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Monday, March 23, 2020
Special Meeting
Council Chambers
5:00 PM
Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in
the Council Chambers on the Thursday 11 days preceding the meeting.
Public wishing to observe the meeting may do so in one of the following
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Members of the public may comment in the following ways: 1) Send an
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attend the meeting to speak.
Call to Order
SPECIAL ACTION ITEM 5:00-6:00 PM
A. Update and Discussion of the COVID-19 Health Emergency and
the City's Response – Verbal Report, No Written Staff Report
6:00-7:00 PM
1.Consideration of Analysis, Public Outreach, and Refined Polling and
Further Direction on a Potential Local Business Tax Ballot Measure for
2020 Election and Potential Changes to the Business Registry and
Business Improvement District Programs
Oral Communications 7:00-7:15 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 7:15-7:20 PM
Items will be voted on in one motion unless removed from the calendar by three Council Members.
2.Approval of Contract Number C20176367 With Serco, Inc. for Three
Years in an Amount Not-to-Exceed $2,322,285 for Residential
Preferential Parking (RPP) Enforcement Services
REVISED
Action Item
Public
Comment as
of 3/23/20,
4 PM
MEMO
A note regarding Monday’s City Council Meeting:
Q&A
Public
Comment as of
3/23/20, 4 PM
Public
Comment as of
3/23/20, 4 PM
2 March 23, 2020
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3.Approval of Contract Number C20178071 With Oracle America, Inc. for
Two-year Term for Software Program Technical Support Services in
the Amount of $262,986; and Authorize the City Manager to Authorize
and Execute a Contract Amendment for up to a 10 Percent
Contingency or in an Amount Not-to-Exceed $26,298 in the Event
Additional Services are Required, for a Total Not-to-Exceed Amount of
$289,284
4.Adoption of a Record of Land Use Action Approving a Change to the
Local Historic Resources Inventory Classification for 526 Waverley
Street From a Category 3 (Contributing Building) to a Category 2
(Major Building) Historic Resource. The Historic Resources Board
Recommends Adoption of the Record of Land Use Action; Approval of
This Historic Designation is Exempt From the California Environmental
Quality Act (CEQA) in Accordance With Section 15301 of the CEQA
Guidelines
5.Approval of a $360,000 Net Zero Budget Amendment in the General
Fund for the Planning & Development Services Department’s Cost
Recovery Program for Private Development Studies
5A. Direction to Staff on Preparation of the Fiscal Year 2021 Proposed
Operating and Capital Budgets
City Manager Comments 7:20-7:30 PM
Action Items
Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials,
Unfinished Business and Council Matters.
6.Review of the 2020 Sustainability and Climate Action Plan (S/CAP)
Update Process and Accept the 2020-2021 Sustainability Work Plan
(STAFF REQUESTS THIS ITEM BE CONTINUED TO APRIL 13,
2020)
7.Acceptance of the GreenWaste of Palo Alto Environmental Report;
Authorization to Negotiate and Execute an Amendment to GreenWaste
Contract Number C09124501 to Increase Compensation by up to
$950,000 to Process Mixed Paper Within the United States; and
Approval of a Budget Amendment in the Refuse Fund (STAFF
REQUESTS THIS ITEM BE CONTINUED TO AN UNKNOWN DATE)
MEMO
MEMO
Q&A
Q&A
Q&APublic
Comment as of
3/23/20 at 4 PM
3 March 23, 2020
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8.Adoption of an Urgency Ordinance and Regular Ordinance Establishing
a Temporary Moratorium on Residential Tenant Evictions for
Nonpayment of Rent Related to the COVID-19 State of Emergency;
and Discussion and Direction on Extending the Evictions Moratorium to
Businesses, Nonprofit Organizations, and Other Commercial Tenants
Council Member Questions, Comments and Announcements
Members of the public may not speak to the item(s)
Adjournment
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contact (650) 329-2550 (Voice) 24 hours in advance.
7:30-8:30 PM
Public
Comment as
of 3/23/20 at 4 PM
MEMO
4 March 23, 2020
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Additional Information
Tentative Agenda
Tentative Agenda
Public Letters to Council
Set 1
City of Palo Alto (ID # 11161)
City Council Staff Report
Report Type: Action Items Meeting Date: 3/23/2020
City of Palo Alto Page 1
Council Priority: Fiscal Sustainability
Summary Title: Update, Consideration, and Potential Direction on Possible
Local Tax Measure for 2020 Election
Title: Consideration of Analysis, Public Outreach, and Refined Polling and
Further Direction on a Potential Local Business Tax Ballot Measure for 2020
Election
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the City Council:
1) Review the results of the Business Climate Survey that was sent to local businesses;
2) Provide direction to staff on next steps in developing a potential local business tax ballot
measure including, but not limited to, drafting of an ordinance for a business tax based
on employee count for City Council review, which requires refined direction on the
following:
a. Selection of a tiered rate model and approximate level of taxation (either specific
rates or gross revenue target);
b. Selection of an annual reporting requirement and an annual escalator;
c. Selection of certain dimensions pertaining to implementation and
administration;
d. Selection of elements of an economic sustainability program to pursue further;
and
3) Review, provide any additional direction needed, approve, and direct staff to proceed
with the initial outline and framework for a second poll as detailed by the City’s polling
consultant, Fairbank, Maslin, Maullin, Metz and Associates (“FM3”) (Attachment C),
regarding a potential local tax ballot measure.
City of Palo Alto Page 2
Executive Summary
This report continues work on the 2019 Council priority, “Fiscal Sustainability.” On January 27,
2020 the City Council gave direction to staff to narrow options related to a potential revenue
generating local tax ballot measure. The ballot measure work plan is spread across three tracks
that interact with each other continuously throughout the process: 1) analysis, 2) polling, and 3)
stakeholder engagement. City staff has engaged the City Council, the Finance Committee,
residents of Palo Alto, and stakeholders in the Palo Alto business community on this process for
the past ten months and will continue to do so throughout this process.
This report provides an update across of each these tracks, by discussing stakeholder
engagement efforts to date, analyzing the impact of four different options for tiering the tax
based on employee headcount, outlining recommendations to further advance the
conversation based on January 27, 2020 direction from the City Council, and discussing what a
second round of polling could include.
This report also includes multiple attachments that offer additional context for the
conversations about a potential business tax ballot measure.
Attachment A: transmits a report from TBWB, the City’s consultant for stakeholder
engagement, which summarizes responses to the online engagement survey conducted by
TBWB. The survey and other stakeholder engagement efforts to date are discussed in the body
of this report.
Attachment B: transmits a report from Matrix Consulting that summarizes various dimensions
of business taxes related to implementation and administration from comparable communities.
Those dimensions, and staff’s recommendations related to those dimensions, are discussed in
the body of this CMR.
Attachment C: transmits a high-level outline of a round two poll. It is anticipated that the City
Council will issue direction to staff regarding further refinement of a potential business tax
ballot measure and that the additional direction will be incorporated into the second round of
polling.
Attachment D: details all prior staff reports to the Finance Committee and to the City Council
that have been issued throughout this process regarding a potential local tax ballot measure.
City of Palo Alto Page 3
Discussion
Stakeholder Engagement Update
The City’s outreach consultant, TBWB, conducted an online survey instrument that was open
from February 12, 2020 through March 4, 2020. This 34-question survey was e-mailed to a
distribution list compiled from various sources, including the City’s business registry program,
the City’s utilities business customer database, and the Palo Alto Chamber of Commerce’s
online directory. Additionally, direct outreach was conducted to various groups, such as the
Palo Alto Downtown Business and Professionals Association, the California Avenue Area
Business Association, and the Stanford Research Park to encourage them to share it with their
members and associates.
TBWB’s key findings from the survey are included as Attachment A to this report and will be
discussed with the City Council on March 23, 2020. The survey covered a variety of topics,
including perceptions of the general business climate, the degree to which community issues
impact businesses, and general opinions related to a potential business tax.
The survey represents only the first step in the outreach plan related to a potential business
tax. In addition to the online survey, City staff met with companies at the Stanford Research
Park on March 3rd to discuss the potential business tax ballot measure and received feedback
and questions from various businesses that participated in the discussion. City staff also plans
to meet with companies through a meeting of the Palo Alto Chamber of Commerce on Tuesday,
March 17th (subsequent to the issuance of this staff report but prior to the discussion at City
Council). The City has also conducted outreach to individual firms and will continue these
efforts throughout the process.
Next steps in the stakeholder engagement process will include the convening of small focus
groups of businesses and other stakeholders to receive further qualitative feedback. As the City
Council continues to refine and iterate what a potential business tax ballot measure may entail
the outreach will continue to be tailored and refined accordingly.
Additionally, the City has set up a website as a central resource for items related to the business
tax ballot measure. Prior City Council direction has been summarized to reflect the progress
made to date, and previous reports are linked so that members of the community can easily
access earlier reference materials. The City’s website related to a potential business tax ballot
measure can be accessed at: www.cityofpaloalto.org/businesstax .
City of Palo Alto Page 4
Analysis Update
In partnership with Matrix Consulting, staff has prepared an analysis of four different scenarios
to show the impact of tiering and of different definitions of “small business” based on
headcount. Some demographic information about the City’s number of firms by employee tier,
as well as employees in each tier, is included below. Following the discussion of the scenarios is
additional analysis on dimensions related to the implementation of a business tax ballot
measure. The source data for Figure 1 and Figure 2 are also included as Appendix A to
Attachment B of this CMR.
Revenue Modeling based on Tiers for Employee Headcount
Figure 1. Total Number of Firms by Employee Headcount Tier by Industry Description
1 2 3 4 5 6 7 8 9
Code Industry Description 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1,000+Grand Total
1100 Agriculture, Forestry, Fishing and Hunting 7 1 8
2300 Construction 53 16 9 6 2 1 87
3100 Manufacturing 3 1 3 2 9
3200 Manufacturing 14 1 1 16
3300 Manufacturing 42 10 6 6 3 4 2 2 1 76
4200 Wholesale Trade 47 12 7 8 3 1 1 79
4400 Retail Trade 55 48 37 15 13 5 173
4500 Retail Trade 38 10 9 5 1 2 3 68
4800 Transportation and Warehousing 8 0 1 0 1 1 11
5100 Information 138 29 26 30 11 5 3 2 3 247
5200 Finance and Insurance 135 36 35 22 6 1 2 237
5300 Real Estate and Rental and Leasing 130 18 14 12 4 1 179
5400 Professional, Scientific, and Technical Services 635 112 83 93 35 23 10 2 3 996
5500 Management of Companies and Enterprises 4 3 6 2 1 1 0 0 2 19
5600 Administrative and Support and Waste Management 68 21 14 10 10 3 126
7100 Arts, Entertainment, and Recreation 25 7 7 7 2 2 50
7200 Accomodation and Food services 37 35 45 61 23 9 1 211
81 Other Services (except Public Administration)468 33 22 17 6 3 549
Total:1,907 393 325 296 121 62 22 6 9 3,141
Percentage of total:60.7%12.5%10.3%9.4%3.9%2.0%0.7%0.2%0.3%
Total # of Firms
Figure 2. Total Number of Employees by Employee Headcount Tier by Industry Description
1 2 3 4 5 6 7 8 9
Code Industry Description 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1,000+Grand Total
1100 Agriculture, Forestry, Fishing and Hunting 7 5 12
2300 Construction 81 114 111 177 150 175 808
3100 Manufacturing 5 7 45 75 132
3200 Manufacturing 28 7 11 46
3300 Manufacturing 67 67 84 151 158 470 750 1,500 2,234 5,481
4200 Wholesale Trade 58 82 88 245 225 175 329 1,202
4400 Retail Trade 112 335 516 478 922 782 3,145
4500 Retail Trade 65 67 127 136 75 250 1,258 1,978
4800 Transportation and Warehousing 15 0 15 0 75 117 222
5100 Information 200 199 365 884 710 815 1,127 1,500 6,889 12,689
5200 Finance and Insurance 219 236 467 705 450 175 764 3,016
5300 Real Estate and Rental and Leasing 188 110 181 344 300 179 1,302
5400 Professional, Scientific, and Technical Services 920 724 1,103 2,855 2,393 3,491 3,298 1,500 5,963 22,247
5500 Management of Companies and Enterprises 4 19 90 70 75 175 0 0 3,245 3,678
5600 Administrative and Support and Waste Management 95 141 198 303 729 626 2,092
7100 Arts, Entertainment, and Recreation 36 44 96 219 150 330 875
7200 Accomodation and Food services 62 238 660 1,903 1,580 1,575 375 6,393
81 Other Services (except Public Administration)549 212 297 530 399 384 2,371
Total:2,711 2,607 4,454 9,075 8,391 9,719 7,901 4,500 18,331 67,689
Percentage of total:4.0%3.9%6.6%13.4%12.4%14.4%11.7%6.6%27.1%
Total # of Employees
City of Palo Alto Page 5
Matrix Consulting used information obtained from the Employment Development Department
(EDD) to develop tables that detail the number of firms, and number of employees, by industry
type by employee tier. In some cases, confidential information was contained in the data and
was redacted by the EDD. In cases where the total employee count was known for the industry
and only one data point was redacted due to confidentiality, the employee count was made to
fit. However, in cases where the data was redacted too much to allow for such an analysis,
Matrix used estimations of employee counts. More information about the methodology Matrix
used to populate the tables can be found in Attachment B.
Figure 1 and Figure 2 do not include businesses in the following industry categories: Educational
Services; Health Care and Social Assistance; Religious, Grantmaking, Civic, Professional, etc.
Those categories represent industries which are typically exempted under either federal/state
requirements (such as non-profits) or which may include significant Stanford Related businesses
that are outside City limits. As discussed in prior reports, the City has no authority to tax
businesses located outside of City limits. To the extent that any firms in those categories are
not exempt under federal/state requirements and within City limits, the number of firms and
employees subject to the tax would increase. However, the EDD does not have a mechanism to
identify non-profits by industry type. Thus, if non-profits are operating in the industry types
detailed in Figure 1 and Figure 2, the number of firms and employees subject to the tax would
decrease slightly. Information about the number of firms and the number of employees in the
industries excluded in Figure 1 and Figure 2 can be found in Appendix C of Attachment 2.
As seen above in Figure 1, 2,300 firms, or 73.2% of businesses in Palo Alto, have fewer than 10
employees; 2,625 (inclusive) firms, or 83.6% of total businesses, have fewer than 20 employees;
and 2,921 firms, or 93.0%, have fewer than 50 employees. In total, these 93.0% of total
businesses have 18,847 employees, representing 27.8% of total employees. This means that the
remaining 48,842 employees, or 72.2% of employees, are at 220 firms, representing 7.0% of
total firms in Palo Alto.
City Council’s most recent direction to staff included the consideration of ‘tiered’ rates to
increase progressively through the different brackets. This typically functions similar to a
marginal tax bracket; a business would pay a registration fee in the first tier, plus a certain rate
for the employees beyond first tier, then at another higher rate for the number of employees
they had in the next tier, up to the top tier. Consistent with prior direction from the City
Council, staff developed four scenarios based on Figure 1 and Figure 2 that apply different tiers
based on employee headcount.
The first scenario, scenario A, shows what it would look like if every business paid a registration
fee and a per employee rate. In Scenarios B, C, and D, those businesses that were categorized
as a “small business”, based on employee size, would pay only the registration fee without
paying an additional per employee price. As seen through Scenarios A, B, C, and D, the rates
City of Palo Alto Page 6
could change, the number of tiers could change, and the definition of small business could be
modified to achieve each different outcome.
City of Palo Alto Page 7
Table 1. Scenario Summary with Small Business Definition, Tier Definitions, and Demographics
Tier 1 Tier 2 Tier 3 Tier 4
Scenario A: No Small Business
Definition 0 -9 EEs 10 – 49 EEs 50 – 249 EEs 250 + EEs
Tax Rate $150 Registration
+ $100/EE
+$125/
additional EE > 9
+$150/
additional EE > 49
+$175/
additional EE >249
# Firms|
% of total 2,300 | 73.2% 621 | 19.8% 183 | 5.8% 37 | 1.2%
# EEs|
% of total 5,318 | 7.9% 13,529 | 20.0% 18,110 | 26.8% 30,732 | 45.4%
Avg Firm
Rate $300 $2,600 $13,550 $137,829
Est Rev. $0.69 M $1.6 M $2.5 M $5.1 M
Scenario B: Small Business < 10 Employees
Definition 0 – 9 EEs 10 – 49 EEs 50 – 499 EEs 500 + EEs
Tax Rate $150
Registration Fee
+$150/
additional EE > 9
+$200/
additional EE > 49
+$225/
additional EE > 499
# Firms|
% of total 2,300 | 73.2% 621 | 19.8% 205 | 6.5% 15 | 0.5%
# EEs|
% of total 5,318 | 7.9% 13,529 | 20.0% 26,011 | 38.4% 22,831 | 33.7%
Avg Firm
Rate $150 $2,100 $19,800 $290,000
Est Rev. $0.35 M $1.3 M $4.05 M $4.3 M
Scenario C: Small Business < 20 Employees
Definition 0 – 19 EEs 20 – 99 EEs 100 – 499 EEs 500 + EEs
Tax Rate $150
Registration Fee
+$150/
additional EE > 19
+$200/
additional EE > 99
+$250/
additional EE > 499
# Firms|
% of total 2,625 | 83.6% 417 | 13.3% 84 | 2.7% 15 | 0.5%
# EEs|
% of total 9,772 | 14.4% 17,466 | 25.8% 17,620 | 26.0% 22,831 | 33.7%
Avg Firm
Rate $150 $3,600 $34,250 $348,000
Est Rev. $0.4 M $1.5 M $2.8 M $5.2 M
Scenario D: Small Business < 50 Employees
Definition 0 – 49 EEs 50 – 249 EEs 250 – 999 EEs 1,000 + EEs
Tax Rate $150
Registration Fee
+$200/
additional EE > 49
+$275/
additional EE > 249
+$300/
additional EE > 999
# Firms|
% of total 2,921 | 93.0% 183 | 5.8% 28 | 0.9% 9 | 0.3%
# EEs|
% of total 18,847 | 27.8% 18,110| 26.8% 12,401 | 18.3% 18,331 | 27.1%
Avg Firm
Rate $150 $10,100 $93,470 $557,700
Est Rev. $0.44 M $1.9 M $2.6 M $5.0 M
City of Palo Alto Page 8
As seen above, the definition of “small business” has a significant impact on the potential
modeling. Based on previous conversations with the City Council, staff varied the definition of
small business based on employee headcount. Cupertino, Mountain View, Redwood City and
San Jose define small business through gross receipts, either less than $5,000 or less than
$1,000, as seen on page 17 of Attachment B.
The scenarios above do not contemplate administrative variables that have yet to be refined by
the City Council. These may include, but are not necessarily limited to, the definition of an
employee, audit and verification requirements associated with a business tax, the inclusion of
an adjustment for inflation (and at what level), how frequently to assess the tax, whether the
tax should be administered on an calendar year basis or rolling basis, whether the tax should be
pro-rated for the first year of a business, whether the business tax should be phased in at a
certain level, what the reporting requirements should be, and what the implementation
timeline will look like. Each of those decisions will need to be factored into more refined
revenue projections as the City continues this evaluation.
Each of these costing scenarios is discussed in detail to examine different approaches for raising
$10 million for the City’s General Fund. Each scenario includes a description of the rates
charged at a certain employee headcount tier, a graph that shows the percentage breakdown
of the revenues raised by employee tier, and a brief description of the distribution of the tax
across the different tiers. As discussed above, City Council’s definition of “small business" may
have a significant impact on the rates paid by the businesses that are do not meet that
definition.
Scenario A – No Business Pays Only a Registration Fee, Tiered at 10, 50, and 250 Employees
Table 2. Scenario A Modeling by Range of Employees
Range of
Employees Base Rate Per Employee Rate
Small
Business
(Yes / no)
Average
Cost per
Firm
0-4 $150 $100 No $192
5-9 $650 $100 No $813
10-19 $1,175 $125 No $1,638
20-49 $2,425 $125 No $3,757
50-99 $6,200 $150 No $9,102
100-249 $13,700 $150 No $22,214
250-499 $36,225 $175 No $55,324
500-999 $79,975 $175 No $123,725
1,000+$167,475 $175 No $348,911
Scenario A - No Small Business, Tiered
City of Palo Alto Page 9
Figure 3. Scenario A Percentage of Revenue by Employee Headcount Tier
Scenario A shows what it would look like if there was a registration fee of $150 and then an
additional per employee charge. The tiers for these per employee charges are 0 – 9 employees
at $100 per employee, moving up to $125 for employees 10 – 49, then increasing again to $150
for employees 50 – 249 before reaching the final tier of $175 for employees 250 or more.
Because this scenario charges for each employee with no additional exemptions, it most closely
aligns the incidence, or burden of the tax, with the employee count. 23% of the revenues would
be raised by the 2,921 firms, representing 93% of total firms, with fewer than 49 employees.
Those firms employ a total of 18,847 employees, representing 27.9% of total employees. The
remaining 77% of revenues would be raised by the 220 firms, representing 7% of total firms,
with 50 or more employees that employ the remaining 48,842 employees, representing 72.2%
of total employees. This scenario can be thought of as a “base” model that helps illustrate the
different rates for different size firms with no exceptions for small businesses. The remaining
scenarios each iterate through what a possible business tax could look like with different
definitions for small business.
City of Palo Alto Page 10
Scenario B – Small Business fewer than 10 employees, Tiered at 10, 50, and 500 Employees
Table 3. Scenario B Modeling by Range of Employees
Range of
Employees Base Rate Per Employee Rate
Small
Business
(Yes / no)
Average
Cost per
Firm
0-4 $150 $0 Yes $150
5-9 $150 $0 Yes $150
10-19 $300 $150 No $856
20-49 $1,800 $150 No $3,399
50-99 $6,325 $175 No $9,711
100-249 $15,075 $175 No $25,008
250-499 $41,325 $175 No $60,424
500-999 $85,100 $200 No $135,100
1,000+$185,100 $200 No $392,456
Scenario B - Small < 10, Tiered
Figure 4. Scenario B Percentage of Revenue by Employee Headcount Tier
Scenario B shows what a potential business tax ballot measure could look like if it included a
definition of small business as fewer than 10 employees. Scenario B evidences the calculated
cost if the registration fee of $150 was charged for business with fewer than 10 employees, and
then a $150 per employee rate was charged for employees between 10 and 49, $200 per
employee for employees between 50 and 249, then $225 for employees 250 and beyond. This
scenario partially shifts the incidence, or burden, of the tax from employers with fewer than 10
employees to employers with more than 10 employees. 2,300 firms, representing 73.2% of
total businesses, with fewer than 10 employees in Palo Alto would pay approximately 3.4% of
City of Palo Alto Page 11
the total revenue. These firms contain 5,318 employees, representing 7.9% of the total
employees in Palo Alto, with the remaining 62,731, or 92.1% of total employees, working for
one of the remaining 841 firms (26.8% of total businesses.) Under this model, 62.7% of retail
businesses and 34.1% of Accommodation and Food Service businesses would pay only the $150
registration fee.
Scenario C – Small Business fewer than 20 employees, Tiered at 20, 100, 500
Table 4. Scenario C Modeling by Range of Employees
Range of
Employees Base Rate Per Employee Rate
Small
Business
(Yes / no)
Average
Cost per
Firm
0-4 $150 $0 Yes $150
5-9 $150 $0 Yes $150
10-19 $150 $0 Yes $150
20-49 $300 $150 No $1,899
50-99 $4,800 $150 No $7,702
100-249 $12,300 $200 No $23,652
250-499 $42,300 $200 No $64,127
500-999 $92,350 $250 No $154,850
1,000+$217,350 $250 No $476,544
Scenario C - Small < 20, Tiered
Figure 5. Scenario C Percentage of Revenue by Employee Headcount Tier
Scenario C shows a potential business tax that defines small business as fewer than 20
employees. This scenario further extends the $150 registration fee assumed in Scenario B for
firms with fewer than 10 employees to firms with fewer than 20 employees. As expected, this
City of Palo Alto Page 12
further shifts the incidence of the tax to employers with more than 20 employees. This scenario
then includes a rate of $150 per employee from 20-99, then $200 per employee from 100-499,
before reaching the highest rate of $250 per employees beyond 499. Under this model, 83.6%
of businesses would pay only the $150 flat rate, and would pay 3.9% of the revenue raised. The
remaining 96.1% of revenue raised would be borne by the remaining 16.4% of business that
have more than 19 employees. 9,772 employees, or 14.4% of total employees, work for the
2,625 firms with fewer than 20 employees, compared to 57,917, or 85.6% of total employees,
who work for the 516 firms with 20 or more employees. Under Scenario C, 81.7% of retail firms
and 55.5% of Accommodation and Food Service businesses would pay only the registration fee.
Scenario D – Small Business Fewer than 50 Employees, Tiered at 50, 250, 1,000
Table 5. Scenario D Modeling by Range of Employees
Range of
Employees Base Rate Per Employee Rate
Small
Business
(Yes / no)
Average
Cost per
Firm
0-4 $150 $0 Yes $150
5-9 $150 $0 Yes $150
10-19 $150 $0 Yes $150
20-49 $150 $0 Yes $150
50-99 $350 $200 No $4,219
100-249 $10,350 $200 No $21,702
250-499 $40,425 $275 No $70,438
500-999 $109,175 $275 No $177,925
1,000+$246,700 $300 No $557,733
Scenario D - Small < 50, Tiered
City of Palo Alto Page 13
Figure 6. Scenario D Percentage of Revenue by Employee Headcount Tier
Scenario D shows a potential business tax that defines small business as fewer than 50
employees. This scenario models the impact of a registration fee being extended beyond the
assumptions contained in assumption C to include all businesses with fewer than 50 employees.
The registration fee in this model is once again $150, but the per employee costs are $200 per
employee from 50 to 249, before increasing to $275 for employees between 250 and 999, and
then increasing to $300 per employee 1,000 and beyond. This model shows that 2,921, or
93.0% of the total firms, employing 27.8% of total employees would pay 4.4% of the total
revenue generated. The remaining 95.6% would be borne by the remaining 220, or 7.0% of
businesses, with more than 49 employees. 48,842 employees, or 72.2% of the total employees
in the City, work for an employer with more than 49 employees. Under Scenario D, 90.0% of
retail firms and 84.4% of Accommodation and Food Service businesses would pay only the
registration fee.
Table 6. Percentage of Employees by Headcount Tier compared to relative percentage of
revenue
Employee Tiers 0-9 10-19 20-49 50-249 250-999 1,000+
% of Employees 7.9%6.6%13.4%26.8%18.3%27.1%
Scenario A % of Revenues 6.9%5.4%11.2%25.0%19.8%31.7%
Scenario B % of Revenues 3.4%2.8%10.0%27.2%21.3%35.2%
Scenario C % of Revenues 3.5%0.5%5.6%24.0%23.4%43.0%
Scenario D % of Revenues 3.5%0.5%0.4%18.7%26.4%50.5%
Table 6 (above) shows the percent of employees by tiered employee headcount compared to
the percentage of revenue raised under each scenario. Staff is looking for input from the City
Council to further inform the development of tiers and rates. As discussed above, the definition
of small business has an impact on the incidence, or burden, of the tax. The City of Palo Alto has
a unique business community and the four scenarios discussed above show the impacts to
different elements on the various parts of that community.
City of Palo Alto Page 14
Additional Variables for Administration of a Business Tax
Matrix Consulting has continued their evaluation of comparable jurisdictions’ business taxes in
order to inform the City’s options regarding implementation and administration of a potential
business tax. The elements of implementation and administration discussed here are reflected
in Attachment B, which summarizes Matrix’s findings and includes their recommendations.
These range from the definition of an employee, to employee verification requirements, to the
inclusion of a hardship or amnesty program, a discussion of exemptions, as well as
implementation timeline, administrative resources, and other considerations such as the
Certified Access Specialist (CASp) fee and compliance with the state mandate for certain
businesses to demonstrate enrollment with the National Pollutant Discharge Elimination
System permit program. Staff’s recommendations for each of those dimensions are included in
the discussion below. Of note, based on the information provided by Matrix, the City
recommends issuing a competitive request for proposal for elements related to the system for
receiving business tax submissions. This proposal could be flexibly structured to include
administration of the program as an option. If a business tax is further pursued, the timing of
the RFP issuance could commence immediately after the election results are certified.
Definition of an Employee
In addition to affecting the amount charged and revenue raised, how the City chooses to define
an employee will also have an impact on the administration of a business tax. Discussions with
the City Council to date have included conversations about the intent of the business tax.
Consistent with those discussions, it is recommended that the City use a definition for
employee that includes those persons receiving a wage from a company in Palo Alto and
included in the company’s report to the Employment Development Department regarding
employees in Palo Alto.
If a company hired an independent contractor, as opposed to an employee, to perform work in
Palo Alto then the contractor’s firm/employer could be required to register as a business and
pay the applicable rate. This would ensure alignment with the intent voiced by the City Council
that the headcount should capture all individuals working in Palo Alto, but would ensure that
the burden for contractors is borne by their employer, not the firm where that contractor is
working.
It is recommended that the ordinance specify that the employee headcount shall be consistent
with the highest monthly number reported by the company to the EDD over the past year. This
will help streamline the reporting of employees and the calculation of the tax for businesses
since reporting to the EDD is mandatory and will also provide an easily verifiable audit
document.
City of Palo Alto Page 15
Matrix’s findings on other jurisdictions’ definitions of employees can be found on pages 4 – 6 of
Attachment B.
Employee Verification Requirements
As discussed with the City Council throughout the past year, it will be important that the City
include audit and verification parameters for enforcement and compliance purposes as part of
a potential business tax. It is recommended that the City not only require a signature under
penalty of perjury verifying that the number of employees is true and accurate and be signed by
the local chief operating officer of a company but also notify businesses that they may be
audited on an annual basis to independently assess the veracity of their submissions. Language
should be included in the ordinance for a potential business tax ballot measure that
representatives of the City shall have access to the records necessary to independently verify
that the correct figures were used in the calculation of a tax and to treat materials gathered
through that verification confidentially.
Matrix’s findings on other jurisdictions’ employee verification requirements can be found on
pages 7 – 11 of Attachment B.
Hardship/Exemption Clause
To date, the City Council has expressed interest in minimizing the impact of a potential business
tax on small businesses. Only one other jurisdiction, San Jose, offers a hardship clause. If the
City Council chooses a tiered model that involves some definition of small business paying only
the registration fee, a hardship clause is not recommended. In each of the three scenarios
described above (Scenarios B, C, and D) where small businesses are charged only a registration
fee, the nominal cost associated with the registration fee for small businesses would be less
than the current base fee for San Jose. Processing hardship applications would also require
additional administrative resources. Given the nominal cost of a registration fee in the City’s
scenarios and the additional administrative resources necessary to administer a hardship
exemption program, a hardship/exemption clause is not recommended for inclusion in the
ordinance.
Matrix’s findings on other jurisdictions’ use of a hardship clause can be found on page 11 of
Attachment B.
Annual Revenue reporting Requirements
On January 27, 2020, the City Council voted to include an annual revenue reporting
requirement. This would ensure that the funds generated through a business tax program are
tracked and accounted for and would help provide accountability for the use of the funds. The
City has several options for an annual report on the revenue generated through a business tax.
From most extensive to least extensive, three options include the development of a citizen’s
committee to review the revenues generated and the expenditure of funds on an annual basis,
the development of an audit from an outside firm to review the revenues and expenditures
City of Palo Alto Page 16
associated with a business tax on an annual basis, and the inclusion of reporting out on
revenues and expenditures generated by a business tax as part of the City’s existing reporting
structures including the Comprehensive Annual Financial Report (CAFR) and the associated
Year-End report.
The City Council has stated its desire to ensure accountability of the funds raised through a
business tax. No other comparable jurisdiction has included a reporting requirement beyond
inclusion in their annual audit in their business tax modernization. One option could include the
creation of a citizen’s oversight committee; however, the resources necessary to staff a citizen’s
committee would be non-trivial and would erode an additional portion of the revenues raised,
in addition to the costs necessary to staff the administrative elements of the business tax. As
such, staff recommends that the City use polling to ensure that annual business tax revenue
expenditures remain aligned with community priorities and the community’s expectation of
accountability for the funds.
Index for Inflation
On January 27, 2020, the City Council voted to include an escalator in the development of a
business tax. The Consumer Price Index (CPI), as calculated by the U.S. Bureau of Labor
Statistics (BLS), reflects the changes in prices year-over-year in a predetermined basket of
goods. This figure quantifies the aggregate price level in an economy and is useful for
quantifying the impacts of inflation.
In order to ensure that a potential business tax generates a consistent amount of revenue, it is
recommended that an index for inflation, consistent with CPI for the San Francisco Bay Area, be
included as part of any potential business tax. The CPI is published on bi-monthly basis (every
even month) by the BLS for the San Francisco Bay Area and is usually released in the middle of
the following month, e.g. February’s information is released in the middle of March.
The selection of a CPI month to use is important not only because it should be consistent, but
because it impacts not only the timing of the administration of the tax but also influences, and
is influenced by, whether the tax should be administered on a rolling basis or an annual basis.
Table 7. Comparable Jurisdictions’ Indices for Inflation (Source: CMR 10655 – Attachment A)
Jurisdiction Type of Tax Index for Inflation
Cupertino Square Footage 1.8%
San Jose Employee Headcount 1.5% minimum base tax, 3.0% on incremental brackets,
3.0% on rate cap
Mountain View Employee Headcount Bay Area CPI
Redwood City Employee Headcount Bay Area CPI
To ensure consistency, it is recommended that a CPI be used from 5 months before an annual
renewal date. (If the annual renewal date was January 1, the CPI used could be the August to
August CPI, which is released in September.) This would ensure sufficient time to apply the CPI
to the prior year’s rates and update notification materials for businesses appropriately. If the
City of Palo Alto Page 17
annual renewal date was July 1, the CPI used could be the February to February annual CPI,
which is released in March to ensure sufficient time to apply the CPI to the prior year’s rates
and update notification materials for businesses appropriately.
Table 8 below, showing 20 years of CPI for the Bay Area, is included for reference. The data
from February to February and August to August has been bordered in the table for ease of
reference.
Table 8. San Francisco Bay Area CPI 1999 – 2019
Year Feb
YoY
Growth
as %Apr
YoY
Growth
as %Jun
YoY
Growth
as %Aug
YoY
Growth
as %Oct
YoY
Growth
as %Dec
YoY
Growth
as %Annual
YoY
Growth
as %
1999 169.4 172.2 171.8 173.5 175.2 174.5 172.5
2000 176.5 4.2%178.7 3.8%179.1 4.2%181.7 4.7%183.4 4.7%184.1 5.5%180.2 4.5%
2001 187.9 6.5%189.1 5.8%190.9 6.6%191.0 5.1%191.7 4.5%190.6 3.5%189.9 5.4%
2002 191.3 1.8%193.0 2.1%193.2 1.2%193.5 1.3%194.3 1.4%193.2 1.4%193.0 1.6%
2003 197.7 3.3%197.3 2.2%196.3 1.6%196.3 1.4%196.3 1.0%195.3 1.1%196.4 1.8%
2004 198.1 0.2%198.3 0.5%199.0 1.4%198.7 1.2%200.3 2.0%199.5 2.2%198.8 1.2%
2005 201.2 1.6%202.5 2.1%201.2 1.1%203.0 2.2%205.9 2.8%203.4 2.0%202.7 2.0%
2006 207.1 2.9%208.9 3.2%209.1 3.9%210.7 3.8%211.0 2.5%210.4 3.4%209.2 3.2%
2007 213.688 3.2%215.842 3.3%216.123 3.4%216.240 2.6%217.949 3.3%218.485 3.8%216.048 3.3%
2008 219.612 2.8%222.074 2.9%225.181 4.2%225.411 4.2%225.824 3.6%218.528 0.0%222.767 3.1%
2009 222.166 1.2%223.854 0.8%225.692 0.2%225.801 0.2%226.051 0.1%224.239 2.6%224.395 0.7%
2010 226.145 1.8%227.697 1.7%228.110 1.1%227.954 1.0%228.107 0.9%227.658 1.5%227.469 1.4%
2011 229.981 1.7%234.121 2.8%233.646 2.4%234.608 2.9%235.331 3.2%234.327 2.9%233.390 2.6%
2012 236.880 3.0%238.985 2.1%239.806 2.6%241.170 2.8%242.834 3.2%239.533 2.2%239.650 2.7%
2013 242.677 2.4%244.675 2.4%245.935 2.6%246.072 2.0%246.617 1.6%245.711 2.6%245.023 2.2%
2014 248.615 2.4%251.495 2.8%253.317 3.0%253.354 3.0%254.503 3.2%252.273 2.7%251.985 2.8%
2015 254.910 2.5%257.622 2.4%259.117 2.3%259.917 2.6%261.019 2.6%260.289 3.2%258.572 2.6%
2016 262.600 3.0%264.565 2.7%266.041 2.7%267.853 3.1%270.306 3.6%269.483 3.5%266.344 3.0%
2017 271.626 3.4%274.589 3.8%275.304 3.5%275.893 3.0%277.570 2.7%277.414 2.9%274.924 3.2%
2018 281.308 3.6%283.422 3.2%286.062 3.9%287.664 4.3%289.673 4.4%289.896 4.5%285.550 3.9%
2019 291.227 3.5%294.801 4.0%295.259 3.2%295.490 2.7%298.443 3.0%297.007 2.5%295.004 3.3%
The City included CPI as its method of increasing fees associated with the Storm Drain program.
That program includes a stipulation that inflation adjustments would be based on the lesser of
the local rate of inflation or 6 percent. The 6 percent serves as a functional limit on year-over-
year increase. If the City Council would like to pursue something similar in the case of the
business tax, a similar ceiling could be imposed.
City Council included direction to include an index for inflation in their January 27 direction to
staff regarding a potential business tax. To advance the conversation, it is important to
determine whether to tie that index to CPI, whether to include a provision that it could not be
lower than the prior year, and clarifying whether there should be a ceiling similar to the
increase for the Storm Drain increase.
Resources for Implementing and Administering a Business Tax
As the City Council continues to explore a potential business tax ballot measure, the timeline
and the administrative resources necessary to implement the business tax can be refined in
parallel to the other decisions made by the City Council.
City of Palo Alto Page 18
The implementation timeline will be significantly impacted by the decisions the City Council
makes with regards to both the structure of the program as well as the decision on whether to
administer the tax in-house or to use a consultant to collect the business tax. Regardless of
which path is pursued, the City would be able to realize a portion of savings from the contract
for the business registry certificate program, which would become partially redundant if a
business tax is implemented. If a potential business tax is ultimately enacted, staff recommends
that the Business Registry Certificate functions be subsumed by the administration of the
Business Tax, regardless of whether that administration is in-house or an outside consultant.
In order to administer the funds in-house, the City would be able to repurpose the portion of a
management analyst that currently works on the business registry, but would need to augment
existing staffing to ensure sufficient resources are available. Other comparable jurisdictions
have between 1.0 and 10.0 dedicated FTE to administer their programs and many contract out
the audit/compliance function as seen on page 13 of Attachment B. Staff could be cross-
trained, but during peak times it would be important to have dedicated resources to administer
the renewal process. It is likely that the City would pursue a functional team where multiple
employees each contribute a portion of their time to the administration of a business tax
program. However, the level of the staff necessary would depend in part on whether the City
Council chooses an expiration and renewal date that is the same for every business or whether
there is a rolling expiration and renewal process.
A rolling process would require dedicated staffing throughout the year in order to process
applications on a rolling basis, while a uniform expiration and renewal date would allow
employees to work on other projects throughout the year and then focus on the business tax
administration.
This also impacts the implementation timeline. It will take time to implement a system, interact
with businesses, and perform outreach and education. Notably, Mountain View elected to
phase-in the full business tax for employers with more than 50 employees. If the City Council
wanted to pursue a similar option, the impact on revenues would need to be considered as part
of that decision.
In order to add two professional staff to administer the business tax and procure a system
capable of receiving online applications, staff estimates a funding need of between $500,000
and $700,000 to administer the program in-house.
The City of Palo Alto is in a somewhat unique situation among comparable jurisdictions since
the City Council is not exploring the modernization of an existing business tax, but rather the
institution of a business tax for the first time. Comparable jurisdictions in the Bay Area
administer their programs in-house, but through Matrix Consulting’s research it was not clear
how they arrived at that decision nor what factors were examined to reach their current service
delivery model.
City of Palo Alto Page 19
Through contact with other cities outside of the area that use consultants to administer their
business tax programs, a few points emerged. Matrix Consulting found that jurisdictions were
charged various rates. These are discussed in greater detail in the Matrix report, in Attachment
B, on pages 14 and 15.
Based on the information provided by Matrix, the City recommends issuing a competitive
request for proposal for elements related to the system for receiving business tax submissions.
This proposal could be flexibly structured to include administration of the program as an
option. If a business tax is further pursued, the timing of the RFP issuance could commence
immediately after the election results are certified. Through this timeline, the City could more
effectively evaluate its options for administering the program and return to the City Council
with a refined recommendation regarding whether the tax should be administered in-house or
through a contracted vendor.
Additional findings of note related to administration are that the City should include that it
provides required State and Federal Law Business License tax exemptions in its ordinance, but
not specifically enumerate them in the ordinance since they may change periodically. The City
could then list those exemptions on its Business Tax portal. Matrix recommends explicitly
including that the obligation of claiming an exemption falls to the business.
Matrix’s findings and recommendations related to the implementation and administration of a
business tax can be found on pages 11-20 of Attachment B.
State Mandates
Matrix also identified two state mandates that the City should keep in mind when
implementing a business tax, as discussed on pages 20 – 22 of Attachment B. First is the
inclusion of a Certified Access Specialist (CASp) fee consistent with SB 1186. SB 1186 requires
that $4 of any business license fee be transmitted to the state for disability access, including
non-profits and otherwise exempted organizations. This additional fee should be added to any
business tax to ensure that funds can be paid to the state. Additionally, the City should include
language about compliance with disability access provisions under federal and state law as part
of its business tax process.
The second state mandate that Matrix identified was related to SB 205, signed into law by
Governor Newsom in October 2019. This law requires certain types of business to demonstrate
their enrollment with the National Pollution Discharge Elimination System (NPDES) permit
program prior to obtaining a business license. The City should provide information related to
these requirements as part of its business tax process, and include a question on the
application about whether the business falls into one of the required categories. However, staff
recommends that the obligation be on businesses to both identify themselves as required to
participate in the NPDES permit program and demonstrate their enrollment as part of their
application.
City of Palo Alto Page 20
Economic Sustainability Strategy
On January 23, 2020 the City Council gave direction to include an economic sustainability
program as part of continued conversations around a business tax. To add a position
responsible for economic sustainability strategy, approximately $250,000 in ongoing funding
would be needed. This role could serve as a central point of citywide strategy implementation
and coordination with businesses throughout the City of Palo Alto and ensure community
engagement with business leaders.
If a position were added, they could also serve as an ombudsperson for local businesses that
interact with City departments, serving as a central resource to coordinate work and responses
about concerns ranging from permitting to the status of infrastructure improvements that
might impact businesses.
This staff liaison could meet with the Palo Alto Downtown Business and Professional
Association (PADPBA), the California Avenue Area Business Association (CAABA), as well as
meetings with groups like the Chamber of Commerce, businesses at Stanford Shopping Mall,
Town & Country Village, and companies at the Stanford Research Park. This position could also
interact with groups like the Transportation Management Association (TMA) to not only
maintain the relationship between the City and the TMA but also strengthen the City’s
engagement with the firms that participate in the TMA.
The City’s commercial districts are assets to Palo Alto companies as well as residents, providing
services and amenities critical to attracting and retaining the talented workforce needed to live,
work, and enjoy Palo Alto. The position could be tasked with ensuring that the City’s
commercial districts remain attractive by coordinating among not only the associations listed
above but also pursuing additional strategies to draw more people to the districts. Adding
$50,000 in non-personal expenses would help bolster the options available for economic
sustainability and ensure that the City could contribute in modest ways to economic
sustainability. These could include further investments in City-organized activities, permitting
fees for certain community events, and outreach campaigns on various topics for the business
community. This would bring the total resource impact of an economic sustainability program
to $300,000 and could help ensure that Palo Alto remains an attractive site for businesses to
locate.
Polling Update
The City has engaged FM3 to conduct public opinion research for the potential local business
tax ballot measure. The City Council approved a workplan that included a preliminary round of
polling that was completed in January and presented to the City Council on January 27, 2020
and a second refined round of polling to be completed in the spring.
The outline and framework for the second poll is detailed in Attachment C of this staff report.
With City Council’s approval of the outline and framework, it is expected that the poll will be
conducted in April and the findings will be reported to the City Council in May.
City of Palo Alto Page 21
Resource Impact
Resources for continued stakeholder engagement and a second round of polling have already
been approved and appropriated by the City Council. As discussed above, anticipated resource
impacts of approximately $500,000 to $700,000 in ongoing funding may be required for the in-
house administration of a business tax and procurement of a system capable of processing
initial applications and payments, as well as renewals and payments, online. Additionally,
approximately $300,000 in ongoing funding would be needed to have dedicated staff for
Economic Sustainability. These ongoing costs would be offset by the revenue generated by a
potential business tax.
Timeline/Next Steps
It is anticipated that the City Council will provide additional direction to staff. The next steps will
consist of refining a chosen costing structure as well as implementation and administration
details, continued stakeholder engagement, and a second round of polling with residents.
A potential draft timeline is detailed below:
Activity Estimated
Schedule
Round 1 Polling January
Stakeholder Outreach (Business Community) January– March
Report out on Round 1 of Ballot Measure Polling/ City Council Approval of
Business Tax Methodology
January 27
City Council Discussion of scenarios w/rates and structures, administration
and implementation, penalties/reporting, and additional needs assessment
at defined levels (including Gross vs. Net analysis and Bondable Revenue).
Provide direction on tax structure for preparation of draft ordinance
language for a potential ballot measure.
March 23
Round 2 refined polling April
City Council to discuss round 2 refined polling results and inform feedback
on draft ordinance for a potential ballot measure for Nov 2020 election
April/May
City Council review of ordinance language, review of ballot language June
City Council takes policy action to place measure on ballot June
(est 6/22) City Council adopts resolution of necessity
City Council adopts resolution calling election
Deadline to submit Ballot Measure to Santa Clara County August 7
Election Day November 3
In order to place a local tax ballot measure on the November 2020 ballot, the City Council
needs to provide additional direction to staff to ensure sufficient time for staff and consultants
to complete the work necessary to reach the November 2020 election timelines.
City of Palo Alto Page 22
If the City Council is unable to continue to narrow the focus regarding the critical elements of a
potential ballot measure, the tight timelines necessary to comply with the election deadlines
may be compromised. It is expected that some of these reports will be transmitted in late
packet due to the quick turnaround times and flow of information.
Environmental Review
This report is not a project for the purposes of the California Environmental Quality Act (CEQA).
Attachments:
Attachment A: TBWB Business Survey
Attachment B: Matrix Consulting Palo Alto Business License Tax Supplemental Report
Attachment C: FM3 Second Poll Outline
Attachment D: Summary of CMRs
TO: City of Palo Alto
FROM: Charles Heath, Partner, TBWBH
DATE: March 9, 2020
RE: Business Climate Survey Results
As the first step in the outreach plan related to a potential business tax, representatives from
local businesses were invited to complete a 34 question survey. Respondents were invited to
begin completing the survey on February 12, 2020 and the survey remained open through
March 4, 2020. A link to the online survey was emailed to all available business email addresses
and two reminder emails were sent during the survey period. The City used e-mail addresses
from various sources; these included City utility accounts on file, e-mail addresses from the City's
Business registry program, as well as individual e-mail addresses identified through the Chamber
of Commerce's website. In addition, outreach was conducted to various groups, such as the Palo
Alto Downtown Business and Professionals Association, the California Avenue Area Business
Association, and the Stanford Research park to encourage them to share the survey with other
businesses. To allow for the survey to be completed anonymously, a dedicated phone line was
created to receive survey responses by phone and hard copy surveys were made available as
well.
The substance of the survey covered a variety of topics including perceptions of the general
business climate, the degree to which various community issues impact local businesses, as well
as opinions related to a potential business tax. Open ended questions and a general comments
section allowed businesses to share feedback outside of the structure of the survey. While the
content of the survey questions were tailored for businesses, many of the same themes covered
in the City’s recent voter opinion research were also included to help compare and contrast the
opinions of businesses and residents.
A total of 120 survey responses were received. Small businesses with five or fewer employees
comprised the largest group of respondents (38.8%). Businesses with 20 or fewer employees
made up 81% of the responses. Only 8% of the responses came from larger businesses with 40
or more employees. Respondents were much more likely to lease property in Palo Alto than own
property. Approximately 75% of survey responses were submitted by the owner or an executive
of a business. An additional 22% of surveys were completed by management level employees.
Following is a summary of key findings from the survey:
•Respondents were evenly divided in their ratings of Palo Alto as a place to do business.
53% rated Palo Alto as an excellent or good place to do business while 47% rated Palo
Alto as an only fair or poor place to do business.
Attachment A
• Businesses were more positive in their ratings of the strength of the local economy. 59%
rated the local economy as very strong or strong and 32.5% rated the economy as
moderate. Only 8% rated the local economy as weak.
• A strong majority of respondents felt that Palo Alto is either a worse place to do business
or about the same as it was five to ten years ago. Similarly, most respondents felt Palo
Alto will be a worse place to do business or about the same in the next five to ten years.
• When asked what Palo Alto could do to improve the local business climate, responses
focused on reducing taxes and regulation, creating more affordable housing, improving
parking and traffic, and improving communication between the City and local
businesses.
• Businesses ranked the cost and availability of housing as the issue having the biggest
impact on attracting and retaining employees, followed by traffic congestion and
parking. Parking was noted as having the biggest impact on attracting and retaining
customers.
• Businesses were evenly divided on their perception of whether the City needs additional
funding to solve local problems. Respondents were also divided on whether the amount
paid in local taxes and utilities is too high or about the right amount. Virtually no
respondents rated these amounts as too low.
• Business were divided as to whether the amount Palo Alto businesses pay in local taxes
is about the same or higher than the amounts paid in other Bay Area cities. Very few
businesses responded that the amount paid in Palo Alto is lower.
• Over 60% of respondents disagreed with the idea that Palo Alto businesses should
contribute to addressing local issues by paying a business tax similar to those paid by
businesses in neighboring cities. Approximately 24% of respondents agreed with this
statement. Similarly, seven out of ten respondents indicated that increasing taxes on
local businesses would have negative impacts including causing some businesses to
relocate outside of Palo Alto.
• 62% of respondents indicated that they would oppose a business tax with tiered rates
based on the number of employees. 38% indicated support. Respondents
overwhelmingly indicated that small businesses should receive an exemption or
discount.
• Majorities of respondents also opposed potential alternative tax structures including a
property tax based on building size (58% oppose), a flat tax that applied to all businesses
equally (66% oppose) and a payroll tax (93% oppose).
• 71% of respondents felt that any business tax should be structured as a special tax with
clearly defined spending priorities rather than a general tax with flexible uses for any city
purpose.
• As for the use of funds from a potential tax, businesses placed the highest priority on
improving traffic and transportation followed by providing more workforce housing.
• If Palo Alto were to enact a business tax, 42% of respondents reported they would
relocate to another community. An additional 33% reported they were unsure about
relocating.
Following is a detailed summary of survey questions and responses. As next steps in in the
outreach process, we will convene small focus groups of businesses and other stakeholders to
receive qualitative feedback. In addition, regular informational updates will be provided to
businesses and the community at-large as Council makes decisions related to a potential
business tax.
Palo Alto Business Climate Survey Results
5. What is the single most important thing Palo Alto could do to make it a better place to
do business in the future?
1. Less regulation 2. Lower taxes and fees for local businesses
3. Increase affordable housing
4. Increase parking
5. Better communication between businesses and city government
6. Promote local businesses 7. Improve traffic
8. Reduce cost of rent for businesses
9. Improve downtown area
10. Address homelessness
11. Improve public transportation
6. What is the next most important thing Palo Alto could do to make it a better place to
do business in the future?
1. Lower taxes and fees for local businesses
2. Increase parking 3. Improve traffic
4. Increase affordable housing
5. Better communication between businesses and city government
6. Reduce cost of rent for businesses
7. Less regulation 8. Improve downtown area
9. Address homelessness
10. Improve public transportation
11. Reduce minimum wage 7. What is the single most important thing Palo Alto could do to help develop and
promote local businesses?
1. Better communication between businesses and city government
2. Lower taxes and fees for local businesses 3. Less regulation 4. Promote local businesses
5. Increase parking
6. Reduce cost of rent for businesses
7. Increase affordable housing 8. Improve downtown area 9. Reduce minimum wage
10. Address homelessness
11. Improve public transportation
8. Following is a list of problems and challenges that some people say need to be addressed in Palo Alto. For each item, please rate how serious the problem is to your business.
10. For each of the following items, please rate the degree to which each item impacts your business’s ability to attract and retain employees in Palo Alto.
12. For each of the following items, please rate the degree to which each item impacts
your business’s ability to attract and retain customers in Palo Alto.
25. Here is a list of several other ways taxes on local businesses are structured in other
cities. For each item, please indicate if you would support or oppose a tax on business
structured in that way.
31. Having now considered different options for structuring a potential local business
tax, please indicate if you would support or oppose a tax on business structured in the
following ways.
Business License Tax Program
Recommended Program Parameters
CITY OF PALO ALTO, CALIFORNIA
March 10, 2019
matrix
consulting group
Attachment B
Table of Contents
1. Overview 1
2.Program Implementation Parameters 2
Appendix A – Number of Firms and Employees per Employee
Size Category 23
Appendix B – EDD Definition of Employee 27
Appendix C – Example Disability Access Compliance Language 28
Appendix D – Sample Business License Tax Forms 29
Business License Tax Report Supplement PALO ALTO, CALIFORNIA
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1 Overview
Since the prior report, the Matrix Consulting Group has developed for City staff an
interactive financial spreadsheet that enables further refinement of revenue projections
to be developed based upon varying scenarios. The tool enables a unique rate per
employee to be applied to each business size category and for each category to be
identified as a small business or not (and therefore applying a different rate for those
identified as a small business).
The revenue projections were developed based upon data received from the State of
California Employment Development Department on 10/3/19 and covered the fourth
quarter of 2018. The data provided by EDD lists, within defined size categories, the
number of firms and the number of employees within the City of Palo Alto. One important
caveat on this data is that it does not exclude Stanford-related businesses and was
generally provided only at the 2-digit NAICS code level. Prior analysis indicated that
Stanford-related business represented approximately 3.3% of the total number of firms
and approximately 11.5% of total employment.
To clean up the data and address the fact that a portion of the dataset had data
suppressed to prevent disclosure of confidential information, the project team made the
following assumptions regarding the suppressed firms and employee counts:
• For each business category based on employee size, the project team initially
assumed any firm in that size category would be at the median of the range (i.e. –
for business category size 5 – 9 we assumed the firm would have 7 employees.
For the over 1000+ category, 1,500 employees was initially assumed when actual
numbers were not available.
• Based upon the missing firms and knowing the size of the missing firms, the project
team utilized a “best fit” approach to allocate the firms to size categories in a
manner that accounted for all “missing employees”.
• This approach enables the data to include all firms in the data set and eliminate
the majority of the “missing employees” that were due to the suppressed data
enabling the final projections to be more accurate and reflective of the actual
business environment in the City of Palo Alto.
For purposes of conducting revenue projections, the average number of employees per
firm is used. The base tables utilized are provided in Appendix A.
The following information provides specific details on policy and administrative elements
of establishing a business license tax program.
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2 Program Implementation Parameters
This supplemental report to the prior report completed on the Business License Tax
Program Revenue projections provides information regarding key elements of
implementing a business license tax program. It is based upon prior advisory direction
given by the City Council at prior meetings and approaches utilized by other Bay Area
comparable communities that license businesses. It is intended to provide context on
potential options regarding how the City of Palo Alto should structure the implementation
and administration of their business license tax program.
1. Defining an Employee.
The City will need to determine a reasonable definition for who is to be considered an
employee and how the total number of employees will be calculated. Several of the
comparable jurisdictions with a Business License Tax program have the term “employee”
defined within their ordinance. Certain jurisdictions further define the term “total number
of employees”, “average number of employees” or similar language based on whether
that jurisdiction’s taxing methodology requires calculation of total employees.
(a) Comparable Communities’ definition of “Employee”:
• “Any or all persons engaged in the operation or activity of any business, whether
as owner, a corporate officer, a partner, agent, manager, solicitor or any and all
persons employed or working in such business either full time, part-time,
permanent or temporary”. – Santa Clara
• “Any person working in, or engaged in, the operation or conduct of any business,
including, but not limited to the owner, a member of the owner’s family, partner,
officer, agent, manager, servant, or solicitor”. – Sunnyvale
• “Any individual in the service of an employer, under an appointment or contract of
hire or apprenticeship, express or implied, oral or written, whether lawfully or
unlawfully employed, and includes but is not limited to, all of the enumerated
categories in subsections (a) through (f) of California Labor Code Section 3351,
regardless of whether Workers' Compensation Benefits, pursuant to Division 4,
Part 1, Section 3200 et seq. of the California Labor Code are required to be paid”.
– San Francisco
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• “Each and every person engaged in the operation or conduct of any business,
whether as owner, member of the owner's family, partner, associate, agent,
manager or solicitor, and each and every other person employed or working in
such business for a wage, salary, commission or room and board”. – San Jose
• “Any person who works for or under the direction of, or on behalf of or as an agent
of a business operator.” – Mountain View
• “All persons engaged in the operation or conduct of any business including an
owner, any member of an owner's family, partner, agent, manager, solicitor and
any and all other persons employed or working in or associated with said
business whether or not any salary or other compensation or remuneration is
paid for such work. "Employee" as used herein includes employees (as defined
above) of subcontractors, licensees or other persons engaged in the business for
which a license hereunder is issued unless such subcontractors, licensees or
other persons are licensed hereunder for the businesses in which they are
engaged or which they conduct. Employee shall not include persons employed
on a seasonal or periodic basis for less than one month or on a part-time basis
for two (2) months or less.” – Redwood City
• “Any person engaged in the operation or conduct of any business, whether or not
any member of the owner’s family, partner, agent, manager, solicitor, and any other
person is employed or working in such business.” – San Mateo
(b) Comparable Communities’ definition of “Average Number of Employees”:
• The total number of employees for whom a tax is to be paid shall be determined in
the following manner:
a. For any business having a fixed place of business in the city, the total number
of employees shall be the greatest number of persons employed or expected to be
employed or taking part in the business during any twenty-four-hour period.
b. For any business not having a fixed place of business in the city, the total
number of employees shall be the greatest number of persons employed or
expected to be employed or taking part in the business within city limits during any
twenty-four-hour period. - Sunnyvale
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• The average number of employees employed in the city in applicant's business
in the one year immediately preceding the commencement of the year for which
the business tax certificate is being issued, and shall be determined as follows:
By ascertaining the total number of hours of service performed in the city by all
employees in the applicant's business during the preceding year and dividing the
total number of hours of service thus obtained by the number of hours of service
constituting a day's work according to the laws, custom or usage governing or
pertaining to such employment, and the number thus obtained shall then be
divided by the number of business days in the preceding year; or
At the option of the applicant, if the applicant files with the state department of
employment the forms and reports hereinafter mentioned, and if the applicant
reports therein all applicant's employees as defined in this chapter, the applicant
may calculate the average number of employees by taking the number of
employees employed in applicant's business in the city in each month of the
preceding year as shown and reported on all DE3 forms, and by dividing the sum
thus obtained by twelve. The DE3 and other forms hereinabove referred to are
those certain forms entitled "DE3 Contribution Return and Report of Wages
Under the Unemployment Insurance Code," which employers are required to file
with the state department of employment, under the Unemployment Insurance
Code of the state for the purpose of reporting contributions due under such code,
and any other form or forms now or hereafter required by the state for such
purposes.
In computing the average number of employees, fractions of numbers of one-
half and greater shall be rounded up to the next whole number. – San Jose
• The number of employees as herein defined employed monthly within the City
earning wages for the periods nearest the fifteenth day of each month during the
previous year as reported by the applicant to the State Department of
Employment on forms which are used for reporting payments due under the
Unemployment Insurance Act of the State of California for each month of the
previous calendar year, adding the same and dividing by twelve (12) and adding
to the result thereof the number of employees compensated by other than wages
engaged in the business. If the applicant has been in business less than one
year, the average number of employees shall be the number of employees
determined as described above divided by the number of months remaining in
the calendar year for which such calculation is made.
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As an alternative to the definition above, and at the option of the applicant, the
"average number of persons employed" shall mean the average number of
persons employed daily by the applicant for one year, determined by ascertaining
the total number of hours of service performed in the City by all such employees
during the previous year and dividing the total number of hours of service thus
obtained by the number of hours of service constituting a year's work of one full-
time employee according to the customs governing such employment and adding
to the result thereof the number of owners, partners or other principals,
salespersons or agents employed by the applicant, irrespective of the number of
hours of service provided by such employees. "Hours of service" as used in this
definition shall include all paid holidays, sick leave, vacations and any other days
for which compensation is paid irrespective of whether work is performed
therefor. As a condition to the optional use of the foregoing definition, the
applicant shall provide all business records or other documentation related to the
calculation aforesaid required by the Director. – Redwood City
(c) State of California Employment Development Department definition of
employee.
Another useful source for defining an employee is the definition utilized by the State of
California Employment Development Department (EDD). This department is the source
of data utilized for projecting and estimating the revenue impacts of the business license
tax program under consideration.
The Employment Development Department defines an employee as:
An “employee” includes all of the following:
• Any officer of a corporation.
• Any worker who is an employee under the ABC Test.
• Any worker whose services are specifically covered by law.
An employee may perform services on a temporary or less than full-time basis.
The law does not exclude services from employment that are commonly referred
to as day labor, part-time help, casual labor, temporary help, probationary, or
outside labor.
This definition is summarized on an information sheet developed by the EDD and
attached as Appendix B. More details regarding the EDD definition of employee can be
found on page 8 of the 2020 California Employer’s Guide available at:
https://www.edd.ca.gov/pdf_pub_ctr/de44.pdf. One major benefit of utilizing the EDD
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definition of employee would be the ability to utilize reports that businesses file with EDD
as part of the City’s audit program. This would provide an easy methodology for auditing
the number of employees for a business.
(d) Analysis and Recommendation
According to California Government Code, Title 4. Government of Cities, Chapter 3.
General Powers, Section 37101(b), the City must ensure that any business license tax
levied fairly reflects the proportion of the taxed activity that is actually carried on within
the City. To comply with this requirement the City will need to ensure that employees
subject to the tax are performing work within the corporate City limits of Palo Alto.
While comparable organizations have various definitions for employee and total number
of employees, to simplify the process for the business owner and for ease with
administration, the City of Palo Alto could consider the following definitions:
Employee: “Any person engaged in the operation or activity of any business, whether as
owner, a corporate officer, a partner, agent, manager, solicitor, or any and all persons
employed or working in such business either full time, part-time, permanent or temporary”.
Total number of employees: “Total number of employees for whom a tax is to be paid
shall be determined as follows:
a. For any business having a fixed place of business in the city:
The total number of employees shall be the greatest number of persons
employed or expected to be employed or taking part in the business during any
twenty-four-hour period.
b. For any business not having a fixed place of business in the city:
The total number of employees shall be the greatest number of persons
employed or expected to be employed or taking part in the business within city
limits during any twenty-four-hour period.”
A guiding clarification question for business owners to determine their number of
employees for purposes of computing the appropriate BLT is “what was the greatest
number of people working for the company, within the City of Palo Alto, on any day in the
past year”?
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Recommendation: Adopt clearly defined and easily calculated definitions of
“employee” and “total number of employees”. It would be suggested that the City
consider adopting the EDD definition of employee to enable an audit program that
is easier to implement and relies upon a known approach to classifying employees.
2. Employee Verification Requirements
This section provides information on methods used in comparable BLT programs to help
ensure the accuracy of provided data that is subsequently used to calculate an
appropriate business license tax. Each comparable BLT program employs various
methods in an attempt to ensure the accuracy of the data provided by business license
applicants.
Each of the cities, regardless of the basis for their respective Business License Tax,
requires the applicant to sign their application. Some applications are signed after
declaring under penalty of perjury that the information contained therein is accurate and
each city provides for the ability to audit the business to determine compliance with their
Business License Tax Code. Some of the comparable cities put a provision in their Code
that prohibits any City employee or agent from revealing any confidential data obtained
during a compliance audit.
The following table shows the comparable cities, whether they require signed affidavits
or sworn statements, and whether they provide for the ability to audit the business’s books
to determine the accuracy of business data reported on the application or renewal form.
City
Signed Affidavit or
Sworn Statement Audit Requirement
Santa Clara Yes Yes
Sunnyvale Yes Yes
East Palo Alto Yes Yes
San Jose Yes Yes
San Francisco Yes Yes
Cupertino Yes Yes
Mountain View Yes Yes
Redwood City Yes Yes
San Mateo Yes Yes
The data show that each comparable City with a BLT program has a business license
applicant attest as to the accuracy of their data on the application or renewal form and
each has an audit provision in their respective Code.
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The following are sample Code language from comparison City BLT Codes as they relate
to verifying data provided on a Business License application or renewal.
• “Upon making application for the first certificate to be issued under this chapter
where the amount of the tax is measured by the number of employees, the
applicant shall furnish to the Director of Finance, for guidance in ascertaining the
amount of such tax, a signed affidavit under penalty of perjury, upon a form
provided by the Director of Finance, setting forth such information as may be
necessary to determine the amount of the tax. The amount of the tax is determined
by the number of persons engaged in the business at the time of application”. –
Santa Clara
• Each person making application for the first license to be issued hereunder, or a
license for a newly established business, shall furnish to the collector a sworn
statement (upon a form provided by the collector) setting forth the following
information:
(a) The exact nature or kind of business for which a license is requested;
(b) The place where such business is to be carried on;
(c) If the license is to be issued to a person doing business under a fictitious
name, the application shall set forth the names of the owners of the
business;
(d) If the license is to be issued to a corporation or a partnership, the
application shall set forth the names of the officers or partners thereof;
(e) The number of employees employed in the business which is the subject
of the application;
(f) Any further information which the collector may require.
(a) No sworn statement required to be filed shall be conclusive as to the
matter set forth therein. The filing of a sworn statement shall not preclude
the city from collecting any sum of money actually due and payable under
this chapter by appropriate action.
(b) The collector shall have the right to examine and audit at all reasonable
times the books and records of any licensee, or person making application
for a license in order to (1) verify any sworn statement filed and the items
contained therein, and (2) verify or ascertain the amount of any business
license tax due.
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If any person fails to file any required statement within the time prescribed,
or if after demand therefor made by the collector he fails to file a corrected
statement, or if any person subject to the tax imposed by this chapter fails
to apply for a license, the collector shall proceed in such manner as he may
deem best to obtain facts and information on which to base his estimate of
the tax due. In case such determination is made, the collector shall give a
notice of the amount so assessed by serving it personally or by depositing
it in the United States mail, postage prepaid, addressed to the person so
assessed at his last known place of address. –Sunnyvale
• The tax administrator shall have the right to audit records of the businesses
subject to the business license tax to ensure compliance with this chapter.
Businesses shall retain records pertaining the business license tax for a period
of three (3) years from the end of each calendar year, and shall allow the city
access to such records, with appropriate notice and at a mutually agreeable time,
to monitor compliance with the requirements of this chapter. Where a business
does not maintain or retain adequate records documenting the number of its
employees or does not allow the city reasonable access to such records, the
city's calculation of the number of employees of the business shall be presumed
to be accurate, absent clear and convincing evidence otherwise. – Mountain
View
• The council, the board of review, the tax review committee, the Tax Collector, and
any person designated as an agent by any of the above-listed persons for such an
inspection may, at any time during normal business hours, for the purpose of
enforcing the provisions of this title, inspect the accounts, books, papers, and
documents of any business that holds any permit or tax certificate of the City or that
has filed a permit application or business tax return with the City. Any person shall
produce under the seal of the City his or her authority to make such an inspection.
The council, board of review, the tax review committee, or Tax Collector may, upon
5 days written notice, require any business that holds a permit or tax certificate
issued by the City or that has filed a permit application or business tax return with
the City to produce any accounts, books, papers, or documents at any location in
the City that the Council, board of review, or Tax Collector may designate in writing,
for the purpose of enforcing this title.
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No person conducting an inspection or review pursuant to this section may reveal
the information obtained from such an inspection or review to anyone not charged
with the administration or enforcement of the provisions of this title. – San Mateo
In order to facilitate a reasonable likelihood of obtaining accurate employee count data,
the City of Palo Alto should consider requiring each applicant to sign their Business
License application and renewal under penalty of perjury, attesting that the information
contained therein is accurate. Recommended language at the bottom of the application
is:
AFFIDAVIT: I certify, under penalty of perjury, the information I
provided in this application is true and correct, to the best of my
knowledge.
Following that statement is the section to print or type the applicant’s name, followed by
the signature line.
The City should include a requirement in the Code that permits audit of a business’s
books, papers, or documents for the purpose of enforcing the Business License Tax
ordinance. Recommended ordinance language is as follows:
“Upon making application for an initial or renewal Business License, the
applicant shall furnish to the City a signed affidavit under penalty of perjury,
upon a form provided by the City, setting forth such information as may be
necessary to determine the amount of the business license tax.”
“The Tax Administrator or designee shall have the right to audit the books,
papers, or other documents of any business subject to the business
license tax to ensure compliance with this chapter. Each business shall
retain records pertaining to the business license tax for a period of three
(3) years from the end of each calendar year. With at least five days
written notice and during normal business hours or a mutually agreeable
time, the business shall allow the City access to such records in order to
monitor compliance with the requirements of this chapter.
No person conducting an inspection or review of a business’s books,
papers, or other documents on behalf of the City and pursuant to this
section may reveal the information obtained from such an inspection or
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review to anyone not charged with the administration or enforcement of the
provisions of this title”.
Recommendation: Require Business License applicants and renewals to sign their
application/renewal under penalty of perjury.
Recommendation: Provide for an audit provision in the Business License Tax
ordinance allowing City officials to audit the books, papers, or other documents of
the business for the purpose of enforcing the ordinance.
Recommendation: Provide a requirement that anyone acting on behalf of the City
that audits a business’s books is legally prohibited from revealing confidential
business data to anyone not charged with the enforcement of the Business License
ordinance.
3. Hardship/Amnesty Programs
Business License Tax hardship or amnesty programs are meant to provide a means for
businesses subject to the tax to have the tax waived if certain conditions are met. The
only City from the comparison to offer a hardship exemption is the City of San Jose.
A portion of the City of San Jose’s financial hardship exemption is as follows:
“The Financial Hardship Exemption Program is designed to help sole
proprietor businesses in the City of San José whose business income is at
or falls below two times the poverty level income established by the United
States Department of Health and Human Services.”
As 89% of the comparable BLT programs do not offer hardship or amnesty exemptions,
it is not recommended that the City of Palo Alto include any such exemption in their BLT
Code as part of the base ordinance. In the future, if circumstances require, the City can
consider implementation of a hardship exemption or amnesty program for businesses
within the City.
Recommendation: To remain consistent with other Bay-area cities, it is not
recommended that the City of Palo Alto include a hardship or amnesty exemption
language in the City’s Business License Tax Program.
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4. Program Administration
The following section provides information on BLT program administration, including
timing of business license renewals and the number of City employees required to
administer a BLT program. Program administration includes managing the business
license program including the timing of when renewal licenses are due. In some of the
comparable jurisdictions, renewal licenses are required at a certain point each year for all
businesses (annual) and in other jurisdictions they are required to be paid on a rolling
basis (i.e. 12 months after the current license was obtained). One jurisdiction, the City of
Sunnyvale, requires businesses to pay for two years at a time in order to receive their
Business License.
The following table shows information on how each comparable BLT program is
administered with regard to when renewal Business Licenses are paid.
City Renewal Comments
Santa Clara Rolling BLT taxes due annually 12 months from the time the license was
first issued. Nonrefundable.
Sunnyvale Annual Must be paid two years at a time with renewals due January 1.
San Francisco Annual March 31.
East Palo Alto Annual Licenses are by calendar year.
San Jose Rolling Based on when first issued. Nonrefundable.
Mountain View Annual By calendar year. Nonrefundable.
Redwood City Annual July 1 – June 30.
San Mateo Annual On a “quarter system”. Taxes due at the end of the quarter in the
year following the month you originally obtained the Business
License (i.e. sign up in January 2020, renewal due in March 2021).
Accepting renewal payments throughout the year on the anniversary of the issuance of
the original business license allows for employee workload to be spread out throughout
the year. While some months will have seen more business starts than others,
theoretically there is more of an even distribution of workload for BLT staff than with
acceptance of renewal payments at only one time of the year.
The benefits of annual license renewal are for overall ease of administration. With all
licenses due for renewal at the same time (or if quarterly, four times a year), staff are able
to obtain efficiencies in receipting payments, following up on overdue licenses, and in
scheduling audits. As discussed later in this section, most comparable jurisdictions do not
have fulltime staff dedicated to the BLT program throughout the year in which those staff
commit 100% of their time to administering the program. The employees in those
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jurisdictions often work fulltime on BLT matters for a few months (during the renewal time)
and then split their time on BLT administration and other responsibilities.
Only cities that use a per employee basis as the methodology for their business license
tax program are included in the following analysis. The table below shows estimated
staffing requirements for administering the BLT program in each respective jurisdiction.
City Estimated
FTEs
Comments
Santa Clara 1.0 There are several employees cross trained to handle multiple
responsibilities, including BLT program administration. There is 1.0
FTE cumulative time commitment estimated from all employees to
administer the BLT program.
Sunnyvale 1.5 There are two fulltime employees assigned to BLT program
administration from October through February. Those employees are
still fulltime the remaining months; however, they perform other tasks
as well during nonrenewal times.
San Jose 10.0 There is a manager, a supervisor, four inspectors (auditors), and four
staff who answer phones/field inquiries. The four who answer phones
are through a staffing agency while all others are employees of the
City. All positions are fulltime.
Mountain
View
1.5 There are two fulltime employees that handle the BLT program and
utilities. They each spend approximately 75% of their time with BLT
program administration.
Redwood
City
1.0 There is one employee who administers the program; however, that
person performs other non BLT tasks as well. That employee spends
approximately 70% of their annual time on BLT program
administration. There are five other employees in the office each
cross-trained to handle BLT functions. Each spends between 5% and
10% of their time on BLT program administration (0.375 FTE).
The data show that the only city with more than two FTEs administering their BLT program
is the City of San Jose; however, San Jose is a much larger city with a significantly larger
business base than Palo Alto. Some of the comparable cities contract with a third party
provider to manage the audit portion of their BLT program.
While the potential to reduce staff workload by requiring two years’ payments at a time
for every business is realistic, it is also reasonable to assume that a business owner is
more likely to object to having to pay for two years’ worth of license tax at once. For this
reason (along with the fact that only one comparable community used this approach), the
City should not require more than one years’ payment at a time.
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It is recommended that the City of Palo Alto consider implementing the program by having
all renewals occurring one time each year (i.e. by January 1). The City should also
consider allowing initial business license payments to be prorated according to the
percentage of the year remaining before the license would expire. For example, if the
City were on a calendar year licensing time period, a new business in the City that opens
and pays for their business license effective October 1st would pay for three months and
then renew effective January 1st. The following is recommended ordinance language:
“Business licenses expire on December 31 each year with renewal
payments due by January 1 each year. Initial business license taxes may
be prorated in accordance with the administrative guidelines established by
the City”.
(a) Estimated In-House Staffing Requirements.
If the business license tax program is conducted in-house, the City of Palo Alto would
likely require the assignment of two employees to be assigned duties related to the
business tax program administration. While their primary responsibility would be for
managing the BLT program, the City would have the ability to cross-train them to perform
other financial duties and to cross-train other Finance office staff to perform the BLT
functions as necessary.
Based on available comparative data, the two employees assigned primary responsibility
for BLT program administration are estimated to have available time throughout the year
to complete other tasks outside of BLT functions. The two employees will likely spend the
majority of their workday handling BLT matters between November and February/March
of each year; however, they should be cross-trained to complete other duties for the City.
The City should plan for software costs associated with buying and installing an
appropriate software system designed to handle business license tax permitting if the
existing systems in place do not have this capability.
(b) Estimated Costs of Contractual Administration.
Three communities that outsource their business license tax administration were
contacted to discuss their perceptions of the service being contracted out and to identify
the costs paid for this contracted service.
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This is summarized in the following table:
City Cost Notes
City of Los
Alamitos
They estimate between 3% and 5% of the
money brought in is remitted to the
contractor for their fee. The City had FY18
BL revenue of $647,433.
At 3% and using a scenario of $10,000,000
in annual revenue that would calculate to
that would be $300,00 in fees owed to the
contractor for program administration.
Turnkey interface with planning
dept. Very hands off for municipal
staff. The contactor take admin
fees off of what they collect. The
City uses for property tax services
also (but this is a flat fee).
Business license just a
percentage of what they process
and handle for the City.
City of Commerce Flat fee per account of $15. This includes a
once per year canvassing of businesses to
discover anyone out of compliance. They
audit once per year and they receive 20% of
any monies collected on non-paying
businesses.
Using 3,141 businesses (firms) for Palo Alto
would be $47,115 plus audit costs if they
recover additional previously uncollected
monies.
Approximately 4,000 accounts.
City of Marina The contractor charges three fees:
•Renewal or new
account $13
•Collection if they become
delinquent: 25%
•Discovery of new
account 35%
They pay contractor about $40,000 a year
on $1.5 million of revenue. This equates to
approximately 2.6% administration fee.
About 2,000 accounts
Have found the contractor to be
easy to work with and overall
there have been very few account
issues.
Those communities with contracted services were happy with the service levels received
and the quality of the services provided by the vendor they had chosen. Additionally, they
were not required to incur any costs associated with software implementation as these
costs were included in the contract for program administration. Fees for the City of Palo
Alto would be estimated to be between 1.5% and 3% of revenue collected or
approximately $100,000 and $300,000. A very informal discussion with one vendor
indicated a likelihood to acquire services closer to the mid-point of this range or below.
The major benefits of contracting out the administration of the business license tax
program is the ability to utilize a specialized resource who is skilled at processing
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applications and identifying business subject to the ordinance. Additionally, the
contracted firm would provide all technology needed and this would likely enable the City
to avoid having the acquire software for the system administration. The City would need
to retain responsibility for serving as an avenue of appeal on the fee calculation if there
is a dispute regarding the fee.
Recommendation: Require renewal payments to be due at the same time each year
for all businesses and provide for pro-ration of the initial business license based
on the date of application.
Recommendation: Issue an RFP for third party administration (including provision
of software solutions) for the business license tax program to enable the City to
acquire firm pricing estimates to determine whether contracting the service is
operationally and cost effective for the City.
Recommendation: If administered in-house, it is estimated that the City will need
to staff with two positions to handle the program workload. These positions can
be cross-trained in other financial duties to enable them to be effectively utilized
during time periods when they are not fully allocated to the business license tax
program.
5. Exemptions
This section provides information on exemptions offered in other comparable BLT
jurisdictions as well as minimum required exemptions under the law. There are certain
mandated business license tax exemptions that all cities in California must apply. Certain
comparable BLT programs offer additional exemptions.
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The following table provides information on BLT program exemptions and whether that exemption is mandated by law.
Exemption Mandated
Santa
Clara Cupertino
East
Palo
Alto
Mountain
View
Redwood
City Sunnyvale
San
Francisco
San
Jose
San
Mateo
Charitable and Nonprofit Organizations1 P P P P P P P P P
Federal and State law requirements P P P P P P P
Veterans / Veteran’s organizations meeting
certain conditions2 P P P P
Interstate Commerce3 P P P P
Banks and Financial Institutions4 P P P
For-hire motor carrier of property5 P P
Home day care provider for 14 or fewer
children6 P P P P
Insurance broker-agents (includes bail bond
agents)7 P P P
Public utility franchise P P P P P
Residential care facilities w/6 or fewer
residents8 P P
Sole business is sale of goods to only the City P
Gross annual business receipts of less than a
certain amount (either $1,000 or $5,000) P P P P
Blind persons9 P
Skilled nursing facilities10 P
For-hire motor carrier of property11 P P
1 Revenue and Taxation Code 23701.
2 California Business and Professions Code Section 16000.7, 16001, 16001.5, 16001.7, and 16001.8.
3 Only if the license itself creates such a financial burden that it prohibits the business from engaging in interstate commerce and conflicts with U.S. Code on interstate commerce.
4 Exempt from local taxation under Article XIII, Section 27 of the California Constitution and Revenue and Taxation Code Section 23182 if they pay the State an “in lieu” tax.
5 If a for-hire motor carrier pays the DMV tax as stipulated in State Revenue and Taxation Code 7231-7236. Only transportation activities are exempt.
6 A home that provides family daycare for 14 or fewer children. Health and Safety Code sections 1597.45 and 1596.78.
7 Exempt from local taxation under Article XIII, Section 28 of the California Constitution if they pay the State an “in lieu” tax (includes Bail Bond agents if this is their only business
activity, California Constitution Article 13, sec 28(f) and Grove v. Los Angeles (40 Cal 2d 751.256)).
8 Health and Safety Code 1566.2 and 1567.8.
9 Payroll tax applicability.
10 Licensed under the provisions of Title 22, California Administrative Code, Division 5 ("Licensing and Certification of Health Facilities and Referral Agencies") Chapter 3 ("Skilled
Nursing Facilities").
11 Revenue and Taxation Code Section 7233.
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Exemption Mandated
Santa
Clara Cupertino
East
Palo
Alto
Mountain
View
Redwood
City Sunnyvale
San
Francisco
San
Jose
San
Mateo
Intercity transportation as a household goods
carrier12 P P
Charter-party carriers operating limousines13 P
Occasional transactions14 P
Artists and craftspersons (handcrafted goods) P
Teachers15 P
Business at certain City facilities P
City police officers working secondary
employment while “in uniform” P
Certain real estate agents/brokers P
Recreation instructors P
Performers and entertainers P
Café musicians16 P
Wholesale business commercial traveler17 P
Real estate auctions18 P
12 Public Utilities Code Section 5327.
13 That are not domiciled or with a company base in the City per Public Utilities Code Section 5371.4.
14 In town selling at the request of a patient or specific business, so long as not selling for more than five days in the year.
15 Music, artistic, or educational subjects when done at the teacher’s or pupil’s residence.
16 Ca Government Code Title 4 Chapter 3, 37101.5 and Business and Professions Code 16000.5.
17 CA Business and Professions Code 16002.
18 CA Business and Professions Code 16002.1 (if the business is not based in the City and their only business is auctions).
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The data show that there are several required exemptions for payment of a business
license or business license tax, as well as several other possible exemptions that are
used in other jurisdictions. In order to simplify operations, the City of Palo Alto should
consider an approach that only provides for legally mandated exemptions from the
business license tax program.
For simplification and because State and federal laws change periodically, the City should
include in its ordinance that it provides required State and Federal law Business License
Tax exemptions (without listing each exemption in the ordinance). A list of those
exemptions should be shown on the City’s website. A useful example of a list of
exemptions to assist business owners is from the City of San Diego. The City of San
Diego’s business exemptions can be viewed on their website at:
https://www.sandiego.gov/treasurer/taxesfees/btax/btaxexemptions.
Adding in exemptions for specific business categories will reduce revenue and increase
complexity of administration of the program.
Recommendation: Provide State and Federal mandated business license tax
exemptions in the City’s ordinance (without listing each of those exemptions in the
ordinance).
Recommendation: For ease of program administration and comparability with
other communities, the City should consider not implementing any other business
exemptions.
Recommendation: Provide an up-to-date list of common approved business
exemptions on the City’s website, making clear that the obligation of claiming an
exemption is on the business.
6. Business License Applications / Renewal
Each comparable BLT jurisdiction provides initial and renewal applications electronically
on the City’s respective website. For ease of administration and to benefit the business
owner, the City should ensure that business license applications are available
electronically on the City’s website. Ideally, for the convenience of applicants, it would be
preferable to have online submittal of forms that enable both completion of the form and
payments for the business license to be conducted online. This functionality will require
more technology to implement; however, it would provide the greatest service to
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applicants and reduce processing times as all forms completed online would not need to
be manually processed.
There are several examples of business license applications for both initial licenses and
renewals. Example initial or renewal applications from the cities of Mountain View,
Redwood City, and Santa Clara are provided in Appendix D.
Recommendation: Ensure business license applications and renewals are
available electronically on the City’s webpage and consider implementing online
submittal and payments for all business license permits.
7. Disability Access Requirements
This section provides information on disability access requirements and
recommendations related to the issuance of business licenses. California Government
Code 4469.5 related to disability access was modified by the State legislature and signed
by the governor in 2018. This modification, as well as existing law, requires each city to
provide business license applicants with certain information regarding compliance with
disability access provisions under federal and state law, including information on legal
obligations from specified state agencies.
The following data is from the Legislative Council’s Digest as it relates to State Assembly
Bill No. 3002 which amends Section 4469.5 of the Government Code related to disability
access:19
Existing law also requires each city, county, or city and county to provide
applicants for a business license or equivalent instrument or permit with
certain information regarding compliance with disability access provisions
under federal and state law, including information on legal obligations from
specified state agencies.
This bill would additionally require the above local jurisdictions issuing
building permits for commercial construction or business licenses to make
available a notice containing specified information regarding disability
access. The bill would also require a local agency to provide the
informational notice to an applicant for a commercial building permit or a
business license. The bill, among other things, would require this
19 http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180AB3002
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informational notice to be translated into specified languages and to include
specified information on compliance requirements under both state and
federal law and an advisory strongly encouraging the applicant to obtain a
Certified Access Specialist (CASp) consultation and inspection. The bill
would define “commercial property” for these purposes. The bill would
require the State Architect to develop a model notice for local agencies to
use to comply with these provisions, as specified. The bill would include
related legislative findings. By imposing new requirements on local
government agencies, the bill would create a state-mandated local
program.
Based on this law, the City should ensure it provides the required and recommended
information to all business license applicants. Information should be provided on the City’s
website. Additionally, SB1186 requires a $4 fee for any applicant of a local business
license be remitted to the State related to increasing disability access compliance. The
following is a screenshot from the City of East Palo Alto’s Business License website:
The link for “The Division of the State Architect” goes to a State webpage that provides
the “model notice” language referenced in the Government Code. There are model
notices provided for in several languages: English, Spanish, Tagalog, Korean,
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Vietnamese, Traditional Chinese, and Simplified Chinese. A copy of the English version
of the model notice is provided as Appendix C.
Recommendation: Provide links on the City’s Business License webpage for the
model “Notice to applicants for business licenses and commercial business
permits”. These notices should be provided in several languages as recommended
by the State.
Recommendation: Ensure the $4 state fee is collected on each business license to
be remitted to the State for increasing disability access compliance.
8. National Pollutant Discharge Elimination System (NPDES) Permit Program
In October 2019 the State Governor signed SB205 into law. This law requires certain
businesses to demonstrate enrollment with the National Pollutant Discharge Elimination
System (NPDES) permit program prior to obtaining a business license. The City should
ensure that it has information on its website related to this requirement and to ensure the
most up-to-date information, the City should link with the State Water Board website for
its NPDES data. Click here to go to the State NPDES website. Click here to go to the
Federal NPDES program.
While the burden should be on the business owner to show enrollment in the NPDES
program when required, the City should include information on its business license
application asking whether the business is required to provide proof of enrollment with
the NPDES program.
Recommendation: Provide links on the City website to the State Water Board
NPDES program to assist business owners in knowing whether they are required
to show proof of enrollment prior to receiving a business license.
Recommendation: Provide a section on the business license application asking the
applicant if they are required to be enrolled in the NPDES program.
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Appendix A: Base Data for Employee Count Methodology
The following table summarizes by NAICS industry classification the number of employees within size category that were
included in the revenue projections.
Total # of Employees
1 2 3 4 5 6 7 8 9
Code Industry Description 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1000+ TOTAL
1100 Agriculture, Forestry, Fishing and Hunting 7 5 12
2300 Construction 81 114 111 177 150 175 808
3100 Manufacturing 5 7 45 75 132
3200 Manufacturing 28 7 11 46
3300 Manufacturing 67 67 84 151 158 470 750 1,500 2,234 5,481
4200 Wholesale Trade 58 82 88 245 225 175 329 1,202
4400 Retail Trade 112 335 516 478 922 782 3,145
4500 Retail Trade 65 67 127 136 75 250 1,258 1,978
4800 Transportation and Warehousing 15 0 15 0 75 117 222
5100 Information 200 199 365 884 710 815 1,127 1,500 6,889 12,689
5200 Finance and Insurance 219 236 467 705 450 175 764 3,016
5300 Real Estate and Rental and Leasing 188 110 181 344 300 179 1,302
5400 Professional, Scientific, and Technical Services 920 724 1,103 2,855 2,393 3,491 3,298 1,500 5,963 22,247
5500 Management of Companies and Enterprises 4 19 90 70 75 175 0 0 3,245 3,678
5600 Administrative and Support and Waste Management 95 141 198 303 729 626 2,092
7100 Arts, Entertainment, and Recreation 36 44 96 219 150 330 875
7200 Accommodation and Food services 62 238 660 1,903 1,580 1,575 375 6,393
81 Other Services (except Public Administration) 549 212 297 530 399 384 2,371
2,711 2,607 4,454 9,075 8,391 9,719 7,901 4,500 18,331 67,689
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The following firms were excluded from the revenue projections based upon the NAICS code.
1 2 3 4 5 6 7 8 9 Total By
Industry 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1000+ Industry
6100 Total Educational Services 74 133 208 371 390 450 0 0 19,681
21,307
62 Total Health care and social assistance 959 433 656 698 540 1204 940 0 17,957
23,387
813 Total Religious, grantmaking, civic, professional, and
similar organizations 63 45 85 180 355 175
903
TOTAL
1,096
611
949
1,249
1,285
1,829
940
-
37,638
45,597
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The following table summarizes by NAICS industry classification the number of firms within each size category that were
included in the financial projections.
Total # of Firms
1 2 3 4 5 6 7 8 9
Code Industry Description 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1000+ TOTAL
1100 Agriculture, Forestry, Fishing and Hunting 7 1 8
2300 Construction 53 16 9 6 2 1 87
3100 Manufacturing 3 1 3 2 9
3200 Manufacturing 14 1 1 16
3300 Manufacturing 42 10 6 6 3 4 2 2 1 76
4200 Wholesale Trade 47 12 7 8 3 1 1 79
4400 Retail Trade 55 48 37 15 13 5 173
4500 Retail Trade 38 10 9 5 1 2 3 68
4800 Transportation and Warehousing 8 0 1 0 1 1 11
5100 Information 138 29 26 30 11 5 3 2 3 247
5200 Finance and Insurance 135 36 35 22 6 1 2 237
5300 Real Estate and Rental and Leasing 130 18 14 12 4 1 179
5400 Professional, Scientific, and Technical Services 635 112 83 93 35 23 10 2 3 996
5500 Management of Companies and Enterprises 4 3 6 2 1 1 0 0 2 19
5600 Administrative and Support and Waste Management 68 21 14 10 10 3 126
7100 Arts, Entertainment, and Recreation 25 7 7 7 2 2 50
7200 Accommodation and Food services 37 35 45 61 23 9 1 211
81 Other Services (except Public Administration) 468 33 22 17 6 3 549
TOTAL 1,907 393 325 296 121 62 22 6 9 3,141
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The following firms were excluded from the financial projections based upon the NAICS code.
1 2 3 4 5 6 7 8 9 Total By
Code Industry 0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1000+ Industry
6100 Total Educational Services 43 20 14 12 6 4 0 0 1
100
62 Total Health care and social assistance 703 68 52 22 7 8 3 0 3
866
813 Total Religious, grantmaking, civic, professional, and
similar organizations 33 13 6 7 2 2 -
-
-
63
TOTAL
779
101
72
41
15
14
3
-
4
1,029
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Appendix B
Employment Development Department -
Definition of Employee
Generally, employment occurs when an employer hires an employee to perform services for wages. An “employer” can be any employing unit, such as a sole proprietor, joint venture, partnership, limited liability company, or corporation. An “employer” can also include associations, trusts, charitable foundations, nonprofit organizations, public entities, household employment, and other organizations. An individual is determined to be an “employee” under the usual common law rules or by application of specific statutes. Refer to Information Sheet: Types of Employment, DE 231TE.
WHO IS AN EMPLOYER?
Section 675 of the California Unemployment Insurance Code (CUIC) provides that a business becomes a subject employer when it employs one or more employees and pays wages in excess of $100 during any calendar quarter. Wages are compensation for personal services performed, including, but not limited to, cash payments, commissions, bonuses, and the reasonable cash value of nonmonetary payments for services, such as meals and lodging. Refer to Information Sheet: Types of Payments, DE 231TP.
Once subject, an employer must register with the Employment Development Department (EDD) within 15 days of becoming a subject employer. Employers are responsible for reporting wages paid to their employees and paying Unemployment Insurance (UI) and Employment Training Tax (ETT) on those wages, as well as withholding and remitting State Disability Insurance* (SDI) and Personal Income Tax (PIT) due on wages paid.
WHO IS AN EMPLOYEE?
An “employee” includes all of the following:
•Any officer of a corporation.
•Any worker who is an employee under the usualcommon law rules.
•Any worker whose services are specifically covered bylaw.
An employee may perform services on a permanent, temporary, or less than full-time basis. The law does not exclude services from employment that are commonly referred to as day labor, part-time help, casual labor, temporary help, probationary, or outside labor. Refer to Information Sheet: Casual Labor, DE 231K.
Who is a Common Law Employee?
Whether an individual is an employee for the purpose of Section 621(b) of the CUIC will be determined by the usual common law rules applicable in determining an employer-employee relationship. To determine whether one performs services for another as an employee, the most important factor is the right of the principal to control the manner and
EMPLOYMENT
DE 231 Rev. 12 (7-17) ).4%2.%4 0AGE OF CU
means of accomplishing a desired result. The right to control, whether or not exercised, is the most important factor in determining the relationship. The right to discharge a worker at will and without cause is strong evidence of the right to control. Other factors to take into consideration are:
1. Whether or not the one performing the services isengaged in a separately established occupationor business.
2.The kind of occupation, with reference to whether, in thelocality, the work is usually done under the direction of aprincipal without supervision.
3.The skill required in performing the services andaccomplishing the desired result.
4. Whether the principal or the person providing theservices supplies the instrumentalities, tools, and theplace of work for the person doing the work.
5.The length of time for which the services are performed todetermine whether the performance is an isolated eventor continuous in nature.
6.The method of payment, whether by the time, a piecerate, or by the job.
7. Whether or not the work is part of the regular businessof the principal, or whether the work is not within theregular business of the principal.
8. Whether or not the parties believe they are creating therelationship of employer and employee.
9.The extent of actual control exercised by the principalover the manner and means of performing the services.
10. Whether the principal is or is not engaged in a businessenterprise or whether the services being performed are forthe benefit or convenience of the principal asan individual.
Another consideration relative to employment is whether or not the worker can make business decisions that would enable him or her to earn a profit or incur a financial loss. Investment of the worker’s time is not sufficient to show a risk of loss.
The numbered factors above are evidence of the right to control. These factors are fully described in Section 4304-1 of Title 22, California Code of Regulations. A determination of whether an individual is an employee will depend upon a grouping of factors that are significant in relationship to the service being performed, rather than depending on a single controlling factor.
The courts and the California Unemployment Insurance Appeals Board have held that the existence of a written contract is not, by itself, a determining factor. The actual practices of the parties in a relationship are more important than the wording of a contract in determining whether a worker is an employee or independent contractor.* Includes Paid Family Leave (PFL).
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Appendix C
Example Disability Access Compliance Language
DISABILITY ACCESS REQUIREMENTS AND RESOURCES
(Issued 12-28-18)
NOTICE TO APPLICANTS FOR BUSINESS LICENSES AND
COMMERCIAL BUILDING PERMITS:
Under federal and state law, compliance with disability access laws is a serious and
significant responsibility that applies to all California building owners and tenants with buildings open to the public. You may obtain information about your legal obligations and how to comply with disability access laws at the following agencies:
DEPARTMENT OF GENERALSERVICES, Division of the State
Architect, CASp Program
www.dgs.ca.gov/dsa
www.dgs.ca.gov/casp
DEPARTMENT OF REHABILITATION Disability Access Services
www.dor.ca.gov
www.rehab.cahwnet.gov/
disabilityaccessinfo
DEPARTMENT OF GENERALSERVICES, California Commission on
Disability Access
www.ccda.ca.gov
www.ccda.ca.gov/resourc
es-menu/
CERTIFIED ACCESS SPECIALIST INSPECTION SERVICES
Compliance with state and federal construction-related accessibility standards ensures that public places are accessible and available to individuals with disabilities. Whether
your business is moving into a newly constructed facility or you are planning an alteration
to your current facility, by engaging the services of a Certified Access Specialist (CASp) early in this process you will benefit from the advantages of compliance and under the
Construction-Related Accessibility Standards Compliance Act (CRASCA, Civil Code 55.51-
55.545), also benefit from legal protections.
Although your new facility may have already been permitted and approved by the building department, it is important to obtain CASp inspection services after your move-in because
unintended access barriers and violations can be created, for example, placing your furniture and equipment in areas required to be maintained clear of obstructions. For planned alterations, a CASp can provide plan review of your improvement plans and an
access compliance evaluation of the public accommodation areas of your facility that may
not be part of the alteration.
A CASp is a professional who has been certified by the State of California to have
specialized knowledge regarding the applicability of accessibility standards. CASp
inspection reports prepared according to CRASCA entitle business and facility owners to specific legal benefits, in the event that a construction-related accessibility claim is filed
against them.
To find a CASp, visit www.apps2.dgs.ca.gov/DSA/casp/casp_certified_list.aspx.
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Appendix D
Sample Business License Tax Application and Renewal
Forms
CITY OF MOUNTAIN VIEW
ATTN: BUSINESS LICENSE
POST OFFICE BOX 7540
MOUNTAIN VIEW, CA 94039-7540 finance@mountainview.gov
650-903-6317
APPLICATION
FOR
BUSINESS LICENSE
This application must be filed with the Finance and Administrative Services Department and the
applicable Business License Tax paid prior to the commencement of the business.
***PLEASE PRINT***
Business Name Business Address (P.O. Box Address NOT acceptable)
STREET ADDRESS
CITY STATE ZIP CODE Business Description
Mailing Address (If Different than Business Address)
ADDRESS
CITY STATE ZIP CODE
Business Telephone No.
( )
Annual Gross Receipts (Revenue)
$5,000 or less—
COMPLETE AFFIDAVIT
$5,001 or more
NAICS Code (6
digits)
MV Code (4
digits)
Name of Owner of Business Date Business Started in Mountain
View (MM/DD/YY)
Total No. of Employees
(including owner)
Home Address of Owner
ADDRESS
CITY STATE ZIP CODE
No. of Rental Units Business Address Sq. Ft. No. of Employees Working
in Mountain View
Contact Person’s Name Contact Person’s Phone No.
( )
Home Telephone No.
( )
Number of Work Days in the City
(Businesses located outside of
Mountain View only)
0-5 Days
65-129 Days
6-64 Days
130+ Days
State Sales Tax No. (CA Seller’s
Permit No.)
Type of
Ownership:
Sole Proprietor Partnership
Nonprofit—COMPLETE AFFIDAVIT
Corporation
LLC
Trust
LLP
Business E-mail
THIS INFORMATION IS NOT A COMPLETE LISTING OF CLEARANCES THAT MIGHT BE REQUIRED
1. If you intend to alter, remodel, relocate, or install any structural, electrical, plumbing, or mechanical portions of the building, you will need to obtain building permits from the Building Inspection Division of the Community Development Department at 650-903-6313.
2. Businesses involving any use changes, exterior building changes, or sign changes are advised to secure Community Development Department approval prior to lease
execution or purchase. Contact the Community Development Department at 650-903-6306.
3. Businesses operated out of the home must comply with Home Occupation Regulations (Section 36.28.75 of the City Code).
4. If you intend to serve food or beverages on the premises, you must obtain approval from the Santa Clara County Health Department (408-918-3400). Provide a copy of
your Health Certificate with your business license application.
5. If your business uses or stores hazardous materials (including paints, thinners, solvents, acids, compressed gases, etc.), you may be required to obtain a Hazardous
Materials Permit from the Fire Department. NOTE: Certain hazardous materials and processes such as spray-painting, welding, etc., are NOT ALLOWED in certain
buildings. Contact the Fire Department at 650-903-6378 for information on permitted uses within the City.
6. Industries discharging processed wastewater down the sewer, such as machining fluid, water from glass washing, chemical neutralization, etc., may be required to
obtain a Wastewater Discharge Permit from the Fire Department. For more information, call 650-903-6378.
7. Police Department approval is required for live entertainment, gaming, massage establishments, and outcall massage services. For more information, call 650-903-6350.
Police Department Approval:
8. If there is a change of ownership, business name, or business location, you are required to obtain a new business license and are subject to any associated fees and approvals. For more information, contact the Finance and Administrative Services Department at 650-903-6317.
NOTICE: I understand that payment of this business tax does NOT represent approval of my use/business with respect to zoning, County Health
Department approval, hazardous materials use or storage, wastewater discharge, or any other requirement. Further, I recognize that it is my responsibility to secure appropriate clearances and that it is advisable for me to secure such requisite approvals prior to establishing this business and
paying this business tax.
Applicant’s Signature Date
FOR CONTRACTORS—License No.
I herewith certify that I have been licensed pursuant to the provisions of
Chapter 9 of Division 3 of the Business and Professions Code of the State
of California and that my license is in full force and effect.
FOR HOME OCCUPATIONS
I am aware of the nine restrictions on “Home Occupations” per Section
36.28.75 of the City Code and will conform thereto if this license is
granted.
Signature Signature
FOR OFFICE USE Approved for Use
Date Paid Cashier Initial Receipt No. Total Paid
Tax Penalty Interest AB 1379 BID 1 BID 2 Planner Signature Print Initial Date
FI-128 (Rev. 09-04-19)
BUSINESS LICENSE INFORMATION IS PUBLIC RECORD
This is a fill-in form. Please fill in and print. Print Form Clear Form
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Comparative Business License Tax Review PALO ALTO, CALIFORNIA
Matrix Consulting Group Page 31
Instructions: 1.
2.
3.
4.
5.
Business Name: DBA:
Business Address:
Mailing Address
Is this business going to be conducted in your home in Santa Clara?
Yes No
Do you claim an exemption to pay Business Tax?
Yes No If yes, include proof of exemption
Yes No
(Check one)
Federal Tax ID (FEIN):(FEIN required for Corporation, LLC, and Partnership)
Please list information regarding the business owner (s) and/or all partners and officers: (attach additional sheet, if necessary)
Title
Contractors License #:Class:
Emergency Contact:Name:Address:
Phone:
TO CALCULATE FEES, PLEASE COMPLETE THE FOLLOWING:
For a corporation or LLC, enter 1 otherwise, enter 0:
$4.00
Date
Title
Email:
(Cannot be PO Box)
If yes, application must be submitted in person and applicant
must first obtain the Home Occupation Rules and Regulations
Will you distribute handbills or flyers door to door? If yes, please obtain a copy of
regulations concerning handbill distribution from the Finance Department.
as provided by Internal Revenue Service (Form 501C)
Name Alternate Phone #Social Security #
Ownership: Corporation Ltd Liability Co (LLC) Partnership Sole Proprietorship/Individual
The issuance of a certificate under the provisions of this chapter to a particular certificate holder does not constitute approval, direct or indirect, by the City that
the certificate holder may operate such business in violation of any of the provisions of the City Code, ordinances or resolutions or any law of the state or
federal government. Any business to whom a certificate has been issued under this chapter will continue to be required, after the issuance thereof, to comply
with all the laws of the City including, but not limited to its zoning regulations, building regulations, fire regulations, plumbing regulations, electrical regulations,
mechanical code and subdivision regulations. Failure of the City to approve, deny, or act upon the application within one hundred and eighty (180) days shall
be deemed a denial of the application. If any person fails to pay the annual renewal tax within ninety (90) days after the tax becomes due, his or her business
certificate is considered revoked (Code Sections 3.40.061, 3.40.062 3.40.110, 3.40.230).
Fire Permit Fee:
Total both lines:
Business Tax: ALL TAXES AND FEES ARE NON-TRANSFERABLE AND NON-
REFUNDABLE State CASp Fee:
New Business Tax Affidavit
A separate application must be completed for each location and for each business at the same location.
Additional information may be required (see section on "Additional Forms Required").
PLEASE TYPE OR PRINT CLEARLY IN INK
BC# _________________
For Office Use Only
All questions must be answered or designated not applicable (N/A), as appropriate.
Carefully read the "Note to Applicant" section.
City of Santa Clara
Municipal Services Division - Business Tax Unit
1500 Warburton Ave, Santa Clara, CA 95050
Phone: (408) 615-2310 Fax: (408) 241-1543
Signature
Print or Type Name
(for Sole Proprietors/Individuals)
Based on the Fee Schedule on the reverse side (Page 2) of the form:
Total Fee:
Business Description:
(Resellers License/BEAN)
Sellers Permit #:
Make checks payable to the City of Santa Clara and submit with completed affidavit.
Business Phone: ________________________________
Number of people (full and part-time/paid or unpaid) engaged in the conduct of business
at this Santa Clara address, including owners, partners, officers, and employees:
Alternate Address
12100 Wilshire Boulevard, Suite 350 | Los Angeles, CA 90025
Phone: (310) 828-1183 | Fax: (310) 453-6562
1999 Harrison St., Suite 2020 | Oakland, CA 94612
Phone: (510) 451-9521 | Fax: (510) 451-0384
TO City of Palo Alto Staff and Council
FROM Dave Metz and Miranda Everitt
FM3 Research
RE: Ballot Measure Refinement Survey Outline
DATE March 11, 2020
This memo outlines our recommended approach for a refinement survey to evaluate voter support for a
potential business tax measure in November 2020. This survey will update baseline attitudes about City
government and issues of concern, but will primarily focus on questions that provide a more precise test of
ballot measure viability: gauging support for a draft 75-word ballot label; testing reactions once the measure is
described in plain language; exploring views of key structural elements of the measure; and testing a full range
of pro and con arguments.
The following is an outline of our recommended survey structure:
•Survey introduction
•Cell or landline, safety check
•Right direction/wrong track (tracking to prior surveys)
•Vote on the ballot measure, using draft 75-word ballot language
•Open-ended question on reason for support/opposition
•Plain-language explanation of the measure with a re-vote
•Job rating - Palo Alto city government (tracking to prior surveys)
•Approval rating on specific aspects of City management (tracking most to prior surveys)
Maintaining infrastructure
Managing budget/finances
Using tax dollars efficiently
Transportation
•Need for additional funding (tracking to prior surveys)
•Problem seriousness battery (tracking most to prior surveys)
Parking
Housing costs
Waste and inefficiency in local government
The economy
Crime
Attachment C
Page 2
Homelessness
Traffic
Growth and development
Local tax rates
Changing character of the community
Coronavirus
Jobs and the economy
• Support for specific, individual measure elements
Per employee tax
Tiered by business size to be progressive
Small businesses would pay a flat registration fee instead
No sunset
Annual escalator
Annual audits
• Importance of potential investment priorities, with variations in wording (tracking many to prior surveys)
Infrastructure
Streets/roads
Traffic congestion
Access for people with disabilities
Sidewalks
Potholes
Affordable housing
Park/rec facilities
Emergency communications
Disaster preparedness
Community centers
Storm drains
Caltrain electrification/crossings
• Support for various cutoff points to define "small business"
• Support for various escalator amounts
• Pro and con arguments, presented in rotating order, with a re-vote after each set of messages
• Pro arguments
Asking business to share cost of City services
Funding for housing
Funding for transportation
Exemptions for small business
Parity with nearby cities
Transparency/accountability provisions
Need to update/modernize business tax structure
Page 3
• Con arguments
Could discourage businesses/startups from locating in Palo Alto
Could cost jobs
Can’t trust how money will be spent
Many other taxes on ballot
Potential for economic downturn
Automatic escalator will yield increases
City has surplus
Could lead to longer commutes
• Test of voter sentiment on equity transfer
• Demographics
Own/rent
Work in Palo Alto
Own a business in Palo Alto
Education
Ethnicity
Income
Gender
• Voter file information (will not need to ask this)
Party
Age
Past election participation
ATTACHMENT D
Detailed Timeline of Discussions with Finance Committee and City Council regarding the
November 2020 Ballot Measure
As discussed in the body of City Manager’s Report (CMR) 11161, the City of Palo Alto has been
discussing its options for a revenue generating ballot measure in 2020 throughout the past 11 months. A
brief timeline of the CMRs and discussions with the Finance Committee and the City Council since April
of 2019, when staff was formally directed to begin working on this project by the City Council, is
included below for additional context. The date, the forum of the meeting (Finance Committee or City
Council), the summary title, and the CMR number are included for ease of reference.
Timeline:
4/22/2019 City Council, “2019 Fiscal Sustainability Workplan”, CMR 10267
4/22/2019 City Council, “Approve Workplan for a Potential Revenue Generated Ballot Measure”,
CMR 10261
6/18/2019 Finance Committee, “Review, Comment, and Accept Preliminary Revenue Estimates
for Consideration of a Ballot Measure”, CMR 10392
8/20/2019 Finance Committee, “Evaluation and Discussion of Potential Revenue Generating
Ballot Measures”, CMR 10445
9/16/2019 City Council, “Evaluation and Discussion of Potential Revenue Generating Ballot
Measures and Budget Amendment”, CMR 10615
10/1/2019 Finance Committee, “Revised Workplan for Consideration of a Ballot Measure”, CMR
10712
10/15/2019 Finance Committee, “Stakeholder Outreach, Initial Polling, and Discussion of a
Potential Ballot Measure”, CMR 10743
11/4/2019 City Council, “Potential Ballot Measure Polling/Outreach, Contract, Solicitation
Exemption and Budget Amendment”, CMR 10792
12/2/2019 City Council, “Structure and Scenarios of Initial Round of Polling for a Potential Local
Tax Measure”, CMR 10891
12/17/2019 Finance Committee, “Consideration, Evaluation, and Discussion of a Revenue
Generating Local Tax Ballot Measure, Review of Refined Modeling, Analysis, Tax Structure and
Recommendation to the City Council”, CMR 10655
1/27/2020 City Council, “Update, Consideration, and Potential Direction on Possible Local Tax
Measure for 2020 Election”, CMR 11019
Item #1
City of Palo Alto
MEMORANDUM
To: City Council
Date: 3/19/2020
SUBJECT: AGENDA ITEM #1, CMR 11161: CONSIDERATION OF ANALYSIS, PUBLIC OUTREACH,
AND REFINED POLLING AND FURTHER DIRECTION ON A POTENTIAL LOCAL
BUSINESS TAX BALLOT MEASURE FOR 2020 ELECTION
Revised Staff Recommendation
Direct staff to:
1)In response to the current public health emergency, discontinue work on the development of a
local business tax measure for the November 2020 election.
2)Focus staff work over the coming year on revisions to the city’s existing business registry
certificate program with the specific goals of:
a.Streamlining the process to register,
b.Ensuring all businesses are registered, improving the completeness of the registry and
reliability of the data.
3)Direct staff to return with a Railroad Grade Separation workplan that extends the target date for
selection of preferred alternatives.
Summary
This memorandum provides an update on the City’s efforts related to the development of a potential
Business Tax Ballot Measure for the 2020 Election. On March 12, staff provided Council an update (CMR
11161) on efforts underway including a review of preliminary results from the Business Climate Survey,
an update on the analysis related to tiering a potential business tax and that showed scenarios with
possible rates, and the outline for a second round of polling. That staff report was a follow‐up to the
direction provided by the City Council on January 27, 2020 to further explore a potential business tax
ballot measure.
Based on recent developments, driven primarily by the impacts associated with COVID‐19, staff
recommends that we discontinue working on a local business tax measure for November 2020 and
COUNCIL MEETING
Received Before Meeting 13/23/2020
4
DocuSign Envelope ID: 21B58030-C2BD-4040-8398-B274891B5162
reconsider the workplan for the November 2022 election. This recommendation is prompted by several
factors including:
‐ The economic landscape has shifted significantly, with COVID 19 significantly impacting
businesses.
‐ With the Santa Clara County Public Health order to shelter in place, staff’s ability to complete
outreach, engagement, and education related to a ballot measure will be severely hampered.
Polling at this time would likely not produce useful results.
‐ Other parallel efforts, such as the grade separation community conversations taking place and
the evaluation and recommendation of grade separation options through the Expanded
Community Advisory Panel (XCAP), will also be impacted by the public health emergency
situation. While not directly linked, the City Council previously issued direction that this tax
focus on transportation needs, and deferral of the selection makes this need less clear.
In the interim, staff is seeking approval to refocus work on refining the business registry program to
enhance its use as a comprehensive and authoritative source of information about the City’s businesses.
The intent of this would be to maintain the current rate ($50 per business, plus $4 for the state‐wide
Certified Access Specialist (CASP) fee unless they meet an exemption) but facilitate the collection of
better information about the corporate population in the City and the key demographics such as size
(employees) and nature of businesses in town.
Discussion
The economic landscape has rapidly shifted since the issuance of the March 12 City Council meeting
staff report (CMR 11161). The economic impacts are not limited to a single segment of Palo Alto’s
complex and interrelated economy. Small businesses such as restaurants and cafes have closed or are
seeing precipitous declines in patronage while large companies face heightened uncertainty. In addition,
Santa Clara County’s Shelter in Place Public Health Order makes it more difficult to solicit meaningful
engagement and feedback with stakeholders, including both residents and businesses.
It is unclear how long the economic, community, and social impacts of this public health emergency will
persist. However, any delay in conversations about a potential business tax ballot measure would have a
clear impact on City’s ability to pursue a ballot measure in November 2020. As previously discussed by
the City Council, to meet statutory deadlines a measure would essentially need to be fully defined in
June.
If City Council chooses to delay a potential business tax ballot measure, staff recommends that work
continue with a focus on the City’s business registry. This will aid in future conversations about a
potential business tax ballot measure through refined information regarding the economic climate in the
City of Palo Alto. One of the most significant areas staff wrestled with was a lack of comprehensive,
authoritative, and accurate data to use in the assessment of various business tax scenarios. Using this
time to streamline the process and reduce the administrative burden for completing the application will
help establish a more comprehensive data baseline. It is anticipated that a streamlined business registry
process with fewer required fields will increase the number of participants and contribute to a more
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comprehensive registry. The postponement of policy discussions about a potential business tax ballot
measure could also be used to conduct an economic study of the City of Palo Alto to further clarify the
economic climate in our community.
It should be noted that staff plans to extend the filing deadline for the current year business registry and
payments for the Business Improvement District (BID).
It is important the City reassure the community that it is here to support Palo Alto’s unique way of life
during these uncertain times. Through the work on a potential business tax ballot measure, the City has
both started and strengthened relationships through engagement with various stakeholders, including
businesses throughout the City. The City has also identified a variety of resources available for both
residents and local businesses that are detailed on the City’s COVID‐19 webpage to help navigate the
changing circumstances that exist today.
__________________________ __________________________
Kiely Nosé Ed Shikada
Chief Financial Officer City Manager
DocuSign Envelope ID: 21B58030-C2BD-4040-8398-B274891B5162
City of Palo Alto (ID # 10874)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/23/2020
City of Palo Alto Page 1
Council Priority: Transportation and Traffic
Summary Title: Approval of Contract with Serco, Inc. for RPP Parking
Enforcement
Title: Approval of Contract Number C20176367 With Serco, Inc., for Three
Years, in an Amount Not-to-Exceed $2,322,285 for Residential Preferential
Parking Enforcement Services
From: City Manager
Lead Department: Transportation
Recommendation
Staff recommends that Council approve and authorize the City Manager or his designee to
execute contract C20176367 (Attachment A) for an amount not to exceed $2,322,285 with
Serco, Inc., for Residential Preferential Parking Enforcement for the City over a three-year
period.
Background
The City actively addressed city-wide parking and transportation challenges using a strategic,
multi-faceted approach focused on parking management, parking supply, and transportation
demand management programs. Parking management strategies have included the
development of a city-wide Residential Preferential Parking (RPP) ordinance.
The RPP program limits non-permit holder parking to two hours during program hours. The RPP
program was the result of a multi-year process that included business and resident stakeholder
engagement with city staff on the development of the program. The program development
included deliberations on enforcement hours, program boundaries, permit prices, and
employee permit allocation. The comprehensive process represents a significant effort to begin
managing neighborhood parking supply. An RPP Ordinance was adopted in December 2014,
with the establishment of RPP districts in the residential areas of Downtown Palo Alto,
City of Palo Alto Page 2
Evergreen Park-Mayfield, Southgate, and Old Palo Alto.
Consistent with Council direction, staff is in the process of awarding a contract necessary to
maintain the program, including parking enforcement and citation processing. This report
provides an overview of the recommended enforcement strategy and vendor selection process.
The City of Palo Alto’s Office of Transportation staff developed a Request for Proposals (RFP) to
receive proposals from firms that could implement the desired parking enforcement program in
a timely manner for the City. The RFP did not specify the number of enforcement officers being
requested; rather, the City invited proposers to visit the RPP Districts and make a proposal
based on their experience with similar programs. The RFP was issued in October 2019 and
proposals were due on Monday, November 18, 2019. The City received the following three (3)
responses to the RFP:
• Ace
• Republic Parking System
• Serco, Inc.
Evaluation
As specified in the RFP, evaluation of the proposals was conducted by City staff using the
following criteria:
• Quality and completeness of the proposal;
• Quality, performance and effectiveness of the solution, goods and/or services to be
provided by the Proposer;
• Proposer’s experience, including the experience of staff to be assigned to the project,
the engagements of similar scope and complexity;
• Cost to the city;
• Proposer’s financial condition and stability;
• Proposer’s ability to perform the work within the time specified;
• Proposer’s prior record of performance with City or other local, county or state agency;
• Proposer’s ability to provide future maintenance, repairs parts and/or services; and
• Proposer’s compliance with applicable laws, regulations, policies (including City Council
policies), guidelines and orders governing prior or existing contracts performed by the
contractor.
Each evaluation committee member calculated summary rating scores which established that
Serco, the current parking enforcement vendor for the City, had a significantly higher score. All
committee members indicated that they were in unanimous agreement that based on an
evaluation of relevant experience, proposed staffing approach, and proposed technologies, the
proposal submitted by Serco demonstrated the most complete understanding of the City’s RPP
City of Palo Alto Page 3
program.
Upon vendor selection, the City negotiated with Serco the details of the awarded contract that
is presented in this report. Commencement of contract negotiations were completed on
February 12, 2020.
Discussion
The City reviewed the three (3) firms that responded to the RFP – Ace, Republic, and Serco. Ace
included an operation outline where they would staff the area with two (2) enforcement
officers. At the same time, the Republic and Serco proposal recommended 8-9 full-time officers,
which is consistent with the current staffing assignments and better balances the workload
expected of the enforcement company for an enforcement area as large of Palo Alto. Republic’s
proposed staffing includes part-time officers, which is not beneficial due to the difficulties of
hiring and maintaining hourly employees in this region. Serco demonstrated a complete
understanding of the four (4) RPP districts and experience enforcing similar parking programs in
other cities. Ace’s proposal showed that they did not understand the complexity of the
enforcement system and demand in the RPP program in developing their staffing estimates.
The table below includes the current operating costs for RPP enforcement services.
Figure 1: Current Contract Enforcement
Serco, Inc. Term Ends Cost per Year RPP Districts
Award Contract May 2018 $503,210 Downtown
Amendment 1 May 2018 $563,210 *Downtown
Amendment 2 May 2019 $675,707 Downtown, Evergreen Park-Mayfield
Amendment 3 May 2019 $693,867 Downtown, Evergreen Park-Mayfield,
Southgate
Amendment 4 November 2019 $693,867 Downtown, Evergreen Park-Mayfield,
Southgate
Amendment
5**
March 2020 $35,070 Downtown, Evergreen Park-Mayfield,
Southgate, Old Palo Alto
*Additional staff for newly annexed Downtown streets
**Amendment 5 added Old Palo Alto for four months
The proposed cost each year reflects each firm’s understanding of the work required to meet
stated program enforcement goals.
City of Palo Alto Page 4
Figure 2: Contract Enforcement Proposals Received
Name of Firm Proposal Cost per Year
Ace $296,526
Republic Parking System $817,639
Serco, Inc. $748,672
Based on Serco’s understanding of the program requirements, level of service proposed and
experience enforcing similar programs, the proposal review committee felt that Serco’s
proposal would be the most effective at yielding the type of enforcement required by the City.
As part of their services, Serco will be responsible for the recruitment of enforcement
personnel, background checks and screening, final selection, and initial and on-going training of
staff. Training will include permit enforcement, issuance of citations, marking vehicles,
customer service, and codes and ordinances related to parking enforcement in the area.
Additionally, Serco will provide all personnel with uniforms, badges, ID tags, and transportation,
including bicycles and clean vehicles. The employees will be Serco employees and not
employees of the City of Palo Alto. The Office of Transportation will manage this contract to
ensure that the Serco representatives are meeting program goals in terms of enforcement.
Timeline
Serco is the incumbent and the transition will solely be administrative. The current contract
with Serco will expire March 31, 2020. This new contract will commence April 1, 2020. Once
the contract is awarded, the Serco team will need at least 30 days to implement a new offsite
office and train officers to utilize new handheld devices before enforcement can begin on April
1, 2020.
Resource Impact
The year one cost of this contract (3/1/2020 through 2/28/2021) is $748,672, and the
subsequent two years include annual increases, making the rates $771,132 and $802,481
respectively for year two and year three. The FY 2020 funding for this contract (March – June
2020) is available in the Residential Preferential Parking (RPP) Fund’s (Fund 239) FY 2020
Adopted Operating Budget. Funding beginning in FY 2021 through the remainder of the
contract is subject to approval through the annual budget development process.
It should be noted that the RPP fund does not operate at full cost recovery. Since FY 2014
approximately $1.4 million in General Fund subsidies have been required to maintain financial
City of Palo Alto Page 5
solvency of the RPP Fund, including a subsidy of $680,000 in FY 2020. In order to continue to
support program operations and service levels, including the costs of this contract in
subsequent years, additional revenue and/or General Fund support via a subsidy to the RPP
Fund will be required. This will be discussed and addressed through the FY 2021 budget
process.
The increase in cost for enforcement in the RPP areas are due to two to main factors, 1) the
addition of four new RPP areas since the original Serco contract was signed in 2015 and 2)
increased hourly labor costs. The City initially entered into a 3-year contract with Serco
(C1556763) on June 1, 2015 to provide RPP parking enforcement. As more RPP areas were
established, amendments were made to increase the number of Parking Enforcement Officers
to patrol new RPPs and the term of the contract to five (5) years. A total of four (4) RPP patrol
areas have been added since the original contract was signed. During the first three years of
the contract, the hourly labor costs did not increase, but the co rose by 5% after that. Labor
costs in the new contract are 7% higher than the last amendment of the prior contract, and
each subsequent year of the new contract, the cost of labor goes up by 3%. A combination of
adding personnel to enforce permit parking in new RPPs and increases in hourly labor costs
over the last 5 years have lead to increased enforcement costs including market inflation.
Policy Implications
Parking Enforcement of the RPP program is consistent with the City’s commitment promote
enhanced safety and mobility in Palo Alto’s transportation system while protecting resources
and preserving the community's quality of life, and is also consistent with the following
Comprehensive Plan goals:
1. Goal T-5, Policy T-5.1 All new development projects should manage parking
demand generated by the project, without the use of on-street parking,
consistent with the established parking regulations. As demonstrated parking
demand decreases over time, parking requirements for new construction should
decrease
2. Policy T-5.11: Work to protect residential areas from parking impacts of nearby
businesses and uses, recognizing that fully addressing some existing intrusions
may take time.
3. Goal B-2; Policy B-2.2 Recognize that employers, businesses and neighborhoods
share many values and concerns, including traffic and parking issues and
preserving Palo Alto’s livability, and need to work together with a priority on
neighborhood quality of life.
Environmental Review
The proposed actions are not a project under the California Environmental Quality Act (CEQA).
City of Palo Alto Page 6
In the event the proposed actions are deemed a project under CEQA, they are exempt under
CEQA regulation 15321 (Enforcement Actions by Regulatory Agencies).
Attachments:
Attachment A - C20176367 Serco (PDF)
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CITY OF PALO ALTO CONTRACT NO. C20176367
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
SERCO INC. FOR PROFESSIONAL SERVICES
This Agreement is entered into on this day of , 2020, (“Agreement”)
by and between the CITY OF PALO ALTO, a California chartered municipal corporation
(“CITY”), and SERCO INC., a New Jersey corporation, located at 12930 Worldgate Drive, Suite 600, Herndon, VA 20170 ("CONSULTANT").
RECITALS
The following recitals are a substantive portion of this Agreement.
A. CITY intends to provide parking enforcement services for the Downtown Residential
Preferential Parking (RPP) district (“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 February 28, 2023
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
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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 Million Three Hundred Twenty Two Thousand Two
Hundred Eighty Five Dollars ($2,322,285.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part
of this Agreement.
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, including, but not limited to, increases in the cost of Services, arising from or caused by
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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.
Option A: No Subcontractor: 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 Phillip Ballin as
the project manager to have supervisory responsibility for the performance, progress, execution of
the Services and will represent CONSULTANT during the day-to-day work on the Project. If
circumstances cause the substitution of the project manager, 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 Mark Hur, Office of Transportation, 250 Hamilton Ave, Palo Alto, CA
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94301, Telephone: (650) 329-2520. 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.
[Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 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, actual third party 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 performance or nonperformance by CONSULTANT, its
officers, employees, agents or contractors under this Agreement.
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 concurrent-ly 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.
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
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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: Serco Inc.
Attn: Muhammad Mansoor/Chan Phuong 12930 Worldgate Drive, Suite 600
Herndon, VA 20170
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 due to that person’s race, skin color, gender, gender
identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic
information or condition, 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,
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
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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 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.
26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any
contract for public works construction, alteration, demolition, repair or maintenance.
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.
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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.
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. C20176367 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
____________________________
City Manager
APPROVED AS TO FORM:
__________________________
City Attorney or designee
SERCO INC.
Officer 1
By:
Name:
Title:
Officer 2
By:
Name:
Title:
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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Contracts Representative
Chan Phuong
David Cornell
Sr Manager Contracts
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EXHIBIT “A” SCOPE OF SERVICES
Project Description
CITY is contracting with CONSULTANT to operate the Parking Enforcement Program for
Residential Preferential Parking (RPP) Districts in Palo Alto.
TASK 1: ONBOARDING AND STARTUP – 30 DAYS
A) CONSULTANT will provide the appropriate and necessary training to CONSULTANT’s
staff (“staff”) who work under this Agreement, relevant to their respective job duties. CONSULTANT shall maintain complete training records for each staffer, as well as any
other records prescribed by law or CITY policy as appropriate. The CITY’s Police
Department will provide all materials related to enforcement rules and regulations
currently in place; all other training materials are to be provided by CONSULTANT.
I. Training topics include, but are not limited to, to the following topics:
a. Design of the RPP District, including information on employee and resident permits
and history of the program development
b. Enforcing parking permit violations and other parking regulations
c. Marking and tagging of vehicles using City-provided handheld devices
d. Palo Alto Municipal Codes, California Vehicle Code, state statutes, and ordinances
related to parking enforcement
e. Chain of command and authority levels
f. Marking, tagging, towing, and impoundment of vehicles
g. Job procedures and emergency protocol
h. Responding to calls for service
i. Customer service delivery and expectations
j. Courtroom procedures and testimony
k. Workplace safety
l. Civil rights law and procedures
m. Information on history of Palo Alto and City Attractions
The training program should provide the CONSULTANT’s staff with sufficient understanding of the RPP program as well as operation of required equipment and
enforcement protocol. All staff are to complete and pass the training course prior to
starting service, and the training procedures must be approved by the CITY. The time
period from CITY’s notice to proceed to start of enforcement shall not be less than thirty
(30) days.
B) CONSULTANT will train staff to appear in court in a professional manner with related
documentation and evidence to support the case. CONSULTANT’s Project Manager will
represent the company in court appearances unless, an enforcement officer is specifically
required to be present, in which case the Project Manager will accompany the
enforcement officer or Supervisor to the hearing.
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C) Additional Deliverables: CONSULTANT will provide a training plan upon receiving
notice to proceed from the CITY. The training plan will include all training activities
planned for enforcement officers and include information from the CITY required to
complete the training, as well as a detailed schedule.
TASK 2: PERSONNEL
A) CONSULTANT will ensure that all new staff meet all CITY of Palo Alto and
CONSULTANT employment requirements as listed below. CONSULTANT will comply
with all existing Government code and CITY non-discrimination policies.
I. All candidates must complete a job application and provide a DMV printout. To be
offered a position, candidates must pass a pre-screening at CONSULTANT’s expense.
CONSULTANT’s pre-screening includes the following:
a. Pre-employment drug and alcohol testing
b. Criminal history background check
c. DMV record check
d. Social Security Number verification e. Eligibility to work in the United States
f. Ability to speak and write in English
g. LiveScan/Fingerprinting
h. California Department of Justice background check
Drivers will undergo further screening: a. Comply with USDOT/Federal Motor Carrier Safety Administration and California
DMV regulations
b. DMV nationwide records check
c. Pass the Smith Systems Defensive Driver Safety Training
d. 40 hours on-the-job training
B) CONSULTANT shall select and hire only persons who are well-qualified to perform the
duties for their respective job positions and should provide classifications of all employee
positions within their proposal, including a job description. Classifications might include,
but are not limited to:
I. Parking Enforcement Supervisor/Manager: Assist the parking enforcement staff with
day-to-day operations and staffing issues. Supervisor shall be responsible to report with
the on a bi-monthly basis and provide updates on the enforcement process, any feedback
from the public, incidents and number of citations issued. A supervisor should possess
sufficient IT knowledge to be able to handle employee equipment issues in the field, and
the capability of working with the citation processing agency for any citation issues.
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II. Parking Enforcement Staff: Responsible for the day-to-day management, supervision,
and operation of parking enforcement services. These individuals must have the capacity
to act as “Ambassadors” for the CITY, providing information about parking enforcement
practices and other information on Palo Alto’s Downtown.
C) CONSULTANT should provide performance metrics for each position so that
performance evaluations may take place.
D) CONSULTANT will provide eleven (11) shirts and eleven (11) pants to full-time employees.
E) CONSULTANT will issue staff jackets, hats, and rain attire for inclement weather, all
bearing the company logo. CONSULTANT and uniform company will be responsible for
cleaning of uniforms. Cleaning of uniforms is not the responsibility of the CITY. CONSULTANT will provide sample uniforms for CITY review prior to any issuance of
uniforms.
F) Staff will wear CONSULTANT-issued photo ID at all times while on duty.
G) CONSULTANT will be expected to purchase parking permits for any staff driving to
Palo Alto.
H) CONSULTANT will be responsible for all personnel supervision, discipline, and
termination actions. However, the CITY may require the removal of any CONSULTANT’s staff, when it is determined to be in the best interest of the CITY, at
any time.
I) CONSULTANT will address temporary vacancies due to vacations, illness, leaves of
absence, or termination and provide continuous staffing.
J) Additional Deliverables:
a. CONSULTANT will supply an updated organization chart and complete list of
employees and roles at the CITY’s request and annually on contract anniversary date.
b. CONSULTANT will provide draft design of enforcement uniforms for approval during
transition phase.
c. At the request of the CITY, Consultant will allow CITY to participate in staff interviews.
TASK 3: Parking Enforcement Program
A) CONSULTANT will be responsible for issuing citations for parking permit violations
within the RPP Districts listed in Task 5. Citations must include the make, model, color,
and style of vehicle, license tag number or Vehicle Identification Number (VIN),
violation code number and description, base fine amount and additional fine amount in
the event there is a failure to respond timely, badge number, the location of the parking
offense, type of offense (e.g. permit incorrectly displayed, no valid permit, not parked in
the right location) and the time and date of the offense.
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B) CONSULTANT staff will be fully trained on City-furnished handheld devices. Staff will
also be trained on how to capture digital images of vehicle license plates, and how to
issue manual paper citations. Consultant will work with CITY’s existing citation
processing vendor to ensure that citations associated with the RPP district may be
recorded and tracked separately from existing parking enforcement.
C) CONSULTANT will train staff on proper placement of citations on the windshield, how
to complete and issue citations for drive offs and covered VIN numbers, missing license
plates, and other unusual occurrences. In the event the driver drives away, the citation
will be mailed as required by the California Vehicle Code.
Task 4: Equipment
A) DESCRIPTION AND LOCATION: CITY will allow CONSULTANT to use citation
issuing handheld devices (EQUIPMENT). CITY will determine the appropriate model(s)
and quantity of EQUIPMENT to assign to CONSULTANT. CONSULTANT will not
remove, reposition or relocate any EQUIPMENT from the Palo Alto without CITY’s
prior written consent.
B) EQUIPMENT OWNERSHIP: CITY will retain title to and ownership of the
EQUIPMENT at all times. CONSTULTANT will not (a) remove or obscure labeling on
the EQUIPMENT indicating that it is the property of CITY or (b) sell, assign, transfer,
pledge, hypothecate or otherwise dispose of, encumber or permit a lien to be placed on
any of the EQUIPMENT. Upon termination of the Agreement, CONSULTANT will
provide CITY reasonable access to CONSULTANT’s location(s) during normal business
hours so CITY may remove the EQUIPMENT.
C) CARE AND OPERATION: CONSULTANT will maintain, store, and use the
EQUIPMENT in a careful and proper manner pursuant to the written instructions of the
EQUIPMENT manufacturer and CITY, and will not make any modifications to the
EQUIPMENT without CITY’s prior written consent. Any modifications to the
EQUIPMENT of any kind will become the property of CITY upon acceptance and
subject to the Agreement. CONSULTANT will comply with all laws, ordinances and
regulations relating to the possession, use and maintenance of the EQUIPMENT. CITY
will not be responsible for any damages, claims, injury or liability (collectively,
“DAMAGES”) relating to the operation of the EQUIPMENT while it is in the possession
of CONSULTANT (except for DAMAGES caused by the negligence of CITY, its
employees, agents or contractors). CONSULTANT will be responsible for all
DAMAGES caused by its use of the EQUIPMENT and for the loss, theft or destruction
of the EQUIPMENT.
D) ACCEPTANCE OF EQUIPMENT: CONSULTANT will immediately inspect each
piece of EQUIPMENT delivered by CITY and give notice to CITY if any EQUIPMENT
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is damaged or different from the type of EQUIPMENT described in its agreement with
CITY. If CONSULTANT gives no such notice within 10 business days after delivery of
any piece of EQUIPMENT, it will be conclusively presumed that such EQUIPMENT
was delivered in good condition. THE EQUIPMENT AND ALL SERVICES ARE
PROVIDED “AS IS.” CITY MAKES NO REPRESENTATION OR WARRANTY OF
ANY KIND, AND EXPRESSLY DISCLAIMS ALL SUCH REPRESENTATIONS
AND WARRANTIES, EXPRESS OR IMPLIED, AS TO THE EQUIPMENT AND THE
SERVICES, INCLUDING BUT NOT LIMITED TO ANY REPRESENTATIONS OR
WARRANTIES AS TO THE SUITABILITY OR FITNESS FOR ANY PURPOSE AND
THE MERCHANTABILITY OF THE EQUIPMENT AND SERVICES. No employee
or agent of CITY is authorized to modify the foregoing warranty or to make additional
warranties that are binding on CITY.
E) RISK OF LOSS OR DAMAGE: CONSULTANT assumes all risk of loss or damage to
the EQUIPMENT from any cause, including but not limited to fire, theft, water damage,
accidental overturning, dropping or negligence and agrees to return the EQUIPMENT to
CITY in the same condition as when received, normal wear and tear excepted. In the
event of loss or damage to the EQUIPMENT due to any cause other than ordinary wear
and tear, CONSULTANT will place the EQUIPMENT in good repair or pay CITY the
replacement value of the EQUIPMENT.
F) CONSULTANT will furnish two (2) hybrid vehicles for parking enforcement services
and will be responsible for all on-going operating expenses including insurance, fuel,
maintenance, and repairs. The vehicles will be equipped with GPS tracking units and
LPR technology as necessary. CONSULTANT’s vehicles shall be clearly identifiable as
performing parking enforcement and parking meter maintenance and collection
operations for the CITY. CONSULTANT’s staff shall operate all vehicles at all times in
compliance with all state and local motor vehicle and emissions laws. Vehicles shall not
have missing parts or dents, and the rear of all patrol vehicles shall have a sign warning
of frequent vehicle stops. All vehicles used by CONSULTANT shall have blinking
flasher lights installed on each vehicle's roof. CONSULTANT will obtain approval by the
CITY Manager and the Chief Communications Officers or his/her designee prior to
ordering decals for the marking of vehicles.
G) CONSULTANT will also provide staff with four (4) Trek Marlin 6 or equivalent
bicycles, anticipating that some enforcement officers may be able to use this method of
enforcement.
H) Due to the limited amount of space available for storage and work area, CONSULTATNT shall
secure an offsite (non City-Hall) field office. CONSULTANT shall furnish and maintain a
suitable work site for its staff working under this Agreement with proper storage conditions to
store hardware, supplies, and documents, including secure storage of information protected by
law or City policy.
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I) CONSULTANT will provide a schedule of estimated patrol routes and frequency recommendations. The CITY seeks to ensure that coverage is adequate, fair, regular, and
consistent, although it is also expected that CONSULTANT will alternate the patrol
routes on a regular basis to eliminate predictability. CONSULTANT can propose changes
to routes and schedules to the CITY as part of their performance reporting meetings and
documentation.
J) CONSULTANT will be responsible for maintaining records of employment and, upon
request, provide the CITY with personnel and training information for each employee.
K) CONSULTANT will require Parking Enforcement Officers to submit daily reports regarding issues such as:
I. Missing or damaged or conflicting parking signs, or traffic control signs, or curb
markings
II. Obstructed parking signs, stop signs, yield signs or any safety hazard
III. Parking abnormalities or abnormal parking patterns
IV. Beat analysis and beat enforcement
V. Incidents/accidents
L) CONSULTANT will update and meet with CITY’s staff regularly, including the
following:
I. Weekly status reports with Parking Operations Lead and other staff as necessary
II. Monthly progress meetings
III. Quarterly evaluation and status report
IV. Annual performance review
M) CONSULTANT will seek CITY approval on operational changes including but not
limited to:
I. Schedules
II. Routes
III. Operations Task 5: RPP Districts
The Residential Preferential Parking (RPP) Program is being introduced as part of a suite of
parking management strategies aimed at improving parking and traffic conditions in Palo Alto. The program will restrict commuter parking during hours of operation, although limited numbers of commuter-employee permits will also be sold.
A) Downtown:
The RPP District includes a geographic area surrounding Palo Alto’s Downtown commercial zone and bounded by the City of Menlo Park to the Northwest. Currently, the only existing parking restrictions within this boundary include the Downtown Business
District color zone and the SOFA business District:
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I. The SOFA business district has 2-hour parking along streets which house mainly local businesses. Customers may re-park after two hours in any of the spaces.
II. The Downtown color zone has 2-hour parking which is limited to a specific color
zone – Blue, Coral, Lime or Purple. Parking twice within the same color zone during
the time period 8:00 to 5:00 is not permitted.
III. The physical boundaries of the Downtown RPP District will not include the existing
SOFA and Downtown commercial areas, which are currently enforced by the Palo
Alto Police Department using mark-moding and chalking. The area within the dotted
blue line will be included in the new parking District.
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IV. Residential permits, Annual Guest Permits and Visitor permits will be valid anywhere within the District. Anyone without a valid permit will be allowed to park for two (2)
hours, at which point they would need to move their car to a different parking space.
The hours of enforcement of the program are Monday through Friday, 8:00am –
6:00pm.
B) Evergreen Park – Mayfield:
The RPP District includes a geographic area surrounding Palo Alto’s California Avenue
commercial zone. Currently, the only existing parking restrictions within this boundary
include the California Avenue business district:
I. The California Avenue zone has 2-hour parking. Parking twice within the same color zone
during the time period 8:00 to 5:00 is not permitted.
II. The physical boundaries of the Evergreen Park - Mayfield RPP District will not include
the existing California Avenue commercial areas, which are currently enforced by the
Palo Alto Police Department using mark-moding and chalking.
III. Residential permits, Annual Guest Permits and Visitor permits will be valid anywhere
within the District. Anyone without a valid permit will be allowed to park for two (2)
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hours, at which point they would need to move their car to a different parking space. The hours of enforcement of the program are Monday through Friday, 8:00am – 6:00pm.
C) Southgate
The RPP District includes a geographic area in the Southgate neighborhood. Currently, there are
no existing parking restrictions within this district
I. Residential permits, Annual Guest Permits and Visitor permits will be valid anywhere
within the District. Anyone without a valid permit will be allowed to park for two (2)
hours, at which point they would need to move their car to a different parking space. The hours of enforcement of the program are Monday through Friday, 8:00am – 5:00pm.
D) Old Palo Alto
The RPP District includes a geographic area in the Old Palo Alto neighborhood.
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Currently, there are no existing parking restrictions within this district.
I. Residential permits, Annual Guest Permits and Visitor permits will be valid anywhere within
the District. Anyone without a valid permit will be allowed to park for two (2) hours, at which
point they would need to move their car to a different parking space. The hours of enforcement
of the program are Monday through Friday, 8:00am – 5:00pm.
TASK 6: ADDITIONAL SERVICES
A) CONSULTANT will provide additional Parking Enforcement Officer to support
enforcement of newly annexed streets and approved neighborhoods in the Residential
Preferential Parking (RPP) program in accordance with this Agreement. CONSULTANT
will begin enforcing street faces in yellow once signage is installed on those streets.
CONSULTANT will not begin enforcing areas shown in blue until receiving further
direction from the City. Once the City provides direction, CONSULTANT shall enforce
newly annexed streets in accordance with the terms of this Contract. CONSULTANT
will follow and be subject to all other protocols as listed previously in this exhibit.
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EXHIBIT “B” SCHEDULE OF PERFORMANCE
CONSULTANT shall do parking enforcement (Task 3) during the days and times described in
each RPP district, as noted in Task 5 of Exhibit A.
CONSULTANT shall perform the other services as specified in EXHIBIT “A” SCOPE OF
SERVICES as to be determined by CITY project manager.
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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, including reimbursable expenses, 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.
Year One (3/1/2020 through 2/28/2021) Not to Exceed $748,672.00
Year Two (3/1/2021 through 2/28/2022) Not to Exceed $771,132.00
Year Three (3/1/2022 through 2/28/2023) Not to Exceed $802,481.00 Sub-total Basic Services for Three Year Term $2,322,285.00
Reimbursable Expenses None
Maxim Total Compensation $2,322,285.00
REIMBURSABLE EXPENSES 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: None All requests for payment of expenses shall be accompanied by appropriate backup
information. Any expense 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 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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EXHIBIT “C-1” SCHEDULE OF RATES
CONSULTANT shall be paid hourly for each officer and project manager that maintains a parking facility.
The tables below include the payment compensation schedule for the program including pre-defined
pricing for implementation of the program. The compensation tables shall remain fixed for term of the
contract.
Compensation Terms – Year 1
Labor Categories Est
Hours
Hourly
Rate
Extended
Rate
Project Manager – Direct Labor Rate 1,920 $49.67 $95,355
Overhead Rate (including Fridge, G&A and Fee) 1,920 $38.43 $73,791
Project Manager (fully burdened) 1,920 $88.10 $169,146
Parking Enforcement Officers – Direct Labor Rate 15,360 $19.00 $291,840
Overhead Rate (including Fringe, G&A and Fee) 15,360 $14.70 $225,844
Parking Enforcement Officer (fully burdened) 15,360 $33.70 $517,684
ODCs/Materials to include: bicycles/vehicles,
uniforms, fuel, cellphones, and other misc.
supplies
N/A $51,750
Burdens and Fee G&A N/A $10,092
ODCs and Materials (fully burdened) N/A $61,842
Project Manager (1), Parking Enforcement
Officers (7 FT PEOs + 1 FT Supervisor) and
ODCs/Materials (all fully burdened)
N/A $748,672
Compensation Terms – Year 2*
Labor Categories Est
Hours
Hourly
Rate
Extended
Rate
Project Manager – Direct Labor Rate 1,920 $51.15 $98,215
Overhead Rate (including Fridge, G&A and Fee) 1,920 $39.59 $76,005
Project Manager (fully burdened) 1,920 $90.74 $174,220
Parking Enforcement Officers – Direct Labor Rate 15,360 $19.57 $300,595
Overhead Rate (including Fringe, G&A and Fee) 15,360 $15.14 $232,619
Parking Enforcement Officer (fully burdened) 15,360 $34.71 $533,214
ODCs/Materials to include: bicycles/vehicles,
uniforms, fuel, cellphones, and other misc.
supplies
N/A $53,303
Burdens and Fee G&A N/A $10,395
ODCs and Materials (fully burdened) N/A $63,397
Project Manager (1), Parking Enforcement
Officers (7 FT PEOs + 1 FT Supervisor) and
ODCs/Materials (all fully burdened)
N/A $771,132
*3% cost of living increase
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Compensation Terms – Year 3**
Labor Categories Est
Hours
Hourly
Rate
Extended
Rate
Project Manager – Direct Labor Rate 1,920 $52.18 $100,179
Overhead Rate (including Fridge, G&A and Fee) 1,920 $40.35 $77,477
Project Manager (fully burdened) 1,920 $92.53 $177,657
Parking Enforcement Officers – Direct Labor Rate 15,360 $20.60 $316,416
Overhead Rate (including Fringe, G&A and Fee) 15,360 $15.93 $244,711
Parking Enforcement Officer (fully burdened) 15,360 $36.53 $561,127
ODCs/Materials to include: bicycles/vehicles,
uniforms, fuel, cellphones, and other misc.
supplies
N/A $53,303
Burdens and Fee G&A N/A $10,395
ODCs and Materials (fully burdened) N/A $63,697
Project Manager (1), Parking Enforcement
Officers (7 FT PEOs + 1 FT Supervisor) and
ODCs/Materials (all fully burdened)
N/A $802,481
**3% cost of living increase
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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 CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY.
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.
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
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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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Certificate Of Completion
Envelope Id: CE94D77EEDE84D3FA5F0FE24F9DD41BF Status: Completed
Subject: Please DocuSign: C20176367 Serco - legal reviewedv.4.pdf
Source Envelope:
Document Pages: 26 Signatures: 2 Envelope Originator:
Certificate Pages: 2 Initials: 0 Terry Loo
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
Terry.Loo@CityofPaloAlto.org
IP Address: 199.33.32.254
Record Tracking
Status: Original
2/20/2020 7:35:26 AM
Holder: Terry Loo
Terry.Loo@CityofPaloAlto.org
Location: DocuSign
Security Appliance Status: Connected Pool: StateLocal
Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign
Signer Events Signature Timestamp
Chan Phuong
Chan.Phuong@serco-na.com
Contracts Representative
Security Level: Email, Account Authentication
(None)Signature Adoption: Pre-selected Style
Using IP Address: 174.64.52.10
Sent: 2/20/2020 7:37:45 AM
Viewed: 2/20/2020 7:58:23 AM
Signed: 2/20/2020 8:01:13 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
David Cornell
David.Cornell@serco-na.com
Sr Manager Contracts
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(None)Signature Adoption: Pre-selected Style
Using IP Address: 204.188.186.6
Sent: 2/20/2020 8:01:16 AM
Viewed: 2/20/2020 8:03:55 AM
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Mark Hur
mark.hur@cityofpaloalto.org
Parking Operations Lead
Security Level: Email, Account Authentication
(None)
Sent: 2/20/2020 8:04:37 AM
Electronic Record and Signature Disclosure:
Not Offered via DocuSign
Carbon Copy Events Status Timestamp
Sarah Wilson
Sarah.Wilson@CityofPaloAlto.org
City of Palo Alto
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Sent: 2/20/2020 8:04:38 AM
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City of Palo Alto (ID # 11027)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/23/2020
City of Palo Alto Page 1
Summary Title: Two-Year Renewal of Oracle Technical Support Services
Title: Approval of Contract Number C20178071 With Oracle America, Inc., for
Two-Year Term for Software Program Technical Support Services in the
Amount of $262,986; and Authorize the City Manager to Authorize and
Execute a Contract Amendment of up to a 10 Percent Contingency in the
Event Additional Services are Required, Up to an Amount Not-to-Exceed
$26,298, for a Total Not-to-Exceed Amount of $289,284
From: City Manager
Lead Department: IT Department
Recommended Motion
Staff recommends that Council approve the following motions:
1. Authorize the City Manager or designee to execute the attached two-year
license and support agreement with Oracle America, Inc., in an amount not to exceed
$262,986 subject to the annual appropriation of funds (Attachment A); and,
2. Approve and authorize the City Manager or designee to authorize and execute
a contract amendment of up to a 10% contingency amount in the event additional
services are required up to a maximum amount of $26,298, for a total not-to-exceed
amount of $289,284.
Discussion
The City has been using Oracle databases since 2000 for various data systems, such as
our SAP and SCADA systems. This contract is necessary to continue receiving updates
to software, software patches, and technical support for the Oracle products licensed
under this agreement. Last fiscal year, Council approved a one-year contract for Oracle
support, contract C19174703 (CMR:10117).
Each year, staff reviews the existing Oracle license count for accuracy to ensure that we
are licensed appropriately.
A solicitation would be impractical and unavailing at this time as the Oracle licenses are
City of Palo Alto Page 2
required to run some of the City’s most critical and necessary applications, and staff has
determined the costs to be reasonable. The absence of these licenses at this time would
not allow core City systems to be accessed and business processes would stop. For
these reasons, staff is requesting an exemption from competitive solicitation as being
impractical and unavailing under PAMC 2.30.360(b)(2).
Resource Impact
Funding for this contract is available in the FY 2020 Operating Budget for the IT
Department in the Technology Fund. Funding for subsequent years of the contract will
be subject to approval through the annual appropriation of funds.
Stakeholder Engagement
This agreement has been reviewed and negotiated by the City Attorney Office, the
Administrative Services Purchasing Division, and Oracle. All parties have agreed to the
terms and conditions set forth in the agreement.
Environmental Review
Approval of these contracts do not constitute a project under the California
Environmental Quality Act (CEQA); therefore, an Environmental Assessment is not
required.
Attachments:
• Attachment A: Oracle Support Service Number 1844903 Two-Year Renewal
City of Palo Alto Purchasing and Contract Administration P.O.Box 10250 Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468
Council Approved Purchase Order
Ship To:
Information Technology Services City of Palo Alto 250 Hamilton Ave., 2nd Floor Palo Alto CA 94301
Bill To:
Information Technology Services City of Palo Alto 250 Hamilton Ave., 2nd Floor Palo Alto CA 94301
Page 1 of 1
Item Material/Description Quantity UM Net Price Net Amount
0010
0020
0030
License and Technical Support Services
Renew al of Oracle Licenses and Technical Support for in the Amount of
$248,712.16, Support Service Number #1844903
Start Date: March 17, 2020
End Date: March 16, 2022
Hardware Technical Support Services
$3,787.06
Start Date: Nov. 16, 2019
End Date: March 16, 2022
Program Technical Support Services
$10,486.74
Start Date: Nov. 26, 2019
End Date: March 26, 2022
The attached Service Details document provides further detail on the
services and pricing, and is hereby attached and incorporated into this
Purchase Order by reference as though fully set forth herein.
This Purchase Order is subject to the Oracle Public Sector Technical
Support Services Agreement between City of Palo Alto and Oracle
America, Inc., Agreement No. US-PS-TSSA-2103261, effective date
21-MAY-2019, as amended by Amendment One to Agreement No. US-
PS-TSSA-2103261, which are hereby attached and incorporated into
this Purchase Order by reference as though fully set forth herein.
City' s project manager: Sherrie Wong
email: Sherrie.Wong@CityofPaloAlto.org
1.00
1.00
1.00
248,712.16 USD
3,787.06 USD
10,486.74 USD
Sub-Total
248,712.16
3,787.06
10,486.74
------------------------
262,985.96
Total 262,985.96
SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.
Vendor Address
ORACLE AMERICA, INC.
500 ORACLE PARKWAY
REDWOOD SHORES CA 94065
Tel: 408-642-2847 Fax: 408-642-2847
P.O. NUMBER MUST APPEAR ON ALL INVOICES, PACKAGES, SHIPPING
PAPERS AND CORRESPONDENCE PERTAINING TO THIS ORDER
PO Number C20178071 Date 03/16/2020Vendor No. 100530 Payment Terms Payment Due 30 days FOB Point Services Only Ship via services as required by city Term 11/16/2020 - 03/16/2022 Buyer/Phone Saira Cardoza / 650-329-2327 Email Saira.Cardoza@cit yofpaloalto.org
DELIVERIES ACCEPTED ONLY BETWEEN 7:00 AM & 3:00 PM UNLESS OTHER
ARRANGEMENTS ARE INDICATED HEREIN
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
City of Palo Alto Purchasing and Contract Administration P.O.Box 10250
Palo Alto CA 94303 Tel:(650)329-2271 Fax:(650)329-2468 Council Approved
Purchase Order
PURCHASE ORDER NUMBER C20178071 SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Purchase Order effective as of March 16, 2020.
CITY OF PALO ALTO
____________________________ Ed Shikada City Manager
APPROVED AS TO FORM:
____________________________ City Attorney or designee (Required on Contracts over $25,000)
ORACLE AMERICA, INC.
Officer 1
By:
Name:
Title:
Officer 2 (Required for Corp. or LLC)
By:
Name:
Title:
Attachments:
Service Details
Agreement No. US-PS-TSSA-2103261, effective date 21-MAY-2019, as amended by Amendment One to Agreement No. US-PS-TSSA-2103261
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
Alex Strayer
Director, Deal Management, Americas SSC
Centralized Workflow Manager
Jake Camarillo
Support Service Number: 1844903
RL_Global_v030519
Service Level: Software Update License & Support
Program Technical Support Services
SERVICE DETAILS
Product Description
Application Server Enterprise Edition - Concurrent Device Application Server Enterprise Edition - Universal Power Unit Designer - Developer
DEVELOPER REL1.0
DIAGNOSTICS PACK 1.5
Discoverer Administration Edition - Named User
Forms Server - Universal Power Unit Oracle Database Enterprise Edition - Universal Power Unit Oracle Diagnostic Management Pack - Universal Power Unit Oracle Tuning Management Pack - Universal Power Unit Programmer - Developer
Reports Server - Universal Power Unit REPORTS V2.5
SQL*PLUS - Developer
TUNING PACK 1.5
WebDB Enterprise Edition - Nonstandard User
Oracle Database Standard Edition - Named User Plus Perpetual Oracle Database Enterprise Edition - Processor Perpetual
Oracle Partitioning - Processor Perpetual Oracle Spatial and Graph - Named User Plus Perpetual
CSI # Qty License
Metric
License
Level /
Type
Start Date End Date Price
3069563 1100 FULL USE 17-Mar-20 16-Mar-22 9,826.16
3069563
960
FULL USE
17-Mar-20
16-Mar-22
14,360.28
3069563
1
FULL USE
17-Mar-20
16-Mar-22
3,930.46
3069563 1 DEVELOP
ER
FULL USE 17-Mar-20 16-Mar-22 2,947.84
3069563 1100 CONCUR
RENT
DEVICE
FULL USE 17-Mar-20 16-Mar-22 4,913.08
3069563 2 FULL USE 17-Mar-20 16-Mar-22 2,247.34
3069563
500
FULL USE
17-Mar-20
16-Mar-22
900.74
3069563
960
FULL USE
17-Mar-20
16-Mar-22
43,235.08
3069563
960
FULL USE
17-Mar-20
16-Mar-22
7,475.02
3069563
960
FULL USE
17-Mar-20
16-Mar-22
7,475.04
3069563
19
FULL USE
17-Mar-20
16-Mar-22
3,684.80
3069563 500 FULL USE 17-Mar-20 16-Mar-22 900.74
3069563
1
DEVELOP
ER
FULL USE
17-Mar-20
16-Mar-22
1,833.72
3069563 13 FULL USE 17-Mar-20 16-Mar-22 6,387.00
3069563 1100 CONCUR
RENT
DEVICE
FULL USE 17-Mar-20 16-Mar-22 4,913.08
3069563 4 FULL USE 17-Mar-20 16-Mar-22 810.66
13920513
50
FULL USE
17-Mar-20
16-Mar-22
7,181.36
18309686
4
FULL USE
17-Mar-20
16-Mar-22
39,614.20
18309686
4
FULL USE
17-Mar-20
16-Mar-22
9,903.56
18309686
50
FULL USE
17-Mar-20
16-Mar-22
2,475.88
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
Support Service Number: 1844903
RL_Global_v030519
Service Level: Oracle Premier Support for Systems
Hardware Technical Support Services
Service Level: Software Update License & Support
Program Technical Support Services
Product Description CSI # Qty License Metric License Level / Type
Start Date End Date Price
ORACLE SERVER EE 8I 8.1 19893780 1100 CONCUR RENT DEVICE
FULL USE 17-Mar-20 16-Mar-22 73,696.12
Program Technical Support Fees: USD 248,712.16
Product Description Serial Number CSI # Qty Start Date End Date Price Installed At: CITY OF PALO ALTO - C/O Utilities Engineering 1007 Elwell Court Palo Alto SANTA CLARA CA 94303 Unite
Oracle Database Appliance X7-2S/X7-2M: model family Oracle Database Appliance X7-2S with two 6.4 TB NVMe SSDs (for factory installation) Oracle Database Appliance X7-2S with two 6.4 TB NVMe SSDs (for factory installation) Power cord: North America and Asia, 2.5 meters, 5-15P plug, C13 connector, 15 A (for factory installation)
Hardware Technical Support Fees: USD 3,787.06
Product Description
Oracle Database Enterprise Edition - Named User Plus Perpetual Oracle Spatial and Graph - Named User Plus Perpetual
Program Technical Support Fees: USD 10,486.74
Total Price: USD 262,985.96 Plus applicable tax
NOTES
• If Oracle accepts Your renewal order, the start date set forth in the Service Details table above shall serve as the commencement date of the technical support services and the technical support services ordered under this renewal order will be provided through the end date specified in the table
Service Level: Software Update License & Support
Program Technical Support Services
22034347 1 16-Nov-19 16-Mar-22 0.00
1845XD304G
22034347
1
16-Nov-19
16-Mar-22
0.00
22034347
1
16-Nov-19
16-Mar-22
3,782.86
22034347
2
16-Nov-19
16-Mar-22
4.20
CSI # Qty License
Metric
License
Level /
Type
Start Date End Date Price
22044528 25 LIMITED
USE
OTHER
26-Nov-19 16-Mar-22 7,715.75
22044528 25 LIMITED
USE
OTHER
26-Nov-19 16-Mar-22 2,770.99
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
Support Service Number: 1844903
RL_Global_v030519
for the applicable programs and/ or hardware ("Support Period").
• If any of the fields listed in the Service Details table above are blank, then such fields do not apply to Your renewal.
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
DocuSign Envelope ID: 97D80158-BAA7-4631-963A-553A1EB72E2E
City of Palo Alto (ID # 11079)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/23/2020
City of Palo Alto Page 1
Summary Title: 526 Waverley Upgrade Historic Inventory From Category 3 to
Category 2
Title: Adoption of a Record of Land Use Action Approving a Change to the
Local Historic Resources Inventory Classification for 526 Waverley Street
From a Category 3 (Contributing Building) to a Category 2 (Major Building)
Historic Resource. The Historic Resources Board Recommends Adoption of
the Record of Land Use Action. Approval of This Historic Designation is
Exempt From the California Environmental Quality Act (CEQA) In Accordance
with Section 15301 of the CEQA Guidelines.
From: City Manager
Lead Department: Planning and Development Services
Recommendation:
Staff recommends that Council reclassify 526 Waverley Street, originally constructed in 1927,
from a Palo Alto Historic Inventory Category 3 Resource (‘Contributing Building’) to a Category 2
Resource (‘Major Building’) as recommended by the Historic Resources Board (HRB).
Executive Summary
This report and Record of Land Use Action (Attachment A) provide background and support the
HRB’s recommendation to upgrade 526 Waverley Street’s Historic Inventory classification from
Category 3 (contributing building) to Category 2 (major building). The Birge Clark designed
building is located within the Commercial Downtown. It formerly housed “Sport and Toy
World.” The site’s Ground Floor and Pedestrian Combining Districts require ground floor retail
or ‘retail-like’ uses. The HRB originally recommended the classification upgrade in 2018, subject
to completion of the HRB-reviewed, staff-approved façade restoration and rehabilitation
project. The HRB more recently affirmed the recommendation in 2020, following completion of
the façade restoration and rehabilitation project in 2019 and the preparation of a historic
structure report documenting the work.
City of Palo Alto Page 2
Background/Discussion
In 1989, Council added this building to the City’s Historic Resource Inventory, classifying the
building at 526 Waverley Street as a Category 3 historic resource. Palo Alto Municipal Code
(PAMC) Chapter 16.49 defines a Category 3 contributing building as: “a good local example of
architectural styles and which relate to the character of a neighborhood grouping in scale,
materials, proportion or other factors. A contributing building may have had extensive or
permanent changes made to the original design, such as inappropriate additions, extensive
removal of architectural details, or wooden facades resurfaced in asbestos or stucco.”
Prior to the 2019 façade restoration/rehabilitation, the building looked like the image on the
left below. Birge Clark’s original design is shown on the drawn image on the right below.
The owner’s work in 2019 restored the building to more closely resemble Clark’s design. The
image on the following page is how the building appears today. Staff and the HRB recommend
Council reclassify it to Inventory Category 2 resource, or ‘Major Building’.
City of Palo Alto Page 3
PAMC 16.49 defines a Category 2 major building as: “any building or group of buildings of major
regional importance, meritorious works of the best architects or an outstanding example of an
architectural style or the stylistic development of architecture in the state or region. A major
building may have some exterior modifications, but the original character is retained.”
Evaluation and Upgrade Request
The attached record of land use action provides the background information. Briefly, the owner
contacted staff in August 2017 after the owner’s consultant report found the modified building
would not likely qualify as a Category 2 for its architectural merits. That is, the building in 2017
had an appearance that did not represent the original design. The property owner contacted
staff to explore the possibility of reclassifying the building related to a rehabilitation proposal.
The owner first presented a rehabilitation concept to the Historic Resources Board (HRB) in an
August 2017 study session (ID #8374). The owner noted interest in the various benefits of a
Category 2 designation, including floor area bonus; at the time, the owner was considering
adding housing units to the building. The owner then filed the Architectural Review (AR)
application in mid-December 2017 (file 17PLN-00454) for an HRB mid-January 2018 review.
The HRB determined the rehabilitation would merit elevation of the building’s local inventory
historic category from 3 to 2 (where reclassification was contingent upon completion of the
rehabilitation). The owner completed the project per the April 2018 AR approval and associated
building permit. The City’s December 2019 independent report found the building eligible for
upgrade to Category 2 resource. Also, the December 2019 report notes the building is eligible
for listing on the California Register under two of the four Criterion: Criterion 1: representing a
multi-generation family legacy business that made a significant contribution to the broad
patterns of Palo Alto history, and Criterion 3: a property deemed individually significant within a
local context for its Spanish Colonial Revival commercial design and its association with a
master architect, Birge M. Clark.
HRB Recommendation
On February 13, 2020, the HRB reviewed the historic structure report (Attachment B) which:
(1) documents the completed improvements with analysis of the project’s adherence to the
Standards for Rehabilitation, and
(2) reviews the rear addition and mezzanine to allow consideration for a future potential
project including removal of the addition.
Before the façade restoration plans were approved, the HRB had reviewed the plans at their
January 25, 2018 meeting1. The 2018 HRB report included original Historic Inventory form
1 The HRB 1-25-18 staff report is linked here: https://www.cityofpaloalto.org/civicax/filebank/documents/62972.
HRB 1-25-18 meeting minutes for 1-25-18 are here:
https://www.cityofpaloalto.org/civicax/filebank/documents/63712
City of Palo Alto Page 4
reflecting the Category 3 status as did the February 13, 2020 HRB report2. The February 2020
report enabled the HRB to affirm its recommendation for reclassification following the
completed restoration project. The HRB action affirming this recommendation for upgrade to a
Category 2 ‘Major Building’ is documented in Attachment C, the draft excerpt HRB meeting
minutes from February 13, 2020.
Architectural Review
The façade restoration/rehabilitation improvements complied with the staff-level Architectural
Review (AR) approval of May 2018. HRB members later visited the site in June 2019 to review
finishes and colors, to satisfy a requirement imposed via approval conditions.
Policy Implications:
Following Council reclassification of the building as a Category 2 building, the property owner
intends to request that staff process a floor area bonus. The bonus floor area is transferrable to
a non-historic building in the Downtown and the PAMC sets forth processes to document any
such transfer. The owner may instead submit an Architectural Review application to use the
bonus floor area on site. Modification of the building exterior with bonus floor area would be
subject to review for compliance with Secretary of the Interior’s Standards during AR
application review process.
Resource Impact:
Any project utilizing the anticipated bonus floor area on site would include review by the
Historic Resources Board and Architectural Review Board. The owner would pay the
appropriate processing fees in effect at that time, as defined in the Municipal Fee Schedule.
Stakeholder Engagement:
The HRB members have been the key community partners during the process to reach this
point.
Environmental Review:
Reclassification of a historic building to a higher category of resource is exempt from CEQA
review under California Environmental Quality Act and CEQA Guidelines per Section 21065.
Attachments:
Attachment A: Record of Land Use Action (RLUA) for Upgrade to Category 2 Resource
(DOCX)
Attachment B: Historic Resource Memorandum December 2019 (PDF)
Attachment C: HRB Draft Excerpt Minutes 2-13-20 (DOCX)
2 The HRB 2-13-20 staff report is linked here: https://www.cityofpaloalto.org/civicax/filebank/documents/75225
The HRB 2-13-20 minutes are not yet online; however, excerpt draft minutes are attached to this report.
Page 1 of 3
ATTACHMENT A
ACTION NO. ------2020
RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO’S LAND USE ACTION TO UPGRADE 526
WAVERLEY STREET FROM HISTORIC RESOURCES INVENTORY CATEGORY III TO CATEGORY II
On March 23, 2020, the Council _____ the property owner’s request to reclassify
the commercial building at 526 Waverley Street from a Category 3 to a Category 2 historic
resource on the City’s Historic Resources Inventory, making the following findings,
determination and declarations:
SECTION 1. Background. The City Council of the City of Palo Alto (“City Council”)
finds, determines, and declares as follows:
A. In July 2017, the owner’s historic preservation consultant evaluated the building’s
potential to qualify as a Palo Alto Inventory Category 2 resource. The consultant found it
would not qualify as a Category 2 for its architectural merits, due to modifications over
time; that is, the building had an appearance that did not represent the original design.
B. In August 2017, the property owner met staff to explore the possibility of reclassifying
the building related to a rehabilitation proposal. At the time, the owner was considering
preliminary concepts for adding upper‐floor residential units. The applicant presented
the rehabilitation concept to the Historic Resources Board (HRB) in a study session on
August 24, 2017 (ID #8374).
C. On December 15, 2017, the owner submitted a formal Architectural Review (AR)
application for rehabilitation/façade restoration (17PLN-00454).
D. On January 25, 2018, the HRB received a staff report (ID #8841) and conducted a public
hearing of the AR application for rehabilitation; the HRB:
(1) determined the rehabilitation would comply with the Secretary of the
Interior’s Standards for Restoration (SISR) and the applicable Architectural
Review (AR) finding,
(2) assessed that the proposed changes would merit elevation of the building’s
local inventory historic category from 3 to 2, and
(3) recommended approval of the proposed façade renovation/restoration and
the requested reclassification contingent upon completion of the rehabilitation
via approval conditions for the formal Architectural Review application.
E. On April 16, 2018, the Director conditionally approved the AR application, requiring
completion of the façade restoration before the applicant could request City Council
approval of Historic Resource Category upgrade. The owner completed the project in
accordance with the approved building permit and in consultation with the HRB
subcommittee regarding finishes prior to final inspection.
Page 2 of 3
F. In December 2019, staff obtained an independent report from its qualified historic
preservation consultant. The report assessed the completed rehabilitation project. The
City’s consultant found the rehabilitated building eligible for upgrade to Category 2
resource and also eligible for listing on the California Register under several criterion:
Criterion 1, representing a multi-generation family legacy business that made a
significant contribution to the broad patterns of Palo Alto history, and criterion 3, a
property deemed individually significant within a local context for its Spanish Colonial
Revival commercial design and its association with master architect Birge M. Clark.
G. On February 13, 2020, the HRB received staff’s report (ID #11090) transmitting the
December 2019 consultant report documenting the completed facade
restoration/rehabilitation project as compliant with the Secretary of Interior's Standards
for Rehabilitation and affirming HRB's 2018 recommendation for reclassification of 526
Waverley Street to Historic Inventory Category 2 from Category 3.
SECTION 2. Environmental Review. This project is exempt from the provisions of
the California Environmental Quality Act (CEQA), per Section 15301.
SECTION 3. Designation Findings.
A. The following criteria, as specified in Municipal Code Section 16.49.040 (b), shall be used
as criteria for designating historic structures/sites to the historic inventory:
1. The structure or site is identified with the lives of historic people or with
important events in the city, state or nation;
2. The structure or site is particularly representative of an architectural style or
way of life important to the city, state or nation;
3. The structure or site is an example of a type of building which was once
common, but is now rare;
4. The structure or site is connected with a business or use which was once
common, but is now rare;
5. The architect or building was important;
6. The structure or site contains elements demonstrating outstanding attention to
architectural design, detail, materials or craftsmanship.
The building at 526 Waverley Street met many of the above criteria when it was first
listed on Palo Alto’s Inventory. With the approved rehabilitation of 2019, the building’s
status as a historic resource has improved; criterion 6 is better met with the
rehabilitated façade. The building continues to be a listed resource on the Palo Alto
Historic Resources Inventory.
B. The definition of Category 2 in Municipal Code Section 16.49.020 (b) must be met to
allow the upgrade to the structure’s category designation: Category 2 Definition:
Page 3 of 3
"Major building" means any building or group of buildings of major regional importance,
meritorious works of the best architects or an outstanding example of an architectural
style or the stylistic development of architecture in the state or region. A major building
may have some exterior modifications, but the original character is retained.
The building at 526 Waverley Street meets the Palo Alto Inventory Category 2 definition,
as per the City’s consultant determination: “The property is a meritorious work of a
locally significant architect, who has many nearby commercial buildings with Category 1
and 2 designations. The subject property was also listed as a Category 3 resource under
the theme of Architecture in 1989. With a substantial amount of the main façade
rehabilitated, the original character has been reinstituted. As a result, 526-534 Waverley
Street appears eligible for reclassification to a Category 2 resource.”
C. California Register of Historical Resources listing: The structure appears eligible for
listing on the California Register of Historical Resources, under two of the four criteria.
The rehabilitated project’s eligibility under Criteria 1 and 3 is described in the report
prepared by Page and Turnbull, December 2019 (Attached to ID #11090).
SECTION 5. Category Upgrade Approved. The City Council approves the property
owner’s request for re-designation of 526 Waverley Street to a Category 2 historic resource on
the City’s Historic Resources Inventory.
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST: APPROVED:
_________________________ ____________________________
City Clerk Director of Planning and
Development Services
APPROVED AS TO FORM:
___________________________
Senior Asst. City Attorney
MEMORANDUM
DATE December 9, 2019 PROJECT NO. 16252A.20
TO Christy Fong PROJECT 526-534 Waverley Street,
Palo Alto
OF
City of Palo Alto Planning
and Community
Environment Department
250 Hamilton Avenue,
5th Floor
Palo Alto, CA 94301
FROM
Alicia Sanhueza, Cultural
Resources Planner, Page &
Turnbull
CC Christina Dikas, Associate
Principal, Page & Turnbull VIA Email
REGARDING: 526-534 Waverley Street – Historic Resource Memorandum
INTRODUCTION
The City of Palo Alto has requested a Historic Resource Memorandum for the property at 526-534
Waverley Street in Palo Alto, California. The subject building is a two-story Spanish Colonial Revival
commercial building designed by renowned local architect Birge Clark and completed in 1927. The
property was initially constructed for Bernard J. Hoffacker and was home to the Palo Alto Sport Shop
and Toy World for 87 years. The building experienced substantial alterations throughout the years,
and in 2018, the subject property underwent a façade rehabilitation to return it to its original design.
The memorandum has been requested to determine the age and significance of the property’s rear
addition and interior mezzanine, and to provide an analysis of the 2018 façade rehabilitation project
for adherence to the Secretary of the Interior’s Standards for the Treatment of Historic Properties
(Standards), specifically the Standards for Rehabilitation.
METHODOLOGY
In 2017, Architectural Resources Group (ARG) completed a Preliminary Assessment Memorandum
for the subject property at 526-534 Waverley Street. Due to the focused scope of the report, this
memorandum relies on the previous findings of the 2017 ARG report. In November 2019, Page &
Turnbull conducted a site visit and assessed the building’s current condition. Limited historical
research was performed at various in-person and online repositories, including the Palo Alto
Historical Association and Palo Alto Development Services Department, to supplement the previous
findings. City staff and the subject property owner provided Page & Turnbull with additional
information, including:
526-534 Waverley Street [16252A.20]
Page 2 of 20
State of California Department of Parks and Recreation Historic Resources Inventory form
for 526-534 Waverley Street (1986)
City of Palo Alto Historic Resources Board/Architectural Review Board Staff Report – 526
Waverley/97-Arb-215 (February 5, 1998)
Façade renovation plans by Randolph B. Popp (March 28, 2017)
City of Palo Alto Development Review – Department Comments – 526 Waverley St/17PLN-
00454 (January 4, 2018)
BRIEF ARCHITECTURAL DESCRIPTION
526-534 Waverley Street is a two-story commercial building located on Waverley Street in the
central business core of Downtown Palo Alto between University and Hamilton Avenues (Figure 1).
Figure 1. Bird’s eye view of 526-534 Waverley Street. Subject property indicated by dashed orange line.
Source: Bing Maps, 2019. Edited by Page & Turnbull.
The building is generally rectangular in plan and the roof has three shallow gables surrounded by a
concrete parapet. The primary (northeast) façade on Waverley Street is separated into three bays,
with the central projecting bay approximately two to three feet taller than the other two bays. The
primary façade is flush with the sidewalk and the southeast and northwest façades abut the
526-534 Waverley Street [16252A.20]
Page 3 of 20
neighboring buildings (Figure 2). The rear (southwest) façade borders a parking lot and alleyway
and is adjacent to an irregularly shaped one-story hollow clay tile addition, previously used as a bike
repair shop.
The primary façade is clad in stucco and topped with a clay S-tile shed roof. Additionally, the primary
façade is divided into three bays (Figure 3). The central projecting bay – the largest of the three – is
flanked by two smaller bays (Figure 4). Each bay features a ground-floor tile-clad storefront and a
glazed wood entrance door and transom. Each bay is set within various Spanish Colonial Revival
style decorative arches. The second story is symmetrical and has 12-light wood sash recessed
casement windows. Wrought iron Juliet balconies with decorative scrollwork accompany the central
and eastern bay windows, and the western bay features decorative wrought iron window screens
with decorative scrollwork (Figure 5). Details along the primary façade include a decorative plaster
lintel and brackets over the northwest storefront, an expansive wood lintel over the center storefront,
and a stucco corbel table at the roofline of the center bay (Figure 6). The rear (southwest) two-story
façade has a shaped parapet reflecting the multiple-gable roof behind it, two 12-light industrial
windows and one 18-light industrial window with translucent glass. It is clad in board formed
concrete. The rear one-story addition extends from the original southwest façade and is accessed
via multiple metal and plywood doors (Figure 7-Figure 8). It is clad in hollow clay tile and features
three flush metal doors (Figure 9). The building is set on a concrete foundation.
The interior is primarily a double-height commercial space with a mezzanine level. The mezzanine
level is generally U-shaped and includes two enclosed office spaces along the main façade. Original
adzed wood beams and posts with decorative brackets and mezzanine railing remain, as does a
stuccoed fireplace with its original adzed wood mantel (Figure 10-Figure 11). The mezzanine level
continues along the west side of the building to the rear (southwest) and is accessible by two non-
original interior staircases. The rear entrance is accessible via an interior concrete ramp through the
one-story addition (Figure 12). Interior walls are clad in a variety of materials, including stucco,
drywall, and hollow clay tiles (Figure 13). Interior floors are clad in wood, terracotta tiles, carpet, and
concrete.
526-534 Waverley Street [16252A.20]
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Figure 2. Primary façade of 526-534 Waverley Street, looking southwest.
Figure 3. Primary façade storefronts of subject property, looking northwest.
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Figure 4. Center bay of primary façade with
decorative corbel table and restored Juliet
balcony, looking northwest.
Figure 5. Northwest bay with decorative plaster
lintel and restored iron window screens, looking
southwest.
Figure 6. Decorative plaster lintel.
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Figure 7. Rear addition and parking lot, looking northeast.
Figure 8. Rear addition, looking north from parking lot.
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Figure 9. Hollow clay tile wall, as seen from interior of rear addition.
Figure 10. Interior mezzanine with adzed wood beams, posts, and joints, and decorative railing.
526-534 Waverley Street [16252A.20]
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Figure 11. View from ground-floor entrance under original mezzanine, looking southeast towards
stuccoed fireplace.
Figure 12. View of interior ramp toward rear
addition, looking southwest.
Figure 13. Interior view of hollow clay tile rear addition, looking southwest.
526-534 Waverley Street [16252A.20]
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HISTORIC DEVELOPMENT
The following is a brief overview of major alterations that have taken place at the subject property
since its construction in 1927 and expands on information provided in ARG’s Preliminary
Assessment:
1927 – Birge Clark-designed building is constructed. The property was originally three
separate commercial spaces, occupied in the first two decades by the sport shop, a bakery,
and the Palo Alto Realty Company.
Between ca. 1927-1930 – Bike repair facility is constructed at the rear of the subject building
(Figure 14-Figure 16)
1948 – The building is remodeled, and the sport shop expands into the rest of the building.
The mezzanine area is expanded along the north and west interior.
1949 – Drive-in service area added to rear of store (painted red and green)
1971 – Reroofing
1992 – Storefronts are altered with new windows, doors, plaster, awnings, and painting
1996 – Reroofing
1998 – Remodel existing mezzanine, restrooms, dressing rooms, and rear exit for
accessibility; install elevator; replace rear second-story windows with current 12- and 16-
light windows.
2017 – After 87 years, the Palo Alto Sport Shop and Toy World closes
2018 – Primary façade rehabilitation
Figure 14. 1930 aerial photograph. Subject property outlined in orange. Source: Flight C-1025, Frame J-1, Fairchild Aerial Surveys, UCSB Aerial Photograph Collection. Edited by Page & Turnbull.
Figure 15. 1940 aerial photograph. Subject property outlined in orange. Source: Flight C-7065, Frame 43, Fairchild Aerial Surveys, UCSB Aerial Photograph Collection. Edited by Page & Turnbull.
526-534 Waverley Street [16252A.20]
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Figure 16. 1924 Sanborn Map Company fire insurance map revised 1949, Sheet 13. Subject property outlined in orange. Source: San Francisco Public Library. Edited by Page & Turnbull.
CURRENT HISTORIC STATUS
526-534 Waverley Street was listed in Palo Alto’s Historic Inventory in 1989 as a Category 3
contributing building, defined as “any building or group of buildings which are good local examples of
architectural styles and which relate to the character of a neighborhood grouping in scale, materials,
proportion or other factors. A contributing building may have had extensive or permanent changes
made to the original design, such as inappropriate additions, extensive removal of architectural
details, or wooden facades resurfaced in asbestos or stucco.”1 Due to previous significant
modifications of the storefront and the loss of original materials and design, Emily Vance of the City
of Palo Alto Planning Department noted in the project’s Development Review Comments that the
subject property had “lost a significant amount of integrity” before the 2018 façade rehabilitation.2
Ms. Vance also noted that with the previously proposed rehabilitation, the building would “once
again possess its original character and rise to the level of Category 2 designation.” Please see the
Historic Resource Eligibility Assessment for Category 2 evaluation which follows.
1 PAMC 16.49.020.
2 “Development Review – Department Comments,” Planning - Historic Preservation, City of Palo Alto, January 4, 2018.
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HISTORIC ELIGIBILITY ASSESSMENT
City of Palo Alto Category 2 Evaluation
A City of Palo Alto Category 2 resource is defined as a “major building,” meaning “any building or
group of buildings of major regional importance, meritorious works of the best architects or an
outstanding example of an architectural style or the stylistic development of architecture in the state
or region. A major building may have some exterior modifications, but the original character is
retained.”3
As previously mentioned, Ms. Vance of the City of Palo Alto Planning Department noted that with the
previously proposed rehabilitation, the building at 526-534 Waverley Street would “once again
possess its original character and rise to the level of Category 2 designation.”4 Furthermore, the
designation would be possible without the restoration of the original French doors on the second
floor of the primary façade, due to the fact that “the windows would be mostly concealed behind
restored iron balconies and that a Category 2 designation allows for ‘some exterior modifications.’”5
Visual observations made during the November 2019 site visit confirm that the project as approved
by Planning staff was completed. The property is a meritorious work of a locally significant architect,
who has many nearby commercial buildings with Category 1 and 2 designations. The subject
property was also listed as a Category 3 resource under the theme of Architecture in 1989. With a
substantial amount of the main façade rehabilitated, the original character has been reinstituted. As
a result, 526-534 Waverley Street appears eligible for reclassification to a Category 2 resource.
California Register of Historic Resources (CRHR) Evaluation
The California Register of Historical Resources (California Register) is an inventory of significant
architectural, archaeological, and historical resources in the State of California. Resources can be
listed in the California Register through several methods. State Historical Landmarks and National
Register-listed properties are automatically listed in the California Register. Properties can also be
nominated to the California Register by local governments, private organizations, or citizens. The
evaluative criteria used by the California Register for determining eligibility are closely based on
those developed by the National Park Service for the National Register of Historic Places.
For a property to be eligible for listing in the California Register, it must be found significant under
one or more of four criteria. The following section examines the eligibility of 526-534 Waverley Street
for individual listing in the California Register, relying primarily on historic research prepared by ARG
in their 2017 Preliminary Assessment.
3 PAMC 16.49.020.
4 “Development Review – Department Comments” dated January 4, 2018.
5 Ibid.
526-534 Waverley Street [16252A.20]
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Criterion 1 (Events): Resources that are associated with events that have made a significant
contribution to the broad patterns of local or regional history or the cultural heritage of
California or the United States.
526-534 Waverley Street does appear to be significant under Criterion 1 (Events) as a property
associated with a legacy business that made a significant contribution to the broad patterns of Palo
Alto history. Based on the historic research assembled in ARG’s Preliminary Assessment, the
subject property was constructed in 1927 for the Hoffacker family in the downtown core of Palo Alto.
Four generations of the Hoffacker family owned and operated the Palo Alto Sport Shop for almost 90
years. Bernard J. Hoffacker commissioned the construction of the subject property, and his son,
Edward Hoffacker Sr., started the sports and toy shop. Edward Sr. also established the Palo Alto
Realty Company, which operated out of one of the building’s three commercial spaces through the
1940s. In the mid-1940s, Edward Sr. passed the management of the sports shop to his two sons,
Bernhard (Bern) and Edward (Ed) Jr. and the business expanded into the other two commercial
spaces. The family operated the business until 2017. According to ARG’s Preliminary Assessment,
the Hoffackers were well known in the community and played a publicly active role by supporting
local sports organizations, funding youth sports competitions, and supporting local non-profits. The
family-owned small business, now a rarity in Palo Alto and elsewhere, was a much-loved and well-
known destination for residents.6 Therefore, the property does appear to be individually significant
under Criterion 1 for its association with a multi-generation family legacy business that was
influential within the local community, with a period of significance of 1927-2017, the years of
operation.
Criterion 2 (Persons): Resources that are associated with the lives of persons important to
local, California, or national history.
526-534 Waverley Street does not appear to be significant under Criterion 2 (Persons) for an
association with the lives of persons important to local, state, or national history. While the subject
property is associated with four generations of the Hoffacker family that owned and operated the
Palo Alto Sport Shop, ARG’s Preliminary Assessment and the supplemental research performed by
Page & Turnbull did not yield any information that suggests any member of the Hoffacker family was
individually of importance to local, state, or national history. Instead, it is the Hoffackers’ long-
standing business and their involvement in the community through the business that is
representative of the family’s contributions. Therefore, the property does not appear to be
individually eligible under Criterion 2.
Criterion 3 (Architecture): Resources that embody the distinctive characteristics of a type,
period, region, or method of construction, or represent the work of a master, or possess high
artistic values.
6 Sarah Hahn, “526-534 Waverley Street Preliminary Assessment Memorandum”, Architectural Resources Group, July 5, 2017.
526-534 Waverley Street [16252A.20]
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526-534 Waverley Street does appear to be individually eligible for listing in the California Register
under Criterion 3 (Architecture) as a building that embodies the distinctive characteristics of a type,
period, region, or method of construction or that represents the work of a master or possesses high
artistic values. Designed by locally renowned architect Birge Clark in 1927, the two-story commercial
building was constructed in Clark’s quintessential Spanish Colonial Revival style. Following the
façade rehabilitation in 2018, the building displays distinctive characteristics of the style, including
stucco cladding, Revival-style storefront arches, decorative ironwork, and wood lintels, an S-shape
clay tile roof, an adzed wood interior mezzanine, and a corbel table. All windows except one wood
sash casement window at the second story of the main façade appear original. The ground floor
storefronts, including the bulkheads, windows, and doors, are all new but remain sensitive to Clark’s
original design and materials.
Birge M. Clark is considered the most influential architect in Palo Alto’s history. Clark was active
during much of the twentieth century and was a proponent of the Spanish Colonial Revival style,
which he called “Early California.” Clark’s prolific output and stylistic consistency greatly contributed
to Palo Alto’s current character. Clark designed a variety of commercial, residential, and industrial
buildings, including 98 residences in Palo Alto and 39 on the Stanford campus. Some of Clark’s
most prominent residential commissions in Palo Alto include all the houses on Coleridge Avenue
between Cowper and Webster Streets, the Dunker House at 420 Maple Street (1926), and the Lucie
Stern residence at 1990 Cowper Street (1932). Other well-known non-residential commissions of
Clark’s include the former Palo Alto Police and Fire Station at 450 Bryant Street (now the Palo Alto
Senior Center) (1927), the Post Office at 380 Hamilton Avenue (1932), the Lucie Stern Community
Center at 1305 Middlefield Road (1932), and the 500 Block of Ramona Street (1920s).7
526-534 Waverley Street exhibits distinct characteristics of the Spanish Colonial Revival style and is
a work of a master architect, Birge M. Clark. While many of Clark’s properties remain intact
throughout Palo Alto, the subject property displays unique characteristics of a Spanish Colonial
Revival commercial property. Thus, the property appears individually significant within a local
context under Criterion 3 for its Spanish Colonial Revival commercial design and its association with
a master architect, Birge M. Clark. The period of significance under this criterion is 1927, the year of
construction.
Criterion 4 (Information Potential): Resources or sites that have yielded or have the potential
to yield information important to the prehistory or history of the local area, California, or the
nation.
The “potential to yield information important to the prehistory or history of California” typically relates
to archeological resources, rather than built resources. When California Register Criterion 4
(Information Potential) does relate to built resources, it is relevant for cases when the building itself
7 Peter Gauvin, “Birge Clark (1893-1989),” Palo Alto Centennial (May 25, 1994).
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is the principal source of important construction-related information. The analysis of the building at
526-534 Waverley Street for eligibility under Criterion 4 is beyond the scope of this report.
CHARACTER-DEFINING FEATURES
As 526-534 Waverley Street has undergone various alterations, its character-defining features are
split into two groups, primary and secondary character-defining features. Primary character-defining
features represent those that are integral to the original Birge Clark design and operation of the Palo
Alto Sport Shop. Secondary character-defining features represent those that are not essential to the
building’s ability to convey its historic significance. All character-defining features represent the
period of significance of 1927- 2017.
Primary Character-Defining Features
Location within the southwest block face of the 500 block of Waverley Street in
Downtown Palo Alto
Original 1927 building footprint (not including rear addition)
Two-story, three-bay primary façade massing
Interior double height commercial space
Features that communicate the commercial property type, including:
o Fixed plate glass storefront windows
o Glazed single entry wood doors with transoms
o Bulkheads beneath storefront windows (with decorative tiling)
o Three distinct entrances that communicate its previous three-store plan
Features that communicate the Spanish Colonial Revival style, including:
o Primary façade:
Stucco cladding
Three distinct Spanish Colonial Revival-style storefront arches
Multi-light, wood-sash, recessed casement windows at the second story
Decorative molding and corbel table
Clay tile shed roof along the primary façade
Decorative ironwork
Wood lintel
Plaster trim and brackets
o Interior mezzanine with adzed wood posts, joists, beams, and railing, only at
northeast side of interior
Original mezzanine staircase located in northwest corner
Secondary Character-Defining Features
One-story rear hollow clay tile addition (built between 1927-1930)
Stuccoed fireplace at interior
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Non-original interior mezzanine along the northwest and southwest interior
Partition walls enclosing original interior mezzanine on northeast side
Windows at rear façade of original building
DISCUSSION OF COMPLIANCE WITH THE SOI STANDARDS
Project Description
In 2018, 526-534 Waverley Street underwent a rehabilitation of its primary façade back to its original
1927 design. According to drawings and plans, the project proposed the construction of the
following:
Ironwork at mezzanine level windows similar to the original design
Ironwork balconies along the mezzanine level similar to the original design
Plaster lintel and brackets similar to the original design
Original wood lintel repaired and restored
Three entryway arches similar to original design
Storefront bulkheads and tilework similar to the original design
Glazed wood doors with glazed transom similar to the original design
New compatible wood sash casement window at the northwest corner of the front façade
Removal of brick finish at the building base
Removal of applied siding and non-original trim
Visual inspection during the November 2019 site visit suggests that this scope of work was
undertaken as outlined.
Standards for Rehabilitation Analysis
The Secretary of the Interior’s Standards for the Treatment of Historic Properties (Standards)
provide guidance for reviewing proposed work on historic properties, with the stated goal of making
possible “a compatible use for a property through repair, alterations, and additions while preserving
those portions or features which convey its historical, cultural, or architectural values.”8 The
Standards are used by Federal agencies in evaluating work on historic properties. The Standards
have also been adopted by local government bodies across the country for reviewing proposed
rehabilitation work on historic properties under local preservation ordinances. The Standards are a
useful analytic tool for understanding and describing the potential impacts of substantial changes to
historic resources.
Emily Vance’s City of Palo Alto Planning Department Development Review found the proposed
changes would meet the Standards for Restoration. While the project was reviewed as a restoration
undertaking and viewed favorably at the time, the completed project is more applicable to the
8 National Park Service, The Secretary of the Interior’s Standards for Treatment of Historic Properties, accessed online 19 November 2013, http://www.nps.gov/hps/tps/standguide/.
526-534 Waverley Street [16252A.20]
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Standards for Rehabilitation due to its use of some new components in a similar but not exact
appearance to the original design. The following discussion provides an additional brief analysis
regarding whether the completed project adheres to the Standards, specifically the Standards for
Rehabilitation.
Rehabilitation Standard 1: A property shall be used for its historic purpose or be placed in a new use
that requires minimal change to the defining characteristics of the building and its site and
environment.
Discussion: 526-534 Waverley Street will continue to be used as commercial space and the
façade rehabilitation project required no change to the defining characteristics of the building, its
site, and its environment.
As constructed, the project appears in compliance with Rehabilitation Standard 1.
Rehabilitation Standard 2: The historic character of a property shall be retained and preserved. The
removal of historic materials or alteration of features and spaces that characterize a property shall
be avoided.
Discussion: It appears that the project did not alter the overall historic character of the 1927
Spanish Colonial Revival style commercial building. The building retained most of its remaining
character-defining features, including its location, two-story massing, stucco cladding, multi-light
mezzanine windows, stucco corbel table, and the clay tile roof. The first-floor storefront systems
were previously altered and at the time of the project no longer retained integrity and were
replaced. The project, as constructed, restored the configuration of the three storefronts and
decorative Spanish Colonial Revival-style archways. Additionally, the decorative molding,
brackets, ironwork, and other character-defining features were reintroduced either as exact
replicas or using a design very similar to the original (see Standard 9 for more analysis of new
components). One original feature, the wood lintel, was restored.
As constructed, the project appears in compliance with Rehabilitation Standard 2.
Rehabilitation Standard 3: Each property shall be recognized as a physical record of its time, place,
and use. Changes that create a false sense of historical development, such as adding conjectural
features or architectural elements from other buildings, shall not be undertaken.
Discussion: ARG’s Preliminary Assessment, planning comments, and project plans have
documented original features and restored elements, including the decorative ironwork,
storefront tile, and plaster trim and brackets. Because of this documentation, the
restoration/rehabilitation work is distinguishable will not be confused as original materials or
contribute to a false sense of historical development.
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As constructed, the project appears in compliance with Rehabilitation Standard 3.
Rehabilitation Standard 4: Most properties change over time; those changes that have acquired
historic significance in their own right shall be retained and preserved.
Discussion: As constructed, the project did not impact any elements of the subject building that
have acquired historic significance in their own right. Although some non-original alterations
remain (including the rear addition), those alterations were not altered as part of the scope of
this façade rehabilitation project.
As constructed, the project appears in compliance of Rehabilitation Standard 4.
Rehabilitation Standard 5: Distinctive features, finishes, and construction techniques or examples of
craftsmanship that characterize a historic property shall be preserved.
Discussion: As constructed, the façade rehabilitation project does not affect any distinctive
materials, features, finishes, construction techniques, or examples of craftmanship of 526-534
Waverley Street. Original elements remain, such as the massing, most mezzanine wood
casement windows, and the corbel table.
As mentioned in Standard 2, the historic features, finishes, and materials that characterize the
subject property and remained prior to the project have been preserved. These include its
location, two-story massing, stucco cladding, multi-light wood casement windows, corbel table,
and clay tile roof. Interior character-defining features, such as the northeast mezzanine, and
secondary character-defining features, such as the rear addition, were not altered as part of the
scope of the façade rehabilitation project.
The ground-floor storefronts have been reconstructed close to their original Birge Clark design,
replacing previous non-original storefronts. Notable features that communicate the original
property design that have been reintroduced include the fixed plate glass storefront windows,
glazed single entry wood sash doors with transoms, bulkheads beneath storefront windows with
decorative tiling, and three distinct entrances that communicate its previous three-store plan.
Furthermore, features that have been reintroduced that communicate the building’s original
Spanish Colonial Revival style include patched stucco cladding, three distinct Revival-style
storefront arches, decorative molding, ironwork, a restored wood lintel above the main entrance,
and the plaster lintel and brackets. One multi-light, wood-sash, mezzanine-level recessed
casement window has replaced a non-original window.
As constructed, the project appears in compliance of Rehabilitation Standard 5.
526-534 Waverley Street [16252A.20]
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Rehabilitation Standard 6: Deteriorated historic features shall be repaired rather than replaced.
Where the severity of deterioration requires replacement of a distinctive feature, the new feature
shall match the old in design, color, texture, and other visual qualities and, where possible,
materials. Replacement of missing features shall be substantiated by documentary, physical, or
pictorial evidence.
Discussion: The project does not appear to have included the replacement of historic materials
that remained, deteriorated or otherwise. The extant materials along the exterior mezzanine
level of the subject property appear mostly original, except for the decorative ironwork that had
been removed in previous years and minimal stucco that was patched in-kind. The casement
window located on the northwest corner of the mezzanine level is not original; the original
window was replaced in previous years and a new window was installed as part of this project
that aligned with the original in design, color, and material. As previously described in Standard
5, the non-original storefronts were constructed close to the original design and did not replace
historic material. Instead, features were replicated from original drawings, historic photos, and
other nearby Birge Clark buildings.
As constructed, the project appears in compliance with Rehabilitation Standard 6.
Rehabilitation Standard 7: Chemical or physical treatments, such as sandblasting, that cause
damage to historic materials shall not be used. The surface cleaning of structures, if appropriate,
shall be undertaken using the gentlest means possible.
Discussion: The project does not appear to have included any chemical or physical treatments
to clean or otherwise treat historic materials.
As constructed, the project appears in compliance of Rehabilitation Standard 7.
Rehabilitation Standard 8: Significant archeological resources affected by a project shall be
protected and preserved. If such resources must be disturbed, mitigation measures shall be
undertaken.
Discussion: The project did not involve excavation that could have affected potential
archeological resources.
As constructed, the project appears in compliance of Rehabilitation Standard 8.
Rehabilitation Standard 9: New additions, exterior alterations, or related new construction shall not
destroy historic materials that characterize the property. The new work shall be differentiated from
the old and shall be compatible with the massing, size, scale, and architectural features to protect
the historic integrity of the property and its environment.
526-534 Waverley Street [16252A.20]
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Discussion: According to planner Emily Vance’s Historic Comments and visual observations
from the November 2019 site visit, the façade rehabilitation project was based on original 1927
Birge Clark elevations and historic photographs.
Some elements were replicas from the original design, including:
Ironwork at the northeast window of the mezzanine level
Ironwork balconies along the mezzanine level
Glazed wood doors with glazed transom
It should be noted that some elements stray from the original design, however, they do not
detract from the historic significance of the building nor significantly alter any character-defining
features. These include:
Keeping the existing center casement windows in the mezzanine level of center bay that were originally French doors9
The plaster brackets framing the north storefront vary slightly from original design (juts out more)
The tilework slightly varies, with more courses of tile than the original design and with a pattern that is not based on the building’s original Terracotta tiles10
Plaster lintel similar to the original design
Three entryway arches similar to original design
Wood lintel at exterior center bay, with ends that slightly vary from original design
Additionally, one mezzanine-story wood sash casement window at the northeast corner replaced
a non-original window within its historic opening. Ironwork at the northeast window of the
mezzanine level was also duplicated on the adjacent window; while it is not in the original plans,
it is evident in historic photos.
As constructed, the project appears in compliance of Rehabilitation Standard 9.
Rehabilitation Standard 10: New additions and adjacent or related new construction shall be
undertaken in such a manner that if removed in the future, the essential form and integrity of the
historic property and its environment would be unimpaired.
Discussion: Neither additions nor adjacent or related new construction were undertaken
during the primary façade rehabilitation project of 526-534 Waverley Street.
As constructed, the project is in compliance with Rehabilitation Standard 10.
9 Approved by City of Palo Alto Planning Department in “Development Review – Department Comments” dated January 4, 2018. 10 Ibid.
526-534 Waverley Street [16252A.20]
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Summary of Standards for Rehabilitation Analysis
As constructed, the project appears to be in compliance with all ten Rehabilitation Standards and
does not cause any project-specific impacts on the historic resource.
QUALIFICATIONS
Page & Turnbull was established in 1973 as Charles Hall Page & Associates to provide architectural
and conservation services for historic buildings, resources, and civic areas. The company was one
of the first architecture firms in California to dedicate its practice to historic preservation and is
among the longest practicing such firms in the country. Offices are located in Los Angeles,
Sacramento, and San Francisco, and staff includes licensed architects, designers, architectural
historians, conservators, and planners. All of Page & Turnbull’s professional staff members meet or
exceed the Secretary of the Interior’s Historic Preservation Professional Qualification Standards.
As an architectural historian within Page & Turnbull’s Cultural Resources Planning Studio, Alicia
Sanhueza meets the Secretary of the Interior’s Professional Qualification Standards for Architectural
History. She is experienced in surveying, researching, and evaluating historic properties, as well as
analyzing proposed projects for potential impacts to historic resources.
City of Palo Alto Page 1
Present: Chair Bower, Board Member Bernstein, Board Member Kohler, Board Member Makinen,
Board Member Pease, Board Member Shepherd, Board Member Wimmer
Action Item 1
1. Report Documenting the Completed Façade Restoration/Rehabilitation Project as Compliant with
the Secretary of Interior’s Standards for Rehabilitation and Affirming HRB’s 2018
Recommendation for Reclassification of 526 Waverley Street to Historic Inventory Category 2
from Category 3
Chair Bower: All right, so Item Number Four is a Report Documenting the Completed Façade
Restoration/Rehabilitation Project as Compliant with the Secretary of Interior’s Standards for
Rehabilitation and Affirming the HRB’s 2018 Recommendation for Reclassification of 526 Waverley Street
to Historic Inventory Category 2 from Category 3. Amy, do you want to…
Amy French: Good morning. Amy French, Chief Planning Official. This report transmits the historic
structure’s report that the applicant provided resources for the City to have retained or prepared by Page
& Turnbull serving as the City’s on-call consultant for items like this. So, what happened while two of you
were not on the Board, notably Member Pease and Member Shepherd, was, I believe Shepherd was not
yet on our Board in 2018, when this project came forward. This project being the rehabilitation and
restoration of 526 Waverley, formerly the Toy and Sport World, I believe is the name of the business that
was there for many, many decades. And, of course, the owner is here represented in the audience, so is
available for questions, those of you who are not as familiar with the project, but those others, four of
you who were familiar with the project back in 2018 when the Board considered the project and provided
a support for a recommendation to upgrade the building from a Category 3 to a Category 2. So, the
upshot is, the work has been done according to the plans that were approved through our architectural
review process with HRB input and recommendation. We are here now today to reconfirm that
recommendation so that we can then proceed to the City Council. So, on the screen I put a slide.
Basically, what we’re doing is confirming the HRB’s 2018 recommendation and we have four votes to do
that. Those of you who have studied this can also vote now, I think, and then these are the two things
that the historic structure report did, which was document the completed improvements and also looked
at the rear addition that was put on after the Birge Clark building was built and the mezzanine to allow
consideration for a future potential project, which has not come in as a project. With that, I’ll say that
again, the owner is in the audience if anyone has questions about the project or question of me, please.
Chair Bower: I have just one procedural question. I presume that what we should do at the conclusion of
our discussion is to create a motion that verifies what you have just described, what the Page & Turnbull
report describes, so that the Council can see that we support this change in category? Is that right?
Ms. French: That would be helpful and also if you want to commit as Chair to being available to attend
the City Council hearing on this, it’s a Consent Calendar item, so it won’t be a hearing necessarily, but it
will be on the Consent Agenda. So, you know, we can work together on dates, but we’re looking to a
March date with Council. I don’t know if there is availability there, but sometimes this (crosstalk).
HISTORIC RESOURCES BOARD MEETING
EXCERPT DRAFT MINUTES: February 13, 2020
City Hall/City Council Chambers
250 Hamilton Avenue
8:30 A.M.
City of Palo Alto Page 2
Chair Bower: I can talk to you about that afterwards.
Ms. French: Yeah.
Chair Bower: Okay. John, if you would like to say something, it’s not required because we’ve got a
record, but we would be happy to hear from you.
John Shenk: Sure. Good morning. John Shenk representing Thoits Brothers, and I won’t be long. We’ll all
keep going, but I wanted to thank you all for the work that you do. I thank Staff. Amy has been
absolutely fantastic helping to guide me through this process. It’s the first time that we’ve taken on a
project like this, first time for me and first time for the Thoits Brothers in a few decades. As owners of
lots of properties in the downtown, the Thoits family has a few pictures on the back wall and has been
here for about 120 some odd years in ownership, and we do care deeply about the broad health of the
community in the downtown, and part of that is the historic fabric that is a meaningful part of our
community. For that reason, we are motivated to take over ownership from the Hoffacker family, the
original developers of the building and to see through this rehabilitation. We’re really excited about it. I
may have shared before, but there are many times, and currently I’ll go out there and stand in front of
the building thinking what’s next, how are we going to do this, what would the right tenant be. People
can probably tell that I have something to do with the building, and they will stop and often say, thank
you, it’s beautiful, these sorts of things. I think there is some personal reward in that, but it’s really
important to us to have this happen in the community over and over. So, we are currently analyzing our
own portfolio, and we own some other very old buildings, where can we do this? And I think it’s neat that
the ordinance, the codes have these sections that we’re going through now where there is - in a way
that we align ourselves, because it’s a costly, time-consuming process, but because it’s a win-win, there
is this process to win a TVR if you will, sort of thing that helps align us. So, there’s not a burden on the
owner to take it on all by themselves in a way, and I really do appreciate that piece that the community I
think all holds hands around. The last thing I’ll leave you with is something, and I don’t know if it will be
the right venue for this, but as we went through this process, there’s a piece of the code that I think is
worth exploring. Maybe it will be with you guys, maybe it will be Staff and the City Attorney’s Office sort
of thing, trying to riddle it out. It’s in 181806, E1, and I think the way we had looked at it is it’s an
opportunity for us to further align around properties that are historic where something has been added
onto it. The addition is not historic and takes away from the historic value of the building. My reading of
it says that, hey, if you remove that area to restore the historic, it becomes I think technically except
area or something where you’re able to move it. You don’t just lose part of your building to restore the
historic piece, you could move that square footage, again following all the historic regulations and
everything else to the degree that we’re even possible, but it gives you that opportunity. There are some
who are interpreting the language to not say that, and I think that becomes a disalignment around, we’re
trying to find ways to restore these historic buildings. So, I mentioned it. Maybe you guys peek at it on
your own time. It’s something I’m exploring with Amy and will continue down the path, because I just
think it’s – I truly believe within the community there’s lots of rifts and different perspectives on things,
but I think around restoring historic buildings, I think we’re all on the same page. I think those words
might need clarification either way, but I think we would all agree that it ought to go towards the let’s
restore the entirety of the historic building where possible. Anyway, that’s it. I think you all for your time
and your assistance, as well, as we went through the 526 Waverley Project. Thank you.
Chair Bower: Martin, question for John?
Board Member Bernstein: Thank you John. Can you repeat that code section again?
Mr. Shenk: Sure, 181806, E1.
Chair Bower: Thank you.
Mr. Shenk: You bet. Thank you all.
City of Palo Alto Page 3
Chair Bower: Hold on, don’t go away. Anyone have questions for John? Okay, one question I have is, the
addition on the back, I know is a secondary addition. Do you know what the date of that is?
Mr. Shenk: It’s in the report. I believe it’s in the 40’s. I forget the exact date.
Chair Bower: It doesn’t represent an historic – according to the Secretary of the Interior’s Standards,
because it’s been there for 50 years, even though it wasn’t part of the original building, it does get some
consideration as an historic addition. Now, what you do with that and how you move forward with the
next phase, I just wanted to be sure you’re aware that that, even though that portion of the building is
not part of the original building, it has some of its own, it has standing on its own. It’s actually not
attractive and isn’t seen from the street, but just be aware of it, that’s all.
Mr. Shenk: Very fair. And just so you know, Chair Bower, is as I bring this up, that was the issue that was
in our brains. We looked at it. But I really think whether that happens or it doesn’t, just more globally if it
were only 20 years old, and I don’t think that’s the issue that we’re struggling with. It’s being able to
remove this area and it becomes where you can move it to restore the historic. I appreciate the nuance
of the age of that addition.
Chair Bower: I think, Martin and other Board Members, that’s an accurate statement about the addition.
After 50 years it becomes significant on its own.
Board Member Bernstein: It does add some level of significance because of its age, right.
Mr. Shenk: It will be an interesting one to explore another day. I think we even had asked Page Y
Turnbull, maybe not, I forget what’s in the report, to kind of look at that piece. And then we’ve got some,
how do you weight the balance of historic significance - there is a neat piece, the back as Birge Clark has
on many of the buildings where we can find similar, almost identical details on some various buildings
used in different ways. The rear of the building. I just, literally a couple of months ago was walking down
the back alley behind, where are we here, the Caldwell Banker Building now, the back of that two-story
building with the metal sash windows of two stories. It is the back of 526 Waverley’s original back, and I
just thought, wow, being able to restore – as much as it’s at the back of the building. But it’s, you know,
maybe someday it’s a big city public parking lot or maybe it’s something. But I think the back can be neat
to look at as well. But I did think it was funny to walk by and see, wait, that’s the back of Waverley, well,
originally.
Chair Bower: And the front of that building is almost identical in its style of having three, what appear to
be three separate storefronts, even though they’re all one interior space.
Mr. Shenk: That’s right, that’s right.
Chair Bower: So, clearly Birge Clark had a style.
Mr. Shenk: It did.
Chair Bower: All right. Martin, you had?
Board Member Bernstein: Yeah. To your point about that code section, we have on our agenda today is
put together suggestions for our retreat, and so maybe our Board, when we come to that agenda and we
can discuss if we want to put that on the retreat.
Chair Bower: Good idea.
Mr. Shenk: But only do it if you really want to have a fun time on the retreat, because looking at code
sections is so fun.
City of Palo Alto Page 4
Chair Bower: It’s what we do. Any other questions for John while we are still in the influence phase?
Good morning Margaret. Glad you could make it.
Chair Bower: I think we’ll close the discussion period and bring it back to the Board and have a discussion
about the issues here. Michael.
Board Member Makinen: Thank you Chair Bower. It’s somewhat of a rarity that we see a project that’s
classified as a restoration here. Most of our projects are rehabilitations and I’m quite pleased to see that.
I don’t know, I can’t think of another one that was a restoration that we’ve entered into here. I don’t
know how the Board feels about it, but maybe we should look at the categorizing of this as a restoration
rather than a restoration/rehabilitation. I don’t know how the rest of the Board feels about that, but it
might give a stronger case for moving it up to a Category 2 from a Category 3.
Chair Bower: That’s what we’re doing today. We’re actually moving it up to a Category 2.
Board Member Makinen: I know we are, but I think it would make the case stronger when it goes to
Council if we’re calling it a restoration. How does the rest of the Board feel about that?
Chair Bower: Well, I don’t know. Any other Board Members want to weigh in on that?
Board Member Bernstein: Is the definition of the categories in our packet today?
Board Member Makinen: We’re calling it a restoration/rehabilitation, which is kind of a locally made-up
type of definition. I don’t know if the Secretary of the Interior’s Standards really recognized the dual
status.
Ms. French: May I jump in and call your attention to the Historic Resource Evaluation. It’s packet page
24. If we want to start considering definitions or what have you. On that page in the first paragraph, at
least Page & Turnbull is saying the subject property underwent a façade rehabilitation to return it to its
original design. So, that’s a firm that is well qualified that uses the word rehabilitation. In the Staff Report
I referred to it with, in both tenses because the types of things that were done to the façade, I think,
may have included both types of construction.
Board Member Makinen: When I read through the report, I recall that when Emily Vance analyzed this,
she categorized it as a rehabilitation, at least in one paragraph that I read of her report, her analysis.
Chair Bower: You know, it might be useful to know the difference between the definition of those two
words. I think it qualifies on both levels and I have no strong feelings about using both, or using one. It
seems to me that restoration would suggest restoring what was there and rehabilitation would suggest
that you are adding back what was there. So, I think you can either do one or the other.
Board Member Makinen: Rehabilitation, in my understanding, is bring an historic property back into use
for modern times and still preserving the character-defining features, the essentials of it.
Chair Bower: I’m happy to adopt your suggestion, if the Board feels that’s appropriate. I don’t think
there’s a wrong way to do this, and maybe your suggesting that we use just one term will simplify the
Council consideration.
Chair Bower: Anyone else? Christian?
Board Member Pease: I support that idea.
Chair Bower: Debbie? Okay, Debbie supports it. Margaret, any opinions.
City of Palo Alto Page 5
Board Member Wimmer: Yeah, I think those two terms are used so closely together, and a lot of the
Secretary of the Interior’s Standards guideline or Standard points fall under both of those categories most
commonly. So, I think it’s a really interesting topic of discussion to really pinpoint which is which. But I do
think that it feels like this is more of a restoration.
Chair Bower: Fine. So, Roger, any feelings on this? Okay, I think the Board agrees with your suggestion,
so let’s just move forward calling this a restoration and simplify things. Is that okay?
Ms. French: Sure, yeah. You know, I would always just go to a source document to see how our – this
expert firm that we have refers to it. There is another, packet page 34 also refers to restoration of the
original French doors on the second floor due to the fact that the windows would be mostly concealed
behind restored iron balconies. Anyways, that’s a restoration according to Page & Turnbull. They
elsewhere used rehabilitation. So, I think it’s fair to be able to call it both.
Chair Bower: John has something.
Ms. French: I will read aloud what our owner has provided as well, just before you vote maybe on that.
Rehabilitation, according to the Secretary of Interior’s Standards acknowledges the need to alter or add
to an historic property to meet continuing or changing uses while retaining the property’s historic
character. Restoration depicts a property at a particular period of time in its history, while removing
evidence of other periods.
Chair Bower: So, actually I think restoration would be a more accurate description, because the project
removed a lot of unsightly and inappropriate…
Board Member Makinen: And if you do a categorization as a restoration, you do have to be very clear on
the period of significance.
Chair Bower: Yeah, but I think the period of significance would be, what, the 20’s when the building was
constructed, originally constructed?
Board Member Makinen: It’s in the report somewhere.
Chair Bower: So, I don’t know, maybe we’re getting too far down in the weeds here. Maybe we should
use both terms.
Board Member Wimmer: The only thing I can find is that with the word rehabilitation, it can include some
kind of modification from what it was originally, whereas restoration is clearly maintaining what was there
originally. But with rehabilitation it can also include some modification and I guess that’s the question,
has it been modified from its original. I know that you were playing around with the arches and the
location of the door and what have you, so that if there is a modification from what is absolutely original
as documented by the original drawings, then it would also include the rehabilitation work, I think.
Chair Bower: Right. So, the one thing I noticed on the project is the ironwork, which is true to the style
and the drawings, but is not detailed anywhere by Birge Clark. This simply doesn’t – there’s no detailing
it exists with dimensions. The ironwork is slightly larger than what is apparent on other Birge Clark
projects. In other words, the ironwork on 527 has one-inch corner posts. This is so insignificant in terms
of the fabric of this building, but I notice it because as a builder, because it’s a little bit different. And
that, I’m perfectly comfortable with that being a differentiation, compatible but differentiation from the
original. We don’t have any originals, but we have other buildings. My point here is that I think you’re
right. There have been very small changes, so we’re not really restoring what’s there because a lot of
what was there was removed. We’re putting back what was in kind, creating the same stylistic feeling of
the façade. That’s, I guess, how I would describe it. And so, it is both restoration of what was there and
refurbishment in terms of bringing something new but slightly different. Is that a fair…
City of Palo Alto Page 6
Ms. French: And I have one more packet page to steer you to, just in case you want more source data.
Page & Turnbull did tackle this. Packet page 38, 39 says Emily Vance’s review from the proposed changes
would meet the Standards for restoration. While the project was reviewed as a restoration undertaking
and viewed favorably at the time, the completed project is more applicable to the Standards for
rehabilitation due to its use of some new components in a similar, but not exact appearance to the
original design. So, that’…
Chair Bower: All right. So, I think your…
Board Member Makinen: Rehabilitation is probably the more correct interpretation of what was being
done here, rather than – somebody could say you didn’t really restore it because you didn’t bring back
everything exactly the way it was.
Chair Bower: Okay, I’m comfortable with that. Martin?
Board Member Bernstein: I’m smiling with familiarity about the topic of restoration. The example of
restoration is that when the Doge’s of Venice repair the Palazzo Seroci (phonetic), that’s a restoration,
where it’s unchanged and it’s just repaired. But if there are any changes to any kind of detailing, that’s
rehabilitation and well supported and I think the Board will agree this is a good project.
Chair Bower: Any other comments? So, are we agreed we can put this into the motion, but we’ll use the
term restoration not, I’m sorry, rehabilitation to describe the project? Okay, other comments? Any other
comments? I would like to just note part of Page & Turnbull’s analysis here, because I thought they did
an excellent job of first discussing eligibility for the California Register for Historic Resources, and of the
four criteria that they evaluated, Criteria One, which is events, Criteria Two, persons, Criteria Three,
architecture, and Criteria Four is information potential, that is Criteria One and Three they meet the
requirements. Four doesn’t really apply and Criteria Two does not meet significance, but that’s a very
strong evidence that this is, indeed, California Registry eligible. Then the second thing I wanted to just
put into the record, which of course, is there but reiterate, is that the Standards for Rehabilitation which
we deal with all the time, starting in page 39 of our packet. Rehabilitation Standard One is the property’s
use for its historic purpose. Two, the historic character of the property will be retained. Three, each
property is recognized as a physical record of its time. Four, even though properties change over time,
those changes have acquired historic significance of their own right, thus the addition in the back may be
captured by this. Five, the distinctive features, finishes and techniques are preserved. Standard Six is
deteriorated historic features doesn’t really apply. Standard Seven, chemical or physical treatments were
not used, that doesn’t apply. Standard Nine, new additions or alterations shall not destroy the historic
character. We don’t have that issue here. And Ten, we don’t have any archeological features. So, of the
ten, this project meets six, I think, of these and the others don’t apply. That’s another very strong
statement about why this project and why this recategorization is not only appropriate, but should be
moved forward by Council. So, having said that, if there are no other questions or statements, can I have
a motion to approve this renovation, reaffirm our earlier – so first of all, it’s that the evidence and the
project outcome now qualifies this building to be categorized as a Category 2 building on our Register
instead of Category 3. Is that appropriate? Anybody want to make that motion? Michael?
MOTION
Board Member Makinen: I make a motion that we approve the project moving it from a Category 3 to a
Category 2. It does meet the Secretary of Interior’s Standards for rehabilitation as evidenced by the
reports from Page & Turnbull and other analyses that were performed.
Chair Bower: Great. A second?
Board Member Shepherd: I second it.
Chair Bower: Any further discussion? Martin.
City of Palo Alto Page 7
Board Member Bernstein: Thank you Chair. I just want to comment to the ownership representative, Mr.
Shenk and the Architect, Mr. Popp. I think under the stewardship of you and your team, excellent job.
Chair Bower: Okay, no further comments? All in favor of the motion say aye. Any opposed.
MOTION PASSED WITH A VOTE OF 7-0. IT’S UNANIMOUS.
Chair Bower: Thank you John. Nice job.
City of Palo Alto (ID # 11176)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/23/2020
City of Palo Alto Page 1
Summary Title: Budget Amendment Ordinance for Planning & Development
Services
Title: Approval of a $360,000 Net Zero Budget Amendment in the General
Fund for the Planning & Development Services Department’s Cost Recovery
Program for Private Development Studies
From: City Manager
Lead Department: Planning and Development Services
Recommendation
Staff recommends that the City Council approve a net zero amendment to the Fiscal Year 2020
Budget Appropriation Ordinance for the General Fund in the Planning and Development
Services Department by:
a. Increasing the revenue estimate for Current Planning operations by $360,000; and,
b. Increasing the expenditure appropriation for Current Planning contracts by $360,000.
This action requires 2/3 of the Council to approve the amendment.
Background
The Planning and Development Services Department pursues full cost recovery for private
development projects through the use of deposit-based fees. In many cases, the department
utilizes the expertise of outside consultants to augment and expedite entitlement studies such
as historic, environmental, and compliance. In practice, the applicant pays upfront for contract
services related to their project and funding is held in a deposit account until services are
performed. The number of projects that use this program fluctuates from year to year and the
associated revenue and expense are realized in the Planning and Development Services budget
when incurred. Historically, the department has been able to utilize salary savings and other
funding adjustments within the annual department appropriation to close the gap between the
budgeted expense versus actual need.
Discussion
Upon submitting a project to the City, an applicant completes the department’s Planning
Review Application (https://www.cityofpaloalto.org/civicax/filebank/documents/73097). The
City of Palo Alto Page 2
application lists the City’s cost recovery policies and procedures for more complex projects. The
cost recovery program provides the City with additional resources to meet the development
needs of the community by offering the applicant the opportunity to use outside consultant
services related to historic, environmental, and compliance review studies for private
development projects. If the applicant chooses to utilize the program, the applicant submits
sufficient funds to cover the anticipated program costs. Private development services related
contracts are exemption from competitive solicitation per Municipal Code Section 2.30.360 as
the services are funded wholly by private developers. Therefore, contracts do not come before
the City Council. The firms conducting these studies are selected for their experience and
expertise.
As these contracts are invoiced, the expense is posted to the department contracts budget.
Corresponding revenues are posted quarterly. In Fiscal Year 2020, the revenues and expenses
from to these projects have exceeded the budgeted amount. The department is requesting an
increase of $360,000 to the contracts budget to pay for consultant services and a corresponding
increase of $360,000 to the revenue budget, resulting in a net zero impact to the General Fund.
Annually, the City receives about fifty direct cost recovery projects per year. These projects vary
from single family dwellings, to mixed used project, to new hotels being developed in Palo Alto.
Resource Impact
Staff is requesting City Council approval of a net zero budget amendment in the General Fund
to increase both revenues and expenses by $360,000. Funds to cover all costs are received by
applicants utilizing the program. Based on Muni Code regulations, this amendment requires
2/3 approval by the City Council.
Policy Implications
Authorization of this budget amendment does not represent a change to any existing policy.
Stakeholder Engagement
Since this is an internal budgeting action only, stakeholder involvement has been limited to the
Planning and Development Services and Administrative Services departments.
Environmental Review
Action on this item does not constitute a project.
City of Palo Alto (ID # 11208)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 3/23/2020
City of Palo Alto Page 1
Council Priority: Fiscal Sustainability
Summary Title: FY 2021 Proposed Operating and Capital Budget Preparation
Title: Direction to Staff on Preparation of the Fiscal Year 2021 Proposed
Operating and Capital Budgets
From: City Manager
Lead Department: Administrative Services
Recommendation
Staff recommends that the City Council approve the development and subsequent issuance of
an essential budget document for the FY 2021 Proposed Operating and Capital Budgets.
Discussion
The disruptions caused by COVID-19 are both widespread and significant. The disruptions
impact not only the economic environment, as seen in the recent performance of various
markets, but also our community, as seen in impacts on residents, local businesses, and our
workforce. The City is faced with an unprecedented challenge of minimizing the risk to our
community while ensuring that crucial services continue uninterrupted. Our workforce is rising
to the challenge, leveraging technology solutions to ensure that they can continue to work on
critical tasks, even while sheltering-in-place.
However, there is a clear need to prioritize the work of staff as we continue through these
uncertain times. Therefore, it is recommended that the City Council approve the development
and subsequent issuance of only an essential budget document for the FY 2021 Proposed
Operating and Capital Budgets. The essential budget document will reflect significantly less
information and documentation that the City Council and public are used to for this proposed
document. Many of the narrative items that appear throughout the documents, such as
accomplishments and initiatives from Departments, will not be included in the issuance of the
essential FY 2021 Proposed Operating and Capital Budget Documents.
The budget will effectively be a carryover budget. This will in large part express the cost of
current service levels recalculated to FY 2021 rates and limited additional adjustments. This
includes the progression through years of CPI in contract services that have increases built into
City of Palo Alto Page 2
them, updated labor costs per our negotiated agreements, and other known changes to current
revenues and expenses. As a result of the uncertainties we face, it is expected that this
proposed budget will reflect only critical changes to service delivery that are known and
quantifiable. In the FY 2021 Proposed Capital Book, only critical changes for projects will be
shown.
• Attachment A shows, as an example, what the Administrative Services Department
section of the Operating Budget would look like if it was presented as it has been in
prior years.
• Attachment B shows a redlined version of that section to show what staff is
recommending be omitted from an essential version of the FY 2021 Proposed Operating
Budget.
• Attachment C shows what the essential version of the department section would look
like.
Narrowing the budget down to its core components will focus staff’s work effort and ensure
that the budget document is able to be produced and distributed according to the schedule
necessary to have City Council approve it by June 30, 2020, including presenting the essential
Proposed Budgets in May. This does mean that there will likely be more substantive changes to
the FY 2021 Budget after it is proposed than there have been in years’ past. This reflects the
heightened uncertainty we now face. As that uncertainty is resolved, staff will return to City
Council with recommended actions to address changes and allocate resources as appropriate
and necessary.
The essential FY 2021 Proposed Operating and Capital Budgets will still be instrumental in
helping the City plan its operations, resource allocations, and service delivery levels for FY 2021.
Narrowing the focus to these essential items is anticipated to allow greater time from the
workforce to be spent on other critical and immediate issues.
Stakeholder Engagement
Conversations with the Finance Committee and the City Council throughout May and June prior
to the adoption of the FY 2021 Operating and Capital Budgets allow for public participation in
the annual budget process.
Resource Impact
Although there is no specific cost associated with the recommendation in this report, it is
anticipated that narrowing the focus of the budget document to essential pieces of information
will allow for greater resources (specifically staff time) to be spent on other critical urgent
matters.
Environmental Review
City of Palo Alto Page 3
This report is not a project for the purposes of the California Environmental Quality Act (CEQA).
Attachments:
• Attachment A - ASD Department Section Original
• Attachment B - ASD Department Section Red-Lined
• Attachment C - ASD Department Section Essential Version
ADMINISTRATIVE
SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 199
ADMINISTRATIVE SERVICESMission Statement
The Administrative Services
Department strives to provide
proactive financial and analytical
support to City departments and
decision-makers and to safeguard and
facilitate the optimal use of City
resources.
Purpose
The purpose of the Administrative Services
Department is to provide excellent cus-
tomer service to decision-makers, the pub-
lic, employees, and City departments;
provide analytical, organizational, and
administrative support for a wide variety
of projects; record, monitor, and protect City assets in a responsible manner;
provide essential financial management and forecasting reports; and prepare
and present financial reporting to various committees and City Council.
ATTACHMENT A
ADMINISTRATIVE SERVICES
200 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER
%!(5ƫ+/!
ADMINISTRATION
1.00 Administrative Assistant
0.50 Senior Management Analyst
āċĀĀƫƫƫƫƫ
* #!)!*0ƫ* (5/0
INVESTMENT & DEBT
0.60 Manager of Treasury, Debt
Investment
0.40 Senior Management Analyst
ƫĂĀĂĀƫ ƫ
5ĉ.50 Full-Time
1.46 Hourly
This organizational chart represents
citywide Full-Time Equivalents (FTEs) for
this department. The Department
Summary tables summarize FTEs by
position allocation
REAL ESTATE
1.00 Real Property Manager
1.00 Senior Management Analyst
1.00 Assistant Director
ACCOUNTING
1.00 Finance Manager
GENERAL LEDGER
1.00 Senior Accountant
1.00 Accountant
1.00 Lead Account Specialist
ENTERPRISE FUND
1.00 Senior Accountant
1.00 Accountant
1.00 Accountant Specialist
ACCOUNTS PAYABLE
1.00 Senior Accountant
1.00 Lead Account Specialist
2.00 Account Specialist
PAYROLL
1.00 Senior Accountant
1.00 Accountant
2.00 Payroll Analyst
PURCHASING & CONTRACTS
1.00 Chief Procurement Officer
4.00 Contract Administrator
1.00 Administrative Associate II
1.00 Buyer
2.00 Senior Buyer
SAP FUNCTIONAL
1.00 Principal Business Analyst
2.00 Senior Business Analyst
OFFICE OF MANAGEMENT AND BUDGET
1.00 Director
2.00 Budget Manager
1.00 Administrative Associate III
2.00 Senior Management Analyst
1.00 Management Analyst
1.00 Assistant Director
REVENUE COLLECTIONS
1.00 Manager of Revenue Collections
2.00 Lead Account Specialist
5.50 Account Specialist
STORES WAREHOUSE
1.00 Warehouse Supervisor
1.00 Lead Storekeeper
3.00 Storekeeper
RISK MANAGEMENT
0.40 Manager of Treasury, Debt &
Investment
0.10 Senior Management Analyst
PRINT & MAIL SERVICES
2.00 Offset Equipment Operator
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 201
Description
The Administrative Services Department (ASD) is responsible for the
following functions:
ADMINISTRATION
Provides financial, analytical, budget, strategic, and administrative support services for the
department and organization.
ACCOUNTING
Performs financial transactions and provides accurate, timely, and reliable financial information
for internal and external customers, including vendor payments, payroll, and financial reporting.
PURCHASING AND CONTRACTS
Facilitates negotiations, purchasing, and contracting needs in a timely, efficient, and customer-
oriented manner.
OFFICE OF MANAGEMENT AND BUDGET (OMB)
Oversees the citywide operating and capital budget preparation, review, and analysis, perfor-
mance measures, and budget monitoring. In addition, prepares the long-range financial forecast
and provides independent analytical support to the organization.
PROPERTY MANAGEMENT AND ACQUISITION
Provides asset management, acquires property rights, manages leasing of City properties, pre-
pares real estate agreements, completes easement acquisitions/vacations, negotiates real
estate deals, and provides real estate services citywide.
TREASURY AND REVENUE COLLECTIONS
Treasury safeguards and invests the City’s portfolio, forecasts major General Fund tax revenues,
issues and manages debt, and performs Utility Risk Management oversight. Revenue Collec-
tions collects payment revenue and provides customer support for parking permits and pay-
ment transactions. Provides print shop services to departments and warehouse services,
including logistics, for the City’s Electric, Water, Gas, and Wastewater Utilities, as well as for
Public Works and the Regional Water Quality Control Plant.
Accomplishments
Q Maintained the City’s AAA credit rating, which results in the lowest possible borrowing
costs; confirmed in the most recent rating by Standard and Poors in February 2019.
Q Addressed City Council request to identify a strategy for ongoing contributions for
retirement costs through immediate action and a strategic action work plan. Immediate
action was completed with the additional $4.0 million contribution to the City’s Pension 115
Trust account. For the strategic action work plan, OMB has been managing and completing
a services inventory to aid in structural changes in the long-term financial picture.
ADMINISTRATIVE SERVICES
202 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Q Drafted and supported a work plan to address the City Council 2019 priority ’Fiscal
Sustainability’, approved by the Finance Committee in March 2019.
Q Issued $26.8 million in tax-exempt and $10.6 million in taxable Certificate of Participation
bonds for the construction of the California Avenue Parking Garage, which is a key step in
the completion of the 2014 Council Infrastructure Plan and a critical project in the ability to
deliver the new Public Safety Building.
Q Managed the City’s real estate leases resulting in revenue of approximately $4.0 million.
Q Began negotiations for real estate transactions including the potential purchase of a 27,829
square foot portion of 3350 Birch Street.
Q Entered into a new license agreement to renovate and manage/operate the City Hall Café at
250 Hamilton Avenue.
Q Explored and identified options for City Council to calculate the long-term unfunded
liabilities for pension. Facilitated the analysis for the change in pension assumptions to a
6.2% discount rate for the normal cost of pension expense. Continued to advance funds to
the Pension Section 115 Trust with approximately $13.5 million in deposits by the end of
Fiscal Year 2019.
Q Completed 20 easements and easement vacations.
Q Consolidated the utility bill print printers with the citywide contract for copy machines
resulting in increased efficiency for the utility bill print function.
Q Participated in citywide emergency preparation and planning to ensure that financial
tracking and reporting will be part of a coordinated emergency response effort.
Q Implemented department-wide, technology-focused, core competency training such as:
SAP module specific training for support resources and SAP reporting training in the Human
Resources and Payroll modules.
Q Worked to streamline and automate accounts payable automated clearing house (ACH)
implementation and Treasury wires between software systems.
Q Received an award in the Accounting Division for the Comprehensive Annual Financial
Report (CAFR) for Fiscal Year 2018 from the Government Finance Officer Associations of
United States and Canada (GFOA) for “excellence in financial reporting”.
Q Received California Society of Municipal Finance Officers (CSMFO) and GFOA awards in the
Office of Management and Budget (OMB) for the Fiscal Year 2019 Adopted CIP and
Operating budgets.
Q Addressed audit finding in regards to P-card administration through the implementation of
a formal review and submittal authorization for increasing P-card limits.
Initiatives
Q Continue implementation of the ASD strategic plan in four focus areas: 1) High-quality
customer service, 2) Innovation and continuous improvement, 3) Best practices, and 4)
Employee excellence, including customer support resources in purchasing, payroll, and
accounting and implementation of electronic forms.
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 203
Q Maintain employee excellence by focusing on employee rating form, training plans, and
specific goals of improving customer service and responsiveness.
Q Work to implement citywide procurement process training and education to improve
efficiency and align with industry best practices and ensure the changing workforce is
equipped to handle their procurement needs in an expeditious fashion. Communicate
established purchasing policies, processes, and requirements.
Q Implement department-wide, technology-focused, core competency training such as SAP
module specific training for day-to-day business operations in departments and SAP
reporting training in the Human Resources and Payroll modules.
Q Collaborate and facilitate the implementation of a new online parking permit management
system in a phased approach, beginning with residential parking permit programs.
Q Continue to work to implement or manage the components of the Fiscal Sustainability work
plan.
Q Continue financial support for emergency preparation for federal financial reporting after a
disaster in conjunction with the Office of Emergency Services.
Q Work to implement the paperless office program, currently in the Purchasing Division, for
the Accounting and Real Estate divisions.
Q Support the citywide effort to upgrade the Enterprise Resource Planning (ERP) system.
Q Explore and provide options for the acquisition of the Media Center property at 900 San
Antonio Road on behalf of the Cable Joint Powers Agency (JPA) using PEG (Public,
Education, and Government) fee revenue for the Cable JPA and City Council review.
Q Support the Cubberley strategic planning efforts and necessary financial analysis with the
community and Palo Alto Unified School District (PAUSD).
Q Establish a new option and lease agreement with the Palo Alto History Museum for the Roth
Building at 300 Homer Avenue.
ADMINISTRATIVE SERVICES
204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Fund
General Fund-Operating 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Printing & Mailing Services Fund 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Total 8,743,725 9,324,580 9,510,092 10,250,186 740,094 7.8%
Revenues
Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0%
Charges to Other Funds 3,742,337 4,090,745 3,335,030 3,186,802 (148,228)(4.4)%
Other Revenue 144,894 145,266 171,400 171,400 ——%
Return on Investments (140)(1,100)400 2,300 1,900 475.0%
Total Revenues 3,891,737 4,248,801 3,519,400 3,548,175 28,776 0.8%
Positions by Fund
General Fund 41.50 40.06 39.61 40.61 1.00 2.52%
Printing and Mailing Services 2.10 2.10 2.10 2.10 ——%
Total 43.60 42.16 41.71 42.71 1.00 2.40%
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 205
GENERAL FUND
Goals and Objectives
GOAL 1
Q Ensure the City of Palo Alto’s short and long-term financial status is healthy and sound.
Objectives:
Q Assist with implementation of City Council’s 2014 Infrastructure Plan by providing updated
financial planning and issuance of debt.
Q Review opportunities for new and/or enhanced revenues.
Q Analyze additional options for reducing the City’s pension and retiree healthcare long-term
liabilities.
Q Provide long-term recommendations and strategies for the City’s real estate assets such as
Cubberley, Ventura, and Middlefield Road lots.
Q Manage real estate assets effectively to enhance revenue and reduce cost.
Q Recommend a strategically balanced budget, maintaining City Council-approved reserve
levels, for City Council consideration.
Q Assist with ongoing labor negotiations with analysis of labor and City proposals.
Q Develop plans for addressing any forecast shortfalls in funding for operations and
infrastructure.
Q Provide bond financing of major capital projects such as the Wastewater Treatment facility
replacements, Public Safety Building, etc.
GOAL 2
Q Provide timely and accurate financial reporting and transactions.
Objectives:
Q Ensure that payroll processing, vendor payments, budget, and annual financial reporting are
clear, timely, accurate, and in compliance with governmental finance standards.
Q Enhance financial reporting mechanisms to ensure that departmental financial information
is relevant and timely; look for opportunities to improve reporting as part of technology
implementation upgrades.
Q Increase information availability and transparency using open data tools and dashboards.
Q Implement complex new labor agreements including new benefit structures, ensuring timely
and accurate payments to employees and governing bodies such as the federal government
and CalPERS.
GOAL 3
Q Ensure public funds and assets are invested prudently and are well-managed.
ADMINISTRATIVE SERVICES
206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Objectives:
Q Ensure sufficient cash is always available to meet current expenditures.
Q Maintain a reasonable rate of return on investments.
Q Invest in sound Environmental, Social, and Governance (ESG) securities, which include
green and sustainable bonds, when available and appropriate, in alignment with recently
approved changes to the investment policy.
GOAL 4
Q Continue implementation of the ASD Strategic Plan in the focus areas of customer service,
innovation, best practices, and employee excellence.
Objectives:
Q Continue implementing a succession plan for the department.
Q Review ASD policies and procedures to continuously update, enhance, and streamline.
Q Roll out training and resources for customer support to improve processing time.
Q Enhance training plans for employees for job specific training and career development.
Q Implement new tools for team collaboration and sharing, such as Office 365 and SharePoint.
Key Performance Measures
ANNUAL PERCENTAGE YIELD ON INVESTMENTS
Goal Ensure public funds and assets are invested prudently and are well-managed.
Objective Maintain a reasonable rate of return on investments.
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
FY 2019
Estimated
FY 2020
Adopted
Annual percentage yield on
investments 1.82%2.16%2.15%2.31%2.40%
Description This measure tracks the City's annual rate of return on investments while following
primary objectives (in priority order) of safety, liquidity, and yield.
Purpose A stable rate of return helps to grow the City's investment portfolio and is one
component in measuring the City's financial rating.
Status
As anticipated with a rising interest rate environment, the City's adopted goal of
2.15% is estimated to be achieved in FY 2019. In comparison, the State
Investment Pool average yield for FY 2018 was 1.36%.
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 207
Workload Measures
AVERAGE PROCESSING TIME FOR PURCHASE REQUISITIONS
Goal Implement performance management programs to support and enhance
communication, accountability, and positive outcomes.
Objective Continue developing and implementing Procurement and Inventory process
improvements.
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
FY 2019
Estimated
FY 2020
Adopted
Average time from receipt of a
Purchase Requisition to issuance of
Purchase Order (Days)
22 26 22 25 25
Description
The City is required to follow procurement rules and regulations as outlined in the
Municipal Code and State Law to ensure open and fair competition and the most
cost-effective use of tax dollars. In compliance with existing rules and regulations,
ASD endeavors to provide goods and services as quickly as possible to City
departments.
Purpose
To measure the average processing time for Purchase Requisitions (PR) in order
to identify processing improvements while being compliant with existing rules and
regulations.
Status
The Purchasing Division has maintained efficiency with the use of e-Procurement
software that was implemented in FY 2016. Staff anticipates an increase in larger,
more complex PRs in FY 2020 due to the volume of capital improvement projects
planned over the next several years. This influx of capital projects will result in an
increase in estimated cycle time. Over the next year, the Purchasing Division will
continue to work with City stakeholders to meet business needs in a timely
manner despite this uptick in complex procurements.
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
FY 2019
Estimated
FY 2020
Adopted
Number of P-card (City credit card)
transactions 19,087 19,230 19,100 17,500 18,000
Number of Purchase Orders and
Purchase Requisitions processed1 1,509 1,455 2,400 1,400 1,500
Total amount of cash and
investments - as of June 30
(Millions)
$532.1 $526.0 $540.0 $523.0 $530.0
1The Administrative Services Department has refined the methodology for reporting this Workload Measure to more
accurately reflect the volume of work performed. As such these numbers differ slightly from previously reported
numbers.
ADMINISTRATIVE SERVICES
208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Division
Accounting 2,043,348 2,154,241 2,313,999 2,517,142 203,143 8.8%
Administration 700,131 701,429 502,573 362,163 (140,410)(27.9)%
Office of Management and Budget 1,019,241 1,471,554 1,427,663 1,515,138 87,475 6.1%
Purchasing 1,439,096 1,561,940 1,609,770 1,719,881 110,110 6.8%
Real Estate 862,337 567,478 651,916 682,402 30,486 4.7%
Treasury 1,314,666 1,223,689 1,522,588 1,722,605 200,017 13.1%
Total 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Dollars by Category
Salary & Benefits
Healthcare 613,176 659,957 720,469 786,754 66,285 9.2%
Other Benefits 121,110 164,532 163,209 169,450 6,241 3.8%
Overtime 21,488 23,104 34,599 35,499 900 2.6%
Pension 1,019,697 1,185,868 1,266,442 1,661,345 394,903 31.2%
Retiree Medical 536,733 564,670 473,449 487,653 14,203 3.0%
Salary 3,841,677 4,146,162 4,257,849 4,198,750 (59,098)(1.4)%
Workers' Compensation 20,338 39,412 108,269 171,647 63,377 58.5%
Total Salary & Benefits 6,174,219 6,783,704 7,024,287 7,511,098 486,811 6.9%
Allocated Charges 364,415 405,529 443,050 461,207 18,157 4.1%
Contract Services 323,681 304,787 238,148 288,148 50,000 21.0%
Facilities & Equipment 270,979 2,570 4,200 4,200 ——%
General Expense 198,066 144,980 206,924 207,924 1,000 0.5%
Operating Transfers-Out ——65,146 —(65,146)(100.0)%
Rents & Leases 11,856 12,856 12,856 12,856 ——%
Supplies & Material 35,602 25,905 33,898 33,898 ——%
Total Dollars by Expense
Category 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Revenues
Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0%
Charges to Other Funds 2,403,540 2,333,469 1,768,909 1,466,507 (302,402)(17.1)%
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 209
Other Revenue 142,894 145,266 171,400 171,400 ——%
Total Revenues 2,551,080 2,492,625 1,952,879 1,825,580 (127,298)(6.5)%
Positions by Division
Accounting 13.60 13.60 13.52 13.52 ——%
Administration 2.08 1.60 1.60 1.60 ——%
Office of Management and Budget 6.02 6.62 6.02 6.02 ——%
Purchasing 9.53 8.57 9.05 9.05 ——%
Real Estate 2.32 2.32 2.32 2.32 ——%
Treasury 7.95 7.35 7.10 8.10 1.00 14.08%
Total 41.50 40.06 39.61 40.61 1.00 2.52%
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
Account Specialist 5.88 4.88 4.63 4.63 —306,563
Account Specialist-Lead 4.05 3.05 3.45 3.45 —244,507
Accountant 3.00 3.00 3.00 3.00 —288,642
Administrative Assistant 1.00 1.00 1.00 1.00 —93,018
Administrative Associate II —1.00 1.00 1.00 —70,986
Administrative Associate III 1.00 1.00 1.00 1.00 —76,090
Assistant Director Administrative
Services 1.65 1.65 1.65 1.65 —318,798
Buyer 1.00 1.00 1.00 1.00 —93,459
Chief Procurement Officer 1.00 1.00 1.00 1.00 —148,512
Contracts Administrator 1.70 2.70 2.70 2.70 —301,463
Director Administrative Services/
CFO 0.80 0.80 0.80 0.80 —199,845
Director Office of Management and
Budget 1.00 1.00 1.00 1.00 —199,035
Management Analyst ——1.00 2.00 1.00 219,336
Manager Accounting 1.00 1.00 ————
Manager Budget 1.00 1.00 2.00 2.00 —312,770
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
ADMINISTRATIVE SERVICES
210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Manager Real Property 1.00 1.00 1.00 1.00 —150,010
Manager Revenue Collections 0.62 0.62 0.62 0.62 —95,198
Manager Treasury, Debt &
Investments 0.60 0.60 0.60 0.60 —89,407
Manager, Finance ——1.00 1.00 —172,723
Payroll Analyst 2.00 2.00 2.00 2.00 —157,915
Senior Accountant 3.00 3.00 3.00 3.00 —365,664
Senior Buyer 1.00 1.00 1.00 1.00 —94,413
Senior Management Analyst 4.90 4.90 2.30 2.30 —312,107
Storekeeper 1.00 1.00 1.00 1.00 —68,918
Storekeeper-Lead 0.20 0.20 0.20 0.20 —14,752
Warehouse Supervisor 0.20 0.20 0.20 0.20 —18,487
Sub-total: Full-Time Equivalent
Positions 38.60 38.60 38.15 39.15 1.00 4,412,618
Temporary/Hourly 2.90 1.46 1.46 1.46 —99,881
Total Positions 41.50 40.06 39.61 40.61 1.00 4,512,499
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 211
Budget Reconciliation
Positions Expenditures Revenues
Net
General Fund
Prior Year Budget 39.61 8,028,509 1,952,878 6,075,631
One-Time Prior Year Budget Adjustments
Supplemental Pension Trust Fund Contribution — (65,146) — (65,146)
General Liability Savings (One-Time FY 2019
Savings)— 12,236 — 12,236
Workers' Compensation Savings (One-Time FY
2019 Savings)— 43,147 — 43,147
One-Time Prior Year Budget Adjustments —(9,763)—(9,763)
Adjustments to Costs of Ongoing Activities
Salary and Benefits Adjustments — 313,132 — 313,132
Proactive Contributions to City's Unfunded
Pension Liability — 199,820 — 199,820
General Fund Cost Allocation Plan — — (302,402) 302,402
General Liability Insurance Allocated Charges — (3,405) — (3,405)
Information Technology Allocated Charges — (4,724) — (4,724)
Printing & Mailing Services Allocated Charges — 12,336 — 12,336
Vehicle Replacement & Maintenance Allocated
Charges — 1,713 — 1,713
Workers' Compensation Allocated Charges — 20,230 — 20,230
Adjustments to Costs of Ongoing Activities —539,102 (302,402)841,504
Total FY 2020 Base Budget 39.61 8,557,848 1,650,476 6,907,372
Budget Adjustments
1 Administrative Services Staffing Vacancies — (277,547) — (277,547)
2 Business Registry Certificate Program (Transfer
from former Development Services Department
to Administrative Services Department)
1.00 239,029 175,103 63,926
Total Budget Adjustments 1.00 (38,518)175,103 (213,621)
Total FY 2020 Adopted Budget 40.61 8,519,330 1,825,579 6,693,751
ADMINISTRATIVE SERVICES
212 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
General Fund
1 Administrative Services Staffing Vacancies 0.00 (277,547)0 (277,547)
This one-time action recognizes vacancy savings for the equivalent of 1.0 FTE Senior Management Analyst and 1.0 FTE
Accounting Specialist during FY 2020. Currently, the Administrative Services Department is experiencing a vacancy
factor of nearly 15%, including positions at these levels. Due to the priority of other staffing recruitments of a more
urgent need, such as Purchasing Division staffing, it is anticipated that these recruitments will not be addressed until
further through FY 2020 and therefore savings can be anticipated. The functions of these positions are currently being
absorbed temporarily by the Chief Financial Officer, Assistant Director, and additional administrative assistance, primarily
on overtime. This diminishes staff's ability to continue to make progress on service delivery evolutions and requires staff
to rely more heavily on contractual assistant and status quo business processes. (Ongoing savings: $0)
Performance Results
This action is anticipated to help contain costs for FY 2020.
2 Business Registry Certificate Program (Transfer
from former Development Services Department to
Administrative Services Department)
1.00 239,029 175,103 63,926
This action reallocates the Business Registry Certificate (BRC) program from the former Development Services
Department to the Administrative Services Department and reassigns the administrative management of both this
program as well as the financial management of the Business Improvement District (BID) to the Administrative Services
Department. With the merging of the Development Services Department and the Planning and Community Environment
Department, this function was determined to best be placed in Administrative Services where the majority of taxes and
administrative fees are handled by various teams with the Treasury Division of the department. This reallocation of 1.0
FTE Management Analyst, $50,000 in contract services, and approximately $175,000 in revenue estimated to be
generated from the BRC, aligns the resources added by the City Council in February 29, 2016 (CMR 6661). A
corresponding adjustment is recommended in the Planning and Development Services Department. (Ongoing costs:
$72,000)
Performance Results
This action reallocates staff between departments and no performance impacts are anticipated to the Business Registry
Certificate program.
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 213
PRINTING AND
MAILING SERVICES
Accomplishments
Q Processed 300,000 utility bills.
Q Maintained timelines for producing City Council packets.
Q In June 2018, replaced an outdated paper cutter with new technology allowing for precision
paper cutting in house.
Initiatives
Q Maintain a high level of customer service for Printing and Mailing by listening to customers
and, when appropriate, making relevant changes to operations.
Q Provide quality printing products that meet the needs of customers.
Goals and Objectives
GOAL 1
Q Provide timely and high-quality services for City departments, City Council, and
Committees.
Objectives:
Q Ensure timely distribution of mail and utility bills.
Q Ensure timely creation and distribution of City Council and Committee packets.
ADMINISTRATIVE SERVICES
214 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Division
Printing and Mailing 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Total 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Dollars by Category
Salary & Benefits
Healthcare 24,790 28,566 27,305 28,291 986 3.6%
Other Benefits 2,253 3,267 3,135 3,359 223 7.1%
Overtime 6,145 4,779 ————%
Pension 24,003 30,959 31,636 47,533 15,897 50.3%
Retiree Medical 59,845 62,960 14,663 15,103 440 3.0%
Salary 106,323 128,064 133,571 142,079 8,508 6.4%
Workers' Compensation 239 462 3,289 5,387 2,098 63.8%
Total Salary & Benefits 223,597 259,056 213,600 241,752 28,152 13.2%
Allocated Charges 177,496 205,990 276,747 360,090 83,343 30.1%
Contract Services 10,607 —114,711 239,711 125,000 109.0%
Facilities & Equipment 31,711 —————%
General Expense 271,603 370,562 286,975 286,975 ——%
Operating Transfers-Out —3,154 1,598 9,200 7,602 475.6%
Rents & Leases 494,718 640,236 507,695 512,870 5,175 1.0%
Supplies & Material 155,174 165,252 80,258 80,258 ——%
Total Dollars by Expense
Category 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Revenues
Charges to Other Funds 1,338,798 1,757,276 1,566,121 1,720,295 154,174 9.8%
Other Revenue 2,000 —————%
Return on Investments (140)(1,100)400 2,300 1,900 475.0%
Total Revenues 1,340,657 1,756,175 1,566,521 1,722,595 156,074 10.0%
Positions by Division
Printing and Mailing 2.10 2.10 2.10 2.10 ——%
Total 2.10 2.10 2.10 2.10 ——%
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 215
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
Manager Revenue Collections 0.10 0.10 0.10 0.10 —15,355
Offset Equipment Operator 1.52 1.52 1.52 1.52 —95,834
Sub-total: Full-Time Equivalent
Positions 1.62 1.62 1.62 1.62 —111,188
Temporary/Hourly 0.48 0.48 0.48 0.48 —27,256
Total Positions 2.10 2.10 2.10 2.10 —138,445
ADMINISTRATIVE SERVICES
216 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Reconciliation
Positions Expenditures Revenues
Net
Printing and
Mailing
Services
Prior Year Budget 2.10 1,481,584 1,566,521 (84,937)
One-Time Prior Year Budget Adjustments
Supplemental Pension Trust Fund Contribution — (1,598) — (1,598)
General Liability Savings (One-Time FY 2019
Savings)— 372 — 372
Workers' Compensation Savings (One-Time FY
2019 Savings)— 1,311 — 1,311
One-Time Prior Year Budget Adjustments —85 —85
Adjustments to Costs of Ongoing Activities
Salary and Benefits Adjustments — 15,724 — 15,724
Proactive Contributions to City's Unfunded
Pension Liability — 5,230 — 5,230
FY 2019 Catch-Up Proactive Contributions to
City's Unfunded Pension Liability — 5,100 — 5,100
Return on Investments — — 1,900 (1,900)
Rents & Leases Expenditure Alignment — 5,175 — 5,175
Transfer to Technology Fund (TE-19001 City
Council Chambers Upgrade)— 9,200 — 9,200
General Fund Cost Allocation Plan — 83,470 — 83,470
General Liability Insurance Allocated Charges — (46) — (46)
Information Technology Allocated Charges — (453) — (453)
Printing & Mailing Services Allocated Charges — — 29,174 (29,174)
Workers' Compensation Allocated Charges — 787 — 787
Adjustments to Costs of Ongoing Activities —124,187 31,074 93,113
Total FY 2020 Base Budget 2.10 1,605,856 1,597,595 8,261
Budget Adjustments
1 Printing Services Non-Salary Expenses — 125,000 125,000 —
Total FY 2020 Adopted Budget 2.10 1,730,856 1,722,595 8,261
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 217
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Printing and
Mailing
Services
1 Printing Services Non-Salary Expenses 0.00 125,000 125,000 0
This action aligns the non-salary budget to reflect increased costs associated with supplies and materials and contract
services for non-routine print jobs. In recent years, activity levels for non-routine print services requests, such as
booklets, brochures, and catalogs, from departments have increased while the budgeted expenses have consistently
stayed level. These costs are allocated to the departments using print services. Increases to both the expenses and
revenues will align funding with current usage levels. (Ongoing net costs: $0)
Performance Results
These budget increases are anticipated to align funding with current activity levels with minimal impact on the quality of
service delivery.
ADMINISTRATIVE
SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 199
ADMINISTRATIVE SERVICESMission Statement
The Administrative Services
Department strives to provide
proactive financial and analytical
support to City departments and
decision-makers and to safeguard and
facilitate the optimal use of City
resources.
Purpose
The purpose of the Administrative Services
Department is to provide excellent cus-
tomer service to decision-makers, the pub-
lic, employees, and City departments;
provide analytical, organizational, and
administrative support for a wide variety
of projects; record, monitor, and protect City assets in a responsible manner;
provide essential financial management and forecasting reports; and prepare
and present financial reporting to various committees and City Council.
ATTACHMENT B
ADMINISTRATIVE SERVICES
200 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER
%!(5ƫ+/!
ADMINISTRATION
1.00 Administrative Assistant
0.50 Senior Management Analyst
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* #!)!*0ƫ* (5/0
INVESTMENT & DEBT
0.60 Manager of Treasury, Debt
Investment
0.40 Senior Management Analyst
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5ĉ.50 Full-Time
1.46 Hourly
This organizational chart represents
citywide Full-Time Equivalents (FTEs) for
this department. The Department
Summary tables summarize FTEs by
position allocation
REAL ESTATE
1.00 Real Property Manager
1.00 Senior Management Analyst
1.00 Assistant Director
ACCOUNTING
1.00 Finance Manager
GENERAL LEDGER
1.00 Senior Accountant
1.00 Accountant
1.00 Lead Account Specialist
ENTERPRISE FUND
1.00 Senior Accountant
1.00 Accountant
1.00 Accountant Specialist
ACCOUNTS PAYABLE
1.00 Senior Accountant
1.00 Lead Account Specialist
2.00 Account Specialist
PAYROLL
1.00 Senior Accountant
1.00 Accountant
2.00 Payroll Analyst
PURCHASING & CONTRACTS
1.00 Chief Procurement Officer
4.00 Contract Administrator
1.00 Administrative Associate II
1.00 Buyer
2.00 Senior Buyer
SAP FUNCTIONAL
1.00 Principal Business Analyst
2.00 Senior Business Analyst
OFFICE OF MANAGEMENT AND BUDGET
1.00 Director
2.00 Budget Manager
1.00 Administrative Associate III
2.00 Senior Management Analyst
1.00 Management Analyst
1.00 Assistant Director
REVENUE COLLECTIONS
1.00 Manager of Revenue Collections
2.00 Lead Account Specialist
5.50 Account Specialist
STORES WAREHOUSE
1.00 Warehouse Supervisor
1.00 Lead Storekeeper
3.00 Storekeeper
RISK MANAGEMENT
0.40 Manager of Treasury, Debt &
Investment
0.10 Senior Management Analyst
PRINT & MAIL SERVICES
2.00 Offset Equipment Operator
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 201
Description
The Administrative Services Department (ASD) is responsible for the
following functions:
ADMINISTRATION
Provides financial, analytical, budget, strategic, and administrative support services for the
department and organization.
ACCOUNTING
Performs financial transactions and provides accurate, timely, and reliable financial information
for internal and external customers, including vendor payments, payroll, and financial reporting.
PURCHASING AND CONTRACTS
Facilitates negotiations, purchasing, and contracting needs in a timely, efficient, and customer-
oriented manner.
OFFICE OF MANAGEMENT AND BUDGET (OMB)
Oversees the citywide operating and capital budget preparation, review, and analysis, perfor-
mance measures, and budget monitoring. In addition, prepares the long-range financial forecast
and provides independent analytical support to the organization.
PROPERTY MANAGEMENT AND ACQUISITION
Provides asset management, acquires property rights, manages leasing of City properties, pre-
pares real estate agreements, completes easement acquisitions/vacations, negotiates real
estate deals, and provides real estate services citywide.
TREASURY AND REVENUE COLLECTIONS
Treasury safeguards and invests the City’s portfolio, forecasts major General Fund tax revenues,
issues and manages debt, and performs Utility Risk Management oversight. Revenue Collec-
tions collects payment revenue and provides customer support for parking permits and pay-
ment transactions. Provides print shop services to departments and warehouse services,
including logistics, for the City’s Electric, Water, Gas, and Wastewater Utilities, as well as for
Public Works and the Regional Water Quality Control Plant.
Accomplishments
Q Maintained the City’s AAA credit rating, which results in the lowest possible borrowing
costs; confirmed in the most recent rating by Standard and Poors in February 2019.
Q Addressed City Council request to identify a strategy for ongoing contributions for
retirement costs through immediate action and a strategic action work plan. Immediate
action was completed with the additional $4.0 million contribution to the City’s Pension 115
Trust account. For the strategic action work plan, OMB has been managing and completing
a services inventory to aid in structural changes in the long-term financial picture.
ADMINISTRATIVE SERVICES
202 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Q Drafted and supported a work plan to address the City Council 2019 priority ’Fiscal
Sustainability’, approved by the Finance Committee in March 2019.
Q Issued $26.8 million in tax-exempt and $10.6 million in taxable Certificate of Participation
bonds for the construction of the California Avenue Parking Garage, which is a key step in
the completion of the 2014 Council Infrastructure Plan and a critical project in the ability to
deliver the new Public Safety Building.
Q Managed the City’s real estate leases resulting in revenue of approximately $4.0 million.
Q Began negotiations for real estate transactions including the potential purchase of a 27,829
square foot portion of 3350 Birch Street.
Q Entered into a new license agreement to renovate and manage/operate the City Hall Café at
250 Hamilton Avenue.
Q Explored and identified options for City Council to calculate the long-term unfunded
liabilities for pension. Facilitated the analysis for the change in pension assumptions to a
6.2% discount rate for the normal cost of pension expense. Continued to advance funds to
the Pension Section 115 Trust with approximately $13.5 million in deposits by the end of
Fiscal Year 2019.
Q Completed 20 easements and easement vacations.
Q Consolidated the utility bill print printers with the citywide contract for copy machines
resulting in increased efficiency for the utility bill print function.
Q Participated in citywide emergency preparation and planning to ensure that financial
tracking and reporting will be part of a coordinated emergency response effort.
Q Implemented department-wide, technology-focused, core competency training such as:
SAP module specific training for support resources and SAP reporting training in the Human
Resources and Payroll modules.
Q Worked to streamline and automate accounts payable automated clearing house (ACH)
implementation and Treasury wires between software systems.
Q Received an award in the Accounting Division for the Comprehensive Annual Financial
Report (CAFR) for Fiscal Year 2018 from the Government Finance Officer Associations of
United States and Canada (GFOA) for “excellence in financial reporting”.
Q Received California Society of Municipal Finance Officers (CSMFO) and GFOA awards in the
Office of Management and Budget (OMB) for the Fiscal Year 2019 Adopted CIP and
Operating budgets.
Q Addressed audit finding in regards to P-card administration through the implementation of
a formal review and submittal authorization for increasing P-card limits.
Initiatives
Q Continue implementation of the ASD strategic plan in four focus areas: 1) High-quality
customer service, 2) Innovation and continuous improvement, 3) Best practices, and 4)
Employee excellence, including customer support resources in purchasing, payroll, and
accounting and implementation of electronic forms.
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 203
Q Maintain employee excellence by focusing on employee rating form, training plans, and
specific goals of improving customer service and responsiveness.
Q Work to implement citywide procurement process training and education to improve
efficiency and align with industry best practices and ensure the changing workforce is
equipped to handle their procurement needs in an expeditious fashion. Communicate
established purchasing policies, processes, and requirements.
Q Implement department-wide, technology-focused, core competency training such as SAP
module specific training for day-to-day business operations in departments and SAP
reporting training in the Human Resources and Payroll modules.
Q Collaborate and facilitate the implementation of a new online parking permit management
system in a phased approach, beginning with residential parking permit programs.
Q Continue to work to implement or manage the components of the Fiscal Sustainability work
plan.
Q Continue financial support for emergency preparation for federal financial reporting after a
disaster in conjunction with the Office of Emergency Services.
Q Work to implement the paperless office program, currently in the Purchasing Division, for
the Accounting and Real Estate divisions.
Q Support the citywide effort to upgrade the Enterprise Resource Planning (ERP) system.
Q Explore and provide options for the acquisition of the Media Center property at 900 San
Antonio Road on behalf of the Cable Joint Powers Agency (JPA) using PEG (Public,
Education, and Government) fee revenue for the Cable JPA and City Council review.
Q Support the Cubberley strategic planning efforts and necessary financial analysis with the
community and Palo Alto Unified School District (PAUSD).
Q Establish a new option and lease agreement with the Palo Alto History Museum for the Roth
Building at 300 Homer Avenue.
ADMINISTRATIVE SERVICES
204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Fund
General Fund-Operating 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Printing & Mailing Services Fund 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Total 8,743,725 9,324,580 9,510,092 10,250,186 740,094 7.8%
Revenues
Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0%
Charges to Other Funds 3,742,337 4,090,745 3,335,030 3,186,802 (148,228)(4.4)%
Other Revenue 144,894 145,266 171,400 171,400 ——%
Return on Investments (140)(1,100)400 2,300 1,900 475.0%
Total Revenues 3,891,737 4,248,801 3,519,400 3,548,175 28,776 0.8%
Positions by Fund
General Fund 41.50 40.06 39.61 40.61 1.00 2.52%
Printing and Mailing Services 2.10 2.10 2.10 2.10 ——%
Total 43.60 42.16 41.71 42.71 1.00 2.40%
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 205
GENERAL FUND
Goals and Objectives
GOAL 1
Q Ensure the City of Palo Alto’s short and long-term financial status is healthy and sound.
Objectives:
Q Assist with implementation of City Council’s 2014 Infrastructure Plan by providing updated
financial planning and issuance of debt.
Q Review opportunities for new and/or enhanced revenues.
Q Analyze additional options for reducing the City’s pension and retiree healthcare long-term
liabilities.
Q Provide long-term recommendations and strategies for the City’s real estate assets such as
Cubberley, Ventura, and Middlefield Road lots.
Q Manage real estate assets effectively to enhance revenue and reduce cost.
Q Recommend a strategically balanced budget, maintaining City Council-approved reserve
levels, for City Council consideration.
Q Assist with ongoing labor negotiations with analysis of labor and City proposals.
Q Develop plans for addressing any forecast shortfalls in funding for operations and
infrastructure.
Q Provide bond financing of major capital projects such as the Wastewater Treatment facility
replacements, Public Safety Building, etc.
GOAL 2
Q Provide timely and accurate financial reporting and transactions.
Objectives:
Q Ensure that payroll processing, vendor payments, budget, and annual financial reporting are
clear, timely, accurate, and in compliance with governmental finance standards.
Q Enhance financial reporting mechanisms to ensure that departmental financial information
is relevant and timely; look for opportunities to improve reporting as part of technology
implementation upgrades.
Q Increase information availability and transparency using open data tools and dashboards.
Q Implement complex new labor agreements including new benefit structures, ensuring timely
and accurate payments to employees and governing bodies such as the federal government
and CalPERS.
GOAL 3
Q Ensure public funds and assets are invested prudently and are well-managed.
ADMINISTRATIVE SERVICES
206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Objectives:
Q Ensure sufficient cash is always available to meet current expenditures.
Q Maintain a reasonable rate of return on investments.
Q Invest in sound Environmental, Social, and Governance (ESG) securities, which include
green and sustainable bonds, when available and appropriate, in alignment with recently
approved changes to the investment policy.
GOAL 4
Q Continue implementation of the ASD Strategic Plan in the focus areas of customer service,
innovation, best practices, and employee excellence.
Objectives:
Q Continue implementing a succession plan for the department.
Q Review ASD policies and procedures to continuously update, enhance, and streamline.
Q Roll out training and resources for customer support to improve processing time.
Q Enhance training plans for employees for job specific training and career development.
Q Implement new tools for team collaboration and sharing, such as Office 365 and SharePoint.
Key Performance Measures
ANNUAL PERCENTAGE YIELD ON INVESTMENTS
Goal Ensure public funds and assets are invested prudently and are well-managed.
Objective Maintain a reasonable rate of return on investments.
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
FY 2019
Estimated
FY 2020
Adopted
Annual percentage yield on
investments 1.82%2.16%2.15%2.31%2.40%
Description This measure tracks the City's annual rate of return on investments while following
primary objectives (in priority order) of safety, liquidity, and yield.
Purpose A stable rate of return helps to grow the City's investment portfolio and is one
component in measuring the City's financial rating.
Status
As anticipated with a rising interest rate environment, the City's adopted goal of
2.15% is estimated to be achieved in FY 2019. In comparison, the State
Investment Pool average yield for FY 2018 was 1.36%.
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 207
Workload Measures
AVERAGE PROCESSING TIME FOR PURCHASE REQUISITIONS
Goal Implement performance management programs to support and enhance
communication, accountability, and positive outcomes.
Objective Continue developing and implementing Procurement and Inventory process
improvements.
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
FY 2019
Estimated
FY 2020
Adopted
Average time from receipt of a
Purchase Requisition to issuance of
Purchase Order (Days)
22 26 22 25 25
Description
The City is required to follow procurement rules and regulations as outlined in the
Municipal Code and State Law to ensure open and fair competition and the most
cost-effective use of tax dollars. In compliance with existing rules and regulations,
ASD endeavors to provide goods and services as quickly as possible to City
departments.
Purpose
To measure the average processing time for Purchase Requisitions (PR) in order
to identify processing improvements while being compliant with existing rules and
regulations.
Status
The Purchasing Division has maintained efficiency with the use of e-Procurement
software that was implemented in FY 2016. Staff anticipates an increase in larger,
more complex PRs in FY 2020 due to the volume of capital improvement projects
planned over the next several years. This influx of capital projects will result in an
increase in estimated cycle time. Over the next year, the Purchasing Division will
continue to work with City stakeholders to meet business needs in a timely
manner despite this uptick in complex procurements.
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
FY 2019
Estimated
FY 2020
Adopted
Number of P-card (City credit card)
transactions 19,087 19,230 19,100 17,500 18,000
Number of Purchase Orders and
Purchase Requisitions processed1 1,509 1,455 2,400 1,400 1,500
Total amount of cash and
investments - as of June 30
(Millions)
$532.1 $526.0 $540.0 $523.0 $530.0
1The Administrative Services Department has refined the methodology for reporting this Workload Measure to more
accurately reflect the volume of work performed. As such these numbers differ slightly from previously reported
numbers.
ADMINISTRATIVE SERVICES
208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Division
Accounting 2,043,348 2,154,241 2,313,999 2,517,142 203,143 8.8%
Administration 700,131 701,429 502,573 362,163 (140,410)(27.9)%
Office of Management and Budget 1,019,241 1,471,554 1,427,663 1,515,138 87,475 6.1%
Purchasing 1,439,096 1,561,940 1,609,770 1,719,881 110,110 6.8%
Real Estate 862,337 567,478 651,916 682,402 30,486 4.7%
Treasury 1,314,666 1,223,689 1,522,588 1,722,605 200,017 13.1%
Total 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Dollars by Category
Salary & Benefits
Healthcare 613,176 659,957 720,469 786,754 66,285 9.2%
Other Benefits 121,110 164,532 163,209 169,450 6,241 3.8%
Overtime 21,488 23,104 34,599 35,499 900 2.6%
Pension 1,019,697 1,185,868 1,266,442 1,661,345 394,903 31.2%
Retiree Medical 536,733 564,670 473,449 487,653 14,203 3.0%
Salary 3,841,677 4,146,162 4,257,849 4,198,750 (59,098)(1.4)%
Workers' Compensation 20,338 39,412 108,269 171,647 63,377 58.5%
Total Salary & Benefits 6,174,219 6,783,704 7,024,287 7,511,098 486,811 6.9%
Allocated Charges 364,415 405,529 443,050 461,207 18,157 4.1%
Contract Services 323,681 304,787 238,148 288,148 50,000 21.0%
Facilities & Equipment 270,979 2,570 4,200 4,200 ——%
General Expense 198,066 144,980 206,924 207,924 1,000 0.5%
Operating Transfers-Out ——65,146 —(65,146)(100.0)%
Rents & Leases 11,856 12,856 12,856 12,856 ——%
Supplies & Material 35,602 25,905 33,898 33,898 ——%
Total Dollars by Expense
Category 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Revenues
Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0%
Charges to Other Funds 2,403,540 2,333,469 1,768,909 1,466,507 (302,402)(17.1)%
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 209
Other Revenue 142,894 145,266 171,400 171,400 ——%
Total Revenues 2,551,080 2,492,625 1,952,879 1,825,580 (127,298)(6.5)%
Positions by Division
Accounting 13.60 13.60 13.52 13.52 ——%
Administration 2.08 1.60 1.60 1.60 ——%
Office of Management and Budget 6.02 6.62 6.02 6.02 ——%
Purchasing 9.53 8.57 9.05 9.05 ——%
Real Estate 2.32 2.32 2.32 2.32 ——%
Treasury 7.95 7.35 7.10 8.10 1.00 14.08%
Total 41.50 40.06 39.61 40.61 1.00 2.52%
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
Account Specialist 5.88 4.88 4.63 4.63 —306,563
Account Specialist-Lead 4.05 3.05 3.45 3.45 —244,507
Accountant 3.00 3.00 3.00 3.00 —288,642
Administrative Assistant 1.00 1.00 1.00 1.00 —93,018
Administrative Associate II —1.00 1.00 1.00 —70,986
Administrative Associate III 1.00 1.00 1.00 1.00 —76,090
Assistant Director Administrative
Services 1.65 1.65 1.65 1.65 —318,798
Buyer 1.00 1.00 1.00 1.00 —93,459
Chief Procurement Officer 1.00 1.00 1.00 1.00 —148,512
Contracts Administrator 1.70 2.70 2.70 2.70 —301,463
Director Administrative Services/
CFO 0.80 0.80 0.80 0.80 —199,845
Director Office of Management and
Budget 1.00 1.00 1.00 1.00 —199,035
Management Analyst ——1.00 2.00 1.00 219,336
Manager Accounting 1.00 1.00 ————
Manager Budget 1.00 1.00 2.00 2.00 —312,770
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
ADMINISTRATIVE SERVICES
210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Manager Real Property 1.00 1.00 1.00 1.00 —150,010
Manager Revenue Collections 0.62 0.62 0.62 0.62 —95,198
Manager Treasury, Debt &
Investments 0.60 0.60 0.60 0.60 —89,407
Manager, Finance ——1.00 1.00 —172,723
Payroll Analyst 2.00 2.00 2.00 2.00 —157,915
Senior Accountant 3.00 3.00 3.00 3.00 —365,664
Senior Buyer 1.00 1.00 1.00 1.00 —94,413
Senior Management Analyst 4.90 4.90 2.30 2.30 —312,107
Storekeeper 1.00 1.00 1.00 1.00 —68,918
Storekeeper-Lead 0.20 0.20 0.20 0.20 —14,752
Warehouse Supervisor 0.20 0.20 0.20 0.20 —18,487
Sub-total: Full-Time Equivalent
Positions 38.60 38.60 38.15 39.15 1.00 4,412,618
Temporary/Hourly 2.90 1.46 1.46 1.46 —99,881
Total Positions 41.50 40.06 39.61 40.61 1.00 4,512,499
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 211
Budget Reconciliation
Positions Expenditures Revenues
Net
General Fund
Prior Year Budget 39.61 8,028,509 1,952,878 6,075,631
One-Time Prior Year Budget Adjustments
Supplemental Pension Trust Fund Contribution — (65,146) — (65,146)
General Liability Savings (One-Time FY 2019
Savings)— 12,236 — 12,236
Workers' Compensation Savings (One-Time FY
2019 Savings)— 43,147 — 43,147
One-Time Prior Year Budget Adjustments —(9,763)—(9,763)
Adjustments to Costs of Ongoing Activities
Salary and Benefits Adjustments — 313,132 — 313,132
Proactive Contributions to City's Unfunded
Pension Liability — 199,820 — 199,820
General Fund Cost Allocation Plan — — (302,402) 302,402
General Liability Insurance Allocated Charges — (3,405) — (3,405)
Information Technology Allocated Charges — (4,724) — (4,724)
Printing & Mailing Services Allocated Charges — 12,336 — 12,336
Vehicle Replacement & Maintenance Allocated
Charges — 1,713 — 1,713
Workers' Compensation Allocated Charges — 20,230 — 20,230
Adjustments to Costs of Ongoing Activities —539,102 (302,402)841,504
Total FY 2020 Base Budget 39.61 8,557,848 1,650,476 6,907,372
Budget Adjustments
1 Administrative Services Staffing Vacancies — (277,547) — (277,547)
2 Business Registry Certificate Program (Transfer
from former Development Services Department
to Administrative Services Department)
1.00 239,029 175,103 63,926
Total Budget Adjustments 1.00 (38,518)175,103 (213,621)
Total FY 2020 Adopted Budget 40.61 8,519,330 1,825,579 6,693,751
ADMINISTRATIVE SERVICES
212 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
General Fund
1 Administrative Services Staffing Vacancies 0.00 (277,547)0 (277,547)
This one-time action recognizes vacancy savings for the equivalent of 1.0 FTE Senior Management Analyst and 1.0 FTE
Accounting Specialist during FY 2020. Currently, the Administrative Services Department is experiencing a vacancy
factor of nearly 15%, including positions at these levels. Due to the priority of other staffing recruitments of a more
urgent need, such as Purchasing Division staffing, it is anticipated that these recruitments will not be addressed until
further through FY 2020 and therefore savings can be anticipated. The functions of these positions are currently being
absorbed temporarily by the Chief Financial Officer, Assistant Director, and additional administrative assistance, primarily
on overtime. This diminishes staff's ability to continue to make progress on service delivery evolutions and requires staff
to rely more heavily on contractual assistant and status quo business processes. (Ongoing savings: $0)
Performance Results
This action is anticipated to help contain costs for FY 2020.
2 Business Registry Certificate Program (Transfer
from former Development Services Department to
Administrative Services Department)
1.00 239,029 175,103 63,926
This action reallocates the Business Registry Certificate (BRC) program from the former Development Services
Department to the Administrative Services Department and reassigns the administrative management of both this
program as well as the financial management of the Business Improvement District (BID) to the Administrative Services
Department. With the merging of the Development Services Department and the Planning and Community Environment
Department, this function was determined to best be placed in Administrative Services where the majority of taxes and
administrative fees are handled by various teams with the Treasury Division of the department. This reallocation of 1.0
FTE Management Analyst, $50,000 in contract services, and approximately $175,000 in revenue estimated to be
generated from the BRC, aligns the resources added by the City Council in February 29, 2016 (CMR 6661). A
corresponding adjustment is recommended in the Planning and Development Services Department. (Ongoing costs:
$72,000)
Performance Results
This action reallocates staff between departments and no performance impacts are anticipated to the Business Registry
Certificate program.
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 213
PRINTING AND
MAILING SERVICES
Accomplishments
Q Processed 300,000 utility bills.
Q Maintained timelines for producing City Council packets.
Q In June 2018, replaced an outdated paper cutter with new technology allowing for precision
paper cutting in house.
Initiatives
Q Maintain a high level of customer service for Printing and Mailing by listening to customers
and, when appropriate, making relevant changes to operations.
Q Provide quality printing products that meet the needs of customers.
Goals and Objectives
GOAL 1
Q Provide timely and high-quality services for City departments, City Council, and
Committees.
Objectives:
Q Ensure timely distribution of mail and utility bills.
Q Ensure timely creation and distribution of City Council and Committee packets.
ADMINISTRATIVE SERVICES
214 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Division
Printing and Mailing 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Total 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Dollars by Category
Salary & Benefits
Healthcare 24,790 28,566 27,305 28,291 986 3.6%
Other Benefits 2,253 3,267 3,135 3,359 223 7.1%
Overtime 6,145 4,779 ————%
Pension 24,003 30,959 31,636 47,533 15,897 50.3%
Retiree Medical 59,845 62,960 14,663 15,103 440 3.0%
Salary 106,323 128,064 133,571 142,079 8,508 6.4%
Workers' Compensation 239 462 3,289 5,387 2,098 63.8%
Total Salary & Benefits 223,597 259,056 213,600 241,752 28,152 13.2%
Allocated Charges 177,496 205,990 276,747 360,090 83,343 30.1%
Contract Services 10,607 —114,711 239,711 125,000 109.0%
Facilities & Equipment 31,711 —————%
General Expense 271,603 370,562 286,975 286,975 ——%
Operating Transfers-Out —3,154 1,598 9,200 7,602 475.6%
Rents & Leases 494,718 640,236 507,695 512,870 5,175 1.0%
Supplies & Material 155,174 165,252 80,258 80,258 ——%
Total Dollars by Expense
Category 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Revenues
Charges to Other Funds 1,338,798 1,757,276 1,566,121 1,720,295 154,174 9.8%
Other Revenue 2,000 —————%
Return on Investments (140)(1,100)400 2,300 1,900 475.0%
Total Revenues 1,340,657 1,756,175 1,566,521 1,722,595 156,074 10.0%
Positions by Division
Printing and Mailing 2.10 2.10 2.10 2.10 ——%
Total 2.10 2.10 2.10 2.10 ——%
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 215
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
Manager Revenue Collections 0.10 0.10 0.10 0.10 —15,355
Offset Equipment Operator 1.52 1.52 1.52 1.52 —95,834
Sub-total: Full-Time Equivalent
Positions 1.62 1.62 1.62 1.62 —111,188
Temporary/Hourly 0.48 0.48 0.48 0.48 —27,256
Total Positions 2.10 2.10 2.10 2.10 —138,445
ADMINISTRATIVE SERVICES
216 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
Budget Reconciliation
Positions Expenditures Revenues
Net
Printing and
Mailing
Services
Prior Year Budget 2.10 1,481,584 1,566,521 (84,937)
One-Time Prior Year Budget Adjustments
Supplemental Pension Trust Fund Contribution — (1,598) — (1,598)
General Liability Savings (One-Time FY 2019
Savings)— 372 — 372
Workers' Compensation Savings (One-Time FY
2019 Savings)— 1,311 — 1,311
One-Time Prior Year Budget Adjustments —85 —85
Adjustments to Costs of Ongoing Activities
Salary and Benefits Adjustments — 15,724 — 15,724
Proactive Contributions to City's Unfunded
Pension Liability — 5,230 — 5,230
FY 2019 Catch-Up Proactive Contributions to
City's Unfunded Pension Liability — 5,100 — 5,100
Return on Investments — — 1,900 (1,900)
Rents & Leases Expenditure Alignment — 5,175 — 5,175
Transfer to Technology Fund (TE-19001 City
Council Chambers Upgrade)— 9,200 — 9,200
General Fund Cost Allocation Plan — 83,470 — 83,470
General Liability Insurance Allocated Charges — (46) — (46)
Information Technology Allocated Charges — (453) — (453)
Printing & Mailing Services Allocated Charges — — 29,174 (29,174)
Workers' Compensation Allocated Charges — 787 — 787
Adjustments to Costs of Ongoing Activities —124,187 31,074 93,113
Total FY 2020 Base Budget 2.10 1,605,856 1,597,595 8,261
Budget Adjustments
1 Printing Services Non-Salary Expenses — 125,000 125,000 —
Total FY 2020 Adopted Budget 2.10 1,730,856 1,722,595 8,261
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 217
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Printing and
Mailing
Services
1 Printing Services Non-Salary Expenses 0.00 125,000 125,000 0
This action aligns the non-salary budget to reflect increased costs associated with supplies and materials and contract
services for non-routine print jobs. In recent years, activity levels for non-routine print services requests, such as
booklets, brochures, and catalogs, from departments have increased while the budgeted expenses have consistently
stayed level. These costs are allocated to the departments using print services. Increases to both the expenses and
revenues will align funding with current usage levels. (Ongoing net costs: $0)
Performance Results
These budget increases are anticipated to align funding with current activity levels with minimal impact on the quality of
service delivery.
ADMINISTRATIVE
SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 199
ADMINISTRATIVE SERVICESMission Statement
The Administrative Services
Department strives to provide
proactive financial and analytical
support to City departments and
decision-makers and to safeguard and
facilitate the optimal use of City
resources.
Purpose
The purpose of the Administrative Services
Department is to provide excellent cus-
tomer service to decision-makers, the pub-
lic, employees, and City departments;
provide analytical, organizational, and
administrative support for a wide variety
of projects; record, monitor, and protect City assets in a responsible manner;
provide essential financial management and forecasting reports; and prepare
and present financial reporting to various committees and City Council.
ATTACHMENT C
ADMINISTRATIVE SERVICES
200 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES DIRECTOR/CHIEF FINANCIAL OFFICER
%!(5ƫ+/!
ADMINISTRATION
1.00 Administrative Assistant
0.50 Senior Management Analyst
āċĀĀƫƫƫƫƫ
* #!)!*0ƫ* (5/0
INVESTMENT & DEBT
0.60 Manager of Treasury, Debt
Investment
0.40 Senior Management Analyst
ƫĂĀĂĀƫ ƫ
5ĉ.50 Full-Time
1.46 Hourly
This organizational chart represents
citywide Full-Time Equivalents (FTEs) for
this department. The Department
Summary tables summarize FTEs by
position allocation
REAL ESTATE
1.00 Real Property Manager
1.00 Senior Management Analyst
1.00 Assistant Director
ACCOUNTING
1.00 Finance Manager
GENERAL LEDGER
1.00 Senior Accountant
1.00 Accountant
1.00 Lead Account Specialist
ENTERPRISE FUND
1.00 Senior Accountant
1.00 Accountant
1.00 Accountant Specialist
ACCOUNTS PAYABLE
1.00 Senior Accountant
1.00 Lead Account Specialist
2.00 Account Specialist
PAYROLL
1.00 Senior Accountant
1.00 Accountant
2.00 Payroll Analyst
PURCHASING & CONTRACTS
1.00 Chief Procurement Officer
4.00 Contract Administrator
1.00 Administrative Associate II
1.00 Buyer
2.00 Senior Buyer
SAP FUNCTIONAL
1.00 Principal Business Analyst
2.00 Senior Business Analyst
OFFICE OF MANAGEMENT AND BUDGET
1.00 Director
2.00 Budget Manager
1.00 Administrative Associate III
2.00 Senior Management Analyst
1.00 Management Analyst
1.00 Assistant Director
REVENUE COLLECTIONS
1.00 Manager of Revenue Collections
2.00 Lead Account Specialist
5.50 Account Specialist
STORES WAREHOUSE
1.00 Warehouse Supervisor
1.00 Lead Storekeeper
3.00 Storekeeper
RISK MANAGEMENT
0.40 Manager of Treasury, Debt &
Investment
0.10 Senior Management Analyst
PRINT & MAIL SERVICES
2.00 Offset Equipment Operator
ADMINISTRATIVE SERVICES
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 201
Description
The Administrative Services Department (ASD) is responsible for the
following functions:
ADMINISTRATION
Provides financial, analytical, budget, strategic, and administrative support services for the
department and organization.
ACCOUNTING
Performs financial transactions and provides accurate, timely, and reliable financial information
for internal and external customers, including vendor payments, payroll, and financial reporting.
PURCHASING AND CONTRACTS
Facilitates negotiations, purchasing, and contracting needs in a timely, efficient, and customer-
oriented manner.
OFFICE OF MANAGEMENT AND BUDGET (OMB)
Oversees the citywide operating and capital budget preparation, review, and analysis, perfor-
mance measures, and budget monitoring. In addition, prepares the long-range financial forecast
and provides independent analytical support to the organization.
PROPERTY MANAGEMENT AND ACQUISITION
Provides asset management, acquires property rights, manages leasing of City properties, pre-
pares real estate agreements, completes easement acquisitions/vacations, negotiates real
estate deals, and provides real estate services citywide.
TREASURY AND REVENUE COLLECTIONS
Treasury safeguards and invests the City’s portfolio, forecasts major General Fund tax revenues,
issues and manages debt, and performs Utility Risk Management oversight. Revenue Collec-
tions collects payment revenue and provides customer support for parking permits and pay-
ment transactions. Provides print shop services to departments and warehouse services,
including logistics, for the City’s Electric, Water, Gas, and Wastewater Utilities, as well as for
Public Works and the Regional Water Quality Control Plant.
ADMINISTRATIVE SERVICES
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Fund
General Fund-Operating 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Printing & Mailing Services Fund 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Total 8,743,725 9,324,580 9,510,092 10,250,186 740,094 7.8%
Revenues
Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0%
Charges to Other Funds 3,742,337 4,090,745 3,335,030 3,186,802 (148,228)(4.4)%
Other Revenue 144,894 145,266 171,400 171,400 ——%
Return on Investments (140)(1,100)400 2,300 1,900 475.0%
Total Revenues 3,891,737 4,248,801 3,519,400 3,548,175 28,776 0.8%
Positions by Fund
General Fund 41.50 40.06 39.61 40.61 1.00 2.52%
Printing and Mailing Services 2.10 2.10 2.10 2.10 ——%
Total 43.60 42.16 41.71 42.71 1.00 2.40%
202 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Division
Accounting 2,043,348 2,154,241 2,313,999 2,517,142 203,143 8.8%
Administration 700,131 701,429 502,573 362,163 (140,410)(27.9)%
Office of Management and Budget 1,019,241 1,471,554 1,427,663 1,515,138 87,475 6.1%
Purchasing 1,439,096 1,561,940 1,609,770 1,719,881 110,110 6.8%
Real Estate 862,337 567,478 651,916 682,402 30,486 4.7%
Treasury 1,314,666 1,223,689 1,522,588 1,722,605 200,017 13.1%
Total 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Dollars by Category
Salary & Benefits
Healthcare 613,176 659,957 720,469 786,754 66,285 9.2%
Other Benefits 121,110 164,532 163,209 169,450 6,241 3.8%
Overtime 21,488 23,104 34,599 35,499 900 2.6%
Pension 1,019,697 1,185,868 1,266,442 1,661,345 394,903 31.2%
Retiree Medical 536,733 564,670 473,449 487,653 14,203 3.0%
Salary 3,841,677 4,146,162 4,257,849 4,198,750 (59,098)(1.4)%
Workers' Compensation 20,338 39,412 108,269 171,647 63,377 58.5%
Total Salary & Benefits 6,174,219 6,783,704 7,024,287 7,511,098 486,811 6.9%
Allocated Charges 364,415 405,529 443,050 461,207 18,157 4.1%
Contract Services 323,681 304,787 238,148 288,148 50,000 21.0%
Facilities & Equipment 270,979 2,570 4,200 4,200 ——%
General Expense 198,066 144,980 206,924 207,924 1,000 0.5%
Operating Transfers-Out ——65,146 —(65,146)(100.0)%
Rents & Leases 11,856 12,856 12,856 12,856 ——%
Supplies & Material 35,602 25,905 33,898 33,898 ——%
Total Dollars by Expense
Category 7,378,820 7,680,331 8,028,509 8,519,330 490,822 6.1%
Revenues
Charges for Services 4,647 13,890 12,570 187,673 175,103 1,393.0%
Charges to Other Funds 2,403,540 2,333,469 1,768,909 1,466,507 (302,402)(17.1)%
GENERAL FUND
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 203
ADMINISTRATIVE SERVICES
Other Revenue 142,894 145,266 171,400 171,400 ——%
Total Revenues 2,551,080 2,492,625 1,952,879 1,825,580 (127,298)(6.5)%
Positions by Division
Accounting 13.60 13.60 13.52 13.52 ——%
Administration 2.08 1.60 1.60 1.60 ——%
Office of Management and Budget 6.02 6.62 6.02 6.02 ——%
Purchasing 9.53 8.57 9.05 9.05 ——%
Real Estate 2.32 2.32 2.32 2.32 ——%
Treasury 7.95 7.35 7.10 8.10 1.00 14.08%
Total 41.50 40.06 39.61 40.61 1.00 2.52%
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
Account Specialist 5.88 4.88 4.63 4.63 —306,563
Account Specialist-Lead 4.05 3.05 3.45 3.45 —244,507
Accountant 3.00 3.00 3.00 3.00 —288,642
Administrative Assistant 1.00 1.00 1.00 1.00 —93,018
Administrative Associate II —1.00 1.00 1.00 —70,986
Administrative Associate III 1.00 1.00 1.00 1.00 —76,090
Assistant Director Administrative
Services 1.65 1.65 1.65 1.65 —318,798
Buyer 1.00 1.00 1.00 1.00 —93,459
Chief Procurement Officer 1.00 1.00 1.00 1.00 —148,512
Contracts Administrator 1.70 2.70 2.70 2.70 —301,463
Director Administrative Services/
CFO 0.80 0.80 0.80 0.80 —199,845
Director Office of Management and
Budget 1.00 1.00 1.00 1.00 —199,035
Management Analyst ——1.00 2.00 1.00 219,336
Manager Accounting 1.00 1.00 ————
Manager Budget 1.00 1.00 2.00 2.00 —312,770
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
204 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES
Manager Real Property 1.00 1.00 1.00 1.00 —150,010
Manager Revenue Collections 0.62 0.62 0.62 0.62 —95,198
Manager Treasury, Debt &
Investments 0.60 0.60 0.60 0.60 —89,407
Manager, Finance ——1.00 1.00 —172,723
Payroll Analyst 2.00 2.00 2.00 2.00 —157,915
Senior Accountant 3.00 3.00 3.00 3.00 —365,664
Senior Buyer 1.00 1.00 1.00 1.00 —94,413
Senior Management Analyst 4.90 4.90 2.30 2.30 —312,107
Storekeeper 1.00 1.00 1.00 1.00 —68,918
Storekeeper-Lead 0.20 0.20 0.20 0.20 —14,752
Warehouse Supervisor 0.20 0.20 0.20 0.20 —18,487
Sub-total: Full-Time Equivalent
Positions 38.60 38.60 38.15 39.15 1.00 4,412,618
Temporary/Hourly 2.90 1.46 1.46 1.46 —99,881
Total Positions 41.50 40.06 39.61 40.61 1.00 4,512,499
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 205
ADMINISTRATIVE SERVICES
Budget Reconciliation
Positions Expenditures Revenues
Net
General Fund
Prior Year Budget 39.61 8,028,509 1,952,878 6,075,631
One-Time Prior Year Budget Adjustments
Supplemental Pension Trust Fund Contribution — (65,146) — (65,146)
General Liability Savings (One-Time FY 2019
Savings)— 12,236 — 12,236
Workers' Compensation Savings (One-Time FY
2019 Savings)— 43,147 — 43,147
One-Time Prior Year Budget Adjustments —(9,763)—(9,763)
Adjustments to Costs of Ongoing Activities
Salary and Benefits Adjustments — 313,132 — 313,132
Proactive Contributions to City's Unfunded
Pension Liability — 199,820 — 199,820
General Fund Cost Allocation Plan — — (302,402) 302,402
General Liability Insurance Allocated Charges — (3,405) — (3,405)
Information Technology Allocated Charges — (4,724) — (4,724)
Printing & Mailing Services Allocated Charges — 12,336 — 12,336
Vehicle Replacement & Maintenance Allocated
Charges — 1,713 — 1,713
Workers' Compensation Allocated Charges — 20,230 — 20,230
Adjustments to Costs of Ongoing Activities —539,102 (302,402)841,504
Total FY 2020 Base Budget 39.61 8,557,848 1,650,476 6,907,372
Budget Adjustments
1 Administrative Services Staffing Vacancies — (277,547) — (277,547)
2 Business Registry Certificate Program (Transfer
from former Development Services Department
to Administrative Services Department)
1.00 239,029 175,103 63,926
Total Budget Adjustments 1.00 (38,518)175,103 (213,621)
Total FY 2020 Adopted Budget 40.61 8,519,330 1,825,579 6,693,751
206 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
General Fund
1 Administrative Services Staffing Vacancies 0.00 (277,547)0 (277,547)
This one-time action recognizes vacancy savings for the equivalent of 1.0 FTE Senior Management Analyst and 1.0 FTE
Accounting Specialist during FY 2020. Currently, the Administrative Services Department is experiencing a vacancy
factor of nearly 15%, including positions at these levels. Due to the priority of other staffing recruitments of a more
urgent need, such as Purchasing Division staffing, it is anticipated that these recruitments will not be addressed until
further through FY 2020 and therefore savings can be anticipated. The functions of these positions are currently being
absorbed temporarily by the Chief Financial Officer, Assistant Director, and additional administrative assistance, primarily
on overtime. This diminishes staff's ability to continue to make progress on service delivery evolutions and requires staff
to rely more heavily on contractual assistant and status quo business processes. (Ongoing savings: $0)
Performance Results
This action is anticipated to help contain costs for FY 2020.
2 Business Registry Certificate Program (Transfer
from former Development Services Department to
Administrative Services Department)
1.00 239,029 175,103 63,926
This action reallocates the Business Registry Certificate (BRC) program from the former Development Services
Department to the Administrative Services Department and reassigns the administrative management of both this
program as well as the financial management of the Business Improvement District (BID) to the Administrative Services
Department. With the merging of the Development Services Department and the Planning and Community Environment
Department, this function was determined to best be placed in Administrative Services where the majority of taxes and
administrative fees are handled by various teams with the Treasury Division of the department. This reallocation of 1.0
FTE Management Analyst, $50,000 in contract services, and approximately $175,000 in revenue estimated to be
generated from the BRC, aligns the resources added by the City Council in February 29, 2016 (CMR 6661). A
corresponding adjustment is recommended in the Planning and Development Services Department. (Ongoing costs:
$72,000)
Performance Results
This action reallocates staff between departments and no performance impacts are anticipated to the Business Registry
Certificate program.
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 207
ADMINISTRATIVE SERVICES
Budget Summary
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change $
FY 2020
Change %
Dollars by Division
Printing and Mailing 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Total 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Dollars by Category
Salary & Benefits
Healthcare 24,790 28,566 27,305 28,291 986 3.6%
Other Benefits 2,253 3,267 3,135 3,359 223 7.1%
Overtime 6,145 4,779 ————%
Pension 24,003 30,959 31,636 47,533 15,897 50.3%
Retiree Medical 59,845 62,960 14,663 15,103 440 3.0%
Salary 106,323 128,064 133,571 142,079 8,508 6.4%
Workers' Compensation 239 462 3,289 5,387 2,098 63.8%
Total Salary & Benefits 223,597 259,056 213,600 241,752 28,152 13.2%
Allocated Charges 177,496 205,990 276,747 360,090 83,343 30.1%
Contract Services 10,607 —114,711 239,711 125,000 109.0%
Facilities & Equipment 31,711 —————%
General Expense 271,603 370,562 286,975 286,975 ——%
Operating Transfers-Out —3,154 1,598 9,200 7,602 475.6%
Rents & Leases 494,718 640,236 507,695 512,870 5,175 1.0%
Supplies & Material 155,174 165,252 80,258 80,258 ——%
Total Dollars by Expense
Category 1,364,905 1,644,249 1,481,584 1,730,856 249,272 16.8%
Revenues
Charges to Other Funds 1,338,798 1,757,276 1,566,121 1,720,295 154,174 9.8%
Other Revenue 2,000 —————%
Return on Investments (140)(1,100)400 2,300 1,900 475.0%
Total Revenues 1,340,657 1,756,175 1,566,521 1,722,595 156,074 10.0%
Positions by Division
Printing and Mailing 2.10 2.10 2.10 2.10 ——%
Total 2.10 2.10 2.10 2.10 ——%
PRINTING AND MAILING SERVICES
208 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES
Staffing
Job Classification
FY 2017
Actuals
FY 2018
Actuals
FY 2019
Adopted
Budget
FY 2020
Adopted
Budget
FY 2020
Change FTE
FY 2020
Salary
Manager Revenue Collections 0.10 0.10 0.10 0.10 —15,355
Offset Equipment Operator 1.52 1.52 1.52 1.52 —95,834
Sub-total: Full-Time Equivalent
Positions 1.62 1.62 1.62 1.62 —111,188
Temporary/Hourly 0.48 0.48 0.48 0.48 —27,256
Total Positions 2.10 2.10 2.10 2.10 —138,445
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 209
ADMINISTRATIVE SERVICES
Budget Reconciliation
Positions Expenditures Revenues
Net
Printing and
Mailing
Services
Prior Year Budget 2.10 1,481,584 1,566,521 (84,937)
One-Time Prior Year Budget Adjustments
Supplemental Pension Trust Fund Contribution — (1,598) — (1,598)
General Liability Savings (One-Time FY 2019
Savings)— 372 — 372
Workers' Compensation Savings (One-Time FY
2019 Savings)— 1,311 — 1,311
One-Time Prior Year Budget Adjustments —85 —85
Adjustments to Costs of Ongoing Activities
Salary and Benefits Adjustments — 15,724 — 15,724
Proactive Contributions to City's Unfunded
Pension Liability — 5,230 — 5,230
FY 2019 Catch-Up Proactive Contributions to
City's Unfunded Pension Liability — 5,100 — 5,100
Return on Investments — — 1,900 (1,900)
Rents & Leases Expenditure Alignment — 5,175 — 5,175
Transfer to Technology Fund (TE-19001 City
Council Chambers Upgrade)— 9,200 — 9,200
General Fund Cost Allocation Plan — 83,470 — 83,470
General Liability Insurance Allocated Charges — (46) — (46)
Information Technology Allocated Charges — (453) — (453)
Printing & Mailing Services Allocated Charges — — 29,174 (29,174)
Workers' Compensation Allocated Charges — 787 — 787
Adjustments to Costs of Ongoing Activities —124,187 31,074 93,113
Total FY 2020 Base Budget 2.10 1,605,856 1,597,595 8,261
Budget Adjustments
1 Printing Services Non-Salary Expenses — 125,000 125,000 —
Total FY 2020 Adopted Budget 2.10 1,730,856 1,722,595 8,261
210 ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET
ADMINISTRATIVE SERVICES
Budget Adjustments
Budget Adjustments Positions Expenditures Revenues
Net
Printing and
Mailing
Services
1 Printing Services Non-Salary Expenses 0.00 125,000 125,000 0
This action aligns the non-salary budget to reflect increased costs associated with supplies and materials and contract
services for non-routine print jobs. In recent years, activity levels for non-routine print services requests, such as
booklets, brochures, and catalogs, from departments have increased while the budgeted expenses have consistently
stayed level. These costs are allocated to the departments using print services. Increases to both the expenses and
revenues will align funding with current usage levels. (Ongoing net costs: $0)
Performance Results
These budget increases are anticipated to align funding with current activity levels with minimal impact on the quality of
service delivery.
ADMINISTRATIVE SERVICES • CITY OF PALO ALTO FISCAL YEAR 2020 ADOPTED OPERATING BUDGET 211
1 of 1
TO: HONORABLE CITY COUNCIL
FROM: BRAD EGGLESTON, PUBLIC WORKS DIRECTOR
DATE: APRIL 6, 2020
SUBJECT: AGENDA ITEM NUMBER 6-Review the 2020 Sustainability and Climate Action
Plan (S/CAP) Update Process and Accept the 2020-2021 Sustainability Work Plan
(Continued From March 23, 2020)
Staff requests this item be moved to April 13, 2020 as there are no immediate deadlines for this
item.
_______________________ _________________________
Brad Eggleston Ed Shikada
Director, Public Works City Manager
6
DocuSign Envelope ID: 0876BF46-CD7C-4809-A634-76506564DFE1
1 of 1
TO: HONORABLE CITY COUNCIL
FROM: BRAD EGGLESTON, PUBLIC WORKS DIRECTOR
DATE: MARCH 23, 2020
SUBJECT: AGENDA ITEM NUMBER 7-Acceptance of the GreenWaste of Palo Alto
Environmental Report; Authorization to Negotiate and Execute an Amendment
to GreenWaste Contract Number C09124501 to Increase Compensation by up to
$950,000 to Process Mixed Paper Within the United States; and Approval of a
Budget Amendment in the Refuse Fund.
Staff is requesting this item be continued to a date uncertain to allow staff to assess the
impacts of recycling market disruptions resulting from the COVID-19 virus response on the
report’s recommendations.
_______________________ _________________________
Brad Eggleston Ed Shikada
Director, Public Works City Manager
7
DocuSign Envelope ID: 188DB205-4858-448F-AE95-C9488A3C7B3A
CITY OF PALO ALTO OFFICE OF THE CITY ATTORNEY
March 23, 2020
The Honorable City Council
Palo Alto, California
Adoption of an Urgency Ordinance and Regular Ordinance Establishing
a Temporary Moratorium on Residential Tenant Evictions for
Nonpayment of Rent Related to the COVID-19 State of Emergency; and
Discussion and Direction on Extending the Evictions Moratorium to
Businesses, Nonprofit Organizations, and Other Commercial Tenants
Recommendation
Staff recommends that the Council:
A. Adopt the Urgency Ordinance (Attachment A) Relating to a Temporary Moratorium on
Residential Evictions for Nonpayment of Rent Due to the COVID-19 State of Emergency.
A supermajority vote of 4/5 of Council Members present is required to adopt an urgency
ordinance which takes effect immediately upon adoption.
B. Adopt the Ordinance (Attachment B) Relating to a Temporary Moratorium on
Residential Evictions for Nonpayment of Rent Due to the COVID-19 State of Emergency.
A regular majority vote is required to approve this ordinance which becomes effective
30 days after the second reading and final adoption.
C. Discuss and provide direction to staff on potentially extending the temporary
moratorium to protect businesses, nonprofit organizations, and other commercial
tenants from eviction for nonpayment of rent due to the COVID-19 state of emergency.
Background
The rapid escalation in community transmission of the novel coronavirus referred to as COVID-
19 in Santa Clara County and the Greater San Francisco Bay Area has resulted in increasingly
more severe public health restrictions on residents and workers in an effort to enforce social
distancing and stem the spread of the virus. On March 16, 2020, the county public health
officers for the six Bay Area counties took the unprecedented and dramatic step of issuing
“shelter-in-place” orders directing residents to shelter at home for three weeks beginning the
following day. The order limits activity, travel, and business functions to only the most essential
needs.
Page 2
The economic damage to the city, region, and individuals will be substantial. As businesses
must close or reduce their hours to comply with public health directives and guidance, workers
will suffer significant wage loss due to lay-offs or reduced work hours. Others will lose income
while unable to work as a result of becoming sick with COVID-19, caring for a sick family
member, self-quarantining, or caring for minor children whose schools are closed. Many
tenants have experienced sudden income loss, and more severe income impacts are
anticipated in the coming weeks. The loss of wages caused by the effects of COVID-19 may
impact tenants’ ability to pay rent, leaving them vulnerable to eviction.
Recognizing the threat of homelessness as an immediate critical life and health concern, cities
in California and around the country have started to adopt temporary moratoria on residential
evictions for nonpayment of rent due to substantial income loss related to COVID-19. California
Governor Gavin Newsom issued an Executive Order on March 16 stating that local ordinances
to prohibit residential and commercial tenant evictions under these circumstances would not
be preempted by state law during the state of emergency. Following the Executive Order, cities
have very recently begun to consider eviction protections for businesses as well. On March 17,
the San Jose City Council adopted a moratorium on residential evictions and gave direction to
staff to develop an ordinance for commercial evictions; and San Francisco Mayor London Breed
announced a commercial tenant eviction moratorium, supplementing the moratorium on
residential evictions enacted the prior week.
Discussion
Two ordinances are presented for the Council’s consideration and adoption. They are
substantively the same, but the first is an urgency ordinance that would go into effect
immediately upon adoption and thus requires approval by a supermajority vote of 4/5 of
Council Members present. The second ordinance would be a regularly adopted ordinance that
will return to the Council for a second reading and would become effective on the 31st day after
final adoption; it only requires a simple majority vote for approval. If the urgency ordinance is
adopted, the temporary moratorium on residential evictions related to COVID-19 would
become effective on March 23, 2020.
Residential Tenant Evictions Prohibited
The proposed ordinances would prohibit evictions of residential tenants for nonpayment of full
rent due to substantial income loss related to COVID-19. This moratorium would remain in
effect for the duration of the local public health emergency proclaimed by the County.
Tenants would be required to document the COVID-19 related income loss to their landlord to
avail themselves of the ordinances’ protections. Tenants would remain responsible for
payment of the rent once they are able to pay or after the end of the local public health
emergency. They would have 120 days from the end of the state of emergency to make full
payment of the back rent.
Commercial Tenant Protections
Page 3
The proposed ordinances do not apply to commercial tenants who also may be suffering
substantial financial loss due to COVID-19. Governor Newsom’s Executive Order signed on
March 16, 2020 allows cities to regulate commercial evictions to protect commercial tenants
from eviction for nonpayment of rent if they are unable to pay as a result of substantial income
loss related to COVID-19. On March 17, 2020, San Francisco Mayor London Breed announced a
moratorium that will prevent any small to medium-sized business from being evicted due to a
loss of income related to loss of revenue or other economic impacts caused by the COVID-19
pandemic. This moratorium would apply to businesses with a license to operate in San
Francisco that have less than $25 million in annual gross receipts.
Staff seeks the Council’s input on whether it is interested in exploring a moratorium on
commercial evictions due to income loss related to COVID-19, including discussion or direction
regarding what types or sizes of business the moratorium should address. If the Council is
interested, it may direct the City Attorney to prepare an ordinance. Alternatively, or in
addition, the Council may also want to direct staff to do additional research and analysis or
conduct outreach to the business community prior to considering a moratorium ordinance on
commercial evictions. Because the Governor’s Executive Order was issued very recently —
Monday, March 16 — and the City organization is making substantial adjustments with the
County’s “shelter-in-place” directive taking effect this past Tuesday, March 17, there has not
been an opportunity to do any outreach or significant analysis.
Stakeholder Engagement
The staff report was posted to the City’s website on March 19, 2020. Staff has brought this
item to Council for its consideration on an accelerated schedule in an effort to be responsive to
the Council’s request at the immediately preceding Council meeting on March 16, 2020 and in
recognition of the urgent public health and safety consequences of residential tenant evictions
at the same time that Bay Area-wide “shelter-in-place” orders are in effect.
Environmental Review
The proposed ordinances are exempt from the California Environmental Quality Act (CEQA)
pursuant to Section 15601 of the CEQA Guidelines because it can be seen with certainty that
there is no possibility that the ordinances will have a significant effect on the environment.
ATTACHMENTS:
• ATT A - ORD Urgency Ordinance Prohibiting Residential Evictions Related to Coronavirus
(PDF)
• ATT B - ORD Ordinance Prohibiting Residential Evictions Related to Coronavirus (PDF)
Department Head: Molly Stump, City Attorney
Page 4
Not Yet Approved ATTACHMENT A
2020031701 1
Ordinance No. ____
Urgency Ordinance of the Council of the City of Palo Alto Relating to a
Temporary Moratorium on Residential Evictions for Nonpayment of Rent During
the COVID-19 State of Emergency and Declaring the Ordinance to be an
Emergency Measure to Take Effect Immediately Upon Adoption
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On March 4, 2020, California Governor Gavin Newsom declared a State of
Emergency due to the threat of Coronavirus Disease 2019 (“COVID-19”).
B. On March 9, 2020, Santa Clara County reported there were 43 cases of persons
testing positive for COVID-19, an increase of 23 confirmed cases in 5 days. The County also
experienced its first death due to the virus. Due to the increased threat and evidence of
community transmission of the virus, the County Public Health Officer issued an order
prohibiting mass gatherings attended by 1,000 persons until March 31, 2020.
C. On March 12, 2020, due to the escalating increase in cases and community
spread of COVID-19 in Santa Clara County, City Manager Ed Shikada, acting as the Director of
Emergency Services, issued a Proclamation of Local Emergency. The City Council ratified the
issuance of the proclamation on March 16, 2020.
D. On March 13, 2020, the County Public Health Officer issued a new order
mandating a countywide moratorium on gatherings of more than 100 persons and a conditional
countywide moratorium on gatherings between 35-100 persons. Most school districts
throughout the San Francisco Bay Area also announced closures for three weeks commencing
the following week on March 16, 2020.
E. On March 15, 2020, Governor Newsom directed the closing of all bars,
nightclubs, brewpubs, and wineries in the state, and called for residents age 65 and older to
self-isolate, to increase social distancing and protect persons most vulnerable to COVID-19. At
the same time, he emphasized the plight of the thousands of unsheltered persons in the state
as a top public health concern.
F. On March 16, 2020, the public health officers for the six Bay Area counties,
including Santa Clara County, took the unprecedented and dramatic step of issuing “shelter-in-
place” orders directing county residents to shelter at home for three weeks beginning March 17
(the “Shelter-in-Place Order” or “Order”). The Order limits activity, travel, and business
functions to only the most essential needs. The Order requires all businesses other than
“essential businesses”, as defined, to cease activities at facilities located in the county.
G. Following prior guidance and recommendations of public health officials and
experts over the past month, Californians in particularly impacted areas like Santa Clara County
Not Yet Approved ATTACHMENT A
2020031701 2
had already begun observing enhanced social distancing practices, including increased telework
on a voluntary basis. Under the more recent county health orders that became effective on
March 16, 2020, the vast majority of city residents and workers are not able to report to work
and many businesses have closed. As a result, restaurant, retail, tourism, and hospitality
business has significantly declined and will continue to decline with mandatory closures now in
effect for many businesses and most workers required to work remotely at home if they are
able to work at all. Workers have been impacted by lost wages and layoffs. Parents have had
to miss work to care for home-bound school-age children.
H. Many tenants have experienced sudden income loss, and further, more severe
income impacts are anticipated. The loss of wages caused by the effects of COVID-19 may
impact tenants’ ability to pay rent when due, leaving tenants vulnerable to eviction.
I. Providing tenants with short-term protection from eviction due to the inability to
pay rent will help avoid increasing the homeless population and stabilize the rental housing
market by reducing displacement. This need is even more acute while in the middle of a
growing pandemic with in-home sheltering mandated to reduce the community spread of
COVID-19, the threat of overburdening of the health care system and resulting fatalities.
J. During this state of emergency, and in the interests of protecting the public
health and preventing the transmission of the coronavirus, it is essential to avoid unnecessary
displacement of tenants. Prohibiting evictions on a temporary basis is needed until the spread
of the virus can be minimized and the emergency restrictions lifted.
K. An urgency ordinance that is effective immediately is necessary to avoid the
immediate threat to public peace, health, and safety as a failure to adopt this urgency
ordinance would result in the displacement of City residents and community members. The
directives from the State and the County to contain the spread of COVID-19 have resulted in
loss of business, furloughs, loss of wages, and lack of work for employees. To protect the public
health, safety, and welfare, the City must act to prevent the eviction of tenants who are unable
to pay rent due to wage losses caused by the effects of COVID-19. An emergency measure is
necessary to protect tenants from eviction for a temporary period.
SECTION 2. Title
This Ordinance shall be known as the “COVID-19 Eviction Moratorium Ordinance”.
SECTION 3. Definitions
A. “Affected Tenant” shall mean a Tenant who has, as a result of the COVID-19 pandemic,
or declaration of the County Public Health Officer, or other local, State or Federal
Authority, suffered a substantial loss in income through their employment as a result of
any of the following: (1) job loss; (2) a reduction of compensated hours of work; (3)
employer’s business closure; (4) missing work due to a minor child’s school closure; or
(5) other similarly-caused reason resulting in a loss of income due to COVID-19.
Not Yet Approved ATTACHMENT A
2020031701 3
B. “Covered Reason for Delayed Payment” includes, but is not limited to, any of the
following: (1) Tenant lost household income as a result of being sick with Coronavirus, or
caring for a household or family member who is sick with Coronavirus; (2) Tenant lost
household income as a result of a lay-off, loss of hours, or other income reduction
resulting from Coronavirus or the state of emergency; (3) Tenant lost household income
due to compliance with a recommendation from a government agency to stay home,
self-quarantine, or avoid congregating with others during the state of emergency.
D. “Landlord” means an owner, lessor, or sublessor who receives or is entitled to receive
rent for the use and occupancy of any Rental Unit, and the agent, representative, or
successor of any of the foregoing.
F. “Rental Unit” means a structure or the part of a structure that is used as a home,
residence, or sleeping place by one person who maintains a household or by two or
more persons who maintain a common household, and which household pays rent for
the use and occupancy for periods in excess of seven days whether or not the
residential use is a conforming use permitted under the Palo Alto Municipal Code.
G. “Tenant” means a residential tenant, subtenant, lessee, sublessee, or any other person
entitled by written or oral rental agreement, or by sufferance, to use or occupancy of a
Rental Unit.
SECTION 4. Applicability
This Ordinance applies to Affected Tenants in any Rental Unit and Landlords of Affected
Tenants. This Ordinance applies to nonpayment eviction notices and unlawful detainer actions
based on such notices, served or filed on or after the date of introduction of this Ordinance.
SECTION 5. Prohibited Conduct
A. During the term of this Ordinance, no Landlord shall take actions to evict a Tenant for
nonpayment of rent if the Tenant demonstrates that as a result of the COVID-19
pandemic, or declaration of the County Public Health Officer, or other local, State or
Federal Authority, including government-recommended precautions related to the
COVID-19 pandemic, the Tenant has suffered a substantial loss in income through their
employment as a result of any of the following: (1) job loss; (2) a reduction of
compensated hours of work; (3) employer’s business closure; (4) missing work due to a
minor child’s school closure; or (5) other similarly-caused reason resulting in a loss of
income due to COVID-19 (collectively referred to as “Covered Reasons for Delayed
Payment”).
B. A Landlord who knows that a Tenant cannot pay some or all of the rent temporarily for
the reasons set forth above, shall not serve a notice pursuant to Code of Civil Procedure
Section 1161(2), file or prosecute an unlawful detainer action based on a 3-day pay or
quit notice, or otherwise seek to evict for nonpayment of rent.
Not Yet Approved ATTACHMENT A
2020031701 4
C. A Landlord knows of the Tenant’s inability to pay rent within the meaning of this
Ordinance if the Tenant notifies the Landlord in writing of lost income and inability to
pay full rent, and provides documentation to support the claim. For purposes of this
section, “in writing” includes email or text communications to a Landlord or the
Landlord’s representative with whom the Tenant has previously corresponded by email
or text. Any medical or financial information provided to the Landlord shall be held in
confidence, and only used for evaluating the Tenant’s claim or enforcing this provision.
SECTION 6. Continuing Obligation to Pay Rent; 120-Day Payback Period
A. Nothing in this Ordinance shall relieve the Tenant of liability for the unpaid rent, which
the Landlord may seek after expiration of the local public health emergency declared by
the Santa Clara County Board of Supervisors on February 10, 2020 (the “state of
emergency”). A Landlord may not charge or collect a late fee for rent that is delayed for
the reasons stated in this Ordinance.
B. Tenants who were afforded eviction protection under this Ordinance shall have up to
120 days after the County of Santa Clara proclaims the termination of the state of
emergency, to pay their Landlord all unpaid rent. During that 120-day period, the
protections against eviction in this Ordinance apply for such Tenants.
SECTION 7. Affirmative Defense to Eviction; Penalties and Remedies
A. Affirmative Defense. Each Landlord that seeks to terminate a tenancy of an Affected
Tenant must comply with this Ordinance. Non-compliance with any applicable provision
of this Ordinance shall constitute an affirmative defense for an Affected Tenant against
any unlawful detainer action under California Code of Civil Procedure Section 1161, as
amended.
To assert this affirmative defense, an Affected Tenant shall have notified their Landlord
prior to the Notice of Termination expiring that they are an Affected Tenant and
establish that, as a as a result of the COVID-19 pandemic or declaration of County Public
Health Officer, or other State or Federal Authority, suffered substantial loss of income
caused by any of the following: (1) job loss; (2) a reduction of compensated hours of
work; (3) work closure; (4) missing work due to a minor child’s school closure; or (5)
other similarly-caused reason resulting in a loss of income due to COVID-19, and has
provided written documentation or other objectively verifiable proof of the same. The
following documents shall create a rebuttable presumption that the Affected Tenant has
met the documentation requirement set forth above, however, they are not the
exclusive form of documentation demonstrating impacts to income due to COVID-19:
1. Letter from employer citing COVID-19 as a reason for reduced work hours
or termination;
2. Employer paycheck stubs;
3. Bank statements.
Not Yet Approved ATTACHMENT A
2020031701 5
B. Civil Remedies.
1. Any Landlord that fail(s) to comply with this Ordinance may be subject to civil
proceedings for displacement of Affected Tenant(s) initiated by the City or the
Affected Tenant Household for actual and exemplary damages.
2. Whoever is found to have violated this Ordinance shall be subject to appropriate
injunctive relief and shall be liable for damages, costs and reasonable attorneys'
fees.
3. Treble damages shall be awarded for a Landlord's willful failure to comply with
the obligations established under this Ordinance.
4. Nothing herein shall be deemed to interfere with the right of a Landlord to file
an action against a Tenant or non-Tenant third party for the damage done to said
Landlord's property. Nothing herein is intended to limit the damages recoverable
by any party through a private action.
SECTION 8. Severability
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held
to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such
decision shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have passed this Ordinance and each and every section,
subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard
to whether any portion of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 9. Environmental Review
The Council finds that the Ordinance is exempt from the California Environmental Quality Act
(CEQA) pursuant to Section 15601 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 10. Effective Date
This Urgency Ordinance shall be effective immediately upon adoption and shall remain in effect
until the regular non-urgency Ordinance No. ____ considered at the same time and first
approved by the Council on March 23, 2020 becomes effective.
SECTION 11. Avoidance of Inconsistencies
To avoid inconsistencies, the City Manager may suspend any part of this Ordinance in the event
that the President of the United States, United States Congress, Governor of the State of
California, or California State Legislature adopts any order or legislation that is inconsistent with
the actions directed in the Ordinance.
Not Yet Approved ATTACHMENT A
2020031701 6
SECTION 12. Emergency Declaration
The Council declares this Ordinance to be an emergency measure, to take effect immediately
upon adoption pursuant to Palo Alto Municipal Code Section 2.04.270(d). The facts constituting
the emergency are stated in Section 1 of this Ordinance.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services
Not Yet Approved ATTACHMENT B
2020031801 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Relating to a Temporary
Moratorium on Residential Evictions for Nonpayment of Rent During
the COVID-19 State of Emergency
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On March 4, 2020, California Governor Gavin Newsom declared a State of
Emergency due to the threat of Coronavirus Disease 2019 (“COVID-19”).
B. On March 9, 2020, Santa Clara County reported there were 43 cases of persons
testing positive for COVID-19, an increase of 23 confirmed cases in 5 days. The County also
experienced its first death due to the virus. Due to the increased threat and evidence of
community transmission of the virus, the County Public Health Officer issued an order
prohibiting mass gatherings attended by 1,000 persons until March 31, 2020.
C. On March 12, 2020, due to the escalating increase in cases and community
spread of COVID-19 in Santa Clara County, City Manager Ed Shikada, acting as the Director of
Emergency Services, issued a Proclamation of Local Emergency. The City Council ratified the
issuance of the proclamation on March 16, 2020.
D. On March 13, 2020, the County Public Health Officer issued a new order
mandating a countywide moratorium on gatherings of more than 100 persons and a conditional
countywide moratorium on gatherings between 35-100 persons. Most school districts
throughout the San Francisco Bay Area also announced closures for three weeks commencing
the following week on March 16, 2020.
E. On March 15, 2020, Governor Newsom directed the closing of all bars,
nightclubs, brewpubs, and wineries in the state, and called for residents age 65 and older to
self-isolate, to increase social distancing and protect persons most vulnerable to COVID-19. At
the same time, he emphasized the plight of the thousands of unsheltered persons in the state
as a top public health concern.
F. On March 16, 2020, the public health officers for the six Bay Area counties,
including Santa Clara County, took the unprecedented and dramatic step of issuing “shelter-in-
place” orders directing county residents to shelter at home for three weeks beginning March 17
(the “Shelter-in-Place Order” or “Order”). The Order limits activity, travel, and business
functions to only the most essential needs. The Order requires all businesses other than
“essential businesses”, as defined, to cease activities at facilities located in the county.
G. Following prior guidance and recommendations of public health officials and
experts over the past month, Californians in particularly impacted areas like Santa Clara County
had already begun observing enhanced social distancing practices, including increased telework
Not Yet Approved ATTACHMENT B
2020031801 2
on a voluntary basis. Under the more recent county health orders that became effective on
March 16, 2020, the vast majority of city residents and workers are not able to report to work
and many businesses have closed. As a result, restaurant, retail, tourism, and hospitality
business has significantly declined and will continue to decline with mandatory closures now in
effect for many businesses and most workers required to work remotely at home if they are
able to work at all. Workers have been impacted by lost wages and layoffs. Parents have had
to miss work to care for home-bound school-age children.
H. Many tenants have experienced sudden income loss, and further, more severe
income impacts are anticipated. The loss of wages caused by the effects of COVID-19 may
impact tenants’ ability to pay rent when due, leaving tenants vulnerable to eviction.
I. Providing tenants with short-term protection from eviction due to the inability to
pay rent will help avoid increasing the homeless population and stabilize the rental housing
market by reducing displacement. This need is even more acute while in the middle of a
growing pandemic with in-home sheltering mandated to reduce the community spread of
COVID-19, the threat of overburdening of the health care system and resulting fatalities.
J. During this state of emergency, and in the interests of protecting the public
health and preventing the transmission of the coronavirus, it is essential to avoid unnecessary
displacement of tenants. Prohibiting evictions on a temporary basis is needed until the spread
of the virus can be minimized and the emergency restrictions lifted.
SECTION 2. Title
This Ordinance shall be known as the “COVID-19 Eviction Moratorium Ordinance”.
SECTION 3. Definitions
A. “Affected Tenant” shall mean a Tenant who has, as a result of the COVID-19 pandemic,
or declaration of the County Public Health Officer, or other local, State or Federal
Authority, suffered a substantial loss in income through their employment as a result of
any of the following: (1) job loss; (2) a reduction of compensated hours of work; (3)
employer’s business closure; (4) missing work due to a minor child’s school closure; or
(5) other similarly-caused reason resulting in a loss of income due to COVID-19.
B. “Covered Reason for Delayed Payment” includes, but is not limited to, any of the
following: (1) Tenant lost household income as a result of being sick with Coronavirus, or
caring for a household or family member who is sick with Coronavirus; (2) Tenant lost
household income as a result of a lay-off, loss of hours, or other income reduction
resulting from Coronavirus or the state of emergency; (3) Tenant lost household income
due to compliance with a recommendation from a government agency to stay home,
self-quarantine, or avoid congregating with others during the state of emergency.
D. “Landlord” means an owner, lessor, or sublessor who receives or is entitled to receive
rent for the use and occupancy of any Rental Unit, and the agent, representative, or
successor of any of the foregoing.
Not Yet Approved ATTACHMENT B
2020031801 3
F. “Rental Unit” means a structure or the part of a structure that is used as a home,
residence, or sleeping place by one person who maintains a household or by two or
more persons who maintain a common household, and which household pays rent for
the use and occupancy for periods in excess of seven days whether or not the
residential use is a conforming use permitted under the Palo Alto Municipal Code.
G. “Tenant” means a residential tenant, subtenant, lessee, sublessee, or any other person
entitled by written or oral rental agreement, or by sufferance, to use or occupancy of a
Rental Unit.
SECTION 4. Applicability
This Ordinance applies to Affected Tenants in any Rental Unit and Landlords of Affected
Tenants. This Ordinance applies to nonpayment eviction notices and unlawful detainer actions
based on such notices, served or filed on or after the date of introduction of this Ordinance.
SECTION 5. Prohibited Conduct
A. During the term of this Ordinance, no Landlord shall take actions to evict a Tenant for
nonpayment of rent if the Tenant demonstrates that as a result of the COVID-19
pandemic, or declaration of the County Public Health Officer, or other local, State or
Federal Authority, including government-recommended precautions related to the
COVID-19 pandemic, the Tenant has suffered a substantial loss in income through their
employment as a result of any of the following: (1) job loss; (2) a reduction of
compensated hours of work; (3) employer’s business closure; (4) missing work due to a
minor child’s school closure; or (5) other similarly-caused reason resulting in a loss of
income due to COVID-19 (collectively referred to as “Covered Reasons for Delayed
Payment”).
B. A Landlord who knows that a Tenant cannot pay some or all of the rent temporarily for
the reasons set forth above, shall not serve a notice pursuant to Code of Civil Procedure
Section 1161(2), file or prosecute an unlawful detainer action based on a 3-day pay or
quit notice, or otherwise seek to evict for nonpayment of rent.
C. A Landlord knows of the Tenant’s inability to pay rent within the meaning of this
Ordinance if the Tenant notifies the Landlord in writing of lost income and inability to
pay full rent, and provides documentation to support the claim. For purposes of this
section, “in writing” includes email or text communications to a Landlord or the
Landlord’s representative with whom the Tenant has previously corresponded by email
or text. Any medical or financial information provided to the Landlord shall be held in
confidence, and only used for evaluating the Tenant’s claim or enforcing this provision.
SECTION 6. Continuing Obligation to Pay Rent; 120-Day Payback Period
A. Nothing in this Ordinance shall relieve the Tenant of liability for the unpaid rent, which
the Landlord may seek after expiration of the local public health emergency declared by
Not Yet Approved ATTACHMENT B
2020031801 4
the Santa Clara County Board of Supervisors on February 10, 2020 (the “state of
emergency”). A Landlord may not charge or collect a late fee for rent that is delayed for
the reasons stated in this Ordinance.
B. Tenants who were afforded eviction protection under this Ordinance shall have up to
120 days after the County of Santa Clara proclaims the termination of the state of
emergency, to pay their Landlord all unpaid rent. During that 120-day period, the
protections against eviction in this Ordinance apply for such Tenants.
SECTION 7. Affirmative Defense to Eviction; Penalties and Remedies
A. Affirmative Defense. Each Landlord that seeks to terminate a tenancy of an Affected
Tenant must comply with this Ordinance. Non-compliance with any applicable provision
of this Ordinance shall constitute an affirmative defense for an Affected Tenant against
any unlawful detainer action under California Code of Civil Procedure Section 1161, as
amended.
To assert this affirmative defense, an Affected Tenant shall have notified their Landlord
prior to the Notice of Termination expiring that they are an Affected Tenant and
establish that, as a as a result of the COVID-19 pandemic or declaration of County Public
Health Officer, or other State or Federal Authority, suffered substantial loss of income
caused by any of the following: (1) job loss; (2) a reduction of compensated hours of
work; (3) work closure; (4) missing work due to a minor child’s school closure; or (5)
other similarly-caused reason resulting in a loss of income due to COVID-19, and has
provided written documentation or other objectively verifiable proof of the same. The
following documents shall create a rebuttable presumption that the Affected Tenant has
met the documentation requirement set forth above, however, they are not the
exclusive form of documentation demonstrating impacts to income due to COVID-19:
1. Letter from employer citing COVID-19 as a reason for reduced work hours
or termination;
2. Employer paycheck stubs;
3. Bank statements.
B. Civil Remedies.
1. Any Landlord that fail(s) to comply with this Ordinance may be subject to civil
proceedings for displacement of Affected Tenant(s) initiated by the City or the
Affected Tenant Household for actual and exemplary damages.
2. Whoever is found to have violated this Ordinance shall be subject to appropriate
injunctive relief and shall be liable for damages, costs and reasonable attorneys'
fees.
3. Treble damages shall be awarded for a Landlord's willful failure to comply with
the obligations established under this Ordinance.
Not Yet Approved ATTACHMENT B
2020031801 5
4. Nothing herein shall be deemed to interfere with the right of a Landlord to file
an action against a Tenant or non-Tenant third party for the damage done to said
Landlord's property. Nothing herein is intended to limit the damages recoverable
by any party through a private action.
SECTION 8. Severability
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held
to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such
decision shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have passed this Ordinance and each and every section,
subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard
to whether any portion of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 9. Environmental Review
The Council finds that the Ordinance is exempt from the California Environmental Quality Act
(CEQA) pursuant to Section 15601 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 10. Effective Date
This Ordinance shall be effective on the thirty-first day after the date of its adoption and shall
remain in effect until the 121st day after the County of Santa Clara proclaims the termination of
the local public health emergency declared on February 10, 2020, as extended.
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Not Yet Approved ATTACHMENT B
2020031801 6
SECTION 11. Avoidance of Inconsistencies
To avoid inconsistencies, the City Manager may suspend any part of this Ordinance in the event
that the President of the United States, United States Congress, Governor of the State of
California, or California State Legislature adopts any order or legislation that is inconsistent with
the actions directed in the Ordinance.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services
701-32
At-Place Memorandum
for Agenda Item #8
March 23, 2020
City Council Meeting
Not Yet Approved ATTACHMENT A
202003231701 1
Ordinance No. ____
Urgency Ordinance of the Council of the City of Palo Alto Relating to a
Temporary Moratorium on Residential Evictions for Nonpayment of Rent During
the COVID-19 State of Emergency and Declaring the Ordinance to be an
Emergency Measure to Take Effect Immediately Upon Adoption
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On March 4, 2020, California Governor Gavin Newsom declared a State of
Emergency due to the threat of Coronavirus Disease 2019 (“COVID-19”).
B. On March 9, 2020, Santa Clara County reported there were 43 cases of persons
testing positive for COVID-19, an increase of 23 confirmed cases in 5 days. The County also
experienced its first death due to the virus. Due to the increased threat and evidence of
community transmission of the virus, the County Public Health Officer issued an order
prohibiting mass gatherings attended by 1,000 persons until March 31, 2020.
C. On March 12, 2020, due to the escalating increase in cases and community
spread of COVID-19 in Santa Clara County, City Manager Ed Shikada, acting as the Director of
Emergency Services, issued a Proclamation of Local Emergency. The City Council ratified the
issuance of the proclamation on March 16, 2020.
D. On March 13, 2020, the County Public Health Officer issued a new order
mandating a countywide moratorium on gatherings of more than 100 persons and a conditional
countywide moratorium on gatherings between 35-100 persons. Most school districts
throughout the San Francisco Bay Area also announced closures for three weeks commencing
the following week on March 16, 2020.
E. On March 15, 2020, Governor Newsom directed the closing of all bars,
nightclubs, brewpubs, and wineries in the state, and called for residents age 65 and older to
self-isolate, to increase social distancing and protect persons most vulnerable to COVID-19. At
the same time, he emphasized the plight of the thousands of unsheltered persons in the state
as a top public health concern.
F. On March 16, 2020, the public health officers for the six Bay Area counties,
including Santa Clara County, took the unprecedented and dramatic step of issuing “shelter-in-
place” orders directing county residents to shelter at home for three weeks beginning March 17
(the “Shelter-in-Place Order” or “Order”). The Order limits activity, travel, and business
functions to only the most essential needs. The Order requires all businesses other than
“essential businesses”, as defined, to cease activities at facilities located in the county.
G. Following prior guidance and recommendations of public health officials and
experts over the past month, Californians in particularly impacted areas like Santa Clara County
Not Yet Approved ATTACHMENT A
202003231701 2
had already begun observing enhanced social distancing practices, including increased telework
on a voluntary basis. Under the more recent county health orders that became effective on
March 16, 2020, the vast majority of city residents and workers are not able to report to work
and many businesses have closed. As a result, restaurant, retail, tourism, and hospitality
business has significantly declined and will continue to decline with mandatory closures now in
effect for many businesses and most workers required to work remotely at home if they are
able to work at all. Workers have been impacted by lost wages and layoffs. Parents have had
to miss work to care for home-bound school-age children.
H. Many tenants have experienced sudden income loss, and further, more severe
income impacts are anticipated. The loss of wages caused by the effects of COVID-19 may
impact tenants’ ability to pay rent when due, leaving tenants vulnerable to eviction.
I. Providing tenants with short-term protection from eviction due to the inability to
pay rent will help avoid increasing the homeless population and stabilize the rental housing
market by reducing displacement. This need is even more acute while in the middle of a
growing pandemic with in-home sheltering mandated to reduce the community spread of
COVID-19, the threat of overburdening of the health care system and resulting fatalities.
J. During this state of emergency, and in the interests of protecting the public
health and preventing the transmission of the coronavirus, it is essential to avoid unnecessary
displacement of tenants. Prohibiting evictions on a temporary basis is needed until the spread
of the virus can be minimized and the emergency restrictions lifted.
K. An urgency ordinance that is effective immediately is necessary to avoid the
immediate threat to public peace, health, and safety as a failure to adopt this urgency
ordinance would result in the displacement of City residents and community members. The
directives from the State and the County to contain the spread of COVID-19 have resulted in
loss of business, furloughs, loss of wages, and lack of work for employees. To protect the public
health, safety, and welfare, the City must act to prevent the eviction of tenants who are unable
to pay rent due to wage losses caused by the effects of COVID-19. An emergency measure is
necessary to protect tenants from eviction for a temporary period.
SECTION 2. Title
This Ordinance shall be known as the “COVID-19 Eviction Moratorium Ordinance”.
SECTION 3. Definitions
A. “Affected Tenant” shall mean a Tenant who has, as a result of the COVID-19 pandemic,
or declaration of the County Public Health Officer, or other local, State or Federal
Authority, suffered a substantial loss in income through their employment as a result of
any of the following: (1) job loss; (2) a reduction of compensated hours of work; (3)
employer’s business closure; (4) missing work due to a minor child’s school closure; or
(5) other similarly-caused reason resulting in a loss of income due to COVID-19.
Not Yet Approved ATTACHMENT A
202003231701 3
B. “Covered Reason for Delayed Payment” includes, but is not limited to, any of the
following: (1) Tenant lost household income as a result of being sick with Coronavirus, or
caring for a household or family member who is sick with Coronavirus; (2) Tenant lost
household income as a result of a lay-off, loss of hours, or other income reduction
resulting from Coronavirus or the state of emergency; (3) Tenant lost household income
due to compliance with a recommendation from a government agency to stay home,
self-quarantine, or avoid congregating with others during the state of emergency.
D. “Landlord” means an owner, lessor, or sublessor who receives or is entitled to receive
rent for the use and occupancy of any Rental Unit, and the agent, representative, or
successor of any of the foregoing.
F. “Rental Unit” means a structure or the part of a structure that is used as a home,
residence, or sleeping place by one person who maintains a household or by two or
more persons who maintain a common household, and which household pays rent for
the use and occupancy for periods in excess of seven days whether or not the
residential use is a conforming use permitted under the Palo Alto Municipal Code.
G. “Tenant” means a residential tenant, subtenant, lessee, sublessee, or any other person
entitled by written or oral rental agreement, or by sufferance, to use or occupancy of a
Rental Unit.
SECTION 4. Applicability
This Ordinance applies to Affected Tenants in any Rental Unit and Landlords of Affected
Tenants. This Ordinance applies to nonpayment eviction notices and unlawful detainer actions
based on such notices, served or filed on or after the date of introduction of this Ordinance.
SECTION 5. Prohibited Conduct
A. During the term of this Ordinance, no Landlord shall take actions to evict a Tenant for
nonpayment of rent if the Tenant demonstrates that as a result of the COVID-19
pandemic, or declaration of the County Public Health Officer, or other local, State or
Federal Authority, including government-recommended precautions related to the
COVID-19 pandemic, the Tenant has suffered a substantial loss in income through their
employment as a result of any of the following: (1) job loss; (2) a reduction of
compensated hours of work; (3) employer’s business closure; (4) missing work due to a
minor child’s school closure; or (5) other similarly-caused reason resulting in a loss of
income due to COVID-19 (collectively referred to as “Covered Reasons for Delayed
Payment”).
B. A Landlord who knows that a Tenant cannot pay some or all of the rent temporarily for
the reasons set forth above, shall not serve a notice pursuant to Code of Civil Procedure
Section 1161(2), file or prosecute an unlawful detainer action based on a 3-day pay or
quit notice, or otherwise seek to evict for nonpayment of rent.
Not Yet Approved ATTACHMENT A
202003231701 4
C. A Landlord knows of the Tenant’s inability to pay rent within the meaning of this
Ordinance if the Tenant notifies the Landlord in writing of lost income and inability to
pay full rent, and provides documentation to support the claim. For purposes of this
section, “in writing” includes email or text communications to a Landlord or the
Landlord’s representative with whom the Tenant has previously corresponded by email
or text. Any medical or financial information provided to the Landlord shall be held in
confidence, and only used for evaluating the Tenant’s claim or enforcing this provision.
SECTION 6. Continuing Obligation to Pay Rent; 120-Day Payback Period
A. Nothing in this Ordinance shall relieve the Tenant of liability for the unpaid rent, which
the Landlord may seek after expiration of the local public healthProclamation of Local
Eemergency ratified and declared by the Santa Clara County Board of SupervisorsCity
Council on February 10March 23, 2020 (the “state of emergency”). A Landlord may not
charge or collect interest, a late fee, or penalty for rent that is delayed for the reasons
stated in this Ordinance.
B. Tenants who were afforded eviction protection under this Ordinance shall have up to
120 days after the County of Santa ClaraCity of Palo Alto proclaims the termination of
the state of emergency, to pay their Landlord all unpaid rent. During that 120-day
period, the protections against eviction in this Ordinance apply for such Tenants.
SECTION 7. Affirmative Defense to Eviction; Penalties and Remedies
A. Affirmative Defense. Each Landlord that seeks to terminate a tenancy of an Affected
Tenant must comply with this Ordinance. Non-compliance with any applicable provision
of this Ordinance shall constitute an affirmative defense for an Affected Tenant against
any unlawful detainer action under California Code of Civil Procedure Section 1161, as
amended.
To assert this affirmative defense, an Affected Tenant shall have notified their Landlord
prior to the Notice of Termination expiring that they are an Affected Tenant and
establish that, as a as a result of the COVID-19 pandemic or declaration of County Public
Health Officer, or other State or Federal Authority, suffered substantial loss of income
caused by any of the following: (1) job loss; (2) a reduction of compensated hours of
work; (3) work closure; (4) missing work due to a minor child’s school closure; or (5)
other similarly-caused reason resulting in a loss of income due to COVID-19, and has
provided written documentation or other objectively verifiable proof of the same. The
following documents shall create a rebuttable presumption that the Affected Tenant has
met the documentation requirement set forth above, however, they are not the
exclusive form of documentation demonstrating impacts to income due to COVID-19:
1. Letter from employer citing COVID-19 as a reason for reduced work hours
or termination;
2. Employer paycheck stubs;
3. Bank statements.
Not Yet Approved ATTACHMENT A
202003231701 5
B. Civil Remedies.
1. Any Landlord that fail(s) to comply with this Ordinance may be subject to civil
proceedings for displacement of Affected Tenant(s) initiated by the City or the
Affected Tenant Household for actual and exemplary damages.
2. Whoever is found to have violated this Ordinance shall be subject to appropriate
injunctive relief and shall be liable for damages, costs and reasonable attorneys'
fees.
3. Treble damages shall be awarded for a Landlord's willful failure to comply with
the obligations established under this Ordinance.
4. Nothing herein shall be deemed to interfere with the right of a Landlord to file
an action against a Tenant or non-Tenant third party for the damage done to said
Landlord's property. Nothing herein is intended to limit the damages recoverable
by any party through a private action.
SECTION 8. Severability
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held
to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such
decision shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have passed this Ordinance and each and every section,
subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard
to whether any portion of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 9. Environmental Review
The Council finds that the Ordinance is exempt from the California Environmental Quality Act
(CEQA) pursuant to Section 15601 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 10. Effective Date
This Urgency Ordinance shall be effective immediately upon adoption and shall remain in effect
until the regular non-urgency Ordinance No. ____ considered at the same time and first
approved by the Council on March 23, 2020 becomes effective.
SECTION 11. Avoidance of Inconsistencies
To avoid inconsistencies, the City Manager may suspend any part of this Ordinance in the event
that the President of the United States, United States Congress, Governor of the State of
California, or California State Legislature adopts any order or legislation that is inconsistent with
the actions directed in the Ordinance.
Not Yet Approved ATTACHMENT A
202003231701 6
SECTION 12. Emergency Declaration
The Council declares this Ordinance to be an emergency measure, to take effect immediately
upon adoption pursuant to Palo Alto Municipal Code Section 2.04.270(d). The facts constituting
the emergency are stated in Section 1 of this Ordinance.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services
Not Yet Approved ATTACHMENT B
20200323021801 1
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Relating to a Temporary
Moratorium on Residential Evictions for Nonpayment of Rent During
the COVID-19 State of Emergency
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On March 4, 2020, California Governor Gavin Newsom declared a State of
Emergency due to the threat of Coronavirus Disease 2019 (“COVID-19”).
B. On March 9, 2020, Santa Clara County reported there were 43 cases of persons
testing positive for COVID-19, an increase of 23 confirmed cases in 5 days. The County also
experienced its first death due to the virus. Due to the increased threat and evidence of
community transmission of the virus, the County Public Health Officer issued an order
prohibiting mass gatherings attended by 1,000 persons until March 31, 2020.
C. On March 12, 2020, due to the escalating increase in cases and community
spread of COVID-19 in Santa Clara County, City Manager Ed Shikada, acting as the Director of
Emergency Services, issued a Proclamation of Local Emergency. The City Council ratified the
issuance of the proclamation on March 16, 2020.
D. On March 13, 2020, the County Public Health Officer issued a new order
mandating a countywide moratorium on gatherings of more than 100 persons and a conditional
countywide moratorium on gatherings between 35-100 persons. Most school districts
throughout the San Francisco Bay Area also announced closures for three weeks commencing
the following week on March 16, 2020.
E. On March 15, 2020, Governor Newsom directed the closing of all bars,
nightclubs, brewpubs, and wineries in the state, and called for residents age 65 and older to
self-isolate, to increase social distancing and protect persons most vulnerable to COVID-19. At
the same time, he emphasized the plight of the thousands of unsheltered persons in the state
as a top public health concern.
F. On March 16, 2020, the public health officers for the six Bay Area counties,
including Santa Clara County, took the unprecedented and dramatic step of issuing “shelter-in-
place” orders directing county residents to shelter at home for three weeks beginning March 17
(the “Shelter-in-Place Order” or “Order”). The Order limits activity, travel, and business
functions to only the most essential needs. The Order requires all businesses other than
“essential businesses”, as defined, to cease activities at facilities located in the county.
G. Following prior guidance and recommendations of public health officials and
experts over the past month, Californians in particularly impacted areas like Santa Clara County
had already begun observing enhanced social distancing practices, including increased telework
Not Yet Approved ATTACHMENT B
20200323021801 2
on a voluntary basis. Under the more recent county health orders that became effective on
March 16, 2020, the vast majority of city residents and workers are not able to report to work
and many businesses have closed. As a result, restaurant, retail, tourism, and hospitality
business has significantly declined and will continue to decline with mandatory closures now in
effect for many businesses and most workers required to work remotely at home if they are
able to work at all. Workers have been impacted by lost wages and layoffs. Parents have had
to miss work to care for home-bound school-age children.
H. Many tenants have experienced sudden income loss, and further, more severe
income impacts are anticipated. The loss of wages caused by the effects of COVID-19 may
impact tenants’ ability to pay rent when due, leaving tenants vulnerable to eviction.
I. Providing tenants with short-term protection from eviction due to the inability to
pay rent will help avoid increasing the homeless population and stabilize the rental housing
market by reducing displacement. This need is even more acute while in the middle of a
growing pandemic with in-home sheltering mandated to reduce the community spread of
COVID-19, the threat of overburdening of the health care system and resulting fatalities.
J. During this state of emergency, and in the interests of protecting the public
health and preventing the transmission of the coronavirus, it is essential to avoid unnecessary
displacement of tenants. Prohibiting evictions on a temporary basis is needed until the spread
of the virus can be minimized and the emergency restrictions lifted.
SECTION 2. Title
This Ordinance shall be known as the “COVID-19 Eviction Moratorium Ordinance”.
SECTION 3. Definitions
A. “Affected Tenant” shall mean a Tenant who has, as a result of the COVID-19 pandemic,
or declaration of the County Public Health Officer, or other local, State or Federal
Authority, suffered a substantial loss in income through their employment as a result of
any of the following: (1) job loss; (2) a reduction of compensated hours of work; (3)
employer’s business closure; (4) missing work due to a minor child’s school closure; or
(5) other similarly-caused reason resulting in a loss of income due to COVID-19.
B. “Covered Reason for Delayed Payment” includes, but is not limited to, any of the
following: (1) Tenant lost household income as a result of being sick with Coronavirus, or
caring for a household or family member who is sick with Coronavirus; (2) Tenant lost
household income as a result of a lay-off, loss of hours, or other income reduction
resulting from Coronavirus or the state of emergency; (3) Tenant lost household income
due to compliance with a recommendation from a government agency to stay home,
self-quarantine, or avoid congregating with others during the state of emergency.
D. “Landlord” means an owner, lessor, or sublessor who receives or is entitled to receive
rent for the use and occupancy of any Rental Unit, and the agent, representative, or
successor of any of the foregoing.
Not Yet Approved ATTACHMENT B
20200323021801 3
F. “Rental Unit” means a structure or the part of a structure that is used as a home,
residence, or sleeping place by one person who maintains a household or by two or
more persons who maintain a common household, and which household pays rent for
the use and occupancy for periods in excess of seven days whether or not the
residential use is a conforming use permitted under the Palo Alto Municipal Code.
G. “Tenant” means a residential tenant, subtenant, lessee, sublessee, or any other person
entitled by written or oral rental agreement, or by sufferance, to use or occupancy of a
Rental Unit.
SECTION 4. Applicability
This Ordinance applies to Affected Tenants in any Rental Unit and Landlords of Affected
Tenants. This Ordinance applies to nonpayment eviction notices and unlawful detainer actions
based on such notices, served or filed on or after the date of introduction of this Ordinance.
SECTION 5. Prohibited Conduct
A. During the term of this Ordinance, no Landlord shall take actions to evict a Tenant for
nonpayment of rent if the Tenant demonstrates that as a result of the COVID-19
pandemic, or declaration of the County Public Health Officer, or other local, State or
Federal Authority, including government-recommended precautions related to the
COVID-19 pandemic, the Tenant has suffered a substantial loss in income through their
employment as a result of any of the following: (1) job loss; (2) a reduction of
compensated hours of work; (3) employer’s business closure; (4) missing work due to a
minor child’s school closure; or (5) other similarly-caused reason resulting in a loss of
income due to COVID-19 (collectively referred to as “Covered Reasons for Delayed
Payment”).
B. A Landlord who knows that a Tenant cannot pay some or all of the rent temporarily for
the reasons set forth above, shall not serve a notice pursuant to Code of Civil Procedure
Section 1161(2), file or prosecute an unlawful detainer action based on a 3-day pay or
quit notice, or otherwise seek to evict for nonpayment of rent.
C. A Landlord knows of the Tenant’s inability to pay rent within the meaning of this
Ordinance if the Tenant notifies the Landlord in writing of lost income and inability to
pay full rent, and provides documentation to support the claim. For purposes of this
section, “in writing” includes email or text communications to a Landlord or the
Landlord’s representative with whom the Tenant has previously corresponded by email
or text. Any medical or financial information provided to the Landlord shall be held in
confidence, and only used for evaluating the Tenant’s claim or enforcing this provision.
SECTION 6. Continuing Obligation to Pay Rent; 120-Day Payback Period
A. Nothing in this Ordinance shall relieve the Tenant of liability for the unpaid rent, which
the Landlord may seek after expiration of the Proclamation of Local Emergency ratified
Not Yet Approved ATTACHMENT B
20200323021801 4
and local public health emergency declared by the Santa Clara County Board of
SupervisorsCity Council on February 10March 23, 2020 (the “state of emergency”). A
Landlord may not charge or collect interest, a late fee, or penalty for rent that is delayed
for the reasons stated in this Ordinance.
B. Tenants who were afforded eviction protection under this Ordinance shall have up to
120 days after the County of Santa ClaraCity of Palo Alto proclaims the termination of
the state of emergency, to pay their Landlord all unpaid rent. During that 120-day
period, the protections against eviction in this Ordinance apply for such Tenants.
SECTION 7. Affirmative Defense to Eviction; Penalties and Remedies
A. Affirmative Defense. Each Landlord that seeks to terminate a tenancy of an Affected
Tenant must comply with this Ordinance. Non-compliance with any applicable provision
of this Ordinance shall constitute an affirmative defense for an Affected Tenant against
any unlawful detainer action under California Code of Civil Procedure Section 1161, as
amended.
To assert this affirmative defense, an Affected Tenant shall have notified their Landlord
prior to the Notice of Termination expiring that they are an Affected Tenant and
establish that, as a as a result of the COVID-19 pandemic or declaration of County Public
Health Officer, or other State or Federal Authority, suffered substantial loss of income
caused by any of the following: (1) job loss; (2) a reduction of compensated hours of
work; (3) work closure; (4) missing work due to a minor child’s school closure; or (5)
other similarly-caused reason resulting in a loss of income due to COVID-19, and has
provided written documentation or other objectively verifiable proof of the same. The
following documents shall create a rebuttable presumption that the Affected Tenant has
met the documentation requirement set forth above, however, they are not the
exclusive form of documentation demonstrating impacts to income due to COVID-19:
1. Letter from employer citing COVID-19 as a reason for reduced work hours
or termination;
2. Employer paycheck stubs;
3. Bank statements.
B. Civil Remedies.
1. Any Landlord that fail(s) to comply with this Ordinance may be subject to civil
proceedings for displacement of Affected Tenant(s) initiated by the City or the
Affected Tenant Household for actual and exemplary damages.
2. Whoever is found to have violated this Ordinance shall be subject to appropriate
injunctive relief and shall be liable for damages, costs and reasonable attorneys'
fees.
3. Treble damages shall be awarded for a Landlord's willful failure to comply with
the obligations established under this Ordinance.
Not Yet Approved ATTACHMENT B
20200323021801 5
4. Nothing herein shall be deemed to interfere with the right of a Landlord to file
an action against a Tenant or non-Tenant third party for the damage done to said
Landlord's property. Nothing herein is intended to limit the damages recoverable
by any party through a private action.
SECTION 8. Severability
If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held
to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such
decision shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have passed this Ordinance and each and every section,
subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard
to whether any portion of the Ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 9. Environmental Review
The Council finds that the Ordinance is exempt from the California Environmental Quality Act
(CEQA) pursuant to Section 15601 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 10. Effective Date
This Ordinance shall be effective on the thirty-first day after the date of its adoption and shall
remain in effect until the 121st day after the County of Santa ClaraCity Council proclaims the
termination of the state of local public health emergency ratified and declared by the Council
on February 10March 23, 2020, as extended.
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Not Yet Approved ATTACHMENT B
20200323021801 6
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SECTION 11. Avoidance of Inconsistencies
To avoid inconsistencies, the City Manager may suspend any part of this Ordinance in the event
that the President of the United States, United States Congress, Governor of the State of
California, or California State Legislature adopts any order or legislation that is inconsistent with
the actions directed in the Ordinance.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services