HomeMy WebLinkAbout2016-11-14 City Council Agenda PacketCity Council
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November 14, 2016
Special Meeting
Council Chambers
5:30 PM
Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 10 days preceding the meeting.
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reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called.
HEARINGS REQUIRED BY LAW
Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken.
Call to Order
Closed Session 5:30-7:30 PM
Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker.
1.CONFERENCE WITH LABOR NEGOTIATORS
City Designated Representatives: City Manager and his Designees
Pursuant to Merit System Rules and Regulations (James Keene,
Molly Stump, Rumi Portillo, Dania Torres Wong, Allyson Hauck)
Employee Organizations: Palo Alto Fire Chiefs’ Association (FCA)
Authority: Government Code Section 54957.6(a)
2.CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Authority: Govt. Code Section 54956.8
Property: Lytton I (Lytton Gardens), 656 Lytton Avenue; Lytton II,
651 University Avenue; Lytton IV, 322, 332 and 334 Everett Avenue,
Palo Alto 94301
REVISED
2 November 14, 2016
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Assessor’s Parcel Numbers: Lytton I AP# 120-03-074; Lytton II AP#
12-003-079; Lytton IV AP#120-14-046 & AP#120-14-048
Agency Negotiators: James Keene, Lalo Perez, Hamid Ghaemmaghami,
Molly Stump
Negotiating Parties: Community Housing, Inc., Episcopal Homes
Foundation, and City of Palo Alto
Under Negotiation: Price and Terms of City’s Options to Repurchase
Lytton Gardens Senior Communities
Special Orders of the Day 7:30-7:45 PM
3.Adoption of Three Resolutions Expressing Appreciation to Abbie
Knopper, Ed Lauing, and Jennifer Hetterly Upon Completion of Their
Terms as Parks and Recreation Commissioners
Agenda Changes, Additions and Deletions
City Manager Comments 7:45-7:55 PM
Oral Communications 7:55-8:10 PM
Members of the public may speak to any item NOT on the agenda. Council reserves the right to limit the duration of Oral Communications period to 30 minutes.
Consent Calendar 8:10-8:15 PM
Items will be voted on in one motion unless removed from the calendar by three Council Members.
4.Approval of Contract Number C17166399 With Page and Turnbull in
the Amount of $105,930 to Prepare Architectural Design Guidelines for
Eichler Neighborhoods and Assist the City of Palo Alto in the
Implementation of Related Changes to the Individual Review (IR)
Guidelines and/or Zoning Code; Adoption of Categorical Exemption
Under Section 15061 of the California Environmental Quality Act
(CEQA) Guidelines and Approval of a Related Budget Amendment in
the General Fund
5.Approval of a Contract Amendment With Cypress Security, Inc.
(C16160138A) in the Amount of $768,223 for a Total Not-to-Exceed
Amount of $2,092,215 and Extend the Term of the Agreement to June
30, 2017 and Approval of Budget Amendments in the General Fund
6.Approval of Contract Number C17165854 With Anderson Pacific
Engineering Construction, Inc. in the Total Amount Not-to-Exceed
3 November 14, 2016
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$426,800 to Provide Construction Services for the Rehabilitation of the
Meter Station in the Collection System to the Regional Water Quality
Control Plant - Capital Improvement Program Project WQ-04011;
Finding of CEQA Exemption Pursuant to Guideline 15301(b),
Maintenance of Existing Facilities
7.Adoption of a Resolution to Authorize the City Manager to Submit
Application(s) and Related Agreement(s) for the California Department
of Resources Recycling and Recovery (CalRecycle) Rubberized
Pavement Grant Program
8.Adoption of an Ordinance Amending Palo Alto Municipal Code Chapter
4.39 (Private Intrusion Alarms)
9.Approval of Amendment Number 3 With C&S Engineers, Inc. Contract
Number C15155208A to Increase the Contract by $350,000 for a Total
Not-to-Exceed Amount of $1,458,329 for Engineering and Design
Services Related to the Airport Apron Reconstruction Design Phase 1B;
and Approval of a Budget Amendment in the Airport Enterprise Fund
10.Approval of $3,175,600 Appropriation to Capital Improvement
Program Project VR-17000 From Vehicle Replacement and
Maintenance Fund Reserve and Approval of Budget Amendments in
Various Funds
11.Utilities Advisory Commission Recommendation That the City Council
Approve Design Guidelines for the 2017 Gas Cost of Service Analysis
12.Approval of the Contract With American Reprographics Company, LLC(ARC) for Managed Print Services for a Not-to-Exceed Total of
$1,683,173 Over Five Years
13.Approval and Authorization for the City Manager to Execute a
Professional Services Agreement With Essense Partners in the Amount
of $870,000 for Utilities Marketing, Communication and Graphic
Design Services for a Term of up to Three Years
14.Finance Committee Recommendation That the City Council Approve
the Fiscal Year 2016 Reappropriation Requests to be Carried Forward
Into Fiscal Year 2017 and Approve Budget Amendments in Various
Funds
15.SECOND READING: Adoption of an Ordinance Adding Chapter 9.17
(Personal Cultivation of Marijuana) to Title 9 of the Palo Alto MunicipalCode (Public Peace, Morals and Safety) to Prohibit Outdoor Cultivation
4 November 14, 2016
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of Marijuana (FIRST READING: October 24, 2016 PASSED: 7-1 Burt
no, DuBois absent)
Action Items
Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 8:15-9:00 PM
16.PUBLIC HEARING: 900 N. California Ave. [14PLN-00233]:Recommendation for Approval of a Preliminary Parcel Map, With
Exceptions, to Subdivide an Existing 30,837 Square Foot Parcel Into
Three Parcels. The Parcel Map Exception is to Allow one of the Parcels
to Exceed the Maximum Lot Area. Environmental Assessment:
Exemption Pursuant to CEQA Guidelines Section 15061 (b)(3). Zoning
District: Single-Family Residential District (R-1) **QUASI JUDICIAL
9:00-9:45 PM
18.PUBLIC HEARING: Adoption of an Ordinance Approving Revisions to
the Architectural Review Findings in Palo Alto Municipal Code Chapter
18.76 and Approval of an Exemption Under Sections 15061 and 15305
of the California Environmental Quality Act (CEQA) Guidelines. The
Planning and Transportation Commission Recommended Council
Approval of the Ordinance (Continued From September 12, 2016 and
October 24, 2016)
9:45-10:15 PM
17.PUBLIC HEARING: Adoption of an Ordinance Amending the Fiscal Year
2017 Municipal Fee Schedule to Adjust Planning and Community
Environment Fees to Reflect Adjustments to Salaries and Benefits
Included in the Fiscal Year 2017 Budget
19.Finance Committee Recommendation That Council: (1) Adopt a
Resolution Approving a Carbon Neutral Natural Gas Plan to Achieve a
Carbon Neutral Gas Portfolio by Fiscal Year 2018 With no Greater Than
10¢/Therm Rate Impact; and Terminating the Palo Alto Green Gas
Program; and (2) Provide Direction to Staff Concerning Aspects of Plan
Implementation (STAFF REQUESTS THIS ITEM BE CONTINUED TO
DECEMBER 5, 2016)
Inter-Governmental Legislative Affairs
Council Member Questions, Comments and Announcements
Members of the public may not speak to the item(s)
Adjournment
AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using
MEMO
5 November 14, 2016
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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.
6 November 14, 2016
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Additional Information
Standing Committee Meetings
Sp. Council Appointed Officers Committee Meeting November 15, 2016
Sp. Finance Committee Meeting November 15, 2016
Sp. Policy and Services Committee Meeting November 15, 2016
Sp. Council Appointed Officers Committee Meeting November 16, 2016
Sp. City School Liaison Committee Meeting November 17, 2016
Schedule of Meetings
Schedule of Meetings
Tentative Agenda
Tentative Agenda
Public Letters to Council
Set 1
City of Palo Alto (ID # 7456)
City Council Staff Report
Report Type: Special Orders of the Day Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Parks and Recreation Commission Resolutions
Title: Adoption of Resolutions Expressing Appreciation to Abbie Knopper, Ed
Lauing, and Jennifer Hetterly Upon Completion of Their Terms as Parks and
Recreation Commissioners
From: City Manager
Lead Department: Community Services
Resolutions are attached.
Attachments:
Attachment A: Abbie Knopper Parks and Rec Commission (DOC)
Attachment B: Ed Lauing Parks and Rec Commissioner (DOC)
Attachment C: Jennifer Hetterly Parks and Rec Commissioner (DOC)
RESOLUTION OF THE COUNCIL OF THE
CITY OF PALO ALTO EXPRESSING APPRECIATION TO
ABBIE KNOPPER, PARKS AND RECREATION COMMISSIONER
WHEREAS, Abbie Knopper served as a Parks and Recreation Commissioner from February 2013 through
December 2016; and
WHEREAS, Abbie Knopper served as Vice Chairperson to the Commission for one year, providing
leadership and support to the Commission, and always ensuring inclusive and productive meetings; and
WHEREAS, Abbie Knopper provided dedicated service to the residents and businesses of this community
by approving numerous City Ordinances related to park improvements and facility use and contributing to the
preservation of the tremendous natural resources of Palo Alto; and
WHEREAS, Abbie Knopper provided guidance and insight in the evaluation of 7.7 acres at Foothills Park,
the exploration of shared use dog parks and the development of the Parks, Trails, Natural Open Space, and
Recreation Master Plan; and
WHEREAS, Abbie Knopper volunteered her time on extra assignments as a Commissioner by participating
on ad-hoc subcommittees charged with advancing policies and projects to provide more opportunities for shared
use of Palo Alto parks; and
WHEREAS, Abbie Knopper’s consideration of concerns raised by the public, her respectful and
appreciative attitude toward Staff, her willingness to listen to different points of view made by Staff and the
Commission until consensus is reached, and in her values of preserving Palo Alto’s natural environment resulted
in formal policy recommendations to the City Council.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Palo Alto desires to
recognize the meritorious service of Abbie Knopper by commending her outstanding public service and recording
its appreciation, as well as the appreciation of the citizens of this community, for the services and contributions
rendered.
INTRODUCED AND PASSED: NOVEMBER 14, 2016
ATTEST: APPROVED:
_______________________ ______________________
City Clerk Mayor
APPROVED AS TO FORM:
________________________ ______________________
City Attorney City Manager
RESOLUTION OF THE COUNCIL OF THE
CITY OF PALO ALTO EXPRESSING APPRECIATION TO
ED LAUING, PARKS AND RECREATION COMMISSIONER
WHEREAS, Ed Lauing served as a Parks and Recreation Commissioner from February 2010 through
December 2016; and
WHEREAS, Ed Lauing served as Chairperson to the Commission for three years, providing leadership and
support to the Commission, and always ensuring inclusive and productive meetings; and
WHEREAS, Ed Lauing provided dedicated service to the residents and businesses of this community by
approving numerous City Ordinances related to park improvements and facility use and contributing to the
successful completion of projects while protecting the valued natural resources of Palo Alto, including El Camino
Park Renovation, and the creation of 10.5 acres in the Palo Alto Baylands, while building a world class golf
course sensitively integrated into the Baylands ecosystem; and
WHEREAS, Ed Lauing provided guidance and insight in the development of the Parks, Trails, Recreation
and Natural Open Space Master Plan; and
WHEREAS, Ed Lauing volunteered his time for extra assignments as a Commissioner by participating on
numerous ad-hoc subcommittees charged with advancing specific projects and policies related to parks and
recreation including, but not inclusive of, capital improvement projects, El Camino Park and the golf course
renovation; and
WHEREAS, Ed Lauing’s consideration of concerns raised by the public, his respectful attitude toward
Staff, his leadership and collaboration skills, his willingness to listen to different points of view made by Staff and
the Commission, along with his efforts to enhance Palo Alto’s parks and recreation system while protecting the
natural environment, resulted in formal policy recommendations to the City Council.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Palo Alto desires to
recognize the meritorious service of Ed Lauing by commending his outstanding public service and recording its
appreciation, as well as the appreciation of the citizens of this community for the services and contributions
rendered.
INTRODUCED AND PASSED: November 14, 2016
ATTEST: APPROVED:
_______________________ ______________________
City Clerk Mayor
APPROVED AS TO FORM:
________________________ ______________________
City Attorney City Manager
RESOLUTION OF THE COUNCIL OF THE
CITY OF PALO ALTO EXPRESSING APPRECIATION TO
JENNIFER HETTERLY, PARKS AND RECREATION COMMISSIONER
WHEREAS, Jennifer Hetterly served as a Parks and Recreation Commissioner from February 2010 through
December 2016; and
WHEREAS, Jennifer Hetterly served as Chairperson to the Commission for two years, providing leadership
and support to the Commission, always ensuring inclusive and productive meetings; and
WHEREAS, Jennifer Hetterly provided dedicated service to the residents and businesses of this community
by approving numerous City Ordinances related to park improvements and facility use, and spearheading greater
commission engagement, expertise and influence in cross-cutting planning efforts, including the Bicycle and
Pedestrian Transportation Plan, Urban Forest Master Plan, and Comprehensive Plan; and
WHEREAS, Jennifer Hetterly helped launch and provided guidance and insight in the development of the
Parks, Trails, Recreation and Natural Open Space Master Plan, including reviewing, commenting and drafting
multiple versions of the Plan; and
WHEREAS, Jennifer Hetterly volunteered her time on extra assignments as a Commissioner by
participating on numerous ad-hoc subcommittees charged with advancing specific projects and policies related to
parks and recreation including, but not inclusive of: community gardens, dog parks and athletic field policies,
community center regulations, Byxbee Park Trail Project, and future planning for Cubberley Community Center;
and
WHEREAS, Jennifer Hetterly’s consideration of concerns raised by the public, her respectful attitude
toward Staff, her willingness to listen to different points of view made by Staff and the Commission and her
attention to detail and tireless efforts to ensure parks and recreation facilities and services are accessible to all
residents of Palo Alto, resulted in formal policy recommendations to the City Council.
NOW, THEREFORE, BE IT RESOLVED, that the City of Palo Alto desires to recognize the meritorious
service of Jennifer Hetterly by commending her outstanding public service and recording its appreciation, as well
as the appreciation of the citizens of this community for the services and contributions rendered.
INTRODUCED AND PASSED: November 14, 2016
ATTEST: APPROVED:
_______________________ ______________________
City Clerk Mayor
APPROVED AS TO FORM:
________________________ ______________________
City Attorney City Manager
City of Palo Alto (ID # 7315)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Eichler Guidelines Contract
Title: Approval of Contract Number C17166399 With Page and Turnbull in the
Amount of $105,930 to Prepare Architectural Design Guidelines for Eichler
Neighborhoods and Assist the City of Palo Alto in the Implementation of
Related Changes to the Individual Review (IR) Guidelines and/or Zoning
Code, Adoption of Categorical Exemption Under Section 15061 of the
California Environmental Quality Act Guidelines and Approval of a Related
Budget Amendment in the General Fund
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that Council:
1. Authorize the City Manager, or designee, to execute Contract C17166399 (Attachment
A) with Page and Turnbull in the amount of $105,930 to:
a. prepare architectural design guidelines for Eichler neighborhoods; and,
b. assist the City of Palo Alto in the implementation of changes to the Individual
Review (IR) guidelines or zoning code; and,
2. Adopt a Categorical Exemption under Sections 15061 of the California Environmental
Quality Act;
3. Amend the Fiscal Year 2017 Budget Appropriation Ordinance in the General Fund by:
a. Increasing the Planning and Community Environment Department’s contractual
services appropriation by $105,930; and,
b. Decreasing the Non-Departmental Planning and Transportation Contingency by
$105,930
Executive Summary:
Palo Alto contains approximately 21 neighborhoods or enclaves of Eichler residences. Two of
these neighborhoods are historic districts listed in the National Register of Historic Places
(Green Gables and Greenmeadow). Nine of these neighborhoods are zoned “Single Story
Overlay” (SSO).
City of Palo Alto Page 2
Staff requests Council approve a contract to retain Page and Turnbull as a consultant to
produce architectural design guidelines for Eichler neighborhoods. The effort will include
developing an understanding of the different Eichler neighborhoods, outreach to residents and
owners about these neighborhoods and future redevelopment, and to establish guidelines and
a review process to evaluate future new home construction. The scope for Page and Turnbull
also includes assisting the City of Palo Alto implement related changes to the Individual Review
(IR) guidelines and/or zoning code.
As part of the FY 2017 budget process, the Finance Committee discussed at length a need for a
contingency fund for various planning and transportation activities. One of the items discussed
in both a May 23, 2016 Finance Committee budget report (viewable at:
https://www.cityofpaloalto.org/civicax/filebank/documents/52505) and the June 13, 2016
Council budget staff report (#6932) was the use of this potential contingency fund for Council
requested Eichler design guidelines. A background memo from Director Gitelman to City
Manager Keene was also provided on May 23rd (Attachment B). Council approved the
contingency fund allocation in the FY17 Adopted Budget on June 13, 2016. The project can be
initiated as soon as the Council approves the contract. Staff estimates it will take 12 to 18
months to complete the effort, which will include mid-course check-ins with the City Council .
Background & Discussion:
Joseph Eichler developed a unique building typology during a key moment of mid-century
growth and development in the Bay Area. In Palo Alto, 21 ‘Eichler’ neighborhoods were
established in the 1950s and 1960s; two of these neighborhoods are listed in the National
Register of Historic Places. Nine Eichler neighborhoods in Palo Alto have a ‘single story overlay’
zoning, which restricts new development and additions to single story development. (One of
the Palo Alto Eichler neighborhoods has a substantial number of original two-story Eichler
homes, and is not eligible for ‘single story overlay’ restrictions under the current zoning code.)
Council Direction
In 2015, Council approved two SSO rezoning applications (Los Arboles and Greer Park North).
In 2016, Council rejected two SSO rezoning applications (Royal Manor and Faircourt #3 and #4).
On May 2, 2016, during the discussion of the Royal Manor SSO proposal, Council directed staff
to evaluate the feasibility of undertaking two possible initiatives in response to controversy
surrounding the construction of two story homes in Eichler neighborhoods:
A. Conduct a preliminary evaluation of a potential Eichler Overlay Zone or
strengthening of IR guidelines for Eichler design and privacy compatibility (for
second story additions); and
B. Explore options for breaking up the petition and 'voting' process to determine
the level of support for Single Story Overlays and Eichler Overlays.
City of Palo Alto Page 3
Council directed staff to evaluate making allowances for second stories, and adjustments to
setbacks (and “possibly other accommodations”), depending on the context of the lot.
At the end of May, during the Fiscal Year 2017 budget process, staff indicated that, in
conjunction with the Eichler Guidelines project, it would explore options for how to determine
the level of support for SSOs and/or Eichler Overlay combining district, to address the Council-
expressed need to ‘fix’ the SSO process issues. Council approved a contingency budget for the
department to be used for this and other purposes.
Eichler Guidelines & Related Code Changes
The selected consultant, Page and Turnbull, is an architectural, planning and research firm.
Staff will work with this consultant to conduct community outreach and develop design
guidelines specific to Eichler neighborhoods, as other jurisdictions have done, and then to
develop related regulations to be adopted as part of the IR Guidelines and/or the municipal
code.
The Consultant will begin work with a stakeholder group to define Eichler guideline parameters.
Proposed revisions to the IR Guidelines and/or the municipal code would be reviewed by the
Planning and Transportation Commission.
Code changes are likely to be focused on Chapter 18.12; specifically, Sections 18.12.100 and
18.12.100:
Section 18.12.100 contains the Single Story Overlay (SSO) Regulations, which could be
modified to improve the SSO process and possibly to establish a specific ‘Eichler Overlay’
combining district that would allow for compatible second story additions and provide
site compatibility criteria.
Section 18.12.110 contains the Individual Review program, which could be modified to
require review of projects with specific Eichler guidelines for second floor additions and
new two story homes for design and privacy compatibility with nearby homes in Eichler
tracts. The section could also be modified to require a review process for one-story
homes in Eichler tracts.
The revised zoning code and/or IR guidelines document(s) would be reviewed concurrently with
the Eichler Neighborhood Design Guidelines.
Consultant Selection
The City released a Request for Statements of Qualifications (SOQs) for this project on August 8,
2016 with a submittal deadline of August 22, 2016. Three firms responded. Only the responses
of Page and Turnbull were judged to have met the City’s criteria:
Qualifications and experience of the staff assigned to the project;
Proposal quality and completeness; and
Ability to perform the work.
City of Palo Alto Page 4
Following receipt of three SOQs, staff requested that Page and Turnbull submit a proposal.
Staff reviewed the proposal and selected the consultant based on proposal content and the
firm’s superior knowledge of historic preservation, architecture, and planning and the ability to
complete the projects in a timely fashion. Page and Turnbull demonstrated successfully
completed design guidelines for other cities, and demonstrated strong skills during preparation
of the Professorville District Design Guidelines for Palo Alto.
Policy Implications:
The City’s Comprehensive Plan contains several goals, policies and programs related to design
of buildings and residential neighborhoods, and historic preservation. These are provided in
Attachment C. The Comprehensive Plan policies and programs listed are those with which the
Eichler Guidelines effort will be consistent.
Resource Impact:
Funding in the amount of $105,930 is available in the Fiscal Year 2017 Adopted Budget Planning
and Transportation Contingency to cover this work. Staff requests that Council authorize the
use of the Planning and Community Environment Contingency by approving a budget
amendment, increasing the Planning and Community Environment Department appropriation
for contracting and decreasing the Planning and Transportation Contingency.
Timeline:
Shortly after execution of a contract, staff will meet with the consultant to begin work.
Environmental Review:
Approval of these contracts is exempt from environmental review under Section 15061 of the
California Environmental Quality Act (CEQA) Guidelines because it can be seen with certainty
that the contract approval will not have a significant effect on the environment. Additional
environmental review may be required and will be completed as necessary for specific projects
utilizing consultant services under this contract.
Attachments:
Attachment A: C17166399 Page and Turnbull Contract (PDF)
Attachment B: Memo Regarding the Addition of this Project to the Work Program
(DOCX)
Attachment C: Comp Plan Policies Programs supporting Eichler Guidelines (DOCX)
CITY OF PALO ALTO CONTRACT NO. C17165226
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
PAGE & TURNBULL, INC. FOR PROFESSIONAL SERVICES
This Agreement is entered into on this 14th day of November, 2016,
(“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (“CITY”), and PAGE & TURNBULL, INC., a California corporation, located at 417
Montgomery Street, Eight Floor, San Francisco, California, 94104 ("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to revise the Eichler Neighborhood Design Guidelines IR Guidelines/Code
(“Project”) and desires to engage a consultant to provide services in connection with the Project
(“Services”).
B. CONSULTANT has represented that it has the necessary professional expertise,
qualifications, and capability, and all required licenses and/or certifications to provide the
Services.
C. CITY in reliance on these representations desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit “A”, attached to and made a part of this
Agreement.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions,
in this Agreement, the parties agree:
AGREEMENT
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at
Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM.
The term of this Agreement shall be from the date of its full execution through November 13,
2017 unless terminated earlier pursuant to Section 19 of this Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance
of Services under this Agreement. CONSULTANT shall complete the Services within the term
of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and
made a part of this Agreement. Any Services for which times for performance are not specified
in this Agreement shall be commenced and completed by CONSULTANT in a reasonably
prompt and timely manner based upon the circumstances and direction communicated to the
CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall
not preclude recovery of damages for delay if the extension is required due to the fault of
CONSULTANT.
DocuSign Envelope ID: 56563D9E-6C8D-45B2-9D16-B39BABCBFA41
Professional Services
Rev. April 27, 2016
2
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”),
and reimbursable expenses, shall not exceed One Hundred Five Thousand Nine Hundred Thirty
Dollars ($105,930.00). CONSULTANT agrees to complete all Basic Services, including
reimbursable expenses, within this amount. The applicable rates and schedule of payment are set
out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a
part of this Agreement. Any work performed or expenses incurred for which payment would
result in a total exceeding the maximum amount of compensation set forth herein shall be at no
cost to the CITY.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions
of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services
performed without the prior written authorization of CITY. Additional Services shall mean any
work that is determined by CITY to be necessary for the proper completion of the Project, but
which is not included within the Scope of Services described at Exhibit “A”.
SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the services performed and the applicable charges (including an
identification of personnel who performed the services, hours worked, hourly rates, and
reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C-
1”). If applicable, the invoice shall also describe the percentage of completion of each task. The
information in CONSULTANT’s payment requests shall be subject to verification by CITY.
CONSULTANT shall send all invoices to the City’s project manager at the address specified in
Section 13 below. The City will generally process and pay invoices within thirty (30) days of
receipt.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be
performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT
represents that it possesses the professional and technical personnel necessary to perform the
Services required by this Agreement and that the personnel have sufficient skill and experience
to perform the Services assigned to them. CONSULTANT represents that it, its employees and
subconsultants, if permitted, have and shall maintain during the term of this Agreement all
licenses, permits, qualifications, insurance and approvals of whatever nature that are legally
required to perform the Services.
All of the services to be furnished by CONSULTANT under this agreement shall meet the
professional standard and quality that prevail among professionals in the same discipline and of
similar knowledge and skill engaged in related work throughout California under the same or
similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
may affect in any manner the Project or the performance of the Services or those engaged to
perform Services under this Agreement. CONSULTANT shall procure all permits and licenses,
pay all charges and fees, and give all notices required by law in the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
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including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections
such errors and omissions, any change order markup costs, or costs arising from delay caused by
the errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds ten percent
(10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to
CITY for aligning the PROJECT design with the budget, incorporate CITY approved
recommendations, and revise the design to meet the Project budget, at no additional cost to
CITY.
SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in
performing the Services under this Agreement CONSULTANT, and any person employed by or
contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act
as and be an independent contractor and not an agent or employee of CITY.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not
assign or transfer any interest in this Agreement nor the performance of any of
CONSULTANT’s obligations hereunder without the prior written consent of the city manager.
Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any
assignment made without the approval of the city manager will be void.
SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of
the work to be performed under this Agreement without the prior written authorization of the city
manager or designee.
CONSULTANT shall be responsible for directing the work of any subconsultants and for any
compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning
compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a
subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval
of the city manager or his designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Ruth Todd as
the Principal to have supervisory responsibility for the performance, progress, and execution of
the Services and Christina Dikas as the project Manager to represent CONSULTANT during the
day-to-day work on the Project. If circumstances cause the substitution of the project director,
project coordinator, or any other key personnel for any reason, the appointment of a substitute
project director and the assignment of any key new or replacement personnel will be subject to
the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request,
shall promptly remove personnel who CITY finds do not perform the Services in an acceptable
manner, are uncooperative, or present a threat to the adequate or timely completion of the Project
or a threat to the safety of persons or property.
CITY’s project manager is Amy French, Planning & Community Environment Department, 250
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Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650)329-2336. The project manager will
be CONSULTANT’s point of contact with respect to performance, progress and execution of the
Services. CITY may designate an alternate project manager from time to time.
SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including
without limitation, all writings, drawings, plans, reports, specifications, calculations, documents,
other materials and copyright interests developed under this Agreement shall be and remain the
exclusive property of CITY without restriction or limitation upon their use. CONSULTANT
agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall
be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other
intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if
any, shall make any of such materials available to any individual or organization without the
prior written approval of the City Manager or designee. CONSULTANT makes no
representation of the suitability of the work product for use in or application to circumstances not
contemplated by the scope of work.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time
during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records
pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and
retain such records for at least three (3) years after the expiration or earlier termination of this
Agreement.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability
of any nature, including death or injury to any person, property damage or any other loss,
including all costs and expenses of whatever nature including attorneys fees, experts fees, court
costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence,
recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or
contractors under this Agreement, regardless of whether or not it is caused in part by an
Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed
to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the
active negligence, sole negligence or willful misconduct of an Indemnified Party.
16.3. The acceptance of CONSULTANT’s services and duties by CITY shall
not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall
survive the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any
covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance
or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions,
ordinance or law, or of any subsequent breach or violation of the same or of any other term,
covenant, condition, provision, ordinance or law.
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SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in
Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement
naming CITY as an additional insured under any general liability or automobile policy or
policies.
18.2. All insurance coverage required hereunder shall be provided through
carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or
authorized to transact insurance business in the State of California. Any and all contractors of
CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
full force and effect during the term of this Agreement, identical insurance coverage, naming
CITY as an additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be filed with CITY
concurrently with the execution of this Agreement. The certificates will be subject to the
approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is
primary coverage and will not be canceled, or materially reduced in coverage or limits, by the
insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of
the cancellation or modification. If the insurer cancels or modifies the insurance and provides
less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the
Purchasing Manager written notice of the cancellation or modification within two (2) business
days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for
ensuring that current certificates evidencing the insurance are provided to CITY’s Chief
Procurement Officer during the entire term of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement,
including such damage, injury, or loss arising after the Agreement is terminated or the term has
expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior
written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will
immediately discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its
performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but
only in the event of a substantial failure of performance by CITY.
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19.3. Upon such suspension or termination, CONSULTANT shall deliver to the
City Manager immediately any and all copies of studies, sketches, drawings, computations, and
other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or
given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such
materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will be
paid for the Services rendered or materials delivered to CITY in accordance with the scope of
services on or before the effective date (i.e., 10 days after giving notice) of suspension or
termination; provided, however, if this Agreement is suspended or terminated on account of a
default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that
portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such
determination may be made by the City Manager acting in the reasonable exercise of his/her
discretion. The following Sections will survive any expiration or termination of this Agreement:
14, 15, 16, 19.4, 20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement.
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY: Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the project director
at the address of CONSULTANT recited above
SECTION 21. CONFLICT OF INTEREST.
21.1. In accepting this Agreement, CONSULTANT covenants that it presently
has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which
would conflict in any manner or degree with the performance of the Services.
21.2. CONSULTANT further covenants that, in the performance of this
Agreement, it will not employ subconsultants, contractors or persons having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California.
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21.3. If the Project Manager determines that CONSULTANT is a “Consultant”
as that term is defined by the Regulations of the Fair Political Practices Commission,
CONSULTANT shall be required and agrees to file the appropriate financial disclosure
documents required by the Palo Alto Municipal Code and the Political Reform Act.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. CONSULTANT acknowledges that it has read
and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to
Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all
requirements of Section 2.30.510 pertaining to nondiscrimination in employment.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Department,
incorporated by reference and may be amended from time to time. CONSULTANT shall comply
with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste
Program. Zero Waste best practices include first minimizing and reducing waste; second,
reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall
comply with the following zero waste requirements:
(a) All printed materials provided by CCONSULTANT to CITY generated from a
personal computer and printer including but not limited to, proposals, quotes,
invoices, reports, and public education materials, shall be double-sided and
printed on a minimum of 30% or greater post-consumer content paper, unless
otherwise approved by CITY’s Project Manager. Any submitted materials printed
by a professional printing company shall be a minimum of 30% or greater post-
consumer material and printed with vegetable based inks.
(b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in
accordance with CITY’s Environmental Purchasing Policy including but not
limited to Extended Producer Responsibility requirements for products and
packaging. A copy of this policy is on file at the Purchasing Division’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide
documentation from the facility accepting the pallets to verify that pallets are not
being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter
4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any
employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of
work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay
such employees no less than the minimum wage set forth in Palo Alto Municipal Code section
4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In
addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance
in accordance with Palo Alto Municipal Code section 4.62.060.
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SECTION 25. NON-APPROPRIATION
25.1. This Agreement is subject to the fiscal provisions of the Charter of the
City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any
penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the
following fiscal year, or (b) at any time within a fiscal year in the event that funds are only
appropriated for a portion of the fiscal year and funds for this Agreement are no longer available.
This section shall take precedence in the event of a conflict with any other covenant, term,
condition, or provision of this Agreement.
SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC
WORKS CONTRACTS
26.1 This Project is not subject to prevailing wages. CONSULTANT is not
required to pay prevailing wages in the performance and implementation of the Project in
accordance with SB 7 if the contract is not a public works contract, if the contract does not
include a public works construction project of more than $25,000, or the contract does not
include a public works alteration, demolition, repair, or maintenance (collectively,
‘improvement’) project of more than $15,000.
SECTION 27. MISCELLANEOUS PROVISIONS.
27.1. This Agreement will be governed by the laws of the State of California.
27.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
27.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorneys' fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
27.4. This document represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which is signed by the parties.
27.5. The covenants, terms, conditions and provisions of this Agreement will
apply to, and will bind, the heirs, successors, executors, administrators, assignees, and
consultants of the parties.
27.6. If a court of competent jurisdiction finds or rules that any provision of this
Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this
Agreement and any amendments thereto will remain in full force and effect.
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27.7. All exhibits referred to in this Agreement and any addenda, appendices,
attachments, and schedules to this Agreement which, from time to time, may be referred to in
any duly executed amendment hereto are by such reference incorporated in this Agreement and
will be deemed to be a part of this Agreement.
27.8 In the event of a conflict between the terms of this Agreement and the
exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case
of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall
control.
27.9 If, pursuant to this contract with CONSULTANT, CITY shares with
CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d)
about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable
and appropriate security procedures to protect that Personal Information, and shall inform City
immediately upon learning that there has been a breach in the security of the system or in the
security of the Personal Information. CONSULTANT shall not use Personal Information for
direct marketing purposes without City’s express written consent.
27.10 All unchecked boxes do not apply to this agreement.
27.11 The individuals executing this Agreement represent and warrant that they
have the legal capacity and authority to do so on behalf of their respective legal entities.
27.12 This Agreement may be signed in multiple counterparts, which shall, when
executed by all the parties, constitute a single binding agreement
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CONTRACT No. C17166399 SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
APPROVED AS TO FORM:
PAGE & TURNBULL, INC
Attachments:
EXHIBIT “A”: SCOPE OF SERVICES
EXHIBIT “B”: SCHEDULE OF PERFORMANCE
EXHIBIT “C”: COMPENSATION
EXHIBIT “C-1”: SCHEDULE OF RATES
EXHIBIT “D”: INSURANCE REQUIREMENTS
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Ruth Todd
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Tom Dufurrena
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EXHIBIT “A”
SCOPE OF SERVICES
CONSULTANT shall complete the Eichler Neighborhood Design Guidelines IR
Guidelines/Code Revisions:
Task 1. Kick-off Tasks
b) Review Existing Documentation/Best Practices Research: CONSULTANT will
review information related to previous design review of Eichlers in Palo Alto;
existing Eichler Design Guidelines from other municipalities such as Sunnyvale
and Cupertino; and other best practices research regarding Eichler or mid-century
modern design guidelines, as needed. CONSULTANT will incorporate existing
relevant research information into the early chapters of the Eichler Neighborhood
Design Guidelines document.
CONSULTANT will also review the existing IR guidelines and/or the Zoning Code, in
particular the Single Story Overlay Regulations
c) Kick-Off Meeting and Walking/Driving Tour: CONSULTANT will schedule a
kick-off meeting with CITY staff to review the project objectives, confirm the
schedule of deliverables, and coordinate the work plan. CONSULTANT may also
share examples of other Eichler or mid-century modern resource guidelines to
elicit feedback and develop a vision of the final product. This meeting will include
a discussion of logistics, agendas, and goals for public participation. Following
the kick-off meeting, CONSULTANT will tour the Eichler neighborhoods with
CITY staff. CONSULTANT envisions this as a ‘show and tell’ tour that will
introduce the key issues that must be addressed.
Task 2. Preparation of the Design Guidelines
a) Design Guidelines Outline: With a thorough understanding of the project goals,
CONSULTANT will design an approach to developing the Guidelines in a way
that addresses the issues, concerns, and input to date. CONSULTANT will revisit
the work plan, assign responsibilities to each team member, and move forward
with the production of a recommended draft document outline.
b) Field Reconnaissance & Digital Photography: In addition to information gleaned
from the Kick-off Meeting and Walking/Driving Tour, CONSULTANT will
return to digitally photograph many of the buildings in the Eichler neighborhoods.
CONSULTANT will also photograph streetscapes and site features, and record all
relevant information necessary to identify character-defining features and
elements. These images will inform findings and be used in CONSULTANT’S
work sessions and presentations.
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c) Administrative Draft Eichler Neighborhood Design Guidelines: Following, CITY
staffs review of the outline, CONSULTANT will develop a draft of the Eichler
Neighborhood Design Guidelines, including written and illustrated content.
CONSULTANT will involve the CITY in the writing process to the extent
desired. CONSULTANT will confer with CITY staff throughout the guidelines
development process. The document will be submitted as an Administrative Draft
to the CITY and Advisory Committee for review.
d) Response to Administrative Draft - CITY and Advisory Committee Comments:
CONSULTANT will review and respond to one (1) set of CITY and Advisory
Committee consolidated comments to the Administrative Draft. CONSULTANT
will respond to these comments in a Response to Comments table.
e) Public Draft Eichler Neighborhood Design Guidelines: CONSULTANT will
incorporate client approved comments to the Administrative Draft and publish a
Public Draft Eichler Neighborhood Design Guidelines for public comment. The
Public Draft Guidelines will be presented at the second community workshop and
two public hearings, as part of an anticipated 12-week public comment review
period.
f) Response to Public Draft Guidelines Comments: CONSULTANT will respond to
one
(1) set of client-approved and consolidated written comments from the CITY and the
public in a Response to Comments table. This will include comments from the
Historic Resources Board and the Planning Commission.
g) Revised Draft Eichler Neighborhood Design Guidelines: CONSULTANT will
incorporate staff-directed comments to the Public Draft and publish the Revised
Eichler Neighborhood Design Guidelines, which will be presented to CITY
Council.
h) Response to CITY Council Comments: CONSULTANT will respond to one (1)
set of client-approved and consolidated written comments from the CITY Council
in a Response to Comments table.
i) Final Eichler Neighborhood Design Guidelines: CONSULTANT will incorporate
client-directed comments to the Revised Guidelines and publish the Final Eichler
Neighborhood Design Guidelines.
Task 3. Individual Review (IR) Guidelines and/or Zoning Code Revisions
The CITY Council directed staff to “return to Council with a preliminary evaluation of an
Eichler overlay zone or strengthening the Individual Review (IR) Guidelines to incorporate
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Eichler design and privacy compatibility where appropriate, and depending on the context of
the lot, make allowance for second stories, adjustments to setbacks and possibly other
accommodations.”
In tandem with development of the Eichler Neighborhood Design Guidelines,
CONSULTANT will work with CITY staff to revise one or both of the following review
processes that may be implemented:
Modifications to Zoning Code: (PAMC) Chapter 18.12 Section 18.12.100, the
Single Story Overlay (SSO) Regulations with respect to creating a process and
guidelines for a specific ‘Eichler Overlay’ combining district that would allow for
compatible second story additions and site compatibility criteria.
Modifications to the IR guidelines: (and/or amend PAMC Section 18.12.110) with
respect to setting forth specific Eichler guidelines for staff review of design and
privacy compatibility of proposed second story additions and new two story
homes in Eichler tracts.
The revised zoning code and/or IR guidelines document(s) will be reviewed concurrently with
the Eichler Neighborhood Design Guidelines milestones, including an Administrative Draft,
Public Draft, Revised Draft, and Final.
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the
number of days/weeks specified below. The time to complete each milestone may be
increased or decreased by mutual written agreement of the project managers for
CONSULTANT and CITY so long as all work is completed within the term of the
Agreement.
Task 1(a), Task 2(a), Task 2(b): Consultant reviews background
materials, conducts fieldwork and research, and prepares the draft
outline
November 2016
Task 1(b): Kick-off Meeting and Walking/Driving Tour with City staff
and consultant
November 2016
Task 2(a): Consultant submits draft outline of Design Guidelines to
City staff for review and comment
November 2016
Task 4(a): Advisory Committee meeting #1 December 2016
Task 4(b): Introductory Community Workshop January 2017
Task 3(a): IR Guidelines/Zoning Code Workshop with Client Team January 2017
Activity Timeframe
Task 2(c), Task 3(b): Consultant develops Administrative Draft
Design Guidelines document and zoning code/IR Guidelines
modifications
January – March 2017
City Staff Progress Report #2: Draft outline February 2017
Task 2(c), Task 3(b): Consultant submits the Administrative Draft to
City staff
March 2017
Advisory Committee Review and Comment on Administrative Draft
via email to staff
March - April 2017
Task 2(d), Task 3(c): Consultant consolidates comments into
Response to Comments tables
March – April 2017
City Staff Progress Report #3: Draft Eichler Neighborhood
Design Guidelines and zoning code/IR Guidelines modifications
April 2017
Task 2(e), Task 3(d): Consultant revises Design Guidelines and
zoning code/IR Guidelines modifications, and submits Public Review
Draft to City staff
May 2017
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Public review period – Public Review Draft posted online and
available at City offices; City receives comments via website, email,
etc.
May - July 2017
Task 4(c): Community Workshop #2 June 2017
Task 4(g): HRB meeting/ informational hearing June 2017
Task 4(g): PTC public hearing to provide comments and
recommend adoption of the Eichler Neighborhood Design
Guidelines and zoning code/IR Guidelines modifications
July 2017
Task 2(f), Task 3(e): Consultant consolidates comments into
Response to Comments tables
May - August 2017
Task 2(g), Task 3(f): Consultant produces Revised Eichler
Neighborhood Design Guidelines and zoning code/IR Guidelines
modifications
August 2017
Activity Timeframe
Task 4(g): City Council hearing to review the Revised Eichler
Neighborhood Design Guidelines and zoning code/IR Guidelines
modifications and provide comments
September 2017
Task 2(h), Task 3(g): Consultant consolidates comments into a
Response to Comments tables
September 2017
Task 2(i), Task 3(h): Consultant produces Final Eichler
Neighborhood Design Guidelines and zoning code/IR Guidelines
modifications
October 2017
Progress Report #4: Final Eichler Neighborhood Design
Guidelines and zoning code/IR Guidelines modifications
October 2017
City staff posts the final Design Guidelines online and distributes/
makes available printed copies
October 2017
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EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services
performed in accordance with the terms and conditions of this Agreement, and as set
forth in the budget schedule below. Compensation shall be calculated based on the
hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for
each task set forth below.
CONSULTANT shall perform the tasks and categories of work as outlined and
budgeted below. The CITY’s Project Manager may approve in writing the transfer of
budget amounts between any of the tasks or categories listed below provided the total
compensation for Basic Services, including reimbursable expenses, and the total
compensation for Additional Services do not exceed the amounts set forth in Section 4
of this Agreement.
BUDGET SCHEDULE NOT TO EXCEED AMOUNT
Task 1 $6,020.00
(Kick Off )
Task 2 $38,800.00
(Preparation of Design Guidelines Report)
Task 3 $22,700.00
(IR Guidelines/Zoning Code Revision)
Task 4 $24,875.00
(Community Involvement & Public Hearings)
Task 5 $8,535.00
(Meetings/Project Management)
Sub-total Basic Services $100,930.00
Reimbursable Expenses $5,000.00
Total Basic Services and Reimbursable expenses $105,930.00
Maximum Total Compensation $105,930.00
REIMBURSABLE EXPENSES
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The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are
included within the scope of payment for services and are not reimbursable expenses.
CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost.
Expenses for which CONSULTANT shall be reimbursed are:
A. Travel outside the San Francisco Bay area, including transportation and meals, will
be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement
of travel and meal expenses for City of Palo Alto employees.
B. Long distance telephone service charges, cellular phone service charges, facsimile
transmission and postage charges are reimbursable at actual cost.
All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense anticipated to be more than $500.00 shall be approved in
advance by the CITY’s project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s
request, shall submit a detailed written proposal including a description of the scope of
services, schedule, level of effort, and CONSULTANT’s proposed maximum
compensation, including reimbursable expense, for such services based on the rates set
forth in Exhibit C-1. The additional services scope, schedule and maximum
compensation shall be negotiated and agreed to in writing by the CITY’s Project
Manager and CONSULTANT prior to commencement of the services. Payment for
additional services is subject to all requirements and restrictions in this Agreement
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EXHIBIT “C-1”
SCHEDULE OF RATES
Tasks 1- 5 will be completed for a fee of $105,930.00, to be billed on a percentage
of completion basis. This fee includes expenses.
Task
Description
Fee Per Task
Total
Hours
1
Kick-off Tasks
Review Existing Documentation/Best Practices Research
Kick-off Meeting and Walking Tour
$ 6,020 48
2
Preparation of Design Guidelines Report
Design Guidelines Outline
Field Reconnaissance & Digital Photography
Administrative Draft Eichler Design Guidelines
Response to Comments on Administrative Draft
Public Draft Eichler Design Guidelines
Response to Comments on Public Draft
Revised Draft Eichler Design Guidelines
Response to Comments on Revised Draft
Final Eichler Design Guidelines Submittal
$ 38,800 326
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1
3
IR Guidelines/Zoning Code Revisions
Workshop with Client Team
Administrative Draft IR Guidelines/Zoning Code Revisions
Response to Comments on Administrative Draft
Public Draft IR Guidelines/Zoning Code Revisions
Response to Comments on Public Draft
Revised Draft IR Guidelines/Zoning Code Revisions
Response to Comments on Revised Draft
Final IR Guidelines/Zoning Code Revisions
$ 22,700 178
4
Community Involvement and Public Hearings
City Staff and Advisory Group Conference Calls (6)
Prep and Introductory Community Workshop
Public Draft Community Workshop
Stakeholder Outreach
Walking Tour and Brochure
HRB, PTC, and City Council Hearing Presentations
$ 24,875 48
5
Meetings/Project Management for 40 weeks
Check-in Meetings/Progress Reports
Project Management
$ 8,535 63
Subtotal Fee and Hours $ 100,930 663
E Expenses @ approx. 5%
Transportation; Printing and Materials; Incidental Services $ 5,000
Total Fee & Expenses and Hours $ 105,930 663
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PAGE & TURNBULL PROFESSIONAL FEE SCHEDULE
Founding Principal $250.00–$300.00 per hour
Principals $170.00–$250.00 per hour
Associate Principals $130.00–$165.00 per hour
Senior Associates $110.00–$160.00 per hour
Architects $100.00–$150.00 per hour
Associates $100.00–$125.00 per hour
Designers, Conservators & Planners $75.00–$125.00 per hour
Historians $85.00–$120.00 per hour
Administrative Personnel $60.00–$120.00 per hour
Architectural Assistants $45.00–$75.00 per hour
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EXHIBIT “D”
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT
OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY
COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT
INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY
STATUTORY
STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY DAMAGE
COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES AUTOMOBILE LIABILITY, INCLUDING
ALL OWNED, HIRED, NON-OWNED
BODILY INJURY
- EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES PROFESSIONAL LIABILITY, INCLUDING,
ERRORS AND OMISSIONS,
MALPRACTICE (WHEN APPLICABLE),
AND NEGLIGENT PERFORMANCE
ALL DAMAGES $1,000,000
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND
EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS
SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND
PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN
COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT
THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL
INSUREDS”
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER
INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.
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B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY
SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER,
BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL
LIABILITY OF THE COMPANY UNDER THIS POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON
OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE
CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE
OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-
PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN
(10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE
AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL:
HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569
OR
HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP
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EXHIBIT “E”
DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS
This Exhibit shall apply only to a contract for public works construction, alteration, demolition,
repair or maintenance work, CITY will not accept a bid proposal from or enter into this
Agreement with CONSULTANT without proof that CONSULTANT and its listed
subcontractors are registered with the California Department of Industrial Relations (“DIR”) to
perform public work, subject to limited exceptions. City requires CONSULTANT and its listed
subcontractors to comply with the requirements of SB 854.
CITY provides notice to CONSULTANT of the requirements of California Labor Code section
1771.1(a), which reads:
“A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject
to the requirements of Section 4104 of the Public Contract Code, or engage in the performance
of any contract for public work, as defined in this chapter, unless currently registered and
qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section
for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the
Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code,
provided the contractor is registered to perform public work pursuant to Section 1725.5 at the
time the contract is awarded.”
CITY gives notice to CONSULTANT and its listed subcontractors that CONSULTANT is
required to post all job site notices prescribed by law or regulation and CONSULTANT is
subject to SB 854-compliance monitoring and enforcement by DIR.
CITY requires CONSULTANT and its listed subcontractors to comply with the requirements of
Labor Code section 1776, including:
Keep accurate payroll records, showing the name, address, social security number, work
classification, straight time and overtime hours worked each day and week, and the actual per
diem wages paid to each journeyman, apprentice, worker, or other employee employed by,
respectively, CONSULTANT and its listed subcontractors, in connection with the Project.
The payroll records shall be verified as true and correct and shall be certified and made available
for inspection at all reasonable hours at the principal office of CONSULTANT and its listed
subcontractors, respectively.
At the request of CITY, acting by its project manager, CONSULTANT and its listed
subcontractors shall make the certified payroll records available for inspection or furnished upon
request to the project manager within ten (10) days of receipt of CITY’s request.
CITY requests CONSULTANT and its listed subcontractors to submit the certified
payroll records to the project manager at the end of each week during the Project.
If the certified payroll records are not produced to the project manager within the 10-day period,
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then CONSULTANT and its listed subcontractors shall be subject to a penalty of one hundred
dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold
the sum total of penalties from the progress payment(s) then due and payable to
CONSULTANT.
Inform the project manager of the location of CONSULTANT’s and its listed subcontractors’
payroll records (street address, city and county) at the commencement of the Project, and also
provide notice to the project manager within five (5) business days of any change of location of
those payroll records.
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Page 1
TO: James Keene, City Manager
FROM: Hillary Gitelman, Director of Planning & Community Environment
RE: Council Requests Regarding Eichler-Specific Guidelines
This memo provides responses to the City Council’s request that planning staff assess the ability to
undertake development of new Eichler-specific amendments to the Individual Review (IR) Guidelines
and/or develop separate design guidelines or zoning regulations to guide development of two story
homes in Eichler neighborhoods, as well as amendments to the process for assessing resident support
for new Single Story Overlay (SSO) districts.
Executive Summary
We appreciate the desire to amend the Individual Review (IR) Guidelines and/or develop separate
design guidelines or regulations to guide development of new two story homes in Eichler
neighborhoods. With sufficient resources, this project could be undertaken as a consultant-led effort
after completion of the IR program review and the Professorville Design Guidelines (both are wrapping
up soon). Amendments to the petition process for new SSO districts can be developed by staff and
considered by the City Council in the context of the next “code clean-up” ordinance, expected in 2017.
Background
On May 2, 2016, Council directed staff to evaluate the feasibility of undertaking two possible initiatives
in response to controversy surrounding the construction of two story homes in Eichler neighborhoods:
A. Conduct a preliminary evaluation of a potential Eichler Overlay Zone or Strengthening of
IR guidelines for Eichler design and privacy compatibility (for second story additions);
and
B. Explore options for breaking up the petition and 'voting' process to determine the level
of support for Single Story Overlays and Eichler Overlays.
The issues addressed by this motion are related to some of the Planning Department’s “Council Priority
Projects” for 2016 as discussed by the City Council at their retreat in late January. At that time, the
priority projects included a review of the Individual Review (IR) process for two story homes and
development of recommendations for improving this program, and also included an annual “code clean-
up” project. To reflect the Council’s May 2nd motion, a new project related to Eichler neighborhoods has
been added to the list of priority projects and has been proposed for funding in a “contingency” within
the FY17 proposed budget.
Discussion
In its motion on May 6, the Council requested staff evaluate the feasibility of undertaking two different
approaches to the issue of two story homes in Eichler neighborhoods. The feasibility of the various
components of the motion varies quite a bit, and is discussed further below.
A. Adopt an Eichler Overlay Zone or strengthen the IR guidelines for Eichler design compatibility and
privacy. This proposal will require consultant support in the form of an architect or urban design
professional with an affinity for mid-century modern residential architecture. While not currently
budgeted, such an individual could conduct community outreach and develop design guidelines
specific to Eichler neighborhoods as other jurisdictions have done, and/or develop regulations to be
May 23, 2016 DRAFT
Page 2
adopted as part of the IR Guidelines or the municipal code. This planning effort would be
strengthened if it also involved preparation of a “context statement” to support evaluation of the
City’s Eichler neighborhoods in terms of their architectural integrity and significance.
Staff believes that preparation of a “context statement” may be eligible for grant funding from the
State Office of Historic Preservation (similar to the Professorville Guidelines which are currently
being wrapped up). General fund resources would be needed for the project manager/design
consultant, and staff has proposed this be funded through a “contingency” in the FY17 budget. The
project can be initiated as soon as the project manager is retained. Staff estimates it will take 16-18
months from start to finish, assuming mid-course check-ins with the City Council do not result in
additional/modified direction requiring additional effort.
B. Improve the petition process to determine the level of support for Single Story Overlays (and
potentially Eichler Overlays). Staff can easily include improvements to the SSO process in the next
regular “code clean-up” ordinance, which is scheduled for 2017. The only clean-up planned for 2016
is the update to the ARB findings, which was referred back to the ARB when the City Council
considered the 2015 code clean-up ordinance.
Conclusion
These are interesting issues that can be tackled in the coming year presuming budget and consultant
resources are available.
ATTACHMENT C
RELATED COMPREHENSIVE PLAN GOALS, POLICIES, PROGRAMS
Eichler Guidelines and Code Updates
Goal, Policy or Program Related to Eichler Guidelines/Code Updates
Goal L-3 states, “Safe, attractive residential neighborhoods, each with its own distinct
character and within walking distance of shopping, services schools and or other public
gathering places.”
Policy L-12 states, “Preserve the character of residential neighborhoods by encouraging new
or remodeled structures to be compatible with the neighborhood and adjacent structures.”
Program L-11 states, “Establish pedestrian oriented design guidelines for residences that
encourage features that enliven the street.”
Program L-48 states, “Use the zoning ordinance, design review process, design guidelines and
coordinated area plans to ensure high quality residential and commercial design.”
Policy L-48 states, “Promote high quality, creative design and site planning that is compatible
with surrounding development and public spaces.”
Policy L-49 states, “Design buildings to revitalize streets and public spaces and to enhance a
sense of community and personal safety…”
Related Program L-50 states, “Undertake a comprehensive review of residential and
commercial zoning requirements to identify additional architectural standards that should be
incorporated to implement Policy L-49.”
Program L-49 states, “In areas of the city having a historic or consistent design character,
design new development to maintain and support the existing character.”
Program L-51 states, “use illustrations and form code methods for simpli8fying the zoning
ordinance and to promote well-designed buildings.”
Program L-52 states, “Discourage the use of fences that obscure the view of houses.”
Program L-54 states, “Review and update the City’s inventory of historic resources including
city owned structures.”
Program L-56 states, “Maintain and strengthen the design review procedure for exterior
remodeling and demolition of historic resources. Discourage demolition of historic resources
and severely restrict demolition of Landmark resources.”
Program L-58 states, “for proposed exterior alterations or additions to designated Historic
Landmarks, require design review findings that the proposed changes are in compliance with
the Secretary of the Interior Standards for Rehabilitation.”
City of Palo Alto (ID # 7333)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Contract Extension for Cypress Security
Title: Approval of a Contract Amendment With Cypress Security, Inc.
(C16160138A) in the Amount of $768,223 for a Total Not-to-Exceed Amount
of $2,092,215 and Extend the Term of the Agreement to June 30, 2017 and
Approval of Budget Amendments in the General Fund
From: City Manager
Lead Department: Police
Recommendation
Staff recommends that the City Council
1. Authorize the City Manager, or his designee, to execute the attached contract
amendment (Attachment A) with Cypress Security, Inc. (C16160138A) in the amount of
$768,223.73 for a total not-to-exceed amount of $2,092,215.73 and extend the term of
the agreement to June 30, 2017;
2. Amend the FY 2017 Budget Appropriation Ordinance for the General Fund by:
a. Increasing the Police Department General Contract Service in the amount of
$735,000; and
b. Decreasing the General Fund Budget Stabilization Reserve by $735,000.
Background and Discussion
Since 2009, the City of Palo Alto has used the services of contract security guards in response to
teen fatalities that have occurred along the Caltrain corridor in Palo Alto. This program is
commonly referred to as Track Watch. From November 2009 to October 2014, guards were
stationed at both the Charleston and Meadow crossings from 6:15 p.m. to 1:15 a.m. (seven
hours). This evening-only level of service at two locations resulted in a monthly cost for rail
security services of approximately $5,000 per month. To address additional teen fatality
incidents, in October 2014, the City increased its rail security services to include the Churchill
crossing and, in November 2014, the City increased its rail security services to include the
California Avenue Station. Most recently, in response to a teen suicide at the Alma crossing
security services were added at this fifth location. This resulted in the City of Palo Alto having
contract security guards at a total of five locations. Additionally, the City increased the original
scope by hiring rail security guards to be present 24-hours per day to help further mitigate the
risk of incidents involving both Caltrain and freight trains.
City of Palo Alto Page 2
Cypress began providing contract security guard services on December 1, 2015. In the Spring of
2016, in response to concerns about the quality of services provided by Cypress, the City
worked with Cypress to restate our expectations and made several service enhancements
including installation of temporary toilet facilities at guard locations, increased coverage to
include a fifth guard position at the Palo Alto Avenue crossing, and an additional sixth and
seventh guard positions to serve as “rovers” to ensure continuous coverage during scheduled
work breaks at all locations. In addition, Cypress guards have been using a GPS tracking
technology so that the City can verify their physical location and proximity to their post in real-
time.
The City of Palo Alto has also been working on several fronts related to what is called “means
restriction” – limiting and reducing access to the tracks, as well as improving visibility along the
rail line. Research has shown that “means restriction” is an important part of a comprehensive
approach to suicide prevention. On our own initiative, the City has helped put in place several
key “means restriction” elements: enhanced and taller fencing along the entire east side of the
Caltrain rail corridor, clearing of brush/shrubs for better visibility, and the installation of a pilot
intrusion detection camera technology at one location to monitor the grade crossing. This
technology is designed to distinguish between humans and other objects down the corridor,
along the right of way and at intersections. To ensure continuous monitoring at all locations
and down the Caltrain corridor, City staff believes that such technology will be key to a
sustainable Track Watch program, eventually replacing the guard program as currently
provided. The Fiscal Year 2017 Adopted Operating Budget anticipated contracting with Cypress
for at least the first six months of the fiscal year, as it was anticipated that the guards might be
able to phase out as the City transitions to this system. However, track security services are
anticipated to be necessary through at the least the end of the fiscal year. This contract
extension provides sufficient funding through June 30, 2017 for 7 guards, 5 stations, and 24/7
coverage.
While means restriction is an important suicide prevention strategy, it is only one of many
efforts underway by the Palo Alto community. The City of Palo Alto’s ongoing commitment to
the Project Safety Net Community Collaborative, which aims to build and strengthen the
community network of support for youth and teens across all community sectors, and helps
provide increased awareness and decreased stigma of mental health, strengthens connections
between teens and caring adults, and provides suicide prevention training in line with our long-
term strategy in suicide prevention.
Track security services are not the panacea to this complex and challenging issue of suicide
prevention that we face as a community. Investment in the health and wellbeing of Palo Alto’s
youth and teens must be pervasive, well beyond track security services, inclusive of community,
school, parent and student efforts across the Palo Alto community. Finally, it is also important
to understand that track security services with human guards is not fool proof, and will be
subject to human error. Recognizing the inherent challenges with human guards and following
City of Palo Alto Page 3
the best practice of video intrusion detection for suicide prevention on rail lines, staff is
experimenting with a pilot intrusion detection camera system as a possible alternative to
human guards as long-term strategy. The City has purchased the camera equipment and related
networking hardware for the intrusion detection system, is paying for third-party monitoring of
the cameras, and intends to go out to bid to expand camera coverage to all street-rail
intersections in the City.
Resource Impact
The additional amount requested is a net addition of $735,000 which includes six months of
service for seven guards, 24-hours per day, 7 days a week. Total Fiscal Year 2017 costs for Track
Watch are estimated to be approximately $1.7 million. The Fiscal Year 2017 Adopted Operating
Budget allocated $824,000 for Track Watch services in the Police Department budget which
assumed a six month contract at a slightly lower level of service from Cypress. In addition, due
to a difference in timing of payments of FY 2016 services, some billings have been accounted
for in FY 2017 resulting in expense savings in FY 2016. These savings are recommended to be
reappropriated in the Stanford Development Agreement Fund (approximately $157,000) under
a separate City Manager Report to be considered by the Finance Committee on October 18,
2016. Therefore, once adjusted for these additional payments and assuming the
reappropriation in the Stanford Development Agreement Fund, additional funding of $735,000
is anticipated for this extension through the remainder of the fiscal year of the year. These
costs are recommended to be drawn from the General Fund Budget Stabilization Reserve.
Environmental Review
This is not a project under the California Environmental Quality Act (CEQA).
Attachments:
Attachment A: Cypress Amendment 092916 (PDF)
1 Revision June 13, 2016
AMENDMENT NO. ONE TO CONTRACT NO. C16160138A
BETWEEN THE CITY OF PALO ALTO AND
CYPRESS SECURITY, LLC
This Amendment No. One to Contract No. C16160138A (“Contract”) is entered into
October 24, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (“CITY”), and CYPRESS SECURITY, LLC, a limited liability company, located at
1762 Technology Drive, San Jose, CA 95110, Telephone Number: (408) 946-4102
(“CONTRACTOR”).
R E C I T A L S
A. The Contract was entered into between the parties for the provision of access
control and enforce access control procedures to the site by monitoring pedestrian traffic through
designated railroad crossings.
B. The parties wish to amend the Contract.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1. Section 3 “TERM” is hereby amended to read as follows:
“TERM.
The term of this Agreement is from December 31, 2016 to June 30, 2017 inclusive,
subject to the provisions of Sections Q and V of the General Terms and Conditions.”
SECTION 2. Section 5 “COMPENSATION FOR ORIGINAL TERM” is hereby
amended to read as follows:
“A sum calculated in accordance with the fee schedule set forth at Exhibit C, not to
exceed a total maximum compensation amount of Two Million Ninety-two Thousand
Two Hundred Fifteen Dollars and seventy three cents ($2,092,215.73).”
SECTION 3. Except as herein modified, all other provisions of the Contract,
including any exhibits and subsequent amendments thereto, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have by their duly authorized representatives
executed this Amendment on the date first above written.
DocuSign Envelope ID: 17A38F8B-7DA8-4AAB-A9EE-BEE94E6045A6
2 Revision June 13, 2016
CITY OF PALO ALTO
City Manager or designee
APPROVED AS TO FORM:
City Attorney or designee
CYPRESS SECURITY, LLC
1st Officer
2nd Officer
Attachments:
a. Exhibit “C” entitled “SCHEDULE OF FEES and RATE SCHEDULE”
DocuSign Envelope ID: 17A38F8B-7DA8-4AAB-A9EE-BEE94E6045A6
CEO
COO
3 Revision June 13, 2016
EXHIBIT C
SCHEDULE OF FEES
Compensation based upon fee schedule
CITY shall pay CONTRACTOR according to the following rate schedule. The maximum amount of
compensation to be paid to CONTRACTOR, including both payment for services and reimbursable
expenses, shall not exceed Two Million Ninety-two Thousand Two Hundred Fifteen Dollars and
seventy three cents ($2,092,215.73). Any services provided or hours worked for which payment
would result in a total exceeding the maximum amount of compensation set forth herein shall be at
no cost to CITY.
Month Coverage Cost
January 2017 29 Regular Days
2 Holidays
24 Hour per Day Coverage
7 Locations
$145,444.08
February 2017 27 Regular Days
1 Holiday
24 Hour per Day Coverage
7 Locations
$129,749.04
March 2017 31 Regular Days
0 Holiday
24 Hour per Day Coverage
7 Locations
$140,958.96
April 2017 30 Regular Days
0 Holidays
24 Hour per Day Coverage
7 Locations
$136,474.80
May 2017 30 Regular Days
1 Holiday
24 Hour per Day Coverage
7 Locations
$143,201.52
June 2017 30 Regular Days
0 Holiday
24 Hour per Day Coverage
7 Locations
$136,474.80
Total Cost $832,303.20
DocuSign Envelope ID: 17A38F8B-7DA8-4AAB-A9EE-BEE94E6045A6
4 Revision June 13, 2016
EXHIBIT C
RATE SCHEDULE
Regular Rate Holiday/OT Rate
Track Watch
Security
Officer
$26.28
$39.42
Roving Break
Relief Officer
$27.72 $41.59
Additional
Vehicle
(Monthly)
$975.00/each vehicle
DocuSign Envelope ID: 17A38F8B-7DA8-4AAB-A9EE-BEE94E6045A6
City of Palo Alto (ID # 7249)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Meter Station Rehabilitation Project
Title: Approval of Contract Number C17165854 With Anderson Pacific
Engineering Construction, Inc. in the Total Amount Not-to-Exceed $426,800
to Provide Construction Services for the Rehabilitation of the Meter Station
in the Collection System to the Regional Water Quality Control Plant -Capital
Improvement Program Project WQ-04011; Finding of CEQA Exemption
Pursuant to Guideline 15301(b), Maintenance of Existing Facilities
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council:
1.Approve and authorize the City Manager or his designee to execute the
contract with Anderson Pacific Engineering Construction, Inc.
(Attachment A) in the amount of $388,000 for construction services for
the rehabilitation of the Meter Station upstream of the main 72-inch
Interceptor to the Regional Water Quality Control Plant,Wastewater
Treatment Fund Capital Improvement Program project WQ-04011;and
2.Approve and authorize the City Manager or his designee to negotiate
and execute one or more change orders to the contract with Anderson
Pacific Engineering Construction, Inc. for related, additional but
unforeseen work which may develop during the project, the total value
of which shall not exceed $38,800.
Background
The meter station, built in 1972, is located on San Antonio Road. It houses two
flowmeters that transmit the contribution of wastewater flow from Mountain
View and Los Altos being sent to the Regional Water Quality Control Plant. After
City of Palo Alto Page 2
44 years of use, corrosion caused by sewer gasses has damaged concrete and the
iron slide gates used to isolate the flowmeters. Due to the corrosion, staff can no
longer maintain and operate the slide gates and they must be replaced.
Discussion
The work to be performed under this contract is to repair concrete in the
wetwells and re-coat the wetwells with a protective industrial coating. In
addition, the defective slide gates will be removed and replaced with new slide
gates and a new knife gate valve will be installed to isolate the flowmeter that
monitors the Mountain View line. To allow rehabilitation, the work includes
providing a temporary bypass sewage system around the meter station.
On August 23, 2016, the City advertised a notice inviting formal bids for the Meter
Station Rehabilitation Project. The bidding period was 29 days. On September 20,
2016, bids were received from two qualified contractors as presented in the bid
summary (Attachment B).
Summary of Bid Process
Bid Name/Number Meter Station Rehabilitation Project
(IFB #165854)
Proposed Length of Project 8 months after Notice to Proceed
Number of Bids downloaded by
Contractors
12
Number of Bids downloaded by
Builder’s Exchanges
8
Number of vendors notified through
City’s eProcurement system
383
Total Days to Respond to Bid 29
Pre-Bid Meeting Yes
Number of Company Attendees at Pre-
Bid Meeting
7
Number of Bids Received:2
Bid Price Range low of $388,000 to high of $543,000.
Staff reviewed all bids submitted and recommends that the bid of $388,000
submitted by Anderson Pacific Engineering Construction, Inc. (APEC) be accepted
and that APEC be declared the lowest responsible bidder. The bid is 13% below
City of Palo Alto Page 3
the engineer's estimate of $444,264. The change order amount of $38,800 (which
equals 10% of the total contract) is requested for related, additional but
unforeseen work which may develop during the project. Staff has met with APEC
to discuss the scope of work to ensure that all tasks are included in the APEC bid.
Staff confirmed with the Contractor's State License Board that the contractor has
an active license on file. Staff also checked references supplied by the contractor
for previous work performed, including other work with the City and at RWQCP,
and found no significant complaints.
Timeline
Following Council approval of the contract, the work is expected to be completed
by May 15, 2017.
Resource Impact
Funding for this contract is included in the Wastewater Treatment Fund Fiscal
Year 2017 Capital Improvement Program project RWQCP Facility Equipment
Assessment and Retrofit (WQ-04011)budget.
Policy Implications
This recommendation does not represent any change to existing City policies.
Environmental Review
The recommended action is exempt from review under the California
Environmental Quality Act pursuant to CEQA Guidelines Section 15301 (b), which
includes maintenance of publicly-owned wastewater facilities involving negligible
expansion.
Attachments:
·Attachment A: Anderson Pacific-C17165854-Meter Station(PDF)
·Attachment B: Bid Summary (IFB-165854)(PDF)
Invitation for Bid (IFB) Package 1 Rev. April 27, 2016
CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
Contract No. C17165854
City of Palo Alto
Meter Station Rehabilitation Project
Attachment A
Invitation for Bid (IFB) Package 2 Rev. April 27, 2016
CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
TABLE OF CONTENTS
SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS…………………………………….…………..6
1.1 Recitals…………………………………………………………………………………………………………………….6
1.2 Definitions……………………………………………………………………………………………………………….6
SECTION 2 THE PROJECT………………………………………………………………………………………………………...6
SECTION 3 THE CONTRACT DOCUMENTS………………………………………………………………………………..7
3.1 List of Documents…………………………………………………………………………………………….........7
3.2 Order of Precedence……………………………………………………………………………………………......7
SECTION 4 CONTRACTOR’S DUTY…………………………………………………………………………………………..8
4.1 Contractor's Duties…………………………………………………………………………………………………..8
SECTION 5 PROJECT TEAM……………………………………………………………………………………………………..8
5.1 Contractor's Co-operation………………………………………………………………………………………..8
SECTION 6 TIME OF COMPLETION…………………………………………………………………………………….......8
6.1 Time Is of Essence…………………………………………………………………………………………………….8
6.2 Commencement of Work…………………………………………………………………………………………8
6.3 Contract Time…………………………………………………………………………………………………………..8
6.4 Liquidated Damages…………………………………………………………………………………………………8
6.4.1 Other Remedies……………………………………………………………………………………………………..9
6.5 Adjustments to Contract Time………………………………………………………………………………….9
SECTION 7 COMPENSATION TO CONTRACTOR……………………………………………………………………….9
7.1 Contract Sum……………………………………………………………………………………………………………9
7.2 Full Compensation……………………………………………………………………………………………………9
SECTION 8 STANDARD OF CARE……………………………………………………………………………………………..9
8.1 Standard of Care…………………………………………………………………………………..…………………9
SECTION 9 INDEMNIFICATION…………………………………………………………………………………………..…10
9.1 Hold Harmless……………………………………………………………………………………………………….10
9.2 Survival…………………………………………………………………………………………………………………10
SECTION 10 NON-DISCRIMINATION……..………………………………………………………………………………10
10.1 Municipal Code Requirement…………….………………………………..……………………………….10
SECTION 11 INSURANCE AND BONDS.…………………………………………………………………………………10
Invitation for Bid (IFB) Package 3 Rev. April 27, 2016
CONSTRUCTION CONTRACT
11.1 Evidence of Coverage…………………………………………………………………………………………..10
SECTION 12 PROHIBITION AGAINST TRANSFERS…………………………………………………………….…11
12.1 Assignment………………………………………………………………………………………………………….11
12.2 Assignment by Law.………………………………………………………………………………………………11
SECTION 13 NOTICES …………………………………………………………………………………………………………….11
13.1 Method of Notice …………………………………………………………………………………………………11
13.2 Notice Recipents ………………………………………………………………………………………………….11
13.3 Change of Address……………………………………………………………………………………………….12
SECTION 14 DEFAULT…………………………………………………………………………………………………………...12
14.1 Notice of Default………………………………………………………………………………………………….12
14.2 Opportunity to Cure Default…………………………………………………………………………………12
SECTION 15 CITY'S RIGHTS AND REMEDIES…………………………………………………………………………..13
15.1 Remedies Upon Default……………………………………………………………………………………….13
15.1.1 Delete Certain Services…………………………………………………………………………………….13
15.1.2 Perform and Withhold……………………………………………………………………………………..13
15.1.3 Suspend The Construction Contract…………………………………………………………………13
15.1.4 Terminate the Construction Contract for Default………………………………………………13
15.1.5 Invoke the Performance Bond………………………………………………………………………….13
15.1.6 Additional Provisions……………………………………………………………………………………….13
15.2 Delays by Sureties……………………………………………………………………………………………….13
15.3 Damages to City…………………………………………………………………………………………………..14
15.3.1 For Contractor's Default…………………………………………………………………………………..14
15.3.2 Compensation for Losses…………………………………………………………………………………14
15.4 Suspension by City……………………………………………………………………………………………….14
15.4.1 Suspension for Convenience……………………………………………………………………………..14
15.4.2 Suspension for Cause………………………………………………………………………………………..14
15.5 Termination Without Cause…………………………………………………………………………………14
15.5.1 Compensation………………………………………………………………………………………………….15
15.5.2 Subcontractors………………………………………………………………………………………………..15
15.6 Contractor’s Duties Upon Termination………………………………………………………………...15
SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES……………………………………………………………16
16.1 Contractor’s Remedies……………………………………..………………………………..………………….16
Invitation for Bid (IFB) Package 4 Rev. April 27, 2016
CONSTRUCTION CONTRACT
16.1.1 For Work Stoppage……………………………………………………………………………………………16
16.1.2 For City's Non-Payment…………………………………………………………………………………….16
16.2 Damages to Contractor………………………………………………………………………………………..16
SECTION 17 ACCOUNTING RECORDS………………………………………………………………………………….…16
17.1 Financial Management and City Access………………………………………………………………..16
17.2 Compliance with City Requests…………………………………………………………………………….17
SECTION 18 INDEPENDENT PARTIES……………………………………………………………………………………..17
18.1 Status of Parties……………………………………………………………………………………………………17
SECTION 19 NUISANCE……………………………………………………………………………………………………….…17
19.1 Nuisance Prohibited……………………………………………………………………………………………..17
SECTION 20 PERMITS AND LICENSES…………………………………………………………………………………….17
20.1 Payment of Fees…………………………………………………………………………………………………..17
SECTION 21 WAIVER…………………………………………………………………………………………………………….17
21.1 Waiver………………………………………………………………………………………………………………….17
SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS……………………………….18
22.1 Governing Law…………………………………………………………………………………………………….18
22.2 Compliance with Laws…………………………………………………………………………………………18
22.2.1 Palo Alto Minimum Wage Ordinance…………….………………………………………………….18
SECTION 23 COMPLETE AGREEMENT……………………………………………………………………………………18
23.1 Integration………………………………………………………………………………………………………….18
SECTION 24 SURVIVAL OF CONTRACT…………………………………………………………………………………..18
24.1 Survival of Provisions……………………………………………………………………………………………18
SECTION 25 PREVAILING WAGES………………………………………………………………………………………….18
SECTION 26 NON-APPROPRIATION……………………………………………………………………………………….19
26.1 Appropriation………………………………………………………………………………………………………19
SECTION 27 AUTHORITY……………………………………………………………………………………………………….19
27.1 Representation of Parties…………………………………………………………………………………….19
SECTION 28 COUNTERPARTS………………………………………………………………………………………………..19
28.1 Multiple Counterparts………………………………………………………………………………………….19
SECTION 29 SEVERABILITY……………………………………………………………………………………………………19
29.1 Severability………………………………………………………………………………………………………….19
SECTION 30 STATUTORY AND REGULATORY REFERENCES …………………………………………………..19
Invitation for Bid (IFB) Package 5 Rev. April 27, 2016
CONSTRUCTION CONTRACT
30.1 Amendments of Laws…………………………………………………………………………………………..19
SECTION 31 WORKERS’ COMPENSATION CERTIFICATION………………………………………………….….19
31.1 Workers Compensation…………………………………………………………………………………….19
SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS………………………………..…20
32.1 General Notice to Contractor…………………………………………………………………………….20
32.2 Labor Code section 1771.1(a)…………………………………………………………………………….20
32.3 DIR Registration Required…………………………………………………………………………………20
32.4 Posting of Job Site Notices…………………………………………………………………………………20
32.5 Payroll Records…………………………………………………………………………………………………20
Invitation for Bid (IFB) Package 6 Rev. April 27, 2016
CONSTRUCTION CONTRACT
CONSTRUCTION CONTRACT
THIS CONSTRUCTION CONTRACT entered into on November 14, 2016 (“Execution Date”) by and between
the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and ANDERSON PACIFIC
ENGINEERING CONSTRUCTION, INC. ("Contractor"), is made with reference to the following:
R E C I T A L S:
A. City is a municipal corporation duly organized and validly existing under the laws of the State of
California with the power to carry on its business as it is now being conducted under the statutes of the
State of California and the Charter of City.
B. Contractor is a Corporation duly organized and in good standing in the State of California,
Contractor’s License Number 245215 and Department of Industrial Relations Registration Number
1000000061. Contractor represents that it is duly licensed by the State of California and has the
background, knowledge, experience and expertise to perform the obligations set forth in this Construction
Contract.
C. On August 23 2016, City issued an Invitation for Bids (IFB) to contractors for the Meter Station
Rehabilitation (“Project”). In response to the IFB, Contractor submitted a Bid.
D. City and Contractor desire to enter into this Construction Contract for the Project, and other
services as identified in the Contract Documents for the Project upon the following terms and conditions.
NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually agreed by and between the undersigned parties as follows:
SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS.
1.1 Recitals.
All of the recitals are incorporated herein by reference.
1.2 Definitions.
Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General
Conditions. If there is a conflict between the definitions in this Construction Contract and in the General
Conditions, the definitions in this Construction Contract shall prevail.
SECTION 2 THE PROJECT.
The Project is the Meter Station Rehabilitation Project, located at 1137 San Antonio Road. Palo Alto, CA
94303 ("Project").
Invitation for Bid (IFB) Package 7 Rev. April 27, 2016
CONSTRUCTION CONTRACT
SECTION 3 THE CONTRACT DOCUMENTS.
3.1 List of Documents.
The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist
of the following documents which are on file with the Purchasing Division and are hereby incorporated by
reference.
1) Change Orders
2) Field Orders
3) Contract
4) Bidding Addenda
5) Special Provisions
6) General Conditions
7) Project Plans and Drawings
8) Technical Specifications
9) Instructions to Bidders
10) Invitation for Bids
11) Contractor's Bid/Non-Collusion Declaration
12) Reports listed in the Contract Documents
13) Public Works Department’s Standard Drawings and Specifications (most current version at
time of Bid)
14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current
version at time of Bid)
15) City of Palo Alto Traffic Control Requirements
16) City of Palo Alto Truck Route Map and Regulations
17) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre-
Qualification Checklist (if applicable)
18) Performance and Payment Bonds
3.2 Order of Precedence.
For the purposes of construing, interpreting and resolving inconsistencies between and among the
provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the
preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City
shall have the sole power to decide which document or provision shall govern as may be in the best
interests of the City.
Invitation for Bid (IFB) Package 8 Rev. April 27, 2016
CONSTRUCTION CONTRACT
SECTION 4 CONTRACTOR’S DUTY.
4.1 Contractor’s Duties
Contractor agrees to perform all of the Work required for the Project, as specified in the Contract
Documents, all of which are fully incorporated herein. Contractor shall provide, furnish, and supply all
things necessary and incidental for the timely performance and completion of the Work, including, but not
limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless
otherwise specified in the Contract Documents. Contractor also agrees to use its best efforts to complete
the Work in a professional and expeditious manner and to meet or exceed the performance standards
required by the Contract Documents.
SECTION 5 PROJECT TEAM.
5.1 Contractor’s Co-operation.
In addition to Contractor, City has retained, or may retain, consultants and contractors to provide
professional and technical consultation for the design and construction of the Project. The Contract
requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other
members of the Project Team and other contractors retained by City to construct other portions of the
Project.
SECTION 6 TIME OF COMPLETION.
6.1 Time Is of Essence.
Time is of the essence with respect to all time limits set forth in the Contract Documents.
6.2 Commencement of Work.
Contractor shall commence the Work on the date specified in City’s Notice to Proceed.
6.3 Contract Time.
Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed
not later than .
Within Eight months (8) after the commencement date specified in City’s Notice to
Proceed.
By executing this Construction Contract, Contractor expressly waives any claim for delayed early
completion.
6.4 Liquidated Damages.
Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of
the entire Work within the Contract Time, including any approved extensions thereto, City may assess
liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion,
based on the amount of One Thousand dollars ($1,000) per day, or as otherwise specified in the Special
Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified
elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial
Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable
Invitation for Bid (IFB) Package 9 Rev. April 27, 2016
CONSTRUCTION CONTRACT
estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled
to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor,
including, but not limited to, setoff against release of retention. If the total amount of liquidated damages
assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from
Contractor or its sureties. Occupancy or use of the Project in whole or in part prior to Substantial
Completion, shall not operate as a waiver of City’s right to assess liquidated damages.
6.4.1 Other Remedies. City is entitled to any and all available legal and equitable remedies City may
have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial
Completion of the entire Work within the Contract Time.
6.5 Adjustments to Contract Time.
The Contract Time may only be adjusted for time extensions approved by City and memorialized in a
Change Order approved in accordance with the requirements of the Contract Documents.
SECTION 7 COMPENSATION TO CONTRACTOR.
7.1 Contract Sum.
Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract
Documents the Contract Sum of Three hundred Eighty Eight Thousand Dollars ($388,000).
[This amount includes the Base Bid and Additive Alternate # 5.]
7.2 Full Compensation.
The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor
and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all
Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties
or obstructions which may arise or be encountered in performance of the Work until its Acceptance by
City, all risks connected with the Work, and any and all expenses incurred due to suspension or
discontinuance of the Work, except as expressly provided herein. The Contract Sum may only be adjusted
for Change Orders approved in accordance with the requirements of the Contract Documents.
SECTION 8 STANDARD OF CARE.
8.1 Standard of Care.
Contractor agrees that the Work shall be performed by qualified, experienced and well-supervised
personnel. All services performed in connection with this Construction Contract shall be performed in a
manner consistent with the standard of care under California law applicable to those who specialize in
providing such services for projects of the type, scope and complexity of the Project.
Invitation for Bid (IFB) Package 10 Rev. April 27, 2016
CONSTRUCTION CONTRACT
SECTION 9 INDEMNIFICATION.
9.1 Hold Harmless.
To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City
Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter
individually referred to as an “Indemnitee” and collectively referred to as "Indemnitees"), through legal
counsel acceptable to City, from and against any and liability, loss, damage, claims, expenses (including,
without limitation, attorney fees, expert witness fees, paralegal fees, and fees and costs of litigation or
arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or
omissions of Contractor, its employees, Subcontractors, representatives, or agents, in performing the Work
or its failure to comply with any of its obligations under the Contract, except such Liability caused by the
active negligence, sole negligence, or willful misconduct of an Indemnitee. Contractor shall pay City for any
costs City incurs to enforce this provision. Except as provided in Section 9.2 below, nothing in the Contract
Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against
City or any other Indemnitee.
Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of
any third-party claim relating to the Contract.
9.2 Survival.
The provisions of Section 9 shall survive the termination of this Construction Contract.
SECTION 10 NON-DISCRIMINATION.
10.1 Municipal Code Requirement.
As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of
this Agreement, it shall not discriminate in the employment of any person because of the race, skin color,
gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. Contractor acknowledges that it has read and understands
the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination
Requirements and the penalties for violation thereof, and will comply with all requirements of Section
2.30.510 pertaining to nondiscrimination in employment.
SECTION 11 INSURANCE AND BONDS.
11.1 Evidence of coverage.
Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with
evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all
requirements in Article 11 of the General Conditions.
Invitation for Bid (IFB) Package 11 Rev. April 27, 2016
CONSTRUCTION CONTRACT
SECTION 12 PROHIBITION AGAINST TRANSFERS.
12.1 Assignment.
City is entering into this Construction Contract in reliance upon the stated experience and qualifications of
the Contractor and its Subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not
assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by
operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or
transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract
and grounds for default in addition to any other legal or equitable remedy available to the City.
12.2 Assignment by Law.
The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of
Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor
is a partnership or joint venture or syndicate or co-tenancy shall result in changing the control of
Contractor, shall be construed as an assignment of this Construction Contract. Control means more than
fifty percent (50%) of the voting power of the corporation or other entity.
SECTION 13 NOTICES.
13.1 Method of Notice.
All notices, demands, requests or approvals to be given under this Construction Contract shall be given in
writing and shall be deemed served on the earlier of the following:
(i) On the date delivered if delivered personally;
(ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and
addressed as hereinafter provided;
(iii) On the date sent if sent by facsimile transmission;
(iv) On the date sent if delivered by electronic mail; or
(v) On the date it is accepted or rejected if sent by certified mail.
13.2 Notice to Recipients.
All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from
Contractor to City shall include the Project name and the number of this Construction Contract and shall be
addressed to City at:
To City: City of Palo Alto
City Clerk
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
Copy to: City of Palo Alto
Public Works Administration
250 Hamilton Avenue
Palo Alto, CA 94301
Attn: Tom Kapushinski
AND
[Include Construction Manager, If Applicable.]
Invitation for Bid (IFB) Package 12 Rev. April 27, 2016
CONSTRUCTION CONTRACT
City of Palo Alto
Utilities Engineering
250 Hamilton Avenue
Palo Alto, CA 94301
Attn:
In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the
following:
Palo Alto City Attorney’s Office
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, California 94303
All Claims shall be delivered personally or sent by certified mail.
All notices, demands, requests or approvals from City to Contractor shall be addressed to:
Anderson Pacific Engineering Construction, Inc.
1390 Norman Avenue
Santa Clara, CA 95054
Attn: Peter Anderson
13.3 Change of Address.
In advance of any change of address, Contractor shall notify City of the change of address in writing. Each
party may, by written notice only, add, delete or replace any individuals to whom and addresses to which
notice shall be provided.
SECTION 14 DEFAULT.
14.1 Notice of Default.
In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any
of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract
Documents, City may give written notice of default to Contractor in the manner specified for the giving of
notices in the Construction Contract, with a copy to Contractor’s performance bond surety.
14.2 Opportunity to Cure Default.
Except for emergencies, Contractor shall cure any default in performance of its obligations under the
Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt
of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will
commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require)
and will diligently and continuously prosecute such cure to completion within a reasonable time, which
shall in no event be later than ten (10) Days after receipt of such written notice.
Invitation for Bid (IFB) Package 13 Rev. April 27, 2016
CONSTRUCTION CONTRACT
SECTION 15 CITY'S RIGHTS AND REMEDIES.
15.1 Remedies Upon Default.
If Contractor fails to cure any default of this Construction Contract within the time period set forth above
in Section 14, then City may pursue any remedies available under law or equity, including, without
limitation, the following:
15.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete
certain portions of the Work, reserving to itself all rights to Losses related thereto.
15.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage
others to perform the Work or portion of the Work that has not been adequately performed by
Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to
itself all rights to Losses related thereto.
15.1.3 Suspend The Construction Contract. City may, without terminating the Construction
Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of
this Construction Contract for as long a period of time as City determines, in its sole discretion,
appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract
Time, and shall have no liability to Contractor for damages if City directs Contractor to resume
Work.
15.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate
this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure
any default as required by Section 14. City’s election to terminate the Construction Contract for
default shall be communicated by giving Contractor a written notice of termination in the manner
specified for the giving of notices in the Construction Contract. Any notice of termination given to
Contractor by City shall be effective immediately, unless otherwise provided therein.
15.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction
Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the
Performance Bond.
15.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract
are cumulative, and shall be in addition to those rights and remedies available in law or in equity.
Designation in the Contract Documents of certain breaches as material shall not waive the City’s
authority to designate other breaches as material nor limit City’s right to terminate the
Construction Contract, or prevent the City from terminating the Agreement for breaches that are
not material. City’s determination of whether there has been noncompliance with the
Construction Contract so as to warrant exercise by City of its rights and remedies for default under
the Construction Contract, shall be binding on all parties. No termination or action taken by City
after such termination shall prejudice any other rights or remedies of City provided by law or
equity or by the Contract Documents upon such termination; and City may proceed against
Contractor to recover all liquidated damages and Losses suffered by City.
15.2 Delays by Sureties.
Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for
completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the
date of the notice of termination, Contractor’s surety shall be deemed to have waived its right to complete
the Work under the Contract, and City may immediately make arrangements for the completion of the
Work through use of its own forces, by hiring a replacement contractor, or by any other means that City
determines advisable under the circumstances. Contractor and its surety shall be jointly and severally
Invitation for Bid (IFB) Package 14 Rev. April 27, 2016
CONSTRUCTION CONTRACT
liable for any additional cost incurred by City to complete the Work following termination. In addition, City
shall have the right to use any materials, supplies, and equipment belonging to Contractor and located at
the Worksite for the purposes of completing the remaining Work.
15.3 Damages to City.
15.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or
equity in the event of Contractor’s default under the Contract Documents.
15.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default
under the Contract Documents, City shall be entitled to deduct the cost of such Losses from
monies otherwise payable to Contractor. If the Losses incurred by City exceed the amount
payable, Contractor shall be liable to City for the difference and shall promptly remit same to City.
15.4 Suspension by City
15.4.1 Suspension for Convenience. City may, at any time and from time to time, without
cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for
such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order
shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order,
Contractor shall, at City’s expense, comply with the order and take all reasonable steps to
minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or
extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change
Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or
expires, Contractor shall resume and continue with the Work. A Change Order will be issued to
cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such
suspension. A Suspension Order shall not be the exclusive method for City to stop the Work.
15.4.2 Suspension for Cause. In addition to all other remedies available to City, if Contractor
fails to perform or correct work in accordance with the Contract Documents, City may
immediately order the Work, or any portion thereof, suspended until the cause for the suspension
has been eliminated to City’s satisfaction. Contractor shall not be entitled to an increase in
Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply
with the Contract Documents. City’s right to suspend the Work shall not give rise to a duty to
suspend the Work, and City’s failure to suspend the Work shall not constitute a defense to
Contractor’s failure to comply with the requirements of the Contract Documents.
15.5 Termination Without Cause.
City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole
upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s expense, comply
with the notice and take all reasonable steps to minimize costs to close out and demobilize. The
compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole and exclusive
compensation for such termination and Contractor waives any claim for other compensation or Losses,
including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other
consequential, direct, indirect or incidental damages of any kind resulting from termination without cause.
Termination pursuant to this provision does not relieve Contractor or its sureties from any of their
obligations for Losses arising from or related to the Work performed by Contractor.
Invitation for Bid (IFB) Package 15 Rev. April 27, 2016
CONSTRUCTION CONTRACT
15.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt
of a billing from Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City
shall pay the following to Contractor as Contractor’s sole compensation for performance of the
Work :
.1 For Work Performed. The amount of the Contract Sum allocable to the portion of the
Work properly performed by Contractor as of the date of termination, less sums previously paid to
Contractor.
.2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors:
(i) Demobilizing and
(ii) Administering the close-out of its participation in the Project (including, without
limitation, all billing and accounting functions, not including attorney or expert fees) for a
period of no longer than thirty (30) Days after receipt of the notice of termination.
.3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site
which were fabricated for subsequent incorporation in the Work.
.4 Profit Allowance. An allowance for profit calculated as four percent (4%) of the sum of
the above items, provided Contractor can prove a likelihood that it would have made a profit if
the Construction Contract had not been terminated.
15.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase
orders and other contracts permitting termination for convenience by Contractor on terms that
are consistent with this Construction Contract and that afford no greater rights of recovery against
Contractor than are afforded to Contractor against City under this Section.
15.6 Contractor’s Duties Upon Termination.
Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice
directs otherwise, do the following:
(i) Immediately discontinue the Work to the extent specified in the notice;
(ii) Place no further orders or subcontracts for materials, equipment, services or facilities,
except as may be necessary for completion of such portion of the Work that is not
discontinued;
(iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the
notice of termination, of all subcontracts, purchase orders and contracts that are
outstanding, including, without limitation, the terms of the original price, any changes,
payments, balance owing, the status of the portion of the Work covered and a copy of
the subcontract, purchase order or contract and any written changes, amendments or
modifications thereto, together with such other information as City may determine
necessary in order to decide whether to accept assignment of or request Contractor to
terminate the subcontract, purchase order or contract;
(iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions
thereof, that City elects to accept by assignment and cancel, on the most favorable terms
reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof,
that City does not elect to accept by assignment; and
(v) Thereafter do only such Work as may be necessary to preserve and protect Work already
in progress and to protect materials, plants, and equipment on the Project Site or in
transit thereto.
Upon termination, whether for cause or for convenience, the provisions of the Contract
Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees,
Invitation for Bid (IFB) Package 16 Rev. April 27, 2016
CONSTRUCTION CONTRACT
submittals of as-built drawings, instructions, or manuals, or other such rights and obligations
arising prior to the termination date.
SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES.
16.1 Contractor’s Remedies.
Contractor may terminate this Construction Contract only upon the occurrence of one of the following:
16.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act
or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any
Subcontractor, due to issuance of an order of a court or other public authority other than City
having jurisdiction or due to an act of government, such as a declaration of a national emergency
making material unavailable. This provision shall not apply to any work stoppage resulting from
the City’s issuance of a suspension notice issued either for cause or for convenience.
16.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within
ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the
Construction Contract (30) days following a second notice to City of Contractor’s intention to
terminate the Construction Contract.
16.2 Damages to Contractor.
In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in
Paragraph 15.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation
and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of
anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental
damages, of any kind.
SECTION 17 ACCOUNTING RECORDS.
17.1 Financial Management and City Access.
Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper
financial management under this Construction Contract in accordance with generally accepted accounting
principles and practices. City and City's accountants during normal business hours, may inspect, audit and
copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence,
instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data
relating to this Project. Contractor shall retain these documents for a period of three (3) years after the
later of (i) Final Payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such
longer period as may be required by law.
Invitation for Bid (IFB) Package 17 Rev. April 27, 2016
CONSTRUCTION CONTRACT
17.2 Compliance with City Requests.
Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition precedent
to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's
right to receive further payments under the Contract Documents. City many enforce Contractor’s
obligation to provide access to City of its business and other records referred to in Section 17.1 for
inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court
of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral
testimony.
SECTION 18 INDEPENDENT PARTIES.
18.1 Status of parties.
Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’
of the other party. City, its officers or employees shall have no control over the conduct of Contractor or
its respective agents, employees, subconsultants, or subcontractors, except as herein set forth.
SECTION 19 NUISANCE.
19.1 Nuisance Prohibited.
Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in
connection in the performance of services under this Construction Contract.
SECTION 20 PERMITS AND LICENSES.
20.1 Payment of Fees.
Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall
provide, procure and pay for all licenses, permits, and fees, required by the City or other government
jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses
for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation
shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set
forth in the licenses or permits issued by other agencies.
SECTION 21 WAIVER.
21.1 Waiver.
A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be
deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition
contained herein, whether of the same or a different character.
Invitation for Bid (IFB) Package 18 Rev. April 27, 2016
CONSTRUCTION CONTRACT
SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS.
22.1 Governing Law.
This Construction Contract shall be construed in accordance with and governed by the laws of the State of
California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no
other place.
22.2 Compliance with Laws.
Contractor shall comply with all applicable federal and California laws and city laws, including, without
limitation, ordinances and resolutions, in the performance of work under this Construction Contract.
22.2.1 Palo Alto Minimum Wage Ordinance. Contractor shall comply with all requirements of
the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from
time to time. In particular, for any employee otherwise entitled to the State minimum wage, who
performs at least two (2) hours of work in a calendar week within the geographic boundaries of
the City, Contractor shall pay such employees no less than the minimum wage set forth in Palo
Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of
the City of Palo Alto. In addition, Contractor shall post notices regarding the Palo Alto Minimum
Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060.
SECTION 23 COMPLETE AGREEMENT.
23.1 Integration.
This Agreement represents the entire and integrated agreement between the parties and supersedes all
prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended
only by a written instrument, which is signed by the parties.
SECTION 24 SURVIVAL OF CONTRACT.
24.1 Survival of Provisions.
The provisions of the Construction Contract which by their nature survive termination of the Construction
Contract or Final Completion, including, without limitation, all warranties, indemnities, payment
obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect
after Final Completion or any termination of the Construction Contract.
SECTION 25 PREVAILING WAGES.
This Project is not subject to prevailing wages. Contractor is not required to pay prevailing wages in the
performance and implementation of the Project in accordance with SB 7, if the public works contract does
not include a project of $25,000 or less, when the project is for construction work, or the contract does not
include a project of $15,000 or less, when the project is for alteration, demolition, repair, or maintenance
(collectively, ‘improvement’) work.
Or
Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the
California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code.
Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has
obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work
in this locality for each craft, classification, or type of worker needed to execute the contract for this
Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be
Invitation for Bid (IFB) Package 19 Rev. April 27, 2016
CONSTRUCTION CONTRACT
obtained at the Purchasing Division’s office of the City of Palo Alto. Contractor shall provide a copy of
prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates
as a minimum. Contractor shall comply with the provisions of all sections, including, but not limited to,
Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages.
SECTION 26 NON-APPROPRIATION.
26.1 Appropriations.
This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto
Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the
event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time
within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds
for this Construction Contract are no longer available. This section shall take precedence in the event of a
conflict with any other covenant, term, condition, or provision of this Agreement.
SECTION 27 AUTHORITY.
27.1 Representation of Parties.
The individuals executing this Agreement represent and warrant that they have the legal capacity and
authority to do so on behalf of their respective legal entities.
SECTION 28 COUNTERPARTS
28.1 Multiple Counterparts.
This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties,
constitute a single binding agreement.
SECTION 29 SEVERABILITY.
29.1 Severability.
In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not be affected.
SECTION 30 STATUTORY AND REGULATORY REFERENCES.
30.1 Amendments to Laws.
With respect to any amendments to any statutes or regulations referenced in these Contract Documents,
the reference is deemed to be the version in effect on the date that the Contract was awarded by City,
unless otherwise required by law.
SECTION 31 WORKERS’ COMPENSATION CERTIFICATION.
31.1 Workers Compensation.
Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows:
“I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be
insured against liability for workers’ compensation or to undertake self-insurance in accordance with the
Invitation for Bid (IFB) Package 20 Rev. April 27, 2016
CONSTRUCTION CONTRACT
provisions of that code, and I will comply with such provisions before commencing the performance of the
Work on this Contract.”
SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS.
32.1 General Notice to Contractor.
City requires Contractor and its listed subcontractors to comply with the requirements of SB 854.
32.2 Labor Code section 1771.1(a)
City provides notice to Contractor of the requirements of California Labor Code section 1771.1(a), which
reads:
“A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the
requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract
for public work, as defined in this chapter, unless currently registered and qualified to perform public work
pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a
bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5
of the Public Contract Code, provided the contactor is registered to perform public work pursuant to
Section 1725.5 at the time the contract is awarded.”
32.3 DIR Registration Required.
City will not accept a bid proposal from or enter into this Construction Contract with Contractor without
proof that Contractor and its listed subcontractors are registered with the California Department of
Industrial Relations (“DIR”) to perform public work, subject to limited exceptions.
32.4 Posting of Job Site Notices.
City gives notice to Contractor and its listed subcontractors that Contractor is required to post all job site
notices prescribed by law or regulation and Contractor is subject to SB 854-compliance monitoring and
enforcement by DIR.
32.5 Payroll Records.
City requires Contractor and its listed subcontractors to comply with the requirements of Labor Code
section 1776, including:
(i) Keep accurate payroll records, showing the name, address, social security
number, work classification, straight time and overtime hours worked each day
and week, and the actual per diem wages paid to each journeyman, apprentice,
worker, or other employee employed by, respectively, Contractor and its listed
subcontractors, in connection with the Project.
(ii) The payroll records shall be verified as true and correct and shall be certified
and made available for inspection at all reasonable hours at the principal office
of Contractor and its listed subcontractors, respectively.
(iii) At the request of City, acting by its project manager, Contractor and its listed
subcontractors shall make the certified payroll records available for inspection
Invitation for Bid (IFB) Package 21 Rev. April 27, 2016
CONSTRUCTION CONTRACT
or furnished upon request to the project manager within ten (10) days of receipt
of City’s request.
City requests Contractor and its listed subcontractors to submit the certified
payroll records to the project manager at the end of each week during the
Project.
(iv) If the certified payroll records are not produced to the project manager within
the 10-day period, then Contractor and its listed subcontractors shall be subject
to a penalty of one hundred dollars ($100.00) per calendar day, or portion
thereof, for each worker, and City shall withhold the sum total of penalties from
the progress payment(s) then due and payable to Contractor. This provision
supplements the provisions of Section 15 hereof.
(v) Inform the project manager of the location of contractor’s and its listed
subcontractors’ payroll records (street address, city and county) at the
commencement of the Project, and also provide notice to the project manager
within five (5) business days of any change of location of those payroll records.
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed
this Agreement on the date first above written.
CITY OF PALO ALTO
City Manager (Contract over $85k)
Purchasing Manager (Contract over $25k)
Contracts Administrator (Contract under $25k)
APPROVED AS TO FORM:
City Attorney or designee
(Contract over $25k)
Contracts Administrator
(Checklist Approval)
PWD APPROVED:
Public Works Director:
ANDERSON PACIFIC ENGINEERING
CONSTRUCTION, INC.
Officer 1
By:
Name:
Title:
Officer 2 (Required for Corp. or LLC)
By:
Name:
Title:
Bid
Item Description Engineer's
Estimate
Anderson
Pacific
Monterey
Mechanical
Blocka
Construction
Cal Pacific
Construction
Base Rehab $444,264 $388,000 $543,000 DID NOT SUBMIT
BID
DID NOT SUBMIT
BID
Remarks Apparent low
bidder
Bid Summary for Meter Station Rehabilitation Project (IFB-165854)
CIP WQ-04011 Plant Equipment Repairs
City of Palo Alto, Public Works Department - RWQCP
Attachment B
City of Palo Alto (ID # 7408)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Resolution to Accept Rubberized Pavement Grant
Title: Adoption of a Resolution to Authorize the City Manager to Submit
Application(s) and Related Agreement(s) for the California Department of
Resources Recycling and Recovery (CalRecycle) Rubberized Pavement Grant
Program
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council adopt a resolution (Attachment A) to authorize
the City Manager or his designee to submit a rubberized pavement grant
application to the California Department of Resources Recycling and Recovery
(CalRecycle) and to sign related program agreements and amendments.
Background
The California Department of Resources Recycling and Recovery (CalRecycle)
administers a program to provide opportunities to divert tires from landfill
disposal, prevent illegal tire dumping and promote markets for recycled-content
tire products. The Rubberized Pavement Grant Program is designed to promote
markets for recycled-content surfacing products derived from California-
generated waste tires. The Rubberized Pavement Grant Program provides
competitive grants to local governments and is aimed at encouraging first-time or
limited users of rubberized pavement in two project categories, Rubberized
Asphalt Concrete Hot-Mix (RAC) and Rubberized Chip Seal (Chip Seal). Eligible
projects must use a minimum of 3,500 tons of RAC which meets American Society
of Testing and Material (ASTM) standards for Asphalt-Rubber Binder.
The City received CalRecycle grants in 2011 and 2015 in the amounts of $250,000
and $63,000, respectively. These grants have supplemented the cost to install
City of Palo Alto Page 2
rubberized pavement on two of the City’s busiest arterials, Alma Street and
Middlefield Road. City Council approved a previous grant application and
resolution in March 2011 (ID#1432). CalRecycle allows resolutions to be valid for
a term of five years.
Discussion
Staff submitted an RAC grant application in October 2016. For the application to
be deemed complete, an updated resolution must be attached by November 29,
2016. The grant funds will supplement the Capital Improvement Program (CIP)
Street Maintenance Program PE-86070. CalRecycle will send award notifications
in January 2017 and grant funds must be expended by April 2019. Staff is
currently in design for the last segment of a three-year project to resurface
Middlefield Road and Alma Street with rubberized asphalt. The Fiscal Year 2017
project will start in spring 2017. RAC material is more expensive than normal
asphalt concrete as it is a recycled product, but may prove to be more durable,
flexible and provide a longer life span than the typical 20-year life span of asphalt
concrete. The $88,200 grant request will help pay for a portion of the rubberized
asphalt. Since the City has received previous RAC grants, the reimbursement rate
is capped at $14 per ton. The FY 2017 Alma Street and Middlefield Road
Resurfacing project is estimated to use 6,300 tons of RAC.
Resource Impact
If a supplemental grant is awarded to the City, staff will return to Council to
approve an adjustment to the Fiscal Year 2017 capital budget to increase the CIP
project budget and recognize reimbursement revenue. The grant requires City
expenditures of funds, which will be reimbursed by the state. No net impact on
the General Fund or Infrastructure Reserve is expected. The remaining funds for
the project are included in the Adopted Fiscal Year 2017 CIP Budget, Street
Maintenance Program, PE-86070 (page 264).
Staff will submit the application, administer agreements and amendments, and
submit for reimbursements periodically during the project as required by the
grant conditions.
Policy Implications
This grant program is consistent with the City of Palo Alto’s Comprehensive Plan
and does not represent any changes to existing City policies.
City of Palo Alto Page 3
Environmental Review
Street resurfacing projects are categorically exempt from the California
Environmental Quality Act (CEQA) under Section 15301(c) of the CEQA Guidelines,
as repair, maintenance and/or minor alteration of existing facilities and no further
review is necessary.
Attachments:
Attachment A: CalRecycle Resolution(DOCX)
ATTACHMENT A
NOT YET APPROVED
Resolution No. ______
Resolution of the Council of the City of Palo Alto Authorizing the City Manager to Submit
Application(s) and Sign Related Agreement(s) for the California Department of Resources
Recycling and Recovery (CalRecycle) Rubberized Pavement Grant Program.
WHEREAS, pursuant to Public Resources Code sections 48000 et seq., 14581, and 42023.1(g),
the Department of Resources Recycling and Recovery (CalRecycle) has established various
payment programs to make payments to qualifying jurisdictions; and
WHEREAS, in furtherance of this authority CalRecycle is require to establish procedures
governing the administration of the payment programs; and
WHEREAS, CalRecycle’s procedures for administering payment programs require, among other
things, an applicant’s governing body to declare by resolution certain authorizations related to
the administration of the payment program.
NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows:
SECTION 1. The Council authorizes the submittal of application(s) to CalRecycle for
Rubberized Pavement Grants for which the City of Palo Alto is eligible.
SECTION 2. The City Manager, or his/her designee is hereby authorized and empowered to
execute in the name of the City of Palo Alto all grant documents, including but not limited to,
applications, agreements, amendments and requests for payment, necessary to secure grant
funds and implement the approved grant project; and
/ /
/ /
/ /
/ /
/ /
/ /
NOT YET APPROVED
SECTION 3. These authorizations are effective for five (5) years from the date of adoption of
this resolution.
INTRODUCED AND PASSSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST: APPROVED:
__________________________ ________________________
City Clerk Mayor
APPROVED AS TO FORM: ________________________
City Manager
__________________________ ________________________
Senior Assistant City Attorney Director of Public Works
City of Palo Alto (ID # 7185)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Alarm Ordinance Municipal Code Revision
Title: Adoption of an Ordinance Amending Palo Alto Municipal Code Chapter
4.39 – Private Intrusion Alarms
From: City Manager
Lead Department: Police
RECOMMENDATIONS
The Police Department recommends adoption of an ordinance amending Palo Alto Municipal
Code Chapter 4.39 – Private Intrusion Alarms.
BACKGROUND
The current Palo Alto Alarm Ordinance 4.39 was adopted in 2002. The ordinance has proven
effective in reducing false alarms and the allocation of police resources that respond to false
alarms. In 2001 the Police Department received 4,675 alarms; that number has been reduced
to 2,666 in 2015. Currently the alarm program is managed by a Code Enforcement Officer
within the Police Technical Services Division. The Police Department is considering outsourcing
the false alarm program to provide more effective, enhanced service to the community and to
free up staff for other duties. The alarm ordinance revisions are intended to remove
inconsistencies and to comply with common practices in order to prepare for a more
automated system.
DISCUSSION
The revisions to the existing Alarm Ordinance affect five provisions:
1) The notification of false alarms by mail.
2) The number of false alarms that trigger a pre-revocation hearing letter.
3) The time frame for scheduling an appeal hearing.
4) The time frame for rendering an appeal decision.
5) The designation of nonresponse after excessive false alarms.
The revised ordinance removes the requirement that alarm users must be given mail
notification of each false alarm prior to being charged with subsequent false alarm activations.
There are instances when multiple false alarms accrue over a short period of time. Residents
City of Palo Alto Page 2
and businesses are notified by their alarm company every time an alarm is activated and police
officers leave a business card when they clear the premises. The alarm user will still be notified
by mail as a backup but it is no longer a requirement that the letter arrive prior to the user be
charged with other false alarms that may occur in the interim between the first false alarm and
the arrival of the letter.
The revised ordinance increases the number of false alarms before the pre-revocation hearing
letter is mailed from four false alarms to five false alarms to be consistent with how the internal
alarm software has been calibrated.
The revised ordinance increases the number of days allowed for the Administrative Hearing
Officer to set the hearing for appeal from fifteen days to forty-five days and the number of days
for the hearing decision from forty-eight hours to ten days. These changes were requested by
the Hearing Officer and are intended to provide realistic timeframes to schedule appeals and
for the Hearing Officer to render decisions.
The language describing non response after the 7th false alarm in a 12-month period has been
clarified. Previously after five false alarms an additional two false alarms in a six month period
would relegate the alarm account to nonresponse. Adhering to a rolling 12-month period is
easier to calculate and reduces the likelihood of an account going on nonresponse in the final
six months in most cases.
RESOURCE IMPACT
Staff does not anticipate any change in revenue from these adjustments and no direct cost
increases will result from the adoption of these modifications.
POLICY IMPLICATIONS
These actions are consistent with existing City policies.
Attachments:
ATTACHMENT A - False Alarm Ordinance Revisions (PDF)
NOT YET APPROVED
Ordinance No. _______
Ordinance of the Council of the City of Palo Alto Amending
Section 4.39.080 (False Alarm Service Charges) and Section
4.39.090 (Revocation of Alarm Registration) of Chapter
4.39 (Private Intrusion Alarms) of the Palo Alto Municipal Code to
Update the False Alarm Program
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
(a) That the adoption of this Ordinance is necessary to update the false alarm
program to be consistent with common practice and how the current alarm software calculates
penalties.
SECTION 2. Section 4.39.080 (False alarm service charges) of Chapter 4.39 (Private
intrusion alarms) of the Palo Alto Municipal Code is hereby amended to read as follows:
4.39.080 False alarm service charges.
(a) There is imposed upon every alarm user whose alarm system causes three or more
false alarms within twelve months a false alarm service charge. A separate charge shall be
imposed for each false alarm in excess of two as set forth in the municipal fee schedule,
provided that the alarm user is given notice by first-class mail of each false alarm prior to the
occurrence of the next false alarm for which a service charge is imposed.
(b) Service charges shall be due and payable and are delinquent after thirty days of the
mailing of a bill from the city. Penalties for delinquency in remittance of any service charge or
any deficiency in remittance shall attach and be paid by the person required to remit at the rate
of ten percent each month on the base false alarm charge, but such penalty shall not be
compounded.
(c) Debt to City. All fees and charges levied pursuant to this chapter shall constitute a
valid and subsisting debt in favor of the city and against the alarm user for whom services were
rendered. If the amount remains unpaid, a civil action may be filed with the appropriate court
for the amount due together with any penalties, any related charges and fees accrued due to
nonpayment and all fees and charges required to file and pursue such civil action.
(d) An alarm user may appeal any alarm service charge under this section by submitting
a letter of appeal to the chief of police explaining the basis for the appeal within fifteen days of
the mailing of the bill for that service charge. While the appeal is pending, the bill shall not be
due and payable. An administrative hearing officer shall set a time and place for a hearing on
the appeal within fifteen forty-five days after receipt of the letter of appeal. Failure to file a
timely letter of appeal shall be a waiver of the alarm user's right to a hearing; however, the
administrative hearing officer may set a date for a hearing if there is cause to believe that it
might encourage substantial cooperation from the alarm user. At the time and place set for the
hearing upon the appeal, the administrative hearing officer shall hear evidence as to whether
the alarm service charge should be imposed in whole or in part. The burden of proof shall be
1
160809 sh 0200003
NOT YET APPROVED
upon the appellant to show that there was no substantial evidence that the alarm service
charge was properly imposed as provided in this chapter. Within forty-eight hours 10 days
after the conclusion of the hearing, the administrative hearing officer shall render a decision
on the appeal. The decision shall be final. Notification of the decision shall be mailed to the
appellant within three days of the decision. If the appeal is denied, the notification shall
inform the alarm user of the exact date that the alarm service charge shall become due and
payable, which date shall in no event be sooner than five days after notice of the decision has
been mailed. SECTION 3. Section 4.39.090 (Revocation of alarm registration) of Chapter 4.39 (Private
intrusion alarms) of the Palo Alto Municipal Code is hereby amended to read as follows:
4.39.090 Revocation of alarm registration.
(a) After the police department has recorded more than four five false alarms on any
specific premises within any twelve-month period, and after the alarm user has been notified
by first-class mail that the false alarms have been activated, the chief of police shall notify the
alarm user by first class mail of a pre-revocation hearing to discuss the cause of the false alarms
and to remind the alarm user that the registration will be subject to revocation if two more
false alarms occur within the following six months the police department has recorded seven
false alarms occur within any twelve-month period. The hearing will be within fifteen forty-five
days from the date of mailing of the notification. Following a pre-revocation hearing, if the
police department has recorded an additional two false alarms within six months seven false
alarms in any twelve-month period, the chief of police shall revoke the alarm user's registration
and from that time on the police department will not respond to any alarm from that alarm
user's premises for a period of six months and until such time as the alarm user submits a new
alarm registration application and the chief of police determines to issue an alarm registration
upon proof that adequate measures have been taken to correct any problem causing the false
alarms.
SECTION 4. Severability. If any provision, clause, sentence or paragraph of this
ordinance, or the application to any person or circumstances, shall be held invalid, such
invalidity shall not affect the other provisions of this Ordinance which can be given effect
without the invalid provision or application and, to this end, the provisions of this Ordinance
are hereby declared to be severable.
//
//
//
//
//
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2
160809 sh 0200003
NOT YET APPROVED
SECTION 5. The Council finds that this project is exempt from the provisions of the
California Environmental Quality Act (“CEQA”), pursuant to Section 15061 of the CEQA
Guidelines, because it can be seen with certainty that there is no possibility that the ordinance
will have a significant effect on the environment.
SECTION 6. This ordinance shall be effective on the thirty-first day after the date of its
adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Principal City Attorney City Manager
____________________________
Director of Administrative Services
____________________________
Police Chief
3
160809 sh 0200003
City of Palo Alto (ID # 7366)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: C&S Engineers Contract CIP AP-16000 Apron-1B
Title: Approval of Amendment Number 3 With C&S Engineers, Inc. Contract
Number C15155208A to Increase the Contract by $350,000 for a Total Not-to-
Exceed Amount of $1,458,329 for Engineering and Design Services Related to
the Airport Apron Reconstruction Design Phase 1B; and Approval of a Budget
Amendment in the Airport Enterprise Fund
From: City Manager
Lead Department: Public Works
Recommended Motion
Staff recommends that Council:
1.Approve Amendment No. 3 to C&S Engineers, Inc. Contract C15155208A
(Attachment A) to increase the contract by $350,000 for a total not to
exceed amount of $1,458,329 for engineering and design services related
to CIP projects; and
2.Amend the Fiscal Year 2017 Budget Appropriation for the Airport Enterprise
Fund by:
a.Increasing the Capital Improvement Program Airport Apron
Reconstruction project (AP-16000)appropriation in the amount of
$28,450; and
b.Decreasing the fund balance in the amount of $28,450.
Background
Prior to transferring Palo Alto Airport (PAO) in 2014, staff analyzed PAO
infrastructure and provided recommendations for important safety-related
maintenance and modernization projects needed to upgrade PAO to a modern
operational facility. With over 170,000 annual operations, PAO serves as an
important General Aviation Reliever Airport for three primary Bay Area airports
City of Palo Alto Page 2
and is identified as an important airport in the National Plan of Integrated Airport
System (NPIAS). Airports in the NPIAS qualify for Federal Aviation Administration
(FAA)grant money for eligible projects under the Airport Improvement Program,
which includes capital improvements necessary for continued safe and efficient
operation of an airport.
Contracts
The City initially entered into a contract with C&S Engineers, Inc.(C&S) in October
2014 in an amount of $250,000 for a term of five (5)years for on-call consulting
services (City Manager’s Report #4948). This contract provides for a variety of
design, construction administration, environmental studies and other planning
functions required for FAA Airport Capital Improvement Projects. On-call
consultant services that are compliant with FAA requirements are eligible for 90%
reimbursement of the contract amount.
In December 2015, Council approved Amendment No. One to increase the
contract amount by $650,000 for a total not-to-exceed amount of $900,000 for
professional engineering and design services related to CIPs (City Manager’s
Report #6367). In August 2016, Council approved Amendment No.2 to increase
the contract amount by $208,329 for a total not-to-exceed amount of $1,108,329
for engineering and design services related to the CIP Airport Perimeter Fence
project AP-16003 (City Manager’s Report #7165).
Capital Improvement
The FAA’s high priority on standard Runway Safety Areas and users concerns
about deteriorating conditions of the airfield prompted a pavement inspection in
September 2013. The inspection resulted in an estimate of more than $8M to
rehabilitate the apron pavement. In 2014,staff prepared and submitted an
Airport Capital Improvement Plan (ACIP)to the FAA, addressing these immediate
rehabilitation needs. On August 20, 2015, City staff and C&S met with the FAA to
discuss the ACIP and prioritize projects.
In September 2015, the City Manager executed a grant agreement for $509,585
for CIP projects AP-16000 and AP-16002 (Airport Apron Reconstruction and
Wildlife Hazard Plan, respectively). In a meeting with staff the same month,the
FAA supported an airfield electrical study and indicated the City should reapply
for a grant to include it in the multi-phase of CIP project AP-16000. PAO received
City of Palo Alto Page 3
the grant and increased the contract accordingly.Furthermore, on October 4,
2016, the FAA ackowledged additional scope to design the replacement of the
aircraft washrack was needed to meet the latest environmental standards and
should be incorporated in Phase 1B of the project apron design.
Grants
To implement the safety enhancements, rehabilitation, and infrastructure needs,
assistance from available grant programs are sought.
When awarding grants, the FAA and Department of Transportation (DOT)require
the City to execute and return agreements within strict timelines, sometimes
within days of receiving the offer. To ensure the City is able to accept and
maximize grants, Council authorized the City Manager to apply for and execute
future grant agreements offered by the FAA and DOT for improvements at the
airport. (City Manager’s Report #5890) The FAA makes airport improvement
grants available to local airport sponsors for 90% of the total costs of eligible
projects and, when applicable, the California DOT will match 2.5% of the federal
share. In receiving grant funds from the FAA, the City agrees to the conditions
governing the use of grant funds and operates the airport in compliance with FAA
requirements.
Discussion
Contract Amendment No. 3 with C&S Companies increases the contract amount
by $350,000 for engineering and design services related to Phase 1B of the apron
CIP project AP-16000.
In addition to addressing the deteriorating pavement condition, Phase 1B of the
project design will include the airfield electrical study and replacement of the
aircraft washrack. Although the footprint of the apron will remain the same, the
total number of tie-downs will be reduced to meet current FAA standards.
As Council authorized the City Manager or his designee to execute applications
for and acceptance of future airport maintenance and improvement grants for
existing infrastructure at PAO, in May 2016 the City applied for and received a
grant from the FAA for $436,481 or 90% of the total cost of the project for the
Apron Design –Phase 1B. The additional $28,450 design costs for the washrack
are grant eligible and these costs will be added to the construction grant
City of Palo Alto Page 4
application where the City will seek 90% reimbursement when the construction
grant is received. If approved, this would result in a net City contribution of
$2,845 to complete this component of the improvements.
Timeline
The completion of the design work, including the airfield electrical study and
aircraft washrack is expected to be completed in Spring 2017.The FAA requires
staff to have bids by the first of May to apply for the first phase construction
grant.
Resource Impact
Funding for the $350,000 contract amendment is available in Aiport Fund Capital
Improvement Program project AP-16000 Airport Apron Reconstruction.
The cost for the additional scope to design the replacement of the aircraft
washrack is $28,450 and was not included in the FY 2017 budget for AP-16000.
Ninety percent of this additional design cost is eligible for reimbursement via an
FAA grant.
Staff will request reimbursement from the FAA for 90% of the cost of the
washrack design as part of the construction grant application to be submitted in
May 2017. They will also manage expenses in pavement maintenance and
liability insurance costs during FY 2017 to ensure the Airport Enterprise Fund
remains solvent,without additional General Fund support,in case additional FAA
funding is not approved. A review of FY 2016 actuals and current year tracking
will be completed as part of the FY 2017 Mid-Year Budget Review report and any
rebalancing actions brought forward as necessary at that time.
Environmental Review
Based on FAA direction, C&S was tasked with preparing documentation necessary
to comply with National Environmental Policy Act (NEPA) requirements for the
airport apron design and as a project that involves only replacements of existing
structure it qualifies under a categorical exclusion.The apron rehabilitation
project previously received environmental approval from the FAA. Under
California Environmental Quality Act (CEQA) guidelines the apron rehabilitation
qualifies under “Categorical Exemption 15302 Replacement or Reconstruction.” A
CEQA Notice of Exemption will be filed prior to project construction.
City of Palo Alto Page 5
Policy Implications
The CIP Apron Rehabilitation project is consistent with two of City Council’s 2016
priorities: 1) Comprehensive planning and action on land use and transportation
and 2) Infrastructure Strategy and Funding.
Attachments:
·Attachment A: CS Engineers Inc. -AMENDMENT NO. 3 (PDF)
1 Revision July 20, 2016
AMENDMENT NO. THREE TO CONTRACT NO. C15155208A
BETWEEN THE CITY OF PALO ALTO AND C & S ENGINEERS, INC.
This Amendment No. Three to Contract No. C15155208A (“Contract”) is entered
into November 14, 2016, by and between the CITY OF PALO ALTO, a California chartered
municipal corporation (“CITY”), and C & S ENGINEEERS, INC., a New York corporation, located
at 499 Col.
Eileen Collins Boulevard, Syracuse, New York 13212 (“CONSULTANT”).
R E C I T A L S
A. The Contract was entered into between the parties for the provision of
On-call engineering services including planning, design engineering,
environmental analyses, grant management and construction management.
B. The parties wish to amend the Contract to increase the funding to cover
an additional task order.
NOW, THEREFORE, in consideration of the covenants, terms, conditions, and
provisions of this Amendment, the parties agree:
SECTION 1. Section 4. NOT TO EXCEED COMPENSATION is hereby amended to
read as follows:
“The compensation to be paid to CONSULTANT for performance of the Services
as amended above, including payment for professional services, shall not exceed
One Million Four Hundred Fifty Eight Thousand Three Hundred Twenty Nine
Dollars ($1,458,329).”
SECTION 2. Except as herein modified, all other provisions of the Contract,
including any exhibits and subsequent amendments thereto, shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives
executed this Agreement on the date first above written.
DocuSign Envelope ID: 6C7F895D-2616-40EA-95C1-2802C90AAA3B
2 Revision July 20, 2016
CITY OF PALO ALTO
____________________________
City Manager
APPROVED AS TO FORM:
____________________________
City Attorney
____________________________
Director of Public Works
C & S ENGINEERS, INC.
By:
Name:
Title:
DocuSign Envelope ID: 6C7F895D-2616-40EA-95C1-2802C90AAA3B
Department Manager
Jessica Bryan
City of Palo Alto (ID # 7411)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Approval of $3,175,600 Appropriation to Capital
Improvement Program Project VR-17000
Title: Approval of $3,175,600 Appropriation to Capital Improvement Program
Project VR-17000 from Vehicle Replacement and Maintenance Fund Reserve
and Approval of Budget Amendments in Various Funds
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council amend the Fiscal Year 2017 Budget Appropriation
Ordinance for
a. the Water Fund by:
i. Increasing the transfer to the Vehicle Replacement and
Maintenance Fund in the amount of $15,407; and
ii. Decreasing the Rate Stabilization Reserve in the amount of
$15,407; and
b. the Gas Fund by:
i. Increasing the transfer to the Vehicle Replacement and
Maintenance Fund in the amount of $15,407; and
ii. Decreasing the Rate Stabilization Reserve in the amount of
$15,407; and
c. the Wastewater Fund by:
i. Increasing the transfer to the Vehicle Replacement and
Maintenance Fund in the amount of $15,406; and
ii. Decreasing the Rate Stabilization Reserve in the amount of
$15,406; and
d. the Vehicle Replacement and Maintenance Fund by:
i. Increasing the transfer from the Water Fund by $15,407;
ii. Increasing the transfer from the Gas Fund by $15,407;
City of Palo Alto Page 2
iii. Increasing the transfer from the Wastewater Fund by $15,406;
iv. Decreasing the ending fund balance by $232,380;
v. Eliminating the Reserve for 2017 Vehicle Replacements in the
amount of $2,897,000; and,
vi. Increasing the Scheduled Vehicle and Equipment Replacement
Fiscal Year 2017 project VR-17000 in the amount of $3,175,600
Background
During the Fiscal Year 2017 budget process, staff reviewed its current progress on
vehicle replacements for Fiscal Years 2015 and 2016. In May 2016 staff requested
a total of $4.9 million be reappropriated from prior year Capital Improvement
Program (CIP) projects VR-15000 and VR-16000 as vehicle replacements had not
yet been completed. At that same time, the decision was made, as part of the the
Fiscal Year 2017 Budget, to hold $2,897,000 for CIP project VR-17000 vehicle
replacements in a reserve while staff caught up with the previous year’s
replacements.
The process for vehicle replacement can be lengthy and includes procurement,
outfitting, and delivery. Some vehicles take up to 18 months to build and outfit
before staff can deliver to customer departments. There are four vehicles in CIP
projects VR-15000 and VR-16000 that still require Council approval, since they are
over $250,000. All other replacement vehicles/equipment in CIP projects VR-
15000 and VR-16000 have been ordered, thirty-three of which have yet to be
received from vendors. Once received, the vendors can be paid, outfitting can
ensue if needed, vehicles can be delivered to departments, and the process for
closing the VR-15000 and VR-16000 projects can be executed.
Discussion
Staff recommends moving the $2,897,000 from reserves under capitalized
equipment to CIP VR-17000 in order to begin issuing purchase orders for the
Fiscal Year 2017 vehicle replacements.
Staff also recommends amending the FY 2017 budget appropriation ordinance for
the Vehicle Fund by $278,600 for the escalated replacement cost of two Utilities
vehicles, both used by the Gas/Water division and being replaced due to
maintenance issues, and one Community Services Department Parks and Open
Space vehicle, being replaced due to irrepareable damage caused in an accident.
City of Palo Alto Page 3
Unit 7214 is a 2010 Mercedes Sprinter, high roof cargo van with custom interior,
used for 24-hour emergency customer response. It is the only vehicle of its kind
in the fleet, and is used for valve repairs and repairing water and gas pipe leaks.
This vehicle has had ongoing electrical issues, causing safety concerns. The
continued maintenance costs for this vehicle will far exceed the costs of replacing.
Unit 8279 is a 2000 Ford F-450 with a utility body, used to support the gas and
water valve maintenance programs. It is also used as a secondary weld truck and
carries a PV-66 vacuum used for valve and meter box maintenance. This vehicle is
critical to maintaining optimum operation of the gas and water distribution
systems. This vehicle has had extensive maintenance issues.
Unit 2764 is a 2003 Ford F-350 Wildland Patrol unit used by park rangers for
general patrol and is the first responder for emergencies in Open Space and the
vicinity. Responses for emergency situations range from pedestrian and cyclist
injuries to medical emergencies and fire suppression. This vehicle is critical to
accessing remote areas of parks and preserves as some police/fire vehicles cannot
travel off paved roads. On April 8, 2016, it was involved in an accident causing
major damage.
According to Vehicle and Equipment Use, Maintenance and Replacement Policy
and Procedures, unit 8279 should have been replaced in 2009/2010 and unit 2764
should have been replaced in 2013. Including the replacement of units 8279 and
7214 in CIP VR-17000 was approved by the Fleet Review Committee on
September 12, 2016, and unit 2764 on October 18, 2016. Some funds have been
collected for the future replacement but not enough for the total cost due to the
escalated replacement.
Resource Impact
The Scheduled Vehicle and Equipment Replacement Fiscal Year 2017 CIP (VR-
17000) does not have sufficient funding to purchase the additional three vehicles.
Traditionally, vehicle procurements are funded through annual charges to the
department/fund that uses the vehicle in order to collect the total replacement
cost of the vehicle by the year it’s scheduled for replacement. In the Fiscal Year
2017 budget for VR-17000, nothing was allocated for the replacement of these
three vehicles, because they were not scheduled to be replaced in FY 2017. To
City of Palo Alto Page 4
support this purchase, an appropriation of $278,600 to the Scheduled Vehicle and
Equipment Replacement Fiscal Year 2017 CIP project (VR-17000) in the Vehicle
Replacement and Maintenance Fund, offset by transfers of $46,220 from the
Utilities Water, Gas, and Wastewater Collection Funds, and $232,380 from the
Vehicle Replacement and Maintenance Fund ending fund balance is
recommended.
Policy Implications
Approval of recommendations does not represent any change to the existing
policy.
Environmental Review
These vehicles will meet the EPA 2016 Emissions standards.
City of Palo Alto (ID # 7416)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Gas Cost of Service and Rate Design Guidelines
Title: Utilities Advisory Commission Recommendation That the City Council
Approve Design Guidelines for the 2017 Gas Cost of Service Analysis
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) request that the Council approve the Design
Guidelines for the 2017 Gas Cost of Service Analysis (Attachment A).
Executive Summary
Gas rates were last adjusted when an 8% rate increase went into effect on July 1, 2016. Staff
intends to complete a gas rate cost of service analysis (COSA) in FY 2017 in advance of a rate
adjustment on July 1, 2017. The primary goal of the COSA will be to review the allocation of
costs to customer classes and the gas rate design to ensure customers are charged according to
the cost to serve them. This report discusses the existing rate design, gives an overview of the
issues to be addressed in the COSA analysis, and presents the proposed COSA design guidelines
to guide staff and the consultant in completing the Gas COSA.
At its October 5, 2016 meeting, the UAC voted unanimously to recommend that Council
approve the proposed Gas COSA design guidelines.
Background
Traditionally, utilities use a COSA to allocate costs among customer classes and to design rates.
COSAs gained a more important role for California publicly-owned utilities after the passage of
Proposition 26 (2010). Proposition 26 added provisions to the State Constitution essentially
defining every local government fee or charge as a tax, requiring voter approval, unless one of
seven exceptions applies. Municipal gas rates that do not exceed the reasonable costs to the
local government of providing gas service are one exception from the constitutional definition
of a tax, and its voter approval requirements.
The FY 2017 Gas Utility Financial Plan (Staff Report 6858) projected the need for a 9% rate
increase on July 1, 2017. The current rates, which were last changed on July 1, 2016, are based
City of Palo Alto Page 2
on a COSA performed in 2012. Current rates include a fixed monthly service charge for each
customer group and volumetric (per therm) rates for all customers. The volumetric component
of residential gas rates (Gas Rate Schedule G-1) consists of two tiers of inclining block rates
(rates that increase with consumption).
Discussion
The following sections provide a review of the current rate structure, a discussion of rate design
issues affecting the utility, and the proposed set of rate design guidelines to guide the COSA.
Summary of Existing Rate Structure
On July 1, 2012 CPAU restructured its gas rates so that the commodity component varied
monthly to match changes in gas market prices. In addition, monthly service charges were
increased to recover the cost of providing gas service to customers. In January 2015, the
Council adopted a new rate component to collect the costs of purchasing allowances to comply
with the State’s cap-and-trade program. This component will change depending on the cost of
allowances and gas demand. Table 1, below, summarizes the current rates for all customer
classes.
Table 1: Current Gas Rates
Rate Component Units
G-1
(Residential)
G-2 (Small
Commercial)
G-3 (Large
Commercial)
G-10
(CNG)
Last
Changed
Service Charge $/month 10.32 78.23 377.43 52.93 7/1/2016
Distribution (Tier
1)
$/therm 0.5021 0.6855 0.6775 0.0963 7/1/2016
Distribution (Tier
2)
$/therm 1.0407 N/A N/A N/A 7/1/2016
Commodity $/therm 0.3433
(Sept. 2016)
0.3433
(Sept. 2016)
0.3433
(Sept. 2016)
0.3433
(Sept. 2016)
(varies
monthly)1
Cap-and-Trade
Compliance $/therm 0.016
(Sept. 2016)
0.016
(Sept. 2016)
0.016
(Sept. 2016)
0.016
(Sept. 2016)
(varies with
actual costs)
Total Volumetric
Rate (Sept. 2016) $/therm Tier 1: 0.8614
Tier 2: 1.4000 1.0448 1.0368 0.4556
Tier 1 amount (for G-1, residential customers):
Winter Therms/day 2 N/A N/A N/A 7/1/2012
Summer Therms/day 0.667 N/A N/A N/A 7/1/2012
On October 17, 2016, Council will consider amending gas rates adding a separate and revenue-
neutral transportation charge that will pass through the costs PG&E charges CPAU for gas
transportation2. If approved, the initial Transportation Charge will be $0.1088/therm with the
Distribution Charges being reduced a like amount.
1 For historic commodity rates, see: http://www.cityofpaloalto.org/civicax/filebank/documents/30399
2 The UAC supported this proposal at its August 31, 2016 meeting. See:
https://www.cityofpaloalto.org/civicax/filebank/documents/53652
City of Palo Alto Page 3
Rate Design Issues
The Gas Utility’s rates are evaluated and implemented based on the utility’s cost to serve its
customers. The Gas Utility’s current rates are based on the methodology from the April 2012
Gas Utility Cost of Service Study completed by Utility Financial Solutions3. Staff has identified
rate design issues to address including:
The need to update the City’s Gas COSA. The current COSA was completed over 4 years
ago and best practice is to prepare a new COSA about every five years, or when there
are significant changes in the utility’s costs, customer base, or other factors.
Carbon reduction goals. The City’s Carbon Neutral electric supply portfolio has led some
customers to consider electrifying the space and water heating systems in their homes,
or replacing gas-using appliances with electric ones. The gas rate structure has an
impact on these decisions.
Rate Design Guidelines
In the past, the UAC and Council have expressed concern about having limited ability to make
changes to proposed rate structures once a COSA is completed. Therefore, staff has committed
to having policy discussions with the UAC and Council prior to embarking on a COSA. Staff is
proposing a set of rate design guidelines (Attachment A) to guide the development of the next
Gas COSA. The proposed guidelines are described below:
Guideline 1. Rates must be based on the cost of service.
Guideline 2. Maximize the volumetric rate and minimize the fixed charges, if feasible.
Guideline 3. All existing rates should be reviewed for applicability in the COSA.
Guideline 4. The COSA should consider the impact of rate designs on electrification.
Guideline 5. The effect of proposed rate design changes on low income customers should be
considered.
Guideline 1: Rates to be based on the cost of service
The goal of a COSA is to identify the costs associated with serving each customer class and the
rates required to recover those costs. Historically, gas utilities have been able to make some
adjustments to COSA-recommended rates to achieve environmental or social objectives. After
Proposition 26, such rates cannot be structured solely to achieve policy objectives unless they
are also cost-based, absent voter approval. The COSA has become an important tool for
demonstrating that utility rates are based on the cost of service. As a result, this guideline must
be the overriding one for the COSA.
Guideline 2: Maximize the volumetric rate and minimize the fixed charges, if feasible
Staff anticipates retaining the existing rate structure—consisting of a volumetric component
and a fixed monthly charge. To encourage efficient use of resources and to maximize the
incentive to convert gas-using appliances to electric-using appliances, the volumetric
3 Staff Report 2812: http://www.cityofpaloalto.org/civicax/filebank/documents/41839
City of Palo Alto Page 4
component should be maximized to the extent feasible while still complying with the cost of
service requirement of Proposition 26 (See Guideline 1).
Guideline 3: Evaluation of all existing rate schedules for continuation, consolidation, or
redefinition
Staff recommends evaluating all existing rate schedules to determine whether they should be
continued or redefined. The main focus of this review will be the customer class definitions for
non-residential customers. The consultant will evaluate whether the boundaries between small
commercial and master-metered residential customers (G-2) and large commercial customers
(G-3) should be redefined to more accurately reflect the customer profiles of each group.
Guideline 4: Impact on electrification
To achieve the City’s carbon reduction goals, electrification is required. Some customers are
considering greater use of electricity in their homes by replacing natural gas fueled water and
space heaters with efficient heat pump water and space heaters. These customers are likely to
have significantly different gas load profiles from the average residential customer. Staff
recommends evaluating whether the cost to serve these customers differs from other
residential customers. If so, adjusting the pricing structure applicable to these customers may
be appropriate.
Guideline 5: Impact on low income customers
Changes in rate design can have different impacts on customers who use different amounts of
energy. Low-income customers have lower gas usage than other customers, on average. Staff
intends to evaluate the impact of any recommended rate design changes on low-income
consumers and may recommend mitigation of those impacts if necessary.
Commission Review and Recommendation
The UAC reviewed the proposed Gas COSA design guidelines at its October 5, 2016 meeting.
Commissioner Forssell asked a clarifying question as to whether the COSA would influence the
overall proposed rate change for July. Staff clarified that he overall rate change would not be
affected, but the COSA may indicate certain customer groups should receive rate changes larger
or smaller than the system average change. In addition, Commissioner Johnston asked if
customer rate groups would be reviewed, which staff affirmed would be included as part of
design guideline 3.
The UAC voted unanimously to recommend that Council approved the proposed Gas COSA
design guidelines. The draft minutes for the UAC’s October 5, 2016 meeting are provided as
Attachment B.
Next Steps
The Gas COSA is expected to be completed by the spring of 2017 so that updated rates can be
adopted as part of the FY 2018 budget process to be effective on July 1, 2017.
City of Palo Alto Page 5
Resource Impact
The work associated with this project will be absorbed using existing staff and contract budgets.
The new rates adopted as a result will be designed to generate adequate sales revenue to fund
the gas utility’s operations in FY 2017. For FY 2017, the utility is projected to need roughly 9%
more sales revenue ($3.8 million) than is generated by current rates. Expenses exceed revenues
currently, and reserves are being used to moderate customer impacts as rates are brought to
parity. Costs in general are projected to increase due to inflation, and continued work on cross-
bore inspections requires additional short-term funding. For more detail on these projections
see the proposed FY 2017 Gas Utility Financial Plan (Staff Report 6858).
Policy Implications
The process of adopting these design guidelines provides the UAC, Finance Committee and
Council an opportunity to provide policy guidance to staff before work begins on the COSA.
Once a COSA is complete, it can be difficult to modify the resulting rate design without
reviewing and possibly amending the analysis.
Environmental Review
Adoption of the Design Guidelines for the 2017 Gas Cost of Service Analysis does not meet the
definition of a project, under Public Resources Code Section 21065 and CEQA Guidelines
Section 15378(b)(5), because it is an administrative governmental activity which will not cause a
direct or indirect physical change in the environment, thus no environmental review is required.
Attachments:
Attachment A: Gas COSA Rate Design Guidelines (PDF)
Attachment B: Excerpted Draft Minutes from the October 5, 2016 UAC meeting (PDF)
Attachment A
Design Guidelines for the Gas Utility Cost of Service Analysis
1. Rates must be based on the cost to serve customers. This is the overriding principle for the
cost of service analysis (COSA); all other rate design considerations are subsidiary to this
basic premise.
2. For this cost of service study, and to the extent feasible, the revenue from volumetric
energy charges should be maximized and the revenue from the fixed charge should be
minimized to provide the maximum incentive for efficiency and electrification, the
conversion of gas-using appliances to electricity-using appliances.
3. The COSA should involve a review of all existing rate schedules for applicability in the COSA.
4. The COSA should evaluate the impact of rate designs on the economics of electrification.
5. The impact of any proposed changes on low income customers should be evaluated
EXCERPTED DRAFT MINUTES OF THE OCTOBER 5, 2016 UTILITIES ADVISORY COMMISSION
ITEM 2. ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend
that the City Council Approve Design Guidelines for the 2017 Gas Cost of Service Analysis
Vice Chair Danaher asked staff to provide some background on why the City completes cost of
service analyses (COSAs) prior to developing its rate proposals. Acting Rates Manager Eric
Keniston explained that, for gas and electric rates, the City is subject to the requirements of
Proposition 26, which requires that all rates be based on the cost of service. A cost of service
analysis allocates expenses across ratepayer groups.
Vice Chair Danaher noted that the City’s electric supplies are carbon neutral and that the
Council will consider a proposal to convert the gas supplies to be carbon neutral. He said that
the Council encourages, and the UAC supports, moving towards electrification.
Commissioner Forssell asked if the 9% projected rate increase in July 2017 will change as a
result of the COSA. Keniston responded that the system wide rate increase will be determined
by the City, but that the COSA may reveal the need to make adjustments between costs
allocated to different customer groups.
Commissioner Johnston asked if there would be different customer groups identified. Keniston
said that this would be looked at and is addressed by proposed Design Guideline 3 (The COSA
should involve a review of all existing rate schedules for applicability in the COSA).
Senior Deputy Assistant City Attorney Jessica Mullan said that the first guideline is the overall
guiding principle and that any policies that may be considered must be compliant with the
overarching cost of service guideline and must be in compliance with Proposition 26.
ACTION:
Commissioner Trumbull made a motion that the UAC recommend that Council approve the
proposed Design Guidelines for the 2017 Gas Cost of Service Analysis. Commissioner Forssell
seconded the motion. The motion carried unanimously (4-0, with Vice Chair Danaher and
Commissioners Forssell, Johnston, and Trumbull voting yes and Chair Cook and Commissioners
Ballantine and Schwartz absent).
ATTACHMENT B
City of Palo Alto (ID # 7046)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Managed Print Services Contract with ARC
Title: Approval of Contract with American Reprographics Company, LLC (ARC)
for Managed Print Services for a Not-to Exceed Total of $1,683,173 Over Five
Years
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that Council authorize the City Manager or his designee to enter into a 5-
year contract with American Reprographics Company, L.L.C. (ARC) (Attachment A) to provide
city-wide multifunctional printer (MFP) equipment and coinciding managed print services (MPS)
in an amount not to exceed $367,068 per year in place of the expired Toshiba copier lease
agreement and the current month-to-month Toshiba agreement.
Executive Summary
The City of Palo Alto has used services provided by ARC for document scanning, storage,
retrieval and collaboration as part of the City’s ongoing effort to transform paper-based
processes into the electronic workspace. Staff is recommending the next step in this evolution
by entering into the ARC contract to implement new multifunctional printers under a managed
print services model that links via the cloud to the ARC document storage platform. The new
MFPs would replace the City’s current fleet of standard office copiers. Staff evaluated solution
options from a number of vendors offered through cooperative pricing arrangements and
determined that ARC offered the best combination of price and features.
Background
In Palo Alto’s continued efforts of becoming a digital and sustainable city, the City has
contracted with ARC Document Solutions for a software as a service (Saas) document imaging
and records management solution, known as Plan Well Collaborate. The ARC SaaS electronic
document management system (DMS) utilizes optical character recognition (OCR) technology
to enhance dynamic records management and retention. This includes document imaging and
scanning services of the City’s existing paper file records and to further enhance our ever
increasing digital records processing practices across the City organization.
City of Palo Alto Page 2
The benefits have significantly improved upon the security, integrity, and availability of public
record documents as well as: gaining back valuable square footage office space once taken up
by large file cabinet systems; savings in office supply costs from reduced copying and filing
practices; and sustainability gains from greener practices of using less paper, electricity and
fewer copier toner cartridges. These benefits are currently in practice in the Purchasing Division
where it has gone largely paperless as a business model.
This proposed contract would expand ARC’s paperless services by replacing the City’s current
fleet of copiers with multifunctional printers that are linked via the cloud to the ARC Plan Well
Collaborate system. The linkage between the MFPs and Plan Well Collaborate will allow City
staff to send electronic copies of documents directly into an electronic space from which
documents can be stored and shared without printing. This will represent another step in the
evolution of the City going paperless for its business operations, thus improving efficiency.
This new proposed contract with ARC does not make any changes to the City’s Print Shop,
which will continue to print the City Council packet and other large print jobs under the Print
Shop’s existing contracts.
Discussion
Solicitation Process:
In an effort to effectively address the City’s expiring Toshiba Lease Agreement for
Multifunctional Printer (MFP) equipment, ASD’s Purchasing and Contracts Administration
division conducted a procurement analysis of cooperative purchasing agency opportunities
(“COOP agreements”), as the most economical approach to renew MFP equipment service, as
provided under PAMC 2.30.360(J). During the comparative analysis of cooperative agreements
from each of the known MFP equipment lease providers, the Purchasing Division learned from
its current provider of document scanning and electronic records management SaaS that they
have a more economical service model for the City to consider over the traditional ‘equipment
lease’ model. After considerable research, staff determined that a more formal solicitation
would be impractical or unavailing and would not be useful or produce any advantage for the
City in that few vendors are currently offering the cost-per-copy service model and this model
would be more economically advantageous for the City as compared to the more traditional
equipment lease model. In addition, the current contract with ARC allows the City to terminate
services within a ninety-day period in the event other vendors begin entering the market place
and staff determines a formal solicitation would result in more favorable price or terms.
Accordingly, based on PAMC 2.30.360(b), the City Manager determined a solicitation would be
unavailing at this time and subsequently, ARC Document Solutions was selected over all others
to provide MFP equipment and Managed Print Services (MPS), because of the unique
advantages of their cost-per-copy service model.
Staff compared MPS offerings from ARC, Cannon, EIS-Xerox, Toshiba, Ricoh, Sharp and CT-
Konica, KBA-Kyocera and Ricoh. No other provider had the benefits listed below, while
City of Palo Alto Page 3
maintaining a competitive price point. This comparison is detailed in Attachment B. Note that
the costs for the vendors compared to ARC in Attachment B do not include the vendors’ click-
charge, which would make each vendor’s cost exceed the ARC cost. (This is noted on
Attachment B with the asterisk and highlighted in green.)
Unlike the other MFP/MPS service providers, ARC does not require equipment leasing. There is
no fix term cost that would otherwise prevent us from decreasing or even ending service
without penalty. ARC’s service model allows the City numerous advantages as detailed below.
Additionally, awarding to any other service provider may present technology problems of
untimely MPS service outages whenever ARC performs a system upgrade to our interfacing
electronic records management tool Plan Well Collaborate, which is used by City departments
for imaging, scanning and retrieval.
Benefits:
By utilizing our current provider ARC Document Solutions as our multifunctional printer
equipment provider we gain a number of unique advantages over all other MFP providers. The
first advantage is that through ARC’s “cost-per-copy” business model, ARC carries their own
equipment contracts with all printer manufacturers. Therefore, new MFP equipment is
provided ‘free’ to the City for use. The City benefits from this model as we may end service at
any time without term penalty; We can change up equipment without penalty or restriction;
We are constantly able to down grade or reduce our printer inventory over time as we
transition to increased electronic document processing.
Our current total cost of ownership as a fixed lease cost with costs tied to the leasing of Toshiba
copier equipment totals has average monthly $34,958. ARC’s cost-per-copy proposal offers a
declining cost model. In the first year the cost-per-copy cost is reduced by a client standard
20%. In each subsequent year the cost-per-copy cost is reduced another 5% to 11% on average,
depending upon how progressive the organization becomes in printing less or going paperless
in office practices. The 20% reduction is largely due to two realized efficiencies as follows:
1) One area of cost reducing efficiency is realized by our ability to eliminate a
significant amount of printer equipment, such as 50+ augmenting large HP
color printers which would also free up valuable square footage of office
floor space once occupied by this equipment. Along with 39 fax machines
and associated analog lines, and an initial ongoing reduction of local
desktop printers no longer needed under the newer technology. The
City’s current fleet of some 300 local desktop printers throughout the City
would no longer be required for the sole benefit of confidential printing
purposes where the new MFP equipment provides “secured print”
technology where users retrieve print jobs in their presence from a print
retrieval queue at any networked MFP of their choice, rather than having
documents sit in waiting on unsecured centralized printers. The secure
print technology also assists in reducing waste in print retrieval. Studies
City of Palo Alto Page 4
by MFP equipment providers validate that 20 percent of the paper printed
by printers are never picked up. In the secure print environment desktops
print to a retrieval queue and if not printed from the queue will simply
expire without wasting paper, toner and electricity.
2) The other cost reducing efficiency is continuously realized through “rules
based printing” as a dynamic feature of the managed print services
software. One of its dynamics is in helping manage the routing of print
work from desktops to appropriate print devices, such as forcing large
print work to the more efficient production print shop equipment.
Another dynamic is an ability to regulate print activity, such as restricting
certain types of printing in Color to B&W instead, or in some cases not
allow printing at all. Another dynamic feature is in providing customizable
popups on desktops to inform system users on printing smarter, such as
an individual’s printing cost against their budget, their green footprint
compared to next best performer, and tips to greener paperless
document management - as with Microsoft Office 365 and DocuSign.
Additional advantages include:
By not being tied to equipment leases means we have the flexibility to choose any brand
and model of MFP equipment we feel to be the best application in given business
environments at any time without penalty. This can mean multiple brands and /or
models across the City. Of course we would seek to standardize as much as possible to
maximize operational efficiency.
ARC includes all toner cartridges, printer paper, network monitoring, maintenance and
repair as built in costs. And within the service model of ARC’s MPS program they will
come out to the customer sight to physically replace low toner cartridges and stock
paper that they remotely monitor for replacement/replenishment.
The mobility of printing that Managed Print Services provides through a feature called
follow me print technology. This is a feature where not only can prints be retrieved from
any one networked printer through the secure print technology, but also remotely
printed from a phone or tablet app to the MPS print queue.
The feature rich reporting ability of ARC’s MPS platform. ARC conducts Quarterly
reviews and analysis of an organizations entire print activity, including ink/toner level
usage to provide from summary level to detailed office area level reports so mangers
can make informed decisions on printing practices as well as to recognize opportunities
for adopting print-less and paperless practices. ARC can also provide the City with MPS
dashboard featured access for onsite monitoring as well.
Another advantage is ARC’s Option 2 proposal for onsite equipment servicing. ARC
supplies the toner cartridges and paper - of choice - rolled into their proposed monthly
cost. Then ARC service representatives monitor and respond to low toner cartridge
level readings from the MPS system dashboard to replenish cartridges and paper. The
service reps can also see and proactively respond to errors or signs of failures registering
City of Palo Alto Page 5
on the MPS system dashboard. In doing so, unlike lease agreements the cost-per-copy
program allows ARC to replace equipment as needed without cost to the City. ARC’s
service level agreement (SLA) allows departments to stay focused and uninterrupted in
their work.
The benefits of managed print services extends beyond using managed print services software
itself to effectively integrate with e-document management software, such as with the City’s
current Office 365 platform and integrated “Plan Well Collaborate” platform to help close the
technology loop of achieving a more paperless office environment; Improving the security and
availability of information and documents; Provide ‘rules-based-printing” program to help
intelligently improve upon our printing practices, even to the point of printing less;
Automatically provide departments and city management with dynamic reporting to make
more informed decisions on the City’s printing practices to achieve maximum cost savings,
sustainably green goals, and business process efficiencies.
City departments with high-printing use were involved in review of ARC’s service model and
offerings of equipment. Department stakeholders were given the opportunity to view ARC’s
Demonstration of their MFP and MPS platform.
Resource Impact
The City currently receives copier services from Toshiba. The table below shows the proposed
cost of a new Toshiba contract using COOP pricing compared to the proposed ARC contract.
The direct or hard costs will increase approximately $2,500 per month under the new ARC
contract initially. However, with the expected decrease in printing volume, as the City shifts to
more pure electronic documents, that difference will be eliminated and an estimated cost
savings of $8,623 per month will be achieved by year five of the contract. The ARC contract
would include a service that delivers and installs new toner and replenishes paper, thus
removing $6,058 in related staff time or “soft costs” immediately. By not having to manage
toner and paper restocking, administrative staff will have a portion of time freed up for other
higher-value tasks.
The cost of the ARC contract will be covered within the existing budget for the citywide Toshiba
contract for printers along with the cost for toners and paper and will be allocated to
departments and funds based on usage as tracked by the MPS software. No additional budget
adjustement is requested as part of this contract amendment. The citywide cost for printing
under the ARC contract will be monitored and may be adjusted in the upcoming annual budget
cycle as printing demand requires. However, it is expected that with rules based printing and
monitoring offered with the MPS software, overall citywide printing costs will decrease in years
two through five of the contract.
City of Palo Alto Page 6
Multifunctional Printer Equipment/Service Cost Analysis
Description Toshiba
Lease
(with MPS)
Toshiba Annual
Lease Cost
PROPOSED ARC
Monthly Cost
(with MPS)
Proposed Annual
No Lease Cost
Proposed MFP
Equipment $ 23,035
$ 27,921
Toner $ - $ 2,184
Paper $ 3,109 $ 484
HP Printer
Maint./Depreciation
$ -
$ -
Fax lines 39 x $50 $ 1,950 $ -
Subtotal (Hard Costs): $ 28,095 $ 337,140 $ 30,589 $ 367,068
ordering toner (labor) $ - $ -
Replacing toner (labor) $ 1,133 $ -
Replacing paper
(labor) $ 4,365
$ -
invocie processing
(labor) $ 360
$ 120
Subtotal (Soft Costs):
$ 6,058
$ 120
Grand Total:
$ 34,153
$ 30,709
1st Yr.* $ 34,153 $ 409,840 $ 30,709 $ 368,506
2nd Yr. $ 34,153 $ 409,840 $ 29,313 $ 351,753
3rd Yr. $ 34,153 $ 409,840 $ 27,987 $ 335,838
4th Yr.** $ 34,153 $ 409,840 $ 26,727 $ 320,719
5th Yr.** $ 34,153 $ 409,840 $ 25,530 $ 306,356
5 Year Total Cost
Comparison***
$ 2,049,200
$ 1,683,173
* Lease cost does not adjust downwards for reduced printing for Toshiba
** Year 4 and 5 are estimates for Toshiba
*** Cost per click not included in the cost for Toshiba
Environmental Review
These services do not constitute a project for the purposes of the California Environmental
Quality Act.
Attachments:
Attachment A: ARC MPS Contract (PDF)
Attachment B: Comparison (PDF)
Attachment A
1
City of Palo Alto General Services Agreement Rev. April 27, 2016
CITY OF PALO ALTO CONTRACT NO.
GENERAL SERVICES AGREEMENT
THIS AGREEMENT made and entered into on the 1st day of January, 2017, by and
between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and ARC DOCUMENT SOLUTIONS, a Texas Limited Liability Company, doing
business at 2430 Mariner Square Loop, Ste A, Alemeda, Ca 94501, Telephone Number:
(415) 495‐2542 (“CONSULTANT”)(each a “Party” and collectively, the “Parties”). In
consideration of their mutual covenants, the parties hereto agree as follows:
1. SERVICES. CONSULTANT shall provide or furnish the services (the “Services”)
described in the Scope of Services, attached at Exhibit A.
Optional On‐Call Provision (This provision only applies if checked and only
applies to on‐call agreements.)
Services will be authorized by CITY, as needed, with a Task Order assigned and
approved by CITY’s Project Manager. Each Task Order shall be in substantially the
same form as Exhibit A‐1. Each Task Order shall designate a CITY Project
Manager and shall contain a specific scope of work, a specific schedule of
performance and a specific compensation amount. The total price of all Task
Orders issued under this Agreement shall not exceed the amount of
Compensation set forth in Section 5 of this Agreement. CONSULTANT shall only
be compensated for work performed under an authorized Task Order and CITY
may elect, but is not required, to authorize work up to the maximum
compensation amount set forth in Section 5.
2. EXHIBITS. The following exhibits are attached to and made a part of this
Agreement:
“A” ‐ Scope of Services
“A‐1” – On‐Call Task Order (Optional) “B” ‐ Schedule of Performance
“C” – Schedule of Fees
“D” ‐ Insurance Requirements
“E” ‐ Performance and/or Payment Bond
“F” ‐ Liquidated Damages (Optional)
CONTRACT IS NOT COMPLETE UNLESS ALL INDICATED EXHIBITS ARE ATTACHED.
3. TERM.
Attachment A
2
City of Palo Alto General Services Agreement Rev. April 27, 2016
The term of this Agreement is from 12/01/2016 to 12/30/2021 inclusive, subject
to the provisions of Sections Q and V of the General Terms and Conditions. The
Term of this Agreement shall be for (60) sixty months (“Term”), beginning on the
date of installation. Thereafter, the term of this Agreement shall be renewed
only upon mutual agreement, unless otherwise terminated by either party.
4. SCHEDULE OF PERFORMANCE. CONSULTANT shall complete the Services within
the term of this Agreement in a reasonably prompt and timely manner based
upon the circumstances and direction communicated to CONSULTANT, and if
applicable, in accordance with the schedule set forth in the Schedule of
Performance, attached at Exhibit B. Time is of the essence in this Agreement.
5. COMPENSATION FOR ORIGINAL TERM. CITY shall pay and CONSULTANT agrees
to accept as not‐to‐exceed compensation for the full performance of the
Services and reimbursable expenses, if any:
The total maximum lump sum compensation of dollars ($ );
OR
The sum of thirty‐thousand, five hundred eighty‐nine dollars ($30,589)
per month, not to exceed a total maximum compensation amount of
three hundred sixty‐seven thousand, sixty‐eight dollars ($367,068) per
year; OR
A sum calculated in accordance with the fee schedule set forth at Exhibit
C, not to exceed a total maximum compensation amount of dollars
($ ).
CONSULTANT agrees that it can perform the Services for an amount not to
exceed the total maximum compensation set forth above. Any hours worked or
services performed by CONSULTANT for which payment would result in a total
exceeding the maximum amount of compensation set forth above for
performance of the Services shall be at no cost to CITY.
CITY has set aside the sum of dollars ($ ) for Additional
Services. CONSULTANT shall provide Additional Services only by
advanced, written authorization from the CITY Manager or designee.
CONSULTANT, at the CITY’s request, shall submit a detailed written
proposal including a description of the scope of services, schedule, level
of effort, and CONSULTANT’s proposed maximum compensation,
including reimbursable expense, for such services. Compensation shall
be based on the hourly rates set forth above or in Exhibit C (whichever is
applicable), or if such rates are not applicable, a negotiated lump sum.
CITY shall not authorize and CONSULTANT shall not perform any
Attachment A
3
City of Palo Alto General Services Agreement Rev. April 27, 2016
Additional Services for which payment would exceed the amount set
forth above for Additional Services. Payment for Additional Services is
subject to all requirements and restrictions in this Agreement.
6. COMPENSATION DURING ADDITIONAL TERMS.
CONSULTANT’S compensation rates for each additional term shall be the
same as the original term; OR
CONSULTANT’s compensation rates shall be adjusted effective on the
commencement of each Additional Term. The lump sum compensation
amount, hourly rates, or fees, whichever is applicable as set forth in
section 5 above, shall be adjusted by a percentage equal to the change in
the Consumer Price Index for Urban Wage Earners and Clerical Workers
for the San Francisco‐Oakland‐ San Jose area, published by the United
States Department of Labor Statistics (CPI) which is published most
immediately preceding the commencement of the applicable Additional
Term, which shall be compared with the CPI published most immediately
preceding the commencement date of the then expiring term.
Notwithstanding the foregoing, in no event shall CONSULTANT’s
compensation rates be increased by an amount exceeding five percent of
the rates effective during the immediately preceding term. Any
adjustment to CONSULTANT’s compensation rates shall be reflected in a
written amendment to this Agreement.
7. INVOICING. CONSULTANT will bill CITY once a month based on meter. Any
meter/tracking data difference will be charged or credited to CITY’s overhead
account. If required, third‐party invoices will be provided to CITY at reimbursable
rates. Payment due from CITY will be provided on monthly statement. Special
billing reports and requirements beyond CONSULTANT’s standard billing
statement, project invoices, and data backup are available upon request for an
additional fee.
Send all invoices to CITY, Attention: Project Manager. The Project Manager is
Mary Figone, Dept.: Administrative Services Department, Accounts Payable
Division, Telephone: (650) 329‐2472. Invoices shall be submitted in arrears for
Services performed. Invoices shall not be submitted more frequently than
monthly. Invoices shall provide a detailed statement of Services performed
during the invoice period and are subject to verification by CITY. CITY shall pay
the undisputed amount of invoices within 30 days of receipt.
GENERAL TERMS AND CONDITIONS
Attachment A
4
City of Palo Alto General Services Agreement Rev. April 27, 2016
A. ACCEPTANCE. CONSULTANT accepts and agrees to all terms and conditions of
this Agreement. This Agreement includes and is limited to the terms and
conditions set forth in sections 1 through 7 above, these general terms and
conditions and the attached exhibits.
B. QUALIFICATIONS. CONSULTANT represents and warrants that it has the
expertise and qualifications to complete the services described in Section 1 of
this Agreement, entitled “SERVICES,” and that every individual charged with the
performance of the services under this Agreement has sufficient skill and
experience and is duly licensed or certified, to the extent such licensing or
certification is required by law, to perform the Services. CITY expressly relies on
CONSULTANT’s representations regarding its skills, knowledge, and
certifications. CONSULTANT shall perform all work in accordance with generally
accepted business practices and performance standards of the industry,
including all federal, state, and local operation and safety regulations.
C. INDEPENDENT CONSULTANT. It is understood and agreed that in the
performance of this Agreement, CONSULTANT and any person employed by
CONSULTANT shall at all times be considered an independent CONSULTANT and
not an agent or employee of CITY. CONSULTANT shall be responsible for
employing or engaging all persons necessary to complete the work required
under this Agreement.
D. SUBCONSULTANTS. CONSULTANT may not use subCONSULTANTs to perform
any Services under this Agreement unless CONSULTANT obtains prior written
consent of CITY. CONSULTANT shall be solely responsible for directing the work
of approved subCONSULTANTs and for any compensation due to
subCONSULTANTs.
E. TAXES AND CHARGES. CONSULTANT shall be responsible for payment of all
taxes, fees, contributions or charges applicable to the conduct of CONSULTANT’s
business.
F. COMPLIANCE WITH LAWS. CONSULTANT shall in the performance of the
Services comply with all applicable federal, state and local laws, ordinances,
regulations, and orders.
G. PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all
requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum
Wage), as it may be amended from time to time. In particular, for any employee
otherwise entitled to the State minimum wage, who performs at least two (2)
hours of work in a calendar week within the geographic boundaries of the CITY,
CONSULTANT shall pay such employees no less than the minimum wage set forth
in Palo Alto Municipal Code section 4.62.030 for each hour worked within the
Attachment A
5
City of Palo Alto General Services Agreement Rev. April 27, 2016
geographic boundaries of the CITY of Palo Alto. In addition, CONSULTANT shall
post notices regarding the Palo Alto Minimum Wage Ordinance in accordance
with Palo Alto Municipal Code section 4.62.060.
H. DAMAGE TO PUBLIC OR PRIVATE PROPERTY. CONSULTANT shall, at its sole
expense, repair in kind, or as the CITY Manager or designee shall direct, any
damage to public or private property that occurs in connection with
CONSULTANT’s performance of the Services. CITY may decline to approve and
may withhold payment in whole or in part to such extent as may be necessary to
protect CITY from loss because of defective work not remedied or other damage
to the CITY occurring in connection with CONSULTANT’s performance of the
Services. CITY shall submit written documentation in support of such
withholding upon CONSULTANT’s request. When the grounds described above
are removed, payment shall be made for amounts withheld because of them.
I. WARRANTIES. CONSULTANT expressly warrants that all services provided under
this Agreement shall be performed in a professional and workmanlike manner in
accordance with generally accepted business practices and performance
standards of the industry and the requirements of this Agreement.
CONSULTANT expressly warrants that all materials, goods and equipment
provided by CONSULTANT under this Agreement shall be fit for the particular
purpose intended, shall be free from defects, and shall conform to the
requirements of this Agreement. CONSULTANT agrees to promptly replace or
correct any material or service not in compliance with these warranties,
including incomplete, inaccurate, or defective material or service, at no further
cost to CITY. The warranties set forth in this section shall be in effect for a period
of one year from completion of the Services and shall survive the completion of
the Services or termination of this Agreement.
J. MONITORING OF SERVICES. CITY may monitor the Services performed under this
Agreement to determine whether CONSULTANT’s work is completed in a
satisfactory manner and complies with the provisions of this Agreement.
K. CITY’S PROPERTY. Excluding any improvements, additions, and/or new
inventions, know‐how, documentation, software, and data that relates
exclusively to CONSULTANT’s intellectual property (collectively, the
“CONSULTANT Pre‐Existing IP”), any reports, information, data or other material
(including copyright interests) developed, collected, assembled, prepared, or
caused to be prepared under this Agreement will become the property of CITY
without restriction or limitation upon their use and will not be made available to
any individual or organization by CONSULTANT or its subCONSULTANTs, if any,
without the prior written approval of the CITY Manager.
Attachment A
6
City of Palo Alto General Services Agreement Rev. April 27, 2016
L. AUDITS. CONSULTANT agrees to permit CITY and its authorized representatives
to audit, at any reasonable time during the term of this Agreement and for three
(3) years from the date of final payment, CONSULTANT’s records pertaining to
matters covered by this Agreement. CONSULTANT agrees to maintain accurate
books and records in accordance with generally accepted accounting principles
for at least three (3) following the terms of this Agreement.
M. NO IMPLIED WAIVER. No payment, partial payment, acceptance, or partial
acceptance by CITY shall operate as a waiver on the part of CITY of any of its
rights under this Agreement.
N. INSURANCE. (a)INSURANCE AGAINST DAMAGE TO PROVIDED EQUIPMENT ‐ CITY,
at its own expense, shall obtain and maintain in full force and effect, without
interruption during the Term of the Agreement, insurance for the Equipment for
its full replacement value against all types of loss or casualty, including theft, fire,
flood and earthquake coverage, and CITY shall be responsible for any repair or
replacement of the Equipment during the Term made necessary by CITY’s act or
omission, or by any misuse or abuse of the Equipment. CONSULTANT agrees CITY
may meet this obligation through self‐insurance.
(b) CONSULTANT, at its sole cost, shall purchase and maintain in full force
during the term of this Agreement, the insurance coverage described at Exhibit
D. Insurance must be provided by companies with a Best’s Key Rating of A‐:VII or
higher and which are otherwise acceptable to CITY’s Risk Manager. The Risk
Manager must approve deductibles and self‐insured retentions. In addition, all
policies, endorsements, certificates and/or binders are subject to approval by
the Risk Manager as to form and content. CONSULTANT shall obtain a policy
endorsement naming the City of Palo Alto as an additional insured under any
general liability or automobile policy. CONSULTANT shall obtain an endorsement
stating that the insurance is primary coverage and will not be canceled or
materially reduced in coverage or limits until after providing 30 days prior
written notice of the cancellation or modification to the Risk Manager.
CONSULTANT shall provide certificates of such policies or other evidence of
coverage satisfactory to the Risk Manager, together with the required
endorsements and evidence of payment of premiums, to CITY concurrently with
the execution of this Agreement and shall throughout the term of this
Agreement provide current certificates evidencing the required insurance
coverages and endorsements to the Risk Manager. CONSULTANT shall include
all subCONSULTANTs as insured under its policies or shall obtain and provide to
CITY separate certificates and endorsements for each subCONSULTANT that
meet all the requirements of this section. The procuring of such required policies
of insurance shall not operate to limit CONSULTANT’s liability or obligation to
indemnify CITY under this Agreement.
Attachment A
7
City of Palo Alto General Services Agreement Rev. April 27, 2016
O. HOLD HARMLESS/INDEMNIFICATION. To the fullest extent permitted by law
and without limitation by the provisions of section N relating to insurance,
CONSULTANT shall indemnify, defend and hold harmless CITY, its Council
members, officers, employees and agents from and against any and all demands,
claims, injuries, losses, or liabilities of any nature, including death or injury to any
person, property damage or any other loss and including without limitation all
damages, penalties, fines and judgments, associated investigation and
administrative expenses and defense costs, including, but not limited to
reasonable attorney’s fees, courts costs and costs of alternative dispute
resolution), arising out of, or resulting in any way from or in connection with the
negligent performance of this Agreement. CONSULTANT’s obligations under this
Section apply regardless of whether or not a liability is caused or contributed to
by any negligent (passive or active) act or omission of CITY, except that
CONSULTANT shall not be obligated to indemnify for liability arising from the
negligence or willful misconduct of CITY. The acceptance of the Services by CITY
shall not operate as a waiver of the right of indemnification. The provisions of
this Section survive the completion of the Services or termination of this
Agreement.
P. NON‐DISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it
shall not discriminate in the employment of any person because of the race, skin
color, gender, age, religion, disability, national origin, ancestry, sexual
orientation, housing status, marital status, familial status, weight or height of
such person. CONSULTANT acknowledges that it has read and understands the
provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to
Nondiscrimination Requirements and the penalties for violation thereof, and
agrees to meet all requirements of Section 2.30.510 pertaining to
nondiscrimination in employment.
Q. WORKERS' COMPENSATION. CONSULTANT, by executing this Agreement,
certifies that it is aware of the provisions of the Labor Code of the State of
California which require every employer to be insured against liability for
workers' compensation or to undertake self‐insurance in accordance with the
provisions of that Code, and certifies that it will comply with such provisions, as
applicable, before commencing and during the performance of the Services.
R. TERMINATION.
CITY may terminate this Agreement prior to the expiration of the Term, without
cause, upon ninety (90) days prior written notice to ARC. Similarly, ARC may
elect, without cause, to terminate this Agreement upon ninety (90) days prior
written notice and take immediate possession of the Equipment and Software.
During the Term of this Agreement the Equipment and Software shall remain the
sole property of CONSULTANT.
Attachment A
8
City of Palo Alto General Services Agreement Rev. April 27, 2016
If CONSULTANT fails to perform any of its material obligations under this
Agreement, in addition to all other remedies provided by law, the CITY Manager
may terminate this Agreement immediately upon written notice of termination.
Upon receipt of such notice of termination, CONSULTANT shall immediately
discontinue performance. CITY shall pay CONSULTANT for services satisfactorily
performed up to the effective date of termination. If the termination if for
cause, CITY may deduct from such payment the amount of actual damage, if any,
sustained by CITY due to CONSULTANT’s failure to perform its material
obligations under this Agreement. Upon termination, CONSULTANT shall
immediately deliver to the CITY Manager any and all copies of studies, sketches,
drawings, computations, and other material or products, whether or not
completed, prepared by CONSULTANT or given to CONSULTANT, in connection
with this Agreement. Such materials shall become the property of CITY.
S. ASSIGNMENTS/CHANGES. This Agreement binds the parties and their
successors and assigns to all covenants of this Agreement. Neither Party shall
assign or transfer this Agreement without the prior written consent of the other
Party. No amendments, changes or variations of any kind are authorized
without the written consent of the other Party.
T. CONFLICT OF INTEREST. In accepting this Agreement, CONSULTANT covenants
that it presently has no interest, and will not acquire any interest, direct or
indirect, financial or otherwise, which would conflict in any manner or degree
with the performance of this Contract. CONSULTANT further covenants that, in
the performance of this Contract, it will not employ any person having such an
interest. CONSULTANT certifies that no CITY Officer, employee, or authorized
representative has any financial interest in the business of CONSULTANT and
that no person associated with CONSULTANT has any interest, direct or indirect,
which could conflict with the faithful performance of this Contract.
CONSULTANT agrees to advise CITY if any conflict arises.
U. GOVERNING LAW. This contract shall be governed and interpreted by the laws
of the State of California.
V. ENTIRE AGREEMENT. This Agreement, including all exhibits, represents the
entire agreement between the parties with respect to the services that may be
the subject of this Agreement. Any variance in the exhibits does not affect the
validity of the Agreement and the Agreement itself controls over any conflicting
provisions in the exhibits. This Agreement supersedes all prior agreements,
representations, statements, negotiations and undertakings whether oral or
written.
Attachment A
9
City of Palo Alto General Services Agreement Rev. April 27, 2016
W. NON‐APPROPRIATION. This Agreement is subject to the fiscal provisions of the
Charter of the CITY of Palo Alto and the Palo Alto Municipal Code. This
Agreement will terminate without any penalty (a) at the end of any fiscal year in
the event that funds are not appropriated for the following fiscal year, or (b) at
any time within a fiscal year in the event that funds are only appropriated for a
portion of the fiscal year and funds for this Contract are no longer available. This
Section shall take precedence in the event of a conflict with any other covenant,
term, condition, or provision of this Contract.
X. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE
REQUIREMENTS. CONSULTANT shall comply with CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Division,
which are incorporated by reference and may be amended from time to time.
CONSULTANT shall comply with waste reduction, reuse, recycling and disposal
requirements of CITY’s Zero Waste Program. Zero Waste best practices include
first minimizing and reducing waste; second, reusing waste and third, recycling
or composting waste. In particular, CONSULTANT shall comply with the
following zero waste requirements:
All printed materials provided by CONSULTANT to CITY generated from a
personal computer and printer including but not limited to, proposals,
quotes, invoices, reports, and public education materials, shall be double‐
sided and printed on a minimum of 30% or greater post‐consumer
content paper, unless otherwise approved by CITY’s Project Manager.
Any submitted materials printed by a professional printing company shall
be a minimum of 30% or greater post‐consumer material and printed
with vegetable based inks.
Goods purchased by CONSULTANT on behalf of CITY shall be purchased in
accordance with CITY’s Environmental Purchasing Policy including, but
not limited to, Extended Producer Responsibility requirements for
products and packaging. A copy of this policy is on file at the Purchasing
Division’s office.
Reusable/returnable pallets shall be taken back by CONTRCATOR, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide
documentation from the facility accepting the pallets to verify that pallets
are not being disposed.
Y. AUTHORITY. The individual(s) executing this Agreement on behalf of the parties
represent and warrant that they have the legal capacity and authority to do so
on behalf of their respective legal entities.
Z. PREVAILING WAGES
This Project is not subject to prevailing wages. CONSULTANT is not required to
pay prevailing wages in the performance and implementation of the Project in
Attachment A
10
City of Palo Alto General Services Agreement Rev. April 27, 2016
accordance with SB 7, if the contract is not a public works contract, if contract
does not include a public works construction project of more than $25,000, or
the contract does not include a public works alteration, demolition, repair, or
maintenance (collectively, ‘improvement’) project of more than $15,000.
OR
CONSULTANT is required to pay general prevailing wages as defined in
Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et
seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions
of Section 1773 of the Labor Code of the State of California, the CITY Council has
obtained the general prevailing rate of per diem wages and the general rate for
holiday and overtime work in this locality for each craft, classification, or type of
worker needed to execute the contract for this Project from the Director of the
Department of Industrial Relations (“DIR”). Copies of these rates may be
obtained at the Purchasing Division’s office of the CITY of Palo
Alto. CONSULTANT shall provide a copy of prevailing wage rates to any staff or
subCONSULTANT hired, and shall pay the adopted prevailing wage rates as a
minimum. CONSULTANT shall comply with the provisions of all sections,
including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813,
of the Labor Code pertaining to prevailing wages.
AA. DIR REGISTRATION. In regard to any public work construction, alteration,
demolition, repair or maintenance work, CITY will not accept a bid proposal from
or enter into this Agreement with CONSULTANT without proof that
CONSULTANT and its listed subCONSULTANTs are registered with the California
Department of Industrial Relations (“DIR”) to perform public work, subject to
limited exceptions. CITY requires CONSULTANT and its listed subCONSULTANTs
to comply with the requirements of SB 854.
CITY provides notice to CONSULTANT of the requirements of California Labor
Code section 1771.1(a), which reads:
“A CONSULTANT or subCONSULTANT shall not be qualified to bid on, be listed in
a bid proposal, subject to the requirements of Section 4104 of the Public
Contract Code, or engage in the performance of any contract for public work, as
defined in this chapter, unless currently registered and qualified to perform
public work pursuant to Section 1725.5. It is not a violation of this section for an
unregistered CONSULTANT to submit a bid that is authorized by Section 7029.1
of the Business and Professions Code or Section 10164 or 20103.5 of the Public
Contract Code, provided the CONSULTANT is registered to perform public work
pursuant to Section 1725.5 at the time the contract is awarded.”
Attachment A
11
City of Palo Alto General Services Agreement Rev. April 27, 2016
CITY gives notice to CONSULTANT and its listed subCONSULTANTs that
CONTRCATOR is required to post all job site notices prescribed by law or
regulation and CONSULTANT is subject to SB 854‐compliance monitoring and
enforcement by DIR.
CITY requires CONSULTANT and its listed subCONSULTANTs to comply with the
requirements of Labor Code section 1776, including:
Keep accurate payroll records, showing the name, address, social security
number, work classification, straight time and overtime hours worked each day
and week, and the actual per diem wages paid to each journeyman, apprentice,
worker, or other employee employed by, respectively, CONSULTANT and its
listed subCONSULTANTs, in connection with the Project.
The payroll records shall be verified as true and correct and shall be certified and
made available for inspection at all reasonable hours at the principal office of
CONSULTANT and its listed subCONSULTANTs, respectively.
At the request of CITY, acting by its project manager, CONSULTANT and its listed
subCONSULTANTs shall make the certified payroll records available for
inspection or furnished upon request to the project manager within ten (10) days
of receipt of CITY’s request.
[For state‐ and federally‐funded projects] CITY requests CONSULTANT
and its listed subCONSULTANTs to submit the certified payroll records to
the project manager at the end of each week during the Project.
If the certified payroll records are not produced to the project manager within
the 10 business day period, then CONSULTANT and its listed subCONSULTANTs
shall be subject to a penalty of one hundred dollars ($100.00) per calendar day,
or portion thereof, for each worker, and CITY shall withhold the sum total of
penalties from the progress payment(s) then due and payable to CONSULTANT.
Inform the project manager of the location of CONSULTANT’s and its listed
subCONSULTANTs’ payroll records (street address, city and county) at the
commencement of the Project, and also provide notice to the project manager
within five (5) business days of any change of location of those payroll records.
BB. CONTRACT TERMS. All unchecked boxes do not apply to this Agreement. In the
case of any conflict between the terms of this Agreement and the exhibits hereto
or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of
any conflict between the exhibits hereto and CONSULTANT’s proposal, the
exhibits shall control.
Attachment A
12
City of Palo Alto General Services Agreement Rev. April 27, 2016
CC.DISPUTE AND GOVERNING LAW: Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration and judgment on the award rendered by the arbitrator. Such
judgment may be entered in any court having jurisdiction thereof. The prevailing
party in any arbitration concerning this Agreement shall be entitled to
reasonable attorneys' fees. Except as otherwise specifically stated, this
Agreement shall be governed by and construed in accordance with the laws of
the State of California without giving effect to any choice or conflict of law
provision or rule.
DD.WAIVER OF BREACH: No waiver of any provision of this Agreement shall be
effective unless such waiver is in writing and signed by the party against whom
such waiver is sought to be enforced.
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
City Manager (Contract over $85k)
APPROVED AS TO FORM:
City Attorney or designee
(Contract over $25k)
ARC DOCUMENT SOLUTIONS
Officer 1
By:
Name:
Title:
Officer 2
By:
Name:
Title:
Attachment A
1
City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT A
SCOPE OF SERVICES
SUMMARY
ARC Document Solutions, LLC (“ARC”) will provide the Equipment, Software, and Services
outlined in Exhibit A‐1.
IMPLEMENTATION: ARC shall plan and coordinate with the CITY of Palo Alto (“CITY”) a phased
in implementation process of agreed to brand(s) and models of multi‐functional printers, any
other equipment (scanners), and the Abacus Managed Print Services (MPS) software. ARC’s
implementation process shall include assessment of each implementing CITY department’s
business work processes. The implementation shall also provide adequate MPS and equipment
use training. The implementation process shall adequately assist the CITY in maximizing its use
of the managed print services technology and the equipment technology, both of which allow
the CITY’s to print less and increase use of the CITY’s electronic document management
practices. The implementation schedule can be found in Exhibit A‐2
SERVICE LEVEL: During the Term, ARC shall provide onsite service and/or remote service (when
access is allowed by CITY) during normal business hours (“Services”). Diagnosis will be
performed within a 4‐8 hour time‐frame and resolution, when feasible within 48 hours.
ONGOING SUPPORT, INSTALLATION, RELOCATIONS & REINSTALLATIONS: ARC and CITY agree
to meet, as needed, to discuss service, volume, and/or new technologies. CITY agrees the
Equipment shall not be relocated without the prior written approval of ARC. Relocation and
software re‐installation fees will be assessed at the time of the request at $150.00 per hour.
CITY agrees not to allow any sub‐tenants with additional networks to use or access ARC
Equipment without the prior approval of ARC.
CITY may option to have ARC change out the brand and/or model of equipment at any one or
more locations. If the CITY places three (3) service calls on any given Multifunctional Device
(MFD) copier within a month, ARC will escalate to the equipment manufacturer. If the MFD
copier has not been fixed and the issue(s) still persists within ninety (90) days, a like for like
copier equipment (L4L) will be rendered. CITY is advised by ARC to limit equipment variety
wherever possible in order to sustain end user consistency of equipment use within the MPS
environment. CITY may option to have ARC replace any equipment at any location that is found
to be deficient in performance. CITY may at any time exercise its option to have ARC remove
any of the equipment ARC provides at any location without penalty or cost to the CITY.
PAPER SUPPLY: Included as part of the service, ARC will supply copier/printer paper in the
type/grade required by the city. ARC will be remotely monitoring paper usage, toner usage,
and all equipment activity, in an effort to maintain 100% uptime performance. Paper will be
automatically delivered to the various departments where equipment is located, based on the
appropriately monitored usage levels of each equipment unit. This means the intervals and
amounts of cases of paper shipped will vary by location based on usage rates in each location.
Attachment A
2
City of Palo Alto General Services Agreement Rev. April 27, 2016
ONSITE SUPPORT: CONSULTANT to Provide One (1) Part‐Time Onsite Employee to replace
paper and toner at all scheduled locations.
ABACUS TRACKING SOFTWARE:
Implement Abacus to enable/encourage continuous improvement of sustainable
printing practices with Rules Based Printing to reduce hardcopy/color printing/costs, to
encourage paperless work flows and redirect large print jobs to the print center. Print
Retrieval to improve confidentiality and to eliminate wasted prints saving paper.
Print and Copy Tracking to identify, track and allocate costs to appropriate departments
Print & Archive / Scan to Archive workflow to SkySite InfoLink
Data Cost Agent to automatically replenish toner for networked devices and reduce
admin time managing ink/toner/paper inventory, proactively monitor error messages
and create a more proactive approach to printer support to reduce downtime.
Software to include: Abacus Print Management User Licenses (500 Users), Abacus Print
Management Device Licenses (60 Devices), On‐Site Installation & Training, Annual Support,
Hardware Server, Installation of RFID Card Readers to all MFD copiers.
REPORTING: ARC will provide reports to CITY of Palo Alto’s Department / Division level
managers on established intervals (monthly and quarterly). ARC will provide enterprise‐wide
activity reports quarterly to the CITY’s executive and environmental management. Reports
will range in detail from equipment usage activity to individual desktop user activity. ARC
representatives are available to help review and interpret report data as needed.
Attachment A
1
City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT A‐1 Equipment
Attachment A
1
City of Palo Alto General Services Agreement Rev. April 27, 2016
Attachment A
1
City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT A‐2 IMPLEMENTATION PLAN
Attachment A
2
City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT B SCHEDULE OF PERFORMANCE EXHIBIT C
SCHEDULE OF FEES
Compensation based upon fee schedule
CITY shall pay CONSULTANT according to the following rate schedule. The maximum amount of compensation to be paid to CONSULTANT, including both
payment for services and reimbursable expenses, shall not exceed the amounts set forth in Sections 5 and 6 of the Agreement. Any services provided or
hours worked for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to CITY.
Attachment A
3
City of Palo Alto General Services Agreement Rev. April 27, 2016
EXHIBIT D INSURANCE REQUIREMENTS
CONSULTANTS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE
SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQUIRED TYPE OF COVERAGE REQUIREMENT
MINIMUM LIMITS
EACH OCCURRENCE AGGREGATE
YES YES
WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY
YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL LIABILITY
BODILY INJURY PROPERTY DAMAGE
BODILY INJURY & PROPERTY DAMAGE COMBINED.
$1,000,000 $1,000,000
$1,000,000
$1,000,000 $1,000,000
$1,000,000
YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED
BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE
BODILY INJURY AND PROPERTY DAMAGE, COMBINED
$1,000,000 $1,000,000 $1,000,000 $1,000,000
$1,000,000
$1,000,000 $1,000,000 $1,000,000 $1,000,000
$1,000,000
NO
PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT
PERFORMANCE
ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONSULTANT, AT
ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE
INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONSULTANT AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE
IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE
FOR CONSULTANT’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569.
III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS”
Attachment A
4
City of Palo Alto General Services Agreement Rev. April 27, 2016
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE
ADDITIONAL INSUREDS.
B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED
AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-
PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
Vendors are required to file their evidence of insurance and any other related notices with the CITY of Palo Alto at the following URL:
https://www.planetbids.com/portal/portal.cfm?CompanyID=25569
OR
http://www.cityofpaloalto.org/gov/depts/asd/planet_bids_how_to.asp
MultiFunctional Printer (MFP) Cooperatives for CoPA
Vendor:ARC**Toshiba*Cannon*EIS-Xerox*CT-Konica*Sharp*KBA-Kyocera*Ricoh*
COOP (PA contract)NIPA NIPA PEPPM NASPO (WSCA)St. Florida KCDA NASPO (WSCA)
Lease per mo. Cost $28,692.72**$12,290.47 $12,795.32 $11,498.10 $9,556.58 $8,930.87 $7,339.89 $8,297.50
MPS annual Cost Included 12,000.00$ 15,000.00$ 16,000.00$ 17,000.00$ 18,000.00$ 23,851.00$ 15,000.00$
Total monthly cost $28,692.72 $24,290.47 $27,795.32 $27,498.10 $26,556.58 $26,930.87 $31,190.89 $23,297.50
Contract Term 60/Months (MPS)36/Months 36/Months 36/Months 36/Months 36/Months 36/ months 36/Months
Sustainable Pkg Removes Pkg Partial Partial Partial Partial Partial 100%Partial
BW/Color Clicks Yes Yes No Yes No Yes No No
Per Click B/W cost (0.07 Incl**)incl 0.0068 incl 0.005 Variable 0.007 variable
Per Click Color cost (0.19 incl**)incl 0.0068 incl 0.055 Variable 0.01-0.04-0.07 variable
Contact Mike
Wells
Laurie
Corral
Jeff
Carvalho
Sean
Bandy Andrew Young Peter
Bishel
Tim
Finnegan
Cathy
Conley
Phone (408) 400-0490 (925) 277-2162 (415) 743-7324 (408) 328-5369 (408) 328-5377 (408) 436-5300 (650) 401-6897 (408) 546-2638
** = Monthly "Non-lease" cost includes MFD's, MPS, toner, paper, and Click charges-est. cost per current volume - declining cost through MPS program
* = Monthly Lease cost only, click-charge cost not calculated, but would increase the total monthly cost under each vendor
Managed Print Services Program Business Model
Criteria ARC RABBIT HP Staples Cannon Xerox Toshiba Ricoh KBA Sharp Konica/Minolta
Provide copier equipt.Free Lease No eqp No eqp Lease Lease Lease Lease Lease Lease Lease
MFP Mfr. agnostic Yes No No No No No No No limited No No
Rules Based Printing (RBP)Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
RBP control to PlanWell Collaborate Yes limited limited limited limited limited limited limited limited limited limited
customizable RBP 'popups' programming Yes Yes No No limited limited Yes Yes Yes Yes Yes
Dynamic billing of print jobs Yes No No No No No Limited No Yes No No
Realtime' MPS monitoring Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
3-Tier color printing No No No No No No No No Yes No No
MPS Srvc Maint Options + hybrids Yes Yes limited limited Yes Yes No Yes Yes Yes Yes
Follow me Print (Offsite)Yes No No No No Yes No No Yes No No
Follow me Scan (Offsite)Yes No No No No Yes No No Yes No No
App for airprint Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
PCL or Postscript print drivers Yes No No No No Yes No No Yes No No
Biomass Plastic components Yes No No No No Yes Yes No Yes No Yes
Induction Heat Fuser & LED technology Yes Yes No No Yes Yes Yes Yes Yes Yes Yes
Single pass duplexing Yes Yes No No Yes Yes Yes Yes Yes Yes Yes
Tablet type display Yes No No No Yes Yes Yes No Yes No Yes
Includes toner cartridges Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Install toner cartridge replcmts Yes*No No No No No No No Yes No No
Paper Included, 20# 30-100% RCP Yes No No No No No No No No No No
100% RC Paper Capable Yes Yes No No Yes Yes Yes Yes Yes Yes Yes
Integrate with ARC Doc. Mgt. SaaS Yes limited limited limited limited limited limited limited limited limited limited
Secure Print card reader Yes Yes No No Yes Yes Yes Yes Yes Yes Yes
Secure Print PIN Yes Yes No No Yes Yes Yes Yes Yes Yes Yes
Yes = provides
No = does not provide
Limited = limited coverage / integration / functionality, or additional cost
* = Cartrige Replacement Service additional cost ($5K)
NOTES:
3-Tier printing potential savings to City except 75% of current color printing is done by City Print Shop or outsourced companies, ex. Prodigy Press. Emphasis on not to print.
No other providers outside of ARC can provide detailed level document controls to City's e-document management platform "PlanWell Collaborate".
Adding another provider for MFD's and MPS creates more complex system to manage with respect to "PanWell Collaborate" and possible system outages or errors
City of Palo Alto (ID # 7164)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Utilities Department Marketing Contract
Title: Approval and Authorization for the City Manager to Execute a
Professional Services Agreement With Essense Partners in the Amount of
$870,000 for Utilities Marketing, Communication and Graphic Design Services
for a Term of up to Three Years
From: City Manager
Lead Department: Utilities
Recommendation
Staff recommends that the City Council approve and authorize the City Manager, or his
designee, to execute the attached professional services agreement with Essense Partners, for
Utilities marketing, communications and graphic design services for a total not to exceed
amount of $870,000 for a three-year term.
Executive Summary
The City of Palo Alto Utilities (CPAU) Department administers a broad portfolio of marketing,
communication and outreach activities for the City’s utility customers and other stakeholders.
CPAU communication channels include the Utilities website, utility bill inserts, print ads in local
publications, digital advertisements, email newsletters, news releases, messaging on bills and
envelopes, videos, social media, customer workshops, participation in community outreach
events and meetings. Graphic design and outreach materials are developed by both staff and
third-party vendors.
This agreement will provide CPAU with professional services for the creation and development
of graphic design, marketing and communication materials. The outreach services target
residential and non-residential customers for the purposes of continuing education about
programs to help the City meet its resource efficiency, sustainability and climate protection
goals, as well as support mandatory regulatory communication requirements. It also enables
CPAU to educate customers about general Utilities initiatives, infrastructure upgrades, and
safety measures, including crisis preparedness and emergency response.
The current CPAU contract for marketing and graphic design services expires on December 31,
2016 (Tandem Creative, Inc.). In order to continue actively marketing and communicating to
City of Palo Alto Page 2
CPAU customers, staff issued a Request for Proposals (RFP) in August 2016. Three potential
vendors responded to the RFP. After analyzing all responses, staff recommends executing a
contract with Essense Partners, to provide market research, strategic campaign planning,
graphic design, marketing evaluation and analytics, and website content support. If fully
implemented, this contract will cost $290,000 annually, for a total not to exceed amount of
$870,000 for up to three years.
Discussion
CPAU’s marketing and communication topics cover energy and water efficiency, renewable
energy, sustainability and climate protection, operations, capital improvement, infrastructure
and safety. CPAU is involved in marketing a variety of programs, including energy and water
efficiency audits, rebates, renewable energy programs, Utilities billing and metering, customer
support services, safety awareness, emergency preparedness and general utilities education.
The communication activities target residents, businesses and industry, schools, community
groups, internal staff, and elected officials that collaborate with the City. This contract, which
will replace the current contract ending December 31, 2016, includes six main tasks. The
contract with Essence will provide market research, strategic campaign planning, graphic
design, marketing evaluation and analytics, and website content support.
Summary of Solicitation Process
Title Utility Marketing, Communication and
Graphic Design Services
RFP Number 17165536
Proposed Length of Project 3 year
RFP Issued August 4, 2016
Number of proposal Packages downloaded 25
Number of vendors notified through City’s
eProcurement system 54
Total Days to Respond to proposal 20 days
Pre-proposal Meeting Date August 11, 2016
Number of Companies at Pre-proposal Meeting 7
Number of Proposals Received 3
Selection Process
The City of Palo Alto issued an RFP in August 2016, notifying 54 potential vendors. A total of 25
vendors downloaded the proposal package. The City scheduled an optional pre-proposal
conference call, in which seven vendors participated. CPAU received three proposals by the
August 24, 2016 deadline. Staff believe that the low number of vendors responding to the RFP
was due to complexity of the requirements for such diverse marketing and communication
needs. Two of the vendors that responded to the RFP were invited to interview with the City.
A staff committee reviewed each proposal, vendor qualifications, and submittal package. The
following selection criteria guided staff’s decision-making: vendor references; qualifications of
City of Palo Alto Page 3
principals and staff; familiarity with the City; financial stability; price competitiveness;
completeness of proposal; proposal clarity; methodology; marketing support; quality of
portfolio; and completeness of response to scope of services. Based on this selection criteria
and committee ranking, staff recommends executing a contract with Essense Partners, a
strategic marketing firm specializing in graphic design, marketing and outreach for the utilities
industry. Essence Partners clearly emerged as a stronger candidate than the other potential
vendor due to their direct experience working with utilities on utility-specific issues.
Essense Partners will provide the following services:
1. Market Research;
2. Strategic Campaign Planning;
3. Graphic Design and Marketing Materials;
4. Analysis & Evaluation;
5. Website; and
6. Contract Management.
Resource Impact
There is no impact to the current CPAU budget. Funds for this contract are included in the FY
2017 Utilities Communication and Demand Side Management program budgets. Expenditures
for subsequent years are subject to annual appropriations. Subject to evaluation of
performance, this contract may be recommended for additional services in the future.
Budget Breakdown- Total Contract Compensation
Contract Year Dates Funds Encumbered
1 11/14/16-11/13/17 $ 290,000.00
2 11/14/17-11/13/18 $ 290,000.00
3 11/14/18-11/13/19 $ 290,000.00
Total $ 870,000.00
City of Palo Alto Page 4
Example Fiscal Year Compensation Breakdown
Utilities
Division Group Project Funding Source Amount
Administration Communications General
Communications
Utilities
Administration
Enterprise Fund
$ 30,000.00
Customer
Support
Services
Customer Service
Billing & General
Customer
Service
Utilities Gas,
Water, Electric &
Wastewater
Enterprise Funds
$ 25,000.00
Resource
Management Resource Planning EV Charging Low Carbon Fuel
Standard Fund $ 10,000.00
Resource
Management Resource Planning Electrification Public Benefits $ 10,000.00
Resource
Management
Utility Program
Services Local Solar Plan Public Benefits $ 15,000.00
Resource
Management
Utility Program
Services
Programs &
Services Public Benefits $200,000.00
Total $290,000.00
Policy Implications
The proposed contract supports the Council-approved Ten-year Energy Efficiency Portfolio Plan,
the Long-term Electric Acquisition Plan, the Gas Utility Long‐term Plan, the Urban Water
Management Plan and Comprehensive Plan Goal N-9. Implementation of marketing services for
efficiency programs supports greenhouse gas reduction goals identified in the Palo Alto Climate
Protection Plan and in the California Global Warming Solutions Act of 2006 (AB 32). Continued
implementation of public awareness campaigns, outreach for utility safety education and
emergency preparedness to customers allows the City to comply with regulatory requirements
and supports the Council-approved legislative policy guidelines.
Environmental Review
Approval of the recommended contract does 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.
Attachments:
Attachment A: Contract with Essense Partners (PDF)
Professional Services
Rev. April 27, 2016
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CITY OF PALO ALTO CONTRACT NO. C17165536
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
ESSENSE PARTNERS
FOR PROFESSIONAL SERVICES
This Agreement is entered into on this 14th day of November, 2016,
(“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (“CITY”), and ESSENSE PARTNERS, a New York corporation, located at 125 Park
Avenue, 25th Floor, New York, NY 10017 ("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to produce integrated outreach and marketing materials for the
Utilities Resource Management, Customer Support Services and Administration Divisions
(“Projects”) and desires to engage a consultant to provide market research, strategic campaign
planning, graphic design, marketing evaluation and analytics, and website content support in
connection with the Projects (“Services”).
B. CONSULTANT has represented that it has the necessary professional expertise,
qualifications, and capability, and all required licenses and/or certifications to provide the
Services.
C. CITY in reliance on these representations desires to engage CONSULTANT to provide
the Services as more fully described in Exhibit “A”, attached to and made a part of this
Agreement.
NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions,
in this Agreement, the parties agree:
AGREEMENT
SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at
Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The
performance of all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution
through November 13, 2019 unless terminated earlier pursuant to Section 19 of this Agreement.
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SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance
of Services under this Agreement. CONSULTANT shall complete the Services within the term
of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and
made a part of this Agreement. Any Services for which times for performance are not specified
in this Agreement shall be commenced and completed by CONSULTANT in a reasonably
prompt and timely manner based upon the circumstances and direction communicated to the
CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall
not preclude recovery of damages for delay if the extension is required due to the fault of
CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to
CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”),
and reimbursable expenses, shall not exceed Two Hundred Ninety Thousand Dollars
($290,000.00) per fiscal year for a not to exceed amount of Eight Hundred Seventy Thousand
($870,000.00) for all three years. CONSULTANT agrees to complete all Basic Services,
including reimbursable expenses, within this amount.
The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY
RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work
performed or expenses incurred for which payment would result in a total exceeding the
maximum amount of compensation set forth herein shall be at no cost to the CITY.
Additional Services, if any, shall be authorized in accordance with and subject to the provisions
of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services
performed without the prior written authorization of CITY. Additional Services shall mean any
work that is determined by CITY to be necessary for the proper completion of the Project, but
which is not included within the Scope of Services described at Exhibit “A”.
SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly
invoices to the CITY describing the services performed and the applicable charges (including an
identification of personnel who performed the services, hours worked, hourly rates, and
reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C-
1”). If applicable, the invoice shall also describe the percentage of completion of each task. The
information in CONSULTANT’s payment requests shall be subject to verification by CITY.
CONSULTANT shall send all invoices to the City’s Project manager at the address specified in
Section 13 below. The City will process and pay invoices, within thirty (30) days of receipt.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be
performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT
represents that it possesses the professional and technical personnel necessary to perform the
Services required by this Agreement and that the personnel have sufficient skill and experience
to perform the Services assigned to them. CONSULTANT represents that it, its employees and
subconsultants, if permitted, have and shall maintain during the term of this Agreement all
licenses, permits, qualifications, insurance and approvals of whatever nature that are legally
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required to perform the Services.
All of the services to be furnished by CONSULTANT under this agreement shall meet the
professional standard and quality that prevail among professionals in the same discipline and of
similar knowledge and skill engaged in related work throughout California under the same or
similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of
and in compliance with all federal, state and local laws, ordinances, regulations, and orders that
may affect in any manner the Project or the performance of the Services or those engaged to
perform Services under this Agreement. CONSULTANT shall procure all permits and licenses,
pay all charges and fees, and give all notices required by law in the performance of the Services.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs,
including, but not limited to, increases in the cost of Services, arising from or caused by
CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections
such errors and omissions, any change order markup costs, or costs arising from delay caused by
the errors and omissions or unreasonable delay in correcting the errors and omissions.
SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works
project, CONSULTANT shall submit estimates of probable construction costs at each phase of
design submittal. If the total estimated construction cost at any submittal exceeds ten percent
(10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to
CITY for aligning the Project design with the budget, incorporate CITY approved
recommendations, and revise the design to meet the Project budget at no additional cost to CITY.
SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in
performing the Services under this Agreement CONSULTANT, and any person employed by or
contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act
as and be an independent contractor and not an agent or employee of CITY.
SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of
CONSULTANT are material considerations for this Agreement. CONSULTANT shall not
assign or transfer any interest in this Agreement nor the performance of any of
CONSULTANT’s obligations hereunder without the prior written consent of the city manager.
Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any
assignment made without the approval of the city manager will be void.
SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that
subconsultants may be used to complete the Services. CITY authorizes CONSULTANT to use
subconsultants for photography, videography and other specialty assignments as needed.
CONSULTANT shall be responsible for directing the work of any subconsultants and for any
compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning
compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a
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subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval
of the city manager or his designee.
SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Mei Shibata as the
Project director to have supervisory responsibility for the performance, progress, and execution
of the Services and Francesca Jones as the Project coordinator to represent CONSULTANT
during the day-to-day work on the Project. If circumstances cause the substitution of the Project
director, Project coordinator, or any other key personnel for any reason, the appointment of a
substitute Project director and the assignment of any key new or replacement personnel will be
subject to the prior written approval of the CITY’s Project manager. CONSULTANT, at CITY’s
request, shall promptly remove personnel who CITY finds do not perform the Services in an
acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of
the Project or a threat to the safety of persons or property.
CITY’s Project manager is Bruce Lesch, Utilities Department, Resource Management Division,
250 Hamilton Ave Palo Alto, CA 94303, Telephone: 6503292244. The Project manager will be
CONSULTANT’s point of contact with respect to performance, progress and execution of the
Services. CITY may designate an alternate Project manager from time to time.
SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including
without limitation, all writings, drawings, plans, reports, specifications, calculations, documents,
other materials and copyright interests developed under this Agreement shall be and remain the
exclusive property of CITY without restriction or limitation upon their use. CONSULTANT
agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall
be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other
intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if
any, shall make any of such materials available to any individual or organization without the
prior written approval of the City Manager or designee. CONSULTANT makes no
representation of the suitability of the work product for use in or application to circumstances not
contemplated by the scope of work.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time
during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records
pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and
retain such records for at least three (3) years after the expiration or earlier termination of this
Agreement.
SECTION 16. INDEMNITY.
16.1. To the fullest extent permitted by law, CONSULTANT shall protect,
indemnify, defend and hold harmless CITY, its Council members, officers, employees and
agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability
of any nature, including death or injury to any person, property damage or any other loss,
including all costs and expenses of whatever nature including attorney’s fees, experts fees, court
costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to
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performance or nonperformance by CONSULTANT, its officers, employees, agents or
contractors under this Agreement, regardless of whether or not it is caused in part by an
Indemnified Party.
16.2. Notwithstanding the above, nothing in this Section 16 shall be construed
to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the
active negligence, sole negligence or willful misconduct of an Indemnified Party.
16.3. The acceptance of CONSULTANT’s services and duties by CITY shall
not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall
survive the expiration or early termination of this Agreement.
SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any
covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance
or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions,
ordinance or law, or of any subsequent breach or violation of the same or of any other term,
covenant, condition, provision, ordinance or law.
SECTION 18. INSURANCE.
18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in
full force and effect during the term of this Agreement, the insurance coverage described in
Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement
naming CITY as an additional insured under any general liability or automobile policy or
policies.
18.2. All insurance coverage required hereunder shall be provided through
carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or
authorized to transact insurance business in the State of California. Any and all contractors of
CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in
full force and effect during the term of this Agreement, identical insurance coverage, naming
CITY as an additional insured under such policies as required above.
18.3. Certificates evidencing such insurance shall be filed with CITY
concurrently with the execution of this Agreement. The certificates will be subject to the
approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is
primary coverage and will not be canceled, or materially reduced in coverage or limits, by the
insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of
the cancellation or modification. If the insurer cancels or modifies the insurance and provides
less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the
Purchasing Manager written notice of the cancellation or modification within two (2) business
days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for
ensuring that current certificates evidencing the insurance are provided to CITY’s Chief
Procurement Officer during the entire term of this Agreement.
18.4. The procuring of such required policy or policies of insurance will not be
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construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification
provisions of this Agreement. Notwithstanding the policy or policies of insurance,
CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss
caused by or directly arising as a result of the Services performed under this Agreement,
including such damage, injury, or loss arising after the Agreement is terminated or the term has
expired.
SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
19.1. The City Manager may suspend the performance of the Services, in whole
or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior
written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will
immediately discontinue its performance of the Services.
19.2. CONSULTANT may terminate this Agreement or suspend its
performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but
only in the event of a substantial failure of performance by CITY.
19.3. Upon such suspension or termination, CONSULTANT shall deliver to the
City Manager immediately any and all copies of studies, sketches, drawings, computations, and
other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or
given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such
materials will become the property of CITY.
19.4. Upon such suspension or termination by CITY, CONSULTANT will be
paid for the Services rendered or materials delivered to CITY in accordance with the scope of
services on or before the effective date (i.e., 10 days after giving notice) of suspension or
termination; provided, however, if this Agreement is suspended or terminated on account of a
default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that
portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such
determination may be made by the City Manager acting in the reasonable exercise of his/her
discretion. The following Sections will survive any expiration or termination of this Agreement:
14, 15, 16, 19.4, 20, and 25.
19.5. No payment, partial payment, acceptance, or partial acceptance by CITY
will operate as a waiver on the part of CITY of any of its rights under this Agreement.
SECTION 20. NOTICES.
All notices hereunder will be given in writing and mailed, postage prepaid, by
certified mail, addressed as follows:
To CITY: Office of the City Clerk
City of Palo Alto
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Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager
To CONSULTANT: Attention of the Project director
at the address of CONSULTANT recited above
SECTION 21. CONFLICT OF INTEREST.
21.1. In accepting this Agreement, CONSULTANT covenants that it presently
has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which
would conflict in any manner or degree with the performance of the Services.
21.2. CONSULTANT further covenants that, in the performance of this
Agreement, it will not employ subconsultants, contractors or persons having such an interest.
CONSULTANT certifies that no person who has or will have any financial interest under this
Agreement is an officer or employee of CITY; this provision will be interpreted in accordance
with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the
State of California.
21.3. If the Project Manager determines that CONSULTANT is a “Consultant”
as that term is defined by the Regulations of the Fair Political Practices Commission,
CONSULTANT shall be required and agrees to file the appropriate financial disclosure
documents required by the Palo Alto Municipal Code and the Political Reform Act.
SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section
2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not
discriminate in the employment of any person because of the race, skin color, gender, age,
religion, disability, national origin, ancestry, sexual orientation, housing status, marital status,
familial status, weight or height of such person. CONSULTANT acknowledges that it has read
and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to
Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all
requirements of Section 2.30.510 pertaining to nondiscrimination in employment.
SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO
WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally
Preferred Purchasing policies which are available at CITY’s Purchasing Department,
incorporated by reference and may be amended from time to time. CONSULTANT shall comply
with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste
Program. Zero Waste best practices include first minimizing and reducing waste; second,
reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall
comply with the following zero waste requirements:
(a) All printed materials provided by CONSULTANT to CITY generated from a
personal computer and printer including but not limited to, proposals, quotes,
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invoices, reports, and public education materials, shall be double-sided and
printed on a minimum of 30% or greater post-consumer content paper, unless
otherwise approved by CITY’s Project Manager. Any submitted materials printed
by a professional printing company shall be a minimum of 30% or greater post-
consumer material and printed with vegetable based inks.
(b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in
accordance with CITY’s Environmental Purchasing Policy including but not
limited to Extended Producer Responsibility requirements for products and
packaging. A copy of this policy is on file at the Purchasing Division’s office.
(c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no
additional cost to CITY, for reuse or recycling. CONSULTANT shall provide
documentation from the facility accepting the pallets to verify that pallets are not
being disposed.
SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE.
CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter
4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any
employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of
work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay
such employees no less than the minimum wage set forth in Palo Alto Municipal Code section
4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In
addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance
in accordance with Palo Alto Municipal Code section 4.62.060.
SECTION 25. NON-APPROPRIATION
25.1. This Agreement is subject to the fiscal provisions of the Charter of the
City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any
penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the
following fiscal year, or (b) at any time within a fiscal year in the event that funds are only
appropriated for a portion of the fiscal year and funds for this Agreement are no longer available.
This section shall take precedence in the event of a conflict with any other covenant, term,
condition, or provision of this Agreement.
SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC
WORKS CONTRACTS
26.1 CONSULTANT is not required to pay prevailing wages in the performance
and implementation of the Project in accordance with SB 7 if the contract is not a public works
contract, if the contract does not include a public works construction Project of more than
$25,000, or the contract does not include a public works alteration, demolition, repair, or
maintenance (collectively, ‘improvement’) Project of more than $15,000.
26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any
contract for public works construction, alteration, demolition, repair or maintenance.
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SECTION 27. MISCELLANEOUS PROVISIONS.
27.1. This Agreement will be governed by the laws of the State of California.
27.2. In the event that an action is brought, the parties agree that trial of such
action will be vested exclusively in the state courts of California in the County of Santa Clara,
State of California.
27.3. The prevailing party in any action brought to enforce the provisions of this
Agreement may recover its reasonable costs and attorney’s fees expended in connection with that
action. The prevailing party shall be entitled to recover an amount equal to the fair market value
of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third
parties.
27.4. This document represents the entire and integrated agreement between the
parties and supersedes all prior negotiations, representations, and contracts, either written or oral.
This document may be amended only by a written instrument, which is signed by the parties.
27.5. The covenants, terms, conditions and provisions of this Agreement will
apply to, and will bind, the heirs, successors, executors, administrators, assignees, and
consultants of the parties.
27.6. If a court of competent jurisdiction finds or rules that any provision of this
Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this
Agreement and any amendments thereto will remain in full force and effect.
27.7. All exhibits referred to in this Agreement and any addenda, appendices,
attachments, and schedules to this Agreement which, from time to time, may be referred to in
any duly executed amendment hereto are by such reference incorporated in this Agreement and
will be deemed to be a part of this Agreement.
27.8 In the event of a conflict between the terms of this Agreement and the
exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case
of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall
control.
27.9 If, pursuant to this contract with CONSULTANT, CITY shares with
CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d)
about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable
and appropriate security procedures to protect that Personal Information, and shall inform City
immediately upon learning that there has been a breach in the security of the system or in the
security of the Personal Information. CONSULTANT shall not use Personal Information for
direct marketing purposes without City’s express written consent.
27.10 All unchecked boxes do not apply to this agreement.
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27.11 The individuals executing this Agreement represent and warrant that they
have the legal capacity and authority to do so on behalf of their respective legal entities.
27.12 This Agreement may be signed in multiple counterparts, which shall, when
executed by all the parties, constitute a single binding agreement.
IN WITNESS WHEREOF, the parties hereto have by their duly authorized
representatives executed this Agreement on the date first above written.
CITY OF PALO ALTO
City Manager or Designee
APPROVED AS TO FORM:
City Attorney or Designee
ESSENSE PARTNERS
Officer 1
By:
Name: Mei Shibata
Title: CEO
Officer 2
By:
Name: Geoff Wyatt
Title: COO
Attachments:
EXHIBIT “A”: SCOPE OF SERVICES
EXHIBIT “B”: SCHEDULE OF PERFORMANCE
EXHIBIT “C”: COMPENSATION
EXHIBIT “C-1”: SCHEDULE OF RATES
EXHIBIT “D”: INSURANCE REQUIREMENTS
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EXHIBIT “A”
SCOPE OF SERVICES
Task 1: Market Research
CONSULTANT shall work with CITY staff to develop and implement market research to
identify the various segments of Palo Alto’s customer base and the issues/concerns of each
segment as well as develop strategy to reach and engage each group. CONSULTANT will gather
data by conducting research (primary and/or secondary*) to gain insight into consumers’
perceptions as well as evaluate the impact of existing CITY programs and educational efforts.
*Secondary research needs will be determined based on CITY requirements for each individual
campaign or Project.
Deliverables:
Key findings report
Research summary
Market analysis
Customer journey mapping
Task 2: Strategic Campaign Planning. CONSULTANT will assess the market research findings
and work closely with CITY staff to develop integrated outreach strategies and materials.
CONSULTANT will develop a marketing roadmap for CITY’s customer service, efficiency and
customer renewable programs, safety awareness, emergency preparedness and general utility
education initiatives.
Deliverables:
An annual outreach plan at the start of each calendar year or fiscal year, based on scheduling and
reporting requirements, as discussed and agreed upon by CITY staff and CONSULTANT,
incorporating the following attributes:
Use of a variety of outreach mechanisms/media
Identification of barriers and proposed solutions
Use of commitments, prompts, norms and incentives
Use of community-based social marketing (CBSM)
Incorporate appropriate analytics tracking into campaign design
Task 3: Graphic Design and Marketing Materials. CONSULTANT will develop distinctive
creative concepts tailored to CITY’s target audience, while remaining consistent with CITY
branding. Examples of CITY audiences include: residents, businesses and industry, schools and
community groups, internal staff, elected officials and/or other government agencies with whom
the City collaborates. CONSULTANT shall collaborate with Project manager at the start of each
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calendar or fiscal year, whichever is most appropriate for scheduling and developing strategic
communication campaigns, to develop annual outreach materials, incorporating traditional and
new media.
Specifically, CONSULTANT shall assist CITY with creating outreach materials and provide
graphic design services to include, but not limited to:
a) Utility bill inserts, print ads, Op-Ed pieces, factsheets, newspaper articles, displays,
brochures
b) High-resolution photographs with a regional context (including original photography if
needed)
c) Images, charts, infographics and graphs clearly explaining complicated information or a
compelling call to action
d) Videos and animated images for a variety of uses including but not limited to online and
classroom education videos, television commercials, and other dynamic media
advertisements
e) Movie making, including story and script development, animation and graphics
f) Promotional items for residents, schools, special events, and businesses
g) Customized illustrations and artwork for a variety of formats
h) Coordinate with outside printers and in-house CITY copying services
Deliverables:
High resolution design files for each requested campaign delivered to CITY vendors
upon request (Prodigy, The Post, The Weekly, Facebook Ads etc.)
High resolution design file archive for each piece of marketing material transferred to
CITY on a monthly basis via DropBox or other agreed upon means of transfer
Task 4: Evaluation & Analytics. CONSULTANT shall work with CITY staff to run
comprehensive analytics on marketing efforts in order to focus campaign direction and assess
cost effectiveness.
Quantitative methods can include but are not limited to:
a) A/B testing
b) Google analytics
c) Beta testing/focus groups
d) Customer-wide survey tactics and analytics
Deliverables:
Annual, quarterly and ad hoc reports on completed Projects or campaigns including:
o marketing analysis (demographics, click rates, program participation numbers
etc.)
o lessons learned
o application of analytical insights to strategic planning
o benchmark of CITY campaigns against industry
o Cost effectiveness
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Task 5: Website
CONSULTANT shall:
a) Evaluate the CITY website and recommend how to make it more engaging, educational and
interactive
b) Assist CITY staff in developing creative elements for the website including photographs,
graphics, charts, videos, games and other elements
c) Assist CITY staff in organizing the website architecture and page mapping
Deliverables:
Evaluation report with site improvement proposal
Proposed website improvement timeline
Improve site based on CITY work order request form
Task 6: Contract Management
Consultant shall maintain Project management relationship with CITY by keeping up an active
shared Project tracking list and annual report to be reviewed during:
6.1) Two in-person meetings per year at CITY offices, including one initial kick-off
meeting the first year
6.2) Check-in calls or webinars upon CITY request
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EXHIBIT “B”
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each Project on an as needed
agreed upon basis. The time to complete each milestone may be increased or decreased by
mutual written agreement of the Project managers for CONSULTANT and CITY so long as all
work is completed within the term of the Agreement. CONSULTANT shall provide a detailed
schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to
proceed.
For each Project CITY shall submit to CONSULTANT a work order request form outlining the
goal and scope of the Project. CONSULTANT shall provide CITY with a written estimate for
each Project. CONSULTANT shall not begin work on any Project until CITY approves estimate.
Tasks Timeline
1. Task 1: Market Research Ongoing as needed
2. Task 2: Strategic Planning Ongoing as needed
3. Task 3: Graphic Design & Marketing Ongoing as needed
4. Task 4: Analysis & Evaluation Ongoing as needed
5. Task 5: Website Ongoing as needed
6. Task 6: Contract Management Ongoing as needed
Task 6.1: In-Person Meeting Within 30 days of contract
execution; then every 6 months
Task 6.2: Calls/Webinars Monthly and as needed
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EXHIBIT “C”
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services performed
in accordance with the terms and conditions of this Agreement based on the hourly rate
schedule attached as Exhibit C-1.
The compensation to be paid to CONSULTANT under this Agreement for all services,
additional services, and reimbursable expenses shall not exceed the amount(s) stated in
Section 4 of this Agreement. CONSULTANT agrees to complete all Services and
Additional Services, within this/these amount(s). Any work performed or expenses
incurred for which payment would result in a total exceeding the maximum amount of
compensation set forth in this Agreement shall be at no cost to the CITY.
The administrative, overhead, secretarial time or secretarial overtime, word processing,
photocopying, in-house printing, insurance and other ordinary business expenses are
included within the scope of payment for services and are not reimbursable expenses.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s Project manager’s
request, shall submit a detailed written proposal including a description of the scope of
services, schedule, level of effort, and CONSULTANT’s proposed maximum
compensation, including reimbursable expenses, for such services based on the rates set
forth in Exhibit C-1. The additional services scope, schedule and maximum
compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager
and CONSULTANT prior to commencement of the services. Payment for additional
services is subject to all requirements and restrictions in this Agreement.
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Budget Breakdown- Total Contract Compensation
Contract Year Dates Funds Encumbered
1 11/14/16-11/13/17 $ 290,000.00
2 11/14/17-11/13/18 $ 290,000.00
3 11/14/18-11/13/19 $ 290,000.00
Total $ 870,000.00
Example Fiscal Year Compensation Breakdown
Utilities Division Group Project Funding Source Amount
Administration Communications
General
Communications
Utilities
Administration
Enterprise Fund $ 30,000.00
Customer Support
Services Customer Service
Billing & General
Customer Service
Utilities Gas,
Water, Electric &
Wastewater
Enterprise Funds $ 25,000.00
Resource Management Resource Planning EV Charging
Low Carbon Fuel
Standard Fund $ 10,000.00
Resource Management Resource Planning Electrification Public Benefits $ 10,000.00
Resource Management Utility Program Services Local Solar Plan Public Benefits $ 15,000.00
Resource Management Utility Program Services Programs & Services Public Benefits $ 200,000.00
Total $ 290,000.00
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EXHIBIT “C-1”
SCHEDULE OF RATES
Role
CEO $225
Project/Account Manager $150
Senior Strategist $200
Senior Copywriter $165
Copywriter $110
Editor $150
Event Coordinator $150
Creative Director $155
Graphics Designer $110
Market Researcher $150
Media Coordinator $165
Outreach Coordinator $150
Videographer $165
Developer $165
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EXHIBIT “D”
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT
OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY
COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT
INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQUIRE
D TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
YES
YES
WORKER’S COMPENSATION
EMPLOYER’S LIABILITY STATUTORY
STATUTORY
YES
GENERAL LIABILITY, INCLUDING
PERSONAL INJURY, BROAD FORM
PROPERTY DAMAGE BLANKET
CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY DAMAGE
COMBINED.
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
YES AUTOMOBILE LIABILITY, INCLUDING
ALL OWNED, HIRED, NON-OWNED
BODILY INJURY - EACH PERSON
- EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY
DAMAGE, COMBINED
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND OMISSIONS,
MALPRACTICE (WHEN APPLICABLE),
AND NEGLIGENT PERFORMANCE
ALL DAMAGES $1,000,000
YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS
SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND
PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN
COVERAGE OR OF COVERAGE CANCELLATION; AND
B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR
CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL.
II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT
THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569.
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III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL
INSUREDS”
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER
INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS.
B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY
SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER,
BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL
LIABILITY OF THE COMPANY UNDER THIS POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON
OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE
CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE
OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-
PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN
(10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE
AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT
THE FOLLOWING URL:
HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569
OR
HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP
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City of Palo Alto (ID # 7443)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Approval of Fiscal Year 2016 Reappropriation Requests to be
Carried Forward into Fiscal Year 2017
Title: Finance Committee Recommendation that the City Council Approves
the Fiscal Year 2016 Reappropriation Requests to be Carried Forward Into
Fiscal Year 2017 and Approve Budget Amendments in Various Funds
From: City Manager
Lead Department: Administrative Services
Recommendation
The Finance Committee and Staff recommend that the City Council amend the Fiscal Year 2017
Budget Appropriation Ordinance for various funds as identified in Attachment A and various
capital projects as identified in Attachment B.
Background
As a part of the fiscal year-end process, staff reviews the City’s unencumbered and unspent
appropriations of the fiscal year just ended, along with the City’s spending plans. Encumbered
amounts are those subject to the legal claims of other parties due to contractual obligations
(for example, commitments made through purchase orders), which are carried forward from
one fiscal year to the next. However, each year there are a small number of important projects
which staff was not able to complete or encumber funds for. The reappropriation process
allows staff to bring forward funding recommendations to the Finance Committee and City
Council to continue these projects.
On September 22, 2014, the City Council approved a recommendation to amend Chapter 2.28,
Section 2.28.090 of the Municipal Code, reducing the previous two-step reappropriations
process (preliminary and final reappropriation authorization) to one step as long as the
Administrative Services Director certifies that sufficient unencumbered and unexpended funds
are available in the current Fiscal Year to be carried forward to the subsequent Fiscal Year.
Additionally, the City Council amended the Municipal Code to eliminate the provision allowing
for the automatic reappropriation of capital project funds. Previously, the Municipal Code
stated that appropriations of capital project funds should continue until the project was
completed or no funds had been expended for two years. Effective Fiscal Year 2016, the
City of Palo Alto Page 2
Finance Committee reviewed and the Council approved a capital budget which includes all
active projects. Since capital projects may be delayed for various reasons, unexpended funds
are carried forward in two ways from the outgoing to the new fiscal year. As part of the
approval of the Fiscal Year 2017 budget, based on estimates, the majority of unexpended and
unencumbered funds were carried forward from Fiscal Year 2016 to Fiscal Year 2017. Now that
the Fiscal Year 2016 has closed and staff has processed necessary accounting transactions any
unexpended and unencumbered funds for each capital project are reviewed one more time.
Based on that review, staff recommends that for some projects in various funds remaining
Fiscal Year 2016 capital dollars are reappropriated to Fiscal Year 2017. Also, as part of this
review, staff realized that for some projects too much funding was recommended for
reappropriation as expenditures occurred in Fiscal Year 2016. Therefore, this staff report also
recommends reversing a portion of previously authorized reappropriations.
Discussion
As noted above, the changes to the Municipal Code from last year allow for the reappropriation
of unencumbered and unexpended funds in advance of the normal year-end closing ordinance
as long as the Administrative Services Director certifies that sufficient unencumbered and
unexpended funds are available.
Attachment A identifies those operating budget reappropriation requests that staff
recommends for approval, while Attachment B lists recommended capital project
reappropriations. With the submission of this report for Finance Committee consideration, the
Administrative Services Director certifies sufficient unencumbered and unexpended funds are
available in Fiscal Year 2016 to be carried forward to Fiscal Year 2017.
Subsequent to the review and approval by the Finance Committee on October 18, 2016, staff
recommends additional reappropriation in the Community Development Block Grant (CDBG)
fund for an additional transaction as outlined below based on further review of final financials
as outlined in Attachment A and below:
Reappropriate funding in the Community Development Block Grant (CDBG) Fund in the amount
of $392,368 for the Mid-Pen Housing grant activities included in the FY 2016 and FY 2017 action
plans. Due to timing funds were unable to be encumbered by the end of the fiscal year and
therefore the grant funding as well as the corresponding reappropriation of the estimate for
grant revenue is recommended to be reappropriated. The reappropriation of grant revenue
offsets this transaction as the CDBG grants are funded on a reimbursement basis once eligible
expenses have been incurred. As a result of this change, the total Special Revenue Funds
reappropriation recommended would be increased from $157,000, as outlined in the staff
report presented to Finance Committee (CMR 7311), to $549,368 in Special Revenue Funds.
The projects for which operating budget reappropriations are recommended can generally be
grouped into the following categories:
City of Palo Alto Page 3
Timing and Workload Delays: Certain projects were delayed due to competing
workload demands, appropriation of funds late in the fiscal year, or other unanticipated
delays. Examples of projects in this category include: Financial Accounting & Reporting
Temporary/Contractual Assistance ($50,000), Budget Software Systems Integration &
Configuration ($100,000), Sales and Use Tax Contract Services ($80,000), Human Service
Resource Allocation Contract Services ($42,000), Community and Public Health
Consultant ($50,000), Fire Emergency Medical Response Equipment ($30,000),
Transportations Management Association Pilot Programs ($100,000), Body Worn
Cameras ($70,000), SB1 Solar Electric (PV) Program Rebates ($300,000), SAP Support
($100,000), Project Safety Net – Trackwatch ($157,000), and Cross-Bore Inspection
Contract ($1,000,000).
Technology Services: Funding was included in Fiscal Year 2016 for technology system
evaluation and upgrade projects but contracts were not awarded by the end of the fiscal
year. Projects in this category include Work Order and Asset Management Application
Integration ($200,000), Council Chambers AV Replacements ($350,000), and Police
Public Safety Technology ($82,000).
Library Donation and Grant: In early Fiscal Year 2015 the Library was awarded two
grants from the Pacific Library Partnership (PLP): one in the amount of $4,485 to offset
delivery costs for LINK+, an interlibrary loan program for participating organizations; and
a $15,000 grant for the Maker+: A Summer Maker Program to support STEAM (Science,
Technology, Engineering, Art & Math) learning and to foster interdisciplinary exploration
among sciences, art, and social sciences. In addition, in June 2015, the City received a
$320,000 donation from the Palo Alto Library Foundation. The Library has utilized this
funding for the purchase of additional technology, such as tablets, e-readers, and other
devices for staff development and customer instruction; where this action will
reappropriate $90,000 necessary for contractual services to continue workflow
efficiency improvements, provide staff training, and customer service efforts for the
new facilities and products. An additional reappropriation of $110,000 is necessary to
explore and fund technologies that complement the new service platform and aid in
further staff development and customer instruction.
Teen Services Programs: At the June 2, 2014 City Council meeting, the City Council
approved a recommendation from the Policy and Services Committee to use a portion
of the net revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 to
fund Teen Programs for Fiscal Year 2015 (CMR #4776). Staff returned to Policy and
Services in the fall of 2015 for Committee Review of the FY 2015 and FY 2016 use of the
Bryant Street Garage Fund for Teen Services and options for a FY 2017 spending plan
(CMR #6167). Teen Services programming includes but is not limited to: makeX, Project
Enybody, Click PA, Ghost Bike, and Ceramics class drop-ins. As a result, this action will
reappropriate $320,380 to continue supporting these programs as well as a sustainable,
long-term approach for Teen Services utilizing Bryant Street funds.
City of Palo Alto Page 4
Capital Reappropriations: As discussed in the Background section of this report, starting
with the Fiscal Year 2016 capital budget, all capital project reappropriations require City
Council approval. The FY 2017 Adopted Budget included approximately $79.8 million in
reappropriated funds, across all City funds based on estimates of anticipated spending
in FY 2016. Since the adoption of the capital budget, some adjustments and
refinements to project reappropriations are required since FY 2016 year end actuals and
projects costs have been updated. These primarily reflect either increases or decreases
to assumed reappropriations in the FY 2017 Adopted Budget:
o Additional reappropriations are recommended, as project expenditures originally
anticipated to occur before the end of FY 2016 will now likely occur in FY 2017;
o Downward adjustments in FY 2016 are recommended, as some expenses were
not anticipated to occur until FY 2017 and were therefore reappropriated in the
budget document to FY 2017. However, the activities were realized in Fiscal Year
2016 and therefore an adjustment to reduce the FY 2017 appropriation is
recommended.
The table on the following page summarizes the recommended net reappropriation
adjustments as detailed in Attachment B. These Fiscal Year 2017 adjustments represent
the final step in the City Council approved change to the reappropriation process. There
are sufficient expenditure savings in Fiscal Year 2016 to support all recommended
reappropriation adjustments.
It should be noted that as a result of the revised process and active review of all project
reappropriations, a reduced level of carryforward from one year to the next is
recommended than by automatically carrying forward all unspent capital funding. As
part of the detailed review of capital projects which started with the development of
the Fiscal Year 2017 Capital Budget and is concluding with the recommendations
contained in this CMR, a total of $0.7 million is being returned to reserves across several
funds that otherwise would have been reappropriated under the prior model, including
$0.4 million in the Capital Improvement Fund.
City of Palo Alto Page 5
Fund
Number of
Projects
Recommended
Reappropriation Adjustment
Capital Improvement Fund 56 ($13,280,195)
Cubberley Property Infrastructure Fund 2 $182,812
Electric Fund 17 ($632,526)
Gas Fund 6 ($472,891)
Refuse Fund 1 $76,502
Storm Drainage Fund 4 ($165,958)
Wastewater Collection Fund 6 ($424,889)
Wastewater Treatment Fund 3 ($110,607)
Water Fund 9 ($1,500,421)
Technology Fund 8 $11,396
Vehicle Replacement and Maintenance Fund 3 ($1,552,882)
Total All Funds 115 ($17,869,659)
Resource Impact
The requested items have been previously reviewed and approved by City Council as part of
annual budget processes. The Director of Administrative Services has certified that sufficient
funds exist for the recommended Fiscal Year 2016 Operating Budget reappropriations
(Attachment A) and Capital Budget reappropriations (Attachment B). Staff recommends $1.3
million in carryover funds in the General Fund, $1.5 million in Enterprise Funds, $0.7 in Internal
Service Funds and $0.5 million in Special Revenue Funds. For capital projects staff recommends
$13.1 million to be reduced from reappropriations assumed in the FY 2017 Adopted Budget in
the Capital Improvement Fund, a net $3.2 million reduction in the various Enterprise Funds, and
a reduction of $1.5 million in the Internal Service Funds.
Policy Implications
This recommendation is consistent with adopted Council policy.
Environmental Review (If Applicable)
The action recommended is not a project for the purposes of the California Environmental
Quality Act.
Attachments:
Attachment A: Operating Reappropriations FY2016 to FY2017 (PDF)
Attachment B: Capital Reappropriations FY2016 to FY2017 (PDF)
Attachment C: October 18, 2016 Finance Committee Excerpt Minutes (PDF)
Attachment A
Fiscal Year 2016 Reappropriations
Fund
Fund Name
Department
Division Title Description
Recommended
Amount
102 General Fund Administrative Services
Financial Accounting &
Reporting
Financial Accounting & Reporting
Temporary/Contractual Assistance
This action provides funding for temporary and contractual assistance in the Accounting Division. This funding will assist in
addressing capacity issues especially during peak work production times such as year-end, allow for cross training of staff, and
coverage for vacancies should they arise in both the Payroll and General Ledger divisions. These resources ensure the Accounting
Division is able to complete the preparation of financial records and the comprehensive annual financial report (CAFR).
50,000$
102 General Fund Administrative Services
General Billing & Collection
Revenue Collections Equipment This action provides for the purchase of a new safe for the Administrative Services Revenue Collections Division. The current safe
is beyond its useful life and it has become increasingly difficult to find replacement parts to maintain it. This funding was
approved as part of the FY2016 Mid-Year Budget Review as it is important to ensure this equipment is in good working order to
properly safeguard the City’s assets.
15,000$
102 General Fund Administrative Services
Office of Management &
Budget
Budget Software Systems Integration & Configuration This action provides funding to clean-up and finalize system configurations and integrations in relationship to the budget
software, Questica. Over the course of FY2016, the Office of Management and Budget (OMB) saw significant changes in
resources, resulting in delays of the completion of Questica's configurations, primarily the integrations of Questica with other
systems such as SAP and the publishing software. This funding is available due to vacancy savings within OMB who would have
worked on these projects and it will be used to support the completion of these integration projects that were delayed due
inadequate staffing resources.
100,000$
102 General Fund City Auditor
Performance Audits
Sales and Use Tax Revenue Reporting Errors Contract
(Municipal Services)
This actions provides funding for potential invoices for the City's current sales and use tax audit and information services,
MuniServices. Payments to the vendor are based on a percentage of the additional sales tax revenue actually received by the
City as a direct result of MuniServices detecting and documenting point-of-sale or use taxpayer reporting errors and/or omissions
with the State Board of Equalization (SBOE). However, confirmation from the State Board of Equalization have been delayed due
to staffing resource gaps at the SBOE. This funding will ensure the City has sufficient funds appropriated to process payments to
MuniServices once we receive more confirmation of misallocated sales and use tax revenue.
80,000$
102 General Fund CSD
Human Services
Human Services Resource Allocation Process Reserve Human Services Resource Allocation Program (HSRAP) Reserve: At the June 9, 2014 City Council meeting, the Council established
a $50,000 reserve for the Human Services Resource Allocation Process as part of the Budget Adoption for Fiscal Year 2015. Since
the reserve was funded as a one-time appropriation and remains unspent through the close of Fiscal Year 2016, this action will
reappropriate the reserve balance of $50,000 into Fiscal Year 2017.
50,000$
102 General Fund CSD
Human Services
Human Services Resource Allocation Process Contracts -
Santa Clara Valley Medical & Project Sentinel
This action provides funding for two human services contracts with Santa Clara Valley Medical ($8,494) and Project Sentinel
($33,513). Although the contracts expired June 30, 2016, a few outstanding invoices remain from activities that occurred prior to
June 30, 2016 and funds need to be carried forward in order to complete payment of these outstanding reimbursement requests.
42,000$
102 General Fund CSD
Teen Programs
Bryant Street Garage Teen Program This action reappropriates remaining funds in the Bryant Street Garage Teen Program that were previously allocated from the net
revenue collected from 455 Bryant Street in Fiscal Years 2009 through 2013 to fund Teen Programs. Community Services Staff
continues to evaluate the best use of the Mitchell Park Community Center and the Teen Center for the best use of the facility and
programming for Teen Services at the Teen Center and elsewhere throughout the City utilizing the Bryant Street Funds. The
reappropriation of these funds ensures appropriate resources will be available for the provision of Teen Services as well as for a
sustainable, long-term approach to the delivery of these services.
320,380$
102 General Fund Fire
Administration
Community and Public Health Consultant This action provides funding for a Community and Public Health Consultant to assess the community health and risk in order to
create preventative intervention programs to reduce the community’s risk from injury, fire or loss as approved in the FY 2016
Adopted Budget. The reappropriation of these funds ensures appropriate resources will be available for consultant analysis that
is critical in helping the Palo Alto Fire Department (PAFD) to identify the City's leading emergency medical issues and how the
Department can intervene to prevent an injury or emergency medical call from occurring.
50,000$
102 General Fund Fire
Emergency Response
Fire Emergency Medical Response Equipment This action provides funding necessary to outfit two new ambulances with EMS supplies such as medicine; medical supplies
(syringes, gauze, gloves, etc.); life support monitoring devices; and equipment to secure and transport the patients (gurneys, stair
chairs, etc.) as approved in the FY 2016 Adopted Budget. In Fiscal Year 2015, the City's vehicle replacement committee approved
the purchase of two new ambulances through the Vehicle Replacement Fund to increase the Fire Department's Emergency
Medical Service (EMS) fleet to six ambulances and allow for four on duty ambulances and two reserve apparatus at all times
increasing the ability to respond to emergency calls and transport more emergency patients to the hospital. It takes
approximately a year to build-out an ambulance, including outfitting with EMS supplies, where this funding will ensure the City
has sufficient funds appropriated to process payments that will be due upon delivery.
30,000$
102 General Fund Library
Administration
Administration Contracts - outreach, development, and
training
This action reappropriates $90,000 for contractual services to improve workflow efficiency, provide staff training, and customer
service improvements for the new library facilities and new products as approved in the FY 2015 Adopted Budget. As a result of
the implementation of the new library service platform and staff’s application of Lean Library Principles to library operations as
well as learning about many other new technologies, these resources are necessary to continue with services to improve
efficiencies as well as support additional outreach efforts and staff development and training.
90,000$
1 OF 4 Finance Committee 11/1/2016
Attachment A
Fiscal Year 2016 Reappropriations
Fund
Fund Name
Department
Division Title Description
Recommended
Amount
102 General Fund Library
Administration
Library Technology Equipment - staff development and
customer instruction
This action reappropriates $110,000 for the acquisition of technology equipment for staff development and customer instruction.
With the implementation of the new library service platform, staff has been devoting time and effort to bring up the platform to
service as approved in the FY 2015 Adopted Budget. In addition, through the implementation of the change of service platform,
library staff has learned about many other new technologies that may be used to work with the new platform in order to
maximize its use. Staff is currently in the process of exploring and experimenting with new technologies that can most effectively
be used with the new service platform. This funding will be used to purchase the selected products in Fiscal Year 2017. The
purchase of these additional elements was anticipated to occur in Fiscal Year 2016, but was delayed as a result of a broadened
effort to find the best solutions to integrate with the enhanced system.
110,000$
102 General Fund Non-Departmental
Development and Training
Management Development and Training This action reappropriates $202,000 to continue the citywide management training program that of which $145,000 was
reappropriated form Fiscal Year 2015 to Fiscal Year 2016, and this action consolidates the remaining balance of that funding with
departmental savings from Fiscal Year 2016. Training programs will continue to focus on the following areas: Ethic, Civics and
Citizen Engagement, Leadership and Management, Budget, Finance, Procurement, Interpersonal Communication, Presentation
Skills, Business Writing, Time Management, Project Management, Change Management, SkillSoft (online based education), and
Safety and Security.
202,000$
102 General Fund PCE
Transportation
Transportation Management Association This action reappropriates $100,000 for pilots and initiatives for the Transportation Management Authority (TMA). This
reappropriation of funds originally approved in Fiscal Year 2016 was recommended as part of CMR #6823, which was approved by
the City Council on June 13,2016. That CMR outlined the potential pilot programs, which include transit subsidies, carpool
subsidies, and low-income programs. Staff will return to City Council for any ongoing funding needs associated with the
Transportation Management Authority as appropriate.
100,000$
102 General Fund Police
Administration
Body Worn Cameras This action provides one-time funding necessary to purchase approximately 90 body worn cameras for sworn Police personnel on
duty as approved in the FY 2016 Adopted Budget. These cameras integrate with and enhance the current in-car camera system,
which only capture approximately 40-60 percent of police field patrol interaction with the public. The use of body worn cameras
will assist in criminal prosecution, potentially reduce civil liability, and aid in the review of alleged misconduct. The Department
evaluated available technology in FY 16 and piloted ten (10) test units beginning in June 2016, where this funding will ensure the
City has sufficient funds to complete the procurement and outfitting of officers in FY 2017.
70,000$
Total General Fund Reappropriation 1,309,380$
2 OF 4 Finance Committee 11/1/2016
Attachment A
Fiscal Year 2016 Reappropriations
Fund
Fund Name
Department
Division Title Description
Recommended
Amount
523 Electric Fund - Operating Utilities
Electric Renewable Energy
SB1 Solar Electric (PV) Program Rebates This action provides funding to fulfill the department's solar photovoltaic rebate obligations. Under the SB1 Solar Electric (PV)
program, the City committed to spend $13 million for solar PV rebates over 10 years, with an average annual cost of $1.3 million
beginning July 2007. In FY 2016, $2.0 million was appropriated for rebate payments with $923,795 in rebate payments paid out.
Based on customer's forecasted project completion dates, payments are estimated to reach $1.3 million for FY 2017. As such,
$300,000 needs to be reappropriated from FY 2016 to meet the anticipated rebate obligations.
300,000$
524 Gas Fund - Operating Utilities
Operations
Cross-Bore Inspection Contract This action provides funding in contract services required to complete the cross-bore inspection program. The cross-bore
inspection program was launched in FY 2012 to ensure there are no natural gas lines are inadvertently installed or cross-bored
through sewer laterals. Cross-bores become potential hazards when homeowners make sewer lateral repairs and inadvertently
damage a bisecting gas line. Approximately 13,000 out of over 18,000 sewer laterals in the city were inspected during Phase I of
this program. Phase II is scheduled to begin in FY 2017, and the funding will allow the City's contractor to begin the inspection of
remaining sewer laterals for cross-bores.
1,000,000$
526 Wastewater Treatment
Fund
Public Works Advanced Water Purification Feasibility Study This action provides funding necessary in contract services to complete a feasibility study of the installation of advanced water
purification system (AWPS) at the Palo Alto Regional Water Quality Control Plant (RWQCP). This is a multi-city effort to expand
the use of recycled water, where $175,875 needs to be reappropriated from FY 2016 to meet contractual obligations.
175,875$
Total Enterprise Funds Reappropriation 1,475,875$
260 Stanford Medical Center
Development
Agreement Fund
Community Services
Project Safety Net
Project Safety Net - TrackWatch This action reappropriates $157,000 in expenditure savings as outstanding invoices remain from Cypress Security, the vendor
providing track security services associated with Project Safety Net. This program was initially funded out of an allocation of
funds in the Stanford Medical Center Development Agreement Fund and invoices for services rendered prior to June 30, 2016
remain outstanding due to a year end close timing issue and funds need to be carried forward in order to complete payment of
these invoices. Beginning in FY 2017, these costs have been shifted to the General Fund Police Department.
157,000$
232 Community
Development Block
Grant (CDBG)
Project - CDBG MidPen Housing Grant This action reappropriates $392,368 necessary for the 2016-17 Community Development Block Grant (CDBG) action plan. The
CDBG program a Federal program providing localities with grants to devise innovative and constructive neighborhood approaches
to improve the physical, economic, and social conditions in their communities. The 2016-17 action plan and associated funding
allocations and adoption of a resolution approving use of the CDBG grant funds was recommended as part of CMR #6683, and
approved by the City Council on May 2,2016. Due to timing, funds were unable to be encumbered by the end of the fiscal year. A
corresponding reappropriation of the estimate for Grant Revenue is recommended to offset this transaction as the CDBG grants
are funded on a reimbursement basis once eligible expenses have been incurred.
392,368$
Total Special Revenue Funds Reappropriation 549,368$
3 OF 4 Finance Committee 11/1/2016
Attachment A
Fiscal Year 2016 Reappropriations
Fund
Fund Name
Department
Division Title Description
Recommended
Amount
682 Technology Fund Information Technology
New Technology
Work Order and Asset Management Application This action reappropriates $200,000 in one-time funding that was provided in Fiscal Year 2016 to migrate the City of Palo Alto’s
existing technology work order management tool. The current tool, Track-it, is over 10 years old, is past its serviceable life, and is
no longer supported by the vendor. This funding will be used to migrate to a next generation cloud-based solution that integrates
Work Order Management and Asset Management and will allow for mobile entry of work orders by all city staff. The migration
was scheduled to occur in Fiscal Year 2016, but is anticipated to occur in Fiscal Year 2017 due to project delays. Ongoing
maintenance funding of $40,000 will be incorporated into the development of subsequent budgets.
200,000$
682 Technology Fund Information Technology
New Technology
Council Chambers AV Replacement This action reappropriates $350,000 in one-time funding that was provided in Fiscal Year 2016 to replace the current analog
media and recording equipment in the Council Chambers with digital equipment. The current equipment is past its serviceable life
and is past its warranty. The current system has no back-up and does not have redundancy capability, which jeopardizes the
ability to stream meetings in the Council Chambers and to record them. The upgrade of the equipment was scheduled to occur in
Fiscal Year 2016, but is now anticipated to occur in Fiscal Year 2017 due to project delays. The upgrade will ensure that the
general function of City Council meetings will not be disrupted. Ongoing maintenance funding of $75,000 will be incorporated into
the development of subsequent budgets.
350,000$
682 Technology Fund Information Technology SAP Support This action reappropriates $100,000 in one-time salary savings associated with vacancies that occurred in Fiscal Year 2016 in the
SAP Functional Team. Due to the vacancies in Fiscal Year 2016, the functional team was unable to address some priority SAP
functionality for departments. This funding will provide funds for contractor hours to address one time needs of departments
such as Human Resources, Planning and Community Environment, and the Fire Department.
100,000$
682 Technology Fund Information Technology
Project Services Administration
Public Safety Technology - Police: Mobile Responder
Application and Online Reporting Application
This action reappropriates $82,000 to fund the implementation of two Police Department applications. The Mobile Responder
Application and the Online Reporting Application both provide enhanced functionality to the Computer Aided dispatch system.
The Mobile Responder Application allows field personnel to view and update events and maps, access databases, and send and
receive messages on a smart phone or tablet. The online reporting application facilitates direct integration to the Records
Management System (RMS) from the field, thereby minimizing staff report time and enhancing service delivery to the public.
Ongoing maintenance for these applications will be incorporated into the development of subsequent budgets.
82,000$
Total Internal Services Funds Reappropriation $ 732,000
All Reappropriations 4,066,623$
4 OF 4 Finance Committee 11/1/2016
Project ID Project Title Fund
Reappropriation
Adjustment
AC-86017 Art in Public Places Capital Improvement Fund (21,298)
OS-00001 Open Space Trails & Amenities Capital Improvement Fund 4,217
OS-09001 Off-Road Pathway Resurfacing and Repair Capital Improvement Fund 37,029
PE-09003 City Facility Parking Lot Maintenance Capital Improvement Fund 2,780
PE-09006 Mitchell Park Library and Community Center New Construction Capital Improvement Fund 132,223
PE-11000 Main Library New Construction & Improvements Capital Improvement Fund 40,099
PE-12013 Magical Bridge Playground Capital Improvement Fund 41,510
PE-12017 City Hall 1st Floor Capital Improvement Fund (2,545)
PE-13003 Parks Master Plan Capital Improvement Fund 43,987
PE-13008 Bowden Park Capital Improvement Fund 10,114
PE-13012 Structural Assessment Capital Improvement Fund 36,143
PE-13014 Streetlights Condition Capital Improvement Fund 215,000
PE-13017 EC Median Landscape Capital Improvement Fund 8,307
PE-14015 Lucie Stern Building Capital Improvement Fund (2,529,568)
PE-15001 New Public Safety Building Capital Improvement Fund 268,336
PE-15003 Fire Station 3 Replacement Capital Improvement Fund (85,180)
PE-15020 Civic Center Waterproofing Study Capital Improvement Fund 13,000
PE-15028 Baylands Levee Improv Feasibility Study Capital Improvement Fund 157,500
PE-15029 Baylands Interpretive Center Improv Capital Improvement Fund (13,221)
PE-86070 Street Maintenance (General Fund Budget )Capital Improvement Fund (49,632)
PF-00006 Roofing Replacement Capital Improvement Fund 12,253
PF-01003 Building Systems Improvements Capital Improvement Fund 77,417
PF-02022 Interior Finishes Construction Capital Improvement Fund (50,719)
PF-04000 Security System Improvements Capital Improvement Fund 16,577
PF-07011 Roth Building Maintenance Capital Improvement Fund (815)
PF-14003 University Ave Parking Capital Improvement Fund 22,095
PF-14004 Cal Avenue Parking District Capital Improvement Fund (29,600)
PF-15005 Emergency Facility Improvements Capital Improvement Fund 79,353
PF-16003 Parking Lot Elevator Q Modernization Capital Improvement Fund 20,608
PF-16004 City Hall Parking Garage LED Lighting Capital Improvement Fund 20,608
PF-93009 Americans With Disabilities Act Compliance Capital Improvement Fund 191,861
PG-06001 Tennis & Basketball Court Resurfacing Capital Improvement Fund 5,000
PG-06003 Benches, Signage, Fencing, Walkways, Landscaping Capital Improvement Fund (55,451)
PG-09002 Park & Open Space Emergency Repairs Capital Improvement Fund (20,467)
PG-12004 Sarah Wallis Park Improvements Capital Improvement Fund (534)
PG-13001 Stanford / PA Soccer Capital Improvement Fund 2,821
PG-13003 Golf Reconfig & Baylands Capital Improvement Fund (9,490,845)
PG-15000 Buckeye Creek Hydrology Study Capital Improvement Fund (129,113)
PL-00026 Safe Routes to School (Local/Neigh. Coll St. Calming)Capital Improvement Fund (138,922)
PL-04010 Bicycle Boulevards Implementation Project Capital Improvement Fund (627,681)
PL-05030 Traffic Signal Upgrades Capital Improvement Fund (489,175)
PL-11001 Dinah SummerHill Pedestrian/Bicycle Path Capital Improvement Fund (111,541)
PL-11002 California Avenue Transit Hub Corridor Capital Improvement Fund (16,580)
PL-12000 Transportation and Parking Improvements Capital Improvement Fund (131,523)
PL-14000 El Camino/ Churchill Intersection Improv Capital Improvement Fund (106,529)
PL-14001 Midtown Connector Capital Improvement Fund (196,209)
PL-15001 Embarcadero Road Corridor Improvements Capital Improvement Fund (28,129)
PL-15002 Parking Guidance System Capital Improvement Fund (129,724)
PL-15004 Parking Wayfinding Design Capital Improvement Fund (25,524)
PL-16000 Quarry Road Capital Improvement Fund 65,618
Attachment B: FY 2016 to FY 2017 Capital Reappropriations
1 of 3
PO-05054 Street Lights Improvements Capital Improvement Fund (61,539)
PO-11000 Sign Reflectivity Upgrade Capital Improvement Fund 97,525
PO-11001 Thermoplastic Lane Marking & Striping Capital Improvement Fund 7,825
PO-12001 Curb and Gutter Repairs Capital Improvement Fund 30,106
PO-12003 Foothills Fire Management Capital Improvement Fund 7,998
PO-89003 Sidewalk Repairs-GF Capital Improvement Fund (406,041)
CB-16001 Cubberly Community Center Master Plan Cubberley 200,778
CB-16001 Cubberly Roof Replacements Cubberley (17,966)
EL-06001 230 kV Electric Intertie Electric (50,241)
EL-10006 Rebuild Underground District 24 Electric (135,897)
EL-10009 Street Light System Conversion Project Electric 36,468
EL-11003 Rebuild Underground District 15 Electric (307,434)
EL-11006 Rebuild Underground District 18 Electric 104,158
EL-11010 Underground District 47 Electric (432,610)
EL-12001 Underground District 46 Electric (622,315)
EL-13006 Sand Hill/Quarry Road 12Kv Tie Electric (156)
EL-13008 Upgrade Electrical Estimating System Electric (103,650)
EL-14004 Maybell 1&2 4/12 kV Conversion Electric (185,372)
EL-14005 Reconfigure Quarry Feeders Electric (35,469)
EL-15001 Electric Substation Battery Replacement Electric (35,986)
EL-16000 Rebuild Underground District 26 Electric 100,000
EL-16003 Substation Security Electric 48,089
EL-89031 Communications System Electric (1,505)
EL-89038 Substation Protection Electric (10,607)
EL-98003 Electric System Imp Electric 1,000,000
GS-03009 System Extensions - Unreimbursed Gas (7,489)
GS-11002 Gas System Improvements Gas (26,162)
GS-12001 Gas Main Replacement - Project 22 Gas (83,718)
GS-14004 Gas System Model Gas (19,604)
GS-15001 Security at City's Gate Gas (140,942)
GS-80017 Gas System Extension Gas (194,976)
RF-16001 HHWS Collection Facility Improvement Refuse 76,502
SD-06101 Storm Drain System R Storm Drainage (174,472)
SD-10101 Southgate Neighborhood Storm Drainage 10,000
SD-11101 Channing Ave/Lincoln Storm Drainage 5,160
SD-13003 Matadero Creek Storm Wtr Storm Drainage (6,646)
WC-11000 Wastewater Collection Rehabilitation/Augmentation - Project 23 Wastewater Collection (7,066)
WC-12001 Wastewater Collection Rehabilitation/Augmentation - Project 25 Wastewater Collection (67,268)
WC-13001 Wastewater Collection Rehabilitation/Augmentation - Project 26 Wastewater Collection (48,554)
WC-14001 Wastewater Collection Rehabilitation/Augmentation - Project 27 Wastewater Collection (81,328)
WC-80020 Sewer System Extension Wastewater Collection (207,439)
WC-99013 Sewer Manhole Rehabilitation and Replacement Wastewater Collection (13,233)
WQ-04011 Facility Condition A Wastewater Treatment (45,015)
WQ-10001 Plant Master Plan Wastewater Treatment (10,674)
WQ-80021 Plant Equipment Replacement Wastewater Treatment (54,918)
WS-07000 Water Regulation System Improvements Water (135,541)
WS-07001 Water Recycling Facilities Water 2,291
WS-08001 Water Reservoir Coating Improvements Water (304,403)
WS-09000 Seismic Water System Upgrades Water (317,178)
WS-11000 Water Main Replacement - Project 25 Water (725,386)
WS-11003 Water Distribution System Improvements Water (602)
WS-11004 Water Supply System Improvements Water (190)
Attachment B: FY 2016 to FY 2017 Capital Reappropriations
2 of 3
WS-12001 Water Main Replacement - Project 26 Water (18,731)
WS-15004 Water System Master Water (681)
TE-01012 IT Disaster Recovery Plan Technology 25,242
TE-05000 Radio Infrastructure Replacement Technology 100,253
TE-06001 Library RFID Implementation Technology (19,467)
TE-11001 Library Computer System Software Technology (49,620)
TE-11002 Mobile In-Car Video System Replacement Technology (17,261)
TE-12001 Development Center Blueprint Technology Enhancement Technology (16,574)
TE-13001 Interactive Voice Response Technology (543)
TE-14002 Virtual Library Branch Technology (10,634)
VR-14002 MSC Fuel Station Demolition Vehicle (58,651)
VR-15000 Vehicle Replacement FY 2015 Vehicle (1,036,928)
VR-16000 Vehicle Replacement FY 2016 Vehicle (457,303)
Total All Funds (17,869,659)
Attachment B: FY 2016 to FY 2017 Capital Reappropriations
3 of 3
FINANCE COMMITTEE
EXCERPT MINUTES
1 Finance Committee
Excerpt Minutes
October 18, 2016
Special Meeting
Tuesday, October 18, 2016
Chairperson Filseth called the meeting to order at 7:00 P.M. in the
Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Filseth (Chair), Schmid, Wolbach
Absent: Holman
1. Approval of Fiscal Year 2016 Reappropriation Requests to be Carried
Forward Into Fiscal Year 2017 and Approve Corresponding Budget
Amendments in Various Funds.
Kiely Nose, Budget Director: Thank you. I’m Kiely Nose, the Budget Director.
Item Number One is the approval of Fiscal Year’s 2016 reappropriation
requests, and I have Jessie here, who has joined the Budget Office over the
summer who will go briefly over the item before you.
Jessie Deschamps, Senior Management Analyst: Good evening Chair Filseth
and members of the Finance Committee, I’m Jessie Deschamps, Senior
Management Analyst with the Office of Management and Budget. Item
Number One tonight is the Fiscal Year 2016 reappropriation request as Kiely
mentioned. As part of the annual process Staff requests the Finance
Committee recommend to Council the approval of carrying forward funds for
Fiscal Year 2016 to 2017 and to make corresponding budget amendments.
In summary, for operating projects, the total now being requested to carry
forward is $1.31 million to the General Fund and $889,000 in other funds.
Attachment AD tells these projects and represents activities that Staff was
unable to complete or encumber funds during the Fiscal Year, which was
primarily due to timing and work load delays. Additionally, two at-place
memos have been submitted for your review. This pertains to adjustments
of two transaction amounts, as well as the inclusion of a wastewater
treatment transaction. For capital projects, Staff recommends a total
reduction of $17.9 million of various funds detailed in attachment B in order
to align estimates used in the Fiscal Year 2017 adopted budget as compared
ATTACHMENT C
EXCERPT MINUTES
2
Finance Committee
Excerpt Minutes
October 18, 2016
with actual Fiscal Year 2016 expenses. So with that, unless there is
something that my coworkers want to add, we have department
representatives available to answer any questions that you might have.
Chair Filseth: Super. First I guess I should ask, are there any comments
from the public who wish to speak on this item? If not, then let’s do both
questions and comments from the Finance Committee. Are there any?
Council Member Schmid.
Council Member Schmid: Okay, just a couple of questions going through the
numbers. Ones that jump out, of course, are the bigger numbers. First, on
the overall capital, we have reappropriation of about $18 million out of 80.
That’s about 23 percent. Is that a normal number, or is that sizeable?
Ms. Nose: I’d say that’s sizeable, especially for this year, but the main cause
is the golf course, so it’s one project. You’ll see that we pulled back $9.5
million in one project alone, and that was just due to the fact that Staff
worked so hard to get everything done so they could launch construction by
July 1, so the timing just got off during the last two months of the Fiscal
Year.
Council Member Schmid: Yeah, I guess that sounds like the Mitchell Park
Library. Okay. On the Operating Budget, there’s a number on Teen Programs
of $320,000. Now that was identified in 2015, eighteen months before. Why
was there so little activity during 2016 on the Teen Programs?
Ms. Nose: Rob is going to come help us out with that.
Rob de Geus, Community Services Director: Good evening Council Members,
Rob de Geus, Community Services Department. It’s good to see you. So the
balance in this fund is about $300 something thousand. What we are
spending is the annual revenue that comes in from the Broad Street Garage,
which is a little over $100,000, and actually that has been growing, so we
have been investing those funds into a number of different teen programs
across the arts and sciences and recreation, but we don’t yet have a plan to
spend the reserve or the balance that is sitting there, which is this $300,000
that’s still carrying forward.
Council Member Schmid: So the concern really is that the annual income
that comes in you can spend on continuing programs, but the $300,000 is
special.
ATTACHMENT C
EXCERPT MINUTES
3
Finance Committee
Excerpt Minutes
October 18, 2016
Mr. de Geus: It’s special and it’s one time, so how do we best invest that.
We have some thoughts we have to come back to the Finance Committee to
discuss, but at this time we didn’t have a plan.
Lalo Perez, Chief Financial Officer: To be fully transparent, not in Rob’s shop,
in our shop, we were supposed to, once we hit a certain trigger point in
paying off the debt, there was extra revenue that was going to come in, and
a portion of this was supposed to go to the Youth Program, and it was
caught about three years into it, and that’s why there was a sizeable
amount. So there wasn’t a Community Services Department (CSD)
programing issue.
Council Member Schmid: I remember that.
Chair Filseth: Can I ask a follow-up question to that, if you’re about finished.
Council Member Schmid: Yeah.
Chair Filseth: So, I mean, I noticed that one and how come it got
reappropriated every year? How come it’s not just a fund that we keep,
because we don’t reappropriate affordable housing fund and other kinds of
stuff like that? Why is that one different?
Mr. Perez: We’re trying to limit the work on the accountants because, let me
give you a comparison as to why. Each fund, when you create it creates a lot
more work and then an audit process. Kiely came from San Jose, so did Ed.
They have the same number of funds as Palo Alto and look at the size of
them. So we created a fund for everything. We’re trying not to do that to
ourselves.
Chair Filseth: So does that mean that each thing like this will just sort of
automatically reappropriate every year if we don’t spend it?
Mr. Perez: Well, you know, the hope is that we come up with whatever
committee or process that Rob comes up and has a plan to use it and that
every year we’re using it and it’s active. There might be some small amount,
but hopefully not near this level. That’s the hope.Chair Filseth: Is that how
you want to do it?
Mr. Perez: I’m sorry.
ATTACHMENT C
EXCERPT MINUTES
4
Finance Committee
Excerpt Minutes
October 18, 2016
Chair Filseth: Is that your guidance as to the best way to do this?
Mr. Perez: I think so, because we think it’s not going to be a normal process.
Chair Filseth: I’m sorry. Go ahead.
Council Member Schmid: Council ought to do that. Um, the other one that
struck me was the Management Development and Training $240,000. Now it
seems to me that training is something that we want to do and a lot of
opportunities, so not to spend a substantial amount like that on training is
surprising. (crosstalk).
Mr. Perez: It’s a good question. Let me give you a little background so we
can put it in perspective. In our labor agreements for our Management and
Professionals and UMPAPA folks in Utilities, the City provides $1,000 per
employee for training that is provided to the department and $500 to the
employee, and what we’re talking about is this $1,000. There’s situations
because of work load or there is just not training available or there is not a
specific need in a particular year where the funds don’t get spent from that
particular pot, so what we’re trying to do is take advantage of an
opportunity to train our people and take those funds that are not spent and
then inject them into the regular operational training programs. So we’re
really repurposing these dollars that would not go to training for whatever
reason that didn’t happen. So I think this is one program that is going to
take off. Rumi has hired a position that was vacant that is going to hit the
training program as well, and that’s, frankly, an area where we need to step
up, especially as we have the turnover we desperately need the training
funds and the programs.
Council Member Schmid: So this might be one we could check off and next
year look and see if you have been effective.
Mr. Perez: I think it has ebb and flows because depending on, you know, the
departments and the individuals and the training needs. For example, in
Office of Management and Budget (OMB) we were down to three. Well, I
wasn’t going to send them to training so there’s money left over from there,
because we had to get the budget done. So depending on the
circumstances, it can vary.
Council Member Schmid: Okay. I guess the Crossboar contract for $1
million, I know there was a big effort in 2012 and then it seemed to die off,
and yet you have $1 million here.
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Mr. Perez: Let me ask Utilities Staff for some help.
Dave Yaun, Strategic Business Manager: So we’re actually embarking on
Phase 2 of the Crossboar Program. So we completed the first phase a couple
of years ago and right now we’re actually in the midst of an audit from the
City Auditor’s Office to see how that contract was done, if it was completed,
just to validate the service that was conducted. So in Phase 2, I think we’ve
done some analysis of what we think is high priorities and we’re going to
come back to Council, probably in winter or the beginning of next year with
that recommendation and just target those high-priority ones.
Council Member Schmid: So it’s not a matter of just not having done parts of
the City, but you’re looking at different…
Mr. Yaun: Areas.
Council Member Schmid: Needs, different…
Mr. Yaun: Right. So in the first phase I think we’ve completed like 40
percent of all Crossbore completion. There were other areas that were
obstructed, so now we will go back and revisit some of those areas. In the
other contract, we didn’t have construction costs imbedded, so in the next
contract we will have that service included.
Council Member Schmid: Thank you. Then a couple of questions on the
capital projects. On PE-13017, no 1401 (crosstalk) Lucy Stern, right, you got
back, is that right, $2.5 million?
Ms. Nose: So, I was actually just talking about this with Rob before the
meeting. What these really are are just true ups and what we asked
departments to do as we’re developing the adopted budget, in order to
ensure that there is no delays as you cross fiscal years, is we asked them to
estimate how far are you going to get in a project by the end of, by basically
June 30 of any given year. And the reason we do that is so that if they don’t
think they’re going to get to a project or get to encumber a contract, we
want to make sure that on July 1 they are able to hit the ground running and
continue with the project. So what you’re seeing here is an estimate that, on
all these projects frankly, that Staff anticipated that these dollars wouldn’t
be expended in Fiscal Year ’16, so we wanted to ensure they are available in
Fiscal Year ’17, so the reason why we’re bringing them all down is so that
we’re not over budgeting or double budgeting the projects. We’re actually
pulling money away from the projects because they spent it in ’16, when
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they previously didn’t think they would. So really it is a very technical just
true-up based on, we made guesses on operations and Staff achieved more
or was able to execute a contract in a more timely fashion.
Council Member Schmid: Now it means that Lucy Stern actually spent the
money and did not need to reappropriate it.
Ms. Nose: Correct.
Council Member Schmid: Why is the golf course then also…
Ms. Nose: Pulled down.
Council Member Schmid: Yes.
Ms. Nose: (Crosstalk) Sure, so we anticipated that the golf course contract
wouldn’t get approved and encumbered until July 1, so we had appropriated,
or Council had approved a project budget of over $10 million in Fiscal Year
’16, so we didn’t think we would be able to execute the contract, so we
moved that $10 million over to Fiscal Year ’17, but ultimately Staff was able
to encumber the contract before June 30, and so I’m pulling it out of…
Council Member Schmid: So it’s not paying the contract, it’s just signing the
contract.
Ms. Nose: Signing the contract.
Mr. Perez: Because when you award a contract you have to award
(crosstalk)
Chair Filseth: It’s encumbered, it’s accrued.
Mr. Perez: And so we got the permit. We weren’t sure if we were going to
get the permit at first.
Ms. Nose: Right.
Chair Filseth: It’s the same thing, right, which is if it’s a negative on this list,
I mean what does that mean? I guess that means that we thought it was
going to be reappropriated, right, but actually we were able to encumber it
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before the deadline, so we’re diminishing the reappropriation tally. Is that
what’s going on?
Mr. Perez: That’s correct.
Ms. Nose: Correct.
Mr. Perez: Because it impacts the reserves in the fund at the end, so… Yeah,
it’s a process that was behind the office, the back office if you will, that you
did not used to see, but as a result of changing to having every project
reappropriated, now you’re seeing all the ins and outs. In a way it’s a little
tedious, but second, it gives visibility and you’re able to ask questions about
what’s going on in the project.
Chair Filseth: That makes perfect sense. It’s just confusing, complicated.
Council Member Schmid: I guess just to contrast that with one in which you
need to increase the appropriation, the Electric System, $1 million, EL-
98003, what happened there? You all of a sudden need to push it out?
Ms. Nose: Sure. Let me look up the project specifically. I think Dave will also
look it up. So at a high level, we didn’t get to encumber the funds, but let
me see if I can articulate why.
Mr. Perez: So maybe while you’re looking that up, if you have any other
questions we could go to that one.
Council Member Schmid: The only other question I have is the Cubberley
Master Plan which was pushed off into 2017 and I notice our five-year time
is creeping up fast. We’re now into the third year and it implies you’re not
making much progress.
Mr. Perez: Maybe I can call on a friend again, Rob, to come up and give you
an update on that.
Mr. de Geus: Good evening again. (Crosstalk) The Cubberley Master Plan
project has been slow to get started for a couple different reasons. Largely, I
think the school district has been talking and doing a lot of analysis on the
enrollment and trying to figure out what it is they truly need. Will it be
another school, will it be K-12, middle or high school, and those discussions,
frankly, are still ongoing. But we have committed to putting a scope of
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services out to get some help, for a consultant to do some sort of “what if”
design work for the district and the City. We have written that scope and it’s
now being reviewed by City Staff and the school district Staff and we hope to
have that out before the end of the year so we can really start the planning
process in earnest January of 2017, but there remain still some big
unknowns with the district really…
Council Member Schmid: I understand the demographic differences between
the schools and the City, but we are trying to sign up a lease, leasee for the
property which means they have to know what they’re facing and it’s
important that we give them some clear notion of where the future is. And
also we have two years before our five-year window closes again on some
capital investment decisions that need to be made.
Mr. de Geus: We have three years left, ’17, ’18 and ’19.
Council Member Schmid: Okay, but time flies.
Mr. Perez: Perez: It does, and you know, we’re trying to utilize the funds,
the roughly $1.8 million, $1.9 million that used to go to the school that now
we’re using for the facility and you will see some restrooms, for example,
some necessities that need to be taken care of, but we’re also mindful that
we don’t want to put money in an area where it may get changed and so
those funds could also stay there and be part of the pot that goes towards
whatever capital program we put in.
Council Member Schmid: Yeah, I guess my only point of bringing this up is
that it’s one of the only times that Council has a chance to, you know, see
what’s going on.
Mr. Perez: Yeah, and this one is, you know, tied to our partner so we need
that partner to dance with us.
Council Member Schmid: I appreciate that there are two different visions of
the future.
Mr. de Geus: And different timelines, perhaps, too. I think the school district
does believe that at some point they are going to need the space for a
school, they just don’t know when that will be, whether it’s, you know, five,
10, 15 years, they don’t know. So we have to come up with some
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alternatives likely, some designs that have flexible spaces that can be
converted to school use in the future.
Council Member Schmid: Good, thank you very much. And that’s my
questions.
Chair Filseth: You know, actually you pretty much covered all mine. Cory?
Council Member Wolbach: I’m good.
Mr. Perez: So we may have to give you the answer later in the...
Council Member Schmid: On the electric?
Mr. Perez: Yeah. We could also e-mail you the answer. Why don’t we do
that.
Chair Filseth: In that case…
Council Member Wolbach: I’d be happy to make a Motion.
Chair Filseth: Go ahead.
Council Member Wolbach: I’ll move this item for recommendation.
Chair Filseth: Second.
Mr. Perez: I’m sorry to interrupt Chair. Could we also include the two at-
places as part of this.
Council Member Wolbach: So do you need me to read these?
Mr. Perez: I don’t think so. I think it’s if you state that the two items added
to the at-places memo be included in the Motion.
Council Member Wolbach: Okay, so I’ll say that, so I’ll move the Staff
recommendation that the Finance Committee amend the Fiscal Year 2017
Budget Appropriation Ordinance for various funds as identified in Attachment
A and capital projects as identified in Attachment B and in addition the two
at-places memos dated October 18, 2016.
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MOTION: Council Member Wolbach moved, seconded by Chair Filseth to
recommend the City Council amend the Fiscal Year 2017 Budget
Appropriation Ordinance for various funds and capital projects as
recommended by Staff, as well as the recommendations outlined in the two
at place memos.
Chair Filseth: Care to speak to your Motion?
Council Member Wolbach: No need to.
Chair Filseth: All in favor?
Chair Filseth: Motion passes 3-0 with Council Member Holman not present.
MOTION PASSED: 3-0 Holman absent
Mr. Perez: Thank you.
Chair Filseth: Thanks to everybody who stayed here for this.
ADJOURNMENT: The meeting was adjourned at 9:27 P.M.
ATTACHMENT C
CITY OF PALO ALTO OFFICE OF THE CITY CLERK
November 14, 2016
The Honorable City Council
Palo Alto, California
SECOND READING: Adoption of an Ordinance Adding Chapter 9.17
(Personal Cultivation of Marijuana) to Title 9 of the Palo Alto
Municipal Code (Public Peace, Morals and Safety) to Prohibit Outdoor
Cultivation of Marijuana (FIRST READING: October 24, 2016
PASSED: 7- 1 Burt no, DuBois absent)
This item was heard by the City Council on October 24, 2016 at which time
Council passed the below Motion. It is now before you for the second
reading.
MOTION RESTATED: Vice Mayor Scharff moved, seconded by Council
Member Kniss to adopt:
A. An Ordinance adding Chapter 9.17 (Personal Cultivation of Marijuana)
to Title 9 (Public Peace, Morals and Safety) of the Palo Alto Municipal
Code to prohibit outdoor marijuana cultivation in Palo Alto; and
B. A finding that this amendment is exempt from review under the
California Environmental Quality Act; and
C. Direct Staff to return within twelve months to Council following public
outreach for potential changes to this Ordinance; and
D. The second reading will take place after the November 8, 2016
election; and
E. Incorporate a twelve month sunset into the Ordinance.
MOTION AS AMENDED PASSED: 7-1 Burt no, DuBois absent
ATTACHMENTS:
Attachment A: ORD Personal Cultivation Alt (PDF)
Page 2
Department Head: Beth Minor, City Clerk
Page 3
NOT YET APPROVED
161102 jb EP/Molly/Marijuana 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Adding Chapter 9.17 (Personal
Cultivation of Marijuana) to Title 9 of the Palo Alto Municipal Code (Public Peace,
Morals and Safety) to Prohibit Outdoor Cultivation of Marijuana
The Council of the City of Palo Alto ORDAIN as follows:
SECTION 1. Findings and Recitals. The Council of the City of Palo Alto finds and declares
as follows:
A. Following passage of Proposition 215, entitled the “Compassionate Use Act of
1996,” California courts have held that there is a limited exception from criminal liability for
seriously ill persons who are in need of medical marijuana for specified medical purposes and
who obtain and use medical marijuana under limited, specified circumstances.
B. On June 9, 1997, the Palo Alto City Council adopted uncodified urgency
Ordinance No. 4422 declaring the establishment and operation of medical marijuana
dispensaries to be prohibited use under the City’s zoning ordinance.
C. On November 8, 2016, the Control, Regulate, and Tax Adult Use of Marijuana Act
(“AUMA”) will come before California voters as Proposition 64. If passed, the AUMA will legalize
the use, sale, and consumption of nonmedical marijuana by persons 21 years of age and older.
D. In addition, the AUMA will create a state regulatory and licensing system
governing commercialization of nonmedical marijuana, but will preserve local governments’
authority to regulate personal cultivation. Specifically, local governments may prohibit personal
outdoor cultivation and reasonably regulate personal indoor cultivation of nonmedical
marijuana.
E. Neither medical nor nonmedical marijuana cultivation are listed in the City’s
zoning code as permitted or conditionally-permitted land uses and are, therefore, prohibited
under the principles of permissive zoning provisions. (City of Corona v. Naulls (2008) 166
Cal.App.4th 418, 431-433). Nevertheless, the AUMA does not expressly recognize the
application of permissive zoning principles like previous medical marijuana legislation.
F. In order to protect the public health, safety, and welfare, the City Council desires
to add Palo Alto Municipal Code Chapter 9.17 to prohibit, in express terms, all outdoor
cultivation of medical and nonmedical marijuana.
G. This Ordinance is not a project within the meaning of section 15378 of the
California Environmental Quality Act (“CEQA”) Guidelines because it has no potential for
resulting in physical change in the environment, either directly or ultimately. In the event that
this Ordinance is found to be a project under CEQA, it is subject to the CEQA exemption
contained in CEQA Guidelines section 15061(b)(3) because it can be seen with certainty to have
no possibility of a significant effect on the environment in that this Ordinance simply clarified
existing local regulations.
NOT YET APPROVED
161102 jb EP/Molly/Marijuana 2
SECTION 2. Chapter 9.17 is hereby added to Title 9 of the Palo Alto Municipal Code to
read as follows:
9.17.010 Definitions.
(1) “Marijuana” means all parts of the plant Cannabis sativa L., Cannabis indica, or Cannabis
ruderalis whether growing or not; the seeds thereof; the resin extracted from any part
of the plant; and every compound, manufacture, salt, derivative, mixture, or
preparation of the plant, its seeds or resin.
(2) “Marijuana cultivation” shall have the same meaning as “cultivation” set forth in
California Business and Professions Code Section 19300.5(k) as that section may be
amended from time to time.
9.17.020 Prohibition.
Outdoor marijuana cultivation is prohibited in the City of Palo Alto.
9.17.030 Enforcement.
The City may enforce this section in any manner permitted by law. The violation of this Chapter
shall be and is hereby declared to be a public nuisance and shall, at the discretion of the City,
create a cause of action for injunctive relief.
9.17.040 Sunset Clause.
The provisions of this ordinance shall be null, void and of no force and effect on and after one
year from its effective date unless the City Council adopts an ordinance continuing its existence.
SECTION 3. Severability. If any provision, clause, sentence or paragraph of this
ordinance, or the application to any person or circumstances, shall be held invalid, such
invalidity shall not affect the other provisions of this ordinance which can be given effect
without the invalid provision or application and, to this end, the provisions of this ordinance are
hereby declared to be severable.
SECTION 4. CEQA The City Council finds and determines that this Ordinance is not a
project within the meaning of section 15378 of the California Environmental Quality Act
(“CEQA”) because it has no potential for resulting in physical change in the environment, either
directly or ultimately. In the event that this Ordinance is found to be a project under CEQA, it is
subject to the CEQA exemption contained in CEQA Guidelines section 15061(b)(3) because it
can be seen with certainty to have no possibility of a significant effect on the environment in
that this Ordinance simply clarifies existing local regulations.
/ /
/ /
/ /
/ /
NOT YET APPROVED
161102 jb EP/Molly/Marijuana 3
SECTION 5. Effective Date. This ordinance shall be effective upon the thirty-first day
after its passage and adoption, and shall expire after one year. Upon the expiration of this
ordinance, the City Clerk shall work with the codifier to remove this section from the Palo Alto
Municipal Code.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST: APPROVED:
______________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: ____________________________
City Manager
______________________________
Principal City Attorney
City of Palo Alto (ID # 7437)
City Council Staff Report
Report Type: Action Items Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: 900 N. California (Preliminary Parcel Map w/Exceptions)
Title: PUBLIC HEARING: 900 N. California Ave. [14PLN-00233]:
Recommendation for Approval of a Preliminary Parcel Map, With Exceptions,
to Subdivide an Existing 30,837 Square Foot Parcel Into Three Parcels. The
Parcel Map Exception is to Allow one of the Parcels to Exceed the Maximum
Lot Area. Environmental Assessment: Exemption Pursuant to CEQA
Guidelines Section 15061 (b)(3). Zoning District: Single-Family Residential
District (R-1) **QUASI JUDICIAL
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that the City Council take the following action(s):
1. Find the project exempt from the California Environmental Quality Act (CEQA) pursuant
to Section 15061(b)(3), and
2. Approve the Record of Land Use Action (Attachment B) for the proposed preliminary
parcel map application, with exceptions, based on findings and conditions of approval
set forth in Attachment B
The Planning & Transportation Commission recommended approval at their meeting on
October 26, 2016.
Executive Summary:
The applicant requests approval of a preliminary parcel map, with exceptions, to subdivide an
approximately 30,837 square foot (sf) property into three separate parcels. The existing
property contains three single-family homes, and the proposed project would provide
individual parcels for three proposed single family homes with one secondary dwelling unit on
the largest parcel. The proposed subdivision project is subject to a Subdivision review and the
proposed homes are subject to Architectural Review by the Architectural Review Board (ARB).
The ARB has reviewed the proposed homes and recommended approval to the Director. The
City of Palo Alto Page 2
Planning and Transportation Commission reviewed the parcel map request and recommends
approval. As designed, the project meets the applicable zoning requirements, with an exception
requested for lot size on one lot.
Background:
Project Information
Owner: Greg Xiong
Architect: Kohler Associates Architects
Representative: None
Legal Counsel: None
Property Information
Address: 900 North California Avenue
Neighborhood: Triple El
Lot Dimensions & Area: Approximately 157 ft. by 231 ft.
Housing Inventory Site: No
Located w/in a Plume: No
Protected/Heritage Trees: None
Historic Resource(s): None
Existing Improvement(s): Three single story single family homes: 2205 Louis Road – 746 sf.
Detached Shed – 296 sf. 912 N California Avenue – 1,749 sf. 900 N
California Avenue – 2,376.44 sf. Sun Room 367 sf.
Existing Land Use(s): Single Family Residential
Adjacent Land Uses &
Zoning:
North: R-1 (single family homes) West: R-1 (single family homes)
East: R-1 (single family homes) South: R-1 (single family homes)
City of Palo Alto Page 3
Aerial View of Property:
Land Use Designation & Applicable Plans
Zoning Designation: R-1 Residential Single Family
Comp. Plan Designation: Single Family
Context-Based Design
Criteria:
Not applicable
Downtown Urban Design
Guide:
Not applicable
South of Forest Avenue
Coordinated Area Plan:
Not applicable
Baylands Master Plan: Not applicable
El Camino Real Design
Guidelines (1976 / 2002):
Not applicable
Proximity to Residential
Uses or Districts (150'):
Yes, in a residential neighborhood
Located w/in the Airport
Influence Area:
Not applicable
Project site
City of Palo Alto Page 4
Prior City Reviews & Action
City Council: None.
PTC: The application was reviewed on October 26, 2016 and this report
forwards the PTC’s recommendation to the City Council.
HRB: None.
ARB: The applicant submitted an application for three single family
residences and one secondary dwelling unit. The City’s Architectural
Review Board (ARB) conducted an architectural review for this
project (15PLN-00155) on September 15, 2016. The report can be
found at the following link:
<http://www.cityofpaloalto.org/civicax/filebank/documents/53783>
The ARB recommended approval of the project to the Director of
Planning and Community Environment, conditioned on the
secondary dwelling unit and a detached garage returning to a
subcommittee for further review and analysis.
Project Description
The applicant requests approval of a Preliminary Parcel Map, with exceptions, to create three
single-family lots. The lots would be 8,033 sf, 9,379 sf, and 13,425 sf. The minimum lot size in
the R-1 zoning district is 6,000 sf and the maximum lot size is 9,999 sf. The proposed Lot Three
would exceed the maximum lot size of 9,999 sf. by proposing a lot that is 13,425 sf. Lot One
would have access from Louis Road and Lots Two and Three would each have access from N.
California Avenue. Attachment D provides a summary of the project’s compliance with the
zoning standards.
Discussion:
The project is for a Preliminary Parcel Map with exceptions which is before the Council due to
the requested exception to the maximum lot area requirement. Preliminary parcel maps
conforming to the Zoning and Subdivision Ordinances may be approved by the Director of
Planning and Community Environment without Council action. The Director of Planning and
Community Environment, however must forward any preliminary parcel map with exceptions
to the Planning and Transportation Commission and the City Council for action.
Exceptions may be granted only upon a finding that the approval would substantially secure the
objectives of the regulations or requirements, to which the exceptions are requested, shall
protect the public health, safety, convenience, and the general welfare and shall be consistent
with and implement the policies and objectives of the comprehensive plan. Any approval of
exceptions may be made upon such conditions as are deemed necessary to secure such
compliance.
City of Palo Alto Page 5
Conditional Exceptions
In accordance with PAMC Chapter 21.32, exceptions shall be granted only upon making the
following findings:
(1) There are special circumstances or conditions affecting the property.
(2) The exception is necessary for the preservation and enjoyment of a substantial
property right of the petitioner.
(3) The granting of the exception will not be detrimental to the public welfare or injurious
to other property in the territory in which the property is situated.
(4) The granting of the exception will not violate the requirements, goals, policies, or spirit
of the law.
In the event an exception is granted, any conditions necessary to achieve the objectives of this
title, the comprehensive plan, or any provision of law shall be imposed. The applicant has
articulated reasons for the proposed exception and these are contained in Attachments B and
E.
Maximum Lot Size
The project site is a non-conforming parcel located in the Single-Family Residential (R-1) Zone
District. The existing lot is square shaped, with a portion of it carved out. The site is
approximately 170 feet deep along N. California Avenue and 156 feet wide along Louis Road.
The existing parcel is non-conforming because the site contains three single-family homes. The
Zoning Code requires that homes be located on individual parcels. The project would increase
the conformance of the site by providing a parcel for each proposed home.
The Site Development Regulations for the R-1 zone district prohibit newly created parcels to
exceed 9,999 square feet, and require newly created parcels to have a minimum site area of
6,000 square feet and minimum site width of 60 feet. The proposal is to subdivide the single
30,837 sf. parcel into three parcels whose sizes are 8,033 sf, 9,379 sf, and 13,425 sf. These
parcels would meet the site width and depth requirements and eliminate the site’s existing
nonconforming status of three houses on one lot; however, the subdivision would result in one
lot exceed the 9,999 sf. maximum.
Neighborhood Character
The 0.70 acre site is relatively flat and contains three existing single-family homes and a storage
shed. The subject property is Zoned R-1. The site contains ash, oak, cypress, pine, and magnolia
trees. The proposed subdivision improvements do not conflict with any of the trees. The
Architectural Review (File #15PLN-00155) for the three proposed homes and the secondary
dwelling unit on Lot 3, addresses management of these trees and the street trees. Adjacent
and nearby homes are one-story on the subject lot’s side of the street along both Louis Road
and North California Street. Nearby homes across both streets are one and two stories with an
overall mixed and moderate scale. Lot size varies significantly within the immediate
City of Palo Alto Page 6
neighborhood and there is not a distinct lot pattern along the street at either side or across the
intersection of Louis Road and North California Avenue. Two lots near the site are 25,410 and
20,000 square feet in lot area.
Consistency with the Comprehensive Plan1
The site has a Comprehensive Plan land use designation of Single-family Residential and is not
subject to any area plans or specific guidelines. Single family residential includes one dwelling
unit on each lot as well as conditional uses requiring permits such as churches and schools. The
net density in single family areas will range from 1 to 7 units per acre, but may rise to a
maximum of 14 units in areas where second units or duplexes are allowed. On balance, the
proposed three new homes meet the intent of the Comprehensive Plan. The project effectively
provides approximately 4 dwelling units per acre where 1 to 5 dwelling units is allowed.
Therefore, the project is consistent with the density prescribed by the Comprehensive Plan.
Consistency with other Comprehensive Plan policies is included in Attachment C.
Zoning Compliance2
The subdivision application complies with the zoning regulations set forth in the R-1 zoning
district. Each site meets the minimum width (60 ft.) and depth (100 ft.) requirements and
complies with the minimum lot size requirements by exceeding 6,000 sf for each lot. However,
the proposal is asking for an exception to the maximum lot size of 9,999 sf. Attachment D
provides a summary of the project’s compliance with the zoning standards.
The site is not currently in compliance with the Zoning Code because it contains three single
family homes on one parcel. The Zoning Code permits one single-family residence and an
accessory dwelling unit on each parcel. The proposed project would ultimately bring the project
more into compliance with the Zoning Code by providing parcels for each proposed single-
family home and accommodated a secondary dwelling unit on one of the parcels. The project
would therefore not reduce the number of units on the property, but would ultimately create
better conformance with the Zoning Code.
Palo Alto Subdivision Code Compliance
PAMC Chapter 21 includes standards for reviewing parcel maps. Because the project includes
deviations from the zoning standards for lot size, the applicant requests an exception to the
maximum lot size standard pursuant to PAMC 21.32. This maximum lot size is established by
PAMC 18.12.040, which states the maximum lot size in the R-1 zoning district is 9,999 sf. The
1 The Palo Alto Comprehensive Plan is available online:
http://www.cityofpaloalto.org/gov/topics/projects/landuse/compplan.asp
2 The Palo Alto Zoning Code is available online: http://www.amlegal.com/codes/client/palo-alto_ca
City of Palo Alto Page 7
project proposes Lot 3 to be 13,425 sf and contain a single-family home and secondary dwelling
unit.
Future Development
The existing residences on the project site would be required to be demolished prior to
recordation of the Parcel Map. If the application is approved, one single-family residence could
be built on each of the resulting lots. The accompanying proposal for construction of three
single-family homes on the three resulting parcels, conforms to all zoning requirements and
would be subject to applicable development impact fees. The City’s Architectural Review Board
(ARB) reviewed the architecture because the project consisted of the three homes. The ARB
recommended approval of the design to the Director of Planning and Community Environment
on September 15, 2016. The appeal period will expire on November 15, 2016. The Director’s
approval of the architecture is not subject to Council approval of the parcel map. However, the
homes will not be able to be constructed if the parcel map is not approved. Once the Parcel
Map is approved, the parcels cannot be merged again because the resulting parcel would
exceed the maximum site area.
Planning and Transportation Commission Review
The Commission reviewed this project at its meeting of October 26, 2016. The Commission
discussed the project and supported the application because the proposed lots would be
consistent with the neighborhood character and that the future development of the lots would
have little impact on traffic or trees. It noted that the project would be consistent with the lot
pattern in the neighborhood, would not impact a historic property, and would create standard
lots over 6,000 square feet. The Commission questioned the project property owner and the
adjacent owner at 920 N. California Avenue about efforts to combine lots and achieve a more
uniform lot development pattern. The owners indicated that conversations over the course of
three to four years could not produce a solution. However, the property owner at 920 N.
California Avenue supports the proposed project. Ultimately, the Commission stated that the
project would increase the conformance of properties in the City by providing a lot for each
house.
The Commission proposed a condition that the applicant submit a coordinated construction
plan if and when houses for the proposed lots are constructed. The ARB has reviewed the
proposed homes for the potential lots, and that project includes a condition of approval (#60)
that requires the applicant and contractor to submit a construction logistics plan with the
grading permit for the project. This condition is proposed as condition number 16 for the parcel
map as well.
After closing the public hearing, the Commission unanimously recommended that the City
Council approve the Preliminary Parcel Map with exceptions in accordance with the findings
and amended conditions of approval contained in the draft Record of Land Use Action. The
City of Palo Alto Page 8
Commission also recommended that the Council determine the project is exempt from CEQA
pursuant to Section 15061(b)(3).
Policy Implications:
The project’s Compliance with applicable comprehensive plan policies is provided in a table
attached to this report. (Attachment C)
Resource Impact:
The three lots that would be created are in an urbanized area of the city that is already served
by city services and would not have a detrimental effect on city resources. Utility services are
already provided in the street that provides access to the project. Development Impact Fees
totaling approximately $50,793 dollars would be required to be paid to the City prior to the
issuance of a building permit for the third of the three residences that could be built on the
resulting three lots. Additionally, the City will realize incremental property and utility user
revenues as well as a one-time documenatary transfer tax once the parcel(s) are sold.
Environmental Review:
The subject project has been assessed in accordance with the authority and criteria contained
in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the
environmental regulations of the City. Specifically, the project is exempt from CEQA pursuant to
Section 15061 (b)(3) in that it can be seen with certainty that the establishment of parcel lines
to divide a noncompliant lot with three existing homes into two conforming lots and a third lot
that remains nonconforming with respect to lot area simply due to the size of the one large
existing parcel, will not result in a significant effect on the environment. There is no change to
the overall boundary of the project site and a net increase of one secondary dwelling unit
authorized by the local zoning regulations.
Attachments:
Attachment A: Location Map (PDF)
Attachment B: Draft RLUA with Findings and Conditions (DOCX)
Attachment C: Comprehensive Plan Analysis (DOCX)
Attachment D: Zoning Compliance Table (DOCX)
Attachment E: Applicant's Project Description (PDF)
Attachment F: Project Plans (DOCX)
COI map All Bodies 2016 (PDF)
APPROVAL NO. ____
RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE
ACTION FOR 900 N. CALIFORNIA AVENUE: PRELIMINARY PARCEL MAP
APPLICATION [14PLN-00233]
On ______, 2016, the City Council of the City of Palo Alto considered and approved the
Preliminary Parcel Map for the development of a three lot subdivision project with exceptions,
making the following findings, determinations and declarations:
SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”) finds,
determines, and declares as follows:
A. On June 25, 2014, Kohler Associates Architects on behalf of Greg Xiong applied for
a Preliminary Parcel Map with exceptions for the development of a 0.70 acre parcel (“The Project”).
B. The project site is comprised of one lot (APN No. 137-51-021) of approximately
0.70-acres. The site contains three residential structures. Single-family residential land uses are
located adjacent to the lot to the north, south, east and west.
C. Following staff review, the Planning and
Transportation Commission reviewed the project and recommended
approval on October 20, 2016 subject to conditions of approval.
SECTION 2. Environmental Review. The City as the lead agency for the Project has
determined that the project is subject to environmental review under provisions of the California
Environmental Quality Act (CEQA). The subject project has been assessed in accordance with the
authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA
Guidelines, and the environmental regulations of the City. Specifically, the project is exempt from
CEQA pursuant to Section 15061(b)(3).
SECTION 3. Preliminary Parcel Map Findings.
A legislative body of a city shall deny approval of a Parcel Map, if it makes any of the following
findings (California Government Code Section 66474):
1. That the proposed map is not consistent with applicable general and specific plans as specified
in Section 65451:
The site does not lie within a specific plan area and is consistent with the provisions of the
Comprehensive Plan.
2. That the design or improvement of the proposed subdivision is not consistent with applicable
general and specific plans:
The map is consistent with the following Comprehensive Plan policies:
a. Policy L-4: Maintain Palo Alto’s varied residential neighborhoods while sustaining the
vitality of its commercial areas and public facilities. Use the Zoning Ordinance as a tool
to enhance Palo Alto’s desirable qualities.
b. Policy L-10: Maintain a citywide structure of Residential Neighborhoods, Centers, and
Employment Districts. Integrate these areas with the City’s and the region’s transit and
street system.
c. Policy L-12: Preserve the character residential neighborhoods by encouraging new or
remodeled structures to be compatible with the neighborhood and adjacent structures.
3. That the site is not physically suitable for the type of development:
The site is well suited for the proposed three single family homes and one secondary dwelling
unit. The proposed homes would replace three existing single-family homes, which complies
with allowed uses of the R-1 zoning district.
4. That the site is not physically suitable for the proposed density of development:
The proposal for the site is consistent with all zoning regulations, with the proposed exceptions,
including lot width, depth, and area.
5. That the design of the subdivision or the proposed improvements are likely to cause substantial
environmental damage or substantially and avoidably injure fish or wildlife or their habitat:
The minor subdivision will not cause environmental damage or injure fish, wildlife, or their
habitat. The project site has been fully urbanized and developed and is centrally located within
a developed residential area. There is no recognized sensitive wildlife or habitat in the project
vicinity.
6. That the design of the subdivision or type of improvements is likely to cause serious public
health problems:
The creation three parcels for three single-family residential units and one secondary dwelling
unit will not cause serious public health problems, because the site is designated for single
family development.
7. That the design of the subdivision or the type of improvements will conflict with easements,
acquired by the public at large, for access through or use of, property within the proposed
subdivision. In this connection, the governing body may approve a map if it finds that alternate
easements, for access or for use, will be provided, and that these will be substantially equivalent
to ones previously acquired by the public. This subsection shall apply only to easements of
record or to easements established by judgment of a court of competent jurisdiction and no
authority is hereby granted to a legislative body to determine that the public at large has
acquired easements for access through or use of property within the proposed subdivision.
The proposed preliminary parcel map will not conflict with easements of any type, in that the
map would create three parcels on the property, and would not affect any of the existing or
proposed easements on or adjacent to the project site.
SECTION 4. Exception Findings
The project proposes exceptions to the zoning standards for lot size for the following and depicted on
Preliminary Parcel Map:
Lot Size (greater than 9,999 square feet): Lot 3.
1. There are special circumstances or conditions affecting the property.
The subject property is substantially larger in area than allowed by the zoning code. The site also
includes three single family residences on one legal parcel, representing another noncompliant
condition. The applicant’s request for a preliminary parcel map with exceptions results in a more
compliant condition within the project boundary and new development that will be more consistent
with and compatible to the surrounding properties. It is not possible to subdivide the parcel into three
or four fully compliant lots. The exception allows one of the three lots to be slightly larger in area than
allowed by the code.
2. The exception is necessary for the preservation and enjoyment of a substantial property right of
the petitioner.
The property owner is eligible to subdivide the existing parcel. The existing one parcel with three
housing units does not conform to the maximum lot area for the R1 District. With the subdivision
exception, the owner is able to create individual legal parcels for three residences, however, one the
lots would remain non-conforming as to lot area. It is not possible to adjust the lot area of the other
parcels or create a fourth parcel in order to achieve complete conformance with the city’s property
development standards. Subdividing the existing parcel into code compliant lots is not possible with
the exception and approving the exception results in three lots that are more consistent and more
compatible to properties in the general vicinity.
3. The granting of the exception will not be detrimental to the public welfare or injurious to other
property in the territory in which the property is situated.
For the reasons cited above, the exception actually results in a housing development design that is
more consistent with the pattern of single family development in the area and renders an existing
nonconforming parcel into two conforming lots and one lot that is slightly larger than the maximum
lot area authorized in the district. The lot area maximum exists to ensure future subdivisions meet a
desired scale and proportionality to other lots in the area. The existing 26,669 lot is inconsistent with
that objective and the exceptions renders the parcel more compatible. Such action is neither
detrimental to the public welfare nor injurious to other property in the area.
4. The granting of the exception will not violate the requirements, goals, policies, or spirit of the
law.
The granting of the exception will further the requirements, goals, policies and spirit of the law by
creating two legal parcels and a third, slightly nonconforming lot, from one lot that is significantly
larger than required by the city’s zoning code. From a neighborhood compatibility perspective, and
consistency with the spirit of the law, the requested exception represents an improvement to the
existing conditions found at the site and further advances the objectives of the code.
SECTION 5. Preliminary Parcel Map Approval Granted. Preliminary Tentative Map approval
is granted by the City Council under PAMC Sections 21.12 and 21.20 and the California Government
Code Section 66474, subject to the conditions of approval in Section 7 of this Record.
SECTION 6. Tentative Map Approval.
The Final Map submitted for review and approval by the City Council shall be in substantial
conformance with the Preliminary Parcel Map prepared by WEC and Associates “Prelminary Parcel
Map 900 N. California Avenue”, consisting of three lots, dated August 19,l 2014, except as modified to
incorporate the conditions of approval in Section 7. A copy of this plan is on file in the Department of
Planning and Community Environment, Current Planning Division. Within two years of the approval date
of the Preliminary Parcel Map, the subdivider shall cause the subdivision or any part thereof to be
surveyed, and a Parcel Map, as specified in Chapter 21.08, to be prepared in conformance with the
Preliminary Parcel Map as conditionally approved, and in compliance with the provisions of the
Subdivision Map Act and PAMC Section 21.16 and submitted to the City Engineer (PAMC Section
21.16.010[a]).
SECTION 7. Conditions of Approval
Department of Planning and Community Environment
Planning Division
1. The applicant shall confirm the location all existing features of the site, including protected and
non-protected trees, wells, structures, utilities, and easements to the satisfaction of Public
Works, the Planning Division, and any other agency that would have an interest in those
features.
2. The owner or designee prior to issuance of any building permit shall pay the applicable
Development Impact fees.
3. The owner or designee prior to building permit issuance shall submit for review and approval a
construction traffic plan and construction phasing plan for development to the City.
4. Development Impact Fees: The proposed project will replace three homes, create three new
parcels and add a secondary dwelling unit, therefore the estimated impact fee is $50,793.08.
5. California Government Code Section 66020 provides that a project applicant who desires to
protest the fees, dedications, reservations, or other exactions imposed on a development
project must initiate the protest at the time the development project is approved or
conditionally approved or within ninety (90) days after the date that fees, dedications,
reservations or exactions are imposed on the Project. Additionally, procedural requirements for
protesting these development fees, dedications, reservations and exactions are set forth in
Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY
PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION
66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE
FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS.
If these requirements constitute fees, taxes, assessments, dedications, reservations, or other
exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide
notification that, as of the date of this notice, the 90-day period has begun in which you may
protest these requirements.
6. The applicant is hereby notified, as required by Government Code § 66020, that the approved
plans, these conditions of approval, and the adopted City fee schedule set forth in Program
H3.1.2 of the City of Palo Alto Comprehensive Plan constitute written notice of the description of
the dedications, reservations, amount of fees and other exactions related to the project. As of
the date of project approval, the 90 day period has begun in which the applicant may protest
any dedications, reservations, fees or other exactions imposed by the City. Failure to file a
protest in compliance with all of the requirements of Government Code § 66020 will result in a
legal bar to challenging the dedications, reservations, fees or other exactions.
7. To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City
Council, its officers, employees and agents (the “indemnified parties”) from and against any
claim, action, or proceeding brought by a third party against the indemnified parties and the
applicant to attack, set aside or void, any permit or approval authorized hereby for the Project,
including (without limitation) reimbursing the City for its actual attorneys’ fees and costs
incurred in defense of the litigation. The City may, in its sole discretion and at Applicant’s
expense, elect to defend any such action with attorneys of its own choice.
Building Division
8. The existing buildings within the project area shall be demolished prior to recording the map. A
separate permit shall be required for the removal of the building.
9. New addresses will be assigned to each lot with the subdivision, following recordation of the
map. The applicant shall file and “Address request Form” and pay the required fee, to the Palo
Alto Development Center.
Public Works Engineering Department
PRIOR TO PARCEL MAP SUBMITTAL
10. Provide a current Preliminary Title Report, printed less than 3 month from Parcel Map submittal
date.
PRIOR TO PARCEL MAP RECORDATION.
11. The City of Palo Alto does not currently have a City Surveyor we have retained the services of
Siegfried Engineering to review and provide approval on behalf of the City. Siegfried will be
reviewing, signing and stamping the Parcel Map associated with your project.
In effort to employ the services of Siegfried Engineering, and as part of the City’s cost recovery
measures, the applicant is required to provide payment to cover the cost of Siegfried
Engineering’s review.
Our intent is to forward your Parcel Map to Siegfriend for an initial preliminary review of the
documents. Siegfriend will then provide a review cost amount based on the complexity of the
project and the information shown on the document. We will share this information with you
once we receive it and ask that you return a copy acknowledging the amount. You may then
provide a check for this amount as payment for the review cost. The City must receive payment
prior to beginning the final review process.
12. Once the Parcel Map is approved by the City, submit wet signed and stamped mylar copy of the
Parcel Map to the Public Works for signature. Map shall be signed by Owner, Notary and
Surveyor prior to formal submittal.
PRIOR TO ISSUANCE OF A BUILDING PERMIT OR GRADING AND EXCAVATION PERMIT
13. Parcel Map shall be recorded with County Recorder.
14. Off-site improvements such as curb and gutter, sidewalk replacement, street tree replacement
and/or new street trees, utility upgrades or street resurfacing are typically required with
subdivisions. As part of the proposed of subdivision, applicant(s) shall be aware that off-site
improvements such as those listed above will be required. At a minimum, plans for the building
permits shall show curb, gutter and sidewalk along the project frontages to be removed and
replaced, full-street width resurfacing (mill and overlay) will be required. The curb ramps at the
intersection may also need to be upgrade as part of this project to comply to accessibility
standards. Plans shall include existing and proposed striping plan. Applicant shall meet with
Urban Forestry to evaluate if a new street tree can be planted along the project frontages.
15. If the existing buildings are to be demolished, applicant shall contact Urban Forestry at (650)496-
5953 prior to demolition to verify tree protection measures are in place.
16. LOGISTICS PLAN: The applicant and contractor shall submit a construction logistics plan to the Public
Works Department that addresses all impacts to the City’s right-of-way, including, but not limited to:
pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, on-site staging
and storage areas, concrete pours, crane lifts, work hours, noise control, dust control, storm water
pollution prevention, contractor’s contact. The plan shall be prepared and submitted along the Rough
Grading and Excavation Permit. Plot the construction fence, entrances, shoring, limits of over excavation,
construction workers parking area, staging and storage areas within the private site for equipment and
material. It shall include notes as indicated on the approved Truck Route Map for construction traffic to
and from the site. Plan shall also indicate if the bus stop will need to be relocated and show how the bike
lane will remain accessible during construction. The logistics plan will provide controls that minimize the
disruption to neighbors and provides parking and staging on-site to the extent feasible.
Utilities Electrical Engineering
17. Applicant shall grant easement to all electric equipment including transformers, switches,
electric pull boxes and vaults, electric conduit.
18. All equipment shall be pad mounted, NO underground equipment is allowed.
19. All the weather head shall follow CPAU standard (lower than 18')
20. Applicant shall install, owned and maintain the streetlight system on the private street. These
street lights shall be fed through a meter pedestal.
21. Only one electric service lateral is permitted per parcel.
22. The developer/owner shall provide space for installing padmount equipment (i.e. transformers,
switches, and interrupters) and associated substructure as required by the City. In addition, the owner
shall grant a Public Utilities Easement for facilities installed within the subdivision as required by the
City.
23. The civil drawings must show all existing and proposed electric facilities (i.e. conduits, boxes, pads,
services, and streetlights) as well as other utilities.
24. The developer/owner is responsible for all substructure installations (conduits, boxes, pads,
streetlights system, etc.) on the subdivision parcel map. The design and installation shall be according
to the City standards and all work must be inspected and approved by the Electrical Underground
Inspector.
25. The developer/owner is responsible for all underground services (conduits and conductors) to single-
family homes within the subdivision. All work requires inspection and approval from both the Building
Department and the Electrical Underground Inspector.
26. The tentative parcel map shall show all required easements as requested by the City.
Utilities Water Gas Wastewater Department
27. The applicant shall submit a request to disconnect all utility services and/or meters to the
existing building including a signed affidavit of vacancy. Utilities will be disconnected or
removed within 10 working days after receipt of request. The demolition permit will be issued
by the Building Inspection Division after all utility services and/or meters have been
disconnected and removed.
28. The applicant shall submit a completed water-gas wastewater service connection application-
load sheets for City of Palo Alto Utilities. The applicant must provide all the information
requested for utility service demands.
29. The applicant shall be responsible for installing and upgrading the existing services as necessary
to handle anticipated peak loads. This responsibility includes all cost associated with design and
construction for the installation/upgrade of the utility services.
30. Each parcel shall have its own water service, gas service and sewer lateral connection shown on
the plans.
31. All utility installations shall be in accordance with the City of Palo Alto utility standards for
water, gas, & wastewater.
SECTION 8. Term of Approval.
1. Preliminary Parcel Map. All conditions of approval of the Preliminary Parcel Map shall
be fulfilled prior to map recordation (PAMC Section 21.16.010[c]). Unless a Tentative Map is filed, and
all conditions of approval are fulfilled within a two- year period from the date of Preliminary Tentative
Map approval, or such extension as may be granted, the Preliminary Tentative Map shall expire and all
proceedings shall terminate.
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
City Clerk Director of Planning and
Community Environment
APPROVED AS TO FORM:
Senior Asst. City Attorney
PLANS AND DRAWINGS REFERENCED:
Those plans prepared by WEC and Associates titled “Preliminary Parcel Map”, consisting of five page, dated
August 19, 2014.
14PLN-00233 City of Palo Alto
Page 1 of 1
ATTACHMENT C
COMPREHENSIVE PLAN ANALYSIS
900 N. California Avenue Parcel Map / File No. 14PLN-00233
Comp Plan Goals and Policies How project adheres or does not adhere
to Comp Plan
The Comprehensive Plan land use designation for
the site is Single Family.
The project continues the single-family land uses.
Land Use and Community Design Element
Goal L-1: A well-designed, compact city, providing
residents and visitors with attractive
neighborhoods, work places, shopping district,
public facilities and open spaces.
The project maintains the character of the land
uses in this area of the City. The project would
subdivide one property into three residential lots
for single family uses. It would retain the same
number of housing units that exist on the site
therefore maintaining the varied residential
neighborhood.
POLICY L-4: Maintain Palo Alto’s varied residential
neighborhoods while sustaining the vitality of its
commercial areas and public facilities. Use the
Zoning Ordinance as a tool to enhance Palo Alto’s
desirable qualities.
Goal L-2: An Enhanced Sense of “Community”
with Development Designed to Foster Public Life
and Meet Citywide Needs.
The project maintains the City’s network of
residential neighborhoods and increases the
conformity of the site. The proposed lots provide
opportunities for the units to integrate into the
City’s circulation network by providing
connections from the lots to the streets and
sidewalks. The project site contains three houses
on one parcel. The proposed project would
subdivide the property into three separate
parcels, with one parcel for each house. The
number of residential units would not be reduced,
thereby retaining the structure of the residential
neighborhood.
POLICY L-10: Maintain a citywide structure of
Residential Neighborhoods, Centers, and
Employment Districts. Integrate these areas with
the City’s and the region’s transit and street
system.
Goal L-3: Safe, Attractive Residential
Neighborhoods, Each With Its Own Distinct
Character and Within Walking Distance of
Shopping, Services, Schools, and/or other Public
Gathering Places.
The project would preserve the character of the
residential neighborhood by creating three lots for
three single-family homes. The lots could then be
used for new or remodeled homes that would be
compatible with the neighborhood.
POLICY L-12: Preserve the character residential
neighborhoods by encouraging new or remodeled
structures to be compatible with the
neighborhood and adjacent structures.
ATTACHMENT D
Project’s Conformance with Zoning Code Regulations
900 N. California Avenue / File No. 14PLN-00233
Table 1: CONFORMANCE WITH CHAPTER 18.12.040 (R-1 DISTRICT)
Regulation Required Proposed Conformance
Lot 1 Lot 2 Lot 3
Minimum Site Specifications
Lot Size 6,000 s.f. 8,032.9 s.f. 9,378.7 s.f. 13,425 s.f. Project Conforms
Site Width 60 ft. 72.375 ft. 84.5 ft. 60 ft. Project Conforms
Site Depth 100 ft. 110.99 ft. 110.99 ft. 156.875 ft. Project Conforms
Maximum Lot Size 9,999 s.f. 8,032.9 s.f. 9,378.7 s.f. 13,425 s.f.* *Project Conforms with
exception findings for Lot 3
June 25, 2014 Page 1 of 4
To: Amy French Project: Minor Subdivision
Planning Department 900 N. California Avenue
City of Palo Alto Palo Alto, California
Palo Alto, California APN: 003-51-021
Dear Ms. French,
We are requesting approval for a Minor Sub-Division at the 900 North California
Avenue. This property that is a total of 30,836.6 square feet. Our proposal is to divide
this property to three separate parcels. The proposed properties will have the following
dimensions and area:
-Lot 1: 8,032.9 sq ft - 110.99 ft x 72.375 ft.
-Lot 2: 9,378.70 sq ft - 110.99 ft x 84.5 ft.
-Lot 3: 13,425.00 sq ft - “L” shaped property: 60.0 feet wide at the North California
frontage, 156.875 along the western property line, 120.00 feet at the rear property line,
and 66. 875 feet at the further eastern property line. It is 60.00 ft at the pan handle
property line parallel to California Avenue. The closest eastern property line is 90.00
feet. Lots 1 and 2 fully comply with the City of Palo Alto R-1 sub-division requirements.
Lot 3 meets the frontage, depth, and the minimum lot area requirements. It does exceed
the maximum Lot Area of 10, 000 SF by 3,425 SF.
Please see Attachment A for the proposed Site Plan divisions.
A. There are special circumstances or Conditions affecting the property:
The subject property at the corner of Louis Road and North California Avenue was
originally 170.00 by 156.875 feet for total of 26,669.0 sq ft. The property at 920
California Avenue is 60.00 by 90.00 feet for a lot area of 5400 Sq. Ft.
We originally assumed the area of this property was created before the current lot size
regulations were in place. However, Greg Xiong, our client for this project, was recently
told the original lot size for 920 n. California was 60 x 100 feet. But, at some point, the
City asked for a 10 foot street dedication. This is why the dimensions for 920 N.
California are 60 x 90 feet and not 60 x 100 feet.
The remaining property has a awkward property shape, not conducive to create three
equally shaped rectangular shaped properties. If the 920 N. California Avenue property
did not exist, the overall site could have been divided in to four separate properties. (See
Attachment B). All four properties would have met the required minimum and maximum
lot areas.
________________________________________________________________________
721 COLORADO AVENUE, SUITE 102 PALO ALTO, CALIFORNIA 94303
650-328-1086 www.kohler-architects.com FAX 650-321-2860
email: info@kohler-architects.com
Page 2 of 4
B) The exception is necessary for the preservation and enjoyment of a
substantial property right of petitioner:
The goal for sub-dividing this property is to create three usable properties and to
construct three new homes for sale to the public. The result will be three new homes
added to the City of Palo Alto’s housing element. Lot 3 will have an additional 600
to 900 sq ft Guest House that will provide an additional living unit.
C) The granting of the exception will not be detrimental to the public welfare or injurious
to other property in the territory in which the property is situated; and
As mentioned above, the property at Lot 3 will have a 2nd Living Unit in the rear yard
that will be available as a rental unit and will contribute to the overall housing count in
Palo Alto. The proposed new homes will all be required to comply with all the current
Zoning Regulations as well as the Individual Review process.
D) The granting of the exception will not violate the requirements, goals, policies, or
spirit of the law.
Each of these three properties will comply with all the City of Palo Alto Zoning
Regulations for the R-1 Zoning District and current Uniform Building Codes. The only
exception we are asking for is to allow a larger than 10, 000 square foot property in a R-1
Zone District.
In conclusion, the owner of this property, Greg Xiong, and I have strived to comply with
all the current zoning regulations to design three new homes that will contribute to overall
housing supply of Palo Alto.
Yours Truly,
Roger K. Kohler
Architect C-7334
Attachments: Page 3- Proposed Lot. Page 4 – Lot Study without 920 N. California
_____________________________________________________________________________________
721 COLORADO AVENUE, SUITE 102 PALO ALTO, CALIFORNIA 94303
650-328-1086 www.kohler-architects.com FAX 650-321-2860
email: info@kohler-architects.com
Attachment F
Project Plans
Hardcopies of project plans are provided to Council Members. These plans are available to the
public by visiting the Planning and Community Environmental Department on the 5th floor of
City Hall at 250 Hamilton Avenue.
Directions to review Project plans online:
1. Go to: https://paloalto.buildingeye.com/planning
2. Search for “900 California Avenue” and open the record by clicking on the green
dot
3. Review the record details and open the “more details” option
4. Use the “Records Info” drop down menu and select “Attachments”
5. Open the attachment named “900 California Avenue”
City of Palo Alto (ID # 7313)
City Council Staff Report
Report Type: Action Items Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Ordinance Revising AR Findings
Title: PUBLIC HEARING: Adoption of an Ordinance Approving Revisions to the
Architectural Review Findings in Palo Alto Municipal Code Chapter 18.76 and
Approval of an Exemption Under Sections 15061 and 15305 of the California
Environmental Quality Act (CEQA) Guidelines. The Planning and
Transportation Commission Recommended Council Approval of the
Ordinance (Continued from September 12, 2016)
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that Council adopt an Ordinance modifying the Architectural Review (AR)
approval findings.
Executive Summary
This report is responsive to the City Council’s direction to make specific changes to draft
architectural review findings. An updated ordinance reflecting Council direction is provided in
Attachment A, where the language added by Council is highlighted in yellow.
Background
Since summer 2015, staff has been working on updating the City’s architectural review findings
to:
Facilitate easier review, reduce writing and reading fatigue, and improve analysis
Provide applicants a better understanding of how projects will be evaluated, and
Improve the standing of projects in court.
The City Council reviewed the findings on April 11, 20161 and requested that staff explore
additional refinements with the ARB and PTC. Staff conducted this review and presented the
1 City Council Staff Report April 11, 2016: http://www.cityofpaloalto.org/civicax/filebank/documents/51728
City of Palo Alto Page 2
results to the City Council on September 12, 20162. Council then directed further refinements,
which are addressed below. Excerpted minutes of the September 12, 2016 Council hearing are
provided as Attachment B.
Discussion
The findings reviewed by the City Council on September 12th are provided below and edited
with strikeout/underline text to reflect Council direction from that meeting.
1. The design is consistent with applicable provisions of the Palo Alto Comprehensive Plan;
Zoning Code including context-based design criteria, as applicable), coordinated area
plans (including compatibility requirements), and any relevant design guides.
2. The project has a unified and coherent design, that:
a. creates an internal sense of order and desirable environment for occupants,
visitors, and the general community,
b. preserves, respects and integrates existing natural features that contribute
positively to the site and the historic character including historic local resources
of the area when relevant,
c. is compatible with its setting, and in the Downtown business district and the
California Avenue business district, establishes design linkages with surrounding
existing buildings so that the visual unity of the street is maintained at a
minimum by:
i. The rhythmic pattern of the street established by the general width of
the buildings and the spacing between them; and
ii. The sizes, proportions, and orientations of windows, bays, and doorways.
d. provides harmonious transitions in scale, mass, and character to adjacent land
uses and land use designations, and
e. enhances living conditions on the site (if it includes residential uses) and in
adjacent residential areas.
3. The design is of high aesthetic quality, using high quality, integrated materials and
appropriate construction techniques, and incorporating textures, colors, and other
details that are compatible with and enhance the surrounding area.
4. The design is functional, allowing for ease and safety of pedestrian and bicycle traffic
and providing for elements that support the building’s necessary operations (e.g.
convenient vehicle access to property and utilities, appropriate arrangement and
amount of open space and integrated signage, if applicable, etc.).
5. The landscape design complements and enhances the building design and its
surroundings, is appropriate to the site’s functions, and utilizes climate appropriate
2 City Council Staff Report, dated September 12, 2016:
http://www.cityofpaloalto.org/civicax/filebank/documents/53708
City of Palo Alto Page 3
regional indigenous drought-resistant plant material capable of providing desirable
habitat when feasible (and preferably California natives), and that can be appropriately
maintained.
6. The project incorporates design principles that achieve sustainability in areas related to
energy efficiency, water conservation, building materials, landscaping, and site planning.
While these changes have been incorporated into the draft ordinance attached, staff must note
that the suggested changes to finding 2(c) are redundant with the context sensitive design
criteria already applicable to the districts referenced by the changes (See Attachment C and
Palo Alto Municipal Code Section 18.16.090(a)(2)(B)) and 18.18.110(a)(2)(B)).
Council also directed staff to return with proposed boundary definitions for the Downtown
business district and the California Avenue business district. To address this request, staff
reviewed the City’s Comprehensive Plan, which provides the following boundaries.
The shaded area in Figure 1 (pink) represents the Downtown Business District and the dashed
(green) outline represents the Downtown Parking Assessment District. The shaded area is also
similar to the City’s Zone A and Zone B Business Improvement District (BID) Boundaries and
Benefit Zones.
City of Palo Alto Page 4
Figure 1: Land Use Map L-5 depicting University Avenue/Downtown Commercial Center/Business District
The shaded area in Figure 2 (light blue with square-dashed blue outline) represents the
California Avenue Business District. The dashed outline (green) represents the California
Avenue Parking Assessment District boundary. There is no California Avenue BID to compare
boundaries as there is for Downtown.
When deciding on a definition for the two business districts, staff recommends the Council be
consistent with the existing Comprehensive Plan designations or the parking assessment district
boundaries to minimize the confusion and variability of terms in different contexts. However,
the Council may determine an alternative boundary is appropriate that is different from those
presented in this report.
Policy Implications
The City Council’s decision to modify the AR findings reflects refinements of existing standards
that clarify and focus project review of projects subject to an Architectural Review approval.
There are no substantive changes to the standards or criteria of review or changes to project
review procedures.
City of Palo Alto Page 5
Figure 2: Land Use Map L-5 California Avenue Commercial Center/Business District
Resource Impact
Other than staff time, no additional fiscal or economic impacts are anticipated.
Timeline
If Council adopts these revisions or further modifications on first reading, the second reading
would be scheduled as a consent calendar review for adoption. Any ordinance adopted on
second reading would become effective 31 days from second reading.
Environmental Review
This project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA
Guidelines Sections 15061(b)(3) (Review for Exemption) and 15305 (Minor Alterations in Land
City of Palo Alto Page 6
Use Limitations) in that (1) the activity (rewording of Architectural Review findings) is covered
by the general rule that CEQA applies only to projects which have the potential for causing a
significant effect on the environment, and it can be seen with certainty that there is no
possibility that the activity in question may have a significantly effect on the environment, and
(2) this ‘minor alteration in land use limitations’ does not result in any changes in land use or
density.
Attachments:
Attachment A: Ordinance Amending Architectural Review Findings (PDF)
Attachment B: Excerpt of Minutes for Council Meeting of September 12 (DOCX)
Attachment C: CBDC Compatibility Criteria (DOCX)
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160713 jb 0131537 1
Ordinance No. _______
Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code
(PAMC) Title 18 (Zoning Regulations), Section 18.76.020 (Architectural Review)
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. As part of the City’s annual Zoning Code update, the City desires to improve its
Architectural Review findings to ensure robust design review, to eliminate repetitive findings and to
remove outmoded and unnecessary findings.
B. On September 3 and October 1, 2015, the Architectural Review Board (ARB)
reviewed the draft updated architectural review findings and provided input. Subsequently, the
Planning and Transportation Commission (PTC) reviewed the AR findings and recommended that
Council approve them without any changes.
C. On April 11, 2016, the Council reviewed the draft findings, suggested revisions and
directed staff and the ARB to review the updated language and offer approval, feedback or changes.
D. On June 16, 2016, the ARB reviewed the updated findings and provided additional
comments.
E. On August 10, 2016, the Planning and Transportation Commission reviewed the
updated findings and concurred with the ARB and Staff’s comments.
F. On September 12, and December 12, 2016, the City Council conducted public
hearings on the updated and revised architectural review findings.
SECTION 2. Subdivision (d) of Section 18.76.020 of the Palo Alto Municipal Code is
amended to read as follows:
18.76.020 Architectural Review.
***
(d) Findings
Neither the director, nor the city council on appeal, shall grant architectural review approval,
unless it is found that each of the following applicable findings is met:
(1) The design is consistent and compatible with applicable elementsprovisions of the Palo Alto
Comprehensive Plan;, Zoning Code (including context-based design criteria, as applicable),
coordinated area plans (including compatibility requirements), and any relevant design
guides.
Not Yet Approved
160713 jb 0131537 2
(2) The project has a unified and coherent design, that:
(a) creates an internal sense of order and desirable environment for occupants, visitors,
and the general community,
(b) preserves, respects and integrates existing natural features that contribute positively
to the site and the historic character including historic local resources of the area
when relevant,
(c) is compatible with its setting, and in the Downtown business district and California
Avenue business district, establishes design linkage with surrounding existing
buildings so that the visual unity of the street is maintained at a minimum by:
i. The rhythmic pattern of the street established by the general width of the
buildings and the spacing between them;
ii. The sizes, proportions, and orientations of windows, bays, and doorways
(d) provides harmonious transitions in scale, mass and character to adjacent land uses
and land use designations, and
(e) enhances living conditions on the site (if it includes residential uses) and in adjacent
residential areas.
(3) The design is of high aesthetic quality, using high quality, integrated materials and
appropriate construction techniques, and incorporating textures, colors, and other details
that are compatible with and enhance the surrounding area.
(4) The design is functional, allowing for ease and safety of pedestrian and bicycle traffic and
providing for elements that support the building’s necessary operations (e.g. convenient
vehicle access to property and utilities, appropriate arrangement and amount of open
space and integrated signage, if applicable, etc.).
(5) The landscape design complements and enhances the building design and its surroundings,
is appropriate to the site’s functions, and utilizes to the extent practical, regional indigenous
drought resistant plant material capable of providing desirable habitat when feasible (and
preferably California natives), and that can be appropriately maintained.
(6) The project incorporates design principles that achieve sustainability in areas related to
energy efficiency, water conservation, building materials, landscaping, and site planning.
(2) The design is compatible with the immediate environment of the site;
(3) The design is appropriate to the function of the project;
(4) In areas considered by the board as having a unified design character or historical character,
the design is compatible with such character;
(5) The design promotes harmonious transitions in scale and character in areas between
different designated land uses;
(6) The design is compatible with approved improvements both on and off the site;
(7) The planning and siting of the various functions and buildings on the site create an internal
sense of order and provide a desirable environment for occupants, visitors and the general
community;
(8) The amount and arrangement of open space are appropriate to the design and the function
of the structures;
Not Yet Approved
160713 jb 0131537 3
(9) Sufficient ancillary functions are provided to support the main functions of the project and
the same are compatible with the project's design concept;
(10) Access to the property and circulation thereon are safe and convenient for pedestrians,
cyclists and vehicles;
(11) Natural features are appropriately preserved and integrated with the project;
(12) The materials, textures, colors and details of construction and plant material are
appropriate expression to the design and function and whether the same are compatible with the
adjacent and neighboring structures, landscape elements and functions;
(13) The landscape design concept for the site, as shown by the relationship of plant masses,
open space, scale, plant forms and foliage textures and colors create a desirable and functional
environment and whether the landscape concept depicts an appropriate unity with the various
buildings on the site;
(14) Plant material is suitable and adaptable to the site, capable of being properly maintained
on the site, and is of a variety which would tend to be drought-resistant and to reduce consumption
of water in its installation and maintenance;
(15) ITie project exhibits green building and sustainable design that is energy efficient, water
conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. The
following considerations should be utilized in determining sustainable site and building design:
(A) Optimize building orientation for heat gain, shading, daylighting, and natural ventilation;
(B) Design of landscaping to create comfortable micro-climates and reduce heat island
effects;
(C) Design for easy pedestrian, bicycle and transit access;
(D) Maximize on site stormwater management through landscaping and permeable paving;
(E) Use sustainable building materials;
(F) Design lighting, plumbing and equipment for efficient energy and water use;
(G) Create healthy indoor environments; and
(H) Use creativity and innovation to build more sustainable environments.
(16) The design is consistent and compatible with the purpose of architectural review as set
forth in subsection (a).
SECTION 3. Adoption of this ordinance is found to be categorically exempt from the
California Environmental Quality Act under CEQA Guideline sections 15061(b)(3) (Common Sense
Exemption) and 15305 (Minor Alterations in Land Use Limitations)because: (1) the activity
(rewording of Architectural Review findings) is covered by the general rule that CEQA applies only
to projects which have the potential for causing a significant effect on the environment, and it can
be seen with certainty that there is no possibility that the activity in question may have a
significantly effect on the environment, and (2) this ‘minor alteration in land use limitations’ does
not result in any changes in land use or density.
Not Yet Approved
160713 jb 0131537 4
SECTION 4. If any section, subsection, sentence, clause or phrase of the ordinance is
for any reason held to be invalid, such decision shall not affect the validity of the remaining portions
of this ordinance. The City Council hereby declares that it should have adopted the ordinance and
each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared unconstitutional.
SECTION 5. This ordinance shall be effective upon the thirty-first day after its passage
and adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Senior Asst. City Attorney City Manager
_____________________________
Director of Planning and Community
Environment
EXCERPT OF MINUTES FOR COUNCIL MEETING OF SEPTEMBER 12, 2016
7. PUBLIC HEARING: Adoption of an Ordinance Approving Revisions to the
Number and Wording of the Architectural Review Findings in Palo
Alto Municipal Code Chapter 18.76 and Approval of an Exemption
Under Sections 15061 and 15305 of the California Environmental
Quality Act Guidelines. The Planning and Transportation Commission
Recommended Council Approval of the Ordinance.
Public Hearing opened and closed without public comment at 11:38 P.M.
MOTION: Vice Mayor Scharff moved, seconded by Council Member Burt to
adopt an Ordinance modifying the Architectural Review Approval Findings
including the following changes:
A. Replace Finding Number 5 with the April 11, 2016 Council directed
language for Finding Number 5, “the landscape design compliments
and enhances the building design and its surroundings, is appropriate
to the site’s functions, and utilizes, to the extent practical, indigenous
drought-resistant plant material capable of providing desirable habitat
and that can be appropriately maintained;” and
B. Remove from Finding Number 2(b), “local.”
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add to the Motion Part A, “adding ‘regional’
after ‘to the extent practical.’”
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to add to the Motion, “add to Finding 2(d), ‘mass’
after ‘transitions in scale.’” (New Part C)
AMENDMENT: Council Member Holman moved, seconded by Council
Member Schmid to add to the Motion, “add to Finding 2(c), “and in urban
areas, establishes design linkages with surrounding existing buildings so that
the visual unity of the street is maintained at a minimum by:
i. The rhythmic pattern of the street established by the general
width of the buildings and the spacing between them; and
ii. The sizes, proportions, and orientations of windows, bays,
and doorways; and
iii. The location and treatment of entryways where applicable.
AMENDMENT TO THE AMENDMENT: Council Member Holman moved,
seconded by Council Member XX to remove Part iii of the Amendment and
replace in the Amendment, “urban areas” with “the Downtown urban core,
California Avenue core, and El Camino Real.”
AMENDMENT TO THE AMENDMENT RESTATED AND INCORPORATED
INTO THE AMENDMENT WITH THE CONSENT OF THE MAKER AND
SECONDER to remove Part iii of the Amendment and replace in the
Amendment, “urban areas” with “the Downtown business district and the
California Avenue business district.”
INCORPORATED INTO THE AMENDMENT WITH THE CONSENT OF THE
MAKER AND SECONDER to add to the Amendment, “Direct Staff to return
with proposed boundary definitions for the Downtown business district and
the California Avenue business district.
AMENDMENT TO THE AMENDMENT: Council Member Filseth moved,
seconded by Council Member XX to add to the Amendment, “remove from
Finding Number 2(d), ‘and land use designations.’”
AMENDMENT TO THE AMENDMENT WITHDRAWN BY THE MAKER
MOTION RESTATED: Vice Mayor Scharff moved, seconded by Council
Member Burt to adopt an Ordinance modifying the Architectural Review
Approval Findings including the following changes:
A. Replace Finding Number 5 with the April 11, 2016 Council directed
language for Finding Number 5, “the landscape design compliments
and enhances the building design and its surroundings, is appropriate
to the site’s functions, and utilizes, to the extent practical, regional
indigenous drought-resistant plant material capable of providing
desirable habitat and that can be appropriately maintained;” and
B. Remove from Finding Number 2(b), “local;” and
C. Add to Finding 2(d), “mass” after “transitions in scale.”
AMENDMENT RESTATED: Council Member Holman moved, seconded by
Council Member Schmid to:
A. Add to the Motion, “add to Finding 2(c), ‘and in the Downtown business
district and the California Avenue business district, establishes design
linkages with surrounding existing buildings so that the visual unity of
the street is maintained at a minimum by:
a. The rhythmic pattern of the street established by the general
width of the buildings and the spacing between them;
b. The sizes, proportions, and orientations of windows, bays, and
doorways;’” and
B. Direct Staff to return with proposed boundary definitions for the
Downtown business district and the California Avenue business district.
SUBSTITUTE MOTION: Mayor Burt moved, seconded by Vice Mayor
Scharff to continue the Motion as Amended, the Amendment as Amended,
and this Item to a date uncertain.
SUBSTITUTE MOTION PASSED: 9-0
City of Palo Alto (ID # 7377)
City Council Staff Report
Report Type: Action Items Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Public Hearing: Fee adjustments
Title: PUBLIC HEARING: Adoption of an Ordinance Amending the Fiscal Year
2017 Municipal Fee Schedule to Adjust Planning and Community
Environment Fees to Reflect Adjustments to Salaries and Benefits Included in
the Fiscal Year 2017 Budget
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that the City Council find the project exempt under Section 15273 of the
California Environmental Quality Act Guidelines adopt the ordinance included as Attachment A
approving amendments to the Planning section of the Municipal Fee Schedule for Fiscal Year
2017 to adjust fees based on a 5.5 percent adjustment for average salary and benefits
increases. The ordinance would also adjust the fee increases scheduled to go into effect on
July 1, 2017 based on adoption of Resolution 9579 on March 28, 2016.
Background:
Last spring, the Planning and Community Environment Department completed a fee study to
update fees for services. Due to the timing of the fee study, the updated fees were based upon
Fiscal Year 2015 cost information, the most recent completed fiscal year information available
at the time. On March 28, 2016 (Staff Report 6638) the City Council accepted the fee study and
approved a resolution adjusting fees and hourly staff rates charged for services. The staff
report for the March 28th hearing is available at:
http://www.cityofpaloalto.org/civicax/filebank/documents/51593 and the resolution adjusting
fees is available at: http://www.cityofpaloalto.org/civicax/filebank/documents/53446.
On June 13, 2016 (Staff Report 6932) Council adopted changes to the Fiscal Year 2017
Municipal Fee Schedule, applying a 5.5 percent average salary and benefits adjustment to most
City fees from the FY 2016 fee levels. Fees for the Planning and Community Environment
City of Palo Alto Page 2
Department did not capture these salary and benefits adjustments. This issue was raised
during the Fiscal Year 2017 budget adoption process and specifically the discussion surrounding
how the organization will keep up with these annual increases now that we have completed
this comprehensive study. Staff committed to return to Council with a 5.5 percent increase to
Fiscal Year 2017 fees resulting in fee increases that will be effective January, 2017.
Discussion:
The Department of Planning & Community Environment charges user fees to applicants
requesting planning entitlements and related services. Planning entitlements include
discretionary actions such as Architectural Reviews, Individual Reviews, Site and Design,
Conditional Use Permits, Variances, Zoning and Comp Plan Amendments. Planning fees do not
include building permits or permit fees for property maintenance, such as roof replacements or
water heater replacements. Those activities fall within the Development Services department.
Council adopted a User Fee Cost Recovery Level Policy (Staff Report 5735) on May 18, 2015 that
suggests high, medium, and low levels of cost recovery based on policy considerations, such as
the degree of public versus private benefit associated with the activity for which a fee is
established. Services that are regulatory in nature (e.g. review for compliance with zoning
regulations) and for which individual users receive most or all of the benefit (e.g. developers
requesting approval of a planning approval), generally fall in the “high” cost recovery level
group.
On March 28, 2016, (Staff Report 6638) the City Council accepted the fee study and approved a
resolution increasing fees for services and hourly staff rates. For fees affecting mostly
commercial development, Council approved fees to fully recover costs based on study results.
Council adopted a two-phased approach for fees that primarily affect residential entitlements,
with fifty percent of the increase realized in Fiscal Year 2017 and the remaining 50 percent
effective Fiscal Year 2018. Council chose to keep Day Care Use Permits and Request for Hearing
Fees below cost recovery levels, and also made changes to appeal fees.
Fees for services are structured in two ways: flat fees and time and materials fees, for which the
Department collects and charges against deposits. Flat fees apply to those activities for which
an average amount of processing time and effort can reasonably be determined. Deposits are
taken when staff time to provide the service is expected to vary widely. Applications such as
Site and Design or major projects requiring Architectural Review Board involvement may
require 50 hours of work or up to 500 hours, depending on the project. In these cases, a deposit
amount set at the minimum needed to complete staff work is identified in the Municipal Fee
Schedule. Once a deposit is received, staff track the amount of effort involved in providing
service and charges are made against the deposit using the appropriate hourly billing rate(s),
including overhead. The applicant is kept informed of all charges against the deposit and if the
City of Palo Alto Page 3
deposit is exhausted and additional work is still required, the applicant is billed for additional
charges. Similarly, the applicant is refunded if costs total less than the deposited amount. Staff
involved in these activities generally span several departments. If consultants are required,
consultant fees are also charged to the applicant. Staff recommends increasing both kinds of
fees by 5.5 percent.
This 5.5 percent increase reflects the average increase of salaries and benefits for Fiscal Year
2017, from Fiscal Year 2016 rates in order to maintain the cost recovery levels. During the
discussion of the adoption of this two year phased approach, Council asked staff to ensure fees
maintain cost recovery levels due to general increases in the cost of doing business now that
this study has been completed. This increase adjusts for that and typically a percentage
increase is applied annually as part of the annual budget process to the extent appropriate.
Should Council choose to adopt the recommended fee increases, they will also increase the
previously adopted Fiscal Year 2018 Planning fees by 5.5%. Any additional changes to those
adopted fees will be brought forward as part of the Fiscal Year 2018 budget process.
Resource Impact:
It is anticipated that revenues in Fiscal Year 2017 will increase by approximately $33,000 with
these fee increases occuring over half way through the fiscal year, representing an increase of
about 1.5 percent of the department’s adopted revenue budget. A change to the
department’s revenue budget is not recommended at this time as these fee activities are driven
by economic activities and currently the department is seeing a decline in commercial
entitlements, a key driver of these revenues. Revenue collections will be monitored and
adjustments brought forward as appropriate during the fiscal year.
Timeline:
Based on State law, fee adjustments can become effective no less than 60 days after Council’s
adoption of the resolution.
Environmental Review
The adoption of user fees is exempt from environmental review under the
California Environmental Quality Act (CEQA). (See CEQA Guidelines Section
15273.)
Attachments:
Attachment A: Ordinance Amending PCE Muni Fee Schedule for FY2017 (PDF)
Attachment B: PCE Proposed Fee Increases FY 2017 (PDF)
City of Palo Alto Page 4
Attachment C: PCE Proposed Hourly Cost Recovery Rates FY2017 (PDF)
Not Yet Approved
161011 jb 0131556 1 October 2016
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending Resolution 9579 to
Update the Fiscal Year 2017 Municipal Fee Schedule to Adjust the Planning and
Community Environment Fees by Fiscal Year 2017 Adjustments to Salaries and
Benefits
The Council does hereby ORDAIN as follows:
A. In spring 2016, the Planning and Community Environment Department completed a
fee study to update fees for services. Due to the timing of the fee study, the updated fees were
based upon Fiscal Year 2015 cost information, the most recent completed fiscal year
information available at the time.
B. On March 28, 2016, the City Council accepted the fee study and approved a
resolution adjusting fees and hourly staff rates charged for services.
C. On June 13, 2016, Council adopted changes to the Fiscal Year 2017 Municipal Fee
Schedule, applying a 5.5 percent average salary and benefits adjustment to most City fees.
Fees for the Planning and Community Environment Department did not capture these salary
and benefits adjustments.
D. This issue was raised during the Fiscal Year 2017 budget adoption process. Staff
committed to return to Council with a 5.5 percent increase to Fiscal Year 2017 fees resulting in
fee increases effective January, 2017.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council of the City of Palo Alto adopts the changes to the Municipal
Fee Schedule as set forth in Exhibit "A" and “B” and incorporated here by reference. When
effective, such fees shall supersede any prior inconsistent fees charged by the Planning and
Community Environment Department.
SECTION 2. The amount of the new or increased fees and charges is no more than
necessary to cover the reasonable costs of the governmental activity, and the manner in which
those costs are allocated to a payer bears a fair and reasonable relationship to the payer's
burden on, or benefits received from, the governmental activity.
SECTION 3. Fees in the Municipal Fee Schedule are for government services provided
directly to the payor that are not provided to those not charged. The amount of this fee does
not exceed the reasonable costs to the City of providing the services. Consequently, pursuant to
Art. XIII C, Section l(e)(2), such fees are not a tax.
161011 jb 0131556 2 October 2016
SECTION 4. Effective Date. The fee increases proposed for FY 2017 described in
Exhibit A and the changes to the hourly billing rates described in Exhibit B shall become
effective no sooner than sixty (60) days from the date of adoption of this ordinance. The fee
increases proposed for FY 2018 described in Exhibit A and the changes to the 2018 hourly billing
rates described in Exhibit B shall become effective on July 1, 2018.
SECTION 5. CEQA. The adoption of user fees is exempt from environmental review
under the California Environmental Quality Act (CEQA). (See CEQA Guidelines Section 15273.)
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Senior Asst. City Attorney City Manager
____________________________
Director of Planning and Community
Environment
____________________________
Director of Administrative Services
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Architectural Review
Architectural Review ‐ Major
Project
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$10,264 initial deposit plus
legal review fees and
applicable Other Application
fees
$10,829 initial deposit plus legal
review fees and applicable Other
Application fees
$10,264 initial deposit plus legal
review fees and applicable Other
Application fees
$10,829 initial deposit plus
legal review fees and
applicable Other Application
fees
Architectural Review ‐ Minor
Project (ARB Review)
$4,982 plus applicable Other
Application fees +
$5,256 plus applicable Other
Application fees +
$6,860 plus applicable Other
Application fees
$7,343 plus applicable
Other Application fees
Architectural Review ‐ Minor
Project (Staff Review)
$2,112 plus applicable Other
Application fees +
$2,228 plus applicable Other
Application fees +
$2,672 plus applicable Other
Application fees
$2,819 plus applicable
Other Application fees
Design Enhancement Exception
$3,623 plus applicable
Other Application fees +
$3,822 plus applicable Other
Application fees +
$5,544 plus applicable Other
Application fees
$5,849 plus applicable
Other Application fees
Preliminary Review
$3,371 plus applicable
Other Application fees +
$3,556 plus applicable Other
Application fees +
$5,451 plus applicable Other
Application fees
$5,751 plus applicable
Other Application fees
Signs ‐ (ARB Review)
$2,261 plus applicable Other
Application fees +
$2,385 plus applicable Other
Application fees +
$3,491 plus applicable Other
Application fees
$3,683 plus applicable Other
Application fees
Signs ‐ (Exceptions)
$2,653 plus applicable Other
Application fees +
$2,799 plus applicable Other
Application fees +
$3,753 plus applicable Other
Application fees
$3,959 plus applicable Other
Application fees
Signs, Minor Facade Changes,
Landscaping, Accessory
Structures, or Similar Minor
Changes to a Building Exterior ‐
(Staff Review)/Master sign
program
$611 plus any applicable
Other Application fees +
$645 plus any applicable Other
Application fees +
$835 plus any applicable Other
Application fees
$881 plus any applicable
Other Application fees
Temporary Sign Permit
$110 per 15 days plus any
applicable Other Application
fees +
$116 per 15 days plus any
applicable Other Application
fees +
$154 per 15 days plus any applicable
Other Application fees
$162 per 15 days plus any
applicable Other Application
fees
Comprehensive Plan Change
Comprehensive Plan Change
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$6,118 initial deposit $6,454 initial deposit $6,118 initial deposit $6,454 initial deposit
Comprehensive Plan
Maintenance Fee
Note: Collected at Building Permit
issuance.
$0.55 per $1,000 of
construction valuation
$0.55 per $1,000 of construction
valuation
$0.55 per $1,000 of construction
valuation
$0.55 per $1,000 of
construction valuation
Development Agreement
Development Agreement
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$7,058 initial deposit plus
Legal Review fees and
applicable Other Application
fees
$7,446 initial deposit plus Legal
Review fees and applicable
Other Application fees
$7,058 initial deposit plus Legal
Review fees and applicable Other
Application fees
$7,446 initial deposit plus
Legal Review fees and
applicable Other Application
fees
Development Agreement ‐
Annual Review
Note: 100 percent of processing costs
will be recovered.
$2,471 initial deposit plus
Legal Review fees and
applicable Other Application
fees
$2,607 initial deposit plus Legal
Review fees and applicable
Other Application fees
$2,471 initial deposit plus Legal
Review fees and applicable Other
Application fees
$2,607 initial deposit plus
Legal Review fees and
applicable Other Application
fees
Planning and Community Environment
Reflects total estimated cost of providing service unless noted with a +
EXHIBIT A
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Development Projects Preliminary Review
Development Projects ‐
Prescreening (PTC & CC Review)
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$3,671 initial deposit plus
Legal Review fees and
applicable Other Application
fees
$3,873 initial deposit plus Legal
Review fees and applicable
Other Application fees
$3,671 initial deposit plus Legal
Review fees and applicable Other
Application fees
$3,873 initial deposit plus
Legal Review fees and
applicable Other Application
fees
Director's Approval
Home Improvement Exception $2,070 +$2,184 +$3,109 $3,280
Director's hearing requested ‐
per hearing $280+$280+$280+$280+
Documents and Photocopies
Administrative Extensions and
Zoning Letters
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1
hr. mininum
Comprehensive Plan $90 plus $4 if mailed $95 plus $4 if mailed $90 plus $4 if mailed $95 plus $4 if mailed
Copy from Optical Disk $28 minimum plus $0.50 per
page
$28 minimum plus $0.50 per
page $28 minimum plus $0.50 per page $28 minimum plus $0.50 per
page
Tree Manual or Other Bounded
Documents $33 plus $4 if mailed $33 plus $4 if mailed $33 plus $4 if mailed $33 plus $4 if mailed
Zoning Map Booklet $98 plus $4 if mailed $98 plus $4 if mailed $98 plus $4 if mailed $98 plus $4 if mailed
Property Research requiring
more than 30 minutes
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1 hr.
mininum Applicable hourly rate/1 hr. mininum Applicable hourly rate/1 hr.
mininum
Environmental Impact Assessment
CEQA Categorical Exemption $400 +$422 +$451 $476
Environmental Impact
Assessment ‐ Mitigated
Negative Declaration
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon application
plus 25% for contract administration
and applicable Legal Review and
Other Application fees
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Environmental Document
(Consultant Prepared)
Note: If estimated costs eceed
$100,000, alternative deposit and
payment schedule arrangements may
be made at the discretion of the
Director of Planning and Community
Environment. 100 percent of processing
costs will be recovered.
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon application
plus 25% for contract administration
and applicable Legal Review and
Other Application fees
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Environmental Document:
Note: 100 percent of processing costs
will be recovered plus any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not.
$5,000 initial deposit plus any
applicable Other Application
fees.
$5,275 initial deposit plus any
applicable Other Application
fees.
$5,000 initial deposit plus any
applicable Other Application fees.
$5,275 initial deposit plus
any applicable Other
Application fees.
Mitigation Monitoring ‐
Environmental Impact Report
Note: 100 percent of processing costs
will be recovered, including any charges
for specialized consultants.
$3,671 initial deposit plus
applicable Legal Review and
Other Application fees
$3,873 initial deposit plus
applicable Legal Review and
Other Application fees
$3,671 initial deposit plus applicable
Legal Review and Other Application
fees
$3,873 initial deposit plus
applicable Legal Review and
Other Application fees
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Mitigation Monitoring ‐
Mitigated Negative Declaration
Note: 100 percent of processing costs
will be recovered, including any charges
for specialized consultants.
$1,224 initial deposit plus
applicable Legal Review and
Other Application fees
$1,291 initial deposit plus
applicable Legal Review and
Other Application fees
$1,224 initial deposit plus applicable
Legal Review and Other Application
fees
$1,291 initial deposit plus
applicable Legal Review and
Other Application fees
Historic Resource
Demolition Application for
Historic Buildings $1,001 $1,056 $1,001 $1,056
Historic Resource Review ‐
Major Project
$1,502 plus any applicable
Other Application fees
$1,585 plus any applicable Other
Application fees
$1,502 plus any applicable Other
Application fees
$1,585 plus any applicable
Other Application fees
Historic Resource Review ‐
Minor Project (Staff Review)
$855 plus any applicable
Other Application fees +
$902 plus any applicable Other
Application fees +
$1,001 plus any applicable Other
Application fees
$1,056 plus any applicable
Other Application fees
Historic Resource Review of
Individual Review Application
$250 plus Individual Review
fees and applicable Other
Application fees
$264 plus Individual Review fees
and applicable Other Application
fees
$250 plus Individual Review fees and
applicable Other Application fees
$264 plus Individual Review
fees and applicable Other
Application fees
Mills Act Contract ‐ Establish or
Withdraw
Note: 100 percent of processing and
legal costs will be recovered.
$1,835 initial deposit plus any
applicable Other Application
fees
$1,936 initial deposit plus any
applicable Other Application
fees
$1,835 initial deposit plus any
applicable Other Application fees
$1,936 initial deposit plus
any applicable Other
Application fees
Transfer of Development Rights
Projects
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$611 initial deposit plus any
applicable Other Application
fees
$645 initial deposit plus any
applicable Other Application
fees
$611 initial deposit plus any
applicable Other Application fees
$645 initial deposit plus any
applicable Other Application
fees
Williamson Act Contract ‐
Establish or Withdraw
Note: 100 percent of processing and
legal costs will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$1,929 initial deposit plus any
applicable Other Application
fees
$2,035 initial deposit plus any
applicable Other Application
fees
$1,929 initial deposit plus any
applicable Other Application fees
$2,035 initial deposit plus
any applicable Other
Application fees
Individual Review
Expansion of Existing Two‐Story
greater than 150 sq. ft.
$4,310 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project,
including historic review +
$4,547 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project, including
historic review +
$5,641 plus applicable Other
Application fees and any other
entitlements necessary to complete
the project, including historic review
$5,951 plus applicable Other
Application fees and any
other entitlements
necessary to complete the
project, including historic
review
Individual Review ‐ Minor
Revisions to Approved Projects
$2,320 plus cost of notices +$2,448 plus cost of notices + $2,931 plust cost of notices $3,092 plust cost of notices
New Two‐Story Addition or New
Two‐Story Home
$5,679 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project,
including historic review +
$5,991 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project, including
historic review +
$7,046 plus applicable Other
Application fees and any other
entitlements necessary to complete
the project, including historic review
$7,434 plus applicable Other
Application fees and any
other entitlements
necessary to complete the
project, including historic
review
Preliminary Individual Review
with Architect $245 +$258 +$375 $396
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Appeals and Legal Review Fees
Legal Review for Additional
hearings
Note: Legal review fees cover up to 3
public hearings. Additional hearings are
charged at 1/3 of the applicable fee.
Additional hearings are
charged at 1/3 of the
applicable fee.
Additional hearings are charged
at 1/3 of the applicable fee.
Additional hearings are charged at
1/3 of the applicable fee.
Additional hearings are
charged at 1/3 of the
applicable fee.
Request for Hearing by City
Council or Planning &
Transportation Commission
Note: This fee is refunded if the City
Council chooses not to hear an
appeal. Also, this fee shall not be
charged if a fee for Director's
hearing has been paid.
$280 +$280 +$280 +$280 +
Appeal costs exceeding appeals
filing fee
Note: All costs will be recovered from
applicant in the event that an appeal is
filed by a third party and the appeal is
upheld and in the event that the
applicant files an appeal that is denied.
$3,000 initial deposit plus any
applicable Other Application
fees.
$3,165 initial deposit plus any
applicable Other Application
fees.
$3,000 initial deposit plus any
applicable Other Application fees.
$3,165 initial deposit plus
any applicable Other
Application fees.
Legal Review ARB Major $2,749 +$2,606 +$5,211 $5,498
Legal Review (legislative review,
zone change, plan amendment,
etc.)
$5,278 +$5,003 +$10,006 $10,556
Legal Review Environmental $4,720 +$4,980 +$9,439 $9,958
Legal Review Mitigation
Monitoring Report $500 $528 $500 $528
Other Application Fees
Public Noticing ‐ 150 ft. Radius
Note: If noticing is required. Covers cost
of up to three rounds of noticing.
$484 +$511 +$529 $558
Public Noticing ‐ 600 ft. Radius
Note: If noticing is required. Covers cost
of up to three rounds of noticing.
$825 +$870 +$927 $977
Public Noticing beyond 600 ft.
Radius
Note: If noticing is required
$931 +$982 +$1,236 $1,304
Record Management Fee $26 per file $26 per file $26 per file $26 per file
Recording Fee with County County cost of recording, if
required
County cost of recording, if
required County cost of recording, if required County cost of recording, if
required
Records Retention $4.00 per plan sheet $4.00 per plan sheet $4.00 per plan sheet $4.00 per plan sheet
Pre‐screening fee
Note: All costs will be recovered for the
prescreening of applicants proposing
rezoning, zoning text amendments,
development agreements, Comp Plan
amendments, or specific plans.
$3,000 initial deposit plus any
applicable Legal Review and
Other Application fees
$3,165 initial deposit plus any
applicable Legal Review and
Other Application fees
$3,000 initial deposit plus any
applicable Legal Review and Other
Application fees
$3,165 initial deposit plus
any applicable Legal Review
and Other Application fees
Planning Compliance Fee
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
Initial deposit equal to 3 hrs of
applicable staff rate
Initial deposit equal to 3 hrs of
applicable staff rate
Initial deposit equal to 3 hrs of
applicable staff rate
Initial deposit equal to 3 hrs
of applicable staff rate
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Contract Administration
Note: 25% Contract Administration and
project management costs are in
addition to direct cost of consultant
services and will be charged to deposit‐
based fees.
25% of direct cost 25% of direct cost 25% of direct cost 25% of direct cost
Site & Design
Site and Design Major
Note: 100 percent of processing and
legal costs will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$22,523 initial deposit plus
any Legal Review fees and
applicable Other Application
Fees
$23,762 initial deposit plus any
Legal Review fees and applicable
Other Application Fees
$22,523 initial deposit plus any Legal
Review fees and applicable Other
Application Fees
$23,762 initial deposit plus
any Legal Review fees and
applicable Other Application
Fees
Subdivision ‐ Five or More Parcels
Subdivision Final Map $4,140 plus any applicable
Other Application fees +
$4,368 plus any applicable Other
Application fees +
$4,663 plus any applicable Other
Application fees
$4,919 plus any applicable
Other Application fees
Tentative Map
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$8,622 initial deposit plus any
applicable Other Application
fees
$9,096 initial deposit plus any
applicable Other Application
fees
$8,622 initial deposit plus any
applicable Other Application fees
$9,096 initial deposit plus
any applicable Other
Application fees
Subdivision (Minor)
Parcel Map $2,527 plus any applicable
Other Application fees +
$2,666 plus any applicable Other
Application fees +
$3,899 plus any applicable Other
Application fees
$4,113 plus any applicable
Other Application fees
Preliminary Parcel Map, Minor
$3,738 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees +
$3,944 plus any applicable Other
Application fees and
Environmental Impact
Assessment fees +
$4,671 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
$4,928 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees
Subdivision (Minor) with Exceptions
Parcel Map, Minor with
Exception
$2,098 plus any applicable
Other Application fees +
$2,213 plus any applicable Other
Application fees +
$2,855 plus any applicable Other
Application fees
$3,012 plus any applicable
Other Application fees
Preliminary Parcel Map, Minor
with Exception
$6,464 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees +
$6,820 plus any applicable Other
Application fees and
Environmental Impact
Assessment fees +
$7,388 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
$7,794 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees
Subscriptions
Board or Commission Agendas $112 annually per board or
commission
$112 annually per board or
commission
$112 annually per board or
commission
$112 annually per board or
commission
Board or Commission Minutes $224 annually per board or
commission
$224 annually per board or
commission
$224 annually per board or
commission
$224 annually per board or
commission
Use Permit
Day Care Center
$186 plus any applicable
Other Application fees plus
Environmental Document fees
+
$186 plus any applicable Other
Application fees plus
Environmental Document fees
+
$186 plus any applicable Other
Application fees plus Environmental
Document fees +
$186 plus any applicable
Other Application fees plus
Environmental Document
fees +
Temporary Use Permit ‐ Minor
Note: Does not include hearing.
$674 plus any applicable
Other Application fees +
$711 plus any applicable Other
Application fees +
$1,143 plus any applicable Other
Application fees
$1,206 plus any applicable
Other Application fees
Conditional Use Permit ‐
Director level
$4,914 plus any applicable
Other Application fees +
$5,184 plus any applicable Other
Application fees +
$5,754 plus any applicable Other
Application fees
$6,070 plus any applicable
Other Application fees
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2018 *
Conditional Use Permit ‐
additional upon hearing request
Adopted for FY 2017* New January 2017 Rate*
$4,650 plus any applicable $4,906 plus any applicable
Other Application fees + Other Application fees +
$9,645 plus any applicable Other
Application fees
New FY 2018 Rate*
$10,175 plus any applicable
Other Application fees
Wireless ‐ Tier 1: Minor AR $2,672 plus any applicable
Other Application fees
$2,819 plus any applicable Other
Application fees
$2,672 plus any applicable Other
Application fees
$2,819 plus any applicable
Other Application fees
Wireless ‐ Tier 2: Conditional
Use Permit
$5,754 plus any applicable
Other Application fees
$6,070 plus any applicable Other
Application fees
$5,754 plus any applicable Other
Application fees
$6,070 plus any applicable
Other Application fees
Wireless ‐ Tier 3: Major ARB $6,109 plus any applicable
Other Application fees
$6,445 plus any applicable Other
Application fees
$6,109 plus any applicable Other
Application fees
$6,445 plus any applicable
Other Application fees
Variance
Variance ‐ Director's level $3,144 plus any applicable
Other Application fees +
$3,317 plus any applicable Other
Application fees +
$3,675 plus any applicable Other
Application fees
$3,877 plus any applicable
Other Application fees
Variance ‐ additional upon
hearing $4,823 +$5,088 +$9,645 $10,175
Zone Change
Planned Community Zone
Change
Note: 100 percent of processing and
legal costs will be recovered
$7,341 initial deposit $7,745 initial deposit $7,341 initial deposit $7,745 initial deposit
Planned Community Zone
Change ‐ Minor Change
Note: 100 percent of processing and
legal costs will be recovered
$1,500 initial deposit $1,583 initial deposit $1,500 initial deposit $1,583 initial deposit
Zone Change Regular
Note: 100 percent of processing and
legal costs will be recovered
$6,118 initial deposit $6,454 initial deposit $6,118 initial deposit $6,454 initial deposit
* Reflects total estimated cost of providing service unless noted with a +
Reflects total estimated cost of providing service unless noted with a +
Staff Rates Adopted for Fiscal Year 2017 New for January, 2017 New for Fiscal Year 2018
Administrative Assistant $130.87 $138.07 $138.07
Administrative Associate I $112.19 $118.36 $118.36
Administrative Associate II $123.62 $130.42 $130.42
Administrative Associate III $132.50 $139.79 $139.79
Assistant Director Planning &
Community Environment $292.56 $308.65 $308.65
Associate Engineer $177.57 $187.34 $187.34
Associate Planner $161.83 $170.73 $170.73
Building/Planning Technician $130.12 $137.28 $137.28
Business Analyst $188.78 $199.16 $199.16
Chief Planning Official $260.15 $274.46 $274.46
Chief Transportation Official $227.16 $239.65 $239.65
City Legal Counsel $273.64 $288.69 $288.69
Code Enforcement Officer $158.53 $167.25 $167.25
Code Enforcement Lead $175.56 $185.22 $185.22
Coordinator Transit
Management Systems $160.38 $169.20 $169.20
Director of Planning and
Community Environment $316.95 $334.38 $334.38
Management Analyst $168.48 $177.75 $177.75
Planning Manager $205.91 $217.24 $217.24
Planner $169.62 $178.95 $178.95
Project Engineer $208.21 $219.66 $219.66
Senior Management Analyst $195.46 $206.21 $206.21
Senior Planner $195.61 $206.37 $206.37
* Includes salary and benefits plus citywide and department overhead, as applicable.
Hourly cost recovery rates *
EXHIBIT B
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Architectural Review
Architectural Review ‐ Major
Project
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$10,264 initial deposit plus
legal review fees and
applicable Other Application
fees
$10,829 initial deposit plus legal
review fees and applicable Other
Application fees
$10,264 initial deposit plus legal
review fees and applicable Other
Application fees
$10,829 initial deposit plus
legal review fees and
applicable Other Application
fees
Architectural Review ‐ Minor
Project (ARB Review)
$4,982 plus applicable Other
Application fees +
$5,256 plus applicable Other
Application fees +
$6,860 plus applicable Other
Application fees
$7,343 plus applicable
Other Application fees
Architectural Review ‐ Minor
Project (Staff Review)
$2,112 plus applicable Other
Application fees +
$2,228 plus applicable Other
Application fees +
$2,672 plus applicable Other
Application fees
$2,819 plus applicable
Other Application fees
Design Enhancement Exception
$3,623 plus applicable
Other Application fees +
$3,822 plus applicable Other
Application fees +
$5,544 plus applicable Other
Application fees
$5,849 plus applicable
Other Application fees
Preliminary Review
$3,371 plus applicable
Other Application fees +
$3,556 plus applicable Other
Application fees +
$5,451 plus applicable Other
Application fees
$5,751 plus applicable
Other Application fees
Signs ‐ (ARB Review)
$2,261 plus applicable Other
Application fees +
$2,385 plus applicable Other
Application fees +
$3,491 plus applicable Other
Application fees
$3,683 plus applicable Other
Application fees
Signs ‐ (Exceptions)
$2,653 plus applicable Other
Application fees +
$2,799 plus applicable Other
Application fees +
$3,753 plus applicable Other
Application fees
$3,959 plus applicable Other
Application fees
Signs, Minor Facade Changes,
Landscaping, Accessory
Structures, or Similar Minor
Changes to a Building Exterior ‐
(Staff Review)/Master sign
program
$611 plus any applicable
Other Application fees +
$645 plus any applicable Other
Application fees +
$835 plus any applicable Other
Application fees
$881 plus any applicable
Other Application fees
Temporary Sign Permit
$110 per 15 days plus any
applicable Other Application
fees +
$116 per 15 days plus any
applicable Other Application
fees +
$154 per 15 days plus any applicable
Other Application fees
$162 per 15 days plus any
applicable Other Application
fees
Comprehensive Plan Change
Comprehensive Plan Change
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$6,118 initial deposit $6,454 initial deposit $6,118 initial deposit $6,454 initial deposit
Comprehensive Plan
Maintenance Fee
Note: Collected at Building Permit
issuance.
$0.55 per $1,000 of
construction valuation
$0.55 per $1,000 of construction
valuation
$0.55 per $1,000 of construction
valuation
$0.55 per $1,000 of
construction valuation
Development Agreement
Development Agreement
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$7,058 initial deposit plus
Legal Review fees and
applicable Other Application
fees
$7,446 initial deposit plus Legal
Review fees and applicable
Other Application fees
$7,058 initial deposit plus Legal
Review fees and applicable Other
Application fees
$7,446 initial deposit plus
Legal Review fees and
applicable Other Application
fees
Development Agreement ‐
Annual Review
Note: 100 percent of processing costs
will be recovered.
$2,471 initial deposit plus
Legal Review fees and
applicable Other Application
fees
$2,607 initial deposit plus Legal
Review fees and applicable
Other Application fees
$2,471 initial deposit plus Legal
Review fees and applicable Other
Application fees
$2,607 initial deposit plus
Legal Review fees and
applicable Other Application
fees
Planning and Community Environment
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Development Projects Preliminary Review
Development Projects ‐
Prescreening (PTC & CC Review)
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$3,671 initial deposit plus
Legal Review fees and
applicable Other Application
fees
$3,873 initial deposit plus Legal
Review fees and applicable
Other Application fees
$3,671 initial deposit plus Legal
Review fees and applicable Other
Application fees
$3,873 initial deposit plus
Legal Review fees and
applicable Other Application
fees
Director's Approval
Home Improvement Exception $2,070 +$2,184 +$3,109 $3,280
Director's hearing requested ‐
per hearing $280+$280+$280+$280+
Documents and Photocopies
Administrative Extensions and
Zoning Letters
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1
hr. mininum
Comprehensive Plan $90 plus $4 if mailed $95 plus $4 if mailed $90 plus $4 if mailed $95 plus $4 if mailed
Copy from Optical Disk $28 minimum plus $0.50 per
page
$28 minimum plus $0.50 per
page $28 minimum plus $0.50 per page $28 minimum plus $0.50 per
page
Tree Manual or Other Bounded
Documents $33 plus $4 if mailed $33 plus $4 if mailed $33 plus $4 if mailed $33 plus $4 if mailed
Zoning Map Booklet $98 plus $4 if mailed $98 plus $4 if mailed $98 plus $4 if mailed $98 plus $4 if mailed
Property Research requiring
more than 30 minutes
Applicable hourly rate/1 hr.
mininum
Applicable hourly rate/1 hr.
mininum Applicable hourly rate/1 hr. mininum Applicable hourly rate/1 hr.
mininum
Environmental Impact Assessment
CEQA Categorical Exemption $400 +$422 +$451 $476
Environmental Impact
Assessment ‐ Mitigated
Negative Declaration
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon application
plus 25% for contract administration
and applicable Legal Review and
Other Application fees
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Environmental Document
(Consultant Prepared)
Note: If estimated costs eceed
$100,000, alternative deposit and
payment schedule arrangements may
be made at the discretion of the
Director of Planning and Community
Environment. 100 percent of processing
costs will be recovered.
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Initial deposit of 100 percent of
estimated costs due upon application
plus 25% for contract administration
and applicable Legal Review and
Other Application fees
Initial deposit of 100 percent
of estimated costs due upon
application plus 25% for
contract administration and
applicable Legal Review and
Other Application fees
Environmental Document:
Note: 100 percent of processing costs
will be recovered plus any other
entitlements necessary to complete the
project, whether indicated as 100
percent cost recovery in this schedule or
not.
$5,000 initial deposit plus any
applicable Other Application
fees.
$5,275 initial deposit plus any
applicable Other Application
fees.
$5,000 initial deposit plus any
applicable Other Application fees.
$5,275 initial deposit plus
any applicable Other
Application fees.
Mitigation Monitoring ‐
Environmental Impact Report
Note: 100 percent of processing costs
will be recovered, including any charges
for specialized consultants.
$3,671 initial deposit plus
applicable Legal Review and
Other Application fees
$3,873 initial deposit plus
applicable Legal Review and
Other Application fees
$3,671 initial deposit plus applicable
Legal Review and Other Application
fees
$3,873 initial deposit plus
applicable Legal Review and
Other Application fees
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Mitigation Monitoring ‐
Mitigated Negative Declaration
Note: 100 percent of processing costs
will be recovered, including any charges
for specialized consultants.
$1,224 initial deposit plus
applicable Legal Review and
Other Application fees
$1,291 initial deposit plus
applicable Legal Review and
Other Application fees
$1,224 initial deposit plus applicable
Legal Review and Other Application
fees
$1,291 initial deposit plus
applicable Legal Review and
Other Application fees
Historic Resource
Demolition Application for
Historic Buildings $1,001 $1,056 $1,001 $1,056
Historic Resource Review ‐
Major Project
$1,502 plus any applicable
Other Application fees
$1,585 plus any applicable Other
Application fees
$1,502 plus any applicable Other
Application fees
$1,585 plus any applicable
Other Application fees
Historic Resource Review ‐
Minor Project (Staff Review)
$855 plus any applicable
Other Application fees +
$902 plus any applicable Other
Application fees +
$1,001 plus any applicable Other
Application fees
$1,056 plus any applicable
Other Application fees
Historic Resource Review of
Individual Review Application
$250 plus Individual Review
fees and applicable Other
Application fees
$264 plus Individual Review fees
and applicable Other Application
fees
$250 plus Individual Review fees and
applicable Other Application fees
$264 plus Individual Review
fees and applicable Other
Application fees
Mills Act Contract ‐ Establish or
Withdraw
Note: 100 percent of processing and
legal costs will be recovered.
$1,835 initial deposit plus any
applicable Other Application
fees
$1,936 initial deposit plus any
applicable Other Application
fees
$1,835 initial deposit plus any
applicable Other Application fees
$1,936 initial deposit plus
any applicable Other
Application fees
Transfer of Development Rights
Projects
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$611 initial deposit plus any
applicable Other Application
fees
$645 initial deposit plus any
applicable Other Application
fees
$611 initial deposit plus any
applicable Other Application fees
$645 initial deposit plus any
applicable Other Application
fees
Williamson Act Contract ‐
Establish or Withdraw
Note: 100 percent of processing and
legal costs will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$1,929 initial deposit plus any
applicable Other Application
fees
$2,035 initial deposit plus any
applicable Other Application
fees
$1,929 initial deposit plus any
applicable Other Application fees
$2,035 initial deposit plus
any applicable Other
Application fees
Individual Review
Expansion of Existing Two‐Story
greater than 150 sq. ft.
$4,310 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project,
including historic review +
$4,547 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project, including
historic review +
$5,641 plus applicable Other
Application fees and any other
entitlements necessary to complete
the project, including historic review
$5,951 plus applicable Other
Application fees and any
other entitlements
necessary to complete the
project, including historic
review
Individual Review ‐ Minor
Revisions to Approved Projects
$2,320 plus cost of notices +$2,448 plus cost of notices + $2,931 plust cost of notices $3,092 plust cost of notices
New Two‐Story Addition or New
Two‐Story Home
$5,679 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project,
including historic review +
$5,991 plus applicable Other
Application fees and any other
entitlements necessary to
complete the project, including
historic review +
$7,046 plus applicable Other
Application fees and any other
entitlements necessary to complete
the project, including historic review
$7,434 plus applicable Other
Application fees and any
other entitlements
necessary to complete the
project, including historic
review
Preliminary Individual Review
with Architect $245 +$258 +$375 $396
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Appeals and Legal Review Fees
Legal Review for Additional
hearings
Note: Legal review fees cover up to 3
public hearings. Additional hearings are
charged at 1/3 of the applicable fee.
Additional hearings are
charged at 1/3 of the
applicable fee.
Additional hearings are charged
at 1/3 of the applicable fee.
Additional hearings are charged at
1/3 of the applicable fee.
Additional hearings are
charged at 1/3 of the
applicable fee.
Request for Hearing by City
Council or Planning &
Transportation Commission
Note: This fee is refunded if the City
Council chooses not to hear an
appeal. Also, this fee shall not be
charged if a fee for Director's
hearing has been paid.
$280 +$280 +$280 +$280 +
Appeal costs exceeding appeals
filing fee
Note: All costs will be recovered from
applicant in the event that an appeal is
filed by a third party and the appeal is
upheld and in the event that the
applicant files an appeal that is denied.
$3,000 initial deposit plus any
applicable Other Application
fees.
$3,165 initial deposit plus any
applicable Other Application
fees.
$3,000 initial deposit plus any
applicable Other Application fees.
$3,165 initial deposit plus
any applicable Other
Application fees.
Legal Review ARB Major $2,749 +$2,606 +$5,211 $5,498
Legal Review (legislative review,
zone change, plan amendment,
etc.)
$5,278 +$5,003 +$10,006 $10,556
Legal Review Environmental $4,720 +$4,980 +$9,439 $9,958
Legal Review Mitigation
Monitoring Report $500 $528 $500 $528
Other Application Fees
Public Noticing ‐ 150 ft. Radius
Note: If noticing is required. Covers cost
of up to three rounds of noticing.
$484 +$511 +$529 $558
Public Noticing ‐ 600 ft. Radius
Note: If noticing is required. Covers cost
of up to three rounds of noticing.
$825 +$870 +$927 $977
Public Noticing beyond 600 ft.
Radius
Note: If noticing is required
$931 +$982 +$1,236 $1,304
Record Management Fee $26 per file $26 per file $26 per file $26 per file
Recording Fee with County County cost of recording, if
required
County cost of recording, if
required County cost of recording, if required County cost of recording, if
required
Records Retention $4.00 per plan sheet $4.00 per plan sheet $4.00 per plan sheet $4.00 per plan sheet
Pre‐screening fee
Note: All costs will be recovered for the
prescreening of applicants proposing
rezoning, zoning text amendments,
development agreements, Comp Plan
amendments, or specific plans.
$3,000 initial deposit plus any
applicable Legal Review and
Other Application fees
$3,165 initial deposit plus any
applicable Legal Review and
Other Application fees
$3,000 initial deposit plus any
applicable Legal Review and Other
Application fees
$3,165 initial deposit plus
any applicable Legal Review
and Other Application fees
Planning Compliance Fee
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
Initial deposit equal to 3 hrs of
applicable staff rate
Initial deposit equal to 3 hrs of
applicable staff rate
Initial deposit equal to 3 hrs of
applicable staff rate
Initial deposit equal to 3 hrs
of applicable staff rate
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2017* New January 2017 Rate*Adopted for FY 2018 * New FY 2018 Rate*
Contract Administration
Note: 25% Contract Administration and
project management costs are in
addition to direct cost of consultant
services and will be charged to deposit‐
based fees.
25% of direct cost 25% of direct cost 25% of direct cost 25% of direct cost
Site & Design
Site and Design Major
Note: 100 percent of processing and
legal costs will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$22,523 initial deposit plus
any Legal Review fees and
applicable Other Application
Fees
$23,762 initial deposit plus any
Legal Review fees and applicable
Other Application Fees
$22,523 initial deposit plus any Legal
Review fees and applicable Other
Application Fees
$23,762 initial deposit plus
any Legal Review fees and
applicable Other Application
Fees
Subdivision ‐ Five or More Parcels
Subdivision Final Map $4,140 plus any applicable
Other Application fees +
$4,368 plus any applicable Other
Application fees +
$4,663 plus any applicable Other
Application fees
$4,919 plus any applicable
Other Application fees
Tentative Map
Note: 100 percent of processing costs
will be recovered plus any
Environmental Impact Assessment and
any other entitlements necessary to
complete the project, whether indicated
as 100 percent cost recovery in this
schedule or not.
$8,622 initial deposit plus any
applicable Other Application
fees
$9,096 initial deposit plus any
applicable Other Application
fees
$8,622 initial deposit plus any
applicable Other Application fees
$9,096 initial deposit plus
any applicable Other
Application fees
Subdivision (Minor)
Parcel Map $2,527 plus any applicable
Other Application fees +
$2,666 plus any applicable Other
Application fees +
$3,899 plus any applicable Other
Application fees
$4,113 plus any applicable
Other Application fees
Preliminary Parcel Map, Minor
$3,738 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees +
$3,944 plus any applicable Other
Application fees and
Environmental Impact
Assessment fees +
$4,671 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
$4,928 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees
Subdivision (Minor) with Exceptions
Parcel Map, Minor with
Exception
$2,098 plus any applicable
Other Application fees +
$2,213 plus any applicable Other
Application fees +
$2,855 plus any applicable Other
Application fees
$3,012 plus any applicable
Other Application fees
Preliminary Parcel Map, Minor
with Exception
$6,464 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees +
$6,820 plus any applicable Other
Application fees and
Environmental Impact
Assessment fees +
$7,388 plus any applicable Other
Application fees and Environmental
Impact Assessment fees
$7,794 plus any applicable
Other Application fees and
Environmental Impact
Assessment fees
Subscriptions
Board or Commission Agendas $112 annually per board or
commission
$112 annually per board or
commission
$112 annually per board or
commission
$112 annually per board or
commission
Board or Commission Minutes $224 annually per board or
commission
$224 annually per board or
commission
$224 annually per board or
commission
$224 annually per board or
commission
Use Permit
Day Care Center
$186 plus any applicable
Other Application fees plus
Environmental Document fees
+
$186 plus any applicable Other
Application fees plus
Environmental Document fees
+
$186 plus any applicable Other
Application fees plus Environmental
Document fees +
$186 plus any applicable
Other Application fees plus
Environmental Document
fees +
Temporary Use Permit ‐ Minor
Note: Does not include hearing.
$674 plus any applicable
Other Application fees +
$711 plus any applicable Other
Application fees +
$1,143 plus any applicable Other
Application fees
$1,206 plus any applicable
Other Application fees
Conditional Use Permit ‐
Director level
$4,914 plus any applicable
Other Application fees +
$5,184 plus any applicable Other
Application fees +
$5,754 plus any applicable Other
Application fees
$6,070 plus any applicable
Other Application fees
Reflects total estimated cost of providing service unless noted with a +
Fee Title Adopted for FY 2018 *
Conditional Use Permit ‐
additional upon hearing request
Adopted for FY 2017* New January 2017 Rate*
$4,650 plus any applicable $4,906 plus any applicable
Other Application fees + Other Application fees +
$9,645 plus any applicable Other
Application fees
New FY 2018 Rate*
$10,175 plus any applicable
Other Application fees
Wireless ‐ Tier 1: Minor AR $2,672 plus any applicable
Other Application fees
$2,819 plus any applicable Other
Application fees
$2,672 plus any applicable Other
Application fees
$2,819 plus any applicable
Other Application fees
Wireless ‐ Tier 2: Conditional
Use Permit
$5,754 plus any applicable
Other Application fees
$6,070 plus any applicable Other
Application fees
$5,754 plus any applicable Other
Application fees
$6,070 plus any applicable
Other Application fees
Wireless ‐ Tier 3: Major ARB $6,109 plus any applicable
Other Application fees
$6,445 plus any applicable Other
Application fees
$6,109 plus any applicable Other
Application fees
$6,445 plus any applicable
Other Application fees
Variance
Variance ‐ Director's level $3,144 plus any applicable
Other Application fees +
$3,317 plus any applicable Other
Application fees +
$3,675 plus any applicable Other
Application fees
$3,877 plus any applicable
Other Application fees
Variance ‐ additional upon
hearing $4,823 +$5,088 +$9,645 $10,175
Zone Change
Planned Community Zone
Change
Note: 100 percent of processing and
legal costs will be recovered
$7,341 initial deposit $7,745 initial deposit $7,341 initial deposit $7,745 initial deposit
Planned Community Zone
Change ‐ Minor Change
Note: 100 percent of processing and
legal costs will be recovered
$1,500 initial deposit $1,583 initial deposit $1,500 initial deposit $1,583 initial deposit
Zone Change Regular
Note: 100 percent of processing and
legal costs will be recovered
$6,118 initial deposit $6,454 initial deposit $6,118 initial deposit $6,454 initial deposit
* Reflects total estimated cost of providing service unless noted with a +
Reflects total estimated cost of providing service unless noted with a +
Staff Rates Adopted for Fiscal Year 2017 New for January, 2017 New for Fiscal Year 2018
Administrative Assistant $130.87 $138.07 $138.07
Administrative Associate I $112.19 $118.36 $118.36
Administrative Associate II $123.62 $130.42 $130.42
Administrative Associate III $132.50 $139.79 $139.79
Assistant Director Planning &
Community Environment $292.56 $308.65 $308.65
Associate Engineer $177.57 $187.34 $187.34
Associate Planner $161.83 $170.73 $170.73
Building/Planning Technician $130.12 $137.28 $137.28
Business Analyst $188.78 $199.16 $199.16
Chief Planning Official $260.15 $274.46 $274.46
Chief Transportation Official $227.16 $239.65 $239.65
City Legal Counsel $273.64 $288.69 $288.69
Code Enforcement Officer $158.53 $167.25 $167.25
Code Enforcement Lead $175.56 $185.22 $185.22
Coordinator Transit
Management Systems $160.38 $169.20 $169.20
Director of Planning and
Community Environment $316.95 $334.38 $334.38
Management Analyst $168.48 $177.75 $177.75
Planning Manager $205.91 $217.24 $217.24
Planner $169.62 $178.95 $178.95
Project Engineer $208.21 $219.66 $219.66
Senior Management Analyst $195.46 $206.21 $206.21
Senior Planner $195.61 $206.37 $206.37
* Includes salary and benefits plus citywide and department overhead, as applicable.
Hourly cost recovery rates *
City of Palo Alto (ID # 7441)
City Council Staff Report
Report Type: Action Items Meeting Date: 11/14/2016
City of Palo Alto Page 1
Summary Title: Carbon Neutral Gas Portfolio
Title: Finance Committee Recommendation That Council: (1) Adopt a
Resolution Approving a Carbon Neutral Natural Gas Plan to Achieve a Carbon
Neutral Gas Portfolio by Fiscal Year 2018 With no Greater Than 10¢/Therm
Rate Impact; and Terminating the Palo Alto Green Gas Program; and (2)
Provide Direction to Staff Concerning Aspects of Plan Implementation
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Finance Committee recommend that Council:
1. Adopt a Resolution that:
a. Approves the Carbon Neutral Gas Plan, enabling the City to achieve a carbon-
neutral gas supply portfolio starting in Fiscal Year (FY) 2018 with a rate impact
not to exceed ten cents per therm (10 ¢/therm); and
b. Terminates the PaloAltoGreen Gas program established by Resolution 9405; and
2. Direct Staff to:
a. Develop an implementation plan for the Carbon Neutral Gas Plan;
b. Provide an option for Council to consider prioritizing local offsets; and
c. Prioritize maximizing carbon reduction within the 10 ¢/therm rate impact cap.
Executive Summary
The proposed Carbon Neutral Natural Gas Plan is designed to achieve carbon neutrality for the
gas supply portfolio by FY 2018 using high-quality environmental offsets at a cost not to exceed
a maximum rate impact of 10 ₵/therm. At current rates, this equates to about a 10% gas rate
increase. The additional cost of a 10 ₵/therm gas rate increase will cost about $43 per year for
the median residential customer usage.
At current costs for environmental offsets and biogas, staff estimates that a 100% carbon
neutral gas portfolio can be achieved for 4 ₵/therm if offsets are used to cover 100% of the gas
use of Palo Alto customers. Alternately, a 100% carbon neutral gas portfolio can be achieved for
10 ₵/therm if offsets are used for 95% of the gas needs and biogas is purchased for 5% of the
gas needs.
City of Palo Alto Page 2
In August 2016, the Utilities Advisory Commission (UAC) recommended that Council approve a
plan to maximize the use of biogas while still achieving 100% carbon neutrality. In October, the
Finance Committee recommended that Council maximize carbon reduction within the 10
¢/therm rate impact cap, which argues for purchasing only environmental offsets, and no
biogas, to achieve the maximum carbon reductions per dollar spent.
Background
The PaloAltoGreen Gas (PAG Gas) program was launched in December 2014. PAG Gas is a
voluntary program providing customers with the option to negate the impact of greenhouse
gas (GHG) emissions associated with their natural gas usage by purchasing environmental
offsets. Engagement by some community members interested in accelerating the reduction of
the City’s natural gas carbon footprint led to a proposal to make the gas portfolio carbon
neutral.
The plan presented to and recommended by the UAC included a portfolio of both physical
biogas and environmental offsets. However, the Finance Committee preferred maximizing the
carbon reduction for the money spent, or using only the less expensive offsets and no biogas as
a mechanism for achieving carbon neutrality in the natural gas portfolio.
Discussion
Staff Report 7284 for the October 18 Finance Committee meeting provides detail on the
proposed Carbon Neutral Gas Plan (Attachment B).
To design and implement a carbon-neutral gas portfolio plan, several inter-related variables
must be considered, including:
1. Rate impact.
2. Supply source (environmental offsets or biogas).
3. Timeframe over which carbon neutrality is achieved
4. Percentage of the portfolio to be made carbon-neutral.
With respect to each of the variables above, the Finance Committee recommends:
1. Rate impact: No greater than 10¢/therm annually
2. Supply source: Environmental offsets.
3. Timeframe over which carbon neutrality is achieved: By FY 2018
4. Percentage of portfolio made carbon neutral: 100% or greater
Rate Impact
Staff recommends that Council make a clear determination of maximum acceptable rate impact
for a carbon-neutral gas portfolio. A rate impact of 10 ₵/therm is equal to approximately a 10%
rate increase based on current gas rates and assuming a commodity rate, which fluctuates
monthly with market prices, of 30 ₵/therm.
City of Palo Alto Page 3
Supply Source
An environmental offset is a reduction in emissions of greenhouse gases (GHGs) made in order
to compensate for or to offset an emission made elsewhere. For example, installation of
manure management systems on dairy farms reduces methane emissions thus generating
offsets. The California Air Resources Board protocols provide robust methods to quantify and
report the GHG reductions.
Biogas, on the other hand, is methane produced from the decay of organic matter. A dairy farm
that generates offsets by preventing methane from entering the atmosphere can also sell the
biogas as a renewable fuel. The price of biogas is currently driven by the federal renewable
transportation fuel program and is at least 28 times more costly than offsets on a dollar per
carbon dioxide equivalent ($/CO2e) basis.
The current cost of offsets is about $8/ton of CO2e, which is equivalent to 4 ₵/therm. If
environmental offsets were purchased today for 100% of the City’s gas usage, all customers
would experience a rate increase of approximately 4%. A median residential customer’s winter
bill would increase by about $2 per month (about $0.75 in the summer).
Summary of Proposal
The Finance Committee recommended a plan using high-quality environmental offsets to
achieve a carbon-neutral gas portfolio by FY 2018. Rates are anticipated to increase by 4
₵/therm and will increase by no more than 10 ₵/therm.
Cost-effectiveness of a Carbon-neutral Gas Portfolio Compared to Electrification
Staff completed a cost effectiveness study for abating GHG emissions by electrifying building
appliances and passenger vehicles. The report was provided to Council in August 2015 (Staff
Report 5971). Figure 1 shows the societal costs of carbon from that study compared to the
carbon cost of environmental offsets and biogas. Environmental offsets currently cost $8/ton of
CO2e compared to the cost of carbon of $226/ton of CO2e for biogas1.
1 Biogas is estimated to cost $1.50/therm, or $1.20/therm more than fossil fuel-based natural gas, resulting in an
incremental cost of carbon of $226/ton of CO2e.
City of Palo Alto Page 4
Figure 1: Incremental Societal Abatement Cost
As shown in Figure 1, environmental offsets are a much less expensive way to achieve carbon
reductions compared to most electrification options2. When the Finance Committee reviewed
these data, its members questioned the use of biogas since it is so much more costly per ton of
CO2e reduced.
Proposed Offset Criteria for Carbon-neutral Gas Supply
For the PAG Gas program, Council approved the use of high-quality environmental offsets from
protocols approved by the California Air Resources Board (Staff Report 4596, Resolution 9405).
The approved protocols currently include forestry, livestock, landfill, coal mine methane, urban
forestry, ozone depleting substance and rice cultivation projects. Offsets used for PAG Gas do
not need to be certified by CARB as it is an extra expense and only necessary if offsets are to be
used for a regulatory compliance obligation. Staff proposes to apply the same standards to
offsets used for the Carbon Neutral Gas Plan including a preference for California and local
projects. One possible local offsets source may be an urban forestry project in Palo Alto.
In addition to researching the use of local offsets, staff will also continue to review the extent to
which fugitive methane emissions from natural gas production, transportation, and distribution
can be attributable to provision of service to Palo Alto customers. There is currently no
definitive answer on this point, but should the amounts attributable to individual customers
become more concrete and clearly associated with the cost of providing service to Palo Alto
customers, staff will consider whether such fugitive emissions would also fall under the
auspices of the plan.
2 The study concluded that (after federal and state incentives) it is cheaper to own and operate a compact electric
car (Nissan Leaf) than a similarly sized gasoline vehicle (Honda Civic) resulting in a negative incremental abatement
cost.
City of Palo Alto Page 5
Committee Review and Recommendation
At its October 18, 2016 meeting, the Finance Committee reviewed the recommendation from
staff and the UAC that Council approve a Carbon Neutral Gas Plan that would use a
combination of physical biogas and high-quality environmental offsets to achieve a carbon-
neutral gas supply portfolio starting in FY 2018 such that the amount of biogas included in the
portfolio would be maximized with a rate impact not to exceed 10 ¢/therm.
The Finance Committee, however, voted to maximize carbon reduction within the 10 ₵/therm
rate impact cap, rather than include the more expensive biogas as part of the portfolio.
Purchasing enough offsets to cover the volume of natural gas burned in the City (30 million
therm or 159,000 tons CO2e per year) results in a rate increase of about 4 ₵/therm.
The Finance Committee also discussed the proper venue for the discussion of the policy
elements of the plan versus the financial impacts of the plan with the Chair of the Finance
Committee opining that the Finance Committee’s charge is limited to review of the financial
impacts. One Finance Committee member advocated for using local projects such as
gasification projects that could convert local waste to biogas.
After discussion of the differences between—and relative values of—biogas and offsets, the
Finance Committee voted to support the staff recommendation, but to maximize the carbon
reduction with the money spent. Staff interprets this, under current economics and until other
options are available, as a preference for offsets over biogas. As the market changes, the plan
provides flexibility for staff to change that prioritization as well, provided staff adheres to the
goal of maximizing carbon reduction. In addition, the Finance Committee recommended that
Council direct staff to provide Council with an option to “prioritize” local offsets. Staff noted
that local offsets would need to go through the proper certification protocols so that the
carbon neutral claims for the gas portfolio could be verified by an independent party. The
Finance Committee’s vote was 2-1 with Chair Filseth and Wolbach voting yes, Vice Mayor
Schmid voting no and Holman absent. The minutes for the October 18, 2016 Finance
Committee meeting are provided as Attachment C.
Resource Impact
If only offsets are purchased to cover gas burned in the City, rates are expected to increase by
about 4 ₵/therm or approximately 4%. With an additional cost of 4 ₵/therm, the median
residential customer’s bill will increase about $17/year.
At the maximum amount under the rate cap of 10₵/therm, implementation of a carbon-neutral
gas portfolio will increase retail rates (and revenues) and the gas commodity budget. At the
rate impact limit of 10 ₵/therm, commodity costs will increase by about $3 million, from $9
million to $12 million, per year. The retail rate revenue will likewise increase by about $3
City of Palo Alto Page 6
million. If the program is approved, the increased cost and revenues will be reflected in the FY
2018 budget request.
For the median residential customer using 18 therms per month in the summer and 54 therms
per month in the winter, the bill impact will be $1.80/month in the summer and $5.40/month
in the winter, or about $43 per year with the additional 10 ₵/therm rate impact
Policy Implications
The Council-approved Utilities Strategic Plan includes an objective to offer programs to meet
the needs of customers and the community.
Strategy 4 in the Council-approved Gas Utility Long-term Plan (GULP) states:
Reduce the carbon intensity of the gas portfolio in accordance with the Climate
Protection Plan by:
a. Designing and implementing a voluntary retail program using reasonably
priced non‐fossil fuel gas resources; and
b. Purchasing non‐fossil fuel gas for the portfolio as long as it can be done with
no rate impact.
Implementation of a carbon-neutral gas portfolio represents a departure from GULP Strategy 4
because the voluntary program will be eliminated and there will be a rate impact resulting from
non-fossil fuel gas resources being purchased for the portfolio. GULP will need to be revised
accordingly should Council approve a carbon-neutral gas portfolio.
A carbon-neutral gas portfolio would, however, be an important part of meeting Council’s
aggressive sustainability goal to reduce the City’s GHG emissions by 80% by 2030.
Next Steps
If Council approves the Carbon Neutral Gas Plan, staff will execute enabling agreements with
qualified counterparties for purchasing environmental offsets. In addition, new rate schedules
will be developed and brought to the UAC and Finance Committee for recommendations and to
the Council for approval. Staff anticipates that this can be achieved such that the gas portfolio
can be implemented in FY 2018.
Because implementation of a carbon-neutral gas portfolio represents a departure from the
Council-approved GULP strategies, GULP will need to be revised before the program is put into
place.
Cancelling PAG Gas will require communication with the customers, repeal of the rate schedule
via resolution, and removal of the charge on participating customers’ bills by the carbon-neutral
implementation date.
City of Palo Alto Page 7
Environmental Review
The Council’s adoption of this Resolution, which approves a Carbon Neutral Natural Gas Plan
and terminates the PAG Gas program does not meet the definition of a project, pursuant to
section 21065 of the California Environmental Quality Act (CEQA). Offset, biogas and other
potential project developers will be responsible for acquiring necessary environmental reviews
and permits as those projects are developed.
Attachments:
Attachemnt A: Resolution Carbon Neutral Gas Portfolio (PDF)
Attachment B: Finance Committee Staff Report Regarding the Carbon Neutral Natural
Gas Portfolio Plan (PDF)
Attachment C: Excerpted Draft Minutes of October 18, 2016 Finance Committee
Meeting (PDF)
161102 jb JM/Staff Reports
Attachment A
NOT YET APPROVED
Resolution No. _____
Resolution of the Council of the City of Palo Alto Approving a
Carbon Neutral Natural Gas Plan to Achieve a Carbon Neutral
Gas Supply Portfolio by Fiscal Year 2018 with No Greater than
10¢/Therm Rate Impact; and Related Termination of the Palo
Alto Green Gas Program
R E C I T A L S
A. In December 2007, Council adopted the City’s Climate Protection Plan which set
aggressive greenhouse gas (GHG) emission reduction goals to be achieved by the year 2020.
B. In March 2013, this Council approved Resolution 9322 directing staff to achieve
carbon neutrality for the electric supply portfolio by 2013 through the use of a combination of
hydroelectric resources, long-term renewable resources and short-term renewable energy
resources and/or renewable energy certificates (“RECs”).
C. On September 9, 2013, this Council approved Resolution 9372 modifying and
suspending portions of the PaloAltoGreen Program, and directing staff to develop a
PaloAltoGreen Gas (PAG Gas Program) Program.
D. On April 21, 2014, this Council approved Resolution 9405 establishing the voluntary
PAG Gas Program to provide the opportunity for residential and commercial customers to
economically reduce or eliminate the impact of GHG emissions associated with their gas usage
through the purchase of certified environmental offsets.
E. In April 2016, this Council adopted a GHG reduction goal of 80% by the year 2030.
GHG emissions associated with natural gas use were 135,000 metric tons of carbon dioxide
equivalent, or 27% of the City’s GHG emissions, in 2015.
F. Staff initially proposed a Carbon Neutral Natural Gas Plan that would use a
combination of physical biogas and high-quality environmental offsets to achieve a carbon-
neutral gas portfolio by fiscal year 2018 by maximizing the amount of biogas in the portfolio
while holding the rate impact at a maximum limit of ten cents per therm (10 ₵/therm).
G. On August 31, 2016, the Utilities Advisory Commission voted 6-1 to recommend
Council approve a Carbon Neutral Gas Plan using a combination of physical biogas and high-
quality environmental offsets to achieve a carbon-neutral gas portfolio and terminate the PAG
Gas Program.
H. On October 18, 2016, the Finance Committee voted 2-1 to instead recommend that
Council:
(i) Adopt a resolution that (a) approves a Carbon Neutral Natural Gas Plan that would
enable the City to achieve a carbon-neutral gas supply portfolio starting in Fiscal Year (FY) 2018
with a rate impact not to exceed ten cents per therm (10 ¢/therm); and (b) terminate the PAG
Gas Program established by Resolution 9405; and
161102 jb JM/Staff Reports
Attachment A
NOT YET APPROVED
(ii) Direct staff to: (a) develop an implementation plan for the Carbon Neutral Natural
Gas Plan; (b) provide an option for Council to consider prioritizing local offsets; and (c) prioritize
maximizing carbon reduction within the 10 ₵/therm rate impact cap.
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council hereby adopts a resolution:
1. Approving a Carbon Neutral Natural Gas Plan, enabling the City to achieve a
carbon-neutral gas supply portfolio starting in fiscal year 2018 with a rate impact not to
exceed ten cents per therm (10 ₵/therm); and
2. Terminating the PAG Gas program established by Resolution 9405.
SECTION 2. The Council’s adoption of this Resolution, which approves a Carbon
Neutral Natural Gas Plan and terminates the PAG Gas program does not meet the definition of a
project, pursuant to section 21065 of the California Environmental Quality Act (CEQA). Offset,
biogas and other potential project developers will be responsible for acquiring necessary
environmental reviews and permits as those projects are developed.
INTRODUCED AND PASSED:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Deputy City Attorney City Manager
Director of Utilities
Director of Administrative Services
City of Palo Alto (ID # 7284)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 10/18/2016
City of Palo Alto Page 1
Summary Title: Carbon Neutral Natural Gas Portfolio Plan
Title: Utilities Advisory Commission Recommendation that Council Adopt a
Resolution Approving a Carbon Neutral Natural Gas Portfolio Plan to Achieve
Maximum Carbon Neutrality Using a Combination of Offsets and Biogas in
the Gas Supply Portfolio by Fiscal Year 2018 with No Greater than 10¢/Therm
Rate Impact; and Related Termination of the Palo Alto Green Gas Program
From: City Manager
Lead Department: Utilities
Recommendation
Staff and the Utilities Advisory Commission (UAC) recommend that the Finance Committee
recommend Council:
1. Adopt a resolution (Attachment A) that:
a. Approves the Carbon Neutral Gas Plan, enabling the City to achieve a carbon-neutral
gas supply portfolio starting in fiscal year (FY) 2018 with a rate impact not to exceed
ten cents per therm (10 ₵/therm); and
b. Terminates the PaloAltoGreen Gas program established by Resolution 9405; and
2. Direct staff to develop an implementation plan for the Carbon Neutral Gas Plan.
Executive Summary
The proposed Carbon Neutral Gas Plan will achieve carbon neutrality for the gas supply
portfolio by FY 2018 with a combination of high-quality environmental offsets and physical
“biogas” or “biomethane”. The proposed cost cap to implement the plan is 10 ₵/therm. Based
on current rates, this equates to about a 10% gas rate increase. For the median residential
customer usage, the additional cost of a 10 ₵/therm gas rate increase is about $43 per year.
The PaloAltoGreen Gas (PAG Gas) program was launched in December 2014. PAG Gas is a
voluntary program providing customers with the option to negate the impact of greenhouse
gas (GHG) emissions associated with their natural gas usage by purchasing environmental
offsets. Implementation of a carbon-neutral gas portfolio renders the voluntary program
redundant, therefore, termination of PAG Gas is recommended when implementing the Carbon
Neutral Gas Plan.
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The UAC reviewed the proposed Carbon Neutral Gas Plan on August 31, 2016 and voted to
recommend that Council approve the proposed plan.
Background
City’s GHG Emissions from Natural Gas
Table 1 below, based on data from the 2016 Earth Day report (Staff Report 6754), shows the
estimate for City and community GHG emissions for 1990, 2005, 2012, and 2015.
Table 1
Palo Alto Community and City Greenhouse Gas Emissions (in 000’s of Metric Tons of CO2e)
Emissions Category 1990 2005 2012 2015
Natural Gas Use 194 166 160 135
Electricity Use 186 160 75 0
Mobile Combustion * 332 372 320 330
Other ** 68 54 36 36
Total 780 752 591 501
* Consultant estimate based on population, employment, vehicle miles travelled and
vehicular emission profiles
** Includes landfill, refuse and Regional Water Quality Control Plant emissions
As shown in Table 1, GHG emissions from natural gas use in 2015 were reduced by 4,406 tons
due to the PAG Gas program. The bulk of the reduction in emissions associated with natural gas
use is associated with reduced natural gas use (from 37.2 million therms in 1990 to 30.1 million
therms in 2012 to 25.5 million therms in 2015).
Gas Utility Long-term Plan (GULP) and Early Evaluations of Alternative Gas Supplies
In November 2009, the UAC reviewed an analysis of physical biogas as a resource for the gas
supply portfolio.1 At that time, staff determined that physical biogas cost about 50 ₵/therm
more than natural gas, or about $100 per ton of carbon dioxide equivalent (CO2e)2 and would
increase a residential customer’s gas bill by 35%.
GULP includes a strategy to evaluate a voluntary green gas program and evaluate purchasing
non-fossil fuel gas for the gas portfolio. The City Council last approved updates to GULP in April
2012 (Staff Report 2522, Resolution 9244), including GULP Strategy 4:
Reduce the carbon intensity of the gas portfolio in accordance with the Climate
Protection Plan by:
a. Designing and implementing a voluntary retail program using reasonably
priced non‐fossil fuel gas resources; and
b. Purchasing non‐fossil fuel gas for the portfolio as long as it can be done with
no rate impact.
1 http://www.cityofpaloalto.org/civicax/filebank/documents/17514
2 1 ton/2204.16 lbs * 116 lbs CO2e/1 MMBtu CH4 *1 MMBtu/10 therms = .0053 tons/therm
City of Palo Alto Page 3
In response to the GULP strategies, in April 2013, staff presented alternatives for a PAG Gas
program to the UAC3 including the use of physical biogas for the program, but found that it
would cost about $1 per therm more than natural gas based on responses to a request for
proposal issued by the Northern California Power Agency. In addition, the long-term contracts
required for biogas project developers to secure financing were, and are still, not conducive to
the potentially volatile demand associated with a voluntary green gas program.
PAG Gas
The PAG Gas program was modeled after the highly successful, voluntary PaloAltoGreen (PAG)
program, which allowed participants to receive 100% renewable energy and eliminate the GHG
emissions associated with their electricity use. Participation rates in PAG were the highest
among similar programs throughout the nation earning recognition for the City and creating a
sense of community pride around sustainability efforts. In 2012, approximately 20% of CPAU’s
customers participated in PAG, representing 8% of the City’s total electric usage.
By 2013, the City’s aggressive Renewable Portfolio Standard (RPS) goal combined with its
carbon-free hydroelectric resources rendered the electric supply portfolio largely carbon
neutral. In March 2013, City Council approved the Carbon Neutral Plan committing CPAU to
pursue only carbon neutral electric resources beginning in calendar year 2013 (Staff Report
3550, Resolution 9322). In September 2013, City Council suspended PAG and directed staff to
develop a new voluntary PAG Gas program to afford participants the opportunity to eliminate
the GHG emissions associated with their natural gas use (Staff Report 4041, Resolution 9372).4
In April 2014, City Council approved the establishment of a voluntary PAG Gas program (Staff
Report 4596, Resolution 9405) using high quality offsets to back the program. All offsets
purchased to date have been from a livestock methane capture project. The PAG Gas rate is
12₵/therm, which equates to an avoided GHG emissions cost of approximately $22 per ton of
CO2e.
The PAG Gas program goal is a 20% participation rate by 2020 with a corresponding GHG
reduction of 16,000 tons of CO2e per year. The 2020 goal represents a 10% reduction in the
City’s total GHG emissions associated with natural gas consumption. The reductions are
achieved by purchasing high quality environmental offsets, with a preference for California
projects, on behalf of participants in order to reduce or eliminate the impact of GHG emissions
associated with each participating customer’s gas usage. All customers can sign up for PAG Gas
3 https://www.cityofpaloalto.org/civicax/filebank/documents/33744
4 In June 2014, since the PAG (electric) program is redundant with the Carbon Neutral Plan, Council eliminated the
PAG program for residential customers (Staff Report 4718, Resolution 9422). At the same time, Council also
reactivated the program for commercial customers since some customers (including City facilities) desire to
participate in a voluntary green electric program to achieve environmental recognition and certifications in line
with their own corporate sustainability goals including participation in the U.S. Green Building Council Leadership
in Energy and Environmental Design (USGBC LEED) Program and the U.S. EPA Green Power Partnership Program.
City of Palo Alto Page 4
for their entire gas usage; commercial customers also have the option of participating in the
program for part of their natural gas usage.
Since the program launch in December 2014, roughly 4% of the City’s residential natural gas
customers have participated in PAG Gas accounting for approximately 3,200 tons of GHG
emissions per year. City facilities began participating in PAG Gas in July 2015 and account for
GHG emissions reductions of approximately 6,000 tons per year. For a typical residential
customer participating in PAG Gas, the cost is approximately $5 per month for an average use
of 42 therms per month. After the June 1, 2016 UAC meeting, staff began to evaluate carbon
neutral gas supply options and suspended active marketing of the program, resulting in
decreased participation in the program.
Figure 1 below shows the trajectory of PAG Gas participation for January 2015 through July
2016.
Figure 1: PAG Gas Program Participation
Figure 2 below shows the number of PAG Gas participants by customer type. Figure 3 shows the
percentage of total gas usage by customer type. As shown, the vast majority of participants are
residential customers—as was the case with the PAG (electric) program. The bulk of the
City of Palo Alto Page 5
participation in terms of gas usage is for City facilities. Very few commercial customers have
participated in the program to date.
Approximately 4.1% of the City’s residential natural gas customers have signed up for PAG Gas
as of the end of June 2016. In July 2015 all City facilities began participating in the program for
100% of their gas usage.
Figure 2: Number of Customers Participating in PAG Gas
City of Palo Alto Page 6
Figure 3: Percentage of the City’s Total Gas Load Participating in PAG Gas
Utilities Advisory Commission Discussions
At its October 7, 2015 meeting the UAC heard public comment on, and discussed the merits
and drawbacks of, an opt-in versus an opt-out structure for the voluntary PAG Gas program.
The minutes from that meeting are provided as Attachment B. At its June 1, 2016, meeting the
UAC was presented with an overview and high-level analysis of several options for reducing the
carbon impact of natural gas use in the City including converting the voluntary program to an
opt-out model (meaning all customers would be automatically enrolled in the program, but
could voluntarily leave the program at any time) and adopting a carbon neutral portfolio for all
customers using either environmental offsets or physical biogas. The four main options
discussed by the UAC at its June 1, 2016 meeting are summarized in Table 2 below.
Table 2: Alternatives for Gas Portfolio GHG Reduction
Pros Cons
Opt-in
Program
Consistent with CPAU’s past practices
of providing program and service
options for those who want them.
Allows participants to feel proud that
they are doing more to help the
environment
Requires significant and continuing
outreach effort to maximize
participation—and minimize
administrative costs—by capturing all
customers who would participate in the
program if they knew about and
understood it
City of Palo Alto Page 7
Pros Cons
Opt-out
Program
Much greater reductions in GHG
emissions associated with natural gas
usage could be achieved sooner and
at a lower cost
After start up, easy and low cost to
administer
Risk of harming CPAU’s reputation as the
program can be viewed by customers as
“slamming” or even taking advantage of
customers who are not paying attention
even after being notified of right to opt-
out
Requires ongoing outreach to notify
customers of their ability to opt-out at any
time
Requires development of detailed
program rules and processes to allow for
opting out/in, securing refunds and
identifying potential sources of funds for
such refunds.
Gas
Portfolio
Backed by
Offsets
Maximum reductions in GHG
emissions associated with natural gas
usage
Minimal administrative costs
No need for complicated program
terms and conditions
Could be perceived as an overreaching
mandate
Small rate increase for all customers
Cost varies with the cost of environmental
offsets
Gas
Portfolio
Backed by
Green
Gas
Maximum reductions in GHG
emissions associated with natural gas
usage if for 100% of the gas portfolio
Minimal administrative costs
No need for complicated program
terms and conditions
Could be perceived as overreaching
Large rate increase for all customers,
especially if for 100% of the gas portfolio
Cost varies with the cost of green gas
Opt-In versus Opt-Out Alternative
Staff provided further analysis for the June 1, 2016 UAC discussion comparing opt-in and opt-
out designs including the cost comparison between the two approaches as shown in Table 3.
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Table 3: Opt-in versus Opt-out Program Cost Estimates
Opt-in Program Opt-out Program
Units Current Post-
2020
First Year Subsequent
Years
Participation % of gas
usage
6% 10% 90% 80%
GHG emissions reduced tons1 9,000 15,000 135,000 120,000
Offset Cost $/ton2 9.25 9.25 9.25 9.25
₵/therm 4.4 4.4 4.4 4.4
Administrative cost $/year
$/ton
$120,000
13.16
$85,000
5.66
$400,0003
2.96
$40,000
0.33
₵/therm 7.0 3.0 1.6 0.5
Total Cost
Retail Rate
$/ton 22.46 14.91 12.21 9.58
₵/therm 12 8 6 5
Residential Bill Impact4 $/month 4.32 2.88 2.16 1.80
Notes:
1. GHG emissions based on projected gas usage of 28.5 million therms per year (150K tons CO2e)
2. Offset costs will adjust with market conditions
3. Communication activities and billing system changes
4. Median residential customer gas use: 54 therms in winter month and 18 therms in summer
A comparison of anticipated customer reactions to the two approaches was also presented and
is shown in Table 4.
Table 4: Anticipated Customer Reactions to Opt-in and Opt-out Programs
Customer Opt-In Program Opt-Out Program
Active
Supporter
Participates in PAG Gas Supports, would not opt out
Passive
Supporter
Intend to opt in, but have
not prioritized signing up
Supports, would not opt out
Unaware
Supporter
Would opt-in, but have
not heard about it
Would not opt out
Ambivalent Don’t pay attention, or
care either way
Unlikely to opt out
Unaware
Opponent
Would not opt in Prefers to opt out, but not paying attention to the City’s
messaging or the resulting changes to their utility bills
Passive
Opponent
Would not opt in Doesn’t support the program, but unlikely to prioritize
opting out
Aware
Opponent
Would not opt in Really don’t want to participate but feel guilty or
embarrassed about opting out, especially if the program
is characterized as being environmentally friendly
Active
Opponent
Would not opt in Would opt-out of the program
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UAC Action on June 1, 2016
On June 1, 2016, the UAC discussed the alternatives to continuing PAG Gas as a voluntary opt-in
program and generally agreed that the current opt-in model was the least desired option.
The UAC discussed the incremental cost of biogas and the availability of environmental offsets
and said that, if the long-term goal was to have a carbon neutral gas portfolio, it would not be
advisable to first convert the program to an opt-out program and then move to a carbon
neutral portfolio since it would look like there was an opt-out option, but then that option
would be taken away. One suggestion was to start with a portfolio that is not 100% carbon
neutral and transition to 100% carbon neutral over time. Another suggestion was to start with
offsets first and move to add more biogas over time. However, at the June 1, 2016 meeting,
the UAC was not presented detailed costs for the different alternatives.
One commissioner expressed support for converting to an opt-out program and advised against
introducing a new program that costs more when gas rates are increasing as shown in the long-
term Gas Financial Plan.
At its June 1, 2016 meeting, the UAC voted 6-1 (with Chair Cook, Vice Chair Danaher, and
Commissioners Ballantine, Forssell, Johnston and Trumbull voting yes and Commissioner
Schwartz opposed) to recommend that Council adopt a carbon neutral gas portfolio and direct
staff to develop an implementation plan. The minutes from the UAC’s June 2016 meeting are
provided as Attachment C.
Discussion
To design and implement a carbon-neutral gas portfolio plan, several inter-related variables
must be considered, including:
1. Rate impact.
2. Supply source (environmental offsets or biogas).
3. Timeframe over which carbon neutrality is achieved
4. Percentage of the portfolio to be made carbon-neutral.
With respect to each of the variables above, staff makes the following recommendations:
1. Rate impact: No greater than 10¢/therm annually
2. Supply source: Combination of environmental offsets and biogas, with exact mix
designed to maximize carbon neutrality within established rate impact limit. Staff
estimates approximate ratio of offsets (95%) to biogas (5%) at the outset of the
program.
3. Timeframe over which carbon neutrality is achieved: By FY 2018
4. Percentage of portfolio made carbon neutral: 100%
City of Palo Alto Page 10
Rate Impact
Staff recommends that Council make a clear determination of acceptable rate impact for a
carbon-neutral gas portfolio. Council took such a step with respect to Carbon Neutral Plan for
electricity where rate impacts, for a variety of reasons, were expected to be less significant than
those potential impacts from a carbon free gas portfolio. The rate impact of achieving carbon
neutrality for the electric portfolio is quite small (on the order of 1-2%) because the
incremental cost to get to carbon-neutrality is diminished by the significant RPS requirement
and the fact that carbon-free hydroelectric supplies provide about half of the City’s energy
requirements in a normal year. The rate cap for the carbon neutral electric portfolio established
by Council is 0.15 cents per kWh (Staff Report 3550, Resolution 9322).
By contrast, the costs associated with a carbon neutral gas supply and associated rate impacts
are not likely to be as low. The gas portfolio is currently supplied 100% by a fossil fuel source,
whereas the electric supply portfolio includes a large fraction of carbon-free hydroelectric
supplies and is subject to the State requirement for renewable supplies to meet a minimum of
33% (now 50% by 2030) of the City’s needs. A rate impact of 10 ₵/therm is equal to
approximately a 10% rate increase based on current gas rates and assuming a commodity rate,
which fluctuates monthly with market prices, of 30 ₵/therm.
Supply Source
Offsets as Supply Source
Using environmental offsets to neutralize the GHG emissions of the gas portfolio is significantly
less expensive than buying biogas. If environmental offsets were purchased today for 100% of
the City’s gas usage, all customers would experience a rate increase of approximately 4%. A
residential customer’s winter bill would increase by about $2 per month (about $0.75 in the
summer). A range of potential offset costs were analyzed and are presented in Figure 4 below.
The current cost of offsets is about $8 per ton of CO2e, which is equivalent to 4 ₵/therm.
City of Palo Alto Page 11
Figure 4: Rate and Bill Impact of Using 100% Offsets to Achieve Carbon-Neutrality
Biogas as a Supply Source
Alternatively, the City’s gas needs could be met with renewable physical biogas, a much more
expensive option.
Biogas is a product of organic conversion (from cow manure at a dairy farm or from a landfill,
for example). Most biogas produced in the United States is used as either a transportation fuel
or to generate electricity. Biogas is most valuable as a transportation fuel due to the Federal
Renewable Fuel Standard program and the state regulations like California’s Low Carbon Fuel
Standard (LCFS) and Renewable Portfolio Standard (RPS). Biogas converted to electricity may be
used to meet California’s RPS compliance obligations for electric utilities. State regulation and
pipeline interconnection costs have largely kept biomethane projects out of California, but out-
of-state supply sources are available.
The short-term price for biogas is in the $2-$3 per therm range due to the transportation fuel-
driven demand mentioned above. For a longer-term fixed-price commitment (5-7 years), prices
are discounted to around $1.50 per therm. Two things eliminated the consideration of biogas
for the City’s voluntary PAG Gas program: (1) the cost and the incompatibility between a
voluntary program with uncertain demand; and (2) the biogas project developers’ need long-
term commitments. While cost is still an issue, if it decided to pursue a carbon-neutral portfolio
for the long term, the City would be in a position to make a long-term commitment for biogas.
At a biogas price of $1.50/therm (or $1.20/therm over the projected $0.30/therm cost for
natural gas), supplying 100% of the portfolio with biogas results in about a 120% rate increase
City of Palo Alto Page 12
or about $65 more per month on an average residential customer’s monthly winter bill (or
about $22 per month more in the summer when average residential use is 18 therms/month).
Figure 5 shows both the rate and bill impacts at various biogas prices.
Figure 5: Rate and Bill Impact of Using 100% Biogas to Achieve Carbon-Neutrality
The two supply sources, environmental offsets and biogas, could be combined to achieve
carbon-neutrality. However, even a ratio of 5% biogas and 95% environmental offsets results in
a rate impact greater than 10%. Figure 6 shows the rate and bill impacts for different
percentages of the two supply resources using biogas costing $1.50/therm and environmental
offsets costing $8 per ton.
City of Palo Alto Page 13
Figure 6: Rate and Bill Impact of Using a Combination of Biogas and Offsets to Achieve
Carbon-Neutrality (Assumes $1.5/therm Biogas & $8/ton Offsets)
Carbon Neutrality: Portfolio Percentage & Timeframe
Two other variables may be adjusted when designing a carbon neutral plan. To reduce the cost
impact of buying green gas for the gas portfolio and the GHG emissions reductions only a
portion of the portfolio could be made carbon neutral. Alternately, or in addition, a green gas
portfolio standard could increase over time (e.g. start at 10% in FY 2018 increasing to 100% by
FY 2021).
Figure 7 shows the rate and bill impacts of various biogas to offset ratios if less than 100% of
the portfolio is carbon-neutral. Again, a $1.50/therm biogas price and an $8 per ton
environmental offset price are assumed.
City of Palo Alto Page 14
Figure 7: Rate and Bill Impact of Using a Combination of Biogas and Offsets to Achieve Partial
Carbon-Neutrality (Assumes $1.5/therm Biogas & $8/ton Offsets)
Summary of Proposal
The proposed plan will use a combination of physical biogas and high-quality environmental
offsets to achieve a carbon-neutral gas portfolio by FY 2018. The amount of biogas included in
the portfolio will be maximized while causing rates to increase by no more than 10 ₵/therm.
Given the 10 ₵/therm rate impact cap and current market prices, approximately 5% of the City’s
portfolio can be met with biogas with the remaining 95% neutralized with environmental
offsets.
If the price of offsets increases, the portfolio may need to comprise up to 100% offsets, or the
portfolio may be less than 100% carbon neutral. On the other hand, if the price of offsets
decreases, the proportion of biogas will increase. Purchasing biogas for less than 5% of the total
portfolio demand may be too small for a transaction. In that case, the portfolio will be
comprised of 100% offsets, and the rate impact with be significantly less than 10 ₵/therm.
Cost-effectiveness of a Carbon-neutral Gas Portfolio Compared to Electrification
In May 2015, the UAC reviewed a cost effectiveness study for abating GHG emissions by
electrifying building appliances and passenger vehicles. The report was provided to Council in
August 2015 (Staff Report 5971). Figure 8 shows the societal costs of carbon from that study
compared to the carbon cost of environmental offsets and biogas. The estimated cost of
$1.50/therm for biogas, or an incremental cost of $1.20/therm relative to brown gas, results in
an incremental cost of carbon of $226 per ton of CO2e. Environmental offsets are assumed to
cost $8/ton of CO2e.
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Figure 8: Incremental Societal Abatement Cost
As shown in Figure 8, environmental offsets are a much less expensive way to achieve carbon
reductions compared to most electrification options5. Biogas, however, results in higher
abatement costs than converting from natural gas-fired water and space heaters to electric
heat pump water and space heaters and converting from a gas stovetop to an electric stovetop.
Proposed Biogas and Offset Criteria for Carbon-neutral Gas Supply
Offset Criteria – Same as Approved for PAG Gas
For the PAG Gas program, Council approved the use of high-quality environmental offsets from
protocols approved by the California Air Resources Board. The approved protocols currently
include forestry, livestock, landfill, coal mine methane, urban forestry, ozone depleting
substance and rice cultivation projects. Offsets used for PAG Gas do not need to be certified by
CARB as it is an extra expense and only necessary if offsets are to be used for a regulatory
compliance obligation. Staff proposes to apply the same standards to offsets used for the
Carbon Neutral Gas Plan including a preference for California and local projects (Staff Report
4596, Resolution 9405).
Biogas Criteria – “Displacement” Concept Allowed
Biogas is generated from an organic source such a waste from a dairy farm, other agricultural
waste or from a landfill. Very little biogas is produced in California, but the Environmental
Protection Agency’s (EPA) Renewable Fuel Standard Program is driving the development of
projects in other states. The EPA recognizes two things: (1) molecules of biogas go into the
pipeline and rarely end up being burned by the purchaser of that gas and (2) gas transportation
5 The study concluded that (after federal and state incentives) it is cheaper to own and operate a compact electric
car (Nissan Leaf) than a similarly sized gasoline vehicle (Honda Civic) resulting in a negative incremental abatement
cost.
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can add significant costs if a biogas purchaser is forced to move gas long distances. The EPA,
therefore, allows for “displacement” whereby biogas is purchased at a point near the project
site and the environmental attributes of that gas are attached to brown gas delivered at a
different location. California’s RPS program, on the other hand, requires entities to contract for
gas transportation from the biogas source to the end use, adding significant cost to the gas.
Because the City is seeking ways to reduce its GHG emissions and is not using offsets or biogas
to meet a compliance obligation, the City has latitude to establish its own criteria for biogas use
and eligibility under the City’s carbon-neutral gas supply program. Staff recommends utilization
of the EPA’s approach, which allows for displacement of biogas in one location for brown gas in
another location under the City’s carbon-neutral gas program.
Alternatives
There are many alternatives to the proposed program, which can be described by varying the
key determinants. The following examples are ways in which the plan can be modified.
1. Rate impact: A rate impact higher than 10 ₵/therm would result in more biogas versus
offsets being part of the portfolio. If the rate impact limit was reduced, the portfolio may
not be able to be 100% carbon neutral. As another alternative, the rate impact could
increase over time—for example, starting out at 5 ₵/therm and increasing to 10 ₵/therm in
five years.
2. Supply: The proposed plan includes a combination of biogas and offsets such that the
amount of biogas is maximized while limiting the rate impact to a set amount (10 ₵/therm).
Instead of a rate impact measure, the program could be developed with a prescribed ratio
of biogas to offsets. In this case, the rate impact would depend on the cost of the offsets
and the biogas and could change year to year.
3. Carbon-neutral coverage of the portfolio: The proposed plan uses the full 10 ₵/therm to get
up to 100% carbon neutrality with the expectation that most (95%) of the supply will be
environmental offsets with the balance being biogas. However, the goal could be less than
100% carbon neutral supplies—for example, the goal could be to achieve 50% carbon
neutral supplies while under the 10 ₵/therm rate impact, which would allow for purchases
of biogas for about 8% of the gas needs and offsets for about 43% of the gas needs given
current prices for offsets and biogas supplies.
4. Timing: The most aggressive implementation schedule, by FY 2018, is recommended.
Carbon-neutrality could be staged over any number of years with changing rate impact or
changing proportion of offsets to biogas.
These program attributes could be combined in any number of ways to develop a program as
shown in Table 5 below.
City of Palo Alto Page 17
Table 5: Proposed Carbon Neutral Gas Plan and Alternatives
Rate Impact
Limit (₵/therm)
Expected Supply 1,2 Carbon Neutral
Portfolio Offsets Biogas
Proposed Program 10 95% 5% 100%
Lower Rate Impact 5 100% 0% 100%
Higher Rate Impact 15 90% 10% 100%
No Offsets
5 0% 4% 4%
10 0% 8% 8%
15 0% 13% 13%
25% Carbon Neutral Portfolio
5 21.5% 3.5%
25% 10 17.5% 7.5%
15 13% 12%
50% Carbon Neutral Portfolio
5 47.5% 2.5%
50% 10 43.25% 6.75%
15 39% 11%
75% Carbon Neutral Portfolio
5 73.5% 1.5%
75% 10 69% 6%
15 65% 10%
Notes: 1 Assumes current prices for environmental offsets and biogas
2 Biogas volumes of less than 5% of the portfolio are likely too small to transact
Commission Review and Recommendation
Staff presented the proposed Carbon Neutral Gas Plan to the UAC at its August 31, 2016
meeting. Commissioners asked if the gas that would be neutralized by buying offsets or
replaced with biogas accounts for all the gas the City uses in addition to whatever is leaked
from source to transportation to the distribution system. Staff explained that the gas needs
were determined by what the City buys at the Citygate and it includes any gas leaked in the
City’s gas distribution system, but not any leaks in the gas transportation system or at the gas
source. The greenhouse gas emission calculation is based on accounting for the gas at the
Citygate as if it was 100% burned and not leaked as methane.
Commissioners generally indicated they liked the flexibility of the proposed program since it
provides for a higher amount of biogas as the cost comes down and it supports the
development of a biogas marketplace. Commissioners also discussed whether carbon neutral
gas would dampen the enthusiasm for electrification and asked if carbon neutral electricity has
dampened the penetration of rooftop solar.
After discussion and hearing public comment, the UAC voted to recommend Council approve
the plan (6-1 with Chair Cook, Vice Chair Danaher, and Commissioners Ballantine, Forssell,
Johnston, and voting yes and Commissioner Schwartz voting no). The minutes from the UAC’s
August 31, 2016 meeting are provided as Attachment D.
City of Palo Alto Page 18
Resource Impact
Implementation of a carbon-neutral gas portfolio will increase retail rates (and revenues) and
the gas commodity budget. The recommendation is to cap the rate impact at 10 ₵/therm. At
that level, commodity costs will increase by about $3 million, from $9 million to $12 million, per
year. The retail rate revenue will likewise increase by $3 million. If the program is approved, the
increased cost and revenues will be reflected in the FY 2018 budget request.
A rate increase of 10 ₵/therm will increase rates by approximately 10%. For the median
residential customer using 18 therms per month in the summer and 54 therms per month in the
winter, the bill impact will be $1.80/month in the summer and $5.40/month in the winter, or
about $43 per year.
Policy Implications
The Council-approved Utilities Strategic Plan includes an objective to offer programs to meet
the needs of customers and the community.
Strategy 4 in the Council-approved GULP states:
Reduce the carbon intensity of the gas portfolio in accordance with the Climate
Protection Plan by:
a. Designing and implementing a voluntary retail program using reasonably
priced non‐fossil fuel gas resources; and
b. Purchasing non‐fossil fuel gas for the portfolio as long as it can be done with
no rate impact.
Implementation of a carbon-neutral gas portfolio represents a departure from GULP Strategy 4
because the voluntary program will be eliminated and there will be a rate impact resulting from
non-fossil fuel gas resources being purchased for the portfolio. GULP will need to be revised
accordingly should Council approve a carbon-neutral gas portfolio.
A carbon-neutral gas portfolio would, however, be an important part of meeting Council’s
aggressive goal to reduce the City’s GHG emissions by 80% by 2030.
Next Steps
Several tasks must be completed before implementing the proposed Carbon Neutral Gas Plan.
For example, existing gas purchasing agreements may be used to procure biogas with details
about the biogas added to the transaction confirmations. Environmental offsets for the current
PAG Gas program are included in the City’s agreement with the program administrator, so new
contracts may need to be developed to purchase offsets for the carbon-neutral portfolio. If the
Carbon Neutral Gas Plan is approved by Council, staff will execute enabling agreements with
qualified counterparties for purchasing environmental offsets.
City of Palo Alto Page 19
In addition, new rate schedules will be developed and brought to the UAC and Finance
Committee for recommendations and to the Council for approval. Staff anticipates that this can
be achieved such that the gas portfolio can be implemented in FY 2018.
Because implementation of a carbon-neutral gas portfolio represents a departure from the
Council-approved GULP strategies, GULP will need to be revised before the program is put into
place.
Cancelling PAG Gas will require communication with the customers, repeal of the rate schedule
via resolution, and removal of the charge on participating customers’ bills by the carbon-neutral
implementation date.
Environmental Review
The Council’s adoption of a resolution implementing a carbon-neutral gas portfolio and
terminating the PaloAltoGreen Gas Program does not meet the definition of a project, pursuant
to section 21065 of the California Environmental Quality Act (CEQA). Offset and biogas project
developers will be responsible for performing necessary environmental reviews and acquiring
permits as offset and biogas projects are developed.
Attachments:
Attachment A: Resolution Approving Carbon Neutral Gas Portfolio (PDF)
Attachment B: Excerpted Final Minutes of October 7, 2015 UAC Meeting (PDF)
Attachment C: Excerpted Final Minutes of June 1, 2016 UAC Meeting (PDF)
Attachment D: Excerpted Draft Minutes of August 31, 2016 UAC Special Meeting (PDF)
NOT YET APPROVED
160921 jb JM/Staff Reports
Resolution No.
Resolution of the Council of the City of Palo Alto Approving a
Carbon Neutral Natural Gas Portfolio Plan to Achieve Maximum
Carbon Neutrality Using a Combination of Offsets and Biogas in
the Gas Supply Portfolio by Fiscal Year 2018 with No Greater than
10¢/Therm Rate Impact; and Related Termination of the Palo Alto
Green Gas Program
R E C I T A L S
A. In December 2007, Council adopted the City’s Climate Protection Plan which set
aggressive greenhouse gas (GHG) emission reduction goals to be achieved by the year 2020.
B. In March 2013, this Council approved Resolution 9322 directing staff to achieve
carbon neutrality for the electric supply portfolio by 2013 through the use of a combination of
hydroelectric resources, long-term renewable resources and short-term renewable energy
resources and/or renewable energy certificates (“RECs”).
C. On September 9, 2013, this Council approved Resolution 9372 modifying and
suspending portions of the PaloAltoGreen Program, and directing staff to develop a
PaloAltoGreen Gas (PAG Gas Program) Program.
D. On April 21, 2014, this Council approved Resolution 9405 establishing the voluntary
PAG Gas Program to provide the opportunity for residential and commercial customers to
economically reduce or eliminate the impact of GHG emissions associated with their gas usage
through the purchase of certified environmental offsets.
E. In April 2016, this Council adopted a GHG reduction goal of 80% by the year 2030.
GHG emissions associated with natural gas use were 135,000 metric tons of carbon dioxide
equivalent, or 27% of the City’s GHG emissions, in 2015.
F. The Carbon Neutral Gas Plan uses a combination of physical biogas and high-quality
environmental offsets to achieve a carbon-neutral gas portfolio by fiscal year 2018 by
maximizing the amount of biogas in the portfolio while holding the rate impact to ten cents per
therm (10 ₵/therm).
G. On August 31, 2016, the Utilities Advisory Commission voted 6-1 to recommend
Council approve the proposed Carbon Neutral Gas Plan and terminate the PAG Gas Program.
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council hereby adopts the resolution:
Attachment A
NOT YET APPROVED
160921 jb JM/Staff Reports
1.Approving a Carbon Neutral Gas Plan, enabling the City to achieve a carbon-
neutral gas supply portfolio starting in fiscal year 2018 with a rate impact not to exceed ten
cents per therm (10 ₵/therm); and
2.Terminating the PaloAltoGreen Gas program established by Resolution 9405.
SECTION 2. The Council’s adoption of this Resolution, which implements a carbon
neutral gas portfolio and terminates the Palo Alto Green Gas program does not meet the
definition of a project, pursuant to section 21065 of the California Environmental Quality Act
(CEQA). Offset and biogas project developers will be responsible for acquiring necessary
environmental reviews and permits as those projects are developed.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
Senior Deputy City Attorney City Manager
Director of Utilities
Director of Administrative Services
ATTACHMENT B
EXCERPTED FINAL MINUTES OF THE OCTOBER 7, 2015
UTILITIES ADVISORY COMMISSION MEETING
ITEM 2. DISCUSSION: Conversion of the PaloAltoGreen Gas Program From an Opt-In to an
Opt-Out Program
Chair Foster noted that this item is on the agenda due to support for the idea expressed from
members of the community.
Public Comment
Sandra Slater commended the commission for keeping sustainability on the agenda. She said
that it's time to move the needle now. She noted that research shows that participation will be
much higher if the program was converted to an opt-out program. She said that the program
could be changed to make the program supportable by all income levels. Converting the
program to an opt-out program is something the City could do that would have an immediate,
positive impact.
Lisa Van Dusen said that the program is not perfect since it is backed by offsets, but we
shouldn't let the perfect be the enemy of the good. We could pay even more by purchasing
more aggressive offsets. There could be mechanisms to get out of the program during an
"amnesty period" and low income customers on the Rate Assistance Program could be retained
as opt-in customers. She said that there was so much staff effort for the PaloAltoGreen
(electric) program just to achieve 24% participation and that there would be savings from lower
marketing and administration costs in an opt-out program.
Chair Foster said that the money paid by PaloAltoGreen Gas (PAGG) program participants fund
offsets that pay to convert waste into methane that is burned to produce renewable electricity
at a dairy farm in Wisconsin and that this wouldn't be done without the revenue from the
offsets. Assistant Director Jane Ratchye indicated that this is correct. She said that the offsets
that back this program are very high quality as they are selected only from those protocols that
have been certified for use in the state’s cap-and-trade auction by the California Air Resources
Board. One of the requirements of those protocols is that the offset be “additive”, or from a
project that would not have been done without the monetary support from the sale of the
offsets. Chair Foster said that he supports an opt-out program and that the additional cost is
only $5 to $6 per month for the average resident.
Commissioner Ballantine noted that there are ongoing costs to maintain an anaerobic digester.
He said that people who opt-in are causing something real to happen. The greenhouse gas
emissions reductions from those sources would not otherwise happen without programs like
PAGG.
Vice Chair Cook noted that the PaloAltoGreen (PAG) Electric program was effectively converted
to cover everyone via the carbon neutral program and was a great way to transfer the new
goal. He asked why PAGG was not made an opt-out program originally. Vice Chair Cook added
that Community Choice Aggregation (CCA) programs were successful because they were opt-
out programs. Ratchye replied that the carbon neutral electric supply is not the same as PAG
and that it was not developed as a transition from PAG. She noted that PAG purchased
Renewable Energy Certificates (RECs) for 100% of a residential customer’s load at a cost of 1.5
cents/kWh, or about 12% more than the normal electric rate. On the other hand, the carbon
neutral electric supplies consist of about half carbon-free hydroelectric supplies, renewable
supplies that are eligible under the state’s Renewable Portfolio Standard (RPS) and that RECs
are purchased for the balance of the needs. It is expected that by the end of 2016, the City’s
RPS will be 57% and with hydro supplies (given a normal hydro year), no RECs will be needed
for carbon neutral electric supplies. She said that the state’s new goal for an RPS of 50% would
result in carbon neutrality anyway at no additional cost in a normal hydro year. However, the
increased cost of PAGG for participants is 12 cents per therm, or about 12% more than the
normal gas rate of about $1 per therm. She said that the additional cost for PAGG was a
consideration for making the program an opt-in program like PAG when the program was
originally conceived. In addition, the program was just launched in January 2015 (and has yet
to roll out a comprehensive marketing campaign for the program) and staff was hoping to
determine the community’s appetite for the program. Ratchye agreed that CCAs are successful
opt-out programs, but that they are generally no more costly than the alternative from the local
utility so participants are not paying any extra to be “slammed” into a CCA.
Vice Chair Cook said that our rates are allowed to go up with the carbon neutral electric
supplies and asked what the threshold is for an opt-out versus an opt-in program.
Chair Foster replied that the comparison of PAGG to the carbon neutral plan is different—like
apples and oranges—since the carbon neutral electric supplies is not an opt-out, or opt-in,
program, but is the electric supply for all customers. The percentage increase in cost to electric
rate payers by going carbon neutral is small compared to the percentage increase to a customer
by paying for participation in PAGG. He said that PAGG should be compared to the PAG electric
program.
Chair Foster asked if there is any legal reason that City Council could not adopt an opt-out
program. Senior Deputy Assistant City Attorney Jessica Mullan said that a legal analysis would
have to be completed and the answer may depend on the program design.
Commissioner Schwartz asked if the point of the program was to reduce gas use or raise
revenue. Chair Foster responded that neither of those options is the point, but that the
objective is to reduce greenhouse gas (GHG) emissions associated with customers’ gas use.
Commissioner Schwartz said that she agreed that more people will do an opt-out program, but
that we need to make sure that participants truly want to participate. We need to provide a
very easy way for people to opt-out and not be penalized for any of the months they were
enrolled if they don’t want to be. A good outreach campaign could be a good way to increase
awareness of the issue and it could have an impact of increasing customers’ awareness. She
said that the program could be a bridge for people to become more conscious of using energy
and would not just be a way to buy ourselves out of the problem.
Commissioner Hall suggested that we not act too hastily, but develop a program like this over
time, similar to the carbon neutral portfolio adoption. He said that he suspects that there
would be a percentage of consumers that would find out later that they were enrolled in a
“voluntary” program and feel cheated. A way forward could be to develop a carbon negative
plan and start with a surcharge that would fund a solution to global warming. He said it could
be a program that would be broadly advertised to ensure that everyone would be aware of the
program.
Commissioner Schwartz noted that she had seen an effective “cow power” video, which is an
example of how the communication can be done in a playful way that would let people
understand that we are in this together, which is a compelling message for many people. She
added that it would be a good messaging experiment.
Commissioner Eglash thanked the public commenters. He also complimented the UAC for
placing the item on the agenda and allowing this discussion to take place. Commissioner Eglash
said that when he weighs the advantages and disadvantages of opt-in versus opt-out, he would
like to avoid disgruntled customers and any worry about customer satisfaction. The greatest
danger of an opt-out plan is potential customer dissatisfaction. We devote a lot of time to
customer satisfaction with the utility. He said it is more risky in this respect and as the price
becomes significant, the danger becomes worse. He said that, with a full marketing campaign,
is it still plausible that people would not be in the program that wouldn't want to be. He added
that perhaps a very successful campaign would result in the same participation of an opt-out
and an opt-in program. Commissioner Eglash indicated that he is leaning towards maintaining
PAGG as an opt-in program. He added that there should be no action on the item at this time
since there is no staff analysis, no fiscal analysis or legal analysis completed at this time. The
discussion is conceptual at this point; there is no proposed design for an opt-out program.
Chair Foster indicated that he disagrees that the participation rates for opt-in versus opt-out
will converge with a great marketing campaign. He added that this is a discussion item on the
agenda tonight so no action can be done.
Commissioner Schwartz said that customer satisfaction depends on transparency. The fact that
CPAU cares about being green will show that an opt-out program is consistent with the brand.
She added that safeguards to allow folks to opt-out will be consistent with transparency.
Commissioner Eglash said that many people in Palo Alto take pride in the City’s environmental
efforts. He stated that safety, reliability, and low cost are primary considerations and to impose
a greener solution that costs extra money is hazardous and must be done carefully.
Commissioner Ballantine noted that offset resources are finite and that pressures from supply
and demand will eventually bite us as the price for offsets will increase as demand increases.
He added that an opt-out program would require sufficient offsets to be supplied.
Commissioner Danaher said that the PAGG program has an environmental benefit, a
psychological benefit, and a moral benefit. He said that the best idea is to make the program
neither opt-in or opt-out, but our gas supply for everyone. He added that an opt-out program
still allows people to opt-out easily since it could be very easy to go to the website and opt out.
Commissioner Hall said that we could conduct a poll to see what the customers’ response
would be to an opt-out program. He said that we should want to have this information before
making a decision.
Commissioner Schwartz advised against a poll as it would defeat the purpose of communicating
the benefits of an opt-out program. Commissioner Danaher added that the poll would only be
answered by the small number of people who read and respond to email.
Commissioner Foster said that the program could be designed so that anyone who failed to
opt-out early enough could still get their money back. He asked if the UAC could make a
motion to recommend that the Council direct staff to develop an opt-out program. Director
Fong stated that it can be added to the rolling calendar. Mullan added that the item is
agendized as a discussion item and that the Commission can add it as a future item to be
agendized under Item 4 on this meeting’s agenda.
Vice Chair Cook thanked the public commenters. Commissioner Hall added his appreciation of
the input from the public commenters, even if some commissioners disagree.
ATTACHMENT C
EXCERPTED FINAL MINUTES OF THE JUNE 1, 2016
UTILITIES ADVISORY COMMISSION MEETING
ITEM 2. ACTION: Utilities Advisory Commission Discussion on Alternatives to the Existing
Voluntary Opt-In PaloAltoGreen Gas Program Including an Opt-Out Mechanism and a Carbon-
Neutral Natural Gas Portfolio
Senior Resource Planner Karla Dailey summarized the written report.
Commissioner Schwartz asked why is was so expensive just to convert from opt-in to opt-out
since the rate is not being changed. Dailey explained that changes to the billing system made up
the bulk of costs. Dailey pointed out that, after the initial investment, administrative costs drop
significantly for the opt-out program. Commissioner Schwartz stated that the cost estimate
seemed very high and questioned the advisability of making changes to the billing system,
which is planned for replacement.
Interim Director Shikada said the timing of an opt-out program should take into account the
legacy billing system.
Commissioner Trumbull asked about the bill impact. Dailey confirmed the bill impact is only for
those customers in the voluntary program.
Commissioner Ballantine asked about the customer breakdown. Dailey said 50% is residential,
30% is small commercial and 20% is large commercial.
Commissioner Forssell asked about the variability for a typical residential customer. Dailey said
some residential customers probably have much higher bills.
Dailey described the types of customers with respect to an opt-out program structure: active
supporters, passive supporters, unaware supporters, ambivalent customers, unaware
opponents, passive opponents, aware opponents and active opponents. Dailey said staff is
concerned about the customers who would be opposed to an opt-out structure, but do not opt-
out right away for whatever reason leading to resentment and poor customer relations at a
later date as well as issues around refunding the PAG Gas fee should a customer demand that.
Commissioner Schwartz said that bill impact was so small that it shouldn’t cause harm to most
customers and, if it was easy to opt-out, an opt-out program shouldn’t be a problem for
anyone. If there were customers that found out later and were mad, the program could be
designed to allow for refunding those customers. Dailey said that this is problematic.
Commissioner Schwartz said that the risk to consumer attitude seems not to be a large issue.
Continuing with the presentation, Dailey said that another option is to convert all, or a portion
of, the natural gas portfolio to carbon neutral supplies.
Commissioner Johnston asked if there would be any mechanical issues with running biogas
through the pipeline. Dailey said that there would be no problem since biogas must meet the
pipeline quality standards. Commissioner Ballantine added that the quality requirements
depend on whether the gas is used for generation directly, or put in the pipeline—and the
biogas can be mixed with natural gas to meet the pipeline quality standards.
Chair Cook asked how the $1/therm incremental cost of biogas compared to the cost of natural
gas. Dailey said that the current commodity cost of natural gas is about 20 cents per therm.
Commissioner Johnston asked if there were limits to the number of offsets available. Dailey
said that there would be sufficient offsets for our portfolio.
Chair Cook asked staff to describe the offsets. Dailey said that the protocols for the offsets are
all California Air Resources Board approved although the offsets themselves are not CARB
certified. She explained the extra CARB certification would be needed for offsets used for
compliance purposes rather than a voluntary program.
Public Comments
Sandra Slater stated that she and Lisa Van Dusen have prepared a letter with comments on the
issue. She said that she supports the opt-out program, but her favorite is to have the gas
portfolio carbon neutral. She said that climate change is a huge problem and time is getting
short. She said that offset purchases can be a bridge in a plan to purchase biogas. She said that
the success of the PaloAltoGreen program proves that there is large support for such a
program. She also referenced the 80% GHG reduction goal by 2030 Council directive. She
advised that we need to wean ourselves off of fossil fuels and move to electrification. She said
there will be a few people, maybe as many as a hundred, who will be opposed, but a small
number of people should not dictate the direction of the utility. She said that it would be nice
to have local offsets, but supporting methane capture projects outside of Palo Alto is valuable
since we have a global problem.
Lisa Van Dusen said that the main point is that there is fundamental responsibility to take
control of the impact caused. She advised that the City should take a bold action, noting that
nothing is perfect. The goal is to maximize carbon reductions, minimize the potential for
grumbling customers, minimize the impact to ratepayers, and allowing customers to have a
choice. She said that higher gas prices also acts to encourage additional gas use efficiency.
Commissioner Johnston said that the City should move away from the opt-in program design
and advised that it should be easy for customers to opt out of the program.
Commissioner Ballantine supported the option of moving to a carbon neutral gas portfolio,
rather than transitioning to an opt-out program. He said that during the rate adjustment
process, the larger users had a smaller percentage impact than the lower using customers,
which is due to the fixed costs to operate the system. He said that it is not free to have a carbon
neutral electric portfolio. He said that the move to electrification may be problematic if the
electric portfolio is carbon free, but the gas portfolio isn’t.
Commissioner Forssell asked if he program would only apply to residential customers only. She
asked if we first go to an opt-out program and allow customers to opt out, then transition to a
portfolio could be a problem since you first allow them out, then force them in. She said that
we could start with carbon neutral portfolio that is not 100%, but could transition there over
time.
Commissioner Schwartz said that all points of view are represented in Palo Alto. She said that
she is in favor of an opt-out program since this is an opportunity to practice how to do that. If
there is no way to opt out, this could be a problem for some customers who will create a large
issue in the community as it has been elsewhere with respect to having smart meters.
Commissioner Trumbull said he did not opt-in to the current program. He was also concerned
about opt-out as a transition to carbon-neutrality.
Vice Chair Danaher said he stated at the prior UAC meeting on the subject that he was
supportive of a carbon neutral gas portfolio and, after seeing the analysis, he is even more
supportive of that option. Danaher asked if there was any negative feedback for the carbon
neutral electric portfolio. Assistant Director Jane Ratchye said that there was no negative
feedback that she knew of regarding the carbon neutral electric portfolio. Vice Chair Danaher
said that there could be a cost for morality and that he supports moving to a carbon neutral
portfolio rather than moving to an opt-out program.
Chair Cook asked Chief Sustainability Officer Gil Friend whether the choices would support the
City’s carbon goals. Friend noted that natural gas represents 25% of the City’s GHG emissions.
Interim Utilities Director Ed Shikada noted that there was no staff recommendation for this
item and views this discussion as one of values. He said that a survey of the community could
be done to determine the community’s view on the issue.
Chair Cook noted that staff did not provide a recommendation as it usually does and said he
thought that this was appropriate in this case. He stated that we are talking about this at a time
when gas rates are very low and also at a time when rates across the board are rising
significantly this year. He said that he had not heard any protest regarding carbon neutrality for
electric supplies, but says that a transition to carbon neutral gas can start and increase over
time. It would be perhaps most advisable to start with offsets first and move to renewable
biogas over time. He would recommend #3 and move to #4 by 2030. He would like to see the
costs for these options.
Commissioner Schwartz said that the issue with smart meter rollout happened when there
were many missteps caused by a rate increase, very hot weather and the new meters were
blamed. She said that rising rates are not a good time to introduce a new program that costs
more. The downside is that the program could fail spectacularly if it becomes the rallying point
for complaints.
Commissioner Schwartz advised that a survey could be taken to determine the level of support.
Chair Cook said he appreciated the additional options presented by staff. He pointed out that
gas prices are currently very low and rates in the five utilities are increasing. Chair Cook said he
was not prepared to adopt a carbon-neutral program supplied with only biogas. He said the
rate impact would be less than the opt-in or opt-out options for a carbon-neutral portfolio.
Dailey confirmed that administrative costs for the portfolio are near zero. He said he prefers
starting with offsets and slowing adding biogas to the carbon-neutral portfolio. Chair Cook
recognized that there will be some complaints but said the rate impact is low and the impact of
a carbon-neutral portfolio is high.
Commissioner Trumbull stated that he was supportive of having more detail available for a
program before going to Council with a final recommendation.
ACTION:
Vice Chair Danaher made a motion that the UAC recommend that Council adopt a carbon
neutral gas portfolio and direct staff to develop an implementation plan. Commissioner
Trumbull seconded the motion. The motion passed (6-1) with Chair Cook, Vice Chair Danaher,
and Commissioners Ballantine, Forssell, Johnston and Trumbull voting yes and Commissioner
Schwartz opposed.
Vice Chair Danaher left the meeting at the conclusion of the discussion of item #2.
ATTACHMENT D
EXCERPTED DRAFT MINUTES OF THE AUGUST 31, 2016 – SPECIAL MEETING
UTILITIES ADVISORY COMMISSION MEETING
ITEM 2. ACTION: Recommendation that Council Approve a Carbon Neutral Natural Gas
Portfolio Plan to Achieve Maximum Carbon Neutrality Using a Combination Of Offsets and
Biogas in the Gas Supply Portfolio by Fiscal Year 2018 with No Greater than 10¢/Therm Rate
Impact; and Related Termination of the Palo Alto Green Gas Program
Senior Resource Planner Karla Dailey provided a presentation summarizing the written report.
Chief Sustainability Officer Gil Friend said that the Sustainability/Climate Action Plan (S/CAP)
includes a plan to get to a carbon neutral utility and an aspirational goal of a carbon neutral
city. He said that moving to an electrified city will be a long and complex process. He said the
proposed program is a bridge to using less natural gas and that a comprehensive approach
including offsets, biogas, efficiency and electrification will be necessary to achieve the city’s
long-term goals. He pointed out that buying offsets provides capital for more projects in the
U.S. and potentially locally.
Public Comment
Sandra Slater said that proposal is an interim strategy to get to carbon neutrality as soon as
possible and offsets are a good tool to use for the time being. The price signal that the program
cost provides will encourage gas efficiency and electrification of gas appliances. She suggested
the money currently used to market the voluntary program could be redirected to efficiency
and fuel switching programs. Offsets are not a “pass” for consumers as evidenced by the fact
that Palo Altans continue to conserve electricity despite the carbon neutral electric supplies.
Lisa van Dusen said that we must do everything and the beauty of this is that it can be done
now and shows an intention to reduce carbon emissions in the long term. We have policies in
place such as the 2009 proclamation to include environmental externalities and the S/CAP goal
to reduce greenhouse gas (GHG) emissions by 80% by 2030. It may be faulted as not enough or
too much, but it’s a good move in the right direction.
Vice Chair Danaher said that the UAC received a comment from a member of the public who
pointed out the proposed offset purchases do not cover fugitive methane losses from natural
gas production and transportation. Vice Chair Danaher added that methane is as bad as coal
due to the fugitive emissions. Commissioner Ballantine said that that position is not reflected in
any DOE report that he searched for. Commissioner Schwartz agreed that the coal and natural
gas are not considered to be equally bad by industry experts.
Vice Chair Danaher said the proposed program is a good starting point and asked about the
value of purchasing biogas. Dailey confirmed biogas is more expensive than offsets and it is
Council’s prerogative to decide whether biogas is worth including. Commissioner Danaher
asked where the methane comes from. Dailey explained the gas comes from landfills and
agriculture, mainly dairy farms.
Commissioner Ballantine said that if the source is dairy farms, then avoided methane emissions
need to be considered. Dailey explained that offsets are generated by preventing methane
from entering the atmosphere and the resulting biogas is a renewable fuel. A specific project
can produce both offsets and renewable biogas.
Commissioner Trumbull said that the request is fine, but he would like to get off gas as soon as
possible. He suggested that rather than buying biogas, extra funds be used for electrification.
Commissioner Johnston asked about the monthly bill impact of the 10 cent per therm rate
increase. Dailey answered that an average residential customer’s winter bill would increase by a
little more than $5 per month and pointed to a chart in the written report with the detail.
Commissioner Forssell clarified the proposed amount of carbon to be covered by offsets is only
that combusted in town and does not include methane leakage from the production fields or
leaks in the transportation system. Assistant Director Jane Ratchye said leakage in the
distribution system is covered. Commissioner Forssell asked about leakage data, and Ratchye
said we know the difference between purchases and sales, but that some of the difference is
due to mechanical meters operating slowly and not measuring all the gas flow so that the
difference cannot all be attributed to leaks.
Commissioner Schwartz pointed out that the strategic plan says customers should be offered
choices for managing their environmental footprint, but this proposed program does not offer
consumers choices and asked if the strategic objective needs to be changed. Ratchye said that
the supply source is a Council decision similar to the decisions made regarding the composition
of the electric supply portfolio. Commissioner Schwartz disagreed. She said where the
electricity comes from is irrelevant, but if she is being told she can’t have an electric stove, that
is a problem. Ratchye explained again that the proposal is about the gas supply portfolio and
not about electrification.
Commissioner Forssell observed there may be confusion between electrification efforts versus
the proposed carbon neutral gas portfolio.
Commissioner Schwartz asked if we need to change the strategic plan. Interim Director Ed
Shikada said that the strategic plan will be updated.
Commissioner Schwartz said biomethane is not very hard to come by. She said Apple can’t find
biogas to serve its facilities. Dailey replied there is biogas available but very little in California.
She explained that the plan is to get gas elsewhere and displace it in accordance with the
federal renewable fuels rules. She said she has talked to all of the City’s regular gas suppliers
and there is biogas available. She explained the some biogas producers are interested selling a
portion of their production for at a longer term at a fixed price discounted to the spot price in
order to diversifying their sales portfolios.
Commissioner Schwartz said if we are pushing everyone to electrify, we should talk about that
in the future.
Commissioner Ballantine said he likes the flexibility of the proposal that allows more biogas to
be included as it becomes available. Natural gas infrastructure is more resilient than electric
infrastructure. He said that, if and electric outage occurs, it would be a dark day in Palo Alto if
all is electric. He said the proposal is good because it includes biogas at a modest rate increase
while we start to work on initiatives to improve the resilience of the electric grid. He added that
this action helps to support a biogas marketplace and level the playing field for other ways to
get heat, including solar thermal heating. He also noted that energy efficiency and the incentive
to reduce local leaked gas is valued more.
Vice Chair Danaher said he likes the flexibility of the proposal to maximize biogas.
Chair Cook said he likes the staff proposal and appreciates the public comment. He pointed out
Carbon Free Palo Alto’s caution that it will be a distraction from the real goal of electrification
to reduce GHG emissions and might discourage fuel switching. He noted the differences
between the carbon neutral electric portfolio and the proposed carbon neutral gas portfolio
but suggested we test the hypothesis by determining whether the carbon free electricity
dampened the penetration of rooftop solar. He said helping to build a biogas market may lead
to lower prices as has happened with renewable electricity, and this program signals a move
away from the GHG emissions associated with natural gas usage.
Commissioner Schwartz asked if staff has done an analysis of where the electricity comes from
with electric used for heating, positing that additional electric load may cause the use of more
gas to power electric generation. Dailey answered that this proposal has nothing to do with
electric generation or increased electric usage.
Commissioner Ballantine asked if we electrify, would we increase our GHG footprint without
realizing it. Ratchye said that a discussion about electrification will happen at a later date.
ACTION:
Vice Chair Danaher made a motion that the UAC recommend that Council approve a Carbon
Neutral Gas Plan to achieve a carbon-neutral gas supply portfolio starting in Fiscal Year 2018
with a rate impact not to exceed ten cents per them; and terminate the PaloAltoGreen Gas
Program established by Resolution 9405. Commissioner Forssell seconded the motion. The
motion passed (6-1) with Chair Cook, Vice Chair Danaher and Commissioners Danaher, Forssell,
Johnston, and Trumbull voting yes and Commissioner Schwartz voting no.
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Special Meeting
Tuesday, October 18, 2016
Chairperson Filseth called the meeting to order at 7:00 P.M. in the
Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California.
Present: Filseth (Chair), Schmid, Wolbach
Absent: Holman
2.Utilities Advisory Commission Recommendation That Council Adopt a
Resolution Approving a Carbon Neutral Natural Gas Portfolio Plan to
Achieve Maximum Carbon Neutrality Using a Combination of Offsets
and Biogas in the Gas Supply Portfolio by Fiscal Year 2018 With No
Greater Than 10¢/Therm Rate Impact; and Related Termination of the
Palo Alto Green Gas Program.
Chair Filseth: Welcome. So next item on the Agenda is the Utilities Advisory
Commission (UAC) Recommendation for Carbon Neutral Gas Portfolio Plan
and I guess there is a Staff presentation, at which point we’ll do public
comment after that and then Committee questions and comments. Okay.
Ed Shikada, General Manager for Utilities: Just a quick intro that Karla Dailey
will report for Staff. We also have two of our UAC Commissioners here
present if the Committee is interested for additional feedback.
Chair Filseth: Super. Thanks for coming. Please proceed.
Karla Dailey, Senior Resource Planner: Good evening. Thank you. My name
is Karla Dailey. I’m a Senior Resource Planner in Utilities, and I do, as we
said, have a short presentation for you. This is just a quick outline of what
we’re going to talk about. So we’ve been doing a number of things over the
past years to address the carbon footprint of our gas utility. I wanted to
point out a couple of policies that are in place right now. The gas utility long-
term plan, which was last revised and approved by Council in 2012 has a
ATTACHMENT C
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strategy, it happens to be Number 4, that says, Reduce the Carbon Intensity
of the Gas Portfolio in accordance with the Climate and Protection Plan by:
1) designing and implementing a voluntary program; and secondly,
purchasing non-fossil fuel gas as long as it can be done with no rate impact.
So that’s what the current policy in place as far as the long-term plan looks
like. So, because of that policy there was designed and implemented a Palo
Alto Green Gas Program that was modeled very closely after the Palo Alto
Green Program, which I know you are all very aware of. It was a very
successful program, won lots of awards, 20 percent participation, kind of a
model for similar programs around the country. The current participation in
the gas program is about four percent of residents, 100 percent of City
facilities and that results in about six percent of the City’s total gas demand.
We supply that program with high quality environmental offsets with a
preference for California projects, but we did go back earlier this year and
take a really close look with our UAC Commissioners at the current program,
looked at the possibility of converting it from an opt-in program to an opt-
out program, but also presented the UAC with some other alternatives to
that and the UAC supported, instead of converting that program to
something like an opt-out program, moving to a completely carbon neutral
gas portfolio. So that’s how we came to work on the program that is being
proposed this evening. Natural gas use accounts for about 27 percent of Palo
Alto’s greenhouse emissions, and you can see that while mobile combustion
is by far and away the largest culprit, since the electric utility is carbon
neutral, the largest, second largest remaining chunk is attributed to the gas
portfolio. The recommended program achieves 100 percent carbon neutrality
with these four sort of constraints. The rate impact being no greater than 10
cents/therm, proposing to use a combination of the same type of offsets that
are used currently for the voluntary program, but trying to incorporate some
biogas into that portfolio as well, as much biogas as possible without
exceeding that 10 cent/therm rate impact. The time frame proposed is Fiscal
Year (FY) 2018 and again, we are proposing that 100 percent of our portfolio
be covered. Now, of course, for all four of those constraints, any one of them
or any combination of them could be changed to come up with a slightly
different program, really a continuum in all directions, but this table shows
you some discrete options for different rate impacts, different combinations
of offsets in biogas and different amounts of the portfolio that could be
covered in a carbon neutral fashion. Of course, the time frame could be,
achieving any of these benchmarks, could be done within any time frame as
well. So, just to talk about the rate impact a little bit more, I think it’s
important to think about the electric program, the electric carbon neutral
program rather than the Palo Alto green program and compare that to what
Staff is proposing on the gas side. The electric portfolio was quite different.
We had a renewable portfolio standard requirement that was quite
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significant prior to moving to a carbon neutral electric portfolio, and the
combination of that RPS requirement and our large amount of hydro supplies
really resulted in a largely carbon-free content of the electric portfolio
already, and so in order to move from that to a 100 percent carbon
neutrality there was a very small rate impact to do that, one to two percent
for a few years, and then almost zero after that. The gas portfolio, on the
other hand, is 100 percent fossil fuel with no renewable aspect to it. Ten
cents/therm is about a 10 percent rate increase based on today’s rates and,
again, part of why that 10 percent or 10-cent number was anchored on in
the proposal is that we could include some biogas in the portfolio at that
level. If you get much lower than a 10 cent/therm rate impact to biogases,
it’s too expensive to include in it. So…
Jane Ratchye, Assistant Director of Utilities: Can you go back one Slide,
point out the Pacific Gas and Electric (PG&E) rate.
Ms. Dailey: Oh yeah, down at the bottom of that Slide you can see the
difference between Palo Alto’s rates and PG&E’s bundled rates. So for
residential customers Palo Alto’s rate is significantly lower.
Council Member Wolbach: Is that gas only, or is that gas plus electricity?
Ms. Dailey: Just gas.
Chair Filseth: And is commercial and large commercial the other way? Am I
reading that right?
Ms. Dailey: It’s very close for commercial and we are slightly higher for large
commercial. So should the program be approved ultimately by Council, our
next steps would be to execute enabling agreements for purchasing
environmental offsets. Right now, even though we are purchasing some for
the voluntary program, we are doing that through a turn-key contract with
our marketing consultant, so we are not directly buying those. We would
need to develop new rate schedules for Council approval, given the gas
utility long-term plan that says we won’t do anything that has any rate
impact whatsoever, we would have to go back and revise the gas utility
long-term plan, and we would need to do some communication and outreach
with the existing Palo Alto green gas participants and perform some fairly
insignificant administrative tasks to terminate the program. The request
before you this evening is from the UAC and Staff to adopt a resolution
approving the Palo Alto, the proposed carbon neutral gas plan and
terminating the Palo Alto green gas program established by Resolution
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(Reso) 9405, and secondly, to direct Staff to develop an implementation
plan for getting to carbon neutrality for the gas portfolio. And that’s all the
official presentation I have. We can take questions or public comment.
Chair Filseth: Okay. Thank you very much. I think the next step is we should
do public comment, so the first speaker, there are six speakers, I think, so
you will each have three minutes. The first speaker is Sandra Slater.
(crosstalk)
Chair Filseth: Ah, let’s see. Should we have the UAC. Actually, why don’t we
do that. Is that okay, the Chair of the UAC speak. Sorry Sandra.
James Cook, Chair, Utilities Advisory Commission: I was last to arrive and
did not fill out a card, so sorry. James Cook. I’m currently the Chair of the
Utilities Advisory Commission, and I live at 730 College Avenue. So I just
wanted to briefly run down how we looked at this. We voted 6-1 in favor of
the Staff recommendation, as we thought this was a great way to reduce
greenhouse gas emissions for the City. You know, obviously, natural gas is,
at least for the utilities, is the next big hurtle to overcome in terms of
greenhouse gas emissions, the biggest greenhouse gas emitter for the gas
utilities and a big part of what the City does. So we thought this was a great
way to raise awareness and take some action on the issue, and also a great
way to replace the Palo Alto green gas, and at the same time to replicate the
success we’ve seen in the carbon neutral portfolio on the electrical side.
They are not the same thing. The carbon neutral electricity is based on
having actually, if the market system is a lot more open to inexpensive
electricity that is green, so it’s not the same thing. Here you’re facing a
market situation where there really isn’t a market for the biogas, or there is
a very small one, but it gives, I think it gives a good market signal for that
industry possibly to develop in a greater way. Also, the offset, using offsets
versus Renewable Energy Certificates (RECS) are not the same thing. So it’s
not considered, I would consider it not as high quality a way to offset your
emissions, but it is what the green gas system uses right now is offsets.
There is also a cool opportunity to use local, potentially local offsets because
the system isn’t as clearly defined as RECS are. You know, there is a
possibility you can fight climate change and reduce greenhouse gases here
locally with those offsets, so I like that possibility. Also, I think we liked it as
a good policy to improve what we’re doing, and it’s a policy that can be
adjusted over time, so if, you know, we tried, like the carbon neutral
electrical side we tried to cap it. I think that came from the Staff, but it was
replicated, certainly a good part of the policy on the carbon neutral
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electricity. But it also says, recognizes that biogas isn’t ready now, but it
might be in the future, or there might be other ways to do it, so I like that it
sort of establishes this framework, gets everyone involved in it right away as
opposed to your four or five or six percent or whatever who are involved
now in the green gas. And, so I think we like this as a great way to take
action locally to do something different than we’ve been doing in a much
greater way and reduce greenhouse gases. So I think there wasn’t that
much debate at the UAC level. The question really was, are these quality, is
this one-time or I think I’m on different sides from our friends at, Zero
Carbon Palo Alto, what’s is it?
Chair Filseth: Carbon Free Palo Alto.
Mr. Cook: Carbon Free Palo Alto, thank you very much. You know, we talked
about this and we don’t see it as a problem with, if the City were to try to
push for a greater electrification, which would be a real great way to also
reduce greenhouse gas emissions, it looks like, we don’t see that this is in
conflict with that, and we also don’t see that would take any energy away
from that, so we did discuss that. Obviously you guys can decide whether or
not you feel that’s true or not, but that was the other thing we wanted to
consider when we were looking at this policy. But I think as far as we were
concerned, that we did spend a lot of time discussing this. This has been a
long discussion. Obviously, it started back in 2013 really, and I think what
Staff ended up with is really, we felt like this was the best option of the
things we’ve seen over the last three years. Thanks very much.
Council Member Schmid: Question.
Chair Filseth: Let’s see, so how should we do this? I mean if we have
questions for the UAC do we do that now?
Council Member Wolbach: I’d say, since we are saving questions for Staff till
later, let’s also save questions for the UAC till later and hear from the public.
Chair Filseth: You’d like to ask them now.
Mr. Cook: I’d be happy to stay, so…
Council Member Wolbach: I have a million questions for Staff and UAC but
I’d kind of like to…
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Chair Filseth: I’ve got a few too. Let’s see.
Council Member Schmid: It’s your decision.
Chair Filseth: Yeah, um. If you’ve got a million questions for Staff and UAC,
then we’ll probably have Steve up here for a long time.
(crosstalk)
Chair Filseth: So why don’t we, if Greg only has one, why don’t we let Greg
ask his question, this will be a little bit of a hybrid here, let’s have Greg ask
his question, then we’ll do public and you and I can ask all ours.
Council Member Schmid: There was one dissenting vote on several
meetings. Could you articulate what the…
Mr. Cook: Yeah, sorry, I was going to bring that up too. So Commissioner
Schwartz had a dissenting vote on this and on when we were discussing the,
I think it was the Green Gas Program. I think her concerns centered around
whether or not, I think she is not so concerned about gas, natural gas, and I
also think she felt like, she did have one concern, remember Karla, one time
she was bringing up to you like that she thought that there might be, if you,
and I think this is, it gets, I think some of her thoughts were sort of led off
into more on the electrification question, but she was concerned that if we
encourage more electrification would that possibly somehow lead to higher
use of gas, because you are using some gas in the grid that is being used in
order to create electricity and that we have the carbon neutral portfolio.
Lisa Forsell: If I may.
Mr. Cook: Commissioner Forsell.
Lisa Forsell: My recollection of her opposition was concern for rate payers.
(crosstalk)
Lisa Forsell: Lisa Forsell, also Utilities Advisory Commissioner. If I recall,
Commissioner Schwartz was mainly concerned about the impact to rate
payers and she favored the opt-out program because it gave customers
choice and her dissenting vote wasn’t that she didn’t, you know, want the
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carbon neutral gas portfolio is that she wanted to maintain choice for the
rate payers.
Mr. Cook: Yeah, that’s a more articulate and short (crosstalk). There were a
couple of other things that she had brought up, but her probably number
one concern was choice, whether or not you were forcing people to do
something or not. And, again, one of the things we discussed was, of course,
we did that we did that on the electrical side.
Chair Filseth: Which is one of your options up here.
Mr. Cook: That’s right. So it was more, and it was also when we were talking
about opt in and opt out in previous meetings as well.
Chair Filseth: Okay, why don’t we do the public comments now and then
we’ll come back and if you guys, especially if you guys will still be able to be
here, okay? So first public speaker is Sandra Slater.
Sandra Slater: Thank you Council and Staff for all your hard work and for
allowing me the opportunity to address you this evening. I got to expand on
a letter that Lisa VanDusen and I wrote to the UAC back in August, which is
on the record. You can take a look at that, and we’re very grateful for the
support of both the UAC and Staff for the green gas program. Natural gas
was originally considered as a way to wean the country off of coal and it was
touted as sort of a cleaner bridge to a renewable energy future, and we
were, frankly, I think, misinformed. Natural gas is an extremely potent
greenhouse gas. In fact, according to the Union of Concerned Scientists,
“the drilling and extraction of natural gas from wells and its transportation
and pipelines results in the leakage of a methane that is 86 times stronger a
greenhouse gas over 20 years.” In addition, the calculations we were initially
given regarding natural gas versus coal does not take into account the
fugitive emissions from extraction and you can think of the Porter Ranch
leak that was so pernicious just last year, which produced 1,200 tons of
methane every day, and in terms of greenhouse gas output per month it
“compares to the equivalent effluvia of 200,000 cars a year”. So preliminary
studies in field measurements show that these so-called fugitive emissions
are just the tip of the iceberg. They occur not only in extraction, but in the
transporting of gas right here in Palo Alto even, there are fugitive emissions
in our gas pipelines. This is no clean energy bridge to a renewable future.
It’s imperative that we wean ourselves from fossil fuels as quickly as
possible, and in the meantime, purchasing a biogas in offsets is basically, as
far as I can see, the least we can do. It’s not a panacea, but it’s a great step
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in the right direction. Palo Alto has a set goal of reducing our Greenhouse
Gases (GHGs) by 80 percent by 2030 and this green gas initiative supports
that effort and will send a signal to Palo Altons that we are using all the tools
in our toolbox to try to reach that goal. Green gas offers an interim strategy
of carbon offsets that can be used as a bridge to get us weaned off of gas
entirely, something that's going to take quite a few years, if not a decade or
more. I’m a firm believer in an all of the above strategy to get us quickly to
carbon neutrality as possible. We need quick and effective efficiency
programs. We need a fuel switch to cleaner sources for our cars and our
homes, and we need a real tax on carbon, but all these things take time.
The program Staff outlined will begin to place a price signal to consumers
that gas is something that should be used sparingly, if at all. It makes
efficiency that much more attractive, because the more expensive the gas,
the more attractive efficiency measures will be and electrification will
become. So this is not an infrastructure investment or spend. We can dial
the cost up or down and efficiency is certainly the low-hanging fruit. This is
not giving a pass to Palo Altons to use as much gas as possible. The Electric
Utility I see Palo Altons every day trying to reduce their electric usage and
we have a carbon neutral electricity, so I think Palo Altons want to do the
right thing if they can so this is a roadmap, interim tool, what we got. Thank
you.
Chair Filseth: Thank you. Next speaker Catherine Martineu.
Catherine Martineu: Thank you. Good evening. I’m the Director of Canopy,
which is an urban forestry organization based here in Palo Alto. I’m here
actually to talk about another maybe more fun aspect of this project, which
is the potential for local carbon offsets. There is a group of people, a climate
action reserve, who are working right now on a new protocol for urban
forestry carbon offsets that will, should allow a city like Palo Alto to use local
tree planting programs, such as for example, tree plantings in South Palo
Alto, which is something that we want to do to bring South Palo Alto tree
cover at parity with North Palo Alto to use these type of programs and with
this new protocol and obtain the offsets. So obviously, then you get the cake
and you get the revenue as well, because we can get the offsets, all of the
extra benefits of a healthy tree canopy and we get to keep the revenue to
fund the program itself. So this is something that is being worked on right
now. This replaces an older protocol that was basically not practical to use, it
was very onerous to administer. This one uses new technology such as
remote sensing, which makes it cost effective, so I’m very hopeful. And it
looks like probably in the spring of 2017 we will see this protocol sent to the
ERB and other agencies for validation and then vetting and so forth, and we
might see potential program by the end of 2017. We are very lucky that
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Walter Passmore, our urban forester, is one of the advisors on the carbon
action reserve team. So there is absolutely no risk that either he or I would
forget to let you know when the protocols are available, but I wanted to
make sure, and I think actually, Commissioner James Cook mentioned that
the program that Staff is recommending allows for local programs. But I just
want to make sure that when the time comes, it is a possibility, that it is
evaluated as part of the carbon offset portfolio.
Chair Filseth: Thank you very much. The next speaker is Bruce Hodge.
Bruce Hodge: Hello. I’m Bruce Hodge from Carbon Free Palo Alto. I’ll be
speaking on what we view as problematic aspects of this plan, and my
colleague, Bret Anderson, will explain our alternative proposal. Carbon Free
Palo Alto does not support this plan. The use of offsets and biogas are
nonscaleable solutions that don’t address the root cause of our natural gas
emissions. The plan is a stand-alone effort that doesn’t serve as a bridge to
more robust solutions. It is an underprised green washing approach that will
most likely be hard to move away from when required additional
investments and real solutions are proposed in the future. Many local
community stakeholders, likely the majority, prefer directly addressing
natural gas problem without using offsets. Other entities, such as the
innovative Sacramento Municipal Utility District (SMUD) Utility are very
interested in Palo Alto’s approach to reducing the use of natural gas and will
not be impressed with an offset solution. Instead, Palo Alto should be
advising innovative solutions that are scaleable and affordable. An offset
solution was vigorously debated during lead up to the Sustainability and
Climate Action Plan (S/CAP) and offsets were eventually dropped from the S-
CAP 80 by 30 plan because of opposition to them. Solving the natural gas
situation here at home is crucial. Offsets will result in approximately $3
million a year leaving the community, money that could be spent more
wisely on investing in our own infrastructure. The use of offsets is essentially
a green washing approach for several reasons. Number one, the market has
failed to price carbon emissions realistically and hence offsets based on an
unrealistically low cost of mitigation was not grounded in reality. And
secondly, offsets only count the combusted emissions from gas and discount
the real cost by as much as 50 percent by ignoring the impact of fugitive
emissions of natural gas itself, as Sandra mentioned earlier. Just to be clear,
the cumulative emissions from natural gas are estimated to be
approximately double the reported figure. This means that in Palo Alto
natural gas accounts for about half of our total emissions and that reduces
the transportation percentage from two-thirds down to about half. We object
to the use biogas as well. Biogas is not a scaleable solution, supplies are
likely to remain limited because of lack of feed stocks and it just perpetuates
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the use of a leaky gas infrastructure with fugitive emissions. Lastly, the plan
is presented in isolation, with no linkage to other efforts that will be
occurring in the same time frame. The proposed expenditure is somewhat
arbitrary and there is no way to compare the potential costs (inaudible) to
other approaches. We urge a more comprehensive approach.
Chair Filseth: Thank you. The next speaker is, you already know that, Bret
Anderson.
Bret Anderson: So I’m also a member of Carbon Free Palo Alto. I’m going to
explain a little bit about what we are proposing as an alternative. What we
think of this alternative is that it’s really Plan A. This is what we should be
doing to reduce gas use in Palo Alto and Plan B could be offsets, but we
should only do that if we have a full comprehensive plan for what plan A
really entails. We’re talking about efficiency measures, electrical equipment
upgrades and upgrades to the electric panels in our homes and in our
businesses and amid infrastructure upgrade to Palo Alto’s grid. So these are
the things that we must do. We know we’re on the path to do them, but we
have not yet, from our Utility Staff, a comprehensive plan that addresses
how we’re going to get these adopted, these measures adopted. So we need
to flush that out. That’s, goal number one would be to lay that plan out, look
at how much it costs, how much it’s going to take from Staff to develop and
run that program, how much would it take to fund that program. The key to
all of this is the high up-front cost of these measures. We know these
measures are tough and they’re going to be mostly done in a retrograde
situation, so we have to come up with a way to finance this. The utility mode
for financing using on-bill financing, tariff based financing is the best pass
forward to get adoption rates high in a retrofit situation, which is really what
we’re dealing with in an 80/30 scenario for reducing gas use in Palo Alto. So
we really have to look at the way we’re going to get on-bill financing for
single measures like a large meter or Heating, Ventilation and Air
Conditioning (HVAC) or efficiency or a whole-house upgrade where we could
finance $30,000 or $20,000 worth of upgrades for a home and have that
billed over ten years or whatever it takes to make that flow for the
customer. It should be a check-the-box decision for the customer as an opt
in, but we need to do all the thinking beforehand and the financing
beforehand using the Utility Financing Mode, which is low cost to capital and
a very easy understood relationship with the end-user customer. We need to
define that funding mechanism is a plan drawn up by Staff where we would
love to work with Staff as Carbon Free Palo Alto to flush that plan out, but
we also need to enumerate the (inaudible) benefits of this kind if a program,
doing it ourselves to the rest of the community to sell the fee, maybe a use
fee, that funds this effort, to sell it to our community, because we’re talking
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about improving our infrastructure, our resiliency, benefits for the
environment for not using fracked natural gas. We’ve got local jobs to create
using these measures, or implementing these measures and I’d also add the
home value that is improved by investing in the infrastructure, so you can
improve the value of your home when you make this investment so offsets
really represent a rent moving, exporting our problem outside of Palo Alto,
whereas our own program, if we fund that through (inaudible) financing is
an investment in our own community. Thank you.
Chair Filseth: Thank you very much. The next speaker is Lisa VanDusen.
Lisa VanDusen: Good evening. Thank you for considering this issue and I
just want to say that Sandra Slater and I have been having these
conversations with the UAC and with others for a while, yes, some years at
this point, so it’s great to have come this far. I just want to comment a little
bit on the remarks that these folks made, and I just want to say that all
sounds great and it’s not entirely clear to me how that’s separate and not
combinable with what we’re doing here. So I would hope that would be and I
would contend that this does not slow us down or prevent us from moving in
that direction at all. So great work, both of you. So first, also I want to say
how much the Staff has done a really excellent job of flushing out the
specifics of this, Karla and Jean, in particular. So I think the benefits you’ve
heard, but I just want to reiterate that this program is really flexible. It can
flex with the marketplace, with what’s available, with the tide of where we
are with efforts like that or anything else. It really does, as James said,
create a framework and allow us to really move around with availability, with
rate payer concerns, with sustainability targets, with progress and cost. So
the second thing is that, and I think you also said this, that it sends a signal.
It sends various kinds of signals. It sends a price signal that, in fact, natural
gas should not be less expensive than electricity. It is not the direction we
want to go, so it sends the signal that way. It sends a market signal to tell
the world and the marketplace that we want alternatives to natural gas.
And it tells consumers, rate payers here and elsewhere that we are doing
what we can to move in the right direction. And when I think, you know,
maybe East Bay Municipal Utility District (MUD) is looking at us, but I think
others the world over are looking at what we’re doing and I agree with the
“all of the above” strategy that Sandra mentioned. So the fact that, I want
to just speak to the concern that Commissioner Schwartz had, which was
that the matter of choice and the importance of that and, in fact, we have
competing things. We have consumer choice, but we also have a mandate
and really a moral calling right now to do everything that we can, and the
City has already adopted the 20 by 2020, 80 by 2030 goal and we have also
the proclamation from 2009, the Council said we wanted to be considering
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externalities in our decisions as we do business, so I hope that you will go
forward with this and take this to the Council and we can all move forward
quickly with this. Thank you.
Chair Filseth: Thank you very much. And our final speaker tonight is Lisa
Forsell.
Lisa Forsell: Hi. Lisa Forsell, UAC Commissioner, although tonight I’m not
representing the UAC but I just wanted to share my own thoughts as to why
I support the proposal. A lot of things have been said tonight that I will try
not to rehash at length. I see it as a transition strategy, not the permanent
strategy, that we shouldn’t go like, “okay, we’re done now, our gas portfolio
is carbon neutral, no more work to be done”. It’s a way to start having an
impact now while we implement the long-term electrification strategy. I like
the current proposal because it’s flexible, so Council, there was a good slide
about it, can decide how much appetite you have for rate impact, and if you
feel it is too high you can go with five cents/therm or, you know, another
number, or if you have a great appetite for rate impact, more physical
biogas could be added to the portfolio. I might also throw in there that, you
know, Carbon Free Palo Alto has also raised a very legitimate concern about
fugitive emissions and if I recall, Staff isn’t quite sure what’s the appropriate
estimate for Palo Alto fugitive methane emissions, but one could attempt to
purchase offsets against the fugitive emissions as well, if that was something
that we wanted to pursue. And finally, just a couple of thoughts about the
opt out, because when we started the conversation at the UAC meeting in
June, we did spend a lot of time talking about opt out and one of the reasons
that I was against an opt out program was because a lot of the rate impact
actually went to administrative costs to operate the opt out program and all
the sort of complicated corner cases about what if you only noticed it six
months later and you wanted retroactive opt out and all these things, so it
felt like, for the money rate payers were spending, I’d rather that money go
to the offsets and the physical biogas than to a big administrative burden for
staff. And I also felt that if we went with an opt out, that could not be a
transition to a full portfolio because we then had, you know, let members,
let rate payers who did not want to be part of the program identify that they
didn’t want to be in and then it’s quite rude to pursue upon them later and I
felt it was better for the community to just take a stand and go with the
whole portfolio. Thank you very much.
Chair Filseth: Thank you. I have a couple of procedural comments. Do you
have a question?
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Council Member Wolbach: Actually a procedural question for you.
Chair Filseth: Okay.
Council Member Wolbach: Do you want take five before we get into
questions? I just want to go grab a cup of coffee before we get into the rest
of this. If we’re going to lose quorum (crosstalk) Take a couple of minutes to
absorb the comments.
Chair Filseth: Yeah, let me make a couple of procedural comments and then
maybe… Is two minutes enough?
Council Member Wolbach: Sure.
Chair Filseth: A maximum of five. Okay. So thank you very much everybody
who came. My question for you guys. I guess what you guys are suggesting
is that we should proceed straight to figuring out how to move to
electrification, get rid of gas and what’s the financing strategy for that. Did I
get that right? That’s, I’m going to guess, is beyond the scope of our agenda
tonight, and it’s something that would be sort of a complex agendized
process, so we’re probably not going to dive into that. Is that accurate?
Terence Howzell, Principal Attorney: That is accurate.
Council Member Wolbach: Can I ask (inaudible) to that one?
Chair Filseth: Yes.
Council Member Wolbach: To the degree that one program might be an
opportunity, present an opportunity cost that deprives us of funds or Staff
resources to pursue another program, we can talk about, you know, the fact
that, we can talk about it in that context, correct?
Mr. Howzell: In passing.
Council Member Wolbach: In passing.
Chair Filseth: Okay. So the second one is, and there may be some
disagreement a little bit on this side, which is okay, right? But it seems to
me that what we’re talking about here is sort of a long and complicated
decision for the City, right. Are we going to move to sort of a different way
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of doing gas? It seems to me that the heavy lifting on that decision should
be borne by the UAC and by the full Council, right. So the question is, what
is our role here in the Finance Committee, because obviously we could cover
a lot of territory. It seems to me that our role in these kinds of things in the
Finance Committee is not, for example, to go back and revisit policy, so I
don’t think the Finance Committee should say, “no, we think it should be
option number 3 instead of Option Number 4”, right. It seems to me that
sort of the center of gravity, what we should be doing is looking at is, you
know, is the City going to go broke trying to do this, right. I mean, it’s our
money to do this. And to a lesser extent, maybe get into the issue of is the
City getting its money’s worth from this kind of program, right. It seems to
me that’s sort of the space that we ought to spend most of our time today.
Do you guys agree generally with that or disagree?
Council Member Schmid: Disagree a little bit.
Chair Filseth: Okay.
Council Member Schmid: I think the function of the committees are to look
in detail at what the consequences of decisions might be. Primarily financial
but I don’t think exclusively financial.
Chair Filseth: Primarily financial would be my comfort zone for this
Committee, because the Utilities Advisory Committee is another committee
another Council Committee that looks at this, and this is their job, to set
rate and things like that seems to me is the purview of the Utilities Advisory
Committee and we can look at that, right, but it doesn’t seem to me that we,
they ought to be going one way and we ought to be going the other and
they ought to provide the guidance on this.
Council Member Schmid: The difference between the UAC and a Council
Committee is we also are elected and have to go in front of the voters, and
so we should be taking into account the public more maybe than the UAC.
Chair Filseth: Sorry. Maybe I haven’t been clear on that. I think as members
of the full Council, I think we are going to be very, very interested in that.
So, I mean, I sort of see myself as having two hats, one is Finance
Committee and the other is, I’m very interested, I mean, I’m going to be
interested in a lot more aspects of this when it comes to Council than on this
Committee. That sort of has been my thought process. But I don’t want to
constrain you from going outside that, to be too narrow. I want to go outside
that somewhat, and I think have at it. But I think my guidance on this would
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be the heavy lifting on policy issues ought to be borne by the UAC and the
full Council when it comes to this. Okay. But as members of the full Council
we’re going to see this thing again, so it’s not completely divorceable. With
that, why don’t we take a couple of minutes break, two minutes.
The Committee took a break from 8:04 P.M. to 8:08 P.M.
Chair Filseth: Okay, with that let’s do Finance Committee comments and
questions and why don’t we do both at once. Council Member Wolbach.
Council Member Wolbach: So a few questions at the moment. I’ll probably
have more later. I guess a good place to start for me would be if somebody
from Staff or UAC perhaps provide just a quick reminder of the difference
between offsets and RECS, first.
Ms. Dailey: So a REC is only associated with Renewable Electric Energy, so
when you generate electricity from a renewable resource, there is an
attribute attached to that electron that is a renewable energy credit. So it
doesn’t make sense to use, you can’t use that for gas. Those are particular
to energy, not to natural gas. An offset is generated by an action to prevent
greenhouse gases from going to the atmosphere by, for instance, planting
trees to sequester carbon, if it’s an additive tree-planting operation. So trees
that are just sort of hanging round town don’t generate offsets, but a
program that is financed by being able to collect revenue for the offsets in
order to achieve that carbon reduction generates offsets.
Council Member Wolbach: So RECS are not an option for natural gas I heard
you say.
Ms. Dailey: Yes, that’s correct.
Council Member Wolbach: So they’re off the table and that’s why it’s not
part of this discussion.
Ms. Dailey: That’s right.
Council Member Wolbach: Thank you for clarifying that question. Okay, I can
move on from there. Next question, there seems a clear emphasis on biogas
over offsets aside from the concerns about costs, biogas being very
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expensive. Just for our edification, maybe a real quick summary why there is
the emphasis on biogas over offsets?
Ms. Dailey: Well, I think because offsets are kind of a more esoteric product,
there has been an emotional leaning toward liking biogas, but it is a very
expensive resource and Staff felt like the rate impact of achieving carbon
neutrality just with biogas would be unacceptable, and so tried to strike a
middle ground. It’s a matter of personal preference, but…
Council Member Wolbach: Any input from the UAC on that one? See if there
are any further thoughts from the recommending body.
Mr. Cook: No, I think that captures it pretty well. I think there is a sense of
biogas as preferable to the existing stock of natural gas, but this is still seen
as a bridge or some sort of transition to using less gas because it does have
the methane emissions, most of the people who have talked from the public
have said. So I think that, you know, we are seeing either that if there is
more biogas you might have an increased percentage of biogas usage in the
program or if there is some other way to transition away from… You know, I
think ultimately may want to transition away from gas, but it’s just that they
don’t have a better explanation. Karla is the real expert on gas, so maybe
she… But I think there is much more to it.
Council Member Wolbach: Okay, next question. On Slide 8 of tonight’s
presentation, Palo Alto’s gas rates are compared to PG&E gas rates, and I
just want to be clear. These are our current gas rates, correct? And I was
hoping to see a quick side-by-side, if it’s available, of… Are we facing some
expected increases in our gas rates anyway? Aren’t we planning to increase
our gas rates already or and if so…
Ms. Ratchye: Yeah, in the long-term plan, the Ffinancial Plan, we had an 8
percent expected increase for Fiscal Year, the next Fiscal Year.
Chair Filseth: And that goes on for a few years, right?
Ms. Ratchye: Yeah, I can’t remember the whole trajectory, but next year we
did and I think there are a couple of years.
Ms. Dailey: But these rates do include a big rate increase that we
experienced as a result of a lot of the money that’s being spent on safety in
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the PG&E system. It gets passed straight through to us from all the work
they are doing.
Council Member Wolbach: Okay, so we’re including some of that.
Ms. Dailey: Oh yeah.
Council Member Wolbach: But this does not include the potential 10 percent
rate increase from this proposal?
Ms. Ratchye: That’s correct.
Council Member Wolbach: So we could… And you said there was also an 8
percent that we’re going to be increasing this coming year anyway, correct?
Ms. Ratchye: That was the expectation that we had in the long-term
Financial Plan, that next year for FY’18 so July 1 it would be 8 percent.
Council Member Wolbach: That’s what I thought. And so I want to make
sure I did my math right here. Looking at just Tier 1 residential, which is
currently we’re at 0.8707 and multiplying that by 1.18, so adding 10 percent
and another eight percent.
Ms. Dailey: Ten cents is the proposed.
Council Member Wolbach: Oh, I’m sorry, it’s 10 cents. We’re not looking at
10 percent.
(crosstalk)
Council Member Wolbach: But it says it’s about a 10 percent rate increase.
Ms. Ratchye: On a winter bill, yeah, there’s a little apples and oranges.
Council Member Wolbach: So estimating a little bit, so we’re still looking at
less than a PG&E bill. So that would be still under Tier 1, for residential Tier
1.
Ms. Dailey: Right.
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Council Member Wolbach: And for, so that would be 0.952. Sorry I’m taking
long doing the math, but doing the same for Tier 2, it would also still be
cheaper, again anyone can check my math here, Tier 2 would still be
cheaper than PG&E at 1.663. Again, these are estimations. So I just want to
get kind of apples to apples what we would be looking at. And I appreciate
the PG&E information being included in this report so we can do a
comparison. As a quick comment on that, one of the most important things I
think about our electricity portfolio which is carbon neutral, is that we are
substantially cheaper than PG&E and being able to stay cheaper than PG&E
on our gas, I think, is also important.
Ms. Ratchye: I want to point out one thing about the gas rates when you’re
making these comparisons, PG&E doesn’t have a fixed charge for residential
and so these rates are the volumetric rates shown, plus you have to add in
this monthly service charge too.
Council Member Wolbach: I got you, thanks.
Ms. Ratchye: So there is another part of it that does kind of effectively bump
up our rates.
Council Member Wolbach: Right but that’s just a fixed $10.32, right?
Ms. Ratchye: Yes.
Council Member Wolbach: And that’s a good reminder. I guess I’m still kind
of sorting out my thoughts about all the public comments we have heard, so
I’m happy to turn it over to colleagues for questions, as I continue to mull
over the different pieces we’ve heard.
Chair Filseth: Very good. Council Member Schmid.
Council Member Schmid: I think there is no question that it is an important
issue and something we’ve got to act on. The opt out decision is a big one.
It’s striking that the Palo Alto Green got four percent of the customers
jumping in and the green electricity had, what, 24 percent? So maybe one
question is, why are there different perceptions out there in the customer
land between gas and electricity.
Ms. Dailey: You know, one answer, and I’ll let Jane chime in too, is we didn’t
market it very heavily, and part of what was going on was so much drought
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messaging over the last couple of years, particularly last year, that there is
some limit to the number of messages that are going out to customers, so a
lot of focus was placed on the drought and not so much on this program. Do
you want to add anything else about why?
Ms. Ratchye: No, I think that’s true. We didn’t market it, and then we
started having all these conversations about, are we going to change it, and
then we’re like, let’s not market it heavily now and then switch it up really
quickly, and so we stopped kind of actively marketing it. The other aspect is,
we did achieve a tremendous number of fraction of customers who joined
the Palo Alto Electric Green Program, but that still amounted to less
percentagewise total electric use than this program, which was not marketed
as a fraction of gas use, and that’s because residential was the bigger
number of participants and so it’s a bigger part of the gas use. So we
actually had more participation in this program, however poorly marketed, in
terms of percentage of gas use than we did after ten years of marketing the
Palo Alto Electric Program.
Chair Filseth: Can I chime in on that briefly? I would concur with that, so I
mean, this focus group of one here, okay, you know we were one of the
earliest adopters of Palo Alto Green, so I asked my spouse, “so are we doing
this?” She said, “no, I don’t know much it”. So… There wasn’t much
information about it so I’m concurring with sort of the, not a lot of
investment in the marketing.
Council Member Schmid: The thought process is a little different. I think the
electricity comes easy to jump on. So my question is, you know, what’s an
offset? Talk to me a little bit about what offsets are. You’re going to depend
for 95 percent of your program on offsets. What is an offset? People have
said gas is worse than electricity in terms of…
Ms. Dailey: Right. An offset is a credit generated from a project that keeps a
greenhouse gas from entering the atmosphere.
Ms. Ratchye: Can you give an example.
Ms. Dailey: For instance, urban forestry, it’s a large planting of trees that
stay in the ground for 100 years and are verified to be there year after year.
Council Member Schmid: I guess offset in electricity is easy. You buy solar
power made in the desert. It doesn’t come to Palo Alto, but it substitutes for
what you’re getting.
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Ms. Dailey: That’s a Renewable Energy Credit.
Council Member Schmid: Okay, what’s an offset?
Ms. Ratchye: Can you do the cow farm thing?
Ms. Dailey: Right, so if you have a, say you have a dairy farm that obviously
cows leave a lot of manure that emits methane into the atmosphere. You
can take that methane and generate electricity with it. That electricity has a
Renewable Energy Credit associated with it, because it was generated with a
renewable resource. But if you are just capturing that methane and not
letting it go to the atmosphere, that’s generating an offset. So you can
actually have an offset, you can have offset generation and renewable
energy credit generation from the same project.
Council Member Schmid: Okay, but cows in California might offset 1 percent
of our natural gas usage. Where are the other 99 percent of offsets?
Ms. Dailey: So you’re buying offsets from a specific project. Are you saying
there are not enough dairy farm projects in California? Yeah, so they’re
coming from other parts of the country. I mean, the biggest sources are
landfills, but also dairy projects in other parts of the country as well.
Council Member Schmid: So we are shifting our offset to somewhere else,
not to the central Sierras that are most important to us?
Ms. Dailey: Well, I mean, the atmosphere is the atmosphere I would argue,
and you know, we’re concerned about global warming, not necessarily Palo
Alto warming.
Council Member Schmid: There was some discussion earlier about landfill,
garbage being turned into through conversion technologies into gas. Is that
an offset?
Ms. Dailey: If a project is preventing methane from a landfill from going into
the atmosphere, that would generate an offset.
Mr. Cook: If it’s a new program.
Ms. Dailey: If it’s a new program and it’s not required by some existing
regulation.
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Council Member Schmid: Right, but stopping garbage going into landfill
would, of course, stop it for the next 50 years.
Ms. Dailey: There’s no protocol for that type of project developed yet.
Council Member Schmid: Why not?
Ms. Dailey: Um.
Council Member Schmid: There are such conversions going on. There is a big
debate in Sacramento about it, so why wouldn’t that be effective? We’re
dumping thousands of tons a year.
Ms. Dailey: Well, we’ve only proposed to use offsets from protocols that are
approved by the California Air Resources Board and…
Council Member Schmid: and so far it’s just cow farms.
Ms. Dailey: Sorry?
Council Member Schmid: So far it’s just cow farms?
Mr. Cook: No, it could be planting trees.
Ms. Dailey: Yeah, I think it’s in the Staff Report actually.
Chair Filseth: Forestry, livestock, landfill, coal mine methane, urban forestry,
ozone depleting projects and (inaudible) projects.
Ms. Dailey: Those are all the Comprehensive Air Resources Board (CARB)-
approved protocols right now.
Council Member Schmid: Yeah, I guess my point about those, that list, is
that list would not deal with California’s gas problem. It might deal with two
percent, three percent, but…
Ms. Dailey: That’s right, it’s Greenhouse Gas Prevention Protocols. Not
necessarily natural gas and they are different.
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Council Member Schmid: Los Angeles is working very hard to try to get
landfill gas conversion technologies and they feel it’s the only way they can
really get offsets.
Ms. Dailey: Let me put it another way, I mean, you as an individual could go
out and buy an offset for your airline travel, if you wanted to, to counteract
it. Or you could go out and buy offsets to counteract the gasoline that you
are burning in your car, assuming you don’t have an electric vehicle. So an
offset can be used to cover many different types of greenhouse gas
emissions. It’s not, as opposed to biogas, which is a physical commodity that
could be used in place of natural gas.
Council Member Schmid: I guess I thought landfill conversion into gas is a
biogas.
Ms. Dailey: It is, absolutely, so that’s the other product that we’re proposing
to use in this. So we’re proposing to use two things to get to carbon
neutrality. One is biogas and the other is offsets, and they are separate.
Council Member Schmid: I guess conversion of waste is not technically
biogas because it uses a broader set of inputs than biogas?
Ms. Dailey: Conversion of waste to methane is biogas, yes.
Council Member Schmid: Okay, I worked it out earlier, and it’s not included
on most biogas lists, and I think for that reason it has been difficult to get
approval in Sacramento for it. Let me ask another question…
Chair Filseth: Before you leave that one, I actually had a question on exactly
the same thing.
Council Member Schmid: Okay, good.
Chair Filseth: Would you mind? So, yeah, I was looking at your example of
offsets that pay to convert waste into methane and was used by a dairy
farmer in Wisconsin I think was one of the examples, right? That sounds like
biogas to me.
Ms. Dailey: There is also biogas that’s generated from the same project, so if
you’re preventing the methane from going into the air, that generates an
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offset. If you’re using the methane from the dairy farm, that’s biogas, if
you’re buying the molecules.
Chair Filseth: So why is the offset only worth 12 cents/therm, but the biogas
is $2/therm?
Ms. Dailey: You know, all these different environmental parks have different
markets that they’re being traded in, and biogas can be used for the Federal
Clean Fuels Program. You can’t use an offset for the Federal Clean Fuels
Program, and so that program is driving the (crosstalk).
Chair Filseth: So there’s a limited supply of biogas and it’s bid up by these
other programs? That’s not fair. Got it. I’m sorry, go ahead.
Council Member Schmid: On Packet Page 29, Figure 8.
Council Member Wolbach: Staff Report Page 15?
Council Member Schmid: Page 15 of the Report. You have the environmental
offsets very cheap at the moment. Things like infrastructure, water heating,
space heating, stoves, get more expensive, biogas very expensive. Then you
have compact vehicles pay for themselves. What do you mean by that?
Ms. Ratchye: What this is is the societal abatement cost for the carbon
equivalent ton, so what that’s basically saying if you bought, this is a Nissan
Leaf instead, I can’t remember what it is, a Civic…
Chair Filseth: A Honda Civic.
Ms. Ratchye: A Honda Civic, then it’s cheaper for society just to do that
alone, so if you say that it’s a negative cost divided by how many therms of
carbons you saved, it’s a negative amount. That’s how all the things on this
graph are done.
Chair Filseth:…your cost right, because you have a bunch of government
credits and so forth, right? Isn’t that what it says?
Ms. Ratchye: No, this is the societal one. We do have also the customer, the
participant cost.
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Council Member Schmid: So why don’t we spend our $3 million per year in
buying Nissan Leafs?
Ms. Ratchye: This is actually the electrification analysis that we did, and
Council has seen this. So, is your question, yeah, that’s like the most cost-
effective way to get carbon reductions.
Council Member Schmid: Yeah, as Chair pointed out, the role of the Finance
Committee is to try to find the best financial option. Are you saying that we
should be spending our $3 million per year to buy Nissan Leafs?
Ms. Ratchye: Well, it might be a better investment for society to make, but
the problem is, who is going to be making this expenditure is the gas rate
payers. So I don’t know if you had anything to add to that.
Council Member Schmid: I mean, you can spend it on Wisconsin cows or…
(crosstalk)
Ms. Ratchye: It becomes a Proposition (Prop) 26 issue.
Council Member Schmid: But you want to spend it on cows in Wisconsin, and
you say, “oh, that’s good”. I mean, why should we be spending it on cows in
Wisconsin instead of, say, replace the bike program with a Nissan Leaf
program? Put Nissan Leafs all over town bought by the City and drive
(crosstalk) save $183.
Ms. Dailey: Bought by the City would be fine.
Mr. Shikada: Is there a protocol for that?
Chair Filseth: He’s tugging on an interesting thread here. Go ahead.
Mr. Shikada: Jane, is there a protocol there for hybrid cars that would allow
us to do that?
Ms. Ratchye: It wouldn’t be an offset, not an offset. I mean the problem is
this program is to buy something for the entire portfolio for all gas rate
payers. And buying Nissan Leafs, there would be…
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Council Member Schmid: I don’t get what the difference is between a cow in
Wisconsin and a Nissan Leaf in Palo Alto.
Chair Filseth: She’s saying it’s a Prop 26 issue, is that right.
Ms. Ratchye: I mean, what this electrification analysis basically shows is
everyone should have a Nissan Leaf, absolutely shows that.
Council Member Schmid: I guess we’re looking at it from the point of view of
the City, how can the City take money from the rate payer and get the most
productive use out of it. And if you are going to have an opt-out program,
you want to be able to say, we are using this money effectively.
Ms. Ratchye: We’re not proposing an opt-out program.
Chair Filseth: UAC’s proposal was to make it mandatory, not opt out.
Mandatory for everybody, right.
Council Member Schmid: Well, even more so then, you have to convince
people if you’re taking $43 from every citizen of Palo Alto, that you are using
it in the most effective way.
Chair Filseth: He’s tugged on an interesting cord here, right, which is, Prop
26 says that we’re allowed to pass the cost of the gas onto the consumer.
We’re not allowed to just tax it and go off and use it to buy park space or
something like that, okay. But what if we spend it on something that reduces
co2 more efficiently than cows in Wisconsin? Is that legal under Prop 26?
Council Member Wolbach: There has to be a protocol. We need a (CARB)
Comprehensive Air Resources Board approved protocol for the offset. It will
have one for car sharing, for electric vehicles, which would be interesting,
but it will have one you just said, right?
Mr. Shikada: Or even like more broadly than the protocol itself is the
question of the legitimacy of the use of the funds, and is…
Mr. Perez: What is the benefit to the gas rate payer…
Council Member Schmid: Okay, let me go a step further then.
Chair Filseth: The benefit to the gas rate payer is less emissions, right?
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Council Member Schmid: People earlier said a more effective use of the
money would be to start dealing with heating in the homes, heating water,
warming homes, would that be (crosstalk)
Ms. Ratchye: That’s the same answer.
Council Member Schmid: But it’s not, you cannot justify it?
Ms. Ratchye: You can’t use all rate payer funds to benefit just particular
individuals who are going to do an electrification of their water heating or
space heating or whatever.
Chair Filseth: But the benefit to rate payers by this program you’re
proposing is that they produce less carbon dioxide when they cook their
Ramen, okay, it reduces carbon dioxide, and so if you have some other
program that reduces carbon dioxide even more when they cook that
Raimen, how is that not a benefit to rate payers? If the first one is a benefit
to rate payers?
Council Member Schmid: Let me pursue…
Ms. Ratchye: It’s a use of the funds. It’s basically a Prop 26 issue. It’s, when
you’re buying these offsets or biogas, that is something you’re doing for the
entire customer, all customers.
Council Member Schmid: Let me pursue then the other issue of opt in and
opt out. Wanting to leave the opt out in, and you get rid of 26.
Council Member Wolbach: Is that true?
Council Member Schmid: No one has to do it. It’s their own volition. So Prop
26 is not relevant, then you could spend it on the most effective thing for
Palo Alto.
Mr. Shikada: Again, the nature with the opt out or opt in is the
administrative costs, and effectively running a program that allowed that
choice.
Ms. Ratchye: I’m just trying to contemplate, I mean, we could do that. That
is an option to change the Palo Alto Green Gas opt in program to an opt out
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program. I’m trying to imagine a marketing campaign for it that says pay a
little bit more for somebody who might get (crosstalk).
Council Member Schmid: You would have to effectively convince the people,
which is exactly what you want to do. You don’t have to convince all of
them. You say convince 90 percent of them. And that’s what politics is, so
that’s what we should be doing.
Ms. Ratchye: And as you see, if you’re looking at this graph, the only thing
that’s cost effective is the Nissan Leaf, that’s it. Heat pump water heaters,
no,unless you value carbon at $59 a ton.
Chair Filseth: Well, you’re valuing it at $8 a ton here.
Ms. Ratchye: Offsets, that’s the cost of that.
Council Member Schmid: A question to the Chair, keep on finances?
Chair Filseth: Yes, we are still on, we are in the zone of is the City getting its
money’s worth.
Council Member Schmid: Okay, good. That’s the questions I had.
Chair Filseth: That was yours. Well, you took all the good ones. So I have a
couple of procedural questions and sort of my questions sort of come back in
sort of the some of the same zone, although not as clever as Greg. If we
proceed with this program, there is basically a 10 percent rate hike, right,
does all that go to the commodity price or is there an expansion of sort of,
it’s going to, you know we’re going to have to have… You know, the
administration of it is going to take some resources, and so forth, is some
going to go to overhead, or…
Ms. Dailey: No, that’s just the commodity price and we would just, I mean,
it’s just kind of the normal course of business. We could certainly buy biogas
from the contracts we already have in place for brown gas and have a one
time set up some enabling agreements for offsets, but it’s a very low
administrative cost program.
Chair Filseth: I assume what we’re talking about here is legal with respect to
Prop 26?
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Mr. Howzell: It is. And the appropriate use of gas rate payer funds.
Chair Filseth: So the sense of the program is that we said, okay, we think a
10 percent rate increase is a reasonable thing for Palo Alto residents, you
know, to move to a carbon neutral gas supply, okay? We think 10 percent is
about appropriate. Now, we could do it for less than that if we, because
we’re doing, basically we’re going to modulate the amount of biogas versus
the offsets we do right? We could do it for less than that if we use less
biogas and more offsets, or we could do it for more than that, if we said
we’re going to buy more biogas because we think biogas is a better thing
than offsets. But I assume there is a range of quality of offsets, right? I
mean, you pick, for example, one which is animal waste is going to be
converted into methane and it’s just going to be gone, as opposed to planted
trees, which is a good thing, but in 100 years the trees going to fall down,
the carbon is going to be released into the atmosphere again, right. So I
assume there is a range of quality of offsets. Is that an accurate
characterization?
Ms. Dailey: I don’t believe so. I mean, we have placed that onto CARB and if
the project meets the protocol that CARB has laid out, then it’s an offset. So
we’re not going to place, we’re not proposing the place some other layer of
verification or scrutiny above and beyond what CARB says is a verifiable real
offset.
Chair Filseth: Okay, I understand. So if I understand what you just said, it’s,
excuse me, as long as you stick to the CARB schedule, you’re at the highest
quality of offsets that there is?
Ms. Dailey: Right, and another reason for using CARB-certified protocols is
because all those offsets could be used to meet an Renewable Portfolio
Standard (RPS) compliance requirement, so in effect, by us purchasing them
for our gas portfolio voluntarily, we’re taking them off the market and
retiring them so that someone else can’t use them to pollute.
Chair Filseth: So I guess sort of the thing that I’m wondering about this is,
you know, assuming the offsets are real, I mean we said well we think
biogas is a higher quality thing than the offsets, why is that? I mean, Cory
sort of tugged on that one a little bit. Why is that? I mean, the both get rid
of carbon, right?
Ms. Dailey: Right. I mean I think we’d be naïve to say that there isn’t some
public perception that doesn’t quite… Biogas is a very physical, definable
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thing. The offsets you have to have a bit more faith in the verification
system and the CARB protocol, so again, it’s a little bit of an emotional
thing.
Chair Filseth: I mean, we’re paying a non-negligible price for that emotional
thing, right? So let me as the question a different way, the way I’d really like
to ask it. I mean given the immense difference in cost, okay, between biogas
and the offsets, you know, let’s say for the sake of argument, you went to
100 percent offsets and 0 percent biogas, okay, but you kept the 10 percent
rate increase, okay, and used the difference to buy a whole lot more offsets,
I mean, wouldn’t you go from carbon neutral to massively carbon negative.
It’s like ten times as many, or 20 times as many carbon offsets as you’re
buying biogas. I mean wouldn’t that be a better use of that investment? I
mean, did you guys talk about that at all?
Council Member Wolbach: Can I chime in on this?
Chair Filseth: Okay, if they’re done.
Mr. Cook: Yeah, let me just answer (crosstalk) The UAC did not consider
that. I think it’s an interesting thought exercise. That’s primarily why you
guys get paid the big bucks.
Chair Filseth: We’re just the bean counters on this side. Go ahead.
Council Member Wolbach: I think we heard from members of the public
some of the concerns around offsets are that they’re, some people interpret
offsets to be green washing. That perhaps CARB’s protocols aren’t as tight
as they could be. Actually that’s a quick question, do we know if CARB is
considering those criticisms, and considering updating their standards to be
more stringent around how they identify and measure offsets. I don’t know if
you’ve paid any attention to that. Maybe that’s a question we should ask
our…
Ms. Ratchye: I actually think they have the strictest there are. There are
protocols developed by different agencies and then CARB certifies those for
their own use and they only accept a fraction of what other people accept.
They, because they do it for compliance, so they’re pretty strict. I’d say
they’re the strictest.
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Council Member Wolbach: So if we did switch to more offsets and less
biogas, that might help make up for any under valuation that was raised by
members of Carbon Free Palo Alto.
Chair Filseth: Or leakage for example, etc.
Council Member Wolbach: And, I’m getting into comments. I’ll let you finish
your questions and I have a couple of comments.
Chair Filseth: I think we’re (crosstalk), so…
Council Member Wolbach: Well then, since I’ve stolen the mike, that’s a
really interesting idea of maybe just focusing on offsets rather than biogas
entirely and my hope is that, I think if we’re talking about, you know, a plan
not for just this year but setting up a process that will probably last a few
years, CARB standards may continue to improve to address the concerns
raised by members of Carbon Free Palo Alto that the offsets might not be as
substantial as they should be, but if we’ve set up a system in saying we’re
going to buy offsets and maybe offsets continue to improve, I think the
concept of offsets, well, that’s the question, right, is the whole concept of
offsets a joke, or is it just that the current system for evaluating them is not
stringent enough? I don’t know if we can ask members of the public who
spoke earlier on this.
Chair Filseth: Well, that’s sort of the rub, right, which is, do we believe in
offsets or not. If you believe in offsets, why are we not looking. If we don’t
believe in offsets, why are we doing this, right?
Council Member Wolbach: Chair, may I, may we?
Chair Filseth: Yeah, you can ask them.
Council Member Wolbach: Let me ask either or both members of Carbon
Free Palo Alto who spoke earlier who were critical of offsets, if you would like
to come to mike and weigh in on this question. Is it impossible that offsets
could be improved in the future through more stringent regulation?
Mr. Hodge: I think that the earlier comments that were made about CARB
and the quality of the offsets is spot on. I think they are probably the
highest offsets that are available, and because CARB has defined those
offsets to be the equivalent of buying allowances so they are for compliance
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purposes. So I don’t, I wouldn’t expect that the quality of the offsets to
somehow get measurably better over time.
Council Member Wolbach: So why is it still considered green washing in your
view then?
Mr. Hodge: It’s considered green washing, we would consider it green
washing because it’s not something which is scaleable. In other words, it’s
something that you can buy, there’s a limited quantity of offsets that are out
there. Certainly Palo Alto could go off and buy these offsets, right, and it
would solve Palo Alto’s problem, but clearly everybody cannot do that, and
so one of the things that we have concentrated on as our group is to focus
on innovative solutions that Palo Alto can deploy and serve as a leader for
the region and state.
Council Member Wolbach: While we’ve got you up there, one other question,
which is people who spoke after you during the public comment period on
this topic expressed their view that this proposal and your ideas are not
incompatible. I would be curious if you would have any further explanation
about why you think this current proposal and your proposals are not
compatible.
Mr. Hodge: I guess one of the things we’re concerned about is this lost
revenue. So that’s the $3 million a year we’re estimated leaving the
community where imagine that $3 million spent on our infrastructure
instead. Buying the offsets does absolutely nothing for our community
except it’s sort of a feel good thing, but it doesn’t really address the issue
that we have directly.
Council Member Wolbach: Did your proposal have a mechanism by which
that same $3 million would be turned around in our own community?
Mr. Hodge: We believe that we have a mechanism that’s too complicated to
describe now, but there are financing mechanisms that are out there that we
believe where the cost actually can be in the same range of costs. In other
words, for the amount of money that we would be spending on offsets, we
believe for instance, that you can have electrification efforts for about the
same price, depending on the driving factors.
Chair Filseth: Although then you may run afoul of Prop 26?
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Mr. Howzell: …gas rate payer funds for those efforts, yes, a Prop 26 issue.
And also we need to just be careful to say…
Chair Filseth: We’re getting close to the edges we understand.
Mr. Howzell: Yes, we may be on the edge.
Chair Filseth: So we’re getting close to the edge, we may be on the edge.
Mr. Anderson: Okay, at a simplistic level, we had the idea of a utility fee, a
utility use fee. There’s already one there for gas. You could replace that, you
could put another one on, but that would be used to basically finance or fund
programmatic improvement in the utility to allow your rate payers options to
reduce their gas use through electrification and efficiency, so if you funded it
at the same level as the offset proposal, then you could get some real work
done in terms of getting those options out on the bill for customers. So you
allow them choice to reduce their gas use through electrification, which
allows them to benefit from that investment as a gas user. Just one
additional point on the quality of offsets, so offsets by nature are difficult to
measure. It’s just the nature of the beast. You can put as many, as heavy a
qualification and activity and protocol in place, but you can’t get away from
the fact that they have to be additive. The project that they promise
happens, would not happen otherwise but for your purse with that offset.
They have to be measurable also. Those things are just difficult to do. They
will never be surety around that and there’s always ways to cut corners and
you have five years later saying, well, is it still in place, are they still
monitoring it. So it’s just a hard thing to kind of keep your arms around and
it’s prone to problems. So that’s one of the difficulties in just, that’s why
they’re suspect in terms of…
Chair Filseth: How are we going to manage that, who is going to be… Oh, I
see, if we just use CARB, CARB manages it we don’t have to worry about it.
Mr. Anderson: Yeah, so CARB’s are reliable. There are third parties. There
are watchdogs. We just trust them.
Council Member Wolbach: But you guys are saying don’t trust them.
Mr. Anderson: Well, we’re saying just the principal of offsets doesn’t work in
terms of we’re trying to reduce gas use, not compensate and export that
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problem outside our community with something that is, by nature,
suspicious.
Chair Filseth: Well, I mean if offsets don’t work then we shouldn’t do this.
And if they do work, then we’re sort of, what’s the right mix of biogas versus
offsets, right, you know, because you could go negative, you could
compensate for, you know, losses, transmission losses and stuff like that. So
what’s the right, I mean, that’s what we’re grappling with, right? Mr. Cook.
Mr. Cook: Yeah. I just thought what Bret said last was the most important
thing, and that’s what I wanted to say when I raised my hand earlier. It’s
just that what we want to do is not generate greenhouse gases, right, and
by burning gas we generate greenhouse gases, so where Carbon Free Palo
Alto is going and where I’d love to see this City go ultimately through the
mechanism of this policy, you know they’re saying don’t do this policy, do
something else and I totally respect that. But we all agree on the core
problem with the offsets is just that you’re, you still are generating the
greenhouse gases. Now you’re offsetting that by reducing greenhouse gas
emissions somewhere else, whether it’s Wisconsin or wherever, it doesn’t
matter in the way that it’s the globe, it’s our planet. But is there, should the
money be spent and the effort be spent locally to reduce the initial
greenhouse gas emission by reducing the use of gas to do the things that we
want to do every day, so can you cut straight to that, and I guess what I’m
saying is and I think what the UAC is saying, and I think what, you know,
what Sandra and Lisa are saying is, hey, let’s do this as an interim step, as a
transitional step to ultimately get to where we’re reducing our greenhouse
gas emissions, not an offset.
Chair Filseth: Can I, I don’t think there’s disagreement on that here.
Mr. Cook: So the question is with policy. How do you get to that point, and
we’re just saying this is the transition to that.
Chair Filseth: But we’re not, that’s not agendized for tonight so we can’t…
Council Member Wolbach: I hate to be asking so many questions, because
we, I mean we’re almost 2 hours in, but there was some discussion about
the possibility of local offsets, and that does sound like keeping the money
locally or making the investment locally to some certainty, to some degree.
Can we get any more color on that concept?
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Ms. Ratchye: Any urban forestry project is absolutely welcome to go meet
the protocol and get that done and we would then be able to buy those
offsets, but it has to be verifiable. You know, it has to be those same high
quality, and if the local project can actually achieve that, that would be
awesome.
Council Member Wolbach: So when we move to a Motion, I’m not sure if it
was already in the recommendation from the UAC to prioritize identifying
local offset opportunities, if they’re available, and if we move this forward to
the Council, maybe that’s something that we could tag on to say that as
we’re looking for offsets, it’s, what’s that?
Ms. Ratchye: At a premium price?
Council Member Wolbach: Maybe at a premium or...
Chair Filseth: It can’t be as big a premium as biogas.
Mr. Hodge: Your trees, your urban forestry is not going to offset the total
emissions from the canopy.
Council Member Wolbach: I would not expect any one item would be, would
solve the problem, but to the degree that it’s an option, maybe that’s
something we would include in directing the Staff to present an option or
two to the full Council when it comes to Council.
Chair Filseth: I think the point here is that there’s probably going to be a
limited capacity, right, it’s a nice thing to do so I’m not arguing against it.
It’s probably going to be limited.
Council Member Schmid: Let me state one possibility. Palo Alto dumps tens
of thousands tons of garbage each year in landfill, which produces methane
gas for 50 years. If there is a conversion technology that translated that into
gas, biogas.
Chair Filseth: You’d like the anaerobic digester or something.
Council Member Schmid: No, conversion technology (inaudible). That would
directly deal with two Palo Alto problems, the need for an offset and what we
do to stop the creation of future methane gas. That’s a double win.
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Chair Filseth: Let me pause for a second and ask our colleague from the
Legal Department. Presumably we’re going to do a Motion at some point,
somebody brought it up, right, and the Motion is going to have to do with
the Staff recommendation and the UAC recommendation adopting the
Carbon Neutral Gas Plan. What does it mean for the Finance Committee to
approve it, right? This is a policy issue that goes far beyond the purview of
Finance, so I mean, let’s say we adopt the Staff recommendation
unanimous. The Council is going to go debate this again, right, and much
more broadly, so it doesn’t go on the consent calendar or something like
that, right?
Mr. Howzell: It could, but there would be a further discussion as to whether
it is appropriate to have it on the consent calendar and based on your
comments suggesting that it really should be something that the Council
would want to necessarily discuss and they will do what they will, what the
recommendation, you know, a unanimous recommendation and interpret it
as they will. But you raise an interesting issue.
Chair Filseth: Well, to me, I’m not comfortable having this Committee sign
off on the whole program. I think it’s beyond our scope, right, to do that. I
think the whole Council should look on it before we just enact it into law,
right.
Mr. Howzell: Well, we have to. (crosstalk) We legally can’t.
Council Member Wolbach: That’s the Staff recommendation?
Chair Filseth: I think in that context, so what is a Motion from us going to
look like? It’s going to look like we adopt this, we vote in favor of the Staff
Motion, but we have these three comments, or what does it look like?
Council Member Wolbach: Can I give it a try?
Mr. Howzell: You could do it that way, or you could inform the full Council of
what the nature of the discussion was. The limits on what your
recommendation is.
Chair Filseth: Okay, right.
Mr. Perez: Let me see if I can add. You have, not necessarily this
Committee, but the Finance Committee have added a condition that it be an
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Action Item. You know. So it could be heard and discussed by the full
Council.
Council Member Schmid: I guess another option is we could ask either the
UAC or Staff to come back with some amendments. (Inaudible) so we don’t
have to send it directly to Council without some adaptation.
Chair Filseth: We could.
Council Member Wolbach: I’ll try my hand at a Motion. I’m just looking at
the time. So I’ll move the Staff recommendation with a couple of minor
changes. Do you need me to read the Staff recommendation or… Okay, so
the changes would be to provide an option for Council to consider to
prioritize locally generated offsets or local offsets. That would be the first
change. And the second one would be to prioritize offsets over biogas.
Chair Filseth: I would second that, but I guess I’d be more comfortable with
language on the second piece. It doesn’t specifically say, well I guess the
Council could, maybe it works. The same discussion, prioritize offsets over
biogas, but I’d like to see a discussion of the relationship between biogas,
offsets and emissions. Because of it’s cost, and I’d like to see, if we’re going
to spend rate payer money on reducing carbon, I’d like to see us reduce
carbon as much as we possibly can, and I think that’s kind of the discussion,
I’d like to hear a little more discussion on that, between UAC and Council.
Council Member Wolbach: What if we, instead of saying prioritize offsets
over biogas, say prioritize maximum carbon reduction within the 10 percent,
I’m sorry, within the 10 cent/therm rate impact cap? And that allows
flexibility.
Chair Filseth: Are you okay with that?
Council Member Wolbach: Well, I’ll speak to that if I have a second.
Chair Filseth: So you can speak to it and I’d like to hear the response from
the UAC and the…
Council Member Wolbach: Do I have a second?
Chair Filseth: Sure, I second it.
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MOTION: Council Member Wolbach moved, seconded by Chair Filseth to
recommend the City Council:
A. Adopt a Resolution that:
i. Approves the Carbon Neutral Gas Plan, enabling the City to
achieve a carbon-neutral gas supply portfolio starting in Fiscal
Year (FY) 2018 with a rate impact not to exceed ten cents per
therm (10 ¢/therm); and
ii. Terminates the PaloAltoGreen Gas program established by
Resolution 9405; and
B. Direct Staff to develop an implementation plan for the Carbon Neutral
Gas Plan; and
C. Direct Staff to provide an option for Council to consider prioritizing
local offsets; and
D. Direct Staff to prioritize maximizing carbon reduction within the 10
cents per therm (10 ¢/therm) rate impact cap.
Council Member Wolbach: So that would allow the flexibility by the Utilities
Department within the program to go with biogas or with offsets,
understanding that their priority would be maximum carbon reduction and
again, it also gives to Council the option to promote local offsets.
Chair Filseth: I see a frown over here. So you’re worried about Prop 26?
Ms. Dailey: No, let me take those in two different chunks. The first one was
prioritizing local projects. I mean, we do have a preference for California
projects in here, which could be modified to local. We’ve never put a price
on that. So we’ve never said we’d be willing to spend X more on a local
California project. So we just put that out there that it’s an undefined thing
now and under your amendment it still stays undefined. As far as prioritizing
offsets, to me that just changes the recommendation to use offsets and it
changes it to spend 10 cents/therm and buy as many offsets as you can with
that, no matter, without tying it to the gas burned.
Chair Filseth: The territory you’ll get into is, well, actually if we did it all with
offsets, it would only take a five percent rate increase.
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Ms. Dailey: Well, that’s right and it’s in your Staff report already, so you
have that information.
Chair Filseth: But you come back and said if you spend 10 cents (crosstalk)
Then we have Prop 26 issues, right? You’re offsetting more carbon than
you’re actually producing, right? But you also get into the issue of the value
of biogas versus offsets, right, and I think you need to grapple with that.
Council Member Wolbach: Can we ask the City Clerk to read back the
Motion, just to make sure it was captured.
Jessica Brettle, Assistant City Clerk: Sure. Would you like me to read the full
Staff recommendation as well?
Chair Filseth: I think so, yeah.
Ms. Brettle: I have a Motion by Council Member Wolbach, seconded by Chair
Filseth to recommend the City Council adopt a Resolution that: A, approves
the carbon neutral gas plan, enabling the City to achieve a carbon neutral
gas supply portfolio starting in Fiscal Year 2018 with a rate impact not to
exceed 10 cents/therm; B, terminates the Palo Alto Green Gas Program as
established by Resolution 9405; C, to direct Staff to develop an
implementation plan for the carbon neutral gas plan; D, to also provide an
option for Council to consider prioritizing local offsets. And I think D, to
prioritize maximizing carbon reduction within the 10 cents/therm rate impact
cap.
Council Member Wolbach: Right, so it’s not specifically saying prioritize
offsets over biogas. It’s saying whatever Staff is deciding, you know, within
this, because this program does allow flexibility already, it was intended to
and that was one of the benefits we heard by UAC and analyzed it. This
would just provide a little bit more encouragement to Staff to really say, as
you’re working within that flexibility, rather than the emotional bias towards
biogas, our emotional bias is towards maximum co2 reduction, however you
do it.
Chair Filseth: Right. Let me try another slice, another view on it. I’m
(crosstalk)
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Ms. Dailey: I’m just wondering what is it that we’re, that we’ll be looking at?
What are the products. There’s biogas, there’s offsets. What other things are
you thinking of that are going to reduce…
Council Member Wolbach: I’m just saying, when deciding what mix, rather
than stipulating fove percent and 95 percent, it’s saying you can stay flexible
on the percentages, depending on Staff’s interpretation or, you know, if
biogas improves, if something changes in the marketplace, if something
changes in technology.
Chair Filseth: …high quality offsets to buy.
Ms. Dailey: If there’s no, I mean the way it’s structured now is to include as
much biogas as possible, staying within the 10-cent rate cap. If it’s
structured the opposite way, we will not buy any biogas, period. I think if
that’s what you’re leaning toward, then it’s a different plan that just says
use offsets.
Chair Filseth: We didn’t understand why there was a bias in favor of biogas
versus offsets. That’s one of the things I think all of came to understand
here tonight, because we were all asking questions about it.
Ms. Dailey: Yeah, and I think, you know, again, over, the main discussions
we’ve had at the UAC and some discussions at Council around the Climate
Action Plan, there’s never been a policy against offsets, but there has been a
feeling about the preference for physical commodity, and so the plan that we
developed was kind of the minimum rate impact you could possibly have and
have any biogas in the portfolio at all.
Chair Filseth: I understand, and that’s part of the reason I like this Motion,
okay, as is. Because we’re not telling, and as I read this Motion, we’re not
telling you to go with offsets and forget about biogas. What we’re saying is,
prioritize CO2 reduction, okay, and if you can translate that feeling into tons
of carbon dioxide, then go for it. But if it’s just a feeling and we really don’t
know, please wait rate payer money and CO2 reduction and go for the max
CO2 reduction, do the 10 percent, you know, take care of Menlo Park
carbon, that’s fine. But prioritize that, because look at it this way, you’re
going to like this, right. You know, look at this Wisconsin example. The
question we asked Greg and I sort of scrummed on earlier, right, said, well
you converted waste into methane and then you’re taking the gas and
making electricity out of it and if you buy the offset, it’s 10 cents/therm and
if you buy the gas it’s two bucks a therm, why is that? Well it’s because
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other people are bidding on the gas. Well, I don’t think rate payers in Palo
Alto, I mean the value here is the offset, right, at least to this program, so it
doesn’t make sense to charge Palo Alto rate payers for these two other guys
bidding against, bidding up the price of the gas, if that makes sense.
Ms. Dailey: Let me try it another way. Would it be, if we could, as we said
somewhere in the Staff Report, cover the entire gas portfolio with offsets,
with a rate impact of two cents, would you rather be there or would you
rather spend 10 cents and do something beyond that?
Chair Filseth: Excellent question. I think that’s a good question for the
Council, not the Finance Committee.
Council Member Wolbach: So the Motion on the table is to spend up to the
10 cents and get as much CO2 reduction as you can within that 10 cent
impact, 10 cents/therm.
Ms. Dailey: Actually, the proposal is to spend 10 cents and to incorporate as
much biogas in that as you can.
Council Member Wolbach: Right and what we’re saying is spend the 10
cents.
Chair Filseth: Spend up to 10 cents.
Council Member Wolbach: And get as much CO2.
Chair Filseth: I’ll take it the way he’s doing it.
Council Member Wolbach: It’s to spend (crosstalk) and get as much CO2
reduction as you can, rather than saying buy as much biogas as you can.
Ms. Ratchye: That’s getting 200 percent of the production.
Council Member Schmid: Let me suggest an alternative.
Chair Filseth: But you’re going to have some flexibility here. You’re going to
have losses in our transmission system. You’re going to have losses in the
nationwide transmission system.
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Ms. Dailey: Right, I hear you.
Council Member Schmid: Can I make a suggestion.
Chair Filseth: Okay, go ahead.
Council Member Schmid: The pressure is to do it by Fiscal Year ’18, 100
percent carbon neutral. It seems to me we’re talking about two different
things. You know, get that done, meaning offsets, or work toward a program
that will achieve that with local offsets, and local offsets could involve things
like infrastructure changes and conversion technology, so that says spend
the 10 cents/therm, but let’s use the money to have a plan, a strategic plan,
to get us somewhere three, four or five years.
Chair Filseth: Yeah, give the difference to those guys. Figure out some way
to do that.
Council Member Wolbach: Was that an Amendment, or is that, are you
suggesting that’s still plausible within the Motion as it’s currently drafted.
(crosstalk)
Council Member Schmid: I think we’d have to change A to read, enable the
City to work towards a carbon neutral gas portfolio with the rate impact, and
to add the local offsets, things like conversion technology and infrastructure.
Council Member Wolbach: We already have that in the Motion.
Council Member Schmid: Do we have those words?
Jessica Brettle, Assistant City Clerk: Do you want me to read it again?
Council Member Wolbach: Could you read just the things that we added.
Ms. Brettle: The two things you added were to provide an option for Council
to consider prioritizing local offsets and to prioritize maximizing carbon
reduction within the 10 cents/therm rate impact cap.
Council Member Schmid: Yeah, such as, I want to add after that local, such
as infrastructure and conversion technology.
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Council Member Wolbach: I would actually not accept that Amendment. I
don’t think it’s necessary. I think it’s redundant, or I think it’s getting too
specific.
Chair Filseth: Wait a second. Can you repeat the second addition again.
Ms. Brettle: Sure. The second addition said, to prioritize maximizing carbon
reduction within the 10 cents/therm rate impact cap.
Chair Filseth: Right.
Ms. Brettle: And Council Member Schmid added a friendly amendment, such
as, or an amendment, “such as infrastructure and conversion technology”.
Council Member Schmid: That would be under C.
Chair Filseth: What you’d really say is, potentially include infrastructure and
conversion technology.
AMENDMENT: Council Member Schmid moved, seconded by Counci Member
XXX to add to Motion Part C “such as infrastructure and conversion
technology.”
Chair Filseth: But does that take us outside the place where we’re not
allowed to go tonight? I don’t know.
Mr. Howzell: I think at this point I think you’re fine and obviously the caveat
on everything that you’re talking about is that we will also work within the
constitutional limitations of Prop 26 regarding the use of rate payer funds,
won’t go beyond the cost of service parameters.
Chair Filseth: So I don’t have a problem with it the maker of the Motion has
a problem.
Council Member Wolbach: Yeah, I’d prefer, I don’t think it’s necessary and
again, you know, looking at the alternatives that are in the Staff Report on
Page 16, I think that the tweaks we’ve made to the Motion reasonably fall
within that range of alternatives. I think that goes a little bit further and I
think that gets more towards other initiatives that should be agendized
separately. I don’t see how it would be accommodated into this effort.
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Chair Filseth: We’re staring into space. You want to get the idea in front of
Council on the Agenda that some of it could go to future mechanisms to
reduce carbon?
Council Member Schmid: Yes, we could start working on things, won’t deliver
them in 2017, but would work to have a long-term global impact.
Mr. Howzell: And I would suggest that that is outside of what we are, the
scope of what we are agendized for this particular meeting.
Chair Filseth: I think you’re probably right.
Council Member Wolbach: And that’s why I didn’t accept it, even though I
think it’s an interesting idea.
Chair Filseth: Okay, your Amendment is not accepted, your friendly
Amendment is not accepted. You can offer it as an unfriendly one.
AMENDMENT FAILED DUE TO THE LACK OF A SECOND
Chair Filseth: Once the City Attorney weighs in (crosstalk). Okay, so we
have a Motion.
Council Member Wolbach: Should we add also that we wanted to come on as
Action rather than consent?
Chair Filseth: Yeah, I think it should go on Action.
Ms. Brettle: I’ll add that on there.
Chair Filseth: Okay, I’m satisfied. All in favor? All opposed.
MOTION PASSED: 2-1 Schmid no, Holman absent
Chair Filseth: Okay, Motion carries with Council Members Filseth and
Wolbach in favor, Council Member Schmid opposed and Council Member
Holman not present. Thank you guys very much. We like it.
Council Member Schmid: Yeah, very important.
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Chair Filseth: Yeah, go look at the tradeoff between offsets and so forth.
ADJOURNMENT: The meeting was adjourned at 9:27 P.M.