CITY FACILITIES AND AUTHORIZATION TO ENTER INTO 3 ADDITIONAL ONE YEAR EXTENSIONS RECOMMENDATION Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute Amendment No. One to Contract No. C07116703 with C-Way Custodian Services (Attachment A) to increase the annual compensation amount by $32,328 for custodial services plus $4,850 for additional services. The amended annual contract amount would total $457,068 for basic services and $68,561 for additional services. 2. Authorize the City Manager or designee to exercise the option to renew the contract for up to three additional one-year periods, and to adjust the annual compensation by the Consumer Price Index (CPI) as specified in the contract if the contractor is responsive to the City’s needs and the quality of the contractor’s work is acceptable during the previous year of the contract. BACKGROUND On November 6, 2006, Council approved Contract CO7116703 with C-Way Custodial Services (CMR:405:06). The work performed under the contract is custodial services at selected listed City facilities. Contracted custodial effort is used to provide service at the following City facilities: all libraries, park restrooms, Municipal Service Center, Golf Course, Waste Water Treatment Plant, Animal Services Center, Baylands Interpretive Center, Junior Museum, landfill offices, parking lots J, Q, R and S/L, Art Center, Rinconada Park pool showers, Community and Children’s Theaters, Development Center, Elwell Court Utility offices and City Hall. The scope of these services includes general cleaning, restroom sanitation, replenishing supplies, trash removal, floor maintenance, counters and tabletop cleaning, exterior entry way cleaning and window washing. CMR:137:08 Page 2 of 2 DISCUSSION The approved contract provided service from December 2006 to November 2007 with an option for four additional years. A CPI increase is allowed each year. Amendment #1 provides for a CPI increase of 2.6% for the second year of the contract, and provides for increased scope of services at the Arastradero Gateway Facility, Children’s Library, park restroom facilities, and Utility offices. Services provided under the first year of the contract met the city’s expectation. RESOURCE IMPACT Funds for this contract are available in the PW/Facilities Management Operating Budget. ENVIRONMENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA) pursuant to Section 21065 of the Public Resources Code. ATTACHMENTS Attachment A: Amendment No. One to Agreement No. C07116703 PREPARED BY: _____________________________________ KAREN SMITH Manager, Facilities Maintenance and Projects DEPARTMENT HEAD: _____________________________________ GLENN ROBERTS Director of Public Works CITY MANAGER APPROVAL: _____________________________________ EMILY HARRISON Assistant City Manager _____________________________________________________________________________________________ CMR: 139:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PLANNING & COMMUNITY ENVIRONMENT DATE: FEBRUARY 11, 2008 CMR:139:08 SUBJECT: ADOPTION OF A: (1) MITIGATED NEGATIVE DECLARATION FOR 1001 SAN ANTONIO AVENUE (CIARDELLA’S) AND (2) RESOLUTION APPROVING A COMPREHENSIVE PLAN LAND USE DESIGNATION OF LIGHT INDUSTRIAL FOR 1001 SAN ANTONIO AVENUE; AND (3) ORDINANCE REZONING APPROXIMATELY 1.8 ACRES OF CALTRANS-OWNED LAND, LOCATED AT THE SOUTHWEST CORNER OF THE TERMINUS OF TRANSPORT ROAD, FROM PUBLIC FACILITIES DISTRICT (PF) TO GENERAL MANUFACTURING DISTRICT (GM) FOR 1001 SAN ANTONIO AVENUE (CIARDELLA’S). RECOMMENDATION: Staff and the Planning and Transportation Commission (P&TC) recommend the City Council: 1. Adopt the Mitigated Negative Declaration (Attachment D) for 1001 San Antonio Avenue; 2. Adopt by Resolution a Comprehensive Plan designation of Light Industrial where no Comprehensive Plan land use designation currently exists (Attachment A); and 3. Adopt an Ordinance (Attachment B) to rezone the 1.81-acre site from Public Facilities (PF) to General Manufacturing (GM). BACKGROUND: In the fall of 2007, CalTrans began to lease the subject land to Ciardella’s, a local garden supply center. On October 22, 2007, the Council received a staff report (CMR 396:07, Attachment C), heard comments from the applicant regarding the rezoning and land use change, and continued its review to a date uncertain, to allow the applicant to submit an architectural review application facilitating a more complete environmental review. The applicant submitted the application and staff prepared and circulated a revised environmental document. The Architectural Review Board (ARB) conducted a public hearing on the proposed site improvements on December 20, 2007, and recommended approval to the Director of Planning and Community Environment. The Director issued a conditional approval of the architectural review application based upon the revised environmental document and ARB recommendation, pending action on the zone change. The adjacent property owner at 4007-4009 Transport Road has participated in all public hearings on this matter. Her focus has been on ensuring adequate conditions for her paper company _____________________________________________________________________________________________ CMR: 139:08 Page 2 of 3 tenant, and she has requested that Caltrans lease a portion of the subject property to her for the provision of parking spaces for her tenants. Staff and the applicant met with the adjacent property owner and the revised plans submitted for architectural review address the neighbor’s concerns. BOARD/COMMISSION REVIEW AND RECOMMENDATIONS As noted in the previous staff report, the P&TC recommended that the City Council approve the Mitigated Negative Declaration and the requested land use designation and zone change as recommended by staff. The P&TC staff report and meeting minutes attached to the October 22, 2007 CMR can be found on the City’s website. At its meeting on December 20, 2007, the ARB received staff’s report (Attachment F) and recommended unanimously that the Director approve the ARB application. At the conclusion of the public review period on the revised environmental document, the ARB application was conditionally approved by the Director on January 3, 2008, as reflected in the approval letter (Attachment E) and based on ARB findings and approval conditions. The 14-day appeal period of the Director’s ARB approval ended on January 17, 2008. No appeal was filed. RESOURCE IMPACT Changing the zoning of the proposed site will allow Ciardella’s to operate as a permitted use on the site and remain a local Palo Alto enterprise, retaining sales tax generated by the business in Palo Alto. POLICY IMPLICATIONS The proposed change in the Zoning Map is consistent with the zoning of adjacent lands that also have frontage on Transport Road and San Antonio Avenue. The extension of the GM zoning onto this property will enable the property owner (Caltrans) to lease state property to a long- standing private business, subject to satisfaction of ARB approval conditions and mitigation measures, and in compliance with the GM regulations. These require all uses to be conducted in such a manner as to preclude any nuisance, hazard, or commonly recognized offensive conditions. The requested GM zoning is in accord with the Light Industrial land use designation proposed for the site as defined in the Palo Alto Comprehensive Plan (PACP). The site is within the San Antonio Road industrial area referenced in the PACP’s land use definition of Light Industrial, which, similar to the GM zone requirements, indicates that emission of fumes, noise, smoke or other pollutants is strictly controlled and that floor area ratio is limited to .5:1. ENVIRONMENTAL REVIEW The attached Mitigated Negative Declaration (Attachment D) was prepared for the rezoning, land use designation, and architectural review applications, and circulated through the State Clearinghouse for a 30 day public review period that ended on January 3, 2008. The Director, in conditionally approving the ARB application, relied upon this document, which will now allow Council to approve the rezoning and land use designation to establish Ciardella’s as a permitted use. The environmental document addresses Ciardella’s use of the site and physical improvements thereto, and the six mitigation measures were designed to mitigate potential on- site and off-site impacts related to both the site improvements and business operations, with _____________________________________________________________________________________________ CMR: 139:08 Page 3 of 3 particular attention to the impacts at 4007-4009 Transport Road. Mitigation measures are designed to: 1. Reduce wind-blown dust emissions during operations; 2. Minimize the free-fall of transferred materials and generation of construction dust; 3. Designate a contact person and provide signage to address operational complaints; 4. Require best management practices and performance standards to be met; 5. Allow only San Antonio egress, supported by signage and website information; and 6. Focus delivery hours from suppliers to early morning hours to the extent practicable. These measures will be implemented upon plan check, construction inspection, and code enforcement during ongoing operations. PREPARED BY: _____________________________________ AMY FRENCH Manager of Current Planning DEPARTMENT HEAD REVIEW: _________________________________________ STEVE EMSLIE Director of Planning and Community Environment CITY MANAGER APPROVAL: _________________________________________ EMILY HARRISON Assistant City Manager ATTACHMENTS Attachment A: Resolution Amending Land Use Map Attachment B: Ordinance Amending the Zoning Map Attachment C: CMR 396:07 dated October 22, 2007 Attachment D: Mitigated Negative Declaration and Initial Study dated November 30, 2007 Attachment E: ARB approval letter dated January 3, 2008 Attachment F: ARB staff report dated December 20, 2007 COURTESY COPIES: Larry Ciardella, President of Ciardella’s Bob Budelli, Vice President of Ciardella’s Nicolas P. Jellins, Esq. Elizabeth Bridges, Esq. Jim Bozionelos, CalTrans, Division of Right of Way Peter Gilli, Deputy Zoning Administrator, City of Mountain View CMR: 128:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: FEBRUARY 4, 2008 CMR: 128:08 SUBJECT: FINANCE COMMITTEE RECOMMENDATION THAT COUNCIL REVIEW AND COMMENT ON THE UPDATE TO THE LONG RANGE FINANCIAL FORECAST AND “SUSTAINABLE BUDGET” REPORTS RECOMMENDATION: After review of the City’s 2007 update to the Long Range Financial Plan on December 11, 2007, and review of the “Sustainable Budget” report on October 16, 2007, the Finance Committee recommended that the City Council review and comment on the forecast of revenues, expenses and reserve levels. The Finance Committee also recommended, on October 16, 2007, that the Council review and comment on the “Sustainable Budget” report. COMMITTEE REVIEW: On December 11, 2007, the Finance Committee reviewed the Long Range Financial Plan. The Finance Committee’s review included questions about the Budget Stabilization Reserve (BSR) level and one-time expenditures that impact the BSR in 2007-08. On October 16, 2007, the Finance Committee reviewed the staff report on the “Sustainable Budget”, which described the issues and tradeoffs that would lead to a sustainable budget for the City of Palo Alto. The Committee recommended that the full Council review the report and provide comment. In discussion, the Committee agreed that it was important to include the community in the priority setting process necessary to achieve a sustainable budget. During the January 12, 2008 priority setting retreat, the Council selected a new priority, “Economic Health of the City.” In the future, deliberations involving what has been described as a “Sustainable Budget” will be subsumed under the new priority. CMR: 128:08 Page 2 of 2 ATTACHMENTS Attachment A: CMR 425:07 – “Update to Long Range Financial Forecast” Attachment B: CMR 387:07 – “Discussion of Council’s Top 4 Priority Sustainable Budget” PREPARED BY: JOSEPH SACCIO Deputy Director of Administrative Services SHARON BOZMAN Senior Financial Analyst DEPARTMENT HEAD APPROVAL: LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager CMR 133:08 Page 1 of 3 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPT: CITY MANAGER’S OFFICE DATE: FEBRUARY 4, 2008 CMR: 133:08 SUBJECT: POLICY AND SERVICES COMMITTEE RECOMMENDATION TO CITY COUNCIL FOR DISCUSSION OF WHETHER THE EXISTING POLICY FOR NAMING CITY-OWNED LAND AND FACILITIES SHOULD BE MODIFIED TO ACCOMMODATE NAMING OPPORTUNITIES FOR MAJOR DONORS TO CAPITAL CAMPAIGNS THAT RAISE FUNDS FOR THE CONSTRUCTION OR RENOVATION OF CITY FACILITIES RECOMMENDATION The Policy and Services Committee recommends that the City Council consider the question of whether the City should modify the existing policy on naming City-owned land and facilities to accommodate naming opportunities for major donors to capital campaigns that raise funds for the construction or renovation of City facilities and then refer the item back to Policy and Services for completion of revisions to the naming policy, if so warranted. BACKGROUND The success of the private fundraising efforts for the recent renovation of the Children’s Library has ignited enthusiasm in several local groups to initiate capital campaigns to supplement the City’s funding for the upcoming library/community center and public safety building projects. There has also been an ongoing effort to raise funds for additions and/or improvements to the Art Center. Although it is unlikely that sufficient private funds could be raised to completely fund any of these projects, the contributions raised can significantly increase the City’s ability to help make these desired facilities and amenities possible. In order to be successful, these fundraising groups need to have the tools and authority to make commitments to potential donors regarding the benefits of making such a significant financial donation. One of those potential benefits is a naming opportunity, which can be a coveted form of recognition and a major attraction for corporate giving. The current policy on naming City-owned land and facilities (Attachment A) was most recently updated in 2004 to address the following: • Development of a process for the re-naming of parks and facilities; • The inclusion of the Parks and Recreation Commission, or other appropriate commissions in the review process for any facility naming or re-naming; CMR 133:08 Page 2 of 3 • Addition of criteria for selecting names; and • New accommodation for recognizing individuals who have made significant contributions to the community. At the time of the update, staff did consider the possibility of naming a park or facility after a benefactor business, group or organization, but decided against it because it would be such a significant change in tradition for Palo Alto. Although only three years have passed, project funding has become significantly more challenging. Additionally, non-profit support groups have indicated an interest in re-addressing this issue in relation to their upcoming capital fund-raising campaigns. If a fund-raising body were to secure a donation in an amount significant enough to fund a major portion of a building/project, there is the question of whether a naming opportunity could be made available for that donor. COMMITTEE REVIEW AND RECOMMENDATION On October 1, as a part of the Council action approving a Budget Adjustment Ordinance for the Mitchell Park Library and Community Center project, the City Council also voted to refer the facility naming issue to the Policy and Services Committee for review and comment. A report was prepared for the Policy and Services Committee (Attachment B) outlining the various questions in which direction was desired before preparing revisions to the policy for review. Staff also performed research on other agencies’ facility naming policies and created a spreadsheet (Attachment C) outlining features of the different policies examined. After reviewing the wide range of questions and issues proposed for comment at its November 14, 2007 meeting, the Policy and Services Committee recommended that the full Council first answer the fundamental question of whether the City is willing to consider the possibility of putting a private or corporate name on a City facility in exchange for a significant financial contribution. This question needs to be answered before any further policy development work is initiated. Once direction is provided on that issue, the Policy and Services Committee would review and provide direction on the remaining questions and options available. Staff would then prepare revisions to the existing policy for the Council’s review. If the Council is willing to consider private or corporate naming, clear parameters would be incorporated into the policy to address such topics as: • Avoiding names that conflict with the vision and mission of the City; • Defining the amount/level of donation required to be recognized with a naming opportunity; • Defining a procedure for approval of naming schedules in advance; and • Other topics as outlined in the November 14 report to Policy and Services. If the Council decides against private or corporate naming of facilities, there are still some modifications to the policy related to capital campaign fund-raising that staff would like to propose. Those items would then be re-addressed with the Policy and Services Committee and would return to the full Council for final review and consideration. RESOURCE IMPACT CMR 133:08 Page 3 of 3 If the City Council is willing to consider private or corporate naming opportunities, the proposed modifications to the City policy on naming City-owned land and facilities could result in substantial contributions to the City for projects that involve capital campaigns where significant donations are recognized with naming opportunities. POLICY IMPLICATIONS These policy modifications, if developed and approved by the City Council, will be incorporated into the policy on naming City-owned land and facilities as procedures for offering naming opportunities in exchange for and/or in recognition of significant contributions to capital campaigns organized and operated by authorized support groups. Any implications to the City’s Gift Policy will be clearly stated in the final report. ENVIRONMENTAL REVIEW This is not a project, under Section 21065 of the Public Resources Code, requiring review under the California Environmental Quality Act. ATTACHMENT A: Existing Policy (1-15) for Naming City-Owned Land and Facilities ATTACHMENT B: November 14, 2007 Report to Policy and Services Committee ATTACHMENT C: Comparison of Facility Naming Policies PREPARED BY: _______________________________ Kelly Morariu Assistant to the City Manager CITY MANAGER APPROVAL: ______________________________ Emily Harrison Assistant City Manager CMR: 144:08 Page 1 of 2 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: FEBRUARY 11, 2008 CMR: 144:08 SUBJECT: SUMMARY OF FINANCE COMMITTEE DISCUSSION OF FINANCING OPTIONS FOR THE PUBLIC SAFETY BUILDING AND LIBRARY/COMMUNITY CENTER PROJECTS RECOMMENDATION: Staff recommends that the Council review the attached action minutes from the Finance Committee meeting of February 4, 2008, and then provide direction on a financing strategy for a Public Safety Building. COMMITTEE REVIEW: On February 4, 2008, the Finance Committee reviewed staff responses to a series of questions and issues posed by the Committee on January 15, 2008 on financing options for the Public Safety Building (PSB). The Committee reviewed this information and discussed at length several financing strategies. Two motions were made (see attached action minutes) that summarized key points of the Finance Committee’s discussion. Council Member Morton moved that the Committee recommend to Council approval of $41 million in COPs and request the community pass a $110 million single facility bond to fund both the PSB and library and community center improvements. This motion was seconded by Council Member Schmid. An amendment to the motion was proposed by Council Member Burt with a second from Council Member Yeh. The amendment incorporated Council Member Morton’s motion, but went on to say that if a survey of the community did not indicate support for the Chair’s motion, then the PSB would be funded solely by COPs and additional new resources would go the libraries and community center. Council Member Burt’s amendment failed on a 2-2 vote with the Chair and Council Member Schmid voting against it. The main motion was then called and it resulted in a 2-2 vote with Council Members Burt and Yeh opposed. It is anticipated that the Chair and other Finance Committee members will summarize the full Committee’s discussion and issues when the full Council meets on this item on February 11, CMR: 144:08 Page 2 of 2 2008. Staff recommends that the Council provide direction on the financing strategy for the PSB, libraries and community center. ATTACHMENTS Attachment A: Action Minutes from Finance Committee Meeting of February 5, 2008” Attachment B: CMR: 140:08 “Response to Finance Committee Questions and Direction on Financing Options for Public Safety Building” PREPARED BY: JOSEPH SACCIO Deputy Director of Administrative Services DEPARTMENT HEAD APPROVAL: LALO PEREZ Director, Administrative Services CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager CMR: 158:08 Page 1 of 8 TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: CITY MANAGER’S OFFICE PUBLIC WORKS DATE: FEBRUARY 4, 2008 CMR: 135:08 SUBJECT: REVIEW OF PROJECT COST ESTIMATES FOR THE MITCHELL PARK LIBRARY AND COMMUNITY CENTER, MAIN LIBRARY, AND DOWNTOWN LIBRARY PROJECTS (CAPITAL IMPROVEMENT PROGRAM PROJECT PE-04012) AND DIRECTION ON SCOPE, FINANCING AND SCHEDULE FOR THE LIBRARY/COMMUNITY CENTER AND PUBLIC SAFETY BUILDING PROJECTS RECOMMENDATION Staff recommends that Council: 1) Confirm the October 1, 2007 Council action which directed the design of a new combined 51,000 square foot Mitchell Park Library and Community Center, expansion and renovation of the Main Library by 4,000 square feet and renovation of the Downtown Library; 2) Eliminate consideration of a June 2008 bond election for financing of the library/community center and public safety building projects to ensure sufficient time to conduct public outreach on community facility needs and priorities; and 3) Provide preliminary direction on whether to bring a design contract amendment and Budget Amendment Ordinance for continued design of the public safety building back to the Council as soon as possible for consideration. BACKGROUND Much of Palo Alto’s municipal infrastructure was built more than 50 years ago. While carefully maintained, many community facilities are worn out and some critical buildings, like the police building and emergency operations center, are no longer functional. Staff and the community have been working for many years to identify mechanisms for modernizing City library and public safety facilities to provide the services residents expect and to serve future generations. The Mitchell Park Library and Community Center, located on Middlefield Road in south Palo Alto, were built in 1958 and 1970, respectively. The library and community center are CMR: 158:08 Page 2 of 8 currently housed in separate buildings. A 2002 bond measure to construct a new Mitchell Park library and community center and to improve and expand the Children’s Library failed to achieve the required 66 2/3 % approval rate for passage. In March 2004, the City Council approved a cost sharing agreement between the City, the Palo Alto Library Foundation, and the Friends of the Palo Alto Library for the renovation and expansion of the Children’s Library, which resulted in the successful reopening of this renovated and expanded branch in September 2007. In 2004, the City Council also reaffirmed its policy direction to maintain all five branches within the Palo Alto library system (Main, Mitchell Park, Downtown, College Terrace, and Children’s). In September 2006, the City Council approved a contract with Group 4 Architecture Research + Planning (Group 4 Architecture) for design and cost estimating services for the Mitchell Park Library/Community Center and for an evaluation of space needs for Main and the other branch libraries, including Downtown (CMR 343:06). A project management team (PMT) comprised of representatives from the Library Advisory Commission (LAC), Parks and Recreation Commission (PRC), Group 4 Architecture, and staff met regularly to evaluate four scenarios for the Mitchell Park Library as well as design options for the Main and Downtown libraries. On December 4, 2006, Group 4 Architecture presented various site scenarios and related costs to Council (CMR:434:06). The item was continued to December 11, 2006, at which time Council approved in-concept the proposed facility improvements contained in the Group 4 Architecture report and in the Library Advisory Commission’s (LAC’s) Library Service Model Analysis and Recommendations (LSMAR) for the Main, Downtown, and College Terrace Libraries. The College Terrace renovation project has been progressing on a separate path through the City’s regular Capital Improvement Program (CIP) budget, with construction scheduled for FY 2008- 09. The City has been exploring the feasibility of constructing a new public safety building since the mid-1980s. The most recent evaluation of the needs for a new facility began in January 2006 with the formation of a Blue Ribbon Task Force (BRTF) to evaluate the need, size, cost and site for a public safety building. The BRTF met 13 times and considered 28 different locations in the City for a new facility. In June 2006, the City Council approved the final BRTF recommendations for a 49,600 square foot building on a Park Boulevard site and, in September 2006, executed a contract amendment with RossDrulisCusenbery Architecture to begin conceptual design and to prepare an environmental assessment of the Park Boulevard site. On November 19, 2007, the City Council adopted the final Environmental Impact Report (EIR) for the public safety building and approved a purchase option agreement for the Park Blvd. site. The Council also directed staff to study the implications of financing the facility through Certificates of Participation (COPs) as opposed to a voter-approved bond measure. The Finance Committee considered this matter on January 15, 2008 and asked staff to return with additional information at the February 5 Committee meeting. Among other options, the Finance Committee discussion included potentially using a mixture of General Obligation bonds and COPs to fund the Public Safety Building. Should GO bonds be recommended for the Public Safety Building, the earliest feasible election date would be November 2008. CMR: 158:08 Page 3 of 8 While proceeding with the design and environmental work for these projects, staff has also proceeded with the Council’s December 2006 direction to do preliminary polling to assess voter sentiment towards the projects. On March 5, 2007, the City Council received the results of a telephone survey conducted during the month of February regarding potential public safety building and library/community center facility bond measures and a possible parcel tax. Solid majorities of voters supported potential bond measures for both the libraries and the public safety building but both measures fell short of the required two-thirds supermajority threshold for passage. The poll demonstrated somewhat stronger support for the library measure than for the public safety building measure. DISCUSSION On October 1, 2007, Council directed staff and Group 4 Architecture to move forward with the design and revised cost estimates for a joint Mitchell Park library-community center design. (CMR 372:07), which would include the Library’s technical services operation currently housed at Downtown Library. The work was also to include design and cost estimates for expansion and renovation of the Main Library and renovation of the Downtown Library. The various site designs are now approximately 35 percent complete and have been reviewed by the PRC, as well as the Library Advisory Commission, Architectural Review Board and the Historic Resources Board. The architects have also developed revised cost estimates based on the more complete designs. The various site layouts are shown in Attachment A and summarized as follows: Mitchell Park Library and Community Center: The new Mitchell Park Library would need to grow from its current square footage (9,500 square feet) to approximately 36,000 square feet to accommodate the current and projected future library use. Of all the branches, Mitchell Park experiences the highest volume of visitors and circulation on an annual basis. The new facility would accommodate an enlarged collection, a dedicated children’s area, an acoustically separated teen area, a technology training room, group study rooms, and a program room. Technical services staff, currently located at the Downtown Library, would be relocated to the Mitchell Park Library in order to facilitate the increased intake of new materials for the entire library system. The existing Mitchell Park Community Center is approximately 10,000 square feet and would be expanded to 15,000 square feet under the current proposal. The joint facility proposal creates efficiencies through shared activity space and allows for a smaller overall facility than if new separate facilities were to be constructed. Main Library expansion: The December 2006 Group 4 Architecture report recommended that improvements at the Main Library include group study areas that are acoustically separated from the rest of the building; and a program space, with restrooms, that seats 100 people. To accommodate these recommendations, the Main Library would need to expand to approximately 30,000 square feet from the current 26,313 square feet (CMR 434:06). The group study space would fit under the existing large eaves of the patios on both ends of the reading room. The addition containing the program room and additional restrooms would be separate, joined by a glassed-in lobby, to the current building to avoid impacting the original historical building. The interior of the existing library would also be renovated, upgrading mechanical, electrical, and lighting systems and reconfiguring the spaces to achieve program goals such as creating a distinct teen room and group study areas. CMR: 158:08 Page 4 of 8 Downtown Library renovation: The evaluation by Group 4 Architecture showed that the existing services at this library adequately serve its service population and significant capital improvements were not recommended. Additional public space and a small community room at Downtown could by obtained by relocating technical services from the Downtown Library to a new Mitchell Park Library. This would allow the current technical services area to be converted for use by the public and would further provide a small community meeting room at the Downtown Library. Staff received Council direction in October 2007 to pursue the option that relocated technical services staff areas to Mitchell Park and created more public space at the Downtown Library. Cost Estimates The costs to develop and construct the joint use Mitchell Park Library and Community Center, Main Library expansion and Downtown Library renovation are detailed in Attachment B and summarized in Table 1, below. The costs were prepared by a professional cost-estimating firm and are based on plans that are approximately 35 percent complete. The estimated total cost includes: design fees; construction cost; material testing and inspection; permit fees; contingency; inflation; construction management; new furnishings, fixtures and equipment (FF&E); and the lease of temporary facilities to house the library or community center during construction. The costs for the Mitchell Park Library and Community Center are inflated to the anticipated 2010 construction year start and assume phased construction so that no more than one library is under construction at any time to reduce the impact on the public. Table 1: Revised Library Project Cost Estimates and Design Options Library/Community Center Design Options Cost Earliest Possible Election Date 1) New Mitchell Park Library/ Community Center, Main Library expansion and Downtown Library renovation (October 2007 Council Direction) Est. Total Cost: $ 80M November 2008 2) Alternatives to Current Council Direction: a) New Mitchell Park Library/Community Center only b) Mitchell Park Library/Community Center with Main Library only c) Mitchell Park Library/Community Center with Downtown Library only a) Est. Total Cost: $ 56M b) Est. Total Cost: $ 76M c) Est. Total Cost: $ 61M November 2008 for all 3 alternatives 3) New Mitchell Park Library only – defer Community Center, Main library and Downtown library improvements Est. Total Cost: $46M- $58M June 2009 June 2009 CMR: 158:08 Page 5 of 8 4) Other Options: a) Design some or all of the sites to a fixed cost or size To be determined based on further Council direction Design Options The alternatives presented under Option 2 provide the Council with flexibility to reduce the overall cost of the project while still being able to meet the deadlines for placing a measure on the November 2008 ballot and without additional design cost expenditures. Options 3 or 4, or other options yet to be identified could be pursued. However, additional design fee and time would be needed to develop concepts and cost estimates and a June 2009 ballot would be the earliest feasible election date. Details of these scenarios follows: Options 2a-c: Construct a new combined 51,000 square foot Mitchell Park Library and Community Center. Phase any subsequent improvements of either the Main or Downtown Libraries. The proposed Main Library expansion and renovation project includes group study areas that are acoustically separated from the rest of the building and a program space which seats 100 people. By eliminating the Main Library expansion from a potential bond measure, these uses could not be accommodated within the existing structure. Other needed improvements to the existing building, including upgrades to the electrical and mechanical systems, new carpet and paint are currently scheduled for replacement in FY 2008-2009 as part of Capital Improvement Project (CIP) PF-07010, Main Library Improvements, although the scope of this project is not as extensive as the work projected in Group 4’s design. This work would be more cost-effective if combined with an expansion of the Main Library. Work on this CIP has been deferred pending Council confirmation of the overall library ballot measure. Council may also wish to consider leaving the technical services staff and materials at their current location at the Downtown Library instead of moving them to a new Mitchell Park Library. Cost savings would be realized by not having to remodel the Downtown Library and by constructing an approximately 4,000 square foot smaller Mitchell Park Library. However, this would not allow for the reconfiguration of the Downtown Library to create more public space and would create staffing inefficiencies as the bulk of the library system’s materials would be processed through Mitchell Park. Option 3: Construct a new 36,000 square foot Mitchell Park Library but defer the construction of a new Community Center to a future year. Do not expand the Main Library or remodel the Downtown Library. The Mitchell Park Library could be built as a stand-alone facility with space set aside for a future Community Center. Additionally, the Council could choose to delay the expansion of the Main Library and the renovation of the Downtown Library. This option would require new schematic design work as the library-only option will require a different location and a different design than now proposed. The current design incorporates a community center into the interior of the new structure and the new building footprint is partially located on the existing community center site. Thus, significant re-design would be required to implement this option, making a November 2008 election infeasible. The existing Community Center would remain at its current location and would require significant accessibility, heating, air conditioning and structural upgrades. These improvements had been planned, but were deferred pending a resolution of CMR: 158:08 Page 6 of 8 whether a joint library/community center should be built. On the down side, postponing future renovations to either the community center, Main Library or Downtown Library would cause the costs of these projects to increase significantly due to the dramatic escalation of construction costs. Option 4: Scale down any of the above design options to meet a fixed budgetary cap. The projects could be designed to meet a fixed budgetary cap. This option would require an unknown amount of time and design effort as the new layout would need to be developed through the Project Management Team and the resulting plan would need to again be reviewed by the various boards and commissions. It would also be the most costly in terms of design fee as Group 4 Architecture would need to significantly change the design plans. The additional time required to review any new designs pursued under this option would preclude the City from meeting the deadlines for placing a measure on the November 2008 ballot. Consideration of a June 2008 Bond Election: Based on the results of the preliminary telephone poll and focus groups, it is clear that many members of the community do not understand the need or priority for the improvements to the public safety building, libraries and Mitchell Park Community Center. The Council would need to vote in early March to place a measure on the June ballot. After this occurs, there are limits on the public outreach that the City may conduct. This timeframe would not ensure sufficient time for effective outreach. Additionally, design of the projects would need to be completed to the 35% level with accompanying cost estimates in order to develop an accurate bond measure description. If the Council wishes to change either project scope in any way, the June 2008 date would be infeasible. Staff recommends remaining flexible with an election date beyond June 2008 until additional public outreach can be accomplished. The earliest feasible election dates for the various library project design options are outlined in Table 1 above. Public Safety Building Design Schedule and Financing Update: At the January 15 meeting, staff presented the Finance Committee with an evaluation of the feasibility of pursuing Certificates of Participation (COPs) as an alternate financing mechanism for the Public Safety Building. The Committee asked for additional information from staff and also discussed the possibility of going to the ballot in November 2008 with a joint library/public safety measure. Following Council direction in November 2007 to pursue alternate financing mechanisms for this project, staff temporarily suspended design work on the public safety building. If the Council wishes to keep November 2008 open for a possible public safety bond measure, staff would need to immediately resume design work and return to Council as soon as possible with a design contract amendment and Budget Amendment Ordinance (BAO) requesting $4 million in order to meet the required timelines for completing 35% design and placing the measure on a ballot. Staff is requesting direction from Council on whether to bring the contract amendment and BAO back for consideration in order to keep open the option of placing the Public Safety Building on a November 2008 ballot. RESOURCE IMPACT The revised costs for the public safety building, libraries and Mitchell Park Community Center projects identified in this staff report and in Attachment A represent capital facility needs for which there is not currently an identified funding source. As the Long Range Financial Forecast CMR: 158:08 Page 7 of 8 has demonstrated, there is very limited General Fund capacity to absorb any new expenses. Debt financing any of the capital costs envisioned in this report through Certificates of Participation will require a fresh, ongoing revenue stream or reallocation of existing resources from the General Fund to pay debt service. General Obligation bonds generate a new revenue stream through an ad valorem property tax so there is no additional burden on the General Fund for the capital costs of a project. There will be additional operating expenses for the public safety building, libraries and Mitchell Park community center. It is currently estimated that utility, custodial, and maintenance expenses for any new building will cost approximately $8.00 per square foot. Since the facilities are still in the design process, additional operating costs have yet to be determined. For example, landscaping costs have not been calculated to date. Although furniture, fixtures and equipment could be included in a COPs issue, there may be additional unidentified needs that would not be eligible for bond financing. For example, an expanded Mitchell Park library will require additional staffing, technology investments, and an enhancement to the collection. The LSMAR identified preliminary estimates for these costs, which will ultimately be determined by factors that could include the size of the library, private fundraising for collection enhancement, and others. As the projects are further defined, staff will be able to refine the operating and maintenance cost estimates and identify potential funding sources. POLICY IMPLICATIONS This recommendation is consistent with Council’s establishment of securing funding for the Library/Community Center and Public Safety projects as a Top 4 priority for 2008. ENVIRONMENTAL REVIEW The actions recommended in this report do not constitute a project under the California Environmental Quality Act (CEQA) pursuant to Section 21065 of the Public Resources Code. Each project will continue to undergo the appropriate environmental review as required for design and construction of the facilities. ATTACHMENTS Attachment A: Library/Community Center Projects Site Layout at 35% Design Completion Attachment B: Library/Community Center Project Cost Estimates PREPARED BY: DEBRA JACOBS, Project Engineer KAREN BENGARD, Senior Engineer MIKE SARTOR, Assistant Public Works Director KELLY MORARIU, Assistant to the City Manager DEPARTMENT HEAD: _________________________________ GLENN ROBERTS Director of Public Works CMR: 158:08 Page 8 of 8 CITY MANAGER APPROVAL: ________________________________ EMILY HARRISON Assistant City Manager