HomeMy WebLinkAbout2008-06-02 City Council Agenda Packet
1 06/02/08
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
June 02, 2008
6:00 p.m.
ROLL CALL
Council Conference Room
A. Interview of Four Applicants to the Public Art Commission
Report
B. Interview of Two Applicants to the Human Relations Commission
Report
Council Chambers
CLOSED SESSION
1. CONFERENCE WITH LABOR NEGOTIATOR
Agency Negotiator: City Manager and his designees pursuant to the
Merit System Rules and Regulations (Frank Benest, Steve Emslie, Kelly
Morariu, Lalo Perez, Sandra Blanch)
Employee Organization: Unrepresented Employee Group Management
& Professional Employees
Authority: Government Code section 54957.6(a)
7:30 PM or as soon as possible thereafter
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.
06/02/08 2
APPROVAL OF MINUTES
April 07, 2008
April 14, 2008
CONSENT CALENDAR
Items will be voted on in one motion unless removed from the calendar by two Council Members.
2. Approval of Four Utilities Public Benefit Contracts for: (1) Residential
Energy Audits with Acterra, (2) Residential Energy Display Devices
with Blue Line Innovations, Inc., (3) Commercial Energy Efficiency
Programs with Ecology Action, and (4) Electric Efficiency Program
Measurement and Evaluation with Summit Blue Consulting in the
Combined Amount Not to Exceed $2,176,986 for a Term of Up to
Three Years
CMR: 257-08 Attachment
3. Approval of a Sublease Agreement Between the Santa Clara Valley
Transportation Authority and Caffe Del Doge, Venezia, Inc. for a
Portion of the University Avenue Depot, 95 University Avenue for a
Five Year Term with Two Five Year Options to Extend
CMR: 261-08 Attachment
4. Adoption of a Water Fund Budget Amendment Ordinance in the
Amount of $30,000 and Approval of an Amendment to Contract
C07120333 with RMC Water & Environment, Inc., to Add $25,000 for
Completion of a Recycled Water Facility Plan and Preparation of
Environmental Documents for Capital Improvement Program Project
WS-07001, (Recycled Water Distribution System Extension) for a Total
Not to Exceed Amount of $267,700
CMR: 255-08 Attachment
5. 2nd Reading Adoption of an Ordinance Amending Chapter 21.50
(Park Land Dedication or Fees In-Lieu Thereof) of Title 21
(Subdivisions and Other Divisions of Land) of the Palo Alto
Municipal Code to Set the Park Land Dedication Requirement to
Five Acres Per Thousand Residents (First reading May 19, 2008 – Passed 8-1 Barton no)
6. 2nd Reading Adoption of an Ordinance Amending Title 18 (Zoning)
of the Palo Alto Municipal Code to Add a New Chapter 18.44
(Green Building Regulations) (First reading May 12, 2008 – Passed 8-0 Barton not participating)
CMR: 262-08 Attachment
06/02/08 3
7. Adoption of a Resolution Expressing Appreciation to Biff Schaefer Upon
His Retirement
Proclamation
8. Adoption of an Budget Amendment Ordinance for the Fiscal Year
2007-2008 to Amend the Table of Organization to Reinstate the
Deputy City Manager Special Projects Classification and Adoption
of a Resolution Amending the Compensation Plan for Management and
Professional Personnel and Council Appointees Adopted By Resolution
No. 8748 to Reinstate One Classification
CMR: 253-08 Attachment
9. Adoption of a Budget Amendment Ordinance Increasing: (1)
Budget for Electric Supply Cost by $6,350,000, (2) Revenue for
Electric Surplus Energy by $800,000, (3) Budget for Gas Supply
Costs by $1,500,000, (4) Revenue for Gas Supply Sales by
$900,000, (5) Revenue for Gas Distribution Sales by
$1,000,000, (6) Budget for Water Supply Costs by $700,000,
and (7) Revenues for Water Sales by $2,000,000
CMR: 252-08 Attachment
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.
UNFINISHED BUSINESS
PUBLIC HEARINGS
10. TEFRA Hearing Regarding Conduit Financing for the Fabian Way Senior
Apartments Project Located at 901 San Antonio Road, Palo Alto, and
Adoption of a Resolution Approving the Issuance of Bonds by the
California Municipal Finance Authority in an Aggregate Principal
Amount Not to Exceed $14,000,000 for the Purpose of Financing the
Construction of Fabian Way Senior Apartments
CMR: 260-08 Attachment
REPORTS OF COMMITTEES AND COMMISSIONS
ORDINANCES AND RESOLUTIONS
REPORTS OF OFFICIALS
06/02/08 4
COUNCIL MATTERS
11. Discussion of City Manager Selection Process
12. Colleagues Memo from Council Members Barton, Burt, and Kishimoto
Regarding Tour of California 2009 Proposal
Attachment
COUNCIL COMMENTS, ANNOUNCEMENTS, AND REPORTS FROM CONFERENCES
Members of the public may not speak to the item(s).
ADJOURNMENT
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: 257:08 Page 1 of 4
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: JUNE 2, 2008 CMR: 257:08
SUBJECT: APPROVAL OF FOUR UTILITIES PUBLIC BENEFIT CONTRACTS
FOR: (1) RESIDENTIAL ENERGY AUDITS WITH ACTERRA, (2)
RESIDENTIAL ENERGY DISPLAY DEVICES WITH BLUE LINE
INNOVATIONS, INC., (3) COMMERCIAL ENERGY EFFICIENCY
PROGRAMS WITH ECOLOGY ACTION, AND (4) ELECTRIC
EFFICIENCY PROGRAM MEASUREMENT AND EVALUATION WITH
SUMMIT BLUE CONSULTING IN THE COMBINED AMOUNT NOT TO
EXCEED $2,176,986 FOR A TERM OF UP TO THREE YEARS
RECOMMENDATION
Staff recommends that City Council:
1. Approve and authorize the City Manager or designee to execute the attached contract for
$60,000 with Acterra for Green@Home: A Residential Energy-Saving Retrofit and
Volunteer-Based Audit Program;
2. Approve and authorize the City Manager or designee to execute the attached contract for
$20,000 with Blue Line Innovations, Inc. to offer residential in-home electricity usage
display technology to assist customers in reducing their energy use;
3. Approve and Authorize the City Manager or designee to execute the attached contract for
$495,662 with Ecology Action for the Energy Edge Program, which will deliver energy
retrofits to small and medium commercial customers;
4. Approve and authorize the City Manager or designee to execute the attached contract for
$150,000 with Summit Blue Consulting for evaluation, measurement, and verification of
the City’s electric efficiency programs; and
5. Authorize the City Manager or designee to extend each of the four contracts listed above
annually for up to two additional years, subject to Council approval of sufficient funds.
BACKGROUND
The Long-term Electric Acquisition Plan (LEAP) objectives and guidelines set the direction for
staff in planning and managing the electric supply portfolio. Council approved the LEAP
Objectives and Guidelines in 2001 and 2002 (CMR:425:01 and CMR:398:02). Staff updates the
2
CMR: 257:08 Page 2 of 4
Council at least annually on progress in implementing LEAP. The LEAP implementation tasks
were most recently updated in March 2007 (CMR:158:07).
In addition, the City’s Ten-Year Energy Efficiency Portfolio Plan, approved by Council in April
2007 (CMR:216:07) identifies and sets high goals for gas and electric conservation and
efficiency programs. The State Legislature amended the California Public Utilities Code through
Assembly Bill 2021 (AB 2021) in September 2006, which requires publicly-owned utilities to set
goals for energy efficiency results and implement and fund third party measurement and
verification of the results of these programs. The proposed contracts with Acterra, Blue Line
Innovations, Ecology Action and Summit Blue Consulting are designed to meet the state and
local requirements by expanding the Utilities Department’s energy efficiency programs and
bringing on third party consultants to measure and evaluate the City’s electric efficiency
programs’ successes.
DISCUSSION
In February 2008, the City issued a Request for Proposals (RFP) seeking responses from
organizations interested in providing third party energy efficiency programs, demand response
initiatives, or evaluation, measurement and verification of programs. The RFP was sent to 135
consulting firms known to offer relevant services. Seven firms responded to the RFP. The
firms’ qualifications and submittals were reviewed in the context of five main criteria identified
in the RFP: quality of service proposed; cost effectiveness; location of the vendor; qualifications
of the consultant; and the financial capability of the company to deliver the services requested in
the RFP.
Summary of Solicitation Process
Proposal Description/Number Energy Efficiency Evaluation, Measurement & Verification,
Electric Peak Demand Reduction, and Third-Party Energy
Efficiency Programs, RFP Number 125914
Proposed Length of Project 36 months
Number of Proposals Mailed 135
Total Days to Respond to Proposal 21
Pre-proposal Meeting Date February 27, 2008
Number of Company Attendees at Pre-
proposal Meeting
23
Number of Proposals Received: 7—6 energy efficiency & 1 measurement and verification
Company Name Location (City, State) Total Points Out of 300
Possible
1. Ecology Action Santa Cruz, CA 266
Proposal Amount Submitted $495,662
2. Western Blue Sacramento, CA 171
Proposal Amount Submitted $ 6,579
3. Global Energy Partners Lafayette, CA 191
Proposal Amount Submitted $515,000
4. Blue Line Innovation Ontario, Canada 250
Proposal Amount Submitted $ 20,000
5. Agilewaves Palo Alto, CA 150
Proposal Amount Submitted $192,900
6. Acterra Palo Alto, CA 228
Proposal Amount Submitted $ 60,000
7. Summit Blue
Proposal Amount Submitted
Boulder, CO
$ 150,000
No competing EM&V
responses
CMR: 257:08 Page 3 of 4
Acterra, Blue Line Innovations, and Ecology Action were selected for third party energy
efficiency programs based on their expertise with delivery of residential and small commercial
efficiency programs. Summit Blue was chosen for the measurement and evaluation work, based
on its experience in evaluating publicly-owned utility efficiency programs, including a contract
with the Northern California Power Agency. Programs will be delivered by the consultants in
the following areas:
(1) Acterra: for residential in-home energy audits;
(2) Blue Line Innovations: to offer residential in-home electricity usage display technology
to assist customers in reducing their energy use;
(3) Ecology Action: for delivery of a small and medium commercial customer energy
efficiency program; and
(4) Summit Blue: for evaluation, measurement, and verification of the City’s electric
efficiency programs.
RESOURCE IMPACT
The total budget impact by fiscal year is shown below:
Contractor Year 1 Year 2 Year 3
Total
Contract
Not-to-
Exceed
Acterra $60,000 $60,000 $60,000 $180,000
Blue Line $20,000 $20,000 $20,000 $60,000
Ecology
Action $495,662 $495,662 $495,662 $1,486,986
Summit Blue $150,000 $150,000 $150,000 $450,000
Contract
Estimate
Per Year
Total $725,662 $725,662 $725,662 $2,176,986
Note that these costs are for program development, implementation, and energy incentives
payments. Cost will be paid out of the Electric and Gas Fund’s energy efficiency incentive
public benefit program and resource management funds. Funds for FY 07/08 and 08/09 are
included in the Electric and Gas Fund budgets. Funds for subsequent years will be subject to
appropriation of funds in subsequent budgets.
POLICY IMPLICATIONS
The proposed contracts support the Council-approved Gas Utility Long-Term Plan, the Ten-year
Energy Efficiency Portfolio Plan, the Long-term Electric Acquisition Plan, and Comprehensive
Plan Goal N-9. Implementation of efficiency programs support greenhouse gas reduction goals
identified in the Palo Alto Climate Protection Plan and in the California Global Warming
Solutions Act of 2006 (AB 32). Development of a third party energy efficiency measurement
and verification program complies with the California Public Resources Code as amended by
Assembly Bill 2021.
ENVIRONMENTAL REVIEW
The provision of these services do not meet the definition of a project pursuant to Section 21065
of the California Public Resources Code, thus no environmental review under CEQA is required.
CMR: 257:08 Page 4 of 4
ATTACHMENTS
A. Contract: Acterra;
B. Contract: Blue Line Innovations;
C. Contract: Ecology Action; and
D. Contract: Summit Blue Consulting.
PREPARED BY: ________________________________
JOYCE KINNEAR
Manager, Utility Marketing Services
DEPARTMENT APPROVAL: ________________________________
VALERIE O. FONG
Director, Utilities
CITY MANAGER APPROVAL: ________________________________
STEVE EMSLIE/KELLY MORARIU
Deputy City Managers
CMR: 261:08 Page 1 of 5
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE: JUNE 2, 2008 CMR: 261:08
SUBJECT: APPROVAL OF A SUBLEASE AGREEMENT BETWEEN THE SANTA
CLARA VALLEY TRANSPORTATION AUTHORITY AND CAFFE DEL
DOGE, VENEZIA, INC. FOR A PORTION OF THE UNIVERSITY
AVENUE DEPOT, 95 UNIVERSITY AVENUE FOR A FIVE YEAR TERM
WITH TWO FIVE YEAR OPTIONS TO EXTEND
RECOMMENDATION
Staff recommends that City Council approve the attached Sublease Agreement between the
Santa Clara Valley Transportation Authority (VTA) and Caffe Del Doge (CDD), Venezia, Inc.
for a portion of the University Avenue Depot and authorize the City Manager or designee to
execute, the attached Sublease Agreement, which includes a specific provision in which the City
agrees to guarantee Caffe del Doge two five year options to extend the lease in the event that the
City decides to extend its own lease of the depot, which is due to expire in 2013.
BACKGROUND
The City signed a lease with Stanford for El Camino Park in 1915, which was amended in 1981
to include the Transit Center and the Depot. The lease for El Camino Park expires on June 30,
2033, but the City has the right to terminate the portion related to the Depot and Transit Center
on February 26, 2013.
On March 31, 1981, Council also approved a 32-year sublease with the Santa Clara Valley
Transportation Agency (VTA) for the Transit Center and the Depot, which is due to expire on
June 30, 2013 unless the City exercises its right to terminate its lease with Stanford, in which
case VTA sublease expiration date is February 26, 2013. On August 6, 2007, in response to
ongoing comments and ideas about locating a coffee or similar vendor at the Depot, as well as
opening the Depot restrooms for public use, Council approved a Request for Proposals (RFP) to
sublease a portion of the Depot for a café service. The City took the lead in developing the RFP
and working with VTA and Stanford to review the proposals. Although the RFP originally
anticipated a lease with the City and VTA as co-lessors, VTA as the sublessee preferred to
negotiate the sub-sublease directly with the Caffe. As a result, the attached sub-sublease is
between the VTA as sub-lessor and CDD as sub-sub lessee, with the City and Stanford
University consenting. To finalize the agreement the City must execute the Sub-Sublease
Agreement (Attachments A & B).
CMR: 261:08 Page 2 of 5
The Sub-Sublease agreement not only requires the City’s consent to VTA’s sub-sublease to
CDD, but CDD has also requested including a provision that will require the City to agree to (1)
continue allowing CDD to lease the Depot from the City following the expiration of the sublease
between the City and VTA, and (2) give CDD two five-year options to extend its sublease of the
Depot with the City, in the event that the City extends its lease of the depot beyond February 26,
2013.
DISCUSSION
SUMMARY OF THE RFP PROCESS
Following Council’s August 6, 2007 approval of the RFP, several articles appeared in the local
newspapers announcing the opportunity of the lease. Staff sent RFP information flyers to 36
individuals and groups who expressed interest in leasing the property. The RFP was also added
to the City’s website.
The intent of the RFP is to sublease approximately 300 square feet of the main Depot building
for a 5-year term to a tenant that could improve, maintain and operate the premises for food and
beverage service which: 1) attracts and serves the general public; 2) provides public access to the
public restrooms during hours of operation; 3) benefits the City and community as a whole; 4)
preserves and maintains the historic significance of the property; and 5) does not adversely
impact the other uses and tenants of the facility. The RFP requires that the improvements,
maintenance and operation of the subleased premises be at no cost to the City or the VTA. The
minimum bid for the monthly rental was $100, and the Lessee would not be required to pay rent
for the first 6 months of the lease.
Two proposals were received: 1) Caffe Del Doge, Venezia, Inc. (CDD); and 2) Passing Track
Café, Co. (PTC). The proposals were reviewed by an evaluation committee comprised of
representatives from Stanford, VTA, Joint Powers Board (JPB) and staff. Proposals were
evaluated based on the 10 criteria required by Policy and Procedures 1-11, Lease of City
property. (Attachment C).
CDD has developed and operated the café at 419 University Avenue for two years. Its parent
company, Caffe Del Doge, Srl, has developed 8 cafes around the world, including Italy, Japan,
Egypt and Hungary. CDD’s concept is to deliver a Venetian coffee-drinking experience which
includes premium quality coffee and quick, natural Venetian-style foods. Proposed
improvements, estimated to cost $103,000, include adding a fixed bar which will include coffee
equipment, washing machines, display cases, refrigeration, an ice machine and sinks. Seating
will be added to the inside and outside as permitted by the City. The Depot will not be changed;
and the outside of the bar and kitchen will be designed to fit the current look of the structure, and
the furniture will be selected accordingly. The café will be open for an average of 12 hours per
day 7 days a week from 6 am to 6 pm. The schedule will be adjusted depending on demand.
Minimal preparation will take place on site due to space constraints, therefore most preparation
of sandwiches and salads will be done at 419 University Avenue. CDD will utilize the janitor
that services 419 University to service the depot daily, primarily after closure. CDD’s bid for the
monthly rental is $1,500.
CMR: 261:08 Page 3 of 5
PTC’s bid for rent (criteria #6) was higher than CDD however; the proposal was weak in
meeting other proposal evaluation criteria, especially those relating to finances and the
proposer’s experience. The financial information provided in the proposal was vague or
incomplete (criteria #9 and #10). The proposal did not include the required 3-year proforma, and
the source of financing was not made clear. Evidence of the proposer’s ability to carry out the
proposed improvements and operate the facility and services as proposed (criteria #5) was also
not included.
The CDD proposal clearly established the public benefit to be provided (criteria #1) by
describing specifically the type of food, service and ambience to be provided. The proposal
describes the Palo Alto/Stanford demographics that have been considered in its plan for a café
that will attract and please the general public and commuters (criteria #1 and #7). The proposed
improvements, which are described in some detail, would meet historical standards and other
requirements of the City codes (criteria #2 and #3). The proposed use and improvements as
described would have no apparent adverse negative impact on the other tenants of the Depot, the
immediate neighborhood or the environment (criteria #4). The proposal offers sample menus
and pricing of items which are reasonable considering the high quality of food, beverages and
service (criteria #8). In addition, the proposal is very strong concerning finances and experience
(criteria #5, #9 and #10). CDD’s 3-year proforma analysis and budget are detailed and realistic
and based on its experience operating similar establishments.
Sublease Agreement
The attached Sublease Agreement provides for the CDD to operate its café service for the
general public in a 1,289 square-foot portion of the 5,375 square-foot depot. Major terms of the
agreement include: 1) the requirement that CDD provide janitorial service to the Depot and
access to the public bathrooms during its hours of operation; 2) no rent requirement for the first
six months of the retail operation and a monthly rent payment of $1,500 to the VTA thereafter;
and 3) improvements must be in accordance with the Secretary of the Interior’s Standards of
Rehabilitation for Historic Buildings and City permitting procedures.
Attachment D includes a summary of the terms of the attached Sublease. Its terms are consistent
with the requirements of the RFP with the exception of two changes requested by the proposer:
1) the addition of an option to extend the five-year term for two additional terms of five years
each; and 2) an increase in the area to be leased from approximately 300 square feet as offered in
the RFP to approximately 1,289 square feet. Staff supports allowing the additional square
footage, which provides for a larger cafe area and seating, an office, portions of the news stand
and ticket storage areas on the mezzanine, and an employee locker area located in the women’s
waiting room, all necessary for the successful operation of the cafe. The specifics of the seating
and the development plan for the café are subject to the City’s permitting process, which
includes approval of a conditional use permit.
Agreeing to the two five-year options to extend beyond 2013 is workable but eliminates any
flexibility the City will have if it decides to continue its lease beyond 2013. The primary term of
the Sublease is approximately 5 years, through the remainder of the VTA’s sublease with the
City ending in 2013. The RFP offered only the original 5-year term and no options to extend
beyond the period, in large part because of the uncertainty of the Depot leases after their
CMR: 261:08 Page 4 of 5
expirations in 2013. CDD later informed staff that it requires the two extension periods to
ensure business continuity. These extensions would, of course, be contingent upon either the
City or VTA continuing to lease the Depot beyond 2013, and would be subject to rent increases
based on the consumer price index. However, because the City has not yet made a determination
on whether it will continue its lease of the Depot beyond February 26, 2013, the long term
implications of agreeing to CDD’s request for two extension options are unclear.
RESOURCE IMPACT
The Sublease requires the CDD to improve, maintain and operate the property at no cost to the
VTA or the City. CDD responsibility for janitorial service and rent payments will reduce costs
for the VTA. CDD responsibility for the public restrooms will reduce City staff time spent
responding to complaints about lack of public access to the restrooms.
POLICY IMPLICATIONS
The proposed Sublease is consistent with Policy and Procedures 1-11, Leased Use of City
Land/Facilities. However, in the event that the City decides to continue leasing the Depot from
Stanford in 2013, it will automatically be bound to the agreement with CDD and will not have
the flexibility to change the term or use.
ENVIRONMENTAL REVIEW
The project is exempt from the requirements of the California Environmental Quality Act under
Section 15301, Existing Facilities, subject to the proposed improvements being consistent with
the Secretary of the Interior’s Standards of Rehabilitation for Historic buildings.
ATTACHMENTS
Attachment A: Sublease Agreement
Attachment B: Consent Letter
Attachment C: Evaluation Criteria
Attachment D: Summary of Sublease Agreement
cc: Stanford
VTA
Caffe Del Doge Venezia, Inc.
CMR: 261:08 Page 5 of 5
PREPARED BY: _____________________________________________________
WILLIAM W. FELLMAN
Manager, Real Property
DEPARTMENTAL HEAD APPROVAL: __________________________________
LALO PEREZ
Director, Administrative Services
CITY MANAGER APPROVAL: _________________________________________
STEVE EMSLIE and KELLY MORARIU
Deputy City managers
CMR: 255:08 Page 1 of 3
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: JUNE 2, 2008 CMR: 255:08
SUBJECT: ADOPTION OF A WATER FUND BUDGET AMENDMENT ORDINANCE
IN THE AMOUNT OF $30,000 AND APPROVAL OF AN AMENDMENT
TO CONTRACT C07120333 WITH RMC WATER & ENVIRONMENT,
INC. TO ADD $25,000 FOR COMPLETION OF A RECYCLED WATER
FACILITY PLAN AND PREPARATION OF ENVIRONMENTAL
DOCUMENTS FOR CAPITAL IMPROVEMENT PROGRAM PROJECT
WS-07001, (RECYCLED WATER DISTRIBUTION SYSTEM
EXTENSION) FOR A TOTAL NOT TO EXCEED AMOUNT OF $267,700
RECOMMENDATION
Staff recommends that Council:
1. Adopt a Budget Amendment Ordinance (BAO) in the amount of $30,000, transferring
$30,000 from the Water Fund Rate Stabilization Reserve to existing Capital Improvement
Project (CIP) WS-07001, (Recycled Water Distribution System Extension); and
2. Approve and authorize the City Manager or designee to execute an amendment to the
existing contract with RMC Water & Environment, Inc. (Attachment A) for a not-to-
exceed amount of $25,000 for planning and engineering design services for the Recycled
Water Expansion Capital Improvement Program Project (WS-07001), bringing the total
not to exceed amount of the contract to $267,700.
BACKGROUND
On April 16, 2007, the City Council approved and authorized the City Manager to execute a
contract with RMC Water & Environment, Inc. (RMC) for preparation of a Recycled Water
Facility Plan and preparation of associated environmental documents for Capital Improvement
Program Project WS-07001 (CMR:191:07). The original contract included $220,700 for
professional services and reimbursable expenses, plus a contingency of $22,000, for a total not to
exceed amount of $242,700.
The original Scope of Work (SOW) focused primarily on preparation of a Recycled Water
Facility Plan and associated environmental documents that would position the project to compete
4
CMR: 255:08 Page 2 of 3
for State and Federal grant funding and low interest loans. This generally included analyses of
all of the essential components of a potential expanded recycled water system to serve additional
users in the City of Palo Alto.
DISCUSSION
The project cost increase can be attributed to a variety of factors that were either beyond the
original SOW or required much more detailed work within the existing SOW. The primary
drivers for the request include:
• The State Water Resources Control Board (SWRCB) administers various grant and loan
programs for projects of this nature. In order to apply for these projects, certain milestones
must be met. While the original SOW included a reasonable approximation of these
milestones, the SWRCB recently notified the City that it requires an additional cultural
resources study as part of the environmental document. The details of the additional study
are included in Appendix B. This task is expected to cost an additional $19,500.
• As part of the Facility Plan and Environmental document preparation, RMC researched and
developed plant operations data and storage/pumping facility alternatives at the Regional
Water Quality Control Plant (RWQCP) that were beyond what was envisioned in the original
SOW. This was necessary to assess the ability of the RWQCP to meet current and future
recycled water deliveries. Potential onsite and offsite storage options were also reviewed as
another option to meet peak flow demands. This task is expected to cost an additional
$17,500.
• Considering the densely urban nature of the project route, RMC developed alternative
alignments that are included in the environmental documentation. While not required for a
Mitigated Negative Declaration, this approach gives some flexibility to choose the
appropriate route and may also be helpful towards satisfying federal National Environmental
Policy Act requirements that will be required if the project were to seek any federal grants.
This task is expected to cost an additional $9,000.
• RMC prepared an application to place the project on the State Revolving Fund (SRF) priority
list that was not included in the original SOW. SRF loans have interest rates on the order of
one half of the CA State General Obligation Bond Rate and can reduce project costs
significantly. This task is expected to cost an additional $1,000.
These additional tasks will require expenditure of the original $22,000 contract contingency as
well as an additional $25,000, for a total of $47,000.
RESOURCE IMPACT
A BAO is required in the amount of $30,000 to add funds to the existing recycled water CIP
(WS-07001). Of the $30,000 total, $25,000 will be allocated to the consultant contract with
RMC and $5,000 is for staff costs. With the addition of the $30,000, the original budget for this
project of $250,000 (comprised of contract and staff costs) increases to $280,000. To fund this
amendment, $30,000 will be transferred from the Water Rate Stabilization Reserve.
CMR: 255:08 Page 3 of 3
The FY 07-08 budget contains an expected grant credit from the SWRCB of $75,000. The grant
will result in a net project cost of $205,000. There will be no impact to the General Fund.
POLICY IMPLICATIONS
Amending the contract is consistent with Council policy. This project is consistent with the
Council-adopted Water Integrated Resource Plan Guideline 3: “Actively participate in
development of cost effective regional recycled water plans.” The project is also consistent with
Council direction to seek to reduce imported water supplies and limit or reduce diversions from
the Tuolumne River.
ENVIRONMENTAL REVIEW
The City is currently preparing an Initial Study and Mitigated Negative Declaration for this
project.
NEXT STEPS
After the facility plan and environmental documents are complete, staff will pursue potential
grant funding opportunities and develop a recommendation on whether to proceed towards
construction of the required facilities. The recommendation will then be submitted to the
Council for consideration.
ATTACHMENTS
A: Amendment No. One to Contract No. C07120333
B: RMC Cost Estimate for Additional Cultural Work
C: Budget Amendment Ordinance
PREPARED BY: ________________________________
NICOLAS PROCOS
Senior Resource Planner
REVIEWED BY: ________________________________
JANE O. RATCHYE
Assistant Director, Resource Management
DEPARTMENT APPROVAL: ________________________________
VALERIE O. FONG
Director of Utilities
CITY MANAGER APPROVAL: ________________________________
STEVE EMSLIE/KELLY MORARIU
Deputy City Managers
______________________________________________________________________________
CMR: 262:08 Page 1 of 3
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE: JUNE 2, 2008 CMR: 262:08
SUBJECT: ADOPTION OF AN ORDINANCE OF THE CITY COUNCIL OF
THE CITY OF PALO ALTO AMENDING TITLE 18 (ZONING) OF
THE PALO ALTO MUNICIPAL CODE TO ADD A NEW CHAPTER
18.44 (GREEN BUILDING REGULATIONS)
RECOMMENDATION
Staff recommends that the City Council adopt the attached ordinance upon second reading,
reflecting the revisions made by the Council on May 12, 2008. The revisions are redlined in the
ordinance. Revised Tables A and B are attached to allow City Council to view the changes
approved with the associated resolution also adopted on May 12, 2008.
The changes enumerated below are in order of appearance in the ordinance and include:
• the seven staff-recommended changes (five ordinance changes and three revisions to the
tables) that appeared in the “at places” memorandum, as approved or modified by
Council,
• an additional ordinance amendment approved by Council, and
• an additional amendment to Table B approved by Council.
1. Addition of the following sentence to the end of the paragraph under Section 18.44.020,
Applicability as follows: “However, commercial covered projects with planning
applications submitted after December 3, 2007 but for which building permits have not yet
been issued as of the effective date of this ordinance shall be subject to compliance with this
Chapter.”
2. Addition of the following clause (shown here in underlined text) to the “GreenPoint Rated
Verification” definition, page 4 of the Ordinance (Section 18.44.030 Definitions, item (k)):
“including green points allocation across all of the resource categories.”
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CMR: 262:08 Page 2 of 3
3. Addition of the following sentence after the first sentence in the “Threshold Verification by
LEED AP” definition, page 6 of the ordinance (Section 18.44.030 Definitions item (w)):
“The LEED AP shall provide supporting information from qualified professionals (e.g. civil
engineer, electrical engineer, Title 24 consultant, commissioning agent, etc.) to certify
compliance with each point on the checklist.”
4. Addition to the list of residential projects subject to checklist point reduction (Section
18.44.050, Incentives for Compliance, item (b)(3)) “and Category 3 and 4 structures on the
local inventory and those structures eligible for the National Register of Historic Places.”
5. Addition to the wording of “Interim Compliance Effort” (Section 18.44.060 item (b)(8)) to
include the resource categories shown in underlined text as follows: “at least 75% of the
required minimum total green points and the GPR allocation of minimum points across all
resource categories”…
6. Addition of a footnote (#6) on Table B, and reference in all boxes where footnote #4 is
referenced: “Points shall include GPR minimum points across all resource categories.”
7. Addition to the governing bodies listed in SECTION 3 of the Ordinance (page 12) “Historic
Resources Board” as among the boards to receive a presentation within a year of the
effective date of the ordinance.
8. Addition to SECTION 3 of the Ordinance (page 12), second sentence to revise to read: “The
report shall include, but is not limited to, documentation of the number and types of projects
subject to the ordinance, explanation of whether and how compliance was achieved,
identification of any problems arising from implementation, the costs of enforcement, and
any recommendations for revisions to the ordinance or accompanying resolution and
Standards for Compliance tables.”
9. Addition to Table A, footnote #5 and to Table B, footnote #4, the words “and incentives”
after “exemptions”. The attached tables show these modifications underlined.
10. Revision of Table B to delete the third row and to revise the fourth row under Single-Family
and Two-Family Residential to read: “Additions <1,250 sf and/or renovations >$75,0005” to
allow use of the existing home remodel Green Point Rated (GPR) checklist instead of the
new construction GPR checklist. The table has been modified (there is no annotation on
attached table for this change).
PREPARED BY: _____________________________________________
AMY FRENCH, AICP
Manager of Current Planning
DEPARTMENT HEAD REVIEW: ________________________________________
CURTIS WILLIAMS
Interim Director of Planning and Community Environment
______________________________________________________________________________
CMR: 262:08 Page 3 of 3
CITY MANAGER APPROVAL: ____________________________________________
STEVE EMSLIE/ KELLY MORARIU
Deputy City Managers
ATTACHMENTS
A. Proposed Ordinance
B. Adopted Resolution
C. Revised Table A
D. Revised Table B
CMR:253:08 Page 1 of 2
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: CITY MANAGER
DATE: JUNE 2, 2008 CMR: 253:08
SUBJECT: ADOPTION OF AN ORDINANCE AMENDING THE BUDGET FOR
THE FISCAL YEAR 2007-2008 TO AMEND THE TABLE OF
ORGANIZATION TO REINSTATE THE DEPUTY CITY
MANAGER, SPECIAL PROJECTS CLASSIFICATION AND
ADOPTION OF A RESOLUTION AMENDING THE
COMPENSATION PLAN FOR MANAGEMENT AND
PROFESSIONAL PERSONNEL AND COUNCIL APPOINTEES
ADOPTED BY RESOLUTION NO. 8748 TO REINSTATE ONE
CLASSIFICATION
RECOMMENDATION
Staff recommends that the City Council:
1. Adopt the attached ordinance amending the 2007-08 Adopted Budget to amend
the Table of Organization to reinstate the Deputy City Manager, Special Projects
classification; and
2. Adopt the attached resolution amending the compensation plan for management
and professional personnel and Council appointees adopted by Resolution 8748 to
reinstate one classification (Deputy City Manager, Special Projects).
DISCUSSION
Currently, a recruitment is underway for a new City Manager. In April 2008, the
Assistant City Manager, Emily Harrison, resigned to pursue another job opportunity.
Staff would like to give the incoming City Manager the opportunity to hire the
replacement Assistant City Manager. Until that occurs, the City Manager has appointed
Steve Emslie, currently the Director of Planning and Community Environment, and Kelly
Morariu, Assistant to the City Manager, to assist him. The City Manager would like both
to serve in an interim capacity as Deputy City Managers until the new City Manager
decides the appropriate staffing for his or her office.
CMR:253:08 Page 2 of 2
The Deputy City Manager position was approved by the City Council in the late 1990s,
however, it does not currently exist as an approved position in the Table of Organization
or the Management and Professional Compensation Plan. To facilitate these temporary
assignments, staff is recommending the City Council adopt the attached ordinance and
resolution returning the Deputy City Manager, Special Projects position to the Table of
Organization and the Management and Professional Compensation Plan. The reinstated
position is part of the Management and Professional personnel group, and the control
point would be $13,336 per month.
POLICY IMPLICATIONS
These recommendations are consistent with City policies, which require active positions
to be listed in the Table of Organization and the relevant compensation plan.
RESOURCE IMPACT
No resource impacts will result from the addition of this classification. No FTE will be
added. Instead, these are temporary assignments and the costs will be offset by salary
savings from the vacant Assistant City Manager and Assistant to the City Manager
positions.
ENVIRONMENTAL REVIEW
This action is not considered a project under the California Environmental Quality Act.
ATTACHMENTS
A. Ordinance Amending the 2007-08 Adopted Budget
B. Resolution Amending the Compensation Plan for Management and Professional
Personnel and Council Appointees
PREPARED BY: __________________________________________
JON ABENDSCHEIN
Administrator
DEPARTMENT HEAD REVIEW: __________________________________________
RUSS CARLSEN
Director of Human Resources
CITY MANAGER APPROVAL: __________________________________________
FRANK BENEST
City Manager
CMR: 252:08 Page 1 of 5
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: UTILITIES
DATE: JUNE 2, 2008 CMR: 252:08
SUBJECT: ADOPTION OF A BUDGET AMENDMENT ORDINANCE INCREASING:
(1) THE BUDGET FOR ELECTRIC SUPPLY COST BY $6,350,000, (2)
REVENUE FOR ELECTRIC SURPLUS ENERGY BY $800,000, (3)
BUDGET FOR GAS SUPPLY COSTS BY $1,500,000, (4) REVENUE FOR
GAS SUPPLY SALES BY $900,000, (5) REVENUE FOR GAS
DISTRIBUTION SALES BY $1,000,000, (6) BUDGET FOR WATER
SUPPLY COSTS BY $700,000, AND (7) REVENUES FOR WATER SALES
BY $2,000,000
RECOMMENDATION
Staff recommends that Council adopt the attached Budget Amendment Ordinance (BAO)
(Attachment 1) which addresses the need for:
a) additional funding for Electric Supply Costs in the amount of $6,350,000;
b) additional revenues for Electric Surplus Energy Revenues in the amount of $800,000;
c) additional funding for the Gas Supply Costs in the amount of $1,500,000;
d) additional revenues for Gas Retail Supply Sales Revenues in the amount of $900,000;
e) additional revenues for Gas Retail Distribution Sales Revenues in the amount of
$1,000,000;
f) additional funding for the Utilities Water Supply Costs in the amount of $700,000; and,
g) additional revenues for Water Retail Sales Revenues in the amount of $2,000,000.
BACKGROUND
Palo Alto’s Municipal Code Title 2 Administrative Code, Chapter 2.28 Fiscal Procedures,
Section 2.28.050 categories of expenditure control lists “utility commodity and commodity
transmission services purchased for resale” as items between which funds can’t be moved.
Therefore, if additional funds are needed for such a category, they must be appropriated by
Council rather than administratively moved from another category for which savings may be
available.
9
CMR: 252:08 Page 2 of 5
On June 11, 2007, Council approved the Utilities Electric, Gas, and Water Fund Fiscal Year
(FY) 2007-08 budgets [CMR:272:07]. Since then, supply costs have increased for each of those
funds.
During the winter and spring of 2007, drought conditions resulted in lower than projected
hydroelectric generation for the year. As a consequence, the City bought replacement electric
energy from the market to meet City loads. Council was informed of the increased electric
supply costs due to the drought on January 22, 2008 [CMR: 122:08], when staff and the UAC
recommended a drawdown of reserves to cover the increased costs in lieu of a FY 2007-08 mid-
year rate increase. To cover these higher costs, Council approved a mid-year Electric Fund
budget increase of $8 million for FY 2007-08 on February 19, 2008 [CMR:151:08].
Gas supply costs also increased during the winter and spring of 2007 due to colder than normal
weather conditions resulting in higher than projected gas use in the City. Additionally, market
prices for natural gas increased significantly above the prices estimated when the budget was
prepared.
Council approved a mid-year budget increase of $304,000 for the Water Fund for FY 2007-08 on
February 19, 2008 [CMR:151:08] to cover higher wholesale water supply costs than were
estimated when the budget was prepared.
DISCUSSION
Electric Fund
Based on actual costs through the third quarter of FY 2007-08 and projections for the remainder
of this fiscal year, the Electric Supply Commodity Purchases budget requires additional funding
of $2.6 million. These costs increased due to wholesale electric market prices that were higher
than budget estimates and hydroelectric generation that was lower than budget projections.
These projections are based on actual bills received through February 2008, estimated bills for
March 2008 and the forecast of costs for April, May and June 2008.
There is also a high degree of uncertainty about the actual electric commodity costs for April,
May and June 2008. If market prices are higher than are forecast and hydroelectric generation is
lower than is forecast for these months, supply costs could be even higher. In such a “worst
case" scenario for the remainder of this fiscal year, electric commodity costs could increase by
an additional $3.75 million. Therefore, staff requests that the budget for the Electric Supply
Commodity Purchases Budget be increased by an additional appropriation of $6.35 million in
order to cover both the expected $2.6 million cost increase and an additional appropriation of
$3.75 million to cover costs in case the high cost/low hydro scenario materializes.
The FY 2007-08 budgeted Electric Surplus Energy Revenue is $2.502 million. However, this is
expected to increase by $800,000. Therefore, staff requests that the budget for these revenues
increase by $800,000. In the high market prices and lower hydroelectric generation scenario,
these revenues may not increase from the budget estimate.
CMR: 252:08 Page 3 of 5
The funds to cover the requested cost increases will come from the Electric Supply Rate
Stabilization Reserve (E-SRSR). Any increased Electric Surplus Energy Revenue will go into
the E-SRSR.
Gas Fund
Gas commodity costs are expected to be higher than was budgeted by about $1.1 million based
on actual cost projections through the third quarter of FY 2007-08 and projections for the
remainder of this fiscal year. The increase is due to higher than anticipated market prices as well
as higher than anticipated natural gas demand in the City due to colder than normal weather. In
January 2008, the expected gas market price for fourth quarter (April through June 2008) was
about $0.80 per therm. Currently, the expected price for gas is $1.04 per therm, a 30%
increase. Market prices were driven by late-season cold weather in the Midwest, low amounts of
gas in storage nation-wide, low amounts of liquefied natural gas (LNG) coming to the country,
and record high crude oil prices worldwide.
If prices remain higher than expected for the remainder of the year, costs could increase by an
additional $400,000. Therefore, staff requests additional appropriations of $1.5 million for the
Gas Supply Commodity Purchases Budget, which includes the $1.1 million of expected cost
increases plus $400,000 of potential cost increases.
Since part of the reason for increased supply costs is that natural gas consumption increased due
to cold weather, the retail sales revenue is expected to increase as well. Based on actual sales to
date, total sales revenue is expected to increase by about $1.8 million above the budgeted amount
with supply revenues increasing by about $800,000 and distribution revenues increasing by $1
million. If gas prices are higher than expected for the remainder of the fiscal year, retail supply
sales revenue would increase by an additional $100,000 since the largest customers have a cost
pass-through type retail rate for supply. Therefore, staff requests that the budget for Gas Supply
Sales Revenue be increased by $900,000 and the budget for Gas Distribution Sales Revenue be
increased by $1,000,000.
The Gas Supply Rate Stabilization Reserve (G-SRSR) is the source for the requested additional
appropriation. Additional revenues will go into both the G-SRSR (for additional supply
revenues) and the Gas Distribution Rate Stabilization Reserve (G-DRSR) (for additional
distribution revenues).
Water Fund
Water consumption for the fiscal year to date is above the adjusted FY 2007-08 budget estimates.
This may be attributed to drier than normal precipitation levels during the winter and early spring
months prompting water use to increase for irrigation. Increased water consumption requires
additional water supply purchases that are expected to cost an additional $165,000 above the
budget level. If consumption levels for May and June are higher than expected, then the costs
could increase by an additional $535,000. Therefore, staff requests additional funding of
$700,000 for the Water Supply Commodity Purchases Budget, which includes the $165,000 of
expected cost increases plus $535,000 of potential cost increases.
CMR: 252:08 Page 4 of 5
The increased water costs are due to increased water consumption, which also increases the retail
sales revenue for the Water Fund. Based on actual sales to date, total retail sales revenue is
expected to increase by about $500,000 above the budgeted amount. In addition, if consumption
is high for May and June, water sales revenue could increase an additional $1.5 million.
Therefore, staff requests that the budget for Water Sales Revenue be increased by $2.0 million,
which includes the $500,000 of expected increased retail sales revenue plus $1.5 million of
potential increased retail sales revenue.
The requested increased appropriation will come from the Water Rate Stabilization Reserve (W-
RSR). Increased revenue will go into the W-RSR.
RESOURCE IMPACT
Electric Fund
The expected impact on the Electric Supply Rate Stabilization Reserve (E-SRSR) is a reduction
of $1.8 million, or $2.6 million of expected commodity cost increases less $800,000 of expected
surplus energy revenue.
In a worst case scenario, the E-SRSR could be a reduced by $6.35 million, if commodity costs
increase by $6.35 million and there is no additional surplus energy revenue.
The E-SRSR is expected to be within the minimum and maximum reserve guideline levels as of
the end of FY 2007-08.
Gas Fund
The expected impact on the Gas Supply Rate Stabilization Reserve (G-SRSR) is a reduction of
$100,000, or $1.1 million of expected commodity cost increases less $1,000,000 of expected gas
supply retail sales revenue. The expected impact on the Gas Distribution Rate Stabilization
Reserve (G-DRSR) is an increase of $800,000.
If gas prices are higher than expected for the balance of the fiscal year, the G-SRSR could be
reduced by $400,000, if commodity costs increase by $1.5 million and retail supply sales
revenues increase by $1.1 million. The G-DRSR is not impacted by a change in commodity
costs so the impact on it would be the same as expected, or an increase of $800,000.
As of the end of FY 2007-08, the G-SRSR is expected to be below the minimum guideline level,
but above the risk assessment levels. The G-DRSR is expected to be within the minimum and
maximum guideline levels.
Water Fund
The expected impact on the Water Rate Stabilization Reserve (W-RSR) is an increase of
$335,000, or $165,000 of expected commodity cost increases less $500,000 of expected water
retail sales revenue.
If consumption is high for the balance of the fiscal year, the W-RSR could increase by $1.3
million due to commodity costs increasing by $700,000 and retail water sales revenue increasing
by $2 million.
CMR: 252:08 Page 5 of 5
The balance of the W-RSS at the end of FY 2007-08 will be within the minimum and maximum
reserve guideline levels.
POLICY IMPLICATIONS
This request does not represent a change in policy.
ENVIRONMENTAL REVIEW
This is not a project under the California Environmental Quality Act.
ATTACHMENT
1. Budget Amendment Ordinance
PREPARED BY: Ipek Connolly, Senior Resource Planner
Jane Ratchye, Assistant Director of Utilities, Resource Management
DEPARTMENT HEAD: ____________________________________
VALERIE O. FONG
Director of Utilities
DEPARTMENT HEAD: ____________________________________
LALO PEREZ
Director of Administrative Services Division
CITY MANAGER APPROVAL: ____________________________________
STEVE EMSLIE/KELLY MORARIU
Interim Deputy City Managers
____________________________________________________________________________________
CMR:260:08 Page 1 of 3
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE: JUNE 2, 2008 CMR: 260:08
SUBJECT: TEFRA HEARING REGARDING CONDUIT FINANCING FOR THE
FABIAN WAY SENIOR APARTMENTS PROJECT LOCATED AT 901
SAN ANTONIO ROAD, PALO ALTO, AND ADOPTION OF A
RESOLUTION APPROVING THE ISSUANCE OF BONDS BY THE
CALIFORNIA MUNICIPAL FINANCE AUTHORITY IN AN
AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $14,000,000
FOR THE PURPOSE OF FINANCING THE CONSTRUCTION OF
FABIAN WAY SENIOR APARTMENTS
RECOMMENDATION
1) Conduct a public hearing under the requirements of the Tax Equity and Fiscal
Responsibility Act of 1983 (TEFRA) and the Internal Revenue Code of 1986, as
amended (Code); and
2) Adopt a resolution (Attachment A) approving the issuance of the bonds in an aggregate
principal amount not to exceed $14,000,000 by the California Municipal Finance
Authority (CMFA) for the benefit of Fabian Way Associates, L.P. (Borrower) in
financing Fabian Way Senior Apartments.
BACKGROUND
Bridge Housing Corporation (Bridge) a non-profit affordable housing developer, is developing a
56 unit low income senior project in Palo Alto. To finance the project, Bridge requested that the
CMFA serve as the issuer of tax exempt revenue bonds for the Fabian Way Senior Apartments
project in an aggregate principal amount not to exceed $14,000,000. Proceeds from the issuance
of the bonds will be used to finance the acquisition, construction and improvement of a 56 unit
multifamily housing facility located at 901 San Antonio Road in the City of Palo Alto, California
for the benefit of the Fabian Way Associates, L.P. (FWALP), a limited partnership created by
Bridge.
In order for all or a portion of the bonds to qualify as tax-exempt bonds, a qualifying public
agency (such as Palo Alto) must conduct a public hearing (TEFRA Hearing), to provide the
members of the community an opportunity to speak in favor of or against the use of tax-exempt
bonds for the financing of the project. Prior to the hearing, reasonable notice must be provided to
the members of the community. Following the close of the TEFRA hearing, an “applicable
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CMR:260:08 Page 2 of 3
elected representative” of the governmental unit hosting the proposed project must provide its
approval of the issuance of the bonds for the financing of the project.
DISCUSSION
Since the facilities to be financed with the proceeds of the CMFA’s debt are located within the
jurisdiction of the City of Palo Alto, the City has been asked to conduct a TEFRA hearing and
adopt a resolution (Attachment A) that approves both the issuance of bonds by the CMFA for the
benefit of FWALP.
As cited in the published notice of May 16, 2008, the public hearing is simply an opportunity for
all interested persons to speak or to submit written comments concerning the proposal to issue
the debt and the nature or location of the facility to be financed; however, there is no formal
obligation on the part of the borrower or the Council to respond to any specific comments made
during the hearing or submitted in writing.
The financing includes, but is not limited to the acquisition, construction and improvement of a
56 unit multifamily affordable senior housing facility located at 901 San Antonio Road in the
City of Palo Alto.
The CMFA is a joint exercise of powers authority that the City became a member of on April 14,
2008. The Joint Exercise of Powers Agreement provides that the CMFA is a public entity,
separate and apart from each member executing such agreement. The debts, liabilities and
obligations of the CMFA do not constitute debts, liabilities or obligations of the members
executing such agreement. The bonds to be issued by the CMFA for the project will be the sole
responsibility of the borrower (FWALP), and the City of Palo Alto will have no financial or
legal, obligation, liability or responsibility for the project or the repayment of the bonds for the
financing of the project. All financing documents with respect to the issuance of the bonds will
contain clear disclaimers that the bonds are not obligations of the City of Palo Alto or the State
of California but are to be paid for solely from funds provided by the borrower.
The City is not exposed to any financial liability by reason of its membership in the CMFA. In
addition, participation by the City in the CMFA does not impact the City’s appropriations limits
and will not constitute any type of indebtedness by the City. Outside of holding the TEFRA
hearing and adopting the required resolution, no other participation or activity of the City or the
City Council with respect to the issuance of the bonds will be required.
Based on the benefits of the project to the Palo Alto community and the lack of any financial
obligations on the part of the City, staff recommends that Council approve the attached
resolution.
RESOURCE IMPACT
As stated, the City will incur no financial obligation from approval of the recommendations.
Fabian Way Associates, L.P. is requesting authority to issue up to $14 million in bonds through
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CMR:260:08 Page 3 of 3
the CMFA. The City will receive a fee for its services when the bonds are issued. The City
would receive approximately $8,750 if the par amount of the bonds issued is $14 million as
reimbursement for costs associated with conducting the TEFRA hearing.
POLICY IMPLICATIONS
Actions recommended in this report are consistent with Council’s prior actions in supporting
non-profit financings under the TEFRA (e.g., approving tax-exempt financing through the
California Municipal Finance Authority for the Gideon Hausner Jewish Day School projects,
CMR: 184:08).
ENVIRONMENTAL REVIEW
Action on this item does not constitute a project under Section 21065 of the Public Resources
Code.
ATTACHMENTS
Attachment A: Resolution of the Council of the City of Palo Alto Approving the Issuance of
Bonds by the California Municipal Finance Authority in an Aggregate Principal amount not to
exceed $14,000,000 for the Purpose of Financing the Construction of Fabian Way Senior
Apartments.
PREPARED BY: _______________________________________________________
JOSEPH SACCIO
Deputy Director, Administrative Services
DEPARTMENT HEAD APPROVAL: _______________________________________
LALO PEREZ
Director, Administrative Services
CITY MANAGER APPROVAL: ___________________________________________
STEVE EMSLIE and KELLY MORARIU
Deputy City Managers