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HomeMy WebLinkAbout2019-03-04 City Council Agenda PacketCity Council 1 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Monday, March 4, 2019 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 COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. Public comment may be addressed to the full City Council via email at City.Council@cityofpaloalto.org. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Special Orders of the Day 5:15-5:30 PM 1.Recognition of the Palo Alto Student Winners From the 2018 Synopsis Science Fair 2.Recognition of the Winners of the 2019 Palo Alto City Library Kids and Teens Writing Contest Closed Session 5:30-7:30 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 3.CONFERENCE WITH CITY ATTORNEY Subject: Written Liability Claim Against the City of Palo Alto by Komuna Capital, LLC; Komuna Palo Alto, LLC; and Komuna Energy, LLC (Claim No. C18-0043) Authority: Government Code Section 54956.9 (e)(3) Council Member Tanaka will be participating remotely from the Linq Hotel/Casino Lobby Check-in area, 3535 Las Vegas Blvd. South, Las Vegas, NV 89109-Areas 5 and 6 on the facilities map REVISED 2 March 4, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 4.CONFERENCE WITH CITY ATTORNEY-EXISTING LITIGATION Santa Clara County Superior Court, Case No. 16CV300760 (One Case, as Defendant) –Miriam Green v. City of Palo Alto Authority: Government Code Section 54956.9(d)(1) Agenda Changes, Additions and Deletions City Manager Comments 7:30-7:40 PM Oral Communications 7:40-7:55 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 7:55-8:00 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 5.Approval of Construction Contract Number C19173793 With Waterproofing Associates, Inc. in an Amount Not-to-Exceed $282,840 and Authorization of Contract Contingency in an Amount Not-to- Exceed $28,284 to Replace the Existing K Wing Roof at Cubberley Community Center 6.Authorize Transmittal of the 2018 Annual Comprehensive Plan and Housing Element Progress Report for the Period of January 1, 2018 to December 31, 2018 to the State of California's Office of Planning and Research and the Department of Housing and Community Development (HCD) 7.Utilities Advisory Commission Recommends the City Council Adopt a Resolution Approving the November 2018 Amended and Restated Water Supply Agreement Between the City and County of San Francisco Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County; and Authorize the City Manager to Execute the Amended and Restated Water Supply Agreement 8.Approval of a License Agreement With Crown Castle Towers 06-2, LLC for Placement of Telecommunications Facilities on City-Owned Property Located at 799 Embarcadero Road 9.Approval of Addendum Number 9 to the Basic Agreement With the Cities of Mountain View and Los Altos; and Amendment Number 6 to Contract Number C869 With the Board of Trustees of the Leland Stanford Junior University Related to the Regional Water Quality Control Plant's Near Term Capital Improvement Program Funding MEMO Q & A 3 March 4, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 10.Approval of Amendment Number 2 to Contract Number S16164688 to add $100,000 for a Total Not-to Exceed Amount of $400,000 With Municipal Resources Group for Professional Human Resources Consulting Services 11.Approval of Four Professional Services Agreements With: (1) BluePoint Planning; (2) Bovo Tighe; (3) Management Partners; and (4) Municipal Resource Group for Organizational Development Over a Three-year Term, all Subject to an Aggregate Not-to-Exceed Amount of $450,000 Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 8:00-9:30 PM 12.Acceptance of the Fiscal Year 2020-2029 Long Range Financial Forecast State/Federal Legislation Update/Action Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. Q & A 4 March 4, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Finance Committee Meeting Cancellation March 5, 2019 Mayor Filseth's State of the City Address March 5, 2019 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report 4th Quarter 2018 Accessory Dwelling Units (ADU) Development Activity Report 2018 Annual Palo Alto Airport Noise Report, Identifying Noise Trends in the Surrounding Areas and Determining Compliance With Established Voluntary Noise Abatement Procedures Public Letters to Council Set 1 CITY OF PALO ALTO OFFICE OF THE CITY CLERK March 4, 2019 The Honorable City Council Palo Alto, California Recognition of the Palo Alto Student Winners From the 2018 Synopsis Science Fair ATTACHMENTS: • Attachment A: Group PDF (PDF) Department Head: Beth Minor, City Clerk Page 2 Certificate of Recognition HONORING Daniel Ong In acknowledgement of outstanding achievements in science and the prestigious honor of receiving Honorable Mention at the 2018 Synopsys Championship Grade 11, Gunn High School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Isabel Sperandio In acknowledgement of outstanding achievements in science and the prestigious honor of receiving Honorable Mention at the 2018 Synopsys Championship Grade 10, Gunn High School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Iyanu Olukotun In acknowledgement of outstanding achievements in science and the prestigious honor of receiving Honorable Mention at the 2018 Synopsys Championship Grade 8, Lathrop Middle School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Jain Aditi In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 2nd Place Award at the 2018 Synopsys Championship Grade 7, Girls Middle School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Justin Hou In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 1st Place Award at the 2018 Synopsys Championship Grade 7, Terman Middle School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Karly Hou In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 2nd Place Award at the 2018 Synopsys Championship Grade 11, Gunn High School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Mihir Borkar In acknowledgement of outstanding achievements in science and the prestigious honor of receiving Honorable Mention at the 2018 Synopsys Championship Grade 11, Gunn High School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Roy Gross In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 1st Place Award at the 2018 Synopsys Championship Grade 7, Terman Middle School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Ryan Mei In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 1st Place Award at the 2018 Synopsys Championship Grade 11, Gunn High School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Tasha Lera In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 1st Place Award at the 2018 Synopsys Championship Grade 7, Terman Middle School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Yu-Ting Chang In acknowledgement of outstanding achievements in science and the prestigious honor of receiving Honorable Mention at the 2018 Synopsys Championship Grade 7, Lathrop Middle School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto Certificate of Recognition HONORING Romelia Sangatelian In acknowledgement of outstanding achievements in science and the prestigious honor of receiving 1st Place at the 2018 Synopsys Championship Grade 11, Los Altos High School Now I, Eric Filseth, do hereby offer the highest praise and congratulations on this 4th day of March, 2019 _____________________________ Eric Filseth Mayor, City of Palo Alto City of Palo Alto (ID # 9937) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: Cubberley Community Center K Wing Re-Roof Project Title: Approval of Construction Contract Number C19173793, With Waterproofing Associates, Inc. in an Amount Not-to-Exceed $282,840 and Authorization of Contract Contingency in an Amount Not-to-Exceed $28,284 to Replace the Existing K Wing Roof at Cubberley Community Center From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute a contract with Waterproofing Associates, Inc. in an amount not to exceed $282,840 (Attachment A), for the Cubberley Community Center K Wing Roofing Replacement project, budgeted in the recurring Capital Improvement Program project, Cubberley Roof Replacements (CB- 16002); and 2. Authorize the City Manager or his designee to negotiate and execute one or more changes to the contract with Waterproofing Associates, Inc. for related additional but unforeseen work which may develop during the project, the total value of which shall not exceed $28,284. Background The existing tar and gravel roof on Cubberley Community Center K Wing Roof is leaking, is beyond its useful life, and no longer meets code or Title 24 requirements. Leaking has caused water damage throughout the soffit areas and ceiling below, increasing required maintenance. The leaks are so extensive that we needed to move this project up in the roofing replacement schedule and get it re-roofed quickly. Discussion This project will prevent additional water damage, reducing maintenance and repair costs. Under contract, Waterproofing Associates, Inc. will remove the existing tar and gravel roofing system down to the wood deck substrate, and the equipment from its current curb supports. City of Palo Alto Page 2 Equipment will be removed for curbs to be rebuilt higher and then equipment will be reinstalled. Per the specifications (Attachment B), Waterproofing Associates, Inc. will provide and install a modified bituminous membrane roofing system throughout, over ¼” DensDeck roof board with R-8 insulation, new crickets and drainage swales to direct rainwater to new roof gutters. Bid Process Staff posted an Invitation for Bid on Planet Bids for the project on November 14, 2018. The bid period was 21 calendar days. Six bids were received on December 4, 2018 (Attachment C, Bid Summary). Summary of Solicitation Process Invitation For Bid (IFB) Published 11/14/2018 Mandatory Pre-Bid Site Walk 11/26/2018 Number of Company Attendees at Pre-bid Meeting 8 Number of Bids Received 6 Bid Opening 12/04/2018 Bid Proposal $ Range $282,840 to $417,534 The bids ranged from a low of $282,840 to a high of $417,543 and the lowest bidder is one percent lower than the engineer’s estimate of $287,156. Staff has reviewed all bids submitted and recommends the base bid and allowances totaling $282,840 submitted by Waterproffing Associates, Inc. be accepted and Waterproofing Associates, Inc. be declared the lowest responsible bidder. The contingency amount of $28,284, representing ten percent of the total contract, is requested for related, additional, but unforeseen work that may develop during the project. Resource Impact Total funding for this project of $311,124 ($282,840 plus contingency of $28,284) is available in the Cubberley Property Infrastructure Fund recurring Capital Improvement Program project CB- 16002, Cubberley Roofing Replacements. Environmental Review This project is categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301c of the CEQA Guidelines as repair, maintenance and/or minor alteration of the existing facilities and no further environmental review is necessary. Attachments:  Attachment A - C19173793 Cubberley K Wing Re-Roof Project  Attachment B - Cubberley K Wing Specs and Drawings  Attachment C - Bid Summary for Cubberley K Wing ReRoof Project Invitation for Bid (IFB) Package 1      Rev. March 17, 2017  CONSTRUCTION CONTRACT  CONSTRUCTION CONTRACT  Contract No. C19173793  City of Palo Alto  Cubberley Community Center K Wing Project  Attachment A   Invitation for Bid (IFB) Package 2                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT  TABLE OF CONTENTS    SECTION 1  INCORPORATION OF RECITALS AND DEFINITIONS…………………………………….…………..6    1.1  Recitals…………………………………………………………………………………………………………………….6    1.2  Definitions……………………………………………………………………………………………………………….6  SECTION 2  THE PROJECT………………………………………………………………………………………………………...6  SECTION 3  THE CONTRACT DOCUMENTS………………………………………………………………………………..7           3.1 List of Documents…………………………………………………………………………………………….........7           3.2 Order of Precedence……………………………………………………………………………………………......7  SECTION 4  CONTRACTOR’S DUTY…………………………………………………………………………………………..8  4.1 Contractor's Duties…………………………………………………………………………………………………..8  SECTION 5  PROJECT TEAM……………………………………………………………………………………………………..8  5.1  Contractor's Co‐operation………………………………………………………………………………………..8  SECTION 6  TIME OF COMPLETION…………………………………………………………………………………….......8    6.1  Time Is of Essence…………………………………………………………………………………………………….8    6.2  Commencement of Work…………………………………………………………………………………………8    6.3  Contract Time…………………………………………………………………………………………………………..8    6.4  Liquidated Damages…………………………………………………………………………………………………8    6.4.1 Other Remedies……………………………………………………………………………………………………..9    6.5  Adjustments to Contract Time………………………………………………………………………………….9  SECTION 7  COMPENSATION TO CONTRACTOR……………………………………………………………………….9    7.1  Contract Sum……………………………………………………………………………………………………………9    7.2  Full Compensation……………………………………………………………………………………………………9  SECTION 8  STANDARD OF CARE……………………………………………………………………………………………..9  8.1  Standard of Care…………………………………………………………………………………..…………………9  SECTION 9  INDEMNIFICATION…………………………………………………………………………………………..…10    9.1  Hold Harmless……………………………………………………………………………………………………….10    9.2  Survival…………………………………………………………………………………………………………………10  SECTION 10  NON‐DISCRIMINATION……..………………………………………………………………………………10  10.1 Municipal Code Requirement…………….………………………………..……………………………….10  SECTION 11  INSURANCE AND  BONDS.…………………………………………………………………………………10    Invitation for Bid (IFB) Package 3                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    11.1  Evidence of Coverage…………………………………………………………………………………………..10  SECTION 12  PROHIBITION AGAINST TRANSFERS…………………………………………………………….…11  12.1  Assignment………………………………………………………………………………………………………….11  12.2  Assignment by Law.………………………………………………………………………………………………11  SECTION 13 NOTICES …………………………………………………………………………………………………………….11            13.1  Method of Notice …………………………………………………………………………………………………11            13.2  Notice Recipents ………………………………………………………………………………………………….11    13.3  Change of Address……………………………………………………………………………………………….12  SECTION 14  DEFAULT…………………………………………………………………………………………………………...12    14.1  Notice of Default………………………………………………………………………………………………….12    14.2  Opportunity to Cure Default…………………………………………………………………………………12  SECTION 15  CITY'S RIGHTS AND REMEDIES…………………………………………………………………………..12    15.1  Remedies Upon Default……………………………………………………………………………………….12    15.1.1   Delete Certain Services…………………………………………………………………………………….13    15.1.2   Perform and Withhold……………………………………………………………………………………..13    15.1.3   Suspend The Construction Contract…………………………………………………………………13    15.1.4  Terminate the Construction Contract for Default………………………………………………13    15.1.5   Invoke the Performance Bond………………………………………………………………………….13    15.1.6   Additional Provisions……………………………………………………………………………………….13    15.2  Delays by Sureties……………………………………………………………………………………………….13    15.3  Damages to City…………………………………………………………………………………………………..14    15.3.1   For Contractor's Default…………………………………………………………………………………..14    15.3.2   Compensation for Losses…………………………………………………………………………………14    15.4  Suspension by City……………………………………………………………………………………………….14   15.4.1  Suspension for Convenience……………………………………………………………………………..14    15.4.2  Suspension for Cause………………………………………………………………………………………..14    15.5  Termination Without Cause…………………………………………………………………………………14    15.5.1   Compensation………………………………………………………………………………………………….14     15.5.2   Subcontractors………………………………………………………………………………………………..15    15.6  Contractor’s Duties Upon Termination………………………………………………………………...15  SECTION 16  CONTRACTOR'S RIGHTS AND REMEDIES……………………………………………………………16           16.1 Contractor’s Remedies……………………………………..………………………………..………………….16    Invitation for Bid (IFB) Package 4                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT             16.1.1   For Work Stoppage……………………………………………………………………………………………16           16.1.2   For City's Non‐Payment…………………………………………………………………………………….16    16.2  Damages to Contractor………………………………………………………………………………………..16  SECTION 17  ACCOUNTING RECORDS………………………………………………………………………………….…16    17.1  Financial Management and City Access………………………………………………………………..16    17.2  Compliance with City Requests…………………………………………………………………………….17  SECTION 18  INDEPENDENT PARTIES……………………………………………………………………………………..17  18.1  Status of Parties……………………………………………………………………………………………………17  SECTION 19  NUISANCE……………………………………………………………………………………………………….…17  19.1  Nuisance Prohibited……………………………………………………………………………………………..17  SECTION 20  PERMITS AND LICENSES…………………………………………………………………………………….17  20.1  Payment of Fees…………………………………………………………………………………………………..17  SECTION 21  WAIVER…………………………………………………………………………………………………………….17  21.1  Waiver………………………………………………………………………………………………………………….17  SECTION 22  GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS……………………………….18  22.1  Governing Law…………………………………………………………………………………………………….18  22.2  Compliance with Laws…………………………………………………………………………………………18  22.2.1 Palo Alto Minimum Wage Ordinance…………….………………………………………………….18  SECTION 23  COMPLETE AGREEMENT……………………………………………………………………………………18  23.1  Integration………………………………………………………………………………………………………….18  SECTION 24  SURVIVAL OF CONTRACT…………………………………………………………………………………..18  24.1  Survival of Provisions……………………………………………………………………………………………18  SECTION 25  PREVAILING WAGES………………………………………………………………………………………….18  SECTION 26  NON‐APPROPRIATION……………………………………………………………………………………….19  26.1  Appropriation………………………………………………………………………………………………………19  SECTION 27  AUTHORITY……………………………………………………………………………………………………….19  27.1  Representation of Parties…………………………………………………………………………………….19  SECTION 28  COUNTERPARTS………………………………………………………………………………………………..19  28.1 Multiple Counterparts………………………………………………………………………………………….19  SECTION 29  SEVERABILITY……………………………………………………………………………………………………19  29.1  Severability………………………………………………………………………………………………………….19  SECTION 30  STATUTORY AND REGULATORY REFERENCES …………………………………………………..19    Invitation for Bid (IFB) Package 5                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    30.1  Amendments of Laws…………………………………………………………………………………………..19  SECTION 31  WORKERS’ COMPENSATION CERTIFICATION………………………………………………….….19  31.1  Workers Compensation…………………………………………………………………………………….19  SECTION 32  DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS………………………………..…20  32.1  General Notice to Contractor…………………………………………………………………………….20  32.2  Labor Code section 1771.1(a)…………………………………………………………………………….20  32.3  DIR Registration Required…………………………………………………………………………………20  32.4  Posting of Job Site Notices…………………………………………………………………………………20  32.5  Payroll Records…………………………………………………………………………………………………20               Invitation for Bid (IFB) Package 6                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    CONSTRUCTION CONTRACT    THIS CONSTRUCTION CONTRACT entered into on March 4, 2019 (“Execution Date”) by and between the CITY  OF PALO ALTO, a California chartered municipal corporation ("City"), and WATERROOFING ASSOCIATES, INC.  ("Contractor"), is made with reference to the following:    R E C I T A L S:    A.  City is a municipal corporation duly organized and validly existing under the laws of the State of  California with the power to carry on its business as it is now being conducted under the statutes of the  State of California and the Charter of City.    B.  Contractor is a corporation duly organized and in good standing in the State of California,  Contractor’s License Number 649862 and Department of Industrial Relations Registration Number  1000000647. Contractor represents that it is duly licensed by the State of California and has the  background, knowledge, experience and expertise to perform the obligations set forth in this Construction  Contract.    C.  On December 4, 2018, City issued an Invitation for Bids (IFB) to contractors for the Cubberley  Community Center K Wing Re‐Roof Project (“Project”).  In response to the IFB, Contractor submitted a Bid.    D.  City and Contractor desire to enter into this Construction Contract for the Project, and other  services as identified in the Contract Documents for the Project upon the following terms and conditions.    NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth  and for other good and valuable consideration, the receipt and sufficiency of which are hereby  acknowledged, it is mutually agreed by and between the undersigned parties as follows:    SECTION 1  INCORPORATION OF RECITALS AND DEFINITIONS.    1.1  Recitals.      All of the recitals are incorporated herein by reference.    1.2  Definitions.      Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General  Conditions.  If there is a conflict between the definitions in this Construction Contract and in the General  Conditions, the definitions in this Construction Contract shall prevail.  SECTION 2  THE PROJECT.    The Project is the Cubberley Community Center K Wing Re‐Roof Project, located at 4000 Middlefield Road,  Palo Alto, CA. ("Project").      Invitation for Bid (IFB) Package 7                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    SECTION 3  THE CONTRACT DOCUMENTS.    3.1   List of Documents.    The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of  the following documents which are on file with the Purchasing Division and are hereby incorporated by  reference.       1) Change Orders    2) Field Orders    3) Contract    4) Bidding Addenda    5) Special Provisions    6) General Conditions    7)    Project Plans and Drawings    8)    Technical Specifications    9)  Instructions to Bidders    10)  Invitation for Bids    11)  Contractor's Bid/Non‐Collusion Declaration    12)   Reports listed in the Contract Documents    13)   Public Works Department’s Standard Drawings and Specifications (most current version at  time of Bid)    14)  Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current  version at time of Bid)    15)  City of Palo Alto Traffic Control Requirements    16)  City of Palo Alto Truck Route Map and Regulations    17)  Notice Inviting Pre‐Qualification Statements, Pre‐Qualification Statement, and Pre‐ Qualification Checklist (if applicable)    18)  Performance and Payment Bonds    3.2   Order of Precedence.    For  the  purposes  of  construing,  interpreting  and  resolving  inconsistencies  between  and  among  the  provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the  preceding section.  If a claimed inconsistency cannot be resolved through the order of precedence, the City  shall have the sole power to decide which document or provision shall govern as may be in the best interests  of the City.    Invitation for Bid (IFB) Package 8                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    SECTION 4  CONTRACTOR’S DUTY.    4.1  Contractor’s Duties    Contractor  agrees  to  perform  all  of  the  Work  required  for  the  Project,  as  specified  in  the  Contract  Documents, all of which are fully incorporated herein.  Contractor shall provide, furnish, and supply all things  necessary and incidental  for the timely performance and completion of the Work, including, but not limited  to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless otherwise  specified in the Contract Documents.  Contractor also agrees to use its best efforts to complete the Work in  a professional and expeditious manner and to meet or exceed the performance standards required by the  Contract Documents.  SECTION 5  PROJECT TEAM.    5.1 Contractor’s Co‐operation.    In addition to Contractor, City has retained, or may retain, consultants  and  contractors  to  provide  professional and technical consultation for the design and construction of the Project.  The Contract requires  that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of  the Project Team and other contractors retained by City to construct other portions of the Project.    SECTION 6  TIME OF COMPLETION.    6.1  Time Is of Essence.      Time is of the essence with respect to all time limits set forth in the Contract Documents.    6.2  Commencement of Work.      Contractor shall commence the Work on the date specified in City’s Notice to Proceed.       6.3  Contract Time.      Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed     not later than      .    within sixty calendar days (60) after the commencement date specified in City’s Notice to  Proceed.    By executing this Construction Contract, Contractor expressly waives any claim for delayed early  completion.    6.4  Liquidated Damages.    Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of  the entire Work within the Contract Time, including any approved extensions thereto, City may assess  liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion,  based on the amount of Five Hundred dollars ($500) per day, or as otherwise specified in the Special  Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified  elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial  Completion.  The assessment of liquidated damages is not a penalty but considered to be a reasonable  estimate of the amount of damages City will suffer by delay in completion of the Work.  The City is entitled  to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor,  including, but not limited to, setoff against release of retention.  If the total amount of liquidated damages    Invitation for Bid (IFB) Package 9                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from  Contractor or its sureties.  Occupancy or use of the Project in whole or in part prior to Substantial  Completion, shall not operate as a waiver of City’s right to assess liquidated damages.    6.4.1  Other Remedies.  City is entitled to any and all available legal and equitable remedies City may  have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial  Completion of the entire Work within the Contract Time.    6.5  Adjustments to Contract Time.      The Contract Time may only be adjusted for time extensions approved by City and memorialized in a  Change Order approved in accordance with the requirements of the Contract Documents.    SECTION 7  COMPENSATION TO CONTRACTOR.    7.1  Contract Sum.      Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract  Documents the Contract Sum of Two Hundred Eighty‐Two Thousand Eighty Hundred Forty Dollars  ($282,840).        [This amount includes the Base Bid and Additive Alternates       .]    7.2  Full Compensation.      The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor  and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses  arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or  obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all  risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of  the Work, except as expressly provided herein.  The Contract Sum may only be adjusted for Change Orders  approved in accordance with the requirements of the Contract Documents.     SECTION 8  STANDARD OF CARE.    8.1 Standard of Care.    Contractor  agrees  that  the  Work  shall  be  performed  by  qualified,  experienced  and  well‐supervised  personnel.  All services performed in connection with this Construction Contract shall be performed in a  manner consistent with the standard of care under California law applicable to those who specialize in  providing such services for projects of the type, scope and complexity of the Project.          Invitation for Bid (IFB) Package 10                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    SECTION 9  INDEMNIFICATION.    9.1  Hold Harmless.      To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City  Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter  individually referred to as an “Indemnitee” and collectively referred to as "Indemnitees"), through legal  counsel acceptable to City, from and against any and liability, loss, damage, claims, expenses (including,  without limitation, attorney fees, expert witness fees, paralegal fees, and fees and costs of litigation or  arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or omissions  of Contractor, its employees, Subcontractors, representatives, or agents, in performing the Work or its  failure to comply with any of its obligations under the Contract, except such Liability caused by the active  negligence, sole negligence, or willful misconduct of an Indemnitee.  Contractor shall pay City for any costs  City incurs to enforce this provision.  Except as provided in Section 9.2 below, nothing in the Contract  Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against  City or any other Indemnitee.    Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of  any third‐party claim relating to the Contract.    9.2  Survival.      The provisions of Section 9 shall survive the termination of this Construction Contract.  SECTION 10  NON‐DISCRIMINATION.    10.1 Municipal Code Requirement.    As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of this  Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender,  age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial  status, weight or height of such person. Contractor acknowledges that it has read and understands the  provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements  and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining  to nondiscrimination in employment.    SECTION 11  INSURANCE AND BONDS.    11.1 Evidence of coverage.      Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with  evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all  requirements in Article 11 of the General Conditions.          Invitation for Bid (IFB) Package 11                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    SECTION 12  PROHIBITION AGAINST TRANSFERS.    12.1 Assignment.    City is entering into this Construction Contract in reliance upon the stated experience and qualifications of  the Contractor and its Subcontractors set forth in Contractor’s Bid.  Accordingly, Contractor shall not assign,  hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation  of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer  without said consent shall be null and void, and shall be deemed a substantial breach of contract and grounds  for default in addition to any other legal or equitable remedy available to the City.    12.2 Assignment by Law.    The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of  Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor  is a partnership or joint venture or syndicate or co‐tenancy shall result in changing the control of Contractor,  shall be construed as an assignment of this Construction Contract. Control means more than fifty percent  (50%) of the voting power of the corporation or other entity.     SECTION 13  NOTICES.    13.1 Method of Notice.      All notices, demands, requests or approvals to be given under this Construction Contract shall be given in  writing and shall be deemed served on the earlier of the following:  (i)  On the date delivered if delivered personally;  (ii)  On the third business day after the deposit thereof in the United States mail, postage prepaid, and    addressed as hereinafter provided;   (iii)  On the date sent if sent by facsimile transmission;   (iv)  On the date sent if delivered by electronic mail; or   (v)  On the date it is accepted or rejected if sent by certified mail.     13.2 Notice to Recipients.       All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from  Contractor to City shall include the Project name and the number of this Construction Contract and shall be  addressed to City at:       To City:    City of Palo Alto     City Clerk     250 Hamilton Avenue     P.O. Box 10250     Palo Alto, CA 94303       Copy to:    City of Palo Alto     Public Works Administration     250 Hamilton Avenue     Palo Alto, CA 94301     Attn: Jimmy Chen        AND    [Include Construction Manager, If Applicable.]    Invitation for Bid (IFB) Package 12                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT        City of Palo Alto     Utilities Engineering     250 Hamilton Avenue     Palo Alto, CA 94301     Attn:            In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the  following:    Palo Alto City Attorney’s Office  250 Hamilton Avenue  P.O. Box 10250  Palo Alto, California 94303       All Claims shall be sent by registered mail or certified mail with return receipt requested.    All notices, demands, requests or approvals from City to Contractor shall be addressed to:    WATERPROOFING ASSOCIATES, INC.   13.3  Change of Address.      In advance of any change of address, Contractor shall notify City of the change of address in writing.  Each  party may, by written notice only, add, delete or replace any individuals to whom and addresses to which  notice shall be provided.  SECTION 14  DEFAULT.    14.1  Notice of Default.      In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any  of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract  Documents, City may give written notice of default to Contractor in the manner specified for the giving of  notices in the Construction Contract, with a copy to Contractor’s performance bond surety.    14.2  Opportunity to Cure Default.    Except for emergencies, Contractor shall cure any default in performance of its obligations under the  Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt  of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will  commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and  will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in  no event be later than ten (10) Days after receipt of such written notice.  SECTION 15  CITY'S RIGHTS AND REMEDIES.    15.1  Remedies Upon Default.      If Contractor fails to cure any default of this Construction Contract within the time period set forth above in  Section 14, then City may pursue any remedies available under law or equity, including, without limitation,  the following:      Invitation for Bid (IFB) Package 13                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    15.1.1  Delete Certain Services.  City may, without terminating the Construction Contract, delete  certain portions of the Work, reserving to itself all rights to Losses related thereto.    15.1.2  Perform and Withhold.  City may, without terminating the Construction Contract, engage  others to perform the Work or portion of the Work that has not been adequately performed by  Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to  itself all rights to Losses related thereto.    15.1.3  Suspend The Construction Contract.  City may, without terminating the Construction  Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this  Construction  Contract  for  as  long  a  period  of  time  as  City  determines,  in  its  sole  discretion,  appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract  Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work.    15.1.4  Terminate the Construction Contract for Default.  City shall have the right to terminate  this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any  default as required by Section 14.  City’s election to terminate the Construction Contract for default  shall be communicated by giving Contractor a written notice of termination in the manner specified  for the giving of notices in the Construction Contract.  Any notice of termination given to Contractor  by City shall be effective immediately, unless otherwise provided therein.    15.1.5  Invoke the Performance Bond.  City may, with or without terminating the Construction  Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the  Performance Bond.    15.1.6  Additional Provisions.  All of City’s rights and remedies under this Construction Contract  are cumulative, and shall be in addition to those rights and remedies available in law or in equity.   Designation in the Contract Documents of certain breaches as material shall not waive the City’s  authority to designate other breaches as material nor limit City’s right to terminate the Construction  Contract, or prevent the City from terminating the Agreement for breaches that are not material.   City’s determination of whether there has been noncompliance with the Construction Contract so  as to warrant exercise by City of its rights and remedies for default under the Construction Contract,  shall be binding on all parties.  No termination or action taken by City after such termination shall  prejudice  any  other  rights  or  remedies  of  City  provided  by  law or equity or by the Contract  Documents  upon  such  termination;  and  City  may  proceed  against  Contractor  to  recover  all  liquidated damages and Losses suffered by City.    15.2  Delays by Sureties.      Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for  completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the  date of the notice of termination, Contractor’s surety shall be deemed to have waived its right to complete  the Work under the Contract, and City may immediately make arrangements for the completion of the Work  through use of its own forces, by hiring a replacement contractor, or by any other means that City determines  advisable under the circumstances.  Contractor and its surety shall be jointly and severally liable for any  additional cost incurred by City to complete the Work following termination.  In addition, City shall have the  right to use any materials, supplies, and equipment belonging to Contractor and located at the Worksite for  the purposes of completing the remaining Work.      Invitation for Bid (IFB) Package 14                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    15.3  Damages to City.    15.3.1  For Contractor's Default.  City will be entitled to recovery of all Losses under law or equity  in the event of Contractor’s default under the Contract Documents.     15.3.2  Compensation for Losses. In the event that City's Losses arise from Contractor’s default  under the Contract Documents, City shall be entitled to deduct the cost of such Losses from monies  otherwise  payable  to  Contractor.  If the Losses incurred by City exceed the amount payable,  Contractor shall be liable to City for the difference and shall promptly remit same to City.     15.4  Suspension by City       15.4.1  Suspension for Convenience.  City may, at any time and from time to time, without cause,  order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such  period of time, up to an aggregate of fifty percent (50%) of the Contract Time.  The order shall be  specifically identified as a Suspension Order by City.  Upon receipt of a Suspension Order, Contractor  shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs  allocable to the Work covered by the Suspension Order.  During the Suspension or extension of the  Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the  Work covered by the Suspension Order.  If a Suspension Order is canceled or expires, Contractor  shall resume and continue with the Work.  A Change Order will be issued to cover any adjustments  of the Contract Sum or the Contract Time necessarily caused by such suspension.    A Suspension  Order shall not be the exclusive method for City to stop the Work.    15.4.2  Suspension for Cause.  In addition to all other remedies available to City, if Contractor fails  to perform or correct work in accordance with the Contract Documents, City may immediately order  the Work, or any portion thereof, suspended until the cause for the suspension has been eliminated  to City’s satisfaction.  Contractor shall not be entitled to an increase in Contract Time or Contract  Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents.   City’s right to suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure  to suspend the Work shall not constitute a defense to Contractor’s failure to comply with the  requirements of the Contract Documents.    15.5  Termination Without Cause.      City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole  upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s expense, comply  with the notice and take all reasonable steps to minimize costs  to  close  out  and  demobilize.    The  compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole and exclusive compensation  for such termination and Contractor waives any claim for other compensation or Losses, including, but not  limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct,  indirect or incidental damages of any kind resulting from termination without cause.  Termination pursuant  to this provision does not relieve Contractor or its sureties from any of their obligations for Losses arising  from or related to the Work performed by Contractor.     15.5.1  Compensation.  Following such termination and within forty‐five (45) Days after receipt of  a billing from Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall  pay the following to Contractor as Contractor’s sole compensation for performance of the Work :    .1  For Work Performed.  The amount of the Contract Sum allocable to the portion of the  Work properly performed by Contractor as of the date of termination, less sums previously paid to  Contractor.    .2  For Close‐out Costs.  Reasonable costs of Contractor and its Subcontractors:    Invitation for Bid (IFB) Package 15                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    (i)  Demobilizing and  (ii)  Administering the close‐out of its participation in the Project (including, without  limitation, all billing and accounting functions, not including attorney or expert fees) for a  period of no longer than thirty (30) Days after receipt of the notice of termination.    .3  For Fabricated Items.  Previously unpaid cost of any items delivered to the Project Site  which were fabricated for subsequent incorporation in the Work.    .4 Profit Allowance.    An allowance for profit calculated as four percent (4%) of the sum of  the above items, provided Contractor can prove a likelihood that it would have made a profit if the  Construction Contract had not been terminated.    15.5.2  Subcontractors.    Contractor shall include provisions in all of its subcontracts, purchase  orders and other contracts permitting termination for convenience by Contractor on terms that are  consistent with this Construction Contract and that afford no greater rights of recovery against  Contractor than are afforded to Contractor against City under this Section.    15.6  Contractor’s Duties Upon Termination.     Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice  directs otherwise, do the following:  (i)  Immediately discontinue the Work to the extent specified in the notice;  (ii)  Place no further orders or subcontracts for materials, equipment, services or facilities,  except  as  may  be necessary  for  completion  of  such  portion  of  the Work  that  is not  discontinued;  (iii)  Provide to City a description in writing, no later than fifteen (15) days after receipt of the  notice  of  termination,  of  all  subcontracts,  purchase  orders  and  contracts  that  are  outstanding, including, without limitation, the terms of the original price, any changes,  payments, balance owing, the status of the portion of the Work covered and a copy of the  subcontract,  purchase  order  or  contract  and  any  written  changes,  amendments  or  modifications  thereto,  together  with  such  other  information  as City  may  determine  necessary in order to decide whether to accept assignment of or request Contractor to  terminate the subcontract, purchase order or contract;  (iv)  Promptly assign to City those subcontracts, purchase orders or contracts, or portions  thereof, that City elects to accept by assignment and cancel, on the most favorable terms  reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof,  that City does not elect to accept by assignment; and  (v) Thereafter do only such Work as may be necessary to preserve and protect Work already  in progress and to protect materials, plants, and equipment on the Project Site or in transit  thereto.    Upon termination, whether for cause or for convenience, the provisions of the Contract Documents  remain in effect as to any Claim, indemnity obligation, warranties, guarantees, submittals of as‐built  drawings,  instructions,  or  manuals,  or  other  such  rights  and  obligations  arising  prior  to  the  termination date.    Invitation for Bid (IFB) Package 16                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    SECTION 16  CONTRACTOR'S RIGHTS AND REMEDIES.    16.1  Contractor’s Remedies.      Contractor may terminate this Construction Contract only upon the occurrence of one of the following:    16.1.1  For Work Stoppage.  The Work is stopped for sixty (60) consecutive Days, through no act  or fault of Contractor, any Subcontractor, or any employee or agent  of  Contractor  or  any  Subcontractor, due to issuance of an order of a court or other public authority other than City having  jurisdiction or due to an act of government, such as a declaration of a national emergency making  material unavailable.  This provision shall not apply to any work stoppage resulting from the City’s  issuance of a suspension notice issued either for cause or for convenience.    16.1.2  For City's Non‐Payment.   If City does not make pay Contractor undisputed sums within  ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction  Contract (30) days following a second notice to City of Contractor’s intention to terminate the  Construction Contract.    16.2  Damages to Contractor.      In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in  Paragraph 15.5.1 above.  Contractor agrees to accept such sums as its sole and exclusive compensation  and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of  anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental  damages, of any kind.  SECTION 17  ACCOUNTING RECORDS.    17.1  Financial Management and City Access.      Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper  financial management under this Construction Contract in accordance with generally accepted accounting  principles and practices. City and City's accountants  during normal business hours, may  inspect, audit and  copy Contractor's records, books, estimates, take‐offs, cost reports, ledgers, schedules, correspondence,  instructions,  drawings,  receipts,  subcontracts,  purchase  orders,  vouchers,  memoranda  and  other  data  relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later  of (i) Final Payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer  period as may be required by law.      Invitation for Bid (IFB) Package 17                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    17.2  Compliance with City Requests.      Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition precedent  to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right  to receive further payments under the Contract Documents.  City many enforce Contractor’s obligation to  provide access to City of its business and other records referred to in Section 17.1 for inspection or copying  by    issuance  of  a  writ  or  a  provisional  or  permanent  mandatory injunction  by  a  court  of  competent  jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony.    SECTION 18  INDEPENDENT PARTIES.    18.1 Status of parties.    Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’ of  the other party.  City, its officers or employees shall have no control over the conduct of Contractor or its  respective agents, employees, subconsultants, or subcontractors, except as herein set forth.  SECTION 19  NUISANCE.    19.1 Nuisance Prohibited.    Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in  connection in the performance of services under this Construction Contract.  SECTION 20  PERMITS AND LICENSES.    20.1 Payment of Fees.  Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall  provide, procure and pay for all licenses, permits, and fees, required by the City or other government  jurisdictions or agencies necessary to carry out and complete the Work.  Payment of all costs and expenses  for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall  be paid to the Contractor for these items or for delays caused by non‐City inspectors or conditions set forth  in the licenses or permits issued by other agencies.    SECTION 21  WAIVER.    21.1 Waiver.    A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be  deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition  contained herein, whether of the same or a different character.        Invitation for Bid (IFB) Package 18                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    SECTION 22  GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS.    22.1 Governing Law.    This Construction Contract shall be construed in accordance with and governed by the laws of the State of  California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no other  place.    22.2 Compliance with Laws.    Contractor shall comply with all applicable federal and California laws and city laws, including, without  limitation, ordinances and resolutions, in the performance of work under this Construction Contract.    22.2.1 Palo Alto Minimum Wage Ordinance.  Contractor shall comply with all requirements of  the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from  time to time.  In particular, for any employee otherwise entitled to the State minimum wage, who  performs at least two (2) hours of work in a calendar week within the geographic boundaries of the  City, Contractor shall pay such employees no less than the minimum wage set forth in Palo Alto  Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City  of Palo Alto.  In addition, Contractor shall post notices regarding the Palo Alto Minimum Wage  Ordinance in accordance with Palo Alto Municipal Code section 4.62.060.  SECTION 23  COMPLETE AGREEMENT.    23.1 Integration.    This Agreement represents the entire and integrated agreement between the parties and supersedes all  prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended  only by a written instrument, which is signed by the parties.  SECTION 24  SURVIVAL OF CONTRACT.    24.1 Survival of Provisions.    The provisions of the Construction Contract which by their nature survive termination of the Construction  Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations,  and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final  Completion or any termination of the Construction Contract.  SECTION 25 PREVAILING WAGES.          This Project is not subject to prevailing wages. Contractor is not required to pay prevailing wages in the  performance and implementation of the Project in accordance with SB 7, if the public works contract does  not include a project of $25,000 or less, when the project is for construction work, or the contract does not  include a project of $15,000 or less, when the project is for alteration, demolition, repair, or maintenance  (collectively, ‘improvement’) work.    Or     Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California  Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code.  Pursuant to  the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the  general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality    Invitation for Bid (IFB) Package 19                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    for each craft, classification, or type of worker needed to execute the contract for this Project from the  Director of the Department of Industrial Relations (“DIR”).  Copies of these rates may be obtained at the  Purchasing Division’s office of the City of Palo Alto.  Contractor shall provide a copy of prevailing wage rates  to  any  staff  or  subcontractor  hired,  and  shall  pay  the  adopted prevailing  wage  rates  as  a  minimum.  Contractor shall comply with the provisions of all sections, including, but not limited to, Sections  1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages.  SECTION 26  NON‐APPROPRIATION.    26.1 Appropriations.    This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto  Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the  event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time  within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for  this Construction Contract are no longer available.  This section shall take precedence in the event of a  conflict with any other covenant, term, condition, or provision of this Agreement.   SECTION 27  AUTHORITY.    27.1 Representation of Parties.    The individuals executing this Agreement represent and warrant that they have the legal capacity and  authority to do so on behalf of their respective legal entities.  SECTION 28  COUNTERPARTS    28.1 Multiple Counterparts.    This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties,  constitute a single binding agreement.  SECTION 29  SEVERABILITY.    29.1 Severability.    In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity,  legality and enforceability of the remaining provisions shall not be affected.    SECTION 30  STATUTORY AND REGULATORY REFERENCES.      30.1 Amendments to Laws.    With respect to any amendments to any statutes or regulations referenced in these Contract Documents,  the reference is deemed to be the version in effect on the date that the Contract was awarded by City,  unless otherwise required by law.    SECTION 31  WORKERS’ COMPENSATION CERTIFICATION.      31.1 Workers Compensation.    Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows:      Invitation for Bid (IFB) Package 20                                                                Rev. March 17, 2017  CONSTRUCTION CONTRACT    “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be  insured against liability for workers’ compensation or to undertake self‐insurance in accordance with the  provisions of that code, and I will comply with such provisions before commencing the performance of the  Work on this Contract.”    SECTION 32  DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS.    32.1 General Notice to Contractor.    City requires Contractor and its listed subcontractors to comply with the requirements of SB 854.    32.2 Labor Code section 1771.1(a)    City provides notice to Contractor of the requirements of California Labor Code section 1771.1(a), which  reads:    “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the  requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for  public work, as defined in this chapter, unless currently registered and qualified to perform public work  pursuant to Section 1725.5.  It is not a violation of this section for an unregistered contractor to submit a bid  that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of  the Public Contract Code, provided the contactor is registered to perform public work pursuant to Section  1725.5 at the time the contract is awarded.”      32.3 DIR Registration Required.    City will not accept a bid proposal from or enter into this Construction Contract with Contractor without  proof that Contractor and its listed subcontractors are registered with the California Department of Industrial  Relations (“DIR”) to perform public work, subject to limited exceptions.    32.4  Posting of Job Site Notices.    City gives notice to Contractor and its listed subcontractors that Contractor is required to post all job site  notices prescribed by law or regulation and Contractor is subject to SB 854‐compliance monitoring and  enforcement by DIR.    32.5 Payroll Records.    City requires Contractor and its listed subcontractors to comply with the requirements of Labor Code section  1776, including:    (i) Keep accurate payroll records, showing the name, address, social security  number, work classification, straight time and overtime hours worked each day  and week, and the actual per diem wages paid to each journeyman, apprentice,  worker, or other employee employed by, respectively, Contractor and its listed  subcontractors, in connection with the Project.    (ii) The payroll records shall be verified as true and correct and shall be certified  and made available for inspection at all reasonable hours at the principal office  of Contractor and its listed subcontractors, respectively.          Invitation for Bid (IFB) Package       21                         Rev. March 17, 2017  CONSTRUCTION CONTRACT    (iii) At the request of City, acting by its project manager, Contractor and its listed  subcontractors shall make the certified payroll records available for inspection  or furnished upon request to the project manager within ten (10) days of receipt  of City’s request.     City requests Contractor and its listed subcontractors to submit the certified  payroll records to the project manager at the end of each week during the  Project.    (iv) If the certified payroll records are not produced to the project manager within  the 10‐day period, then Contractor and its listed subcontractors shall be subject  to a penalty of one hundred dollars ($100.00) per calendar day, or portion  thereof, for each worker, and City shall withhold the sum total of penalties from  the progress payment(s) then due and payable to Contractor.  This provision  supplements the provisions of Section 15 hereof.    (v) Inform the project manager of the location of contractor’s and its listed  subcontractors’ payroll records (street address, city and county) at the  commencement of the Project, and also provide notice to the project manager  within five (5) business days of any change of location of those payroll records.          IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the    date and year first above written.     CITY OF PALO ALTO    ____________________________   Purchasing Manager   City Manager or designee      APPROVED AS TO FORM:    ____________________________  City Attorney or designee    APPROVED:    ____________________________  Public Works Director      WATERPROOFING ASSOCIATES, INC.   Officer 1  By:___________________________    Name:________________________    Title:__________________________    Date: _________________________    Officer 2  By:____________________________    Name:_________________________    Title:___________________________    Date:____________________________      TECHNICAL SPECIFICATIONS FOR CUBBERLEY K-WING RE-ROOF AT 4000 MIDDLEFIELD ROAD PALO ALTO, CALIFORNIA October 4, 2018 Issued by: City of Palo Alto Public Works Department Public Services Division Facilities Contract Services & Rehabilitation Projects Prepared by: ________________________________ Cecil R. Lectura Project Engineer Approved by: ________________________________ Jimmy Y. Chen Project Manager Attachment B Cubberley K-Wing Re-Roof TABLE OF CONTENTS Page 1 TABLE OF CONTENTS SECTION 01 11 00 GENERAL REQUIREMENTS SECTION 01 74 00 TEMPORARY CONDITIONS SECTION 01 77 00 CONTRACT CLOSEOUT SECTION 02 41 00 DEMOLITION SECTION 06 10 00 ROUGH CARPENTRY SECTION 07 52 16 SBS MODIFIED BITUMINOUS MEMBRANE ROOFING, COLD-APPLIED SECTION 07 62 00 SHEET METAL FLASHING AND TRIM SECTION 07 72 69 ROOF ANCHORS & SAFETY RESTRAINTS SECTION 07 92 00 JOINT SEALANTS SECTION 09 91 13 EXTERIOR PAINTING AND FINISHING APPENDIX PROJECT DRAWINGS - COLD-APPLIED MODIFIED BITUMEN ROOFING INSTALLATION GUIDE S:\PWD\FAC-MSC\REHAB & CIP\Rehab&CIPProjects - ACTIVE\Cubberley\Cubb Roofs\Cubb K-Wing_Re- Roof\Cubb-K-ReRoof_Specs.doc Cubberley K-Wing Re-Roof Section 01 11 00 Page 1 SECTION 01 11 00 - GENERAL REQUIREMENTS PART 1 - GENERAL 1.1 SCOPE OF WORK The contractor shall be responsible for all labor, material, tools, equipment, and services necessary for removing and replacing existing tar and gravel roof areas (both sloped and flat), approximately 12,220 SF, at the K-Wing building at the Cubberley Community Center, located at 4000 Middlefield Road, in Palo Alto, California. Contractors bidding the project shall, at their discretion, measure and verify the roof areas during the mandatory bid walk. The project includes but is not limited to the following: A. Remove existing base assemblies of all roof-mounted HVAC equipment (where noted on drawings.) Install crickets/drainage swales to direct rainwater away from units per the construction drawings. B. Remove existing tar and gravel roof system down to existing plywood sheathing: approximately 12,220 SF at flat roof areas. Replace dry rot- damaged sheathing as necessary and prep all plywood areas before installing Tremco modified bituminous membrane roofing system over fiberboard over min. R-8 tapered rigid insulation or City-approved equal, throughout roof and around pipe and exhaust ductwork penetrations. Roof over non-conditioned spaces below to receive no insulation, except where tapered as needed for adequate roof drainage. Install crickets/drainage swales to direct rainwater to existing drain units per the construction drawings. Apply acrylic Title-24, CRRC-approved white or light-colored reflective coating over all roofing material areas as final step, after all other roof work completed. C. Remove any existing predominantly rusted metal roof exhaust vent units as necessary and replace with new at same locations. D. Remove and replace all wood sleepers and metal clamps at all piping with new rubber Durablok sleepers or approved equal (over rubber plates glued to cap sheet.) Install new galv. pipe roller assemblies on gas piping per code. Any piping that needs to be raised to allow Durabloks below must be completed by the contractor or his/her sub-contractors as part of this work. All other piping to have new galv. metal clamps with the sleepers. E. Remove and replace all existing galv. edge metal perimeter flashing throughout both roofs. F. Remove any obstructions that impede the following work. Peeling paint at all Cubberley K-Wing Re-Roof Section 01 11 00 Page 2 roof fascia boards to be properly removed and wood encapsulated per lead abatement standards as required. All dry rot-damaged eave and fascia boards to be replaced. In all cases with wood, prime and install two coats of paint to match existing conditions. Seal, prime, and install two coats of paint at all fascia to match existing conditions. G. Seal all electrical conduit penetrations and any existing openings with proper waterproofing methods where required. H. Replace existing gutters with appropriately-sized Kynar-finished gutters. Provide color samples to match existing fascia color. Provide and install galv. rain diverters below roof plies over each gutter end, as applicable. Diverters to prevent excess rainwater overflow over gutter ends. I. Install at all gutters at both sloped and flat roof areas: 5” deep, powder- coated, black steel gutter screens, model “E-Z-Lock Small Hole,” by Midwest Enterprises, Inc. J. Install new galvanized wire mesh screen covers securely over pipe jacks, to prevent both vandalism and vermin encroachment. K. Remove and replace with like kind, any damaged soffits under roof overhangs, down to existing roof framing members (removing affected fascia board(s) as necessary.) Removal and disposal of all visible dry rot at roof framing, along with framing member replacement must be confirmed with the City’s Project Engineer or Project Manager prior to removal and disposal. Repair/patch stucco soffit assembly to match existing conditions. Replace fascia portions with new to match existing. Paint to match existing color to nearest breaklines. L. Provide and install galv. rain diverters below roof plies over each gutter end. Diverters to prevent excess rainwater overflow over gutter ends. M. Verify and clear all roof drains and drainage pipes servicing as downspouts. There shall be no clogged drains prior to Final Inspection. 1.2 RELATED WORK Reference the drawings and specifications for this project. 1.3 PRE-BID CONFERENCE Cubberley K-Wing Re-Roof Section 01 11 00 Page 3 A. The bidding Contractor shall attend a mandatory pre-bid meeting and job site visit, and be prepared to raise any questions he/she may have about the renovation area, methods, procedures, required inspections, plans, specifications, and the contract documents. B. For substitution approval, bidding Contractor must first submit an RFI and get an approval prior to bid opening. An addendum will then be issued to all prospective bidders prior to bid opening. C. Contractor requirements: Contractor State Licensing Board: Roofing (C-39). 1.4 PRE-CONSTRUCTION MEETING, SCHEDULE The City shall schedule a pre-construction meeting to review the project with the Contractor. At the time of the meeting, the Contractor shall furnish to the Project Manager for review and approval, a Microsoft Project bar-graph schedule covering various phases of the operations, and all required submittals. The approved progress schedule shall be followed throughout the contract. The Contractor shall also provide emergency contact numbers for after-hours calls. Copies of all product data must be submitted and approved by the City of Palo Alto’s Project Manager, prior to their installation. 1.5 CONSTRUCTION SCHEDULE Contractor shall begin work within seven (7) calendar days after receiving the Notice to Proceed, and shall complete all work covered by this contract within 45 calendar days from the Notice to Proceed date. If bad weather or unforeseeable site conditions occur, the Contractor may be granted extra days to complete the job only after a letter requesting for the time extension is submitted and approved by the Project Manager. Contractor shall adjust his schedule for any special events occurring at the site. No additional overhead will be paid. The Contractor shall notify the City of Palo Alto’s Project Manager at least five (5) working days prior to commencing work, when weather conditions allow for an uninterrupted, 45-day appropriated rain-free or temperature-conflicting period of time. All noise-producing demolition work shall be done during non-business hours. Building will be in use throughout construction. All utilities to areas outside the work area must be maintained. Maintain both ingress and egress to/from building at all times and clear walkways for public use (as applicable.) Cubberley K-Wing Re-Roof Section 01 11 00 Page 4 1.6 PROTECTION OF EXISTING BUILDING A. Contractor shall use proper and diligent care to protect any and all property belonging to the City of Palo Alto, or others, including existing buildings, doors, floors, walks, pavements, pipe systems, ceiling structures, etc. Contractor shall take all reasonable steps to minimize any dirt, noise, dust, traffic, or other problems, i.e. damage to surrounding property or buildings attributable to any action by the Contractor. B. Contractor shall not overload any part of the premises or the building with any excess material or equipment. If so, he shall do so at his own risk and he shall be solely responsible for any and all loss, damage, and/or injury arising or resulting from the overloading. Protect interior floors and concrete sidewalks not only with heavy plywood sheets to evenly distribute trucks loads, but also when carting materials and debris over them. 1.7 SAFETY A. Contractor is solely responsible for safety on the job site and shall comply with all Cal-OSHA safety requirements, all state safety regulations, and orders. 1. Strictly observe safety precautions, and erect temporary barricades, warning lines, signs, and protective railings to protect persons in, around, and under the work areas. Dropping or throwing of objects from above is prohibited. 2. Follow NRCA and OSHA fire protection and prevention provisions including, but not limited to, those listed in OSHA 1962; Chapter 150, 151, 152, 153, and OSHA Chapter 110, 1191 – 110 as they apply to torch application. Comply with all federal, state, and local regulations. 1.8 DRAWINGS A. The location and design of the required construction are shown on the drawings accompanying these Specifications. The following listed drawings are hereby made a part of these Specifications and this contract. Sheet No. Title Date Cubberley K-Wing Re-Roof Section 01 11 00 Page 5 A-1 K-Wing Roof Plan, Project Data October 3, 2018 A-2 Roof Details October 3, 2018 B. Any part of the work that is mentioned in either the specifications or on the drawings shall be understood by the Contractor to be part of the full scope of work to be done. 1.9 CONTRACT DOCUMENTS AT THE JOB SITE The Contractor shall keep one copy of all the contract documents at the job site in complete and good order. These shall be available to City representatives and public agencies having jurisdiction, and shall include all approved drawings, shop drawings, specifications, addenda, and change orders. 1.10 INCLUSION OF GENERAL CONDITIONS AND DIVISION ONE Sections of Division 1 are a part of each and every section of these specifications and apply to each and every section as fully as if repeated in each case therein. 1.11 SITE INVESTIGATION Contractor shall visit the site, verify the general and location conditions, and note all other matters that will affect the proposed work. Failure to do so will not relieve the Contractor from his responsibility of underestimating the difficulty or the cost of the work. 1.12 SITE CONDITIONS AND SURVEYS Before beginning the work, the Contractor shall compare actual site conditions with the requirements of the drawings, and shall verify all existing conditions and dimensions. Any discrepancies should be reported immediately to the Project Manager before proceeding with any of the work. Data and information shown and indicated on the drawings should be field-verified. 1.13 CONTRACTOR SUPERVISION Contractor’s Project Superintendent shall have full authority to make minor changes and shall be responsible for the supervision and direction of the construction area. Questions regarding ANY revisions shall be addressed to City's Project Manager via a written Request For Information (RFI). Project Superintendent shall be present on site daily. Cubberley K-Wing Re-Roof Section 01 11 00 Page 6 1.14 COORDINATION OF WORK Contractor shall coordinate all work with the City's Project Manager. 1.15 DESIGNATED CITY REPRESENTATIVE A. All communications and interface, including written correspondence by the Contractor, shall be with the City of Palo Alto Facilities Rehabilitation Division, P.O. Box 10250, Palo Alto, CA 94303, phone (650) 496-6900, ATTN: Cecil R. Lectura. B. The Project Engineer is Cecil R. Lectura at (650) 496-6921. 1.16 WARRANTY A. Contractor shall submit a warranty certificate, covering the roofing product for a period of twenty (20) years, from the date of final project acceptance. The certificate shall be included in the base bid proposal at no additional cost to the City. B. Contractor shall also submit a contractor warranty certificate, covering work performed under this contract for a period of two (2) years from the date of final project acceptance. The certificate shall be included in the base bid proposal at no additional cost to the City. 1.17 PERSONNEL REQUIREMENTS A. Contractor is required to have the Project Superintendent or lead onsite daily to manage the work during construction. B. Proper Protective Equipment (PPE) is required at all time during construction. These include hard hats, safety goggles, sound and respiratory protection, safety gloves, safety shoes, and full-length clothing. C. All Contractor’s employees shall wear either badges or have clothing identified with the company’s name. D. Contractor is responsible for his/her employees and subcontractor’s proper conduct, appearances, behavior and language used while on the job site. E. Copies of all current SDS for all components must be kept on site. Provide all crewmembers with appropriate safety data and training Cubberley K-Wing Re-Roof Section 01 11 00 Page 7 as is related to the specific chemical compound he or she may be expected to come in contact with. Each crewmember shall be fully aware of first-aid measures to be used in case of accidents. 1.19 OVERLOADING Contractor shall not overload any part of the premises or the building with any excess material or equipment. If so, he shall do so at his own risk and he shall be solely responsible for any and all loss, damage, and/or injury arising or resulting from the overloading. 1.20 DELIVERY OF MATERIALS OR EQUIPMENT Contractor is responsible for the storage of all equipment and materials. Contractor assumes all risk for storage of his/her materials. END OF SECTION Cubberley K-Wing Re-Roof Section 01 74 00 Page 1 SECTION 01 74 00 - TEMPORARY CONDITIONS PART 1 - GENERAL 1.1 WATER, LIGHT AND POWER All utilities shall be available to the Contractor for construction purposes at no charge. The Contractor is responsible for any temporary connections, extensions and distributions, including all wiring, piping, fittings, fixtures, devices, etc. Utilities must remain operational to all areas of the building at all times. Coordinate any required utilities shut down with Project Manager at least 48 hours in advance. 1.2 TEMPORARY SANITARY FACILITIES Contractor shall provide and install, without extra cost to the City, one or more portable and lockable chemical toilet(s) located where permitted by the City and kept continually in sanitary odor-free condition during project. Remove portable toilet(s) on project completion. Place portable toilet(s) in conformance with applicable laws, codes, and regulations. 1.3 DELIVERY AND STORAGE OF MATERIALS AND EQUIPMENT A. There will be a designated area for storage outside of the building and all the space in the work area is also available as storage space during construction. Material shall be neatly stored in the construction area. B. The Contractor shall assume full responsibility for protection and safe keeping of any materials, tools, and equipment stored on City's property. C. Store materials and equipment only in areas designated by the City for this purpose. D. It is anticipated that Contractor's materials will be placed in the job area. The Contractor shall coordinate delivery requirements with the City Project Manager. E. The Contractor shall be held fully responsible for safe mounting, use, storage and disassembly of the equipment; repair or restoration of the existing structure, its surfaces and finishes, landscaped areas and walkways, or other damage caused by the equipment. Cubberley K-Wing Re-Roof Section 01 74 00 Page 2 1.4 DEBRIS AND CLEANING A. Waste All debris from demolition, framing removal, and other construction-related activities shall be carefully handled and discarded in a manner to minimize the generation of dirt and dust. Keep construction areas clean of waste material daily. All work areas shall be left broom-clean daily. B. All debris shall be removed by Contractor or Contractor’s employees. If debris boxes are used, they must be owned by Contractor or rented from Green Waste only. If rental debris boxes are used, they must be rented from the Palo Alto Sanitation Company (Green Waste), 2000 Geng Road, Palo Alto, CA (650) 493-4894. C. Contractor shall recycle all possible construction debris, including packaging of new materials. Contractor shall comply with City’s Green Building Ordinance. Contractor shall register itself and the project on the City of Palo Alto’s waste management website: greenhalosystems.com. Follow the instructions on the website to create and submit a plan, as well as to track the project’s recycling efforts. Provide documentation & receipts of all recycled materials prior to final request for payment and for final inspection. END OF SECTION Cubberley L-Wing Flat Roof Repair Section 01 77 00 Page 1 SECTION 01 77 00 - CONTRACT CLOSEOUT PART 1 - GENERAL 1.1 CLOSEOUT PROCEDURES A. When contractor considers work has reached final completion, including all change orders and punch list, submit written certification that: 1) contract documents have been reviewed, 2) work has been inspected, 3) work is complete and in accordance with contract documents, and 4) project is ready for Project Manager’s inspection. B. In addition to submittal required by the general conditions of the contract, submit a final statement of accounting, giving total adjusted contract sum. Project will not be considered complete until all project documents are submitted. C. Return all keys and access badges to owner. 1.2 FINAL CLEANING A. Execute prior to final inspection. B. Clean all surfaces. Remove temporary labels, stains and foreign substances. C. Remove waste and surplus materials, rubbish, and temporary facilities from the project site. D. Re-do final cleaning if not cleaned to owner’s standards. 1.3 WARRANTIES AND BONDS A. Contractor shall assemble documents provided by subcontractors, suppliers, and manufacturers and file in a three ring binder with durable plastic cover. Provide a table of contents and warranty certificates covering 1) all roofing materials for 20 (15 min.) years, and 2) labor for two (2) years from the date of final project acceptance. END OF SECTION Cubberley K-Wing Re-Roof Section 02 41 00 Page 1 SECTION 02 41 00 - DEMOLITION PART 1 - GENERAL 1.1 RELATED DOCUMENTS Drawings and general requirements of the Contract, including General Requirements, Special Provisions and Division 1 Specification Sections, apply to this Section. 1.2 SCOPE OF WORK Refer to construction drawings for roof area designations: A. Removal of all existing roofing system: tar and gravel roofing, asphalt underlayment, down to the existing plywood sheathing. B. Removal of all existing gutters and drip edge and gravel stop flashings, where noted on construction drawings. C. Temporary removal of remaining rooftop equipment to access equipment curbs - rooftop equipment components to be reinstalled afterwards. D. Removal and disposal of all visible dry rot at sheathing and roof framing members, after removing existing roofing system. Dry rot must be confirmed with the City’s Project Engineer or Project Manager prior to removal and disposal. E. Removal of damaged stucco soffits under roof overhangs, down to existing roof framing members. Removal and disposal of all visible dry rot at roof framing, along with framing member replacement. Dry rot must be confirmed with the City’s Project Engineer or Project Manager prior to removal and disposal. 1.3 REGULATORY REQUIREMENTS A. Conform to applicable codes for removal of materials from site. Comply with all regulations and requirements for dust control and disposal. 1.4 CONTRACTOR REQUIREMENTS A. Contractor State Licensing Board: Roofing (C-39). 1.5 PROJECT CONDITIONS Cubberley K-Wing Re-Roof Section 02 41 00 Page 2 A. Owner’s occupants will occupy portions of building immediately within affected areas. Conduct improvements so occupants’ operations will not be disrupted. All noise-producing demolition work shall be coordinated and timeframe pre-determined, prior to start of work. B. Maintain access to all walkways, corridors, and other adjacently occupied or used areas in and around the facility. C. Provide, place, and maintain temporary barriers and security devices for safety of the occupants during the duration of the project. D. Do not allow roof debris and construction materials to fall onto any walking area surfaces during the entire project. These include the interior floors, outdoor walkways, and parking areas. E. Ensure protection and use care with all roof-located antenna, cabling, and/or mechanical equipment. Contractor shall be responsible for any and all damage that occurs to this equipment. F. Prevent debris from entering or blocking roof drains or plumbing vents. 1.6 WEATHER LIMITATIONS A. Proceed with demolition only when existing and forecasted weather conditions permit Work to proceed without water entering into existing roofing system or building. B. Contractor shall be responsible for any and all temporary weather proofing if required. PART 2 - PRODUCTS 2.1 TEMPORARY ROOFING MATERIALS Selection of materials and design of temporary roofing is responsibility of Contractor. PART 3 - EXECUTION 3.1 DEMOLITION OF ROOFING MATERIAL For removing roofing material and/or substrate, the contractor shall ensure that the following work practices are followed, with best practices and methods in Cubberley K-Wing Re-Roof Section 02 41 00 Page 3 mind: 1. Worker sign-in and on-site safety talk. 2. Roofing material shall be removed in the most intact state as possible. 3. Wet methods shall be used to remove roofing materials that are not intact, or that will be rendered not intact during removal, unless such wet methods are not feasible or will create safety hazards. 4. All extensive work utilizing cutting machines onsite shall be continuously misted during use, unless competent person determines that misting substantially decreases worker safety. 5. Upon being lowered, unwrapped material shall be transferred to a closed receptacle in such a manner to avoid the dispersion of dust. 6. Roof level heating and ventilation air intake sources shall be isolated or the ventilation system shall he shut down. 3.2 DISPOSAL A. Collect and place demolished materials in containers. Promptly dispose of demolished materials. Do not allow demolished materials to accumulate on-site. B. Contractor shall comply with Palo Alto Municipal Code Chapter 5.24 Requirements to Divert Construction and Demolition Waste from Landfill and under heading 1.4, Section 01 74 00, “Temporary Conditions”, located herein these Technical Specifications. END OF SECTION Cubberley K-Wing Re-Roof Section 06 10 00 Page 1 SECTION 06 10 00 - ROUGH CARPENTRY PART 1 - GENERAL 1.0 SCOPE OF WORK Contractor shall furnish all labor, materials, tools, and equipment to remove and replace all worn and/or damaged plywood sheathing, framing supports, and pipe sleepers. Replace all the existing electrical conduits and gas sleepers with Durabloks or approved equal. Replace plywood roof sheathing and wood fascias with like kind and length, upon discovery of either dry-rot or other damage. 1.1 RELATED SECTIONS A. Section 02 41 00 - Demolition. B. Section 07 51 13 - Cold-Applied Modified Bitumen Roofing C. Section 07 60 00 - Flashing and Sheet Metal. General requirements for fabrication of sheet metal flashings and trim. D. Section 07 92 00 - Joint Sealants: Sealing of all roof joints. 1.2 QUALITY ASSURANCE A. Grading rules of the following associations apply to lumber furnished under this Section: 1. West Coast Lumber Inspection Bureau (WCLIB). 2. Western Wood Products Association (WWPA). 3. Redwood Inspection Service (RIS). B. Plywood shall conform to Product Standard PS 1-74. 1.3 PRODUCT DELIVERY, STORAGE AND HANDLING A. Immediately upon delivery to job site, place materials in area protected from weather. B. Store materials & cover with protective waterproof covering, providing for adequate air circulation & ventilation. Polyethylene cover is unacceptable. Cubberley K-Wing Re-Roof Section 06 10 00 Page 2 C. Do not allow materials to be exposed to any moisture during transportation, storage, handling and installation. D. Stack lumber flat with spacers beneath and between each bundle to provide air circulation. Protect lumber from weather by covering with waterproof sheeting, securely anchored. Provide for air circulation around stacks and under coverings. 1.4 COORDINATION Coordinate carpentry work with the work of other trades, ensuring timely performance of carpentry work as required to meet the construction schedule. 1.5 SUMMARY A. Section Includes: 1. Rooftop equipment bases and support curbs. 2. Wood Blocking, and Wood Nailers. 1.6 ACTION SUBMITTALS A. Product Data: For each type of process and factory-fabricated product. Indicate component materials and dimensions and include construction and application details. 1.7 DELIVERY, STORAGE, AND HANDLING A. Stack lumber flat with spacers beneath and between each bundle to provide air circulation. Protect lumber from weather by covering with waterproof sheeting, securely anchored. Provide for air circulation around stacks and under coverings. PART 2 - PRODUCTS 2.0 MATERIALS A. Blocking, edgings, curbs attached to substrate framing: S4S, Douglas fir, Douglas Fir-larch, or Hem-Fir, No. 2 grade or better. Lumber: Shall be Pressure Treated Douglas Fir (PTDF). Cubberley K-Wing Re-Roof Section 06 10 00 Page 3 2.1 NAILS FOR STRUCTURE A. Nails shall be as per NRCA and UBC, and JM roof manufacturer. 2.2 MISCELLANEOUS LUMBER A. General: Provide miscellaneous lumber indicated and lumber for support or attachment of other construction, including the following: 1. Blocking. 2. Nailers. 3. Rooftop equipment bases and support curbs. 2.3 MISCELLANEOUS ROUGH FASTENERS A. Wood Nailer and Wood Blocking Fasteners Shall be stainless steel hex cap scews that adhere to ASTM F593. B. General: Provide fasteners of size and type indicated that comply with requirements specified in this article for material and manufacture. 1. Where carpentry is exposed to weather, in ground contact, pressure-preservative treated, or in area of high relative humidity, provide fasteners of Type 304 stainless steel. C. Nails, Brads, and Staples: ASTM F 1667. D. Power-Driven Fasteners: NES NER-272. E. Wood Screws: ASME B18.6.1. F. Screws for Fastening to Metal Framing:, length as recommended by screw manufacturer for material being fastened. ASTM C 954. G. Lag Bolts: ASME B18.2.1 (ASME B18.2.3.8M). H. Bolts: Steel bolts complying with ASTM A 307, Grade A (ASTM F 568M, Property Class 4.6); with ASTM A 563 (ASTM A 563M) hex nuts and, where indicated, flat washers. I. Expansion Anchors: Anchor bolt and sleeve assembly of material indicated below with capability to sustain, without failure, a load equal to 6 times the load imposed when installed in unit masonry assemblies and Cubberley K-Wing Re-Roof Section 06 10 00 Page 4 equal to 4 times the load imposed when installed in concrete as determined by testing per ASTM E 488 conducted by a qualified independent testing and inspecting agency. 1. Material: Stainless steel with bolts and nuts complying with ASTM F 593 and ASTM F 594, Alloy Group 1 or 2 (ASTM F 738M and ASTM F 836M, Grade A1 or A4). PART 3 - EXECUTION 3.0 DESCRIPTION A. All workmanship shall be in accordance with the best practice, shall be accurate, with exact measurements and layout and shall be performed in a neat and careful fashion. B. Where necessary to avoid splitting, nail holes shall be sub-bored. Split pieces shall be removed and replaced. B. Cleaning up - Upon completion of his work, the Contractor shall remove all staging and other apparatus used in the work. Contractor shall also clean up and remove all scrap material and debris and leave the job and surrounding areas in a clean and workmanlike manner. 3.1 INSTALLATION – GENERAL A. Set carpentry to required levels and lines, with members plumb, true to line, cut, and fitted. Fit carpentry to other construction; scribe and cope as needed for accurate fit. Locate nailers, blocking, and similar supports to comply with requirements for attaching other construction. B. Framing Standard: Comply with AF&PA's WCD 1, "Details for Conventional Wood Frame Construction," unless otherwise indicated. C. Do not splice structural members between supports unless otherwise indicated. D. Provide blocking and framing as indicated and as required to support facing materials, fixtures, specialty items, and trim. E. Sort and select lumber so that natural characteristics will not interfere with installation or with fastening other materials to lumber. Do not use materials with defects that interfere with MISCELLANEOUS ROUGH CARPENTRY function of member or pieces that are too small to use with Cubberley K-Wing Re-Roof Section 06 10 00 Page 5 minimum number of joints or optimum joint arrangement. F. Securely attach carpentry work to substrate by anchoring and fastening as indicated, complying with the following: 1. Table 2304.9.1, "Fastening Schedule," in ICC's International Building Code. 3.2 WOOD BLOCKING, AND NAILER INSTALLATION A Install where indicated and where required for attaching other work. Form to shapes indicated and cut as required for true line and level of attached work. Coordinate locations with other work involved. C. Attach items to substrates to support applied loading. Recess bolts and nuts flush with surfaces unless otherwise indicated. C. Mechanically attach all wood nailers using stainless steel screws spaced 3" to 6" on center in a staggered pattern. Securely attach or anchor as specified. 3.3 PROTECTION A. Protect miscellaneous rough carpentry from weather. If, despite protection, miscellaneous rough carpentry becomes wet, apply EPA- registered borate treatment. Apply borate solution by spraying to comply with EPA-registered label. END OF DIVISION Cubberley K-Wing Re-Roof Section 07 52 16 Page 1 SECTION 07 52 16 - SBS MODIFIED BITUMINOUS MEMBRANE ROOFING, COLD-APPLIED PART 1 - GENERAL 1.1 SECTION INCLUDES A. The attached are components of this section: 1. Scope of work. 2. General Conditions. 3. Specifications. B. Drawings and general provisions of the Contract, including General and Supplementary Conditions and Division 01 Specification Sections, apply to this Section. C. Roofing Terminology: See ASTM D 1079 and glossary of NRCA's "The NRCA Roofing and Waterproofing Manual" for definition of terms related to roofing work in this Section. 1.2 PRODUCTS INSTALLED BUT NOT FURNISHED UNDER THIS SECTION A. Sheet metal flashing and trim. B. Sheet metal roofing specialties. 1.3 RELATED SECTIONS A. Section 06 10 00 - Rough Carpentry. B. Section 07 60 00 - Flashing and Sheet Metal. 1.4 REFERENCE STANDARDS A. References in these specifications to standards, test methods and codes, are implied to mean the latest edition of each such standard adopted. The following is an abbreviated list of associations, institutions, and societies which may be used as references throughout this specification section 1. ASTM - American Society for Testing and Materials, Philadelphia, PA. 2. FS - Federal Specification. Cubberley K-Wing Re-Roof Section 07 52 16 Page 2 3. NRCA - National Roofing Contractors Association; Rosemont, IL. 4. UL - Underwriters Laboratories; Northbrook, IL. a. UL790 Class A. 5. FM - Factory Mutual 4470. a. Class I-90 wind uplift. 6. OSHA - Occupational Safety and Health Administration; Wash., DC. 7. SMACNA - Sheet Metal and Air Conditioning Contractors National Association; Chantilly, VA. 1.5 SCOPE OF WORK A. Furnish and install cold process roofing, insulation, flashings, Title 24 compliant Cool Roof coating, and miscellaneous materials. B. Work includes: 1. Removal of existing roofing system, insulation, and any unused equipment. Reuse existing roof downspouts. Installation of designated new roofing, gutters, and flashing. Make special precautions for falling debris in interior space during removal phase. 2. Install red rosin paper over entire deck surface. 3. Mechanically Fasten fiberglass faced Polyisocyanurate insulation to deck. Install insulation throughout to meet R-8 thermal resistance rating. Install tapered polyisocyanurate at 1/4" per 12" slope to low roof. Stagger joints in insulation. 4. Adhere one (1) layer of 0.25" Dens Deck Prime gypsum board over Polyisocyanurate insulation using Low Rise Foam Insulation Adhesive. 5. Adhere one (1) ply of 80 mil thick, smooth surfaced, fiberglass reinforced modified bitumen membrane in urethane adhesive. 6. Adhere one (1) ply of 120 mil thick ASTM 6163, Type 1, Grade G, fire rated, granule surfaced, SBS modified bitumen membrane in urethane adhesive. 7. Install two (2) ply SBS modified bitumen asphalt base flashings in polymeric solvent free bituminous cold mastic adhesive. 8. Apply white Energy Star certified, CEC Title 24 compliant, and CRRC listed intumescent, fire retardant, styrenated acrylic latex roof coating. Cubberley K-Wing Re-Roof Section 07 52 16 Page 3 a. SRI shall be no less than rated at 0.83. Thermal emittance shall be no less than 0.84. 9. Install new edge termination metal, two piece surface mounted counterflashing at wall, cap flashing at condenser unit platform. 10. Install new 4 lb. lead flashing around all pipe penetrations. a. All metal work to be SMACNA-approved detail. 11. Manufacturer to provide (3) days of part time project inspection. 12. Provide new foam blocking and unitstrut clamps at conduit lines. 13. Install traffic pads under communication equipment resting on the roof and at ladder access point. C. Unit Prices: Refer to Division 01 Section "Unit Prices" for description of Work in this Section affected by unit prices. 1.6 QUALITY ASSURANCE A. Contractor shall: 1. Have workers trained and certified by manufacturer, including a full-time on-site supervisor with a minimum of five years' experience installing products comparable to those specified, able to communicate verbally with Contractor, Architect, and employees, and qualified by the manufacturer to install manufacturer's product and furnish warranty of type specified. 2. Be experienced in cold process roofing ten years minimum under same company name. 3. Be acceptable by Owner and roofing material supplier. 4. Maintain a copy of roofing specification on the job site at all times. 5. Shall be a Certified Applicator by the material manufacturer. 6. Utilizing Tremco's technical inspectors, Contractor will acquire three (3) job site inspection days as required by material manufacturer and Owner. B. Roofing material supplier shall: Cubberley K-Wing Re-Roof Section 07 52 16 Page 4 1. Be an approved manufacturer with UL listed roofing systems comparable to those specified for this Project, with minimum five years' experience in manufacture of comparable products in successful use in similar applications, and able to furnish warranty with provisions matching specified requirements. 2. Be Associate Member in good standing with National Roofing Contractors' Association (NRCA). 3. Be nationally recognized in roofing, waterproofing, and moisture survey industry. 4. Provide Owner names of at least four (4) certified applicators. 5. Provide local Field Representative to make periodic site visits, report work quality and job progress. Provide a field inspector to make job site inspections and submit daily reports and photographs of work. 6. The presence and activity of the manufacturer's/specifier's representative and/or owner's representative shall in no way relieve the contractor of his contractual responsibilities or duties. C. Roofing Inspector shall: 1. Be a technical representative of manufacturer not engaged in the sale of products and experienced in the installation and maintenance of the specified roofing system, qualified to perform roofing observation and inspection specified in Field Quality Control Article, to determine Installer's compliance with the requirements of this Project, and approved by the manufacturer to issue warranty certification. The Roofing Inspector shall be one of the following: a. An authorized full-time technical employee of the manufacturer. b. An independent party certified as a Registered Roof Observer by the Roof Consultants Institute, retained by the Contractor or the Manufacturer and approved by the Manufacturer. D. Plans and specifications: 1. Contractor must notify owner and specifier of any omissions, contradictions or conflicts seven (7) days before bid date. Owner and specifier will provide necessary corrections or additions to plans and specifications by addendum. If he does not so notify owner and specifier of any such condition, it will be assumed he has included the necessary Cubberley K-Wing Re-Roof Section 07 52 16 Page 5 items in his bid to complete this specification. 2. It is the intent that this be a completed project as far as the contract documents set forth. It is not the intent that different phases of work on this project be delegated to various trades and subcontractors by the contract documents. Contractor must make his own contracts with various subcontractors, setting forth the work these subcontractors will be held responsible for. Contractor alone will be held responsible by the owner for the completed project. 3. If the contractor feels a conflict exists between what is considered good roofing practice and these specifications he shall state in writing all objections prior to submitting quotations. 4. It is the contractor's responsibility during the course of the work, to bring to the attention of the owner's representative any defective membrane, insulation or deck discovered where not previously identified. E. Project meetings: 1. Pre-Construction Meeting: a. Will be scheduled by Owner within seven (7) days after receipt of the City of Palo Alto’s Notice to Proceed letter, signed by the contractor. b. Attendance: - Representative of Owner. - Roofing material manufacturer/specifier. - Contractor. c. Agenda: - Submittal of insurance certificates. - Submittal of executed bonds and insurance certificates. - Execution of Owner-Contractor Agreement. - Distribution of contract documents. - Review drawings and specifications. - Review methods and procedures related to roofing installation, including manufacturer's written instructions. - Submittal of list of subcontractors, material submittals, and progress schedule. - Review and finalize construction schedule and verify availability of materials, Installer's personnel, equipment, and facilities needed to make progress and avoid delays. Cubberley K-Wing Re-Roof Section 07 52 16 Page 6 - Examine substrate conditions and finishes for compliance with requirements, including flatness and fastening. - Review structural loading limitations of roof deck during and after roofing. - Review base flashings, special roofing details, roof drainage, roof penetrations, equipment curbs, and condition of other construction that will affect roofing system. - Review governing regulations and requirements for insurance and certificates if applicable. - Review temporary protection requirements for roofing system during and after installation. - Review roof observation and repair procedures after roofing installation. - Designation of responsible personnel. - Walkover inspection. F. Progress meetings: 1. Will be scheduled by Owner as required. 2. Attendance: a. Owner. b. Contractor. c. Job superintendent. d. Roofing material manufacturer/specifier. e. Subcontractors, as appropriate. 3. Minimum agenda: a. Review of work progress. b. Field observations, problems, and decisions. c. Identification of problems which impede planned progress. d. Maintenance of progress schedule. e. Maintenance of quality and work standards. f. Effect of proposed changes on progress schedule and coordination. g. Protection of area around work zone due to ongoing operations. Cubberley K-Wing Re-Roof Section 07 52 16 Page 7 G. Final inspection: 1. Will be scheduled by roofing material manufacturer upon job completion. Attendance: a. Owner. b. Contractor. c. Roofing material manufacturer/specifier. 2. Minimum agenda: a. Walkover inspection. b. Identification of problems which may impede issuance of warranty. 1.7 SUBMITTALS A. The performance requirements outlined in Section II of this specification shall be strictly adhered to. Submittal of alternate materials and/or systems not conforming to these performance specifications will result in the disqualification of the bidder. Bidders shall submit the following with the bid: 1. Product compatibility: a. Written verification from roofing material supplier that major roofing components, including (but not limited to) coatings, cold process adhesives; roofing ply sheets; reinforcement fabric felts and mats; mastics; and sealants are all compatible with each other. 2. Test reports: a. Written verification from roofing material supplier that roofing system meets or exceeds regulatory agency/s requirements. A photocopy of the UL Class "A" listing for the specified system with proposed manufacturer as listed in the 2015 UL Building Materials Directory. 3. Red label products: a. Written verification from roofing material supplier that cold process coatings are not red label. Cubberley K-Wing Re-Roof Section 07 52 16 Page 8 4. Product data: a. Product data sheets. b. Material safety data sheets. B. Action Submittals: 1. Product Data: For each type of product indicated. 2. Shop Drawings: For roofing system. Include plans, elevations, sections, details, and attachments to other work. Provide roof plan showing orientation and types of roof deck, orientation of membrane roofing, and fastening spacings and patterns for mechanically fastened components. a. Base flashings and built-up terminations. b. Tapered insulation, including slopes. c. Crickets, saddles, and tapered edge strips, including slopes. d. Insulation fastening patterns for corner, perimeter, and field-of- roof locations. 3. Samples for Verification: For the following products: a. Sheet roofing materials, of color specified for exposed material. C. informational Submittals: 1. Contractor's Product Certificate: Submit certificate, indicating products intended for Work of this Section, including product names and numbers and manufacturers names, with statement indicating that products to be provided meet the requirements of the Contract Documents. 2. Qualification Data: For Installer, Manufacturer, and Roofing Inspector . a. Include letter from Manufacturer written for this Project indicating approval of Installer. 3. Manufacturer Certificates: Signed by roofing manufacturer certifying that roofing system complies with requirements specified in "Performance Requirements" Article. a. Submit evidence of compliance with performance requirements, including UL listing certificate and Energy Performance. Cubberley K-Wing Re-Roof Section 07 52 16 Page 9 b. Indicate that proposed system components are compatible. 4. Warranties: Unexecuted sample copies of special warranties. 5. Field Quality Control Reports: Periodic reports of Roofing Inspector. Include weather conditions, description of work performed, tests performed, defective work observed, and corrective actions taken to correct defective work. D. Closeout Submittals: 1. Maintenance Data: To include in maintenance manuals. 2. Warranties: Executed copies of warranties. 1.8 DELIVERY, STORAGE AND HANDLING A. Delivery of materials: 1. Deliver roofing materials to Project site in original, new, dry, unopened, and well-marked containers with seals unbroken and labeled with manufacturer's name, product brand name and type, date of manufacture, approval or listing agency markings, and directions for storing and mixing with other components. 2. Deliver materials in sufficient quantity to allow continuity of work. 3. Coordinate delivery with Owner – location TBD. B. Storage of materials: 1. Store liquid materials in their original undamaged containers in a clean, dry, protected location and within the temperature range required by roofing system manufacturer. Protect stored liquid material from direct sunlight. a. Discard and legally dispose of liquid material that cannot be applied within its stated shelf life. 2. Store rolled goods on ends only. Discard rolls which have been flattened, creased, or otherwise damaged. Place materials on pallets. Do not stack pallets. 3. Stack insulation on pallets. 4. Store materials marked "keep from freezing" in areas where temperatures will remain above 40 degrees F. Cubberley K-Wing Re-Roof Section 07 52 16 Page 10 5. Rooftop storage: Disperse material to avoid concentrated loading. 6. Cover top and sides of all exterior stored materials with canvas tarpaulin (or polyethylene). Secure tarpaulin. 7. No materials may be stored in open or in contact with ground or roof surface. 8. Should Contractor be required to quickly cover material temporarily, such as during an unanticipated rain shower, all materials shall be stored on a raised platform covered with secured canvas tarpaulin (or polyethylene), top to bottom. This is only a temporary covering, since at end of each day's work, all roofing materials and accessories are to be stored in trailers. C. Protection of materials: 1. Contractor shall assume full responsibility for the protection and safekeeping of products stored on premises. 2. Protect roof insulation materials from physical damage and from deterioration by sunlight, moisture, soiling, and other sources. Store in a dry location. Comply with insulation manufacturer's written instructions for handling, storing, and protecting during installation. 3. Handle and store roofing materials and place equipment in a manner to avoid permanent deflection of deck. 1.9 SITE CONDITIONS A. Field measurements and material quantities: 1. Applicator shall have SOLE responsibility for accuracy of all measurements, estimates of material quantities and sizes, and site conditions that will affect work. Contractor will be responsible for determining entire existing roof assembly. All asbestos testing results shall be provided to contractors at the pre-bid conference, if applicable. B. Existing conditions: 1. Access to roof shall be from exterior only or as approved by Owner. No unauthorized roofing employees will be allowed within building. 2. Air-conditioning units and other equipment shall be moved/lifted as required to install roofing materials complete and in accordance with plans and specifications. When units and equipment are to be moved, they shall be carefully disconnected and moved to a protected area so Cubberley K-Wing Re-Roof Section 07 52 16 Page 11 as not to damage any part or component thereof, and shall be reconnected in such a way that they are restored to a prior work operating condition. 3. All disconnection and re-connection shall be performed by a mechanical and/or electrical company licensed to perform such work. C. Asbestos: 1. Owner agrees to exonerate, indemnify, defend, and hold harmless contractor and roofing material manufacturer from and against all claims, demands, lawsuits, damages, expenses and losses incurred by Contractor's removal of asbestos-containing materials from Owner's building and work site provided Contractor conducts its operations according to applicable requirements established by: a. Occupation Safety and Health Administration (OSHA). b. Environmental Protection Agency (EPA). c. Asbestos Hazard Emergency Response Act (AHERA). d. State of California, Occupation Safety and Health Administration (Cal/OSHA). D. Environmental requirements: 1. Proceed with installation only when existing and forecasted weather conditions permit roofing system to be installed according to manufacturer's written instructions and warranty requirements. 2. Do not work in rain, snow, or in presence of water. a. New roofing materials shall not be installed under any circumstances if rain is forecasted to occur within the working day on any level forecasted above the 30% chance of rain. All roofing materials shall be installed totally dry and free of moisture. 3. Daily Protection: Coordinate installation of roofing so insulation and other components of roofing system not permanently exposed are not subjected to precipitation or left uncovered at the end of the workday or when rain is forecast. 4. Provide tie-offs at end of each day's work to cover exposed roofing and insulation with a course of roofing sheet securely in place with joints and edges sealed. Cubberley K-Wing Re-Roof Section 07 52 16 Page 12 5. Complete terminations and base flashings and provide temporary seals to prevent water from entering completed sections of roofing. 6. Do not work in temperatures below 40 degrees F. 7. Do not install materials marked "keep from freezing" when daily temperatures are scheduled to fall below 40 degrees F. 8. Do not perform masonry work below 35 degrees F. Make proper provisions to protect work from freezing 48 hours after laying if work is performed between 35 degrees F. and 45 degrees F. 9. Remove any work exposed to freezing. 10. Remove temporary plugs from roof drains at end of each day. 11. Remove and discard temporary seals before beginning work on adjoining roofing. E. Safety requirements: 1. All application, material handling, and associated equipment shall conform to and be operated in conformance with OSHA safety requirements. 2. Comply with federal, state, local and Owner fire and safety requirements. 3. Advise Owner whenever work is expected to be hazardous to Owner employees and/or operators. 4. Maintain a crewman as a floor area guard whenever roof decking is being repaired or replaced. 5. Maintain fire extinguisher within easy access whenever power tools, roofing kettles, and torches are being used. 6. Advise Owner when volatile materials are to be used near air ventilation intakes so that they can be shut down or blocked. 7. OSHA fall protection and job zone ground protection will be enforced. F. Security requirements: 1. Comply with Owner security requirements. 2. Provide Owner with current list of accredited persons. 3. Require identification be displayed by all persons employed on this Cubberley K-Wing Re-Roof Section 07 52 16 Page 13 project. G. Temporary sanitary facilities: 1. Furnish, install, and maintain temporary sanitary facilities for employee use during project. Remove on project completion. 2. Place portable toilets in conformance with applicable laws, codes, and regulations. 1.10 SUBSTITUTIONS A. When a particular make or trade name is specified, it shall be indicative of standard required. 1. Owner reserves right to be final authority on acceptance or rejection of any substitute. 1.11 PAYMENT SECURITY A. Progress payments: 1. Payment to the Contractor shall be progress payment as agreed to by owner and contractor. 2. Final payment shall be withheld until all provisions of the specifications are met. 1.12 QUANTITIES INCLUDED IN THE BASE BID A. Include the following items in your base bid: 1. Walkpad installation around all serviceable equipment in addition to added linear feet. 2. All wood blocking and fastening components. 3. All perimeter flashing and metal components. 4. All tapered edge and cant strips. 5. All existing or new counterflashing. 6. All surface mastics, coatings, stripping ply, etc. 7. All warranty/inspection charges. 1.13 WARRANTY/GUARANTEE Cubberley K-Wing Re-Roof Section 07 52 16 Page 14 A. Warranty: 1. General: Warranties specified shall be in addition to, and run concurrent with, other warranties required by the Contract Documents. Manufacturer's disclaimers and limitations on product warranties do not relieve Contractor of obligations under requirements of the Contract Documents. 2. Upon project completion, material manufacturer's acceptance, and once complete payment has been received by both Contractor and material manufacturer, material manufacturer shall deliver to owner a Twenty (20) year Roofing System Warranty and Owner's Manual. Visits to the roof by the materials manufacturer shall be made at years’ 2, 5, 10, and 15. A formal site inspection report by manufacturer's field technicians shall be made at those times. B. Manufacturer's standard or customized form in which manufacturer agrees to repair or replace components of built-up roofing that fail in materials or workmanship within specified warranty period. Failure includes roof leaks. The Manufacturers Warranty must include labor & material coverage against leakage on all components; including those manufactured by others. Included: 1. Insulation materials, fasteners, and adhesives. 2. All roofing membrane, base flashings, fasteners, roofing membrane accessories and other components of roofing system specified in this Section. 3. All drain assemblies, scuppers, expansion joints, pitch pans, lead jacks, excluding interior plumbing. 4. Any leaks or other problems caused by substrate movement, excluding decks, shall not be excluded from the written warranty. 5. Wind damage from speeds up to 74 mph. 6. Warranty Period: 20 years from date of Substantial Completion. C. Installer's Warranty: 1. Submit roofing Installer's warranty, on warranty form at end of this Section, signed by Installer, covering the Work of this Section and related Sections indicated above, including all components of built-up roofing such as built-up roofing membrane, base flashing, roof insulation, fasteners, cover boards, substrate boards, vapor retarders, roof pavers, and walkway products, for the following warranty period: a. Warranty Period: Two years from date of Substantial Completion. Cubberley K-Wing Re-Roof Section 07 52 16 Page 15 D. Extended Roof System Warranty: 1. Warranties specified in this Section include the following components and systems specified in other sections supplied by the roofing system Manufacturer, and installed by the roofing system Installer: a. Sheet metal flashing and trim, including roof penetration flashings. b. Manufactured copings, roof edge, counterflashings, and reglets. c. Roof curbs, hatches, and penetration flashings. E. Guarantee: 1. Upon project completion and Owner acceptance, effective upon complete payment, Contractor shall issue Owner a guarantee against defective workmanship and materials for a period of two (2) years. F. This roofing system will be inspected on a regular basis by the local manufacturer's representative and WTI field inspectors during installation. Before a system warranty is granted, the entire system as specified will have undergone final inspection by a certified inspector from the manufacturer's Technical Services Department. G. All roofing drawings and flashing details as provided by this specification shall be bid accordingly. There shall be no substitutes allowed to the details. PART 2 PRODUCTS 2.1 GENERAL A. Comply with quality control, references, specifications, and manufacturer's data. Products containing asbestos are prohibited on this project. Use only asbestos-free products. 2.2 MANUFACTURERS A. Manufacturers: Subject to compliance with requirements, provide products by a manufacturer meeting qualification requirements in Quality Assurance Article. B. Basis-of-Design Manufacturer/Product: The roof system specified in this Section is based upon products of Tremco, Inc., Beachwood, OH, (800) 562-2728, www.tremcoroofing.com, that are named in other Part 2 articles. Cubberley K-Wing Re-Roof Section 07 52 16 Page 16 Provide specified products. 1. Owner-approved equal. C. Source Limitations: Obtain components for roofing system from same manufacturer as membrane roofing or manufacturer approved by membrane roofing manufacturer. 2.3 PERFORMANCE REQUIREMENTS A. General Performance: Roofing shall withstand exposure to weather without failure or leaks due to defective manufacture or installation. 1. Accelerated Weathering: Roofing system shall withstand 2000 hours of exposure when tested according to ASTM G 152, ASTM G 154, or ASTM G 155. 2. Impact Resistance: Roofing system shall resist impact damage when tested according to ASTM D 3746 or ASTM D 4272. B. Material Compatibility: Provide roofing materials that are compatible with one another under conditions of service and application required, as demonstrated by membrane roofing manufacturer based on testing and field experience. C. SPRI Wind Design Standard: Manufacture and install roof-edge flashings tested according to SPRI ES-1. D. Flashings and Fastening: Comply with requirements of Division 07 Sections "Sheet Metal Flashing and Trim" and "Roof Specialties." Provide base flashings, perimeter flashings, detail flashings and component materials and installation techniques that comply with requirements and recommendations of the following: 1. FM Global 1-49: Loss Prevention Data Sheet for Perimeter Flashings. 2. FM Global 1-29: Loss Prevention Data Sheet for Above Deck Roof Components. 3. NRCA Roofing Manual (Sixth Edition) for construction details and recommendations. 4. SMACNA Architectural Sheet Metal Manual (Seventh Edition) for construction details. E. Exterior Fire-Test Exposure: ASTM E 108, Class A; for application and roof slopes indicated, as determined by testing identical membrane roofing Cubberley K-Wing Re-Roof Section 07 52 16 Page 17 materials by a qualified testing agency. Materials shall be identified with appropriate markings of applicable testing agency. F. Fire-Resistance Ratings: Where indicated, provide fire-resistance-rated roof assemblies identical to those of assemblies tested for fire resistance per ASTM E 119 by a qualified testing agency. Identify products with appropriate markings of applicable testing agency. G. Solar Reflectance Index: Not less than 0.83 when calculated according to ASTM E 1980, based on testing identical products by a qualified testing agency. H. Energy Star Listing: Roofing system shall be listed on the DOE's ENERGY STAR "Roof Products Qualified Product List" for low-slope roof products. I. Energy Performance: Roofing system shall have an initial solar reflectance index of not less than 0.83 and an emissivity of not less than 0.84 when tested according to CRRC-1. 2.4 ROOFING MEMBRANE MATERIALS A. Sheathing Paper: Red-rosin type, minimum 3 lb/100 sq. ft. (0.16 kg/sq. m). B. Base Sheet: 1. ASTM D 6163 Type IGrade S SBS/SEBS-modified asphalt coated glass- fiber-reinforced sheet, smooth surfaced. a. Basis of design product: Tremco, POWERply Standard Smooth. b. Tensile Strength at 73 deg. F (23 deg. C), minimum, ASTM D 5147: 95 lbf/in (17 kN/m) machine direction; 85 lbf/in (215 kN/m) cross machine direction. c. Thickness, minimum, ASTM D 5147: 0.080 inch (2.0 mm). C. SBS Modified Bituminous Cap Sheet: 1. ASTM D 6163 Type IGrade G SBS-modified asphalt-coated glass-fiber-reinforced sheet, granular surfaced. a. Basis of design product: Tremco, POWERply Standard FR. b. Exterior Fire-Test Exposure, ASTM E 108: Class A. c. Tensile Strength at 73 deg. F (23 deg. C), minimum, ASTM D 5147: Machine direction 80.0 lbf/in (14.0 kN/m); Cross Cubberley K-Wing Re-Roof Section 07 52 16 Page 18 machine direction 70.0 lbf/in (12.0 kN/m). d. Tear Strength at 73 deg. F (23 deg. C), minimum, ASTM D 5147: Machine direction, 100 lbf (440 N); Cross machine direction 100 lbf (440 N). e. Elongation at 73 deg. F (23 deg. C), minimum, ASTM D 5147: Machine direction 7.5 percent; Cross machine direction 7.5 percent. f. Low Temperature Flex, maximum, ASTM D 5147: -15 deg. F (- 26 deg. C). g. Thickness, minimum, ASTM D 5147: 0.120 inch (3 mm). D. Base Flashing Backer Sheet: 1. ASTM D 6163 Type IGrade S SBS/SEBS-modified asphalt coated glass-fiber-reinforced sheet, smooth surfaced. a. Basis of design product: Tremco, POWERply Standard Smooth. b. Tensile Strength at 73 deg. F (23 deg. C), minimum, ASTM D 5147: 95 lbf/in (17 kN/m) machine direction; 85 lbf/in (215 kN/m) cross machine direction. c. Thickness, minimum, ASTM D 5147: 0.080 inch (2.0 mm). E. Base Flashing Sheet: 1. ASTM D 6163 Type IGrade G SBS-modified asphalt-coated glass-fiber-reinforced sheet, granular surfaced. a. Basis of design product: Tremco, POWERply Standard FR. b. Exterior Fire-Test Exposure, ASTM E 108: Class A. c. Tensile Strength at 73 deg. F (23 deg. C), minimum, ASTM D 5147: Machine direction 80.0 lbf/in (14.0 kN/m); Cross machine direction 70.0 lbf/in (12.0 kN/m). d. Tear Strength at 73 deg. F (23 deg. C), minimum, ASTM D 5147: Machine direction, 100 lbf (440 N); Cross machine direction 100 lbf (440 N). e. Elongation at 73 deg. F (23 deg. C), minimum, ASTM D 5147: Machine direction 7.5 percent; Cross machine direction 7.5 percent. f. Low Temperature Flex, maximum, ASTM D 5147: -15 deg. F (- Cubberley K-Wing Re-Roof Section 07 52 16 Page 19 26 deg. C). g. Thickness, minimum, ASTM D 5147: 0.120 inch (3 mm). 2.5 ROOF INSULATION A. Roof Insulation, General: Preformed roof insulation boards manufactured or approved by roofing manufacturer, selected from manufacturer's standard sizes suitable for application, of thicknesses indicated. 1. Tapered Insulation: Provide factory-tapered insulation boards fabricated to slope of 1/4 inch per 12 inches (1:48) unless otherwise indicated. 2. Provide saddles, crickets, tapered edge strips, and other insulation shapes where indicated for sloping to drain. Fabricate to slopes indicated. B. Roof Insulation: 1. Polyisocyanurate board insulation, high density,ASTM C 1289 Type II Class 4 CFC-and HCFC-free, with recycled content glass-fiber mat facer on both major surfaces. CCMC listed. a. Compressive Strength, ASTM C 1621: Grade 4: Not less than 80 psi (550 kPa). b. Conditioned Thermal Resistance at 75 deg. F (24 deg. C): 2.5 at 0.5 inches (13 mm) thick. d. Thickness, minimum, ASTM D 5147: 0.080 inch (2.0 mm). C. Roof Insulation Cover Board: 1. Glass-mat-faced gypsum panel, primed, ASTMC 1177/C 1177M. a. Basis of design product: Tremco/GP Gypsum DensDeck Prime. b. Thickness: 1/4 inch. D. Roof Insulation Adhesive: 1. Cold fluid-applied bead-applied low-rise adhesive,two-component solvent-free low odor elastomeric urethane, formulated to adhere roof insulation to substrate. a. Basis of design product: Tremco, Low Rise Foam Insulation Adhesive. Cubberley K-Wing Re-Roof Section 07 52 16 Page 20 b. Flame Spread Index, ASTM E 84: 10. c. Smoke Developed Index, ASTM E 84: 30. d. Volatile Organic Compounds (VOC), maximum, ASTM D 3960: 0 g/L. e. Tensile Strength, minimum, ASTM D 412: 250 psi (1724 kPa). f. Peel Adhesion, minimum, ASTM D 903: 17 lbf/in (2.98 kN/m). g. Flexibility, 70 deg. F (39 deg. C), ASTM D 816: Pass. E. Insulation Cant Strips: ASTM C 208, Type II, Grade 1, cellulosic-fiber insulation board. F. Tapered Edge Strips: ASTM C 208, Type II, Grade 1, cellulosic-fiber insulation board. G. Substrate Joint Tape: 6-or 8-inch-(150-or 200-mm-) wide, coated, glass-fiber joint tape. 2.6 COLD-APPLIED ADHESIVE MATERIALS A. General: Adhesive and sealant materials recommended by roofing system manufacturer for intended use and compatible with roofing membrane. 1. Liquid-type auxiliary materials shall comply with VOC limits of authorities having jurisdiction. 2. Adhesives and sealants that are not on the exterior side of weather barrier shall comply with the testing and product requirements of the California Department of Public Health's (formerly, the California Department of Health Services') "Standard Method for the Testing and Evaluation of Volatile Organic Chemical Emissions from Indoor Sources Using Environmental Chambers." B. Base and Cap Sheet Adhesive: 1. Cold-applied roofing interply adhesive, two part, urethane based formulated for compatibility and use with specified roofing membranes and flashings. 1. Basis of Design: Powerply Endure Bio Adhesive. 2. 100% solids 3. Density: 11.1 lbs/gal per ASTM D1475 4. 1 g/l VOC per ASTM D3960 5. Indentation Hardness: 88 Shore A per ASTM D2240 C. Flashing Backer Sheet Adhesive: Cubberley K-Wing Re-Roof Section 07 52 16 Page 21 1. Elastomeric Roofing Mastic, Solvent-Free:One-part, low-odor elastomeric roof mastic specially formulated for compatibility and use with specified roofing membranes and flashings. a. Basis of design product: Tremco, POLYroof SF. b. Volatile Organic Compounds (VOC), maximum, ASTM D 3960: 20 g/L. c. Elongation at 77 deg. F (25 deg. C), minimum, ASTM D 412: 300 percent. D. Flashing Sheet Adhesive: 1. Elastomeric Roofing Mastic, Solvent-Free:One-part, low-odor elastomeric roof mastic specially formulated for compatibility and use with specified roofing membranes and flashings. a. Basis of design product: Tremco, POLYroof SF. b. Volatile Organic Compounds (VOC), maximum, ASTM D 3960: 20 g/L. c. Elongation at 77 deg. F (25 deg. C), minimum, ASTM D 412: 300 percent. E. Asphalt Primer: 1. Asphalt primer, water-based, polymer modified. a. Basis of design product: Tremco, TREMprime WB. b. Volatile Organic Compounds (VOC), maximum, ASTM D 3960: 2 g/L. F. Asphalt Roofing Cement: ASTM D 4586, asbestos free, of consistency required by roofing system manufacturer for application. G. Mastic Sealant: Polyisobutylene, plain or modified bitumen, nonhardening, nonmigrating, nonskinning, and nondrying. 2.7 SURFACING MATERIALS A. Acrylic Emulsion Coating Material: 1. Acrylic Roof Coating, Fire-Retardant Elastomeric:Intumescent and solar reflectant, Energy Star qualified, CRRC listed, and California Title 24 Energy Code compliant, , formulated for use on bituminous roof Cubberley K-Wing Re-Roof Section 07 52 16 Page 22 surfaces. a. Basis of design product: Tremco, Polarcote FR. b. Volatile Organic Compounds (VOC), maximum, ASTM D 3960: Not more than 30 g/L. c. Reflectance, minimum, ASTM C 1549: 82 percent. d. Solar Reflectance Index (SRI), ASTM E 1980: 103. 2.8 WALKWAYS A. Walkway Material: 1. Walkway pads, ceramic-granule-surfaced reinforced asphalticcomposition slip-resisting pads, manufactured as a traffic pad for foot traffic, 1/2 inch (13 mm) thick minimum. a. Basis of design product: Tremco, Trem-Tred. b. Flexural Strength at max. load, minimum, ASTM C 203: 210 psi (1.5 kPa). c. Granule adhesion (weight loss), maximum, ASTM D 4977: 1.1 gram. d. Impact Resistance at 77 deg. F (25 deg. C), ASTM D 3746: No Damage to Roof. e. Pad Size: 36 by 48 inch (914 by 1220 mm). 2.9 AUXILIARY ROOFING MATERIALS A. General: Auxiliary materials recommended by roofing system manufacturer for intended use and compatible with roofing membrane. B. Stripping Reinforcing Fabric: 1. Vinyl Coated Fiberglass. f. B Basis of design product: Tremco, BURmesh. C. Joint Sealant: Elastomeric joint sealant compatible with roofing materials, with movement capability appropriate for application: D. Fasteners: Factory-coated steel fasteners and metal or plastic plates meeting corrosion-resistance provisions in FMG 4470, designed for fastening roofing components to substrate, tested by manufacturer for required pullout strength, and acceptable to roofing system manufacturer. Cubberley K-Wing Re-Roof Section 07 52 16 Page 23 1. One (1) inch cap nails: a. Type: Spiral or annular ring shank, twelve (12) gage minimum, with integral one (1) inch cap. 2. Acceptable manufacturers: a. Hillwood Manufacturing Co., Cleveland, OH. b. Hoffler Wire Products Co., Inc., Nevada City, CA. c. Independent Nail, Inc., Bridgewater, MA. d. W. H. Maze Co., Peru, IL. e. National Nail Corp., Grand Rapids, MI. f. Simplex Nails, Inc., Americus, GA. 3. Galvanized sheet steel to wood blocking: a. FS FF-N-105B(3) Type II, Style 20, roofing nails; galvanized steel wire, flat head, diamond point, round, barbed shank. b. Length: Sufficient to penetrate wood blocking 1-1/4 inches minimum. 4. Drawband: a. Gold Seal stainless steel worm gear clamp by Murray Corporation, Cockeysville, MD. b. Power-Seal stainless steel worm drive clamps by Breeze Clamp Company, Saltsburg, PA. 5. Termination Bar: a. 16 ga. galvanized steel "C" bar, 2 1/2" wide with 1/2" receivers and 1/4" x 3/8" oblong holes placed 8" o.c. 6. Counterflashing/termination bar to wall: a. Gold Seal stainless steel worm gear clamp by Murray Corporation, Cockeysville, MD. E. Metal Flashing Sheet: Metal flashing sheet is specified in Division 07 Section "Sheet Metal Flashing and Trim." F. Miscellaneous Accessories: Provide miscellaneous accessories Cubberley K-Wing Re-Roof Section 07 52 16 Page 24 recommended by roofing system manufacturer. G. Metal gutter screens: Provide and install at all gutters at both sloped and flat roof areas: 5” deep, powder-coated, black steel gutter screens, model “E-Z-Lock Small Hole,” by Midwest Enterprises, Inc. Screen shall meet corrosion-resistance provisions in FMG 4470. 2.10 METAL FLASHINGS A. Counterflashing metal: 1. All metal to be 24 gauge. 2. Kick and hem all metal. 3. Install metal per SMACNA APPROVED DETAIL. 4. Cleat metal to be 22 ga. B. Plumbing Vents and drain lead: 1. ASTM B 29-79 (1984), four (4) lb. sheet lead. C. Perimeter edge metal: 1. All metal to be 24 gage, Kynar 500 finished to match existing fascia trim color. 2. Kick and hem all metal. 3. Install metal per SMACNA-APPROVED DETAIL. 4. Cleat metal to be 22 ga.. 5. Provide cover plates at all joints. PART 3 EXECUTION 3.1 EXAMINATION A. Examine substrates, areas, and conditions, with Installer present, for compliance with the following requirements and other conditions affecting performance of roofing system: 1. Verify that roof openings and penetrations are in place and curbs are set and braced and that roof drain bodies are securely clamped in place. B. Proceed with installation only after unsatisfactory conditions have been corrected. C. Verify conditions as satisfactory to receive work. Cubberley K-Wing Re-Roof Section 07 52 16 Page 25 D. Do not begin roofing until all unsatisfactory conditions are corrected. Beginning work constitutes acceptance of conditions. E. Verify that work of other trades penetrating roof deck or requiring men and equipment to traverse roof deck has been approved by Owner, manufacturer, and roofing contractor. F. Check projections, curbs, and deck for inadequate anchorage, foreign material, moisture, or unevenness that would prevent quality and execution of new roofing system. 3.2 GENERAL WORKMANSHIP A. Substrate: Free of foreign particles prior to laying roof membrane. B. Phased application: Not permitted. All plies shall be completed each day. C. Traffic and equipment: Kept off completed plies until adhesive has set. D. Wrapper and packaging materials: Not to be included in roofing system. E. Mechanical fasteners: 1. Seated firmly in discs with fastener heads flush or below disc's top surface. F. Base flashing height: 1. Not less than eight (8) inches above finished roof surface, unless approved by manufacturer. 3.3 PREPARATION A. Protection: 1. Contractor shall be responsible for protection of property during course of work. Lawns, shrubbery, paved areas, and building shall be protected from damage. Repair damage at no extra cost to Owner. 2. Provide at site prior to commencing removal of debris, a dumpster or dump truck to be located adjacent to building where directed by Owner. 3. Roofing, flashings, membrane repairs, and insulation shall be installed and sealed in a watertight manner on same day of installation or before arrival of inclement weather. 4. At start of each work day drains within daily work area shall be plugged. Cubberley K-Wing Re-Roof Section 07 52 16 Page 26 Plugs to be removed at end of each work day or before arrival of inclement weather. 5. Preparation work shall be limited to those areas that can be covered with installed roofing material on same day or before arrival of inclement weather. 6. Arrange work sequence to avoid use of newly constructed roofing for storage, walking surface, and equipment movement. Move equipment and ground storage areas as work progresses. 7. Provide clean plywood walkways and take other precautions required to prevent tracking of aggregate/debris from existing membrane into new work area where aggregate/debris pieces can be trapped within new roofing membrane. Contractor shall instruct and police his workmen to ensure that aggregate/debris is not tracked into new work areas on workmen's shoes or equipment wheels. Discovery of entrapped aggregate/debris within new membrane is sufficient cause for its rejection. 8. Surface preparation: a. Remove: Designated roofing, to roof deck. b. Clean roof deck substrate of dust, debris, moisture, and other substances detrimental to roofing installation according to roofing system manufacturer's written instructions. Remove sharp projections. c. Remove designated existing perimeter metal. d. Remove designated flashings to substrate. e. Prevent materials from entering and clogging roof drains and conductors and from spilling or migrating onto surfaces of other construction. Remove roof-drain plugs when no work is taking place or when rain is forecast. 3.4 INSTALLATION - GENERAL A. Install roofing system in accordance with manufacturer's recommendations. B. Install wood cants, blocking, curbs, and nailers in accordance with requirements of Division 06 carpentry section. C. Install roofing system in accordance with the following NRCA Manual Plates and NRCA recommendations; modify as required. Follow roofing system manufacturer recommendations for all details. Cubberley K-Wing Re-Roof Section 07 52 16 Page 27 1. Base Flashing for Non-wall-supported deck (Movement Joint): Plates MB-6 and MB-6S. 2. Base and Surface-mounted Counterflashing: Plates MB-4 and MB-4S. 3. Raised Perimeter Edge with Metal Flashing (Fascia Cap): Plates MB- 2 and MB-2S. 4. Gutter at Draining Edge: Plates MB-22 and MB-22S. 5. Equipment Support Curb: Plates MB-9 and MB-9S. 6. Equipment Support Stand: Plates MB-10. 7. Equipment Support Stand and Typical Rain Collar Penetration Detail: Plates MB-11 and MB-11S. 8. Raised Curb Detail at Rooftop HVAC Units, Premanufactured: Plates MB-12 and MB12S and Division 7 Section "Roof Accessories." 9. Raised Curb Detail at Rooftop HVAC Units (Job site constructed wood curb): Plates MB-13 and MB-13S and Division 06 Section "Miscellaneous Rough Carpentry." 10. Skylight, Scuttle (Roof Hatch), and Smoke Vents: Plates MB-14 and MB-14S and Division 07 Section "Roof Accessories." 11. Penetration, Sheet Metal Enclosure for Piping Through Roof Deck: Plates MB-16 and MB-16S. 12. Penetration, Isolated Stack Flashing: Plates MB-17 and MB-17S. 13. Penetration, Plumbing Vent: Plates MB-18 and MB-18S. 14. Penetration, Pocket: Plates MB-19 and MB-19S. 15. Guide for Clearances between Pipes / Walls / Curbs -Table 4. 16. Guide for Crickets and Saddles -Table 5. 3.5 INSTALLATION - INSULATION A. Comply with roofing manufacturer's written instructions for installing roof insulation. B. Install tapered insulation at 1/4" per 12" slope incline where needed. Follow NRCA guidelines for layout of tapered plan and/or follow roofing product manufacturer's recommendations. Cubberley K-Wing Re-Roof Section 07 52 16 Page 28 C. Cant Strips: Install specified cant strip material adhered in low rise foam insulation adhesive. D. Install tapered insulation under area of roofing to conform to slopes indicated. E. Install insulation with long joints of insulation in a continuous straight line with end joints staggered between rows, abutting edges and ends between boards. Fill gaps exceeding 1/4 inch (6 mm) with insulation. 1. Base Flashing for Non-wall-supported deck (Movement Joint): Plates MB-6 and MB-6S. F. Install insulation under area of roofing to achieve required thickness. Where overall insulation thickness is 2.7 inches (68 mm) or greater, install two or more layers with joints of each succeeding layer staggered from joints of previous layer a minimum of 6 inches (150 mm) in each direction. 1. Install insulation at minimum thickness and average overall thickness of 1.5 inches (38 mm). G. Trim surface of insulation where necessary at roof gutters so completed surface is flush and does not restrict flow of water. H. Install tapered edge strips at perimeter edges of roof that do not terminate at vertical surfaces. I. Adhered Insulation: Install each layer of insulation and adhere to substrate as follows: 1. Install insulation at minimum thickness and average overall thickness of 1.5 inches (38 mm). J. Mechanically Fastened Insulation: Install each layer of insulation and secure to deck using mechanical fasteners specifically designed and sized for fastening specified board-type roof insulation to deck type. 1. Install insulation at minimum thickness and average overall thickness of 1.5 inches (38 mm). K. Mechanically Fastened and Adhered Insulation: Install first layer of insulation to deck using mechanical fasteners specifically designed and sized for fastening specified board-type roof insulation to deck type. 1. Install insulation at minimum thickness and average overall thickness of 1.5 inches (38 mm). Cubberley K-Wing Re-Roof Section 07 52 16 Page 29 2. Set each layer of insulation in ribbons of bead-applied insulation adhesive, firmly pressing and maintaining insulation in place. L. Install cover boards over insulation with long joints in continuous straight lines with end joints staggered between rows. Offset joints of insulation below a minimum of 6 inches (150 mm) in each direction. Loosely butt cover boards together. Tape joints if required by roofing manufacturer. 1. Set cover board in ribbons of bead-applied insulation adhesive, firmly pressing and maintaining cover in place. 3.6 COLD-APPLIED ROOFING MEMBRANE INSTALLATION - GENERAL A. Deck Type: Wood deck. B. Base Sheet: One: 1. Adhering Method: Cold-adhesive applied. C. Granular-Surfaced SBS-Modified Asphalt Cap Sheet: 1. Adhering Method: Cold-adhesive applied. D. Start installation of roofing membrane in presence of roofing system manufacturer's technical personnel. E. Coordinate installation of roofing system so insulation and other components of the roofing membrane system not permanently exposed are not subjected to precipitation or left uncovered at the end of the workday or when rain is forecast. 1. Provide tie-offs at end of each day's work configured as recommended by NRCA Roofing Manual Appendix: Quality Control Guidelines -Insulation to protect new and existing roofing. 2. Complete terminations and base flashings and provide temporary seals to prevent water from entering completed sections of roofing. 3. Remove temporary plugs from roof drains at end of each day. 4. Remove and discard temporary seals before beginning work on adjoining roofing. F. Substrate-Joint Penetrations: Prevent roofing asphalt and adhesives from penetrating substrate joints, entering building, or damaging roofing system components or adjacent building construction. Cubberley K-Wing Re-Roof Section 07 52 16 Page 30 3.7 SBS-MODIFIED BITUMINOUS MEMBRANE INSTALLATION A. Install modified bituminous roofing membrane sheet and cap sheet according to roofing manufacturer's written instructions, starting at low point of roofing system. Extend roofing membrane sheets over and terminate beyond cants, installing as follows: 1. Unroll roofing membrane sheets and allow them to relax for minimum time period required by manufacturer. 2. Embed each ply sheet in cold-applied membrane adhesive applied at rate required by roofing manufacturer. B. Laps: Accurately align roofing membrane sheets, without stretching, and maintain uniform side and end laps. Stagger end laps. Install roofing membrane sheets so side and end laps shed water. Completely bond and seal laps, leaving no voids: 1. Repair tears and voids in laps and lapped seams not completely sealed. 2. Apply roofing granules to cover exuded bead at laps. 3.8 HEAT-WELDING CAP SHEET SEAMS A. Cap Sheet Seam Heat-Welding: Prepare and weld seams according to roofing manufacturer's written instructions: 1. Clean minimum 4 inch (102 mm) wide seam area on both surfaces to be joined. Remove debris and contaminants. Allow seam to thoroughly dry prior to performing welding. 2. Continuously weld 4 inch (102 mm) wide seam using roofing manufacturer's recommended automatic heat welding machine or hand-held heat gun. Roll seam with minimum 75 lb (34 kg) steel roller. 3.9 FLASHING AND STRIPPING INSTALLATION A. Install base flashing over cant strips and other sloped and vertical surfaces, at roof edges, and at penetrations through roof; secure to substrates according to roofing system manufacturer's written instructions, and as follows: 1. Prime substrates with asphalt primer if required by roofing manufacturer. Cubberley K-Wing Re-Roof Section 07 52 16 Page 31 2. Backer Sheet Application: Adhere backer sheet to substrate in cold- applied flashing sheet adhesive. 3. Flashing Sheet Application: Adhere flashing sheet to substrate in cold-applied adhesive. Apply cold-applied flashing sheet adhesive to back of flashing sheet if recommended by roofing manufacturer. 4. Extend base flashing up walls, curbs a minimum of 8 inches high, and 6 inches onto field of of new membrane. 5. At perimeter gravel stop: a. Install additional wood nailer to match new insulation height. Ensure edge metal matches existing profile and color. Flange width: 4”. Fascia width: to conform with existing trim. Install continuous cleat or J hooks. Install cover plates and set in Polyroof LV. 6. At exterior stucco walls: a. Set flashing ply and capsheet membrane in ELS mastic. Heat weld vertical seams.Ensure complete bond and continuity without wrinkles or voids. Lap sheeting ends six (6) inches; splice ends with lap adhesive; steel roll. b. MB width: Sufficient to extend at least six (6) inches beyond toe of cant onto new roof. c. Top coat all flashings with white coating. d. Mechanically fasten with masonry anchors top edge of all flashings with termination bar with TF tape backing. Fasten 8” o.c. to pre-drilled wall. e. Install new counterflashing – GSM with kick and hem and receiver. Fasten 8” o.c. with TF tape backing. 7. At plumbing vents: a. Remove existing stack flashing. b. Wedge plumbing vent tight against deck. c. Provide tapered edge at vent base. Firmly butt edge strip to blocking; miter corners. Mechanically attach edge strip to deck. d. Apply 1/16 inch uniformly thick layer of asphalt mastic to Cubberley K-Wing Re-Roof Section 07 52 16 Page 32 surface receiving metal flange. 1. Pipe outside diameter greater than two (2) inches: Bend lead inside pipe one (1) inch minimum with pliers or rubber/plastic mallet; replace cracked lead. 2. Pipe outside diameter two (2) inches or less: Cut lead at vent top; fabricate and install integral lead cap. e. Seal flange with two (2) strips of flashing ply flashing embedded between alternate applications of asphalt mastic. Extend first ply two (2) inches beyond flange; second ply two (2) inches beyond first ply. 8. At roof drains: a. Flash according to Tremco warranty guidelines and NRCA standards. 9. At flanged vents: a. Install nailers equal to final insulation height where flanged will be secured. Install base sheet. b. Set primed flange in bed of asphalt mastic and nailer 3” o.c. staggered. c. Install two ply strip in with asphalt mastic. B. Flashing Sheet Top Termination: Mechanically fasten top of base flashing securely at terminations and perimeter of roofing using metal termination bar fastened on 8 inch centers: 1. Seal all termination bar with specified urethane sealant. 2. All flashings shall be counter-flashed. a. All counter-flashings shall be sealed with urethane sealant. C. Install roofing membrane cap-sheet stripping where metal flanges and edgings are set on membrane roofing according to roofing system manufacturer's written instructions: 1. All metal flanges shall be primed with asphalt primer and set in a bed of asphalt mastic before being secured with fasteners or stripped in over. 2. All metal flanges shall be stripped in over with 1 ply of SBS Modified Cubberley K-Wing Re-Roof Section 07 52 16 Page 33 Base Sheet and 1 ply of SBS Modified Cap Sheet. All plies shall be adhered in cold mastic; Polyroof SF. 3.10 SURFACING AND COATING INSTALLATION A. Prior to applying the coating to the roof membrane and base flashings; the roof must be allowed to cure out after all asphaltic/bituminous materials are installed for a period of 30 days. B. Acrylic Emulsion Coating over Cold-Applied Surfacing: Coat roofing membrane surface with cold-applied adhesive surfacing adhesive applied at rate required by roofing manufacturer. 1. Acrylic Emulsion Coating: Apply coating to roofing membrane and base flashings in not less than two coats, with number of coats, thickness of application, and application method as recommended in writing by coating manufacturer. 3.11 ROOF SYSTEM APPLICATION A. Embed two Comp Base Plies in a uniform and continuous application of interply mastic. Interply application rate: 2.5 gallons per 100 sq. ft. B. Immediately after installation, broom and/or roll ply sheet. Ensure complete and continuous seal and contact between adhesive and felts, including ends, edges and laps without wrinkles, fish mouths, or blisters. Broom/roller width: Thirty-four (34) inches minimum. C. Apply uniform and continuous pressure to exposed edge and end laps to ensure complete adhesion. D. Avoid walking on plies until mastic adhesive has set. E. Overlap previous day's work twenty-four (24) inches. F. Lap ply membrane ends four (4) inches. Stagger end laps three (3) feet minimum. G. Ply shall never touch ply, even at roof edges, laps, tapered edge strips, and cants. H. Fit plies into roof scupper drain; install housing with lead flanges and finishing plies; install strainer screen. Cubberley K-Wing Re-Roof Section 07 52 16 Page 34 I. Extend roofing membrane to top edge of cant at wall and projection bases. J. Cut out fishmouths/side laps which are not completely sealed; patch. Replace all sheets which are not fully and continuously bonded. 3.12 DAILY WATERSTOP/TIE-INS A. Envelope insulation with eighteen (18) inch wide No. 15 ply sheet. Adhere envelope to deck and insulation with a continuous 1/16 inch thick application of tie-off mastic. Glaze cut-off with surfacing mastic. 3.13 MISCELLANEOUS / FIELD QUALITY CONTROL A. Painting: 1. Paint all small metal vents and pipes with Solargard 6083 coating. B. Cap metal and counter flashings: 1. Install 24 ga. cap metal and counter flashings where designated. C. Pipes and conduit: 1. Capture all conduit projections with a lead jack and storm collar. D. Walkway Pads: Install walkway pads using units of size indicated or, if not indicated, of manufacturer's standard size according to walkway pad manufacturer's written instructions: 1. Install traffic pads under any communication equipment resting on rooftop. Install traffic pads at any serviceable equipment. Install traffic pads at ladder access to roof. 2. Set walkway pads in cold-applied adhesive. E. Roofing Inspector: Contractor shall engage a qualified roofing inspector for a minimum of 5 full-time days on site to perform roof tests and inspections and to prepare start up, interim, and final reports. Roofing Inspector's quality assurance inspections shall comply with criteria established in ARMA/NRCA's "Quality Control Guidelines for the Application of Built-up Roofing." F. Final Roof Inspection: Arrange for roofing system manufacturer's technical Cubberley K-Wing Re-Roof Section 07 52 16 Page 35 personnel to inspect roofing installation at commencement and upon completion. 1. Notify Owner 48 hours in advance of date and time of inspection. G. Repair or remove and replace components of modified bitumen roofing where test results or inspections indicate that they do not comply with specified requirements. 1. Additional testing and inspecting, at Contractor's expense, will be performed to determine if replaced or additional work complies with specified requirements. 3.14 PROTECTING AND CLEANING A. Protect roofing system from damage and wear during remainder of construction period. When remaining construction will not affect or endanger roofing, inspect roofing for deterioration and damage, describing its nature and extent in a written report, with copies to Architect and Owner: 1. Immediately upon job completion, roof membrane and metal surfaces shall be cleaned of debris. 2. Clean grounds around building of any debris from roofing project. 3. Ensure all drains are flowing freely by testing. B. Correct deficiencies in or remove roofing system that does not comply with requirements, repair substrates, and repair or reinstall roofing system to a condition free of damage and deterioration at time of Substantial Completion and according to warranty requirements. C. Clean overspray and spillage from adjacent construction using cleaning agents and procedures recommended by manufacturer of affected construction. END OF SECTION Cubberley K-Wing Re-Roof Section 07 62 00 Page 1 SECTION 07 62 00 - SHEET METAL FLASHING AND TRIM PART 1 - GENERAL 1.1 RELATED DOCUMENTS A. Drawings and general requirements of the Contract, including General Conditions, Special Provisions and Division 1 Specification Sections, apply to this Section. 1.2 SCOPE OF WORK A. Install both new continuous drip edge and gravel stop flashing. B. Re-attach replaced roof drain assembly units to existing downspouts on-site, where necessary. C. Section includes: 1. Roof drainage sheet metal fabrications. 2. Low-slope roof sheet metal fabrications. 3. Steep-slope roof sheet metal fabrications. 4. Manufactured reglets and counterflashings. 5. Miscellaneous sheet metal flashing and trim. D. Miscellaneous sheet metal accessories. E. Related Requirements: 1. Division 06 Section "Miscellaneous Rough Carpentry"for wood nailers, curbs, and blocking. 2. Division 07 Section " SBS Modified Bitumen Roofing " for warranty requirements for sheet metal flashing and trim items integral with roofing. 1.3 PERFORMANCE REQUIREMENTS A. General: Install sheet metal flashing and trim to withstand wind loads, structural movement, thermally induced movement, and exposure to weather without failing, rattling, leaking, and fastener disengagement. Cubberley K-Wing Re-Roof Section 07 62 00 Page 2 B. Fabricate and install flashings and copings capable of resisting forces for the appropriate wind zone, per Factory Mutual's Loss Prevention Data Sheet 1-49. C. Temperature Range: 120 deg F ambient; 180 deg F, material surface. D. Thermal Movements: Provide sheet metal flashing and trim that allow for thermal movements resulting from the maximum range of ambient and surface temperatures provided above by preventing buckling, opening of joints, hole elongation, overstressing of components, failure of sealant joints, failure of connections, and other detrimental effects. Provide clips that resist rotation and avoid shear stress as a result of sheet metal and trim thermal movements. Base engineering calculations on surface temperatures of materials due to both solar heat gain and nighttime sky heat loss. E. Water Infiltration: Provide sheet metal flashing and trim that do not allow water infiltration to the building interior. F. Coordinate sheet metal flashing and trim layout and seams with sizes and locations of penetrations to be flashed, and joints and seams in adjacent materials. G. Coordinate sheet metal flashing and trim installation with adjoining roofing and wall materials, joints, and seams to provide leakproof, secure, and noncorrosive installation. 1.4 SUBMITTALS A. Product Data: For each type of product indicated. Include construction details, material descriptions, dimensions of individual components and profiles, and finishes for each manufactured product and accessory. B. Shop Drawings: Describe material profiles, jointing pattern, jointing details, fastening methods, interface with other work and installation details. 1. Material. 2. Thickness of material. 3. Weight. 4. Finish. 5. Location of each item and details of expansion joint covers, including the direction of expansion and contraction. Cubberley K-Wing Re-Roof Section 07 62 00 Page 3 1.5 QUALITY ASSURANCE A. 4Comply with "Architectural Sheet Metal Manual" by SMACNA, for each general category of work required. B. Applicator: Applicator who has complete sheet metal flashing and trim work similar in material, design, and extent to that indicated for this project and with a record of successful in-service performance and with 5 years minimum experience. C. Pre-installation Conference: Conduct conference at Project site to comply with requirements in Division 1 Section "Project Management and Coordination." 1. Meet with Owner, Architect, Owner's insurer if applicable, Installer, and installers whose work interfaces with or affects sheet metal flashing and trim including installers of roofing materials, roof accessories, unit skylights, and roof-mounted equipment. 2. Review methods and procedures related to sheet metal flashing and trim. 3. Examine substrate conditions for compliance with requirements, including flatness and attachment to structural members. 4. Document proceedings, including corrective measures and actions required, and furnish copy of record to each participant. 1.6 DELIVERY, STORAGE, AND HANDLING A. Deliver sheet metal flashing materials and fabrications undamaged. Protect sheet metal flashing and trim materials and fabrications during transportation and handling. B. Unload, store, and install sheet metal flashing materials and fabrications in a manner to prevent bending, warping, twisting, and surface damage. C. Stack materials on platforms or pallets, covered with a suitable weather-tight and ventilated covering. Do not store sheet metal flashing and trim materials in contact with other materials that might cause staining, denting, or other surface damage. Store sheet metal flashing and trim materials away from uncured concrete and masonry. 1. Protect strippable protective covering on sheet metal flashing and trim from exposure to sunlight and high humidity, except to extent necessary for period of sheet metal flashing and trim installation. Cubberley K-Wing Re-Roof Section 07 62 00 Page 4 1.7 WARRANTY A. Refer to warranty requirements of Division 07 Section SBS Modified Bitumen Roofing for terms and conditions of warranties covering work of this Section. PART 2 - PRODUCTS 2.1 MATERIALS, GENERAL A. Recycled Content: Provide products made from steel sheet with average recycled content such that postconsumer recycled content plus one-half of pre-consumer recycled content is not less than the following: 1. Sheet Metal Flashings: Minimum 30 percent post-consumer recycled content. 2. Local/Regional Materials: Give preference to manufacturer’s whose facilities are within a 500 mile radius of the project site. Also give preference to materials that are harvested, extracted, mined, quarried, etc. within a 500 mile radius of the project site. 2.2 PERFORMANCE REQUIREMENTS A. General: Sheet metal flashing and trim assemblies shall withstand wind loads, structural movement, thermally induced movement, and exposure to weather without failure due to defective manufacture, fabrication, installation, or other defects in construction. Completed sheet metal flashing and trim shall not rattle, leak, or loosen, and shall remain watertight. B. Sheet Metal Standard for Flashing and Trim: Comply with NRCA's "The NRCA Roofing Manual" and SMACNA's "Architectural Sheet Metal Manual" requirements for dimensions and profiles shown unless more stringent requirements are indicated. C. Thermal Movements: Allow for thermal movements from ambient and surface temperature changes to prevent buckling, opening of joints, overstressing of components, failure of joint sealants, failure of connections, and other detrimental effects. Cubberley K-Wing Re-Roof Section 07 62 00 Page 5 2.3 MATERIALS A. Zinc-Coated (Galvanized) Steel Sheet: ASTM A653/A653M, G90 (Z275) coating designation; structural quality, mill-phosphatized where indicated for field painting. 1. Do not apply an acrylic passivator coating to galvanized sheet metal schedule to be painted, or remove this coating mechanically before delivery to the project site. B. Sealant: ASTM C920, polyurethane-based sealant; of type, grade, class, and use classifications required to seal joints in sheet metal flashing and trim and remain watertight. 1. SikaFlex-15LM or equal C. Flux: FS O-F-506. D. Epoxy Seam Sealer: Two-part, noncorrosive, aluminum seam-cementing compound, recommended by aluminum manufacturer for exterior nonmoving joints, including riveted joints. E. Butyl Sealant: ASTM C1311, single-component, solvent-release butyl rubber sealant; polyisobutylene plasticized; heavy bodied for hooked-type expansion joints with limited movement. F. Bituminous Coating: Cold-applied asphalt emulsion complying with ASTM D1187. G. Neoprene Flashing Components: 1. Manufacturer: Gaco Western, Inc. unless noted otherwise. H. Solder: 1. For Zinc-Coated (Galvanized) Steel Sheet: ASTM B32, Grade Sn50, 50 percent tin and 50 percent lead or Grade Sn60, 60 percent tin and 40 percent lead. I. Bedding Compound: Rubber-asphalt type. J. Plastic Cement: Asphaltic base cement. Cubberley K-Wing Re-Roof Section 07 62 00 Page 6 K. Sealing Tape: Pressure-sensitive, 100 percent solids, polyisobutylene compound sealing tape with release-paper backing. Provide elastic, non-sag, nontoxic, non- staining tape. 2.4 MANUFACTURED SHEET METAL FLASHING AND TRIM A. Reglets and counterflashings: Units of type, material, and profile indicated, formed to provide secure interlocking of separate reglet and counter-flashing pieces, and compatible with flashing indicated. Manufactured units of heights to overlap top edges of base flashings by 4 inches (100 mm) and in lengths not exceeding 12 feet (3.6 m) designed to snap into reglets and compress against base flashings with joints lapped, from the following exposed metal: 1. Galvanized Steel : 24 gauge thickness. 2. Available Manufacturers: Subject to compliance with requirements, manufacturers offering products that may be incorporated into the Work include, but are not limited to, the following: a. Fry Reglet. b. MM Systems. c. Heckmann Building Products, Inc. d. Substitutions: Under provisions of Section 01630. 3. Surface-Mounted Type: Provide with slotted holes for fastening to substrate, with neoprene or other suitable weatherproofing washers and with channel for sealant at top edge. 4. Stucco Type: Provide with upturned fastening flange and extension leg of length to match thickness of applied finish materials. 5. Flexible Flashing Retainer: Provide resilient plastic or rubber accessory to secure flexible flashing in reglet where clearance does not permit use of standard metal counter-flashing or where Drawings show reglet without metal counter-flashing. 6. Counter-flashing Wind-Restraint Clips: Provide clips to be installed before counter-flashing to prevent wind uplift of counter-flashing lower edge. B. EPDM Flashing: Sheet flashing product made from ethylene-propylene-diene terpolymer, complying with ASTM D4637, 0.040-inch (1.0 mm) thick. 1. Available Products: Heckmann Building Products Inc.; No. 81 EPDM Thru- Wall Flashing. Cubberley K-Wing Re-Roof Section 07 62 00 Page 7 2.5 FABRICATION - GENERAL A. General: Custom fabricate sheet metal flashing and trim to comply with details shown and recommendations in cited sheet metal standard that apply to design, dimensions, geometry, metal thickness, and other characteristics of item required. Fabricate sheet metal flashing and trim in shop to greatest extent possible. Obtain field measurements for accurate fit before shop fabrication. B. Fabrication Tolerances: Fabricate sheet metal flashing and trim that is capable of installation to a tolerance of 1/4 inch in 20 feet (6 mm in 6 m) on slope and location lines indicated on Drawings and within 1/8-inch (3-mm) offset of adjoining faces and of alignment of matching profiles. C. Expansion Provisions: Form metal for thermal expansion of exposed flashing and trim. D. Seams, Soldered: Fabricate nonmoving seams with flat-lock seams. Tin edges to be seamed, form seams, and solder. E. Do not use graphite pencils to mark metal surfaces. F. Fabricate sheet metal with flat-lock seams; solder with type solder and flux recommended by manufacturer, except seal aluminum seams with sealant and, where required for strength, rivet seams and joints. G. Fabricate sheet metal flashing and trim in thickness and weight needed to comply with performance requirements, but not less than that specified for each application of metal. H. Fabricate corners, transitions, and terminations as a single unit; extend a minimum of 4-inches and a maximum of 8-inches in any direction. I. Fabricate cleats and attachment devices from the same material as the accessory being anchored or from a compatible, non-corrosive metal. The thickness of these cleats and attachment devices should be as recommended by SMACNA's 'Architectural Sheet Metal Manual' and Factory Mutual's Loss Prevention Data Sheet 1-49 for the given application, but not less than the thickness of the metal being secured. J. Sealant Joints: Where movable, nonexpansion-type joints are required, form metal to provide for proper installation of elastomeric sealant according to cited sheet metal standard. Cubberley K-Wing Re-Roof Section 07 62 00 Page 8 K. Coat backside of fabricated sheet metal with 15-mil sulfur-free bituminous coating, SSPC-Paint 12, where required to separate metals from corrosive substrates, including cementitious materials, wood or other absorbent materials; or provide other permanent separation. L. Provide for thermal expansion of running sheet metal work by overlaps of expansion joints in fabricated work. Where required for watertight construction, provide hooked flanges filled with polyisobutylene mastic for 1-inch embedment of flanges. M. Space expansion joints at intervals of not more than 50-feet. Conceal expansion provisions where possible. N. Roof-Penetration Flashing: Fabricate from the following material: 1. Galvanized Steel: 0.0276-inch (0.7 mm) thick. 2.6 ROOF-DRAINAGE SHEET METAL FABRICATIONS A. Hanging Gutters: Fabricate to cross section required, complete with end pieces, outlet tubes, and other accessories as required. Fabricate in minimum 96-inch- (2400-mm-) long sections. Furnish flat-stock gutter brackets and flat-stock gutter spacers and straps fabricated from same metal as gutters, of size recommended by cited sheet metal standard but with thickness not less than twice the gutter thickness. Fabricate expansion joints, expansion-joint covers, and gutter accessories from same metal as gutters. Shop fabricate interior and exterior corners. 1. Gutter Profile: Style According to cited sheet metal standard. 2. Gutters with Girth up to 15 Inches (380 mm): Fabricate from the following materials: a. G-90 Bonderized Galvanized Steel: 24 gauge thick. B. Downspouts: Fabricate round downspouts to dimensions indicated. Furnish with metal hangers from same material as downspouts and anchors. Shop fabricate elbows. 1. G-90 Bonderized Galvanized Steel: 24 gauge thick. Cubberley K-Wing Re-Roof Section 07 62 00 Page 9 2.7 LOW-SLOPE ROOF SHEET METAL FABRICATIONS A. Roof Edge Flashing and Fascia Cap: Fabricate in minimum 96-inch-(2400-mm-) long, but not exceeding 12-foot-(3.6-m-) long sections. Furnish with 6-inch-(150- mm-) wide, joint cover plates. Shop fabricate interior and exterior corners. Fabricate expansion joints, expansion-joint covers, and gutter accessories from same metal as gutters. Shop fabricate interior and exterior corners. 1. Joint Style: Butted with expansion space and 6-inch-(150-mm-) wide, concealed backup plate. 2. Fabricate from the following materials: a. G-90 Bonderized Galvanized Steel: 24 gauge thick. B. Counterflashing: Shop fabricate interior and exterior corners. Fabricate from the following materials: 1. Galvanized Steel: 24 gauge thick. C. Flashing Receivers: Fabricate from the following materials: 1. Galvanized Steel: 24 gauge thick. D. Roof-Penetration Flashing: Fabricate from the following materials: 1. Galvanized Steel: 24 gauge thick. E. Roof-Drain Flashing: Fabricate from the following materials: 1. Stainless Steel: 24 gauge thick. 2.8 STEEP-SLOPE ROOF SHEET METAL FABRICATIONS A. Gutter Drip Edges: Fabricate from the following materials: 1. Stainless Steel: 24 gauge thick. B. Rake Flashing: Fabricate from the following materials: 1. G-90 Bonderized Galvanized Steel: 24 gauge thick. Cubberley K-Wing Re-Roof Section 07 62 00 Page 10 C. Roof-Penetration Pitch Pocket Flashing: Fabricate from the following materials: 1. Stainless Steel: 24 gauge thick. 2.9 MISCELLANEOUS MATERIALS & SHEET METAL FABRICATIONS A. Equipment Support Flashing: Fabricate from galvanized steel 0.0276-inch (0.7 mm) thick. B. General: Protect mechanical and other finishes on exposed surfaces from damage by applying strippable, temporary protective film before shipping. C. Bonderized G-90 Sheet Steel. 1. Galvanized G90 that has been put through a phosphate bath and has a layer of Chromate applied and dried leaving it ready to accept paint. Thickness of all metal shall be 24 gauge minimum, that shall conform to ASTM 653. D. Sheet Lead. 1. 1. 4 lb lead that shall conform to ASTM B749. 2.10 FINISHES A. Comply with NAAMM's "Metal Finishes Manual for Architectural and Metal Products" for recommendations for applying and designating finishes. B. Finish: Standard (dull) mill finish; painted unless noted otherwise on Drawings. PART 3 - EXECUTION 3.1 EXAMINATION A. Examine substrates and conditions under which sheet metal flashing and trim are to be installed and verify that work may properly commence. Do not proceed with installation until unsatisfactory conditions have been corrected. Beginning of installation means acceptance of existing conditions. B. Examine substrates, areas, and conditions, with Installer present, for compliance with requirements for installation tolerances, substrate, and other conditions affecting performance of the Work. Cubberley K-Wing Re-Roof Section 07 62 00 Page 11 1. Verify compliance with requirements for installation tolerances of substrates. 2. Verify that substrate is sound, dry, smooth, clean, sloped for drainage, and securely anchored. 3. Verify that air-or water-resistant barriers have been installed over sheathing or backing substrate to prevent air infiltration or water penetration. C. Proceed with installation only after unsatisfactory conditions have been corrected. 3.2 PREPARATION A. Allow wet substrates to dry thoroughly. B. Clean debris from all substrates. 3.3 INSTALLATION - GENERAL A. General: Anchor sheet metal flashing and trim and other components of the Work securely in place, with provisions for thermal and structural movement. Use fasteners, solder, protective coatings, separators, sealants, and other miscellaneous items as required to complete sheet metal flashing and trim system. 1. Install sheet metal flashing and trim true to line, levels, and slopes. Provide uniform, neat seams with minimum exposure of solder, welds, and sealant. i. Install sheet metal flashing and trim to fit substrates and to result in watertight performance. Verify shapes and dimensions of surfaces to be covered before fabricating sheet metal. 2. Space cleats not more than 12 inches (300 mm) apart. Attach each cleat with at least two fasteners. Bend tabs over fasteners. 3. Install exposed sheet metal flashing and trim with limited oil canning, and free of buckling and tool marks. 4. Torch cutting of sheet metal flashing and trim is not permitted. Cubberley K-Wing Re-Roof Section 07 62 00 Page 12 5. Do not use graphite pencils to mark metal surfaces. B. Fasteners: Use fastener sizes that penetrate wood blocking or sheathing not less than 1-1/4 inches (32 mm) for nails and not less than 3/4 inch (19 mm) for wood screws. C. Conceal fasteners and expansion provisions where possible in exposed work and locate to minimize possibility of leakage. Cover and seal fasteners and anchors as required for a tight installation. D. Seal joints as required for watertight construction. 1. Use sealant-filled joints unless otherwise indicated. Embed hooked flanges of joint members not less than 1 inch (25 mm) into sealant. Form joints to completely conceal sealant. When ambient temperature at time of installation is between 40 and 70 deg F (4 and 21 deg C), set joint members for 50 percent movement each way. Adjust setting proportionately for installation at higher ambient temperatures. Do not install sealant-type joints at temperatures below 40 deg F (4 deg C). 2. Prepare joints and apply sealants to comply with requirements in Section 079200 "Joint Sealants." E. Soldered Joints: Clean surfaces to be soldered, removing oils and foreign matter. Pre-tin edges of sheets with solder to width of 1-1/2 inches (38 mm); however, reduce pre-tinning where pre-tinned surface would show in completed Work. 1. Do not use torches for soldering. 2. Heat surfaces to receive solder, and flow solder into joint. Fill joint completely. Completely remove flux and spatter from exposed surfaces. 3. Stainless-Steel Soldering: Tin edges of uncoated sheets, using solder for stainless steel and acid flux. Promptly remove acid flux residue from metal after tinning and soldering. Comply with solder manufacturer's recommended methods for cleaning and neutralization. F. Anchor work in place with non-corrosive fasteners, adhesives, setting compounds, tapes and other materials and devices as recommended by manufacturer of each material or system. G. Install self-adhesive flashing prior to or in conjunction with sheet metal items, as shown on Drawings. H. Provide for thermal expansion and building movements. Comply with recommendations of "Architectural Sheet Metal Manual" by SMACNA. Cubberley K-Wing Re-Roof Section 07 62 00 Page 13 I. Install exposed sheet metal flashing and trim without excessive oil canning, buckling, and tool marks. J. Install sheet metal flashing and trim to fit substrates and to result in watertight performance. Verify shapes and dimensions of surfaces to be covered before fabricating sheet metal. K. Install sheet metal flashing and trim true to line and levels indicated. Provide uniform, neat seams with minimum exposure of solder, welds, and sealant. 1. Metal Protection: Where dissimilar metals will contact each other or corrosive substrates, protect against galvanic action by painting contact surfaces with bituminous coating or by other permanent separation as recommended by fabricator or manufacturers of dissimilar metals. L. Composition Stripping: Cover flanges (edges) of work set on bituminous substrate with 5 courses of glass fiber fabric (ASTM D1668) set in and covered with asphaltic roofing cement. M. Fasteners: Use fasteners of sizes that will penetrate substrate not less than 1-1/4- inches (32 mm) for nails and not less than 3/4-inch (19 mm) for wood screws. 1. Galvanized or pre-painted, Metallic-Coated Steel: Use stainless-steel fasteners. 2. Use concealed fasteners wherever possible. Exposed fasteners should have bonded neoprene washers or should be sealed. N. Seal moving joints in metal work with butyl joint sealants, complying with requirements specified in Section 07920 as required for watertight construction. 1. Where sealant-filled joints are used, embed hooked flanges of joint members not less than 1-inch (25 mm) into sealant. Form joints to completely conceal sealant. When ambient temperature at time of installation is moderate, between 40 and 70 deg F (4 and 21 deg C), set joint members for 50 percent movement either way. Adjust setting proportionately for installation at higher ambient temperatures. Do not install sealant-type joints at temperatures below 40 deg F (4 deg C). O. Soldered Joints: Clean surfaces to be soldered, removing oils and foreign matter. Pre-tin edges of sheets to be soldered to a width of 1-1/2-inches (38 mm) except where pre-tinned surface would show in finished Work. Cubberley K-Wing Re-Roof Section 07 62 00 Page 14 1. Do not use open-flame torches for soldering. Heat surfaces to receive solder and flow solder into joints. Fill joints completely. Completely remove flux and spatter from exposed surfaces. 2. Clean metal surfaces of soldering flux and other substances that could cause corrosion. 3.4 INSTALLATION - ROOF-DRAINAGE SYSTEM A. General: Install sheet metal roof-drainage items to produce complete roof- drainage system according to cited sheet metal standard unless otherwise indicated. Coordinate installation of roof perimeter flashing with installation of roof- drainage system. B. Hanging Gutters: Join sections with riveted and soldered joints. Provide for thermal expansion. Attach gutters at eave or fascia to firmly anchor them in position. Provide end closures and seal watertight with sealant. Slope to downspouts. 1. Fasten gutter spacers to front and back of gutter. 2. Anchor and loosely lock back edge of gutter to continuous eave or apron flashing. 3. Anchor gutter with gutter brackets spaced not more than 36 inches (910 mm) apart to roof deck, unless otherwise indicated, and loosely lock to front gutter bead. C. Downspouts: Join sections with 1-1/2-inch (38-mm) telescoping joints. 1. Provide hangers with fasteners designed to hold downspouts securely to walls. Locate hangers at top and bottom and at approximately 60 inches (1500 mm) o.c. 3. Connect downspouts to underground drainage system. 3.5 INSTALLATION - ROOF-FLASHING A. General: Install sheet metal flashing and trim to comply with performance requirements and cited sheet metal standard. Provide concealed fasteners where possible, and set units true to line, levels, and slopes. Install work with laps, joints, and seams that are permanently watertight and weather resistant. Cubberley K-Wing Re-Roof Section 07 62 00 Page 15 B. Equipment Support Flashing: Coordinate installation of equipment support flashing with installation of roofing and equipment. Weld or seal flashing with elastomeric sealant to equipment support member. C. Roof Edge Flashing: Anchor to resist uplift and outward forces according to recommendations in cited sheet metal standard unless otherwise indicated. Interlock bottom edge of roof edge flashing with continuous cleat anchored to substrate at staggered 3-inch (75-mm) centers. D. Pipe or Post Counterflashing: Install counterflashing umbrella with close-fitting collar with top edge flared for elastomeric sealant, extending minimum of 4 inches (100 mm) over base flashing. Install stainless-steel draw band and tighten. E. Counterflashing: Coordinate installation of counterflashing with installation of base flashing. Insert counterflashing in reglets or receivers and fit tightly to base flashing. Extend counterflashing 4 inches (100 mm) over base flashing. Lap counterflashing joints minimum of 4 inches (100 mm). Secure in waterproof manner by means of interlocking folded seam or blind rivets and sealant unless otherwise indicated. F. Roof-Penetration Flashing: Coordinate installation of roof-penetration flashing with installation of roofing and other items penetrating roof. Seal with elastomeric sealant and clamp flashing to pipes that penetrate roof. 3.6 CLEANING AND PROTECTION A. Clean exposed metal surfaces of substances that interfere with uniform oxidation and weathering. B. Clean and neutralize flux materials. Clean off excess solder. C. . Clean off excess sealants. D. Remove temporary protective coverings and strippable films as sheet metal flashing and trim are installed unless otherwise indicated in manufacturer's written installation instructions. On completion of sheet metal flashing and trim installation, remove unused materials and clean finished surfaces as recommended by sheet metal flashing and trim manufacturer, including removing unused fasteners, metal filings, pop rivet stems, and pieces of flashing. Maintain sheet metal flashing and trim in clean condition during construction. E. Replace sheet metal flashing and trim that have been damaged or that have deteriorated beyond successful repair by finish touchup or similar minor repair procedures. Cubberley K-Wing Re-Roof Section 07 62 00 Page 16 F. Performance: Watertight and weatherproof performance of flashing and sheet metal work is required. END OF SECTION Cubberley K-Wing Re-Roof Section 07 72 69 Page 1 SECTION 07 72 69 - ROOF ANCHORS & SAFETY RESTRAINTS PART 1 - GENERAL 1.1 SUMMARY A. Provide and install roof edge protection system, including pipe railings, uprights, bases, counterweights (if not connecting directly to roof system, fittings, and delivery to site. Provide and install covers for holes at walking surfaces, where workers or objects can fall through or where the holes’ design can create a tripping hazard. Provide and install a warning or marking system to warn workers that they are approaching an unprotected roof side or edge. Other systems are the use of a safety monitor, the installation of access zoning, and fall restraint systems to prevent the worker from falling any distance. 1.2 RELATED SECTIONS A. Section 07 52 16 - SBS Modified Bituminous Membrane Roofing, Cold- Applied: Coordination of roof edge protection installation. 1.3 REFERENCES A. American National Standards Institute (ANSI) - A21.l Safety Requirements for Floor and Wall Openings, Railings and Toe Boards. B. American National Standards Institute (ANSI) - A58.l Minimum Design Loads in Buildings and Other Structures. C. American National Standards Institute (ANSI) - Al 17.1 Accessible and Usable Buildings and Facilities. D. American Society of Testing and Materials (ASTM) A47 - Standard Specification for Ferrite Malleable Iron Castings. E. American Society of Testing and Materials (ASTM) A53 - Standard Specification for Pipe, Steel, Black and Hot-Dipped, Zinc-Coated, Welded and Seamless. F. American Society of Testing and Materials (ASTM) A153 - Standard Specification for Zinc Coating (Hot-Dip) on Iron and Steel Hardware. G. American Society of Testing and Materials (ASTM) A500 - Standard Cubberley K-Wing Re-Roof Section 07 72 69 Page 2 Specification for cold-formed welded and seamless carbon steel structural tubing. H. Occupational Safety & Health Administration (OSHA): 1910.23 - Guarding Floor and Wall Openings and Holes. 1.4 SUBMITTALS A. Manufacturer's data sheets on each product to be used, including: 1. Preparation instructions and recommendations. 2. Shop Drawings: Indicate profiles, sizes, connections, size and type of fasteners and accessories. 3. Field Measurements: Verify field measurements prior to assembly and/or ordering. 4. Storage and handling requirements and recommendations. 5. Installation Instructions. B. Shop Drawings: Drawings showing fabrication and installation of handrails and guardrails including plans, elevations, sections, details of components, anchor details, and attachment to adjoining units of work. C. Selection Samples: For each finish product specified, two complete sets of color chips representing manufacturer's full range of available colors and patterns. 1.5 QUALITY ASSURANCE A. Railings Structural Requirements: 1. Handrail, wall rail and guardrail assemblies and attachments shall withstand a minimum concentrated load of 200 pounds (90719 g) applied in any direction on the top rail. 2. Infill area of guardrail system capable of withstanding a horizontal concentrated load of 200 pounds (90719 g) applied to one square foot (8165 g/sm) at any point in the system. Load not to act concurrently with loads on top rail of system in determining stress on guardrail. B. Hole covers: Cubberley K-Wing Re-Roof Section 07 72 69 Page 3 1. Covers and protect holes: gaps or voids 2 inches or more in its least dimension in a floor, roof, deck, or other walking/working surface. a. Keeps workers from falling through holes. b. Be wary of hole’s design which can create a trip hazard. c. Keeps objects from falling through hole and injuring workers below. d. Keeps holes protected which can be cut (or constructed) in floor to receive equipment or ducts and for future access points (e.g. opening for stairs that will be installed later.) e. Keeps holes protected which can be cut in roofs in preparation for installing skylights, ventilation units, and other features and equipment. 2. Hole covers are strong protective surfaces used on walking/working surfaces or roadways to prevent workers from falling through a hole. a. Used for permanent holes typically built for a specific purpose (e.g., permanent access points, manhole covers, and trap doors) and are only effective when they are properly designed and secured in place. b. Used for temporary holes often constructed on work sites with reusable materials, most commonly using plywood and steel plates. For example, to cover large holes in a road, hinged steel plate covers can be used. Other options for covers include grates designed to support weight, custom boxes to cover a hole with an elevated lip or partially installed equipment, and temporary trapdoors. 3. Use heavy plywood for covering temporary holes in floors and roofs, but plywood strength and durability can vary. a. Approved plywood rating systems: APA–The Engineered Wood Association (formerly the American Plywood Association and Douglas Fir Plywood Association) and the Timber Engineering Company (TECO). CSHOs should refer to these organizations for detailed information. b. Use only exterior-grade plywood at areas where workers are using hauling equipment, to prevent damage to the flooring from concentrated loads. Typical protective layers may include liquid latex compounds, penetrating oils, sheet plastics, and interlocking membranes. c. Plywood covers rest on the hole edges that are supported Cubberley K-Wing Re-Roof Section 07 72 69 Page 4 through the joists. Plywood piece must be large than the hole, overlapping the support surfaces and positioned with the grain direction running along the shortest unsupported hole dimension. C. Warning or Marking Systems: 1. A warning line system is a barrier erected on a flat or low- sloped roof to warn workers that they are approaching an unprotected roof side or edge. They must be established before work begins. All workers must be trained for these requirements. a. Warning lines are not engineered to physically prevent or arrest falls and may not be used in all situations. They must remain between34 – 39” above the roof level and have a minimum tensile strength of 500 lbs. Lines must be installed so that one section of line will not cause stanchions to tip over. b. On flat or low-sloped roofs, warning lines are used in conjunction with conventional fall protection or a safety monitoring system. They must be installed at least 6’ back from edges (10 feet when mechanical equipment is used.). c. Workers are not allowed in the area between the warning line and the unprotected edge, except during roofing work. Any employee performing roofing work between the warning line and the roof edge must be protected using another form of fall protection. D. Access Zoning: 1. A controlled access zone (CAZ) is a clearly marked, designated work area where certain work (e.g., overhand bricklaying) may take place without conventional fall protection systems. a. They are used to keep out workers other than those authorized to enter a work area. b. Situations where CAZs are used include overhand bricklaying and related work (provided that workers are not reaching more than 10 inches below the walking or working level they are on), leading edge work, and precast concrete erection (both used when conventional fall protection is infeasible or creates a greater hazard.) c. Control lines are used to demark CAZs. Cubberley K-Wing Re-Roof Section 07 72 69 Page 5 2. A controlled decking zone (CDZ) is a clearly marked work area used during steel erection while workers are initially installing decking at the leading edge of the work area. E. Fall Restraint Systems and Positioning Devices: 1. System or device shall withstand at minimum a concentrated load of 3,000 pounds of force or twice the maximum expected force that is needed to restrain the worker from exposure to the fall hazard. 2. Positioning devices are specialized systems that hold workers in place on an elevated vertical surface (such as a wall) allowing them to keep both hands free to work while leaning into the system. When the worker leans back, the system is activated (supporting the worker’s body weight). Positioning devices limit free falls to two feet or less. F. Protection of Skylights and Access Hatches: 1. Existing skylights must be protected by grates or covers, and be capable of supporting, without failure, at least twice the weight of the workers, equip-ment, and materials that may be imposed on the cover at any one time. 2. Roof hatch entrances need to be protected if too close to the roof edge. They are considered holes when open (see section on Hole Covers.) 1.6 DELIVERY, STORAGE, AND HANDLING A. Materials to be delivered to the job site in good condition and adequately protected against damage as handrails are a finished product. B. Store products in manufacturer's unopened packaging until ready for installation. 1.7 PROJECT CONDITIONS A. Maintain environmental conditions (temperature, humidity, and ventilation) within limits recommended by manufacturer for optimum results. Do not install products under environmental conditions outside manufacturer's absolute limits. B. Field Measurements: Where handrails and railings are indicated to fit to other construction, check actual dimensions of other construction by Cubberley K-Wing Re-Roof Section 07 72 69 Page 6 accurate field measurements before fabrication; show recorded measurements on final shop drawings. 1. Where field measurements cannot be made without delaying the railing fabrication and delivery, obtain guaranteed dimensions in writing by the Contractor and proceed with fabrication of products to not delay fabrication, delivery and installation. C. Coordinate fabrication and delivery schedule of handrails with construction progress and sequence to avoid delay of railing installation. PART 2 - PRODUCTS 2.1 MANUFACTURERS A. Acceptable Manufacturer: Guardian, Miller, or approved equal. B. Substitutions: permitted upon review and approval. 2.2 SYSTEMS A. Provide pipe or tubing, fittings, and accessories as indicated or required to match design indicated on the Drawings. 1. Fittings: Cast iron. 2. Handrail Tubing, 12 gauge, Size a. 1-1/2 inches - 1.90 inches O D. b. 1-1/4 inches – 1.660 inches O D. 3. Handrail Pipe, Schedule 40, Size: a. 1-1/2 inches - 1.90 inches (48 mm) O D. b. 1-1/4 inches – 1.660 inches (38 mm) O D. 4. Infill Panels: As indicated. Refer to Drawings. B. Roof Edge Protection: Provide pipe railings, uprights, bases, counterweights, and fittings. 1. Freestanding counterweighted guardrail system with 42 inch (1067 mm) minimum height (between 39 to 45 inches) to provide a pedestrian egress barrier on the roof to withstand a minimum load of 200 lb (90719 g) in any direction to the top rail per OSHA Regulation 29 CFR 1910.23. 2. Pipe: Steel, 1-1/2 inches (48 mm) schedule 40, galvanized. 3. Tube: Galvanized tube, 12 gauge, 1-1/2 inches, 1.90 inches (48 mm) Cubberley K-Wing Re-Roof Section 07 72 69 Page 7 OD. 4. Rails and Posts: Galvanized Tube, 12 gauge, 1-1/2 inches 1.90 inches (38 mm) diameter. 5. Counterweight Levers: Galvanized Tube, 12 gauge, 1-1/4 inches 1.660 inches (38 mm) diameter. 6. Mounting Bases: Steel bases are galvanized and are supplied with a rubber pad on underside of the component. 7. Counterweights: Molded recycled PVC with one fixing collar per counterbalance. 8. Fasteners: stainless steel or galvanized. C. Custom Design: Provide pipe, fittings, and accessories as indicated or required by Drawings to match design indicated. 2.5 MATERIALS A. Pipe: 1. Steel Pipe: Steel, 1-1/2 inches (38 mm) schedule 40, galvanized. 2. Tube: Galvanized tube, 12 gauge, 1-1/2 inches, 1.90 inches (48 mm) OD. B. Fittings, Including Elbows, Crossovers, Wall flanges, Tees, Couplings: 1. Galvanized Malleable Cast Iron: approved equal structural pipe fittings, ASTM A447 with ASTM A153 galvanizing. C. Finish: Polyester factory applied spray coating. D. Fasteners: Type 304 or 305 stainless steel or galvanized. 2.6 FABRICATION A. Fit and shop assemble components in largest practical sizes for delivery to site. B. Upright tops shall be plugged with weather and light resistant material and shall be attached to the working surface. C. Assemble components with joints tightly fitted and secured. Accurately form components to suit installation. There shall be a horizontal top rail connected to the supports and one or more midrails running parallel to the top rail. Top rail to be able to raise as necessary to account workers Cubberley K-Wing Re-Roof Section 07 72 69 Page 8 using stilts or otherwise working in an elevated location above the work surface. PART 3 - EXECUTION 3.1 PREPARATION A. Prepare surfaces using the methods recommended by the manufacturer for achieving the best result. B. Existing parapets must be a minimum of 39” high or roof fall protection must be provided. 3.2 INSTALLATION A. Install in accordance with manufacturer's instructions. B. Fit exposed connections accurately together to form tight joints. For all connections with approved fittings or approved equal, each set screw is to be tightened to 29 foot pounds (39 N-m) of torque. C. Perform cutting, and fitting required for installation of handrails. Set handrails and accurately in location, alignment, and elevation, measured from established lines and levels. D. Install toeboards on guardrails when necessary to protect workers below from falling objects. E. In lieu of top rails, wire rope may be use, but must have flags made of highly visible material every 6 feet. 3.3 PROTECTION A. Protect installed products until completion of project. B. Touch-up, repair or replace damaged products before Substantial Completion. END OF SECTION Cubberley K-Wing Re-Roof Section 07 92 00 Page 1 SECTION 07 92 00 - JOINT SEALANTS PART 1 - GENERAL 1.1 RELATED DOCUMENTS A. Drawings and general requirements of the Contract, including General Conditions, Special Provisions and Division 1 Specification Sections, apply to this Section. 1.2 SCOPE OF WORK A. The Work of this Section consist of furnishing and installing the following: 1. Exterior sealants. 2. Joint sealant primers and accessories. 1.3 RELATED SECTIONS A. Section 076000 - Flashing and Sheet Metal: Sealant installation with flashings. 1.4 SUBMITTALS A. Product Data: Provide data and installation instructions for each type of joint sealant required. B. Certification by joint sealant manufacturer that sealants plus the primers and cleaners required for sealant installation comply with local regulations controlling use of volatile organic compounds (VOCs). C. Submit manufacturer’s letter of certification that products are appropriate for the uses intended. 1.5 QUALITY ASSURANCE A. Sealant applicator shall specialize in the installation of joint sealants with a minimum of 2 years experience. B. Elastomeric joint sealants shall be produced and installed to establish and to maintain watertight continuous seals without causing staining or deterioration of joint substrates. Cubberley K-Wing Re-Roof Section 07 92 00 Page 2 C. Sealant manufacturer shall confirm in writing that all materials contacting the sealants, including joint backings, gaskets, spacers, and joint substrates, are compatible with the sealant to be installed. Schedule sufficient time to test these materials for compatibility with the sealant, as necessary. Compatibility tests shall be performed to the sealant manufacturer’s standards. D. Sealant manufacturer shall confirm in writing the appropriate joint preparation and priming techniques required to obtain rapid, acceptable adhesion of the joint sealants to the joint substrates. E. Perform field adhesion testing of joint sealants to all surface types. Field adhesion testing shall be completed and results shall be reviewed and approved by sealant manufacturer and installer before commencing sealant installation. F. Pre-installation meeting: Review joint application procedures, compatibility tests, adhesion tests, and warranty requirements in a meeting involving installer, manufacturer or manufacturer’s representative, building owner or manager, consultant, and contractor. G. Sealant manufacturer shall provide one announced and one unannounced quality control check/adhesion test with the sealant installer at the job site. 1.6 DELIVERY, STORAGE, AND HANDLING A. Deliver materials to Project site in original unopened containers or bundles with labels indicating manufacturer, product name and designation, color, expiration period for use, pot life, curing time, and mixing instructions for multi-component materials intact and legible. B. Store and handle materials in compliance with manufacturer's recommendations to prevent their deterioration or damage due to moisture, high or low temperatures, contaminants, or other causes. 1.7 PROJECT CONDITIONS A. Do not proceed with installation of joint sealants under the following conditions: 1. When ambient and substrate temperature conditions are outside the limits permitted by joint sealant manufacturer. 2. Below 40 deg F (4.4 deg C). 3. When joint substrates are wet or retaining moisture. Cubberley K-Wing Re-Roof Section 07 92 00 Page 3 B. Joint Width Conditions: Do not proceed with installation of joint sealants where joint widths are less than allowed by joint sealant manufacturer for application indicated. C. Joint Substrate Conditions: Do not proceed with installation of joint sealants until contaminants capable of interfering with their adhesion are removed from joint substrates. PART 2 - PRODUCTS 2.1 MATERIALS A. Compatibility: Provide joint sealants, joint fillers, and other related materials that are compatible with one another and with joint substrates under conditions of service and application, as demonstrated by sealant manufacturer based on testing and field experience. B. Colors: Provide color of exposed joint sealants to match colors indicated by reference to manufacturer's standard designations. C. Provide selections made by Architect from manufacturer's full range of standard colors for products of type indicated. 2.2 JOINT SEALANTS A. Weatherproofing Sealant: Provide product complying ASTM C920, also with ASTM C1193 and tested under ASTM C719; Type S, Grade NS, Class 25; that accommodates joint movement of not more than 25 percent in both extension and compression for a total of 50 percent, use at conventional glazing and for weatherproofing. 1. Dow Corning Corporation; Dow Corning 790, 791, or 795. 2. Tremco; Spectrem II or Spectrem III. 3. Pecora Corporation; 895. B. Flashings Sealant: ASTM C920, Type S, Grade NS, Class 25; single component elastomeric accommodating joint movement of not more than 25 percent in both extension and compression for a total of 50 percent. 1. Dow Corning Corporation; Dow Corning 791, 795, or Contractors Weatherproofing Sealant. Cubberley K-Wing Re-Roof Section 07 92 00 Page 4 C. Reglets and Flashings Sealant: ASTM C920, Type S, Grade NS, Class 25; single component elastomeric accommodating joint movement of not more than 25 percent in both extension and compression for a total of 50 percent. 1. Dow Corning Corporation; Dow Corning 791, 795, or Contractors Weatherproofing Sealant. D. Self-Leveling Sealant: ASTM C920, Type S, Grade SL; single component, chemical curing, non-staining, non-bleeding, non-sagging type; color as selected; use in concrete expansion and control joints in parking garages, plaza and terrace decks, floor and sidewalk joints. 1. Dow Corning Corporation; Dow Corning 890SL. 2. Pecora Corporation; Urexpan NR-200 -. 3. Tremco; THC-900. 4. Sika Corporation, Inc.; Sikaflex 2C-FL. 2.3 JOINT SEALANT BACKING A. General: Provide sealant backings and accessory materials, including primers, of material and type that are non-staining; are compatible with joint substrates, sealants, and other joint fillers; and are approved for applications indicated by sealant manufacturer based on field experience and laboratory testing. B. Foam Joint Fillers: Non-gassing, preformed, compressible, resilient, non-staining, non-waxing, non-extruding strips of flexible plastic foam of material indicated below and of size, shape, and density to control sealant depth, prevent three-sided adhesion, provide a surface against which to tool, and otherwise contribute to producing optimum sealant performance: 1. Cylindrical Sealant Backings: ASTM C1330, Type C (closed-cell material with a surface skin) or Type B (bicellular material with a surface skin), and of size and density to control sealant depth and otherwise contribute to producing optimum sealant performance and as recommended by sealant manufacturer. 2. Elastomeric Tubing Sealant Backings: Neoprene, butyl, EPDM, or silicone tubing complying with ASTM D1056, nonabsorbent to water and gas, and capable of remaining resilient at temperatures down to minus 26 deg F (minus 32 deg C). Provide products with low compression set and of size Cubberley K-Wing Re-Roof Section 07 92 00 Page 5 and shape to provide a secondary seal, to control sealant depth, and to otherwise contribute to optimum sealant performance. 2.4 MISCELLANEOUS MATERIALS A. Primer: Material recommended by joint sealant manufacturer where required for adhesion of sealant to joint substrates indicated, as determined from pre- construction joint sealant-substrate tests and field tests. Certify that primer will not permanently stain adjacent joint surfaces. B. Cleaners for Nonporous Surfaces: Chemical cleaners acceptable to manufacturers of sealants and sealant backing materials, free of oily residues or other substances capable of staining or harming in any way joint substrates and adjacent nonporous surfaces, and formulated to promote optimum adhesion of sealants with joint substrates. C. Masking Tape: Non-staining, nonabsorbent material compatible with joint sealants and surfaces adjacent to joints, to mask off adjacent joint surfaces where sealant is not permanently intended to be applied. D. Bondbreaker Tape: Polyethylene pressure sensitive adhesive tape, to be used in areas where backer rod cannot fit and where three-sided adhesion is to be avoided. PART 3 - EXECUTION 3.1 EXAMINATION A. Examine joints indicated to receive joint sealants, with Installer present, for compliance with requirements for joint configuration, installation tolerances, and other conditions affecting joint sealant performance. B. Verify that joint sizes and surfaces are free of defects and acceptable for installation of joint sealants. C. Verify joint dimensions and shapes to ensure they are within the sealant manufacturer’s guidelines. Resolve any variances prior to installation. Do not proceed with sealant installation until the unsatisfactory conditions have been corrected. Cubberley K-Wing Re-Roof Section 07 92 00 Page 6 3.2 PREPARATION A. Surface Cleaning of Joints: Clean out joints immediately before installing joint sealants to comply with recommendations of joint sealant manufacturer. B. Thoroughly clean the areas that the new sealant will contact using a de-greasing solvent such as toluene or xylene and the two-rag wipe technique. IPA (isopropyl alcohol) is not a degreasing solvent. The new sealant should have a minimum contact area of 1/4”. C. Remove all foreign material from joint substrates that could interfere with adhesion of joint sealant, including dust, paints (except for permanent, protective coatings tested and approved for sealant adhesion and compatibility by sealant manufacturer), oil, grease, waterproofing, water repellents, water, surface dirt, and frost. D. Clean porous joint substrate surfaces by oil-free brushing, grinding, blast cleaning, mechanical abrading, or a combination of these methods to produce a clean, sound substrate capable of developing optimum bond with joint sealants. Do not damage finished surface of materials while performing cleaning operations. Remove loose particles remaining from above cleaning operations by vacuuming or blowing out joints with oil-free compressed air. E. Clean metal, glass, porcelain enamel, glazed surfaces of ceramic tile, and other nonporous surfaces with chemical cleaners or other means that do not stain, harm substrates, or leave residues capable of interfering with adhesion of joint sealants. F. Masking Tape: Use masking tape where required to prevent contact of sealant with adjoining surfaces that otherwise would be permanently stained or damaged by such contact or by cleaning methods required to remove sealant smears. Remove tape immediately after tooling without disturbing joint seal. 3.3 JOINT PRIMING A. Prime joint substrates where indicated or where recommended by joint sealant manufacturer based on pre-construction joint sealant-substrate tests or prior experience. Apply primer to comply with joint sealant manufacturer's recommendations. B. Confine primers to areas of joint sealant bond; do not allow spillage or migration onto adjoining surfaces. C. Allow primer to dry. Do not prime areas that cannot be sealed the same day. Cubberley K-Wing Re-Roof Section 07 92 00 Page 7 3.4 INSTALLATION OF SEALANT BACKINGS A. Install joint fillers of type indicated to provide support of sealants during application and at position required to produce the cross-sectional shapes and depths of installed sealants relative to joint widths that allow optimum sealant movement capability. B. Do not leave gaps between ends of joint fillers. C. Do not stretch, twist, puncture, or tear joint fillers. D. Remove absorbent joint fillers that have become wet prior to sealant application and replace with dry material. E. Tolerances: 1. Minimum Sealant Contact Area: 1/4-inch. 2. Minimum Joint Depth: 1/4 + 1/8-inch, with the joint width at least twice the joint depth to allow the sealant its maximum movement capability. 3.5 INSTALLATION OF JOINT SEALANTS A. General: Comply with joint sealant manufacturer's printed installation instructions applicable to products and applications indicated, except where more stringent requirements apply. B. Sealant Installation Standard: Comply with recommendations of ASTM C1193 for use of joint sealants as applicable to materials, applications, and conditions indicated. C. Installation of Sealants: Install sealants by proven techniques that result in sealants directly contacting and fully wetting joint substrates, completely filling recesses provided for each joint configuration, and providing uniform, cross- sectional shapes and depths relative to joint widths that allow optimum sealant movement capability. Install sealants at the same time sealant backings are installed. D. Tooling of Non-sag Sealants: Immediately after sealant application and prior to time skinning or curing begins, tool sealants to form smooth, uniform beads of configuration indicated, to eliminate air pockets, and to ensure contact and adhesion of sealant with sides of joint. Remove excess sealants from surfaces adjacent to joint. Do not use tooling agents that discolor sealants or adjacent surfaces or are not approved by sealant manufacturer. Cubberley K-Wing Re-Roof Section 07 92 00 Page 8 1. Remove excess sealant from surfaces adjacent to joints. 2. Use tooling agents that are approved in writing by sealant manufacturer and that do not discolor sealants or adjacent surfaces. 3. Provide concave joint configuration per Figure 5A in ASTM C1193, unless otherwise indicated. 4. Provide flush joint configuration where indicated per Figure 5B in ASTM C1193. 3.6 FIELD QUALITY CONTROL A. Field-Adhesion Testing: Field test joint-sealant adhesion to joint substrates as follows: 1. Extent of Testing: Test completed elastomeric sealant joints as follows: a. Perform 10 tests for the first 1000 feet (300 m) of joint length for each type of elastomeric sealant and joint substrate. 2. Test Method: Test joint sealants as appropriate for type of joint-sealant application indicated. a. For joints with dissimilar substrates, verify adhesion to each substrate separately; do this by extending cut along one side, verifying adhesion to opposite side. Repeat procedure for opposite side. 3. Inspect joints for complete fill, for absence of voids, and for joint configuration complying with specified requirements. Record results in a field-adhesion-test log. 4. Inspect tested joints and report on the following: a. Whether sealants in joints connected to pulled-out portion failed to adhere to joint substrates or tore cohesively. Include data on pull distance used to test each type of product and joint substrate. Compare these results to determine if adhesion passes sealant manufacturer's field-adhesion hand-pull test criteria. b. Whether sealants filled joint cavities and are free of voids. c. Whether sealant dimensions and configurations comply with specified requirements. 5. Record test results in a field-adhesion-test log. Include dates when sealants were installed, names of persons who installed sealants, test dates, test locations, whether joints were primed, adhesion results and percent elongations, sealant fill, sealant configuration, and sealant dimensions. 6. Repair sealants pulled from test area by applying new sealants following same procedures used originally to seal joints. Ensure that original sealant surfaces are clean and that new sealant contacts original sealant. Cubberley K-Wing Re-Roof Section 07 92 00 Page 9 B. Evaluation of Field Test Results: Sealants not evidencing adhesive failure from testing or noncompliance with other indicated requirements will be considered satisfactory. Remove sealants that fail to adhere to joint substrates during testing or to comply with other requirements. Retest failed applications until test results prove sealants comply with indicated requirements. 3.7 CLEANING A. Construction Waste Management: Manage construction waste in accordance with provisions of Section 01524 Construction Waste Management. Submit documentation for Credit MR 2.1 and Credit MR 2.2to satisfy the requirements of that Section. B. Clean off excess sealants and sealant smears adjacent to joints as the Work progresses by methods and with cleaning materials approved in writing by manufacturers of joint sealants and of products in which joints occur. C. Leave finished work in a neat, clean condition with no evidence of spillovers onto adjacent surfaces. 3.8 PROTECTION A. Protect joint sealants during and after curing period from contact with contaminating substances or from damage resulting from construction operations or other causes so that they are without deterioration or damage at time of Substantial Completion. B. If, despite such protection, damage or deterioration occurs, cut out and remove damaged or deteriorated joint sealants immediately so that and installations with repaired areas are indistinguishable from original work. END OF SECTION Cubberley K-Wing Re-Roof Section 09 91 13 Page 1 SECTION 09 91 13 - EXTERIOR PAINTING AND FINISHING PART 1 - GENERAL 1.0 WORK INCLUDED A. Surface preparation for all existing wood fascia and supports above the roofline, etc. B. Surface finish priming and painting of new roof fascia boards and all new wood and metals roof surfaces. Paint all items above to match existing. 1.1 RELATED WORK A. Section 06 10 00 - Rough Carpentry. B. Section 07 51 13 - Cold-applied Modified Bitumen Roofing C. Section 07 60 00 - Flashing and Sheet Metal. 1.2 REFERENCES A. ANSI/ASTM D16 - Definitions of Terms Relating to Paint, Varnish, Lacquer, and Related Products. B. ASTM D2016 - Test Method for Moisture Content of Wood. 1.3 DEFINITIONS Conform to ANSI/ASTM D16 for interpretation of terms used in this section. 1.4 QUALITY ASSURANCE A. Product Manufacturer - Company specializing in manufacturing quality paints and finish products with five years experience. B. Applicator - Company or individual knowledgeable in commercial painting and finishing with five (5) years documented experience. 1.5 SUBMITTALS A. Submit product data. Cubberley K-Wing Re-Roof Section 09 91 13 Page 2 B. Provide product data on all finishing products. C. Submit samples. D. Submit manufacturer's application instructions. 1.6 ENVIRONMENTAL REQUIREMENTS Do not apply exterior coatings during rain or when relative humidity is above 50 percent, unless required otherwise by manufacturer's instructions. PART 2 - PRODUCTS 2.0 ACCEPTABLE MANUFACTURERS - PAINT A. Kelly Moore or approved equal. 2.1 MATERIALS Accessory Materials - Linseed oil, shellac, turpentine, paint thinners and other materials not specifically indicated but required to achieve the finishes specified, of commercial quality. 2.2 FINISHES Refer to schedule at end of Section for surface finish schedule. Colors are to match existing. PART 3 - EXECUTION 3.0 INSPECTION A. Verify that surfaces are ready to receive work as instructed by the product manufacturer. B. Examine surfaces scheduled to be finished prior to commencement of work. Report any condition that may potentially affect proper application. C. Measure moisture content of surfaces using an electronic moisture meter. Do not apply finishes unless moisture content of surfaces is below the following maximums: Cubberley K-Wing Re-Roof Section 09 91 13 Page 3 1. Fifteen percent (15%) measured in accordance with ASTM D2016. D. Beginning of installation means acceptance of substrate. 3.1 PREPARATION A. Correct minor defects and clean surfaces which affect work of the section. B. Galvanized Surfaces - Remove surface contamination and oils and wash with solvent. Apply coat of etching primer. 3.2 PROTECTION A. Protect elements surrounding the work of this section from damage or disfiguration. At side adjacent to any existing childcare centers, it is vital that protection be provided from any work at the roof above. Coordinate with City of Palo Alto Project Manager for best alternatives. B. Repair damage to other surfaces caused by work of this section. C. Furnish drop cloths, shields, and protective methods to prevent spray or droppings from disfiguring other surfaces. 3.3 APPLICATION A. Apply products in accordance with manufacturer's instructions. B. Sand lightly between coats to achieve required finish. C. Allow applied coat to dry before next coat is applied. D. Prime back surfaces of exterior woodwork with primer paint. 3.4 CLEANING A. As work proceeds, promptly remove paint where spilled, splashed, or spattered. B. Collect cotton waste, cloths and material, which may constitute a fire hazard, place in closed metal containers and remove daily from site. Cubberley K-Wing Re-Roof Section 09 91 13 Page 4 3.5 SCHEDULE - EXTERIOR SURFACES A. Wood - Painted 1. One coat primer, 2201722 latex 2. Two coats exterior paint, 1250 acrylic latex B. Steel - Unprimed 1. One coat zinc chromate primer, 1710 red oxide 2. Two coats exterior paint, 1250 acrylic latex C. Steel - Galvanized 1. One coat primer, 122 latex 2. Two coats exterior paint, color TBD. END SECTION 1/8" = 1'-0" K-WING PARTIAL ROOF PLAN 1/8" = 1'-0" CONDUIT OR PIPING SUPPORT 1/8" = 1'-0" K-WING PARTIAL ROOF PLAN JOB No.173793 DESCRIPTION: Cubberley K Wing ReRoof Project SHEET No.: 1 BID SUMMARY FOR ROOFING REPLACEMENT DATE : 12/5/2018 IFB No.:173793 DATE : BID DESCRIPTION BID GOVT Waterproofing and Associates, Inc. Pioneer Contractors, Inc. State Roofing Alcal Specialty Best Contracting Platinum Roofing ITEM QTY UNIT ESTIM BID BID BID BID BID BID BID 1 Base Bid Roof Replacement, etc.1 LS $258,781 $260,000 $288,000 $309,140 $286,652 $285,000 $253,712 2 New Gutters and Paint to Match Existing 1 LS $18,375 $12,840 $32,000 $20,818 $44,270 $62,000 $153,822 3 Dry-Rot Repair Allowance 1 LS $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Total $287,156 $282,840 $330,000 $339,958 $340,922 $357,000 $417,534 PREPARED BY: Jimmy Chen, PM CHECKED BY: Mike Wong, Facilities Maintenance Ma Attachment C City of Palo Alto (ID # 9958) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: 2018 Annual Comprehensive Plan and Housing Element Progress Report Title: Authorize Transmittal of the 2018 Annual Comprehensive Plan and Housing Element Progress Report for the Period of January 1, 2018 to December 31, 2018 to the State of California's Office of Planning and Research and the Department of Housing and Community Development (HCD) From: City Manager Lead Department: Planning and Community Environment Recommendation Review the 2018 Annual Comprehensive Plan and Housing Element Progress Report and Authorize its Transmittal to the State of California’s Office of Planning and Research (OPR) and Department of Housing and Community Development (HCD) by April 1, 2019. Executive Summary In accordance with AB 879 (Government Code section 65400) and Palo Alto’s 2030 Comprehensive Plan, staff has prepared the City’s first Comprehensive Plan Progress Report, including the City’s Housing Element Annual Progress Report for the calendar year 2018. As the 2030 Comprehensive Plan was just adopted a little over a year ago, staff is not anticipating any changes to the Comprehensive Plan itself at this time. This report provides an update on the following two critical Comprehensive Plan documents: 1. 2030 Comprehensive Plan Implementation Plan 2. 2015-2023 Housing Element This staff report provides a general summary of progress towards the programs and goals set forth in each of these documents. It also includes two attachments with detailed tables to allow City of Palo Alto Page 2 staff and local and state officials to track the progress of individual programs and goals, as needed. Background 2030 Comprehensive Plan Implementation Plan The 2030 Comprehensive Plan Implementation Plan adopted in November 2017 contains 57 pages of programs attributed to approximately 15 different “lead agencies or departments.” These programs are meant to be implemented over the course of the Comprehensive Plan’s life, or approximately 12 years. Since the Comprehensive Plan was only adopted a little more than a year ago, only a handful (about 4%) have been completed. However, about 12% of all programs are partially completed and about 55% are ongoing. Many ongoing programs are routine items that must be completed every year and will therefore never be “complete.” About one third, or 29%, of all programs have not yet been initiated. 2018 Status Number of Programs Percent of Total Programs Ongoing 230 55% Complete 15 4% Partially Complete 53 12% Pending 120 29% Total 418 100% The Implementation Plan categorizes each identified program based on priority. Chapter 9 of the Comprehensive Plan defines these categories as follows. Please see page 212 of the Comprehensive Plan for greater detail. • R: “Routine” activities that are part of the normal course of business for staff • IP: “In progress” – programs that were already underway to complete a specific, defined work effort at the time of the Comprehensive Plan’s adoption • S: “Short-term” – programs planned for implementation within the first five years after Comprehensive Plan adoption • M: “Medium-term” – typically means programs that would be implemented or completed roughly within five to ten years after Comprehensive Plan adoption • L: “Long-term” – programs that would be implemented or completed more than ten years after Comprehensive Plan adoption City of Palo Alto Page 3 While it is not uncommon for priorities to shift over time depending on resource availability, almost all of the Implementation Plan’s routine programs were successfully implemented in 2018 along with a number of short-term programs. Many other short-term and even some medium-term programs were also partially completed. As expected, though, very few long- term programs were partially or fully completed. Attachment A of this report includes seven different tables: one for each of the below listed elements of the 2030 Comprehensive Plan and its relative programs. In total the Comprehensive Plan includes the following eight elements. 1. Land Use 2. Transportation 3. Natural Environment 4. Safety 5. Community Services and Facilities 6. Business and Economics 7. Governance 8. Housing* *Progress on the Housing Element is reportedly separately in Attachment B, as it has different State reporting requirements than the other seven Comprehensive Plan elements. In Attachment A, the progress towards each program is identified in the “status” column of each table. The priority of each program is identified in the “priority” column of each table. The key for the “priority” column is noted below. C = Complete, PC = Partially Complete, O = Ongoing, P = Pending, U = Unknown 2015-2023 Housing Element The City is required to prepare an Annual Progress Report (APR) per Government Code Section 65400 on its progress and program status in implementing its housing element. There are three components of the APR: 1) Total number of net housing units produced or “permitted” by the City in a calendar year; 2) Status on jurisdiction’s progress in addressing its (RHNA); 3) Status in the implementation of the 2015-2023 Housing Element’s programs and goals. The APR must be submitted to the California Department of Housing and Community Development and the Governor’s Office of Planning and Research by April 1 of each year. The City will need to submit its 2018 APR by April 1, 2019. City of Palo Alto Page 4 The City permitted a total of net 54 dwelling units over 2018 in the above moderate (market rate) income category. The Housing Element is one of the mandatory elements which must be included in the City’s Comprehensive Plan. The Housing Element provides goals, policies and actions that help the City plan for the housing needs for all segments of the City’s population. Housing Element law mandates that local governments adequately plan to meet the existing and projected housing needs of all economic segments of the community. The City is required to update its Housing Element per State Housing Element Law every eight years. The City’s current Housing Element for the period of 2015-2023 was adopted on November 10, 2014 and was certified by the California Department of Housing and Community Development (HCD) on January 20, 2015. The Housing Element can be found at the link provided here: https://www.cityofpaloalto.org/civicax/filebank/documents/37935. The Housing Element covers five key areas: 1) Analysis of existing needs, including the number of people living in substandard or overcrowded housing, people paying more for their homes than they can sustainably afford, people with special housing needs, and affordable units at risk of converting to market rate. 2) Analysis of projected needs, including the allocation of income-specific housing needs developed by the Association of Bay Area Governments (ABAG). 3) A site inventory where housing development is allowed, as well as supported by infrastructure and the environment. 4) Analysis of government controls on housing development. 5) Programs, policies and objectives that the City will adopt to assist the development of housing for different income and special needs groups, ensure equal housing opportunity, and preserve and improve the existing housing stock. Figure 1 below provides a summary of the main Housing Element components. Figure 1: Housing Element Components City of Palo Alto Page 5 Importantly, the State requires the annual progress report to describe the City’s progress in meeting its fair share of Regional Housing Needs Allocation (RHNA) efforts to preserve, rehabilitate or produce housing. As part of the RHNA process overseen by the Association of Bay Area Governments (ABAG), the City of Palo Alto was assigned a quantified goal of 1,988 units, which represents the City’s “fair share” of projected housing need for the 2015-2023 planning period, distributed among the following income groups: very low (345 units), low (346 units), moderate (278 units) and above moderate (587 units) income categories. See Table 1 below for the RHNA breakdown by income group and a summary of the City’s progress in meeting its RHNA through 2018. The City’s Draft 2018 APR is available online via the following link: https://www.cityofpaloalto.org/civicax/filebank/documents/68942 Table 1: City of Palo Alto Regional Housing Needs Allocation 2015-2023 Income Group % of County AMI Palo Alto RHNA (2014- 2022) % of Units Units Permitted (2014-2018) % of RHNA Accomplished (2014-2018) Very Low 0-50% 691 35% 43 6% Low 51-81% 432 22% 58 13% Moderate 81-120% 278 14% 42 15% Above Moderate 120%+ 587 29% 304 52% Total 1,988 100% 447 22% Goals, Policies and Programs The Housing Element contains several adopted programs that the City will need to implement during the Housing Element period from 2015 to 2023. Table 2 below has a summary of the status of those programs of the Housing Element. Of the 72 programs listed in the Housing Element, 31 are ongoing programs, 23 of those have been completed, 12 are underway and 6 programs have not yet been completed. The 12 programs underway is part of the second phase of the City’s Housing Work Plan that is subject to Council’s approval. While the six programs that have not yet been completed require further Council’s direction. Table 2. Status of Near Term Housing Element Programs (December 2014 to December 2018) and Ongoing Programs Status Housing Element Programs Number City of Palo Alto Page 6 Ongoing Promote/Incentivize Rehabilitation and Neighborhood Revitalization (H1.1.1; H3.2.2; H1.3.1) Implementation of BMR Ordinance (H3.1.2; H3.1.3; H3.1.5) Enforcement of Condominium Conversion (H3.1.9; H3.1.10) Support of 100% Affordable Housing Projects (H3.1.11; H3.3.1; H3.3.2; H3.4.2; H3.4.4; H2.3.1) Assisting Lower Income Households (H3.2.1) Regional Efforts to Support Housing (H3.3.3; H3.3.6; H3.4.1; H3.5.1; H4.1.1; H5.1.3) Fair Housing and CDBG Implementation (H4.1.2; H4.1.3; H4.1.4; H4.1.5; H4.1.6) Promote Green Building (H5.1.1; H5.1.2; H5.1.4; H5.1.5; H5.1.6) 31 Completed Modifying Zoning Code for Promotion of ADU (H1.1.2; H3.3.5) Amending Zoning Code and BMR Ordinance to Create Incentives for Affordable Housing and Workforce Housing (H2.1.4; H2.1.9; H3.6.1; H2.2.1; H3.1.1; H2.1.1; H2.1.2; H2.2.8; H2.1.3; H2.1.6; H3.1.12; H2.2.7) Promotion of Housing Sites and Developed Plans (H2.1.8; H5.1.7; H2.2.6) Housing Preservation via Financial Incentives (H2.2.4; H3.1.8) Creation of Affordable Housing Fund via Impact and In-lieu (H3.1.6; H3.4.3) Support of Transitional Housing (H3.5.2; H3.5.3) 23 Partially Completed Reduction of Fees and Flexible Development Standards for Preservation of Cottages (H1.1.3) BMR Requirements in Condominium Conversions and Preservation of At-Risk Units (H1.2.1; H3.1.4; H3.1.13) Transfer of Development Rights (H2.1.7) Increase Connectivity and Walkability and Study of Parking (H2.1.5; H2.1.10; H3.3.7) Development of Coordinated Plans (H2.2.3) 12 City of Palo Alto Page 7 Outreach to Identify Housing Sites and Regional Collaboration (H2.2.2; H4.2.2; 3.1.14) Pending Pedestrian and Transit Oriented Overlay & Specific Plans (H2.1.11; H2.1.12) Identify Transit Rich Housing Sites (H2.2.5) Innovative Housing (H3.1.7) Group homes and Flexible Standards for Special Needs (H3.3.4; H4.2.1) 6 Total 72 Source: Planning & Community Environment, February 15, 2019 Housing Legislation The California Legislature passed a 15 bill housing package on September 15, 2017. Many of the provisions in the housing package became effective on January 1, 2018. Because of the passage of the 2017 Housing Package, there are now additional housing element reporting requirements. Per SB 35 and AB 879, annual reporting requirements are now applicable to charter cities. Prior to the passage of AB 879, charter cities were not required to submit the APR, although the City did submit the APR on an annual basis. In addition, local jurisdictions are now required to hold a public hearing and accept public comment regarding the APR. The Draft 2018 APR will be publicly presented to Council on March 4, 2019. In addition, Senate Bill (SB 35) and Assembly Bill (AB 72), encourages cities to meet its RHNA housing production goals. Assembly Bill 72 requires that the State (HCD), review local governments’ general plans and actions on housing proposals for compliance with State law and allows HCD to report violations to the California Office of Attorney General. While SB 35 requires cities that have not met their housing production goals to approve multifamily projects in a ministerial, streamlining approval process. Together, AB 72 and SB 35 reinforces the notion that the City must produce its fair share of affordable housing production or risk loss of local land control and/or HCD has the option to revoke approved Housing Element and report violations to the Attorney General. Annually, HCD will use data reported by the City’s APR to determine if it is subject to the new SB 35 streamlining requirements. HCD will determine and release a list of cities subject to the SB 35 in approximately June 2019 after APR are due. If cities have met their prorated lower and above-moderate RHNA for the reporting period, the city would not be subject to SB 35. For cities that have not met their lower income RHNA, the City would be subject to 50% affordability--developer must provide at least 50% of its total units to lower income persons-- can invoke the streamlining approval process. However, if a city has not met their lower income and above moderate (market rate) RHNA production, the developer can invoke the streamlining process for a lesser affordable percentage—the total percentage of affordable City of Palo Alto Page 8 units decreases to 10%. The developer would need to provide 10% of its total units to lower income to invoke the streamlining process. In both cases, lower income is deed restricted not to exceed 80% of area median income. In the above Table 2, the City have not made progress towards its lower RHNA but met its above moderate RHNA, subjecting itself to the 50% affordability. The City is half way through its Housing Element and have produced 52% of its above moderate goal. Given the rate of production the City may be subject to the 10% affordability the following year, if the City does not permit at least 63 units. Due to the State requirements of housing production, the Santa Clara County Civil Grand Jury has suggested to create a RHNA subregion for the next RHNA cycle. Given the many constraints of housing production in the Bay Area and to also increase collaborative countywide efforts, the City will join the formation of a countywide RHNA sub region. As part of the RHNA process, cities can join a subregion to conduct an allocation process for RHNA. This will enable cities to meet its RHNA goals for all income levels and additional collaboration and cooperation on a countywide level to ensure a fair share of housing production. Planning Commission Review On February 13, 2019, PTC reviewed a draft of the 2018 Annual Comprehensive Plan and Housing Element Progress Report. PTC recommends that City Council approve this report and authorize its transmittal to the State of California’s Office of Planning and Research (OPR) and Department of Housing and Community Development (HCD) by April 1, 2019. PTC also asked staff for additional information to explain the reasons why Palo Alto is not meeting its RHNA allocations. Staff is currently collecting data and stakeholder input to respond to this request. Additionally, PTC is exploring the possibility of a future subcommittee to monitor Comprehensive Plan progress over the course of the year. This would position PTC to best fulfill their responsibility to recommend any needed Comprehensive Plan changes on an annual basis. Policy Implications The City must submit the APR by April 1 of each year. If the report is not submitted by May 31 of each year, the City may be subject to a court order that requires completion of the report. Cities that fail to complete and submit their APRs will trigger SB 35 streamlinging provisions for housing development applications as mentioned above. Resource Impact There is no resource impact, other than staff time to prepare and submit the report. Timeline City of Palo Alto Page 9 Staff will submit the 2018 APR to HCD and OPR by April 1, 2019. Environmental Review Review and submittal of the attached report is not a project requiring review under the California Environmental Quality Act (CEQA). City of Palo Alto Page 10 Attachments: A. 2030 Comprehensive Plan Implementation Plan: 2018 Progress Report B. 2015-2023 Housing Element: 2018 Progress Report Attachments: Attachment A: 2030 Comprehensive Plan Implementation Plan 2018 Progress Report (PDF) Attachment B: 2018 Housing Element Annual Progress Report (PDF) Attachment A: 2030 Comprehensive Plan Implementation Plan 2018 Progress Report 2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  1 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  LAND USE ELEMENT     Goal L‐1: A compact and resilient city providing residents and visitors with attractive neighborhoods, work places, shopping districts, public facilities, and open spaces.  L1.6.1  Review regulatory tools available to the City and identify  actions to enhance and preserve the livability of  residential neighborhoods and the vitality of commercial  and employment districts, including improved code  enforcement practices.  Planning &  Community  Environment  Department  S  $$ O  See code enforcement audit  response. Implementation (update of  Palo ALto311 tool) not commenced.  L1.8.1  Maintain and update as appropriate the 1985 Land Use  Policies Agreement that sets forth the land use policies of  the City, Santa Clara County, and Stanford University with  regard to Stanford unincorporated lands.  Planning &  Community  Environment  Department  IP  $ P  The City is currently working with  Santa Clara County and Stanford to  review Stanford's application for an  amendment to their 2000 General  Use Permit addressing the use of  unincorporated lands adjacent to  Palo Alto that should be approved in  2019.  The Stanford 2018 General Use  Permit amendment will  include a  revision and update of the 1985 Land  Use Policies Agreement (Protocol  amended in 2000).  Goal L‐2: An enhanced sense of “community” with development designed to foster public life, meet citywide needs and embrace the principles of sustainability.  L2.2.1  Explore whether there are appropriate locations to allow  small‐scale neighborhood‐serving retail facilities such as  coffee shops and corner stores in residential areas.  Planning &  Community  Environment  Department  M  $    L2.4.1 Amend the Housing Element to eliminate housing sites  along San Antonio Road and increase residential  densities in Downtown and the California Avenue area to  replace potential units from the sites eliminated.   Planning & Community  Environment  Department  S $ P I think this is underway and Jon and  Clare are working on it.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  2 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L2.4.2  Allow housing at Stanford Shopping Center, provided  that adequate parking and vibrant retail is maintained  and no reduction of retail square footage results from  the new housing.  Planning &  Community  Environment  Department  S  $ C  Mixed Use development is allowed in  the CC zoning district.  Development  of such kind would require creative  parking solutions to accommodate all  uses.  L2.4.3  Allow housing on the El Camino Real frontage of the  Stanford Research Park. Explore multi‐family housing  elsewhere in Stanford Research Park and near the SUMC. Planning &  Community  Environment  Department  S  $ O  Requires rezoning; Consider  expanding Affordable Housing zoning  overlay (PAMC 18.30J) to RP zoned  properties.  L2.4.4  Assess non‐residential development potential in the  Community Commercial, Service Commercial and  Downtown Commercial Districts (CC, CS and CD) and the  Neighborhood Commercial District (CN), and convert  non‐retail commercial FAR to residential FAR, where  appropriate. Conversion to residential capacity should  not be considered in Town and Country Village.   Planning &  Community  Environment  Department  S  $ C  Affordable Housing zoning overlay  (PAMC 18.30J) created in 2018 now  available for CC, CS, CD and CN  properties.  L2.4.5  Update the municipal code to include zoning changes  that allow a mix of retail and residential uses but no  office uses. The intent of these changes would be to  encourage a mix of land uses that contributes to the  vitality and walkability of commercial centers and transit  corridors.  Planning &  Community  Environment  Department S  $    L2.4.6  Explore changing the Transfer of Development Rights  (TDR) ordinances for both buildings of historic  significance and for seismic retrofits so that transferred  development rights may only be used for residential  capacity.   Planning &  Community  Environment  Department M  $ O To be started in approximately 5  years  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  3 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L2.4.7  Explore mechanisms for increasing multi‐family housing  density near multimodal transit centers.   Planning &  Community  Environment  Department S $$ P  From what I have learned, I can only  recall the Affordable Housing  Combining District that loosens  standards for MF projects within half  mile of transit.  I’m not sure or recall  of additional policies underway to  increase density near transit but a lot  of policy at the State level want to  reinforce this idea.  State legislatures  that will affect density near transit if  they do pass i.e. SB 50 and one of  many of CASA Compact’s 10 Elements  encourage density.  L2.4.8  Identify development opportunities for BMR and more  affordable market rate housing on publicly owned  properties in a way that is integrated with and enhances  existing neighborhoods.  Planning &  Community  Environment  Department S $$ P  As I recalled from my conversation  with Roland the City only owns  parking structures and there aren’t  any other parcels to be developed on.  The City instead, has help encourage  more BMR opportunities through  policies measures such as the  (recently?) passed Affordable  Housing Overlay and Workforce  Housing Overlay that both loosen  development standards and the  ability to rezone.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  4 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L2.5.1 Collaborate with PAUSD in exploring opportunities to  build housing that is affordable to school district  employees.   Planning &  Community  Environment  Department  M $ O  From time to time PAUSD will contact  the City to ask about residential  growth to anticipate student  population from the school district.   However, there is not a special  preference for BMR opportunities for  PAUSD at this point. OES is interested  in strategies that could increase the  number of government employees  who live near the City.  Such  employees, including of PAUSD, are  considered Disaster Service Workers  per Cal. Gov't Code Sec. 3100 et seq.  L2.7.1 Review development standards to discourage the net  loss of housing units.   Planning &  Community  Environment  Department  S $ P  In the City’s code 18.15 reference no  net loss i.e., the code states if the  developer were to vacant or  demolish a property within a 5‐ yearPRECENDING an application, the  housing development must provide  at least the same units equivalent  size as existed and at affordable rent  at same or lower.  This can be found  in Ch 18.15.020, ii.    Also, at the State  level, there are various bills that  discourage the net loss of units as SB  166 and many initiatives for anti‐ displacement laws.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  5 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L2.8.1 Conduct a study to evaluate various possible tools for  preventing displacement of existing residents.  Planning &  Community  Environment  Department  M $$ O  None –that I know of.  But we can  say the City did passed a relocation  ordinance that ensures tenants facing  eviction relocation assistance  regardless of their income levels.  I  believe prior relocation assistance  was based on those who made less  than 90% AMI.   Also, the City  continues to fund Project Sentinel  through CDBG funds to help with  landlord/tenant mitigation to prevent  such cases as  evictions/displacements.  L2.8.2 Develop and implement a system to inventory the  characteristics of existing housing units and track  changes in those characteristics on a regular basis. Make  the information publicly available.  Planning &  Community  Environment  Department M $$   Not aware of this, I can ask Roland. OES is interested in inventories of  housing and other such building  stock; should coordinate with Chief  Building Official and our Safety  Assessment Program (SAP).  L2.10.1  Collaborate with PAUSD to plan for space to  accommodate future school expansions or new school  sites, and evaluate zoning space to accommodate new  schools.  Planning &  Community  Environment  Department  IP  $$    Goal L‐3: Safe, attractive residential neighborhoods, each with its own distinct character and within walking distance of shopping, services, schools, and/or other public  gathering places.  L3.2.1  Evaluate and implement strategies to prevent conversion  of residential and neighborhood‐serving retail space to  office or short‐term vacation rentals.   Planning &  Community  Environment  Department  IP  $ C  PAMC Section 18.40.180 ensures no  net loss of retail space in designated  areas  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  6 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L.3.5.1  Develop a program to assess and manage both the  positive and negative impacts of basement construction  in single family homes on the community and the  environment, including:    Impacts to the natural environment, such as potential  impacts to the tree canopy, groundwater supply or  quality, and soil compaction.    Safety issues such as increased surface flooding  increased groundwater intrusion with sea level rise,  emergency access and egress, or sewage backflows.   Planning &  Community  Environment  Department  S  $$  OES is interested in public safety  impacts of planning and zoning  Goal L‐4: Inviting pedestrian scale centers that offer a variety of retail and commercial services and provide focal points and community gathering places for the city’s  residential neighborhoods and employment districts.  L4.2.1  Study the overall viability of ground‐floor retail  requirements in preserving retail space and creating an  active street environment, including the types of  locations where such requirements are most effective.  Planning &  Community  Environment  Department  M  $$    L4.2.2  Evaluate the effectiveness of formula retail limits  adopted for California Avenue. Develop incentives for  local small businesses where warranted.    Planning &  Community  Environment  Department  M  $$    L4.2.3  Explore and potentially support new, creative and  innovative retail in Palo Alto.   Planning &  Community  Environment  Department  L  $$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  7 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L4.4.1  Study the feasibility of using public and private funds to  provide and maintain landscaping and public spaces such  as parks, plazas, sidewalks and public art within  commercial areas.  Planning &  Community  Environment  Department  M  $ P  The Public Art Program provides  ongoing temporary exhibitions in  front of City Hall, in the heart of  downtown Palo Alto.  Additionally,  public artworks are being  commissioned in both the downtown  and California Avenue corridors at  the upcoming downtown parking  garage, California Avenue garage, and  the Public Safety Building. An artwork  was installed in January 2019 in  downtown Palo Alto at the renovated  Avenidas building, which will be open  and available to the public. (CSD)  L4.4.2  Through public/private cooperation, provide well‐signed, clean, and accessible restrooms.   Planning &  Community  Environment  Department  R  $    L4.4.3 Collaborate with merchants to enhance the appearance  of streets and sidewalks within all Centers. Encourage the  formation of business improvement districts and  undertake a proactive program of maintenance, repair,  landscaping and enhancement.  Planning &  Community  Environment  Department  R $$ O There are no substantial actions to  report at this time. (urban forestry)  L4.4.4  Identify priority street improvements that could make a  substantial contribution to the character of Centers, such  as widening sidewalks, narrowing travel lanes, creating  medians, restriping to allow diagonal parking, and  planting trees.  Planning &  Community  Environment  Department  S  $$$ P California Avenue is completed.  Downtown is inactive.  L4.5.1  Revise zoning and other regulations as needed to  encourage the preservation of space to accommodate  small businesses, start‐ups and other services.  Planning &  Community  Environment  Department  M  $$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  8 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L4.5.2  Program L4.5.2  Consider planning, regulatory, or other  incentives to encourage property owners to include  smaller office spaces in their buildings to serve small  businesses, non‐profit organizations, and independent  professionals.  Planning &  Community  Environment  Department  M  $    L.4.6.1  Explore increasing hotel FAR from 2.0 to 3.0 in the  University Avenue/Downtown area and 2.5 in areas  outside of Downtown.  Planning &  Community  Environment  Department  M  $$    L4.8.1  Prepare a Coordinated Area Plan for Downtown. Planning &  Community  Environment  Department  S  $$$    L4.8.2  Study the feasibility of converting parts of University  Avenue to a pedestrian zone.  Planning &  Community  Environment  Department  S  $$ O Inactive  L4.9.1  While preserving adequate parking to meet demand,  identify strategies to reuse surface parking lots.   Planning &  Community  Environment  Department  R  $ O Inactive  L4.9.2  Explore adding additional Floor Area Ratio (FAR) for retail  at Stanford Shopping Center.   Planning &  Community  Environment  Department  M  $ O To be started in approximately 5  years  L4.10.1  Prepare a coordinated area plan for the North Ventura  area and surrounding California Avenue area. The plan  should describe a vision for the future of the North  Ventura area as a walkable neighborhood with multi‐ family housing, ground floor retail, a public park, creek  improvements, and an interconnected street grid. It  should guide the development of the California Avenue  area as a well‐designed mixed use district with diverse  land uses and a network of pedestrian‐oriented streets.  Planning &  Community  Environment  Department  S  $$$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  9 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L4.10.2  Create regulations for the California Avenue area that  encourage the retention or rehabilitation of smaller  buildings to provide spaces for existing retail, particularly  local, small businesses.   Planning &  Community  Environment  Department  S  $$ O  Historic preservation program is  static and needs influx of grant funds  and personnel before this program is  embarked upon  L4.16.1  Maintain distinct neighborhood shopping areas that are  attractive, accessible and convenient to nearby residents. Planning &  Community  Environment  Department  R  $ C  Commercial zoning and Retail  Preservation Ordinance ensure these  shopping areas are maintained  Goal L‐5: High quality employment districts, each with their own distinctive character and each contributing to the character of the city as a whole. L5.1.1  Explore with Stanford University various development  options for adding to the Stanford Research Park a  diverse mix of uses, including residential, commercial  hotel, conference center, commercial space for small  businesses and start‐ups, retail, transit hub, and other  community‐supporting services that are compatible with  the existing uses, to create a vibrant innovation‐oriented  community.   Planning &  Community  Environment  Department S  $$ P Staff meets regularly with Stanford to  discuss this and others goals  Goal L‐6: Well‐designed buildings that create coherent development patterns and enhance city streets and public spaces. L6.1.1  Promote awards programs and other forms of public  recognition for projects of architectural merit that  contribute positively to the community.  Planning &  Community  Environment  Department  L  $ C  The existing ARB awards occur every  five years – next up is 2020 ARB  awards.  Historic preservation awards  under consideration.  L6.3.1  Develop guidelines for bird‐friendly building design that  minimizes hazards for birds and reduces the potential for  collisions.  Planning &  Community  Environment  Department  M  $$ O  To be started in approximately 5  years. Staff is currently implementing  bird‐friendly design with the help of  Guidelines from other cities.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  10 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L6.6.1  Modify design standards for mixed use projects  to  promote a pedestrian‐friendly relationship to the street,  including elements such as screened  parking or  underground parking, street‐facing windows and entries,  and porches, windows, bays and balconies along public  ways, and landscaping, and trees along the street. Avoid  blank or solid walls at street level.  Planning &  Community  Environment  Department  S  $ P  While specific mixed use design  standards could be enhanced, staff  uses the existing Guidelines and  context based design criteria to  promote pedestrian‐friendly  environments.    L6.7.1  Implement architectural standards to assure they  effectively address land use transitions.  Planning &  Community  Environment  Department  R  $ C  Staff and the ARB regularly  implement the AR Findings to ensure  smooth transitions between uses.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  11 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  Goal L‐7: Conservation and preservation of Palo Alto’s historic buildings, sites, and districts.    Program for Policy L7.2 C  (No program stated –this mitigation  measure from EIR became a policy in  the final Comp Plan): “If a proposed  project would substantially affect the  exterior of a potential historic  resource that has not been evaluated  for inclusion into the City’s Historic  Resources Inventory, City staff shall  consider whether it is eligible for  inclusion in State or federal registers  prior to the issuance of a demolition  or alterations permit.  Minor exterior  improvements that do not affect the  architectural integrity of potentially  historic buildings shall be exempt  from consideration.  Examples of  minor improvements may include  repair or replacement of features in  kind, or other changes that do not  alter character‐defining features of  the building.” Implementation of  Policy 7.2 commenced in January  2018.  L7.1.1  Update and maintain the City’s Historic Resource  Inventory to include historic resources that are eligible  for local, State, or federal listing. Historic resources may  consist of a single building or structure or a district.  Planning &  Community  Environment  Department S  $ O  Program has not commenced. OES is  interested in inventories of housing  and other such assets; should  coordinate with Chief Building Official  and our Safety Assessment Program  (SAP).  L7.1.2  Reassess the Historic Preservation Ordinance to ensure  its effectiveness in the maintenance and preservation of  historic resources, particularly in the University  Avenue/Downtown area.   Planning &  Community  Environment  Department  S  $ O Program has not comments (staff  knows ordinance Is ineffective).  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  12 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L7.8.1  Promote and expand available incentives for the  retention and rehabilitation of buildings with historic  merit in all zones and revise existing zoning and permit  regulations to minimize constraints to adaptive reuse.  Planning &  Community  Environment  Department  M  $ O Program has not commenced  L7.8.2  Create incentives to encourage salvage and reuse of  discarded historic building materials.  Planning &  Community  Environment  Department  L  $ O Program has not commenced  L7.8.3  Seek additional innovative ways to apply current codes  and ordinances to older buildings. Use the State  Historical Building Code for designated historic buildings.  Planning &  Community  Environment  Department  R  $ O Program has not commenced  L7.12.1  Review parking exceptions for historic buildings in the  Zoning Code to determine if there is an effective balance  between historic preservation and meeting parking  needs.  Planning &  Community  Environment  Department  L  $ O Program has not commenced  Goal L‐8: Attractive and safe civic and cultural facilities provided in all neighborhoods and maintained and used in ways that foster and enrich public life. Goal L‐9: Attractive, inviting public spaces and streets that enhance the image and character of the city.  L9.1.1  Evaluate existing zoning code setback requirements to  ensure they are appropriate for scenic routes.  Planning &  Community  Environment  Department  L  $ O To be started in approximately 5‐10  years.    L9.3.1  Review standards for streets and signage and update as  needed to foster natural, tree‐lined streets with a  minimum of signage.   Planning &  Community  Environment  Department  M  $    L9.6.1  Analyze existing neighborhoods and determine where  publicly accessible shared, outdoor gathering spaces are  below the citywide standard. Create new public spaces,  including public squares, parks and informal gathering  spaces in these neighborhoods.  Planning &  Community  Environment  Department  M  $$$ O Program has not commenced  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  13 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L9.7.1  Develop a strategy to enhance gateway sites with special  landscaping, art, public spaces and/or public buildings.  Emphasize the creek bridges and riparian settings at the  entrances to the City over Adobe Creek and San  Francisquito Creek.  Planning &  Community  Environment  Department  R  $ O Program has not commenced  L9.8.1  Establish incentives to encourage native trees and low  water use plantings in new development throughout the  city.  Planning &  Community  Environment  Department M  $ O  To be started in approximately 5  years.  Such incentives may not be  needed, as staff has successfully  encouraged native trees and low  water use plantings through the use  of the AR findings.  L9.10.1  Continue  the  citywide  undergrounding  of  utility  wires.  Minimize the impacts of undergrounding on street tree  root systems and planting areas.  City of Palo  Alto Utilities R  $$$    L9.10.2  Encourage the use of compact and well‐designed utility  elements,  such  as  transformers,  switching  devices,  backflow  preventers  and  telecommunications  infrastructure. Place these elements in locations that will  minimize their visual intrusion.  City of Palo  Alto Utilities R  $    L9.11.1  Implement the findings of the City’s Infrastructure Blue  Ribbon Committee and its emphasis for rebuilding our  civic spaces.  Department  of Public  Works  IP  $$$    L9.11.2  Identify  City‐owned  properties  where  combinations  of  wireless  facilities  can  be  co‐located,  assuming  appropriate lease agreements are in place.  City of Palo  Alto Utilities M  $    L9.12.1  Coordinate  with  regional  utility  providers  on  activities  that would impact their infrastructure and right‐of‐way.  City of Palo  Alto Utilities R  $    Goal L‐10: Maintain an economically viable local airport with minimal environmental impacts.    L10.1.1  Relocate the terminal building away from the Runway 31  clear  zone  and  closer  to  the  hangars,  allowing  for  construction of a replacement terminal.  Department  of Public  Works  L  $$$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  14 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  L10.1.2  Update the Airport Layout Plan in accordance with  Federal  Aviation  Administration  requirements,  as  needed, while ensuring conformance with the Baylands  Master Plan to the maximum extent feasible.   Department  of Public  Works M  $$$    L10.1.3  Identify  and  pursue  funding  to  address  maintenance,  safety and security improvements needed at PAO.  Department  of Public  Works R  $   OES has provided some assistance;  the Airport staff know us and  presume will reach out to OES as they  see fit  L10.3.1  Establish  and  implement  a  system  for  processing,  tracking and reporting noise complaints regarding local  airport operations on an annual basis,  Department  of Public  Works  S  $$    L10.3.2  Work with the airport to pursue opportunities to  enhance the open space and habitat value of the airport.  These include:    Maintaining native grasses;   Reconstructing levees to protect the airport from sea  level rise while enhancing public access and habitat  conservation; and    Evaluating the introduction of burrowing owl habitat.  This program is subject to federal wildlife hazard  requirements and guidelines for airports.  Community  Services  Department  R  $$ O No action, yet.  L10.4.1  Continue to provide a bicycle/pedestrian path adjacent  to Embarcadero Road, consistent with the Baylands  Master Plan and open space character of the baylands  subject to federal and State airport regulations.   Planning &  Community  Environment  Department  R  $ C OK     2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  15 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  TRANSPORTATION ELEMENT     Goal T‐1: Create a sustainable transportation system, complemented by a mix of land uses, that emphasizes walking, bicycling, use of public transportation, and other  methods to reduce greenhouse gas emissions and the use of single occupancy motor vehicles.  T1.2.1 Create a long‐term education program to change the  travel habits of residents, visitors, shoppers, and  workers by informing them about transportation  alternatives, incentives, and impacts. Work with the  PAUSD and with other public and private interests, such  as the Chamber of Commerce and Commuter Wallet  partners, to develop and implement this program.   Planning &  Community  Environment  Department R $ O Inactive  T1.2.2  Advocate for improved connectivity to transit to serve  workers who live in the South Bay and work in Palo  Alto.  Planning &  Community  Environment  Department  R  $ P  Ongoing, by city staff and council  members appointed to various  boards and commissions.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  16 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.2.3  Formalize TDM requirements by ordinance and require  new developments above a certain size threshold to  prepare and implement a TDM plan to meet specific  performance standards. Require regular  monitoring/reporting and provide for enforcement with  meaningful penalties for non‐compliance. The  ordinance should also:   Establish a list of effective TDM measures that  include transit promotion, prepaid transit passes,  commuter checks, car sharing, carpooling, parking cash‐ out, bicycle lockers and showers, shuttles to Caltrain,  requiring TMA membership and education and  outreach to support the use of these modes.   Allow property owners to achieve reductions  by contributing to citywide or employment district  shuttles or other proven transportation programs that  are not directly under the property owner’s control.   Provide a system for incorporating alternative  measures as new ideas for TDM are developed.    Establish a mechanism to monitor the success  of TDM measures and track the cumulative reduction of  peak hour motor vehicle trips. TDM measures should at  a minimum achieve the following reduction in peak  hour motor vehicle trips, with a focus on single‐ occupant vehicle trips. Reductions should be based on  the rates included in the Institute of Transportation  Engineers’ Trip Generation Manual for the appropriate  land use category and size:   45 percent reduction in the Downtown district   35 percent reduction in the California Avenue  area   30 percent reduction in the Stanford Research  Park   30 percent reduction in the El Camino Real  Corridor   20 percent reduction in other areas of the city   Require new development projects to pay a  Transportation Impact Fee for all those peak‐hour  motor vehicle trips that cannot be reduced via TDM  measures. Fees collected would be used for capital  Planning &  Community  Environment  Department  S  $ P  Partially implemented; Inactive‐  Ordinance needs refinement and  administrative guidelines needed    Inactive    Inactive    Partially Implemented; Inactive‐  TDM program does not require  specific measures, just targets.  Measures at discretion of  owner/developer.    Partially implemented; Inactive‐  formal administrative guidelines and  process documentation needed;    Inactive  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  17 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.2.4  Evaluate the performance of pilot programs  implemented by the Palo Alto Transportation  Management Association and pursue expansion from  Downtown to California Avenue and other areas of the  city when appropriate.   Planning &  Community  Environment  Department  IP  $ P  Quarterly reports and annual survey  evaluate the TMA.  Expansion to Cal  Ave will occur in 2019  T1.2.5  Site City facilities near high‐capacity transit and revise  existing regulations, policies, and programs to  encourage telecommuting, satellite office concepts, and  work‐at‐home options.   Planning &  Community  Environment  Department  R  $ C  Public Safety Building and Garage  are sited near Caltrain depot at  California Avenue  T1.2.6  Pursue full participation of Palo Alto employers in the  TMA.  Planning &  Community  Environment  Department  R  $$ C TMA does ongoing outreach.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  18 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.3.1  Develop an electric vehicle promotion program that  identifies policy and technical issues, barriers and  opportunities to the expansion of electric vehicles.   Office of  Sustainability   M  $$ C  The Electric Vehicle Sustainability  Implementation Plan (SIP) Working  group has worked on building  awareness of EV options through  communications and Ride and Drive  events. The website includes public‐ facing information to make it easy  for EV drivers and potential EV  drivers to understand EVs and EV  charging. The City co‐sponsored four  Ride and Drive Events: April 2018  Earth Day Festival, September 2018  National Drive Electric Week, and  Stanford HIP (Health Improvement  Program) Events in May 2018 and  October 2018. The EV SIP Working  group will look into whether or not  creating a formal EV promotion  program is needed, or if the work  can be done without a formal  promotion program. OES is involved.  OES pioneered the first electric  bicycles (eBikes) for PD/OES and  recently rolled out the new all‐ electric Utility Terrain Vehicle (UTV);  having vehicles powered by local  generation (PV) is a top priority for a  major disaster scenario.  T1.3.2  Use low‐emission vehicles for the Palo Alto Free Shuttle  and work with transit providers, including SamTrans  and VTA, to encourage the adoption of electric, fuel cell  or other zero emission vehicles. Also work with private  bus and shuttle providers, delivery companies, and ride  services.  Planning &  Community  Environment  Department M  $$$ O  Will be considered in 2019 Shuttle  Service RFP/check with sustainability  office  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  19 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.4.1  Update the Zoning Code to ensure compatibility with  the electric vehicle infrastructure requirements.  Planning &  Community  Environment  Department  S  $    T1.4.2  Periodically review requirements for electric and plug‐in  vehicle infrastructure in new construction. Consider and  periodically review requirements for electric and plug‐in  infrastructure for remodels. Consider costs to the City,  including identifying payment options.   Office of  Sustainability   R  $ P  The City of Palo Alto’s Green  Building Advisory Group discussed  requirements for electric and plug‐in  vehicle infrastructure within the  context of Palo Alto’s Energy Reach  Code. The state of California is  currently conducting a statewide  cost effectiveness study on  electrification, and the group  decided to wait on the results of the  study before making decisions on  electric and plug‐in vehicle  infrastructure in new construction.  T1.4.2 will be incorporated into the  Electric Vehicle Sustainability  Implementation Plan Working group  work plan for 2019.  T1.6.1  Collaborate with transit providers, including Caltrain,  bus operators and rideshare companies, to develop  first/last mile connection strategies that boost the use  of transit and shuttle service for local errands and  commuting.   Planning &  Community  Environment  Department  S  $ P Ongoing  T1.6.2  Continue to work with Caltrain, Amtrak, and public bus  operators to expand bicycle storage on public transit  vehicles and at transit hubs during both peak and off‐ peak hours.  Planning &  Community  Environment  Department  IP  $ P Ongoing  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  20 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.11.1  Collaborate with Stanford University, VTA, Caltrain and  other agencies to pursue improvements to the Palo Alto  Transit Center area aimed at enhancing pedestrian  experience and improving circulation and access for all  modes, including direct access to El Camino Real for  transit vehicles.  Planning &  Community  Environment  Department IP  $$$ P Active: Initial Planning 5%  T1.11.2 In collaboration with Caltrain and Stanford Research  Park, pursue expansion of service to the California  Avenue Caltrain Station and creation of an enhanced  transit center at the Station, including connections to  VTA bus service, the Palo Alto Free Shuttle, the  Marguerite, and other private shuttles serving the  Research Park.  Planning &  Community  Environment  Department M $$$ O Inactive  T1.12.1  Strongly recommend that VTA maintain existing service  and coverage levels in Palo Alto.   Planning &  Community  Environment  Department  IP  $ C Ongoing, by Council members on  VTA Committees and City staff  T1.12.2 Work with VTA to expand VTA express bus service  routes to serve the Stanford Research Park, California  Avenue, Stanford University, and Downtown.   Planning &  Community  Environment  Department S $$ O  NextNetwork implementation would  maintain current express bus service  to Palo Alto. However, VTA’s  recently proposed 90/10 plan will  eliminate two routes and reduce  service on all others except one.  T1.12.3  Work with VTA to study the feasibility of, and if  warranted provide, traffic signal prioritization for buses  at Palo Alto intersections, focusing first on regional  transit routes. Also, advocate for bus service  improvements on El Camino Real such as queue jump  lanes and curbside platforms.   Planning &  Community  Environment  Department S  $$ P   Ongoing  T1.13.1  Investigate a pilot program to subsidize a taxi,  rideshare, or transit program for Palo Altans to get  to/from downtown, including offering education and  incentives to encourage users.   Planning &  Community  Environment  Department  M  $ P  A trial program began in April 2016  via the TMA. The TMA continues to  subsidize ridesharing and transit for  downtown service workers.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  21 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.14.1  Evaluate the shuttle system in collaboration with  community members, people with special needs, and  PAUSD to:   Evaluate current routes and ridership;   Identify potential service improvements,  including new or modified routes; expanded schedules  that accommodate daytime, evening, and weekend  demand; facilitating transit connections, and  improvements to the safety and appearance of shuttle  stops;    Explore partnerships with other services that  could complement and supplement the Palo Alto  Shuttle;    Develop clear and engaging materials to  explain and promote shuttle use with the purpose of   reducing barriers to use; and    Establish a schedule for regular evaluation and  reporting to optimize shuttle system use and  effectiveness.   Planning &  Community  Environment  Department  IP $$$ P  Due to limited staff resources, the  2019 RFP will maintain current  service level and bid out an optional  additional route.    Most recent analysis was done in  2016    Will include an additional route in  2019 RFP.    Inactive    Inactive     Ongoing  T1.16.1  Continue regular surveys of bicycle use across the city,  by collecting bicycle counts on important and potential  bicycle corridors.   Planning &  Community  Environment  Department  IP  $$ P Ongoing as part of Bicycle Boulevard  program  T1.16.2 Consider marketing strategies such as a recurring Palo  Alto Open Streets program of events, potentially in  coordination with local business groups, which would  include street closures and programming.   Planning &  Community  Environment  Department  M $ O Inactive  T1.16.3  Encourage private schools to develop Walk and Roll  Maps as part of Transportation Demand Management  strategies to reduce vehicle trips.   Planning &  Community  Environment  Department  IP  $ P Gideon Hausner developed their  own map in 2014.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  22 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.16.4  Participate in local and regional encouragement events  such as Palo Alto Walks and Rolls, Bike to Work Day,  and Bike Palo Alto! that encourages a culture of  bicycling and walking as alternatives to single occupant  vehicle trips.   Planning &  Community  Environment  Department  M  $ C Ongoing  T1.19.1  Adjust the street evaluation criteria of the City's  Pavement Management Program to ensure that areas  of the road used by bicyclists are maintained at the  same standards as, or at standards higher than, areas  used by motor vehicles. Include bicycle and e‐bike  detection in intersection upgrades.   Department of  Public Works  M  $    T1.19.2  Prioritize investments for enhanced pedestrian access  and bicycle use within Palo Alto and to/from  surrounding communities, including by incorporating  improvements from related City plans, for example the  2012 Bicycle + Pedestrian Transportation Plan and the  Parks, Trails & Open Space Master Plan, as amended,  into the Capital Improvements Program.  Department of  Public Works  IP  $$$    T1.19.3  Increase the number of east‐west pedestrian and  bicycle crossings across Alma Street and the Caltrain  corridor, particularly south of Oregon Expressway.   Department of  Public Works  L  $$$    T1.19.4  Encourage the use of bike sharing, and the provision of  required infrastructure throughout Palo Alto, especially  at transit stations and stops, job centers, community  centers, and other destinations.   Planning &  Community  Environment  Department  IP  $ P Pilot Program for bikes, e‐bikes, and  e‐scooters is open to applicants.  T1.19.5  Improve amenities such as seating, lighting, bicycle  parking, street trees, public art, and interpretive  stations along bicycle and pedestrian paths and in City  parks to encourage walking and cycling and enhance  the feeling of safety.   Planning &  Community  Environment  Department &  Department of  Public Works  IP  $$$ P  The Public Art Program installed an  artist designed series of crosswalks  at the intersection of Louis and  Fielding to increase visibility of the  crosswalks and encourage walking.  Ongoing as opportunities arise.  (CSD)  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  23 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T1.22.1  Collect, analyze and report transportation data through  surveys and other methods on a regular basis. Track  progress on build‐out of the 2012 Bicycle + Pedestrian  Transportation Plan network.   Planning &  Community  Environment  Department  R  $$ C Ongoing  T1.25.1 As part of the effort to reduce traffic congestion,  regularly evaluate the City’s current Transportation  Impact Fee and modify as needed to implement  transportation infrastructure improvements.  Modifications to the impact fee program should be  structured in keeping with the City’s desire to require  new development to reduce peak hour motor vehicle  trips to the extent feasible through TDM plans and by  contributions to the provision of transit services,  shuttles, carpool/ rideshare incentives, and similar  programs.   Planning &  Community  Environment  Department  IP  $ P Ongoing: Updated TIF to be  considered in February 2019  T1.26.1  In collaboration with regional agencies and neighboring  jurisdictions, identify and pursue funding for rail  corridor improvements and grade separation.   Planning &  Community  Environment  Department  S  $ P  Ongoing. Connecting Palo Alto  process will help the City access  Measure B funds for grade  separation. Staff also seek Federal  Rail‐Highway Crossings (Section 130)  funds to improve safety. OES should  be brought into this discussion.  Goal T‐2: Decrease delay, congestion, and vehicle miles travelled with a priority on our worst intersections and our peak commute times, including school traffic.  T2.1.1  Implement computerized traffic management systems  to improve traffic flow when feasible.   Planning &  Community  Environment  Department  IP  $$$ P  PASS Grant Program targets  University Ave signal coordination.  Charleston Road signals recently  upgraded. Need Rafael to provide  more information.  T2.1.2  Implement a program to monitor, coordinate, and  optimize traffic signal timing a minimum of every two  years along arterial and residential arterial streets.   Planning &  Community  Environment  Department  IP  $$ U Check with Rafael on status.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  24 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T2.2.1  Work in partnership with the Palo Alto TMA and  Stanford University to aggregate data and realize  measurable reductions in single‐occupant vehicle  commuting to and from Downtown and in the Stanford  Research Park.  Planning &  Community  Environment  Department  IP  $ P Ongoing  T2.3.1 When adopting new CEQA significance thresholds for  VMT for compliance with SB 743 (2013), adopt  standards for vehicular LOS analysis for use in  evaluating the consistency of a proposed project with  the Comprehensive Plan, and also explore desired  standards for MMLOS, which includes motor vehicle  LOS, at signalized intersections.    Planning &  Community  Environment  Department S $$ O VMT thresholds must be adopted by  July 1, 2020.  T2.4.1 Revise protocols for reviewing office, commercial, and  multi‐family residential development proposals to  evaluate multimodal level of service and identify gaps in  the low stress bicycle and pedestrian network.   Planning &  Community  Environment  Department  S $ O Inactive  Goal T‐3: Maintain an efficient roadway network for all users.    T3.5.1 Continue to use best practices in roadway design that  are consistent with complete streets principles and the  Urban Forest Master Plan, focusing on bicycle and  pedestrian safety and multi‐modal uses. Consider  opportunities to incorporate best practices from the  National Association of City Transportation Officials  guidelines for urban streets and bikeways, tailored to  the Palo Alto context.   Department of  Public Works  S $$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  25 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T3.5.2  Establish procedures for considering the effects of  street design on emergency vehicle response time.   Department of  Public Works & Palo Alto Police  Department & Palo Alto Fire  Department  R $  P  Emergency response times continue  to be evaluated on a regular basis.  Response times have increased in  the past several years. Most of this  increase can be attributed to a  positive economy/low  unemployment rate which has  translated to traffic congestion as  well as staffing vacancies in police.  13 of the Police Department’s 92  officer positions are vacant. The  department has been able to meet  minimum staffing requirements,  however additional ancillary  officers, such as a full traffic team,  have gone unfilled. This has reduced  the number of officers on the street  from an average of 12 per day to 8.  This equates to fewer officers and  therefore increased responsibilities  and response times. Additionally,  Public Safety is happy to provide  input on street design and should be  consulted during in the early stages  when Transportation is making  significant changes. OES should be  brought into this discussion.  T3.10.1  Support increased public transit, traffic management  and parking solutions to ensure safe, convenient access  to and from the Stanford Shopping Center/ Medical  Center area.   Planning &  Community  Environment  Department  R $ P  Ongoing, Quarry Road Extension is a  potential project with regional  transit benefits  T3.10.2  Implement and monitor Development Agreement  traffic mitigations at Stanford Medical Center.   Planning &  Community  Environment  Department  IP $ C Ongoing   2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  26 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T3.10.3  Provide safe, convenient pedestrian, bicycle, and transit  connections between the Stanford Shopping  Center/Medical Center areas and housing along the  Sand Hill Road/Quarry Road corridors to Palo Alto  Transit Center, Downtown Palo Alto, and other primary  destinations.   Planning &  Community  Environment  Department R $$$ P  Ongoing. Quarry Road Re‐striping  and Path to Transit Center are  recent projects. Quarry Road  Extension is future project that  reduces transit travel time.  T3.10.4  Pursue extension of Quarry Road for transit,  pedestrians and bicyclists to access the Palo Alto Transit  Center from El Camino Real. Also study the feasibility of  another pedestrian and bicycle underpass of Caltrain at  Everett Street.  Planning &  Community  Environment  Department  M $$ P Initial Planning: 5%  T3.15.1  Undertake studies and outreach necessary to advance  grade separation of Caltrain to become a “shovel ready”  project and strongly advocate for adequate State,  regional, and federal funding for design and  construction of railroad grade separations.   Planning &  Community  Environment  Department  S $$$ P Active: Planning: 25%  T3.15.2  Conduct a study to evaluate the implications of grade  separation on bicycle and pedestrian circulation.   Planning &  Community  Environment  Department  S $$ P Active: Planning: 25%  T3.17.1  Complete a Palo Alto Avenue crossing study to identify  potential near‐term safety and accessibility  improvements.    Planning &  Community  Environment  Department  S $$ P Active: Planning: 25%  T3.17.2  Work with Caltrain to ensure that the rail tracks are safe  and secure with adequate fencing and barriers.   Planning &  Community  Environment  Department  S $ C Ongoing. CMO, PWD, PD, OES are  also involved in this.  Goal T‐4: Protect local streets that contribute to neighborhood character and provide a range of local transportation options. T4.2.1  Periodically evaluate residential areas for traffic impacts  and use the results of that evaluation to prioritize traffic  calming measures.   Planning &  Community  Environment  Department  IP  $$ C Ongoing  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  27 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T4.4.1  Use landscaping and other improvements to establish  clear “gateways” at the points where the Oregon  Expressway, University Avenue and Embarcadero Road  transition from freeways to neighborhoods.   Department of  Public Works L  $$$    Goal T‐5: Encourage attractive, convenient, efficient and innovative parking solutions for all users.    T5.1.1  Evaluate the need to update parking standards in the  municipal code, based on local conditions, different  users’ needs and baseline parking need. Allow the use  of parking lifts for Office/R&D and multifamily housing  as appropriate.   Planning &  Community  Environment  Department  S  $    T5.1.2  Consider reducing parking requirements for retail and  restaurant uses as a way to encourage new businesses  and the use of alternative modes.   Planning &  Community  Environment  Department  M  $    T5.1.3  Work with stakeholders in each commercial center and  employment district to monitor conditions and  determine the appropriate timing for revisions to  parking requirements.   Planning &  Community  Environment  Department  M  $ O Not yet commenced  T5.1.4  Study the feasibility of unbundled parking for office,  commercial, and multi‐family residential developments  (including senior housing developments) that are well‐ served by transit and demonstrated walking and biking  connections.   Planning &  Community  Environment  Department  S  $    T5.1.5 Consider reducing parking requirements for multi‐ family uses as a way to encourage new multi‐family  housing and the use of alternative modes, where  reduction in parking would not impact the  neighborhood.  Planning &  Community  Environment  Department  S  $    T5.2.1 Use technology to help identify parking availability and  make it easy to pay any parking fees.   Planning &  Community  Environment  Department  S $$$  Inactive. Limited resources.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  28 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T5.2.2  Study and implement pricing strategies for public  parking in commercial districts, taking into  consideration both employee parking demand and the  needs of retailers and customers. Use pricing to  encourage short term parking on street, long term  parking in parking garages, and the use of alternative  modes of transportation  Planning &  Community  Environment  Department  IP  $$ P  Ongoing. Reviewing pricing options  including raising rates and  implementing dynamic paid on‐ street parking.  T5.2.3  Implement Council‐adopted recommendations from the  parking management study for the Downtown area,  which address the feasibility of removing color‐coded  parking zones, and dynamic pricing and management  policies to prioritize short‐term parking spaces closest  to the commercial core for customers, garage parking  for employees, and neighborhood parking for residents.  Planning &  Community  Environment  Department  S  $$$ P Ongoing. Dependent on T5.2.2.  T5.4.1 Explore incentives to encourage privately initiated  shared parking among individual property owners when  developments have excess parking that can be available  for other businesses to use.   Planning &  Community  Environment  Department  S $  Inactive  T5.8.1  Study the feasibility of retrofitting City‐owned surface  parking lots to implement best management practices  for stormwater management and urban heat island  mitigation, including green infrastructure, permeable  pavement and reflective surfaces.   Department of  Public Works  S  $$    T5.8.2  Identify incentives to encourage the retrofit of privately  owned surface parking areas to incorporate best  management practices for stormwater management  and urban heat island mitigation as well as incentives  for the provision of publicly accessible bicycle parking in  privately owned lots.   Planning &  Community  Environment  Department S  $   Public Works lead on stormwater;  bicycle parking required per code.  This is ongoing or complete  T5.8.3  Update City requirements regarding trees and other  landscaping that capture and filter stormwater within  surface parking lots to take advantage of new  technology.  Planning &  Community  Environment  Department  R  $  Public Works lead on stormwater  and urban forest  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  29 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T5.11.1  Coordinate with neighborhood groups and local  businesses and other stakeholders to evaluate the need  for a residential parking permit program in areas  without existing programs.  Planning &  Community  Environment  Department  S  $$ P Ongoing  T5.12.1  Work with employers, merchants, schools, and  community service providers, to identify ways to  provide more bicycle parking, including e‐bike parking  with charging stations, near existing shops, services and  places of employment.   Planning &  Community  Environment  Department  R  $ P Ongoing via 311 requests  T5.12.2  Install secure electronic bike lockers such as the  BikeLink system, at high theft locations, including  transit stations and parking garages.   Planning &  Community  Environment  Department  M  $$ O Inactive  T5.12.3  Assess the need to provide additional bicycle parking in  City‐owned parking lots and rights‐of‐way.   Planning &  Community  Environment  Department  M  $$ P Ongoing  Goal T‐6: Provide a safe environment for motorists, pedestrians, and bicyclists on Palo Alto streets.    T6.1.1  Follow the principles of the safe routes to schools  program to implement traffic safety measures that  focus on Safe Routes to work, shopping, downtown,  community services, parks, and schools, including all  designated school commute corridors.  Planning &  Community  Environment  Department  R  $$ C Ongoing  T6.1.2  Develop, distribute and aggressively promote maps and  apps showing safe routes to work, shopping,  community services, parks and schools within Palo Alto  in collaboration with stakeholders, including PAUSD,  major employers, TMAs, local businesses and  community organizations.   Planning &  Community  Environment  Department IP  $$ C  Ongoing. School Walk and Roll Maps  are updated as needed. Walk and  Roll to Libraries Map was completed  in 2016 and updated in 2018.  T6.1.3 Address pedestrian safety along Alma Street between  Embarcadero Road and Lytton Street.   Planning &  Community  Environment  Department  S $$ O Inactive  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  30 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T6.1.4  Address pedestrian safety on shared‐use paths through  the use of signs, pavement markings, and outreach to  users, encouraging them to be safe and courteous.   Planning &  Community  Environment  Department  R  $ C Ongoing  T6.2.1  Regularly collect severity and location data on roadway  collisions for all modes of travel, including fatalities and  severe injuries, and use this data to make roadway  design decisions. In collaboration with Santa Clara  County, develop an up‐to‐date, public database for this  information.  Planning &  Community  Environment  Department R  $$ C  County is working on improving and  training users on the collision  database. Collision data is used in  planning transportation projects.  T6.4.1  Consider the Adopted School Commute Corridors  Network and adopted “Walk and Roll” maps when  reviewing development applications and making land  use and transportation planning decisions. Incorporate  these requirements into City code when feasible.  Planning &  Community  Environment  Department  R  $ P Ongoing.  T6.4.2  Establish standards and procedures for maintaining safe  bicycling routes, including signage for warnings and  detours during construction projects.   Planning &  Community  Environment  Department   IP  $ C Complete? Traffic Control Plan  Guidelines were updated in 2016  T6.4.3  In collaboration with PAUSD, provide adult crossing  guards at school crossings that meet established  warrants.   Planning &  Community  Environment  Department  S  $$ C Ongoing  T6.6.1  Periodically evaluate safety on roadways and at  intersections and enhance conditions through the use  of signal technology and physical changes. Consider the  construction of traffic circles for improved intersection  safety.   Planning &  Community  Environment  Department  R  $$$ C Ongoing  T6.6.2  Continue to provide educational programs for children  and adults, in partnership with community‐based  educational organizations, to promote the safe walking  and safe use of bicycles, including the City‐sponsored  bicycle education programs in the public schools and  the bicycle traffic school program for juveniles.   Planning &  Community  Environment  Department R  $$ C Ongoing  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  31 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T6.6.3  Work with PAUSD and employers to promote roadway  safety for all users, including motorized alternatives to  cars and bikes such as mopeds and e‐bikes, through  educational programs for children and adults.   Planning &  Community  Environment  Department  R  $$ C Ongoing  T6.6.4 Complete a mobility and safety study for downtown  Palo Alto, looking at ways to improve circulation and  safety for all modes.   Planning &  Community  Environment  Department  M $$  Inactive  T6.6.5  Identify and construct safety improvements for  pedestrian underpasses, including on Embarcadero  Road.   Planning &  Community  Environment  Department  L  $$$  Inactive  T6.6.6  Improve pedestrian crossings by creating protected  areas and better pedestrian and traffic visibility. Use a  toolbox including bulb outs, small curb radii, high  visibility crosswalks, and landscaping.   Planning &  Community  Environment  Department  R  $$$ C Ongoing      T6.6.7  Establish a program to educate residents to keep  sidewalks clear of parked cars, especially on narrow  local streets in neighborhoods with rolled curbs. Survey  for compliance annually.   Planning &  Community  Environment  Department  M  $$ O Inactive  T6.7.1  Evaluate the performance of safety improvements and  identify methods to encourage alternative  transportation modes.   Planning &  Community  Environment  Department  R  $ C Ongoing  Goal T‐7: Provide mobility options that allow people who are transit dependent to reach their destinations.    T7.1.1  Expand transportation opportunities for transit‐ dependent riders by supporting discounts for taxi fares,  rideshare services, and transit, by coordinating transit  systems to be shared by multiple senior housing  developments, and by maintaining a database of  volunteer drivers, and other transit options.   Planning &  Community  Environment  Department M  $$ O Inactive  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  32 Program Program Text Lead   Department Priority * Level   of Effort  2018  Status** Notes  T7.1.2  Coordinate with social service agencies and transit  agencies to fill gaps in existing transportation routes  and services accessible to transit‐dependent riders no  matter their means and design new bus routes that  enable them to access those services.   Planning &  Community  Environment  Department  R  $$$ P 2019 shuttle RFP will include bids for  new shuttle route in South Palo Alto  T7.1.3  Pursue expanded evening and night time bus service to  enhance mobility for all users during off‐peak times.   Planning &  Community  Environment  Department  R  $ O Unlikely with proposed VTA 90/10  orientation.  Goal T‐8: Influence the shape and implementation of regional transportation policies and technologies to reduce traffic congestion and greenhouse gas emissions. T8.1.1  Continue to participate in regional efforts to develop  technological solutions that make alternatives to the  automobile more convenient.  Planning &  Community  Environment  Department  R  $ C  Ongoing –Dumbarton Forward and  PASS Signal Project, Managers’  Mobility Partnership, ASK JARRETT  FOR MORE PROJECTS  T8.3.1  Advocate for provision of a new southbound entrance  ramp to Highway 101 from San Antonio Road, in  conjunction with the closure of the southbound  Charleston Road on‐ramp at the Rengstorff Avenue  interchange in Mountain View.   Planning &  Community  Environment  Department  S  $ P Initial project definition in FY20  T8.7.1  Work with regional transportation providers to improve  connections between Palo Alto and the San Francisco  International Airport and Norman Y. Mineta San Jose  International Airport.   Planning &  Community  Environment  Department  R  $ U Inactive? Check with Jarrett  T8.8.1  Identify and improve bicycle connections to/from  neighboring communities in Santa Clara and San Mateo  counties to support local trips that cross city  boundaries. Also advocate for reducing barriers to  bicycling and walking at freeway interchanges,  expressway intersections, and railroad grad crossings.   Planning &  Community  Environment  Department IP  $$$ P  Ongoing. Peninsula Bikeway  wayfinding signage was installed in  2018.  Planning to identify route  improvements continues.       2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  33 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes    NATURAL ENVIRONMENT ELEMENT    Goal N‐1: Protect, conserve and enhance Palo Alto’s citywide system of open space, including connected and accessible natural and urban habitats, ecosystems, and natural  resources, providing a source of public health, natural beauty and enjoyment for Palo Alto residents.  N1.1.1  Develop Comprehensive Resource Conservation Plans for  the Pearson Arastradero Preserve, Esther Clark Preserve,  and Foothills Park to steward the protection of local  ecosystems.  Community  Services  Department  S‐M  $$$ P  Community Services Department has  been working on a Comprehensive  Conservation Plan for the Baylands  Nature Preserve, which will be  complete in the Spring of 2019. The  draft Capital Improvement Plan  budget includes a project to conduct  a Comprehensive Conservation Plan  for Pearson Arastradero Preserve,  Esther Clark Preserve, and Foothills  Park in FY20.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  34 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N1.1.2  Promote and support ecosystem protection and  environmental education programs in Palo Alto and  neighboring school districts.  Community  Services  Department  S  $ C  Community Services Department Park  Rangers work with students from Palo  Alto and East Palo Alto schools to  conduct volunteer restoration  programs in Palo Alto Open Space  preserves. Community Services staff  also partner with Save the Bay,  Grassroots Ecology, and the  Environmental Volunteers, which are  organizations that routinely work  with students from Palo Alto and  neighboring school districts to  conduct restoration projects in Palo  Alto Open Space areas. Community  Service Educators and Instructors  teach science classes in 60  elementary schools on the Peninsula,  operate public hours and activities  the Baylands Nature Center, and  provide science classes and camps for  families throughout the City including  in three open space preserves.  N1.3.1  Work to maintain Williamson Act agricultural preserve  contracts within the City.  Planning &  Community  Environment  Department  S  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  35 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N1.3.2  Provide information and support programs that  encourage residents to enhance their private yards with  native plant species and low impact landscaping.   Planning &  Community  Environment  Department  R  $$ C  Community Services Department  Parks staff have partnered with a few  passionate residents to convert four  passive use, ornamental grass areas  into pollinator gardens. These  pollinator gardens include signs  explaining the project, the native  plants used, and information on how  to make similar garden at your own  home. Community Services also  supports the Community Garden  Program, which includes two  demonstration gardens at Eleanor  Pardee Park (edible garden and  water‐wise garden). The Master  Gardeners also provide occasional  classes on gardening and irrigation to  the public.  Two new programs have  also been launched to offer property  owner assistance in order to establish  more trees in South Palo Alto.  Both  promote native and/or climate  adapted species, consider proximity  to utilities, and utilize a new open  source inventory tool to provide age  specific information to owners.  (urban Forestry)  N1.4.1  Periodically review California Environmental Quality Act  (CEQA) thresholds of significance regarding special status  species to identify changes in listed species  recommended by professionally recognized scientific  experts.  Planning &  Community  Environment  Department  R  $ C  State data bases and biology reports  are used protect special status  species and refine thresholds through  the CEQA process.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  36 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N1.4.2  Explore the feasibility of expanding the use of overlay  tools such as the Site and Design (D) Review Combining  District or similar development review and restriction  tools to protect special‐status species and their habitats  from development.   Planning &  Community  Environment  Department  M  $$ O  To be started in approximately 5  years, for now Site and Design  protects these sensitive properties.  N1.4.3  Assess opportunities to expand habitats of special –status  species within publicly‐owned open spaces.   Community  Services  Department  R  $$ P  This is currently happening as part of  the Comprehensive Conservation Plan  for the Baylands Nature Preserve. It  will also be part of the scope of the  FY20 project to conduct a  Comprehensive Conservation Plan for  Pearson Arastradero Preserve, Esther  Clark Preserve, and Foothills Park.  N1.5.1  Maintain the value of local wetlands as habitats by  ensuring adequate flow from the Bay and minimizing  effluent.  Community  Services  Department  R  $ C  The Community Services Park Rangers  manage the tide gate at the Baylands  Nature Preserve, which allows tidal  Bay water into the 618‐acre Palo Alto  Flood Basin. The Rangers adjust the  tide gate to maximize tidal flow into  the Flood Basin, while ensuring that  the water levels don’t create  mosquito breeding habitat, and so  there are no impacts to flood  protection.  N1.6.1  Continue to coordinate City review, particularly by  Planning, Public Works and Community Services  Departments, of projects that might impact the City’s  foothills and hillside areas.  Planning &  Community  Environment  Department  R  $$ C  The Development Review Committee  meets regularly to discuss and  coordinate on pending projects.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  37 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N1.7.1  Examine and improve existing management practices,  including the provision of access to open space for City  vehicles and equipment, to ensure that natural resources  are protected.  Community  Services  Department  R  $$ P  This is currently happening as part of  the Comprehensive Conservation Plan  for the Baylands Nature Preserve. It  will also be part of the scope of the  FY20 project to conduct a  Comprehensive Conservation Plan for  Pearson Arastradero Preserve, Esther  Clark Preserve, and Foothills Park.OES  will coordinate re: Foothills Fire  Management Plan and related  emergency plans.  N1.7.2  Protect wildlife in public open space areas by improving  litter collection, restricting the use of non‐recyclable  plastics, prohibiting the feeding of wild, feral and stray  animals in open space, and enforcing dog leash laws.  Community  Services  Department  R  $ C  Open Space and Parks staff and  volunteers work diligently to  promptly collect and remove litter.  Council approved the ordinance  prohibiting feeding wildlife feral  animals in open Space and parks on  June 9, 2014. The Rangers enforce the  dog leash laws in Open Space.  N1.7.3  Provide information about responsible behavior in  environmentally‐sensitive areas through signage,  pamphlets and documents on the City’s website.  Community  Services  Department R  $ C  Open Space staff post signage in the  preserves about appropriate  behavior. They also post information  in the kiosks and nature centers.  N1.7.4  Review and map existing easements and maintenance  roads for potential trails and trail connections.   Community  Services  Department  S  $$ O No action, yet.  N1.10.1  Use City funds and seek additional sources of funding,  including State and federal programs, to finance open  space acquisition, maintenance or conservation.   Community  Services  Department  R  $ P  In 2018, the Community Services  Department was awarded a State  grant to fund new outdoor education  exhibits and signage in the Baylands  and is currently working with non‐ profit partners (Friends of the Palo  Alto Parks) to provide matching  funds.    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  38 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N1.10.2  Create mechanisms to monitor, assess and respond  quickly to land acquisition opportunities that would  expand or connect the City’s system of parks and open  spaces, and establish a long‐term funding strategy for  acquisition that would enable the City to move quickly  when opportunities arise.  Community  Services  Department S  $$$ O No action, yet.  Goal N‐2: A thriving urban forest that provides public health, ecological, economic, and aesthetic benefits for Palo Alto.    N2.1.1  Explore ways to prevent and ameliorate damage to trees  and tree roots by above and below ground infrastructure  and buildings.   Department  of Public  Works  R  $    N2.2.1  Periodically update the UFMP and Tree Protection  Ordinance to ensure policies and regulations remain  relevant set leading standards for tree health practices.  Department  of Public  Works  R  $$    N2.4.1  Promote landscape design that optimizes soil volume,  porosity, structure and health, as well the location, shape  and configuration of soil beds.  Planning &  Community  Environment  Department M  $ P  A Green Infrastructure Plan is 85%  complete.  It contains recommended  practices and policies, directs creation  of standard details, and references  similar content in plans and  documents such as the Tree and  Landscape Technical Manual. (urban  Forestry)  N2.7.1  Maintain and irrigate healthy trees in parks, open space,  parking lots, and City rights‐of‐way, while identifying and  replacing unhealthy trees in those areas.   Department  of Public  Works  S  $$    N2.7.2  Continue to invest in the care, irrigation and monitoring  of street trees during drought conditions.   Department  of Public  Works  R  $$    N2.7.3  Actively pursue funding for tree planting to increase  canopy cover significantly across the city, avoid a net loss  of canopy at the neighborhood level, and attain canopy  size targets in parks, open space, parking lots, and City  rights‐of‐way.   Department  of Public  Works  R  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  39 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N2.9.1  Increase awareness, severity and enforcement of  penalties for tree damage.  Department  of Public  Works  M  $    N2.9.2  Develop a program for using the City’s Urban Forestry  Fund to replace trees lost to public improvement and  infrastructure projects, with replanting occurring onsite  or as close to the original site as is ecologically  appropriate.   Department  of Public  Works  M  $$    N2.10.1  Continue to require replacement of trees, including street  trees lost to new development.  Planning &  Community  Environment  Department  R  $ C As part of the AR process,  replacement trees are required.  N2.10.2  As part of the update of the Tree and Landscape  Technical Manual, consider expanding tree protections to  include additional mature trees and provide criteria for  making site‐specific determinations of trees that should  be protected.  Planning &  Community  Environment  Department  S  $ P  The Tree and Landscape Technical  Manual has been updated and  distributed for feedback.  Completion  is expected in 2019.  Concurrently  changes have been drafted to Title 8  of Palo Alto Municipal Code. (urban  forestry )  N2.10.3  Consider revisions to the appeals process to increase  transparency regarding tree removals and expanded  opportunities for community members to appeal the  removal of trees.  Planning &  Community  Environment  Department  L  $$ P  Changes to Palo Alto Municipal Code  will initiate revisions to the appeals  process for tree removals. (urban  forestry)  N2.11.1  Develop a transparent and publicly accessible street tree  removal and replacement schedule.   Department  of Public  Works  M  $    N2.11.2  Develop a program to replace unhealthy public trees over  time.   Department  of Public  Works  M  $$    N2.12.1  Explore ways to leverage the fact that Palo Alto’s urban  forest alleviates climate change by capturing and storing  carbon dioxide.  Department  of Public  Works  M  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  40 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N2.13.1  Work with local nonprofits to establish one or more tree  planting programs that are consistent with the UFMP,  and rely on locally native, resilient species. Review  existing tree planting guidelines to ensure they achieve  these objectives.  Department  of Public  Works  S  $$    N2.13.2  Provide on‐going education for City staff, residents, and  developers regarding landscape, maintenance, and  irrigation practices that protect the urban forest and  wildlife species.   Department  of Public  Works R  $    N2.13.3  Involve tree owners in tree maintenance programs. Planning &  Community  Environment  Department R  $ P  Launch of an interactive open source  tree inventory is a platform for  expanding public outreach and  customized information for tree  owners.  This is being done in  conjunction with improvements to  the City website and expanded social  media. (urban forestry)  N2.13.4  Cooperate with the Palo Alto Unified School District,  Stanford University, Caltrain, Caltrans, Pacific Gas &  Electric, and other public and private entities to ensure  that their tree planting, tree removal, and maintenance  practices are consistent with City guidelines.  Department  of Public  Works  R  $    Goal N‐3: Conservation of both natural and channelized creeks and riparian areas as open space amenities, natural habitat areas, and elements of community design.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  41 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N3.3.1  Update the Stream Corridor Protection Ordinance to explore 150 feet as the desired stream setback along  natural creeks in open space and rural areas west of  Foothill Expressway. This 150‐foot setback would prohibit  the siting of buildings and other structures, impervious  surfaces, outdoor activity areas and ornamental  landscaped areas within 150 feet of the top of a creek  bank. Allow passive or intermittent outdoor activities and  pedestrian, equestrian and bicycle pathways along  natural creeks where there are adequate setbacks to  protect the natural riparian environment. Within the  setback area, provide a border of native riparian  vegetation at least 30 feet along the creek bank.    The update to the Stream Protection Ordinance  should  establish:    Design recommendations for development or  redevelopment of sites within the setback, consistent  with basic creek habitat objectives and significant net  improvements in the condition of the creek.   Conditions under which single‐family property and  existing development are exempt from the 150‐foot  setback   Appropriate setbacks and creek conservation measures  for undeveloped parcels.  Planning &  Community  Environment  Department  S  $$ O This would be started in the next 3‐5  years.  N3.3.2  Examine the development regulations of the Stream  Corridor Protection Ordinance, with stakeholder  involvement to establish appropriate setback  requirements that reflect the varying natural and  channelized conditions along creeks east of Foothill  Expressway. Ensure that opportunities to provide an  enhanced riparian setback along urban creeks as  properties are redeveloped or improved are included in  this evaluation.   Planning &  Community  Environment  Department  S  $$ O This would be started in the next 3‐5  years.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  42 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N3.3.3  For all creeks, update the Stream Corridor Protection  Ordinance to minimize impacts on wildlife by:    Limiting the development of recreational trails to one  side of natural riparian corridors.   Requiring careful design of lighting surrounding natural  riparian corridors to maximize the distance between  nighttime lighting and riparian corridors and direct  lighting away from the riparian corridor.   Planning &  Community  Environment  Department S  $$ P  The development of trails is outside  the Department’s purview.  Lighting  near riparian areas is reviewed as a  part of the CEQA process.  N3.4.1  Develop a community creek stewardship program to  promote existing creek clean‐up days, organize new  events, and increase appreciation of riparian corridors.   Department  of Public  Works  M  $$    N3.6.1  Review and update the Grading Ordinance to ensure that  it adequately protects creeks from the erosion and  sedimentation impacts of grading.  Department  of Public  Works  M  $$    N3.8.1  Work with the SCVWD to develop a maintenance,  restoration and enhancement improvement program that  preserves flood protection while preserving riparian  habitat, and identifies specific stretches of corridor to be  restored or daylighted, standards to be achieved, and  sources of funding. Include provisions for tree and  vegetation planting to enhance natural habitat and shade  cover.  Department  of Public  Works  M  $$  OES is involved  N3.8.2  Participate cooperatively in the JPA to achieve increased  flood protection, habitat preservation, enhancement and  improved recreational opportunities along San  Francisquito Creek.  Department  of Public  Works IP  $  OES is involved  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  43 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  Goal N‐4: Water resources and infrastructure that are managed to sustain plant and animal life, support urban activities, and protect public health and safety.  N4.2.1  Educate customers on efficient water use (indoor and outdoor), tree care, and landscaping options.  Department  of Public  Works  R  $ C  Lead agency should be Utilities. The  City of Palo Alto in partnership with  the Santa Clara Valley Water District  offers a suite of water efficiency  programs including landscape  conversion rebates, indoor and  outdoor survey kits, graywater  laundry to landscape rebates, and  irrigation system rebates. The City  also offers a variety of workshops on  water efficiency throughout the year.    N4.5.1  Study the supply and quality of local groundwater  aquifers to better understand their utility as natural  water storage.   City of Palo  Alto Utilities  L  $ C  The City in partnership with the Santa  Clara Valley Water District completed  a comprehensive study of the  Northwest County aquifer. OES  should coordinate re: emergency  water supplies.   N4.5.2  Work with local public agencies to educate residents  regarding the public health, fire, and overall quality of life  risks associated with long‐term drought.   City of Palo  Alto Utilities  R  $ C  The City has engaged in public  outreach activities and provides  information on the City website about  the importance of making water  conservation a way of life.  N4.6.1  Encourage residents to use rain barrels or other  rainwater reuse systems.  City of Palo  Alto Utilities S  $ C  Public Works should be the lead  department. The City offers a $50  rebate for residents to acquire rain  barrels.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  44 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N4.7.1  Support and participate in the work of the SCVWD to  prepare a high‐quality groundwater management plan  that will address groundwater supply and quality,  including, as appropriate:    An understanding of subsurface hydrology.    Strategies to reduce depletion.    Opportunities to recharge groundwater, including  through use of recycled water and extracted  groundwater.    Methods to ensure that uncontaminated, toxin‐free  groundwater is used in a manner that benefits the  community, for example in irrigation of parks, street  cleaning, and dust suppression.   An approach to metering extracted groundwater.  Department  of Public  Works  S  $    N4.7.2  Support the SCVWD and the Regional Water Quality  Control Board (RWQCB) to implement their mandate to  protect groundwater from the adverse impacts of urban  uses.  Department  of Public  Works S  $    N4.7.3  Work with the SCVWD and RWQCB to identify and map  key groundwater recharge and stormwater management  areas for use in land use planning and permitting and the  protection of groundwater resources.   Department  of Public  Works IP  $    N4.8.1  Research and promote new construction techniques and  recharge strategies developed to reduce subsurface and  surface water impacts and comply with City dewatering  policies.   Department  of Public  Works IP  $    N4.8.2  Explore appropriate ways to monitor all excavations and  other projects to ensure that dewatering does not result  in recharge into the aquifer where needed.   Department  of Public  Works  S  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  45 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N4.10.1  Monitor and implement practices for reducing water  pollution. Examples include state‐of‐the‐art best  management practices (BMPs), land use planning  approaches, and construction of modern stormwater  management facilities.   Department  of Public  Works  R  $$$    N4.10.2  Continue public education programs on water quality  issues, including BMPs for residents, businesses,  contractors, and City employees.   Department  of Public  Works  R  $    N4.10.3  Implement swift and rigorous spill response, cleanup, and  follow‐up investigation procedures to reduce the impacts  of toxic spills on the city’s creeks and San Francisco Bay.   Department  of Public  Works  R  $$  OES should coordinate re: emergency  plans  N4.10.4  Increase monitoring and enforcement of existing  prohibitions on materials and practices known to impact  local water quality, such as use of copper, in the design  and construction industries.   Department  of Public  Works R  $    N4.11.1  Evaluate neighborhoods where parking controls may  hinder street sweeping and recommend any changes that  are needed.   Department  of Public  Works  M  $    N4.12.1  Implement the City’s Integrated Pest Management Policy  with periodic assessments of pesticide use and use of  BMPs to reduce pesticide applications and toxicity, and  maximize non‐chemical control.   Department  of Public  Works R  $    N4.12.2  Revise the City’s Tree and Landscape Technical Manual to  include stronger requirements for least‐toxic practices in  the landscape permitting process.  Department  of Public  Works  S  $    N4.12.3  Promote the value of toxin‐free landscape management,  and educate residents about the impacts of common  fertilizers, herbicides, insecticides and pesticides on local  water quality.  Department  of Public  Works R  $    N4.13.1  Promote the use of permeable paving materials or other  design solutions that allow for natural percolation and  site drainage through a Storm Water Rebate Program and  other incentives.  Department  of Public  Works S  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  46 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N4.13.2  Develop and implement a green stormwater  infrastructure plan with the goal to treat and infiltrate  stormwater.   Department  of Public  Works  S  $$$    N4.13.3  Mitigate flooding through improved surface permeability  or paved areas, and stormwater capture and storage.  Department  of Public  Works  S  $$    N4.14.1  Establish a standardized process for evaluating the  impacts of development on the storm drainage system,  including point source discharge, base flow and peak  flow.  Department  of Public  Works S  $    N4.14.2  Complete improvements to the storm drainage system  consistent with the priorities outlined in the City's Storm  Drainage Master Plan, as amended.  Department  of Public  Works  IP  $$$    N4.15.1  Work with commercial and industrial dischargers to  identify and implement pollution prevention measures  and BMPs to eliminate or reduce the discharge of metals  and other pollutants of concern.  Department  of Public  Works R  $$    N4.15.2  Encourage commercial dischargers to consistently go  beyond minimum requirements of the Clean Bay Business  Program.  Department  of Public  Works  R  $    N4.16.1  Implement approved recommendations based on the  Long‐Term Facilities Plan prepared for the RWQCP.  City of Palo  Alto Utilities  IP  $$$ P  Public Works should be the lead  department. The City continues to  implement the recommendations  from the RWQCP Long Term Facilities  Plan, including constructing a new  biosolids Dewater & Loadout Facility  that is slated for startup in 2019.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  47 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N4.16.2  Develop a plan to address ongoing operations of the  RWQCP taking potential sea level rise and growth in  surrounding communities into account.   City of Palo  Alto Utilities  M  $$$ P  Public Works should be the lead  department. Sea level rise policy and  plan development has commenced  and RWQCP stakeholders will be  included adaptation planning. The  Sea Level Rise Plan will serve as the  Sea Level Rise Implementation Plan of  the Sustainability and Climate Action  Plan.  N4.17.1  Evaluate the expansion of existing recycled water  infrastructure to serve a larger area. Develop a plan to  install “purple pipe” when streets are opened for other  infrastructure work.  City of Palo  Alto Utilities  M  $$ P  The City in partnership with the Santa  Clara Valley Water District completed  a business plan and 30% engineering  design for a recycled water  distribution system expansion to the  Stanford Research Park. The City has  not developed a plan to included  recycled water pipeline installation in  conjunction with other infrastructure  projects.  N4.17.2  Evaluate the possibility of using recycled water as an  emergency water supply.  City of Palo  Alto Utilities  L  $ O  The City has not investigated using  recycled water as an emergency  water supply. The City is currently  investigating opportunities with to  convert purified wastewater to a  potable system that could be used as  a drought‐proof, sustainable water  supply in the future. OES should  coordinate re: emergency water  supplies.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  48 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N4.17.3  Investigate ways to reuse non‐traditional water sources  including recycled, gray, black and stormwater.   City of Palo  Alto Utilities  R  $ C  The City in partnership with the Santa  Clara Valley Water District completed  a business plan and 30% engineering  design for a recycled water  distribution system expansion to the  Stanford Research Park. The City  offers rebates for graywater systems.  Black water systems have not been  considered in detail. The City  continues to investigate other water  reuse opportunities in collaboration  with the Santa Clara Valley Water  District.  Goal N‐5: Clean, healthful air for Palo Alto and the San Francisco Bay Area.    N5.1.1  Provide City input on significant proposals for air quality  legislation and state implementation plans.   Planning &  Community  Environment  Department  R  $ C Planning works with the City lobbyist  to identify issues and provides ideas.  N5.1.2  Implement BAAQMD recommended standards for the  design of buildings near heavily traveled roads, in order  to minimize exposure to auto‐related emissions.  Planning &  Community  Environment  Department  S  $ C BAAQMD standards are implemented  through the CEQA process.  N5.1.3  Explore adopting new standards that target the reduction  of very fine particulate matter (PM2.5), which is  associated with increased impacts on health.  Planning &  Community  Environment  Department  S  $ C PM2.5 standards are implemented  through the CEQA process.  N5.2.1  Promote understanding of the impacts of extended idling  on air quality, for residents, auto‐dependent businesses,  and schools.   Planning &  Community  Environment  Department  M  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  49 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N5.2.2  Consider adopting and enforcing penalties for drivers that  idle for longer than 3‐5 minutes.   Planning &  Community  Environment  Department  M  $    N5.3.1  Cooperatively work with Santa Clara County and the  BAAQMD to ensure that mining and industrial operations  mitigate environmental and health impacts.   Planning &  Community  Environment  Department  R  $ C  Industrial operations are mitigated  through the CEQA process.  There are  no mining resources within the City  limits.  N5.3.2  Monitor particulate emissions at local California Air  Resources Board monitoring stations and make the  information easily available to citizens.   Planning &  Community  Environment  Department  R  $ C  BAAQMD provides monitoring  information on their webpage ‐  http://www.baaqmd.gov/about‐air‐ quality/current‐air‐quality.  N5.3.3  Promote understanding of the health impacts of  particulate emissions and provide information to  residents and businesses about steps they can take to  reduce particulate emissions, such as reducing or  eliminating wood burning or using low emission  alternatives to wood‐burning stoves and fireplaces.  Planning &  Community  Environment  Department R  $    N5.3.4  Explore feasible and cost‐effective opportunities to  reduce concrete and asphalt use by the City, in parks and  other public projects.  Department  of Public  Works  R  $    Goal N‐6: An environment that minimizes the adverse impacts of noise.    N6.3.1  Continue working to reduce noise impacts created by  events and activities taking place in communities  adjoining Palo Alto.   Planning &  Community  Environment  Department  R  $    N6.3.2  Evaluate the feasibility of adopting noise criteria in the  purchase of new City vehicles and equipment.  Department  of Public  Works  M  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  50 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N6.3.3  Update the Noise Ordinance, as needed, to provide for  clear interpretation of the regulations, to review the  effectiveness of existing standards, and to ensure that  regulations address contemporary issues.  Planning &  Community  Environment  Department  S  $ O    To be started in approximately 3‐5  years  N6.7.1  Update noise impact review procedures in the Noise  Ordinance and the Zoning Code to address appropriate  requirements for analysis and thresholds for impacts on  residential land uses and publicly‐owned conservation  land.  Planning &  Community  Environment  Department  S  $ O To be started in approximately 3‐5  years  N6.10.1  Evaluate changes to the Noise Ordinance to further  reduce the impacts of noise from leaf blowers and  residential power equipment.   Planning &  Community  Environment  Department  M  $ O Program not yet commenced  N6.11.1  For larger development projects that demand intensive  construction periods and/or use equipment that could  create vibration impacts, such as the Stanford University  Medical Center or major grade separation projects,  require a vibration impact analysis, as well as formal,  ongoing monitoring and reporting of noise levels  throughout the entire construction process pertinent to  industry standards.    The monitoring plan should identify hours of operation  and could include information on the monitoring  locations, durations and regularity, the instrumentation  to be used and appropriate noise control measures to  ensure compliance with the noise ordinance.  Planning &  Community  Environment  Department  S  $$ C  Construction noise is reviewed as part  of the CEQA process.  Mitigation  measures, including limited hours of  operation, are used to reduce noise  and vibration.  N6.12.1  Continue working to reduce noise associated with  operations of the Palo Alto Airport. Also, ensure  compliance with the land use compatibility standards for  community noise environments, shown in Table N‐1, by  prohibiting incompatible land use development within  the 60 dBA CNEL noise contours of the airport.  Department  of Public  Works R  $$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  51 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N6.12.2  Participate in appropriate public forums and engage with  other governmental agencies and representatives to  ensure that activities at airports in the region do not  negatively affect noise levels in Palo Alto.  Department  of Public  Works IP  $    N6.13.1  Encourage the Peninsula Corridors Joint Powers Board to  pursue technologies and grade separations that would  reduce or eliminate the need for train horns/whistles in  communities served by rail service.   Planning &  Community  Environment  Department  IP  $ P Active: See T3.15.1  N6.13.2  Evaluate changing at‐grade rail crossings so that they  qualify as Quiet Zones based on Federal Railroad  Administration (FRA) rules and guidelines in order to  mitigate the effects of train horn noise without adversely  affecting safety at railroad crossings.   Planning &  Community  Environment  Department  S  $$$ P Active: See T3.15.1  N6.13.3  Participate in future environmental review of the  California High‐Speed Rail (HSR) Project, planned to  utilize existing Caltrain track through Palo Alto, to ensure  that it adheres to noise and vibration mitigation  measures.   Planning &  Community  Environment  Department  S  $$ P Ongoing  Goal N‐7: A clean, efficient energy supply that makes use of cost‐effective renewable resources.    N7.1.1  Meet customer electricity needs with least total cost  resources after careful assessment of environmental cost  and benefits.   City of Palo  Alto Utilities  R  $    N7.2.1  Promote the adoption of cost‐effective, renewable  energy technologies from diverse renewable fuel sources  by all customers.   City of Palo  Alto Utilities S  $   OES and CPAU are coordinating re:  the CPAU Strategic Plan (UAC), the  VMWare Microgrid Public Private  Partnership, and other such efforts  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  52 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N7.2.2  Assess the feasibility of using life cycle analysis and total  cost of ownership analysis for public and private projects,  funded by the project proponent, in order to minimize  the consumption of energy, the production of  greenhouse gases, including GHG emissions of  construction materials and demolition and costs over the  life of the project.  City of Palo  Alto Utilities  M  $$    N7.4.1  Continue timely incorporation of State and federal energy  efficiency standards and policies in relevant City codes,  regulations and procedures, and higher local efficiency  standards that are cost‐effective.  Planning &  Community  Environment  Department  R  $    N7.4.2  Implement cost effective energy efficiency programs for  all customers, including low income customers.   City of Palo  Alto Utilities R  $    N7.4.3  Incorporate cost‐effective energy conservation measures  into construction, maintenance, and City operation and  procurement practices.  City of Palo  Alto Utilities  R  $$    N7.4.4  Implement gas and electric rate structures that  encourage efficient use of resources while meeting State  law requirements that rates be based on the cost of  service.   City of Palo  Alto Utilities M  $    N7.4.5  Continue to provide public education programs  addressing energy conservation and efficiency.  City of Palo  Alto Utilities R  $    N7.5.1  Monitor professional and medically‐sound research and  studies on light‐emitting diodes (LEDs).   City of Palo  Alto Utilities M  $    N7.6.1  Explore changes to building and zoning codes to  incorporate solar energy, energy storage and other  energy efficiency measures into major development  projects, including City‐owned projects.   Planning &  Community  Environment  Department  S  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  53 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N7.6.2  Promote use of the top floors of new and existing  structured automobile garages for installation of  photovoltaic panels and green roofs.  Planning &  Community  Environment  Department  S  $ C  New garage on Sherman includes PV  panels; PV panels approved in  downtown and California Avenue  existing city garages. OES has specific  interests in how to harvest from such  PV arrays using "mobile DER" (solar‐ battery trailers, etc.)  N7.6.3  Promote solar energy in individual private projects. Planning &  Community  Environment  Department  R  $    N7.7.1  Evaluate the potential for a cost‐effective plan for  transitioning to a completely carbon‐neutral natural gas  supply.   City of Palo  Alto Utilities  S  $ C  The City implemented a Carbon  Neutral Gas program utilizing high‐ quality carbon offsets.  N7.7.2  Explore the transition of existing buildings from gas to  electric or solar water and space heating.   City of Palo  Alto Utilities S  $$    N7.8.1  Evaluate energy efficient approaches for the treatment  and reuse of organic waste that maximize resource  recovery and reduce greenhouse gas generation at the  RWQCP located in Palo Alto and the Palo Alto Landfill.   City of Palo  Alto Utilities M  $    Goal N‐8: Actively support regional efforts to reduce our contribution to climate change while adapting to the effects of climate change on land uses and city services.  N8.1.1  Participate in cooperative planning with regional and  local public agencies, including on the Sustainable  Communities Strategy, on issues related to climate  change, such as greenhouse gas reduction, water supply  reliability, sea level rise, fire protection services,  emergency medical services, and emergency response  planning.  Planning &  Community  Environment  Department  R  $  OES LHMP, THIRA  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  54 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  N8.1.2  Pursue or exceed State goals of achieving zero net carbon  for residential buildings by 2020 and commercial  buildings by 2030, without compromising the urban  forest.  Office of  Sustainability S  $ P  The Energy Sustainability  Implementation Plan (SIP) working  group convened a stakeholder  process to identify opportunities to  increase efficiency of new and  existing building stock beyond  California’s state building standards  and to support building electrification  through Palo Alto’s Energy Reach  Code for building code cycle  beginning in 2020. The Energy SIP  Working Group also evaluated various  benchmarking and retro‐ commissioning requirements as part  of the Green Building Ordinance. Staff  completed a Zero Net Energy  Roadmap report and a 2019 Title 24  Energy Reach Code Cost Effectiveness  Study.  N8.2.1  Periodically update the S/CAP consistent with the update  schedule in the approved S/CAP; this update shall include  an updated greenhouse gas inventory and updated short,  medium, and long‐term emissions reduction goals.   Office of  Sustainability  Services  M  $$ P  The 2020 S/CAP Update is currently  underway. Staff have proposed a  process, timeline, and budget request  for the 2020 S/CAP Update, which will  result in a new 2020 S/CAP Update  that include Sustainability  Implementation Plan Actions for 2020  – 2050.  N8.3.1  Protect the Municipal Services Center, Utility Control  Center, and RWQCP from the impacts of sea level rise.   City of Palo  Alto Utilities M  $$$    N8.4.1  Prepare response strategies that address sea level rise,  increased flooding, landslides, soil erosion, storm events  and other events related to climate change. Include  strategies to respond to the impacts of sea level rise on  Palo Alto’s levee system.  Planning &  Community  Environment  Department  S  $$$  OES should be consulted  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  55 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes    SAFETY ELEMENT    Goal S‐1: A safe community that is aware of risks and prepared for emergencies.     S1.1.1  Expand public education programs that help and  encourage each household in the City to be prepared to  be self‐sufficient, with enough stored water and food to  support the entire household for at least one week after  a major earthquake, flood, terrorism event, pandemic or  other major disaster.  Office of  Emergency  Services  S  $ C  OES has expanded our outreach to  the community, per FEMA's whole  community guidelines, and provides  public safety education lectures,  presentations, and trainings  throughout the community.  These  events include earthquake planning  and the need to "Build a Kit" that  contains supplies for one week.  OES  conducted 149 public safety public  education events, disaster drills, etc.  in CY 2018. Additionally, the OES  website Preparedness page also  provides this same information.  Recommended priority change to R  for routine.  S1.1.2  Continue to implement and fund the Emergency Services  Volunteer program.   Office of  Emergency  Services  S  $ C  OES continues to manage the ESV  program, adding close to 100 new  members each year, but also losing  members each year through normal  attrition.  There are currently over  700 registered volunteers.  OES  apportions funds annually to support  this program including an annual  community event, monthly training  sessions, quarterly leader meetings,  and two exercises per year.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  56 S1.1.3  Conduct emergency hazard drills with key stakeholder  organizations across the community to improve  preparedness for known threats and hazards.  Office of  Emergency  Services  R  $$ C  Throughout the year, OES conducts  emergency drills with key  stakeholders that include seminars,  communications tests, table‐top  exercises, functional, and full scale  exercises.  We routinely coordinate  with skilled nursing centers, faith  based organizations, private schools,  businesses, Stanford Hospital, and  Stanford University and others in  conducting these drills and exercises.    S1.1.4  Support an annual community public safety fair to  educate and engage the public on preparedness and  offer the opportunity to buy emergency disaster supplies  for home and vehicle.   Office of  Emergency  Services  R  $$ P  OES is in the planning stages and in  conjunction with the Palo  Alto/Stanford Citizen Corps Council to  hold a large community public safety  fair either in 2019 or 2020.  OES  typically sponsors one or two smaller  public safety fairs during the year,  normally planned and hosted by a  stakeholder from the community.    S1.1.5  Encourage local businesses and other organizations to  have disaster preparedness, communication, mitigation  and recovery plans in place.  Office of  Emergency  Services  R  $ C  The private sector is a major element  of our public safety outreach and  education activities.  This includes the  Stanford Shopping Center, the  Stanford Research Park, the Chamber  of Commerce, etc.  For the past two  years OES has supported the  establishment of a business radio  system in the Stanford Research Park  to improve communications among  the 100+ businesses in that sector.  In  2018, OES assisted several faith‐ based organizations to develop  emergency plans for their facilities.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  57 S1.2.1  Develop accessible, attractive marketing materials to  promote involvement in community crime safety  programs.   Office of  Emergency  Services  R  $ C  OES has developed various marketing  materials to promote preparedness  and public safety.  Annually, OES  provides two utility flyers for  Earthquake awareness in April and  Floods / Severe Storms in October (in  partnership with PW).  In late 2018,  the Preparedness web page was re‐ vamped, see  www.cityofpaloalto.org/preparednes s.  We also assist other departments  in providing their public safety  materials at various community  events we support.  We have a  planned work effort to create multi‐ lIngual products for our most  important education materials.  S1.3.1  Explore the use of urban design principles to increase  safety and prevent crime in Palo Alto.   Planning &  Community  Environment  Department  S  $   OES should be involved. please  change to Department of Public  Works  S1.3.2  Support programs such as the Department of Housing  and Urban Development’s Good Neighbor Next Door,  which incentivizes home purchase for first responders  with discounts.   Planning &  Community  Environment  Department R  $ O  I don’t believe any homes in PA fit  under the criteria of the Good  Neighbor Next Door program and the  City does not have HUD‐designated  revitalization areas. OES should be  involved.  S1.4.1  Make data available to maintain an accurate, up to date,  and complete real‐time local crime mapping function to  promote neighborhood safety.  Police  Department  M  $$ C  The Police Department already  maintains a crime reports page on  the website. OES supports.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  58 S1.5.1 Promote neighborhood security by providing crime  prevention information and training to residents, and  continuing to fund resident involvement in neighborhood  safety programs such as “Know Your Neighbor” grants  and Block Preparedness Coordinators.  Police  Department  R  $ C  The police department continues to  issue Block Party permits and  encourage residents to seek the  “Know Your Neighbor” grant funds.  The Department has hired and  trained a Public Affairs Manager who  interacts with the public on a daily  basis on at least six social platforms.  The department reinitiated its  involvement in National Night Out in  August 2018 and will continue to plan  and host this event on an annual  basis moving forward. Block  Preparedness Coordinators fall under  the Office of Emergency Services. OES  runs the City's Crime Prevention  (Neighborhood Watch) element of  the Emergency Services Volunteer  (ESV) program  S1.5.2  Collaborate with the Palo Alto Unified School District  (PAUSD), other school districts in the city, private  schools, businesses, non‐profits, and local faith‐based  organizations provide community safety education.   Police  Department  R  $ C  In cooperation with the Office of  Emergency Services, the two  departments provide regular training  to various entities. This past year, the  PD created Safety Plans for each of  the PAUSD schools. OES has provided  safety training to a wide variety of  organizations. Training is ongoing and  cooperative. OES coordinates.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  59 S1.5.3  Encourage the PAUSD to develop secure school facilities  and collaborate with Emergency Services Volunteers on  disaster preparedness activities; emergency disaster  planning, exercises and drills; and disaster recovery.  Office of  Emergency  Services  R  $ P  OES and PAUSD routinely work on  safety and disaster topic.  Secure  school facilities includes the efforts of  PAPD school resource officers  providing active shooter training to  PAUSD schools and having a  consistent presence on school  campuses.  In 2019, OES is scheduled  to assist PAUSD with EOC related  training and exercises at the District  office.     S1.5.4  Continue to support and encourage participation in  Police Department programs to introduce youth to the  importance and benefits of local law enforcement.   Police  Department  R  $ P  In fall 2018, the Police Department  tried to launch the youth version of  our very popular Citizens’ Academy.  Unfortunately, there was limited  interest in the youth community. The  Police Department is currently  revising its Explorer Program hoping  to reignite youth interest in the  profession. The Police Department  has also teamed up with the San  Francisco 49ers of late participating  in their “Team Up” Program, pairing  and officer with a teenager to attend  events together. OES supports the  PD; some aspects of youth outreach  tie in to our ESV program  S1.6.1  Enhance public safety department training for evolving  challenges, such as small‐ to large‐scale human threats,  interacting with individuals with mental illness, and non‐ lethal alternatives.  Police  Department  R  $ C  Police training in this area is ongoing  and continuous. Larger scale events  and trainings are usually coordinated  by the Office of Emergency Services.  OES supports.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  60 S1.6.2  Support the PAPD in implementing and maintaining  approved technologies for data gathering, surveillance,  and recording interactions with the public. Incorporate  best practices in use policies with special consideration in  ensuring the programs protect the public’s privacy rights  and civil liberties, in accordance with current legislation.  Ensure transparency by communicating new equipment  implementation, usage, privacy considerations, and  retention of data.  Police  Department  S  $$ P  The Police Department issued Body‐ worn cameras to all patrol officers in  September 2018. These cameras will  supplement the five cameras already  installed in each patrol vehicle.  Changes in the law coming in July  2019 will allow enhanced public  access to Body‐worn video.  Significant staff time and resources  are being dedicated to this change as  videos require redaction of citizen  personal identifying information on a  frame by frame basis.   Chief Jonsen kicked off his first  Chief’s Advisory Group meeting in  October 2018. There are 31 citizen  members. The goal is to introduce  and discuss policy, staffing, crime and  general updates on a bi‐monthly  basis. The group’s initials tasks  include a review of the Field‐based  recording policy and to create a  neighborhood traffic enforcement  plan, from their perspective.  OES  supports.  S1.6.3  Communicate transparently with the community  regarding adoption of new PAPD equipment and/or  tactics while balancing the need for operational security.  Police  Department  S  $ P  Chief Jonsen kicked off his first  Chief’s Advisory Group meeting in  October 2018. There are 31 citizen  members. The goal is to introduce  and discuss policy, staffing and  general updates on a bi‐monthly  basis. The group’s initials tasks  include a review of the Field‐based  recording policy and to create a  neighborhood traffic enforcement  plan, from their perspective.    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  61 S1.7.1  Regularly monitor and review the level of public safety  staffing and satellite police station locations required for  efficient local service delivery.   Police  Department  R  $ O  The Police Department does not  currently house more than one  service location. The goal is to focus  on patrol officers being in the  community and going to the citizen,  rather than being in a station where  they are not visible. In coordination  with the design of the new Public  Safety Building and the move in 2022  to Sherman Avenue, staff will discuss  and identify options for a Downtown  safety presence, including City Hall  response.  S1.7.2  Design the new Public Safety building to meet essential  service standards, the needs of the public safety  departments and be resilient against known threats and  hazards.  Department  of Public  Works S  $$$   OES has a major role in the new PSB  re: EOC, communications, resilience,  etc.  S1.7.3  Provide community notifications in the event of  emergency using the best available methods and explore  new technologies for emergency public information and  warnings.   Office of  Emergency  Services  R  $$ C  OES is the local administrator for the  County's mass notification system  AlertSCC which is hosted by the  software company Everbridge, and  we have the ability to use this tool to  provide notifications to the  community by landline phone, cell  phone, and text as well as the ability  to use WEA.    S1.8.1  Update Palo Alto’s 2001 Terrorism Response Plan. Office of  Emergency  Services  S  $$ P OES expects to complete this  planning process in 2019.  S1.9.1  Develop an Infrastructure Master Plan that projects the  future needs of streets, underground utilities, and all City  assets and plans for the incorporation of new technology  that improves efficiency and effectiveness.  Department  of Public  Works S  $$$  OES has an interest in infrastructure.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  62 S1.10.1  Regularly update and make publicly available the City of  Palo Alto Emergency Operations Plan (EOP).  Office of  Emergency  Services  R  $$$ C  OES last updated the EOP in 2016 and  has the EOP and other plans posted  on www.cityofpaloalto.org/oes.  OES  has a family of emergency related  plans including the EOP and its  associated planning annexes that are  available online in english.  We have a  planning review cycle for each plan to  allow for regular updates to these  plans.  S1.10.2  Participate in local and regional planning efforts to  mitigate, prepare for, respond to, and recover from  emergencies.   Office of  Emergency  Services  R  $   OES participates in numerous  regional public safety planning  initiatives such as UASI, NCRIC; OES  leads certain regional groups  including the San Francisquito Creek  Multi‐Agency Coordination (SFC  MAC) group, and the Silicon Valley  Homeland Security Coordination  Group (SV‐HSCG).  OES also  participates in Regional all hazards  exercises to broaden our exposure,  experience, and knowledge of  regional threats and allied agency  plans, procedures, and capabilities.   Additionally, OES is integrated into  newly formed Santa Clara County OES  planning efforts and processes.  S1.10.3  Implement the mitigation strategies and guidelines  provided by the LHMP, including those that address  evolving hazards resulting from climate change.  Office of  Emergency  Services  R  $$ C  OES routinely implements the Local  Hazard Mitigation Plan (LHMP) and  updates it on schedule.  OES also  maintains the implementation status  of mitigation activities listed in the  LHMP.  Currently of 38 projects listed  in the LHMP, 5 are complete, 22 are  underway, and 6 are not started.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  63 S1.12.1  Encourage multiagency coordination in case of incidents  that cross disciplinary or jurisdictional boundaries or  coordination that involves complex incident  management scenarios.   Office of  Emergency  Services  R  $ P  This task is similar to 1.10.2.   Additionally, OES personnel are  training to become members of the  South Bay Incident Management  Team.    S1.12.2  Explore the establishment of mutually‐beneficial  cooperative agreements between Palo Alto’s police and  fire departments and those of neighboring cities.   Police  Department,  Fire  Department  M  $ P  Operations‐ ongoing   The police and fire departments  operate on a tri‐city (Palo Alto,  Mountain View, Los Altos) Computer  Aided Dispatch (CAD) system sharing  real‐time calls for services. The  system allows each city to see and  hear other calls and assist as needed.  Dispatching services can also be  shared between the three cities.   The Police Department is currently  managing the regional effort to  implement a digital radio system,  known as the Silicon Valley Regional  Interoperability Authority. Moving to  this system will allow all of Santa  Clara County Public Safety Agencies  to communicate via radio. This was  not previously possible.  The Department continues to explore  other cooperative agreements on a  regular basis, including a tri‐city  Records’ Management System.  OES  is involved.  S1.13.1  Identify solutions to add an additional power line to Palo  Alto to ensure redundancy.   City of Palo  Alto Utilities S  $$    S1.13.2  Explore incentives to adopt emerging, residential off‐grid  capabilities and technologies, including back‐up power  sources vital in the event of natural disasters or other  threats.   City of Palo  Alto Utilities M  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  64 S1.13.3  Continue citywide efforts to underground utility wires to  limit injury, loss of life, and damage to property in the  event of human‐made or natural disasters.   City of Palo  Alto Utilities  R  $$$    S1.13.4  Enhance the safety of City‐owned natural gas pipeline  operations. Work with customers, public safety officials,  and industry leaders to ensure the safe delivery of  natural gas throughout the service area. Provide safety  information to all residents on City‐owned natural gas  distribution pipelines.   City of Palo  Alto Utilities  R  $$    S1.13.5  Provide off‐grid and/or backup power sources for critical  City facilities to ensure uninterrupted power during  emergencies and disasters.  City of Palo  Alto Utilities  R  $$  OES is involved.  Goal S‐2: Protection of life, ecosystems and property from natural hazards and disasters, including earthquake, landslide, flooding, and fire.  S2.5.1  Periodically review and update the City’s Seismic Hazard  Ordinance.   Development  Services  Department  IP  $ C  The department continues to work  the “Amendments to the Municipal  Code for the Regulation of Seismic  Vulnerable Buildings” staff report to  City Council. The City is actively  working with California Emergency  Management Agency to secure a  Hazard Mitigation Grant. The City  anticipant notice in Spring 2019 at  which time the program will be  reviewed with the City Council and  community. The City remains  committed to updating to local  regulations, policies, and procedures  including an analysis of any potential  CEQA requirements to ensure the  safety of buildings in Palo Alto.  S2.5.2  Continue to provide incentives for seismic retrofits of  structures throughout the city, particularly those building  types that would affect the most people in the event of  an earthquake.  Planning &  Community  Environment  Department  S  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  65 S2.6.1  Encourage efforts by individual neighborhood or block‐ level groups to pool resources for seismic retrofits.  Planning &  Community  Environment  Department  M  $    S2.6.2  Continue to use a seismic bonus and a TDR Ordinance for  seismic retrofits for eligible structures in the Commercial  Downtown (CD) zone.  Planning &  Community  Environment  Department  R  $    S2.6.3  Evaluate the TDR Ordinance so that transferred  development rights may be used for residential  development on the receiver sites.  Planning &  Community  Environment  Department  R  $    S2.6.4  Study the possibility of revising the transfer of  development rights program to encourage seismic  retrofits.   Planning &  Community  Environment  Department  M  $    S2.6.5  Explore the use of Community Development Block  Grants, Palo Alto Housing Funds and other sources of  funding to support owners of lower income and senior  housing to retrofit seismically‐unsafe construction.   Planning &  Community  Environment  Department  S  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  66 S2.7.1  As part of the construction permitting process for  proposed new and redeveloped buildings in areas of  identified hazard shown on MapS‐2, structures that  would affect the most people in a seismic event require  submittal to the City of a geotechnical/seismic report  that identifies specific risks and appropriate mitigation  measures.   Development  Services  Department  S  $ C  Please see additional hazard maps at:  https://www.cityofpaloalto.org/civica x/filebank/documents/68614.     Notes: recommended changing  program text language “this map” to  “the Alquist ‐ Priolo Fault Map (state  law) and Map S‐2 and S‐4”. Also  provide maps from source:  https://maps.conservation.ca.gov/cgs /#datalist.      We also recommend eliminating  S2.7.1 as it is state law and the  answer below will remain the same  from year to year.    Per state law, this a requirement and  if development occurs on an  identified property as outlined on the  Alquist ‐ Priolo Fault Map, the  developer is required to submit  geotechnical/seismic report that  identifies specific risks and  appropriate mitigation measures.  S2.7.2  Review and update, as appropriate, City code  requirements for excavation, grading, filling and  construction to ensure that they conform to currently  accepted and adopted State standards.  Department  of Public  Works M  $    S2.7.3  Utilize the results of Palo Alto’s Seismic Hazards  Identification Program and inventory of potentially  seismically vulnerable building types to establish  priorities and consider incentives to encourage structural  retrofits.  Planning &  Community  Environment  Department  S  $  OES is involved.  S2.8.1  Implement flood mitigation requirements of FEMA in  Special Flood Hazard Areas as illustrated on the Flood  Insurance Rate Maps.   Department  of Public  Works  R  $$$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  67 S2.8.2  Continue participating in FEMA’s Community Rating  System to reduce flood insurance for local residents and  businesses and strive to improve Palo Alto’s rating in  order to lower the cost of flood insurance.  Department  of Public  Works R  $    S2.8.3  Collaborate with the San Francisquito Creek Joint Powers  Authority and the Santa Clara Valley Water District on  environmentally‐sensitive efforts to stabilize, restore,  maintain and provide one percent (100‐year) flood  protection adjacent to San Francisquito Creek.   Department  of Public  Works  IP  $$$    S2.8.4  Work with East Palo Alto, Santa Clara Valley Water  District and San Francisquito Creek Joint Powers  Authority on efforts to increase the flows within the San  Francisquito Creek possible solutions include replacing  the City‐owned Newell Road Bridge and District‐owned  Pope Chaucer Street Bridge.  Department  of Public  Works S  $$$    S2.10.1  Keep basement restrictions up to date with changing  flood hazard zones.   Planning &  Community  Environment  Department  S  $    S2.11.1  Review development standards applicable in areas  susceptible to flooding from sea level rise, including east  of Highway 101, West Bayshore and East Meadow Circle,  the area east of San Antonio Road and north of East  Charleston, and implement shoreline development  regulations to ensure that new development is protected  from potential impacts of flooding resulting from sea  level rise and significant storm events. Regulations  should be consistent with the Baylands Master Plan, as  amended, and may include new shoreline setback  requirements, limits on lot line adjustments to avoid the  creation of vulnerable shoreline lots, and/or triggers for  relocation or removal of existing structures based on  changing site conditions and other factors.  Planning &  Community  Environment  Department  S  $$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  68 S2.11.2  Study appropriate restrictions on underground  construction in areas outside of flood zones, as shown on  Map S‐5, to accommodate expected higher groundwater  levels due to sea level rise and minimize consequent  flooding of underground construction.  Planning &  Community  Environment  Department  S  $    S2.12.1  Work cooperatively with the Santa Clara Valley Water  District and the San Francisquito Creek Joint Powers  Authority to provide flood protection from high tide  events on San Francisco Bay, taking into account the  impacts of future sea level rise, to provide one percent  (100‐year) flood protection from tidal flooding, while  being sensitive to preserving and protecting the natural  environment.   Department  of Public  Works  R  $$$    S2.12.2  Work with regional, State, and federal agencies to  develop additional strategies to adapt to flood hazards to  existing or new development and infrastructure,  including support for environmentally sensitive levees.  Department  of Public  Works R  $    S2.13.1  Regularly review and update the Fire Department’s  operations, training facilities and programs to ensure  consistency with current standards and Best  Management Practices.   Fire  Department R  $ C Operations‐ ongoing  S2.13.2  Explore technological tools, such as cameras or remote  sensors, to identify smoke or fires and initiate response  as quickly as possible.   Fire  Department  S  $$ C  Operations‐ ongoing.OES intends to  assist the Fire Department in a timely  deployment of such technologies  S2.14.1  Regularly review and fund updates to the Palo Alto  Foothills Fire Management Plan to ensure consistency  with current standards and Best Management Practices.   Fire  Department  M  $$ C Prevention‐ ongoing focus of the  FFMP. OES supports.  S2.14.2  Implement the Foothills Fire Management Plan to  balance conservation of natural resources with reduction  of fire hazards especially in open space areas.   Fire  Department  R  $$$ C Prevention‐ ongoing focus of the  FFMP.  S2.14.3  Minimize fire hazards by maintaining low density zoning  in wildland fire hazard areas.   Planning &  Community  Environment  Department  R  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  69 S2.14.4  Work collaboratively with other jurisdictions and  agencies to reduce wildfire hazards in and around Palo  Alto, with an emphasis on effective vegetation  management and mutual aid agreements.   Fire  Department R  $ C Prevention‐ ongoing focus of the  FFMP.  S2.14.5  Consider implementation of CAL FIRE recommended  programs in educating and involving the local community  to diminish potential loss caused by wildfire and identify  prevention measures to reduce those risks.   Fire  Department S  $$ C Prevention‐ ongoing focus of the  FFMP. OES supports.  S2.15.1  Evaluate measures for optimal service delivery to  improve efficiency; develop automatic or mutual aid  agreements with other jurisdictions, including Stanford,  to improve efficiencies.   Fire  Department M  $$ P Operations ‐ ongoing  S2.15.2  Upgrade fire stations so that all remain fully functional  following earthquakes.   Fire  Department IP  $$$ P Support – ongoing.   S2.15.3  Periodically update the Fire Department Standards of  Cover document.  Fire  Department S  $ C Support‐ ongoing.  S2.16.1  Provide public education on fire safety, including  wildland and structural fire prevention, evacuation  routes and guidelines for clearance of landscaping and  other hazards around structures.   Fire  Department R  $ C Support – ongoing. OES and PD  support.  Goal S‐3: An environment free of the damaging effects of human‐caused threats and hazardous materials.    S3.1.1  Continue City permitting procedures for commercial and  industrial storage, use, and handling of hazardous  materials and regulate the commercial use of hazardous  materials that may present a risk of off‐site health or  safety effects.  Fire  Department  IP  $ C Prevention‐ ongoing focus of the  Hazmat Division.  S3.1.2  Minimize the risks of biohazards in Palo Alto, including  Level 4 biohazards, by continuing to review and update,  as necessary, local regulations regarding use, handling  and disposal.   Fire  Department S  $ C Prevention‐ ongoing focus of the  Hazmat Division.  S3.1.3  Strengthen development review requirements and  construction standards for projects on sites with  groundwater contamination.   Development Services  Department  S  $  please change to Department of  Public Works  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  70 S3.1.4  Establish protocols to monitor the movement of  hazardous materials on Palo Alto roadways and respond  effectively to spills via established truck and construction  routes.   Fire  Department M  $ P Prevention‐ ongoing focus of the  Hazmat Division.  S3.1.5  Work with non‐profit organizations to provide  information to the public regarding pesticides and other  commonly used hazardous materials, environmentally  preferable alternatives, and safe recycling and disposal  practices to all user groups.   Fire  Department  R  $  Note: Public Works should respond to  this item in the future.  S3.1.6  Continue providing regular household hazardous waste  collection events at the Palo Alto Regional Water Quality  Control Plant and strive to make these programs more  convenient and accessible to residents.   Department  of Public  Works R  $    S3.1.7  Continue to allow small quantity generators to dispose of  hazardous waste at cost.   Department  of Public  Works  R  $    S3.1.8  Continue to educate residents on the proper disposal of  pharmaceutical and household hazardous waste.  Encourage proper disposal of medications through  pharmacies or drug take‐back programs rather than  flushing.   Department  of Public  Works  R  $    S3.6.1  Work with the freight industry to monitor the contents of  freight trains intersecting Palo Alto for potentially  hazardous materials, and to establish accountability for  accidents and spills.   Office of  Emergency  Services R  $   OES participates in the Caltrain Life  Safety Committee, along with our  Fire Department, and several other  agencies.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  71 S3.6.2  Work with Caltrain and the PAUSD, to educate students  and the public on the dangers of rail trespass and the  benefits of suicide support services available in Palo Alto.  Community  Services  Department  R  $ P  With the Office of Emergency  Services, CSD coordinated invitations  to community partners (including  PAUSD and Caltrain) to participate in  demonstrations and updates on the  railway’s Intrusion Detection system  during one of three dates in the Fall.   Once a quarter, PSN Executive  Director checked in with Co‐Chairs of  Project Safety Net’s Means  Restriction Advisory Workgroup to  discuss activities that focus on public  railway safety. Co‐Chairs include a  suicidologist and behavioral health  clinician, both from Stanford  Behavioral Health Department. Semi‐ annually, have formal update and  strategizing meetings with PAUSD  Student and Wellness Services staff.  These meetings focused on  identifying collaboration  opportunities for community  education, outreach, and training as  well as youth mental healthcare  services.  During these meetings,  suicide prevention and mental health  awareness were primary topics. OES  has a major role: Intrusion Detection  System (IDS); other departments  (PWD, PD) have roles. OES is the lead  department for ongoing operation  and improvement to the IDS and  related rail safety technology  coordination.  This initial start‐up  period is a substantial draw on staff.  resources.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  72 S3.8.1  Encourage residential and commercial food waste  reduction through incentives, educational outreach and  programs.   Department  of Public  Works  R  $    S3.8.2  To the extent allowed by law, use refuse rate structures  that incentivize waste reduction.   Department  of Public  Works  R  $    S3.8.3  Continue to work with CalRecycle and the Department of  Toxic Substances Control to develop and promote long‐ term solid waste management, such as environmentally  responsible recycling programs, composting of food  waste and other organics, and citywide electronics and  digital hardware recycling efforts.  Department  of Public  Works IP  $    S3.9.1  Periodically review and update the adopted Construction  and Debris program.  Department  of Public  Works  R  $    S3.9.2  Educate Palo Alto residents and developers about  available incentives to use environmentally friendly  deconstruction activities to minimize our carbon  footprint, and to save natural resources, as well as space  in our landfills.   Development  Services  Department  R  $  please change to Department of  Public Works Zero Waste  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  73      S3.10.1  Support efforts to enforce extended producer  responsibility for solid waste to reduce waste produced  from manufacturing, shipping, packaging and the entire  life‐cycle of the product.   Office of  Sustainability  Services  R  $ C  The City of Palo adopted a new Zero  Waste plan in August 2018. The Plan  identifies new and expanded policies,  programs, and infrastructure that will  be needed to reach Palo Alto’s Zero  Waste goals. This includes efforts  around extended producer  responsibility for solid waste. In the  last year, Palo Alto assisted the  County transition from a medicine  drop‐off & disposal program run and  funded by Palo Alto into one run and  funded by the pharmaceutical  manufacturers. These programs work  best when they apply to a large  geographic area. Palo Alto, therefore,   supported State legislation which  would require manufacturers to  manage and pay for other collection‐ type programs as well.  S3.12.1  Complete an inventory of the City’s digital infrastructure  to locate vulnerabilities and gaps in system redundancies  and develop recommendations for improved  cybersecurity.  City of Palo  Alto Utilities S  $$    S3.12.2  Establish criteria for the installation of high security  telecommunications technology in new local government  projects.   City of Palo  Alto Utilities  M  $    S3.12.3  Establish a wi‐fi network that will be available to public  safety responders and Emergency Service Volunteers in  the event of power interruption during an emergency or  disaster.  City of Palo  Alto Utilities  S  $$   OES has a major role; possible Public  Private Partnership with Carnegie  Mellon University (Moffett Field  Campus); tie‐in to Vmware PPP. OES  has a major role; possible Public  Private Partnership with Carnegie  Mellon University (Moffett Field  Campus); tie‐in to Vmware PPP.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  74 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes    COMMUNITY SERVICES AND FACILITIES ELEMENT    Goal C‐1: Deliver community services effectively and efficiently.     C1.1.1  Based on identified needs, continue to provide and  expand the provision of multilingual literature, program  information and educational displays at public  community facilities and parks.   Community  Services  Department  R  $ C  Multi‐lingual signs (English and Spanish) are used in some open  space and parks locations.  Activity information at Cubberley  Master Plan community meetings has  been provided in English, Spanish and  Mandarin including having  interpreters on site to encourage  greatest participation.  Recreation Services currently has bi‐ lingual staff at all three community  centers who are able to assist Spanish  speaking customers with rentals and  program information.  C1.1.2   Establish a cross‐cultural outreach program to engage  residents of all ages, cultural, social and linguistic  backgrounds in educational, recreational and cultural  activities offered throughout the City of Palo Alto.   Community  Services  Department M  $ O No action, yet.  C1.2.1   Periodically review public information, outreach and  community relations activities to evaluate effectiveness.  Community  Services  Department  R  $ P  Recreation Services has started  launching & tracking social media  campaigns which provides data on  user engagement.  We hope to use  this data as a baseline to document  marked improvements in program  and service outreach online.  C.1.2.2  Explore a City solution to help residents and others to  resolve questions and concerns and navigate the City’s  community services and facilities.  Community  Services  Department  M  $ O No action  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  75 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.2.3  Identify barriers to participation in City programming and  facilities across gender, age, socioeconomic and ethnic  groups and sexual identity and orientation, as well as  mental and physical abilities, and adopt strategies to  remove barriers to participation.   Community  Services  Department  S  $ C  In 2017 with the help of a $270,000  federal grant, the Department  launched an access and inclusion  initiative for the rebuilding of the  Junior Museum & Zoo to ensure the  new facility and its exhibits are  accessible to people with physical  and developmental disabilities. In  2018 the Palo Alto Art Center  Foundation and Junior Museum &  Zoo received an Institute of Museum  and Library Services grant to support  Working Together, a program  intended to diversify the museum  field through a ladder of engagement  for youth diverse in ethnicity and  ability levels. In 2018, the Human  Relations Commission conducted a  LBGTQ+ Community Needs  Assessment which included a  question on their level of satisfaction  with a variety of community services.   Strategies to address the survey  results are currently under  development. In 2018, Recreation  Services utilized Outlet Adolescent  Counseling Services & LGBT Youth  Space to provide LGBTQ Awareness  and Sensitivity Training to Summer  and Teen Center Staff. Topics  included in training consisted of  proper terminology and how to  respond to LBGTQ youth that confide  in our staff about their sexual and  gender identities.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  76 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.2.4  Based on identified needs, expand program offerings to  underserved groups.   Community  Services  Department  R  $$$ C  The Community Services Department,  through support organization such as  the Art Center Foundation and the  Friends of the Junior Museum & Zoo  and service organizations such as the  Boys and Girls Club of the Peninsula  has funded scholarship programs for  underserved youth to attend some of  the City’s classes and summer camps.  In 2018, the Friends of the Palo Alto  Children’s Theatre (FOPACT) provided  $25,000 in transportation grants to  local Title‐1 schools and low‐income  populations, and low‐income schools,  bringing more than 3,000 under‐ represented students to matinee  performances at the Children’s  Theatre.  In additional outreach,  FOPACT funded more than $10,000 in  scholarships for summer camps and  year‐round classes. Recreation  Services continues to provide Fee  Reduction Scholarships for low‐ income populations for programs and  services, in addition to keeping our  program costs below traditional  market value.    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  77 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.3.1  Develop and implement a plan to collect and analyze  data on demographics, use of community service  facilities and needs of the community as related to parks,  open spaces, recreation, arts and culture.   Community  Services  Department  M  $ C  The Palo Alto Art Center regularly  collects and reviews demographic  information from program  participants. The Palo Alto Children’s  Theatre surveys program participants  and parents for feedback.  Recreation  Services continually surveys program  participants for feedback which  includes some basic demographic  information (what facility the  customer utilized and use purpose).  C1.6.1   Establish a program to facilitate continuing corporate  support for community services through contributions of  funds, time, materials and expertise.   Community  Services  Department  M  $ C  Recreation Services continues to  work with the Palo Alto Recreation  Foundation (PARF) to recruit  potential corporate sponsorships for  events and services.  Most recently,  Kaiser Permanente has agreed to  sponsor Summer Twilight Concerts  and Movies with a $1,500  sponsorship.  C1.12.1  In cooperation with public and private businesses, non‐ profit organizations, and PAUSD, develop a service  program that will coordinate the efforts of agencies  providing services to families and youth in Palo Alto.   Community  Services  Department R  $ O No action, yet.  C1.13.1  Determine the potential for City shared use of PAUSD  facilities for weekend, summer and evening use for  community uses such as child care, libraries, recreational  facilities, community meeting space, education, language  education, health care, culture and computer resources.   Community  Services  Department  M  $ P  With the reconstruction of the JMZ  and the need for additional parking at  the Lucie Stern Complex, an  agreement has been made with  Walter Hayes School to provide the  City use of their parking facilities on  weekends and evenings for  community meetings and events.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  78 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.15.1  Support and promote the provision of comprehensive  child care services in Palo Alto by public and private  providers, including employers.   Community  Services  Department  S  $ C  The Early Care and Education  Community, under the direction of  the Office of Human Services,  continues to provide outreach to and  educations programs for home and  center based child care providers in  the community.    C1.15.2  Utilize the Early Care and Education Committee to  develop and update the Child Care Master Plan, and to  connect providers and professionals working with  families with young children, explore challenges and  opportunities to programs and services for young  children, and support early education programs in the  community in their efforts to enhance quality.   Community  Services  Department  S  $ P  A consultant is currently conducting  an assessment of the needs of  families with children overseen by  staff in the Office of Human Services  and the Early Care and Education  Committee. The final report is  expected in early Spring, 2019.  C.1.15.3  Collaborate with Palo Alto Community Child Care  (PACCC) to identify, develop, and promote high quality  early learning environments to serve all families in our  community.   Community  Services  Department M  $ C  The Office of Human Services  continues to oversee a contract with  PACCC to administer the City’s Child  Care Subsidy program to provide  quality and affordable child care to  low income families.  C1.15.4  Explore opportunities to provide access to childcare for  families of City employees.   Community  Services  Department  L  $ O No action (suggesting checking with  HR)  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  79 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.16.1  Identify funding sources for expanded outreach and  increased involvement to support youth and teen  leadership programs and events.   Community  Services  Department  M  $ P  The Palo Alto Art Center provides a  variety of teen leadership programs,  including include the Art Center Teen  Leadership group, Teen Takeover,  which engaged more than 100 teens  in FY18, and volunteer opportunities.   The Teen Arts Council, an initiative of  the Palo Alto Children’s Theatre,  hosts weekly meetings, planning free  events that serve more than 1,700  local teens each year. In addition, the  group, along with the City of Palo  Alto and Children’s Theatre, hosted  The Buoyancy Teen Music & Art  Festival attracting more than 450  teens in attendance.  C1.16.2  Leverage available funding to pursue support of teen  mental, physical, social and emotional health programs.   Community  Services  Department  R  $ P  Project Safety Net is a collaborative  community network to develop and  implement a community‐based  mental health plan that includes  education, prevention and  intervention strategies that together  provide a “safety net” for youth in  Palo Alto, and defines our  community’s teen suicide prevention  efforts.  C1.17.1  Optimize participation in such programs by increasing the  number of locations where the programs are provided  and by supporting transportation options to these  locations.   Community  Services  Department  S  $ P  Recreation Services has expanded the  location of BOOST Fitness Programs  to include classes at Cubberley  Community Center, Lucie Stern  Community Center and Alma Room,  located at Alma Plaza.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  80 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C.1.17.2  Develop programs and activities for teens that  strengthen leadership skills, encourage a culture of  community service, inclusiveness, tolerance and  acceptance of others.  Community  Services  Department  R  $ C  The Art Center offers a supportive  and professional internship  experience for emerging museum  and arts professionals. We work with  approximately 25 college and  graduate interns annually. Art Center  Interns consistently report that they  are assigned to useful tasks, make a  meaningful difference, feel  appreciated, and enjoy the work  environment. The Palo Alto Children’s  Theatre provides teens with hands‐ on learning and leadership  opportunities.  The Children’s Theatre  also works with the Friends of the  Palo Alto Children’s Theatre to offer  26 paid Internships for teens each  summer. Representing the City of  Palo Alto, Teen Leadership brings  teen voice into various facets of Palo  Alto. Leadership opportunities  through Palo Alto Youth Council and  Teen Advisory Board are offered to  high school students who wish to  bring their passion, commitment, and  creativity into serving the needs of  the teen community. The Community  Services offers a Science Camp  Assistant Program that provides  leadership and team building skills  during the summer months to  approximately 45 teens each year.    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  81 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.17.3  Promote a diverse range of interests and vocations  among programs offered to children, youth and teens.   Community  Services  Department  M  $ C  The Palo Alto Art Center Children’s  Fine Art engaged over 2,100 children  with high‐quality art classes and  workshops for youth ages 18 months  to 18 years in FY18. Programs include  after‐school classes, special one and  two‐day workshops, weeklong  summer camps, and Scout merit  badge programs. Classes were  offered in digital photography,  ceramics, painting, drawing, and  mixed‐media sculpture. Recreation  Services continues to provide  hundreds of programs and services to  children, youth and teens through  camps, contract classes and service  opportunities.  C1.18.1  Develop a program to engage the talents and skills that  seniors possess that would provide volunteer  opportunities throughout the City.   Community  Services  Department  R  $ C  The Palo Alto Art Center maintains a  volunteer program that supports all  areas of Art Center operations and  engages volunteers of all ages.  Volunteers contributed 7,837 total  hours in fiscal year 2017‐2018 at a  value of $216,305.89. The Friends of  the Palo Alto Children’s Theatre  manage an invaluable volunteer  support program that is open to all  ages.  Volunteers contributed nearly  3,000 hours in FY18. Opportunity for  CSD and OES to cross‐fertilize re:  senior volunteers.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  82 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C.1.18.2  Support, promote, and publicize the provision of  comprehensive senior services in coordination with  senior service providers. Comprehensive services include  addressing senior nutrition, mental health and  transportation.   Community  Services  Department  R  $ C  The Office of Human Services  oversees a contract with Avenidas to  support the provision of  comprehensive services for seniors in  Palo Alto.  Through the HSRAP  program, financial support is granted  to other agencies providing nutrition,  legal, vision, disability, homeless,  medical and mental health services.  C.1.18.3  Establish a support program for caregivers of seniors and  people with disabilities by partnering with private,  nonprofit, faith‐based and public community service  organizations.   Community  Services  Department  M  $ C  The Palo Alto Art Center regularly  partners with Avenidas. In 2017, the  Center hosted an Intergenerational  Play Date with Avenidas and Youth  Community Services. The Center  continued this program in 2018. In  2018, the Center developed a  collaborative grant proposal with  Avenidas to fund a free series of  collage classes for seniors in the  community. This proposal is pending.  The Community Services Department  co‐sponsored a Caregiver Conference  organized by Avenidas on November  10, 2018. The Friends of the Palo Alto  Children’s Theatre works with the  Ronald McDonald House to provide  free summer camps, year‐round  workshops and field trips for children  and families who are visiting the area  for medical care.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  83 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.20.1  Partner with agencies for support and improved access  so that all can participate as appropriate in Palo Alto  recreational programs.   Community  Services  Department  R  $ P  CSD Recreation Services has  outreached to Magical Bridge  Foundation to establish a partnership  that will include cross‐training for  inclusion best practices, potential  inclusion buddy system for recreation  camps and program and long‐term  joint programming. The Office of  Human Services collaborates with  Abilities United to provide a annual  summer camp program for special  needs children ages 5‐18.  C1.22.1  Increase awareness about caring and compassion for the  unhoused and those who suffer from mental and/or  physical conditions through educational programming in  partnership with community and business organizations  throughout the region.   Community  Services  Department  R  $ P  The Office of Human Services  facilitates a committee of local  homeless and senior services  providers to address the needs of  homeless senior citizens in the  community. With the assistance  service providers, will be hosting a  resource fair for homeless seniors in  February, 2019.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  84 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C1.22.2  Work with Santa Clara and San Mateo Counties, the State  of California, the federal government, non‐profit  agencies, business and other organizations to define  roles and responsibilities in the comprehensive provision  of permanent supportive housing and temporary shelter,  food, clothing and transportation for those in need.   Planning &  Community  Environment  Department  R  $ P  The City continues to be involved  with the County for opportunities  and support in identifying funds and  provide emergency shelter.  (The City  has designated emergency shelters  per Housing Element but not sure if  this is only during certain times as  winter and summer – let me double  check with the team).   The City is  involved with the Emergency Housing  Consortium with the County (to quite  sure if the City still is, last contract I  found was from 2002).  The City is  working on encouraging developers  to use Measure A funding and other  State funding that would leverage  these funding for permanent,  supportive housing.    Goal C‐2: Demonstrate a commitment to excellence and high quality service to the public among City of Palo Alto officials and employees.  C2.2.1  Establish performance review criteria for City employees  that consider the quality of service provided.   Human  Resources  Department  M  $    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  85 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C2.2.2  Periodically perform evaluations of City service delivery  and develop strategies for continuous improvement. Use  metrics and make information publicly available.   Community  Services  Department  R  $$ C  The Palo Alto Art Center regularly  evaluates all of its programs for the  public and uses a Net Promotor Score  in all evaluations to determine our  overall effectiveness. Evaluations are  frequently reviewed and discussed at  a staff level to promote program  assessment and improvement. The  Palo Alto Children’s Theatre conducts  annual program reviews, including  customer surveys and feedback, to  evaluate program effectiveness and  reach. The Children’s Theatre  regularly participates in department‐ wide collaborations with other CSD  programs, in order to better utilize  resources, and reach wider  audiences. Recreation Services  conducts quarterly program  evaluations through Survey Monkey  to solicit customer feedback and  evaluate program effectiveness.    C3.2.1  Develop a proactive Asset Management Program for  infrastructure requirements and costs.   Administrative  Services  Department  M  $$    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  86 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  Goal C‐3:  Recognize the intrinsic value and everyday importance of our parks and community centers, libraries, civic buildings and cultural assets by investing in their  maintenance and improvement.  C3.3.1  Periodically evaluate how parks and recreational facilities  are being used and develop strategies for improving their  use overall.   Community  Services  Department  IP  $ P  Staff, with the help of park users,  evaluated the use the tennis courts at  Mitchell Park and observed that  pickleball is frequently being played  on the tennis courts. As a result, staff  stripped three of the courts for dual  use (tennis and pickleball) and are  currently working with the Parks and  Recreation Commission and the  pickleball users to try to create  dedicated pickleball courts.  C3.3.2  Study and recommend methods of private and public  financing for improved park maintenance, rehabilitation,  and construction of facilities, including those used for  arts and culture.   Community  Services  Department  S  $ O  No action, yet (for Open Space and  Parks). Funds are being set aside for  the maintenance of artworks at the  time of their commission at the  California Avenue Garage and Public  Safety Building. The Friends of the  Junior Museum & Zoo is rebuilding  the JMZ with over $25M in privately  contributed funding. The project will  also incorporate a public artwork.  The Friends of the Palo Alto  Children’s Theatre purchased a $110K  lighting and audio system upgrade.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  87 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C3.3.3  Estimate the costs of retrofitting all park facilities with  water efficient appliances, fixtures and irrigation systems  and develop an implementation schedule to phase‐in use  of non‐potable water conservations measures where and  when feasible.   City of Palo  Alto Utilities & Community  Services  Department  M  $$ P  Community Services Staff is working  on this as sites are renovated through  Capital Improvement Projects. Most  recently, areas of the golf course  landscaping that had been irrigated  with potable water were converted  to recycled water. Community  Services Staff try to retrofit irrigations  systems as parks and City landscaped  areas are renovated through Capital  Improvement Projects. Most  recently, when the golf course was  renovated, a new type of turf grass  was used, which allows us to irrigate  the course (excluding the greens)  with 100% recycled water. Previously,  a 40% potable/60% recycled blend  was required to keep the grass alive.  Also during the golf course  renovation, landscaping around the  club house that had been irrigated  with potable water was converted to  recycled water.  C3.3.4  Periodically assess the need to adjust parkland  dedication or fees in lieu thereof to ensure they remain  proportional to real estate values in Palo Alto.   Planning &  Community  Environment  Department  R  $ O No action, yet.  Goal C‐4: Plan for a future in which our parks, open spaces, libraries, public art, and community facilities thrive and adapt to the growth and change of Palo Alto.  C4.1.1  Explore opportunities to dedicate City‐owned land as  parkland to protect and preserve its community‐serving  purpose into the future.  Community  Services  Department S  $$$ C  On 6/5/2017 Council dedicated 36.5  acres at the former ITT property  (located in the Baylands Nature  Preserve) as park land.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  88 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C4.1.2  Encourage dedication of new land for parks through  regulations and incentives for new development and  programs to solicit bequests of land within the city.   Community  Services  Department  M  $$ O No action, yet.  C4.1.3  Pursue opportunities to create linear parks over the  Caltrain tracks in the event the tracks are moved below  grade.  Community  Services  Department  L  $$$ O No action, yet.  C4.1.4  Explore ways to dedicate a portion of in‐lieu fees towards  acquisition of parkland, not just improvements.   Community  Services  Department  M  $ O No action, yet.  C4.5.1  Use Cubberley Community Center as a critical and vital  part of the City’s service delivery system while also  planning for its future.  Community  Services  Department  IP  $$ P  The Public Art Commission has  approved an artist‐led community  meal that will take place in March  2019 in which members of the  community will share a meal and  listen to artist proposals for  temporary artworks at Cubberley.  At  the conclusion of the meal,  participants will vote on the  temporary artwork that will engage  the community. The Cubberley Stock  project is intended to bring diverse  stakeholders together to explore the  future of Cubberley. CCC is a  community resource for recovery. OES has an emergency facility at CCC;  the CCC is also identified as a primary  Red Cross Shelter in their National  Shelter System.  Goal C‐5: Sustain the health, well‐being, recreation, and safety of residents and visitors, and improve the quality, quantity, and affordability of social services for all  community members, including children, youth, teens, seniors, the unhoused, and people with disabilities.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  89 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C5.1.1  Allocate resources to create and support initiatives to  increase the health and well‐being of the public.   Community  Services  Department  R  $ C  In fall 2017, in conjunction with a  variety of community partners— including Avenidas, Healthy City,  Healthy Community, and Youth  Community Services‐‐ the Palo Alto  Art Center presented the exhibition  Play!. This exhibition engaged  thousands of visitors. Evaluation  results from the exhibition  showcased the value of the show in  generating positive, playful  experiences, encouraging visitors to  play, make, or consider, and  providing visitors with a new  perspective on play. The Palo Alto  Children’s Theatre brings on‐site  performing arts and wellness  programs to all twelve PAUSD  Elementary Schools, serving more  than 3,000 children annually, with  Outreach Theatre Productions in  grades 3‐5 and Dance In Schools  fitness classes in all K‐2 classes.  The City led a community‐wide  Healthy City Healthy Community  initiative.  The stakeholder group  achievements include: designation of  Palo Alto as an Age‐Friendly  community, organized an annual  community health fair, began  development of a welcome packet  for new residents on health and  wellness resources.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  90 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C5.1.2  Establish a community‐sourced online clearinghouse of  information and activities related to health promotion in  the community.   Community  Services  Department  M  $ C  An online welcome packet is available  and provides a clearinghouse for  health and wellness resources for  new residents.  C5.6.1  Incorporate health and well‐being topics, including arts  and culture, into existing events and programs at City‐ owned park and recreation facilities.   Community  Services  Department  R  $ C  The Palo Alto Art Center actively  promotes classes, workshops,  exhibitions, and public programs at  all City facilities. The Public Art  Program initiated a pilot mobile  platform at the Mitchell Park Library  and Community Center , the Palo Alto  Art Center, and Rinconada Library to  make more information available  about the public artworks at those  sites.  Through multi‐arts education,  the Children’s Theatre develops  lifelong skills such as critical and  creative thinking, cooperation, and  aesthetic sensitivity. Performing arts  education opportunities include  onsite classes, camps and production  experiences, as well as support of the  Teen Arts Council.  The Palo Alto Children’s Theatre staff  oversee the City of Palo Alto’s annual  Twilight Concert Series, featuring  summer free concerts in parks  throughout the City. Recreation  Services continually incorporates the  41 Developmental Assets into our on‐ going programs and Special Events.   More specifically, our Annual May  Parade theme typically highlights a  specific developmental asset.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  91 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  C5.6.2  Work with schools and community organizations to  provide programs that educate residents, workers and  visitors on health and well‐being topics.  Community  Services  Department  R  $$ P  The Office of Human Services, in  collaboration with the Alzheimer’s  Association, hosted an educational  event in March, 2018 on dementia  and how to make Palo Alto a  “Dementia Friendly” community.  C5.9.1  Identify existing and potential indoor and outdoor  locations for community gardens and farmers markets at  City‐owned or leased facilities and spaces.   Community  Services  Department  M  $   Staff is working on developing a  partnership with a local church to use  some of their land as a community  garden. We hope to have an  agreement in 2019. OES has an  interest in local food production for  emergencies.       2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  92 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes    BUSINESS AND ECONOMICS ELEMENT    Goal B‐1: Businesses in Palo Alto that contribute to economic vitality, enhance the city’s physical environment, promote municipal revenues and provide needed local  services.  B.1.1  Implement and periodically amend an Economic  Development Policy to guide business development in  the City in a manner consistent with Policy L‐1.10.  Office of  Economic  Development  R  $ P  Our Economic Development Policy  remains relevant to meeting the  demands of our local community.  In  2019, the City Manager's Office plans  to bring forward the Economic  Development Policy to the Policy &  Services Committee of the City  Council for review. OES would want  the data for disaster recovery  purposes.  Goal B‐3: Careful management of City revenues and expenditures so that the fiscal health of the City is ensured and services are delivered efficiently and equitably.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  93 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  B3.2.1  Continue to refine tools, such as the Business Registry, as  data sources on existing businesses, including the type of  business, number of employees, size, location, and other  metrics to track the diversity of Palo Alto businesses.  Development  Services  Department/ Office of  Economic  Development  IP  $$ C  For the 2018 calendar year business  registry cycle, the City changed fee  collection vendors and entered into a  contract with Avenu Insights &  Analytics (Avenu). Avenu provides  sales tax analysis, property tax  analysis and Downtown Business  Improvement District (BID) fee  collection for the City.  Aligning the  business registry fee collection under  Avenu saved the City resources and  increased data accuracy. For the 2019  business registry cycle, the City is  further improving data accuracy and  saving resources by combining the  business registry fee collection with  the BID fee collection through Avenu.  This action will provide businesses  with one invoice for both fees  thereby eliminating confusion. The  action will also allow Avenu to merge  databases and create one business  database for the City.   Goal B‐4: The stimulation of diverse commercial, retail and professional service business opportunities through supportive business policies and a culture of innovation.  B4.2.1  Revise zoning and other regulations as needed to  encourage the preservation of space to accommodate  small businesses, start‐ups and other services.  Planning &  Community  Environment  Department  M  $$ O Not yet commenced  B4.2.2  Consider planning, regulatory, or other incentives to  encourage property owners to include smaller office  spaces in their buildings to serve small businesses, non‐ profit organizations, and independent professionals.  Planning &  Community  Environment  Department  M  $ O Not yet commenced  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  94 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  B4.6.1  Work with local merchants to encourage Palo Alto  residents, workers, and visitors to buy in Palo Alto.  Office of  Economic  Development  R  $$ C  The City continues to support the  sales tax generating zones of  Downtown, California Ave., Stanford  Mall and various shopping  areas/centers with buy in Palo Alto  through localized outreach,  communication and marketing  support as requested. In partnership  with zone representatives, the City’s  focus for buy local has mainly been  dominated by addressing  parking/traffic needs as related to the  Upgrade Downtown and California  Ave. Parking Garage projects. For  these zones, banner programs have  also continued to be implemented  and developed. The City has also  supported Stanford Mall with several  grand openings such as Hermes. The  City’s partnership with Chamber of  Commerce also continues and staff  remain committed to aligning  resources and supporting the  Chamber’s goals and objectives.  B4.6.2  Study the overall viability of ground‐floor retail  requirements in preserving retail space and creating an  active street environment, including the types of  locations where such requirements are most effective.   Office of  Economic  Development M  $$ O  As the Economic Development Policy  is updated, resources may be  assigned to this medium‐term  project.  B4.6.3  Maintain distinct neighborhood shopping areas that are  attractive, accessible, and convenient to nearby  residents.  Planning &  Community  Environment  Department  R  $ C  This program is implemented with  use of the AR findings  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  95 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  Goal B‐5: City regulations and operating procedures that provide certainty, predictability and flexibility and help businesses adapt to changing market conditions.  B5.1.1  Regularly evaluate ways to improve coordination of the  City’s environmental review, permitting, and inspection  processes.  Planning &  Community  Environment  Department R  $ C  Planning continually works to  streamline the CEQA process and  works with other departments to  ensure the necessary permitting is  anticipated and inspections are  conditioned as needed.    B5.1.2  Improve design guidelines to reduce ambiguity and more  clearly articulate compatibility principles to the business  community and to the public.  Planning &  Community  Environment  Department  M  $$ O To be started in approximately 5  years  B5.1.3  Simplify the design review process for small‐scale  changes to previously approved site plans and buildings.  Planning &  Community  Environment  Department  M  $$ P  This is an on‐going process that staff  continues to refine.  Mostly recently,  staff implemented the “Over the  Counter” process to streamline small  project changes.  B5.1.4  Revise zoning and other regulations as needed to  encourage the revitalization of aging retail structures and  areas. Encourage the preservation of space to  accommodate small, independent retail businesses and  professional services.  Planning &  Community  Environment  Department  R  $$ P  Historic preservation polices  maintains older structures, but more  can be done to encourage the  preservation of small  retail/commercial spaces.  Goal B‐6: Attractive, vibrant retail centers, each with a mix of uses and a distinctive character.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  96 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  B6.1.1  Actively work with Downtown businesses, professional  associations and the Palo Alto Chamber of Commerce to  retain successful retail businesses that contribute to the  City’s goals for Downtown.  Office of  Economic  Development  R  $$ C  The City continues to attend and  participate in meetings and initiatives  put forward by the Palo Alto  Chamber of Commerce, the Palo Alto  Downtown Business and Professional  Association, and the California  Avenue Merchants Association.  The  City is also an active member of the  Silicon Valley Economic Development  Alliance; SVEDA is a regional  partnership of economic  development professionals who bring  together public and private resources  to ensure the success of businesses in  Silicon Valley.  Goal B‐7: Thriving business employment districts at Stanford Research Park, Stanford Medical Center, East Bayshore/San Antonio Road Area and Bayshore Corridor that  complement the City’s business and neighborhood centers.  B7.2.1  Review policies and regulations guiding development at  Stanford Research Park and revise them as needed to  allow improved responsiveness to changing market  conditions in a manner consistent with Policy L‐1.10.  Planning &  Community  Environment  Department  M  $$ O Not yet commenced  B7.2.2  Study the feasibility of a “transfer of development rights”  (TDR) program and other measures that would provide  greater development flexibility within Stanford Research  Park without creating significant adverse traffic impacts  or increasing the allowable floor area.  Planning &  Community  Environment  Department  M  $$ O  Not yet commenced       2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  97 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes    GOVERNANCE ELEMENT    Goal G‐1: Effective opportunities for public participation in local government.  G1.1.1  Consider making data available at a transactional level on  the Open Data Portal.    G1.2.1  Continue to hold regular, Town Hall‐style meetings in  neighborhoods.  City Council R  $$ C  The City Council, City Manager, and  Departments continue to prioritize  hosting Town Halls. For example, in  2018 Mayor Liz Kniss convened a  town hall regarding traffic and  congestion.  Additional meetings  have been held regarding specific  topics, such as Connecting Palo Alto,  Midtown Transportation Fair, the  Cubberley Co‐Design, and more.  Events such as these provide  opportunities for residents to directly  impact their local government.  G1.2.2  Periodically review the suite of engagement options used  to solicit citizen input and expertise on policy issues.  City  Manager R  $ ‐ $$$ P  The City Manager has directed staff  to review and update the community  engagement strategy in 2019.  As  part of that process, staff will review  the suite of engagement options  employed by the City.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  98 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G1.2.3  Continue to rely on neighborhood organizations, the City  website, local media, online technologies and other  communication platforms to keep residents informed of  current issues and to encourage citizen engagement.  City  Manager R  $ P  The City uses a range of  communication tools to keep the  community informed and engaged.   These include maintaining the City  website and calendar; sharing events  and information via social media  platforms such as Instagram, Next  Door, Facebook, and Twitter; posting  videos on YouTube and broadcasting  Council and Committee meetings via  the MidPen Media Center; providing  emergency communications via Nixle  and AlertSCCC; reading and  responding to emails from the public  to City Council and the City Manager  general e‐mail boxes; maintaining  and using the Palo Alto 311 app; and  meeting face‐to‐face with residents,  businesses, and organizations. In  2019, the City will overhaul and  redesign the website, ensuring it  remains a welcoming and helpful  digital destination for residents,  businesses, and visitors.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  99 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G1.2.4  Provide access to communications technologies at City  facilities, including public libraries and City Hall, and  explore innovative locations for communication.  City  Manager  R  $$ C  City facilities continue to provide  access to communication  technologies. Many City facilities  offer free wi‐fi for guests. In addition,  the public libraries offer computer  access for patrons as well as access to  newspapers, publications, texts, as  well as visual and audio recordings.   The Palo Alto Library also provides  library card holders with tremendous  online resources; these can be  accessed at a library or via a patron's  own computer or device. Digital  offerings include e‐books, film  streaming, music, research archives,  homework help, study guides, and  more.  All of these digital resources  help connect residents to each other,  to their local communities, and to the  broader world so they can stay  informed, knowledgeable, and  participate.  G1.2.5  Continue to release City Council staff reports to the  public up to 10 days prior to Council hearings to increase  public awareness of City decision‐making.  City Clerk  R  $ C  The City continues to follow the  practice of publishing City Council  agendas 11 days in advance of each  Council meeting. Most staff reports  are included in this publication,  although some staff reports are  produced fewer than 11 days before  Council meetings. 98% of Fiscal Year  2018 City Council agendas were  published 11 days in advance.  Goal G‐2: Informed and involved civic, cultural, environmental, social service and neighborhood organizations and residents.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  100 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G2.2.1  Continue to offer the use of City facilities to non‐profit  civic, environmental, cultural, neighborhood and social  service organizations for meetings and events at  discounted or complimentary rates and via sponsorship  programs.  City  Manager R  $ C  The City continues to partner with  local organizations to host meetings  and events at City facilities.  Neighbors Abroad and Cool Block  were just two of the many  organizations the City partnered with  to co‐host meetings and events at  reduced rates. The public libraries  offer free meeting spaces to various  community organizations including  Project SafetyNet, MidPeninsula  Media Center, CASP artists and the  Palo Alto Camera Club. The City looks  forward to hosting more meetings in  the future.  Goal G‐4: Active involvement of local citizens as volunteers.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  101 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G4.1.1  Continue and expand volunteer opportunities and the  community’s awareness of public and nonprofit  organizations serving the City.  All  Departments R  $ C  Ongoing. Collaborations with PTA,  PAUSD, SCC DPH, Bike Palo Alto!,  SVBC, PAMF, Stanford Hospital, and  LPCH. Volunteers are an element of  OES’s "whole community"  preparedness program.  Due to the regulatory code  compliance elements of   Community services provides  numerous volunteer opportunities  and has benefited from thousands of  volunteer hours in the arts, open  space and sciences.  In 2018, the City Council authorized a  formal partnership with Cool Block.  Through this program,  local residents  will become better connected to their  neighbors, learn how to steward the  environment, and prepare for natural  disasters.  Participants will also  become aware of public and non‐ profit resources and services  available to them.  The public library  provides various volunteer  opportunities to the community  where residents assist and present  programs by  becoming TLAB (Teen  Library Advisory Board)volunteers,  Homebound services volunteers,  Tech helpers, ESL Coaches and Virtual  Reality Coaches.  Through these  opportunities, residents have an  opportunity to connect, collaborate,  teach and learn from each other.    2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  102 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G4.1.2  Publicly recognize the efforts of individuals, groups, and  businesses that provide volunteer services within the  City.  City  Manager  R  $ C  Through the Know Your Neighbor  grant program, the City supports the  efforts of volunteers to host events  that promote a sense of community  and neighborhoods.  In addition, the  City collaborates with local  organizations to recognize volunteers  through awards. Two examples  include the Citizen Corps Service  Award and collaboration with the  Canopy to host the Mayor's Tree  Planting and Awards Ceremony.   The  City Clerk hosts an annual event to  recognize the contributions of those  serving on boards and commissions.  Likewise, the library along with the  Friends of the Palo Alto Library hosts  an annual volunteer appreciation  event for their service and efforts to  support library programming. Finally,  the City Council also issues  proclamations to honor individuals  and organizations who make  significant contributions to public life  in Palo Alto. OES (with support of  CMO) hosts an annual recognition  event for our volunteers and other  community partners.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  103 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G4.1.3  Coordinate with the Palo Alto Unified School District to  develop classroom‐based leadership, governance and  civic participation programs.  City  Manager M  $$ C  The City of Palo Alto regularly hosts  high school students as summer  interns; the Human Resources  Department coordinates this annual  program. In 2018, City of Palo Alto  staff and executives spoke to local  high school students regarding their  careers and civic engagement.  The  City continues to seek more ways to  connect with young people in the  classroom.  G4.1.4  Support the transition from school‐based volunteering to  civic participation via outreach to parent volunteers and  student leaders.  City  Manager  M  $ C  The City supports and the Community  Services Department staffs the Palo  Alto Youth Council (PAYC). The PAYC  is a collaborative of Palo Alto high  school students committed to  servicing the needs of the teen  community by serving as a voice  toward change and action. PAYC  keeps cognizant of issues relevant to  the teen community and works to  develop creative and engaging ways  to raise awareness and resolve. They  meet weekly throughout the year.  G4.1.5  Coordinate with the real estate community to develop a  welcome package for new residents, containing City  resources, information and ways to contribute to  livability.  City  Manager M  $$ P  The Utilities Department currently  sends a welcome message to new  residents and customers. In 2019 this  will be reviewed and updated.  Goal G‐6: More clearly defined procedures, standards, and expectations for development review.  2030 COMPREHENSIVE PLAN IMPLEMENTATION:  2018 PROGRESS REPORT  * S = Short (< 5 years), M = Medium (5‐10 years), L = Long (>10 years), IP = In Progress, R = Routine          ** C = Complete, P = Partially Complete, O = Outstanding, U = Unknown  104 Program Program Text Lead   Department Priority* Level   of Effort  2018  Status** Notes  G6.2.1  Provide clear information across multiple communications platforms to guide citizens and  businesses through the City review and approval process. Planning and  Community  Environment R  $ C  Staff uses the internet, message  boards, mailing, newspaper ads,  direct communication, etc. to  communicate and engage citizens  and businesses alike.  G6.2.2  Continue and expand customer‐oriented process  improvement efforts.  All  Departments R  $$ P  OES actively does this. Development  Services is partnering with  Information Technology and  Administrative Services departments  to implement a Customer Queuing  software system which will provide  more predictable timing for  customers. The department also  continues to update forms and  applications to assist with submittals.  Finally, the department is working to  convert submittal of building plans  from paper to electronic format. Not  yet commenced for PCE – merging of  PCE and DS underway; customer  service improvements to be  evaluated  G6.2.3  Use the pre‐screening process to obtain early feedback  from the City Council and the community regarding  ordinance changes intended to facilitate specific  development proposals.  Planning and  Community  Environment R  $ C PAMC Section 18.79 is regularly  implemented to achieve this goal.    Attachment B: 2018 Housing Element Annual Progress Report Jurisidiction Name Reporting Calendar Year First Name Last Name Title Email Phone Street Address City Zipcode v 1_29_19 250 Hamilton Ave Palo Alto 94301 Please Start Here Submittal Instructions Housing Element Annual Progress Reports (APRs) forms and tables must be submitted to HCD and the Governor's Office of Planning and Research (OPR) on or before April 1 of each year for the prior calendar year; submit separate reports directly to both HCD and OPR pursuant to Government Code section 65400. There are two options for submitting APRs: 1. Online Annual Progress Reporting System (Preferred) - This enters your information directly into HCD’s database limiting the risk of errors. If you would like to use the online system, email APR@hcd.ca.gov and HCD will send you the login information for your jurisdiction. Please note: Using the online system only provides the information to HCD. The APR must still be submitted to OPR. Their email address is opr.apr@opr.ca.gov. 2. Email - If you prefer to submit via email, you can complete the excel Annual Progress Report forms and submit to HCD at APR@hcd.ca.gov and to OPR at opr.apr@opr.ca.gov. Please send the Excel workbook, not a scanned or PDF copy of the tables. General Information 2018 Palo Alto Contact Information Hang Huynh Senior Planner Hang.Huynh@CityofPaloAlto.org (650) 329-2493 Mailing Address Annual Progress Report January 2019 Jurisdiction Palo Alto Reporting Year 2018 (Jan. 1 - Dec. 31) Date Application Submitted Total Approved Units by Project Total Disapproved Units by Project Streamlining Notes 2 3 4 6 7 8 9 10 Prior APN+Current APN Street Address Project Name+Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Date Application Submitted Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low-Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate-Income Total PROPOSED Units by Project Total APPROVED Units by project Total DISAPPROVED Units by Project (Auto-calculated Can Be Overwritten) Was APPLICATION SUBMITTED Pursuant to GC 65913.4(b)? (SB 35 Streamlining) Notes+ Summary Row: Start Data Entry Below 58 1 77 136 81 120-28-051 190 CHANNING AV, PALO ALTO, CA 94301 18PLN-00043 2 to 4 O 2/1/2018 4 4 No UNDER REVIEW, COLUMN 6 IS NET DU CHANGE. 132-35-045 3705 EL CAMINO REAL, PALO ALTO, CA 94306 18PLN-00136 5+R 4/19/2018 58 1 59 59 No COLUMN 6 IS NET DU CHANGE 132-46-100 4115 EL CAMINO REAL, PALO ALTO, CA 94306 18PLN-00238 5+O 7/20/2018 7 7 No UNDER REVIEW, COLUMN 6 IS NET DU CHANGE. 137-25-008 531 IRVEN CT, PALO ALTO, CA 94306 18PLN-00088 SFD O 3/8/2018 1 1 1 No COLUMN 6 IS NET DU CHANGE 120-03-062 565 HAMILTON AV, PALO ALTO, CA 94301 18PLN-00313 5+R 9/17/2018 10 10 No UNDER REVIEW, COLUMN 6 IS NET DU CHANGE. 137-27-090 4152 DONALD DR A 18000-00147 ADU R 1/18/2018 1 1 1 No 003-50-070 2100 BELLVIEW DR 18000-00464 ADU R 2/23/2018 1 1 1 No 120-18-005 358 ADDISON AV, UNIT A 18000-00781 ADU R 3/27/2018 1 1 1 No 003-32-035 741 HOMER AV 18000-00506 ADU R 2/28/2018 1 1 1 No 127-48-016 3451 CORK OAK WY 18000-01426 ADU R 5/25/2018 1 1 1 No 137-19-008 1070 CERRITO WY 18000-01109 ADU R 4/27/2018 1 1 1 No 127-19-122 728 GAILEN AV 18000-00954 ADU R 4/17/2018 1 1 1 No 127-24-013 3256 CLIFTON CT 18000-01496 ADU R 6/5/2018 1 1 1 No 120-06-072 555 KINGSLEY AV 18000-01564 ADU R 6/12/2018 1 1 1 No 003-33-037 1001 FULTON ST 18000-01425 ADU R 5/25/2018 1 1 1 No 132-02-027 2640 MIDDLEFIELD RD 18000-01647 ADU R 6/19/2018 1 1 1 No 127-49-069 3287 MIDDLEFIELD RD 18000-01820 ADU R 7/9/2018 1 1 1 No 132-40-053 389 MATADERO AV 18000-01411 ADU R 5/24/2018 1 1 1 No 003-14-064 1741 EDGEWOOD DR 18000-01817 ADU R 7/6/2018 1 1 1 No 127-22-027 3342 VERNON TER 18000-00917 ADU R 4/12/2018 1 1 1 No 132-27-031 3247 EMERSON ST 18000-00522 ADU R 3/1/2018 1 1 1 No 124-30-031 310 LELAND AV 18000-02224 ADU R 8/21/2018 1 1 1 No 137-04-025 2350 CORNELL ST 18000-00841 ADU R 4/3/2018 1 1 1 No 148-05-036 124 MONROE DR 18000-02018 ADU R 7/27/2018 1 1 1 No 003-31-013 641 GUINDA ST 18000-01810 ADU R 7/6/2018 1 1 1 No 132-40-023419 MARGARITA AV 18000-01327 ADU R 5/16/2018 1 1 1 No 127-49-0213350 CORK OAK WY 18000-00297 ADU R 2/2/2018 1 1 No UNDER REVIEW 124-23-0281630 CASTILLEJA AV 18000-00606 ADU R 3/8/2018 1 1 No UNDER REVIEW 003-31-065 619 GUINDA ST 18000-00992 ADU R 4/19/2018 1 1 No UNDER REVIEW 003-04-021 951 HAMILTON AV 18000-01009 ADU R 4/19/2018 1 1 No UNDER REVIEW Housing Development Applications Submitted Table A Note: + Optional field Cells in grey contain auto-calculation formulas ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) 51 Project Identifier Unit Types Proposed Units - Affordability by Household Incomes 132-02-019 2554 WEBSTER ST 18000-01181 ADU R 5/7/2018 1 1 No UNDER REVIEW 137-14-102841 LA JENNIFER WY 18000-01261 ADU R 5/10/2018 1 1 No UNDER REVIEW 003-10-046585 E CRESCENT DR 18000-01418 ADU R 5/25/2018 1 1 No UNDER REVIEW 124-05-032 2320 BYRON ST 18000-01495 ADU R 6/5/2018 1 1 No UNDER REVIEW 137-05-045 1411 COLLEGE AV 18000-01550 ADU R 6/8/2018 1 1 No UNDER REVIEW 137-16-033926 MATADERO AV 18000-01681 ADU R 6/21/2018 1 1 No UNDER REVIEW 127-08-046 3161 GREER RD 18000-01699 ADU R 6/22/2018 1 1 No UNDER REVIEW 120-07-0591338 MIDDLEFIELD RD 18000-01777 ADU R 6/29/2018 1 1 No UNDER REVIEW 137-13-010 750 PAUL AV 18000-01787 ADU R 7/3/2018 1 1 No UNDER REVIEW 167-07-032 4248 SUZANNE DR 18000-01874 ADU R 7/12/2018 1 1 No UNDER REVIEW 137-13-0583886 LA DONNA AV 18000-01937 ADU R 7/19/2018 1 1 No UNDER REVIEW 124-23-0441648 MARIPOSA AV 18000-02000 ADU R 7/26/2018 1 1 No UNDER REVIEW 137-11-050 3775 LA SELVA DR 18000-02077 ADU R 8/3/2018 1 1 No UNDER REVIEW 132-18-086 2608 BRYANT ST 18000-02088 ADU R 8/6/2018 1 1 No UNDER REVIEW 127-30-0412570 MARSHALL DR 18000-02124 ADU R 8/10/2018 1 1 No UNDER REVIEW 132-55-019 2732 BYRON ST 18000-02338 ADU R 9/4/2018 1 1 No UNDER REVIEW 120-01-031 119 WEBSTER ST 18000-02493 ADU R 9/20/2018 1 1 No UNDER REVIEW 124-27-015 261 STANFORD AV 18000-02528 ADU R 9/25/2018 1 1 No UNDER REVIEW 120-06-001 1001 COWPER ST 18000-02545 ADU R 9/27/2018 1 1 No UNDER REVIEW 167-05-006 4206 POMONA AV 18000-02570 ADU R 10/1/2018 1 1 No UNDER REVIEW 124-05-072 2227 TASSO ST 18000-02660 ADU R 10/10/2018 1 1 No UNDER REVIEW 132-05-0033442 MIDDLEFIELD RD 18000-02883 ADU R 11/5/2018 1 1 No UNDER REVIEW 132-45-012 4133 PARK BL 18000-02932 ADU R 11/9/2018 1 1 No UNDER REVIEW 132-48-033 3130 RAMONA ST 18000-02982 ADU R 11/15/2018 1 1 No UNDER REVIEW 124-07-043 360 KELLOGG AV 18000-02996 ADU R 11/16/2018 1 1 No UNDER REVIEW 137-19-052 4010 MANZANA LN 18000-03021 ADU R 11/20/2018 1 1 No UNDER REVIEW 127-25-010 841 AMES AV 18000-03109 ADU R 12/5/2018 1 1 No UNDER REVIEW 124-18-004 150 TENNYSON AV 18000-03168 ADU R 12/12/2018 1 1 No UNDER REVIEW 120-05-001 803 COWPER ST 18000-03239 ADU R 12/20/2018 1 1 No UNDER REVIEW 003-12-046 15 PHILLIPS RD 18000-03244 ADU R 12/20/2018 1 1 No UNDER REVIEW ANNUAL ELEMENT PROGRESS REPORTHousing Element Implementation(CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan. 1 - Dec. 31)Cells in grey contain auto-calculation formulas Table A2 Annual Building Activity Report Summary - New Construction, Entitled, Permits and Completed Units Streamlining Infill Housing without Financial Assistance or Deed Restrictions Term of Affordability or Deed Restriction Notes 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Prior APN+Current APN Street Address Project Name+Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=RenterO=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted AboveModerate-Income EntitlementDate Approved # of Units issued Entitlements Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted AboveModerate-Income Building Permits Date Issued # of Units Issued Building Permits Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted AboveModerate-Income Certificates of Occupancy or other forms of readiness (see instructions) Date Issued # of Units issued Certificates of Occupancy or other forms of readiness How many of the units were Extremely Low Income?+ Was Project APPROVED using GC 65913.4(b)? (SB 35 Streamlining) Y/N Infill Units?Y/N+ Assistance Programs for Each Development (see instructions) Deed Restriction Type(see instructions) For units affordable without financial assistance or deed restrictions, explain how the locality determined the units were affordable(see instructions) Term of Affordability or Deed Restriction (years) (if affordable in perpetuity enter 1000)+ Number of Demolished/Destroyed Units+ Demolished or Destroyed Units+ Demolished/Destroyed Units Owner or Renter+ Notes+ Summary Row: Start Data Entry Below 117 117 54 54531 IRVEN CT, PALO 18PLN-00088 SFD O 1 6/1/2018 1 1 12/3/2018 1 N Y3265 EL CAMINO 15PLN-00312 2 to 4 O 3 7/6/2018 3 N Y120-14-004 356 HAWTHORNE 17PLN-00367 SFD O -1 -1 N Y 132-37-056 3001 EL CAMINO REAL 18PLN-00152 5+R 44 11/9/2018 44 N Y 124-18-096 115 RINCONADA AVE 18PLN-00104 SFD O -1 6/13/2018 -1 N Y Demo Triplex, Build 2 SFR's 137-12-023 3721 LA DONNA AVE 17PLN-00435 SFD O 1 3/14/2018 1 1 7/13/2018 1 N Y 003-33-050 1023 MIDDLEFIELD 18PLN-00193 SFD O -1 3/29/2018 -1 N Y Demo Triplex, Build 2 SFR's 132-36-084 2755 EL CAMINO REAL 16PLN-00464 5+R 57 6/25/2018 57 N Y 99 12 restricted units for 99 years; 6 at 140% and 6 at 150% AMI 137-25-109 567 MAYBELL AVE 17PLN-00158 SFD O 12 2/26/2018 12 N Y Parcel Map Application 142-28-107 1501 CALIFORNIA AVE 14000-01600 2 to 4 O 2 2/5/2018 2 N Y Mayfield Stanford Development Agreement 142-28-106 1635 BOWDOIN CT 14000-01600 2 to 4 O 2 2/5/2018 2 N Y Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01581 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1600 AMHERST CT 14000-01581 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01586 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1615 AMHERST CT 14000-01586 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01587 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 2500 AMHERST ST 14000-01587 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01601 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1615 BOWDOIN CT 14000-01601 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01609 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 142-28-XXX 2435 AMHERST ST 14000-01609 SFD O 1 2/5/2018 1 N Y Mayfield Stanford Development Agreement 124-16-089 1545 ALMA ST 17000-03116 2 to 4 O 1 4/4/2018 1 1 6/8/2018 1 N Y124-16-089 1543 ALMA ST 17000-03117 2 to 4 O 1 4/4/2018 1 1 6/8/2018 1 N Y 003-51-021 912 N CALIFORNIA AV 17000-01770 ADU R 1 7/5/2018 1 N Y147-27-005 237 SCRIPPS CT 17000-02169 ADU R 1 3/20/2018 1 N Y120-05-062 940 WEBSTER ST 17000-02390 ADU R 1 2/1/2018 1 N Y137-04-005 980 CALIFORNIA AV 17000-02730 ADU R 1 3/15/2018 1 N Y127-28-086 836 BRUCE DR 17000-02881 ADU R 1 5/8/2018 1 N Y132-19-048 2829 EMERSON ST 17000-03099 ADU R 1 9/26/2018 1 N Y137-27-090 4152 DONALD DR A 18000-00147 ADU R 1 6/7/2018 1 N Y003-50-070 2100 BELLVIEW DR 18000-00464 ADU R 1 6/20/2018 1 N Y003-32-035 741 HOMER AV 18000-00506 ADU R 1 7/5/2018 1 N Y132-27-031 3247 EMERSON ST 18000-00522 ADU R 1 11/19/2018 1 N Y 120-18-005 358 ADDISON AV, UNIT A 18000-00781 ADU R 1 6/21/2018 1 N Y137-04-025 2350 CORNELL ST 18000-00841 ADU R 1 12/10/2018 1 N Y 127-22-027 3342 VERNON TER 18000-00917 ADU R 1 11/13/2018 1 N Y 127-19-122 728 GAILEN AV 18000-00954 ADU R 1 8/22/2018 1 N Y137-19-008 1070 CERRITO WY 18000-01109 ADU R 1 7/19/2018 1 N Y 132-40-023 419 MARGARITA AV 18000-01327 ADU R 1 12/18/2018 1 N Y 132-40-053 389 MATADERO AV 18000-01411 ADU R 1 10/17/2018 1 N Y003-33-037 1001 FULTON ST 18000-01425 ADU R 1 10/3/2018 1 N Y 127-48-016 3451 CORK OAK WY 18000-01426 ADU R 1 7/13/2018 1 N Y127-24-013 3256 CLIFTON CT 18000-01496 ADU R 1 8/27/2018 1 N Y120-06-072 555 KINGSLEY AV 18000-01564 ADU R 1 9/6/2018 1 N Y 132-02-027 2640 MIDDLEFIELD RD 18000-01647 ADU R 1 10/10/2018 1 N Y 167-06-062 665 GLENBROOK DR 17000-02364 ADU R 1 3/9/2018 1 N Y 127-58-008 3094 STELLING DR 17000-02541 ADU R 1 2/9/2018 1 N Y003-03-034 833 HAMILTON AV 17000-02777 ADU R 1 3/30/2018 1 N Y132-02-017 2546 WEBSTER ST 17000-03055 ADU R 1 4/27/2018 1 N Y127-11-022 3624 EVERGREEN DR 17000-03103 ADU R 1 3/20/2018 1 N Y 132-18-035 2591 RAMONA ST 17000-03106 ADU R 1 3/5/2018 1 N Y 003-31-013 641 GUINDA ST 18000-01810 ADU R 1 12/13/2018 1 N Y 003-14-064 1741 EDGEWOOD DR 18000-01817 ADU R 1 10/26/2018 1 N Y 127-49-069 3287 MIDDLEFIELD RD 18000-01820 ADU R 1 10/12/2018 1 N Y148-05-036 124 MONROE DR 18000-02018 ADU R 1 12/11/2018 1 N Y124-30-031 310 LELAND AV 18000-02224 ADU R 1 11/30/2018 1 N Y 137-25-062 580 GEORGIA AV 17000-02801 ADU R 1 4/26/2018 1 N Y120-17-043 400 CHANNING AV 17000-03144 ADU R 1 5/23/2018 1 N Y120-17-043 400 CHANNING AV 17000-03146 ADU R 1 5/23/2018 1 N Y Note: + Optional field Housing with Financial Assistance and/or Deed Restrictions Demolished/Destroyed UnitsProject Identifier 1 Unit Types Affordability by Household Incomes - Completed Entitlement Affordability by Household Incomes - Building Permits Affordability by Household Incomes - Certificates of Occupancy Jurisdiction Palo Alto Reporting Year 2018 (Jan. 1 - Dec. 31) 1 3 4 RHNA Allocation by Income Level 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total Units to Date (all years)Total Remaining RHNA by Income Level Deed Restricted 43 Non-Deed Restricted Deed Restricted 58 Non-Deed Restricted Deed Restricted Non-Deed Restricted 11 3 28 Above Moderate 587 174 15 61 54 304 283 1988 286 18 89 54 447 1541 Note: units serving extremely low-income households are included in the very low-income permitted units totals Cells in grey contain auto-calculation formulas Please contact HCD if your data is different than the material supplied here 58 Total RHNA Total Units 44 Income Level Very Low Low 42 ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Moderate 691 432 278 2 Table BRegional Housing Needs Allocation ProgressPermitted Units Issued by Affordability 648 374 236 43 This table is auto-populated once you enter your jurisdiction name and current year data. Past year information comes from previous APRs. TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H1 Goal ENSURE THE PRESERVATION OF THE UNIQUE CHARACTER OF RESIDENTIAL NEIGHBORHOODS H1.1 Policy Promote the rehabilitation of deteriorating or substandard residential properties using sustainable and energy conserving approaches. H1.1.1 Program Continue the citywide property maintenance, inspection, and enforcement program. Continue to provide services which promote rehabilitation of substandard housing. City Funds Planning & Community Environment; Code Enforcement Ongoing Ongoing program H1.1.2 Program Consider modifying development standards for second units, where consistent with maintaining the character of existing neighborhoods. The modifications should encourage the production of second units affordable to very low-, low-, or moderate-income households. Consider modifying the Zoning Code to provide for additional second units. General Fund Planning & Community Environment Conduct a study within three years of adoption of Housing Element to assess the potential for additional second units with modifications to the development standards. Completed. Ordinance adopted on May 8, 2017. H1.1.3 Program Provide incentives to developers such as reduced fees and flexible development standards to encourage the preservation of existing rental cottages and duplexes currently located in the R-1 and R-2 residential areas. Preserve 10 rental cottages and duplexes. City Housing funds Planning & Community Environment Explore incentives within three years of Housing Element adoption Underway; part of the Phase 2 Housing Element implementation plan for 2019 H1.2 Policy Support efforts to preserve multifamily housing units in existing neighborhoods. H1.2.1 Program When a loss of rental housing occurs due to subdivision or condominium conversion approvals, the project shall require 25 percent BMR units. Provide 10 additional affordable housing units on sites where rental housing will be lost. NA Planning & Community Environment Ongoing Underway - there have not been any projects subject to this program to date. Status of Housing Element Programs 2015-2023 December 2018 Housing Element Program Status Page 1 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H1.3 Policy Encourage community involvement in the maintenance and enhancement of public and private properties and adjacent rights-of-way in residential neighborhoods. H1.3.1 Program Create community volunteer days and park cleanups, plantings, or similar events that promote neighborhood enhancement and conduct City- sponsored cleanup campaigns for public and private properties. Coordinate with the City’s waste and disposal hauler to conduct a cleanup campaign once a year to promote neighborhood clean-up. City Housing Funds Public Works Department Ongoing Ongoing program H1.4 Policy Ensure that new developments provide appropriate transitions from higher density development to single-family and low-density residential districts to preserve neighborhood character. H2 Goal SUPPORT THE CONSTRUCTION OF HOUSING NEAR SCHOOLS, TRANSIT, PARKS, SHOPPING, EMPLOYMENT, AND CULTURAL INSTITUTIONS H2.1 Policy Identify and implement strategies to increase housing density and diversity, including mixed-use development and a range of unit styles, near community services. Emphasize and encourage the development of affordable and mixed-income housing to support the City’s fair share of the regional housing needs and to ensure that the City’s population remains economically diverse. Housing Element Program Status Page 2 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.1.1 Program To allow for higher density residential development,consider amending the Zoning Code to permit high-density residential in mixed use or single use projects in commercial areas within one-half a mile of fixed rail stations and to allow limited exceptions to the 50-foot height limit for Housing Element Sites within one-quarter mile of fixed rail stations. Provide opportunities for a diverse range of housing types near fixed rail stations. City Funds Planning & Community Environment Consider Zoning Code amendments within three years of Housing Element adoption Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.1.10 Program As a part of planning for the future of El Camino Real,explore the identification of pedestrian nodes (i.e.“pearls on a string”)consistent with the South El Camino Design Guidelines,with greater densities in these nodes than in other areas. Explore the identification of pedestrian nodes. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Underway; part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019. H2.1.11 Program Consider implementing the Pedestrian and Transit Oriented Development (PTOD)Overlay for the University Avenue downtown district to promote higher density multifamily housing development in that area. Consider PTOD for University Avenue. City Funds Planning & Community Environment Within four years of Housing Element adoption, in conjunction with the Comprehensive Plan update Not Yet Completed. H2.1.12 Program Evaluate developing specific or precise plans for the downtown,California Avenue,and El Camino Real areas to implement in the updated Comprehensive Plan.Adopt plans for these areas, as appropriate. Evaluate developing plans for downtown, California Avenue, and El Camino Real. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Not Yet Completed. H2.1.2 Program Allow increased residential densities and mixed use development only where adequate urban services and amenities, including roadway capacity, are available. Make sure that adequate services are available when considering increased residential densities. City Funds Planning & Community Environment Ongoing Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. Housing Element Program Status Page 3 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.1.3 Program Amend the zoning code to specify the minimum density of eight dwelling units per acre in all RM-15 districts.Consider amending the zoning code to specify minimum density for other multifamily zoning districts,consistent with the multi-family land use designation in the Comprehensive Plan. To provide opportunities for up to10 additional dwelling units on properties zoned RM-15 City Funds Planning & Community Environment Within three years of Housing Element adoption Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.1.4 Program Amend the Zoning Code to create zoning incentives that encourage the development of smaller,more affordable housing units,including units for seniors,such as reduced parking requirements for units less than 900 square feet and other flexible development standards. Provide opportunities for 75 smaller, more affordable housing units. City Funds Planning & Community Environment Within three years of Housing Element adoption Completed. H2.1.5 Program Use sustainable neighborhood development criteria to enhance connectivity, walkability, and access to amenities, and to support housing diversity. Increase connectivity and walkability in new development. City Funds Planning & Community Environment Ongoing Underway H2.1.6 Program Consider density bonuses and/or concessions including allowing greater concessions for 100% affordable housing developments. Provide opportunities for 100% affordable housing developments. City Funds Planning & Community Environment Ongoing Underway; part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019. H2.1.7 Program Explore developing a Transfer of Development Rights (TDR)program to encourage higher-density housing in appropriate locations. Create opportunities for higher-density housing. City Funds Planning & Community Environment Consider program within two years of Housing Element adoption Underway; part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019. Underway (part of Comp Plan Implementation). Housing Element Program Status Page 4 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.1.8 Program Promote redevelopment of underutilized sites by providing information about potential housing sites onthe City’s website,including the Housing Sites identified to meet the RHNA and information about financial resources available through City housing programs. Provide information to developers about potential housing sites. City funds Planning & Community Environment Post information on website upon adoption of Housing Element Completed. H2.1.9 Program Amend the Zoning Code to create zoning incentives that encourage the consolidation of smaller lots identified as Housing Inventory Sites and developed with 100%affordable housing projects.Incentives may include development review streamlining,reduction in required parking for smaller units,or graduated density when consolidated lots are over one-half acre.Adopt amendments as appropriate.Provide information regarding zoning incentives to developers. Amend the Zoning Code to provide development incentives to meet the RHNA. City funds Planning & Community Environment Adopt amendments within two years of Housing Element adoption Completed. H2.2 Policy Continue to support the redevelopment of suitable lands for mixed uses containing housing to encourage compact,infill development.Optimize the use of existing urban services,and support transit use. Housing Element Program Status Page 5 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.2.1 Program Implement an incentive program within three years of Housing Element adoption for small properties identified as a Housing Element Site to encourage housing production on those sites.The incentive eliminates Site and Design Review if the project meets the following criteria: •The project has 9 residential units or fewer •A residential density of 20 dwelling units per acre or higher • Maximum unit size of 900 square feet Streamline processing for identified Housing Element Sites. City Funds Planning & Community Environment Adopt program within three years of Housing Element adoption Completed. H2.2.2 Program Work with Stanford University to identify sites suitable for housing that may be located in the Stanford Research Park and compatible with surrounding uses. Identify sites suitable for housing to accommodate additional housing units. City Funds Planning & Community Environment Identify sites within three years of Housing Element adoption Underway. H2.2.3 Program Use coordinated area plans and other tools to develop regulations that support the development of housing above and among commercial uses. Explore additional opportunities to encourage housing in commercial areas. Planning & Community Environment Ongoing Underway. Part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019; development of the North Ventura Coordinated Area Plan in progress. Housing Element Program Status Page 6 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.2.4 Program As detailed in the Resources chapter of the Housing Element,the City of Palo Alto has committed to providing financial assistance towards the conversion of 23 multi-family units to very low-income (30-50%AMI)units for a period of 55 years,and is seeking to apply credits towards the City’s RHNA (refer to Appendix C -Adequate Sites Program Alternative Checklist).The Palo Alto Housing Corporation (PAHC) approached the City for assistance in converting a portion of the 60 units at the Colorado Park Apartments,to be reserved for very low-income households.The committed assistance will ensure affordability of the units for at least 55 years, as required by law. By the end of the second year of the housing element planning period, the City will enter into a legally enforceable agreement for $200,000 in committed assistance to purchase affordability covenants on 23 units at the Colorado Park Apartments. The City will report to HCD on the status of purchasing affordability covenants no later than July 1, 2018, and to the extent an agreement is not in place, will amend the Housing Element as necessary to identify additional sites. City Housing funds Planning & Community Environment Ongoing Completed January 2016. H2.2.5 Program The City will continue to identify more transit-rich housing sites including in the downtown and the California Avenue area after HCD certification as part of the Comprehensive Plan Update process and consider exchanging sites along San Antonio and sites along South El Camino that are outside of identified “pedestrian nodes” for the more transit-rich identified sites. Explore additional appropriate housing sites. City Funds Planning & Community Environment Ongoing Not yet completed. Housing Element Program Status Page 7 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.2.6 Program On parcels zoned for mixed use, consider allowing exclusively residential use on extremely small parcels through the transfer of zoning requirements between adjacent parcels to create horizontal mixed use arrangements.If determined to be appropriate,adopt an ordinance to implement this program. Consider transfer of zoning requirements to create horizontal mixed use. City Funds Planning & Community Environment Within three years of Housing Element adoption Completed as part of Program 2.1.9. H2.2.7 Program Explore requiring minimum residential densities to encourage more housing instead of office space when mixed-use sites develop,and adopt standards as appropriate. Explore requiring minimum densities in mixed use districts. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.2.8 Program Assess the potential of removing maximum residential densities (i.e. dwelling units per acre)in mixed use zoning districts to encourage the creation of smaller housing units within the allowable Floor Area Ratio (FAR), and adopt standards as appropriate. Assess removal of maximum densities in mixed use zoning districts. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.3 Policy Heighten community awareness and to receive community input regarding the social, economic and environmental values of maintaining economic diversity in the City by providing affordable and mixed income higher density housing along transit corridors and at other appropriate locations. Housing Element Program Status Page 8 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.3.1 Program Maintain an ongoing conversation with the community, using a variety of forms of media, regarding the need for affordable housing, the financial realities of acquiring land and building affordable housing, and the reasons that affordable housing projects need higher densities to be feasible developments. Perform outreach on affordable housing. City Funds Planning & Community Environment Ongoing Ongoing. H3 Goal MEET UNDERSERVED HOUSING NEEDS, AND PROVIDE COMMUNITY RESOURCES TO SUPPORT OUR NEIGHBORHOODS H3.1 Policy Encourage, foster, and preserve diverse housing opportunities for very low-, low-, and moderate income households. H3.1.1 Program Amend the City’s BMR ordinance to lower the BMR requirement threshold from projects of five or more units to three or more units,and to modify the BMR rental section to be consistent with case law related to inclusionary rental housing. Provide opportunities for four additional BMR units. City Funds Planning & Community Environment Amend BMR Ordinance within three years of Housing Element adoption. Completed. Ordinance adopted on April 17, 2017. Housing Element Program Status Page 9 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.10 Program Annually monitor the progress in the construction or conversion of housing for all income levels, including the effectiveness of housing production in mixed use developments. Provide information to the City Council on the effectiveness of City programs. City Funds Planning & Community Environment Provide annual reports Ongoing program H3.1.11 Program When using Housing Development funds for residential projects, the City shall give a strong preference to those developments which serve extremely low-income (ELI), very low-income, and low-income households. Provide funding opportunities for development of housing for Extremely Low Income households. City Housing Development funds Planning & Community Environment Ongoing Ongoing program, housing funds provided as needed by housing projects. Housing Element Program Status Page 10 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.12 Program Amend the Zoning Code to provide additional incentives to developers who provide extremely low-income (ELI), very low-income, and low-income housing units, above and beyond what is required by the Below Market Rate program, such as reduced parking requirements for smaller units, reduced landscaping requirements, and reduced fees. Provide incentives for development of housing for Extremely Low Income households. City Housing funds Planning & Community Environment Within three years of Housing Element adoption Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H3.1.13 Program For any affordable development deemed a high risk to convert to market rate prices within two years of the expiration of the affordability requirements, the City will contact the owner and explore the possibility of extending the affordability of the development. To protect those affordable developments deemed a high risk to converting to market rate City Housing funds Planning & Community Environment Ongoing Underway, in discussions with property owners of projects at risk of conversion, including Lytton Gardens, Terman Apartments and Webster Wood Apartments. H3.1.14 Program Encourage and support the regional establishment of a coordinated effort to provide shared housing arrangement facilitation,similar to the HIP Housing Home Sharing Program in San Mateo County.Advocate among regional and nonprofit groups to establish the necessary framework. Meet with regional groups and work to establish a Santa Clara Home Sharing Program City Housing funds Planning & Community Environment Within two years of Housing Element adoption Underway. On April 2018, the Santa Clara County's Board approved the Santa Clara Home Sharing Program with partnership with Catholic Charities of Santa Clara County. Housing Element Program Status Page 11 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.2 Program Implement the BMR ordinance to reflect the City’s policy of requiring: a) At least 15 percent of all housing units in projects must be provided at below market rates to very low-, low-, and moderate-income households. Projects on sites of five acres or larger must set aside 20 percent of all units as BMR units. Projects that cause the loss of existing rental housing may need to provide a 25 percent component as detailed in Program H 1.2.1. BMR units must be comparable in quality, size, and mix to the other units in the development. b) Initial sales price for at least two- thirds of the BMR units must be affordable to a household making 80 to 100 percent of the Santa Clara County median income. The initial sales prices of the remaining BMR units may be set at higher levels affordable to households earning between 100 to 120 percent of the County’s median income. For projects with a 25 percent BMR component, four-fifths of the BMR units must be affordable to households in the 80 to 100 percent of median Provide 10 affordable units through implementation of the City’s BMR program. Developers Planning & Community Environment Ongoing – implementation of existing program Ongoing program H3.1.3 Program Continue implementation of the Below Market Rate Program Emergency Fund to prevent the loss of BMR units and to provide emergency loans for BMR unit owners to maintain and rehabilitate their units. Consider expansion of program funds to provide financial assistance for the maintenance and rehabilitation of older BMR units. Use the BMR Program Emergency Fund to prevent the loss of at least two affordable units and assist in maintenance and rehabilitation of at least four older BMR units BMR Emergency Fund Planning & Community Environment On Ongoing program, preserved one BMR unit in 2016 Housing Element Program Status Page 12 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.4 Program Preserve affordable housing stock by monitoring compliance, providing tenant education, and seeking other sources of funds for affordable housing developments at risk of market rate conversions. The City will continue to renew existing funding sources supporting rehabilitation and maintenance activities. Prevent conversion of affordable housing to market rate, and renew funding sources for rehabilitation and maintenance of housing stock. City, CDBG funds Planning & Community Environment Ongoing – implementation of existing program Underway, in discussions with property owners of projects at risk of conversion, including Lytton Gardens, Terman Apartments and Webster Wood Apartments. H3.1.5 Program Encourage the use of flexible development standards, including floor- area ratio limits, creative architectural solutions, and green building practices in the design of projects with a substantial BMR component. Increase opportunities for BMR development through use of flexible development standards. City Funds Planning & Community Environment Ongoing – implementation of existing program Ongoing program H3.1.6 Program Require developers of employment- generating commercial and industrial developments to contribute to the supply of low- and moderate-income housing through the payment of commercial in-lieu fees as set forth in a nexus impact fee study and implementing ordinances. Generate in-lieu fees to contribute toward the creation of low- and moderate-income housing. City Housing Fund Planning & Community Environment Continue to regularly update the commercial in-lieu fee. Completed. The commercial in-lieu fee was updated in June 2017. H3.1.7 Program Ensure that the Zoning Code permits innovative housing types such as co- housing and provides flexible development standards that will allow such housing to be built,provided the character of the neighborhoods in which such housing is proposed to be located is maintained. Review the Zoning Code and determine appropriate amendments to allow innovative housing types with flexible development standards. City Funds Planning & Community Environment Consider changes to the Zoning Code within four years of Housing Element adoption. Not yet completed. Housing Element Program Status Page 13 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.8 Program Recognize the Buena Vista Mobile Home Park as providing low- and moderate income housing opportunities. Any redevelopment of the site must be consistent with the City’s Mobile Home Park Conversion Ordinance adopted to preserve the existing units. To the extent feasible, the City will seek appropriate local, state and federal funding to assist in the preservation and maintenance of the existing units in the Buena Vista Mobile Home Park. Preserve the 120 mobile home units in the Buena Vista Mobile Home Park as a low and moderate income housing resource. City, State and Federal Funds Planning & Community Environment Ongoing Completed. Mobile home park was preserved in September 2017. H3.1.9 Program Continue enforcing the Condominium Conversion Ordinance. Maintain the rental housing stock. City Funds Planning & Community Environment Ongoing Ongoing program H3.2 Policy Reduce the cost of housing by continuing to promote energy efficiency,resource management, and conservation for new and existing housing. H3.2.1 Program Continue to assist very low-income households in reducing their utility bills through the Utilities Residential Rate Assistance Program (RAP). Provide assistance to with utility bills to 800 low-income households. City Funds Palo Alto Utilities Department Ongoing Ongoing program Housing Element Program Status Page 14 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.2.2 Program Use existing agency programs such as Senior Home Repair to provide rehabilitation assistance to very low- and low-income households. Provide rehabilitation assistance to 600 very low and low-income households. CDBG and General Fund Planning & Community Environment Ongoing Ongoing. CDBG funds were allocated for a pilot home repair program in FY18. H3.3 Policy Support the reduction of governmental and regulatory constraints, and advocate for the production of affordable housing. H3.3.1 Program When appropriate and feasible, require all City departments to expedite processes and allow waivers of development fees as a means of promoting the development of affordable housing. Continue to reduce processing time and costs for affordable housing projects. City Funds Planning & Community Environment Ongoing Ongoing program H3.3.2 Program Continue to exempt permanently affordable housing units from any infrastructure impact fees adopted by the City. Reduce costs for affordable housing projects. City Funds Planning & Community Environment Ongoing Ongoing program Housing Element Program Status Page 15 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.3.3 Program Promote legislative changes and funding for programs that subsidize the acquisition, rehabilitation, and operation of rental housing by housing assistance organizations, nonprofit developers, and for-profit developers. Continue as an active member of the Non- Profit Housing Association of Northern California to promote legislative changes and funding City Funds Planning & Community Environment; City Manager Ongoing Ongoing, active membership in the Non- Profit Housing Association. H3.3.4 Program Support the development and preservation of group homes and supported living facilities for persons with special housing needs by assisting local agencies and nonprofit organizations in the construction or rehabilitation of new facilities for this population. Regularly review existing development regulations, and amend the Zoning Code accordingly to reduce regulatory obstacles to this type of housing. City & CDBG Funds Planning & Community Environment Amend Zoning Code within three years of Housing Element adoption. Not yet completed. H3.3.5 Program Review and consider revising development standards for second units to facilitate the development of this type of housing, including reduced minimum lot size and FAR requirements. Based on this analysis, consider modifications to the Zoning Code to better encourage development of second units. Complete study on impact of revised standards, and consider Zoning Code Amendments City Funds Planning & Community Environment, City Council Ongoing Completed. Zoning code updates completed March 2017. H3.3.6 Program Continue to participate with and support agencies addressing homelessness. Continue City staff participation in prioritizing funding for County-wide programs. City, CDBG & HOME funds Planning & Community Environment, City Council Ongoing Ongoing program Housing Element Program Status Page 16 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.3.7 Program Prepare a local parking demand database to determine parking standards for different housing uses (i.e. market rate multifamily, multifamily affordable, senior affordable, emergency shelters etc.) with proximity to services as a consideration. Adopt revisions to standards as appropriate. Determine parking standards for different residential uses. City Funds Planning & Community Environment Within four years of Housing Element adoption Underway, consultant has been retained to complete a parking study. H3.4 Policy Pursue funding for the acquisition, construction,and rehabilitation of housing that is affordable to very low-, low-,and moderate-income households. H3.4.1 Program Maintain a high priority for the acquisition of new housing sites near public transit and services, the acquisition and rehabilitation of existing housing, and the provision for housing-related services for affordable housing. Seek funding from all State and federal programs whenever they are available to support the development or rehabilitation of housing for very low-, low-, and moderate-income households Allocate CDBG funding to acquire and rehabilitate housing for very low-, low-, and moderate income households. CDBG, State Local Housing Trust Fund Planning & Community Environment Ongoing Ongoing program Housing Element Program Status Page 17 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.4.2 Program Support and expand local funding sources including the City’s Housing Development Fund, Housing Trust of Santa Clara County, CDBG Program, County of Santa Clara’s Mortgage Credit Certificate Program (MCC), or similar program. Continue to explore other mechanisms to generate revenues to increase the supply of low- and moderate-income housing. Increase the supply of affordable housing stock. City Housing Development Fund, Housing Trust of Santa Clara County, CDBG, Santa Clara County MCC Planning & Community Environment Ongoing Ongoing program H3.4.3 Program Periodically review the housing nexus formula required under Chapter 16.47 of the Municipal Code to fully reflect the impact of new jobs on housing demand and cost. Continue to evaluate the housing nexus formula, and adjust the required impact fees to account for the housing demand from new development. City Funds Planning & Community Environment Ongoing Completed. Housing nexus study updated in 2016. Fees updated in 2017. H3.4.4 Program The City will work with affordable housing developers to pursue opportunities to acquire, rehabilitate, and convert existing multi-family developments to long-term affordable housing units to contribute to the City’s fair share of the region’s housing needs. Identify potential sites for acquisition and conversion and provide this information to developers. City Funds Planning & Community Environment Within three years of Housing Element adoption Ongoing program H3.5 Policy Support the provision of emergency shelter,transitional housing,and ancillary services to address homelessness. Housing Element Program Status Page 18 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.5.1 Program Continue to participate in the Santa Clara County Homeless Collaborative as well as work with adjacent jurisdictions to develop additional shelter opportunities. Continue City staff participation as members of the Collaborative’s CDBG and Home Program Coordinators Group. City, CDBG & HOME funds Planning & Community Environment, City Council Ongoing Ongoing. Continued participation in regional CDBG/housing collaborative efforts. H3.5.2 Program Amend the Zoning Code to clarify distancing requirements for emergency shelters,stating that “no more than one emergency shelter shall be permitted within a radius of 300 feet.” Amend the Zoning Code to clarify distancing requirements for emergency shelters. City Funds Planning & Community Environment Adopt amendments within one year of Housing Element adoption Completed. H3.5.3 Program Amend the Zoning Code to revise definitions of transitional and supportive housing to remove reference to multiple-family uses,and instead state that “transitional and supportive housing shall be considered a residential use of property and shall be subject only to those restrictions that apply to other residential dwellings of the same type in the same zone.” Amend the Zoning Code to revise transitional and supportive housing definitions. City Funds Planning & Community Environment Adopt amendments within one year Completed. H3.6 Policy Support the creation of workforce housing for City and school district employees as feasible. H3.6.1 Program Conduct a nexus study to evaluate the creation of workforce housing for City and school district employees. Create the opportunity for up to five units of workforce housing. City of Palo Alto Commercial Housing Fund Planning & Community Environment Conduct a study within four years of adoption of the Housing Element. Completed. City adopted Workforce Housing Overlay. H4 Goal PROMOTE AN ENVIRONMENT FREE OF DISCRIMINATION AND THE BARRIERS THAT PREVENT CHOICE IN HOUSING. H4.1 Policy Support programs and agencies that seek to eliminate housing discrimination. Housing Element Program Status Page 19 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H4.1.1 Program Work with appropriate State and federal agencies to ensure that fair housing laws are enforced, and continue to support groups that provide fair housing services, such as the Mid-Peninsula Citizens for Fair Housing Continue to coordinate with State and federal agencies to support programs to eliminate housing discrimination, and provide financial support for fair housing services. City Funds Planning & Community Environment Ongoing Ongoing. The City contracts with Project Sentinel to provide fair housing services. H4.1.2 Program Continue the efforts of the Human Relations Commission to combat discrimination in rental housing, including mediation of problems between landlords and tenants. Continue to provide mediation services for rental housing discrimination cases. City Funds Human Relations Commission, Planning & Community Environment Ongoing Ongoing. The City contracts with Project Sentinel to provide mediation services. H4.1.3 Program Continue implementation of City’s ordinances and State law prohibiting discrimination in renting or leasing housing based on age, parenthood, pregnancy, or the potential or actual presence of a minor child. Implement existing ordinances regarding discrimination City Funds Planning & Community Environment Ongoing Ongoing program H4.1.4 Program Continue the City’s role in coordinating the actions of various support groups that seek to eliminate housing discrimination and in providing funding and other support for these groups to disseminate fair housing information in Palo Alto, including information on referrals to pertinent investigative or enforcement agencies in the case of fair housing complaints. Continue to provide funding and other support for these groups to disseminate fair housing information in Palo Alto. City Funds,Human Services Resource Allocation Process (HSRAP) Office of Human Services Ongoing Ongoing. The City contracts with Project Sentinel to provide fair housing services. Housing Element Program Status Page 20 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H4.1.5 Program Heighten community awareness regarding and implement the Reasonable Accommodations procedure for the siting, funding, development, and use of housing for people with disabilities. Continue to provide information to residents on reasonable accommodation procedures via public counters and on the City’s website. City Funds Planning & Community Environment Ongoing Ongoing program H4.1.6 Program Continue to implement the Action Plan of the City of Palo Alto’s Community Development Block Grant (CDBG) Consolidated Plan and the Analysis of Impediments to Fair Housing Choice. Provide for increased use and support of tenant/landlord educational mediation opportunities as called for in the CDBG Action Plan and the Analysis of Impediments to Fair Housing Choice. CDBG funds, General Fund Planning & Community Environment Ongoing Ongoing program. H4.2 Policy Support housing that incorporates facilities and services to meet the health care, transit, and social service needs of households with special needs, including seniors and persons with disabilities. H4.2.1 Program Ensure that the Zoning Code facilitates the construction of housing that provides services for special needs households and provides flexible development standards for special service housing that will allow such housing to be built with access to transit and community services while preserving the character of the neighborhoods in which they are proposed to be located. Evaluate the Zoning Code and develop flexible development standards for special service housing. City Funds Planning & Community Environment Evaluate the Zoning Code within three years of adoption of the Housing Element. Not yet completed. Housing Element Program Status Page 21 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H4.2.2 Program Work with the San Andreas Regional Center to implement an outreach program that informs families in Palo Alto about housing and services available for persons with developmental disabilities. The program could include the development of an informational brochure, including information on services on the City’s website, and providing housing-related training for individuals/families through workshops. Provide information regarding housing to families of persons with developmental disabilities. General Fund Planning & Community Environment Develop outreach program within three years of adoption of the Housing Element. Underway. City to send letter of support. H5 Goal REDUCE THE ENVIRONMENTAL IMPACT OF NEW AND EXISTING HOUSING. Housing Element Program Status Page 22 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H5.1 Policy Reduce long-term energy costs and improve the efficiency and environmental performance of new and existing homes. H5.1.1 Program Periodically report on the status and progress of implementing the City’s Green Building Ordinance and assess the environmental performance and efficiency of homes in the following areas: - Greenhouse gas emissions - Energy use - Water use (indoor and outdoor) - Material efficiency - Storm water runoff - Alternative transportation Prepare reports evaluating the progress of implementing the City’s Green Building Ordinance. City funds, Development fees Planning & Community Environment, Building Division Ongoing Ongoing program H5.1.2 Program Continue providing support to staff and the public (including architects, owners, developers and contractors) through training and technical assistance in the areas listed under Program H5.1.1. Provide educational information regarding the City’s Green Building Ordinance. City funds, Development fees Planning & Community Environment, Building Division Ongoing Ongoing program Housing Element Program Status Page 23 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H5.1.3 Program Participate in regional planning efforts to ensure that the Regional Housing Needs Allocation targets areas that support sustainability by reducing congestion and greenhouse gas emissions. Provide a regional framework for sustainability in creating new housing opportunities through the City’s Regional Housing Mandate Committee. City Funds Planning & Community Environment Ongoing Ongoing program H5.1.4 Program Review federal, State, and regional programs encouraging the improvement of environmental performance and efficiency in construction of buildings, and incorporate appropriate programs into Palo Alto’s policies, programs and outreach efforts. Continue to update regulations for environmental sustainability. City Funds Planning & Community Environment, Public Works & Utilities Ongoing Ongoing program H5.1.5 Program Enhance and support a proactive public outreach program to encourage Palo Alto residents to conserve resources and to share ideas about conservation. Provide up-to-date information for residents regarding conservation through educational brochures available at City Hall and posted on the City’s website. City Funds Planning & Community Environment, Public Works & Utilities Ongoing Ongoing program H5.1.6 Program Provide financial subsidies, recognition, or other incentives to new and existing homeowners and developers to achieve performance or efficiency levels beyond minimum requirements. Continue to recognize homeowners and developers who incorporate sustainable features beyond what is required by the Green Building Ordinance. City Funds Planning & Community Environment Ongoing Ongoing program Housing Element Program Status Page 24 of 25 Revised February 15, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H5.1.7 Program In accordance with Government Code Section 65589.7,immediately following City Council adoption,the City will deliver to all public agencies or private entities that provide water or sewer services to properties within Palo Alto a copy of the 2015-2023 Housing Element. Immediately following adoption, deliver the 2015-2023 Palo Alto Housing Element to all providers of sewer and water services within the City. City Funds Planning & Community Environment Within one month of adoption of the Housing Element Completed. Housing Element Program Status Page 25 of 25 Revised February 15, 2019 Jurisdiction Palo Alto Reporting Year 2018 (Jan. 1 - Dec. 31) Current Year Deed Restricted 0 Non-Deed Restricted 0 Deed Restricted 0 Non-Deed Restricted 0 Deed Restricted 0 Non-Deed Restricted 0 Above Moderate 117 117 60 136 81 0 0 0 0 0 Income Rental Ownership Total Very Low 0 0 0 Low 0 0 0 Moderate 0 0 0 Above Moderate 0 0 0 Total 0 0 0 Cells in grey contain auto-calculation formulas Units Constructed - SB 35 Streamlining Permits Number of Streamlining Applications Approved Total Developments Approved with Streamlining Total Units Constructed with Streamlining Total Housing Applications Submitted: Number of Proposed Units in All Applications Received: Total Housing Units Approved: Total Housing Units Disapproved: Permitted Units Issued by Affordability Summary Income Level Very Low Low Moderate Total Units 44 Entitlement Summary Use of SB 35 Streamlining Provisions Note: units serving extremely low-income households are included in the very low-income permitted units totals Number of Applications for Streamlining Attachment A | 2030 Comprehensive Plan Implementation Plan: 2018 Progress Report 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 1 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L A N D U S E E L E M E N T Goal L-1: A compact and resilient city providing residents and visitors with attractive neighborhoods, work places, shopping districts, public facilities, and open spaces. L1.6.1 Review regulatory tools available to the City and identify actions to enhance and preserve the livability of residential neighborhoods and the vitality of commercial and employment districts, including improved code enforcement practices. Planning & Community Environment Department S $$ P The City recently completed a code enforcement audit. An update of the Palo Alto311 tool is also planned. L1.8.1 Maintain and update as appropriate the 1985 Land Use Policies Agreement that sets forth the land use policies of the City, Santa Clara County, and Stanford University with regard to Stanford unincorporated lands. Planning & Community Environment Department S $ P As part of the Stanford 2018 General Use Permit – staff is requesting a review and update to the three party agreement. Goal L-2: An enhanced sense of “community” with development designed to foster public life, meet citywide needs and embrace the principles of sustainability. L2.2.1 Explore whether there are appropriate locations to allow small-scale neighborhood-serving retail facilities such as coffee shops and corner stores in residential areas. Planning & Community Environment Department M $ P No action has been taken at this time. L2.4.1 Amend the Housing Element to eliminate housing sites along San Antonio Road and increase residential densities in Downtown and the California Avenue area to replace potential units from the sites eliminated. Planning & Community Environment Department S $ PC In March 2019, the City Council is expected adopt an ordinance that eliminates residential density restrictions Downtown and California Avenue Area. The Housing Element is anticipated to be updated during its regular update cycle. L2.4.2 Allow housing at Stanford Shopping Center, provided that adequate parking and vibrant retail is maintained and no reduction of retail square footage results from the new housing. Planning & Community Environment Department S $ PC Mixed Use development is already allowed in the CC zoning district and retail protections already exist. Housing development would require creative parking solutions to accommodate all uses. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 2 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L2.4.3 Allow housing on the El Camino Real frontage of the Stanford Research Park. Explore multi-family housing elsewhere in Stanford Research Park and near the SUMC. Planning & Community Environment Department S $ P No action has been taken at this time. L2.4.4 Assess non-residential development potential in the Community Commercial, Service Commercial and Downtown Commercial Districts (CC, CS and CD) and the Neighborhood Commercial District (CN), and convert non-retail commercial FAR to residential FAR, where appropriate. Conversion to residential capacity should not be considered in Town and Country Village. Planning & Community Environment Department S $ PC The Affordable Housing Combining District (PAMC 18.30J) approved in April 2018 creates new opportunities for housing in the CC, CS, CD and CN districts. Additionally, recent changes were approved in the CD, CN and CS districts that allow greater residential floor area. Council directed staff to evaluate other changes to non- residential floor area to further incentivize housing. L2.4.5 Update the municipal code to include zoning changes that allow a mix of retail and residential uses but no office uses. The intent of these changes would be to encourage a mix of land uses that contributes to the vitality and walkability of commercial centers and transit corridors. Planning & Community Environment Department S $ P Some changes have been made to incentivize housing – a prohibition on office uses has not been initiated at this time L2.4.6 Explore changing the Transfer of Development Rights (TDR) ordinances for both buildings of historic significance and for seismic retrofits so that transferred development rights may only be used for residential capacity. Planning & Community Environment Department M $ P 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 3 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L2.4.7 Explore mechanisms for increasing multi-family housing density near multimodal transit centers. Planning & Community Environment Department S $$ PC A number of ordinances have been or are pending adoption the achieve this goal (Workforce Housing, Affordable Housing and a variety of housing- related ordinances that increase housing density. It is anticipated further changes may be required through Council policy direction and changes in State law. L2.4.8 Identify development opportunities for BMR and more affordable market rate housing on publicly owned properties in a way that is integrated with and enhances existing neighborhoods. Planning & Community Environment Department S $$ O The City continues to look for opportunities on publicly-owned lots, including partnerships such as the Cubberley Master Plan detailed below. L2.5.1 Collaborate with PAUSD in exploring opportunities to build housing that is affordable to school district employees. Planning & Community Environment Department M $ O The City has partnered with PAUSD to explore affordable housing to school district employees through the Cubberley Master Plan. Additionally, the City set-aside $3,000,000 for a potential teacher housing project on County owned land. Recent adoption of the Workforce Housing ordinance may also provide opportunities for school district employees on PF zoned property owned or leased by PAUSD. L2.7.1 Review development standards to discourage the net loss of housing units. Planning & Community Environment Department S $ P At the State level, there are various bills are being considered that discourage the net loss of units, such as SB 166, and many initiatives for anti-displacement laws. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 4 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L2.8.1 Conduct a study to evaluate various possible tools for preventing displacement of existing residents. Planning & Community Environment Department M $$ PC Although a study has not yet been conducted, the City did pass a relocation ordinance that ensures tenants facing eviction relocation assistance regardless of their income levels. Also the City continues to fund Project Sentinel through CDBG funds to help prevent evictions or displacements. L2.8.2 Develop and implement a system to inventory the characteristics of existing housing units and track changes in those characteristics on a regular basis. Make the information publicly available. Planning & Community Environment Department M $$ P No action has been taken at this time. L2.10.1 Collaborate with PAUSD to plan for space to accommodate future school expansions or new school sites, and evaluate zoning space to accommodate new schools. Planning & Community Environment Department IP $$ O The City has partnered with PAUSD on the Cubberley Master Plan to, in part, accommodate future school expansions or school sites. Goal L-3: Safe, attractive residential neighborhoods, each with its own distinct character and within walking distance of shopping, services, schools, and/or other public gathering places. L3.2.1 Evaluate and implement strategies to prevent conversion of residential and neighborhood-serving retail space to office or short-term vacation rentals. Planning & Community Environment Department IP $ PC PAMC Section 18.40.180 ensures that there is no net loss of retail space in designated areas. Policy action addressing short-term vacation rentals is has not been initiated at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 5 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L.3.5.1 Develop a program to assess and manage both the positive and negative impacts of basement construction in single family homes on the community and the environment, including: ▪ Impacts to the natural environment, such as potential impacts to the tree canopy, groundwater supply or quality, and soil compaction. ▪ Safety issues such as increased surface flooding increased groundwater intrusion with sea level rise, emergency access and egress, or sewage backflows. Planning & Community Environment Department S $$ PC The City has been studying this issue for several years and adopted regulations in 2017 and more recently February 2018 to address the impacts dewater from basement construction in the community. New standards address a variety of the objectives for this program and a summary sheet is available online : https://www.cityofpaloalto.org/civica x/filebank/documents/64867. The City will continue to monitor this issue. Goal L-4: Inviting pedestrian scale centers that offer a variety of retail and commercial services and provide focal points and community gathering places for the city’s residential neighborhoods and employment districts. L4.2.1 Study the overall viability of ground-floor retail requirements in preserving retail space and creating an active street environment, including the types of locations where such requirements are most effective. Planning & Community Environment Department M $$ P No action has been taken at this time. L4.2.2 Evaluate the effectiveness of formula retail limits adopted for California Avenue. Develop incentives for local small businesses where warranted. Planning & Community Environment Department M $$ P No action has been taken at this time. L4.2.3 Explore and potentially support new, creative and innovative retail in Palo Alto. Planning & Community Environment Department L $$ P No action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 6 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L4.4.1 Study the feasibility of using public and private funds to provide and maintain landscaping and public spaces such as parks, plazas, sidewalks and public art within commercial areas. Planning & Community Environment Department M $ PC The Public Art Program provides ongoing temporary exhibitions in front of City Hall. Additionally, public artworks are currently being commissioned for both the downtown and California Avenue corridors. L4.4.2 Through public/private cooperation, provide well-signed, clean, and accessible restrooms. Planning & Community Environment Department R $ P No specific action has been taken at this time. L4.4.3 Collaborate with merchants to enhance the appearance of streets and sidewalks within all Centers. Encourage the formation of business improvement districts and undertake a proactive program of maintenance, repair, landscaping and enhancement. Planning & Community Environment Department R $$ P No specific action has been taken at this time. L4.4.4 Identify priority street improvements that could make a substantial contribution to the character of Centers, such as widening sidewalks, narrowing travel lanes, creating medians, restriping to allow diagonal parking, and planting trees. Planning & Community Environment Department S $$$ P No specific action has been taken at this time. L4.5.1 Revise zoning and other regulations as needed to encourage the preservation of space to accommodate small businesses, start-ups and other services. Planning & Community Environment Department M $$ P No specific action has been taken at this time. L4.5.2 Consider planning, regulatory, or other incentives to encourage property owners to include smaller office spaces in their buildings to serve small businesses, non- profit organizations, and independent professionals. Planning & Community Environment Department M $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 7 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L.4.6.1 Explore increasing hotel FAR from 2.0 to 3.0 in the University Avenue/Downtown area and 2.5 in areas outside of Downtown. Planning & Community Environment Department M $$ P No specific action has been taken at this time. Recent Council direction to staff suggests the City may be revisiting this program objective to incentive more housing over hotel use. L4.8.1 Prepare a Coordinated Area Plan for Downtown. Planning & Community Environment Department S $$$ P This is anticipated to begin in Winter 2020. L4.8.2 Study the feasibility of converting parts of University Avenue to a pedestrian zone. Planning & Community Environment Department S $$ P This will be considered as part of the Downtown CAP. L4.9.1 While preserving adequate parking to meet demand, identify strategies to reuse surface parking lots. Planning & Community Environment Department R $ P No specific action has been taken at this time. L4.9.2 Explore adding additional Floor Area Ratio (FAR) for retail at Stanford Shopping Center. Planning & Community Environment Department M $ P No specific action has been taken at this time. L4.10.1 Prepare a coordinated area plan for the North Ventura area and surrounding California Avenue area. The plan should describe a vision for the future of the North Ventura area as a walkable neighborhood with multi‐ family housing, ground floor retail, a public park, creek improvements, and an interconnected street grid. It should guide the development of the California Avenue area as a well-designed mixed use district with diverse land uses and a network of pedestrian-oriented streets. Planning & Community Environment Department S $$$ O Currently underway. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 8 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L4.10.2 Create regulations for the California Avenue area that encourage the retention or rehabilitation of smaller buildings to provide spaces for existing retail, particularly local, small businesses. Planning & Community Environment Department S $$ P No specific action has been taken at this time. L4.16.1 Maintain distinct neighborhood shopping areas that are attractive, accessible and convenient to nearby residents. Planning & Community Environment Department R $ P No specific action has been taken at this time. Goal L-5: High quality employment districts, each with their own distinctive character and each contributing to the character of the city as a whole. L5.1.1 Explore with Stanford University various development options for adding to the Stanford Research Park a diverse mix of uses, including residential, commercial hotel, conference center, commercial space for small businesses and start-ups, retail, transit hub, and other community-supporting services that are compatible with the existing uses, to create a vibrant innovation-oriented community. Planning & Community Environment Department S $$ P No specific action has been taken at this time. Goal L-6: Well-designed buildings that create coherent development patterns and enhance city streets and public spaces. L6.1.1 Promote awards programs and other forms of public recognition for projects of architectural merit that contribute positively to the community. Planning & Community Environment Department L $ P The existing ARB awards occur every five years. The next ARB awards will be in 2020. Staff is currently considering historic preservation awards. L6.3.1 Develop guidelines for bird-friendly building design that minimizes hazards for birds and reduces the potential for collisions. Planning & Community Environment Department M $$ PC While no specific regulations have been implemented, through the architectural review process, bird- friendly conditions of approval are and have been imposed on projects where there is the potential for collisions. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 9 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L6.6.1 Modify design standards for mixed use projects to promote a pedestrian-friendly relationship to the street, including elements such as screened parking or underground parking, street-facing windows and entries, and porches, windows, bays and balconies along public ways, and landscaping, and trees along the street. Avoid blank or solid walls at street level. Planning & Community Environment Department S $ PC While the City’s specific mixed-use design standards could be enhanced, staff currently uses the existing guidelines and context based design criteria to promote the development of pedestrian-friendly environments. L6.7.1 Implement architectural standards to assure they effectively address land use transitions. Planning & Community Environment Department R $ O Staff and the ARB regularly implement the AR findings to ensure smooth transitions between different uses throughout the city. Goal L-7: Conservation and preservation of Palo Alto’s historic buildings, sites, and districts. L7.1.1 Update and maintain the City’s Historic Resource Inventory to include historic resources that are eligible for local, State, or federal listing. Historic resources may consist of a single building or structure or a district. Planning & Community Environment Department S $ P No specific action has been taken at this time. L7.1.2 Reassess the Historic Preservation Ordinance to ensure its effectiveness in the maintenance and preservation of historic resources, particularly in the University Avenue/Downtown area. Planning & Community Environment Department S $ P No specific action has been taken at this time. L7.2 If a proposed project would substantially affect the exterior of a potential historic resource that has not been evaluated for inclusion into the City’s Historic Resources Inventory, City staff shall consider whether it is eligible for inclusion in State or federal registers prior to the issuance of a demolition or alterations permit. Minor exterior improvements that do not affect the architectural integrity of potentially historic buildings shall be exempt from consideration. Examples of minor improvements may include repair or replacement of features in kind, or other changes that do not alter character-defining features of the building. Planning & Community Environment Department O Projects are reviewed on a case by case basis. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 10 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L7.8.1 Promote and expand available incentives for the retention and rehabilitation of buildings with historic merit in all zones and revise existing zoning and permit regulations to minimize constraints to adaptive reuse. Planning & Community Environment Department M $ P No specific action has been taken at this time. L7.8.2 Create incentives to encourage salvage and reuse of discarded historic building materials. Planning & Community Environment Department L $ O Staff is working on refinements to the Construction and Demolition regulations. L7.8.3 Seek additional innovative ways to apply current codes and ordinances to older buildings. Use the State Historical Building Code for designated historic buildings. Planning & Community Environment Department R $ P No specific action has been taken at this time. L7.12.1 Review parking exceptions for historic buildings in the Zoning Code to determine if there is an effective balance between historic preservation and meeting parking needs. Planning & Community Environment Department L $ P No specific action has been taken at this time. Goal L-8: Attractive and safe civic and cultural facilities provided in all neighborhoods and maintained and used in ways that foster and enrich public life.* * Note that there were not programs associated with Goal L-8 at the time of the Comprehensive Plan’s adoption. Goal L-9: Attractive, inviting public spaces and streets that enhance the image and character of the city. L9.1.1 Evaluate existing zoning code setback requirements to ensure they are appropriate for scenic routes. Planning & Community Environment Department L $ P No specific action has been taken at this time. L9.3.1 Review standards for streets and signage and update as needed to foster natural, tree-lined streets with a minimum of signage. Planning & Community Environment Department M $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 11 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L9.6.1 Analyze existing neighborhoods and determine where publicly accessible shared, outdoor gathering spaces are below the citywide standard. Create new public spaces, including public squares, parks and informal gathering spaces in these neighborhoods. Planning & Community Environment Department M $$$ P No specific action has been taken at this time. L9.7.1 Develop a strategy to enhance gateway sites with special landscaping, art, public spaces and/or public buildings. Emphasize the creek bridges and riparian settings at the entrances to the City over Adobe Creek and San Francisquito Creek. Planning & Community Environment Department R $ P No specific action has been taken at this time. L9.8.1 Establish incentives to encourage native trees and low water use plantings in new development throughout the city. Planning & Community Environment Department M $ O Through the architectural review process, projects are required to install, to the extent practical, regional indigenous drought resistant plant material capable of providing a desirable habitat that can be appropriately maintained. L9.10.1 Continue the citywide undergrounding of utility wires. Minimize the impacts of undergrounding on street tree root systems and planting areas. City of Palo Alto Utilities R $$$ O CPAU continues to work with AT&T to identify new underground districts. CPAU and AT&T are currently finalizing the following new underground districts: 48, 49, 50, 51 and 52 at various locations in Palo Alto. These are areas with an unusually dense concentration of aerial facilities or that carry a heavy volume of pedestrian or vehicular traffic. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 12 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L9.10.2 Encourage the use of compact and well-designed utility elements, such as transformers, switching devices, backflow preventers and telecommunications infrastructure. Place these elements in locations that will minimize their visual intrusion. City of Palo Alto Utilities R $ O CPAU continues to work with applicants, PCE and Public Works to ensure that utilities equipment is well screened yet maintains clear access for the safety of the staff that operates and maintains the equipment. CPAU also ensures service reliability L9.11.1 Implement the findings of the City’s Infrastructure Blue Ribbon Committee and its emphasis for rebuilding our civic spaces. Department of Public Works IP $$$ O The Committee’s findings resulted in Council’s adoption of the 2014 Council Infrastructure Plan, including nine priority projects. Implementation of the Plan is underway, with three of the projects under construction and others in the design process. L9.11.2 Identify City-owned properties where combinations of wireless facilities can be co-located, assuming appropriate lease agreements are in place. City of Palo Alto Utilities M $ O Through Master Lease Agreements and applications from wireless providers, staff evaluates opportunities for co-location where feasible. L9.12.1 Coordinate with regional utility providers on activities that would impact their infrastructure and right-of-way. City of Palo Alto Utilities R $ O The City’s Utilities Department coordinates with regional utility providers. Goal L-10: Maintain an economically viable local airport with minimal environmental impacts. L10.1.1 Relocate the terminal building away from the Runway 31 clear zone and closer to the hangars, allowing for construction of a replacement terminal. Department of Public Works L $$$ O The Airport is currently requesting FAA funding for an Airport Layout Plan (ALP) update. The relocation of the Airport Terminal building will be studied during the update. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 13 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes L10.1.2 Update the Airport Layout Plan in accordance with Federal Aviation Administration requirements, as needed, while ensuring conformance with the Baylands Master Plan to the maximum extent feasible. Department of Public Works M $$$ O The Airport is currently requesting FAA funding for an Airport Layout Plan (ALP) update. L10.1.3 Identify and pursue funding to address maintenance, safety and security improvements needed at PAO. Department of Public Works R $ O An Airport Fee Study is currently being performed and is near completion to ensure that the Airport Enterprise Fund is self-sustaining. OES has provided some assistance. L10.3.1 Establish and implement a system for processing, tracking and reporting noise complaints regarding local airport operations on an annual basis. Department of Public Works S $$ C Since 2014, an Annual Aircraft Noise Complaints Report is completed each January and submitted to City Council. L10.3.2 Work with the airport to pursue opportunities to enhance the open space and habitat value of the airport. These include: ▪ Maintaining native grasses; ▪ Reconstructing levees to protect the airport from sea level rise while enhancing public access and habitat conservation; and ▪ Evaluating the introduction of burrowing owl habitat. This program is subject to federal wildlife hazard requirements and guidelines for airports. Community Services Department R $$ P No specific action has been taken at this time. L10.4.1 Continue to provide a bicycle/pedestrian path adjacent to Embarcadero Road, consistent with the Baylands Master Plan and open space character of the baylands subject to federal and State airport regulations. Planning & Community Environment Department R $ O Staff will continue to prioritize the provision of a bicycle/pedestrian path adjacent to Embarcadero Road. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 14 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T R A N S P O R T A T I O N E L E M E N T Goal T-1: Create a sustainable transportation system, complemented by a mix of land uses, that emphasizes walking, bicycling, use of public transportation, and other methods to reduce greenhouse gas emissions and the use of single occupancy motor vehicles. T1.2.1 Create a long-term education program to change the travel habits of residents, visitors, shoppers, and workers by informing them about transportation alternatives, incentives, and impacts. Work with the PAUSD and with other public and private interests, such as the Chamber of Commerce and Commuter Wallet partners, to develop and implement this program. Planning & Community Environment Department R $ O This is an ongoing effort. The City’s most recent support of this program is through the Transportation Management Authority. T1.2.2 Advocate for improved connectivity to transit to serve workers who live in the South Bay and work in Palo Alto. Planning & Community Environment Department R $ O City staff and elected official continuously advocate for improved connectivity to transit. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 15 T1.2.3 Formalize TDM requirements by ordinance and require new developments above a certain size threshold to prepare and implement a TDM plan to meet specific performance standards. Require regular monitoring/reporting and provide for enforcement with meaningful penalties for non-compliance. The ordinance should also: ▪ Establish a list of effective TDM measures that include transit promotion, prepaid transit passes, commuter checks, car sharing, carpooling, parking cash- out, bicycle lockers and showers, shuttles to Caltrain, requiring TMA membership and education and outreach to support the use of these modes. ▪ Allow property owners to achieve reductions by contributing to citywide or employment district shuttles or other proven transportation programs that are not directly under the property owner’s control. ▪ Provide a system for incorporating alternative measures as new ideas for TDM are developed. ▪ Establish a mechanism to monitor the success of TDM measures and track the cumulative reduction of peak hour motor vehicle trips. TDM measures should at a minimum achieve the following reduction in peak hour motor vehicle trips, with a focus on single- occupant vehicle trips. Reductions should be based on the rates included in the Institute of Transportation Engineers’ Trip Generation Manual for the appropriate land use category and size: • 45 percent reduction in the Downtown district • 35 percent reduction in the California Avenue area • 30 percent reduction in the Stanford Research Park • 30 percent reduction in the El Camino Real Corridor Planning & Community Environment Department S $ PC This program has been partially implemented. The referenced ordinance needs refinement and administrative guidelines are needed. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 16 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes • 20 percent reduction in other areas of the city ▪ Require new development projects to pay a Transportation Impact Fee for all those peak-hour motor vehicle trips that cannot be reduced via TDM measures. Fees collected would be used for capital improvements aimed at reducing vehicle trips and traffic congestion. ▪ Ensure a stable, sustained funding source to support implementation of TDM measures. T1.2.4 Evaluate the performance of pilot programs implemented by the Palo Alto Transportation Management Association and pursue expansion from Downtown to California Avenue and other areas of the city when appropriate. Planning & Community Environment Department IP $ O Quarterly reports and annual survey are currently used to evaluate the TMA; expansion to Cal Ave is anticipated. T1.2.5 Site City facilities near high-capacity transit and revise existing regulations, policies, and programs to encourage telecommuting, satellite office concepts, and work-at-home options. Planning & Community Environment Department R $ O The new Public Safety Building and Garage are sited near the Caltrain depot at California Avenue. T1.2.6 Pursue full participation of Palo Alto employers in the TMA. Planning & Community Environment Department R $$ O TMA performs ongoing outreach to encourage such participation. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 17 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.3.1 Develop an electric vehicle promotion program that identifies policy and technical issues, barriers and opportunities to the expansion of electric vehicles. Office of Sustainability M $$ O The Electric Vehicle Sustainability Implementation Plan (SIP) working group has built awareness of EV options through communications and “Ride and Drive” events. The website includes public-facing information to make it easy for EV drivers and potential EV drivers to understand EVs and EV charging. The EV SIP Working group will look into whether or not creating a formal EV promotion program is needed. OES is also involved in efforts to promote and pilot electric vehicles. Having vehicles powered by local generation (PV) is a top priority for a major disaster scenario. T1.3.2 Use low-emission vehicles for the Palo Alto Free Shuttle and work with transit providers, including SamTrans and VTA, to encourage the adoption of electric, fuel cell or other zero emission vehicles. Also work with private bus and shuttle providers, delivery companies, and ride services. Planning & Community Environment Department M $$$ O Use of low-emissions vehicles will be considered in 2019 Shuttle Service RFP. T1.4.1 Update the Zoning Code to ensure compatibility with the electric vehicle infrastructure requirements. Planning & Community Environment Department S $ P No specific action has been taken at this time. However, a recurring challenge with EV infrastructure is the loss of required parking for existing facilities – staff anticipates advancing an ordinance to address this issue during 2019 calendar year. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 18 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.4.2 Periodically review requirements for electric and plug-in vehicle infrastructure in new construction. Consider and periodically review requirements for electric and plug-in infrastructure for remodels. Consider costs to the City, including identifying payment options. Office of Sustainability R $ O The state of California is currently conducting a statewide cost effectiveness study on electrification. The City of Palo Alto’s Green Building Advisory Group has decided to wait on the results of the study before making decisions on electric and plug-in vehicle infrastructure in new construction. This program will be incorporated into the Electric Vehicle Sustainability Implementation Plan working group work plan for 2019. T1.6.1 Collaborate with transit providers, including Caltrain, bus operators and rideshare companies, to develop first/last mile connection strategies that boost the use of transit and shuttle service for local errands and commuting. Planning & Community Environment Department S $ O Staff collaborates with local transit providers on an ongoing basis to implement this program. T1.6.2 Continue to work with Caltrain, Amtrak, and public bus operators to expand bicycle storage on public transit vehicles and at transit hubs during both peak and off- peak hours. Planning & Community Environment Department IP $ O Efforts to implement this program are ongoing. T1.11.1 Collaborate with Stanford University, VTA, Caltrain and other agencies to pursue improvements to the Palo Alto Transit Center area aimed at enhancing pedestrian experience and improving circulation and access for all modes, including direct access to El Camino Real for transit vehicles. Planning & Community Environment Department IP $$$ P Staff are currently in the very early stages of planning for this project. Significant work is still required to implement this program and is expected to be addressed in the Downtown CAP. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 19 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.11.2 In collaboration with Caltrain and Stanford Research Park, pursue expansion of service to the California Avenue Caltrain Station and creation of an enhanced transit center at the Station, including connections to VTA bus service, the Palo Alto Free Shuttle, the Marguerite, and other private shuttles serving the Research Park. Planning & Community Environment Department M $$$ P Staff are currently in the very early stages of planning for this project. Significant work is still required to implement this program and is expected to be addressed in the Downtown CAP. T1.12.1 Strongly recommend that VTA maintain existing service and coverage levels in Palo Alto. Planning & Community Environment Department IP $ O Council members on VTA Committees and City staff recommend this on an ongoing basis. T1.12.2 Work with VTA to expand VTA express bus service routes to serve the Stanford Research Park, California Avenue, Stanford University, and Downtown. Planning & Community Environment Department S $$ O The implementation of NextNetwork would maintain the current express bus service to Palo Alto. However, VTA’s recently proposed 90/10 plan would eliminate two routes and reduce service on all others except one. T1.12.3 Work with VTA to study the feasibility of, and if warranted provide, traffic signal prioritization for buses at Palo Alto intersections, focusing first on regional transit routes. Also, advocate for bus service improvements on El Camino Real such as queue jump lanes and curbside platforms. Planning & Community Environment Department S $$ O Efforts to implement this program are ongoing. T1.13.1 Investigate a pilot program to subsidize a taxi, rideshare, or transit program for Palo Altans to get to/from downtown, including offering education and incentives to encourage users. Planning & Community Environment Department M $ O A trial program began in April 2016 via the TMA. The TMA continues to subsidize ridesharing and transit for downtown service workers. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 20 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.14.1 Evaluate the shuttle system in collaboration with community members, people with special needs, and PAUSD to: ▪ Evaluate current routes and ridership; ▪ Identify potential service improvements, including new or modified routes; expanded schedules that accommodate daytime, evening, and weekend demand; facilitating transit connections, and improvements to the safety and appearance of shuttle stops; ▪ Explore partnerships with other services that could complement and supplement the Palo Alto Shuttle; ▪ Develop clear and engaging materials to explain and promote shuttle use with the purpose of reducing barriers to use; and ▪ Establish a schedule for regular evaluation and reporting to optimize shuttle system use and effectiveness. Planning & Community Environment Department IP $$$ O Due to limited staff resources, the 2019 RFP will maintain the current level of service and bid out an optional additional route. The most recent analysis of the routes and ridership was done in 2016. Efforts to establish a schedule for regular shuttle evaluation and reporting are ongoing. T1.16.1 Continue regular surveys of bicycle use across the city, by collecting bicycle counts on important and potential bicycle corridors. Planning & Community Environment Department IP $$ O These efforts are ongoing as part of Bicycle Boulevard program. T1.16.2 Consider marketing strategies such as a recurring Palo Alto Open Streets program of events, potentially in coordination with local business groups, which would include street closures and programming. Planning & Community Environment Department M $ P No specific action has been taken at this time. T1.16.3 Encourage private schools to develop Walk and Roll Maps as part of Transportation Demand Management strategies to reduce vehicle trips. Planning & Community Environment Department IP $ O Gideon Hausner developed their own Walk and Roll map in 2014. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 21 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.16.4 Participate in local and regional encouragement events such as Palo Alto Walks and Rolls, Bike to Work Day, and Bike Palo Alto! that encourages a culture of bicycling and walking as alternatives to single occupant vehicle trips. Planning & Community Environment Department M $ O Palo Alto participates in local and regional events that encourage bicycling and walking on an ongoing basis. T1.19.1 Adjust the street evaluation criteria of the City's Pavement Management Program to ensure that areas of the road used by bicyclists are maintained at the same standards as, or at standards higher than, areas used by motor vehicles. Include bicycle and e-bike detection in intersection upgrades. Department of Public Works M $ O City-wide street surveys are completed biennially and include pavement inspections of bike lanes and bike boulevards. Installation of video detection equipment is included with street maintenance projects when appropriate. T1.19.2 Prioritize investments for enhanced pedestrian access and bicycle use within Palo Alto and to/from surrounding communities, including by incorporating improvements from related City plans, for example the 2012 Bicycle + Pedestrian Transportation Plan and the Parks, Trails & Open Space Master Plan, as amended, into the Capital Improvements Program. Department of Public Works IP $$$ O Prioritization efforts occur annually with the review and adoption of the Capital Improvement Plan. T1.19.3 Increase the number of east-west pedestrian and bicycle crossings across Alma Street and the Caltrain corridor, particularly south of Oregon Expressway. Department of Public Works L $$$ P No specific action has been taken at this time. T1.19.4 Encourage the use of bike sharing, and the provision of required infrastructure throughout Palo Alto, especially at transit stations and stops, job centers, community centers, and other destinations. Planning & Community Environment Department IP $ O A pilot program for bikes, e-bikes, and e-scooters is currently open to applicants. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 22 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.19.5 Improve amenities such as seating, lighting, bicycle parking, street trees, public art, and interpretive stations along bicycle and pedestrian paths and in City parks to encourage walking and cycling and enhance the feeling of safety. Planning & Community Environment Department & Department of Public Works IP $$$ O The Public Art Program installed an artist designed series of crosswalks at the intersection of Louis and Fielding to increase visibility of the crosswalks and encourage walking. Efforts to install additional artworks as well as other amenities are ongoing as opportunities arise. Additionally, when appropriate, private development projects are required to provide bench seating or other amenities that support walking in the community. T1.22.1 Collect, analyze and report transportation data through surveys and other methods on a regular basis. Track progress on build-out of the 2012 Bicycle + Pedestrian Transportation Plan network. Planning & Community Environment Department R $$ O Efforts to implement this program are ongoing. T1.25.1 As part of the effort to reduce traffic congestion, regularly evaluate the City’s current Transportation Impact Fee and modify as needed to implement transportation infrastructure improvements. Modifications to the impact fee program should be structured in keeping with the City’s desire to require new development to reduce peak hour motor vehicle trips to the extent feasible through TDM plans and by contributions to the provision of transit services, shuttles, carpool/ rideshare incentives, and similar programs. Planning & Community Environment Department IP $ O Efforts to implement this program are ongoing. An updated TIF will be considered in the first half of 2019. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 23 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T1.26.1 In collaboration with regional agencies and neighboring jurisdictions, identify and pursue funding for rail corridor improvements and grade separation. Planning & Community Environment Department S $ O The Connecting Palo Alto process will help the City access Measure B funds for grade separation. Staff are also seeking Federal Rail-Highway Crossings (Section 130) funds to improve safety. Goal T-2: Decrease delay, congestion, and vehicle miles travelled with a priority on our worst intersections and our peak commute times, including school traffic. T2.1.1 Implement computerized traffic management systems to improve traffic flow when feasible. Planning & Community Environment Department IP $$$ O The PASS Grant Program targets signal coordination on University Ave. The signals on Charleston Road were recently upgraded. T2.1.2 Implement a program to monitor, coordinate, and optimize traffic signal timing a minimum of every two years along arterial and residential arterial streets. Planning & Community Environment Department IP $$ O Staff generally monitors traffic signal timing on a daily basis and coordinates/optimizes each corridor every other year, resources permitting. T2.2.1 Work in partnership with the Palo Alto TMA and Stanford University to aggregate data and realize measurable reductions in single-occupant vehicle commuting to and from Downtown and in the Stanford Research Park. Planning & Community Environment Department IP $ O Efforts to implement this program are ongoing. T2.3.1 When adopting new CEQA significance thresholds for VMT for compliance with SB 743 (2013), adopt standards for vehicular LOS analysis for use in evaluating the consistency of a proposed project with the Comprehensive Plan, and also explore desired standards for MMLOS, which includes motor vehicle LOS, at signalized intersections. Planning & Community Environment Department S $$ O The VMT thresholds must be adopted by July 1, 2020. T2.4.1 Revise protocols for reviewing office, commercial, and multi-family residential development proposals to evaluate multimodal level of service and identify gaps in the low stress bicycle and pedestrian network. Planning & Community Environment Department S $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 24 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes Goal T-3: Maintain an efficient roadway network for all users. T3.5.1 Continue to use best practices in roadway design that are consistent with complete streets principles and the Urban Forest Master Plan, focusing on bicycle and pedestrian safety and multi-modal uses. Consider opportunities to incorporate best practices from the National Association of City Transportation Officials guidelines for urban streets and bikeways, tailored to the Palo Alto context. Department of Public Works S $$ O Where applicable, projects such as the Charleston-Arastradero corridor have incorporated best practices as outlined in this program. T3.5.2 Establish procedures for considering the effects of street design on emergency vehicle response time. Department of Public Works & Palo Alto Police Department & Palo Alto Fire Department R $ O Emergency response times continue to be evaluated on a regular basis. Specific procedures have not been adopted at this time. T3.10.1 Support increased public transit, traffic management and parking solutions to ensure safe, convenient access to and from the Stanford Shopping Center/ Medical Center area. Planning & Community Environment Department R $ O Efforts to implement this program are ongoing. The potential Quarry Road Extension project would have regional transit benefits. T3.10.2 Implement and monitor Development Agreement traffic mitigations at Stanford Medical Center. Planning & Community Environment Department IP $ O Efforts to monitor traffic mitigation measures at SUMC are ongoing. T3.10.3 Provide safe, convenient pedestrian, bicycle, and transit connections between the Stanford Shopping Center/Medical Center areas and housing along the Sand Hill Road/Quarry Road corridors to Palo Alto Transit Center, Downtown Palo Alto, and other primary destinations. Planning & Community Environment Department R $$$ O Efforts to implement this program are ongoing. Recent projects include the re-striping of Quarry Road and the new path to the Transit Center. The extension of Quarry Road is a future project that would reduce transit travel time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 25 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T3.10.4 Pursue extension of Quarry Road for transit, pedestrians and bicyclists to access the Palo Alto Transit Center from El Camino Real. Also study the feasibility of another pedestrian and bicycle underpass of Caltrain at Everett Street. Planning & Community Environment Department M $$ O Staff are in the very early stages of planning for this project. T3.15.1 Undertake studies and outreach necessary to advance grade separation of Caltrain to become a “shovel ready” project and strongly advocate for adequate State, regional, and federal funding for design and construction of railroad grade separations. Planning & Community Environment Department S $$$ O The City is actively engaged in planning for this project. T3.15.2 Conduct a study to evaluate the implications of grade separation on bicycle and pedestrian circulation. Planning & Community Environment Department S $$ O The City is actively engaged in planning for this project. T3.17.1 Complete a Palo Alto Avenue crossing study to identify potential near-term safety and accessibility improvements. Planning & Community Environment Department S $$ O The City is actively engaged in planning for this project. Moreover, it is anticipated that this specific crossing will be evaluated in the Downtown CAP (beginning Winter 2020) T3.17.2 Work with Caltrain to ensure that the rail tracks are safe and secure with adequate fencing and barriers. Planning & Community Environment Department S $ O Transportation works with Caltrain on this on an ongoing basis. CMO, PWD, PD, OES are also involved in this. Goal T-4: Protect local streets that contribute to neighborhood character and provide a range of local transportation options. T4.2.1 Periodically evaluate residential areas for traffic impacts and use the results of that evaluation to prioritize traffic calming measures. Planning & Community Environment Department IP $$ O Efforts to implement this program are ongoing. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 26 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T4.4.1 Use landscaping and other improvements to establish clear “gateways” at the points where the Oregon Expressway, University Avenue and Embarcadero Road transition from freeways to neighborhoods. Department of Public Works L $$$ P No specific action has been taken at this time. Goal T-5: Encourage attractive, convenient, efficient and innovative parking solutions for all users. T5.1.1 Evaluate the need to update parking standards in the municipal code, based on local conditions, different users’ needs and baseline parking need. Allow the use of parking lifts for Office/R&D and multifamily housing as appropriate. Planning & Community Environment Department S $ PC Parking lifts are regulated and permitted in the municipal code. Multi-family parking standards were reduced in early 2019 as a means to reflect anticipated parking need and incentivize housing development. T5.1.2 Consider reducing parking requirements for retail and restaurant uses as a way to encourage new businesses and the use of alternative modes. Planning & Community Environment Department M $ PC In early 2019, the City Council adopted an ordinance that provides a parking credit for 1,500 square feet of retail and retail-like uses located in mixed use projects in certain commercial districts. T5.1.3 Work with stakeholders in each commercial center and employment district to monitor conditions and determine the appropriate timing for revisions to parking requirements. Planning & Community Environment Department M $ P No specific action has been taken at this time. T5.1.4 Study the feasibility of unbundled parking for office, commercial, and multi-family residential developments (including senior housing developments) that are well- served by transit and demonstrated walking and biking connections. Planning & Community Environment Department S $ PC Unbundled parking was authorized for qualifying housing projects using the Workforce Housing Combining district. As resources permit, further expansion of this concept could be considered for other districts. T5.1.5 Consider reducing parking requirements for multi- family uses as a way to encourage new multi-family housing and the use of alternative modes, where reduction in parking would not impact the neighborhood. Planning & Community Environment Department S $ C Parking standards for multi-family housing uses were reduced in early 2019 as a means to reflect anticipated parking needs and incentivize housing. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 27 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T5.2.1 Use technology to help identify parking availability and make it easy to pay any parking fees. Planning & Community Environment Department S $$$ P No specific action has been taken at this time. T5.2.2 Study and implement pricing strategies for public parking in commercial districts, taking into consideration both employee parking demand and the needs of retailers and customers. Use pricing to encourage short term parking on street, long term parking in parking garages, and the use of alternative modes of transportation Planning & Community Environment Department IP $$ O Efforts to implement this program are ongoing. Staff are currently reviewing pricing options which include raising rates and implementing dynamic paid on- street parking. T5.2.3 Implement Council-adopted recommendations from the parking management study for the Downtown area, which address the feasibility of removing color-coded parking zones, and dynamic pricing and management policies to prioritize short-term parking spaces closest to the commercial core for customers, garage parking for employees, and neighborhood parking for residents. Planning & Community Environment Department S $$$ O Efforts to implement this program are ongoing and dependent on T5.2.2. T5.4.1 Explore incentives to encourage privately initiated shared parking among individual property owners when developments have excess parking that can be available for other businesses to use. Planning & Community Environment Department S $ P No specific action has been taken at this time. T5.8.1 Study the feasibility of retrofitting City-owned surface parking lots to implement best management practices for stormwater management and urban heat island mitigation, including green infrastructure, permeable pavement and reflective surfaces. Department of Public Works S $$ O The development of the Green Stormwater Infrastructure Plan, which is anticipated to be accepted by Council in June 2019, will advance this program. T5.8.2 Identify incentives to encourage the retrofit of privately owned surface parking areas to incorporate best management practices for stormwater management and urban heat island mitigation as well as incentives for the provision of publicly accessible bicycle parking in privately owned lots. Planning & Community Environment Department S $ O Bicycle parking is already required per code. Please contact Public Works for an update on stormwater issues. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 28 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T5.8.3 Update City requirements regarding trees and other landscaping that capture and filter stormwater within surface parking lots to take advantage of new technology. Planning & Community Environment Department R $ P No specific action has been taken at this time. T5.11.1 Coordinate with neighborhood groups and local businesses and other stakeholders to evaluate the need for a residential parking permit program in areas without existing programs. Planning & Community Environment Department S $$ O Efforts to implement this program are ongoing. T5.12.1 Work with employers, merchants, schools, and community service providers, to identify ways to provide more bicycle parking, including e-bike parking with charging stations, near existing shops, services and places of employment. Planning & Community Environment Department R $ O Efforts to implement this program are ongoing via 311 requests. T5.12.2 Install secure electronic bike lockers such as the BikeLink system, at high theft locations, including transit stations and parking garages. Planning & Community Environment Department M $$ P No specific action has been taken at this time. T5.12.3 Assess the need to provide additional bicycle parking in City-owned parking lots and rights-of-way. Planning & Community Environment Department M $$ O Efforts to implement this program are ongoing. Goal T-6: Provide a safe environment for motorists, pedestrians, and bicyclists on Palo Alto streets. T6.1.1 Follow the principles of the safe routes to schools program to implement traffic safety measures that focus on Safe Routes to work, shopping, downtown, community services, parks, and schools, including all designated school commute corridors. Planning & Community Environment Department R $$ O Efforts to implement this program are ongoing. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 29 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T6.1.2 Develop, distribute and aggressively promote maps and apps showing safe routes to work, shopping, community services, parks and schools within Palo Alto in collaboration with stakeholders, including PAUSD, major employers, TMAs, local businesses and community organizations. Planning & Community Environment Department IP $$ O Efforts to implement this program are ongoing. School Walk and Roll ,aps are updated as needed. A Walk and Roll to Libraries map was completed in 2016 and updated in 2018. T6.1.3 Address pedestrian safety along Alma Street between Embarcadero Road and Lytton Street. Planning & Community Environment Department S $$ O Efforts to implement this program are ongoing. T6.1.4 Address pedestrian safety on shared-use paths through the use of signs, pavement markings, and outreach to users, encouraging them to be safe and courteous. Planning & Community Environment Department R $ O Efforts to implement this program are ongoing. T6.2.1 Regularly collect severity and location data on roadway collisions for all modes of travel, including fatalities and severe injuries, and use this data to make roadway design decisions. In collaboration with Santa Clara County, develop an up-to-date, public database for this information. Planning & Community Environment Department R $$ O The County is working on improving and training users on the collision database. This collision data is used when planning transportation projects. T6.4.1 Consider the Adopted School Commute Corridors Network and adopted “Walk and Roll” maps when reviewing development applications and making land use and transportation planning decisions. Incorporate these requirements into City code when feasible. Planning & Community Environment Department R $ O Efforts to implement this program are ongoing. T6.4.2 Establish standards and procedures for maintaining safe bicycling routes, including signage for warnings and detours during construction projects. Planning & Community Environment Department IP $ C The Traffic Control Plan Guidelines were updated in 2016. T6.4.3 In collaboration with PAUSD, provide adult crossing guards at school crossings that meet established warrants. Planning & Community Environment Department S $$ O Efforts to implement this program are ongoing. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 30 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T6.6.1 Periodically evaluate safety on roadways and at intersections and enhance conditions through the use of signal technology and physical changes. Consider the construction of traffic circles for improved intersection safety. Planning & Community Environment Department R $$$ O Efforts to implement this program are ongoing. T6.6.2 Continue to provide educational programs for children and adults, in partnership with community-based educational organizations, to promote the safe walking and safe use of bicycles, including the City-sponsored bicycle education programs in the public schools and the bicycle traffic school program for juveniles. Planning & Community Environment Department R $$ O Efforts to implement this program are ongoing. T6.6.3 Work with PAUSD and employers to promote roadway safety for all users, including motorized alternatives to cars and bikes such as mopeds and e-bikes, through educational programs for children and adults. Planning & Community Environment Department R $$ O Efforts to implement this program are ongoing. T6.6.4 Complete a mobility and safety study for downtown Palo Alto, looking at ways to improve circulation and safety for all modes. Planning & Community Environment Department M $$ P T6.6.5 Identify and construct safety improvements for pedestrian underpasses, including on Embarcadero Road. Planning & Community Environment Department L $$$ P T6.6.6 Improve pedestrian crossings by creating protected areas and better pedestrian and traffic visibility. Use a toolbox including bulb outs, small curb radii, high visibility crosswalks, and landscaping. Planning & Community Environment Department R $$$ O Efforts to implement this program are ongoing. T6.6.7 Establish a program to educate residents to keep sidewalks clear of parked cars, especially on narrow local streets in neighborhoods with rolled curbs. Survey for compliance annually. Planning & Community Environment Department M $$ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 31 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T6.7.1 Evaluate the performance of safety improvements and identify methods to encourage alternative transportation modes. Planning & Community Environment Department R $ O Efforts to implement this program are ongoing. Goal T-7: Provide mobility options that allow people who are transit dependent to reach their destinations. T7.1.1 Expand transportation opportunities for transit- dependent riders by supporting discounts for taxi fares, rideshare services, and transit, by coordinating transit systems to be shared by multiple senior housing developments, and by maintaining a database of volunteer drivers, and other transit options. Planning & Community Environment Department M $$ P No specific action has been taken at this time. T7.1.2 Coordinate with social service agencies and transit agencies to fill gaps in existing transportation routes and services accessible to transit-dependent riders no matter their means and design new bus routes that enable them to access those services. Planning & Community Environment Department R $$$ P It is anticipated the 2019 shuttle RFP will include bids for a new shuttle route in South Palo Alto. T7.1.3 Pursue expanded evening and night time bus service to enhance mobility for all users during off-peak times. Planning & Community Environment Department R $ P Extended service is unlikely due to the proposed VTA 90/10 orientation. Goal T-8: Influence the shape and implementation of regional transportation policies and technologies to reduce traffic congestion and greenhouse gas emissions. T8.1.1 Continue to participate in regional efforts to develop technological solutions that make alternatives to the automobile more convenient. Planning & Community Environment Department R $ O Staff participates in regional efforts such as Dumbarton Forward, the PASS Signal Project and the Managers’ Mobility Partnership. T8.3.1 Advocate for provision of a new southbound entrance ramp to Highway 101 from San Antonio Road, in conjunction with the closure of the southbound Charleston Road on-ramp at the Rengstorff Avenue interchange in Mountain View. Planning & Community Environment Department S $ P Initial project definition is expected in FY20. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 32 Program Program Text Lead Department Priority * Level of Effort 2018 Status** Notes T8.7.1 Work with regional transportation providers to improve connections between Palo Alto and the San Francisco International Airport and Norman Y. Mineta San Jose International Airport. Planning & Community Environment Department R $ P No specific action has been taken at this time. T8.8.1 Identify and improve bicycle connections to/from neighboring communities in Santa Clara and San Mateo counties to support local trips that cross city boundaries. Also advocate for reducing barriers to bicycling and walking at freeway interchanges, expressway intersections, and railroad grad crossings. Planning & Community Environment Department IP $$$ PC The Peninsula Bikeway wayfinding signage was installed in 2018. Planning to identify additional route improvements is ongoing. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 33 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N A T U R A L E N V I R O N M E N T E L E M E N T Goal N-1: Protect, conserve and enhance Palo Alto’s citywide system of open space, including connected and accessible natural and urban habitats, ecosystems, and natural resources, providing a source of public health, natural beauty and enjoyment for Palo Alto residents. N1.1.1 Develop Comprehensive Resource Conservation Plans for the Pearson Arastradero Preserve, Esther Clark Preserve, and Foothills Park to steward the protection of local ecosystems. Community Services Department S-M $$$ O The Community Services Department has been working on a Comprehensive Conservation Plan for the Baylands Nature Preserve, which will be complete in the Spring of 2019. The draft Capital Improvement Plan budget includes a project to conduct a Comprehensive Conservation Plan for Pearson Arastradero Preserve, Esther Clark Preserve, and Foothills Park in FY20. N1.1.2 Promote and support ecosystem protection and environmental education programs in Palo Alto and neighboring school districts. Community Services Department S $ O The Community Services Department Park Rangers work with students from Palo Alto and East Palo Alto schools to conduct volunteer restoration programs in Palo Alto Open Space preserves. Community Services staff also partner with Save the Bay, Grassroots Ecology, and the Environmental Volunteers to conduct restoration projects with local students. Community Service instructors teach science classes in 60 elementary schools on the Peninsula, operate public hours and activities at the Baylands Nature Center, and provide science classes and camps for families and children. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 34 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N1.3.1 Work to maintain Williamson Act agricultural preserve contracts within the City. Planning & Community Environment Department S $ O The City Council annually considers and makes a determination on the renewal of the existing Williamson Act contracts. Most recently, all 23 contracts were renewed. N1.3.2 Provide information and support programs that encourage residents to enhance their private yards with native plant species and low impact landscaping. Planning & Community Environment Department R $$ O Community Services Department Parks staff have partnered with local residents to create pollinator gardens that include educational signs to encourage others to follow their example. The Community Garden Program, which includes two demonstration gardens at Eleanor Pardee Park. The Master Gardeners also provide occasional public classes on gardening and irrigation. Two new programs have also been launched to offer property owner assistance in order to establish more trees in South Palo Alto. Both promote native and/or climate adapted species, consider proximity to utilities, and utilize a new open source inventory tool to provide age specific information to owners. (Updates provided by CSD and Urban Forestry) N1.4.1 Periodically review California Environmental Quality Act (CEQA) thresholds of significance regarding special status species to identify changes in listed species recommended by professionally recognized scientific experts. Planning & Community Environment Department R $ O State databases and biology reports are used protect special status species and refine thresholds through the CEQA process. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 35 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N1.4.2 Explore the feasibility of expanding the use of overlay tools such as the Site and Design (D) Review Combining District or similar development review and restriction tools to protect special-status species and their habitats from development. Planning & Community Environment Department M $$ P Staff expects to initiate this program in approximately 5 years. For now, Site and Design protect these sensitive properties. N1.4.3 Assess opportunities to expand habitats of special –status species within publicly-owned open spaces. Community Services Department R $$ O This is currently happening as part of the Comprehensive Conservation Plan for the Baylands Nature Preserve. It will also be part of the scope of the FY20 project to conduct a Comprehensive Conservation Plan for Pearson Arastradero Preserve, Esther Clark Preserve, and Foothills Park. N1.5.1 Maintain the value of local wetlands as habitats by ensuring adequate flow from the Bay and minimizing effluent. Community Services Department R $ O The Community Services Park Rangers manage the tide gate at the Baylands Nature Preserve, which allows tidal Bay water into the 618-acre Palo Alto Flood Basin. The Rangers adjust the tide gate to maximize tidal flow into the Flood Basin, while ensuring that the water levels don’t create mosquito breeding habitat, and so there are no impacts to flood protection. N1.6.1 Continue to coordinate City review, particularly by Planning, Public Works and Community Services Departments, of projects that might impact the City’s foothills and hillside areas. Planning & Community Environment Department R $$ O The Development Review Committee meets regularly to discuss and coordinate on pending projects. N1.7.1 Examine and improve existing management practices, including the provision of access to open space for City vehicles and equipment, to ensure that natural resources are protected. Community Services Department R $$ I This is currently happening as part of the Comprehensive Conservation Plan for the Baylands Nature Preserve. It will also be part of the scope of the FY20 project to conduct a 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 36 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes Comprehensive Conservation Plan for Pearson Arastradero Preserve, Esther Clark Preserve, and Foothills Park. OES plans to coordinate with regards to the Foothills Fire Management Plan and related emergency plans. N1.7.2 Protect wildlife in public open space areas by improving litter collection, restricting the use of non-recyclable plastics, prohibiting the feeding of wild, feral and stray animals in open space, and enforcing dog leash laws. Community Services Department R $ O Open Space and Parks staff and volunteers work diligently to promptly to collect and remove litter. Council approved an ordinance prohibiting feeding wildlife or feral animals in open space or parks on June 9, 2014. The Rangers enforce the dog leash laws in open space. N1.7.3 Provide information about responsible behavior in environmentally-sensitive areas through signage, pamphlets and documents on the City’s website. Community Services Department R $ O Open space staff post signage in the preserves about appropriate behavior. They also post information in the kiosks and nature centers. N1.7.4 Review and map existing easements and maintenance roads for potential trails and trail connections. Community Services Department S $$ P No specific action has been taken at this time. N1.10.1 Use City funds and seek additional sources of funding, including State and federal programs, to finance open space acquisition, maintenance or conservation. Community Services Department R $ O In 2018, the Community Services Department was awarded a State grant to fund new outdoor education exhibits and signage in the Baylands and is currently working with non- profit partners (including Friends of the Palo Alto Parks) to provide matching funds. N1.10.2 Create mechanisms to monitor, assess and respond quickly to land acquisition opportunities that would expand or connect the City’s system of parks and open Community Services Department S $$$ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 37 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes spaces, and establish a long-term funding strategy for acquisition that would enable the City to move quickly when opportunities arise. Goal N-2: A thriving urban forest that provides public health, ecological, economic, and aesthetic benefits for Palo Alto. N2.1.1 Explore ways to prevent and ameliorate damage to trees and tree roots by above and below ground infrastructure and buildings. Department of Public Works R $ C An analysis was completed that provides a tool box of best practices to reduce tree root versus sidewalk conflicts. Recommendations are informing the comprehensive long- term sidewalk management plan. N2.2.1 Periodically update the UFMP and Tree Protection Ordinance to ensure policies and regulations remain relevant set leading standards for tree health practices. Department of Public Works R $$ O The second edition of the UFMP is expected to be presented to City Council in 2019. In addition, draft revisions to Title 8 of Palo Alto Municipal Code will be presented for consideration. N2.4.1 Promote landscape design that optimizes soil volume, porosity, structure and health, as well the location, shape and configuration of soil beds. Planning & Community Environment Department M $ O A Green Infrastructure Plan is 85% complete. It contains recommended practices and policies, directs creation of standard details, and references similar content in plans and documents such as the Tree and Landscape Technical Manual. (Update provided by Urban Forestry) N2.7.1 Maintain and irrigate healthy trees in parks, open space, parking lots, and City rights-of-way, while identifying and replacing unhealthy trees in those areas. Department of Public Works S $$ O Due to increased planting efforts, nearly 95% of all public planting sites are currently occupied by a tree. This represents strong progress towards a full stocking goal of 98% (which accounts for mortality and removals). 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 38 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes An analysis of tree shading for parking lots has also been initiated. N2.7.2 Continue to invest in the care, irrigation and monitoring of street trees during drought conditions. Department of Public Works R $$ P No specific action has been taken at this time. N2.7.3 Actively pursue funding for tree planting to increase canopy cover significantly across the city, avoid a net loss of canopy at the neighborhood level, and attain canopy size targets in parks, open space, parking lots, and City rights-of-way. Department of Public Works R $ P No specific action has been taken at this time. N2.9.1 Increase awareness, severity and enforcement of penalties for tree damage. Department of Public Works M $ P Draft revisions to Title 8 of Palo Alto Municipal Code as well as the addition of designated officers who can enforce penalties may increase the severity of penalties. N2.9.2 Develop a program for using the City’s Urban Forestry Fund to replace trees lost to public improvement and infrastructure projects, with replanting occurring onsite or as close to the original site as is ecologically appropriate. Department of Public Works M $$ P No specific action has been taken at this time. N2.10.1 Continue to require replacement of trees, including street trees lost to new development. Planning & Community Environment Department R $ O As part of the Architectural Review process, replacement trees are required. N2.10.2 As part of the update of the Tree and Landscape Technical Manual, consider expanding tree protections to include additional mature trees and provide criteria for making site-specific determinations of trees that should be protected. Planning & Community Environment Department S $ O The Tree and Landscape Technical Manual has been updated and distributed for feedback. Completion is expected in 2019. Concurrently, changes have been drafted to Title 8 of Palo Alto Municipal Code. (Update provided by Urban Forestry ) 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 39 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N2.10.3 Consider revisions to the appeals process to increase transparency regarding tree removals and expanded opportunities for community members to appeal the removal of trees. Planning & Community Environment Department L $$ P Changes to Palo Alto Municipal Code will initiate revisions to the appeals process for tree removals. N2.11.1 Develop a transparent and publicly accessible street tree removal and replacement schedule. Department of Public Works M $ O The current notification process for tree removals includes a physical notice on the tree for a minimum of two weeks and listing on the City website. Tree replacement letters are mailed to owners adjacent to locations where a new tree will be planted with information about the new species and contacts for feedback. Additional outreach is being considered. N2.11.2 Develop a program to replace unhealthy public trees over time. Department of Public Works M $$ P No specific action has been taken at this time. N2.12.1 Explore ways to leverage the fact that Palo Alto’s urban forest alleviates climate change by capturing and storing carbon dioxide. Department of Public Works M $ O A project outline was created for prospective buyers of carbon offsets who may be interested in local co- benefits beyond typical projects for the compliance carbon market. Initial conversations have occurred with global facilitators at the request of prospective buyers. N2.13.1 Work with local nonprofits to establish one or more tree planting programs that are consistent with the UFMP, and rely on locally native, resilient species. Review existing tree planting guidelines to ensure they achieve these objectives. Department of Public Works S $$ O The policy for the Forestry Fund was amended to allow funds paid by developers in lieu of planting on site to be utilized for planting elsewhere. To date one project has been funded to plant 300 trees over a three year 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 40 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes term throughout South Palo Alto to address tree canopy disparities. Native or climate adapted tree species will be prioritized. N2.13.2 Provide on-going education for City staff, residents, and developers regarding landscape, maintenance, and irrigation practices that protect the urban forest and wildlife species. Department of Public Works R $ P No specific action has been taken at this time. N2.13.3 Involve tree owners in tree maintenance programs. Planning & Community Environment Department R $ O In order to expand public outreach and provide customized information for tree owners, the City is launching an interactive open source tree inventory. This is being done in conjunction with improvements to the City website and expanded social media. N2.13.4 Cooperate with the Palo Alto Unified School District, Stanford University, Caltrain, Caltrans, Pacific Gas & Electric, and other public and private entities to ensure that their tree planting, tree removal, and maintenance practices are consistent with City guidelines. Department of Public Works R $ P No specific action has been taken at this time. Goal N-3: Conservation of both natural and channelized creeks and riparian areas as open space amenities, natural habitat areas, and elements of community design. N3.3.1 Update the Stream Corridor Protection Ordinance to explore 150 feet as the desired stream setback along natural creeks in open space and rural areas west of Foothill Expressway. This 150-foot setback would prohibit the siting of buildings and other structures, impervious surfaces, outdoor activity areas and ornamental landscaped areas within 150 feet of the top of a creek bank. Allow passive or intermittent outdoor activities and pedestrian, equestrian and bicycle pathways along Planning & Community Environment Department S $$ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 41 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes natural creeks where there are adequate setbacks to protect the natural riparian environment. Within the setback area, provide a border of native riparian vegetation at least 30 feet along the creek bank. The update to the Stream Protection Ordinance should establish: ▪ Design recommendations for development or redevelopment of sites within the setback, consistent with basic creek habitat objectives and significant net improvements in the condition of the creek. ▪ Conditions under which single-family property and existing development are exempt from the 150-foot setback ▪ Appropriate setbacks and creek conservation measures for undeveloped parcels. N3.3.2 Examine the development regulations of the Stream Corridor Protection Ordinance, with stakeholder involvement to establish appropriate setback requirements that reflect the varying natural and channelized conditions along creeks east of Foothill Expressway. Ensure that opportunities to provide an enhanced riparian setback along urban creeks as properties are redeveloped or improved are included in this evaluation. Planning & Community Environment Department S $$ P No specific action has been taken at this time. N3.3.3 For all creeks, update the Stream Corridor Protection Ordinance to minimize impacts on wildlife by: ▪ Limiting the development of recreational trails to one side of natural riparian corridors. ▪ Requiring careful design of lighting surrounding natural riparian corridors to maximize the distance between nighttime lighting and riparian corridors and direct lighting away from the riparian corridor. Planning & Community Environment Department S $$ P No specific action has been taken at this time.The development of trails is outside the Department’s purview. Lighting near riparian areas is reviewed as a part of the CEQA process. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 42 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N3.4.1 Develop a community creek stewardship program to promote existing creek clean-up days, organize new events, and increase appreciation of riparian corridors. Department of Public Works M $$ O Public Works partners with Grass Roots to promote existing clean up days and promote creek awareness. N3.6.1 Review and update the Grading Ordinance to ensure that it adequately protects creeks from the erosion and sedimentation impacts of grading. Department of Public Works M $$ O The Stormwater Ordinance is currently being updated. Updates will reduce impacts from erosion and sedimentation. N3.8.1 Work with the SCVWD to develop a maintenance, restoration and enhancement improvement program that preserves flood protection while preserving riparian habitat, and identifies specific stretches of corridor to be restored or daylighted, standards to be achieved, and sources of funding. Include provisions for tree and vegetation planting to enhance natural habitat and shade cover. Department of Public Works M $$ P No specific action has been taken at this time. N3.8.2 Participate cooperatively in the JPA to achieve increased flood protection, habitat preservation, enhancement and improved recreational opportunities along San Francisquito Creek. Department of Public Works IP $ C The flood control portion of the San Francisquito Creek widening downstream of Highway 101 project was completed in 2018. Goal N-4: Water resources and infrastructure that are managed to sustain plant and animal life, support urban activities, and protect public health and safety. N4.2.1 Educate customers on efficient water use (indoor and outdoor), tree care, and landscaping options. Department of Public Works R $ O The City of Palo Alto in partnership with the Santa Clara Valley Water District offers a suite of water efficiency programs including landscape conversion rebates, indoor and outdoor survey kits, graywater laundry to landscape rebates, and irrigation system rebates. The City also offers a variety of workshops on water efficiency throughout the year. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 43 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N4.5.1 Study the supply and quality of local groundwater aquifers to better understand their utility as natural water storage. City of Palo Alto Utilities L $ O The City in partnership with the Santa Clara Valley Water District completed a comprehensive study of the Northwest County aquifer. N4.5.2 Work with local public agencies to educate residents regarding the public health, fire, and overall quality of life risks associated with long-term drought. City of Palo Alto Utilities R $ O The City has engaged in public outreach activities and provides information on the City website about the importance of making water conservation a way of life. N4.6.1 Encourage residents to use rain barrels or other rainwater reuse systems. City of Palo Alto Utilities S $ O The City offers a $50 rebate for residents to acquire rain barrels. N4.7.1 Support and participate in the work of the SCVWD to prepare a high-quality groundwater management plan that will address groundwater supply and quality, including, as appropriate: ▪ An understanding of subsurface hydrology. ▪ Strategies to reduce depletion. ▪ Opportunities to recharge groundwater, including through use of recycled water and extracted groundwater. ▪ Methods to ensure that uncontaminated, toxin-free groundwater is used in a manner that benefits the community, for example in irrigation of parks, street cleaning, and dust suppression. ▪ An approach to metering extracted groundwater. Department of Public Works S $ C The Groundwater Chapter of the Recycled Water Strategic Plan, which addresses groundwater supply and quality, was completed in 2018. N4.7.2 Support the SCVWD and the Regional Water Quality Control Board (RWQCB) to implement their mandate to protect groundwater from the adverse impacts of urban uses. Department of Public Works S $ O The Green Stormwater Infrastructure Plan that addresses this issue is expected to be accepted by Council in June 2019. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 44 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N4.7.3 Work with the SCVWD and RWQCB to identify and map key groundwater recharge and stormwater management areas for use in land use planning and permitting and the protection of groundwater resources. Department of Public Works IP $ C The Groundwater Chapter of the Recycled Water Strategic Plan was completed in 2018. N4.8.1 Research and promote new construction techniques and recharge strategies developed to reduce subsurface and surface water impacts and comply with City dewatering policies. Department of Public Works IP $ C The dewatering ordinance and regulations were updated in January 2018. N4.8.2 Explore appropriate ways to monitor all excavations and other projects to ensure that dewatering does not result in recharge into the aquifer where needed. Department of Public Works S $ C The dewatering ordinance and regulations were updated in January 2018 which includes monitoring of adjacent parcels for dewatering projects. N4.10.1 Monitor and implement practices for reducing water pollution. Examples include state-of-the-art best management practices (BMPs), land use planning approaches, and construction of modern stormwater management facilities. Department of Public Works R $$$ O The Green Stormwater Infrastructure Plan that addresses this issue is expected to be accepted by Council in June 2019. Updates to the Stormwater Ordinance will be proposed in 2019. N4.10.2 Continue public education programs on water quality issues, including BMPs for residents, businesses, contractors, and City employees. Department of Public Works R $ O Public education and outreach will continue within Palo Alto. See cleanbay.org for more information. N4.10.3 Implement swift and rigorous spill response, cleanup, and follow-up investigation procedures to reduce the impacts of toxic spills on the city’s creeks and San Francisco Bay. Department of Public Works R $$ O Public Works implements a spill response plan to protect the environment. N4.10.4 Increase monitoring and enforcement of existing prohibitions on materials and practices known to impact local water quality, such as use of copper, in the design and construction industries. Department of Public Works R $ O Future construction projects are reviewed during the design phase to monitor impacts to local water quality. N4.11.1 Evaluate neighborhoods where parking controls may hinder street sweeping and recommend any changes that are needed. Department of Public Works M $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 45 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N4.12.1 Implement the City’s Integrated Pest Management Policy with periodic assessments of pesticide use and use of BMPs to reduce pesticide applications and toxicity, and maximize non-chemical control. Department of Public Works R $ O Integrated Pest Management language will continue to be included in future contracts with pest control companies. N4.12.2 Revise the City’s Tree and Landscape Technical Manual to include stronger requirements for least-toxic practices in the landscape permitting process. Department of Public Works S $ O The Tree and Landscape Manual has been drafted with references to integrated pest management practices. N4.12.3 Promote the value of toxin-free landscape management, and educate residents about the impacts of common fertilizers, herbicides, insecticides and pesticides on local water quality. Department of Public Works R $ O Integrated Pest Management language will continue to be included in future contracts with pest control companies. Education and outreach to local residents and businesses will also continue. N4.13.1 Promote the use of permeable paving materials or other design solutions that allow for natural percolation and site drainage through a Storm Water Rebate Program and other incentives. Department of Public Works S $ O An annual educational insert is mailed to residents providing information about the rebate program. N4.13.2 Develop and implement a green stormwater infrastructure plan with the goal to treat and infiltrate stormwater. Department of Public Works S $$$ O The Green Stormwater Infrastructure Plan is expected to be accepted by Council in June 2019. N4.13.3 Mitigate flooding through improved surface permeability or paved areas, and stormwater capture and storage. Department of Public Works S $$ O Bioretention areas were added to the Charleston Arastradero Corridor project. N4.14.1 Establish a standardized process for evaluating the impacts of development on the storm drainage system, including point source discharge, base flow and peak flow. Department of Public Works S $ O Projects that require a building permit are reviewed by PWE staff to verify that the proposed runoff from project sites is equal to or less than the existing runoff. Any excess flow must be detained or retained on-site. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 46 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N4.14.2 Complete improvements to the storm drainage system consistent with the priorities outlined in the City's Storm Drainage Master Plan, as amended. Department of Public Works IP $$$ O Storm Drainage Master Plan projects are being implemented through the Capital Improvement Program using funding from the Stormwater Management Fee. N4.15.1 Work with commercial and industrial dischargers to identify and implement pollution prevention measures and BMPs to eliminate or reduce the discharge of metals and other pollutants of concern. Department of Public Works R $$ O Public Works actively works with industries through inspections, education and outreach. See cleanbay.org for more information. N4.15.2 Encourage commercial dischargers to consistently go beyond minimum requirements of the Clean Bay Business Program. Department of Public Works R $ O Public Works actively works with industries through inspections, education and outreach. See cleanbay.org for more information. N4.16.1 Implement approved recommendations based on the Long-Term Facilities Plan prepared for the RWQCP. City of Palo Alto Utilities IP $$$ O The City continues to implement the recommendations from the RWQCP Long Term Facilities Plan, including constructing a new biosolids Dewater & Loadout Facility that is slated for startup in 2019. (Public Works should provide updates on this program in the future.) N4.16.2 Develop a plan to address ongoing operations of the RWQCP taking potential sea level rise and growth in surrounding communities into account. City of Palo Alto Utilities M $$$ O Sea level rise policy and plan development has commenced and RWQCP stakeholders will be included in adaptation planning. The Sea Level Rise Plan will serve as the Sea Level Rise Implementation Plan of the Sustainability and Climate Action Plan. N4.17.1 Evaluate the expansion of existing recycled water infrastructure to serve a larger area. Develop a plan to install “purple pipe” when streets are opened for other infrastructure work. City of Palo Alto Utilities M $$ O The City in partnership with the Santa Clara Valley Water District completed a business plan and 30% engineering design for a recycled water 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 47 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes distribution system expansion to the Stanford Research Park. The City has not developed a plan to include recycled water pipeline installation in conjunction with other infrastructure projects. N4.17.2 Evaluate the possibility of using recycled water as an emergency water supply. City of Palo Alto Utilities L $ O The City has not investigated using recycled water as an emergency water supply. The City is currently investigating opportunities to convert purified wastewater to a potable system that could be used as a drought-proof, sustainable water supply in the future. N4.17.3 Investigate ways to reuse non-traditional water sources including recycled, gray, black and stormwater. City of Palo Alto Utilities R $ o The City in partnership with the Santa Clara Valley Water District completed a business plan and 30% engineering design for a recycled water distribution system expansion to the Stanford Research Park. The City offers rebates for graywater systems. Black water systems have not been considered in detail. The City continues to investigate other water reuse opportunities in collaboration with the Santa Clara Valley Water District. Goal N-5: Clean, healthful air for Palo Alto and the San Francisco Bay Area. N5.1.1 Provide City input on significant proposals for air quality legislation and state implementation plans. Planning & Community Environment Department R $ O Planning works with the City lobbyist to identify issues and provides ideas. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 48 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N5.1.2 Implement BAAQMD recommended standards for the design of buildings near heavily traveled roads, in order to minimize exposure to auto-related emissions. Planning & Community Environment Department S $ O BAAQMD standards are implemented through the CEQA process. N5.1.3 Explore adopting new standards that target the reduction of very fine particulate matter (PM2.5), which is associated with increased impacts on health. Planning & Community Environment Department S $ O PM2.5 standards are implemented through the CEQA process. N5.2.1 Promote understanding of the impacts of extended idling on air quality, for residents, auto-dependent businesses, and schools. Planning & Community Environment Department M $ O In July 2018, the City Council adopted an anti-idling ordinance. N5.2.2 Consider adopting and enforcing penalties for drivers that idle for longer than 3-5 minutes. Planning & Community Environment Department M $ O In July 2018, the City Council adopted an anti-idling ordinance. N5.3.1 Cooperatively work with Santa Clara County and the BAAQMD to ensure that mining and industrial operations mitigate environmental and health impacts. Planning & Community Environment Department R $ O Industrial operations are mitigated through the CEQA process. There are no mining resources within the City limits. N5.3.2 Monitor particulate emissions at local California Air Resources Board monitoring stations and make the information easily available to citizens. Planning & Community Environment Department R $ O BAAQMD provides monitoring information on their webpage. See http://www.baaqmd.gov/about-air- quality/current-air-quality. N5.3.3 Promote understanding of the health impacts of particulate emissions and provide information to residents and businesses about steps they can take to reduce particulate emissions, such as reducing or eliminating wood burning or using low emission alternatives to wood-burning stoves and fireplaces. Planning & Community Environment Department R $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 49 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N5.3.4 Explore feasible and cost-effective opportunities to reduce concrete and asphalt use by the City, in parks and other public projects. Department of Public Works R $ P No specific action has been taken at this time. Goal N-6: An environment that minimizes the adverse impacts of noise. N6.3.1 Continue working to reduce noise impacts created by events and activities taking place in communities adjoining Palo Alto. Planning & Community Environment Department R $ P No specific action has been taken at this time. N6.3.2 Evaluate the feasibility of adopting noise criteria in the purchase of new City vehicles and equipment. Department of Public Works M $ P No specific action has been taken at this time. N6.3.3 Update the Noise Ordinance, as needed, to provide for clear interpretation of the regulations, to review the effectiveness of existing standards, and to ensure that regulations address contemporary issues. Planning & Community Environment Department S $ P No specific action has been taken at this time. N6.7.1 Update noise impact review procedures in the Noise Ordinance and the Zoning Code to address appropriate requirements for analysis and thresholds for impacts on residential land uses and publicly-owned conservation land. Planning & Community Environment Department S $ P No specific action has been taken at this time. N6.10.1 Evaluate changes to the Noise Ordinance to further reduce the impacts of noise from leaf blowers and residential power equipment. Planning & Community Environment Department M $ P No specific action has been taken at this time. N6.11.1 For larger development projects that demand intensive construction periods and/or use equipment that could create vibration impacts, such as the Stanford University Medical Center or major grade separation projects, require a vibration impact analysis, as well as formal, ongoing monitoring and reporting of noise levels throughout the entire construction process pertinent to industry standards. Planning & Community Environment Department S $$ O Construction noise is reviewed as part of the CEQA process. Mitigation measures, including limited hours of operation, are used to reduce noise and vibration. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 50 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes The monitoring plan should identify hours of operation and could include information on the monitoring locations, durations and regularity, the instrumentation to be used and appropriate noise control measures to ensure compliance with the noise ordinance. N6.12.1 Continue working to reduce noise associated with operations of the Palo Alto Airport. Also, ensure compliance with the land use compatibility standards for community noise environments, shown in Table N-1, by prohibiting incompatible land use development within the 60 dBA CNEL noise contours of the airport. Department of Public Works R $$ O A member of the Palo Alto City Council and a member of the Palo Alto Pilot Association each serve on the Santa Clara County Airport Land Use Commission. N6.12.2 Participate in appropriate public forums and engage with other governmental agencies and representatives to ensure that activities at airports in the region do not negatively affect noise levels in Palo Alto. Department of Public Works IP $ O In 2018, City staff briefed the City Council on matters relating to airplane noise in Palo Alto. The City has communicated with the Federal Aviation Administration by frequently writing letters regarding FAA actions that may impact aircraft noise levels in Palo Alto. These letters and other actions are executed in consultation with neighboring communities. Lastly and significantly, the Palo Alto City Council voted to join the Santa Clara/Santa Cruz Counties Airport/Community Roundtable. N6.13.1 Encourage the Peninsula Corridors Joint Powers Board to pursue technologies and grade separations that would reduce or eliminate the need for train horns/whistles in communities served by rail service. Planning & Community Environment Department IP $ O See T3.15.1 N6.13.2 Evaluate changing at-grade rail crossings so that they qualify as Quiet Zones based on Federal Railroad Administration (FRA) rules and guidelines in order to Planning & Community Environment Department S $$$ O See T3.15.1 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 51 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes mitigate the effects of train horn noise without adversely affecting safety at railroad crossings. N6.13.3 Participate in future environmental review of the California High-Speed Rail (HSR) Project, planned to utilize existing Caltrain track through Palo Alto, to ensure that it adheres to noise and vibration mitigation measures. Planning & Community Environment Department S $$ O Efforts to implement this program are ongoing. Goal N-7: A clean, efficient energy supply that makes use of cost-effective renewable resources. N7.1.1 Meet customer electricity needs with least total cost resources after careful assessment of environmental cost and benefits. City of Palo Alto Utilities R $ O Staff continue this effort on a routine basis. N7.2.1 Promote the adoption of cost-effective, renewable energy technologies from diverse renewable fuel sources by all customers. City of Palo Alto Utilities S $ O The City continues to facilitate customer efforts in this area, primarily related to the use of solar photovoltaics and energy storage systems. OES and CPAU are also coordinating regarding the CPAU Strategic Plan (UAC), the VMWare Microgrid Public Private Partnership, and other such efforts. N7.2.2 Assess the feasibility of using life cycle analysis and total cost of ownership analysis for public and private projects, funded by the project proponent, in order to minimize the consumption of energy, the production of greenhouse gases, including GHG emissions of construction materials and demolition and costs over the life of the project. City of Palo Alto Utilities M $$ O Utilities worked closely with Development Services to evaluate the cost effectiveness (but not the life cycle analysis) of adopting a local energy reach code to mandate electric heat pump water heating, electric heat pump space heating, and whole-building electrification in new construction projects. Based on this analysis, staff is not recommending any electrification mandates for new construction projects. Palo Alto has 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 52 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes joined a statewide study that will cover additional gas and electric efficiency measures and the cost effectiveness of these measures in new construction projects. Results are expected in Spring 2019. N7.4.1 Continue timely incorporation of State and federal energy efficiency standards and policies in relevant City codes, regulations and procedures, and higher local efficiency standards that are cost-effective. Planning & Community Environment Department R $ O Staff continue this effort on a routine basis N7.4.2 Implement cost effective energy efficiency programs for all customers, including low income customers. City of Palo Alto Utilities R $ O PAU continues to implement various energy efficiency programs that target different customer segments, including homeowners, renters, multifamily buildings, low-income households, large commercial customers and small to medium businesses. For fiscal year 2018, electric efficiency savings alone achieved through CPAU programs are estimated at 0.66% of the City’s electric load, while gas efficiency savings are estimated at 0.9% of the City’s gas load. These achievements are close to the adopted FY 2018 energy efficiency targets of 0.75% for electric and 1.0% for gas. N7.4.3 Incorporate cost-effective energy conservation measures into construction, maintenance, and City operation and procurement practices. City of Palo Alto Utilities R $$ O The City continues this effort on a routine basis. Public Works should provide updates on this program in the future. N7.4.4 Implement gas and electric rate structures that encourage efficient use of resources while meeting State City of Palo Alto Utilities M $ O The City continues this effort on a routine basis. Implementation of 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 53 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes law requirements that rates be based on the cost of service. time-of-use rates have been differed until 2023 or later, until after the installation of the advanced electric meters. CPAU has increasing block rates for electric and gas rates for residential customers to encourage conservation among the residential customers. N7.4.5 Continue to provide public education programs addressing energy conservation and efficiency. City of Palo Alto Utilities R $ O CPAU offers low-cost home energy audits to residents through the Home Efficiency Genie program. On an ongoing basis, customers can subscribe to an electric newsletter that gives updates on workshops and programs. There are separate newsletters targeting residents, small-to-medium commercial customers and large commercial customers. CPAU holds facility manager meetings twice a year for large commercial customers with updates on rates and programs. N7.5.1 Monitor professional and medically-sound research and studies on light-emitting diodes (LEDs). City of Palo Alto Utilities M $ O CPAU monitors ongoing research on LED products through industry allies and product-specific updates from research labs and vendors. N7.6.1 Explore changes to building and zoning codes to incorporate solar energy, energy storage and other energy efficiency measures into major development projects, including City-owned projects. Planning & Community Environment Department S $ O Staff implements this on an ongoing basis. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 54 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N7.6.2 Promote use of the top floors of new and existing structured automobile garages for installation of photovoltaic panels and green roofs. Planning & Community Environment Department S $ O The new garage on Sherman includes PV panels. PV panels have also been approved in existing city garages downtown and on California Avenue. N7.6.3 Promote solar energy in individual private projects. Planning & Community Environment Department R $ P No specific action has been taken at this time. N7.7.1 Evaluate the potential for a cost-effective plan for transitioning to a completely carbon-neutral natural gas supply. City of Palo Alto Utilities S $ O CPAU has achieve carbon neutrality for the FY 2018 gas supply portfolio through the purchase of high-quality offsets. CPAU is also exploring local carbon offsets to maintain its carbon- neutral gas portfolio. Completed, CPAU annually purchases…… carbon- offset . The City implemented a Carbon Neutral Gas program utilizing high-quality carbon offsets. N7.7.2 Explore the transition of existing buildings from gas to electric or solar water and space heating. City of Palo Alto Utilities S $$ O CPAU launched a heat pump water heater rebate program in 2016 to incentivize homeowners to replace their gas water heaters with high efficiency electric heat pump water heaters (HPWH). Since the program was launched, CPAU has hosted two HPWH workshops for residents, contractors and architects. CPAU has also completed a cost-effectiveness assessment of replacing gas space heating with heat pump space heating for single family homes; results show higher utility bills for most homes without a solar 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 55 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes photovoltaic system. In 2018, CPAU received a grant award from the Bay Area Air Quality Management District to implement a pilot to replace gas wall furnace units with efficient heat pump space heating alternatives in up to three multifamily buildings. The pilot will begin in 2019 and expected to be completed by 2020. N7.8.1 Evaluate energy efficient approaches for the treatment and reuse of organic waste that maximize resource recovery and reduce greenhouse gas generation at the RWQCP located in Palo Alto and the Palo Alto Landfill. City of Palo Alto Utilities M $ P No specific action has been taken at this time. Goal N-8: Actively support regional efforts to reduce our contribution to climate change while adapting to the effects of climate change on land uses and city services. N8.1.1 Participate in cooperative planning with regional and local public agencies, including on the Sustainable Communities Strategy, on issues related to climate change, such as greenhouse gas reduction, water supply reliability, sea level rise, fire protection services, emergency medical services, and emergency response planning. Planning & Community Environment Department R $ P No specific action has been taken at this time. N8.1.2 Pursue or exceed State goals of achieving zero net carbon for residential buildings by 2020 and commercial buildings by 2030, without compromising the urban forest. Office of Sustainability S $ P No specific action has been taken at this time. N8.2.1 Periodically update the S/CAP consistent with the update schedule in the approved S/CAP; this update shall include an updated greenhouse gas inventory and updated short, medium, and long-term emissions reduction goals. Office of Sustainability Services M $$ P The 2020 S/CAP Update is currently underway. Staff have proposed a process, timeline, and budget request for the 2020 S/CAP Update, which will result include Sustainability Implementation Plan Actions for 2020 – 2050. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 56 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes N8.3.1 Protect the Municipal Services Center, Utility Control Center, and RWQCP from the impacts of sea level rise. City of Palo Alto Utilities M $$$ P No specific action has been taken at this time. N8.4.1 Prepare response strategies that address sea level rise, increased flooding, landslides, soil erosion, storm events and other events related to climate change. Include strategies to respond to the impacts of sea level rise on Palo Alto’s levee system. Planning & Community Environment Department S $$$ P 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 57 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes S A F E T Y E L E M E N T Goal S-1: A safe community that is aware of risks and prepared for emergencies. S1.1.1 Expand public education programs that help and encourage each household in the City to be prepared to be self-sufficient, with enough stored water and food to support the entire household for at least one week after a major earthquake, flood, terrorism event, pandemic or other major disaster. Office of Emergency Services S $ O OES has expanded its outreach to the community, per FEMA's whole community guidelines, and provides public safety education lectures, presentations, and trainings throughout the community. OES conducted 149 public safety education events, disaster drills, etc. in FY 2018. The OES Preparedness webpage also provides this information. S1.1.2 Continue to implement and fund the Emergency Services Volunteer program. Office of Emergency Services S $ O OES continues to manage the ESV program, adding close to 100 new members each year, but also losing members each year through normal attrition. There are currently over 700 registered volunteers. OES apportions funds annually to support this program including an annual community event, monthly training sessions, quarterly leader meetings, and two exercises per year. S1.1.3 Conduct emergency hazard drills with key stakeholder organizations across the community to improve preparedness for known threats and hazards. Office of Emergency Services R $$ O Throughout the year, OES conducts emergency drills with key stakeholders that include seminars, communications tests, 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 58 table-top exercises, functional, and full scale exercises. OES routinely coordinates with skilled nursing centers, faith based organizations, private schools, businesses, Stanford Hospital, and Stanford University and others to conduct these drills. S1.1.4 Support an annual community public safety fair to educate and engage the public on preparedness and offer the opportunity to buy emergency disaster supplies for home and vehicle. Office of Emergency Services R $$ O OES is in the planning stages with the Palo Alto/Stanford Citizen Corps Council to hold a large community public safety fair either in 2019 or 2020. OES typically sponsors one or two smaller public safety fairs during the year, normally planned and hosted by a stakeholder from the community. S1.1.5 Encourage local businesses and other organizations to have disaster preparedness, communication, mitigation and recovery plans in place. Office of Emergency Services R $ O The private sector is a major focus of OES’s public safety outreach and education activities. This includes the Stanford Shopping Center, the Stanford Research Park, the Chamber of Commerce, etc. For the past two years OES has supported the establishment of a business radio system in Stanford Research Park to improve communications among the 100+ businesses in that area. In 2018, OES assisted several faith-based organizations in developing emergency plans for their facilities. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 59 S1.2.1 Develop accessible, attractive marketing materials to promote involvement in community crime safety programs. Office of Emergency Services R $ O OES has developed various marketing materials to promote preparedness and public safety. Annually, OES provides two utility flyers for earthquake awareness in April and floods/severe storms in October (in partnership with Public Works). In late 2018, the Preparedness webpage was re- vamped. OES has a planned work effort to create multi- lingual products for important education materials. S1.3.1 Explore the use of urban design principles to increase safety and prevent crime in Palo Alto. Planning & Community Environment Department S $ P No specific action has been taken at this time. S1.3.2 Support programs such as the Department of Housing and Urban Development’s Good Neighbor Next Door, which incentivizes home purchase for first responders with discounts. Planning & Community Environment Department R $ P No homes in Palo Alto currently fit under the criteria of the Good Neighbor Next Door program to staff knowledge and the City does not have HUD-designated revitalization areas. S1.4.1 Make data available to maintain an accurate, up to date, and complete real-time local crime mapping function to promote neighborhood safety. Police Department M $$ PC The Police Department maintains a crime reports page on the website and will consider additional functionality. S1.5.1 Promote neighborhood security by providing crime prevention information and training to residents, and continuing to fund resident involvement in neighborhood safety programs such as “Know Your Neighbor” grants and Block Preparedness Coordinators. Police Department R $ O The police department continues to issue Block Party permits and encourage residents to seek the “Know Your Neighbor” grant funds. The Department has hired and trained a Public Affairs Manager who interacts with the public on 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 60 a daily basis on at least six social platforms. The department reinitiated its involvement in National Night Out in August 2018 and plans to host this event on an annual basis moving forward. OES runs the City's Crime Prevention (Neighborhood Watch) element of the Emergency Services Volunteer (ESV) program. S1.5.2 Collaborate with the Palo Alto Unified School District (PAUSD), other school districts in the city, private schools, businesses, non-profits, and local faith-based organizations provide community safety education. Police Department R $ O In cooperation with OES, the Police Departments provides regular training to various entities. This past year, the Police created Safety Plans for each of the PAUSD schools. OES also continues to provide safety training to a wide variety of organizations. S1.5.3 Encourage the PAUSD to develop secure school facilities and collaborate with Emergency Services Volunteers on disaster preparedness activities; emergency disaster planning, exercises and drills; and disaster recovery. Office of Emergency Services R $ O OES and PAUSD routinely work on the safety and disaster topic. Secure school facilities includes the efforts of the Police Department school resource officers providing active shooter training to PAUSD schools and having a consistent presence on school campuses. In 2019, OES is scheduled to assist PAUSD with EOC related training and exercises at the District office. S1.5.4 Continue to support and encourage participation in Police Department programs to introduce youth to the importance and benefits of local law enforcement. Police Department R $ PC The Police Department is currently revising its Explorer Program in hopes of reigniting youth interest in the profession. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 61 The Police Department has also teamed up with the San Francisco 49ers to participate in their “Team Up” Program, pairing an officer with a teenager to attend events together. S1.6.1 Enhance public safety department training for evolving challenges, such as small- to large-scale human threats, interacting with individuals with mental illness, and non-lethal alternatives. Police Department R $ O Police training in this area is ongoing and continuous. Larger scale events and trainings are usually coordinated by the Office of Emergency Services. OES supports. S1.6.2 Support the PAPD in implementing and maintaining approved technologies for data gathering, surveillance, and recording interactions with the public. Incorporate best practices in use policies with special consideration in ensuring the programs protect the public’s privacy rights and civil liberties, in accordance with current legislation. Ensure transparency by communicating new equipment implementation, usage, privacy considerations, and retention of data. Police Department S $$ PC The Police Department issued body-worn cameras to all patrol officers in September 2018. These cameras supplement the five cameras already installed in each patrol vehicle. Changes in the law in July 2019 will allow enhanced public access to body- worn video. An Advisory Group is also tasked with a review of the field-based recording policy. S1.6.3 Communicate transparently with the community regarding adoption of new PAPD equipment and/or tactics while balancing the need for operational security. Police Department S $ PC An Advisory Group meeting took place in October 2018. There are 31 citizen members. The goal is to introduce and discuss policy, staffing and general updates on a bi-monthly basis. The group’s initials tasks include a review of the Field-based recording policy and to create a neighborhood traffic enforcement plan, from their perspective. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 62 S1.7.1 Regularly monitor and review the level of public safety staffing and satellite police station locations required for efficient local service delivery. Police Department R $ P The Police Department does not currently have more than one service location. The department’s goal is to keep patrol officers in the community, rather than in a station where they are not visible. In coordination with the design of the new Public Safety Building and the move in 2022 to Sherman Avenue, staff will discuss and identify options for a Downtown safety presence, including City Hall response. S1.7.2 Design the new Public Safety building to meet essential service standards, the needs of the public safety departments and be resilient against known threats and hazards. Department of Public Works S $$$ PC This project has been integrated with the new California Avenue Area Parking Garage to minimize parking impacts at the selected site. Garage construction is currently underway. The Public Safety Building design is proceeding and construction will start when the garage is complete. S1.7.3 Provide community notifications in the event of emergency using the best available methods and explore new technologies for emergency public information and warnings. Office of Emergency Services R $$ O OES is the local administrator for the County's mass notification system, AlertSCC, which is hosted by the software company Everbridge. OES has the ability to use this tool to provide notifications to the community by landline phone, cell phone, and text as well as the ability to use WEA. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 63 S1.8.1 Update Palo Alto’s 2001 Terrorism Response Plan. Office of Emergency Services S $$ PC OES expects to complete this planning process in 2019. S1.9.1 Develop an Infrastructure Master Plan that projects the future needs of streets, underground utilities, and all City assets and plans for the incorporation of new technology that improves efficiency and effectiveness. Department of Public Works S $$$ PC An Infrastructure Management System has been implemented to track operating and capital improvement costs and to maintain updates on deferred “catch-up” maintenance and planned “keep-up” maintenance for future improvements. S1.10.1 Regularly update and make publicly available the City of Palo Alto Emergency Operations Plan (EOP). Office of Emergency Services R $$$ O OES last updated the EOP in 2016 and has the EOP and other plans posted on its website. OES has a planning review cycle for each plan to allow for regular updates. S1.10.2 Participate in local and regional planning efforts to mitigate, prepare for, respond to, and recover from emergencies. Office of Emergency Services R $ O OES participates in numerous regional public safety planning initiatives such as UASI, NCRIC. OES leads certain regional groups including the San Francisquito Creek Multi-Agency Coordination (SFC MAC) group, and the Silicon Valley Homeland Security Coordination Group (SV- HSCG). OES also participates in Regional all hazards exercises to broaden the City’s exposure, experience, and knowledge of regional threats and allied agency plans, procedures, and capabilities. Additionally, OES is integrated into the newly formed Santa Clara County OES planning efforts and processes. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 64 S1.10.3 Implement the mitigation strategies and guidelines provided by the LHMP, including those that address evolving hazards resulting from climate change. Office of Emergency Services R $$ O OES routinely implements the Local Hazard Mitigation Plan (LHMP) and updates it on schedule. OES also maintains the implementation status of mitigation activities listed in the LHMP. Currently of 38 projects listed in the LHMP, 5 are complete, 22 are underway, and 6 are not started. S1.12.1 Encourage multiagency coordination in case of incidents that cross disciplinary or jurisdictional boundaries or coordination that involves complex incident management scenarios. Office of Emergency Services R $ O See S1.10.2. Additionally, OES personnel are training to become members of the South Bay Incident Management Team. S1.12.2 Explore the establishment of mutually-beneficial cooperative agreements between Palo Alto’s police and fire departments and those of neighboring cities. Police Department, Fire Department M $ PC The police and fire departments operate on a tri-city (Palo Alto, Mountain View, Los Altos) Computer Aided Dispatch (CAD) system sharing real-time calls for services. The system allows each city to see and hear other calls and assist as needed. Dispatching services can also be shared between the three cities. The Police Department is currently managing the regional effort to implement a digital radio system, known as the Silicon Valley Regional Interoperability Authority. Moving to this system will allow all of Santa Clara County Public Safety Agencies to communicate via radio. This was not previously possible. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 65 S1.13.1 Identify solutions to add an additional power line to Palo Alto to ensure redundancy. City of Palo Alto Utilities S $$ PC CPAU is in continuing discussions with Stanford on the design and feasibility of a second transmission line that could provide power to both Palo Alto (as an alternate source) and Stanford. S1.13.2 Explore incentives to adopt emerging, residential off-grid capabilities and technologies, including back-up power sources vital in the event of natural disasters or other threats. City of Palo Alto Utilities M $ PC Currently CPAU facilitates customer adoption of systems to improve their resiliency, but CPAU does not provide any monetary incentives for such systems because it is not cost effective to use rate-payer funds for the purpose at this time. S1.13.3 Continue citywide efforts to underground utility wires to limit injury, loss of life, and damage to property in the event of human-made or natural disasters. City of Palo Alto Utilities R $$$ O CPAU continues this effort on a routine basis. S1.13.4 Enhance the safety of City-owned natural gas pipeline operations. Work with customers, public safety officials, and industry leaders to ensure the safe delivery of natural gas throughout the service area. Provide safety information to all residents on City-owned natural gas distribution pipelines. City of Palo Alto Utilities R $$ O CPAU continues this effort on a routine basis. S1.13.5 Provide off-grid and/or backup power sources for critical City facilities to ensure uninterrupted power during emergencies and disasters. City of Palo Alto Utilities R $$ O CPAU provides reliable electric services, but the City maintains onsite backup diesel generation at City facilities. Goal S-2: Protection of life, ecosystems and property from natural hazards and disasters, including earthquake, landslide, flooding, and fire. S2.5.1 Periodically review and update the City’s Seismic Hazard Ordinance. Development Services Department IP $ PC The department continues to work on the “Amendments to the Municipal Code for the Regulation of Seismic Vulnerable Buildings” staff report to City Council. The City is actively 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 66 working with California Emergency Management Agency to secure a Hazard Mitigation Grant. The City anticipant notice in Spring 2019 at which time the program will be reviewed with the City Council and community. The City remains committed to updating local regulations, policies, and procedures including an analysis of any potential CEQA requirements to ensure the safety of buildings in Palo Alto. S2.5.2 Continue to provide incentives for seismic retrofits of structures throughout the city, particularly those building types that would affect the most people in the event of an earthquake. Planning & Community Environment Department S $ O The City is in the process its seismic ordinance and will explore incentives. S2.6.1 Encourage efforts by individual neighborhood or block-level groups to pool resources for seismic retrofits. Planning & Community Environment Department M $ P No specific action has been taken at this time. S2.6.2 Continue to use a seismic bonus and a TDR Ordinance for seismic retrofits for eligible structures in the Commercial Downtown (CD) zone. Planning & Community Environment Department R $ O This is an existing provision in the zoning code and implemented on an ongoing basis S2.6.3 Evaluate the TDR Ordinance so that transferred development rights may be used for residential development on the receiver sites. Planning & Community Environment Department R $ P This is identified as a task on the City’s Housing Work Plan for 2019. S2.6.4 Study the possibility of revising the transfer of development rights program to encourage seismic retrofits. Planning & Community Environment Department M $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 67 S2.6.5 Explore the use of Community Development Block Grants, Palo Alto Housing Funds and other sources of funding to support owners of lower income and senior housing to retrofit seismically-unsafe construction. Planning & Community Environment Department S $ P No specific action has been taken at this time. S2.7.1 As part of the construction permitting process for proposed new and redeveloped buildings in areas of identified hazard shown on MapS-2, structures that would affect the most people in a seismic event require submittal to the City of a geotechnical/seismic report that identifies specific risks and appropriate mitigation measures. Development Services Department S $ O Per state law, if development occurs on an identified property as outlined on the Alquist - Priolo Fault Map, the developer is required to submit a geotechnical/seismic report that identifies specific risks and appropriate mitigation measures. Please see Maps S-2 and S-4 as well as additional hazard maps at: https://www.cityofpaloalto.org/ civicax/filebank/documents/686 14. S2.7.2 Review and update, as appropriate, City code requirements for excavation, grading, filling and construction to ensure that they conform to currently accepted and adopted State standards. Department of Public Works M $ O The code requirements are currently up-to-date. Staff will continue to monitor accepted and adopted standards and update code as needed. S2.7.3 Utilize the results of Palo Alto’s Seismic Hazards Identification Program and inventory of potentially seismically vulnerable building types to establish priorities and consider incentives to encourage structural retrofits. Planning & Community Environment Department S $ O The City is in the process its seismic ordinance and will explore incentives. S2.8.1 Implement flood mitigation requirements of FEMA in Special Flood Hazard Areas as illustrated on the Flood Insurance Rate Maps. Department of Public Works R $$$ O All private and public development projects within the Special Flood Hazard Areas are reviewed for compliance with FEMA regulations. S2.8.2 Continue participating in FEMA’s Community Rating System to reduce flood insurance for local residents and businesses and strive to improve Palo Alto’s rating in order to lower the cost of flood insurance. Department of Public Works R $ O Palo Alto continues to participate in the Community Rating System and to evaluate 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 68 opportunities to improve the rating. S2.8.3 Collaborate with the San Francisquito Creek Joint Powers Authority and the Santa Clara Valley Water District on environmentally-sensitive efforts to stabilize, restore, maintain and provide one percent (100-year) flood protection adjacent to San Francisquito Creek. Department of Public Works IP $$$ PC The Highway 101 to Bay project was completed in 2018. The Upstream of Highway 101 project is currently in the Design Development and Entitlements process. S2.8.4 Work with East Palo Alto, Santa Clara Valley Water District and San Francisquito Creek Joint Powers Authority on efforts to increase the flows within the San Francisquito Creek possible solutions include replacing the City-owned Newell Road Bridge and District-owned Pope Chaucer Street Bridge. Department of Public Works S $$$ PC Draft Environmental Impact Reports for the Newell Road Bridge project and the Upstream of Highway 101 project, which includes Pope Chaucer Street Bridge, are expected to be released in spring 2019. S2.10.1 Keep basement restrictions up to date with changing flood hazard zones. Planning & Community Environment Department S $ P No specific action has been taken at this time. S2.11.1 Review development standards applicable in areas susceptible to flooding from sea level rise, including east of Highway 101, West Bayshore and East Meadow Circle, the area east of San Antonio Road and north of East Charleston, and implement shoreline development regulations to ensure that new development is protected from potential impacts of flooding resulting from sea level rise and significant storm events. Regulations should be consistent with the Baylands Master Plan, as amended, and may include new shoreline setback requirements, limits on lot line adjustments to avoid the creation of vulnerable shoreline lots, and/or triggers for relocation or removal of existing structures based on changing site conditions and other factors. Planning & Community Environment Department S $$ P No specific action has been taken at this time. S2.11.2 Study appropriate restrictions on underground construction in areas outside of flood zones, as shown on Map S-5, to accommodate expected higher groundwater levels due to sea level rise and minimize consequent flooding of underground construction. Planning & Community Environment Department S $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 69 S2.12.1 Work cooperatively with the Santa Clara Valley Water District and the San Francisquito Creek Joint Powers Authority to provide flood protection from high tide events on San Francisco Bay, taking into account the impacts of future sea level rise, to provide one percent (100-year) flood protection from tidal flooding, while being sensitive to preserving and protecting the natural environment. Department of Public Works R $$$ O The City continues to work with the project team to plan for projects such as tide gate replacement and future SAFER projects to improve Bay levees in anticipation of future sea level rise. S2.12.2 Work with regional, State, and federal agencies to develop additional strategies to adapt to flood hazards to existing or new development and infrastructure, including support for environmentally sensitive levees. Department of Public Works R $ PC A Sea Level Rise Policy is expected to be accepted in 2019 and a Sea Level Plan will then be developed. S2.13.1 Regularly review and update the Fire Department’s operations, training facilities and programs to ensure consistency with current standards and Best Management Practices. Fire Department R $ O Efforts to implement this program are ongoing. S2.13.2 Explore technological tools, such as cameras or remote sensors, to identify smoke or fires and initiate response as quickly as possible. Fire Department S $$ O Efforts to implement this program are ongoing. OES intends to assist the Fire Department in the timely deployment of such technologies. S2.14.1 Regularly review and fund updates to the Palo Alto Foothills Fire Management Plan to ensure consistency with current standards and Best Management Practices. Fire Department M $$ O Such prevention measures are an ongoing focus of the FFMP. S2.14.2 Implement the Foothills Fire Management Plan to balance conservation of natural resources with reduction of fire hazards especially in open space areas. Fire Department R $$$ O Such prevention measures are an ongoing focus of the FFMP. S2.14.3 Minimize fire hazards by maintaining low density zoning in wildland fire hazard areas. Planning & Community Environment Department R $ P No specific action has been taken at this time. The zoning code already provides for low density zoning in fire hazard areas. S2.14.4 Work collaboratively with other jurisdictions and agencies to reduce wildfire hazards in and around Palo Alto, with an emphasis on effective vegetation management and mutual aid agreements. Fire Department R $ O Such prevention measures are an ongoing focus of the FFMP. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 70 S2.14.5 Consider implementation of CAL FIRE recommended programs in educating and involving the local community to diminish potential loss caused by wildfire and identify prevention measures to reduce those risks. Fire Department S $$ O Such prevention measures are an ongoing focus of the FFMP. S2.15.1 Evaluate measures for optimal service delivery to improve efficiency; develop automatic or mutual aid agreements with other jurisdictions, including Stanford, to improve efficiencies. Fire Department M $$ O Efforts to implement this program are ongoing. S2.15.2 Upgrade fire stations so that all remain fully functional following earthquakes. Fire Department IP $$$ O Efforts to implement this program are ongoing. S2.15.3 Periodically update the Fire Department Standards of Cover document. Fire Department S $ O Efforts to implement this program are ongoing. S2.16.1 Provide public education on fire safety, including wildland and structural fire prevention, evacuation routes and guidelines for clearance of landscaping and other hazards around structures. Fire Department R $ O Efforts to implement this program are ongoing. Goal S-3: An environment free of the damaging effects of human-caused threats and hazardous materials. S3.1.1 Continue City permitting procedures for commercial and industrial storage, use, and handling of hazardous materials and regulate the commercial use of hazardous materials that may present a risk of off-site health or safety effects. Fire Department IP $ O Such prevention measures are an ongoing focus of the Hazmat Division. S3.1.2 Minimize the risks of biohazards in Palo Alto, including Level 4 biohazards, by continuing to review and update, as necessary, local regulations regarding use, handling and disposal. Fire Department S $ O Such prevention measures are an ongoing focus of the Hazmat Division. S3.1.3 Strengthen development review requirements and construction standards for projects on sites with groundwater contamination. Development Services Department S $ P No specific action has been taken at this time. S3.1.4 Establish protocols to monitor the movement of hazardous materials on Palo Alto roadways and respond effectively to spills via established truck and construction routes. Fire Department M $ O Such prevention measures are an ongoing focus of the Hazmat Division. S3.1.5 Work with non-profit organizations to provide information to the public regarding pesticides and other commonly used hazardous materials, environmentally preferable alternatives, and safe recycling and disposal practices to all user groups. Fire Department R $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 71 S3.1.6 Continue providing regular household hazardous waste collection events at the Palo Alto Regional Water Quality Control Plant and strive to make these programs more convenient and accessible to residents. Department of Public Works R $ O The City provides ongoing weekly household hazardous waste (HHW) collection events. The percentage of Palo Alto households participating in the collection program each year is currently at a record high of 19.9%. This is among the highest participation rates in the state and is higher than the Santa Clara County rate of about 4%. S3.1.7 Continue to allow small quantity generators to dispose of hazardous waste at cost. Department of Public Works R $ O Hazardous waste from qualifying small quantity generators within the Regional Water Quality Control Plant service area is collected by appointment at household hazardous waste collection events. S3.1.8 Continue to educate residents on the proper disposal of pharmaceutical and household hazardous waste. Encourage proper disposal of medications through pharmacies or drug take-back programs rather than flushing. Department of Public Works R $ O The Zero Waste and Watershed Protection Groups prepare and provide outreach materials to encourage safe pharmaceutical disposal at industry-funded take- back and mail-back locations throughout the County, and at the City’s Household Hazardous Waste Station. S3.6.1 Work with the freight industry to monitor the contents of freight trains intersecting Palo Alto for potentially hazardous materials, and to establish accountability for accidents and spills. Office of Emergency Services R $ O OES participates in the Caltrain Life Safety Committee, along with our Fire Department, and several other agencies. S3.6.2 Work with Caltrain and the PAUSD, to educate students and the public on the dangers of rail trespass and the benefits of suicide support services available in Palo Alto. Community Services Department R $ O With the Office of Emergency Services, CSD coordinated invitations to community partners (including PAUSD and Caltrain) to participate in 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 72 demonstrations and updates on the railway’s Intrusion Detection system on three dates in the fall. Once a quarter, the Project Safety Net Executive Director checks in with Co-Chairs of Project Safety Net’s Means Restriction Advisory Work group to discuss activities that focus on public railway safety. Co-Chairs include a suicidologist and behavioral health clinician, both from the Stanford Behavioral Health Department. Semi- annually, CSD has formal update and strategizing meetings with PAUSD Student and Wellness Services staff. These meetings focus on identifying collaboration opportunities for community education, outreach, and training as well as youth mental healthcare services. During these meetings, suicide prevention and mental health awareness are discussed. OES is the lead department for ongoing operation and improvement to the Intrusion Detection System and related rail safety technology coordination. Other departments (PWD, PD) have roles too. S3.8.1 Encourage residential and commercial food waste reduction through incentives, educational outreach and programs. Department of Public Works R $ O The Zero Waste Group prepares and provides educational and 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 73 outreach materials for food waste reduction. S3.8.2 To the extent allowed by law, use refuse rate structures that incentivize waste reduction. Department of Public Works R $ P There are limited opportunities to use rate structures to incentivize waste reduction due to legal issues. S3.8.3 Continue to work with CalRecycle and the Department of Toxic Substances Control to develop and promote long-term solid waste management, such as environmentally responsible recycling programs, composting of food waste and other organics, and citywide electronics and digital hardware recycling efforts. Department of Public Works IP $ O The City continues to be a leader with environmentally responsible programs. Food waste separation is mandated and collected for dry anaerobic digestion at the nearby ZWED Facility. E-waste is also accepted for recycling. S3.9.1 Periodically review and update the adopted Construction and Debris program. Department of Public Works R $ O The Zero Waste Group is developing a new deconstruction program that would divert several thousand tons of construction waste from the landfill annually. Adoption of the related ordinance is expected to be considered by Council in April 2019. S3.9.2 Educate Palo Alto residents and developers about available incentives to use environmentally friendly deconstruction activities to minimize our carbon footprint, and to save natural resources, as well as space in our landfills. Development Services Department R $ P No specific action has been taken at this time. S3.10.1 Support efforts to enforce extended producer responsibility for solid waste to reduce waste produced from manufacturing, shipping, packaging and the entire life-cycle of the product. Office of Sustainability Services R $ O The City of Palo adopted a new Zero Waste plan in August 2018. The Plan identifies new and expanded policies, programs, and infrastructure that will be needed to reach Palo Alto’s Zero Waste goals. This includes efforts around extended 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 74 producer responsibility for solid waste. In the last year, Palo Alto transitioned from a medicine drop-off & disposal program run and funded by Palo Alto into one run and funded by the pharmaceutical manufacturers. Palo Alto, also supported State legislation which would require manufacturers to manage and pay for other collection-type programs as well. S3.12.1 Complete an inventory of the City’s digital infrastructure to locate vulnerabilities and gaps in system redundancies and develop recommendations for improved cybersecurity. City of Palo Alto Utilities S $$ PC CPAU and IT have worked together to improve the firewalls for utility system equipment and to add redundancy to communication lines used for the phone system and broadband connection for city services. This is assessed and improved on a routine basis. S3.12.2 Establish criteria for the installation of high security telecommunications technology in new local government projects. City of Palo Alto Utilities M $ P No specific action has been taken at this time. S3.12.3 Establish a wi-fi network that will be available to public safety responders and Emergency Service Volunteers in the event of power interruption during an emergency or disaster. City of Palo Alto Utilities S $$ P This will be evaluated as part of the fiber-to-the-node project in the coming years. OES has a major role in this including coordinating a possible Public Private Partnership with Carnegie Mellon University (Moffett Field Campus) and a Vmware Public Private Partnership. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 75 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C O M M U N I T Y S E R V I C E S A N D F A C I L I T I E S E L E M E N T Goal C-1: Deliver community services effectively and efficiently. C1.1.1 Based on identified needs, continue to provide and expand the provision of multilingual literature, program information and educational displays at public community facilities and parks. Community Services Department R $ O Multi-lingual signs (English and Spanish) are used in some open space and parks locations. Recreation Services currently has bi-lingual staff at all three community centers who are able to assist Spanish speaking customers with rentals and program information. Additionally, activity information at Cubberley Master Plan community meetings has been provided in English, Spanish and Mandarin and interpreters have been on site to encourage participation. C1.1.2 Establish a cross-cultural outreach program to engage residents of all ages, cultural, social and linguistic backgrounds in educational, recreational and cultural activities offered throughout the City of Palo Alto. Community Services Department M $ P No specific action has been taken at this time. C1.2.1 Periodically review public information, outreach and community relations activities to evaluate effectiveness. Community Services Department R $ O Recreation Services has started launching and tracking engagement from social media campaigns. CSD hopes to use this data as a baseline to document marked improvements in program and service outreach online. C.1.2.2 Explore a City solution to help residents and others to resolve questions and concerns and navigate the City’s community services and facilities. Community Services Department M $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 76 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.2.3 Identify barriers to participation in City programming and facilities across gender, age, socioeconomic and ethnic groups and sexual identity and orientation, as well as mental and physical abilities, and adopt strategies to remove barriers to participation. Community Services Department S $ PC In 2017 with the help of a $270,000 federal grant, CSD launched an access and inclusion initiative for the rebuilding of the Junior Museum & Zoo to ensure the new facility and its exhibits are accessible to people with physical and developmental disabilities. In 2018 the Palo Alto Art Center Foundation and Junior Museum & Zoo received an Institute of Museum and Library Services grant to support Working Together, a program intended to engage youth diverse in ethnicity and ability levels. In 2018, the Human Relations Commission conducted a LBGTQ+ Community Needs Assessment which included a question on levels of satisfaction with a variety of community services. Strategies to address the survey results are currently under development. In 2018, Recreation Services utilized Outlet Adolescent Counseling Services & LGBT Youth Space to provide LGBTQ Awareness and Sensitivity Training to Summer and Teen Center Staff. Topics included in the training included proper terminology and how to respond to LBGTQ youth that confide in CSD staff about their sexual and gender identities. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 77 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.2.4 Based on identified needs, expand program offerings to underserved groups. Community Services Department R $$$ O The Community Services Department, through support organization such as the Art Center Foundation and the Friends of the Junior Museum & Zoo and service organizations such as the Boys and Girls Club of the Peninsula, has funded scholarship programs for underserved youth to attend some of the City’s classes and summer camps. In 2018, the Friends of the Palo Alto Children’s Theatre (FOPACT) provided $25,000 in transportation grants to local Title-1 schools and low-income populations, and low-income schools, bringing more than 3,000 under- represented students to matinee performances at the Children’s Theatre. In additional outreach, FOPACT funded more than $10,000 in scholarships for summer camps and year-round classes. Recreation Services continues to provide Fee Reduction Scholarships for low- income populations for programs and services, in addition to keeping our program costs below traditional market value. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 78 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.3.1 Develop and implement a plan to collect and analyze data on demographics, use of community service facilities and needs of the community as related to parks, open spaces, recreation, arts and culture. Community Services Department M $ C The Palo Alto Art Center regularly collects and reviews demographic information from program participants. The Palo Alto Children’s Theatre surveys program participants and parents for feedback. Recreation Services continually surveys program participants for feedback which includes some basic demographic information (what facility the customer utilized and use purpose). C1.6.1 Establish a program to facilitate continuing corporate support for community services through contributions of funds, time, materials and expertise. Community Services Department M $ O Recreation Services continues to work with the Palo Alto Recreation Foundation (PARF) to recruit potential corporate sponsorships for events and services. Most recently, Kaiser Permanente has agreed to sponsor Summer Twilight Concerts and Movies with a $1,500 sponsorship. C1.12.1 In cooperation with public and private businesses, non- profit organizations, and PAUSD, develop a service program that will coordinate the efforts of agencies providing services to families and youth in Palo Alto. Community Services Department R $ P No specific action has been taken at this time. C1.13.1 Determine the potential for City shared use of PAUSD facilities for weekend, summer and evening use for community uses such as child care, libraries, recreational facilities, community meeting space, education, language education, health care, culture and computer resources. Community Services Department M $ PC With the reconstruction of the JMZ and the need for additional parking at the Lucie Stern Complex, an agreement has been made with Walter Hayes School to allow the City to use of their parking facilities on weekends and evenings for community meetings and events. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 79 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.15.1 Support and promote the provision of comprehensive child care services in Palo Alto by public and private providers, including employers. Community Services Department S $ C The Early Care and Education Community, under the direction of the Office of Human Services, continues to provide outreach to and education programs for home and center based child care providers in the community. C1.15.2 Utilize the Early Care and Education Committee to develop and update the Child Care Master Plan, and to connect providers and professionals working with families with young children, explore challenges and opportunities to programs and services for young children, and support early education programs in the community in their efforts to enhance quality. Community Services Department S $ PC A consultant is currently conducting an assessment of the needs of families with children overseen by staff in the Office of Human Services and the Early Care and Education Committee. The final report is expected in early Spring 2019. C.1.15.3 Collaborate with Palo Alto Community Child Care (PACCC) to identify, develop, and promote high quality early learning environments to serve all families in our community. Community Services Department M $ C The Office of Human Services continues to oversee a contract with PACCC to administer the City’s Child Care Subsidy program to provide quality and affordable child care to low income families. C1.15.4 Explore opportunities to provide access to childcare for families of City employees. Community Services Department L $ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 80 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.16.1 Identify funding sources for expanded outreach and increased involvement to support youth and teen leadership programs and events. Community Services Department M $ PC The Palo Alto Art Center provides a variety of teen leadership programs, including include the Art Center Teen Leadership group, Teen Takeover, which engaged more than 100 teens in FY18, and volunteer opportunities. The Teen Arts Council, an initiative of the Palo Alto Children’s Theatre, hosts weekly meetings, planning free events that serve more than 1,700 local teens each year. In addition, the group, along with the City of Palo Alto and Children’s Theatre, hosted The Buoyancy Teen Music & Art Festival attracting more than 450 teens in attendance. C1.16.2 Leverage available funding to pursue support of teen mental, physical, social and emotional health programs. Community Services Department R $ O Project Safety Net is a collaborative community network to develop and implement a community-based mental health plan that includes education, prevention and intervention strategies that together provide a “safety net” for youth in Palo Alto, and defines our community’s teen suicide prevention efforts. C1.17.1 Optimize participation in such programs by increasing the number of locations where the programs are provided and by supporting transportation options to these locations. Community Services Department S $ PC Recreation Services has expanded the location of BOOST Fitness Programs to include classes at Cubberley Community Center, Lucie Stern Community Center and the Alma Room, located at Alma Plaza. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 81 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C.1.17.2 Develop programs and activities for teens that strengthen leadership skills, encourage a culture of community service, inclusiveness, tolerance and acceptance of others. Community Services Department R $ O The Art Center offers a supportive and professional internship experience for emerging museum and arts professionals. CSD works with approximately 25 college and graduate interns annually. The Palo Alto Children’s Theatre provides teens with hands-on learning and leadership opportunities. The Children’s Theatre also works with the Friends of the Palo Alto Children’s Theatre to offer 26 paid Internships for teens each summer. Representing the City of Palo Alto, Teen Leadership brings teen voice into various facets of Palo Alto. Leadership opportunities through Palo Alto Youth Council and Teen Advisory Board are offered to high school students who wish to bring their passion, commitment, and creativity into serving the needs of the teen community. Community Services offers a Science Camp Assistant Program that provides leadership and team building skills during the summer months to approximately 45 teens a year. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 82 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.17.3 Promote a diverse range of interests and vocations among programs offered to children, youth and teens. Community Services Department M $ C The Palo Alto Art Center Children’s Fine Art program engaged over 2,100 children with high-quality art classes and workshops for youth ages 18 months to 18 years in FY18. Programs include after-school classes, special one and two-day workshops, weeklong summer camps, and Scout merit badge programs. Classes were offered in digital photography, ceramics, painting, drawing, and mixed-media sculpture. Recreation Services continues to provide hundreds of programs and services to children, youth and teens through camps, contract classes and service opportunities. C1.18.1 Develop a program to engage the talents and skills that seniors possess that would provide volunteer opportunities throughout the City. Community Services Department R $ O The Palo Alto Art Center maintains a volunteer program that supports all areas of Art Center operations and engages volunteers of all ages. Volunteers contributed 7,837 total hours in fiscal year 2017-2018 at a value of $216,305.89. The Friends of the Palo Alto Children’s Theatre manage an invaluable volunteer support program that is open to all ages. Volunteers contributed nearly 3,000 hours in FY18. There are opportunities for CSD and OES to cross-fertilize ideas regarding senior volunteers. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 83 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C.1.18.2 Support, promote, and publicize the provision of comprehensive senior services in coordination with senior service providers. Comprehensive services include addressing senior nutrition, mental health and transportation. Community Services Department R $ O The Office of Human Services oversees a contract with Avenidas to support the provision of comprehensive services for seniors in Palo Alto. Through the HSRAP program, financial support is granted to other agencies providing nutrition, legal, vision, disability, homeless, medical and mental health services. C.1.18.3 Establish a support program for caregivers of seniors and people with disabilities by partnering with private, nonprofit, faith-based and public community service organizations. Community Services Department M $ PC The Palo Alto Art Center regularly partners with Avenidas. In 2017, the Center hosted an Intergenerational Play Date with Avenidas and Youth Community Services. The Center continued this program in 2018. In 2018, the Center developed a collaborative grant proposal with Avenidas to fund a free series of collage classes for seniors in the community. This proposal is pending. The Community Services Department co-sponsored a Caregiver Conference organized by Avenidas on November 10, 2018. The Friends of the Palo Alto Children’s Theatre works with the Ronald McDonald House to provide free summer camps, year-round workshops and field trips for children and families who are visiting the area for medical care. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 84 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C1.20.1 Partner with agencies for support and improved access so that all can participate as appropriate in Palo Alto recreational programs. Community Services Department R $ O CSD Recreation Services has reached out to Magical Bridge Foundation to establish a partnership that will include cross-training for inclusion best practices, potential inclusion buddy systems for recreation camps and programs and long-term joint programming. The Office of Human Services collaborates with Abilities United to provide an annual summer camp program for special needs children ages 5-18. C1.22.1 Increase awareness about caring and compassion for the unhoused and those who suffer from mental and/or physical conditions through educational programming in partnership with community and business organizations throughout the region. Community Services Department R $ O The Office of Human Services facilitates a committee of local homeless and senior services providers to address the needs of homeless senior citizens in the community. With the assistance service providers, CSD will be hosting a resource fair for homeless seniors in February, 2019. C1.22.2 Work with Santa Clara and San Mateo Counties, the State of California, the federal government, non-profit agencies, business and other organizations to define roles and responsibilities in the comprehensive provision of permanent supportive housing and temporary shelter, food, clothing and transportation for those in need. Planning & Community Environment Department R $ O The City continues to work with the County in identifying housing and supportive services funds and providing emergency shelters. The City is also working on encouraging developers to use Measure A funding and other State funding for permanent, supportive housing. Goal C-2: Demonstrate a commitment to excellence and high quality service to the public among City of Palo Alto officials and employees. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 85 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C2.2.1 Establish performance review criteria for City employees that consider the quality of service provided. Human Resources Department M $ P No specific action has been taken at this time. C2.2.2 Periodically perform evaluations of City service delivery and develop strategies for continuous improvement. Use metrics and make information publicly available. Community Services Department R $$ O The Palo Alto Art Center regularly evaluates all of its programs for the public and uses a Net Promotor Score in all evaluations to determine our overall effectiveness. Evaluations are frequently reviewed and discussed at a staff level to promote program assessment and improvement. The Palo Alto Children’s Theatre conducts annual program reviews, including customer surveys and feedback, to evaluate program effectiveness and reach. Recreation Services conducts quarterly program evaluations through Survey Monkey to solicit customer feedback and evaluate program effectiveness. C3.2.1 Develop a proactive Asset Management Program for infrastructure requirements and costs. Administrative Services Department M $$ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 86 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes Goal C-3: Recognize the intrinsic value and everyday importance of our parks and community centers, libraries, civic buildings and cultural assets by investing in their maintenance and improvement. C3.3.1 Periodically evaluate how parks and recreational facilities are being used and develop strategies for improving their use overall. Community Services Department IP $ PC Staff, with the help of park users, evaluated the use the tennis courts at Mitchell Park and observed that pickleball is frequently being played on the tennis courts. As a result, staff stripped three of the courts for dual use (tennis and pickleball) and are currently working with the Parks and Recreation Commission and the pickleball users to try to create dedicated pickleball courts. C3.3.2 Study and recommend methods of private and public financing for improved park maintenance, rehabilitation, and construction of facilities, including those used for arts and culture. Community Services Department S $ P Funds currently come from a wide variety of sources. C3.3.3 Estimate the costs of retrofitting all park facilities with water efficient appliances, fixtures and irrigation systems and develop an implementation schedule to phase-in use of non-potable water conservations measures where and when feasible. City of Palo Alto Utilities & Community Services Department M $$ PC Community Services staff is working on this as sites are renovated through Capital Improvement Projects. Most recently, when the golf course was renovated, a new type of turf grass was used, which allows the City to irrigate the course (excluding the greens) with 100% recycled water. C3.3.4 Periodically assess the need to adjust parkland dedication or fees in lieu thereof to ensure they remain proportional to real estate values in Palo Alto. Planning & Community Environment Department R $ P No specific action has been taken at this time. Goal C-4: Plan for a future in which our parks, open spaces, libraries, public art, and community facilities thrive and adapt to the growth and change of Palo Alto. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 87 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C4.1.1 Explore opportunities to dedicate City‐owned land as parkland to protect and preserve its community-serving purpose into the future. Community Services Department S $$$ PC On 6/5/2017 Council dedicated 36.5 acres at the former ITT property (located in the Baylands Nature Preserve) as park land. C4.1.2 Encourage dedication of new land for parks through regulations and incentives for new development and programs to solicit bequests of land within the city. Community Services Department M $$ P No specific action has been taken at this time. C4.1.3 Pursue opportunities to create linear parks over the Caltrain tracks in the event the tracks are moved below grade. Community Services Department L $$$ P No specific action has been taken at this time. C4.1.4 Explore ways to dedicate a portion of in-lieu fees towards acquisition of parkland, not just improvements. Community Services Department M $ P No specific action has been taken at this time. C4.5.1 Use Cubberley Community Center as a critical and vital part of the City’s service delivery system while also planning for its future. Community Services Department IP $$ PC The Cubberley Stock project is intended to bring diverse stakeholders together to explore the future of Cubberley. The Public Art Commission has approved an artist- led community meal that will take place in March 2019 in which members of the community will share a meal and listen to artist proposals for temporary artworks at Cubberley. Cubberley is also a community resource for recovery. OES has an emergency facility at Cubberley. Cubberley is also identified as a primary Red Cross Shelter in the Red Cross’s National Shelter System. Goal C-5: Sustain the health, well-being, recreation, and safety of residents and visitors, and improve the quality, quantity, and affordability of social services for all community members, including children, youth, teens, seniors, the unhoused, and people with disabilities. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 88 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C5.1.1 Allocate resources to create and support initiatives to increase the health and well-being of the public. Community Services Department R $ O In fall 2017, in conjunction with a variety of community partners— including Avenidas, Healthy City, Healthy Community, and Youth Community Services-- the Palo Alto Art Center presented the exhibition Play! The Palo Alto Children’s Theatre brings on-site performing arts and wellness programs to all twelve PAUSD Elementary Schools, serving more than 3,000 children annually. The City led a community-wide Healthy City Healthy Community initiative. The stakeholder group achievements include: designation of Palo Alto as an Age-Friendly community, organization of an annual community health fair, and development of a welcome packet for new residents on health and wellness resources. C5.1.2 Establish a community-sourced online clearinghouse of information and activities related to health promotion in the community. Community Services Department M $ C An online welcome packet is available and provides health and wellness resources for new residents. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 89 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes C5.6.1 Incorporate health and well-being topics, including arts and culture, into existing events and programs at City- owned park and recreation facilities. Community Services Department R $ O The Palo Alto Art Center actively promotes classes, workshops, exhibitions, and public programs at all City facilities. The Public Art Program initiated a pilot mobile platform at the Mitchell Park Library and Community Center, the Palo Alto Art Center, and Rinconada Library to make more information available about the public artworks at those sites. The Palo Alto Children’s Theatre staff oversee the City of Palo Alto’s annual Twilight Concert Series, featuring summer free concerts in parks throughout the City. C5.6.2 Work with schools and community organizations to provide programs that educate residents, workers and visitors on health and well-being topics. Community Services Department R $$ O The Office of Human Services, in collaboration with the Alzheimer’s Association, hosted an educational event in March 2018 on dementia and how to make Palo Alto a “Dementia Friendly” community. C5.9.1 Identify existing and potential indoor and outdoor locations for community gardens and farmers markets at City-owned or leased facilities and spaces. Community Services Department M $ PC Staff is working on developing a partnership with a local church to use some of their land as a community garden. Staff hope to have an agreement in 2019. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 90 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes B U S I N E S S A N D E C O N O M I C S E L E M E N T Goal B-1: Businesses in Palo Alto that contribute to economic vitality, enhance the city’s physical environment, promote municipal revenues and provide needed local services. B.1.1 Implement and periodically amend an Economic Development Policy to guide business development in the City in a manner consistent with Policy L-1.10. Office of Economic Development R $ O Our Economic Development Policy remains relevant to meeting the demands of our local community. In 2019, the City Manager's Office plans to bring forward the Economic Development Policy to the Policy & Services Committee of the City Council for review. Goal B-3: Careful management of City revenues and expenditures so that the fiscal health of the City is ensured and services are delivered efficiently and equitably. B3.2.1 Continue to refine tools, such as the Business Registry, as data sources on existing businesses, including the type of business, number of employees, size, location, and other metrics to track the diversity of Palo Alto businesses. Development Services Department/ Office of Economic Development IP $$ C For the 2018 calendar year business registry cycle, the City changed fee collection vendors and entered into a contract with Avenu Insights & Analytics (Avenu). For the 2019 business registry cycle, the City is further improving data accuracy and saving resources by combining the business registry fee collection with the BID fee collection through Avenu. This action will provide businesses with one invoice for both fees thereby eliminating confusion. The action will also allow Avenu to merge databases and create one business database for the City. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 91 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes Goal B-4: The stimulation of diverse commercial, retail and professional service business opportunities through supportive business policies and a culture of innovation. B4.2.1 Revise zoning and other regulations as needed to encourage the preservation of space to accommodate small businesses, start-ups and other services. Planning & Community Environment Department M $$ P No specific action has been taken at this time. B4.2.2 Consider planning, regulatory, or other incentives to encourage property owners to include smaller office spaces in their buildings to serve small businesses, non- profit organizations, and independent professionals. Planning & Community Environment Department M $ P No specific action has been taken at this time. B4.6.1 Work with local merchants to encourage Palo Alto residents, workers, and visitors to buy in Palo Alto. Office of Economic Development R $$ O The City continues to support the sales tax generating zones of Downtown, California Ave., Stanford Mall and various shopping areas in Palo Alto through localized outreach, communication and marketing support as requested. In partnership with zone representatives, the City’s focus for buy local has mainly been addressing parking and traffic needs. The City’s partnership with Chamber of Commerce also continues and staff remain committed to aligning resources and supporting the Chamber’s goals and objectives. B4.6.2 Study the overall viability of ground-floor retail requirements in preserving retail space and creating an active street environment, including the types of locations where such requirements are most effective. Office of Economic Development M $$ P As the Economic Development Policy is updated, resources may be assigned to this project. B4.6.3 Maintain distinct neighborhood shopping areas that are attractive, accessible, and convenient to nearby residents. Planning & Community Environment Department R $ O This program is implemented through the use of Architectural Review findings. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 92 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes Goal B-5: City regulations and operating procedures that provide certainty, predictability and flexibility and help businesses adapt to changing market conditions. B5.1.1 Regularly evaluate ways to improve coordination of the City’s environmental review, permitting, and inspection processes. Planning & Community Environment Department R $ O Planning continually works to streamline the CEQA process and works with other departments to ensure the necessary permitting is anticipated and inspections are conditioned as needed. B5.1.2 Improve design guidelines to reduce ambiguity and more clearly articulate compatibility principles to the business community and to the public. Planning & Community Environment Department M $$ P No specific action has been taken at this time. B5.1.3 Simplify the design review process for small-scale changes to previously approved site plans and buildings. Planning & Community Environment Department M $$ O This is an ongoing process that staff continues to refine. Mostly recently, staff implemented the “Over the Counter” process to streamline small project changes. B5.1.4 Revise zoning and other regulations as needed to encourage the revitalization of aging retail structures and areas. Encourage the preservation of space to accommodate small, independent retail businesses and professional services. Planning & Community Environment Department R $$ O Historic preservation policies maintain older structures, but more can be done to encourage the preservation of small retail and commercial spaces. Goal B-6: Attractive, vibrant retail centers, each with a mix of uses and a distinctive character. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 93 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes B6.1.1 Actively work with Downtown businesses, professional associations and the Palo Alto Chamber of Commerce to retain successful retail businesses that contribute to the City’s goals for Downtown. Office of Economic Development R $$ O The City continues to attend and participate in meetings and initiatives put forward by the Palo Alto Chamber of Commerce, the Palo Alto Downtown Business and Professional Association, and the California Avenue Merchants Association. The City is also an active member of the Silicon Valley Economic Development Alliance. SVEDA is a regional partnership of economic development professionals who bring together public and private resources to ensure the success of businesses in Silicon Valley. Goal B-7: Thriving business employment districts at Stanford Research Park, Stanford Medical Center, East Bayshore/San Antonio Road Area and Bayshore Corridor that complement the City’s business and neighborhood centers. B7.2.1 Review policies and regulations guiding development at Stanford Research Park and revise them as needed to allow improved responsiveness to changing market conditions in a manner consistent with Policy L-1.10. Planning & Community Environment Department M $$ P No specific action has been taken at this time. B7.2.2 Study the feasibility of a “transfer of development rights” (TDR) program and other measures that would provide greater development flexibility within Stanford Research Park without creating significant adverse traffic impacts or increasing the allowable floor area. Planning & Community Environment Department M $$ P No specific action has been taken at this time. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 94 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes GOVERNANCE ELEMENT Goal G-1: Effective opportunities for public participation in local government. G1.1.1 Consider making data available at a transactional level on the Open Data Portal. P No update is available for this program as no lead department, priority or level of effort was assigned to this program at the time of the Comprehensive Plan’s Adoption. G1.2.1 Continue to hold regular, Town Hall-style meetings in neighborhoods. City Council R $$ O The City Council, City Manager, and Departments continue to prioritize hosting Town Halls. For example, in 2018 Mayor Liz Kniss convened a town hall regarding traffic and congestion. Additional meetings have been held regarding specific topics, such as Connecting Palo Alto, Midtown Transportation Fair, the Cubberley Co-Design, and more. G1.2.2 Periodically review the suite of engagement options used to solicit citizen input and expertise on policy issues. City Manager R $ - $$$ O The City Manager has directed staff to review and update the community engagement strategy in 2019. As part of that process, staff will review the suite of engagement options employed by the City. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 95 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G1.2.3 Continue to rely on neighborhood organizations, the City website, local media, online technologies and other communication platforms to keep residents informed of current issues and to encourage citizen engagement. City Manager R $ O The City uses a range of communication tools to keep the community informed and engaged. These include maintaining the City website and calendar, sharing events and information via social media platforms such as Instagram, Next Door, Facebook, and Twitter, posting videos on YouTube and broadcasting Council and Committee meetings via the MidPen Media Center, providing emergency communications via Nixle and AlertSCCC, reading and responding to emails from the public to City Council and the City Manager general e-mail boxes, maintaining and using the Palo Alto 311 app, and meeting face-to-face with residents, businesses, and organizations. In 2019, the City will overhaul and redesign its website, ensuring it remains a welcoming and helpful digital destination for residents, businesses, and visitors. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 96 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G1.2.4 Provide access to communications technologies at City facilities, including public libraries and City Hall, and explore innovative locations for communication. City Manager R $$ O City facilities continue to provide access to communication technologies. Many City facilities offer free wi-fi for guests. In addition, the public libraries offer computer access for patrons. The Palo Alto Library also provides library card holders with tremendous online resources; these can be accessed at a library or via a patron's own computer or device. Digital offerings include e-books, film streaming, music, research archives, homework help, study guides, and more. All of these digital resources help connect residents to each other, to their local communities, and to the broader world so they can stay informed, knowledgeable, and engaged. G1.2.5 Continue to release City Council staff reports to the public up to 10 days prior to Council hearings to increase public awareness of City decision-making. City Clerk R $ O The City continues to follow the practice of publishing City Council agendas 11 days in advance of each Council meeting. Most staff reports are included in this publication, although some staff reports are produced fewer than 11 days before Council meetings. 98% of Fiscal Year 2018 City Council agendas were published 11 days in advance. Goal G-2: Informed and involved civic, cultural, environmental, social service and neighborhood organizations and residents. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 97 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G2.2.1 Continue to offer the use of City facilities to non-profit civic, environmental, cultural, neighborhood and social service organizations for meetings and events at discounted or complimentary rates and via sponsorship programs. City Manager R $ O The City continues to partner with local organizations to host meetings and events at City facilities. Neighbors Abroad and Cool Block were just two of the many organizations the City recently partnered with to co-host meetings and events at reduced rates. The public libraries offer free meeting spaces to various community organizations including Project SafetyNet, MidPeninsula Media Center, CASP artists and the Palo Alto Camera Club. Goal G-4: Active involvement of local citizens as volunteers. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 98 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G4.1.1 Continue and expand volunteer opportunities and the community’s awareness of public and nonprofit organizations serving the City. All Departments R $ O Numerous departments offer volunteer opportunities and promote awareness of local organizations serving the City. For example, Transportation collaborates with PTA, PAUSD, SCC DPH, Bike Palo Alto!, SVBC, PAMF, Stanford Hospital, and LPCH. Volunteers are also an element of OES’s "whole community" preparedness program. Community services also provides numerous volunteer opportunities and has benefited from thousands of volunteer hours in the arts, open space and sciences. Additionally, City Council authorized a formal partnership with Cool Block. The public library also provides various volunteer opportunities to the community where residents assist and present programs by becoming TLAB (Teen Library Advisory Board) volunteers, Homebound services volunteers, Tech helpers, ESL Coaches and Virtual Reality Coaches. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 99 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G4.1.2 Publicly recognize the efforts of individuals, groups, and businesses that provide volunteer services within the City. City Manager R $ O Through the Know Your Neighbor grant program, the City supports the efforts of volunteers to host events that promote a sense of community and neighborhoods. In addition, the City collaborates with local organizations to recognize volunteers through awards. Two examples include the Citizen Corps Service Award and collaboration with the Canopy to host the Mayor's Tree Planting and Awards Ceremony. The City Clerk also hosts an annual event to recognize the contributions of those serving on boards and commissions. Likewise, the library along with the Friends of the Palo Alto Library hosts an annual volunteer appreciation event. The City Council also issues proclamations to honor individuals and organizations who make significant contributions to public life in Palo Alto. Lastly, OES (with support of CMO) hosts an annual recognition event for OES volunteers and other community partners. G4.1.3 Coordinate with the Palo Alto Unified School District to develop classroom-based leadership, governance and civic participation programs. City Manager M $$ PC The City of Palo Alto regularly hosts high school students as summer interns. In 2018, City of Palo Alto staff and executives spoke to local high school students regarding their careers and civic engagement. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 100 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G4.1.4 Support the transition from school-based volunteering to civic participation via outreach to parent volunteers and student leaders. City Manager M $ PC The City supports and the Community Services Department staffs the Palo Alto Youth Council (PAYC). The PAYC is a collaborative of Palo Alto high school students committed to servicing the needs of the teen community by serving as a voice toward change and action. G4.1.5 Coordinate with the real estate community to develop a welcome package for new residents, containing City resources, information and ways to contribute to livability. City Manager M $$ PC The Utilities Department currently sends a welcome message to new residents and customers. In 2019 this will be reviewed and updated. Goal G-6: More clearly defined procedures, standards, and expectations for development review. G6.2.1 Provide clear information across multiple communications platforms to guide citizens and businesses through the City review and approval process. Planning and Community Environment R $ O Staff uses the internet, message boards, mailing, newspaper ads, direct communication, etc. to communicate and engage citizens and businesses alike. G6.2.2 Continue and expand customer-oriented process improvement efforts. All Departments R $$ O Several departments are working to improve customer-oriented processes. For example, Development Services is partnering with Information Technology and Administrative Services departments to implement a Customer Queuing software system which will provide more predictable timing for customers. Development Services is also working to convert submittal of building plans from a paper to electronic format. 2 0 3 0 C O M P R E H E N S I V E P L A N I M P L E M E N T A T I O N : 2 0 1 8 P R O G R E S S R E P O R T * S = Short (< 5 years), M = Medium (5-10 years), L = Long (>10 years), IP = In Progress, R = Routine ** C = Complete, PC = Partially Complete, P = Pending, O = Ongoing 101 Program Program Text Lead Department Priority* Level of Effort 2018 Status** Notes G6.2.3 Use the pre-screening process to obtain early feedback from the City Council and the community regarding ordinance changes intended to facilitate specific development proposals. Planning and Community Environment R $ O PAMC Section 18.79 is regularly implemented to achieve this goal. Attachment B: 2018 Housing Element Annual Progress Report Jurisidiction Name Reporting Calendar Year First Name Last Name Title Email Phone Street Address City Zipcode v 1_29_19 250 Hamilton Ave Palo Alto 94301 Please Start Here Submittal Instructions Housing Element Annual Progress Reports (APRs) forms and tables must be submitted to HCD and the Governor's Office of Planning and Research (OPR) on or before April 1 of each year for the prior calendar year; submit separate reports directly to both HCD and OPR pursuant to Government Code section 65400. There are two options for submitting APRs: 1. Online Annual Progress Reporting System (Preferred) - This enters your information directly into HCD’s database limiting the risk of errors. If you would like to use the online system, email APR@hcd.ca.gov and HCD will send you the login information for your jurisdiction. Please note: Using the online system only provides the information to HCD. The APR must still be submitted to OPR. Their email address is opr.apr@opr.ca.gov. 2. Email - If you prefer to submit via email, you can complete the excel Annual Progress Report forms and submit to HCD at APR@hcd.ca.gov and to OPR at opr.apr@opr.ca.gov. Please send the Excel workbook, not a scanned or PDF copy of the tables. General Information 2018 Palo Alto Contact Information Hang Huynh Senior Planner Hang.Huynh@CityofPaloAlto.org (650) 329-2493 Mailing Address Annual Progress Report January 2019 Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 Report Summary - New Construction, Entitled, Permits and Completed Units Date Application Submitted 234 56 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate- Income Entitlement Date Approved # of Units issued Entitlements Summary Row: Start Data Entry Below 000000117 117 531 IRVEN CT, PALO ALTO, CA 94306 18PLN-00088 SFD O 1 6/1/2018 1 3265 EL CAMINO REAL 15PLN-00312 2 to 4 O 3 7/6/2018 3 120-14-004 356 HAWTHORNE AVE 17PLN-00367 SFD O -1 -1 132-37-056 3001 EL CAMINO REAL 18PLN-00152 5+ R 44 11/9/2018 44 124-18-096 115 RINCONADA AVE 18PLN-00104 SFD O -1 6/13/2018 -1 137-12-023 3721 LA DONNA AVE 17PLN-00435 SFD O 1 3/14/2018 1 003-33-050 1023 MIDDLEFIELD 18PLN-00193 SFD O -1 3/29/2018 -1 132-36-084 2755 EL CAMINO REAL 16PLN-00464 5+ R 57 6/25/2018 57 137-25-109 567 MAYBELL AVE 17PLN-00158 SFD O 12 2/26/2018 12 142-28-107 1501 CALIFORNIA AVE 14000-01600 2 to 4 O 0 142-28-106 1635 BOWDOIN CT 14000-01600 2 to 4 O 0 142-28-XXX 1501 CALIFORNIA AV 14000-01581 SFD O 0 142-28-XXX 1600 AMHERST CT 14000-01581 SFD O 0 142-28-XXX 1501 CALIFORNIA AV 14000-01586 SFD O 0 142-28-XXX 1615 AMHERST CT 14000-01586 SFD O 0 142-28-XXX 1501 CALIFORNIA AV 14000-01587 SFD O 0 142-28-XXX 2500 AMHERST ST 14000-01587 SFD O 0 142-28-XXX 1501 CALIFORNIA AV 14000-01601 SFD O 0 142-28-XXX 1615 BOWDOIN CT 14000-01601 SFD O 0 142-28-XXX 1501 CALIFORNIA AV 14000-01609 SFD O 0 142-28-XXX 2435 AMHERST ST 14000-01609 SFD O 0 124-16-089 1545 ALMA ST 17000-03116 2 to 4 O 1 4/4/2018 1 124-16-089 1543 ALMA ST 17000-03117 2 to 4 O 1 4/4/2018 1 003-51-021 912 N CALIFORNIA AV 17000-01770 ADU R 0 147-27-005 237 SCRIPPS CT 17000-02169 ADU R 0 120-05-062 940 WEBSTER ST 17000-02390 ADU R 0 137-04-005 980 CALIFORNIA AV 17000-02730 ADU R 0 127-28-086 836 BRUCE DR 17000-02881 ADU R 0 132-19-048 2829 EMERSON ST 17000-03099 ADU R 0 137-27-090 4152 DONALD DR A 18000-00147 ADU R 0 Project Identifier Unit Types Affordability by Household Incomes - Completed Entitlement 1 Note: + Optional field Cells in grey contain auto-calculation formulas Annual Building Activity ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 Report Summary - New Construction, Entitled, Permits and Completed Units Date Application Submitted 234 56 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate- Income Entitlement Date Approved # of Units issued Entitlements Summary Row: Start Data Entry Below 000000117 117 003-50-070 2100 BELLVIEW DR 18000-00464 ADU R 0 003-32-035 741 HOMER AV 18000-00506 ADU R 0 132-27-031 3247 EMERSON ST 18000-00522 ADU R 0 120-18-005 358 ADDISON AV, UNIT A 18000-00781 ADU R 0 137-04-025 2350 CORNELL ST 18000-00841 ADU R 0 127-22-027 3342 VERNON TER 18000-00917 ADU R 0 127-19-122 728 GAILEN AV 18000-00954 ADU R 0 137-19-008 1070 CERRITO WY 18000-01109 ADU R 0 132-40-023 419 MARGARITA AV 18000-01327 ADU R 0 132-40-053 389 MATADERO AV 18000-01411 ADU R 0 003-33-037 1001 FULTON ST 18000-01425 ADU R 0 127-48-016 3451 CORK OAK WY 18000-01426 ADU R 0 127-24-013 3256 CLIFTON CT 18000-01496 ADU R 0 120-06-072 555 KINGSLEY AV 18000-01564 ADU R 0 132-02-027 2640 MIDDLEFIELD RD 18000-01647 ADU R 0 167-06-062 665 GLENBROOK DR 17000-02364 ADU R 0 127-58-008 3094 STELLING DR 17000-02541 ADU R 0 003-03-034 833 HAMILTON AV 17000-02777 ADU R 0 132-02-017 2546 WEBSTER ST 17000-03055 ADU R 0 127-11-022 3624 EVERGREEN DR 17000-03103 ADU R 0 132-18-035 2591 RAMONA ST 17000-03106 ADU R 0 003-31-013 641 GUINDA ST 18000-01810 ADU R 0 003-14-064 1741 EDGEWOOD DR 18000-01817 ADU R 0 127-49-069 3287 MIDDLEFIELD RD 18000-01820 ADU R 0 148-05-036 124 MONROE DR 18000-02018 ADU R 0 124-30-031 310 LELAND AV 18000-02224 ADU R 0 137-25-062 580 GEORGIA AV 17000-02801 ADU R 0 120-17-043 400 CHANNING AV 17000-03144 ADU R 0 120-17-043 400 CHANNING AV 17000-03146 ADU R 0 Project Identifier Unit Types Affordability by Household Incomes - Completed Entitlement 1 Note: + Optional field Cells in grey contain auto-calculation formulas Annual Building Activity ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 237 89 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate- Income Building Permits Date Issued # of Units Issued Building Permits Summary Row: Start Data Entry Below 00000054 54 531 IRVEN CT, PALO ALTO, CA 94306 18PLN-00088 SFD O 1 12/3/2018 1 3265 EL CAMINO REAL 15PLN-00312 2 to 4 O 0 120-14-004 356 HAWTHORNE AVE 17PLN-00367 SFD O 0 132-37-056 3001 EL CAMINO REAL 18PLN-00152 5+ R 0 124-18-096 115 RINCONADA AVE 18PLN-00104 SFD O 0 137-12-023 3721 LA DONNA AVE 17PLN-00435 SFD O 1 7/13/2018 1 003-33-050 1023 MIDDLEFIELD 18PLN-00193 SFD O 0 132-36-084 2755 EL CAMINO REAL 16PLN-00464 5+ R 0 137-25-109 567 MAYBELL AVE 17PLN-00158 SFD O 0 142-28-107 1501 CALIFORNIA AVE 14000-01600 2 to 4 O 2 2/5/2018 2 142-28-106 1635 BOWDOIN CT 14000-01600 2 to 4 O 2 2/5/2018 2 142-28-XXX 1501 CALIFORNIA AV 14000-01581 SFD O 1 2/5/2018 1 142-28-XXX 1600 AMHERST CT 14000-01581 SFD O 1 2/5/2018 1 142-28-XXX 1501 CALIFORNIA AV 14000-01586 SFD O 1 2/5/2018 1 142-28-XXX 1615 AMHERST CT 14000-01586 SFD O 1 2/5/2018 1 142-28-XXX 1501 CALIFORNIA AV 14000-01587 SFD O 1 2/5/2018 1 142-28-XXX 2500 AMHERST ST 14000-01587 SFD O 1 2/5/2018 1 142-28-XXX 1501 CALIFORNIA AV 14000-01601 SFD O 1 2/5/2018 1 142-28-XXX 1615 BOWDOIN CT 14000-01601 SFD O 1 2/5/2018 1 142-28-XXX 1501 CALIFORNIA AV 14000-01609 SFD O 1 2/5/2018 1 142-28-XXX 2435 AMHERST ST 14000-01609 SFD O 1 2/5/2018 1 124-16-089 1545 ALMA ST 17000-03116 2 to 4 O 1 6/8/2018 1 124-16-089 1543 ALMA ST 17000-03117 2 to 4 O 1 6/8/2018 1 003-51-021 912 N CALIFORNIA AV 17000-01770 ADU R 1 7/5/2018 1 147-27-005 237 SCRIPPS CT 17000-02169 ADU R 1 3/20/2018 1 120-05-062 940 WEBSTER ST 17000-02390 ADU R 1 2/1/2018 1 137-04-005 980 CALIFORNIA AV 17000-02730 ADU R 1 3/15/2018 1 127-28-086 836 BRUCE DR 17000-02881 ADU R 1 5/8/2018 1 132-19-048 2829 EMERSON ST 17000-03099 ADU R 1 9/26/2018 1 137-27-090 4152 DONALD DR A 18000-00147 ADU R 1 6/7/2018 1 Project Identifier Unit Types 1 Annual Building Activity Affordability by Household Incomes - Building Permits ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 237 89 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate- Income Building Permits Date Issued # of Units Issued Building Permits Summary Row: Start Data Entry Below 00000054 54 003-50-070 2100 BELLVIEW DR 18000-00464 ADU R 1 6/20/2018 1 003-32-035 741 HOMER AV 18000-00506 ADU R 1 7/5/2018 1 132-27-031 3247 EMERSON ST 18000-00522 ADU R 1 11/19/2018 1 120-18-005 358 ADDISON AV, UNIT A 18000-00781 ADU R 1 6/21/2018 1 137-04-025 2350 CORNELL ST 18000-00841 ADU R 1 12/10/2018 1 127-22-027 3342 VERNON TER 18000-00917 ADU R 1 11/13/2018 1 127-19-122 728 GAILEN AV 18000-00954 ADU R 1 8/22/2018 1 137-19-008 1070 CERRITO WY 18000-01109 ADU R 1 7/19/2018 1 132-40-023 419 MARGARITA AV 18000-01327 ADU R 1 12/18/2018 1 132-40-053 389 MATADERO AV 18000-01411 ADU R 1 10/17/2018 1 003-33-037 1001 FULTON ST 18000-01425 ADU R 1 10/3/2018 1 127-48-016 3451 CORK OAK WY 18000-01426 ADU R 1 7/13/2018 1 127-24-013 3256 CLIFTON CT 18000-01496 ADU R 1 8/27/2018 1 120-06-072 555 KINGSLEY AV 18000-01564 ADU R 1 9/6/2018 1 132-02-027 2640 MIDDLEFIELD RD 18000-01647 ADU R 1 10/10/2018 1 167-06-062 665 GLENBROOK DR 17000-02364 ADU R 1 3/9/2018 1 127-58-008 3094 STELLING DR 17000-02541 ADU R 1 2/9/2018 1 003-03-034 833 HAMILTON AV 17000-02777 ADU R 1 3/30/2018 1 132-02-017 2546 WEBSTER ST 17000-03055 ADU R 1 4/27/2018 1 127-11-022 3624 EVERGREEN DR 17000-03103 ADU R 1 3/20/2018 1 132-18-035 2591 RAMONA ST 17000-03106 ADU R 1 3/5/2018 1 003-31-013 641 GUINDA ST 18000-01810 ADU R 1 12/13/2018 1 003-14-064 1741 EDGEWOOD DR 18000-01817 ADU R 1 10/26/2018 1 127-49-069 3287 MIDDLEFIELD RD 18000-01820 ADU R 1 10/12/2018 1 148-05-036 124 MONROE DR 18000-02018 ADU R 1 12/11/2018 1 124-30-031 310 LELAND AV 18000-02224 ADU R 1 11/30/2018 1 137-25-062 580 GEORGIA AV 17000-02801 ADU R 1 4/26/2018 1 120-17-043 400 CHANNING AV 17000-03144 ADU R 1 5/23/2018 1 120-17-043 400 CHANNING AV 17000-03146 ADU R 1 5/23/2018 1 Project Identifier Unit Types 1 Annual Building Activity Affordability by Household Incomes - Building Permits ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 2310 11 12 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate- Income Certificates of Occupancy or other forms of readiness (see instructions) Date Issued # of Units issued Certificates of Occupancy or other forms of readiness Summary Row: Start Data Entry Below 0000000 531 IRVEN CT, PALO ALTO, CA 94306 18PLN-00088 SFD O 3265 EL CAMINO REAL 15PLN-00312 2 to 4 O 120-14-004 356 HAWTHORNE AVE 17PLN-00367 SFD O 132-37-056 3001 EL CAMINO REAL 18PLN-00152 5+ R 124-18-096 115 RINCONADA AVE 18PLN-00104 SFD O 137-12-023 3721 LA DONNA AVE 17PLN-00435 SFD O 003-33-050 1023 MIDDLEFIELD 18PLN-00193 SFD O 132-36-084 2755 EL CAMINO REAL 16PLN-00464 5+ R 137-25-109 567 MAYBELL AVE 17PLN-00158 SFD O 142-28-107 1501 CALIFORNIA AVE 14000-01600 2 to 4 O 142-28-106 1635 BOWDOIN CT 14000-01600 2 to 4 O 142-28-XXX 1501 CALIFORNIA AV 14000-01581 SFD O 142-28-XXX 1600 AMHERST CT 14000-01581 SFD O 142-28-XXX 1501 CALIFORNIA AV 14000-01586 SFD O 142-28-XXX 1615 AMHERST CT 14000-01586 SFD O 142-28-XXX 1501 CALIFORNIA AV 14000-01587 SFD O 142-28-XXX 2500 AMHERST ST 14000-01587 SFD O 142-28-XXX 1501 CALIFORNIA AV 14000-01601 SFD O 142-28-XXX 1615 BOWDOIN CT 14000-01601 SFD O 142-28-XXX 1501 CALIFORNIA AV 14000-01609 SFD O 142-28-XXX 2435 AMHERST ST 14000-01609 SFD O 124-16-089 1545 ALMA ST 17000-03116 2 to 4 O 124-16-089 1543 ALMA ST 17000-03117 2 to 4 O 003-51-021 912 N CALIFORNIA AV 17000-01770 ADU R 147-27-005 237 SCRIPPS CT 17000-02169 ADU R 120-05-062 940 WEBSTER ST 17000-02390 ADU R 137-04-005 980 CALIFORNIA AV 17000-02730 ADU R 127-28-086 836 BRUCE DR 17000-02881 ADU R 132-19-048 2829 EMERSON ST 17000-03099 ADU R 137-27-090 4152 DONALD DR A 18000-00147 ADU R Project Identifier Unit Types 1 Annual Building Activity ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 2310 11 12 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner Very Low- Income Deed Restricted Very Low- Income Non Deed Restricted Low- Income Deed Restricted Low- Income Non Deed Restricted Moderate- Income Deed Restricted Moderate- Income Non Deed Restricted Above Moderate- Income Certificates of Occupancy or other forms of readiness (see instructions) Date Issued # of Units issued Certificates of Occupancy or other forms of readiness Summary Row: Start Data Entry Below 0000000 003-50-070 2100 BELLVIEW DR 18000-00464 ADU R 003-32-035 741 HOMER AV 18000-00506 ADU R 132-27-031 3247 EMERSON ST 18000-00522 ADU R 120-18-005 358 ADDISON AV, UNIT A 18000-00781 ADU R 137-04-025 2350 CORNELL ST 18000-00841 ADU R 127-22-027 3342 VERNON TER 18000-00917 ADU R 127-19-122 728 GAILEN AV 18000-00954 ADU R 137-19-008 1070 CERRITO WY 18000-01109 ADU R 132-40-023 419 MARGARITA AV 18000-01327 ADU R 132-40-053 389 MATADERO AV 18000-01411 ADU R 003-33-037 1001 FULTON ST 18000-01425 ADU R 127-48-016 3451 CORK OAK WY 18000-01426 ADU R 127-24-013 3256 CLIFTON CT 18000-01496 ADU R 120-06-072 555 KINGSLEY AV 18000-01564 ADU R 132-02-027 2640 MIDDLEFIELD RD 18000-01647 ADU R 167-06-062 665 GLENBROOK DR 17000-02364 ADU R 127-58-008 3094 STELLING DR 17000-02541 ADU R 003-03-034 833 HAMILTON AV 17000-02777 ADU R 132-02-017 2546 WEBSTER ST 17000-03055 ADU R 127-11-022 3624 EVERGREEN DR 17000-03103 ADU R 132-18-035 2591 RAMONA ST 17000-03106 ADU R 003-31-013 641 GUINDA ST 18000-01810 ADU R 003-14-064 1741 EDGEWOOD DR 18000-01817 ADU R 127-49-069 3287 MIDDLEFIELD RD 18000-01820 ADU R 148-05-036 124 MONROE DR 18000-02018 ADU R 124-30-031 310 LELAND AV 18000-02224 ADU R 137-25-062 580 GEORGIA AV 17000-02801 ADU R 120-17-043 400 CHANNING AV 17000-03144 ADU R 120-17-043 400 CHANNING AV 17000-03146 ADU R Project Identifier Unit Types 1 Annual Building Activity ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 Streamlining Infill Housing without Financial Assistance or Deed Restrictions Term of Affordability or Deed Restriction Notes 2 3 13 14 15 16 17 18 19 20 21 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner How many of the units were Extremely Low Income?+ Was Project APPROVED using GC 65913.4(b)? (SB 35 Streamlining) Y/N Infill Units? Y/N+ Assistance Programs for Each Development (see instructions) Deed Restriction Type (see instructions) For units affordable without financial assistance or deed restrictions, explain how the locality determined the Term of Affordability or Deed Restriction (years) (if affordable in perpetuity enter 1000)+ Number of Demolished/Dest royed Units+ Demolished or Destroyed Units+ Demolished/Dest royed Units Owner or Renter+ Notes+ Summary Row: Start Data Entry Below 00 000 531 IRVEN CT, PALO ALTO, CA 94306 18PLN-00088 SFD O NY 3265 EL CAMINO REAL 15PLN-00312 2 to 4 O NY 120-14-004 356 HAWTHORNE AVE 17PLN-00367 SFD O NY 132-37-056 3001 EL CAMINO REAL 18PLN-00152 5+ R NY 124-18-096 115 RINCONADA AVE 18PLN-00104 SFD O NY Demo Triplex, Build 2 SFR's 137-12-023 3721 LA DONNA AVE 17PLN-00435 SFD O NY 003-33-050 1023 MIDDLEFIELD 18PLN-00193 SFD O NY Demo Triplex, Build 2 SFR's 132-36-084 2755 EL CAMINO REAL 16PLN-00464 5+ R NY 137-25-109 567 MAYBELL AVE 17PLN-00158 SFD O NY Parcel Map Application 142-28-107 1501 CALIFORNIA AVE 14000-01600 2 to 4 O NY Mayfield Stanford Development Agreement 142-28-106 1635 BOWDOIN CT 14000-01600 2 to 4 O NY Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01581 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1600 AMHERST CT 14000-01581 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01586 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1615 AMHERST CT 14000-01586 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01587 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 2500 AMHERST ST 14000-01587 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01601 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1615 BOWDOIN CT 14000-01601 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 1501 CALIFORNIA AV 14000-01609 SFD O NY Mayfield Stanford Development Agreement 142-28-XXX 2435 AMHERST ST 14000-01609 SFD O NY Mayfield Stanford Development Agreement 124-16-089 1545 ALMA ST 17000-03116 2 to 4 O NY 124-16-089 1543 ALMA ST 17000-03117 2 to 4 O NY 003-51-021 912 N CALIFORNIA AV 17000-01770 ADU R NY 147-27-005 237 SCRIPPS CT 17000-02169 ADU R NY 120-05-062 940 WEBSTER ST 17000-02390 ADU R NY 137-04-005 980 CALIFORNIA AV 17000-02730 ADU R NY 127-28-086 836 BRUCE DR 17000-02881 ADU R NY 132-19-048 2829 EMERSON ST 17000-03099 ADU R NY 137-27-090 4152 DONALD DR A 18000-00147 ADU R NY Housing with Financial Assistance and/or Deed Restrictions Demolished/Destroyed UnitsProject Identifier Unit Types 1 Annual Building Activity ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan 1 - Dec 31) Table A2 Streamlining Infill Housing without Financial Assistance or Deed Restrictions Term of Affordability or Deed Restriction Notes 2 3 13 14 15 16 17 18 19 20 21 Prior APN+Current APN Street Address Project Name+ Local Jurisdiction Tracking ID+ Unit Category (SFA,SFD,2 to 4,5+,ADU,MH) Tenure R=Renter O=Owner How many of the units were Extremely Low Income?+ Was Project APPROVED using GC 65913.4(b)? (SB 35 Streamlining) Y/N Infill Units? Y/N+ Assistance Programs for Each Development (see instructions) Deed Restriction Type (see instructions) For units affordable without financial assistance or deed restrictions, explain how the locality determined the Term of Affordability or Deed Restriction (years) (if affordable in perpetuity enter 1000)+ Number of Demolished/Dest royed Units+ Demolished or Destroyed Units+ Demolished/Dest royed Units Owner or Renter+ Notes+ Summary Row: Start Data Entry Below 00 000 003-50-070 2100 BELLVIEW DR 18000-00464 ADU R NY 003-32-035 741 HOMER AV 18000-00506 ADU R NY 132-27-031 3247 EMERSON ST 18000-00522 ADU R NY 120-18-005 358 ADDISON AV, UNIT A 18000-00781 ADU R NY 137-04-025 2350 CORNELL ST 18000-00841 ADU R NY 127-22-027 3342 VERNON TER 18000-00917 ADU R NY 127-19-122 728 GAILEN AV 18000-00954 ADU R NY 137-19-008 1070 CERRITO WY 18000-01109 ADU R NY 132-40-023 419 MARGARITA AV 18000-01327 ADU R NY 132-40-053 389 MATADERO AV 18000-01411 ADU R NY 003-33-037 1001 FULTON ST 18000-01425 ADU R NY 127-48-016 3451 CORK OAK WY 18000-01426 ADU R NY 127-24-013 3256 CLIFTON CT 18000-01496 ADU R NY 120-06-072 555 KINGSLEY AV 18000-01564 ADU R NY 132-02-027 2640 MIDDLEFIELD RD 18000-01647 ADU R NY 167-06-062 665 GLENBROOK DR 17000-02364 ADU R NY 127-58-008 3094 STELLING DR 17000-02541 ADU R NY 003-03-034 833 HAMILTON AV 17000-02777 ADU R NY 132-02-017 2546 WEBSTER ST 17000-03055 ADU R NY 127-11-022 3624 EVERGREEN DR 17000-03103 ADU R NY 132-18-035 2591 RAMONA ST 17000-03106 ADU R NY 003-31-013 641 GUINDA ST 18000-01810 ADU R NY 003-14-064 1741 EDGEWOOD DR 18000-01817 ADU R NY 127-49-069 3287 MIDDLEFIELD RD 18000-01820 ADU R NY 148-05-036 124 MONROE DR 18000-02018 ADU R NY 124-30-031 310 LELAND AV 18000-02224 ADU R NY 137-25-062 580 GEORGIA AV 17000-02801 ADU R NY 120-17-043 400 CHANNING AV 17000-03144 ADU R NY 120-17-043 400 CHANNING AV 17000-03146 ADU R NY Housing with Financial Assistance and/or Deed Restrictions Demolished/Destroyed UnitsProject Identifier Unit Types 1 Annual Building Activity ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Jurisdiction Palo Alto Reporting Year 2018 (Jan. 1 - Dec. 31) 1 3 4 RHNA Allocation by Income Level 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total Units to Date (all years)Total Remaining RHNA by Income Level Deed Restricted 43 Non-Deed Restricted Deed Restricted 58 Non-Deed Restricted Deed Restricted Non-Deed Restricted 11 3 28 Above Moderate 587 174 15 61 54 304 283 1988 286 18 89 54 447 1541 Note: units serving extremely low-income households are included in the very low-income permitted units totals Cells in grey contain auto-calculation formulas Please contact HCD if your data is different than the material supplied here 58 Total RHNA Total Units 44 Income Level Very Low Low 42 ANNUAL ELEMENT PROGRESS REPORT Housing Element Implementation (CCR Title 25 §6202) Moderate 691 432 278 2 Table BRegional Housing Needs Allocation ProgressPermitted Units Issued by Affordability 648 374 236 43 This table is auto-populated once you enter your jurisdiction name and current year data. Past year information comes from previous APRs. TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H1 Goal ENSURE THE PRESERVATION OF THE UNIQUE CHARACTER OF RESIDENTIAL NEIGHBORHOODS H1.1 Policy Promote the rehabilitation of deteriorating or substandard residential properties using sustainable and energy conserving approaches. H1.1.1 Program Continue the citywide property maintenance, inspection, and enforcement program. Continue to provide services which promote rehabilitation of substandard housing. City Funds Planning & Community Environment; Code Enforcement Ongoing Ongoing program H1.1.2 Program Consider modifying development standards for second units, where consistent with maintaining the character of existing neighborhoods. The modifications should encourage the production of second units affordable to very low-, low-, or moderate-income households. Consider modifying the Zoning Code to provide for additional second units. General Fund Planning & Community Environment Conduct a study within three years of adoption of Housing Element to assess the potential for additional second units with modifications to the development standards. Completed. Ordinance adopted on May 8, 2017. H1.1.3 Program Provide incentives to developers such as reduced fees and flexible development standards to encourage the preservation of existing rental cottages and duplexes currently located in the R-1 and R-2 residential areas. Preserve 10 rental cottages and duplexes. City Housing funds Planning & Community Environment Explore incentives within three years of Housing Element adoption Underway; part of the Phase 2 Housing Element implementation plan for 2019 H1.2 Policy Support efforts to preserve multifamily housing units in existing neighborhoods. H1.2.1 Program When a loss of rental housing occurs due to subdivision or condominium conversion approvals, the project shall require 25 percent BMR units. Provide 10 additional affordable housing units on sites where rental housing will be lost. NA Planning & Community Environment Ongoing Underway - there have not been any projects subject to this program to date. Status of Housing Element Programs 2015-2023 December 2018 Housing Element Program Status Page 1 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H1.3 Policy Encourage community involvement in the maintenance and enhancement of public and private properties and adjacent rights-of-way in residential neighborhoods. H1.3.1 Program Create community volunteer days and park cleanups, plantings, or similar events that promote neighborhood enhancement and conduct City- sponsored cleanup campaigns for public and private properties. Coordinate with the City’s waste and disposal hauler to conduct a cleanup campaign once a year to promote neighborhood clean-up. City Housing Funds Public Works Department Ongoing Ongoing program H1.4 Policy Ensure that new developments provide appropriate transitions from higher density development to single-family and low-density residential districts to preserve neighborhood character. H2 Goal SUPPORT THE CONSTRUCTION OF HOUSING NEAR SCHOOLS, TRANSIT, PARKS, SHOPPING, EMPLOYMENT, AND CULTURAL INSTITUTIONS H2.1 Policy Identify and implement strategies to increase housing density and diversity, including mixed-use development and a range of unit styles, near community services. Emphasize and encourage the development of affordable and mixed-income housing to support the City’s fair share of the regional housing needs and to ensure that the City’s population remains economically diverse. Housing Element Program Status Page 2 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.1.1 Program To allow for higher density residential development,consider amending the Zoning Code to permit high-density residential in mixed use or single use projects in commercial areas within one-half a mile of fixed rail stations and to allow limited exceptions to the 50-foot height limit for Housing Element Sites within one-quarter mile of fixed rail stations. Provide opportunities for a diverse range of housing types near fixed rail stations. City Funds Planning & Community Environment Consider Zoning Code amendments within three years of Housing Element adoption Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.1.10 Program As a part of planning for the future of El Camino Real,explore the identification of pedestrian nodes (i.e.“pearls on a string”)consistent with the South El Camino Design Guidelines,with greater densities in these nodes than in other areas. Explore the identification of pedestrian nodes. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Underway; part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019. H2.1.11 Program Consider implementing the Pedestrian and Transit Oriented Development (PTOD)Overlay for the University Avenue downtown district to promote higher density multifamily housing development in that area. Consider PTOD for University Avenue. City Funds Planning & Community Environment Within four years of Housing Element adoption, in conjunction with the Comprehensive Plan update Not Yet Completed. H2.1.12 Program Evaluate developing specific or precise plans for the downtown,California Avenue,and El Camino Real areas to implement in the updated Comprehensive Plan.Adopt plans for these areas, as appropriate. Evaluate developing plans for downtown, California Avenue, and El Camino Real. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Completed. Comprehensive Plan adopted the study of Coordinated Plans for Cal Ave and Downtown. H2.1.2 Program Allow increased residential densities and mixed use development only where adequate urban services and amenities, including roadway capacity, are available. Make sure that adequate services are available when considering increased residential densities. City Funds Planning & Community Environment Ongoing Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. Housing Element Program Status Page 3 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.1.3 Program Amend the zoning code to specify the minimum density of eight dwelling units per acre in all RM-15 districts.Consider amending the zoning code to specify minimum density for other multifamily zoning districts,consistent with the multi-family land use designation in the Comprehensive Plan. To provide opportunities for up to10 additional dwelling units on properties zoned RM-15 City Funds Planning & Community Environment Within three years of Housing Element adoption Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.1.4 Program Amend the Zoning Code to create zoning incentives that encourage the development of smaller,more affordable housing units,including units for seniors,such as reduced parking requirements for units less than 900 square feet and other flexible development standards. Provide opportunities for 75 smaller, more affordable housing units. City Funds Planning & Community Environment Within three years of Housing Element adoption Completed. H2.1.5 Program Use sustainable neighborhood development criteria to enhance connectivity, walkability, and access to amenities, and to support housing diversity. Increase connectivity and walkability in new development. City Funds Planning & Community Environment Ongoing Underway H2.1.6 Program Consider density bonuses and/or concessions including allowing greater concessions for 100% affordable housing developments. Provide opportunities for 100% affordable housing developments. City Funds Planning & Community Environment Ongoing Underway; part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019. H2.1.7 Program Explore developing a Transfer of Development Rights (TDR)program to encourage higher-density housing in appropriate locations. Create opportunities for higher-density housing. City Funds Planning & Community Environment Consider program within two years of Housing Element adoption Underway; part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019. Underway (part of Comp Plan Implementation). Housing Element Program Status Page 4 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.1.8 Program Promote redevelopment of underutilized sites by providing information about potential housing sites onthe City’s website,including the Housing Sites identified to meet the RHNA and information about financial resources available through City housing programs. Provide information to developers about potential housing sites. City funds Planning & Community Environment Post information on website upon adoption of Housing Element Completed. H2.1.9 Program Amend the Zoning Code to create zoning incentives that encourage the consolidation of smaller lots identified as Housing Inventory Sites and developed with 100%affordable housing projects.Incentives may include development review streamlining,reduction in required parking for smaller units,or graduated density when consolidated lots are over one-half acre.Adopt amendments as appropriate.Provide information regarding zoning incentives to developers. Amend the Zoning Code to provide development incentives to meet the RHNA. City funds Planning & Community Environment Adopt amendments within two years of Housing Element adoption Completed. H2.2 Policy Continue to support the redevelopment of suitable lands for mixed uses containing housing to encourage compact,infill development.Optimize the use of existing urban services,and support transit use. Housing Element Program Status Page 5 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.2.1 Program Implement an incentive program within three years of Housing Element adoption for small properties identified as a Housing Element Site to encourage housing production on those sites.The incentive eliminates Site and Design Review if the project meets the following criteria: •The project has 9 residential units or fewer •A residential density of 20 dwelling units per acre or higher • Maximum unit size of 900 square feet Streamline processing for identified Housing Element Sites. City Funds Planning & Community Environment Adopt program within three years of Housing Element adoption Completed. H2.2.2 Program Work with Stanford University to identify sites suitable for housing that may be located in the Stanford Research Park and compatible with surrounding uses. Identify sites suitable for housing to accommodate additional housing units. City Funds Planning & Community Environment Identify sites within three years of Housing Element adoption Underway. H2.2.3 Program Use coordinated area plans and other tools to develop regulations that support the development of housing above and among commercial uses. Explore additional opportunities to encourage housing in commercial areas. Planning & Community Environment Ongoing Underway. Part of the Phase 1 Housing Element implementation plan for 2018. Completion anticipated Feb/March 2019; development of the North Ventura Coordinated Area Plan in progress. Housing Element Program Status Page 6 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.2.4 Program As detailed in the Resources chapter of the Housing Element,the City of Palo Alto has committed to providing financial assistance towards the conversion of 23 multi-family units to very low-income (30-50%AMI)units for a period of 55 years,and is seeking to apply credits towards the City’s RHNA (refer to Appendix C -Adequate Sites Program Alternative Checklist).The Palo Alto Housing Corporation (PAHC) approached the City for assistance in converting a portion of the 60 units at the Colorado Park Apartments,to be reserved for very low-income households.The committed assistance will ensure affordability of the units for at least 55 years, as required by law. By the end of the second year of the housing element planning period, the City will enter into a legally enforceable agreement for $200,000 in committed assistance to purchase affordability covenants on 23 units at the Colorado Park Apartments. The City will report to HCD on the status of purchasing affordability covenants no later than July 1, 2018, and to the extent an agreement is not in place, will amend the Housing Element as necessary to identify additional sites. City Housing funds Planning & Community Environment Ongoing Completed January 2016. H2.2.5 Program The City will continue to identify more transit-rich housing sites including in the downtown and the California Avenue area after HCD certification as part of the Comprehensive Plan Update process and consider exchanging sites along San Antonio and sites along South El Camino that are outside of identified “pedestrian nodes” for the more transit-rich identified sites. Explore additional appropriate housing sites. City Funds Planning & Community Environment Ongoing Not yet completed. Housing Element Program Status Page 7 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.2.6 Program On parcels zoned for mixed use, consider allowing exclusively residential use on extremely small parcels through the transfer of zoning requirements between adjacent parcels to create horizontal mixed use arrangements.If determined to be appropriate,adopt an ordinance to implement this program. Consider transfer of zoning requirements to create horizontal mixed use. City Funds Planning & Community Environment Within three years of Housing Element adoption Completed as part of Program 2.1.9. H2.2.7 Program Explore requiring minimum residential densities to encourage more housing instead of office space when mixed-use sites develop,and adopt standards as appropriate. Explore requiring minimum densities in mixed use districts. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.2.8 Program Assess the potential of removing maximum residential densities (i.e. dwelling units per acre)in mixed use zoning districts to encourage the creation of smaller housing units within the allowable Floor Area Ratio (FAR), and adopt standards as appropriate. Assess removal of maximum densities in mixed use zoning districts. City Funds Planning & Community Environment Ongoing in conjunction with the Comprehensive Plan update Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H2.3 Policy Heighten community awareness and to receive community input regarding the social, economic and environmental values of maintaining economic diversity in the City by providing affordable and mixed income higher density housing along transit corridors and at other appropriate locations. Housing Element Program Status Page 8 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H2.3.1 Program Maintain an ongoing conversation with the community, using a variety of forms of media, regarding the need for affordable housing, the financial realities of acquiring land and building affordable housing, and the reasons that affordable housing projects need higher densities to be feasible developments. Perform outreach on affordable housing. City Funds Planning & Community Environment Ongoing Ongoing. H3 Goal MEET UNDERSERVED HOUSING NEEDS, AND PROVIDE COMMUNITY RESOURCES TO SUPPORT OUR NEIGHBORHOODS H3.1 Policy Encourage, foster, and preserve diverse housing opportunities for very low-, low-, and moderate income households. H3.1.1 Program Amend the City’s BMR ordinance to lower the BMR requirement threshold from projects of five or more units to three or more units,and to modify the BMR rental section to be consistent with case law related to inclusionary rental housing. Provide opportunities for four additional BMR units. City Funds Planning & Community Environment Amend BMR Ordinance within three years of Housing Element adoption. Completed. Ordinance adopted on April 17, 2017. Housing Element Program Status Page 9 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.10 Program Annually monitor the progress in the construction or conversion of housing for all income levels, including the effectiveness of housing production in mixed use developments. Provide information to the City Council on the effectiveness of City programs. City Funds Planning & Community Environment Provide annual reports Ongoing program H3.1.11 Program When using Housing Development funds for residential projects, the City shall give a strong preference to those developments which serve extremely low-income (ELI), very low-income, and low-income households. Provide funding opportunities for development of housing for Extremely Low Income households. City Housing Development funds Planning & Community Environment Ongoing Ongoing program, housing funds provided as needed by housing projects. Housing Element Program Status Page 10 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.12 Program Amend the Zoning Code to provide additional incentives to developers who provide extremely low-income (ELI), very low-income, and low-income housing units, above and beyond what is required by the Below Market Rate program, such as reduced parking requirements for smaller units, reduced landscaping requirements, and reduced fees. Provide incentives for development of housing for Extremely Low Income households. City Housing funds Planning & Community Environment Within three years of Housing Element adoption Completed; part of the Phase 1 Housing Element implementation plan for 2018. Completion Feb 2019. H3.1.13 Program For any affordable development deemed a high risk to convert to market rate prices within two years of the expiration of the affordability requirements, the City will contact the owner and explore the possibility of extending the affordability of the development. To protect those affordable developments deemed a high risk to converting to market rate City Housing funds Planning & Community Environment Ongoing Underway, in discussions with property owners of projects at risk of conversion, including Lytton Gardens, Terman Apartments and Webster Wood Apartments. H3.1.14 Program Encourage and support the regional establishment of a coordinated effort to provide shared housing arrangement facilitation,similar to the HIP Housing Home Sharing Program in San Mateo County.Advocate among regional and nonprofit groups to establish the necessary framework. Meet with regional groups and work to establish a Santa Clara Home Sharing Program City Housing funds Planning & Community Environment Within two years of Housing Element adoption Underway. On April 2018, the Santa Clara County's Board approved the Santa Clara Home Sharing Program with partnership with Catholic Charities of Santa Clara County. Housing Element Program Status Page 11 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.2 Program Implement the BMR ordinance to reflect the City’s policy of requiring: a) At least 15 percent of all housing units in projects must be provided at below market rates to very low-, low-, and moderate-income households. Projects on sites of five acres or larger must set aside 20 percent of all units as BMR units. Projects that cause the loss of existing rental housing may need to provide a 25 percent component as detailed in Program H 1.2.1. BMR units must be comparable in quality, size, and mix to the other units in the development. b) Initial sales price for at least two- thirds of the BMR units must be affordable to a household making 80 to 100 percent of the Santa Clara County median income. The initial sales prices of the remaining BMR units may be set at higher levels affordable to households earning between 100 to 120 percent of the County’s median income. For projects with a 25 percent BMR component, four-fifths of the BMR units must be affordable to households in the 80 to 100 percent of median Provide 10 affordable units through implementation of the City’s BMR program. Developers Planning & Community Environment Ongoing – implementation of existing program Ongoing program H3.1.3 Program Continue implementation of the Below Market Rate Program Emergency Fund to prevent the loss of BMR units and to provide emergency loans for BMR unit owners to maintain and rehabilitate their units. Consider expansion of program funds to provide financial assistance for the maintenance and rehabilitation of older BMR units. Use the BMR Program Emergency Fund to prevent the loss of at least two affordable units and assist in maintenance and rehabilitation of at least four older BMR units BMR Emergency Fund Planning & Community Environment On Ongoing program, preserved one BMR unit in 2016 Housing Element Program Status Page 12 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.4 Program Preserve affordable housing stock by monitoring compliance, providing tenant education, and seeking other sources of funds for affordable housing developments at risk of market rate conversions. The City will continue to renew existing funding sources supporting rehabilitation and maintenance activities. Prevent conversion of affordable housing to market rate, and renew funding sources for rehabilitation and maintenance of housing stock. City, CDBG funds Planning & Community Environment Ongoing – implementation of existing program Underway, in discussions with property owners of projects at risk of conversion, including Lytton Gardens, Terman Apartments and Webster Wood Apartments. H3.1.5 Program Encourage the use of flexible development standards, including floor- area ratio limits, creative architectural solutions, and green building practices in the design of projects with a substantial BMR component. Increase opportunities for BMR development through use of flexible development standards. City Funds Planning & Community Environment Ongoing – implementation of existing program Ongoing program H3.1.6 Program Require developers of employment- generating commercial and industrial developments to contribute to the supply of low- and moderate-income housing through the payment of commercial in-lieu fees as set forth in a nexus impact fee study and implementing ordinances. Generate in-lieu fees to contribute toward the creation of low- and moderate-income housing. City Housing Fund Planning & Community Environment Continue to regularly update the commercial in-lieu fee. Completed. The commercial in-lieu fee was updated in June 2017. H3.1.7 Program Ensure that the Zoning Code permits innovative housing types such as co- housing and provides flexible development standards that will allow such housing to be built,provided the character of the neighborhoods in which such housing is proposed to be located is maintained. Review the Zoning Code and determine appropriate amendments to allow innovative housing types with flexible development standards. City Funds Planning & Community Environment Consider changes to the Zoning Code within four years of Housing Element adoption. Not yet completed. Housing Element Program Status Page 13 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.1.8 Program Recognize the Buena Vista Mobile Home Park as providing low- and moderate income housing opportunities. Any redevelopment of the site must be consistent with the City’s Mobile Home Park Conversion Ordinance adopted to preserve the existing units. To the extent feasible, the City will seek appropriate local, state and federal funding to assist in the preservation and maintenance of the existing units in the Buena Vista Mobile Home Park. Preserve the 120 mobile home units in the Buena Vista Mobile Home Park as a low and moderate income housing resource. City, State and Federal Funds Planning & Community Environment Ongoing Completed. Mobile home park was preserved in September 2017. H3.1.9 Program Continue enforcing the Condominium Conversion Ordinance. Maintain the rental housing stock. City Funds Planning & Community Environment Ongoing Ongoing program H3.2 Policy Reduce the cost of housing by continuing to promote energy efficiency,resource management, and conservation for new and existing housing. H3.2.1 Program Continue to assist very low-income households in reducing their utility bills through the Utilities Residential Rate Assistance Program (RAP). Provide assistance to with utility bills to 800 low-income households. City Funds Palo Alto Utilities Department Ongoing Ongoing program Housing Element Program Status Page 14 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.2.2 Program Use existing agency programs such as Senior Home Repair to provide rehabilitation assistance to very low- and low-income households. Provide rehabilitation assistance to 600 very low and low-income households. CDBG and General Fund Planning & Community Environment Ongoing Ongoing. CDBG funds were allocated for a pilot home repair program in FY18. H3.3 Policy Support the reduction of governmental and regulatory constraints, and advocate for the production of affordable housing. H3.3.1 Program When appropriate and feasible, require all City departments to expedite processes and allow waivers of development fees as a means of promoting the development of affordable housing. Continue to reduce processing time and costs for affordable housing projects. City Funds Planning & Community Environment Ongoing Ongoing program H3.3.2 Program Continue to exempt permanently affordable housing units from any infrastructure impact fees adopted by the City. Reduce costs for affordable housing projects. City Funds Planning & Community Environment Ongoing Ongoing program Housing Element Program Status Page 15 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.3.3 Program Promote legislative changes and funding for programs that subsidize the acquisition, rehabilitation, and operation of rental housing by housing assistance organizations, nonprofit developers, and for-profit developers. Continue as an active member of the Non- Profit Housing Association of Northern California to promote legislative changes and funding City Funds Planning & Community Environment; City Manager Ongoing Ongoing, active membership in the Non- Profit Housing Association. H3.3.4 Program Support the development and preservation of group homes and supported living facilities for persons with special housing needs by assisting local agencies and nonprofit organizations in the construction or rehabilitation of new facilities for this population. Regularly review existing development regulations, and amend the Zoning Code accordingly to reduce regulatory obstacles to this type of housing. City & CDBG Funds Planning & Community Environment Amend Zoning Code within three years of Housing Element adoption. Not yet completed. H3.3.5 Program Review and consider revising development standards for second units to facilitate the development of this type of housing, including reduced minimum lot size and FAR requirements. Based on this analysis, consider modifications to the Zoning Code to better encourage development of second units. Complete study on impact of revised standards, and consider Zoning Code Amendments City Funds Planning & Community Environment, City Council Ongoing Completed. Zoning code updates completed March 2017. H3.3.6 Program Continue to participate with and support agencies addressing homelessness. Continue City staff participation in prioritizing funding for County-wide programs. City, CDBG & HOME funds Planning & Community Environment, City Council Ongoing Ongoing program Housing Element Program Status Page 16 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.3.7 Program Prepare a local parking demand database to determine parking standards for different housing uses (i.e. market rate multifamily, multifamily affordable, senior affordable, emergency shelters etc.) with proximity to services as a consideration. Adopt revisions to standards as appropriate. Determine parking standards for different residential uses. City Funds Planning & Community Environment Within four years of Housing Element adoption Underway, consultant has been retained to complete a parking study. H3.4 Policy Pursue funding for the acquisition, construction,and rehabilitation of housing that is affordable to very low-, low-,and moderate-income households. H3.4.1 Program Maintain a high priority for the acquisition of new housing sites near public transit and services, the acquisition and rehabilitation of existing housing, and the provision for housing-related services for affordable housing. Seek funding from all State and federal programs whenever they are available to support the development or rehabilitation of housing for very low-, low-, and moderate-income households Allocate CDBG funding to acquire and rehabilitate housing for very low-, low-, and moderate income households. CDBG, State Local Housing Trust Fund Planning & Community Environment Ongoing Ongoing program Housing Element Program Status Page 17 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.4.2 Program Support and expand local funding sources including the City’s Housing Development Fund, Housing Trust of Santa Clara County, CDBG Program, County of Santa Clara’s Mortgage Credit Certificate Program (MCC), or similar program. Continue to explore other mechanisms to generate revenues to increase the supply of low- and moderate-income housing. Increase the supply of affordable housing stock. City Housing Development Fund, Housing Trust of Santa Clara County, CDBG, Santa Clara County MCC Planning & Community Environment Ongoing Ongoing program H3.4.3 Program Periodically review the housing nexus formula required under Chapter 16.47 of the Municipal Code to fully reflect the impact of new jobs on housing demand and cost. Continue to evaluate the housing nexus formula, and adjust the required impact fees to account for the housing demand from new development. City Funds Planning & Community Environment Ongoing Completed. Housing nexus study updated in 2016. Fees updated in 2017. H3.4.4 Program The City will work with affordable housing developers to pursue opportunities to acquire, rehabilitate, and convert existing multi-family developments to long-term affordable housing units to contribute to the City’s fair share of the region’s housing needs. Identify potential sites for acquisition and conversion and provide this information to developers. City Funds Planning & Community Environment Within three years of Housing Element adoption Ongoing program H3.5 Policy Support the provision of emergency shelter,transitional housing,and ancillary services to address homelessness. Housing Element Program Status Page 18 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H3.5.1 Program Continue to participate in the Santa Clara County Homeless Collaborative as well as work with adjacent jurisdictions to develop additional shelter opportunities. Continue City staff participation as members of the Collaborative’s CDBG and Home Program Coordinators Group. City, CDBG & HOME funds Planning & Community Environment, City Council Ongoing Ongoing. Continued participation in regional CDBG/housing collaborative efforts. H3.5.2 Program Amend the Zoning Code to clarify distancing requirements for emergency shelters,stating that “no more than one emergency shelter shall be permitted within a radius of 300 feet.” Amend the Zoning Code to clarify distancing requirements for emergency shelters. City Funds Planning & Community Environment Adopt amendments within one year of Housing Element adoption Completed. H3.5.3 Program Amend the Zoning Code to revise definitions of transitional and supportive housing to remove reference to multiple-family uses,and instead state that “transitional and supportive housing shall be considered a residential use of property and shall be subject only to those restrictions that apply to other residential dwellings of the same type in the same zone.” Amend the Zoning Code to revise transitional and supportive housing definitions. City Funds Planning & Community Environment Adopt amendments within one year Completed. H3.6 Policy Support the creation of workforce housing for City and school district employees as feasible. H3.6.1 Program Conduct a nexus study to evaluate the creation of workforce housing for City and school district employees. Create the opportunity for up to five units of workforce housing. City of Palo Alto Commercial Housing Fund Planning & Community Environment Conduct a study within four years of adoption of the Housing Element. Completed. City adopted Workforce Housing Overlay. H4 Goal PROMOTE AN ENVIRONMENT FREE OF DISCRIMINATION AND THE BARRIERS THAT PREVENT CHOICE IN HOUSING. H4.1 Policy Support programs and agencies that seek to eliminate housing discrimination. Housing Element Program Status Page 19 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H4.1.1 Program Work with appropriate State and federal agencies to ensure that fair housing laws are enforced, and continue to support groups that provide fair housing services, such as the Mid-Peninsula Citizens for Fair Housing Continue to coordinate with State and federal agencies to support programs to eliminate housing discrimination, and provide financial support for fair housing services. City Funds Planning & Community Environment Ongoing Ongoing. The City contracts with Project Sentinel to provide fair housing services. H4.1.2 Program Continue the efforts of the Human Relations Commission to combat discrimination in rental housing, including mediation of problems between landlords and tenants. Continue to provide mediation services for rental housing discrimination cases. City Funds Human Relations Commission, Planning & Community Environment Ongoing Ongoing. The City contracts with Project Sentinel to provide mediation services. H4.1.3 Program Continue implementation of City’s ordinances and State law prohibiting discrimination in renting or leasing housing based on age, parenthood, pregnancy, or the potential or actual presence of a minor child. Implement existing ordinances regarding discrimination City Funds Planning & Community Environment Ongoing Ongoing program H4.1.4 Program Continue the City’s role in coordinating the actions of various support groups that seek to eliminate housing discrimination and in providing funding and other support for these groups to disseminate fair housing information in Palo Alto, including information on referrals to pertinent investigative or enforcement agencies in the case of fair housing complaints. Continue to provide funding and other support for these groups to disseminate fair housing information in Palo Alto. City Funds,Human Services Resource Allocation Process (HSRAP) Office of Human Services Ongoing Ongoing. The City contracts with Project Sentinel to provide fair housing services. Housing Element Program Status Page 20 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H4.1.5 Program Heighten community awareness regarding and implement the Reasonable Accommodations procedure for the siting, funding, development, and use of housing for people with disabilities. Continue to provide information to residents on reasonable accommodation procedures via public counters and on the City’s website. City Funds Planning & Community Environment Ongoing Ongoing program H4.1.6 Program Continue to implement the Action Plan of the City of Palo Alto’s Community Development Block Grant (CDBG) Consolidated Plan and the Analysis of Impediments to Fair Housing Choice. Provide for increased use and support of tenant/landlord educational mediation opportunities as called for in the CDBG Action Plan and the Analysis of Impediments to Fair Housing Choice. CDBG funds, General Fund Planning & Community Environment Ongoing Ongoing program. H4.2 Policy Support housing that incorporates facilities and services to meet the health care, transit, and social service needs of households with special needs, including seniors and persons with disabilities. H4.2.1 Program Ensure that the Zoning Code facilitates the construction of housing that provides services for special needs households and provides flexible development standards for special service housing that will allow such housing to be built with access to transit and community services while preserving the character of the neighborhoods in which they are proposed to be located. Evaluate the Zoning Code and develop flexible development standards for special service housing. City Funds Planning & Community Environment Evaluate the Zoning Code within three years of adoption of the Housing Element. Not yet completed. Housing Element Program Status Page 21 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H4.2.2 Program Work with the San Andreas Regional Center to implement an outreach program that informs families in Palo Alto about housing and services available for persons with developmental disabilities. The program could include the development of an informational brochure, including information on services on the City’s website, and providing housing-related training for individuals/families through workshops. Provide information regarding housing to families of persons with developmental disabilities. General Fund Planning & Community Environment Develop outreach program within three years of adoption of the Housing Element. Underway. City to send letter of support. H5 Goal REDUCE THE ENVIRONMENTAL IMPACT OF NEW AND EXISTING HOUSING. Housing Element Program Status Page 22 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H5.1 Policy Reduce long-term energy costs and improve the efficiency and environmental performance of new and existing homes. H5.1.1 Program Periodically report on the status and progress of implementing the City’s Green Building Ordinance and assess the environmental performance and efficiency of homes in the following areas: - Greenhouse gas emissions - Energy use - Water use (indoor and outdoor) - Material efficiency - Storm water runoff - Alternative transportation Prepare reports evaluating the progress of implementing the City’s Green Building Ordinance. City funds, Development fees Planning & Community Environment, Building Division Ongoing Ongoing program H5.1.2 Program Continue providing support to staff and the public (including architects, owners, developers and contractors) through training and technical assistance in the areas listed under Program H5.1.1. Provide educational information regarding the City’s Green Building Ordinance. City funds, Development fees Planning & Community Environment, Building Division Ongoing Ongoing program Housing Element Program Status Page 23 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H5.1.3 Program Participate in regional planning efforts to ensure that the Regional Housing Needs Allocation targets areas that support sustainability by reducing congestion and greenhouse gas emissions. Provide a regional framework for sustainability in creating new housing opportunities through the City’s Regional Housing Mandate Committee. City Funds Planning & Community Environment Ongoing Ongoing program H5.1.4 Program Review federal, State, and regional programs encouraging the improvement of environmental performance and efficiency in construction of buildings, and incorporate appropriate programs into Palo Alto’s policies, programs and outreach efforts. Continue to update regulations for environmental sustainability. City Funds Planning & Community Environment, Public Works & Utilities Ongoing Ongoing program H5.1.5 Program Enhance and support a proactive public outreach program to encourage Palo Alto residents to conserve resources and to share ideas about conservation. Provide up-to-date information for residents regarding conservation through educational brochures available at City Hall and posted on the City’s website. City Funds Planning & Community Environment, Public Works & Utilities Ongoing Ongoing program H5.1.6 Program Provide financial subsidies, recognition, or other incentives to new and existing homeowners and developers to achieve performance or efficiency levels beyond minimum requirements. Continue to recognize homeowners and developers who incorporate sustainable features beyond what is required by the Green Building Ordinance. City Funds Planning & Community Environment Ongoing Ongoing program Housing Element Program Status Page 24 of 25 Revised February 7, 2019 TABLE D: Program Implementation Status Goal/Policy/Program Description Plan Objective Funding Source Responsible Agency Time Frame Status H5.1.7 Program In accordance with Government Code Section 65589.7,immediately following City Council adoption,the City will deliver to all public agencies or private entities that provide water or sewer services to properties within Palo Alto a copy of the 2015-2023 Housing Element. Immediately following adoption, deliver the 2015-2023 Palo Alto Housing Element to all providers of sewer and water services within the City. City Funds Planning & Community Environment Within one month of adoption of the Housing Element Completed. Housing Element Program Status Page 25 of 25 Revised February 7, 2019 Jurisdiction Palo Alto Reporting Year 2018 (Jan. 1 - Dec. 31) Current Year Deed Restricted 0 Non-Deed Restricted 0 Deed Restricted 0 Non-Deed Restricted 0 Deed Restricted 0 Non-Deed Restricted 0 Above Moderate 117 117 60 136 81 0 0 0 0 0 Income Rental Ownership Total Very Low 0 0 0 Low 0 0 0 Moderate 0 0 0 Above Moderate 0 0 0 Total 0 0 0 Cells in grey contain auto-calculation formulas Units Constructed - SB 35 Streamlining Permits Number of Streamlining Applications Approved Total Developments Approved with Streamlining Total Units Constructed with Streamlining Total Housing Applications Submitted: Number of Proposed Units in All Applications Received: Total Housing Units Approved: Total Housing Units Disapproved: Permitted Units Issued by Affordability Summary Income Level Very Low Low Moderate Total Units 44 Entitlement Summary Use of SB 35 Streamlining Provisions Note: units serving extremely low-income households are included in the very low-income permitted units totals Number of Applications for Streamlining City of Palo Alto (ID # 9999) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: Resolution Approving Amended and Restated Water Supply Agreement with San Francisco Title: Utilities Advisory Commission Recommends the City Council Adopt a Resolution Approving the November 2018 Amended and Restated Water Supply Agreement Between the City and County of San Francisco Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County and Authorizing the City Manager to Execute the Amended and Restated Water Supply Agreement From: City Manager Lead Department: Utilities Recommended Motion Staff and the Utilities Advisory Commission (UAC) recommend the City Council adopt the attached resolution (Attachment A) approving the Amended and Restated Water Supply Agreement Between the City and County of San Francisco Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County (WSA) dated November 2018 and authorizing the City Manager to execute the Amended and Restated WSA when final execution copies are prepared and distributed by BAWSCA. Executive Summary On September 10, 2018 The City of Palo Alto (City) passed Resolution No. 9791 authorizing the Bay Area Water Supply And Conservation Agency (BAWSCA) to negotiate with the City and County of San Francisco to amend the 2009 WSA. All BAWSCA member agencies provided similar negotiating authority to BAWSCA. BAWSCA and the San Francisco Public Utilities Commission (SFPUC) identified seven issues to be addressed in the WSA. These proposed amendments are consistent with the spirit of the 2009 WSA and are reflected in the Amended and Restated Water Supply Agreement (Amended and Restated WSA) in Attachment B. A redlined version of the document is included as Attachment C. The SFPUC approved the Amended and Restated WSA on December 11, 2018, and the City of Palo Alto Page 2 Wholesale Customers, including the City, must approve the amendments to put them into effect. Background The City purchases water from the San Francisco Regional Water System (System) and is one of the twenty six members of BAWSCA, also known as the “Wholesale Customers.” In June 2009, the City entered into the WSA, which sets forth the terms under which the Wholesale Customers purchase water from the System. The WSA built upon the 1984 "Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and Certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County" (1984 Agreement). Pursuant to Section 2.03 of the WSA, the WSA may be amended by a minimum of two-thirds of the Wholesale Customers representing at least 75 percent of the quantity of water delivered by San Francisco to all the Wholesale Customers during the fiscal year immediately preceding the amendment. Discussion Some sections require amendment to address substantive and important issues that have arisen during implementation of the WSA. The seven proposed amendments are described below and are included in Attachment D. 1. Oversight of SFPUC's Capital Improvement Program (2009 WSA new Section 6.09): The Water System Improvement Program (WSIP) is a multi-year capital program to upgrade and make seismically sound major parts of the System. SFPUC adopted the WSIP in 2002 and the program is ongoing, and amendment number six addresses the completion date. The Wholesale Customers have had some oversight of the WSIP, both through the enactment of AB 1823 (2002), and also through quarterly meetings and public reporting. The WSIP did not eliminate the need for an ongoing Capital Improvement Program (CIP) to maintain the integrity of the System. As the WSIP nears completion, the SFPUC’s CIP is expanding to achieve a sustainable rate of repair and replacement consistent with overall asset management of the System and SFPUC’s water supply and delivery targets (water quality, drought reliability, etc.). SFPUC establishes a CIP on a 10-year rolling basis. This amendment adds a new section to the WSA obligating SFPUC to formally engage with BAWSCA on its 10-year CIP development. This amendment ensures that BAWSCA and the Wholesale Customers are involved in the development of the 10-year CIP, have the opportunity to comment on proposed changes to the water supply and delivery targets, requires the SFPUC to create an asset management policy applicable to the System by December 31, 2020, and commits the SFPUC to quarterly reporting and meetings on CIP implementation. City of Palo Alto Page 3 2. Tier 1 Drought Allocation Plan (2009 WSA Attachment H Section 2.1): The 1984 Agreement required the SFPUC and the Wholesale Customers to develop a Shortage Allocation Plan during droughts. The plan was approved in 2000 for average System-wide shortages of up to 20%. Under the plan, the available water supply during droughts is allocated according to a pre-established formula between Retail and Wholesale Customers (the "Tier 1 allocation") for shortages of 5, 10, 15 and 20 percent. The water allocated to Wholesale Customers is then allocated between those customers according to a second pre- established formula (the "Tier 2 allocations"). Various factors that affect this formula have changed since 2009, particularly the proportionate purchases from the System from San Francisco Retail and Wholesale Customers. As a result, if the Tier 1 allocation had been applied during the 2014-2017 drought, San Francisco Retail Customers would have been allocated more water than they are allocated during normal, drought-free years. Both the SFPUC and the Wholesale Customers recognize that this is not a reasonable way to allocate water during a shortage, so the proposed WSA amendments include an amendment to the Tier 1 Drought Allocation Plan that makes a modest change to the existing formula to ensure that, in the event of a shortage, San Francisco Retail Customers will need to reduce consumption by a minimum of 5%. Under this new formula, more water would be available to Wholesale Customers during a shortage than would be available under the existing formula, and the amendment also provides that some of the water conserved by San Francisco Retail Customers will remain in storage for use in subsequent dry years. This amendment benefits the City by ensuring a more equitable allocation of water during a water shortage resulting from drought. 3. 2018 Decisions (2009 WSA Sections 3.13, 4.01, 4.05, 4.06, 9.06, Attachment Q): The 1984 Agreement memorialized the perpetual 184 million gallon per day "Supply Assurance" to the Wholesale Customers which survives the expiration or termination of the 2009 WSA. The Supply Assurance is subject to reduction due to drought, emergencies and system maintenance/malfunction. The Wholesale Customers have allocated shares of the Supply Assurance called "Individual Supply Guarantees." The cities of San Jose and Santa Clara have a different contractual relationship with the SFPUC. The SFPUC delivers water to the northern portions of the cities of San Jose and Santa Clara on a temporary and interruptible basis in accordance with individual contracts with these cities. To date, the SFPUC has not exercised its contractual right to terminate or reduce water supply to San Jose and Santa Clara, nor has it agreed to make either of the cities a permanent customer. Accordingly, San Jose and Santa Clara do not have Individual Supply Guarantees. The 2009 WSA required that by December 31, 2018, the SFPUC was to decide whether to make San Jose and Santa Clara permanent customers and whether to offer additional supply to other existing permanent Wholesale Customers. New water supply projects would be needed for the SFPUC to make Santa Clara or San Jose permanent Wholesale City of Palo Alto Page 4 Customers. To date, no new viable supply projects have been identified. Additionally, system usage is currently projected to be below contract levels through 2040. It is therefore premature for the SFPUC to make these decisions at this time. This amendment will extend the deadline for the SFPUC to decide from December 2018 to December 2028 and will obligate the SFPUC to provide annual updates to its commission regarding developing permanent supply for San Jose and Santa Clara. The amendment also expands the area to which Santa Clara can deliver SFPUC water to be consistent with Santa Clara’s service area boundary. 4. Asset Classification (2009 WSA new Section 5.11 and definitions and Attachment R; revisions to Section 4.07): A basic principle of the 1984 Agreement involved the classification of System assets used to serve Retail and Wholesale Customers. Asset classification is critical to allocating costs associated with System facilities in the Sierras that are used for both water and power purposes (the “Hetch Hetchy Enterprise”). System assets located in the Tuolumne, Stanislaus, and San Joaquin counties, are classified as “Water” assets, “Power” assets, or “Joint” assets. Classification of Hetch Hetchy Enterprise assets determines the allocation of capital and operating costs of the facilities by function. For Joint assets, which have both power and water benefits, costs are split 55% to the Power Enterprise and 45% to the Water Enterprise. Wholesale and Retail Customers then pay for the water portion based on their proportional purchases of water. Power related costs are not paid by Wholesale Customers. The 1984 Agreement was a legal settlement that included a partial list of Hetch Hetchy asset classifications. These classifications were incorporated into the 2009 Agreement without change, though the list was not specifically replicated in the 2009 Agreement. In FY 2010/2011, SFPUC unilaterally changed the classification and the related cost allocation of a small number of assets of the System from Power to Joint. This reclassification would have added $50 million in obligations to Wholesale Customers. BAWSCA disputed this decision and, rather than submit the dispute to arbitration, the parties negotiated this contract amendment. This amendment documents and fixes the classification of all significant Hetch Hetchy Enterprise assets. The amendment also reclassifies seven specific, known major projects on five assets, without changing the classification of the underlying asset. This amendment immediately removes $50 million as an obligation of the Wholesale Customers associated with SFPUC’s unilateral reclassification of assets from FY 2010/2011. Additionally, going forward this amendment makes the contract clearer with respect to the classification of 500 assets, which will ensure that the Wholesale Customers pay only their fair share of upcoming capital work. This amendment facilitates efficient contract administration and limits and mitigates Wholesale Customer exposure to financial risks on certain specified projects. 5. Wholesale Capital Fund (2009 WSA, Section 6.08 E and Attachment M-3): Under the 2009 WSA, funds for capital projects are appropriated and placed into the Wholesale Capital Fund upon appropriation. The balance of the fund is reviewed at 5-year intervals beginning in FY 2014-15, and any excess balance (unexpended, unencumbered amount in excess of City of Palo Alto Page 5 10% of appropriation) is transferred to a balancing account to return to Wholesale Customers. In implementing the reconciliation of the Wholesale Capital Fund, SFPUC discovered that the reconciliation timing did not conform to the SFPUC's budget requirements, appropriation process, and project spending needs. For instance, if funding is appropriated for a project in year four of the 5-year review period, it may result in return of funds after only 1 year even though the project may take several years to complete. This amendment provides for an annual reconciliation of costs to ensure that SFPUC has the necessary resources for capital improvements, without holding an excessive amount of Wholesale Customer funds in the Wholesale Capital Fund. 6. WSIP Completion Date (2009 WSA Section 3.09): The WSA contained an outdated WSIP completion date of 12/31/2015. This amendment updates the WSIP completion date to December 30, 2021, as adopted by the SFPUC's Commission in March of 2018. This amendment keeps WSA current and better protects the City from the potential loss of contract claim for failure to enforce the outdated completion date. 7. Regional Groundwater Storage and Recover Project (RGSRP) (2009 Agreement, Section 3.17): This amendment updates the RGSRP contract provisions to better reflect how the RGSRP will be operated and to outline the cost-allocation responsibilities shared by the RGWRP's partner agencies. Through this program, groundwater pumpers in the southern portion of the Westside Basin (City of Daly City, City of San Bruno, and California Water Service Company) reduce groundwater pumping in exchange for receiving additional surface water through the System, thus increasing storage in the groundwater system. SFPUC may then recover the stored groundwater from the basin during water shortages using new SFPUC Regional Program wells operated by Daly City, San Bruno, California Water Service Company and the SFPUC. This project benefits all customers of the System by making use of available groundwater storage capacity. The language in the WSA describing the details of how the project is operated following its construction is outdated and does not correctly reflect how the project will be operated. This amendment is necessary for the WSA to accurately reflect how the regional groundwater storage and recovery project will be operated. In addition to the substantive amendments set forth above, the proposed Amended and Restated WSA includes a number of non-substantive updates and "clean-up" revisions, as set out below: 1. Updated WSA Attachment A, reflecting new and revised definitions. 2. Updated WSA Attachment C, reflecting recent Individual Supply Guarantee transfers. 3. Updated WSA Attachment K, reflecting the updated Wholesale Customers' share of Net Book Value of Existing Assets and share of Revenue-Funded Capital Expenditures; 4. New section 3.18, reflecting the Hetch Hetchy Amendment approved in 2013. City of Palo Alto Page 6 5. Revised section 8.04, reflecting the authority previously delegated by the Wholesale Customers to BAWSCA in 2014 to initiate, defend, and settle arbitration for matters subject to arbitration under the WSA. 6. Updates reflecting Cal Water's acquisition of Skyline County Water District. 7. Updates to the addresses for both BAWSCA and SFPUC. San Francisco, acting by and through its Public Utilities Commission, approved the Amended and Restated WSA, as negotiated by BAWSCA, on December 11, 2018, pending approval by the requisite number of the Wholesale Customers. Committee Review and Recommendation On February 6, 2019, the UAC reviewed and discussed the Amended and Restated WSA dated November 2018. Nicole Sandkulla, CEO and General Manager of BAWSCA, attended the meeting. Commissioners asked questions about the amendments and received detailed responses from Ms. Sandkulla that provided additional background and historical perspectives on the negotiation of the WSA amendments. After the discussion, the UAC voted unanimously (6-0, Ballantine absent) to support the staff recommendation. Attached are the excerpted draft minutes of this meeting (Attachment E). Resource Impact By clarifying the classification of major facilities, the Asset Classification amendment will immediately remove $50 million as an obligation of the Wholesale Customers associated with SFPUC’s unilateral reclassification of assets from FY 2010/2011. Additionally, going forward this amendment makes the contract clearer with respect to the classification of 500 assets. This clarification will ensure that Wholesale Customers pay only their fair share of upcoming capital work currently estimated at $2 billion over 10 years. Under the Wholesale Capital Fund amendment, Wholesale Customers will continue to be responsible for the actual revenue-funded capital expenditures irrespective of whether the true-up mechanism is on a five-year or annual basis while providing SFPUC with adequate funds for revenue-funded capital projects. It is in the Wholesale Customers’ interest to provide SFPUC the revenue needed to fund these annual repair and maintenance projects while ensuring the Wholesale Capital Fund is kept at a reasonable level. The proposed amendment achieves those goals. The CIP-related amendment will give BAWSCA and the Wholesale Customers the ability to oversee and scrutinize the SFPUC’s capital program. The CIP program is a major factor in the resulting water rates. The proposed amendments will have no impact on the FY19 and FY20 budgets. City of Palo Alto Page 7 Policy Implications The execution and administration of the Amended and Restated WSA reaffirms the water reliability and quality requirements in the WSA and is consistent with the spirit of the 2009 WSA. Environmental Review Prior to approval of the WSIP, San Francisco prepared a program environmental impact report (PEIR) for the WSIP in compliance with the California Environmental Quality Act (CEQA) and the San Francisco Planning Commission certified the WSIP Final PEIR in Planning Commission Motion No. 17734. The City reviewed the Final PEIR and CEQA findings and adopted them to the extent the findings were relevant to its decision to approve the WSA. At this time, the City need not take any further action to comply with the requirements of CEQA as the amendments are not a "project" for the purposes of the CEQA. The amendments at issue involve an administrative activity that does not result in a direct change to the environment (see 14 CCR Section 15378(b)(5)), and would not result in a direct or reasonably foreseeable indirect physical change in the environment (see 14 CCR Section 15060(c)(2)). Attachments: • Attachment A: Resolution of the Council of the City of Palo Alto Approving the Amended and Restated Water Supply Agreement • Attachment B: 2018 Amended and Restated Water Supply Agreement (with Attachments) • Attachment C: 2018 Amended and Restated Water Supply Agreement Redlined Against the 2009 Water Supply Agreement • Attachment D: The Seven 2018 WSA Amendments • Attachment E: Draft Excerpted Minutes UAC February 6, 2019 1 Resolution No. ____ Resolution of the Council of the City of Palo Alto Approving the Amended and Restated Water Supply Agreement Between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County R E C I T A L S A. Water supply agencies in Alameda, San Mateo and Santa Clara Counties have purchased water from the City and County of San Francisco (San Francisco) for many years. B. The San Francisco Public Utilities Commission (SFPUC or Commission) Water Enterprise operates the Regional Water System, which delivers water to communities in Alameda, San Mateo and Santa Clara Counties, as well as to customers within San Francisco (collectively, “the Parties”). C. The Parties entered into the “Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and Certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County” in 1984. D. In April 2003, water supply agencies in Alameda, San Mateo and Santa Clara Counties established the Bay Area Water Supply and Conservation Agency (BAWSCA), as authorized by Water Code Section 81300 et seq. E. Upon expiration of the 1984 “Settlement Agreement and Master Water Sales Contract,” the Parties entered into the “Water Supply Agreement between San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County” ("Water Supply Agreement") on July 1, 2009, authorized by SFPUC Resolution No. 09-0069. F. On September 10, 2018 this Council, by Resolution No. 9791, delegated authority to BAWSCA to act as its authorized representative in discussions and negotiations with San Francisco to amend the Water Supply Agreement. G. Each of the other 25 entities which are members of BAWSCA similarly delegated negotiating authority to BAWSCA. H. BAWSCA has submitted periodic reports to the City on progress during the negotiations and has provided detailed briefings on all significant elements of the amendments. I. The Parties now desire to adopt an amended and restated Water Supply Agreement in order to: (1) require the SFPUC to adhere to a formal program to engage with BAWSCA on its 10- year CIP development; ATTACHMENT A 2 (2) adjust the provisions of the Water Shortage Allocation Plan regarding the initial allocation of water during shortages between San Francisco Retail and Wholesale water customers; (3) extend the December 31, 2018 deadline for the SFPUC to complete a water supply planning process and decide whether or not to (a) grant permanent customer status to the cities of San Jose and Santa Clara, dedicating a permanent share of the SFPUC water supply to these two wholesale customers, who currently have temporary, interruptible status, and (b) increase the 184 million gallon per day (mgd) Supply Assurance created as a permanent dedication of water supply in the 1984 “Settlement Agreement and Master Water Sales Contract” and carried forward into the 2009 Water Supply Agreement (collectively "the 2018 Decisions"); (4) change the classification of certain Hetch Hetchy Water and Power capital projects, adjusting the amount of capital funding to be provided towards these projects by the Parties and the SFPUC Power Enterprise through the term (June 30, 2034) of the Water Supply Agreement; (5) modify provisions related to the SFPUC’s administration of the Wholesale Capital Fund to more closely align with the historic rate of capital project spending by the SFPUC and prevent volatility in the annual determination of the Wholesale Revenue Requirement; (6) extend the estimated timing of the completion of the WSIP to reflect the currently adopted program completion date; (7) clarify the cost allocation and water accounting provisions used for the Regional Water System's Groundwater Storage and Recovery Project; and J. In addition to the substantive modifications set forth above, the amended and restated Water Supply Agreement also includes a number of non-substantive updates and revisions to incorporate previously approved modifications, such as the First Amendment to the Water Supply Agreement, adopted in 2013 as new Section 3.18, prohibiting San Francisco from draining Hetch Hetchy Reservoir or decommissioning O'Shaughnessy Dam without securing Wholesale Customer approval in the form of an amendment. K. In 2008, through SFPUC Resolution No. 08-0200, San Francisco approved the Water System Improvement Program (WSIP) to upgrade San Francisco's regional and local water system and achieve Level of Service Goals and Objectives, which include meeting average annual water demand of 265 million gallons per day (mgd) through 2018; reevaluation of forecasted 2030 Regional Water System demand projections and water supply options by 2018, and SFPUC’s decision in 2018 regarding Regional Water System deliveries after 2018; and meeting dry year delivery needs while limiting rationing to a maximum of twenty percent system wide during droughts. (1) Prior to approval of the WSIP, San Francisco prepared a program environmental impact report (PEIR) for the WSIP in compliance with the California Environmental Quality Act (CEQA) and the San Francisco Planning Commission certified the WSIP Final PEIR in Planning Commission Motion No. 17734. 3 (2) The Wholesale Customers reviewed the Final PEIR and CEQA findings and, in conjunction with approval of the Water Supply Agreement in 2009, the Wholesale Customers also adopted CEQA findings that were relevant to each Wholesale Customer's decision to approve the WSA. (3) The amendments considered now are not a "project" for the purposes of CEQA as they involve an administrative activity that does not result in a direct change to the environment (see 14 CCR Section 15378(b)(5)), and would not result in a direct or reasonably foreseeable indirect physical change in the environment (see 14 CCR Section 15060(c)(2)). (4) In the event the amendments are considered a "project," they would be subject to the categorical exemption for operation, repair, and maintenance of existing facilities (see 14 CCR Section 15301) and the amendments do not implicate substantial changes that involve a new significant environmental effect (see 14 CCR Section 15162(a)). L. The Parties recognize that, both before and after the most recent statewide drought, after meeting drought-related conservation mandates, several BAWSCA member agencies were unable to meet their respective minimum purchase requirements described in Article 3.07 of the Water Supply Agreement, which requires payment for water below the required minimum purchase level even if such water is not delivered and used. (1) BAWSCA and San Francisco have identified intra system water transfers in general as one potential solution to long-term water reliability needs among the Wholesale Customers, and Section 3.04 of the Water Supply Agreement provides a simplified process for permanent Individual Supply Guarantee (ISG) transfers among certain Wholesale Customers. (2) Several of the Wholesale Customers with minimum purchase requirements might be interested in transferring water within their respective ISGs, if doing so would also reduce their minimum purchase requirements and corresponding financial impact of paying for water that is not used. (3) The Parties to the Water Supply Agreement have a collective interest in working to promptly identify a resolution to this as part of a future contract amendment. (4) BAWSCA and San Francisco will begin discussions to address this issue commencing in January 2019. M. San Francisco's currently adopted WSIP program completion date is December 30, 2021. 4 N. One of the remaining final projects in the WSIP, the Alameda Creek Recapture Project, is the subject of a revised environmental impact report that has not yet been published for public review and comment. (1) On April 3, 2018, the Wholesale Customers provided formal comment to the SFPUC, as part of its action to adopt the most recent WSIP completion date, that the proposed WSIP completion date and accompanying construction schedule extension date for the Alameda Creek Recapture Project to December 30, 2021, may not be sufficient to accommodate any project modifications that might be necessary as a result of the ongoing revised environmental analysis, increasing uncertainty associated with the adequacy of the Project schedule as proposed by the SFPUC. (2) The SFPUC has indicated that it's Hetch Hetchy Local Simulation Model (HHLSM) hydrologic modeling identifies the supply yield anticipated by the Alameda Creek Recapture Project as critical to achieving and maintaining drought year reliability and achieving the WSIP Water Supply Level of Service Goal. (3) The Wholesale Customers acknowledge that the Alameda Creek Recapture Project cannot proceed to construction until environmental review under CEQA is successfully completed, and the past practice of BAWSCA has been to support extensions of individual WSIP project schedules and overall WSIP scheduled completion, including past extensions for the Alameda Creek Recapture Project, if supported by technical and other analysis as necessary to successfully complete the project and achieve project objectives. (4) BAWSCA intends to act in a manner that represents the best interests of all of its member agencies’ water supply while avoiding any harm alleged by any one member agency’s water supply as a result of any future action by SFPUC. O. The Wholesale Regional Water System Security and Reliability Act (AB 1823, Water Code Section 73500 et seq.) continues the Legislature's oversight of SFPUC’s implementation of the regional projects included in WSIP through January 1, 2022. P. BAWSCA intends to ask the Legislature again to extend its oversight of the WSIP program in anticipation of the SFPUC’s need to extend the WSIP completion date to accommodate individual project schedules with reasonable delays, such as the Alameda Creek Recapture Project. Q. An amended and restated Water Supply Agreement, in the form negotiated by BAWSCA, was presented to and approved by the Commission on December 11, 2018. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The analysis contained in the WSIP PEIR, and the CEQA findings adopted by the City in connection with the adoption of the Water Supply Agreement in 2009 5 remain adequate for purposes of this approval action because there are no substantial changes proposed in the WSIP that was approved in 2008, and there are no substantial changes in circumstances that would require major revisions to the WSIP PEIR due to the involvement of new significant environmental effects or an increase in the severity of previously identified significant impacts, and there is no new information of substantial importance that would change the conclusions set forth in the WSIP PEIR. SECTION 2. The City Council approves the modifications included in the attached amended and restated "Water Supply Agreement Between the City and County of San Francisco Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County" dated November 2018 (Amended and Restated Water Supply Agreement). SECTION 3. The City Manager is authorized and directed to sign the Amended and Restated Water Supply Agreement, in the form previously approved by the San Francisco Public Utilities Commission and attached hereto. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ _____________________________ Assistant City Attorney City Manager _____________________________ Director of Utilities _____________________________ Director of Administrative Services 1 15118728.1 AMENDED AND RESTATED WATER SUPPLY AGREEMENT between THE CITY AND COUNTY OF SAN FRANCISCO and WHOLESALE CUSTOMERS in ALAMEDA COUNTY, SAN MATEO COUNTY AND SANTA CLARA COUNTY NOVEMBER 2018 ATTACHMENT B 2 15118728.1 TABLE OF CONTENTS Article 1. Parties, Effective Date, And Defined Terms .............................................................. 1 1.01. Definitions ................................................................................................................. 1 1.02. Parties ...................................................................................................................... 1 1.03. Effective Date ........................................................................................................... 2 Article 2. Term; Amendments During Term .............................................................................. 4 2.01. Term ......................................................................................................................... 4 2.02. Extension and Renewal of Term ............................................................................... 4 2.03. Amendments ............................................................................................................ 5 Article 3. Water Supply ............................................................................................................ 8 3.01. Supply Assurance ..................................................................................................... 8 3.02. Allocation of Supply Assurance ................................................................................. 9 3.03. Wholesale Customer Service Areas ........................................................................10 3.04. Permanent Transfers of Individual Supply Guarantees ............................................12 3.05. Restrictions on Resale .............................................................................................13 3.06. Conservation; Use of Local Sources; Water Management Charge ..........................13 3.07. Restrictions on Purchases of Water from Others; Minimum Annual Purchases .......14 3.08. Water Quality ...........................................................................................................15 3.09. Completion of WSIP ................................................................................................15 3.10. Regional Water System Repair, Maintenance and Operation ..................................16 3.11. Shortages ................................................................................................................16 3.12. Wheeling of Water from Outside SFPUC System ....................................................19 3.13. Limits on New Customers ........................................................................................19 3.14. Measurement of Water ............................................................................................21 3.15. New Sources of Water Supply to Maintain Supply Assurance .................................23 3.16. New Sources of Water Supply to Increase Supply Assurance .................................24 3.17. Westside Basin Groundwater Storage and Recovery Project ..................................24 3.18. Water Supply Agreement Amendment Required. ....................................................29 Article 4. Implementation of Interim Supply Limitation. ............................................................31 4.01. Interim Supply Limitation Imposed by SFPUC .........................................................31 4.02. Retail and Wholesale Customer Allocations Under Interim Supply Limitation ..........31 4.03. Transfers of Interim Supply Allocations ....................................................................31 4.04. Environmental Enhancement Surcharge ..................................................................32 4.05. San Jose/ Santa Clara Interim Supply Allocation and Process for Reduction/ Termination. .............................................................................................................34 4.06. San Francisco Decisions in 2028 Regarding Future Water Supply ..........................36 3 15118728.1 4.07. Retained Discretion of SFPUC and Wholesale Customers ......................................36 Article 5. Wholesale Revenue Requirement ...........................................................................38 5.01. Scope of Agreement ................................................................................................38 5.02. General Principles ...................................................................................................38 5.03. Capital Cost Recovery - Existing Regional Assets ...................................................40 5.04. Capital Cost Contribution - New Regional Assets ....................................................42 5.05. Water Enterprise Operation and Maintenance Expenses .........................................44 5.06. Water Enterprise Administrative and General Expenses ..........................................46 5.07. Water Enterprise Property Taxes .............................................................................48 5.08. Hetch Hetchy Enterprise Expenses .........................................................................48 5.09. Hetch Hetchy Enterprise Capital Costs ....................................................................50 5.10. Additional Agreements Related to Financial Issues .................................................51 5.11. Classification of Existing System Assets. .................................................................54 Article 6. Integration of Wholesale Revenue Requirement with SFPUC Budget Development and Rate Adjustments .............................................................................................57 6.01. General ....................................................................................................................57 6.02. Budget Development ...............................................................................................57 6.03. Rate Adjustments ....................................................................................................57 6.04. Rate Structure .........................................................................................................59 6.05. Balancing Account ...................................................................................................60 6.06. Wholesale Revenue Coverage Reserve ..................................................................62 6.07. Working Capital Requirement ..................................................................................64 6.08. Wholesale Capital Fund ...........................................................................................65 6.09. SFPUC Adoption of Regional Water System 10-Year Capital Improvement Program .............................................................................................67 Article 7. Accounting Procedures; Compliance Audit ..............................................................72 7.01. SFPUC Accounting Principles, Practices .................................................................72 7.02. Calculation of and Report on Wholesale Revenue Requirement ..............................73 7.03. Appointment of Compliance Auditor .........................................................................74 7.04. Conduct of Compliance Audit ..................................................................................75 7.05. Issuance of Compliance Auditor’s Report ................................................................77 7.06. Wholesale Customer Review ...................................................................................78 Article 8. Other Agreements of the Parties ..............................................................................79 8.01. Arbitration and Judicial Review ................................................................................79 8.02. Attorneys’ Fees ........................................................................................................83 8.03. Annual Meeting and Report .....................................................................................84 8.04. 8.04 Administrative Matters Delegated to BAWSCA ................................................85 4 15118728.1 8.05. Preservation of Water Rights; Notice of Water Rights Proceedings .........................86 8.06. SFPUC Rules and Regulations ................................................................................86 8.07. Reservations of, and Limitations on, Claims ............................................................87 8.08. Prohibition of Assignment ........................................................................................89 8.09. Notices ....................................................................................................................90 8.10. Incorporation of Attachments ...................................................................................91 8.11. Interpretation ...........................................................................................................91 8.12. Actions and Approvals by San Francisco .................................................................91 8.13. Counterparts ............................................................................................................91 8.14. Limitations on Damages ..........................................................................................92 8.15. Force Majeure .........................................................................................................92 8.16. No Third-Party Beneficiaries ....................................................................................93 8.17. Good Faith and Fair Dealing ....................................................................................93 Article 9. Implementation and Special Provisions Affecting Certain Wholesale Customers .....94 9.01. 9.01 General; Individual Water Sales Contracts .......................................................94 9.02. California Water Service Company ..........................................................................94 9.03. City of Hayward .......................................................................................................96 9.04. Estero Municipal Improvement District .....................................................................97 9.05. Stanford University ..................................................................................................97 9.06. City of San Jose and City of Santa Clara .................................................................98 9.07. City of Brisbane, Guadalupe Valley Municipal Improvement District, Town of Hillsborough.............................................................................................................99 5 15118728.1 LIST OF ATTACHMENTS A Definitions B Wholesale Customer Regional Water System Purchases 2007-2008 (Section 1.03) C List of Agencies and Individual Supply Guarantees (Section 3.02) D Procedure for Pro Rata Reduction of Individual Supply Guarantees if Total Use Exceeds 184 MGD (Section 3.02) E Minimum Quantities for Dual Source Agencies (Section 3.07.C) F Sample Individual Water Sales Contract (Section 9.01) G Water Quality Notification and Communications Plan (Section 3.08.B) H Tier 1 Shortage Plan (Section 3.11.C) I NOT USED J Water Use Measurement and Tabulation (Section 3.14) K-1 Wholesale Customers’ Share of Net Book Value of Existing Assets (Section 5.03) K-2 Wholesale Customers’ Share of the Revenue-Funded Capital Expenditures (Section 5.03) K-3 Annual Payments for Wholesale Share of 6/30/09 Net Plant & CWIP (Water Assets) (Section 5.03) K-4 Annual Payments for Wholesale Share of 6/30/09 Net Plant & CWIP (Hetch Hetchy Assets) (Section 5.03) K-5 10-Year Payoff Schedules for Existing Rate Base (Section 5.03) L-1 Identification of WSIP Projects as Regional/Retail (Section 5.04) L-2 Certificate of Use of Proceeds (Section 5.04.A) L-3 Annual Report on Expenditures of and Earnings on Proceeds (Section 5.04.A) M-1 Revenue-Funded Capital Additions (Section 5.04.B) M-2 Revenue-Funded Capital Annual Reporting Requirements (Section 5.04.B) M-3 Wholesale Capital Fund and Balancing Account Adjustment (Section 6.08) N-1 Balancing Account/Rate Setting Calculation Table (Section 6.03.A.3.a) N-2 Wholesale Revenue Requirement Schedules (Section 6.03.A.3.b) 6 15118728.1 N-3 Schedule of Projected Water Sales, Wholesale Revenue Requirement and Wholesale Rates (Section 6.03.A.3.c) O Statement of Wholesale Revenue Requirement/Changes in Balancing Account (Section 7.02.B.1) P Management Representation Letter (Section 7.02.B.5) Q-1 San Jose Service Area (Section 9.06) Q-2 Santa Clara Service Area (Section 9.06) R Classification of Existing System Assets (Section 5.11) 1 15118728.1 AMENDED AND RESTATED WHOLESALE WATER SUPPLY AGREEMENT Introductory Statement Both San Francisco, as the Regional Water System owner and operator, and its Wholesale Customers share a commitment to the Regional Water System providing a reliable supply of high quality water at a fair price, and achieving these goals in an environmentally sustainable manner. Article 1. Parties, Effective Date, And Defined Terms 1.01. Definitions The capitalized terms used in this Agreement shall have the meanings set forth in Attachment A. 1.02. Parties The parties to this Agreement are the City and County of San Francisco and such of the following entities (all of which purchase water from San Francisco) as have executed this Agreement: Alameda County Water District California Water Service Company City of Brisbane City of Burlingame City of Daly City City of East Palo Alto City of Hayward City of Menlo Park City of Millbrae City of Milpitas City of Mountain View City of Palo Alto 2 15118728.1 City of Redwood City City of San Bruno City of San José City of Santa Clara City of Sunnyvale Coastside County Water District Estero Municipal Improvement District Guadalupe Valley Municipal Improvement District Mid-Peninsula Water District North Coast County Water District Purissima Hills Water District Stanford University Town of Hillsborough Westborough Water District The entities listed above which have executed this Agreement shall be collectively referred to as the “Wholesale Customers.” 1.03. Effective Date A. Except as provided in subsection C, this Agreement shall become effective only when it has been approved by San Francisco and by each of the entities listed in Section 1.02 and when San Francisco and each of those entities (except for the City of Hayward) have entered into an Individual Water Sales Contract as provided in Section 9.01. B. If San Francisco and all of the entities listed in Section 1.02 approve this Agreement and (except for the City of Hayward) an Individual Water Sales Contract on or before July 1, 2009, the effective date shall be July 1, 2009. If San Francisco and all of the entities listed in Section 1.02 approve this Agreement and (except for the City of Hayward) an Individual Water Sales Contract after July 1, 2009 but on or before September 1, 2009, the effective date shall be the date on which the last entity listed in Section 1.02 approves this Agreement and, if required, an Individual Water Sales Contract. C. If by September 1, 2009 this Agreement has been approved by fewer than all of the entities listed in Section 1.02 or fewer than all of such entities (other than the City of Hayward) have entered into an Individual Water Sales Contract, but it has been approved by entities representing at least 75% in number and 75% of the water purchased from SFPUC by 3 15118728.1 all listed agencies during FY 2007-08 (i.e., 173.39 MGD), then San Francisco shall have the option to waive the requirement in subsection A that all listed agencies have approved this Agreement and an Individual Water Sales Contract as a condition precedent to this Agreement and any Individual Water Sales Contract becoming effective. San Francisco shall have 60 days from September 1, 2009 (i.e., until October 31, 2009) within which to decide whether or not to waive the condition. If San Francisco decides to waive the condition, those listed agencies that have approved this Agreement and Individual Water Sales Contract before October 31, 2009 will be bound thereby and this Agreement and Individual Water Sales Contracts will become effective as to them, as of the date of San Francisco’s waiver. For purposes of determining whether listed agencies that have approved this Agreement represent at least 75% of the water purchased during FY 2007-08, the quantity of water attributable to each listed entity shall be as set forth on Attachment B. D. he provisions of Article 9 that apply to fewer than all Wholesale Customers (i.e., Sections 9.02 - 9.07) shall not become effective unless San Francisco and the entity to which the section applies have each approved (1) this Agreement, and (2) the underlying Individual Water Sales Contract, unless otherwise provided in Article 9. This provision does not affect the continued enforceability of provisions in those sections that derive from independently enforceable judgments, orders or agreements. 4 15118728.1 Article 2. Term; Amendments During Term 2.01. Term The term ("Term") of this Agreement shall be twenty five (25) years. The Term shall begin on July 1, 2009, regardless of whether the Effective Date is before or after that date, and shall end on June 30, 2034. Except as provided in Article 9, the term of all Individual Water Sales Contracts shall also begin on July 1, 2009 and end on June 30, 2034. 2.02. Extension and Renewal of Term A. In December 2031, the SFPUC may provide written notice to the Wholesale Customers that it is willing to extend the Term of this Agreement. Between January 1, 2032 and June 30, 2032, any Wholesale Customer may accept the SFPUC's offer to extend the Term by providing a written notice of extension to the SFPUC. If such notices of extension are received from Wholesale Customers representing at least two-thirds in number as of June 30, 2032 and seventy five percent (75%) of the quantity of water delivered by the SFPUC to all Wholesale Customers during fiscal year 2030-31, the Term shall be extended for another five (5) years ("First Extension Term"), through June 30, 2039. No party to this Agreement which does not wish to remain a party during the Extension Term shall be compelled to do so by the actions of other parties under this section. B. In December 2036, the SFPUC may provide written notice to the Wholesale Customers that it is willing to extend the Term of this Agreement. Between January 1, 2037 and June 30, 2037, any Wholesale Customer may accept the SFPUC's offer to extend the Term by providing a written notice of extension to the SFPUC. If such notices of extension are received from Wholesale Customers representing at least two-thirds in number as of June 30, 2037 and seventy five percent (75%) of the quantity of water delivered by the SFPUC to all Wholesale Customers during fiscal year 2035-36, the Term shall be extended for another five (5) years ("Second Extension Term"), through June 30, 2044. No party to this Agreement which does not wish to remain a party during the Extension Term shall be compelled to do so by the actions of other parties under this section. C. After the expiration of the Term, and, if applicable, the Extension Terms, this Agreement may be renewed by mutual consent of the parties, subject to any modifications thereof which may be determined at that time. If fewer than all of the parties desire to renew this Agreement beyond its Term, with or without modifications, the SFPUC and the Wholesale 5 15118728.1 Customers who wish to extend the Agreement shall be free to do so, provided that no party to this Agreement which does not wish to become a party to such a renewed Agreement shall be compelled to do so by the actions of other parties under this section. 2.03. Amendments A. Amendments to Agreement; General 1. This Agreement may be amended with the written consent of all parties. 2. This Agreement may also be amended with the written consent of San Francisco and of Wholesale Customers representing at least two-thirds in number (i.e., 18 as of July 1, 2009) and seventy five percent (75%) of the quantity of water delivered by San Francisco to all Wholesale Customers during the fiscal year immediately preceding the amendment. 3. No amendment which adversely affects a Fundamental Right of a Wholesale Customer may be made without the written consent of that customer. Amendments to Article 5 which merely affect the allocation of costs between City Retail customers on the one hand and Wholesale Customers collectively on the other, and amendments to Articles 6 and 7 which merely alter budgetary, accounting and auditing procedures do not affect Fundamental Rights and may be made with the consent of parties meeting the requirements of Section 2.03.A.2. 4. When an amendment has been approved by San Francisco and the number of Wholesale Customers required in Section 2.03.A.2, San Francisco shall notify each of the Wholesale Customers in writing of the amendment's adoption. Notwithstanding any provision of law or this Agreement, any Wholesale Customer that claims that the amendment violates its Fundamental Rights under Section 2.03.A.3, shall have 30 days from the date San Francisco delivers the notice of its adoption in which to challenge the amendment’s validity through a judicial action. If no such action is filed within 30 days, the amendment shall be finally and conclusively deemed to have been adopted in compliance with this section. B. Amendments to Article 9 1. Notwithstanding the provisions of Sections 2.03.A.2 and 2.03.A.3, any provision of Article 9 which applies only to an individual Wholesale Customer may be amended with the written concurrence of San Francisco and the Wholesale Customer to which it applies; 6 15118728.1 provided that the amendment will not, directly or indirectly, adversely affect the Fundamental Rights of the other Wholesale Customers. 2. Before making any such amendment effective, San Francisco shall give notice, with a copy of the text of the proposed amendment, to all other Wholesale Customers. The Wholesale Customers shall have 30 days in which to object to the amendment on the ground that it is not permissible under this subsection. If no such objection is received by San Francisco, the proposed amendment shall become effective. If one or more Wholesale Customers object to the amendment, San Francisco, the individual Wholesale Customer with which San Francisco intends to effect the amendment, and the Wholesale Customer(s) which lodged the objection shall meet to discuss the matter. 3. If the dispute cannot be resolved and San Francisco and the Wholesale Customer involved elect to proceed with the amendment, either San Francisco or the Wholesale Customer shall give written notice of such election to each Wholesale Customer that has objected. Any Wholesale Customer that has objected to such amendment shall have 30 days from receipt of this notice within which to commence an action challenging the validity of such amendment, and such amendment shall be deemed effective as of the end of this 30-day period unless restrained by order of court. C. Amendments to Attachments. The following attachments may be amended with the written concurrence of San Francisco and BAWSCA on behalf of the Wholesale Customers: Attachment Name G January 2006 Water Quality Notification and Communications Plan J Water Use Measurement and Tabulation L-1 Identification of WSIP Projects as Regional/Retail N-1 Balancing Account/Rate Setting Calculation Table N-2 Wholesale Revenue Requirement Schedules N-3 Schedule of Projected Water Sales, Wholesale Revenue Requirement and Wholesale Rates P Management Representation Letter 7 15118728.1 R Classification of Existing System Assets (subject to Section 5.11) Amendments to these attachments shall be approved on behalf of San Francisco by the Commission and on behalf of BAWSCA by its Board of Directors, unless the Commission by resolution delegates such authority to the General Manager of the SFPUC or the Board of Directors by resolution delegates such authority to the General Manager/CEO of BAWSCA. D. Amendments to Individual Water Sales Contracts. Individual Water Sales Contracts described in Section 9.01 may be amended with the written concurrence of San Francisco and the Wholesale Customer which is a party to that Individual Water Sales Contract; provided that the amendment is not inconsistent with this Agreement or in derogation of the Fundamental Rights of other Wholesale Customers under this Agreement. 8 15118728.1 Article 3. Water Supply 3.01. Supply Assurance A. San Francisco agrees to deliver water to the Wholesale Customers up to the amount of the Supply Assurance. The Supply Assurance is for the benefit of the entities listed in Section 1.02, irrespective of whether or not they have executed this Agreement. Water delivered by San Francisco to Retail Customers shall not be included in the Supply Assurance. Until December 31, 2018, the foregoing commitment is subject to Article 4. B. Both the Supply Assurance and the Individual Supply Guarantees identified in Section 3.02 are expressed in terms of daily deliveries on an annual average basis and do not themselves constitute a guarantee by San Francisco to meet peak daily or hourly demands of the Wholesale Customers, irrespective of what those peak demands may be. The parties acknowledge, however, that the Regional Water System has been designed and constructed to meet peak daily and hourly demands and that its capacity to do so has not yet been reached. San Francisco agrees to operate the Regional Water System to meet peak requirements of the Wholesale Customers to the extent possible without adversely affecting its ability to meet peak demands of Retail Customers. This Agreement shall not preclude San Francisco from undertaking to meet specific peak demand requirements of individual Wholesale Customers in their Individual Water Sales Contracts. C. The Supply Assurance is perpetual and shall survive the expiration or earlier termination of this Agreement. Similarly, the Individual Supply Guarantees identified in Section 3.02 and/or the Individual Water Sales Contracts are perpetual and shall survive the expiration or earlier termination of this Agreement or the Individual Water Sales Contracts. D. Notwithstanding the Supply Assurance established by this section, the Individual Supply Guarantees identified in Section 3.02 and the Individual Water Sales Contracts, the amount of water made available by San Francisco to the Wholesale Customers is subject to reduction, to the extent and for the period made necessary by reason of water shortage, Drought, Emergencies, or by malfunctioning or rehabilitation of facilities in the Regional Water System. Any such reduction will be implemented in accordance with Section 3.11. The amount of water made available to the Wholesale Customers may not be reduced, however, merely because the water recycling and groundwater projects which the WSIP envisions to be constructed within San Francisco, or the conservation programs intended to reduce water use 9 15118728.1 by Retail Customers that are included in the WSIP, do not generate the yield or savings (10 MGD combined) anticipated by San Francisco. 3.02. Allocation of Supply Assurance A. Pursuant to Section 7.02 of the 1984 Agreement, a portion of the Supply Assurance has been allocated among 24 of the 26 Wholesale Customers. These Individual Supply Guarantees are also expressed in terms of annual average metered deliveries of millions of gallons per day and are listed in Attachment C. B. Three Wholesale Customers do not have Individual Supply Guarantees. The cities of San Jose and Santa Clara do not have an Individual Supply Guarantees because San Francisco has provided water to them on a temporary and interruptible basis as described in Sections 4.05 and 9.06. The City of Hayward does not have an Individual Supply Guarantee because of the terms of the 1962 contract between it and San Francisco, as further described in Section 9.03. C. If the total amount of water delivered by San Francisco to Hayward and to the Wholesale Customers that are listed on Attachment C exceeds 184 MGD over a period of three consecutive fiscal years (i.e., July 1 through June 30), then the Individual Supply Guarantees of those Wholesale Customers listed on Attachment C shall be reduced pro rata so that their combined entitlement and the sustained use by Hayward does not exceed 184 MGD. The procedure for calculating the pro rata reduction in Individual Supply Guarantees is set out in Attachment D. 1. The provisions of this subsection C are not in derogation of the reservation of claims to water in excess of the Supply Assurance which are contained in Section 8.07. Nor do they constitute an acknowledgement by Wholesale Customers other than Hayward that San Francisco is obligated or entitled to reduce their Individual Supply Guarantees in the circumstances described herein. The provisions of this subsection C shall, however, be operative unless and until a court determines that its provisions violate rights of the Wholesale Customers derived independently of this Agreement. 2. The foregoing paragraph is not intended to and shall not constitute a contractual commitment on the part of San Francisco to furnish more water than the Supply Assurance to the Wholesale Customers or a concession by San Francisco that the provisions of this subsection violate any rights of the Wholesale Customers. 10 15118728.1 D. Notwithstanding the reservation of claims contained in Sections 3.02.C and 8.07, it shall be the responsibility of each Wholesale Customer to limit its purchases of water from San Francisco so as to remain within its Individual Supply Guarantee. San Francisco shall not be liable to any Wholesale Customer or be obligated to supply more water to any Wholesale Customer individually or to the Wholesale Customers collectively than the amount to which it or they are otherwise entitled under this Agreement due to the use by any Wholesale Customer of more water than the amount to which it is entitled under this Agreement. E. San Francisco shall install such new connections between the Regional Water System and the distribution system of any Wholesale Customer that are necessary to deliver the quantities of water to which the Wholesale Customer is entitled under this Agreement. San Francisco shall have the right to determine the location of such connections, in light of the need to maintain the structural integrity of the Regional Water System and, where applicable, the need to limit peaking directly off of Regional Water System pipelines by a Wholesale Customer's individual retail customers, the need to ensure that a Wholesale Customer's individual retail customers have access to alternative sources of water in the event of a reduction in San Francisco's ability to provide them with water, and other factors which may affect the desirability or undesirability of a particular location. San Francisco's decisions regarding the location of new connections and the location, size and type of any new meters shall not be reviewable by a court except for an abuse of discretion or failure to provide a Wholesale Customer with connections and meters adequate to deliver the quantity of water to which it is entitled under this Agreement. 3.03. Wholesale Customer Service Areas A. Each of the Individual Water Sales Contracts described in Section 9.01 will contain, as an exhibit, a map of the Wholesale Customer’s service area. A Wholesale Customer may not deliver water furnished to it by San Francisco outside the boundary of its service area without the prior written consent of San Francisco, except for deliveries to another Wholesale Customer on an emergency and temporary basis pursuant to Section 3.07.B. B. If a Wholesale Customer wishes to expand its service area, it shall request San Francisco's consent to the expansion and provide information reasonably requested by San Francisco about the amount of water projected to be purchased from San Francisco to meet demand within the area proposed to be added to the service area. 11 15118728.1 C. San Francisco may refuse a Wholesale Customer's request to expand its service area on any reasonable basis. If San Francisco denies a request by a Wholesale Customer to expand its service area, or fails to act on the request for six months after it has been submitted, the Wholesale Customer may challenge San Francisco's denial or delay in court. Such a challenge may be based on the Wholesale Customers’ claim, reserved in Section 8.07, that San Francisco is obligated under federal or state law to furnish water, included within its Individual Supply Guarantee, to it for delivery outside its then-existing service area and that it is entitled to enlarge its service area to supply water to such customers. San Francisco reserves the right to contest any such claim on any applicable ground. This subsection does not apply to San Jose and Santa Clara, whose maximum service areas are fixed pursuant to Section 9.06. D. This section will not prevent San Francisco and any Wholesale Customer, other than San Jose and Santa Clara, from agreeing in an Individual Water Sales Contract or an amendment thereto that: • the Wholesale Customer may expand its service area without subsequent San Francisco approval to a definitive size but no larger, or • the Wholesale Customer will not expand its service area beyond its present limits without San Francisco approval and waiving the provisions of this section with respect to any additional expansion. E. If two or more Wholesale Customers agree to adjust the boundaries of their respective service areas so that one assumes an obligation to serve customers in an area that was previously within the service area of another Wholesale Customer, they may also correspondingly adjust their respective Individual Supply Guarantees. Such adjustments are not subject to the requirements of Section 3.04 and shall require only the consent of San Francisco and the Wholesale Customers involved, so long as the Supply Assurance and the Individual Supply Guarantees of other Wholesale Customers are not affected. Service area boundary adjustments that would result in the expansion of any California Water Service Company service areas are subject to the requirements of Section 9.02.D. Any adjustment of service area boundaries that would result in the supply of water in violation of this Agreement or the Act shall be void. F. San Francisco acknowledges that it has heretofore consented in writing to deliveries of water by individual Wholesale Customers outside their service area boundaries and 12 15118728.1 agrees that nothing in this Agreement is intended to affect such prior authorizations, which remain in full force and effect according to their terms. Such authorizations shall be identified in the Individual Water Sales Contracts. 3.04. Permanent Transfers of Individual Supply Guarantees A. A Wholesale Customer that has an Individual Supply Guarantee may transfer a portion of it to one or more other Wholesale Customers, as provided in this section. B. Transfers of a portion of an Individual Supply Guarantee must be permanent. The minimum quantity that may be transferred is 1/10th of a MGD. C. Transfers of portions of Individual Supply Guarantees are subject to approval by the SFPUC. SFPUC review is limited to determining (1) whether a proposed transfer complies with the Act, and (2) whether the affected facilities in the Regional Water System have sufficient capacity to accommodate delivery of the increased amount of water to the proposed transferee. D. The participants in a proposed transfer shall provide notice to the SFPUC specifying the amount of the Individual Supply Guarantee proposed to be transferred, the proposed effective date of the transfer, which shall not be less than 60 days after the notice is submitted to the SFPUC, and the Individual Supply Guarantees of both participants resulting from the transfer. The SFPUC may require additional information reasonably necessary to evaluate the operational impacts of the transfer. The SFPUC will not unreasonably withhold or delay its approval; if the SFPUC does not act on the notice within 60 days, the transfer will be deemed to have been approved. E. Within 30 days after the transfer has become effective, both the transferor and the transferee will provide notice to the SFPUC and BAWSCA. By September 30 of each year during the Term, the SFPUC and BAWSCA will prepare an updated Attachment C to reflect transfers occurring during the immediately preceding fiscal year. F. Amounts transferred will remain subject to pro rata reduction under the circumstances described in Section 3.02.C and according to the formula set forth in Attachment D. 13 15118728.1 3.05. Restrictions on Resale Each Wholesale Customer agrees that it will not sell any water purchased from San Francisco to a private party for resale by such private party to others in violation of the Act. Each Wholesale Customer also agrees that it will not sell water purchased from San Francisco to another Wholesale Customer without prior written approval of the SFPUC, except on a temporary and emergency basis as permitted in Section 3.07.B.2. The SFPUC agrees that it will not unreasonably withhold its consent to a request by a Wholesale Customer to deliver water to another Wholesale Customer for resale. 3.06. Conservation; Use of Local Sources; Water Management Charge A. In order to support the continuation and expansion of water conservation programs, water recycling, and development of alternative supplies within the Wholesale Customers’ service areas, the SFPUC will, if requested by BAWSCA, include the Water Management Charge in water bills sent to Wholesale Customers. The SFPUC will deliver all Water Management Charge revenue to BAWSCA monthly and shall deliver an annual accounting of Water Management Charge revenue to BAWSCA within 90 days after the end of each fiscal year. The SFPUC’s obligations to collect and deliver Water Management Charge revenue to BAWSCA under this subsection are conditioned on BAWSCA’s delivery to the SFPUC of an annual report describing the projects and programs on which Water Management Charge funds received from the SFPUC during the previous fiscal year were expended and an estimate of the amount of water savings attributable to conservation programs and of the yield of alternative supplies developed. This report will be due within 180 days after the end of each fiscal year during which Water Management Charge funds were received. B. The SFPUC will work together with BAWSCA to explore ways to support water conservation programs, recycling projects, and conjunctive use alternatives outside the Wholesale Service Area, in particular projects and programs that have the potential to increase both flows in the lower Tuolumne River (downstream of New Don Pedro Reservoir) and water deliveries to the Regional Water System. C. Each Wholesale Customer shall take all actions within its legal authority related to water conservation that are necessary to insure that the SFPUC (a) remains eligible for (i) state and federal grants and (ii) access to the Drought Water Bank operated by the California Department of Water Resources, as well as other Drought-related water purchase or transfer 14 15118728.1 programs, and (b) complies with future legal requirements imposed on the Regional Water System by the federal government, the State, or any other third party as conditions for receiving funding or water supply. D. San Francisco and each Wholesale Customer agree that they will diligently apply their best efforts to use both surface water and groundwater sources located within their respective service areas and available recycled water to the maximum feasible extent, taking into account the environmental impacts, the public health effects and the effects on supply reliability of such use, as well as the cost of developing such sources. 3.07. Restrictions on Purchases of Water from Others; Minimum Annual Purchases A. Each Wholesale Customer (except for Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale) agrees that it will not contract for, purchase or receive, with or without compensation, directly or indirectly, from any person, corporation, governmental agency or other entity, any water for delivery or use within its service area without the prior written consent of San Francisco. B. The prohibition in subsection A does not apply to: 1. recycled water; 2. water necessary on an emergency and temporary basis, provided that the Wholesale Customer promptly gives San Francisco notice of the nature of the emergency, the amount of water that has been or is to be purchased, and the expected duration of the emergency; or 3. water in excess of a Wholesale Customer’s Individual Supply Guarantee. C. Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale may purchase water from sources other than San Francisco, provided that San Francisco shall require that each purchase a minimum annual quantity of water from San Francisco. These minimum quantities are set out in Attachment E and shall also be included in the Individual Water Sales Contracts between San Francisco and each of these four Wholesale Customers. The minimum purchase requirement in these Individual Water Sales Contracts will be waived during a Drought or other period of water shortage if the water San Francisco makes available to these Wholesale Customers is less than its minimum purchase quantity. 15 15118728.1 3.08. Water Quality A. San Francisco shall deliver treated water to Wholesale Customers (except Coastside County Water District, which receives untreated water from Crystal Springs and Pilarcitos Reservoirs) that complies with primary maximum contaminant level and treatment technique standards at the regulatory entry points designated in the San Francisco Regional Water System Domestic Water Supply Permit (currently Permit No. 02-04-04P3810001) issued by the California Department of Public Health (CDPH). B. San Francisco will provide notice to the Wholesale Customers in accordance with the Water Quality Notification and Communications Plan (current version dated January 2006), attached hereto as Attachment G. San Francisco will regularly update its plan in consultation with the Wholesale Customers and the CDPH. The next update will be completed one year after the Effective Date and include expanded coverage of secondary maximum contaminant level exceedances and water quality communication triggers. The plan will note that the Wholesale Customers will receive the same notification no later than the San Francisco water system (currently Permit No. 02-04-01P3810011) except for distribution-related issues. C. San Francisco and the Wholesale Customers will establish a Water Quality Committee. The Water Quality Committee will meet at least quarterly to collaboratively address water quality issues, such as Water Quality Notification and Communications Plan updates, regulatory issues, and water quality planning studies/ applied research. San Francisco and each Wholesale Customer will designate a representative to serve on the committee. There will be a Chair and Vice Chair position for the Water Quality Committee. The Chair and Vice Chair positions will be held by San Francisco and the Wholesale Customers and rotate between them on an annual basis. 3.09. Completion of WSIP San Francisco will complete construction of the physical facilities in the WSIP by December 30, 2021. The SFPUC agrees to provide for full public review and comment by local and state interests of any proposed changes that delay previously adopted project completion dates or that delete projects. The SFPUC shall meet and consult with BAWSCA before proposing to the Commission any changes in the scope of WSIP projects which reduce their capacity or ability to achieve adopted Level of Service Goals and Objectives. The SFPUC 16 15118728.1 retains discretion to determine whether to approve the physical facilities in the WSIP until after it completes the CEQA process as set forth in Section 4.07. 3.10. Regional Water System Repair, Maintenance and Operation A. San Francisco will keep the Regional Water System in good working order and repair consistent with prudent utility practice. B. San Francisco will submit reports to its Retail and Wholesale Customers on the "State of the Regional Water System," including reports on completed and planned maintenance, repair or replacement projects or programs, by September of every even- numbered year, with reports to start in September 2010. C. San Francisco will cooperate with any audit of the SFPUC's asset management practices that may be initiated and financed by BAWSCA or the Wholesale Customers. BAWSCA may contract with third parties to conduct the audits. San Francisco will consider the findings and recommendations of such audits and will provide a written response indicating agreement with the recommendations, or disagreement with particular recommendations and the reasons why, within 90 calendar days after receipt. D. San Francisco will continue to operate its reservoirs in a manner that assigns higher priority to the delivery of water to the Bay Area and the environment than to the generation of electric power. The SFPUC, as the Regional Water System operator, is solely responsible for making day-to-day operational decisions. 3.11. Shortages A. Localized Water Reductions. Notwithstanding San Francisco's obligations to deliver the Supply Assurance to the Wholesale Customers collectively and the Individual Supply Guarantees to Wholesale Customers individually, San Francisco may reduce the amount of water available or interrupt water deliveries to specific geographical areas within the Regional Water System service area to the extent that such reductions are necessary due to Emergencies, or in order to install, repair, rehabilitate, replace, investigate or inspect equipment in, or perform other maintenance work on, the Regional Water System. Such reductions or interruptions may be imposed by San Francisco without corresponding reductions or interruptions in the amount of water available to SFPUC water users outside the specific geographical area where reductions or interruptions are necessary, if the system's ability to supply water outside the specific geographical area has not been impaired. In the event of such 17 15118728.1 a reduction or interruption, San Francisco will restore the supply of water to the specific geographical area as soon as is possible. Except in cases of Emergencies (during which oral notice shall be sufficient), San Francisco will give the affected Wholesale Customer(s) reasonable written notice of such localized reductions or interruptions, the reasons therefor, and the probable duration thereof. B. System-Wide Shortages and SFPUC Response to Regional Emergencies. Following a major system emergency event, the SFPUC will work closely with its Wholesale Customers to monitor customer demand, including the demand source. In the event that any individual Wholesale Service Area or Retail Service Area customer’s uncontrolled distribution system leaks could result in major water waste and endanger the supply provided by the Regional Water System as a whole, flow through some customer connections may need to be temporarily reduced or terminated. SFPUC will work closely with customers to assess the nature of the demand (e.g. fire-fighting versus leakage), so that public health and safety protection can be given top priority. 1. All emergencies that require use of non-potable source water will require use of chlorine, or other suitable disinfectant, if feasible. 2. San Francisco will use its best efforts to meet the seismic reliability and delivery reliability Level of Service Goals and Objectives adopted by the Commission in conjunction with the WSIP. San Francisco will distribute water on an equitable basis throughout the Regional Water System service area following a regional Emergency, subject to physical limitations caused by damage to the Regional Water System. 3. San Francisco's response to Emergencies will be guided by the then- current version of the ERRP. The SFPUC shall periodically review, and the Commission may amend, the ERRP to ensure that it remains an up-to-date and effective management tool. 4. The SFPUC will give the Wholesale Customers notice of any proposal to amend the ERRP in a manner that would affect them. The notice will be delivered at least thirty days in advance of the date on which the proposal is to be considered by the Commission and will be accompanied by the text of the proposed amendment. C. Shortages Caused by Drought; Acquisition of Dry Year Supplies. Notwithstanding San Francisco's obligations to deliver the Supply Assurance to the Wholesale Customers collectively and the Individual Supply Guarantees to Wholesale Customers 18 15118728.1 individually, San Francisco may reduce the amount of water available to the Wholesale Customers in response to Drought. 1. The Tier 1 Shortage Plan (Attachment H) will continue to be used to allocate water from the Regional Water System between Retail and Wholesale Customers during system-wide shortages of 20% or less. 2. San Francisco and the Wholesale Customers may negotiate in good faith revisions to the Tier 1 Shortage Plan to adjust for and accommodate anticipated changes due to demand hardening in the SFPUC's Wholesale and Retail Service Areas. Until agreement is reached, the current Tier 1 Shortage Plan will remain in effect. 3. The SFPUC will honor allocations of water among the Wholesale Customers (“Tier 2 Allocations”) provided by BAWSCA or if unanimously agreed to by all Wholesale Customers. If BAWSCA or all Wholesale Customers do not provide the SFPUC with Tier 2 Allocations, then the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers. For Regional Water System shortages in excess of 20%, San Francisco shall (a) follow the Tier 1 Shortage Plan allocations up to the 20% reduction, (b) meet and discuss how to implement incremental reductions above 20% with the Wholesale Customers, and (c) make a final determination of allocations above the 20% reduction. After the SFPUC has made the final allocation decision, the Wholesale Customers shall be free to challenge the allocation on any applicable legal or equitable basis. 4. San Francisco will use its best efforts to identify potential sources of dry year water supplies and establish the contractual and other means to access and deliver those supplies in sufficient quantity to meet a goal of not more than 20 percent system-wide shortage in any year of the design drought. 5. San Francisco will cooperate with BAWSCA to improve water supply reliability. As an example of such cooperation, San Francisco may invite a representative of BAWSCA to attend and participate in meetings with third parties for development of dry year water supplies. If San Francisco does not invite a BAWSCA representative to attend a specific scheduled meeting, it will promptly (within 30 days of any such meeting) provide BAWSCA with a written or oral report on the meeting, including any decisions reached at it, as well as information about planned subsequent meetings. Progress in securing dry year water supplies 19 15118728.1 will be reported to the SFPUC and the BAWSCA board of directors during the first quarter of each calendar year. 3.12. Wheeling of Water from Outside SFPUC System Subject to the Wheeling Statute, the SFPUC will not deny use of Regional Water System unused capacity for wheeling when such capacity is available for wheeling purposes during periods when the SFPUC has declared a water shortage emergency under Water Code Section 350 if the following conditions are met: A. The transferor pays reasonable charges incurred by the SFPUC as a result of the wheeling, including capital, operation, maintenance, administrative and replacement costs (as such are defined in the Wheeling Statute). B. Wheeled water that is stored in the Regional Water System spills first. C. Wheeled water will not unreasonably: (1) impact fish and wildlife resources in Regional Water System reservoirs; (2) diminish the quality of water delivered for consumptive uses; or (3) increase the risk of exotic species impairing Regional Water System operations. The transferor may at its own expense provide for treatment to mitigate these effects. D. Priority will be given to wheeling by Wholesale Customers or BAWSCA over arrangements for third-party public entities. 3.13. Limits on New Customers A. New Wholesale Customers Prior to December 31, 2028. Until December 31, 2028, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless: 1. It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations as provided in Section 4.07; 2. It concurrently completes any necessary environmental review under CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; and 3. This Agreement is amended to incorporate any commitments to proposed new wholesale customers and to San Jose and Santa Clara, and to address the effects, if any, 20 15118728.1 of the new customer(s) on water supply reliability, water quality and cost to existing customers of the Regional Water System. B. New Wholesale Customers After December 31, 2028. As of January 1, 2029, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless: 1. It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations as provided in Section 4.07; 2. It concurrently completes any necessary environmental review under CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; 3. Doing so increases the reliability of the Regional Water System; and 4. This Agreement is concurrently amended (a) to reflect that increased reliability by means of an increased commitment by San Francisco to deliver water during Droughts and (b) to address the effects, if any, of the new customer(s) on water supply, water quality and cost to existing customers of the Regional Water System. C. New Retail Customers. San Francisco may enter into new retail water service obligations outside of the City and County of San Francisco: 1. Only in Alameda, San Mateo, Santa Clara, San Joaquin and Tuolumne Counties; 2. That are within or immediately adjacent to areas in which it currently serves other Retail Customers; and 3. Until the aggregate additional demand represented by the new retail customers reaches 0.5 MGD. The limitations on serving new Retail Customers described in this subsection do not apply to historical obligations to supply water that may be contained in prior agreements between the SFPUC or its predecessor the Spring Valley Water Company, and individual users or property owners located adjacent to Regional Water System transmission pipelines. D. Water Exchanges and Cost Sharing Agreements with Other Water Suppliers. Subject to completion of necessary environmental review under CEQA, San 21 15118728.1 Francisco may at any time enter into water exchanges or cost sharing agreements with other water suppliers to enhance dry year or normal year water deliveries, provided that San Francisco cannot incur new water service obligations to such other water suppliers unless the requirements for taking on new wholesale customers in subsections A and B above are met. 3.14. Measurement of Water A. The parties recognize that continuous and accurate measurement of water deliveries to and from the Regional Water System and maintenance of complete and accurate records of those measurements is necessary (1) for the costs of the Regional Water System to be allocated in accordance with this Agreement, (2) for implementation of other provisions of this Agreement, and (3) for effective operation and maintenance of a water system serving a large urbanized region. B. It is the responsibility of the SFPUC to obtain and record these measurements. To do so, the SFPUC shall install, maintain and operate measuring and recording equipment at the following locations: (1) inputs to the Regional Water System from all water sources (“System Input Meters”), (2) internal flow meters to support operation of the Regional Water System (“In- Line Meters”), (3) deliveries to the City at the San Francisco-San Mateo County line (“County- Line Meters”) and to three reservoirs in San Francisco (“In-City Terminal Reservoir Meters”), (4) deliveries to SFPUC Retail Customers located outside the boundaries of the City, and (5) deliveries to the Wholesale Customers, as described and illustrated in Attachment J. C. The SFPUC shall inspect, test, service, and calibrate the measuring and recording equipment installed at the locations described in subsection B and will repair or replace them when necessary, in order to ensure that their accuracy is consistent with specifications provided in Attachment J. D. The SFPUC shall continue to contract with a qualified independent metering consultant to perform periodic inspection, testing, servicing and calibration of the County-Line Meters, the In-City Terminal Reservoir Meters, and the System Input and In-Line Meters described in Attachment J, as well as the portion of the SFPUC’s Supervisory Control and Data Acquisition (SCADA) system that utilizes the flow signals produced by that measuring and recording equipment. The method, schedule and frequency for calibration and maintenance of the County-Line Meters and the In-City Terminal Reservoir Meters are specified in Attachment J. The SFPUC shall provide copies of the metering consultant's reports to BAWSCA. 22 15118728.1 E. System Input Meters measure water deliveries into the Regional Water System from sources such as Hetch Hetchy and the SFPUC’s water treatment plants. System Input Meters also measure deliveries from the Regional Water System to outside sources or from such sources to the Regional Water System through interties with the Santa Clara Valley Water District and the East Bay Municipal Utility District. In-Line Meters measure internal system flows and are located on the Bay Division Pipelines and other main transmission pipelines. These meters are collectively referred to as the “System Input and In-line Meters.” Similar to the County-Line Meters, the System Input and In-Line Meters have secondary metering equipment, such as differential pressure transmitters and flow recorders. The System Input and In-Line Meters, and all associated secondary metering equipment, shall be calibrated and maintained according to the method, schedule, and frequency specified in the Procedures Manual described in subsection G, below. F. The locations of the smaller and more numerous meters described in subsection B (4) and (5) are not illustrated in Attachment J; however, they are also critical in the determination of cost allocations, and accordingly require continued maintenance and calibration. It is the responsibility of the SFPUC to maintain the accuracy of these meters and their secondary metering equipment. G. The SFPUC will prepare a Procedures Manual which will describe in detail the procedures for periodic inspection, testing, servicing and calibration of the measuring and recording equipment described in subsection B. Once the Procedures Manual is completed, the SFPUC and BAWSCA may agree that it should supersede some or all of the requirements in Attachment J regarding the County-Line and the In-City Terminal Reservoir Meters. Unless and until such an agreement is reached and documented, however, the requirements in Attachment J, Section D will continue in force as minimum standards for meter maintenance and calibration of the County-Line and In-City Terminal Reservoir Meters (subject to modification under the circumstances described in Attachment J, Section A.4). H. If BAWSCA and the SFPUC are unable to agree on the water use calculations required by Attachment J for a particular year, the Wholesale Customers may file a demand for arbitration challenging the SFPUC's determination of the Wholesale Revenue Requirement for that year on the basis of its reliance on disputed water use calculations. Such a challenge must be brought in the manner and within the time specified in Section 8.01. 23 15118728.1 3.15. New Sources of Water Supply to Maintain Supply Assurance A. Urgent Reductions of Existing Surface Water Supplies. Sudden and unanticipated events may require San Francisco to act promptly to protect the health, safety and economic well-being of its Retail and Wholesale Customers. Such sudden events include, but are not limited to drought, earthquakes, terrorist acts, catastrophic failures of facilities owned and operated by San Francisco, and other natural or man-made events. If such events diminish San Francisco’s ability to maintain the Supply Assurance, San Francisco may increase the Wholesale Revenue Requirement to pay for planning, evaluation and implementation of replacement sources of supply when such needs arise and without the prior approval of the Wholesale Customers. San Francisco will keep the Wholesale Customers informed of actions being taken under this subsection, progress made, and contingency actions the Wholesale Customers may need to consider taking. To the extent appropriate and applicable, San Francisco will act in accordance with Section 3.11 and the ERRP. Nothing in this subsection limits San Francisco’s obligations under Section 3.11 to pursue additional sources of supply to augment supplies available during drought. B. Non-Urgent Reductions of Existing Surface Water Supplies. Climate change, regulatory actions and other events may impact San Francisco’s ability to maintain the Supply Assurance from its existing surface water supplies, but on timescales long enough to permit San Francisco to collaborate with its Wholesale Customers on how best to address possible impacts to water supply. If such events diminish San Francisco’s ability to maintain the Supply Assurance, San Francisco may increase the Wholesale Revenue Requirement to pay for planning, evaluation and implementation of replacement sources of supply when such needs arise and without the prior approval of the Wholesale Customers. San Francisco will keep the Wholesale Customers informed of actions being taken under this subsection, progress made, and contingency actions the Wholesale Customers may need to consider taking. San Francisco will solicit input and recommendations from BAWSCA and the Wholesale Customers, and take those recommendations into consideration. Prior to Commission approval of plans or taking other actions that would impact the Wholesale Revenue Requirement, San Francisco will hold a public hearing to receive written and oral comments. Nothing in this subsection modifies San Francisco’s obligation to maintain the ability to provide the Supply Assurance under this Agreement. 24 15118728.1 3.16. New Sources of Water Supply to Increase Supply Assurance A. Surface Water Supplies From Existing Watersheds After 2018. The Commission action in SFPUC Resolution Number 08-0200, adopted October 30, 2008 requires certain decisions by San Francisco regarding whether to supply more than 265 MGD from its watersheds following 2018. Such decisions are to be made by December 31, 2018, subject to the exercise of San Francisco's retained CEQA discretion in Section 4.07. San Francisco's future decisions may include an offer to increase the Supply Assurance at the request of some or all of its Wholesale Customers. Costs associated with providing additional water from its existing water supplies in San Mateo, Santa Clara, Alameda, Tuolumne, and Stanislaus Counties shall be allocated to Wholesale and Retail Customers as described in Article 5. B. New Water Supplies. If San Francisco seeks to develop additional water supplies from new sources to increase the Supply Assurance available to Wholesale Customers, studies and resulting water supply projects will be conducted jointly with BAWSCA under separate agreement(s) specifying the purpose of the projects, the anticipated regional benefits and how costs of studies and implementation will be allocated and charged. Nothing in this Agreement shall serve as precedent for the allocation of such new supply capital costs between Retail and Wholesale Customers or associated operational expenses, which shall only occur following approval of both parties and amendment of this Agreement, if necessary, under Section 2.03. 3.17. Westside Basin Groundwater Storage and Recovery Project In August 2014, the SFPUC approved a WSIP project called the Groundwater Storage and Recovery Project (“Project”), which authorized the SFPUC to enter into an agreement governing the operation of the Project with the Participating Pumpers entitled “Agreement for Groundwater Storage and Recovery from the Southern Portion of the Westside Groundwater Basin by and among the San Francisco Public Utilities Commission, the City of Daly City, the City of San Bruno, and California Water Service Company” (“Project Operating Agreement”), which became effective on December 16, 2014. The Project produces Regional benefits for all customers of the Regional Water System by making use of available groundwater storage capacity in the Southern portion of the Westside Basin through the supply of additional surface water (“In Lieu Water”) to the Participating Pumpers from the Regional Water System, in exchange for a corresponding reduction in groundwater pumping at existing wells owned by the Participating Pumpers. The new groundwater supply that accrues to storage as a result of 25 15118728.1 delivery of In Lieu Water will be recovered from the SFPUC Storage Account during water shortages using new Regional Project Facilities or Shared Facilities operated by the Participating Pumpers and the SFPUC. Project mitigation capital costs and annual Project operations and maintenance expenses and water supplies shall be allocated as follows: A. All In Lieu Water delivered to the Participating Pumpers shall be (1) temporary and interruptible in nature and (2) at the sole discretion of the SFPUC based on the total volume of water available to the Regional Water System. B. All In Lieu Water delivered to the Participating Pumpers shall be considered a delivery of water to storage and shall not be construed to affect or increase the Individual Supply Guarantees of these Wholesale Customers or to otherwise entitle them to any claim of water in excess of their Individual Supply Guarantees. C. In the event that it is necessary to reduce the Participating Pumpers’ aggregate designated quantity of groundwater production allocation pursuant to Section 4.7 of the Project Operating Agreement, the SFPUC may supply an annual maximum of up to 500 acre feet of Participating Pumper Replacement Water from the Regional Water System at a price comparable to the Participating Pumpers’ then-current groundwater cost, as may be adjusted annually as provided for in Section 4.7 of the Project Operating Agreement. Each of the Participating Pumpers may elect to take delivery of its share of Participating Pumper Replacement Water either as interruptible surface water deliveries from the Regional Water System or as a transfer of storage credits from the SFPUC Storage Account. All revenue received from such water sales or transfers shall be considered revenue related to the sale of water and allocated between Retail Customers and Wholesale Customers on the basis of Proportional Water Use. All volumes of Participating Pumper Replacement Water delivered shall not be construed to affect or increase the Individual Supply Guarantees of these Wholesale Customers or to otherwise entitle them to any claim of water in excess of their Individual Supply Guarantees. D. Any operation and maintenance expenses incurred by the Participating Pumpers and the SFPUC that are related to the operation of Project Facilities and Shared Facilities for Project purposes shall be included as Regional pumping expenses under Section 5.05.B of this Agreement and included as part of the Wholesale Revenue Requirement. For rate setting purposes, estimated Project operation and maintenance expenses shall be used as set forth in 26 15118728.1 Section 6.01 of this Agreement. Operation and maintenance expenses associated with the Participating Pumpers' Existing Facilities that do not provide Regional benefits shall not be included in the Wholesale Revenue Requirement. On a case-by-case basis, the SFPUC may include operation and maintenance expenses associated operation of the Participating Pumpers’ Existing Facilities in the Wholesale Revenue Requirement provided that such expenses (1) are solely attributable to Project operations for a Regional benefit and (2) are not caused by the Participating Pumper's failure to operate and maintain its existing wells in a reasonable and prudent manner consistent with water utility industry standards. The SFPUC shall provide the Wholesale Customers with copies of Project Operation and Maintenance Expenses documentation provided by the Participating Pumpers under Section 9.2 of the Project Operating Agreement. E. The Project Mitigation, Monitoring and Reporting Program (“MMRP”) adopted by the SFPUC included mitigation measure HY-6 to prevent well interference impacts to the Irrigation Well Owners. In mitigation measure HY-6, the SFPUC agreed to provide standby supplies of Irrigation Well Owner Replacement Water from the Regional Water System, to alter Project operations, and implement other actions (e.g., well replacement) to avoid well interference impacts that require the consent of the Irrigation Well Owners. The SFPUC’s Project mitigation and other obligations to the Irrigation Well Owners are memorialized in substantially identical “Groundwater Well Monitoring and Mitigation Agreements” with one or more of the Irrigation Well Owners. For purposes of this Agreement, water supplies, and the capital costs and operations and maintenance expenses associated with providing Irrigation Well Owner Replacement Water and implementing other mitigation actions identified in the Project MMRP, shall be allocated as follows: 1. Irrigation Well Owner Replacement Water shall be limited to a cumulative maximum of 1.76 mgd and shall be delivered only in volumes necessary for mitigating well interference impacts as provided in the Project MMRP. The supply of Irrigation Well Owner Replacement Water by the SFPUC shall not be considered a new water supply commitment to Retail Customers or Wholesale Customers under Section 3.13 of this Agreement. The annual volume of Irrigation Well Owner Replacement Water supplied shall be metered and allocated as water from the Regional Water System during shortages between Retail Customers and Wholesale Customers in proportion to and consistent with the provisions of the Shortage Allocation Plan. All revenue received from Irrigation Well Owners for metered deliveries of Irrigation Well Owner Replacement Water shall be considered revenue related to the sale of 27 15118728.1 water and allocated between Retail Customers and Wholesale Customers on the basis of Proportional Water Use. 2. All Project capital costs incurred by the SFPUC in complying with the mitigation measures in the Project MMRP shall be considered Regional capital costs under Section 5.04 of this Agreement. 3. Operations and maintenance expenses incurred by the SFPUC in maintaining Project mitigation assets described in the Project MMRP shall be considered Regional transmission and distribution expenses under Section 5.05.D of this Agreement. Well pumping expenses that are required to be paid by the SFPUC in the agreements with the Irrigation Well Owners shall be considered Regional pumping expenses under Section 5.05.B of this Agreement. 4. Any wheeling charges imposed by California Water Service Company for delivery of Irrigation Well Owner Replacement Water shall be considered Regional transmission and distribution expenses under Section 5.05.D of this Agreement. F. F. The SFPUC will audit (1) operation and maintenance expenses submitted by the Participating Pumpers, and (2) well pumping expenses submitted by the Irrigation Well Owners, for reimbursement to confirm that such costs were incurred, respectively, as a result of (1) operating Project Facilities and Shared Facilities for a Regional benefit and (2) complying with mitigation obligations in the Project MMRP. Costs associated with the use of Project Facilities or Shared Facilities for Direct Retail or Direct Wholesale purposes, or that do not otherwise provide Regional benefits, shall not be included in the Wholesale Revenue Requirement. The SFPUC is responsible for resolving disputes with the Participating Pumpers and Irrigation Well Owners concerning expense allocations. Project expense documentation, including documentation of negotiation and settlement of disputed costs, will be available for review during the Compliance Audit described in Section 7.04 of this Agreement. The Wholesale Customers may dispute the SFPUC’s resolution of expense allocations through the arbitration provisions in Section 8.01 of this Agreement. G. The SFPUC may direct the Participating Pumpers to recover water from the SFPUC Storage Account for any type of shortage referenced in Section 3.11 of this Agreement. Water recovered from the SFPUC Storage Account using Project Facilities and Shared Facilities may be used for (1) the benefit of all Regional Water System customers; (2) Retail Customers; or (3) one or more of the Participating Pumpers. The Wholesale Revenue Requirement shall 28 15118728.1 only include operation and maintenance expenses incurred due to the operation of Project Facilities and Shared Facilities for Regional benefits, including expenses incurred due to compliance with mitigation measures in the Project MMRP. H. All water recovered during shortages caused by drought from the SFPUC Storage Account for Regional benefit, by the Participating Pumpers and by the SFPUC for delivery to Retail and Wholesale Customers, shall be used to free up a comparable volume of surface water from the Regional Water System for allocation in accordance with the Tier 1 Shortage Plan. I. If the Project is terminated for any reason, including breach of the Project Operating Agreement by one or more of the Participating Pumpers or the SFPUC, a force majeure event as specifically defined by the Project Operating Agreement, or due to regulatory action or legal action, then: 1. Any water remaining in the SFPUC Storage Account shall be used for the benefit of all customers of the Regional Water System; 2. Outstanding eligible operation and maintenance expenses, including costs incurred during recovery of remaining stored water, will be allocated as provided in this Section 3.17 of this Agreement; and 3. If Project Facilities are no longer capable of being used for a Regional benefit, the Wholesale Customers will be credited with their share of proceeds from disposition of Project Facilities or reimbursed their share of such capital costs for any Project Facilities which are retained by the SFPUC for Direct Retail benefit and not used for the benefit of the Wholesale Customers, on the basis of (a) original cost less depreciation and outstanding related Indebtedness or (b) original cost less accumulated depreciation for revenue funded Project Facilities. J. In the event that a Participating Pumper establishes the occurrence of a force majeure event as defined in the Project Operating Agreement, the SFPUC may enter into negotiations with the Participating Pumper to take over the operation of the portion of any Shared Facilities used for Project purposes for continued Regional use. If the SFPUC cannot reach agreement regarding the continued use of Shared Facilities for ongoing Regional benefit, the Participating Pumper shall reimburse the SFPUC and the Wholesale Customers for their respective shares of previously incurred Project capital costs used to upgrade the Shared 29 15118728.1 Facilities on the basis of (a) original cost less depreciation and outstanding related Indebtedness or (b) original cost less accumulated depreciation for revenue funded Shared Facilities. In the event that the SFPUC seeks to take over the operation of Shared Facilities for Direct Retail use, or one or more Wholesale Customers seeks to negotiate with a Participating Pumper to take over the operation of Shared Facilities for individual use or Direct Wholesale use, the party or parties benefiting from such transfer of Shared Facilities shall reimburse the other parties to this Agreement with their respective shares of previously incurred Project capital costs on the basis described in the previous sentence, or as the parties may otherwise agree. 3.18. Water Supply Agreement Amendment Required. San Francisco may not change the existing condition of the Hetch Hetchy Reservoir by: 1. Abandoning or decommissioning O'Shaughnessy Dam; or 2. Draining Hetch Hetchy Reservoir, except for purposes of (i) repair, rehabilitation, maintenance, improvement, or reconstruction of O'Shaughnessy Dam or appurtenances, (ii) supplying water to the Bay Area during drought, or (iii) meeting water release requirements under the Raker Act, or federal or state law, unless the parties enter into an amendment to the Water Supply Agreement, in full force and effect, adopted in accordance with Section 2.03. The amendment shall state, or restate, as the case may be: A. The level of service goals for seismic reliability and delivery reliability adopted by the Commission in conjunction with such proposed changes to the Regional Water System, provided such goals are at least as protective of the Wholesale Customers as the Level of Service Goals and Objectives; B. The level of water quality to be delivered, which is currently provided for in Section 3.08, and C. The specific cost allocation procedures, written as an amendment to Article 5, which apply to (1) the abandonment or decommissioning of O'Shaughnessy Dam, or (2) the draining of Hetch Hetchy Reservoir, and (3) the development, operation and maintenance of New Regional Assets 30 15118728.1 that may be required to replace water supplied by Hetch Hetchy Reservoir and delivered to the Bay Area. In the event that the parties are not able to agree upon and approve an amendment to the Water Supply Agreement as set forth above, San Francisco may not abandon or decommission O'Shaughnessy Dam or drain Hetch Hetchy Reservoir. 31 15118728.1 Article 4. Implementation of Interim Supply Limitation. 4.01. Interim Supply Limitation Imposed by SFPUC In adopting the WSIP in Res. No. 08-0200, the Commission included full implementation of all proposed WSIP capital improvement projects to achieve Level of Service Goals and Objectives relating to public health, seismic safety, and delivery reliability, but decided to adopt a water supply element that includes the Interim Supply Limitation. This article describes how the parties will implement the Interim Supply Limitation imposed by the SFPUC between the Effective Date and December 31, 2018, and how the SFPUC will conduct water supply planning after December 31, 2018. 4.02. Retail and Wholesale Customer Allocations Under Interim Supply Limitation The Interim Supply Limitation is allocated as follows between Retail and Wholesale Customers: Retail Customers' allocation: 81 MGD Wholesale Customers' allocation: 184 MGD The Wholesale Customers' collective allocation of 184 MGD under the Interim Supply Limitation includes the demand of the cities of San Jose and Santa Clara, whose demand is not included in the Supply Assurance, as provided in Section 3.02.B. By December 31st, 2010, the Commission will establish each Wholesale Customer's Interim Supply Allocation at a public meeting. 4.03. Transfers of Interim Supply Allocations A. Any Wholesale Customer, including Hayward, may transfer a portion of its Interim Supply Allocation to one or more other Wholesale Customers, as provided in this section. All Wholesale Customers are also eligible transferees, including California Water Service Company up to its Individual Supply Guarantee. B. Transfers of a portion of an Interim Supply Allocation must be prospective. The duration of a transfer cannot be less than the balance of the fiscal year. The minimum quantity that may be transferred is 1/10th of a MGD. C. Transfers of portions of Interim Supply Allocations are subject to approval by the SFPUC. SFPUC review is limited to determining (1) whether a proposed transfer complies with 32 15118728.1 the Act, and (2) whether the affected facilities in the Regional Water System have sufficient capacity to accommodate delivery of the increased amount of water to the proposed transferee. D. The participants in a proposed transfer shall provide notice to the SFPUC specifying the amount of the Interim Supply Allocation proposed to be transferred and the proposed effective date of the transfer, which shall not be less than 60 days after the notice is submitted to the SFPUC. The SFPUC may require additional information reasonably necessary to evaluate the operational impacts of the transfer. The SFPUC will not unreasonably withhold or delay its approval; if the SFPUC does not act on the notice within 60 days, the transfer will be deemed to have been approved. E. Within 30 days after the transfer has become effective, both the transferor and the transferee will provide written notice to the SFPUC and BAWSCA. F. Transfers of Interim Supply Allocations shall continue in effect until the earlier of (1) delivery of written notice to the SFPUC by the transfer participants that the transfer has been rescinded or (2) December 31, 2018. 4.04. Environmental Enhancement Surcharge A. Establishment of Environmental Enhancement Surcharge. Beginning with wholesale water rates for fiscal year 2011-2012, and continuing for the duration of the Interim Supply Limitation, the Commission will establish the Environmental Enhancement Surcharge concurrently with the budget-coordinated rate process set forth in Article 6 of this Agreement. The monetary amount of the Environmental Enhancement Surcharge per volume of water, such as dollars per acre-foot, will be equivalent for Retail Customer use in excess of 81 MGD and Wholesale Customer use in excess of 184 MGD. The Environmental Enhancement Surcharge will be simple to calculate so that Wholesale Customers can estimate potential surcharges for budgeting purposes and establish retail rates within their service areas. B. Application of Environmental Enhancement Surcharge. Beginning in fiscal year 2011-12, the Environmental Enhancement Surcharge will be levied only if and when combined Retail Customer and Wholesale Customer purchases exceed the Interim Supply Limitation of 265 MGD and if the fund described in subsection D below has been established by the San Francisco Board of Supervisors. In that event, the Environmental Enhancement Surcharge will apply to Retail Customers for use in excess of 81 MGD and to individual 33 15118728.1 Wholesale Customers for use in excess of their Interim Supply Allocations established by the Commission pursuant to Section 4.02. 1. Environmental Enhancement Surcharges related to the Retail Customers’ use in excess of their 81 MGD Retail Customer Allocation will be paid by the SFPUC, and no portion of such surcharges may be allocated to Wholesale Customers. The method of recovering the Environmental Enhancement Surcharges imposed upon Retail Customers shall be within the sole discretion of the SFPUC. 2. Environmental Enhancement Surcharges related to the individual Wholesale Customers’ use in excess of their respective Interim Supply Allocations will be paid to the SFPUC by individual Wholesale Customers. C. Collection of Environmental Enhancement Surcharge. Notwithstanding the budget-coordinated rate setting process contemplated in Article 6 of this Agreement, the Environmental Enhancement Surcharge for any given year will be determined retrospectively based on actual annual usage during the fiscal year in excess of the Interim Supply Allocation and paid in equal monthly installments over the remainder of the immediately following fiscal year. D. Establishment of Fund for Environmental Enhancement Surcharge Proceeds. Environmental Enhancement Surcharges paid by the SFPUC and by Wholesale Customers will be placed into a restricted reserve fund. The SFPUC will request the San Francisco Board of Supervisors to establish this fund by ordinance and, if adopted, the fund will be subject to the following restrictions: 1. Interest earnings will stay in the reserve fund. 2. The reserve fund shall (a) be subject to automatic appropriation; (b) require unexpended and unencumbered fund balances to be carried forward from year to year; and (c) not be transferred to the San Francisco General Fund. 3. The reserve fund may be used only for specific environmental restoration and enhancement measures for the Sierra and local watersheds, such as those included in the Watershed Environmental Improvement Program. 4. Environmental Enhancement Surcharge proceeds shall be expended in an expeditious manner. Any Environmental Enhancement Surcharge 34 15118728.1 proceeds that remain in the reserve fund as of December 31, 2018 shall be used to complete projects previously approved under subsection E. Upon completion of the identified projects, the balance of any unexpended sums in the reserve fund shall be distributed to BAWSCA and the SFPUC in proportion to the total amount of surcharges assessed to the Wholesale and Retail Customers, respectively. E. Use of Environmental Enhancement Surcharge Proceeds. Specific uses of Environmental Enhancement Surcharges will be decided by the SFPUC and BAWSCA General Managers following input from environmental stakeholders and other interested members of the public. If parties are unable to agree, then they will jointly select a third person to participate in making the decision. 4.05. San Jose/ Santa Clara Interim Supply Allocation and Process for Reduction/ Termination. San Francisco will supply a combined annual average of 9 MGD to the cities of San Jose and Santa Clara through 2028. Water supplied by San Francisco may only be used in the defined service areas of San Jose and Santa Clara shown on Attachment Q-1 and Q-2, respectively. San Francisco may reduce the quantity of water specified in this section when it establishes the Interim Supply Allocations for Wholesale Customers in Section 4.02. The establishment of Interim Supply Allocations for San Jose and Santa Clara shall not be considered a reduction of supply within the meaning of this section, provided that the Interim Supply Allocations assigned to San Jose and Santa Clara do not effect a reduction greater than the aggregate average reduction in Individual Supply Guarantees for Wholesale Customers that have such guarantees. The application of Interim Supply Allocations to San Jose and Santa Clara, and water supply planning after December 31, 2018, are subject to the following provisions: A. In December 2010 and in each December thereafter through 2027, the SFPUC shall prepare and the Commission shall consider, at a regularly scheduled public meeting, a Water Supply Development Report detailing progress made toward (1) meeting the Interim Supply Limitation by June 30, 2018 and (2) developing additional water supplies that will allow the Commission to designate San Jose and Santa Clara as permanent Wholesale Customers of the Regional Water System with a combined Individual Supply Guarantee of up to 9 MGD by the end of the Term on June 30, 2034. 35 15118728.1 B. The annual Water Supply Development Report shall be based on water purchase projections and work plans prepared by the SFPUC for the Retail Customers and by BAWSCA for the Wholesale Customers, respectively, and submitted to the Commission in June of each year beginning in 2010. C. If the Commission finds that the projections in the Water Supply Development Report show that (1) the Interim Supply Limitation will not be met by June 30, 2018, as a result of Wholesale Customers' projected use exceeding 184 MGD, or (2) the purchases of the Wholesale Customers, including San Jose and Santa Clara, are projected to exceed 184 MGD before June 30, 2028, the Commission may issue a conditional ten year notice of interruption or reduction in supply of water to San Jose and Santa Clara. D. Upon issuance of the conditional notice of interruption or reduction, the SFPUC will prepare a new analysis of water supply that will be utilized by the San Francisco Planning Department in its preparation of any necessary documentation under CEQA pursuant to Section 4.07 on the impacts of interrupting or reducing service to San Jose and Santa Clara. E. Such notice of interruption or reduction will be rescinded if the Commission finds, based upon a subsequent annual Water Supply Development Report, that (1) sufficient progress has been made toward meeting the Interim Supply Limitation, or (2) projections show that the projected purchases of the Wholesale Customers, including San Jose and Santa Clara, will not exceed 184 MGD by June 30, 2028. F. In no case shall any interruption or reduction of service to San Jose or Santa Clara pursuant to this section become effective less than two years from the completion of the CEQA process (not including resolution of any appeals or litigation) or ten years from the notice, whichever is longer. If the ten year notice is issued after 2018, such interruption or reduction would be effective after 2028. G. If deliveries to San Jose and Santa Clara are interrupted, existing turnout facilities to San Jose and Santa Clara will remain in place for possible use during emergencies. H. San Francisco and the cities of San Jose and Santa Clara will cooperate with BAWSCA and the Santa Clara Valley Water District in the identification and implementation of additional water sources and conservation measures for the cities’ service areas that are 36 15118728.1 relevant to the water supply and the possible offer of permanent status for the two cities by the SFPUC. 4.06. San Francisco Decisions in 2028 Regarding Future Water Supply A. By December 31, 2028, San Francisco will have completed any necessary CEQA review pursuant to Section 4.07 that is relevant to making San Jose and Santa Clara permanent customers of the Regional Water System and will decide whether or not to make San Jose and Santa Clara permanent customers of the Regional Water System with a combined Individual Supply Guarantee of 9 MGD allocated equally between the two cities, as well as how much water in excess of 9 MGD it will supply to San Jose and Santa Clara. San Francisco will make San Jose and Santa Clara permanent customers only if, and to the extent that, San Francisco determines that Regional Water System long term water supplies are available. In the event that San Francisco decides to afford permanent status to San Jose and Santa Clara, this Agreement will be amended pursuant to Section 2.03. B. By December 31, 2028, San Francisco will have completed any necessary CEQA review pursuant to Section 4.07 and will decide how much water, if any, in excess of the Supply Assurance it will supply to Wholesale Customers from the Regional Water System to meet their projected future water demands until the year 2040, and whether to offer a corresponding increase in the Supply Assurance as a result of these determinations. 4.07. Retained Discretion of SFPUC and Wholesale Customers A. This Agreement contemplates discretionary actions that the SFPUC and the Wholesale Customers may choose to take in the future that could result in physical changes to the environment ("Discretionary Actions"). The Discretionary Actions include decisions to: 1. Develop additional or alternate water resources by the SFPUC or one or more Wholesale Customers; 2. Implement the physical facilities comprising the WSIP by December 30, 2021; 3. Approve wheeling proposals by Wholesale Customers; 4. Approve new wholesale customers and water exchange or cost sharing agreements with other water suppliers; 5. Provide additional water to San Jose and/or Santa Clara; 6. Offer permanent status to San Jose and/or Santa Clara; 37 15118728.1 7. Reduce or terminate supply to San Jose and/or Santa Clara; 8. Provide additional water to Wholesale Customers in excess of the Supply Assurance to meet their projected future water demands; 9. Offer a corresponding volumetric increase in the Supply Assurance; and 10. Implement the Hetch Hetchy Water and Power projects listed in Attachment R-2. The Discretionary Actions may require the SFPUC or Wholesale Customers to prepare environmental documents in accordance with CEQA prior to the SFPUC or the Wholesale Customers determining whether to proceed with any of the Discretionary Actions. Accordingly, and notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement commits the SFPUC or the Wholesale Customers to approve or carry out any Discretionary Actions that are subject to CEQA. Furthermore, the SFPUC’s or Wholesale Customers’ decisions to approve any of these Discretionary Actions are subject to the requirement that San Francisco and each Wholesale Customer, as either a “Lead Agency” (as defined in Section 21067 of CEQA and Section 15367 of the CEQA Guidelines) or a “Responsible Agency” (as defined in Section 21069 of CEQA and Section 15381 of the CEQA Guidelines) shall have completed any CEQA-required environmental review prior to approving a proposed Discretionary Action. B. In considering any proposed Discretionary Actions, the SFPUC and Wholesale Customers retain absolute discretion to: (1) make such modifications to any of the proposed Discretionary Actions as may be necessary to mitigate significant environmental impacts; (2) select feasible alternatives to the proposed Discretionary Actions that avoid significant adverse impacts; (3) require the implementation of specific measures to mitigate the significant adverse environmental impacts as part of the decision to approve the Discretionary Actions; (4) balance the benefits of the proposed Discretionary Actions against any significant environmental impacts before taking final actions to approve the proposed Discretionary Actions if such significant impacts cannot otherwise be avoided; or (5) determine not to proceed with the proposed Discretionary Actions. 38 15118728.1 Article 5. Wholesale Revenue Requirement 5.01. Scope of Agreement This Article shall be applicable only to the water rates charged by San Francisco to the Wholesale Customers. Nothing contained in this Agreement shall limit, constrain, or in any way affect the rates which San Francisco may charge for water sold to Retail Customers or the methodology by which such rates are determined. 5.02. General Principles This Article sets forth the method by which the Wholesale Customers’ collective share of expenses incurred by the SFPUC in delivering water to them will be determined. This collective share is defined as the “Wholesale Revenue Requirement.” A. The SFPUC currently operates several enterprises, including the Water Enterprise, the Wastewater Enterprise, and the Hetch Hetchy Enterprise. B. The Wastewater Enterprise is responsible for treating sewage within San Francisco and provides no benefit to the Wholesale Customers. C. The Hetch Hetchy Enterprise is responsible for storing and transmitting water to the Water Enterprise, generating hydroelectric power and transmitting it to San Francisco, generating electric power within San Francisco, and distributing electricity and steam heat within San Francisco. Its water supply operations provide benefits to the Wholesale Customers. D. The Water Enterprise delivers water to both Retail Customers, which are located both within and outside San Francisco, and to the Wholesale Customers, all of which are located outside San Francisco. E. This Article implements two general principles as follows: (1) the Wholesale Customers should not pay for expenses of SFPUC operations from which they receive no benefit and (2) the Wholesale Customers should pay their share of expenses incurred by the SFPUC in delivering water to them on the basis of Proportional Annual Use unless otherwise explicitly provided in this Agreement. F. To implement these general principles, the Wholesale Revenue Requirement will consist of, and be limited to, the Wholesale Customers’ shares of the following categories of expense: 39 15118728.1 1. Capital cost recovery of Water Enterprise Existing Assets, and Hetch Hetchy Enterprise Existing Assets classified as Water-Only and the Water-Related portion of Joint assets (Section 5.03) 2. Contribution to the capital cost of Water Enterprise New Regional Assets (Section 5.04) 3. Water Enterprise operation and maintenance expenses, including power purchased from the Hetch Hetchy Enterprise that is used in the operation of the Water Enterprise (Section 5.05) 4. Water Enterprise administrative and general expenses (Section 5.06) 5. Water Enterprise property taxes (Section 5.07) 6. The Water Enterprise’s share of the Hetch Hetchy Enterprise’s operation and maintenance, administrative and general, and property tax expenses (Section 5.08) 7. The Water Enterprise’s share of the Hetch Hetchy Enterprise’s capital cost of New Assets classified as Water-Only and the Water-Related portion of Joint assets (Section 5.09) In each of these cost categories, Direct Retail Expenses will be allocated entirely to Retail Customers. Direct Wholesale Expenses will be allocated entirely to the Wholesale Customers. Regional Expenses will be allocated between Retail Customers and Wholesale Customers as provided in this Article. G. For purposes of establishing the rates to be charged Wholesale Customers, expenses will be based on the budget for, and estimates of water purchases in, the following fiscal year, as provided in Article 6. For purposes of accounting, the Wholesale Revenue Requirement will be determined on the basis of actual expenses incurred and actual water use, as provided in Article 7. H. In addition, rates charged to Wholesale Customers may include the Wholesale Customers’ contribution to a Wholesale Revenue Coverage Reserve, as provided in Section 6.06, which is not included in the Wholesale Revenue Requirement itself. 40 15118728.1 5.03. Capital Cost Recovery - Existing Regional Assets A. SFPUC has previously advanced funds to acquire or construct Existing Assets used and useful in the delivery of water to both Wholesale Customers and Retail Customers. The parties estimate that the Wholesale Customers’ share of the net book value of these assets, as of the expiration of the 1984 Agreement on June 30, 2009, will be approximately $366,734,424, as shown on Attachment K-1. B. In addition, SFPUC has also previously advanced funds received from Retail Customer revenues to acquire or construct assets included in Construction-Work-In-Progress (CWIP) as of June 30, 2009. The parties estimate that the Wholesale Customers’ share of the book value of these revenue funded capital expenditures, as of the expiration of the 1984 Agreement on June 30, 2009, will be approximately $15,594,990, as shown on Attachment K-2. The Wholesale Customers shall pay their share of the cost of Existing Assets and revenue- funded CWIP by amortizing the amounts shown on Attachment K-1 and Attachment K-2 over 25 years at an interest rate of 5.13 percent. The amounts to be included in the Wholesale Revenue Requirement pursuant to this section shall be the sum of the annual principal and interest amounts shown on Attachments K-3 (for Water Enterprise Regional Assets and the one Direct Wholesale Asset) and K-4 (for Hetch Hetchy Enterprise Water-Only Assets and the Water-Related portion [45 percent] of Joint assets) calculated on the basis of monthly amortization of principal as set forth on Attachments K-3 and K-4. C. In addition, the Commission has previously appropriated funds, advanced through rates charged to Retail Customers, for construction of capital projects. Some of these projects are active, and have unexpended balances of appropriated funds that are not included in CWIP as of June 30, 2009. These projects, and the associated balances, are shown on Attachment K-5. Expenditures of funds from these balances during FY 2009-10, FY 2010-11 and FY 2011-12 will be reviewed in FY 2012-13. The SFPUC will prepare a report showing the amount expended in each year on each project and the total expended during all years on all projects that are categorized as Regional or, in the case of Hetch Hetchy Enterprise, are categorized as either Water-Only or Joint. The wholesale share of that total will be determined using the allocation principles in this Agreement based on Proportional Water Use during those three years. The result, plus accrued interest at the rate specified in Section 6.05.B, will be calculated by the SFPUC and its calculation reviewed by the Compliance Auditor as part of the Compliance Audit for FY 2012-13. The audited total will be paid based on a schedule of level 41 15118728.1 annual principal and interest amounts over ten years at an interest rate of 4.00%, calculated on a monthly amortization basis. All or any portion of the balance may be prepaid. The first year’s payment will be included in the Wholesale Revenue Requirement for FY 2014-15. D. The parties agree that the Wholesale Customers’ share of the net book values of Existing Regional Assets as of June 30, 2008 as shown on Attachment K-1 are accurate. The compliance audit conducted on the calculation of the FY 2008-09 Suburban Revenue Requirement required by the 1984 Agreement will determine the actual amounts of depreciation on, and capital additions to, plant in service during that fiscal year. Those amounts will be compared to the corresponding estimates shown on Attachments K-1 and K-2. The differences will be added to or subtracted from the estimated asset values shown on Attachments K-1 and K-2 and the amortization schedules in Attachments K-3 and K-4 will be recalculated. The wholesale allocation factors shall be fixed at 70.1% for the Water Enterprise Existing Assets and 64.2% for Hetch Hetchy Enterprise Existing Assets for both the preliminary and final payment schedules. The SFPUC will prepare and provide to the Wholesale Customers revised Attachments K-1 through K-4 based on the Wholesale Customers’ share of the net book value of the assets placed in service as of June 30, 2009 used to provide water service to the Wholesale Customers and the net book value of revenue-funded CWIP expended as of June 30, 2009. The revised Attachments K-1 through K-4 shall be approved by the General Manager of the SFPUC and the General Manager/CEO of BAWSCA and will be substituted for the original Attachments K-1 through K-4. E. The original Attachments K-1 through K-4, based on estimates, shall be used for estimating the Wholesale Revenue Requirement for the fiscal year beginning July 1, 2009. The revised Attachments, based on audited actuals, shall be used to determine the actual Wholesale Revenue Requirement for FY 2009-10 and to determine the Wholesale Revenue Requirement(s) in all subsequent years, except as may be provided elsewhere in this Agreement. F. The Wholesale Customers, acting through BAWSCA, may prepay the remaining unpaid Existing Assets principal balance, in whole or in part, at any time without penalty or early payment premium. Any prepayments will be applied in the month immediately following the month in which the prepayment is made and the revised monthly amount(s) will be used to calculate the Wholesale Revenue Requirement. Any partial prepayments must be in an amount at least equal to $10 million. In the event of a partial prepayment, an updated schedule for the 42 15118728.1 remaining payments shall be prepared reflecting the unpaid balance after prepayment, amortized through the end of FY 2034, calculated as provided in this section. The updated schedule, approved by the General Manager of the SFPUC and the General Manager/CEO of BAWSCA, will be substituted for Attachment K-3 and/or Attachment K-4. 5.04. Capital Cost Contribution - New Regional Assets A. Debt-Funded Capital Additions. The Wholesale Customers shall pay the wholesale share of Net Annual Debt Service for New Regional Assets. The Regional projects in the WSIP are identified in Attachment L-1. 1. The amount of Net Annual Debt Service for New Regional Assets will be determined for each series of Indebtedness issued. Until the proceeds of a particular series are Substantially Expended, the amount attributable to specific projects will be based on the expected use of proceeds shown in the “Certificate Regarding Use of Proceeds” executed by the SFPUC General Manager on behalf of the Commission in connection with the sale of the Indebtedness, provided such certificate identifies the use of proceeds at a level of detail equivalent to that shown on Attachment L-2, which is a copy of the certificate prepared for the 2006 Revenue Bonds, Series A. If a certificate does not identify the use of proceeds at that level of detail, the SFPUC General Manager shall prepare and execute a separate certificate which does identify the use of proceeds at the level of detail shown on Attachment L-2 and deliver it to BAWSCA within 15 days from the closing of the sale of the Indebtedness. 2. After the proceeds of a series are Substantially Expended, the SFPUC General Manager will prepare and execute a certificate showing the actual expenditure of proceeds at a level of detail equivalent to the initial General Manager certificate. The resulting allocation of Net Debt Service to New Regional Assets for a series of bonds will be used in the fiscal year in which the proceeds have been Substantially Expended and thereafter. Differences between the amount of Net Debt Service paid by Wholesale Customers prior to that year and the amount of Net Debt Service that they should have paid during that time based on the actual expenditure of proceeds will be taken into account in calculation of the balancing account for the fiscal year in which the proceeds were Substantially Expended. The application of the remaining proceeds shall be proportionate to the allocation of the Net Debt Service to New Regional Assets. 3. The Wholesale Customers’ share of Net Annual Debt Service for the New Regional Assets that are categorized as Direct Wholesale will be 100 percent. (None of the 43 15118728.1 projects in the WSIP are categorized as Direct Wholesale.) The Wholesale Customers’ share of Net Annual Debt Service for all other New Regional Assets will be determined each year and will be equal to the Wholesale Customers’ Proportional Annual Use. 4. If Indebtedness is issued by the SFPUC to refund the 2006 Revenue Bonds, Series A or to refund any other long-term Indebtedness issued after July 1, 2009, the Net Annual Debt Service attributable to proceeds used for refunding will be allocated on the same basis as the Indebtedness being refunded. 5. The SFPUC will prepare an annual report showing for each issue of Indebtedness and through the most recently completed fiscal year: (1) net financing proceeds available to pay project costs, (2) actual earnings on proceeds, (3) actual expenditures by project. The report shall be substantially in the form of Attachment L-3 and shall be delivered to BAWSCA on or before November 30 of each year, commencing November 2009. 6. In addition to Net Debt Service, Wholesale Customers will pay a proportionate share of annual administrative costs associated with Indebtedness, such as bond trustee fees, credit rating agency fees, letter of credit issuer fees, San Francisco Revenue Bond Oversight Committee fees, etc., but only to the extent such fees are neither paid from proceeds of Indebtedness nor included in SFPUC operation and maintenance or administrative and general expenses. B. Revenue-Funded Capital Additions. The Wholesale Customers shall pay the wholesale share of the appropriation contained in the SFPUC annual budget for each year to be used to acquire or construct New Regional Assets. If such appropriations are reimbursed from proceeds of Indebtedness, the Wholesale Customers will be credited for prior payments made under this Section 5.04.B. The Wholesale Customers’ share of the annual appropriation for revenue-funded New Regional Assets that are categorized as Direct Wholesale will be 100 percent. (None of the Repair and Replacement projects in the SFPUC’s most recent capital improvement program updated on February 10, 2009, is categorized as Direct Wholesale.) The Wholesale Customers’ share of the annual appropriation for all other revenue-funded New Regional Assets will be determined each year and will be equal to the Wholesale Customers’ Proportional Annual Use in each fiscal year. The amount appropriated in each fiscal year for the wholesale share of New Regional Assets shall be contributed to the Wholesale Capital Fund described in Section 6.08 and reported on and administered as shown in that section and Attachments M-1 through M-3. 44 15118728.1 5.05. Water Enterprise Operation and Maintenance Expenses There are five categories of Water Enterprise Operation and Maintenance Expenses, described below: A. Source of Supply 1. Description: This category consists of the costs of labor, supervision and engineering; materials and supplies; and other expenses incurred in the operation and maintenance of collecting and impounding reservoirs, dams, wells and other water supply facilities located outside San Francisco; watershed protection; water supply planning; and the purchase of water. 2. Allocation: Direct Retail expenses, including water supply planning for Retail operations (such as City Retail water conservation programs), will be assigned to the Retail Customers. Regional expenses will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date there are no Direct Wholesale expenses in the Source of Supply category.) B. Pumping 1. Description: This category consists of the costs of labor, supervision and engineering; materials and supplies; and other expenses incurred in the operation and maintenance of water pumping plants, ancillary structures and equipment and surrounding grounds; and fuel and power purchased for pumping water. 2. Allocation: Direct Retail expenses will be assigned to the Retail Customers. Regional expenses will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date there are no Direct Wholesale expenses in the Pumping category.) C. Treatment 1. Description: This category consists of the costs of labor, supervision and engineering; materials and supplies and other expenses incurred in the operation and maintenance of water treatment plants and drinking water quality sampling and testing. The cost of water quality testing will not include expenses incurred on behalf of the Wastewater 45 15118728.1 Enterprise. Any remaining costs, after adjusting for the Wastewater Enterprise, will be reduced by the amount of revenue received for laboratory analyses of any type performed for agencies, businesses and/or individuals other than the Water and Hetch Hetchy Enterprises. 2. Allocation: Direct Retail expenses will be assigned to the Retail Customers. Regional expenses will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date there are no Direct Wholesale expenses in the Treatment category.) D. Transmission and Distribution 1. Description: This category consists of the cost of labor, supervision and engineering; materials and supplies; and other expenses incurred in the operation and maintenance of transmission and distribution pipelines, appurtenances, meters (other than those expenses payable by individual Wholesale Customers pursuant to Section 5.10.C.3), distribution reservoirs storing treated water, craft shops and auto shops servicing vehicles used for operation and maintenance of the Regional Water System rather than for Direct Retail facilities, and miscellaneous facilities related to the transmission and distribution of water. 2. Allocation: Direct Retail Transmission and Distribution expenses will be assigned to the Retail Customers. Regional Transmission and Distribution expenses will be allocated between Retail and Wholesale Customers on the basis of Proportional Annual Use. Expenses incurred for the operation and maintenance of three terminal reservoirs, i.e., Sunset Reservoir (North and South Basins), University Mound Reservoir (North and South Basins), and Merced Manor Reservoir, as well as transmission pipelines delivering water to them, are classified as Regional expenses notwithstanding the location of the reservoirs within San Francisco. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date the only Direct Wholesale expenses in the Transmission and Distribution category are associated with the Palo Alto pipeline.) E. Customer Services 1. Description: This category consists of labor; materials and supplies; and other expenses incurred for meter reading, customer record keeping, and billing and collection for the Water Enterprise. 46 15118728.1 2. Allocation: Customer Services expenses will be allocated among the Water Enterprise, the Wastewater Enterprise, and Hetch Hetchy Enterprise in proportion to the time spent by employees in Customer Services for each operating department/enterprise. The Water Enterprise’s share of Customer Services expense will be allocated 98 percent to the Retail Customers and two percent to the Wholesale Customers, as illustrated on Attachment N- 2, Schedule 1. 5.06. Water Enterprise Administrative and General Expenses Administrative and General expenses consist of the Water Enterprise’s share of the cost of general government distributed through the full-cost Countywide Cost Allocation Plan, the services of SFPUC support bureaus, Water Enterprise administrative and general expenses that cannot be directly assigned to a specific operating and maintenance category, and the cost of the Compliance Audit. These four subcategories, and the method by which costs in each are to be calculated and allocated, are as follows: A. Countywide Cost Allocation Plan 1. Description: This subcategory consists of the Water Enterprise’s share of the costs of San Francisco general government and other City central service departments which are not directly billed to the Water Enterprise or other operating departments. All San Francisco operating departments are assigned a prorated share of these costs through the full- cost Countywide Cost Allocation Plan (COWCAP) prepared annually by the San Francisco Controller. 2. Allocation: The Water Enterprise’s assigned share of central government costs as shown in the annual full-cost COWCAP prepared by the San Francisco Controller, will be allocated between Retail Customers and Wholesale Customers on the basis of the composite percentage of the allocated expenses in the five categories of operation and maintenance expense described in Section 5.05. The composite wholesale percentage shown on Attachment N-2, Schedule 1 is 42.07 percent, derived by dividing the wholesale share of Operation and Maintenance expenses ($46,573,883) by total Operation and Maintenance expenses ($110,700,133). B. Services of SFPUC Bureaus 1. Description: This subcategory consists of the support services provided to the Water Enterprise by the SFPUC Bureaus, which presently consist of the General 47 15118728.1 Manager’s Office, Business Services, External Affairs, and Infrastructure Bureau. Business Services presently includes Financial Services, Information Technology Services, Human Resource Services, Fleet Management, and Customer Services. 2. Allocation: There are three steps involved in determining the Wholesale Customers’ share of SFPUC Bureau costs. a. Step One: Bureau expenses which have either been recovered separately or which provide no benefit to Wholesale Customers will be excluded. Examples of Bureau expenses recovered separately include (1) Customer Services expenses, which are recovered as provided in Section 5.05.E, and (2) Infrastructure expenses, which are assigned to individual projects and capitalized. An example of a Bureau expense that provides no benefit to Wholesale Customers is Information Technology Services expenses for support of the San Francisco Municipal Railway. In addition, the SFPUC will continue its practice of assigning City Attorney Office expenses charged to the General Manager's Office for projects or lawsuits that relate to only one enterprise directly to that enterprise. For example, costs related to a lawsuit involving the Wastewater Enterprise will not be assigned to the Water Enterprise. b. Step Two: Bureau expenses adjusted as provided in Step One will be allocated among the Water Enterprise, the Wastewater Enterprise and the Hetch Hetchy Enterprise on the basis of the actual salaries of employees in each enterprise or department, as illustrated on Attachment N-2, Schedule 7. c. Step Three: The amount allocated to the Water Enterprise through Step Two will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. C. Water Enterprise Administrative and General 1. Description: This category includes expenses incurred by the Water Enterprise that are not readily assignable to specific operating divisions. This category includes the following expenses: a. Water Administration: This includes the costs of labor and other expenses of the administrative section of the Water Enterprise, supervision and engineering expenses, professional services, travel and training, equipment purchases, and materials and supplies not directly assignable to a specific operating unit. b. Services Provided by Other City Departments: This includes charges of other San Francisco departments directly billed to the Water Enterprise 48 15118728.1 administration by other San Francisco departments for services ordered by the Water Enterprise, such as legal services, risk management, telecommunications, employee relations, purchasing, mail services, and workers compensation claims paid. c. Litigation and Claims Paid: This includes charges incurred for attorney services and claims and judgments paid in litigation arising from the operation of the Water Enterprise. 2. Allocation: In each of these three subcategories, expenses that benefit only Retail Customers will be excluded. For example, the cost of claims and judgments resulting from a break in or leak from pipelines or reservoirs in the Retail Service Area (with the exception of the three terminal reservoirs and pipelines delivering water to them) will be assigned to the Retail Customers. Remaining Water Enterprise Administrative and General expenses will be allocated between Retail Customers and Wholesale Customers on the basis of the composite percentage of allocated operation and maintenance expense categories described in Section 5.05. D. Compliance Audit. The cost of the Compliance Audit described in Section 7.04 will be assigned 50 percent to the Retail Customers and 50 percent to the Wholesale Customers. 5.07. Water Enterprise Property Taxes A. Description: This category consists of property taxes levied against property owned by San Francisco located in Alameda, San Mateo and Santa Clara counties and used and managed by the SFPUC. B. Allocation: All property taxes paid, net of (1) reimbursements received from lessees and permit holders, and (2) refunds from the taxing authority, are Regional expenses. Net property taxes will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. 5.08. Hetch Hetchy Enterprise Expenses A. Introduction. There are two steps involved in determining the amount of the Wholesale Customers’ share of Hetch Hetchy Enterprise expenses. 49 15118728.1 1. The first step is to determine the Water Enterprise’s share of Hetch Hetchy Enterprise operation expenses, maintenance expenses, administrative and general expenses, and property taxes. 2. The second step is to determine the Wholesale Customers’ share of expenses allocable to the Water Enterprise. B. Determination of the Water-Related Portion of Hetch Hetchy Enterprise Expenses 1. Operation and Maintenance Expenses: This category consists of the cost of labor, materials and supplies, and other expenses incurred in operating and maintaining Hetch Hetchy Enterprise physical facilities. a. Description: Expenses associated exclusively with the production and distribution of hydroelectric power (e.g., generating plants and power transmission lines and towers, transformers and associated electric equipment, purchased power, wheeling charges, rental of power lines, etc.) are categorized as Power-Only and are allocated to power. Expenses associated exclusively with the operation and maintenance of facilities that serve only the water function (e.g., water transmission pipelines and aqueducts, activities related to compliance with federal and state drinking water quality laws, etc.) are categorized as Water- Only and are allocated entirely to water. Expenses associated with the operation and maintenance of facilities that serve both the water and power functions (e.g., dams, security programs, etc.) are categorized as Joint and are reallocated as 55 percent Power-Related and 45 percent Water-Related. 2. Administrative and General Expenses: There are three subcategories of Hetch Hetchy Enterprise Administrative and General expenses. a. Full-Cost Countywide Cost Allocation Plan: This subcategory consists of the cost of San Francisco general government and other City central service departments which are not directly billed to operating departments but allocated through the full- cost Countywide Cost Allocation Plan described in Section 5.06.A. Costs in this subcategory are classified as Joint, and are reallocated as 55 percent Power-Related and 45 percent Water- Related. b. SFPUC Bureau Costs: This subcategory consists of the expenses described in Section 5.06.B. One hundred percent of Customer Services expenses allocated to the Hetch Hetchy Enterprise are categorized as Power-Only. The remaining amount of Bureau 50 15118728.1 expenses allocated to the Hetch Hetchy Enterprise pursuant to Section 5.06.B will be reallocated between power and water in proportion to the salaries of Hetch Hetchy Enterprise employees assigned to each function as shown on Attachment N-2, Schedule 7.1. c. Other Administrative and General: This subcategory includes payments to the United States required by the Act, labor, supervision and engineering and other costs not readily assignable to a specific operation or maintenance function or program. Costs related to power administration (such as long range planning and policy analysis for energy development, administration of power contracts, and administration of work orders to City departments for energy services) are Power-Only costs. Costs related to water administration (such as legal and professional services for the protection of the City's water rights) are Water- Only costs and will be assigned to the Water Enterprise. Costs related to both power administration and water administration (such as general administration, office rents, office materials and supplies, and services of other City departments benefitting to both power and water are Joint administrative and general costs and are reallocated as 55 percent Power- Related and 45 percent Water-Related. 3. Property Taxes. This category consists of property taxes levied against property owned by San Francisco in Tuolumne, Stanislaus, San Joaquin, and Alameda counties and operated and managed by the Hetch Hetchy Enterprise. Allocation: Property taxes are classified as Joint costs. They will be reallocated as 55 percent Power-Related and 45 percent Water-Related. C. Calculation of Wholesale Customers’ Share of Hetch Hetchy Enterprise Expenses. The Water Enterprise’s share of Hetch Hetchy Enterprise expenses consist of 100 percent of Water-Only expenses and the Water-Related portion (45%) of Joint expenses. The Wholesale Customers’ share of the sum of the Water Enterprise’s share of Hetch Hetchy Enterprise expenses determined under subsection B shall be calculated by multiplying that dollar amount by Adjusted Proportional Annual Use. 5.09. Hetch Hetchy Enterprise Capital Costs A. Introduction. Wholesale Customers are also allocated a share of Hetch Hetchy Enterprise capital costs. B. Components of Capital Costs. The components of Hetch Hetchy Enterprise capital costs are as follows: 51 15118728.1 1. Existing Assets Cost Recovery. The Wholesale Customers’ repayment of their share of Hetch Hetchy Existing Assets (Water-Only and the Water-Related portion [45 percent] of Joint assets) is shown on Attachment K-4 accompanying Section 5.03. 2. Debt Service on New Assets. The Water Enterprise will be assigned 100 percent of Net Annual Debt Service attributable to acquisition and construction of New Hetch Hetchy Enterprise assets that are Water-Only and the Water-Related portion (45 percent) of Net Annual Debt Service on New Hetch Hetchy Enterprise Joint assets. The provisions of Section 5.04.A apply to debt service on New Hetch Hetchy Enterprise assets. 3. Revenue-Funded Capital Additions. The Water Enterprise will be assigned 100 percent of capital expenditures from revenues for New Hetch Hetchy Enterprise assets that are Water-Only and the Water-Related portion (45 percent) of such expenditures for new Hetch Hetchy Enterprise Joint assets. The provisions of Section 5.04.B apply to the payment of New revenue-funded Hetch Hetchy Enterprise assets. C. Calculation of Wholesale Customers’ Share of Hetch Hetchy Enterprise Capital Costs. The Wholesale Customers’ share of the Net Annual Debt Service and revenue funded capital expenditures determined under subsections B.2 and 3 shall be calculated by multiplying that dollar amount by Adjusted Proportional Annual Use. 5.10. Additional Agreements Related to Financial Issues A. Wholesale Customers Not Entitled to Certain Revenues. The Wholesale Customers have no entitlement to any of the following sources of revenue to the SFPUC. 1. Revenues from leases or sales of SFPUC real property. 2. Revenues from the other utility services such as the sale of electric power, natural gas and steam. 3. Revenues from the sale of water to customers and entities other than the Wholesale Customers. 4. Revenues earned from the investment of SFPUC funds other than funds contributed by the Wholesale Customers to the Wholesale Revenue Coverage Reserve described in Section 6.06 or the Wholesale Capital Fund described in Section 6.08. Wholesale Customers are also entitled to the benefit of earnings on proceeds of Indebtedness (through 52 15118728.1 expenditure on New Regional Assets and /or application to Debt Service) and to interest on the Balancing Account as provided in Section 6.05.B. 5. Revenues not related to the sale of water. B. Wholesale Customers Not Charged with Certain Expenses. The Wholesale Customers will not be charged with any of the following expenses: 1. Capital costs for assets constructed or acquired prior to July 1, 1984 other than Existing Asset costs that are repaid pursuant to Section 5.03. 2. Expenses incurred by the SFPUC for generation and distribution of electric power, including Hetch Hetchy Enterprise Power-Only expenses and the Power-Related share of Hetch Hetchy Enterprise Joint expenses. An exception to this is Regional energy costs incurred by the Water Enterprise, for which Wholesale Customers are charged on the basis of Proportional Annual Use. 3. Expenses incurred by SFPUC in providing water to Retail Customers. 4. Expenses associated with the SFPUC’s accruals or allocations for uncollectible Retail Water accounts. 5. Attorneys’ fees and costs incurred by the Wholesale Customers that a court of competent jurisdiction orders San Francisco to pay as part of a final, binding judgment against San Francisco as provided in Section 8.03.B.2. 6. Any expenses associated with funding any reserves (other than the required Wholesale Revenue Coverage Reserve described in Section 6.06) accrued and not anticipated to be paid within one year unless such reserve is established by mutual agreement of the SFPUC and BAWSCA. 7. Any expenses accrued in respect to pending or threatened litigation, damage or personal injury claims or other loss contingencies unless projected to be paid within one year. Otherwise, such expenses will be charged to the Wholesale Customers when actually paid. 8. Any expense associated with installing, relocating, enlarging, removing or modifying meters and service connections at the request of an individual Wholesale Customer. 9. The Retail Customers’ portion of any Environmental Enhancement Surcharges imposed to enforce the Interim Supply Limitation set forth in Section 4.04. 53 15118728.1 C. Revenues Not Credited to Payment of Wholesale Revenue Requirement. The following payments by Wholesale Customers, individually or collectively, are not credited as Wholesale revenues for purposes of Section 6.05.B: 1. Payments by individual Wholesale Customers of the Environmental Enhancement Surcharge imposed to enforce the Interim Supply Limitation set forth in Section 4.04. 2. Payments of attorneys’ fees and costs incurred by San Francisco that a court of competent jurisdiction orders the Wholesale Customers to pay as part of a final, binding judgment against the Wholesale Customers, as provided in Section 8.03.B.3. 3. Payments by individual Wholesale Customers for installation, relocation, enlargement, removal or modification of meters and service connections requested by, and charged to, a Wholesale Customer. 4. Payments applied to the amortization of the ending balance in the balancing account under the 1984 Agreement, pursuant to Section 6.05.A. 5. Payments of the Water Management Charge which are delivered to BAWSCA pursuant to Section 3.06. 6. Payments directed to the Wholesale Revenue Coverage Reserve pursuant to Section 6.06. 7. Prepayments authorized by Sections 5.03.C and 5.03.F. D. Other 1. The Wholesale Customers will receive a proportional benefit from funds received by the SFPUC from (a) governmental grants, rebates, reimbursements or other subventions, (b) private-sector grants for Regional capital or operating purposes of the Water Enterprise and the Water-Only and Water-related portion of Joint Hetch Hetchy Water Enterprise expenses, or (c) a SFPUC use of taxable bonds. 2. The Wholesale Customers will receive a proportionate benefit from recovery of damages, including liquidated damages, by SFPUC from judgments against or settlements with contractors, suppliers, sureties, etc., related to Regional Water System projects and the Water-Only and Water-Related portion of Joint Hetch Hetchy Enterprise projects. 54 15118728.1 3. The SFPUC will continue to charge Wholesale Customers for assets acquired or constructed with proceeds of Indebtedness on which Wholesale Customers paid Debt Service during the Term of this Agreement on the “cash” basis (as opposed to the “utility” basis) after the expiration or earlier termination of this Agreement. The undertaking in this Section 5.10.D.3 will survive the expiration or earlier termination of this Agreement. 5.11. Classification of Existing System Assets. Existing System Assets of the Regional Water System include the water storage, transmission, and treatment systems owned and operated by San Francisco in Tuolumne, Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco Counties. These assets are managed by either the Water Enterprise or the Hetch Hetchy Enterprise and the assets have been classified for purposes of cost allocation. A. Water Enterprise Assets. Water Enterprise assets are currently managed, operated, and maintained by the Water Enterprise and are generally located west of Alameda East Portal, in addition to the treatment facilities located at Tesla and the Thomas Shaft Emergency Disinfection Facility. These assets are classified as Direct Retail, Direct Wholesale, or Regional. B. Hetch Hetchy Enterprise Assets. Hetch Hetchy Enterprise assets are currently managed, operated and maintained by the Hetch Hetchy Enterprise and are generally located east of the Alameda East Portal of the Coast Range Tunnel in Sunol Valley, Alameda County. These assets are classified as Power-Only, Water-Only, or Joint, in accordance with Sections 5.08 and 5.09. Through the Wholesale Revenue Requirement, the Wholesale Customers pay Existing System Asset capital costs and operating expenses in accordance with Section 5.02.F and do not pay capital costs or operating expenses associated with assets classified as Direct Retail, Power-Only, and the Power-Related portion of Joint assets. C. Attachment R Documents Classifications. To facilitate WSA administration, Attachment R documents the classification of major Existing System Assets operated by the Hetch Hetchy Enterprise. Attachment R consists of three documents: R-1 Introduction, R-2 Special Classification of Discrete Projects for 2018 Amendment Purposes, and R-3 Major Hetch Hetchy Enterprise Existing System Assets. Attachment R may be modified as specified in Section 5.11.D and in the manner set forth in Section 2.03.C. 55 15118728.1 D. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets is Not Exhaustive. Existing System Assets include, but are not limited to, land; fixed infrastructure such as dams, tunnels, buildings, water treatment plants and pipelines; equipment such as pumps and vehicles; and related appurtenances. Major Hetch Hetchy Enterprise Existing System Assets, and their classifications, are listed in Attachment R-3. Attachment R-3 does not include all assets of the Regional Water System, but represents the parties' best efforts to document major Hetch Hetchy Enterprise Existing System Assets that would incur capital costs and operating expenses subject to cost allocation. The classification of assets listed on R-3 may not be changed during the Term, any Extension Term, and any renewal of the Agreement, however, Attachment R-3 may be modified by mutual agreement in accordance with Section 2.03.C to (1) add an asset that was inadvertently omitted, (2) to add a new asset, and (3) remove a destroyed or obsolete asset. In the event that the parties cannot agree on the classification of any omitted or new assets, the dispute shall be subject to arbitration under Section 8.01. E. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets Classifications are Fixed. The classification of the major Hetch Hetchy Enterprise Existing System Assets is fixed and shall control the allocation of capital costs and operating expenses for the remainder of the Term, any Extension Terms, and any renewal of the Agreement. However, changes may be proposed in accordance with subsection G below. Capital costs and operating expenses are meant to be inclusive of all costs related to assets, including, but not limited to, any alterations, additions, improvements, rehabilitation, replacement of assets, and equipment that is appurtenant thereto. Since asset classifications are fixed in Attachment R-3, asset classifications may not be modified by mutual agreement in accordance with Section 2.03.C. F. Attachment R-2, Special Classification of Discrete Projects for 2018 Amendment Purposes. Past, ongoing and future capital projects involving five Hetch Hetchy Enterprise Existing System Assets defined in Attachment R-2 have classifications that differ from the underlying asset classifications. These project-related classification changes shown on Attachment R-2, are part of the 2018 amendments to the Agreement and are not precedential for any other asset-related capital cost or operating expense. With the exception of the defined projects related to the five assets listed on R-2, the capital projects for all assets follow the asset classifications. Capital projects listed on Attachment R-2 must be approved by the SFPUC following necessary CEQA review. 56 15118728.1 G. Five Year Notice of Intent to Renegotiate Cost Allocation. In the event San Francisco or the Wholesale Customers, which may be represented by BAWSCA, wish to propose and negotiate a change in Existing System Asset classifications, or a change in the Water-Related portion (45 percent) of Joint expenses, for the next Water Supply Agreement, such party must provide the other at least 5 years' written notice prior to the expiration of the Term or Extension Term, or the renewal of the Agreement. At a minimum, the noticing party must provide a comprehensive analysis of the financial and rate impacts of the proposed change at least two years prior to the expiration of the Term or Extension Term, or the renewal of the Agreement. To meet this requirement, the parties may agree to jointly analyze, under a separate agreement, system capacity and usage and/or new assets, as well as other possible alternative cost allocation methodologies. Either party may also unilaterally initiate such studies by consultants of their choice and bear all their own costs. 57 15118728.1 Article 6. Integration of Wholesale Revenue Requirement with SFPUC Budget Development and Rate Adjustments 6.01. General A. The purpose of the allocation bases set forth in Article 5 is to determine the Wholesale Revenue Requirement for each fiscal year. The Wholesale Revenue Requirement can only be estimated in advance, based on projected costs and water deliveries. These projections are used to establish water rates applicable to the Wholesale Customers. B. After the close of each fiscal year, the procedures described in Article 7 will be used to determine the actual Wholesale Revenue Requirement for that year, based on actual costs incurred, allocated according to the provisions of Article 5, and using actual water delivery data. The amount properly allocated to the Wholesale Customers shall be compared to the amount billed to the Wholesale Customers for the fiscal year, other than those identified in Section 5.10.C. The difference will be entered into a balancing account to be charged to, or credited to, the Wholesale Customers, as appropriate. C. The balancing account shall be managed as described in Section 6.05. 6.02. Budget Development The SFPUC General Manager will send a copy of the proposed SFPUC budget to BAWSCA at the same time as it is sent to the Commission. In addition, a copy of materials submitted to the Commission for consideration at meetings prior to the meeting at which the overall SFPUC budget is considered (including (a) operating budgets for the Water Enterprise and the Hetch Hetchy Enterprise, (b) budgets for SFPUC Bureaus, and (c) capital budgets for the Water Enterprise and the Hetch Hetchy Enterprise) will also be sent to BAWSCA concurrently with their submission to the Commission. 6.03. Rate Adjustments A. Budget Coordinated Rate Adjustments. Adjustments to the rates applicable to the Wholesale Customers shall be coordinated with the budget development process described in this section except to the extent that Sections 6.03.B and 6.03.C authorize emergency rate increases and drought rate increases, respectively. If the SFPUC intends to increase wholesale water rates during the ensuing fiscal year, it will comply with the following procedures: 58 15118728.1 1. Adjustments to the wholesale rates will be adopted by the Commission at a regularly scheduled meeting or at special meeting, properly noticed, called for the purpose of adjusting rates or for taking any other action under the jurisdiction of the Commission. 2. The SFPUC will send a written notice by mail or electronic means to each Wholesale Customer and to BAWSCA of the recommended adjustment at least thirty (30) days prior to the date of the meeting at which the Commission will consider the proposed adjustment. The notice will include the date, time and place of the Commission meeting. 3. The SFPUC shall prepare and provide to each Wholesale Customer and to BAWSCA the following materials: (a) a table illustrating how the increase or decrease in the Wholesale Revenue Requirement and wholesale rates were calculated, substantially in the form of Attachment N-1, (b) a schedule showing the projected expenses included in the Wholesale Revenue Requirement for the fiscal year for which the rates are being proposed, and supporting materials, substantially in the form of Attachment N-2, and (c) a schedule showing projected water sales, Wholesale Revenue Requirements and wholesale rates for the fiscal year for which rates are being set and the following four years, substantially in the form of Attachment N-3. These materials will be included with the notification required by Section 6.03.A.2. 4. Rate adjustments will be effective no sooner than thirty (30) days after adoption of the wholesale rate by the Commission. 5. San Francisco will use its best efforts to provide the Wholesale Customers with the information described above. San Francisco's failure to comply with the requirements set forth in this section shall not invalidate any action taken by the Commission (including, but not limited to, any rate increase or decrease adopted). In the event of such failure, the Wholesale Customers may either invoke arbitration, as set forth in Section 8.01, or seek injunctive relief, to compel San Francisco to remedy the failure as soon as is reasonably practical, and San Francisco shall be free to oppose the issuance of the requested judicial or arbitral relief on any applicable legal or equitable basis. The existence of this right to resort to arbitration shall not be deemed to preclude the right to seek injunctive relief. 6. Because delays in the budget process or other events may cause San Francisco to defer the effective date of Wholesale Customer rate adjustments until after the beginning of San Francisco's fiscal year, nothing contained in this Agreement shall require San Francisco to make any changes in the water rates charged to Wholesale Customers effective at 59 15118728.1 the start of San Francisco's fiscal year or at any other specific date. Nothing in the preceding sentence shall excuse non-compliance with the provisions of Section 6.02 and this section. B. Emergency Rate Increases. The Commission may adjust the Wholesale Customers’ rates without complying with the requirements of Section 6.03.A in response to an Emergency that damages the Regional Water System and disrupts San Francisco’s ability to maintain normal deliveries of water to Retail and Wholesale Customers. In such an Emergency, the Commission may adopt an emergency rate surcharge applicable to Wholesale Customers without following the procedures set forth in this section, provided that any such rate surcharge imposed by the Commission shall be applicable to both Retail and Wholesale Customers and incorporate the same percentage increase for all customers. Any emergency rate surcharge adopted by the Commission shall remain in effect only until the next-budget coordinated rate- setting cycle. C. Drought Rates. If the Commission declares a water shortage emergency under Water Code Section 350, implements the Tier 1 Shortage Plan (Attachment H) described in Section 3.11.C, and imposes drought rates on Retail Customers, it may concurrently adjust wholesale rates independently of coordination with the annual budget process. Those adjustments may be designed to encourage water conservation and may constitute changes to the structure of the rates within the meaning of Section 6.04. The parties agree, however, that, in adopting changes in rates in response to a declaration of water shortage emergency, the Commission shall comply with Section 6.03.A.1 and 2 but need not comply with Section 6.04.B. Drought Rate payments and payments of excess use charges levied in accordance with the Tier 1 Shortage Plan described in Section 3.11.C constitute Wholesale Customer Revenue and count towards the Wholesale Revenue Requirement. The SFPUC may use these revenues to purchase additional water for the Wholesale Customers from the State Drought Water Bank or other willing seller. 6.04. Rate Structure A. This Agreement is not intended and shall not be construed to limit the Commission’s right (a) to adjust the structure of the rate schedule applicable to the Wholesale Customers (i.e., the relationship among the several charges set out therein) or (b) to add, delete, or change the various charges which make up the rate schedule, provided that neither such charges nor the structure of the rate schedule(s) applicable to the Wholesale Customers shall be arbitrary, unreasonable, or unjustly discriminatory as among said customers. The 60 15118728.1 SFPUC will give careful consideration to proposals for changes in the rate schedule made jointly by the Wholesale Customers but, subject to the limitations set out above, shall retain the sole and exclusive right to determine the structure of the rate schedule. B. If the SFPUC intends to recommend that the Commission adopt one or more changes to the structure of wholesale rates (currently set forth in SFPUC Rate Schedule W-25), it shall prepare and distribute to the Wholesale Customers and BAWSCA a report describing the proposed change(s), the purpose(s) for which it/they are being considered, and the estimated financial effect on individual Wholesale Customers or classes of customers. Wholesale Customers may submit comments on the report to the SFPUC for sixty (60) days after receiving the report. The SFPUC will consider these comments and, if it determines to recommend that the Commission adopt the change(s), as described in the report or as modified in response to comments, the SFPUC General Manager shall submit a report to the Commission recommending specific change(s) in the rate structure. Copies of the General Manager’s report shall be sent to all Wholesale Customers and BAWSCA at least thirty (30) days prior to the Commission meeting at which the changes will be considered. C. The SFPUC may recommend, and the Commission may adopt, changes in the structure of wholesale rates at any time. However, the new rate schedule implementing these changes will become effective at the beginning of the following fiscal year. 6.05. Balancing Account A. Balancing Account Established Under 1984 Agreement. The amount of credit in favor of San Francisco as of the expiration of the term of 1984 Agreement (June 30, 2009) is not known with certainty as of preparation and execution of this Agreement. It will not be known with certainty until the Compliance Audit for FY 2008-09 is completed and disputes, if any, that the Wholesale Customers or the SFPUC may have with the calculation of the Suburban Revenue Requirement for that fiscal year and for previous fiscal years have been settled or decided by arbitration. The parties anticipate that the amount of the credit in favor of San Francisco as of June 30, 2009 may be within the range of $15 million to $20 million. In order to reduce the credit balance due San Francisco under the 1984 Agreement in an orderly manner, while avoiding unnecessary fluctuations in wholesale rates, the parties agree to implement the following procedure. 61 15118728.1 1. In setting wholesale rates for FY 2009-10, SFPUC will include a balancing account repayment of approximately $2 million. 2. In setting wholesale rates for FY 2010-11 and following years, SFPUC will include a balancing account repayment of not less than $2 million and not more than $5 million annually until the full amount of the balance due, plus interest at the rate specified in Section 6.05.B, is repaid. 3. The actual ending balance as of June 30, 2009 will be determined, by the parties’ agreement or arbitral ruling, after the Compliance Audit report for FY 2008-09 is delivered to BAWSCA. That amount, once determined, will establish the principal to be amortized through subsequent years’ repayments pursuant to this Section 6.05.A. B. Balancing Account Under This Agreement 1. Operation. After the close of each fiscal year, the SFPUC will compute the costs allocable to the Wholesale Customers for that fiscal year pursuant to Article 5, based on actual costs incurred by the SFPUC and actual amounts of water used by the Wholesale Customers and the Retail Customers. That amount will be compared to the amounts billed to the Wholesale Customers for that fiscal year (including any Excess Use Charges, but excluding revenues described in Section 5.10.C). The difference will be posted to a “balancing account” as a credit to, or charge against, the Wholesale Customers. Interest shall also be posted to the balancing account calculated by multiplying the amount of the opening balance by the average net interest rate, certified by the Controller as earned in the San Francisco Treasury for the previous fiscal year on the San Francisco County Pooled Investment Account. Interest, when posted, will carry the same mathematical sign (whether positive or negative) as carried by the opening balance. The amount posted to the balancing account in each year shall be added to, or subtracted from, the balance in the account from previous years. The calculation of the amount to be posted to the balancing account shall be included in the report prepared by the SFPUC pursuant to Section 7.02. The opening balance for fiscal year 2009-10 shall be zero. 2. Integration of Balancing Account with Wholesale Rate Setting Process. If the amount in the balancing account is owed to the Wholesale Customers (a positive balance), the SFPUC shall take it into consideration in establishing wholesale rates. However, the SFPUC need not apply the entire amount to reduce wholesale rates for the immediately ensuing 62 15118728.1 year. Instead, the SFPUC may prorate a positive ending balance over a period of up to three successive years in order to avoid fluctuating decreases and increases in wholesale rates. a. If a positive balance is maintained for three successive years and represents 10 percent or more of the Wholesale Revenue Requirement for the most recent fiscal year, the SFPUC shall consult with BAWSCA as to the Wholesale Customers’ preferred application of the balance. The Wholesale Customers shall, through BAWSCA, direct that the positive balance be applied to one or more of the following purposes: (a) transfer to the Wholesale Revenue Coverage Reserve, (b) amortization of any remaining negative balance from the ending balancing account under the 1984 Agreement, (c) prepayment of the existing asset balance under Section 5.03, (d) water conservation or water supply projects administered by or through BAWSCA, (e) immediate reduction of wholesale rates, or (f) continued retention for future rate stabilization purposes. In the absence of a direction from BAWSCA, the SFPUC shall continue to retain the balance for rate stabilization in subsequent years. b. If the amount in the balancing account is owed to the SFPUC (a negative balance), the SFPUC shall not be obligated to apply all or any part of the negative balance in establishing wholesale rates for the immediately ensuring year. Instead, the SFPUC may prorate the negative balance in whole or in part over multiple years in order to avoid fluctuating increases and decreases in wholesale rates. 6.06. Wholesale Revenue Coverage Reserve A. The SFPUC may include in wholesale rates for any fiscal year an additional dollar amount (“Wholesale Revenue Coverage”), which for any fiscal year shall equal the following: 1. The lesser of (i) 25% of the Wholesale Customers’ share of Net Annual Debt Service for that fiscal year determined as described in Section 5.04.A, or (ii) the amount necessary to meet the Wholesale Customers’ proportionate share of Debt Service coverage required by then-current Indebtedness for that fiscal year, minus 2. A credit for (i) the actual amounts previously deposited in the “Wholesale Revenue Coverage Reserve” (as defined in subsection B below), (ii) accrued interest on the amounts on deposit in the Wholesale Revenue Coverage Reserve, and (iii) an amount equal to any additional interest that would have accrued on the actual amounts previously deposited in the Wholesale Revenue Coverage Reserve assuming no withdrawals had been made therefrom. 63 15118728.1 B. During each fiscal year, the SFPUC will set aside and deposit that portion of revenue equal to Wholesale Revenue Coverage into a separate account that the SFPUC will establish and maintain, to be known as the “Wholesale Revenue Coverage Reserve.” Deposits into the Wholesale Revenue Coverage Reserve shall be made no less frequently than monthly. The Wholesale Revenue Coverage Reserve shall be credited with interest at the rate specified in Section 6.05.B. The SFPUC may use amounts in the Wholesale Revenue Coverage Reserve for any lawful purpose. Any balance in the Wholesale Revenue Coverage Reserve in excess of the Wholesale Revenue Coverage amount as of the end of any fiscal year (as calculated in subsection 6.06(A) above) shall be applied as a credit against wholesale rates in the immediately following fiscal year unless otherwise directed by BAWSCA. C. Within 180 days following the later of expiration of the Term or final payment of Debt Service due on Indebtedness issued during the Term to which Wholesale Customers were contributing, SFPUC shall rebate to the Wholesale Customers an amount equal to the Wholesale Revenue Coverage amount in effect for the fiscal year during which the Term expires or the final payment of Debt Service on Indebtedness is made based on each Wholesale Customer’s Proportional Annual Use in the fiscal year during which the Term expires or the final payment of debt service on Indebtedness is made. D. SFPUC shall provide a schedule of debt issuance (with assumptions), and the Wholesale Customers’ share of Net Annual Debt Service (actual and projected) expected to be included in wholesale rates starting in 2009-10 through the expected completion of the WSIP. The schedule is to be updated annually prior to rate setting. If estimated Debt Service is used in rate setting, the SFPUC must be able to demonstrate that the Water Enterprise revenues will be sufficient to meet the additional bonds test for the proposed bonds and rate covenants for the upcoming year. E. Conditions in the municipal bond market may change from those prevailing in 2009. If, prior to expiration of the Term, the SFPUC determines that it would be in the best financial interest of both Retail Customers and Wholesale Customers of the Regional Water System for the Debt Service coverage requirement to be increased in one or more series of proposed new Indebtedness above 1.25%, or for the coverage covenant to be strengthened in other ways, it will provide a written report to BAWSCA. The report will contain (1) a description of proposed covenant(s) in the bond indenture; (2) an explanation of how savings are expected to be achieved (e.g., increase in the SFPUC’s credit rating over the then-current level; ability to 64 15118728.1 obtain credit enhancement, etc.); (3) the estimated all-in true interest cost savings; (4) a comparison of the Wholesale Revenue Requirements using the Debt Service coverage limitation in subsection A and under the proposed methodology; and (5) a comparison of the respective monetary benefits expected to be received by both Retail and Wholesale Customers. The SFPUC and BAWSCA agree to meet and confer in good faith about the proposed changes. F. Any increase in Debt Service coverage proposed by the SFPUC shall be commensurate with Proportional Water Use by Retail and Wholesale Customers. If the SFPUC demonstrates that an increase in Debt Service coverage will result in equivalent percentage reductions in total Wholesale and Retail Debt Service payments over the life of the proposed new Indebtedness, based on Proportional Water Use, BAWSCA may agree to a modification of the Wholesale Revenue Coverage requirement in subsection A. If BAWSCA does not agree to a proposed modification in coverage requirements in the covenants for new Indebtedness, SFPUC may nevertheless proceed with the modification and the issuance of new Indebtedness. Any Wholesale Customer, or BAWSCA, may challenge an increase in the Wholesale Revenue Requirement resulting from the modification in Debt Service coverage through arbitration as provided in Section 8.01.A. If the arbitrator finds that the increase in Debt Service coverage (1) did not and will not result in equivalent percentage reductions in total Wholesale and Retail Debt Service payments over the life of the proposed new Indebtedness, based on Proportional Water Use, or (2) was not commensurate with Proportional Water Use, the arbitrator may order the Wholesale Revenue Requirement to be recalculated both retrospectively and prospectively to eliminate the differential impact to Wholesale or Retail Customers, subject to the limitation in Section 8.01.C. 6.07. Working Capital Requirement A. The SFPUC maintains working capital in the form of unappropriated reserves for the purpose of bridging the gap between when the SFPUC incurs operating expenses required to provide service and when it receives revenues from its Retail and Wholesale Customers. The Wholesale Customers shall fund their share of working capital as part of the annual Wholesale Revenue Requirement calculation. The amount of wholesale working capital for which the Wholesale Customers will be responsible will be determined using the 60-day standard formula approach. B. Applying this approach, annual wholesale working capital equals one-sixth of the wholesale allocation of operation and maintenance, administrative and general, and property tax 65 15118728.1 expenses for the Water and Hetch Hetchy Enterprises. Wholesale working capital shall be calculated separately for the Water and Hetch Hetchy Enterprises. C. Each month, the sum of the Water Enterprise and Hetch Hetchy Enterprise working capital components will be compared with the ending balance in the Wholesale Revenue Coverage Reserve to determine if the Wholesale Customers provided the minimum required working capital. If the Wholesale Revenue Coverage Reserve is greater than the total Water Enterprise and Hetch Hetchy Enterprise working capital requirement, the Wholesale Customers will have provided their share of working capital. If the Wholesale Revenue Coverage Reserve is less than the total Water Enterprise and Hetch Hetchy Enterprise working capital requirement, the Wholesale Customers will be charged interest on the difference, which will be included in the adjustment to the Balancing Account under Section 6.05.B for the subsequent fiscal year. 6.08. Wholesale Capital Fund A. The SFPUC currently funds revenue-funded capital projects through annual budget appropriations that are included in rates established for that fiscal year and transferred to a capital project fund from which expenditures are made. Consistent with the San Francisco Charter and Administrative Code, the SFPUC appropriates funds in advance of construction in order to maintain a positive balance in the capital project fund. The capital project fund also accrues interest and any unspent appropriations in excess of total project costs. It is the SFPUC’s practice to regularly monitor the capital project fund balance to determine whether a surplus has accumulated, which can be credited against the next fiscal year’s capital project appropriation. B. The SFPUC shall establish a comparable Wholesale Revenue-Funded Capital Fund (Wholesale Capital Fund) to enable the Wholesale Customers to fund the wholesale share of revenue-funded New Regional Assets. The Wholesale Capital Fund balance is zero as of July 1, 2009. The SFPUC may include in wholesale rates for any fiscal year an amount equal to the wholesale share of the SFPUC’s appropriation for revenue funded New Regional Assets for that year, which sum will be credited to the Wholesale Capital Fund. The wholesale share of other sources of funding, where legally permitted and appropriately accounted for under GAAP, will also be credited to the Wholesale Capital Fund, together with interest earnings on the Wholesale Capital Fund balance. 66 15118728.1 C. The SFPUC will expend revenues appropriated and transferred to the Wholesale Capital Fund only on New Regional Assets. The annual capital appropriation included in each fiscal year’s budget will be provided to BAWSCA in accordance with Section 6.02 and will take into account the current and projected balance in the Wholesale Capital Fund, as well as current and projected unexpended and unencumbered surplus, as shown on attachment M-1, which will be prepared by the SFPUC each year. D. Commencing on November 30, 2010 and thereafter in each fiscal year during the Term, the SFPUC will also provide an annual report to BAWSCA on the status of individual revenue-funded New Regional Assets, substantially in the form of Attachment M-2. E. In order to prevent the accumulation of an excessive unexpended and unencumbered balance in the Wholesale Capital Fund, the status of the fund balance will be reviewed through the annual Compliance Audit, commencing in FY 2018-19. The FY 2018-19 Compliance Audit and the Wholesale Customer/BAWSCA review under Section 7.06 shall include Wholesale Capital Fund appropriations, expenditures and interest earnings for FY 2014- 15 through 2017-18 for the purpose of determining whether a Balancing Account transfer is required. If the June 30 unencumbered balance of the Wholesale Capital Fund exceeds the lesser of the following: (i) the Target Balance; (ii) the unencumbered remaining cumulative appropriations, the amount of such excess shall be transferred to the credit of the Wholesale Customers to the Balancing Account described in Section 6.05. In order to avoid funding delays for New Regional Asset capital projects resulting from prior year transfers of excess Wholesale Capital fund balances to the Wholesale Customers, if the June 30 unencumbered balance of the Wholesale Capital Fund is below the lesser of the following: (i) the Target Balance; (ii) the unencumbered remaining cumulative appropriation, such deficiency shall be posted to the Balancing Account described in Section 6.05 as a charge to the Wholesale Customers. Notwithstanding the foregoing, no such charge to the Wholesale Customers shall exceed $4 million annually. Amended Attachment M-3 illustrates the process for determining the Wholesale Capital Fund balance as of June 30, 2019. F. Three years prior to the end of the Term, the SFPUC and BAWSCA will discuss the disposition of the Wholesale Capital Fund balance at the end of the Term. Absent 67 15118728.1 agreement, any balance remaining in the Wholesale Capital Fund at the end of the Term shall be transferred to the Balancing Account, to the credit of the Wholesale Customers. 6.09. SFPUC Adoption of Regional Water System 10-Year Capital Improvement Program A. Established Level of Service Goals and Objectives. In approving the WSIP, the Commission adopted Level of Service Goals and Objectives that are, in part, used to develop capital programs related to water, including the 10-Year Capital Improvement Program for the Regional Water System (“10-Year CIP”). BAWSCA and the Wholesale Customers shall have the opportunity to review and provide written or oral comments on any changes to the Level of Service Goals and Objectives that may be submitted to the Commission for approval. B. Submittal of an Asset Management Policy. Prior to December 31, 2020, the SFPUC shall develop and submit to the Commission for approval an Asset Management Policy applicable to the Regional Water System. C. Coordination of 10-Year CIP and SFPUC Budget Meetings. The Commission annually reviews, updates, and adopts a 10-Year CIP pursuant to Section 8B.123 of the San Francisco Charter. At two-year intervals, the Commission holds two budget meetings concerning the 10-Year CIP. Over the course of the two budget meetings, the SFPUC reviews its budget priorities, potential changes to projects in the previously adopted 10-Year CIP, and the potential financial implications of such changes. In the event that Charter amendments are placed on the ballot that could alter or amend the City’s budget preparation and adoption efforts, BAWSCA shall be notified in advance of any proposed change that could result in a less robust CIP development effort, and BAWSCA and the SFPUC shall meet to consider BAWSCA’s comments on maintaining a robust CIP development effort. D. Mid-cycle Changes to the 10-Year CIP. The SFPUC shall include within the Water Enterprise Capital Improvement Program Quarterly Projects Reports that it provides to the Commission (“CIP Quarterly Projects Reports”) discussion of any material changes proposed to projects that are included in the most recently adopted 10-Year CIP. The SFPUC defines a material change as a change that applies to a CIP project whose approved CIP budget is equal to or greater than $5,000,000 that results in one or more of the following: 1. Increases the cost of the CIP project by more than 10%. 2. Increases the schedule of the CIP project by extending said schedule by 12 calendar months or greater. 68 15118728.1 3. Affects the SFPUC’s ability to meet the Level of Service Goals and Objectives. The SFPUC shall also include within the CIP Quarterly Projects Reports discussion of any new capital project that is not included in the most recently adopted 10-Year CIP if the SFPUC has 1) begun spending on the project and 2) anticipates that it will require total funding in excess of $5,000,000. For such projects, the parties recognize that the work may be of an urgent nature and that details of those projects may be developing quickly to address a critical need. The SFPUC commits that, for these projects, an expanded discussion will be provided in quarterly reports generated 6 months following the creation of the project in the City’s finance and accounting system. At a minimum, the discussion will include: 1) a detailed scope of work, 2) schedule, 3) cost breakdown, and 4) proposed source of funding. This level of detail shall continue to be included in subsequent quarterly reports through either the completion of the work or until the work is included as part of an adopted 10-Year CIP. E. BAWSCA and Wholesale Customer Notice and Review. Beginning in 2020, at least 30 days before the first budget meeting, the SFPUC shall provide BAWSCA and the Wholesale Customers with written notice of the dates of the two budget meetings. At least 30 days before the first budget meeting, the SFPUC shall also provide BAWSCA and the Wholesale Customers with a draft of the 10-Year CIP and meet with those same parties to review potential candidate projects that it is considering for inclusion in the 10-Year CIP. Final materials for the first budget meeting will be made available to BAWSCA and the Wholesale Customers no less than 14 days prior to that budget meeting. Final materials for the second budget meeting will be made available to BAWSCA and the Wholesale Customers on the same date that they are made available to the Commission. Prior to the Commission’s adoption of the 10-Year CIP at the second budget meeting, San Francisco shall respond, in writing, to all written comments by BAWSCA and the Wholesale Customers on the 10-Year CIP that were submitted prior to the date of the first budget meeting. F. Contents of Draft 10-Year CIP – Projects in Years One and Two of 10-Year Schedule. The SFPUC’s CIP projects generally fall into three categories: defined projects, placeholder concepts that could become projects, and programmatic spending for expenses likely to be made but for which there is no schedule. Projects in the near-term years of the 10- Year CIP have more definition than those in the outer years, and as a result more detailed information is available for them. For each project listed that has significant expected 69 15118728.1 expenditures identified in the first two years of the 10-Year CIP, the draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall include the following elements: 1. Project name. 2. Project description and justification. 3. Description of the project’s relationship to the Level of Service Goals and Objectives. 4. Project asset classification for cost-allocation purposes, pursuant to Attachment R for Hetch Hetchy Enterprise assets, or as Regional or Retail for Water Enterprise assets. 5. Project schedule where applicable, broken down by phase, through to completion. 6. Total project budget estimate including a proposed inflation rate. G. Contents of Draft 10-Year CIP – Projects Listed After First Two Years of 10- Year Schedule. For each project that is listed in years three through ten of the 10-Year CIP, the draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall include the following elements: 1. Project name. 2. Project description and justification. 3. Description of the project’s relationship to the Level of Service Goals and Objectives. 4. Project asset classification for cost-allocation purposes, pursuant to Attachment R for Hetch Hetchy Enterprise assets, or as Regional or Retail for Water Enterprise assets. 5. Project schedule information that forms the basis for project planning if available. 6. Total project budget estimate. H. Additional Contents of Draft 10-Year CIP. The draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall also include the following: 1. A discussion of any changes to projects in the previously adopted 10- Year CIP, the reasons for such changes, any impact of the proposed changes on the SFPUC’s ability to achieve the Level of Service Goals 70 15118728.1 and Objectives, and the SFPUC’s proposal for meeting the specific Level of Service Goals and Objectives in question. 2. A discussion of factors that have influenced the 10-Year CIP budget or identified projects, or have the potential to influence the overall budget or the number, cost and scale of identified projects, such as rate increase considerations, local rate setting policies, etc. 3. A discussion of how the CIP will be staffed. 4. A cash flow estimate for each project included as part of the first five years of the 10-Year CIP that considers historical spending and changes in the amount of work to be done. 5. Project spreadsheets that separate new projects from existing projects. 6. A summary roll-up for Regional costs, including all programmatic costs budgeted in the 10-Year CIP. I. Quarterly Reporting and Meetings. 1. CIP Quarterly Projects Reports. The SFPUC shall include within the CIP Quarterly Projects Reports a detailed status update of each Regional project in the 10-Year CIP that has an estimated cost greater than $5 million and a summary of the work completed to date for such projects. The CIP Quarterly Projects Reports shall focus on the first two years’ projects in the 10-Year CIP, but shall also demonstrate a connection to the 10-Year CIP asset classification and the Level of Service Goals and Objectives. The CIP Quarterly Projects Reports shall identify any Regional project in the 10-Year CIP with an estimated cost greater than $5 million that is behind schedule, and, for each project so identified, shall describe the SFPUC’s plan and timeline for either making up the delay or adopting a revised project schedule. In each fourth quarter of the fiscal year CIP Quarterly Projects Report, the SFPUC will also address the status of Regional projects in the 10-Year CIP that have an estimated cost of less than $5 million, noting any such projects that are behind schedule and describing the SFPUC’s plan and timeline for either making up the delay or adopting a revised project schedule. 2. Quarterly Meetings. If requested by BAWSCA, the SFPUC shall hold quarterly meetings with BAWSCA to review each CIP Quarterly Projects Report, during which the SFPUC shall present information and detail about the individual projects and overall implementation of the 10-Year CIP, as well as the need for re-prioritization and/or the proposal 71 15118728.1 of new candidate projects for consideration as part of the next update of the 10-Year CIP. As part of the meeting held in each fourth quarter of the fiscal year, the SFPUC shall provide additional information and detail regarding the CIP development schedule and associated coordination proposed with BAWSCA. 72 15118728.1 Article 7. Accounting Procedures; Compliance Audit 7.01. SFPUC Accounting Principles, Practices A. Accounting Principles. San Francisco will maintain the accounts of the SFPUC and the Water and Hetch Hetchy Enterprises in conformity with Generally Accepted Accounting Principles. San Francisco will apply all applicable pronouncements of the Governmental Accounting Standards Board (GASB) as well as statements and interpretations of the Financial Accounting Standards Board and Accounting Principles Board opinions issued on or before March 30, 1989, unless those pronouncements or opinions conflict with GASB pronouncements. B. General Rule. San Francisco will maintain the accounting records of the SFPUC and the Water and Hetch Hetchy Enterprises in a format and level of detail sufficient to allow it to determine the annual Wholesale Revenue Requirement in compliance with this Agreement and to allow its determination of the Wholesale Revenue Requirement to be audited as provided in Section 7.04. C. Water Enterprise. San Francisco will maintain an account structure which allows utility plant and operating and maintenance expenses to be segregated by location (inside San Francisco and outside San Francisco) and by function (Direct Retail, Regional and Direct Wholesale). D. Hetch Hetchy Enterprise. San Francisco will maintain an account structure which allows utility plant and operating and maintenance expenses to be segregated into Water Only, Power Only and Joint categories. E. SFPUC. San Francisco will maintain an account structure which allows any expenses of SFPUC bureaus that benefit only the Wastewater Enterprise, the Power-Only operations of the Hetch Hetchy Enterprise or Retail Customers to be excluded from the Wholesale Revenue Requirement. F. Utility Plant Ledgers. San Francisco will maintain subsidiary plant ledgers for the Water and Hetch Hetchy Enterprises that contain unique identifying numbers for all assets included in the rate base and identify the original cost, annual depreciation, accumulated depreciation, date placed in service, useful life, salvage value if any, source of funding (e.g., bond series, revenues, grants), and classification for purposes of this Agreement. 73 15118728.1 G. Debt. San Francisco will maintain documentation identifying: 1. The portion of total bonded debt outstanding related to each series of each bond issue. 2. The portion of total interest expense related to each series of each bond issue. 3. The use of proceeds of each bond issue (including proceeds of commercial paper and/or other interim financial instruments redeemed or expected to be redeemed from bonds and earnings on the proceeds of financings) in sufficient detail to determine, for each bond issue, the proceeds and earnings of each (including proceeds and earnings of interim financing vehicles redeemed by a bond issue) and the total amounts expended on Direct Retail improvements and the total amounts expended on Regional improvements. H. Changes in Accounting. Subject to subsections A thru G, San Francisco may change the chart of accounts and accounting practices of the SFPUC and the Water and Hetch Hetchy Enterprises. However, the allocation of any expense to the Wholesale Customers that is specified in the Agreement may not be changed merely because of a change in (1) the accounting system or chart of accounts used by SFPUC, (2) the account to which an expense is posted or (3) a change in the organizational structure of the SFPUC or the Water or Hetch Hetchy Enterprises. I. Audit. San Francisco will arrange for an audit of the financial statements of Water and Hetch Hetchy Enterprises to be conducted each year by an independent certified public accountant, appointed by the Controller, in accordance with Generally Accepted Auditing Standards. 7.02. Calculation of and Report on Wholesale Revenue Requirement A. Within five months after the close of each fiscal year, San Francisco will prepare a report showing its calculation of the Wholesale Revenue Requirement for the preceding fiscal year and the change in the balancing account as of the end of that fiscal year. The first such report will be prepared by November 30, 2010 and will cover fiscal year 2009-10 and the balancing account as of June 30, 2010. B. The report will consist of the following items: 74 15118728.1 1. Statement of changes in the balancing account for the fiscal year being reported on, and for the immediately preceding fiscal year, substantially in the form of Attachment O. 2. Detailed supporting schedules 8.1 through 8.2 substantially in the form of Attachment N-2. 3. Description and explanation of any changes in San Francisco’s accounting practices from those previously in effect. 4. Explanation of any line item of expense (shown on Attachment N-2, schedules 1 and 4) for which the amount allocated to the Wholesale Customers increased by (a) ten percent or more from the preceding fiscal year, or (b) more than $1,000,000. 5. Representation letter signed by the SFPUC General Manager and by other SFPUC financial staff shown on Attachment P, as the General Manager may direct, subject to change in position titles at the discretion of the SFPUC. C. The report will be delivered to the BAWSCA General Manager by the date identified in Subsection A. Once the report has been delivered to BAWSCA, San Francisco will, upon request: 1. Provide BAWSCA with access to, and copies of, all worksheets and supporting documents used or prepared by San Francisco during its calculation of the Wholesale Revenue Requirement; 2. Make available to BAWSCA all supporting documentation and calculations used by San Francisco in preparing the report; and 3. Promptly provide answers to questions from BAWSCA staff about the report. 7.03. Appointment of Compliance Auditor A. Purpose. The purpose of this section is to provide for an annual Compliance Audit by an independent certified public accountant of the procedures followed and the underlying data used by San Francisco in calculating the Wholesale Revenue Requirement for the preceding fiscal year. The annual Compliance Audit shall also determine whether the Wholesale Revenue Requirement has been calculated in accordance with the terms of the Agreement and whether amounts paid by the Wholesale Customers in excess of or less than 75 15118728.1 the Wholesale Revenue Requirement have been posted to the balancing account, together with interest as provided in Section 6.05. B. Method of Appointment. The Controller shall select an independent certified public accountant (“Compliance Auditor”) to conduct the Compliance Audit described below. The Compliance Auditor may be the same certified public accountant engaged by the Controller to audit the financial statements of the Water and Hetch Hetchy Enterprises. Subject to approval by the Controller and the General Manager of the SFPUC, the Compliance Auditor shall have the authority to engage such consultants as it deems necessary or appropriate to assist in the audit. The terms of this Article shall be incorporated into the contract between San Francisco and the Compliance Auditor, and the Wholesale Customers shall be deemed to be third-party beneficiaries of said contract. 7.04. Conduct of Compliance Audit A. Standards. The Compliance Auditor shall perform the Compliance Audit in accordance with Generally Accepted Auditing Standards. In particular, its review shall be governed by the standards contained in Section AU 623 (Reports on Specified Elements, Accounts or Items of a Financial Statement) of the AICPA, Professional Standards, as amended from time to time. B. Preliminary Meeting; Periodic Status Reports; Access to Data. Prior to commencing the audit, the Compliance Auditor shall meet with San Francisco and BAWSCA to discuss the audit plan, the procedures to be employed and the schedule to be followed. During the course of the audit, the Compliance Auditor shall keep San Francisco and BAWSCA informed of any unforeseen problems or circumstances which could cause a delay in the audit or any material expansion of the audit’s scope. The Compliance Auditor shall be given full access to all records of the SFPUC and the Water and Hetch Hetchy Enterprises that the Auditor deems necessary for the audit. C. Audit Procedures. The Compliance Auditor shall review San Francisco’s calculation of the Wholesale Revenue Requirement and the underlying data in order to carry out the purpose of the audit described in Section 7.03.A and to issue the report described in Section 7.05. At a minimum, the Compliance Auditor shall address the following: 1. Water Enterprise Operating and Maintenance Expenses. The Compliance Auditor shall review Water Enterprise cost ledgers to determine whether the 76 15118728.1 recorded operating and maintenance expenses fairly reflect the costs incurred, were recorded on a basis consistent with applicable Generally Accepted Accounting Principles, and were allocated to the Wholesale Customers as provided in this Agreement. 2. Water Enterprise Administrative and General Expenses. The Compliance Auditor shall review Water Enterprise cost ledgers and other appropriate financial records, including those of the SFPUC, to determine whether the recorded administrative and general expenses fairly reflect the costs incurred by or allocated to the Water Enterprise, whether they were recorded on a basis consistent with applicable Generally Accepted Accounting Principles, whether SFPUC charges were allocated to the Water Enterprise in accordance with this Agreement, and whether the amount of administrative and general expenses allocated to the Wholesale Customers was determined as provided by this Agreement. 3. Property Taxes. The Compliance Auditor shall review Water Enterprise cost ledgers to determine whether the amount of property taxes shown on the report fairly reflects the property tax expense incurred by San Francisco for Water Enterprise property outside of San Francisco and whether there has been deducted from the amount to be allocated (1) all taxes actually reimbursed to San Francisco by tenants of Water Enterprise property under leases that require such reimbursement and (2) any refunds received from the taxing authority. The Compliance Auditor also shall determine whether the amount of property taxes allocated to the Wholesale Customers was determined as provided in this Agreement. 4. Debt Service. The Compliance Auditor shall review SFPUC records to determine whether debt service, and associated coverage requirements, were allocated to the Wholesale Customers as provided in this Agreement. 5. Amortization of Existing Assets in Service as of June 30, 2009. The Compliance Auditor shall review both Water and Hetch Hetchy Enterprise records to determine whether the payoff amount for Existing Assets allocated to the Wholesale Customers as shown on Attachment K-1 through K-4 was calculated as provided in Section 5.03 of this Agreement. 6. Revenue-Funded Capital Appropriations/Expenditures. The Compliance Auditor shall review San Francisco’s calculation of actual expenditures on the wholesale share of revenue-funded New Regional Assets and remaining unexpended and unencumbered project balances in the “Wholesale Capital Fund” described in Section 6.08, to determine whether the procedures contained in that section were followed. 77 15118728.1 7. Hetch Hetchy Expenses. The Compliance Auditor shall determine whether Hetch Hetchy Enterprise expenses were allocated to the Wholesale Customers as provided in this Agreement. D. Use of and Reliance on Audited Financial Statements and Water Use Data 1. In performing the audit, the Compliance Auditor shall incorporate any adjustments to the cost ledgers recommended by the independent certified public accountant, referred to in Section 7.01.I, which audited the financial statements of the Water and Hetch Hetchy Enterprises. The Compliance Auditor may rely upon the work performed by that independent certified public accountant if the Compliance Auditor reviews the work and is willing to take responsibility for it as part of the compliance audit. 2. In performing the Compliance Audit and issuing its report, the Compliance Auditor may rely on water use data furnished by the Water Enterprise, regardless of whether the Wholesale Customers contest the accuracy of such data. The Compliance Auditor shall have no obligation to independently verify the accuracy of the water use data provided by San Francisco; however, the Compliance Auditor shall disclose in its report any information which came to its attention suggesting that the water use data provided by San Francisco are inaccurate in any significant respect. E. Exit Conference. Upon completion of the audit, the Compliance Auditor shall meet with San Francisco and BAWSCA to discuss audit findings, including (1) any material weakness in internal controls and (2) adjustments proposed by the Compliance Auditor and San Francisco’s response (i.e., booked or waived). 7.05. Issuance of Compliance Auditor’s Report A. San Francisco will require the Compliance Auditor to issue its report no later than nine months after the fiscal year under audit (i.e., March 31 of the following calendar year). The Compliance Auditor’s report shall be addressed and delivered to San Francisco and BAWSCA. The report shall contain: 1. A statement that the Auditor has audited the report on the calculation of the Wholesale Revenue Requirement and changes in the balancing account, and supporting documents, prepared by San Francisco as required by Section 7.02. 78 15118728.1 2. A statement that the audit was conducted in accordance with auditing standards generally accepted in the United States of America, and that the audit provides a reasonable basis for its opinion. 3. A statement that in the Compliance Auditor’s opinion the Wholesale Revenue Requirement was calculated by San Francisco in accordance with this Agreement and that the change in the balancing account shown in San Francisco’s report was calculated as required by this Agreement and presents fairly, in all material respects, changes in and the balance due to (or from) the Wholesale Customers as of the end of the fiscal year under audit. 7.06. Wholesale Customer Review A. One or more Wholesale Customers, or BAWSCA, may engage an independent certified public accountant (CPA) to conduct a review (at its or their expense) of San Francisco’s calculation of the annual Wholesale Revenue Requirement and a review of changes in the balancing account. B. If a Wholesale Customer or BAWSCA wishes such a review to be conducted it will provide written notice to SFPUC within 30 days of the date the Compliance Auditor’s report is issued. The notice will identify the CPA or accounting/auditing firm that will conduct the review and the specific aspects of the Compliance Auditor’s report that are the subject of the review. If more than one notice of review is received by the SFPUC, the requesting Wholesale Customers shall combine and coordinate their reviews and select a lead auditor to act on their behalf for the purposes of requesting documents and conducting on-site investigations. C. San Francisco will cooperate with the CPA appointed by a Wholesale Customer or BAWSCA. This cooperation includes making requested records promptly available, making knowledgeable SFPUC personnel available to timely and truthfully answer the CPA’s questions and directing the Compliance Auditor to cooperate with the CPA. D. The Wholesale Customer’s review shall be completed within 60 days after the date the Compliance Auditor’s report is issued. At the conclusion of the review, representatives of San Francisco and BAWSCA shall meet to discuss any differences between them concerning San Francisco’s compliance with Articles 5 or 6 of this Agreement during the preceding fiscal year or San Francisco’s calculation of the Wholesale Revenue Requirement for the preceding fiscal year. If such differences cannot be resolved, the dispute shall be submitted to arbitration in accordance with Section 8.01. 79 15118728.1 Article 8. Other Agreements of the Parties 8.01. Arbitration and Judicial Review A. General Principles re Scope of Arbitration. All questions or disputes arising under the following subject areas shall be subject to mandatory, binding arbitration and shall not be subject to judicial determination: 1. the determination of the Wholesale Revenue Requirement, which shall include both the calculations used in the determination and the variables used in those calculations; 2. the SFPUC’s adherence to accounting practices and conduct of the Compliance Audit; and 3. the SFPUC’s classification of new or omitted assets for purposes of determining the Wholesale Revenue Requirement. All other questions or disputes arising under this Agreement shall be subject to judicial determination. Disputes about the scope of arbitrability shall be resolved by the courts. B. Demand for Arbitration. If any arbitrable question or dispute should arise, any Wholesale Customer or the SFPUC may commence arbitration proceedings hereunder by service of a written Demand for Arbitration. Demands for arbitration shall set forth all of the issues to be arbitrated, the general contentions relating to those issues, and the relief sought by the party serving the Demand. Within 45 days after service of a Demand upon it, any Wholesale Customer or the SFPUC may serve a Notice of Election to become a party to the arbitration and a Response to the issues set forth in the Demand. The Response shall include the party’s general contentions and defenses with respect to the claims made in the Demand, and may include any otherwise arbitrable claims, contentions and demands that concern the fiscal year covered by the Demand. If a timely Notice of Election and Response is not filed by any such entity, it shall not be a party to the arbitration but shall nonetheless be bound by the award of the arbitrator. If no party to this Agreement serves a timely Notice of Election and Response, the party seeking arbitration shall be entitled to the relief sought in its Demand for Arbitration without the necessity of further proceedings. Any claims not made in a Demand or Response shall be deemed waived. 80 15118728.1 If a Demand or Notice of Election is made by the SFPUC, it shall be served by personal delivery or certified mail to each Wholesale Customer at the address of such customer as set forth in the billing records of the SFPUC. If a Demand or Notice of Election is made by a Wholesale Customer, service shall be by certified mail or personal delivery to the General Manager, SFPUC, 525 Golden Gate Avenue, 13th Floor, San Francisco, California 94102, and to each of the other Wholesale Customers. If arbitration is commenced, the Wholesale Customers shall use their best efforts to formulate a single, joint position with respect thereto. In any event, with respect to the appointment of arbitrators, as hereinafter provided, all Wholesale Customers that take the same position as to the issues to be arbitrated shall jointly and collectively be deemed to be a single party. C. Limitations Period. All Demands For Arbitration shall be served within twelve months of receipt by BAWSCA of the Wholesale Revenue Requirement Compliance Auditor’s Report for that year. If a party fails to file a Demand within the time period specified in this subsection, that party waives all present and future claims with respect to the fiscal year in question. If no such Demand is served within the twelve month period specified above, the SFPUC’s determination of the Wholesale Revenue Requirement for that year shall be final and conclusive. Whether any particular claim is barred by the twelve month limitations period provided for herein shall be for the arbitrator to determine. Prior to the expiration of the twelve month limitations period, the parties to the dispute may agree by written stipulation to extend the period by up to six additional months. The Arbitrator may order the alteration or recalculation of underlying Water Enterprise and/or Hetch Hetchy Enterprise accounts or asset classifications. Such changes shall be used to calculate the Wholesale Revenue Requirement for the fiscal year in dispute and shall also be used to determine future Wholesale Revenue Requirements, if otherwise applicable, even though the existing entries in such accounts or the asset classifications, in whole or in part, predate the twelve month period described above, so long as a timely arbitration Demand has been filed in accordance with this subsection. D. Number and Appointment of Arbitrators. All arbitration proceedings under this section shall be conducted by a single arbitrator, selected by the SFPUC and a designated representative of the Wholesale Customers or each group of Wholesale Customers that take the same position with respect to the arbitration, within 75 days after service of the Demand. If the parties to the arbitration cannot agree on an arbitrator within 75 days, any party may petition 81 15118728.1 the Marin County Superior Court for the appointment of an arbitrator pursuant to Code of Civil Procedure Section 1281.6 (or any successor provision). E. Guidelines for Qualifications of Arbitrators. The Wholesale Customers and the SFPUC acknowledge that the qualifications of the arbitrator will vary with the nature of the matter arbitrated, but, in general, agree that such qualifications may include service as a judge or expertise in one or more of the following fields: public utility law, water utility rate setting, water system and hydraulic engineering, utility accounting methods and practices, and water system operation and management. The parties to the arbitration shall use their best efforts to agree in advance upon the qualifications of any arbitrator to be appointed by the Superior Court. F. Powers of Arbitrator; Conduct of Proceedings 1. Except as provided in this section, arbitrations under this section shall be conducted under and be governed by the provisions of California Code of Civil Procedure Sections 1282.2 through 1284.2 (hereinafter, collectively, “Code sections”), and arbitrators appointed hereunder shall have the powers and duties specified by the Code sections. 2. Within the meaning of the Code sections, the term “neutral arbitrator” shall mean the single arbitrator selected by the parties to the arbitration. 3. Unless waived in writing by the parties to the arbitration, the notice of hearing served by the arbitrator shall not be less than 90 days. 4. The lists of witnesses (including expert witnesses), and the lists of documents (including the reports of expert witnesses) referred to in Code of Civil Procedure Section 1282.2 shall be mutually exchanged, without necessity of demand therefore, no later than 60 days prior to the date of the hearing, unless otherwise agreed in writing by the parties to the arbitration. Upon application of any party, or on his or her own motion, the arbitrator may schedule one or more prehearing conferences for the purposes of narrowing and/or expediting resolution of the issues in dispute. Strict conformity to the rules of evidence is not required, except that the arbitrator shall apply applicable law relating to privileges and work product. The arbitrator shall consider evidence that he or she finds relevant and material to the dispute, giving the evidence such weight as is appropriate. The arbitrator may limit testimony to exclude evidence that would be immaterial or unduly repetitive, provided that all parties are afforded the opportunity to present material and relevant evidence. 82 15118728.1 5. Within thirty days after the close of the arbitration hearing, or such other time as the arbitrator shall determine, the parties will submit proposed findings and a proposed remedy to the arbitrator. The parties may file objections to their adversary’s proposed findings and remedy within a time limit to be specified by the arbitrator. The arbitrator shall not base his or her award on information not obtained at the hearing. 6. The arbitrator shall render a written award no later than twelve months after the arbitrator is appointed, either by the parties or by the court, provided that such time may be waived or extended as provided in Code of Civil Procedure Section 1283.8. 7. The provisions for discovery set forth in Code of Civil Procedure Section 1283.05 are incorporated into and made part of this Agreement, except that: (a) leave of the arbitrator need not be obtained for the taking of depositions, including the depositions of expert witnesses; (b) the provisions of Code of Civil Procedure Section 2034.010 et seq., relating to discovery of expert witnesses, shall automatically be applicable to arbitration proceedings arising under this Agreement without the necessity for a formal demand pursuant to Section 2034.210 and the date for the exchange of expert discovery provided by Sections 2034.260 and 2034.270 shall be not later than 60 days prior to the date for the hearing; and (c) all reports, documents, and other materials prepared or reviewed by any expert designated to testify at the arbitration shall be discoverable. In appropriate circumstances, the arbitrator may order any party to this Agreement that is not a party to the arbitration to comply with any discovery request. 8. For the purposes of allocation of expenses and fees, as provided in Code of Civil Procedure Section 1284.2, if any two or more Wholesale Customers join together in a single, joint position in the arbitration, those Wholesale Customers shall be deemed to be a single party. If any Wholesale Customer or customers join together with the SFPUC in a single joint position in the arbitration, those Wholesale Customers and the SFPUC together shall be deemed to be a single party. 9. Subject to any other limitations imposed by the Agreement, the arbitrator shall have power to issue orders mandating compliance with the terms of the Agreement or enjoining violations of the Agreement. With respect to any arbitration brought to redress a claimed wholesale overpayment to the SFPUC, the arbitrator’s power to award monetary relief shall be limited to entering an order requiring that an adjustment be made in the amount posted to the balancing account for the fiscal year covered by the Demand. 83 15118728.1 10. All awards of the arbitrator shall be binding on the SFPUC and the Wholesale Customers regardless of the participation or lack thereof by any Wholesale Customer or the SFPUC as a party to the arbitration proceeding. The parties to an arbitration shall have the power to modify or amend any arbitration award by mutual consent. The arbitrator shall apply California law. 8.02. Attorneys’ Fees A. Arbitration or Litigation Between San Francisco and Wholesale Customers Arising under the Agreement or Individual Water Sales Contracts. Each party will bear its own costs, including attorneys’ fees, incurred in any arbitration or litigation arising under this Agreement or the Individual Water Sales Contracts between San Francisco and the Wholesale Customers. Notwithstanding the foregoing, and subject to the limitations contained herein, the SFPUC may allocate to the Wholesale Customers as an allowable expense, utilizing the composite rate used for allocating other Water Enterprise administrative and general expenses, any attorneys’ fees and costs incurred by the SFPUC in connection with arbitration and/or litigation arising under this Agreement and/or the Individual Water Sales Contracts. Attorneys’ fees incurred by the SFPUC for attorneys employed in the San Francisco City Attorney’s office shall be billed at the hourly rates charged for the attorneys in question by the San Francisco City Attorney’s Office to the SFPUC. Attorneys’ fees incurred by the SFPUC for attorneys other than those employed in the San Francisco City Attorney’s Office shall be limited to the hourly rates charged to the SFPUC for attorneys and paralegals with comparable experience employed in the San Francisco City Attorney’s office and in no event shall exceed the highest hourly rate charged by any attorney or paralegal employed in the City Attorney’s Office to the SFPUC. B. Arbitration or Litigation Outside of Agreement Concerning the SFPUC Water System or Reserved Issues 1. The attorneys’ fees and costs incurred by the SFPUC in litigation between San Francisco and one or more of the Wholesale Customers arising from matters outside of the Agreement, including, without limitation, litigation and/or arbitration concerning the issues specifically reserved in the Agreement, shall be allocated between the Retail Customers and the Wholesale Customers utilizing the composite rate used for allocating other Water Enterprise administrative and general expenses. 2. If, in any litigation described in subsection B.1 above, attorneys’ fees and costs are awarded to one or more of the Wholesale Customers as prevailing parties, the 84 15118728.1 SFPUC’s payment of the Wholesale Customers’ attorneys’ fees and costs shall not be an allowable expense pursuant to subsection A. 3. If, in any litigation described in subsection B.1, the SFPUC obtains an award of attorneys’ fees and costs as a prevailing party against one or more of the Wholesale Customers, any such award shall be reduced to offset the amount of the SFPUC’s fees and costs, if any, that have already been paid by the Wholesale Customers in the current or any prior fiscal years pursuant to subsection B.1 and the provisions of Articles 5 and 6 of the Agreement. 4. Nothing contained in this Agreement, including this subsection, shall authorize a court to award attorneys’ fees and costs to a prevailing party as a matter of contract and/or the provisions of Civil Code Section 1717, in litigation between San Francisco and one or more of the Wholesale Customers arising from matters outside of the Agreement, including, without limitation, litigation and/or arbitration concerning the issues specifically reserved in the Agreement. C. Attorneys Fees and Costs Incurred by the SFPUC in Connection with the Operation and Maintenance of the SFPUC Water Supply System. All attorneys’ fees and costs incurred by the SFPUC in connection with the operation and maintenance of the SFPUC’s water supply system shall be allocated between Retail Customers and the Wholesale Customers utilizing the composite rate used for allocating other Water Enterprise administrative and general expenses. 8.03. Annual Meeting and Report A. The parties wish to ensure that the Wholesale Customers may, in an orderly way, be informed of matters affecting the Regional Water System, including matters affecting the continuity and adequacy of their water supply from San Francisco. For this purpose, the General Manager of the SFPUC shall meet annually with the Wholesale Customers and BAWSCA during the month of February, commencing February 2010. At these annual meetings, the SFPUC shall provide the Wholesale Customers a report on the following topics: 1. Capital additions under construction or being planned for the Regional Water System, including the status of planning studies, financing plans, environmental reviews, permit applications, etc.; 85 15118728.1 2. Water use trends and projections for Retail Customers and Wholesale Customers; 3. Water supply conditions and projections; 4. The status of any administrative proceedings or litigation affecting San Francisco’s water rights or the SFPUC’s ability to deliver water from the watersheds which currently supply the Regional Water System; 5. Existing or anticipated problems with the maintenance and repair of the Regional Water System or with water quality; 6. Projections of Wholesale Revenue Requirements for the next five years; 7. Any other topic which the SFPUC General Manager places on the agenda for the meeting; 8. Any topic which the Wholesale Customers, through BAWSCA, request be placed on the agenda, provided that the SFPUC is notified of the request at least 10 days before the meeting. B. The General Manager of the SFPUC, the Assistant General Manager of the Water Enterprise, and the Assistant General Manager of Business Services-CFO will use their best efforts to attend the annual meetings. If one or more of these officers are unable to attend, they will designate an appropriately informed assistant to attend in their place. 8.04. 8.04 Administrative Matters Delegated to BAWSCA A. The Wholesale Customers hereby delegate the authority and responsibility for performing the following administrative functions contemplated in this Agreement to BAWSCA: 1. Approval of calculations of Proportional Annual Water Use required by Section 3.14 and Attachment J, “Water Use Measurement and Tabulation”; 2. Approval of amendments to Attachments J and K-3 and K-4, “25-Year Payoff Schedules for Existing Rate Base”; 3. Agreement that the Water Meter and Calibration Procedures Manual to be prepared by the SFPUC may supersede some or all of the requirements in Attachment J, as described in Section 3.14; 86 15118728.1 4. Conduct of Wholesale Customer review of SFPUC’s calculation of annual Wholesale Revenue Requirement/Change in Balancing Account described in Section 7.06; 5. Approval of an adjustment to Wholesale Revenue Coverage as described in Section 6.06. B. A majority of the Wholesale Customers may, without amending this Agreement, delegate additional administrative functions to BAWSCA. To be effective, such expanded delegation must be evidenced by resolutions adopted by the governing bodies of a majority of the Wholesale Customers. In 2014, all twenty-six Wholesale Customers adopted resolutions delegating authority to BAWSCA to initiate, defend and settle arbitration for the matters that, pursuant to Section 8.01 of this Agreement, are subject to mandatory, binding arbitration. C. Unless otherwise explicitly stated, the administrative authority delegated to BAWSCA may be exercised by the General Manager/CEO of BAWSCA, rather than requiring action by the BAWSCA Board of Directors. In addition, the Wholesale Customers may, with the consent of BAWSCA, delegate to BAWSCA the initiation, defense, and settlement of arbitration proceedings provided for in Section 8.01. 8.05. Preservation of Water Rights; Notice of Water Rights Proceedings A. It is the intention of San Francisco to preserve all of its water rights, irrespective of whether the water held under such water rights is allocated under this Agreement. Nothing in this Agreement shall be construed as an abandonment, or evidence of an intent to abandon, any of the water rights that San Francisco presently possesses. B. San Francisco shall use its best efforts to give prompt notice to BAWSCA of any litigation or administrative proceedings to which San Francisco is a party involving water rights to the Regional Water System. The failure of San Francisco to provide notice as required by this section, for whatever reason, shall not give rise to any monetary liability. 8.06. SFPUC Rules and Regulations The sale and delivery of all water under this Agreement shall be subject to such of the “Rules and Regulations Governing Water Service to Customers” of the Water Enterprise adopted by the Commission, as those rules and regulations may be amended from time to time, as are (1) applicable to the sale and delivery of water to the Wholesale Customers, (2) reasonable, and (3) not inconsistent with either this Agreement or with an Individual Water 87 15118728.1 Sales Contract. The SFPUC will give the Wholesale Customers notice of any proposal to amend the Rules and Regulations in a manner that would affect the Wholesale Customers. The notice will be delivered at least thirty days in advance of the date on which the proposal is to be considered by the Commission and will be accompanied by the text of the proposed amendment. 8.07. Reservations of, and Limitations on, Claims A. General Reservation of Raker Act Contentions. The 1984 Agreement resolved a civil action brought against San Francisco by certain of the Wholesale Customers. Plaintiffs in that action contended that they, and other Wholesale Customers that are municipalities or special districts, were “co-grantees” within the meaning of Section 8 of the Act and were entitled to certain rights, benefits and privileges by virtue of that status. San Francisco disputed those claims. Nothing in this Agreement, or in the Individual Water Sales Contracts, shall be construed or interpreted in any way to affect the ultimate resolution of the controversy between the parties concerning whether any of the Wholesale Customers are “co-grantees” under the Act and, if so, what rights, benefits and privileges accrue to them by reason of that claimed status. B. Claims Reserved but not Assertable During Term or Portions Thereof. The following claims, which San Francisco disputes, are reserved but may not be asserted during the Term (or portions thereof, as indicated): 1. The Wholesale Customers’ claim that the Act entitles them to water at cost. 2. The Wholesale Customers’ claim that San Francisco is obligated under the Act or state law to supply them with additional water in excess of the Supply Assurance. This claim may not be asserted unless and until San Francisco decides not to meet projected water demands of Wholesale Customers in excess of the Supply Assurance pursuant to Section 4.06. 3. The claim by San Jose and Santa Clara that they are entitled under the Act, or any other federal or state law, to permanent, non-interruptible status and to be charged rates identical to those charged other Wholesale Customers. This claim may not be asserted unless and until San Francisco notifies San Jose or Santa Clara that it intends to interrupt or terminate water deliveries pursuant to Section 4.05. 88 15118728.1 4. he Wholesale Customers’ claim that the SFPUC is not entitled to impose a surcharge for lost power generation revenues attributable to furnishing water in excess of the Supply Assurance. This claim may not be asserted unless and until SFPUC furnishes water in excess of the Supply Assurance during the Term and also includes such a surcharge in the price of such water. 5. Claims by Wholesale Customers (other than San Jose and Santa Clara, whose service areas are fixed) that SFPUC is obligated under the Act or state law to furnish water, within their Individual Supply Guarantee, for delivery to customers outside their existing service area and that Wholesale Customers are entitled to enlarge their service areas to supply those customers. Such claims may be asserted only after compliance with the procedure set forth in Section 3.03, followed by SFPUC’s denial of, or failure for six months to act on, a written request by a Wholesale Customer to expand its service area. C. Waived Activities. The Wholesale Customers (and the SFPUC, where specified) will refrain from the following activities during the Term (or portions thereof, as specified): 1. The Wholesale Customers and the SFPUC will not contend before any court, administrative agency or legislative body or committee that the methodology for determining the Wholesale Revenue Requirement (or the requirements for (a) amortization of the ending balance under the 1984 Agreement, or (b) contribution to the Wholesale Revenue Coverage) determined in accordance with this Agreement violates the Act or any other provision of federal law, state law, or San Francisco’s City Charter, or is unfair, unreasonable or unlawful. 2. The Wholesale Customers will not challenge the transfer of funds by the SFPUC to any other San Francisco City department or fund, provided such transfer complies with the San Francisco City Charter. The transfer of its funds, whether or not permitted by the City Charter, will not excuse the SFPUC from its failure to perform any obligation imposed by this Agreement. 3. The Wholesale Customers and the SFPUC will not assert monetary claims against one another based on the 1984 Agreement other than otherwise arbitrable claims arising from the three fiscal years immediately preceding the start of the Term (i.e., FYs 2006-07, 2007-08 and 2008-09). Such claims, if any, shall be governed by the dispute resolution provisions of this Agreement, except that the time within which arbitration must be commenced shall be 18 months from delivery of the Compliance Auditor’s report. 89 15118728.1 D. Other 1. This Agreement shall determine the respective monetary rights and obligations of the parties with respect to water sold by the SFPUC to the Wholesale Customers during the Term. Such rights and obligations shall not be affected by any judgments or orders issued by any court in litigation, whether or not between parties hereto, and whether or not related to the controversy over co-grantee status, except for arbitration and/or litigation expressly permitted in this Agreement. No judicial or other resolution of issues reserved by this section will affect the Wholesale Revenue Requirement which, during the Term, will be determined exclusively as provided in Articles 5, 6 and 7 of this Agreement. 2. Because delays in the budget process or other events may cause the SFPUC to defer the effective date of changes in wholesale rates until after the beginning of the fiscal year, this Agreement does not require the SFPUC to make changes in wholesale rates effective at the start of the fiscal year or at any other specific date. 3. he Wholesale Customers do not, by executing this Agreement, concede the legality of the SFPUC’s establishing Interim Supply Allocations, as provided in Article 4 or imposing Environmental Enhancement Surcharges on water use in excess of such allocations. Any Wholesale Customer may challenge such allocation when imposed and/or such surcharges if and when levied, in any court of competent jurisdiction. 4. The furnishing of water in excess of the Supply Assurance by San Francisco to the Wholesale Customers shall not be deemed or construed to be a waiver by San Francisco of its claim that it has no obligation under any provision of law to supply such water to the Wholesale Customers, nor shall it constitute a dedication by San Francisco to the Wholesale Customers of such water. 8.08. Prohibition of Assignment A. This Agreement shall be binding on, and shall inure to the benefit of, the parties and their respective successors and permitted assigns. Each Wholesale Customer agrees that it will not transfer or assign any rights or privileges under this Agreement, either in whole or in part, or make any transfer of all or any part of its water system or allow the use thereof in any manner whereby any provision of this Agreement will not continue to be binding on it, its assignee or transferee, or such user of the system. Any assignment or transfer in violation of this covenant, and any assignment or transfer that would result in the supply of water in violation of the Act, shall be void. 90 15118728.1 B. Nothing in this section shall prevent any Wholesale Customer (except the California Water Service Company and Stanford) from entering into a joint powers agreement or a municipal or multi-party water district with any other Wholesale Customer (except the two listed above) to exercise the rights and obligations granted to and imposed upon the Wholesale Customers hereunder, nor shall this section prevent any Wholesale Customer (except the two listed above) from succeeding to the rights and obligations of another Wholesale Customer hereunder as long as the Wholesale Service Area served by the Wholesale Customers involved in the succession is not thereby enlarged. 8.09. Notices A. All notices and other documents that San Francisco is required or permitted to send to the Wholesale Customers under this Agreement shall be sent to each and all of the Wholesale Customers by United States mail, first class postage prepaid, addressed to each Wholesale Customer at the address to which monthly water bills are mailed by the Water Enterprise. B. All notices or other documents which the Wholesale Customers are required or permitted to send to San Francisco under this Agreement shall be sent by United States mail, first class postage prepaid, addressed as follows: General Manager San Francisco Public Utilities Commission 525 Golden Gate Avenue, 13th Floor San Francisco, CA 94123 C. Each Wholesale Customer is a member of BAWSCA. San Francisco shall send a copy of each notice or other document which it is required to send to all Wholesale Customers to BAWSCA addressed as follows: General Manager/CEO Bay Area Water Supply and Conservation Agency 155 Bovet Road, Suite 650 San Mateo, CA 94402 The failure of San Francisco to send a copy of such notices or documents to BAWSCA shall not invalidate any rate set or other action taken by San Francisco. 91 15118728.1 D. Any party (or BAWSCA) may change the address to which notice is to be sent to it under this Agreement by notice to San Francisco (in the case of a change desired by a Wholesale Customer or BAWSCA ) and to the Wholesale Customer and BAWSCA (in the case of a change desired by San Francisco). The requirements for notice set forth in Section 8.01 concerning arbitration shall prevail over this section, when they are applicable. 8.10. Incorporation of Attachments Attachments A through R, referred to herein, are incorporated in and made a part of this Agreement. 8.11. Interpretation In interpreting this Agreement, or any provision thereof, it shall be deemed to have been drafted by all signatories, and no presumption pursuant to Civil Code Section 1654 may be invoked to determine the Agreement’s meaning. The marginal headings and titles to the sections and paragraphs of this Agreement are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part hereof. 8.12. Actions and Approvals by San Francisco Whenever action or approval by San Francisco is required or contemplated by this Agreement, authority to act or approve shall be exercised by the Commission, except if such action is required by law to be taken, or approval required to be given, by the San Francisco Board of Supervisors. The Commission may delegate authority to the General Manager in accordance with the San Francisco City Charter and Administrative Code, except for actions that this Agreement requires to be taken by the Commission. 8.13. Counterparts Execution of this Agreement may be accomplished by execution of separate counterparts by each signatory. San Francisco shall deliver its executed counterpart to BAWSCA and the counterpart which each Wholesale Customer executes shall be delivered to San Francisco. The separate executed counterparts, taken together, shall constitute a single agreement. 92 15118728.1 8.14. Limitations on Damages A. Unless otherwise prohibited by this Agreement, general or direct damages may be recovered for a breach of a party’s obligations under this Agreement. No party is liable for, or may recover from any other party, special, indirect or consequential damages or incidental damages, including, but not limited to, lost profits or revenue. No damages may be awarded for a breach of Section 8.17. B. The limitations in subsection A apply only to claims for damages for an alleged breach of this Agreement. These limitations do not apply to claims for damages for an alleged breach of a legal duty that arises independently of this Agreement, established by constitution or statute. C. If damages would be an inadequate remedy for a breach of this Agreement, equitable relief may be awarded by a court in a case in which it is otherwise proper. D. This section does not apply to any claim of breach for which arbitration is the exclusive remedy pursuant to Section 8.01.A. 8.15. Force Majeure A. Excuse from Performance. No party shall be liable in damages to any other party for delay in performance of, or failure to perform, its obligations under this Agreement, including the obligations set forth in Sections 3.09 and 4.06, if such delay or failure is caused by a “Force Majeure Event.” B. Notice. The party claiming excuse shall deliver to the other parties a written notice of intent to claim excuse from performance under this Agreement by reason of a Force Majeure Event. Notice required by this section shall be given promptly in light of the circumstances, and, in the case of events described in (c), (d) or (e) of the definition of Force Majeure Event only, not later than ten (10) days after the occurrence of the Force Majeure Event. Such notice shall describe the Force Majeure Event, the services impacted by the claimed event, the length of time that the party expects to be prevented from performing, and the steps which the party intends to take to restore its ability to perform. C. Obligation to Restore Ability to Perform. Any suspension of performance by a party pursuant to this section shall be only to the extent, and for a period of no longer duration 93 15118728.1 than, required by the nature of the Force Majeure Event, and the party claiming excuse shall use its best efforts to remedy its inability to perform as quickly as possible. 8.16. No Third-Party Beneficiaries This Agreement is exclusively for the benefit of the parties and not for the benefit of any other Person. There are no third-party beneficiaries of this Agreement and no person not a party shall have any rights under or interests in this Agreement. No party may assert a claim for damages on behalf of a person other than itself, including a person that is not a party. 8.17. Good Faith and Fair Dealing San Francisco and the Wholesale Customers each acknowledge their obligation under California law to act in good faith toward, and deal fairly with, each other with respect to this Agreement. 94 15118728.1 Article 9. Implementation and Special Provisions Affecting Certain Wholesale Customers 9.01. 9.01 General; Individual Water Sales Contracts A. As described in Section 1.03, San Francisco previously entered into Individual Water Sales Contracts with each of the Wholesale Customers. The term of the majority of Individual Water Sales Contracts will expire on June 30, 2009, concurrently with the expiration of the 1984 Agreement. Except as provided below in this Article, each of the Wholesale Customers will execute a new Individual Water Sales Contract with San Francisco concurrently with its approval of the Agreement. B. The Individual Water Sales Contracts will describe the service area of each Wholesale Customer, identify the location and size of connections between the Regional Water System and the Wholesale Customer’s distribution system, provide for periodic rendering and payment of bills for water usage, and in some instances contain additional specialized provisions unique to the particular Wholesale Customer and not of general concern or applicability. A sample Individual Water Sales Contract is provided at Attachment F. The Individual Water Sales Contracts between San Francisco and the Wholesale Customers will not contain any provision inconsistent with Articles 1 through 8 of this Agreement except (1) as provided below in this Article or (2) to the extent that such provisions are not in derogation of the Fundamental Rights of other Wholesale Customers under this Agreement. Any provisions in an Individual Water Sales Contract which are in violation of this section shall be void. 9.02. California Water Service Company A. The parties recognize that the California Water Service Company is an investor- owned utility company and, as such, has no claim to co-grantee status under the Act, which specifically bars private parties from receiving for resale any water produced by the Hetch Hetchy portion of the Regional Water System. Accordingly, the following provisions shall apply to the California Water Service Company, notwithstanding anything to the contrary elsewhere in this Agreement. B. The total quantity of water delivered by San Francisco to the California Water Service Company shall not in any calendar year exceed 47,400 acre feet, which is the estimated average annual production of Local System Water. If San Francisco develops additional Local System Water after the Effective Date, it may (1) increase the maximum 95 15118728.1 delivery amount stated herein; and (2) increase the Supply Assurance, but not necessarily both. San Francisco has no obligation to deliver water to California Water Service Company in excess of the maximum stated herein, except as such maximum may be increased by San Francisco pursuant to this subsection. The maximum annual quantity of Local System Water set forth in this subsection is intended to be a limitation on the total quantity of water that may be allocated to California Water Service Company, and is not an Individual Supply Guarantee for purposes of Section 3.02. The maximum quantity of Local System Water set forth in this subsection is subject to reduction in response to (1) changes in long-term hydrology or (2) environmental water requirements that may be imposed by or negotiated with state and federal resource agencies in order to comply with state or federal law or to secure applicable permits for construction of Regional Water System facilities. San Francisco shall notify California Water Service Company of any anticipated reduction of the quantity of Local System Water set forth in this subsection, along with an explanation of the basis for the reduction. C. Notwithstanding anything in Section 8.08 to the contrary, California Water Service Company shall have the right to assign to a public agency having the power of eminent domain all or a portion of the rights of California Water Service Company under any contract between it and San Francisco applicable to any individual district of California Water Service Company in connection with the acquisition by such public agency of all or a portion of the water system of California Water Service Company in such district. In the event of any such assignment of all the rights, privileges and obligations of California Water Service Company under such contract, California Water Service Company shall be relieved of all further obligations under such contract provided that the assignee public agency expressly assumes the obligations of California Water Service Company thereunder. In the event of such an assignment of a portion of the rights, privileges and obligations of California Water Service Company under such contract, California Water Service Company shall be relieved of such portion of such obligations so assigned thereunder provided that the assignee public agency shall expressly assume such obligations so assigned to it. D. Should California Water Service Company seek to take over or otherwise acquire, in whole or in part, the service obligations of another Wholesale Customer under Section 3.03.E, it will so inform San Francisco at least six months prior to the effective date of the sale and provide information concerning the total additional demand proposed to be served, in order that San Francisco may compare the proposed additional demand to the then-current estimate of Local System Water. In this regard, California Water Service Company has notified 96 15118728.1 the SFPUC that it has reached an agreement to acquire the assets of Skyline County Water District (“Skyline”) and assume the responsibility for providing water service to customers in the Skyline service area. California Water Service Company has advised the SFPUC that, on September 18, 2008, the California Public Utilities Commission approved California Water Service Company’s acquisition of Skyline. The SFPUC anticipates approving the transfer of Skyline’s Supply Guarantee as shown on Attachment C to California Water Service Company and the expansion of California Water Service Company’s service area to include the current Skyline service area before the Effective Date of this Agreement. All parties to this Agreement authorize corresponding modifications of Attachment C, as well as any of the Agreement’s other provisions, to reflect the foregoing transaction without the necessity of amending this Agreement. E. Nothing in this Agreement shall preclude San Francisco from selling water to any county, city, town, district, political subdivision, or other public agency for resale to customers within the service area of the California Water Service Company. Nothing in this Agreement shall require or contemplate any delivery of water to California Water Service Company in violation of the Act. F. Nothing in this Agreement shall alter, amend or modify the Findings of Fact and Conclusions of Law and the Judgment dated May 25, 1961, in that certain action entitled City and County of San Francisco v. California Water Service Company in the Superior Court of the State of California in and for the County of Marin, No. 23286, as modified by the Quitclaim Deed from California Water Service Company to San Francisco dated August 22, 1961. The rights and obligations of San Francisco and California Water Service Company under these documents shall continue as therein set forth. 9.03. City of Hayward A. San Francisco and the City of Hayward (“Hayward”) entered into a water supply contract on February 9, 1962 (“the 1962 contract”) which provides, inter alia, that San Francisco will supply Hayward with all water supplemental to sources and supplies of water owned or controlled by Hayward as of that date, in sufficient quantity to supply the total water needs of the service area described on an exhibit to the 1962 contract “on a permanent basis.” The service area map attached as Exhibit C to the 1962 contract was amended in 1974 to remove an area of land in the Hayward hills and in 2008 to make minor boundary adjustments identified in SFPUC Resolution No. 08-0035. 97 15118728.1 B. The intention of the parties is to continue the 1962 contract, as amended, in effect as the Individual Water Sales Contract between San Francisco and Hayward. Accordingly, it shall not be necessary for San Francisco and Hayward to enter into a new Individual Water Sales Contract pursuant to this Article and approval of this Agreement by Hayward shall constitute approval of both this Agreement and an Individual Water Sales Contract for purposes of Section 1.03. The 1962 contract, as amended, will continue to describe the service area of Hayward, while rates for water delivered to Hayward during the Term shall be governed by Article 5 hereof. The 1962 contract, as amended, will continue in force after the expiration of the Term. 9.04. Estero Municipal Improvement District A. San Francisco and the Estero Municipal Improvement District (“Estero”) entered into a water supply contract on August 24, 1961, the term of which continues until August 24, 2011 (“the 1961 Contract”). The 1961 Contract provides, inter alia, that San Francisco will supply Estero with all water supplemental to sources and supplies of water owned or controlled by Estero as of that date, in sufficient quantity to supply the total water needs of the service area described on an exhibit to the 1961 Contract. B. The intention of the parties is to terminate the 1961 Contract and replace it with a new Individual Water Sales Contract which will become effective on July 1, 2009. The new Individual Water Sales Contract will describe the current service area of Estero. The Individual Supply Guarantee applicable to Estero shall be 5.9 MGD, rather than being determined as provided in the 1961 Contract. 9.05. Stanford University A. The parties recognize that The Board of Trustees of The Leland Stanford Junior University (“Stanford”) operates a non-profit university, and purchases water from San Francisco for redistribution to the academic and related facilities and activities of the university and to residents of Stanford, the majority of whom are either employed by or students of Stanford. Stanford agrees that all water furnished by San Francisco shall be used by Stanford only for domestic purposes and those directly connected with the academic and related facilities and activities of Stanford, and no water furnished by San Francisco shall be used in any area now or hereafter leased or otherwise used for industrial purposes or for commercial purposes 98 15118728.1 other than those campus support facilities that provide direct services to Stanford faculty, students or staff such as the U.S. Post Office, the bookstore and Student Union. Nothing in this Agreement shall preclude San Francisco from selling water to any county, city, town, political subdivision or other public agency for resale to Stanford or to customers within the service area of Stanford. B. Notwithstanding anything in Section 8.08 to the contrary, Stanford shall have the right to assign to a public agency having the power of eminent domain all or a portion of the rights of Stanford under this Agreement or the Individual Water Sales Contract between it and San Francisco in connection with the acquisition by such public agency of all or a portion of Stanford’s water system. In the event of any such assignment of all the rights, privileges, and obligations of Stanford under such contract, Stanford shall be relieved of all further obligations under such contract, provided that the assignee public agency expressly assumes Stanford’s obligations thereunder. In the event of such an assignment of a portion of the rights, privileges, and obligations of Stanford under such contract, Stanford shall be relieved of such obligations so assigned thereunder, provided that the assignee public agency shall expressly assume such obligations so assigned to it. Nothing in this Agreement shall require or contemplate any delivery of water to Stanford in violation of the Act. 9.06. City of San Jose and City of Santa Clara A. Continued Supply on Temporary, Interruptible Basis. During the term of the 1984 Agreement, San Francisco provided water to the City of San Jose (“San Jose”) and the City of Santa Clara (“Santa Clara”) on a temporary, interruptible basis pursuant to SFPUC Resolution No. 85-0256. Subject to termination or reduction of supply as provided in Section 4.05 of this Agreement, San Francisco will continue to supply water to San Jose and Santa Clara on a temporary, interruptible basis pending a decision by the Commission, pursuant to Section 4.05.H, as to whether to make San Jose and Santa Clara permanent customers of the Regional Water System. San Francisco will furnish water to San Jose and Santa Clara at the same rates as those applicable to other Wholesale Customers pursuant to this Agreement. Water delivered to San Jose and Santa Clara after July 1, 2009 may be limited by the SFPUC’s ability to meet the full needs of all its other Retail and Wholesale Customers. The service areas of San Jose and Santa Clara set forth in their Individual Water Sales Contracts may not be 99 15118728.1 expanded using the procedure set forth in Section 3.03. The combined annual average water usage of San Jose and Santa Clara shall not exceed 9 MGD. The allocation of that total amount between San Jose and Santa Clara shall be as set forth in their Individual Water Sales Contracts. B. Reservation of Rights. In signing this Agreement, neither San Jose nor Santa Clara waives any of its rights to contend, in the event that San Francisco (1) elects to terminate or interrupt water deliveries to either or both of the two cities prior to 2028 using the process set forth in Section 4.05, or (2) does not elect to take either city on as a permanent customer in 2028, that it is entitled to permanent customer status, pursuant to the Act or any other federal or state law. Santa Clara's reservation of rights is limited to its existing Service Area A, as shown on Attachment Q-2. Service Area B, south of Highway 101, was added in 2018 solely for the operational convenience of Santa Clara. Santa Clara waives its right to make claims described in this Section 9.06.B and Section 8.07.B.3 with respect to Service Area B. In signing this Agreement, San Francisco does not waive its right to deny any or all such contentions. 9.07. City of Brisbane, Guadalupe Valley Municipal Improvement District, Town of Hillsborough A. The parties acknowledge that San Francisco has heretofore provided certain quantities of water to the City of Brisbane (“Brisbane”), Guadalupe Valley Municipal Improvement District (“Guadalupe”) and the Town of Hillsborough (“Hillsborough”) at specified rates or without charge pursuant to obligations arising out of agreements between the predecessors of San Francisco and these parties, which agreements are referred to in judicial orders, resolutions of the SFPUC and/or the 1960 contracts between San Francisco and Brisbane, Guadalupe and Hillsborough. The parties intend to continue those arrangements and accordingly agree as follows: 1. Nothing in this Agreement is intended to alter, amend or modify the terms of SFPUC Resolution No. 74-0653 or the indenture of July 18, 1908 between the Guadalupe Development Company and the Spring Valley Water Company. 2. Nothing in this Agreement is intended to alter, amend or modify the Findings of Fact and Conclusions of Law and Judgment dated May 25, 1961 in that certain action entitled City and County of San Francisco v. Town of Hillsborough in the Superior Court of the State of California in and for the County of Marin, No. 23282, as modified by the Satisfaction of Judgment filed October 23, 1961 and the Compromise and Release between 100 15118728.1 Hillsborough and San Francisco dated August 22, 1961. The rights and obligations of Hillsborough under these documents shall continue as therein set forth. 3. Nothing in this Agreement is intended to affect or prejudice any claims, rights or remedies of Guadalupe or of Crocker Estate Company, a corporation, or of Crocker Land Company, a corporation, or of San Francisco, or of their successors and assigns, respectively, with respect to or arising out of that certain deed dated May 22, 1884, from Charles Crocker to Spring Valley Water Works, a corporation, recorded on May 24, 1884, in Book 37 of Deeds at page 356, Records of San Mateo County, California, as amended by that certain Deed of Exchange of Easements in Real Property and Agreement for Trade in Connection Therewith, dated July 29, 1954, recorded on August 4, 1954, in Book 2628, at page 298, Official Records of said San Mateo County, or with respect to or arising out of that certain action involving the validity or enforceability of certain provisions of said deed entitled City and County of San Francisco v. Crocker Estate Company, in the Superior Court of the State of California in and for the County of Marin, No. 23281. /// /// /// /// /// /// /// /// /// /// /// 15066183.1 Attachment A - Definitions “1984 Agreement” refers to the 1984 Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County, which expires on June 30, 2009. “Act” refers to the Raker Act, 38 Stat. 242, the Act of Congress, enacted in 1913, that authorized the construction of the Hetch Hetchy system on federal lands. “Adjusted Proportional Annual Use” means the respective percentages of annual water use, as adjusted to reflect deliveries of water by the Hetch Hetchy Enterprise to outside City Retail Customers. The adjustment is calculated each year as described in Section B of Attachment J and is shown on lines 18 and 19 of Table 1 of that Attachment. “Agreement” refers to this Water Supply Agreement, by and among San Francisco and the Wholesale Customers who approve this Agreement in accordance with Section 1.03. “BAWSCA” refers to the Bay Area Water Supply and Conservation Agency established pursuant to Division 31 of the California Water Code (Water Code §§81300-81461) or its successor and permitted assigns. “CEQA” refers to the California Environmental Quality Act found at §§21000 et seq. of the Public Resources Code and the Guidelines for the California Environmental Quality Act found at §§15000 et seq. of Title 14 of the California Code of Regulations, as amended from time to time. “Commission” means the governing board of the SFPUC, whose members, as of the date of this Agreement, are appointed by the Mayor of San Francisco and confirmed by the San Francisco Board of Supervisors. “Compliance Audit” refers to the annual audit of the Wholesale Revenue Requirement by the Compliance Auditor required by Sections 7.03 through 7.05. “Compliance Auditor” refers to the independent certified public accountant chosen by the San Francisco Controller to conduct each fiscal year’s audit of the SFPUC’s calculation of the Wholesale Revenue Requirement as provided in Section 7.03.B. 15066183.1 “Countywide Cost Allocation Plan” refers to the full costs of the Water and Hetch Hetchy Enterprises’ prorated share of San Francisco city government expenses that are not directly billed to city departments, as determined by the Controller of the City and County of San Francisco. “Debt Service” means principal and interest paid during a fiscal year on Indebtedness incurred by the SFPUC for the 2006 Revenue Bonds, Series A, and subsequently issued Indebtedness (exclusive of 2006 Revenue Bonds Series B and C), the proceeds of which are used or are scheduled to be used for the acquisition or construction of New Regional Assets or to refund such Indebtedness. “Direct Retail” refers to Regional Water System capital or operating expenditures that are incurred to provide water service solely to Retail Customers. “Direct Wholesale” refers to Regional Water System capital or operating expenditures that are incurred to provide water service solely to one or more Wholesale Customers. “Drought” means a water shortage caused by lack of precipitation, as reflected in resolutions of the Commission calling for voluntary or mandatory water rationing based on evaluation of water stored or otherwise available to the Regional Water System, whether or not the Commission declares a water shortage emergency pursuant to Water Code §§ 350 et seq., as amended from time to time. “Effective Date” refers to the date this Agreement will become effective in accordance with the terms of Section 1.03. “Emergency” means a sudden, non-drought event, such as an earthquake, failure of Regional Water System infrastructure or other catastrophic event or natural disaster that results in an insufficient supply of water available to the Retail or Wholesale Service Areas for basic human consumption, firefighting, sanitation, and fire protection. “Encumbrance” or “Encumber” refers to the process by which the City Controller certifies the availability of amounts previously appropriated by the Commission for specifically identified SFPUC capital projects performed either by third parties or through work orders to other City departments. 15066183.1 “Environmental Enhancement Surcharge” means the surcharge to be imposed by the SFPUC on individual parties to this Agreement whose use exceeds their Interim Supply Allocation when the collective use of water by all parties to this Agreement is in excess of the Interim Supply Limitation. “ERRP” refers to a SFPUC document entitled Emergency Response and Recovery Plan: Regional Water System (“ERRP”) dated August 23, 2003, and updated November 2006. “Excess Use Charges” are monthly charges set by the SFPUC, in the form of multipliers, that are applied to the Wholesale Customer water rates during times of mandatory rationing if a Wholesale Customer's water usage is greater than its shortage allocation. Excess Use Charges are further described in Section 4 of the Tier 1 Shortage Plan (Attachment H). “Existing Assets” refers to Regional and Hetch Hetchy Water-Only and Water-Related capital assets plant in service as of June 30, 2009. “Existing System Assets” refers to all Water Enterprise and Hetch Hetchy Enterprise assets and assets that are components of, or appurtenances thereto. Existing Assets are a subset of the Existing System Assets for repayment of capital costs under Section 5.03. “Existing Facilities” means those wells and associated infrastructure owned by the Participating Pumpers and in existence as of the effective date of the Project Operating Agreement, and any replacements of Existing Facilities irrespective of location. “Force Majeure Event” means an event not the fault of, and beyond the reasonable control of, the party claiming excuse which makes it impossible or extremely impracticable for such party to perform obligations imposed on it by this Agreement, by virtue of its effect on physical facilities and their operation or employees essential to such performance. Force Majeure Events include (a) an “act of God” such as an earthquake, flood, earth movement, or similar catastrophic event, (b) an act of the public enemy, terrorism, sabotage, civil disturbance or similar event, (c) a strike, work stoppage, picketing or similar concerted labor action, (d) delays in construction caused by unanticipated negligence or breach of contract by a third party or inability to obtain essential materials after diligent and timely efforts; or (e) an order or regulation issued by a federal or state regulatory agency after the Effective Date or a judgment or order entered by a federal or state court after the Effective Date. 15066183.1 “Fundamental Rights” of Wholesale Customers are their status as parties to this Agreement, their allocation of water recognized in Section 3.02, their protection against arbitrary, unreasonable, or unjustly discriminatory rates provided in Section 6.04, and any specific rights described in Article 9. “Groundwater Storage and Recovery Project” refers to a WSIP project for groundwater storage and recovery in the Southern portion of the Westside Basin approved in SFPUC Resolution No. 14-0127 dated August 12, 2014. “Hetch Hetchy Enterprise” refers to Hetch Hetchy Water and Power Enterprise, a SFPUC operating department. “In Lieu Water” refers to Regional Water System water, subject to the limitations set forth in Section 9.02 of this Agreement for water delivered to California Water Service Company, that the SFPUC delivers at no charge on an interruptible basis to the Participating Pumpers, to replace groundwater that the Participating Pumpers refrain from pumping using their Existing Facilities during storage periods under the Project Operating Agreement. “Include” and its variants mean “including but not limited to” whenever used in this Agreement, regardless of whether or not it is capitalized. “Indebtedness” includes revenue bonds, bond anticipation notes, certificates of participation (excluding certificates of participation towards which SFPUC contributes debt service as an operating expense), and commercial paper. “Individual Water Sales Contract” refers to the contracts between each Wholesale Customer and San Francisco contemplated in Section 9.01 that details customer-specific matters such as location of service connections, service area maps and other matters specific to that customer. “Individual Supply Guarantee” refers to each Wholesale Customer’s share of the Supply Assurance, as shown in Attachment C. “Interim Supply Allocation” refers to each Wholesale Customer’s share, to be established by the SFPUC pursuant to Section 4.02, of the Interim Supply Limitation. 15066183.1 “Interim Supply Limitation” refers to the 265 MGD annual average limitation on water deliveries until December 31, 2018 from Regional Water System watersheds imposed by the SFPUC in its approval of the WSIP in Resolution Number 08-0200 dated October 30, 2008. “Irrigation Well Owners” refers to the Hills of Eternity, Home of Peace, and Salem Cemetery; Eternal Home Cemetery; Woodlawn Cemetery; Holy Cross Cemetery; Italian Cemetery; Olivet Cemetery; Cypress Lawn Cemetery; and the California Golf Club, located within the Southern portion of the Westside Basin. “Irrigation Well Owner Replacement Water” refers to water supplied by the Regional Water System delivered on a standby basis by the SFPUC, or wheeled through California Water Service Company's South San Francisco District System, for delivery to Irrigation Well Owners as may be necessary under the MMRP. “Joint,” when used in connection with Hetch Hetchy Enterprise assets or expenses, refers to assets used or expenses incurred in providing both water supply (“Water-Related”) and in the generation and transmission of electrical energy (“Power-Related”). “Level of Service Goals and Objectives” refers to the “Phased WSIP Goals and Objectives” adopted by the Commission in Resolution No. 08-0200 dated October 30, 2008 as part of the approval of the WSIP and any amendments that may be adopted by the Commission. “Local System Water” refers to Regional Water System water supplies developed in San Mateo, Alameda and Santa Clara Counties or otherwise not produced by the Hetch Hetchy Enterprise under rights of way granted by the Raker Act. “MGD” refers to an average flow rate of one million gallons per day over a specific time period, often a year. For example, one MGD is equal to 365 million gallons per year or 1,120 acre feet per year. “Mitigation, Monitoring and Reporting Program or “MMRP” refers to the CEQA required program of mitigation and monitoring adopted by the SFPUC as part of Groundwater Storage and Recovery Project approval in Resolution No. 14-0127. “Net Annual Debt Service” refers to debt service less payments made from proceeds of Indebtedness (e.g., capitalized interest), earnings on bond proceeds (e.g., reserve fund 15066183.1 earnings) used to pay Debt Service, and interest paid from renewed commercial paper, or from reserve fund liquidation. “New Assets” refers to Regional and Hetch Hetchy Water-Only and Water-Related capital assets added to Regional Water System plant in service after June 30, 2009. “New Regional Assets” refers to New Assets placed in service on or after July 1, 2009 that are used and useful in delivering water to Wholesale Customers. The following four categories comprise New Regional Assets: 1. Water Enterprise Regional Assets 2. Water Enterprise Direct Wholesale Assets 3. Hetch Hetchy Water Only Assets 4. Water-Related portion (45 percent) of Hetch Hetchy Joint Assets “Participating Pumpers” refers to the Wholesale Customers pumping groundwater who are parties to the Project Operating Agreement; specifically, the cities of Daly City and San Bruno and the California Water Service Company, South San Francisco Service Area. “Participating Pumper Replacement Water” refers to the quantity of Regional Water System water that may be made available by the SFPUC to some or all of the Participating Pumpers in accordance with Section 4.7 of the Project Operating Agreement. “Power-Only,” when used with reference to Hetch Hetchy Enterprise capital costs and operating and maintenance expenses, means capital costs and expenses that are incurred solely for the construction and operation of assets used to generate and transmit electrical energy. “Power-Related” refers to the power related portion (55%) of Joint Hetch Hetchy Enterprise assets or expenses. “Prepayment” refers to payments of principal and interest amounts not due in the year the prepayment is made, as described in Section 5.03. “Project Facility or Facilities” refers to all Groundwater Storage and Recovery Project assets, such as Project wells and all related fixed assets (e.g., real property, water treatment, connecting pipelines) that are acquired or constructed by the SFPUC pursuant to the Project 15066183.1 Operating Agreement and operated as Regional Water System assets for the allocation of capital costs and operation and maintenance expenses under this Agreement. “Project Operating Agreement” refers to the “Agreement for Groundwater Storage and Recovery from the Southern Portion of the Westside Groundwater Basin by and among the San Francisco Public Utilities Commission, the City of Daly City, the City of San Bruno, and California Water Service Company,” dated as of December 16, 2014. “Proportional Annual Use” means the shares of deliveries from the Regional Water System used by City Retail Customers and by the Wholesale Customers in a fiscal year, expressed as a percentage. The percentages of annual use are calculated each year as described in Section B of Attachment J and are shown on lines 10 and 11 of Table 1 of that Attachment. “Proportional Water Use” refers the general principle of allocating Regional Water System costs based on the relative purchases of water by Retail and Wholesale Customers. “Regional,” when used with reference to Water Enterprise capital assets and operating expenses, refers to assets and expenses that benefit Wholesale and Regional Customers. “Regional Water System” means the water storage, transmission and treatment system operated by the SFPUC in Tuolumne, Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco counties, including projects constructed under the WSIP, but excluding Direct Retail and Direct Wholesale assets. “Retail Customers” means any customer that purchases water from San Francisco that is not a Wholesale Customer, whether located inside or outside of San Francisco. “Retail Service Area” means the areas where SFPUC sells water to Retail Customers. “Retail Water” means water sold by the SFPUC to its Retail Customers within and outside San Francisco. “San Francisco” refers to the City and County of San Francisco. “SFPUC” refers to the San Francisco Public Utilities Commission as an operating department of San Francisco, the General Manager of which reports to the Commission. 15066183.1 “SFPUC Bureaus” refers to the portions of the SFPUC that provide support services to the SFPUC Operating Departments. These presently consist of the General Manager’s Office, Business Services, and External Affairs. “SFPUC Operating Departments” refers to the Water, Hetch Hetchy and Wastewater Program Enterprises under the control and management of the SFPUC pursuant to the San Francisco Charter. “SFPUC Storage Account” refers to the book account maintained by the SFPUC showing the amount of water stored in the Southern Westside Basin pursuant to the Project Operating Agreement. “Shared Facilities” refers to an Existing Facility that is owned by a Participating Pumper, as upgraded through the expenditure of Regional capital costs under Section 5.04 of this Agreement and operated in part as a Project Facility. “Substantially Expended”: A bond issue series is substantially expended when 98% of the proceeds and investment earnings contributed to the project fund have been expended. “Supply Assurance” means the 184 MGD maximum annual average metered supply of water dedicated by San Francisco to public use in the Wholesale Service Area (not including San Jose and Santa Clara) in the 1984 Agreement and Section 3.01 of this Agreement. “Target Balance,” for purposes of determining the Wholesale Capital Fund unencumbered balance under Section 6.08.E and amended Attachment M-3 beginning in FY 2018-19, means the sum of (i) the current year (FY 2018-19) wholesale share of the revenue funded capital appropriation for New Regional Assets pursuant to Section 5.04.B times the quotient of 4 divided by 5; plus (ii) the wholesale appropriation for the prior year (FY 2017-18) times the quotient of 3 divided by 5; plus (iii) the wholesale appropriation for the 2nd year prior (FY 2016- 17) times the quotient of 2 divided by 5; plus (iv) the wholesale appropriation for the third year prior (FY 2015-16) times the quotient of 1 divided by 5. Such appropriations shall take into account any de-appropriations and/or reimbursements from bond proceeds or other sources. The fiscal years in parentheses used in this definition are for illustration purposes only. “Term” means the 25-year term commencing July 1, 2009, including one or both 5-year extensions authorized by Section 2.02.A and B. 15066183.1 “Tier 1 Shortage Plan” refers to the Water Shortage Allocation Plan (Attachment H) adopted by the SFPUC and the Wholesale Customers in conjunction with this Agreement describing the method for allocating water between the SFPUC and the Wholesale Customers collectively for shortages of up to 20% of deliveries from the Regional Water System, as amended from time- to-time. “Water Enterprise” refers to the San Francisco Water Department (SFWD), an SFPUC Operating Department. “Water Management Charge” refers to the charge collected by San Francisco on behalf of BAWSCA for local water resource development in the Wholesale Service Area pursuant to Section 3.06 of this Agreement. “Water-Only,” when used with reference to Hetch Hetchy Enterprise capital costs and operating and maintenance expenses, means capital costs and expenses that are incurred solely for the construction and operation of assets used to protect water quality or to provide for the delivery of water for consumptive purposes. “Water-Related” refers to the water related portion (45%) of Joint Hetch Hetchy Enterprise assets or expenses. “Water Supply Development Report” refers to the annual report prepared pursuant to Section 4.05, and submitted to the Commission for purposes of estimating whether Regional Water System demand will be within the Interim Supply Limitation by June 30, 2018. “Wheeling Statute” refers to Article 4 of Chapter 11 of the California Water Code, as amended from time to time. “Wholesale Capital Fund” is the account established by the SFPUC for deposit of Wholesale Customer revenue that is used to fund the wholesale share of revenue-funded New Regional Assets, as described in Section 6.08. “Wholesale Customer” or “Customers” means one or more of the 26 water customers identified in Section 1.02 that are contracting for purchase of water from San Francisco pursuant to this Agreement. 15066183.1 “Wholesale Revenue Coverage” refers to the additional dollar amount included in wholesale rates each fiscal year that is charged to Wholesale Customers by the SFPUC for their proportionate share of Debt Service coverage under Section 6.06.A. “Wholesale Revenue Coverage Reserve” refers to the account established by the SFPUC for deposit of Wholesale Revenue Coverage under Section 6.06.B. “Wholesale Revenue Requirement” means the calculated Wholesale Customer portion of SFPUC Regional Water System capital and operating costs as determined in accordance with the provisions of Article 5 of this Agreement, formerly called the “Suburban Revenue Requirement” in the 1984 Agreement. “Wholesale Service Area” means the combined service areas of the Wholesale Customers, as delineated on the service area maps attached to each Individual Water Sales Contract. “WSIP” refers to the Water System Improvement Program approved by the Commission in Resolution No. 08-0200 on October 30, 2008, as amended from time to time. ATTACHMENT B WHOLESALE CUSTOMER REGIONAL WATER SYSTEM PURCHASES FY 2007-2008* (To determine 75% approval process for Section 1.02) ;,:;";":"""1"""""""";"''';''':':',;;/',,',/,''x"';"":::"';;""""J""'::c,,",_ ...,,:..':".......,HWHOLESA'/E:G.I!STJ1MERo.:ja:ö ,i""""","",, '"',..y,',:;,""'Y"'/;):I.';;:)'S:".'''::',:,,,,!,:;;'t";"'/"§,'i;t.'::-:.%Ù"",;"""',,,, .....,.:..'., :;, Alameda County Water District 12.90 California Water Service Company 37.72 City of Brisbane 0.23 City of Burlingame 4.50 City of Daly City 4.49 City of East Palo Alto 2.16 City of Hayward 19.33 City of Menlo Park 3.69 City of Milbrae 2.46 City öf Milpitas 6.95 City of Mountain View 10.51 City of Palo Alto 12.72 City of Redwood City 11.01 City of San Bruno 1.86 City of San Jose 4.80 City of Santa Clara 3.49 City of Sunnyvale 10.52 Coastside County Water District 2.08 Estero Municipal Improvement District 5.51 Guadalupe Valley Municipal Improvement District 0.40 Mid-Peninsula Water District 3.25 North Coast County Water District 3.25 Purissima Hills Water District 2.31 Skyline County Water District 0.16 Stanford University 2.31 Town of Hillsborough 3.83 Westborough Water District 0.95 Total 173.39 *Source: SFPUC Commercial Division Records Note: FY 2007-2008 was a Leap Year with 366 days. 1847951. ATTACHMENT C 15074851.1 INDIVIDUAL SUPPLY GUARANTEES (1) (2) WHOLESALE CUSTOMER 100 Cubic Feet (per year)1 Million Gallons Per Day (MGD)1 Alameda County Water District 6,714,439 13.760 California Water Service Company2 17,320,807 35.499 City of Brisbane 224,435 0.460 City of Burlingame 2,553,753 5.234 City of Daly City 2,094,386 4.292 City of East Palo Alto 1,689,713 3.463 City of Menlo Park 2,174,231 4.456 City of Millbrae 1,538,120 3.152 City of Milpitas 4,504,533 9.232 City of Mountain View 6,079,715 12.460 City of Palo Alto 8,087,730 16.575 City of Redwood City 5,333,115 10.930 City of San Bruno 1,583,899 3.246 City of Sunnyvale 6,138,122 12.580 Coastside County Water District 1,061,453 2.175 Estero Municipal Improvement District 2,878,807 5.900 Guadalupe Valley Municipal Improvement District 254,436 0.521 Mid-Peninsula Water District 1,898,707 3.891 North Coast County Water District 1,872,928 3.838 Purissima Hills Water District 792,832 1.625 Skyline County Water District 88,537 0.181 Stanford University 1,479,764 3.033 Town of Hillsborough 1,995,644 4.090 Westborough Water District 644,172 1.320 Total:3 79,004,278 161.913 Footnotes: 1. 100 Cubic feet per year = Million Gallons per Day / 0.00000204946. Figures in column (1) are calculated using unrounded MGD values and are more precise than the figures listed in column (2) 2. Includes quantities from Los Trancos County Water District and Palomar Park Water District. 3. Total does not equal sum of MGD figures due to rounding. Total is not 184 MGD because the table does not include the City of Hayward. Cordilleras Mutual Water Association is not a party to this Agreement, but it has its own Supply assurance of 3,007 hundred cubic feet (CCF). ATTACHMENT D PROCEDURE FOR PRO-RATA REDUCTION OF WHOLESALE CUSTOMERS' INDIVIDUAL SUPPLY GUARANTEES (SECTION 3.02). The 23 wholesale customers listed on Attachment C have individual Supply Guarantees that total approximately 161.9 MGD. If the amount of water purchased from SFPUC by Hayward exceeds 22.1 MGD for three consecutive fiscal years, the individual Supply Guarantees of each of those 23 wholesale customers will be reduced as described below. STEP ONE: Obtain the average annual excess purchases during the three fiscal year period. For example, assume Hayward uses 25.0 MGD, 24.2 MGD and 26.0 MGD in three consecutive years. The average annual excess use for that period is 2.9 MGD; calculated as follows: (25.0 MGD + 24.2 MGD + 26.0 MGD) + 161.9 MGD = 186.9 MGD 3 186.9 MGD -184.0 MGD = 2.9 MGD STEP TWO: Allocate the excess purchases among the 23 Wholesale Customers in proportion to each customer's Supply Guarantee as a percentage of the total Supply Guarantees (161.9 MGD as of FY 2009-10). For example, assume that Wholesale Customer A's Supply Guarantee is 12.0 MGD. Wholesale Customer A's percentage share of the total individual supply guarantees is 0.074, calculated as follows: '12.0 MGD 161.9 MGD = 0.074 and its share of the excess use is 0.22 MGD, calculated as follows: 2.9 MGD x 0.074 = 0.22 MGD i 866408.4 STEP THREE: Determine Wholesale Customer's adjusted Supply Guarantee by subtracting the result of Step Two from the Wholesale Customer's Supply Guarantee: 12 MGD - 0.22 MGD = 11.78 MGD ********** Adjustments will be made at intervals comprised of distinct three-year periods of use by Hayward in excess of 22.1 MGD rather than overlapping periods. For example, assuming that the first adjustment were to occur in FY 2014-15 (based on use during FY 2011-12, FY 2012-13 and FY 2013-14), a second adjustment will not occur earlier than three full fiscal years thereafter (Le., FY 2017-18, based on use by Hayward in FY 2014-15, FY 2015-16 and FY 2016-17). The figures used in the second and subsequent adjustments will reflect previous adjustments. For example, a second adjustment will use 158.9 MGD as the total of individual Supply Guarantees (161.6 MGD - 2.7 MGD = 158.9 MGD). For purposes of simplicity, the volumetric units used in the foregoing example are MGD. For actual adjustment calculations, the unit employed will be hundreds of cubic feet ("ccf'), the unit by which the SFPUC measures water deliveries for billing purposes. The procedure described and illustrated above is independent of and unrelated to the establishment by the SFPUC of Interim Supply Limitations described in Article 4. ATTACHMENT D Page 2 1866408.4 ATTACHMENT E MINIMUM ANNUAL PURCHASE QUANTITIES (Section 3.07.C) Alameda County Water District City of Milpitas City of Mountain View City of Sunnyvale ATTACHMENT F WATER SALES CONTRACT This Contract, dated as of , 2009, is entered into by and between the City and County of San Francisco ("San Francisco") and ("Customer"). RECITALS San Francisco and the Customer have entered into a Water Supply Agreement (UWSA"), which sets forth the terms and conditions under which San Francisco will continue to furnish water for domestic and other municipal purposes to Customer and to other Wholesale Customers. The WSA contemplates that San Francisco and each individual Wholesale Customer will enter into an individual contract describing the location or locations at which water will be delivered to each customer by the San Francisco Public Utilities Commission ("SFPUC"), the customer's service area within which water so delivered is to be sold, and other provisions unique to the individual purchaser. This Water Sales Contract is the individual contract contemplated by the WSA. AGREEMENTS OF THE PARTIES 1. Incorporation of the WSA The terms and conditions of the WSA are incorporated into this Contract as if set forth in full herein. 2. Term Unless explicitly provided to the contrary in Article 9 of the WSA, the term of this Contract shall be identical to that provided in Section _ of the WSA. 1669591.1 3. Sèrvice Area Water delivered by San Francisco to the Customer may be used or sold within the service area shown on the map designated Exhibit A attached .hereto. Except as provided in Section _ of the WSA, Customer shall not deliver or sell any water provided by San Francisco outside of this area without the prior written consent of the General Manager of the SFPUC. 4. Location and Description of Service Connections Sale and delivery of water to Customer will be made through a connection or connections to the SFPUC Regional Water System at the location or locations shown on Exhibit A attached hereto and with the applicable present accoimtnumber, description, connection size, and meter size shown on Exhibit B attached hereto. 5. Interties With Other Systems. Customer maintains interties with neighboring water systems at the location or locations. shown on Exhibit A attached hereto and with the connection size(s) as shown on Exhibit C attached hereto. 6. Billing and Payment San Francisco shall compute the amounts of water delivered and bill Customer therefor on a monthly basis. The bill shall show the separate components of the charge (e.g., service, consumption, demand). Customer shall pay the amount due within thirty (30) days after receipt of the bilL. If Customer disputes the accuracy of any portion of the water bill it shall (a) notify the General Manager of the SFPUC in writing of the specific nature of the dispute and (b) pay the undisputed portion of the bill within thirty (30) days after receipt. Customer shall meet with the General Manager of the SFPUC or a delegate to discuss the disputed portion of the bilL. ATTACHMENT F, Page 2 1669591.2 7.,8.,9,..Other Specialized Provisions (Certain Wholesale Customers will require additional provisions in their individual contracts addressed to issues such as minimum and/or maximum water delivery quantities, prior authorized wheeling arrangements, maximum expansion of the service area, etc. These and other provisions addressing issues unique to the particular Wholesale Customer may be added here, subject to the. provisions of Section 9.01 of the WSA.) IN WITNESS WHEREOF, the parties hereto have executed this Contract, to become effective upon the effectiveness of the WSA, by their duly authorized representatives. CITY AND COUNTY OF SAN FRANCISCO Acting by and through its Public Utilities Commission Date:_,2009 BY Edward Harrington General Manager NAME OF WHOLESALE CUSTOMER BY Date:_,2009 Name: Title: Note: This attachment is provided for the convenience of the prospective parties to the Water Supply Agreement and associated individual contracts. The format may be modified as desired by San Francisco and Wholesale Customer, subject to Section 9.01 of the WSA. ATTACHMENT F, Page 3 1669591.2 Gã~ G~-..ATTACHMENT G WATER VVASTE"NATER POWE!' Water Quality Notification and Communications Plan Revision 4 January 2006 Updated by: Water Quality Engineering Olivia Chen Consultants, Inc. 1 15017932.1 ATTACHMENT H WATER SHORTAGE ALLOCATION PLAN This Interim Water Shortage Allocation Plan (“Plan”) describes the method for allocating water between the San Francisco Public Utilities Commission (“SFPUC”) and the Wholesale Customers collectively during shortages caused by drought. The Plan implements a method for allocating water among the individual Wholesale Customers which has been adopted by the Wholesale Customers. The Plan includes provisions for transfers, banking, and excess use charges. The Plan applies only when the SFPUC determines that a system-wide water shortage due to drought exists, and all references to “shortages” and “water shortages” are to be so understood. This Plan was adopted pursuant to Section 7.03(a) of the 1984 Settlement Agreement and Master Water Sales Contract and has been updated to correspond to the terminology used in the June 2009 Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County and Santa Clara County ("Agreement"). SECTION 1. SHORTAGE CONDITIONS 1.1. Projected Available SFPUC Water Supply. The SFPUC shall make an annual determination as to whether or not a shortage condition exists. The determination of projected available water supply shall consider, among other things, stored water, projected runoff, water acquired by the SFPUC from non-SFPUC sources, inactive storage, reservoir losses, allowance for carryover storage, and water bank balances, if any, described in Section 3. 1.2 Projected SFPUC Purchases. The SFPUC will utilize purchase data, including volumes of water purchased by the Wholesale Customers and by Retail Customers (as those terms are used in the Agreement) in the year immediately prior to the drought, along with other available relevant information, as a basis for determining projected system-wide water purchases from the SFPUC for the upcoming year. 1.3. Shortage Conditions. The SFPUC will compare the available water supply (Section 1.1) with projected system-wide water purchases (Section 1.2). A shortage condition exists if the SFPUC determines that the projected available water supply is less than projected system-wide water purchases in the upcoming Supply Year (defined as the period from July 1 through June 30). When a shortage condition exists, SFPUC will determine whether voluntary or mandatory actions will be required to reduce purchases of SFPUC water to required levels. 1.3.1 Voluntary Response. If the SFPUC determines that voluntary actions will be sufficient to accomplish the necessary reduction in water use throughout its service area, the SFPUC and the Wholesale Customers will make good faith efforts to reduce their water purchases to stay within their annual shortage allocations and associated monthly water use budgets. The SFPUC will not impose excess use charges during periods of voluntary rationing, but may suspend the prospective accumulation of water bank credits, or impose a ceiling on further accumulation of bank credits, consistent with Section 3.2.1 of this Plan. 2 15017932.1 1.3.2 Mandatory Response. If the SFPUC determines that mandatory actions will be required to accomplish the necessary reduction in water use in the SFPUC service area, the SFPUC may implement excess use charges as set forth in Section 4 of this Plan. 1.4. Period of Shortage. A shortage period commences when the SFPUC determines that a water shortage exists, as set forth in a declaration of water shortage emergency issued by the SFPUC pursuant to California Water Code Sections 350 et seq. Termination of the water shortage emergency will be declared by resolution of the SFPUC. SECTION 2. SHORTAGE ALLOCATIONS 2.1. Annual Allocations between the SFPUC and the Wholesale Customers. The annual water supply available during shortages will be allocated between the SFPUC and the collective Wholesale Customers as follows: Level of System Wide Reduction in Water Use Required Share of Available Water SFPUC Share Wholesale Customers Share 5% or less 6% through 10% 11% through 15% 16% through 20% 35.5% 36.0% 37.0% 37.5% 64.5% 64.0% 63.0% 62.5% The water allocated to the SFPUC shall correspond to the total allocation for all Retail Customers. In the event that the SFPUC share of the available water supply in the above table results in Retail Customers having a positive allocation (i.e., a supply of additional water rather than a required percentage reduction in water use), the SFPUC’s percentage share of the available water supply in the table shall be reduced to eliminate any positive allocation to Retail Customers, with a corresponding increase in the percentage share of the available water supply allocated to the Wholesale Customers. For any level of required reduction in system-wide water use during shortages, the SFPUC shall require Retail Customers to conserve a minimum of 5%, with any resulting reallocated supply credited to storage for inclusion in calculation of projected available water SFPUC water supply in a subsequent year (Section 1.1). The parties agree to reevaluate the percentages of the available water supply allocated to Retail and Wholesale Customers by May 1, 2028. 2.2 Annual Allocations among the Wholesale Customers. The annual water supply allocated to the Wholesale Customers collectively during system wide shortages of 20 percent or less will be apportioned among them based on a methodology adopted by all of the Wholesale Customers, as described in Section 3.11(C) of the Agreement. In any year for which the methodology must be applied, the Bay Area Water Supply and Conservation Agency (“BAWSCA”) will calculate each Wholesale Customer’s individual percentage share of the amount of water allocated to the Wholesale Customers collectively pursuant to Section 2.1. Following the declaration or reconfirmation of a water shortage emergency by the SFPUC, BAWSCA will deliver to the SFPUC General Manager a list, signed by the President of BAWSCA’s Board of Directors and 3 15017932.1 its General Manager, showing each Wholesale Customer together with its percentage share and stating that the list has been prepared in accordance with the methodology adopted by the Wholesale Customers. The SFPUC shall allocate water to each Wholesale Customer, as specified in the list. The shortage allocations so established may be transferred as provided in Section 2.5 of this Plan. If BAWSCA or all Wholesale Customers do not provide the SFPUC with individual allocations, the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers. The methodology adopted by the Wholesale Customers utilizes the rolling average of each individual Wholesale Customer’s purchases from the SFPUC during the three immediately preceding Supply Years. The SFPUC agrees to provide BAWSCA by November 1 of each year a list showing the amount of water purchased by each Wholesale Customer during the immediately preceding Supply Year. The list will be prepared using Customer Service Bureau report MGT440 (or comparable official record in use at the time), adjusted as required for any reporting errors or omissions, and will be transmitted by the SFPUC General Manager or his designee. 2.3. Limited Applicability of Plan to System Wide Shortages Greater Than Twenty Percent. The allocations of water between the SFPUC and the Wholesale Customers collectively, provided for in Section 2.1, apply only to shortages of 20 percent or less. The SFPUC and Wholesale Customers recognize the possibility of a drought occurring which could create system-wide shortages greater than 20 percent despite actions taken by the SFPUC aimed at reducing the probability and severity of water shortages in the SFPUC service area. If the SFPUC determines that a system wide water shortage greater than 20 percent exists, the SFPUC and the Wholesale Customers agree to meet within 10 days and discuss whether a change is required to the allocation set forth in Section 2.1 in order to mitigate undue hardships that might otherwise be experienced by individual Wholesale Customers or Retail Customers. Following these discussions, the Tier 1 water allocations set forth in Section 2.1 of this Plan, or a modified version thereof, may be adopted by mutual written consent of the SFPUC and the Wholesale Customers. If the SFPUC and Wholesale Customers meet and cannot agree on an appropriate Tier 1 allocation within 30 days of the SFPUC’s determination of water shortage greater than 20 percent, then (1) the provisions of Section 3.11(C) of the Agreement will apply, unless (2) all of the Wholesale Customers direct in writing that a Tier 2 allocation methodology agreed to by them be used to apportion the water to be made available to the Wholesale Customers collectively, in lieu of the provisions of Section 3.11(C). The provisions of this Plan relating to transfers (in Section 2.5), banking (in Section 3), and excess use charges (in Section 4) shall continue to apply during system-wide shortages greater than 20 percent. 2.4. Monthly Water Budgets. Within 10 days after adopting a declaration of water shortage emergency, the SFPUC will determine the amount of Tier 1 water allocated to the Wholesale Customers collectively pursuant to Section 2.1. The SFPUC General Manager, using the Tier 2 allocation percentages shown on the list delivered by BAWSCA pursuant to Section 2.2, will calculate each Wholesale Customer’s individual annual allocation. The SFPUC General Manager, or his designee, will then provide each Wholesale Customer with a proposed schedule of monthly water budgets based on the pattern of monthly water purchases during the Supply Year immediately preceding the declaration of shortage (the “Default Schedule”). Each 4 15017932.1 Wholesale Customer may, within two weeks of receiving its Default Schedule, provide the SFPUC with an alternative monthly water budget that reschedules its annual Tier 2 shortage allocation over the course of the succeeding Supply Year. If a Wholesale Customer does not deliver an alternative monthly water budget to the SFPUC within two weeks of its receipt of the Default Schedule, then its monthly budget for the ensuing Supply Year shall be the Default Schedule proposed by the SFPUC. Monthly Wholesale Customer water budgets will be derived from annual Tier 2 allocations for purposes of accounting for excess use. Monthly Wholesale Customer water budgets shall be adjusted during the year to account for transfers of shortage allocation under Section 2.5 and transfers of banked water under Section 3.4. 2.5. Transfers of Shortage Allocations. Voluntary transfers of shortage allocations between the SFPUC and any Wholesale Customers, and between any Wholesale Customers, will be permitted using the same procedure as that for transfers of banked water set forth in Section 3.4. The SFPUC and BAWSCA shall be notified of each transfer. Transfers of shortage allocations shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. Transfers of shortage allocations shall be in compliance with Section 3.05 of the Agreement. The transferring parties will meet with the SFPUC, if requested, to discuss any effect the transfer may have on its operations. SECTION 3. SHORTAGE WATER BANKING 3.1. Water Bank Accounts. The SFPUC shall create a water bank account for itself and each Wholesale Customer during shortages in conjunction with its resale customer billing process. Bank accounts will account for amounts of water that are either saved or used in excess of the shortage allocation for each agency; the accounts are not used for tracking billings and payments. When a shortage period is in effect (as defined in Section 1.4), the following provisions for bank credits, debits, and transfers shall be in force. A statement of bank balance for each Wholesale Customer will be included with the SFPUC’s monthly water bills. 3.2. Bank Account Credits. Each month, monthly purchases will be compared to the monthly budget for that month. Any unused shortage allocation by an agency will be credited to that agency’s water bank account. Credits will accumulate during the entire shortage period, subject to potential restrictions imposed pursuant to Section 3.2.1. Credits remaining at the end of the shortage period will be zeroed out; no financial or other credit shall be granted for banked water. 3.2.1. Maximum Balances. The SFPUC may suspend the prospective accumulation of credits in all accounts. Alternatively, the SFPUC may impose a ceiling on further accumulation of credits in water bank balances based on a uniform ratio of the bank balance to the annual water allocation. In making a decision to suspend the prospective accumulation of water bank credits, the SFPUC shall consider the available water supply as set forth in Section 1.1 of this Plan and other reasonable, relevant factors. 3.3. Account Debits. Each month, monthly purchases will be compared to the budget for that month. Purchases in excess of monthly budgets will be debited against an agency’s water bank account. Bank debits remaining at the end of the fiscal year will be subject to excess use charges (see Section 4). 5 15017932.1 3.4. Transfers of Banked Water. In addition to the transfers of shortage allocations provided for in Section 2.5, voluntary transfers of banked water will also be permitted between the SFPUC and any Wholesale Customer, and among the Wholesale Customers. The volume of transferred water will be credited to the transferee’s water bank account and debited against the transferor’s water bank account. The transferring parties must notify the SFPUC and BAWSCA of each transfer in writing (so that adjustments can be made to bank accounts), and will meet with the SFPUC, if requested, to discuss any affect the transfer may have on SFPUC operations. Transfers of banked water shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. If the SFPUC incurs extraordinary costs in implementing transfers, it will give written notice to the transferring parties within ten (10) business days after receipt of notice of the transfer. Extraordinary costs means additional costs directly attributable to accommodating transfers and which are not incurred in non-drought years nor simply as a result of the shortage condition itself. Extraordinary costs shall be calculated in accordance with the procedures in the Agreement and shall be subject to the disclosure and auditing requirements in the Agreement. In the case of transfers between Wholesale Customers, such extraordinary costs shall be considered to be expenses chargeable solely to individual Wholesale Customers and shall be borne equally by the parties to the transfer. In the case of transfers between the SFPUC and a Wholesale Customer, the SFPUC’s share of any extraordinary transfer costs shall not be added to the Wholesale Revenue Requirement. 3.4.1. Transfer Limitations. The agency transferring banked water will be allowed to transfer no more than the accumulated balance in its bank. Transfers of estimated prospective banked credits and the “overdrafting” of accounts shall not be permitted. The price of transfer water originally derived from the SFPUC system is to be determined by the transferring parties and is not specified herein. Transfers of banked water shall be in compliance with Section 3.05 of the Agreement. SECTION 4. WHOLESALE EXCESS USE CHARGES 4.1. Amount of Excess Use Charges. Monthly excess use charges shall be determined by the SFPUC at the time of the declared water shortage consistent with the calendar in Section 6 and in accordance with Section 6.03 of the Agreement. The excess use charges will be in the form of multipliers applied to the rate in effect at the time the excess use occurs. The same excess use charge multipliers shall apply to the Wholesale Customers and all Retail Customers. The excess use charge multipliers apply only to the charges for water delivered at the rate in effect at the time the excess use occurred. 4.2 Monitoring Suburban Water Use. During periods of voluntary rationing, water usage greater than a customer’s allocation (as determined in Section 2) will be indicated on each SFPUC monthly water bill. During periods of mandatory rationing, monthly and cumulative water usage greater than a Wholesale Customer’s shortage allocation and the associated excess use charges will be indicated on each SFPUC monthly water bill. 4.3. Suburban Excess Use Charge Payments. An annual reconciliation will be made of monthly excess use charges according to the calendar in Section 6. Annual excess use charges will be calculated by comparing total annual purchases for each Wholesale Customer with its 6 15017932.1 annual shortage allocation (as adjusted for transfers of shortage allocations and banked water, if any). Excess use charge payments by those Wholesale Customers with net excess use will be paid according to the calendar in Section 6. The SFPUC may dedicate excess use charges paid by Wholesale Customers toward the purchase of water from the State Drought Water Bank or other willing sellers in order to provide additional water to the Wholesale Customers. Excess use charges paid by the Wholesale Customers constitute Wholesale Customer revenue and shall be included within the SFPUC's annual Wholesale Revenue Requirement calculation. SECTION 5. GENERAL PROVISIONS GOVERNING WATER SHORTAGE ALLOCATION PLAN 5.1. Construction of Terms. This Plan is for the sole benefit of the parties and shall not be construed as granting rights to any person other than the parties or imposing obligations on a party to any person other than another party. 5.2. Governing Law. This Plan is made under and shall be governed by the laws of the State of California. 5.3. Effect on Agreement. This Plan describes the method for allocating water between the SFPUC and the collective Wholesale Customers during system-wide water shortages of 20 percent or less. This Plan also provides for the SFPUC to allocate water among the Wholesale Customers in accordance with directions provided by the Wholesale Customers through BAWSCA under Section 2.2, and to implement a program by which such allocations may be voluntarily transferred among the Wholesale Customers. The provisions of this Plan are intended to implement Section 3.11(C) of the Agreement and do not affect, change or modify any other section, term or condition of the Agreement. 5.4. Inapplicability of Plan to Allocation of SFPUC System Water During Non-Shortage Periods. The SFPUC’s agreement in this Plan to a respective share of SFPUC system water during years of shortage shall not be construed to provide a basis for the allocation of water between the SFPUC and the Wholesale Customers when no water shortage emergency exists. 5.5. Termination. This Plan shall expire at the end of the Term of the Agreement.. The SFPUC and the Wholesale Customers can mutually agree to revise or terminate this Plan prior to that date due to changes in the water delivery capability of the SFPUC system, the acquisition of new water supplies, and other factors affecting the availability of water from the SFPUC system during times of shortage. SECTION 6. ALLOCATION CALENDAR 6.1. Annual Schedule. The annual schedule for the shortage allocation process is shown below. This schedule may be changed by the SFPUC to facilitate implementation. 7 15017932.1 6.1.1 In All Years Target Dates 1. SFPUC delivers list of annual purchases by each Wholesale Customer during the immediately preceding Supply Year November 1 2. SFPUC meets with the Wholesale Customers and presents water supply forecast for the following Supply Year February 3. SFPUC issues initial estimate of available water supply February 1 4. SFPUC announces potential first year of drought (if applicable) February 1 5. SFPUC and Wholesale Customers meet upon request to exchange information concerning water availability and projected system- wide purchases February 1-May 31 6. SFPUC issues revised estimate of available water supply, and confirms continued potential shortage conditions, if applicable March 1 7. SFPUC issues final estimate of available water supply April 15th or sooner if adequate snow course measurement data is available to form a robust estimate on available water supply for the coming year. 8. SFPUC determines amount of water available to Wholesale Customers collectively April 15th or sooner if adequate snow course measurement data is available to form a robust estimate on available water supply for the coming year. In Drought Years Target Dates 9. SFPUC formally declares the existence of water shortage emergency (or end of water shortage emergency, if applicable) under Water Code Sections 350 et. seq. April 15-30 10. SFPUC declares the need for a voluntary or mandatory response April 15-30 11. BAWSCA submits calculation to SFPUC of individual Wholesale Customers’ percentage shares of water allocated to Wholesale Customers collectively April 15- 30 12. SFPUC determines individual shortage allocations, based on BAWSCA’s submittal of individual agency percentage shares to SFPUC, and monthly water budgets (Default Schedule) April 25—May 10 13. Wholesale Customers submit alternative monthly water budgets (optional) May 8-May 24 14. Final drought shortage allocations are issued for the Supply Year beginning July 1 through June 30 June 1 15. Monthly water budgets become effective July 1 16. Excess use charges indicated on monthly Suburban bills August 1 (of the beginning year) through June 30 (of the succeeding year) 17. Excess use charges paid by Wholesale Customers for prior year August of the succeeding year ATTACHMENT I NOT USED ATTACHMENT J DEFINITIONS AND FORMULAS FOR CALCULATING PROPORTIONAL ANNUAL WATER USE TABLE OF CONTENTS "- This Attachment contains four sections, three figures, and five tables. Section A: Section B: Section C: Section D: Figure 1: Figure 2: Fi'gure 3: Table 1: Table 2: Table 3: Table 4: Table 5: Water Meters Calculation of Proportional Annual Water Use Data Requirements and Schedule County Line and In-City Terminal Reservoir Meter Calibration and Maintenance Locations of SFPUC County- Line Meters and In-City Terminal Reservoirs Generalized Schematic of Lake Merced Pump Station Locations of System Input and In-Line Meters Base Usage and Allocation Rates Locations of SFPUC County-line Meters and In-City T eriinal Reservoirs Locations of SFPNC System Input and In-line Meters County-line Meters, In-City Terminal Reservoirs and Associated Metering Equipment Meter Calibration and Maintenance Frequency Table 1 presents the format for the water usage and allocation rate calculations for reference and to ilustrate the definitions and formulas described in Sections A through C. Tables 2 and 3 list the meters whose locations are shown on Figures 1 and 3, respectively. Table March i i, 2009 1 4 identifies the type of meter and associated metering equipment for the County-line Meters and Terminal Reservoirs. Table 5 identifies the meter calibration and maintenance frequency for the meters and equipment listed in Table 4. SECTION A. WATERMETERS 1. General The Agreement provides that certain operating and maintenance expenses and the capital cost òf certain categories of utility plant in service are to be allocated between San Francisco and. i the Wholesale Customer~ on the basis of proportionate ännual usage of the Regional Water' System. The purpose of this Attachment is to describe the meters) and ilustrate the method by which proportionate anual usage wil be calculated. 2. Units of Measurement, Rounding, Conversion The SFPUC wil compile the usage data required to complete Table 1 anually.. The . units of measurement and'conventions for converting and rounding wil be as follows. The data in the Table 1 will be presented, and the calculationS contemplated by this Attachment shown, in imits of milions of gallons per day (mgd), rounded tothe nearest tenth of an mgd~Percentages (e.g., the City and Wholesale usa~e rates) shall be carried to two digits to the right ofthedecimal point and reduction factors shall be carried to four digits to the right of the decimal point. Data compiled by the SFPUC in units of hundreds of cubic feet per year (cd) shall be converted to mgd by multiplying hundreds of cubic feet per year by 0.0000020493 (or 2.0493 x 10'6) for non-leap years and 0.0000020437 (or 2.0437 x 10'6) for leap years, In founding, if the rightmost digit dropped is 0 through 4, the preceding digit shall be left u!lchanged; if the rightmost digit dropped is 5 through 9, the preceding digit shall be increased by l. 2 March ii, 2009 3. Location of Meters/Gauges The SFPUC presently maintains meters and gauges that have been used to determine the proportionate usage of the Regional Water System, in accordance with the methods and calculations described in Exhibit J to the 1984 contract between San Francisco and the Wholesale Customers. These meters consist of "County-Line Meters," "In-City Terminal Reservoir Meters" and "System Input and In-line Meters" as described in the following subsections. As new capital improvement projects are designed and constructed by the SFPUC, it may be necessary for new meters to be installed to ensure continued accurate determinations of the proportionate usage of the Regional Water System. "Planned meters" are included in the following subsections where planed capital improvement projects are likely to require the installation of additional meters. a. County-line Meters The SFPUC presently maintains meters at or near the San Mateo-San Francisco County line to measure flow through all transmission pipelines entering the City ("County-line Meters"). The existing and planned County-line Meters are listed in Table 2 and shown on Figures 1 and 2. Additional details pertaining to the County-line meters located at the Lake Merced Pump Station, and specifically to water deliveries from the pump station to Sunset Reservoir, Sutro Reservoir, and Lake Merced are provided below. (1) County-Line deliveries to Sunsetand Sutro Reservoirs Water delivered to the City through the Sunset Supply Pipeline may be pumped from the Lake Merced Pump Station to either Sunset Reservoir or Sutro Reservoir located within the City. When water is pumped from the Lake Merced Pump Station to both Sunset and Sutro reservoirs simultaneously, the recording instrumentation on the Sunset and Sutro venturi meters are designed to record flows through both meters. When water is pumped to Sutro Reservoir only (typically utilizing Pump NO.4 at the 3 March 11, 2009 Lake Merced Pump Station), the source water is from the Sunset Reservoir (not the County-line), and the direction of flow through the Sunset venturi meter is reversed. Under this pumping scenario, the recording instrumentation on the Sunset and Sutro venturi meters are designed to not record flow on their respective recorders such that the in-City transfer of water between Sunset and Sutro Reservoirs is not included as a County-line delivery to the City. Figure 2 provides a generalized schematic of the Lake Merced Pump Station and the typical direction of flow from the County-line, through the pump station. (2) County-line deliveries to Lake Merced In order to raise and maintain water levels in Lake Merced, the SFPUC occasionally delivers water directly from the Regional Water System to Lake Merced. Deliveries from the Regional Water System to Lake Merced are accomplished at the Lake Merced Pump Station. The procedure involves operating valves on the suction side of Sunset Pump NO.2 such that water may flow by gravity in the Sunset Supply Pipeline, from San Mateo County, across the County-line and into San Francisco, through Lake Merced Pump Station and into the Lake Merced wet welL. A 16-inch pipeline connection on the suction side of Sunset Pump NO.2 allows for deliveries of water to the wet well (see Figure 2). Water deliveries from the Regional Water System to Lake Merced are considered County-line deliveries and an in-City usage in the calculation of water allocation rates. b. In-City Terminal Reservoirs Water usage by the City includes water deliveries from the SFPUC's "terminal reservoirs." The terminal reservoirs are: 1) Sunset Reservoir, 2) University Mound Reservoir, and 3) Merced Manor Reservoir. The terminal reservoirs are shown on Figure 1. c. System Input and In-Line Meters 4 March 11, 2009 The SFPUC presently measures water flow into and through the Regional System utilizing "System Input and In-Line Meters." The existing and planned System Input and In- Line Meters are listed in Table 3 and shown on Figure 3. d. Wholesale Customer Meters and City Retail Customer Meters Located Outside the Boundaries of the City The SFPUC presently measures water deliv~ries from the Regional Water System to its Wholesale Customers at various locations where the water delivery systems of the individual Wholesale Customers tie into the Regional Water System. The meters at these locations are referred to as the Wholesale Customers' "master meters." The SFPUCalso measures water deliveries from the Regional Water System to other customers located outside of the boundaries of the City that are not Wholesale Customers. Water deliveries to the Wholesale Customers and Retail Customers outside the City's boundaries that receive water from the Regional Water System are accounted for by the SFPUC's Customer Service Division as described in Section B. 4. Replacement and Relocation of Meters, Gauges, and Recording Devices. The SFPUC presently equips all of its large venturi meters with differential pressure transmitters. The smaller meters utilize other methods and equipment to register and record flows. The SFPUC will maintain the meters, gauges, and recording devices described above in subsections (a), (b), (c), and (d) unless and until such meters, gauges, and recording devices are replaced. The SFPUC may replace the meters, gauges, and recording devices described above in subsections (a), (b), (c), and (d) or install new meters, gauges, and recording devices at new locations, provided that such changes do not diminish the accuracy of the water flow measurements or impair the ability of the SFPUC to separate direct City water use from water use by the wholesale customers. Maintenance and calibration procedures for new or replaced equipment may change. Modified maintenance and calibration procedures for new or replaced equipment will conform to industry standards set forth in A WWA Manual M33, the applicable 5 March 11, 2009 standards in the International Society of Automation, and will implement the manufacturer's instructions for maintenance and calibration. The SFPUC will provide BA WSCA with advance written notice of any such changes, together with a brief explanation of the reasons therefor and a description of the type and location of the replacement. Such notice shall automatically amend the list of meters, gauges, and recording devices set forth above in subsections (a), (b), (c), and (d). 5. Recording of Water Flow Data a. Flow Data The City shall record and maintain data measuring base water flow throughout the SFPUC Regional Water System as necessary to determine proportional annual water usage. b. Reservoir Data The SFPUC shall record and maintain data measuring the levels of the terminal reservoirs described above in subsection A.3.b and shown on Figure 1 on an hourly basis. Flow values derived from reservoir level readings for all reservoirs in the SFPUC wholesale system shall be calculated using the tables contained in the SFPUC publication "Reservoir Data" (aka "The Weir Book"), which set forth the relationship between reservoir levels and water volumes, as such tables may be amended from time to time to reflect changes in the volumes of the various reservoirs. The tables to be used initially shall be those from the current edition of The Weir Book. SECTION B. CALCULA TION OF PROPORTIONAL ANNUAL USAGE "Base rates" means the percentages of annual SFPUC deliveries attributed to the Wholesale Customers and to City Retail Customers. 6 March 11,2009 (1) "Gross San Francisco County line base deliveries" shall equal the total amount of water flowing into the City's distribution system through transmission pipelines entering the City, as measured by the County-Line Meters described in Section A.3.a. and shown on Figures 1 and 2. (2) "Daly City base deliveries" shall equal the water flowing to Daly City through meter accounts provided downstream of the County-Line meters or through SFPUC's City Distribution Division. At present these accounts are: (a) CSPLl/Macdonald Avenue Service (Account number 010084-01- 0) (b) Guttenberg Street Service (Account number 010013-01-3) (c) Carter Street Service (Account numb.ers 284070-01-8 and 284071- 01-6) These accounts represent a portion of the total deliveries to Daly City. The quantities of water delivered to these four Daly City accounts are reported monthly in Form MGT44 i by the SFPUC's Customer Service Division. These connections to meters are presently located within the City, and thus record water which has already been recorded by the SFPUC's master meters at the County line. So long as this condition continues, Daly City base deliveries shall be subtracted from "Gross San Francisco County line base deliveries." (3) "Net San Francisco base deliveries" shall equal the result of subtracting "Daly City base deliveries" from "Gross San Francisco County line base deliveries." 7 March i i, 2009 (4) "Other suburban raw water base deliveries" shall equal the sum of all deliveries of raw (untreated) water to customers of the SFPUC located outside the City other than deliveries to the Wholesale Customers. "Other suburban raw water base deliveries" include deliveries of raw water in Alameda and San Mateo Counties to SFPUC Retail Customers, City departments and commissions, and other users affiiated with San Francisco. (5) "Other suburban treated water base deliveries" shall equal the sum of all deliveries of treated water to customers of the SFPUC located outside the City . other than deliveries to the Wholesale Customers. Other suburban treated water base deliveries include deliveries of treated water t6 the SFPUC's Retail Customers in San Mateo, Santa' Clara and Alameda Counties (such as NASA Ames Research Center and LLNL), to City departments and commissions and other users affiliated with San Francisco (such as the San Francisco International Airport, the San Francisco County Jail, and tenants ofland owned by the City Recreation and Park Deparment). (6) "Other suburban base deliveries" shall equal the sum of "Other suburban raw water deliveries" and "Other suburban treated water deliveries." The combined amount of raw and treated water delivered to suburban entities other than the Wholesale Customers is reported monthly in Form MGT440 by the SFPUC's Customer Service Division, (7) "Total City base usage" shall equal "Net San Francisco base deliveries" plus "Other suburban base deliveries." (8) "Total wholesale base usage" shall equal the sum of all metered deliveries to the Wholesale Customers measured at their SFPUC master meters (including all deliveries to Daly City which are comprised of deliveries through meters located outside San Francisco and meters located inside San Francisco, deliveries through the latter of which are designated above in paragraph B.1.2 as "Daly City base 8 March I I, 2009 deliveries"). The quantity of water delivered to the individual Wholesale Customers, and the combined amount of water delivered to all Wholesale Customers is reported monthly in Foml MGT440 by the SFPUC's Customer Service Division. (9) "Total system base usage" shall equal "City base usage" plus "Wholesale base usage." (10) "Wholesale base rate" shall equal the percentage obtained by dividing "Wholesale base usage" by "Total system base usage." (11) "City base rate" shall equal the percentage obtained by subtracting "Wholesale base rate" from 100 percent. (12). "Base system input" shall equal all amounts of water supplied to the SFPUC Regional Water System, which presently comes from the following sources: (a) Hetch Hetchy water as measured at the venturi meters on the 58-inch, 61- inch, and 78.5-inch San Joaquin Pipeline Nos. 1,2, and 3 near Oakdale. (b) Water supplied by HHWPD to LLNL as measured at the customer meter. Water delivered from the system to LLNL shall be deemed negative in sign for the purpose of determining "Base system input." (c) Hetch Hetchy water pumped from the Alameda siphons to San Antonio Reservoir as measured at the venturi meter on the 60-inch San Antonio pipeline. Water delivered from the system to San Antonio Reservoir shall be deemed negative in sign for the purpose of determining "Base system input." 9 March I 1, 2009 March i i, 2009 (d) Sunol Valley Water Treatment Plant as measured at the meter on the 78- inch effluent pipeline. (e) Harry Tracy Water Treatment Plant as measured at the venturi meters on the 60-inch and 78-inch effluent pipelines. (f) Raw water deliveries to all SFPUCRetail Customers outside the City boundaries as measured at the customer meter. These deliveries are considered positive for the puroses of Table 1. Currently, raw water deliveries to the system are represented by the following account numbers contained in Form MGT440 prepared by the SFPUC's Customer Service Division: 266081-01-7 (Calaveras Nursery) 266081-02-5 (Calaveras Nursery) 264355-01-7 (Caltrans) 266084-02-9 (Color Spot Nursery) 272701-02-0 (Color Spot Nursery) 266069-02-0 (Crystal Springs Golf Course) 266078-02-1 (Dell Franklin) 266078-01-3 (Dells Nursery) 266084-01-1 (Hi-C Nursery) 272701-01-2 (Hi-C Nursery) 284112-01-8 (Hansen Aggregates) 266084-03-7 (Jeff Anhorn Nursery) 272701-03-8 (Jeff Anhorn Nursery) 266079-02-9 (Mission Valley Rock) 281043-01-8 (Mission Valley Rock) 267618~02-3 (Nagata Farms) 267618-01-5 (Nagata Farms) 266090-01-8 (Naka Nursery) 10 March 11, 2009 266091-01-6 (Naka Nursery) 266090-02-6 (Naka Nursery) 266091-02-4 (Naka Nursery) 264315-02-9 (Pacific Nurseries) 266076-01-7 (Sunol Christmas Tree Farm) 266076-02-5 (Sunol Tree Farm) 276095-01-5 (Sunol Valley Golf & Recreation) 266077-02-3 (Ura Farm) 264352-01-4 (Ura, John) 266075-01-9 (Valley Crest) 268276-01-1 (Valley Crest Nursery) 266093-01-2 (Valley Crest Tree Company). 268426-02-0 (Valley Crest Tree Company) 266075-02-7 (Valley Crest Tree Company) 266093-02-0 (Valley Crest Tree Company) 268276-02:-9 (Valley Crest Tree Company) 266082-01-5 (Western Star Nursery) 266089-01-0 (Western Star Nursery) 267254-02-7 (Western Star Nursery) 266082-02-3 (Western Star) 266089-02-8 (Western Star) 267254-03-5 (Western Star) (g) Raw water deliveries from Pilarcitos Reservoir and Crystal Springs Reservoir to Coastsid~ County Water District as measured at the customer meters. These deliveries are considered positive for the purposes of Table 1. Currently, raw water deliveries to Coastside County Water District from both reservoirs are represented under account number 010027-01-9 contained in Form MGT441 prepared by the SFPUC's Customer Service Division: 11 March I I, 2009 (h) Crystal Springs Balancing Reservoir. The flow into or out of the Crystal Springs Balancing Reservoir shall be calculated based on the changes in the amounts of water stored in the reservoir. The amounts of water stored shall be determined by the use of water level sensors, and the application of water level readings to a water level-storage capacity table. Decreases in storage, which indicate a flow from the Balancing Reservoir into the system, shall be deemed positive in sign. Increases in storage, which indicate a flow into the Balancing Reservoir from the system, shall be deemed negative in sign. Over the period of a year, the total flows into and out of Crystal Springs Balancing Reservoir are nearly equivalent. As such, total sys.tem input from Crystal Springs Reservoir shall be deemed zero for calculating current base rates. (i) Deliveries to Crystal Springs Reservoir as measured by the overflow weir at the Pulgas Pump Station. Deliveries from the system to Crystal Springs Reservoir ("spills") shall be deemed negative in sign for the purpose of determining "Base system input." G) Terminal Reservoirs. The "terminal reservoirs" consist of Sunset Reservoir, University Mound Reservoir, and Merced Manor Reservoir, each located within the City of San Francisco. The flow into or out of the terminal reservoirs shall be calculated based on the changes in the amounts of water stored in them. The amounts of water stored shall be determined by the use of water level sensors, and the application of water levels to water level-storage capacíty tables. Over the period of a year, the total flows into and out of terminal reservoirs are nearly equivalent. As such, total system input from the terminal reservoirs shall be deemed zero for calculating base rates. (k) Other Sources. Other sources of flow into, or from, the Regional Water System, shall be accounted for as "other sources." Examples of other 12 sources of system input would include intertie water deliveries between the Regional System and the Santa Clara Valley Water District, and between the Regional System and the East Bay Municipal Utilities District, and deliveries of raw water from Crystal Springs Reservoir in the event of an emergency. Flows from the system shall be. deemed negative in sign for the purpose of determining "Base system input." (13) "Total base system input" shall equal the sum of the system inputs from the sources described in paragraph B. i .12. . (14) "Joint system loss reduction factor" shall equal "Total system base usage" divided by "Total base system input." "Joint system loss reduction factor" shall not exceed 1.0. (15) "Daly City reduction factor" shall equal "Net San Francisco base deliveries" divided by "Gross San Francisco County line base deliveries." "Daly City reduction factor" shall not exceed 1.0. (16) "Total suburban base deliveries" shall equal "Other suburban base deliveries" plus "Total wholesale base usage." (17) "Suburban reduction factor" shall equal "Wholesale base usage" divided by "Total suburban base deliveries." "Suburban reduction factor" shall not exceed 1.0. (18) "HHWPD Deliveries above Oakdale" shall equal the total amount of water delivered by the HHWPD to users located above the system input meters in Oakdale. Water users located above the system input meters in Oakdale are currently represented by Groveland Community Services District and the HHWPD facility at Moccasin. 13 March 11, 2009 (19) "HH Reduction Factor" is calculated for the purpose of determining the Wholesale Customers' share of the Hetch Hetchy Assessment. The factor shall equal a fraction, the numerator of which is the total system input measured at the Oakdale meters (Table 1, line 12.a) and the denominator of which is the sum of the total system input measured at the Oakdale meters (Table 1, line 12.a) plus the total "HHWPD deliveries above Oakdale" (Table 1, line 18). SECTION C. DATA REQUIREMENTS AND SCHEDULE 1. Collection and Dissemination of Data The SFPUC presently compiles daily flow data for the County-line meters, System Input and In-Line Meters, and daily reservoir water level data, and provides copies of that data to the Wholesale Customers (through BA WSCA) on a monthly basis. Thè SFPUC also provides copies of wholesale "Suburban Resale" and City Retail water usage data to BA WSCA on a monthly basis. Additionally, the SFPUC provides BA WSCA aCcess to flow data for the meters as reported and recorded by the SFPUC's SCADAsystem. The SFPUC shall continue to provide the flow and water usage data described above to BA WSCA on a monthly basis, and shall continue to allow BA WSCA access to the SCADA system data, so that a coordinated effort between the SFPUC and BA WSCA will allow for updating Table 1 of this Attachment annually on a timely basis. It shall continue to be the SFPUC's responsibility to compile the data necessary to update Table 1 of this Attachment annually and the City shall deliver to BAWSCA, for review and approval, copies ofthe updated Table 1 by September 15 for the fiscal year ending the preceding June 30, as shown by the schedule contained in Section C.3. 14 March i i, 2009 Upon reasonable notice to the General Manager of the SFPUC, BAWSCA shall be given access to all water flow ànd usage records compiled by the SFPUC, including raw data, at reasonable times during business hours and shall have the right to copy such records and data at its expense. 2. Lack of Data The paries recognize that, because of human error, mechanical failure, or other unplanned events, portions ofthe data required for the calculation of the usage rates and ratios described in Sections B and C of this Attachment occasionally may be unavailable or incorrect. In the event that such data are unavailable or inaccurate, the SFPUC shall make a reasonable estimate of the unavailable or incorrect data or use the most accurate alternative data that are available, and substitute the estimate therefor. If the SFPUC uses an estimate of the unavailable or inaccurate data or alternative data, it shall provide BA WSCA with the following: (1) a description of the unavailable or inaccurate data and the estimation or substitution of data used therefor; (2) an explanation of the cause of the missing or inaccurate data and the reasons underlying the SFPUC's estimation or substitution of alternate data; and (3) a statement of how the error or malfunction that caused the unavailability or inaccuracy of the data will be avoided in the future. The SFPUC shall provide this information to BA WSCA upon calculation by the SFPUC of the usage rates and ratios described in this Attachment for the fiscal year in question. 15 March i i, 2009 3. Schedule for Completing the Annual Calculations of Water Usage Rates The paries recognize the importance of updating Table 1 of this Attachment anually in a timely maner, and that historically, doing so has required a coordinated effort between the SFPUC and BAWSCA. To assure timely completion of the anual calculations of water usage rates 'and ratios, the paries agree to adhere to the following schedule. (1) By August 15: The SFPUC shall forward to BA WSCA all data for the fiscal year ending the preceding June 30, necessary to make a determination ofthë base water usage and base allocation rates for the Wholesale Customers and the City. (2) By September 15. The City shall deliver to BAWSCA, for review and approval, draft copies of the updated Table 1 for the fiscal year ending the preceding June 30. (3) Between September 15 and October 15. The SFPUC and BAWSCA shall reconcile any discrepancies or inaccuracies in the draft calculations of water usage rates and shall reach agreement on a final updated Table 1 for the fiscal year ending the preceding June 30. (4) By November 1. The SFPUC shall deliver to BA WSCA a finalized updated Table 1, signed by the SFPUC General Manager, or appropriate designee, representing the water usage rates agreed upon by the SFPUC and BAWSCA, for the fiscal year ended June 30. (5) By November 15. BA WSCA shall return the finalized Table 1 to the SFPUC, counter-signed by the BA WSCA General Manager/CEO. If the SFPUC does not receive the countersigned Table 1 from BA WSCA by November 15, it may use the water use data as contained in the Table 1 delivered pursuant to paragraph (4) above, subject to arbitration as provided in section 8.01 of the Agreement. 16 . March 11, 2009 SECTION D. COUNTY LINE AND IN-CITY TERMINAL RESERVOIR METER CALIBRA nON AND MAINTENANCE i. General This section refers only to the County-Line and In-City Terminal Reservoir Meters. The term "meter(s)" includes the primary meter.itself (most of the primary meters in the SFPUC's water system are Venturi-type flow meters) as well as any and all of the associated equipment used to measure, record, and transmit flow and water level data. The metering equipment associated with the primary metering device (also referred to as the secondary metering equipment) includes differential pressure transmitters, recorders, telecommunications equipment and the portion of the SFPUC's Supervisory Control and Data Acquisition (SCADA) System that is used to transmit flow and water level measurements from the water meter to the computer terminal that records the measured data. The County-Line and In-City Terminal Reservoir meters, their general locations, and their associated metering equipment are listed in Table 4. 2. Frequency and Type of Work to be Performed The meters, water level sensors, and associated metering equipment are to be inspected, tested, calibrated, and maintained according to the applicable meter calibration and maintenance frequency specified in Table 5. 3. Components of the Calibration and Maintenance Work 17 March i i, 2009 The SFPUC will contract with an independent metering consultant to perform periodic inspections, testing, servicing and calibrations of the meters and metering equipment for the County-line meters and In-City Terminal Reservoirs. The metering consultant's calibration and maintenance work wil include the following components: . · Annual Pitot Tube Tests: Pitot tube flow tests shall be performed once a year on all . Venturi-type flow meters. See Sections 4.b and 4.c for further detaiL. · Quarterly Secondary Meter Equipment Testing and Calibration: The secondary metering equipment shall be tested for accuracy and calibrated quarterly at five input levels (0%, 25%, 50%,75% and 100% of the full range of flow). See Section 4.a for further detaiL. · Cleaning: Clean and remove dust, oils, dirt, etc. from all instruments. · Flushing: Flush and clean Venturi tube differential pressure (D/P) sensing lines. · Inspecting: Inspections for mechanical fatigue, leaky pipes and fittings, worn parts, and improper operation of electrical/electronic equipment. · Lubrication: Mechanical parts shall be lubricated as needed. 4. Calibration Procedures The metering consultant shall continue to calibrate and maintain the County-line meters and metering equipment listed in Table 4 in accordance with the frequency of work specified in Table 5. The work includes documenting meter readings and accuracy before and after calibration. Specific tasks to be completed by the metering consultant are as follows: a) Quarterly testing and calibration. The secondary metering equipment shall be tested and calibrated quarerly using NIST Traceable test equipment, and a "dead weight tester." 18 March i i, 2009 The system loop error for the secondary metering equipment is determined by connecting its output to the differential pressure transmitter and adjusting the dead weight tester to 5 places over the full range of flow: 0%, 25%, 50%, 75% and 100%, while all instruments in the loop are connected. For water level transmitters, provide simulated test head equal to full range of the transmitter being calibrated, comparing the simulated test head to its 4-20 miliamp output signal to determine transmitter error and calibration requirements. The system loop error for the secondary metering equipment may not exceed +/-2%. The individual components of the secondary metering equipment shall also be tested at the same 5 input levels and calibrated as necessary to ensure the error of the system and individual components does not exceed +/- 2%. b) Anual Pitot Tube Testing and Calibration. Annual Pitot tube testing shall be conducted for a comparison of flow totalized by the Pitot tube test equipment and the totalizer used by the SFPUC for water measurement and biling purposes. Annual Pitot tube flow testing shall be performed on all flow meters for assessment of Venturi error using the Annubar continuous flow method at 22%ofthe pipe radius. Pitot tube flow testing must be conducted continuously for a minimum of 30 minutes per test. The Pitot tube flow tests are first performed before any of the secondary metering instruments are calibrated to determine the total system error (system consisting of the primary metering device and secondary metering equipment). Once the total system loop. error has been established, perform secondary loop instrument testing and calibration as per the quarterly testing and calibration procedures described in 4.a above. If the total system error exceeds +/- 2% after calibration of the secondary metering equipment, minor adjustments to the differential pressure transmitter shall be made to correct (calibrate) the error in the Venturi meter. Repeat Pitot tube testing must be performed after the individual instrument calibration and differential pressure transmitter adjustments have been performed to establish that total system loop error is within +/- 2%. 19 March 11, 2009 c) Pitot tube testing shall be conducted at a flow rate representing the typical flow for the meter (and, if operationally possible, at three different flows ranging from a minimum to near maximum capacity flow). d) The metering consultant shall perform the meter testing and calibration procedures utilizing the meter characteristic curves (for example, the pressure drop vs. flow for a Venturi meter) that have been obtained during previous meter calibration and maintenance work. e) During each quarerly site visit, the metering consultant shall tnspect, assess and document the condition of all metering equipment, including meter, gauges, indicators, recorders, transmitters and other instrumentation, used in the measurement and recording offlow rates and cumulative flow totals and shall document all operational problems with. the calibration instruments and meters during the calibration process. Problems may include air entrainment, leakage, flow disturbance and unstable meter readings. f) Prior to each quarterly site visit, the metering consultant shall review prior calibration records and reports for each meter to determine if previously-identified errors or equipment deficiencies were corrected as previously recommended. g) Each quarter, the metering consultant shall submit a final report (See Section 6) containing all of the calibration results for each meter tested and calibrated during the quarter. The metering consultant's report shall include a narrative description of the work conducted on each meter and meter calibration reports for the individual metering equipment. The quarterly report shall also address deficiencies that were not previously corrected according to the recommendations made in the prior report. 5. Calibration Instruments The instrument used for flow testing of the primary meter (Venturi) must meet the accuracy standards required by the American Water Works Association (AWWA), and be 20 March i i, 2009 capable of measuring actual flows with an error of less than +/- 2%. If a particular calibration instrument is not rated for accuracy by the A WWA, its accuracy wil be determined by reference to its manufacturer's representations as to accuracy. 6. Calibration Reports Within foureen (14) working days after the beginning of each quarter, the metering consultant shall submit a written progress report of the work performed during the previous quarter. Each quarterly report wil describe the results of the meter calibrations and any other tasks performed. The report wil also include comments regarding any observations of abnormal conditions and any recommendations regarding these meters and their related equipment. The reports must include complete descriptions and status of meters and related equipment, dates and times of service, all calibration specifics, pipeline dimensions, range of flow rates and totalized volumes, before and after error analysis and accuracy levels achieved, testing equipmentused, and the name(s) of the person(s) that performed the work. When appropriate and necessary, the metering consultant shall provide recommendations for improving the accuracy and reliability of the equipment and/or the methods of data collection. If, in the opinion of the metering consultant, the condition of a meter or its associated metering equipment is found to be defective, damaged, or otherwise in need of immediate repair or replacement, the metering consultant shall: 1) promptly notify the appropriate SFPUC personnel of the problem and recommend a solution to the problem so that the SFPUC can determine how to address it and, 2) include the problem description in its quarterly report. - 21 March 11,2009 FIGURE 1 Golden Gate Bridge Pacific Ocean Bay Bridge San Francisco San Francisco Bay Lake Merced CITY AND COUNTY 4 OF SAN FRANCISCO 6 SAN MATEO COUNTY Lake Merced Pump Station G),CI,~ . 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B a y D i v i s i o n P i p e l i n e N o . 4 Pu l g a s - B a y D i v i s i o n P i p e l i n e N o . 1 Pu l g a s . B a y D i v i s i o n P i p e l i n e N o . 2 Pu l g a s . B a y D i v i s i o n P i p e l i n e N o . 3 Pu l g a s . B a y D i v i s i o n P i p e l i n e N o . 4 Cr y s t a l S p r i n g s R e s e r v o i r O u t f a l l Ha r r y T r a c y W T P E f f u e n t . S u n s e t S u p p l y Ha r r y T r a c y W T P E f f u e n t . S a n A n d r e a s S u p p l y Cr y s t a l S p r i n g s . s a n A n d r e a s P i p e l i n e Cr y s t a l S p r i n g s P u m p S t a t i o n . S u n s e t S u p p l y Cr y s t a l S p r i n g s P u m p S t a t i o n . C r y s t a l S p r i n g s N o . Cr y s t a l S p r i n g s B a l a n c i n g R e s e r v o i r Sa n t a C l a r a V a l l e y W D I n t e r t i e Sa n J o a q u i n P i p e l i n e N o . 4 ( P l a n n e d ) Ea s t B a y M U D I n t e r t i e ( P l a n n e d ) Ba y D i v i s i o n P i p e l i n e N o . 5 ( P l a n n e d ) (n o t s h o w n o n t h i s m a p ) (n o t s h o \ M o n t h i s m a p ) (n o t s h o w n o n t h i s m a p ) 2 S u p p l y FI G U R E 3 LO C A T I O N Al b e r s R o a d , S o u t h o f O a k d a l e i n S l a n i s l a u s C o u n t y Sa e a s S a n J o a q u i n P i p e l i n e N o . 1 sa e 8 S S a n J o a q u i n P i p e l i n e N o . 1 Sa A n t o n i o P u m p S l a t l o n Sa A n t o n i o P u m p S l a t i o n Su n o l V a l l e y W a t e r T r e a t m e n t P l a n t Dr i s c o l l R o a d i n F r e m o n t sa e a s I r v i n g t o n B a y D i v i s i o n P i p e l i n e N o . Mi s s i o n B o u l e v a d i n F r e m o n t sa e a s I r v i n g t o n B a y D i v i s i o n P i p e l i n e N o . Ha s s l e r R o a d a t P u l g a s V a l v e L o t sa e a s P u l g a s B a y D i v i s i o n P i p e l i n e N o . sa e a s P u l g a s B a y D i v i s i o n P i p e l i n e N o . sa e a s P u l g a s B a y D i v i s i o n P i p e l i n e N o . ca n a d a R o a d n e a r P u l g a s T e m p l e Ha r r T r a c y W a t e r T r e a t m e n t P l a n t Ha r r T r a c y W a t e r T r e a t m e n t P l a n t Cr s t a l S p r i n g s P u m p S l a t i o n Cr s t a l S p r i n g s P u m p S l a t i o n Cr s t a l S p r i n g s P u m p S l a t i o n ca n a d a R o a d n e a r P u l g a s T e m p l e Mi l p i t a s B o u l e v a r d i n M i l p i t a s To b e d e t e r m i n e d To b e d e t e r m i n e d To b e d e t e r m i n e d . L a w r e n c e L 1 v e n n o r e Na t i o n a l L a b o r a t o r y Co n n e c t i o n t o Sa n J o a q u i n P i p e l i n e s ~\ " ' ~ a n J o a q u i n P i p e l i n e M e t e r s - " " ; ; 0 ; 9 " : " " ' ( i 9 ) , ~ , G 3 , f B Lo c a t e d n e a r O a ~ Ca l a v e r a s Re s e r o i r Lo c a t i o n s o f S y s t e m I n p u t a n d I n - L i n e M e t e r s Table 1 Base Usage (mgd) and Allocation Rates (1 )(2)(3)(4)(5) (6)(7)(8) Usage Definition 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 1. Gross S.F. Co. line 8.1 79.5 78.3 75.7 2. Daly City portion 8.2 0.2 0.2 0.2 3. Net S.F.(1-2)79.3 78.1 75.5 4. Other suburban raw water 8.4 0.4 0.5 0.7 5. Other suburban treated water 8.5 4.1 3.4 3.9 6. Total other suburban (4+5)4.5 3.9 4.6 7. Total City usage (3+6)83.8 82.0 80.1 8. Total wholesale usage 8.8 167.4 164.4 175.8 9. Total system usage (7+8)251.2 246.4 255.9 10. Wholesale alloc. rate (819)66.63% 66.72%68.70% 11. City alloc. rate (100%-10)33.37%33.28%31.30% 12a. HHWPD input (Oakdale)8.12 194.7 202.6 227.3 12b. Deliveries to LLNL 8.12 -0.4 -0.9 -0.9 12c. HH to San Ant. Res.8.12 -3.8 -1.8 -11.6 12d. Sunol ValleyWTP 8.12 28.5 29.4 17.6 12e. Harr Tracy WTP 8.12 45.2 40.4 41.2 12f. Raw water deliveries 8.12 0.4 0.4 0.7 12g. Deliveries to Coastside Co. WD 8.12 1.8 1.6 2.1 12h. Crys. Sprs. 8al. Res.8.12 0.0 0.0 0.0 12i. Spil to CS Res.8.12 -19.9 -42.6 -37.1 12j. Terminal Reservoirs 8.12 0.0 0.0 0.0 12k. Other sources 8.12 0.0 1.9 3.8 13.Total system input 8.13 246.5 231.0 243.1 14. Jt. sys. loss red. fact.(9113)1.0000 1.0000 1.0000 15. Daly City red. factor (311 )0.9975 0.9974 0.9974 16. Total suburban (6+8)171.9 168.3 180.4 17. Suburban red. factor (8116)0.9736 0.9768 0.9745 18. HHWPD Deliveries above Oakdale 8.18 19. HH Reduction Factor 8.19 99.56% Me t e r 1 2 3 4 5 6 A Me t e r 7 8 9 Ta b l e 2 Lo c a t i o n s o f S F P U C C o u n t y - L i n e M e t e r s a n d I n - C i t y T e r m i n a l R e s e r v o i r s Co u n t y - L i n e M e t e r s Pi p e l i n e Su n s e t Su t r o La k e M e r c e d O u t f a l l Lo c a t i o n La k e M e r c e d P u m p S t a t i o n La k e M e r c e d P u m p S t a t i o n La k e M e r c e d P u m p S t a t i o n Sa n A n d r e a s N O . 2 Cr y s t a l S p r i n g s N o . 1 Cr y s t a l S p r i n g s N O . 2 Ju n i p e r D S e r r a ( H w y . 2 8 0 ) S o u t h o f B e l l e A v e . PG & E M a r t i n S e r v i c e C e n t e r Y a r d Ta m a s c o C t . S o u t h o f Su n n y da l e A v e . Sa n A n d r e a s N O . 3 ( P l a n n e d ) To b e d e t e r m i n e d In - C i t y T e r m i n a l R e s e r v o i r s Re s e r v o i r Su n s e t R e s e r v o i r Un i v e r s i t y M o u n d R e s e r v o i r Me r c e d M a n o r R e s e r v o i r Lo c a t i o n 26 t h A v e n u e a n d O r t e g a Un i v e r s i t y A v e n u e a n d B a c o n 23 r d A v e n u e a n d O c e a n Me t e r 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 B C D& E Ta b l e 3 Lo c a t i o n s o f S F P U C S y s t e m I n p u t a n d I n - L i n e M e t e r s Pi p e l i n e Sa n J o a q u i n P i p e l i n e N O . 1 Sa n J o a q u i n P i p e l i n e N O . 2 Sa n J o a q u i n P i p e l i n e N O . 3 Sa n A n t o n i o P i p e l i n e Su n o l V a l l e y W T P E f f l u e n t Ca l a v e r a s P i p e l i n e Ir v i n g t o n - B a y D i v i s i o n P i p e l i n e N O . 1 Ir v i n g t o n - B a y D i v i s i o n P i p e l i n e N O . 2 Ir v i n g t o n - B a y D i v i s i o n P i p e l i n e N O . 3 Ir v i n g t o n - B a y D i v i s i o n P i p e l i n e N O . 4 Pu l g a s - B a y D i v i s i o n P i p e l i n e N o . 1 Pu l g a s . . B a y D i v i s i o n P i p e l i n e N O . 2 Pu l g a s - B a y D i v i s i o n P i p e l i n e N O . 3 Pu l g a s - B a y D i v i s i o n P i p e l i n e N O . 4 Cr y s t a l S p r i n g s R e s e r v o i r O u t f a l l Ha r r y T r a c y W T P E f f l u e n t - S u n s e t S u p p l y Ha r r y T r a c y W T P E f f l u e n t - S a n A n d r e a s S u p p l y Cr y s t a l S p r i n g s - S a n A n d r e a s P i p e l i n e Cr y s t a l S p r i n g s P u m p S t a t i o n - S u n s e t S u p p l y Cr y s t a l S p r i n g s P u m p S t a t i o n - C r y s t a l S p r i n g s N O . 2 S u p p l y Cr y s t a l S p r i n g s B a l a n c i n g R e s e r v o i r Sa n t a C l a r a V a l l e y W D I n t e r t i e Sa n J o a q u i n P i p e l i n e N O . 4 ( P l a n n e d ) Ea s t B a y M U D I n t e r t i e ( P l a n n e d ) Ba y D i v i s i o n P i p e l i n e N O . 5 ( P l a n n e d ) Lo c a t i o n Al b e r s R o a d , S o u t h o f O a k d a l e i n S t a n i s l a u s C o u n t y Sa m e a s S a n J o a q u i n P i p e l i n e N o . 1 Sa m e a s S a n J o a q u i n P i p e l i n e N O . 1 Sa n A n t o n i o P u m p S t a t i o n Sa n A n t o n i o P u m p S t a t i o n Su n o l V a l l e y W a t e r T r e a t m e n t P l a n t Dr i s c o l l R o a d i n F r e m o n t Sa m e a s I r v i n g t o n B a y D i v i s i o n P i p e l i n e N O . 1 Mi s s i o n B o u l e v a r d i n F r e m o n t Sa m e a s I r v i n g t o n B a y D i v i s i o n P i p e l i n e N o , 3 Ha s s l e r R o a d a t P u l g a s V a l v e L o t Sa m e a s P u l g a s B a y D i v i s i o n P i p e l i n e N o . 1 Sa m e a s P u l g a s B a y D i v i s i o n P i p e l i n e N O . 1 Sa m e a s P u l g a s B a y D i v i s i o n P i p e l i n e N O . 1 Ca n a d a R o a d n e a r P u l g a s T e m p l e Ha r r y T r a c y W a t e r T r e a t m e n t P l a n t Ha r r y T r a c y W a t e r T r e a t m e n t P l a n t Cr y s t a l S p r i n g s P u m p S t a t i o n Cr y s t a l S p r i n g s P u m p S t a t i o n Cr y s t a l S p r i n g s P u m p S t a t i o n Ca n a d a R o a d n e a r P u l g a s T e m p l e Mi l p i t a s B o u l e v a r d i n M i l p i t a s To b e d e t e r m i n e d To b e d e t e r m i n e d To b e d e t e r m i n e d TABLE 4 SFPUC COUNTY~LINE METERS, IN-CiTY TERMINAL RESERVOIRS, AND ASSOCIATED METERING EQUIPMENT County-Line Meter Meter Type Location 1. Sunset 60" Venturi Lake Merced Pump Station Associated Metering .Rosemount DIP transmitter Equipment:.Honeywell recorder.SCADA 2.Sutro 36" Venturi Lake Merced Pump Station Associated Metering .Rosemount DIP transmitter Equipment:.Honeywell recorder.SCADA 3.Lake Merced Outfall 16" Mao. Meter Lake Merced Pump Station Associated Metering .Honeywell recorder Equipment:.SCADA 4.San Andreas NO.2 36" Venturi Junipero Serra (Hwy. 280) south of Belle Avenue Associated Metering .Yokogawa DIP transmitter Equipment:.NLS display .AGM electronics.Honeywell recorder.SCADA 5.Crystal Springs NO.1 44" Venturi PG&E Martin Service Center Yard Associated Metering .Yokogawa DIP transmitter Equipment:.NLS display.AGM electronics.Honeywell recorder.SCADA 6.Crystal Springs NO.2 60" Venturi Tamasco ct. south of Sunnvdale Avenue Associated Metering .Yokogawa DIP transmitter Equipment:.NLS display.AGM electronics.SCADA In-Citv Terminal Reservoirs 1.Sunset Pressure 26m Avenue and Ortega Transducer Associated Metering .Honeywell recorder Equipment:.SCADA 2.Merced-Manor Pressure 23ra Avenue and Ocean Transducer Associated Metering .Honeywell recorder Equipment:.SCADA 3.University Mound Pressure University Avenue and Bacon Transducer Associated Metering .Honeywell recorder .Equipment:.SCADA TABLES METER CALIBRATION AND MAINTENANCE FREQUENCY METERI FREQUENCY WORK TO BE PERFORMED EQUIPMENT (See Work Codes Listed Below) Quarterly Semi-Annual CA CL FL IN LU PT Annual Venturi Meters X X X X X (1 )(1 ) Magnetic Meters X X X X (2) (2)(2) Yokagowa DIP X X X X X Transmitters Rosemount DIP X X X X X Transmitters Honeywell X X X X Recorders Water Level Sensors X X X X (Pressure Transducers) SCADA Electronics X X AGM Electronics X X NLS Digital Displays X X Electrostatic 24V DC X X Power Supplies (3) ASCO Solenoids X X X X (4) WORK CODES: CA = CALIBRATE; CL = CLEAN; FL = FLUSH; IN = INSPECT; LU = LUBRICATE; PT = PITOT TUBE TEST. NOTES: (1) Inspection and flushing requirements for Venturi meters refer to the pressure tubing from the meter to the differential pressure transmitter. (2) May calibrate using clamp-on meter where conditions allow. Inspection and cleaning requirements for magnetic meters refer to the sensors or probes that are inserted through the pipe walL. (3) Adjust voltage if necessary. (4) Replace rubber ware as needed. III-wIIIIci~z~xwu.ow:J..~ .- ~ I ~ 0 l - I- ~ ~ as t f a ~ Z l - I u . : J U 0 I - g ~ ~ .. c i : J ~ I I in ~ ff 0 ~ I - o ) - I- i x II c i :J Z .~ ~ ~ ¡ j w i x .. c . o * i * ~ **IIw:J..~en~om..~..ciZu. moi.i:o:eQI~ ~I ClH~ ~ ~ u l D '0 ~ U ) a: : i . v .. M o - - O' . - ~I G f ~ - ;; l J " l N - ~ ~ O'00.-00O'ir~ ui M M N ui 0 .. ' . . - M 0 ui 0 0 N- i r lD 00..O' .. - . ui .-.- -uiui .v00uiui", : t --M00 lD.v '*.N.¿lD -- O ' - - N 0 0 . - q O ' - - q- - - ' c ñ M O ' N .. u i M . lD ' i r N - lD . - 0 0 M M .v . v . v 00 O ' O' 0 o . - cñ 0 0 -- N .- . . 0' m --.v . v lDoN.. '..00m-- .v . M O ' .- u i .- M -- - c ñ lD l D N . - N' . . ' N .v . v '* u i l D m M N M M .- 0 0 0 ui c ñ 0 0 - ui . - N . - m .v . v M. . M 0 ' * . . . - . . ' * L J ui . - O N ' - N O O O M N .- O ' u i - - c : M O O N . - .- - - - ' 0 0 m . . i r I . N - u i .. 0 0 N . - O O l D u i .. 0 0 0 ' 0 0 u i O O - - N' u i - l D - N ' l D ' . - - 0 0 ' lD l D . - O O N . - M -- - - M M .v . v . v . v .v . v . v . v . v . v VlCl+-oZ M N M O'.!oM..lD O ' 'ı ~~ ~ lD O' ~ ' ı ~ ~ ~ ~ Q 1 : : lD . . ; ; '+ t i U o e " 0 Vl c . i : ro r o +- i : + - i: - ' C ro . . r o el 0 e l '¿ 3 ; zECl+-Vl;:Vl ro V l :: ' ¿ 1: V l V ) ~ ~ § ro ~ § ' e ._ " 0 ti c i Clix r o +- '+ C ' ë . o 0 r o Vl C U ro 0 O ' ~ . ~ 0 rc ' ü 0 0 el C l 0 +- . . 0 Cl a . N Z C l ~ r o o L L C E" O - o 0 Cl C l C l o M t; t J t J O J J' C l C l i x "Q " Q - 0 rc i . l i Q ) c: a . a . t J o C l :r ~ £ l £ 00~M..lD --îCo''¡u::..+-VlCoU"0Cl+-U(J(J..a. ro 3 ; C U .2 - 0 ti C l Cl . . ix ~ ~ ' è tí a . .~ ' ı e ( J a. ~ ro ' ı ¡ ¡ 25 ~ ~ Q ) OM t J ~ ~ ~ ~ V l ( J -0 c ~ : g ~ 2 ~ 3 ; ~ r n ~ '0 ~ ~ . ~ 0: ; ; ~ a : +-ClzECl+-Vl;:Vl ui .v . v . v lD O'.!oM..lD'+oVl ro+-croel+-ClzECl+-Vl;:vi ~ O' ~ ~ ~ M r o .. a . lD'+oVlroa. 3;U-0Cro..croel..ClZ"0Cl+-UCl '0..a. '+oCl ..ro.. C l vi + - Cl ~ V l ro . . ~ ~ ~ .. . ~ i . 3; C ~ .. l D . .. N N M -- ' o . - ' o u i o 0 N- - - ' N .v . v ::0-Cl +- i x Vl ( J Cl : : .. c ~ ( J c ; : Cl ix ro ~ a. ~ 'u C l c 0 ..3; o(o¡:a.~.. r o +- : : c c o c ~ c i ..c::oEci+-CClE~ 00~~lD'ıVl rotoa.Cl ixc:oNMVlUc:c: jl : Vl3.2:êVl roVl+-C::oEro"0croVl+-UCl '0..a.co"0ClVlro .0 Cl C l +- . . ro r o E E :¡ ¡ : Vl V l L. L . U U :J : J a. a . LL L L Vl V l N M Vl+-ClVlVl c:..Cl+-ro3; -- u i - - M -- . - O ' u i .. - - O ' . - N- c ñ 0 0 r l 00 . . 0 . . M l D . . . . .. - M ' . - ' N ' ui l D .v . v . v . v c"i i i c ro V l 0 m O ' , ¡ .. i . " V i t 1 : : : o 0 0 - Z U u c c : .. 0 " 0 'ı " . c 2: ~ ~ Cl c " 0 Vl c C l ~ 0 c . +- U ~ Cl V l C l Vl V l . . C 0 r o ~ Ò 3 ; 00 u i - - ui l D O ' M M M 3; 3 ; 3 ; :J : J : J U U U Vl::c. 00.!oM..lDVl roClucroro Vl . 0 c c o 0 ". ¡ ' U 'e C l -0 V l c: ~ ro a . Õ 3 ; i- u --VlCl..::.t-0cCla.xClo~ ~.0~'+oCl o tiro..Cl ;:ro..roCl;:Ji"0(J+-...9 P(J3 VlCl..::.t-0cCla.xCloi-~Vl::c. 00~M ~. . 00 l D o V l r: r o .. 0 C l ~ ~ ~ c. ~ ti r o :: . 0 o c .c 0 .. - 0 -- C l 9 : G ~ m - 0 o g a . tí ~ ~ +- ~ ~ Ce o C l OJ 0 t ) ~ .§ . ~ ~ ~ ro 0 r o :t r c ¡ : l I c: - 0 r o C l Cl ( J U 0 Cl X 0 c . ~ u : r o 3 ; o-0c.o"0ClVl ro .0 N:. ui l D O'ooN.....-~.- '+o.-Cltiroa. N:.+-CClE..Uro+-~Cl (J~ ATIACHMENT K-2 WHOLESALE CUSTOMERS' SHARE OF THE BOOK VALUE OF REVENUE FUNDED CAPITAL EXPENDITURES "PRELIMINARY - TO BE SUBSTTUTED WITH FINAL 6/30/09 VALUES" ¡Seetlon 5.03) (11 (2)13)(4)(51 (6)(7J (B)(9)Project CWIPasof FY 2008.09 Reduction for CWIPas Water Related Wholesale No.Project Description Rate Class 6/30/08 Expenditures 02A Funding 6/30/09 CWIP Share A.Water Enterprise 1 Regional Projects CUW352 Alameda Creek Fishery Joint S 2,007,607 S 224,582 S 2,232,189 S SCUW353 Seismic Upgrade (§ Hayward Fault Joint S 3,129,234 S 1,967,625 S 5,096,859 S S CUW354 LOWER CRYSTAL SPRINGS DAM-REV-5FWD Joint S 7,046,944 S 1,086,262 S 8,133,206 S SCUW355 STANDBY POWER FACILITES Joint S 3,715,276 S 6,596,849 S 10,312,125 S SCUW357 Adit leak Repairs Joint S 783.S 1,129 S 1,912 S SCUW359Irvington Tunnel Joint S 21,391,129 S 5,176,713 S 26,567,842 S S CUW359 Joint S 7,837,176 S S 7,837,176 S SCUW361JointS368,057 S 1,383,959 S 1,752,016 S SCUW361JointS1,255,545 S S 1,255,545 S SCUW361Pulgas Balancing Reservoir Joint S 1,248,002 S S 1,248,002 S SCUW361JointS570,179 S S 570,179 S SCUW361JointS712.921 S .. S 712,921 S SCUW363SCADA Phase II Joint S 1,335,371 S 1,738,045 S 3,073,416 S SCUW363JointS1,062,050 S S 1,062,050 S SCUW365Cross Connection Control Joint S 3.635,172 S 547,801 S 4,182,973 S S Capitalized in FY 200~-o9CUW367 HTWP LT lmpr Joint S 8,011,348 S 2,479,731 S 10,491,079 S SCUW368;. ,Joint S 23,640,601 S S 23,640,601 S SCUW368 BDPL Hydraulic Capacity Joint S 17,556,905 S 4,200,442 S 21,757,347 S SCUW368JointS2,579,847 S S 2,579,847 S SCUW370 Pipeline Readiness Joint S 5,320,934 S 328,070 S 5,649,004 S SCUW371 CSPS and Pipeline Joint S 11,420,770 S 3,872,779 S 15,293,549 S SCUW372 University Mound (N)Joint S 4,624,981 S 1,068,147 S 5,693,128 S S CUW373 ~5JPL Joint S 19,479,341 S 6,023,849 S 25,503;190 S SCUW373JointS7,199,051 S S 7,199,051 S SCUW374 Calaveras Dam Joint S 31,171,669 S 4,314,430 S 35,486,099 S SCUW374JointS2,366,343 S S 2,366,343 S SCUW378 C5PL #2 Joint S 7,453,098 S 913,369 $8,366,467 S SCUW379 5APL #3 Joint S 5,728,934 S .588,346 S 6,317,280 S SCUW380 BDPK "3&4 Crossovers Joint S 3,855,357 S 1,083,888 S 4,939,245 S.SCUW381; .Joint S 5,450,995 S S 5,450,995 S SCUW381 SVWTP Expansion Joint S 53,222 S 3,090,520 S 3,143,742 S SCUW381. .Joint S 97,373 S S 97,373 S SCUW382 SVWTP Treated Water Reservoir Joint S 5,799,505 S 575 S 5,800,080 S S'CUW384 Tesla Joint S 6,102,621 S 7,444,942 S 13,547,563 S SCUW386 SAPS X-CONNECT & PUMP IMP 96A UEa Joint S 1,374,491 S 971,625 S 2,346,116 S SCUW388fPEIRJointS896,476 S 1,641,717 S 2,538,193 S SCUW388JointS1,331,676 S S 1,331,676 S SCUW390 Desalination Pilot Joint S 175,165 S S 175,i65 S SCUW391Baden/San Pedro Valve Lots Joint S 3,964,642 S 948,589 S 4,913,231 S SCUW392Program Management Joint S 2,452,297 S 5,081,444 S 7,533,741 S SCUW393BDPL 114 Condition Assessment Joint S 25.071 S 294,634 S 319,705 S SCUW394 Watershed Envirof!ent Improvement Joint S 142,924 S 96,027 S 238,951 S S Capitalized in FY 2008-09CUW101 SAN ANDREAS PLANT EXPANSION #1 Joint S 182 S 96,027 S 96,209 S 67,443 CUW111 LOWER CRYSTAL SPRINGS DAM-REV-5FWD Joint S 40,436 S S 40,436 S 28,346CUW151 Baden PS Joint S 921 S 26,760 S 27,681 S 19,404CUW161 Water Treatment Facilities Joint S 75,801 S 605 S 76,406 S 53,561 CUW178 SAPS X-CONNECT & PUMP IMP 96A UEB Joint S 104,902 S S 104,902 S 73,536 CUW202 J Joint S 50,808 S S 50,808 S 35,616CUW202 Replace pecp Joint S 285,003 S 64,256 S 349,259 S 244,831CUW202JointS2,365 S S 2,365 S 1,658 CUWl27 SCADA Joint S 50,029 S 2,481.274 S 2,531,303 S 1,774,443CUW356New Crystal Springs Bypass Tunnel Joint $13,992,264 S 5,560,862 16,028,397 S 3,524,729 S 2,470,835 CUW358 Sunset (N)Joint S 52,494,764 S 4,887,980 55,806,081 S 1,576,663 S 1,105,241 Capitalized in FV 2008-09CUW387 Tesla Portal Disinfection Joint S 2,377,262 S (1,996)1,223,945 S 1,151,321 S 807,076'OW"')Joint S 45,413 S S 4.5,413 S 31,835. CUW135 New Lines and Bypass Valves Joint S 153,983 S 620,156 S 774,139 S 542.671 CUW135 Joint S 8,860 S S 8,860 S 6,211CUW143JointS5,656 S S 5,656 S 3,965CUW143 HH Water Treatment Plan Joint S 709,972 S 8,817 S 718,789 S 503,871 CUW143 Joint S 96,292 S S 96,292 S 67,501CUW186 5VWTP IMPROVEMENT PROJECT -eP~-5FWD Joint S 3,604 S S 3,604 S 2,526CUW206;Joint S 4,365 S S 4,365 S 3,060CUW206 Tesla PortallThomas Shaft Emergency Disinfection Joint S 283,620 S 5,665 S 289,285 S 202,789 CUW206 Joint S 227,004 S S 227,004 S 159,130CUW231 Millbrae labs Joint S 81,856 $34.685 S 116,541 S 81,695 CUW236 TEL5A/5JVH WQ MONITORING IMPR Joint S 152,963 S S 152,963 S 107,227CUW366; .Joint S 16,523 S S 16,523 S 11,583CUW366 HTWP ST Improvements Joint S 1,398,798 S 5,732,626 7,131,424 S SCUW366 .Joint S 1,452,901 S 1,452,901 S SCUW120 WATER QUALITY PLANNING STUDY Joint S 577 $S 577 S 404CUW164WATER VULNERABILITY STUDY-UEB Joint S 479 S S 479 S 336CUW1815TAND8Y POWER FACILITIES Joint S 5,905 S S 5,905 S 4,139CUW210 Milbrae Administrative Bldg Remodel Joint S 7,803 S 321,553 S 329,356 S 230.879CUW220 Calaveras Dam Evaluation Joint S 308,971 S S 308,971 S 216,589. CUW227 Watershed Facilties and Fencing Joint S 190.552 S 206,448 S 397,000 S 278,297CUW228 Watershed Roads Joint S 358,434 S 85,337 S 443,771 S 311,083CUW232 Crystal Springs Dam Discharge Joint S 363,823 S S 363,823 S 255,040CUW242J- ..Joint S 311,548 S 22,741 S 334,289 S 234,337Demolition of Unsafe StructuresCUW242 Joint S 315 S S 315 S 221CUW261 Regional R&R - Storage Joint S 275,694 S 277,958 S 553,652 S 388,110CUW262J- .Joint S 1,236,895 S 409,282 S 1,646,177 S 1,153,970Regional R&R - TreatementCUW262 Joint S 277,383 S S .27,383 S 194,445 'page 2 of 2 4/17/2009 ATTACHMENT K-3 25 YEAR PAYOFF SCHEÖULE FOR EXISITING RATE BASE WATER ENTERPRISE REGIONAL ASSETS AND ONE DIRECT WHOLESALE ASSET **PRELIMINARY - TO BE SUBSTITUTED WITH FINAL 6/30/09 VALUES** (Section5.03) Water Assets 6/30/09 Wholesale Share of Net Plant & CWIP (Attachment K-1)358,452,207 Interest Rate:5.13% Term:25 Monthly Principal & Interest Calculation:2,004,277 Annual Wholesale Revenue Requirement:24,051,326 Fiscal Yr Annual Year End Ending Principal Interest Payment (Wtr)Balance Jun-lO 6,848,259 17,203,067 24,051,326 331,603,948 Jun-11 7,207,954 16,843,372 24,051,326 .324,395,994 Jun-12 7,586,541 16,464,785 24,051,326 316,809,453 Jun-13 7,985,013 16,066,313 24,051,326 308,824,439 Jun-14 8,404,415 15,646,911 24,051,326 300,420,024 Jun-15 8,845,844 15,205,482 24,051,326 291,574,180 Jun-16 9,310,459 14,740,867 24,051,326 282,263,721 Jun-17 9,799,478 14,251,848 24,051,326 272,464,243 Jun-18 10,314,181 13,737,145 24,051,326 262,150,062 Jun-19 10,855,919 13,195,407 24,051,326 251,294,143 Jun-20 11,426,110 12,625,216 24,051,326 239,868,033 Jun-21 12,026,250 12,025,076 24,051,326 227,841,784 Jun-22 12,657,911 11,393,415 24,051,326 215,183,873 Jun-23 13,322,749 10,728,577 24,051,326 201,861,123 Jun-24 .14,022,507 10,028,819 24,051,326 187,838,616 Jun-25 14,759,019 9,292,307 24,051,326 173,079,597 Jun-26 15,534,215 8,517,111 24,051,326 157,545,382 Jun-27 16,350;127 7,701,199 24,051,326 141,195,254 Jun-28 17,208,894 6,842,432 24,051,326 123,986,361 Jun-29 18;112,766 5,938,560 24,051,326 105,873,594 Jun-30 19,064,113 4,987,213 24,051,326 86,809,482 Jun-31 20,065,428 3,985,898 24,051,326 66,744,054 Jun-32 21,119,335 2,931,991 24,051,326 45,624,719 Jun-33 22,228,597 1,822,729 24,051,326 23,396,122 Jun-34 23,396,122 655,204 24,051,326 0 Totals:338,452,207 262,830,943 601,283,150 Water . Page 4 of 1 4/17/2009 ATTACHMENT K-4 25 YEAR PAYOFF SCHEDULE FOR EXISTING RATE BASE HETCH HETCHY WATER ASSETS AND WATER-RELATED PORTION OF JOINT ASSETS **PRElIMINARY -TO BE SUBSTITUTED WITH FINAL 6/30/09 VALUES** (Section 5.03) Hetch Hetchy 6/30/09 Wholesale Share of Net Plant & CWIP (Attachment K-1)43,877,206 Interest Hate:5.13% Term:25 Monthly Pr'incipal & Interest Calculation:259,836 Annual Wholesale Revenue Requirement:3,118,033 Fiscal Yr Annual Year End Ending Principal.Interest Payment (HH)Balance Jun-10 887,814 2,230,219 3,118,033 42,989,393 . Jun-11 934,445 2,183,588 3,118,033 42,054,948 Jun-12 983,525 2,134,507 3,118,033 41,071,423 Jun-13 1,035,183 2,082,849 3,118,033 ,40,036,239 Jun-14 1,089,555 2,028,478 3,118,033 38,946,685 Jun-15 1,146,782 1,971,250 3,118,033 37,799,903 Jun-16 1,207,015 1,911,017 3,118,033 36,592,887 Jun-17 1,270,412 1,847,621 3,118,033 35,322,475 Jun-18 .1,337,138 1,780,,894 3,118,033 33,985,337 Jun-19 1,407,370 1,710,663 3,118,033 32577,967 Jun-20 1,481,290 1,636,743 3,118,033 31,096,678 Jun-21 1,559,092 1,558,940 3,118,033 29,537,585 Jun-22 1,640,981 1,477,051 3,118,033 27,896,604 Jun-23 1,727,172 1,390,861 .3,118,033 26,169,432 Jun-24 l,8i7,889 1,300,144 3,118,033 24,351,544 Jun-25 1,913,371 1,204,662 3,118,033 22,438,173 Jun-26 2,013,868 1,104,165 3,118,033 20,424,305 Jun-27 2,119,643 998,389 3,118,033 18,304,662 Jun-28 2,230,974 887,058 3,118,033 16,073,688 Jun-29 2,348,153 769,880 3,118~033 13,725,535 Jun-30 2,471,486 .646,546 3,118,033 11,254,048 Jun-31 2,601,298 516,735 3,118,033 8,652,751 Jun-32 2,737,927 380,106 3,118,033 5,914,824 Jun-33 2,881,733 236,300 3,118,033 3,033,091 Jun-34 3,033,091 84,941 3,118,033 0 43,877,206 34,073,607 77,950,813 Hetch Hetchy Page 5 of 1 4/17/2009 '" VI :¡ '"0 2! c 'r ; . ! ,. .. c( a i VI '"0c'~E::0CWVI2!:: in c ; ! l- I- " C W 0. c in '"Co in )( c( w ~g VI2! z N :: o - o ; t _ 0 (! 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N rÓ M Ñ 0. . " " 0' . . M MN C O - o ~ f ' N "" ~ 0 0' C D C D c6 å ~ - ¡g ~ ; : "' M ~ CD ' " 0 a N ~ 0 .. 0 ' . . 0' " . . ~r Ó ~ M N C D o ~ ~ ÑN - ~ a a a 6 ~ 0 ~ .. C D 0 cñ c ö C D - "' . . ~ o ~ N ¿Ñ r Ó ~ ~ ~ a: a : w w I - 3~ z ir 3 ~ mI- mm ü 00 ~ ~ w w U 0 ~ ~ w 0 : o 0 ~ 0 . a: a : 0 ~ ~ a . c : - . a: a : a . c ( ~ ~ ~ ~ Oc ( ë 5 b 0. ~ ~ 1 - • REVISED ATTACHMENT K-1 WHOLESALE CUSTOMERS SHARE OF NET BOOK VALUE OF EXISTING ASSETS AS OF JUNE 30, 2009 • (Section 5.03) Notes Water Hetch Hetchy Total Regional System Net Plant as of 6/30/09 1, 5 $485,580,249 1 $63,528,861 2 $549,109,110 Regional Construction VVork in Progress as 6/30/09 2 $35,072,164 3 $7,507,984 3 $42,580,148 Total Net Plant and Construction Work in Progress $520,652,413 $71,036,845 $591,689,258 Regional System Allocation Factor 3 70.1% 64.2% Wholesale Share of Regional System Net Plant $340,391,755 $40,785,529 $381,177,284 Wholesale Share of Construction Work inProgress 4 $11,025,550 $4,820,126 $15,845,676 Total Wholesale Share of Net Plant and CWIP $351,417,305 $45,605,655 $397,022,960 Interest Rate 5.13% 5.13% Term (Yrs) 25 25 Monthly Principal & Interest $2,081,055 ' $270,072 $2,351,127 Annual Wholesale Revenue Requirement Amount $24,972,661 $3,240,861 $28,213,522 Notes 1. FAACS 120D Report as of 6/30/09 2. CWIP based on balance as 6/30/09, with adjustments from the Agreed-Upon Procedures Report. See K-2 for details. 3. Fixed allocation factors based on dollar weighted 5-year average of J-Table allocation factors (2003-04 through 2007-08) 4, Projects CUW127 SCADA, CUW687/934 525 Golden Gate, and CUW690 Customer Care and Billing are specially allocated, see K-2 for details 5. A rounding difference of $3,846 was identified by the SFPUC relating to various cumulative prior year differences in net utility plant. Under Section 5.03D, the Parties agreed that the Wholesale Customers' share of net book values of existing regional assets as of 06/30/2008 are accurate. However, to match Attachment K to the FY08-09 Audited SRRC, the SFPUC will credit the 1984 Balancing Account for $79. Original Rate Base, FY08-09 SRRC $19,367,641 Adjusted Rate Base $19,367,562 1984 Balancing Account Credit $79 APPROVED IN ACCORDANCE WITH ARTICLE V, SECTION 6.03D OF THE WATER SUPPLY AGREEMENT BETWEEN THE CITY & COUNTY OF SAN FRANCISCO & WHOLESALE CUSTOMERS: CITY AND COUNTY OF SAN FRANCISCO Acting by and through its Public Utilities Co mission By: Edward Harrington General Manager Date: 3 (4 ‚2011 BAY AREA WATER SUPPLY AND CONSERVATION AGENCY Acting on behalf of the Wholesale Customers By: Date: Arthur R. Jensen General Manager 2011 • Page lof 4 Revised Attachment K-1 REVISED ATTACHMENT K-2 WHOLESALE CUSTOMERS SHARE OF REVENUE FUNDED CAPITAL EXPENDITURES CONSTRUCTION WORK IN PROGRESSAS OF JUNE 30, 2009 (Sectloh 6.03) (1) (2) (3) Rate Project No. Project Description Class (4) CWIP as of 6130/09 . (4a) Adjustments (4b) (5) Adjusted CWIP as of WatecrwR jeplated 06/30/09 (6) Wholesafe • Share Funding Source / Notes A. Water Enterprise 1. Regional Projects . CUW111/112 Lower Crystal Springs Dam Joint CUW127 SCADA Joint 52, 615 30,952 o 0 52,615 30,952 36,883 ACP196A 13,951 ACP/98A Split 64.3%/35.9%. Joint/City CUW135 New Lines and Bypass Valves Joint 69,818 (6,018) • 63,800 44.724 98A . CUW143 HH Water Treatment J'oint - 1167 (1,167) 0 0 ACP CUW168 Alameda liCP -EISIEIR Standbi Power Facilifies CUW181 Joint 26,428 5,905 o 0 26,428 5,905 18,526 ACP 4,139 ACP CUVV202 Replace PCCP . Thomas Shaft Roadway CUW205 Joint 414,754 530,329 0, a 414,754 530,329 290,743 ACP/96A/98A 371,761 96A1988 CUW208 Lawrence -Livermore . City o ' o 0 0 ACP CUW220 Calaveras Dam Evaluation Joint 308,971 0 308,971 216,588 ACP CUW227 Watershed Facilitiesind Fencing Joint CUW228 Watershed Roads Joint CUW231 Millbrae Labs Improvement Joint 235,658 443,771 58,081 0 0 0 235 ,658 443,771 58,081 165,19à ACP 311,083 ACP 40,715 ACP198B CUW236 Tesla/SJVH WO Monitoring Joint 5,596 (6,596) 0 0 98B CUW242 Demolltion of Unsafe Structures *Joint 2534 a 2534 P CUW248 SunoUNiles Dam Removal Joint 81 ,111 0 81111 , 561,879 ACP CUW253 WQ Projects Joint 72,144 0 72,144 50,573 ACP ' CUW261 Regional R&R - Storage Joint 706,584 0 706 684 , 495,386 ACP CUW262 Reglonal R&R - Treatment CUW263 Reglonal R&R - Transmission Joint Joint CUW264 Watershed Roads • Joint 575 ,064 1,433,996 • 198,163 0 0 0 575 , oe4 1,433,993 298 163 , 403,120 ACP 1,005,231 ACP, 138,912 ACP CUW354 Lower Clystai Springs Dam • CUW355 Standby Power Facilities Joint Joint • 857,235 37, 875 0 a 857,235 37, 875 600,922 ACP 26,550 ACP CUW356 New Crystal Springs Bypass Tunnel Joint 3,671,856 0 3,671,856 2573,971 96A/98A 0UW359/0UW12- lrvington Tunnel Joint 2,095,122 0 2,095,122 1,468,681 ACP CUW388 BDPL Hydrautic Capacity Joint 1,612,592 0 1,812,592 1,130,427 ACP CUW371 CSPS and Pipeline Joint CUW374 Calaveras Dam Joint CUW382 SVWTP Treated Water Resevoir Joint . 2 52441 : 661980 3Z153 0 0 0 221,690 644,618 32,153 155,404 ACP 381,777 ACP 22,539 ACP C11W384/C0W23i Tesla Disinfection ' Joint • 230,019 0 230,019 T 161,244 ACP CUW387 CSPL #2 . Joint 1,195,062 0 1,195,062 837,739 96A/28B • CUW392 Program Management . Special 979,694 (979,694) 0 0 Special CUW685 Emergency Operations Center Joint . 185 . 0 185 129 ACP CUW687I934 625 Golden Gate Joint . 15,797,879 0 1e97,679 0 will be paid for as iease in lieu of rent ,CUW690 Customer Care & Billing • Special 3,536,118 0 3,535,118 0 Note A W710 OCIP CU Special 2496,959 (2,496,959) 0 . 0 SpeCial TOTAL REGIONAL PROJECTS 38,561,597 (3,489,434) ..... 35,072,164 eleeee 11,025,560 2. Wholesale Direct None B. Hetch Hetchy Water & Power CUH703, . Priest Reservoir Bypass Joint 574 0 574 268 166 ACP CUI-1762 SJPL Repaira . Water 66,609 a 66,609 66,609 42,763 ACP CUH766 HH Security Improvements Joint 284,456 0 284,456 128,005 82,179 ACP CUI-1804 HH Roads Joint 567,503 0 .567,503 255,376 163,952 ACP CUH846 New Moccasin Penstock Power 543,074 0 543,074 0 0 ACP CUH931 Microwave Replacement Joint 4,156,642 D 4,156,642 1,870,489 1,200,854 ACP CUH941 HH SCADA Security & Control Joint 702,709 0 702,709 316,219 203,013 ACP CUH950 Penstock Renovation Power 561,636 0 561,536 0 0 ACP C1JI-1957 Moccasin Corrision Control Water 314,805 0 314,805 314,805 202,105 ACP CUH959 Moccasin Reservoir Water Quality Water 109,379 0 109,379 109,379 70,221 ACP CUI-1964 Watershed Land Purchase Water 47,768 0 47,768 47,768 30,667 ACP CUH976 HH Water R&R - Joint Facilities Joint 2,495,322 0 2,495,322 1,122,895 720,898 ACP CUH975 Fili Water R&R - Kirkwood Penstock Assessment Power 460,170 0 460,170 b 0 ACP OUH975 HH Water R&R - SJPL Rehabilitation/RR Lime Slaker Water 2,330,076 0 2,330,076 2,330,076 1,495,909 ACP CUH977 Facilities Maintenance - Water Joint 2,076,186 0 2,076,186 934,284 599,810 ACP CUI1998 Camp Mather Leach Field Joint 26,270 0 26,270 11,822 7,569 ACP TOTAL HETCH HETCHY WATER & POWER 14,743,078 0 14,743,078 7,507,984 4,820,126 TOTAL COMBINED WATER AND HHWP 53,304,675 (3,489,434) 49,815,242 7,507,984 15,845,676 !Vote A: CUW690 Qustomer Care & Billinq This project will be specially allocated. SFPUC will refiect $70,702,36 ($3,535,117.97 x 2%) as an adjustment ta the Balancing Account in favor of the Retail customers. Page 2 of 4 Revised Attachment K-2 REVISED ATTACHMENT K-3 (Section 5.03) ANNUAL PAYMENTS FOR WHOLESALE SHARE OF 6/30/09 NET PLANT & CWIP (WATER ASSETS) Revised for February 2013 Prepayment 6/30/09 Wholesale Share of Net Plant & CW1P: 351,417,305 Interest Rate: 5.13% Original Term: 25 Monthly Principal & Interest Calculation through 6/30/13: 2,081,055 Annual Wholesale Revenue Requirement through 6/30/13: 24,972,661 Fiscal Yr Ending Principal Interest Total Prepay- ment End Bal (6/30) Jun-10 7,110,596 17,862,065 24,972,661 344,306,709 Jun-11 7,484,069 17,488,591 24,972,661 336,822,640 Jun-12 7,877,159 17,095,502 24,972,661 328,945,481 Jun-13 13,715,985 11,256,676 24,972,661 315,229,496 0 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25 Jun-26 Jun-27 Jun-28 Jun-29 Jun-30 Jun-31 Jun-32 Jun-33 Jun-34 36,187,809 63,702,834 99,890,643 315,229,496 Note: The monthly supporting calculation for fiscal year 2012-13 is attached. Revised Attachment K-3 Monthly Calculations for Updated 1(-3 Schedule for FY 2012-13 Based on February 2013 Prepayment (Water) 6/30/12 Unpaid Balance Interest Rate: Origina!Term: Monthly Principal & Interest Calculation through 6/30/13 Anl')ual Wholesale Revenue Requirement through 6/30/13: Prepayment Date Month Beginning Ending Mo. Pmt Balance Principal (ll 6/30/12 n/a n/a 7/30/12 2,081,055 328,945,481 674,813 8/30/12 2,081,055 328,270,667 677,698 9/30/12 2,081,055 327,592,970 680,595 10/30/12 2,081,055 326,912,374 683,505 11/30/12 2,081,055 326,228,870 686,427 12/30/12 2,081,055 325,542,443 689,361 1/30/13 2,081,055 324,853,082 692,308 2/28/13 2,081,055 324,160,774 695,268 3/30/13 2,081,055 8,236,010 2,045,846 4/30/13 2,081,055 6,190,164 2,054,592 5/30/13 2,081,055 4,135,572 2,063,375 6/30/13 2,081,055 2,072,19� 2,072,196 Total (Rev K-3): 13,715,985 Current K-3 1�1:8,290,896 Additlonal Principal Amortized: 5,425,089 Interest (ll n/a 1,406,242 1,403,357 1,400,460 1,397,550 1,394,628 1,391,694 1,388,747 1,385,787 35,209 26,463 17,680 8,859 11,256,676 16,681,765 Total n/a 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 2,081,055 24,972,661 I 24,972,661 {1) Starting in March, the Prepayment is applied to the monthly Interest calculations and monthly p_ri.ncipal is calculated to maintain monthly principal and Interest $2,081,055 and the annual WRR amount at $24,972,661 resulting in no impact to the 6/30/13 balancing account compared to no prepayment being made. {2) K-3 principal and Interest for FY 12-13 on K-3 before prepayment. Provided for reference only. Revised Attachment K-3 328,945,481 5.13% 25 2,081,055 24,972,66_1 2/27/13 Ending Prepay- Balance ment 328,945,481 328,270,667 327,592,970 326,912,374 326,228,870 325,542,443 324,853,082 324,160,774 323,465,506 315,229,496 Ill 6,190,164 4,135,572 2,072,196 0 315,229,496 ATTACHMENT l(-4 (Section 5.03) ANNUAL PAYMENTS FOR WHOLESALE SHARE OF 6/30/09 NET PLANT & CWIP (HETCH HETCHY ASSETS) Revised for February 2013 Prepayment 6/30/09 Wholesale Share of Net Plant & CWIP: 45,605,655 Interest Rate: 5.13% Original Term: 25 Monthly Principal & Interest Calculation through 6/30/13: 270,072 Annual Wholesale Revenue Requirement through 6/30/13: 3,240,861. Fiscal Yr Ending Principal Interest Total Prepay- ment End Bal (6/30) Jun -10 922,787 2,318,074 3,240,861 44,682,868 Jun-11 971,255 2,269,606 3,240,861 43,711,612 Jun -12 1,022,269 2,218,592 3,240,861 42,689,343 Jun -13 1,780,010 1,460,850 3,240,861 40,909,333 Jun-14 Jun -15 Jun -16 Jun-17 Jun-18 Jun-19 'Jun-20 Jun-21 Jun-22 Jun-23 Jun-24. Jun-25 Jun-26 Jun-27 Jun-28 Jun-29 Jun-30 Jun-31 Jun-32 Jun-33 Jun-34 4,696,322 8,267,121 12,963,443 40,909,333 Note: The monthly supporting calculation for fiscal year 2012-13 is attached. Revised Attachment K-4 REVISED Monthly Calculations for Updated K Schedules for FY 2012-13 Based on February 2013 Prepayment (Hetch Hetchy) 6/30/12 Unpaid Balance Interest Rate: 42,689,343 5.13% Original Term: 25 Monthly Principal & Interest Calculation through 6/30/13 270,072 Annual Wholesale Revenue Requirement through 6/30/13: 3,240,861 Est. Prepayment Date 2/27/13 Month Beginning Ending Prepay- Ending Mo. Pmt Balance Principal (1) Interest (1) Total Balance ment 6/30/12 n/a n/a n/a n/a 42,689,343 7/30/12 270,072 42,689,343 87,575 182,497 270,072 42,601,769 8/30/12 270,072 42,601,769 87,949 182,123 270,072 42,513,820 9/30/12 270,072 42,513,820 88,325 181,747 270,072 42,425,494 10/30/12 270,072 42,425,494 88,703 181,369 270,072 42,336,792 11/30/12 270,072 42,336,792 89,082 180,990 270,072 42,247,710 12/30/12 270,072 42,247,710 89,463 180,609 270,072 42,158,247 1/30/13 270,072 42,158,247 89,845 180,227 270,072 42,068,402 2/28/13 270,072 42,068,402 90,229 179,842 270,072 41,978,172 40,909,333 3/30/13 270,072 1,068,839 265,502 4,569 270,072 803,337 4/30/13 270,072 803,337 266,637 3,434 270,072 536,699 5/30/13 270,072 536,699 267,777 2,294 270,072 268,922 6/30/13 270,072 268,922 268,922 1,150 270,072 0 Total (Rev K-4): 1,780,010 1,460,850 3,240,861 40,909,333 Current K-4(2): 1,075,962 2,164,899 3,240,861 Additional Principal Amortized (K-4): 704,048 Combined Plus Additional K-3 Principal: 5,425,089 Prepayment Combined Additional Principal: 6,129,137 356,138,829 (1) Starting In March, the Prepayment is applied to the monthly interest calculations and monthly principal is calculated to maintain monthly principal and interest $270,072 and the annual WRR amount at $3,240,861, resulting in no impact to the 6/30/13 balancing account compared to np prepayment being made. (2) K-4 principal and interest for FY 12-13 on K-4 before prepayment. Revised Attachment K-4 ( ATTACHMENT K-5 10 YEAR PAYOFF SCHEDULES FOR EXISTING RATE BASE WATER ENTERPRISE UNEXPENDED APPROPRIATIONS FOR REVENUE-FUNDED REGIONAL ASSETS CONSTRUCTION WORK IN PROGRESS (CWIP) AS OF JUNE 30, 2009 (Section 5.03C) Difference Difference (Increase) from (Increase) from Revised Audited Audited Original Original 6/30/09 Wholesale Share of Unexpended Appropriations of CWIP $ 6,618,478 $ 6,618,021 $ 457 $ 6,613,084 $ 5,394 Interest Rate: 4.00% Term: 10 Monthly Principal & Interest Calculation: $67,009 Annual Wholesale Revenue Requirement: $804,106 $804,051 $ 55 $803,451 $655 Fiscal Yr Ending Principal Interest Annual Payment Year End Balance Jun-15 $549,366 $254,740 $804,106 $6,069,112 Jun-16 $571,748 $232,358 $804,106 $5,497,363 Jun-17 $595,042 $209,064 $804,106 $4,902,321 Jun-18 $619,285 $184,821 $804,106 $4,283,035 Jul-19 $644,516 $159,590 $804,106 $3,638,519 Jun-20 $670,775 $133,332 $804,106 $2,967,745 Jun-21 $698,103 $106,004 $804,106 $2,269,642 Jun-22 $726,545 $77,562 $804,106 $1,543,097 Jul-23 $756,145 $47,961 $804,106 $786,952 Jun-24 $786,952 $17,155 $804,106 $0 Totals: $6,618,478 $1,422,587 $8,041,065 K-5 (WTR) as of 6-30-15 REVISED Revised Attachment K-5 ATTACHMENT K-5 10 YEAR PAYOFF SCHEDULES FOR EXISTING RATE BASE HETCH HETCHY ENTERPRISE UNEXPENDED APPROPRIATIONS FOR REVENUE-FUNDED REGIONAL ASSETS CONSTRUCTION WORK IN PROGRESS (CWIP) AS OF JUNE 30, 2009 (Section 5.03C) Revised Audited Difference Original Difference (Increase) from Increase Audited from Original 6/30/09 Wholesale Share of Unexpended Appropriations of CWIP 2,923,204 $ 2,914,484 $ 8,720 $ 2,912,877 $ 10,326 Interest Rate: 4.00% Term: 10 Monthly Principal & Interest Calculation: $29,596 Annual Wholesale Revenue Requirement: $355,152 $354,093 $ 1,059 $353,898 $1,254 Fiscal Yr Ending Principal Interest Total End. Balance Principal Interest Annual Payment Year End Balance Jun-15 $20,592 $9,004 $29,596 $2,680,563 $242,640 $112,512 $355,152 $2,680,563 Jun-16 $21,431 $8,165 $29,596 $2,428,037 $252,526 $102,626 $355,152 $2,428,037 Jun-17 $22,304 $7,292 $29,596 $2,165,223 $262,814 $92,338 $355,152 $2,165,223 Jun-18 $23,213 $6,383 $29,596 $1,891,701 $273,522 $81,631 $355,152 $1,891,701 Jul-19 $24,159 $5,437 $29,596 $1,607,036 $284,665 $70,487 $355,152 $1,607,036 Jun-20 $25,143 $4,453 $29,596 $1,310,773 $296,263 $58,889 $355,152 $1,310,773 Jun-21 $26,167 $3,429 $29,596 $1,002,440 $308,333 $46,819 $355,152 $1,002,440 Jun-22 $27,233 $2,363 $29,596 $681,544 $320,895 $34,257 $355,152 $681,544 Jul-23 $28,343 $1,253 $29,596 $347,575 $333,969 $21,183 $355,152 $347,575 Jun-24 $29,498 $98 $29,596 ($0) $347,575 $7,577 $355,152 ($0) Totals: $2,923,204 $628,318 $3,551,522 $2,923,204 $628,318 $3,551,522 K-5 (HHP) as of 6-30-15 REVISED Revised Attachment K-5 Review of Unexpended Balances of Appropriated Funds (Not Included in CWIP as of 6/30/2009) Construction Work in Progress As of June 30, 2009 (Section 5.03.CI (A) (8) (C) (D) = (A) -(8)-(C) Appropriiltion YTD Expenditures PTD Expenditures Encumbrilnces Avililiible Billilnce (E) =(El)+ (E2) + r--�(E�1)�---�(E_2)�---�(E_3�) ---�(E_4�) ---�(E_5�) ____ (�E6�)---, (E3)+(E4)+(E5) + (E6) Expenditures in Project Wiiter Assets: CliissifiCiltion As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 L.....FY.2_009 __ -_10 ...... _ ... FY_2_0_1_0-_1 ... 1 _ ...... FY ... 2_0_1_1-_1_2_..._ I .. FY ..... 20_1_2-.. 1 .. 3_..._ 1..,FY...,.20.1 .. 3-.. 1 .. 4 _ _._.. IYT.,D...,rv.,2.0 .. 1,..4-.1__,5 T otil Expenditures Addition to K-5 CUWlll Addition to K-5 CUW112 Addition to K-5 CUW118 K-5 CUW135 K-S CUW143 K-5 CUW148 K-5 K-5 K-5 K-5 K-5 K-S K-5 K-5 K-5 K-5 K-5 K-5 K-5 K-S K-5 K-5 K-5 K-5 K-5 CUW161 CUW168 CUW202 CUW210 CUW227 CUW228 CUW231 CUW241 CUW242 CUW2SO CUW253 CUW2S7 CUW261 CUW262 CUW263 CUW264 CUW127 CUW392 CUW710 CRYSTAL SP RES OP PLAN' CRYSTAL SPRINGS P/L NO 1-PHASE 21 MILLBRAE SHOP-PHASE 2-B' NEW LINE & BYPASS VALVES' HETCH HETCHYWATER TREATMENT PLAN'·10 ENVIRONMENTAL & REGULATORY COMP1 TREATMENT FACILITIES IMPROVEMENTS' ALAMEDA CREEK FISH RELEASE SAN ANTONIO PIPELINE EMERGENCY REPAIR MILLBRAE ADMIN BLDG INTERIM REMODEL' WATERSHED FENCES/FACILITIES' WATERSHED ROADS RECONSTRUCTION' MILLBRAE LAB CAPITAL IMPROVEMENTS' FACILITIES MAINT SUPPORT STRUCTURES' DEMOLITION UNSAFE STRUCTURES' WATERSHED TRAILS & RECREATION IMPROv' FACILITIES SECURITY PROJECT''' WATER PROTECTION'·' REGIONAL WATER STORAGE RNR -BUDGET1'' TREATMENT FACS/WQ IMPROVE -BUDGET' CONVEYANCE/TRANSMISSION -BUDGET' WATERSHED ROADS -BUDGET' INST SCADA SYSTEM7'1 PROGRAM MANAGEMENT SERVICES -WSIF�'·'·" OCIP PROJECT CONTROL2'1 CUH977-03 HH MATHER FACILITIES TOTAL ALL PROJECTS PER K-5 SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW SW ST AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ AAAACP REGIONAL $ AAAACP LOCAL/REGIONAL $ AAAACP LOCAL/REGIONAL $ AAAACP LOCAL/REGIONAL $ AAAACP Local $ l,OSS,054 $ 2,422,523 $ 11,263,269 $ 4,829,680 $ 18,821,529 $ 3,241,279 $ 15,028,319 $ 1,S37,398 $ 1,400,000 $ 2,407,700 $ 3,000,000 $ 5,170,000 $ 770,000 $ S,000,000 $ 1,000,000 $ 387,639 $ S,300,000 $ 1,448,720 $ 1,7SO,OOO $ 4,801,000 $ 7,82S,OOO $ 3,000,000 $ 13,1S6,681 $ 1,000,000 $ 2,497,881 $ 73,000 $ 118,189,672 $ $ 207 $ 3,998 $ 2,103 $ 164,267 $ 990 $ 334 $ 100,642 $ (339,46S) $ 284,902 $ S30,822 $ 85,843 $ 40,678 $ 8,390 $ 24,867 $ 9,431 $ 234,328 $ 113,871 $ 430,990 $ 896,697 $ 1,404,SOl $ 202,638 $ 6,221,108 $ (92,112) $ 235,706 $ 13,327 $ 10,57 9,063 $ 1,023,222 $ 1,37S,634 $ 11,014,662 $ 4,689,067 $ 18,616,320 $ 3,0lS,985 $ 14,747,873 $ 1,094,937 $ 923,712 $ l,93S,204 $ 2,548,376 $ 4,415,913 $ S53,694 $ 4,988,882 $ 410,040 $ 112,689 $ 4,308,224 $ 497,747 $ 706,684 $ 3,201,827 $ 4,019,441 $ 1,517,064 $ 12,393,475 $ 7S8,065 $ 2,496,959 $ SS,989 $ 101,421,685 $ $ $ $ $ 47,947 $ $ $ 125,057 $ 16,032 $ 160 $ 494,574 $ 2,742 $ $ $ 21,524 $ 11,233 $ 142,789 $ 481,704 $ 283,219 $ 293,371 $ 381,217 $ 14S,665 $ $ 33,289 $ $ $ 2,480,523 $ 34,832 $ 1,046,889 $ 248,607 $ 140,613 $ 157,262 $ 225,294 $ 280,446 $ 317,404 $ 460,2S6 $ 472,336 $ (42,9SO) $ 751,34S $ 216,306 $ 11,118 $ 568,436 $ 263,717 $ 848,987 $ $ 1,327 $ $ 23,027 $ 36,572 $ $ 580 $ 11,523 $ 5,936 $ $ 221,71S $ $ 42,703 $ 1,74S $ $ 4,558 $ 142,346 $ 469,269 760,097 1,305,802 3,424,342 1,337,271 $ 3S7,690 $ 763,206 208,646 922 17,011 14,287,464 $ 1,043,316 $ $ 622,441 $ $ 2,062,S74 $ $ 687,176 $ $ $ $ $ $ $ $ 17,011 $ $ 5,282,240 $ $ 99 $ $ 1,4S3 $ 7,125 $ $ 45,176 $ 67,487 $ 5,366 $ $ 38,212 $ $ 54,851 $ $ $ $ 100,S91 $ S93,283 $ $ 473,078 $ 749,747 $ 473,915 $ $ 2 $ $ $ 2,610,385 $ $ $ $ $ $ $ $ 31,045 $ 748,839 $ $ $ $ $ $ $ $ $ $ 33,103 $ 217,706 $ 69,916 $ $ $ $ $ 1,100,609 $ 2,233 24,981 1,642 17,763 46,61 9 $ (6,684) $ $ $ 446,362 $ 118,158 $ $ $ $ $ 557,836 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 1,753 $ $ $ $ $ 1,753 $ $ 1,426 $ $ 24,480 $ 43,697 $ $ 45,756 $ 105,604 $ 11,302 $ $ 259,927 $ $ 97,554 $ 1,745 $ $ 4,558 $ 991,776 $ 950,973 $ 1,043,316 $ 1,153,603 $ 3,478,031 $ 1,368,681 $ $ $ $ 17,011 $ 9,599,442 $ (F) = (C) + (D) -(E) (GI (H) Appropriiltion Transfer Out through Ooseout (I) DEOBLIGATE/ Encumbrances Process OBLIGATION Unused Balance As of June 30, 2015 As of June 30, 2015 As of June 30, 2015 34,832 $ 1,045,463 $ 248,607 $ 116,133 $ 161,512 $ 225,294 $ 234,690 $ 336,857 $ 464,986 $ 472,496 $ 191,697 $ 754,087 $ 118,752 $ 9,373 $ 589,960 $ 270,392 $ $ $ $ 445,570 $ 327,528 $ 114,255 $ 763,206 $ 241,933 $ 922 $ $ 7,168,545 $ $ $ $ $ $ $ $ 7,068 $ $ $ $ $ $ $ $ $ $ $ $ $ 327,528 $ $ $ $ $ $ 334,596 $ 34,832 $ 1,045,463 $ 248,607 $ 116,133 $ 161,512 $ 225,294 $ 234,690 $ 329,789 $ 464,986 $ 472,496 $ 191,697 $ 754,087 $ 118,752 $ 9,373 $ 589,960 $ 270,392 $ $ $ $ $ $ $ 763,206 $ 241,933 $ 922 $ 6,274,124 $ VI= {A) -(8) -(E) -(G) (H)-(11 Unexpended Balilncesof Appropriation after Closeout and Deobligate As of June 30, 2015 445,570 114,255 559,825 LOCAL PROJECTS LOCAL $ 73,000 $ 13,327 $ 55,989 $ $ 17,011 $ 17,011 $ $ $ $ $ $ 17,011 $ $ $ $ $ Addition to K-5 CUW690 Page 1 of 5 JOINT LOCAL AND REGIONAL PROJECTS REGIONAL PROJECTS TOTAL ALL PROJECTS PER K-5 Proportionill Water Use per J-Tiible Wholesille Share before Customer lnformiltion System CUSTOMER INFORMATION SYSTEM' SW (AA) (BB) LOCAL/REGIONAL $ 16,654,562 $ 6,364,702 $ 15,648,499 $ 33,289 $ 972,774 $ $ 2 $ $ $ $ $ $ 1,006,061 $ $ 1,006,061 $ $ REGIONAL $ 101,462,110 $ 4,201,034 $ 85,717,197 $ 2,447,234 $ 13,297,679 $ 5,265,229 $ 2,610,383 $ 1,100,609 $ 46,619 $ 557,836 $ 1,753 $ 9,582,429 $ 6,162,484 $ 334,596 $ 5,268,063 $ $ 559,825 -$,--711"'8"',1"'89"',--=6"'72,-T$--""10"',5"'79"""',06"'3,-T$--,1-,-01"",4"'2"'1"",6"'85=-""'s---2=-,""43"'0"',s"'2"'3-,$,----=174,"'2s"'7"",464=--,s,---=5--=,27s2=-,724,-,oc-$,---=2--=,6"'1"'0,"'3ss=--s,---=1"',1"'00"',--=609=----,,-s----,46"',--=6"'19,-T$--,5"'5,:7--:,8-=-36=-Ts----,-1,-=75:,3,-$,----,9,-,5:,99,.,-,,44,-,2=-""'s---=7,""1"'68,.,,54=5---,$,-----=3734,-,5:,9"'6-,-,$,---,6--=,z-=747,"'12,.,4C-$,-------$,-----:5-:,59,-,s:,2"'5,- 66.67% 65.86% 65.83% 66.56% 67.63% 65.67% (Cll = (AA) x (BB) $ 3,510,328 $ 1,719,198 $ 724,531 $ 31,030 $ 377,264 $ 1,151 $ 6,363,503 AAAACP LOCAL/REGIONAL $ 8,856,574 $ 3,786,403 $ 5,757,389 $ 1,384,017 $ 62,794 $ 51,242 $ 11,552 $ - $ Water Regional share (49.7% of Customer Information System up to FY 2013 and 51.2% for FY 2014) 1,715,168 $ 2,400,419 $ $ 1,193,008 $ 47,133 $ 23,425 $ 523,304 $ 260,082 $ 40,839 $ 20,297 $ 24,696 $ 12,644 $ 3,036,391 $ 1,509,457 Wholesille share {2% from Water Regional share} (C2) Wholesale Share after Customer Information System Pooled Interest Rate in FY 2010-11 Pooled Interest Rate in FY 2011-12 Pooled Interest Rate in FY 2012-13 Pooled Interest Rate in FY 2013-14 Estimated Pooled Interest Rate in FY 2014-15 (as of March 31, 2015} Interest Amount in FY 2010-11 Interest Amount in FY 2011-12 Interest Amount in FY 2012-13 Interest Amount in FY 2013-14 Estimated lntere5t Amount in FY 2014-15 (as of March 31., 2015} Balance due from Wholesale Customers CC=(Cl+C2) (DDl) (DD2) (DD3) (DD4) (DDS) (EEl) = (CC) x (DDl} (EE2) = (CC) x (DD2) (EE3) = (CC) x (DD3) (EE4) = (CC) x (DD4} (EES) = (CC) x (DDS) (FF)= (CC)+ (EEl) + (EE2) + (EE3} + (EE4) + (EE5) $ 23,860 $ 469 $ $ 3,534,188 $ 1,719,667 $ 1.24% 1.11% 1.11% 0.85% 0.85% 0.663% 0.663% 0.499% 0.499% 5,202 $ 729,733 0.85% 0.663% 0.499% 406 $ 253 $ $ 31,436 $ 377,517 $ 1,151 $ 0.663% 0.499% 0.499% 0.499% _$-_43_,,'-82_4---,-$ ____ $ ____ -,$ ____ .;-$ ___ ---'$�---$ _$'--_3�9.:..;;,22.;;.9;..._$'--_1;;.;;9.:.;;,0.;;.88;..._$'------$'------$'------$'------$ $ 30,041 $ 14,617 $ 6,203 $ $ $ $ -$',---2�3,�43 -2 -�$--1-1,�4-01-.,..$---4�,838-�$---2 -08--,-$-------,$-----$ $ 17,636 $ 8,581 $ 3,641 $ 157 $ 1,884 $ 6 $ $ 3,688,350 $ 1,773,355 $ 744,415 $ 31,801 $ 379,401 $ 1,157 $ 30,189 6,393,692 43,824 58,318 50,860 39,880 31,905 6,618,478 REVISED ATTACHMENT K-5 K-5 K-5 K-5 Addition to K-5 K-5 Addition to K-5 K-5 K-5 Addition to K-5 Project Project Title Hetch Hetchy Assets: CUH703 PRIEST RESERVOIR DIVERSION CHANNEL CUH762 CUH926 CUH945 CUH957 CUH959 CUH964 SAN JOAQUIN PIPELINE REPAIRS PIPELINE PURCHASE REPLACEMENT PIPE' SJ PIPELINE #4 ADDITION; CROSSOVER;TSTAJ' FAC MAINTENANCE -WATER TRANSPORTATION MOCCASIN RESV WATER QUALllY WATERSHED PROPERlY PURCHASES CUH975-02 REDUNDANT POWER SUPPLIES CUH975-03 RESERVIOR-DAM ASSESSMENT/IMPROVEMENTS CUH975-04 FOOTHILL TUNNELIMPROVEMENTS CUH97S-05 MOCCASIN SEWAGE DISPOSAL IMPROVEMENTS CUH97S-06 DAM DEFLECTION REHABILITATION CUH97S-07 MOUNTAIN TUNNEL ADIT DOOR UPGRADE CUH975-08 OS DRUM GATE ASSESSMENT CUH975-09 RESERVIOR VALVES REHABILITATION CUH975-10 MOUNTAIN TUNNEL REHAB CUH975-11 TRASH RACKS MOCCASSIN GATE CUH975-13 0 SHAUGHNESSY NEEDLE VALVES CUH975-14 PENSTOCK ASSESSMENT/IMPROVEMENTS CUH975-15 SJPL REHABILITATION CUH975-16 TUNNEL CONDITION ASSESSMENT/IMPROVEMENT CUH975-17 ROCK RIVER SLAKER CUH975-18 MOCCASIN AFTERBAY REHAB CUH975-19 LEITHOLD SERVICE LINE CUH975 CUH383 K-5 CUH766 Addition to K-5 CUH774 WATER INFRASTRUCTURE -BUDGET'· 10· 11 O'SHAUGENESSY WATER SYSTEM RENOVATION' HETCHY FACILITIES SECURllY IMPROV.' OLD MOCCASIN POWERHOUSE REHAB.' HETCH-HETCHY ROADS REBUILDING' K-5 CUHB04 K-5 CUH810 VARIOUS OLD JOB1'� 5' 14 Addition to K-5 CUH846 MOCCASIN PENSTOCK REPLACEMENT' MOCCASIN PHONE SYSTEM O'SHAUGENESSY DIS. REPAIRS K-5 CUH876 K-5 CUH878 Addition to K-5 Addition to K-5 K-5 K-5 K-5 K-5 Addition to K-5 CUH899 CUH923 CUH931 CUH941 CUH946 CUH949 CUH950 STUDY/DESIGN REPL CANYON TUNNEL/PENSTOCJ<' HH DOMESTIC WATER SYSTEM' HH MICROWAVE REPLACEMENT HH SCAD SECURllY & CONTROL, EAST FAC MAINTENANCE -SUPPORT STRUCTURE' RIGHT OF WAY MAINTENANCE' PEN STOCK RENOVATIONS CUH977-01 FACILITIES -SUPPORT STRUCTURES CUH977-02 ROOR REPLACEMENT ENGINEERING BLDG CUH977-04 FIBER/COMMUNICATION SYSTEM UPGRADES CUH977-0S HETCHY HETCHY ROADS & RIGHT OF WAY CUH977-07 REPAVE HETCHY ROADS-TESLA TO OSH CUH977-08 HETCHY HVAC UNITS CUH977-09 SCADNHMI SYSTEM REPLACEMENT CUH977-10 FIRE SUPPRESSION SYSTEM-OPS BUILDING CUH977-11 HETCHY ELECTRICAL UPGRADES CUH977-12 WARNERVILLE BIO-DIESEL TANK CUH977-13 REPLACEMENT SCADA MASTER CUH977-15 O'SH COT 1 ROOF/ADA IMPROVEMENTS CUH977-17 BIO DIESEL TANK/FACILITIES REPAIRS CUH977-18 REPLACE WOOD WATER TANKS CUH977-19 EMERGENCY BACK UP POWER MOCCASIN CUH977-20 ENGINEERING OFFICE HVAC CUH977-21 HHP SECURllY UPGRADES CUH977-22 REPAIR MOCCASIN COTTAGES CUH977-23 Oil CONTAINMENT PROJECT CUH977-24 HHWP SMALL WATER SYSTEM IMPROVEMENTS CUH977-25 WEST PORTAL TANK PIPING IMPROVEMENTS CUH977-26 PERMIT HHWP ROW MAINTENANCE K-5 CUH977 Addition to K-5 CUW269 FACILITIES MAINTENANCE -BUDGET' 10'" FIBER STUDv' Page 2 of 5 TOTAL ALL PROJECTS PER K-5 POWER PROJECTS WATER PROJECTS JOINT PROJECTS TOTAL ALL PROJECTS PER K-5 Proportional Water Use per J-Table Wholesale Share (100% of WATER and 45%of JOINT) ST AAAACP ST AAAACP ST AAAACP ST AAAACP ST AAAACP ST AAAACP ST AAAACP ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST ST AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP AAAACP ClassifiCiltion Power WATER WATER WATER WATER WATER WATER JOINT JOINT WATER JOINT JOINT JOINT JOINT JOINT JOINT WATER JOINT Power WATER JOINT WATER Power JOINT PROJECT TOTAL JOINT JOINT JOINT JOINT Power Power JOINT JOINT Power JOINT JOINT JOINT JOINT JOINT Power JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT JOINT POWER JOINT JOINT JOINT (E) = (El) + (£2) + (A) (B) (C) (D) = (A) -(8)-(C) --�(E�1)�---�(E_2)�---�(E_3�) ---�(E_4�) ---�(E_5�) ____ (�E6-J_� (E3)+(E4)+(ES) + (E6) Appropriation YTD Expenditures PTO Expenditures Encumbrances Available Balance Expenditures in (FJ = (C) + (D) -(E) (G) Encumbrances (H) Appropriation Transfer Out through Closeout Process (I) DEOBLIGATf/ OBLIGATION (J) =(A)· (B)-(E)-(G)­(H)-(1) Unexpended Balances of Appropriation after Closeout and Deobligate As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 L=FY=2=009-=,:;10:r,__,:,.FY;,;2:,;0=1;;;0-;:,1:,,1 _ _..,:,,FY,:,.2;;;0=1,:,1-;:,1,;;,2 _.1._l1,,FY,:,,:,:20�1;:,2-;,:13;;;,_.1_l1,,FY,:,,:,:20�1�3-;,:1;;;4 _-1...: IYT=D==FY=2=0=J.4..===1:..15 Tot.I Expenditures Unused Balonce As of June 30, 2015 As of June 30, 2015 As of June 30, 2015 As of June 30, 2015 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 21,210,344 $ 58,645 $ 20,178,474 $ 12,715 $ 1,019,155 $ 11,677 $ 668,169 $ 345,705 $ $ $ 1,025,551 $ 6,319 $ $ 6,320 $ $ 41,469,206 $ 376,954 $ 41,337,704 $ 22,570 $ 108,932 $ 95,946 $ 5,657 $ (4,335) $ 26,504 $ $ 123,772 $ 7,730 $ $ 159,860 $ 13,667 $ 157,489 $ $ 2,371 $ $ $ $ $ $ $ 2,371 $ 2,371 $ 500,000 $ $ 440,711 $ $ 59,289 $ $ $ $ $ $ $ 59,289 $ 59,289 $ 3,400,000 $ 122,418 $ 2,896,826 $ 209,138 $ 294,036 $ 201,606 $ 154,592 $ 107,781 $ (28,813) $ $ 435,166 $ 68,008 $ $ 68,008 $ 150,000 $ $ 109,379 $ $ 40,621 $ 11,955 $ $ $ $ $ 11,955 $ 28,666 $ $ 28,666 $ 800,000 $ 130,035 $ 509,035 $ 1,388 $ 289,577 $ 35,024 $ $ $ $ $ 35,024 $ 255,941 $ 255,941 $ $ 100,000 $ 8,549 $ 8,549 $ 2,120 $ 89,331 $ 323 $ 35,375 $ 50,539 $ $ $ 86,237 $ 5,214 $ $ 5,214 $ 300,000 $ 179,633 $ 179,633 $ $ 120,367 $ 36,725 $ 83,642 $ $ $ $ 120,367 $ $ $ 315,500 $ 418 $ 190,257 $ $ 125,243 $ $ $ $ $ $ $ 125,243 $ $ 125,243 $ 691,500 $ 197,110 $ 388,174 $ 9,159 $ 294,167 $ 23,389 $ 274,666 $ (15,812) $ 416 $ 282,659 $ 20,667 $ $ 20,667 $ 110,000 $ 54,847 $ 137,259 $ $ (27,259) $ (27,259) $ $ $ $ $ (27,259) $ $ $ 643,000 $ 447,483 $ 450,726 $ 1,323 $ 190,951 $ 155,893 $ 31,392 $ $ $ 187,285 $ 4,989 $ $ 4,989 $ 115,000 $ 3,094 $ 96,931 $ 20,048 $ (1,979) $ 13,854 $ 4,215 $ $ $ $ 18,069 $ $ $ 500,000 $ $ 239,922 $ $ 260,078 $ $ 445 $ $ $ $ 445 $ 259,633 $ $ 259,633 $ 972,000 $ 704,286 $ 945,567 $ 32,997 $ (6,564) $ 26,433 $ $ $ $ $ 26,433 $ $ $ 415,000 $ 2,339 $ 2,339 $ $ 412,661 $ 43,275 $ 219,026 $ $ $ $ 262,301 $ 150,360 $ $ 150,360 $ 190,000 $ 141,801 $ 168,113 $ 14,462 $ 7,425 $ 5,525 $ $ $ 5,525 $ 16,362 $ $ 16,362 $ 1,000,000 $ 255,974 $ 460,170 $ 99,191 $ 440,639 $ 237,131 $ 302,699 $ $ $ $ 539,830 $ $ $ 2,925,000 $ 2,327,311 $ 2,327,311 $ 792,130 $ (194,441) $ 428,865 $ 104,300 $ 14,872 $ 36,377 4,869 $ 8,406 $ 597,689 $ $ $ $ 528,000 $ 247,576 $ 247,576 $ 6,239 $ 274,185 $ 6,245 $ 290 $ $ $ $ 6,535 $ 273,889 $ $ 273,535 $ 160,000 $ 2,765 $ 2,765 $ 141,818 $ 15,417 $ 129,230 $ 14,182 $ $ $ $ 143,412 $ 13,823 $ $ 13,823 $ 20,000 $ $ $ $ 20,000 $ 12,457 $ $ $ $ $ 12,457 $ 7,543 $ $ 7,543 $ 15,000 $ $ $ $ 15,000 $ 15,000 $ $ $ $ $ 15,000 $ $ $ $ 9,000,000 $ 4,573,186 $ 5,845,292 $ 1,119,487 $ 2,035,221 $ 1,107,086 $ 1,070,232 $ 49,599 $ 36,377 5,285 $ 8,406 $ 2,276,985 $ 877,723 $ $ $ 877,369 $ 765,578 $ $ 765,453 $ $ 125 $ $ $ $ $ $ $ 124 $ $ 124 $ 2,086,692 $ 340,148 $ 2,038,933 $ 23,484 $ 24,275 $ 40,374 $ 3,174 $ $ $ $ 43,548 $ 4,211 $ $ 4,211 $ 1,808,487 $ $ 1,808,481 $ $ 6 $ $ $ $ $ $ $ 6 $ $ 6 $ 4,175,027 $ 574,433 $ 3,777,676 $ 398,725 $ (1,374) $ 353,081 $ 30,350 $ $ $ $ 383,431 $ 13,920 $ $ 13,920 $ 7,641,687 $ 47,557 $ 7,566,901 $ 559 $ 74,227 $ 74,786 $ $ $ $ $ 74,786 $ $ $ $ 716,623 $ $ 713,578 $ $ 3,045 $ $ $ $ $ $ $ 3,045 $ $ 3,045 $ 1,610,000 $ 16,912 $ 1,530,015 $ 457 $ 79,528 $ 9,802 $ $ $ $ $ 9,802 $ 70,183 $ $ 70,183 $ 7,179,009 $ 42,279 $ 7,110,173 $ $ 68,836 $ 24,863 $ $ 9,316 $ (9,316) $ $ 24,863 $ 43,973 $ $ 43,973 $ 30,000 $ 21,804 $ 28,087 $ $ 1,913 $ $ $ 1,913 $ $ 1,913 $ 1,393,211 $ $ 1,393,062 $ $ 149 $ $ $ $ $ $ $ 149 $ $ 149 $ 4,767,000 $ 999,151 $ 4,156,642 $ 442,163 $ 168,195 $ 440,316 $ 21,851 $ 57,854 $ 24,872 11,287 $ $ 556,180 $ 54,178 $ $ $ 2,068,180 $ 489,156 $ 1,923,129 $ 104,912 $ 40,139 $ 72,077 $ 37,002 $ $ 3,836 $ $ 112,915 $ 32,136 $ $ $ 32,136 $ 2,281,454 $ 239 $ 2,273,485 $ $ 7,969 $ $ $ $ $ $ $ 7,969 $ $ 7,969 $ 815,000 $ $ 814,208 $ $ 792 $ $ $ $ $ $ $ 792 $ $ 792 $ 9,444,452 $ 3,264,219 $ 6,109,676 $ 2,758,048 $ 576,728 $ 2,493,142 $ 191,537 $ 59,334 $ 300,067 89,053 $ (2,944) $ 3,130,189 $ 204,587 $ 1,861 $ $ $ 361,556 $ 43 $ 361,591 $ $ (35) $ $ $ (35) $ $ $ (35) $ $ $ $ 216,670 $ 55,370 $ 227,450 $ $ (10,780) $ (10,780) $ $ $ $ $ (10,780) $ $ $ $ 3,354,480 $ 113,923 $ 460,652 $ 2,542,583 $ 351,245 $ 2,673,530 $ 60,374 $ 8,905 $ $ $ 2,742,809 $ 151,019 $ $ $ 151,019 $ 1,036,000 $ 277,627 $ 940,924 $ 42,323 $ 52,753 $ 78,945 $ 16,131 $ $ $ $ 95,076 $ $ $ $ 125,000 $ 6,390 $ 24,132 $ $ 100,868 $ 4,600 $ 8,216 $ $ $ $ 12,816 $ 88,052 $ $ $ 88,052 $ 100,000 $ 24,513 $ 115,350 $ $ (15,350) $ (15,350) $ $ $ $ $ (15,350) $ $ $ $ 475,000 $ 253,777 $ 321,571 $ 9,236 $ 144,193 $ 85,621 $ 45,066 $ 22,742 $ $ $ 153,429 $ $ $ $ 95,000 $ $ 76,902 $ $ 18,098 $ 18,098 $ $ $ $ $ 18,098 $ $ $ $ 305,000 $ 89,098 $ 214,397 $ 8,703 $ 81,900 $ 90,603 $ $ $ $ $ 90,603 $ $ $ $ 37,828 $ $ 37,828 $ $ $ $ $ $ $ $ $ $ $ $ 310,000 $ $ 302,831 $ $ 7,169 $ $ $ $ $ $ $ 7,169 $ $ $ 7,169 $ 560,000 $ 380,477 $ 549,131 $ 14,256 $ (3,387) $ (7,197) $ 2,341 $ $ $ $ (4,856) $ 15,725 $ $ $ 15,725 $ 457,000 $ 397,964 $ 447,177 $ 17,626 $ (7,803) $ (5,427) $ 2,156 $ $ $ $ (3,271) $ 13,094 $ $ $ 13,094 $ 350,000 $ 307,505 $ 311,932 $ 7,535 $ 30,533 $ 38,068 $ $ $ $ $ 38,068 $ $ $ $ 203,749 $ 184 $ 943 $ $ 202,806 $ 335 $ 492 $ 2,825 $ 34,153 $ $ 37,805 $ 165,001 $ $ $ 162,892 $ 70,000 $ 66,489 $ 66,489 $ $ 3,511 $ 234 $ $ $ $ $ 234 $ 3,277 $ $ $ 3,277 $ 25,000 $ 14,797 $ 14,797 $ $ 10,203 $ $ $ $ $ $ $ 10,203 $ $ $ $ 253,000 $ 39,635 $ 39,635 $ 1,804 $ 211,561 $ 93,684 $ 47,607 $ 1,072 $ 10,550 47,512 $ $ 200,425 $ 12,940 $ $ $ 12,940 $ 225,000 $ 70,038 $ 70,038 $ 135,864 $ 19,098 $ 139,594 $ (6,170) $ 7,784 $ $ $ 141,208 $ 13,754 $ $ $ $ 350,000 $ 20,236 $ 20,236 $ 311,608 $ 18,156 $ 315,980 $ 9,066 $ $ $ $ 325,046 $ 4,718 $ $ $ $ 24,000 $ 4,929 $ 4,929 $ $ 19,071 $ 19,071 $ $ $ $ $ 19,071 $ $ $ $ 292,717 $ 18,024 $ 18,024 $ 274,693 $ $ 273,149 $ 1,519 $ $ $ $ 274,668 $ 25 $ $ $ 25 $ 7,730 354 354 54,178 202,726 2,109 10,203 13,754 4,718 PROJECTTOTAL _s�--9�,2_2_7,�000-�$ ___ 2�,1_4_1 �,0_19_�$ ___ 4�,_62_6�,9_5_9�$ __ �3,_366�,2_3_1�$ __ �1,_2_33�,8_1_0 _s�-3�.7_9_2.�7 _58_�s __ 1_86_,�7_98_�s __ 4_3�,2_93_�s __ 4_4�,7_0_3 ___ 4_7�,5_1_2�$ _____ �s __ �4,_ll_S�,064-�$ ____ 4_84�,_97_7_$�------s� ______ s ___ 4_5_4 �,1_93_�s ____ 3_0,_784_ ST AAAACP JOINT $ 26,250 $ $ $ $ 26,250 $ 26,250 $ $ $ $ $ $ 26,250 $ $ $ $ $ (AAAl) (AAA2) (BBB) POWER WATER JOINT -$.---13""2-,7--2-5,-060----,.$---13-,2-l-l-,8-22-.,.$--l-18-,-11-1-,3-68--,$---8-,-45--9-,8--7--7--,$---6,-15--3-,8--1-5--$,--8-,7-90-,--744--$,--2-,36--9,-36 __ 2_$.--6--68-.-54-7-.,.$--3--9-8,-23-0-.,.$--1--5 ... 3-,1-37---.,.$---5,-46_2_$,,_ __ 12-,3-8 ... 5-,48-2--,$---2,-2-28-,2-1-0""""$,----1-,8-6--1-$,----4--70-,-206---$,---1-,460--,-37--2-.,.$----2-95-,77=2- $ $ $ 40,288,106 $ 50,294,566 $ 42,142,388 $ 132,725,060 $ 3,718,237 $ 2,975,907 $ 6,517,678 $ 13,211,822 $ 35,126,924 $ 47,973,816 $ 35,010,628 $ 118,111,368 $ 3,006,377 $ 1,167,044 $ 4,286,456 $ 8,459,877 $ 2,154,805 1,153,706 2,845,304 6,153,815 $ $ 2,968,787 $ 945,901 $ 4,876,056 $ 8,790,744 66.48% $ $ $ 1,156,235 $ 497,757 $ 715,370 $ 2,369,362 $ 65.70% 412,823 $ 118,318 $ 137,406 $ 668,547 $ 65.72% 300,067 $ 34,068 $ 64,095 $ 398,230 $ 66.43% 89,053 $ 4,869 $ 59,215 $ 153,137 $ 67.52% (2,944) $ 8,406 $ $ 5,462 $ 65.56% 4,924,021 $ 1,609,319 $ 5,852,142 $ 12,385,482 $ 237,161 $ 711,431 $ 1,279,618 $ 2,228,210 $ 1,861 $ $ $ 1,861 $ 11,278 $ 317,601 $ 141,327 $ 470,206 $ 7,543 $ 386,100 $ 1,066,729 $ 1,460,372 $ 216,479 7,730 71,562 295,771 (CCC) = (AAAl x 100% + AAA2 x 45%) x (BBB) $ 2,087,451 $ 538,525 $ 118,395 41,794 $ 21,278 $ 5,511 $ 2,812,954 REVISED ATTACHMENT K-5 Page 3 of 5 (A) (B) ICJ (D) = (A) -(8)-(C) Appropriation YTD Expenditures PTO Expenditures Encumbrances Available Balance Pooled Interest Rate in FY 2010-11 Pooled Interest Rate in FY 2011-12 Pool&d Interest Rate in FY 2012-13 Pooled Interest Rate in FY 2013-14 Estimated Pooled Interest Rate in FY 2014-15 (as of March 31, 2015} Interest Amount in FY 2010-11 Interest Amount in FY 2011-12 Interest Amount in FY 2012-13 Interest Amount in FY 2013-14 Estimated Interest Amount in FY 2014-15 (as of March 31, 2015} (DDD1) (DDD2) (DDD3) (DDD4) (DDD5) ClassifiCiltion (EEEl) = (CCC} x (DDD1) (EEE2) = (CCC} x (DDD2) (EEE3) = (CCC} x (DDD3) (EEE4) = (CCC) x (DDD4) (EEE5) = (CCC) x (DDD5) As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 As of June 30, 2009 Balance due from Wholesale Customers (FFF) =(CCC}+ (EEEl) + (EEE2) + (EEE3) + (EEE4) + (EEE5) 1 Total expenditure only included amount up to the Unused Balance. 2 Expenditures under projects CUW392 and CUW710 were re-allocated to various projects. As a resutt, there are zero balance in expenditures for these projects. 3 Project CUW690 -Customer Care & Billing System will be specially allocated due to limit to Customer Services% (2%} in WSA contract section S.OSE. 4 There is a difference in Appropriation Balance as of March 31, 2009 vs. June 30, 2009. 5 Actual expenditures exceed available fund balance, assume the exc..d expenditures are from encumbrances. 6 This project has been closed out as of June 6, 2013. 7 This project is split 64.3%/35. 7%, Joint/City} per Revised Attachment K-2. 8 This project has been closed out as of June 30, 2012. 9 Project is included as part of the revenue funded capital project. 10 Project is included as part of the Water Enterprise revenue bond funded capital project. (E) = (El) + (E2) + �-�(E_1�) ----�(E_2)�---�(�E3�)----�(E_4�)----�(E_5�) ----�(E_6�) -� (E3)+(E4)+(ES) + (E6) Expenditures in FY 2009-10 ��-_;FY�2�0�1;;0-;,:1,:.l _ _;F,;,Y,,:2;;0=11�-=12:,_L_l _,:,FY,:,,:,20;;;1�2;;;-13:;;,__JIL;,.FY;,.2;;;0;,:1;;;3-;;;1;;:4'"""11_,YT=D=FY=2=014-==1=5:..I Tot.I Expenditures 1.24% 1.11% 1.11% 0.85% 0.85% 0.85% 0.663% 0.663% 0.663% 0.663% 0.499% 0.499% 0.499% 0.499% 0.499% 0.499% $ 25,884 $ $ $ $ $ $ 25,884 $ 23,171 $ 5,978 $ $ $ $ $ 29,148 $ 17,743 $ 4,577 $ 1,006 $ $ $ $ 23,327 $ 13,840 $ 3,570 $ 785 $ 277 $ $ $ 18,195 $ 10,416 $ 2,687 $ 591 $ 209 $ 106 $ 27 $ 13,694 $ 2,178,506 $ 555,338 $ 120,777 42,279 $ 21,384 $ 5,538 $ 2,923,204 (F) = (C) + (D) -(E) Unused Balance 11 Projects CUH975 and CUH977 were funded by revenue in FY 2009-10 and FY 2010-11. However, starting: in FY 2011-12, these two projects were funded by Water Revenue Bond Series 20118. As a result, Wholesale Customers were refunded $10,838,326 ($10,519,682 collected in FY 2009-10 and FY 2010-11 plus interest of $318,644) in FY 2011-12. 12 Intentionally left blank. 13 There is a difference in Appropriation Balance as of March 31, 2009 vs. June 30, 2009. 14 Per discussion with Carlos Jacobo, project CUH810 is a custom work project and should be "POWER" not "JOINT'. These custom works are mainfy for street light maintenance. (G) Encumbrances (H) Appropriation Transfer Out through Closeout Process (I) DEOBLIGATE/ OBLIGATION As of June 30, 2015 As of June 30, 2015 As of June 30, 2015 (J) = (A) -(B)-(E)-(G)­(H)-(1) Unexpended Balances of Appropriation after Closeout and Deobligate As of June 30, 2015 REVISED ATTACHMENT K-5 Project Number REGIONAL CUW373 Regional CUW384 Regional CUW387 Regional CUW352 Regional CUW355 Regional CUW359 Regional CUW370 Regional CUW374 Regional CUW381 Regional CUW382 Regional CUW386 Regional CUW353 Regional CUW363 Regional CUW368 Regional CUW380 Regional CUW389 Regional CUW393 Regional CUW354 Regional CUW356 Regional CUW357 Regional CUW361 Regional CUW365 Regional CUW366 Regional CUW367 Regional CUW369 Regional CUW371 Regional CUW378 Regional CUW379 Regional CUW390 Regional CUW391 Regional ATTACHMENT L-1 IDENTIFICATION OF WSIP PROJECTS AS REGIONAL/RETAIL (Section 5.04) Project Description San Joaquin Region San Joaquin Pipeline System Rehabilitation Tesla Advance Disinfection Tesla Portal Disinfection Sunol Valley Region Alameda Creek Fishery Enhancement Stand-by Power - Various Locations New Irvington Tunnel/Alameda Siphon NO.4 Pipeline Readiness Improvements Calaveras Dam Replacement SVWTP 40 mgd Addition SVWTP Finished Water Reservoir San Antonio Pump Station Upgrade Bay Division Region Seismic Upgrade BDPL 3 & 4 SCADA Phase II/Security Upgrades BDPL Reliability Upgrades BDPL 3 & 4 Crossover EBMUD Intertie BDPL 4 Slipline Peninsula Region Lower Crystal Springs Dam Improvement Crystal Springs Bypass Tunnel Adit Leak Repairs Pulgas Balancing Reservoir Rehabilitation and Improvements Cross Connection Control HTWTP Short Term Improvemetns HTWTP Long Term Improvements Capuchino Valve Lot Improvements Crystal Springs/San Andreas Transmission Crystal Springs Pipleine 2 Replacement San Andreas Pipeline 3 Installation Desalination Baden & San Pedro Valve Lots Improvements Page 1 of 3 ATTACHMENT L-1 IDENTIFICATION OF WSIP PROJECTS AS REGIONAL/RETAIL (Section 5.04) Project Number Project Description San Francisco Region CUW358 Regional Sunset Reservoir Upgrades - North Basin CUW372 Regional University Mound Reservoir Upgrades - North Basin System-Wide CUW388 Regional PEIR CUW392 Regional Program Management Services CUW394 Regional Watershed Land Acquisition RETAIL Reservoirs CUVV307 Local Summit Reservoir Rehabilitation CUW310 Local New Northwest Reservoir CUW319 Local Hunters Point Reservoir Rehabilitation CUW334 Local Stanford Heights Reservoir Rehabilitation CUW335 Local Potrero Heights Reservoir Rehabiliation CUW337 Local Sutro Reservoir Rehabilitation Pump Stations/Tanks CUW306 Local Croçker Amazon Pump Station Upgrade CUW309 Local Lake Merced Pump Station Upgrade CUW314 Local La Grande Tank Upgrade CUW318 Local Forest Hill Tank Rehabilitation CUW320 Local Forest Hilll Pump Station Upgrade CUW321 Local Forest Knoll Pump Station Upgrade CUW322 Local Lincoln Park Pump Station Upgrade CUW323 Local Alemany Pump Station Upgrade CUW324 Local Mount Davidson Pump Station Upgrade CUW326 Local Palo Alto Pump Station Upgrade CUW326 Local Sktview-AquaVista Pump Station Upgrade CUW327 Local Summit Pump Station Upgrade CUW328 Local McLaren #1 Tank Rehabilitation CUW329 Local Potrero Heights Tank Seismic Upgrade CUW330 Local Forest Knoll Tank Seismic Upgrade CUW331 Local Lincoln Park Tank Seismic Upgrade CUW332 Local McLaren #2 Tank Rehabilitation CUW333 Local Mount Davidson Tank Seismic Upgrade CUW338 Local La Grande Pump Station Upgrade CUW339 Local Potrero Heights Pump Station Upgrade CUW340 Local Vista Francisco Pump Station Upgrade Page2 of 3 Project Number CUW304 Local CUW308 Local CUW311 Local CUW312 Local CUW313 Local CUW315 Local CUW316 Local CUW301 Local CUW302 Local CUW364 Local CUW303 Local CUW305 Local ATTACHMENT L-1 IDENTIFICATION OF WSIP PROJECTS AS REGIONAL/RETAIL (Section 5.04) Project Description PipelinesNalves North University Mound System Upgrade Motorize Key Valves Sunset Circulation Improvements Lincoln Way Transmission Line Noe Valley Transmission Main, Phase 2 Eastlest Transmission Main Fulton (§ Sixthe Ave Main Replacement Water SupplylWater Quality Groundwater Recycled Water Lawrence-Livermore National Laboratory Water Quality Improvements Miscellaneous Vehicle Service Facility Upgrade Fire Protection at CCD Page 3 of 3 A TT ACHMENT L-2 03/13/06 $507,815,000 PUBLIC UTILITIES COMMISSION OF THE CITY AND COUNTY OFSAN FRANCISCO SAN FRANCiSCO WATER REVENUE BONDS, 2006 SERIES A $110,065,000 PUBLIC UTILITIES COMMISSION OF THE CITYAND COUNTY OF SAN FRANCISCO SAN FRANCISCO WATER REVENUE BONDS, 2006 REFUNDING SERIESB CERTIFICATE REGARDING USE OF PROCEEDS The undersigned hereby states and certifesas follows: (i) The undersigned is the General Manager of the Public Utiities Commission of the City and County of San Francisco (the "Commission"), and is authorized to execute this certificate on behalf of the Commission and is knowledgeable with respect to the matters set forth herein. (ii) On the date hereof, the Commission is issuing the two series of bonds captioned above (the "2006 Series A Bonds," the "2006 Refunding Series B Bonds" and, together, the "Bonds") pursuant to an Amended and Restated Indenture dated as of August 1, 2002 and the First Supplemental Indenture dated as of March 1, 2006 (collectively, the "Indenture"), both by and between the Commission and U.S. Bank National Association, as trustee (the "Trustee"). (iii) The Trustee wil transfer and deposit the proceeds of the 2006 Series A Bonds received by the Trustee on the date hereof as follows: (1) $48,212,528.32 will be deposited in the 2006 Series A Gapitalized Interest Account established within the Interest Fund; (2) $15,958,031.25 will be deposited in the 2006 Series A Reserve Account of the Bond Reserve Fund; (3) $623,906.09 will be deposited in the 2006 Series A Costs of Issuance Fund; (4) $120,622,352.19 will be deposited in the 2006 Series A Refunding Fund and transferred pursuant to Irrevocable Refunding Instructions of the Commíssion dated the date hereof; and (5) the remaining $338,600,816.86 wil be transferred to the Treasurer for deposit to the 2006 Senes A Project Fund. (iv) The proceeds of the 2006 Series A Bonds transferred pursuant to the Irrevocable Refunding Instructions of the Commission wil be used to defease and refund the Commission's Commercial Paper Notes (Water Series) on a current basis. The Notes were issued to finance a portion of the facilities described in Exhibit A hereto. (v) The proceeds of the Bonds deposited in the 2006 Series A Project Fund will be used to finance a portion of the facilties described in Exhibit A hereto. A TT ACHMENT L-2 CONTINUED (vi) The Trustee wil transfer and deposit the proceeds of the 2006 Refunding Series B Bonds received by the Trustee on the date hereof as follows: (1) $192,498.04 wil be deposited in the 2006 Refunding Series B Costs of Issuance Fund; and (2) $111,178,241.95 wil be deposited in the 2006 Refunding Series B Refunding Fund. (vii) The proceeds of the Bonds deposited in the 2006 Refunding Series B Refunding Fund, together with amounts on deposit in the funds and accounts established under the Indenture for the Commission's San Francisco Water Revenue Bonds, 1996 Series A (the "1996 Series A Bonds") and its San Francisco Water Revenue Bonds, 2001 Series A (the "2001 Series A Bonds"), wil be used to refund on an advance basis a portion of the outstanding 1996 Series A Bonds and a portion of the outstanding 2001 Series A Bonds. The portion of the 1996 Series A Bonds being refunded were issued to finance the facilties (the "1996 Project") described in Exhibit B hereto, and the portion of the 2001 Series A Bonds being refunded were used to finance the facilties (the "2001 Project") described in Exhibit B hereto. (viii) Exhibit C hereto attached describes (A) each use to be made by any person of the Project', the 1996 Project and the 2001 Project other than use by the Commission and other non-federal governmental units and other than use by members of the public generally, and (B) payments (if any) directly or indirectly in respect of such use which are to be made after the date hereof; (ix) Other than as set forth in Exhibit A and Exhibit B, no portion of the proceeds of the Bonds wil be used, directly or indirectly, to make or finance a loan to any person (other than a State or local government unit) or to acquire property which wil be sold or leased to any person (other than a State or local government unit) on an installment a sale basis except as referenced in Exhibit C. (x) The Commission expects to use the Project for the purposes referenced and discussed in Exhibit Ai Exhibit B, Exhibit C and Exhibit D or for other governmental purposes of the Commission during the entire term ofthe Bonds. , (xi) Set forth on Exhibit 0 is the Commission's methodology for determining governmental use and private use with respect to the water enterprise: (xii) To the best knowledge of the undersigned, the above statements are reasonable and there are no other facts, estimates or circumstances, other than those set forth herein, that would matenally affect the statements made herein.i Capitalized terms used but not defined herein have the meanings set forth in the Indenture. IN WITNESS WHEREOF, I have hereunto set my name this 15th day of March, 2006. By: 2// ATTACHMENT L-2 (CONTINUED) WATER ENTERPRISE REVENUE BOND 2006 SERIES A SUMMARY OF SOURCES AND USES OF FUNDS (Section 5.04) Source: Closing Documents (Certificate Regarding Use of Proceeds) Proceeds Principal Plus Premium Minus Underwriter's Discount Minus Insurance Net Proceeds i;07,815,000.00 19,109,138.35 (932,940.06) (1,973,563.58) 524,017,634.71 Use of Proceeds Capitalized Interest Fund Bond Reserve Fund Insurance Fund Series A Refunding Fund Series A Project Fund Total Uses 48,212,528.32 15,958,031.25 623,906.09 120,622,352.191. 338,600,816.86 f 459,223,169.05 524,017,634.71 Commercial Paper Project Fund Total Hetch Hetchy Tesia Portal Disinfection 251,262.58 1,147,302.42 1,398,565.00 Advance Disinfection 429,714.76 5,611,554.24 6,041,269.00 SJPL 4,737,937.28 17,784,667.72 22,522,605.00 Total Hetch Hetchy 5,418,914.62 24,543,524.38 29,962,439.00 SF Regional University Mouhd - North 55,728.10 5,964,279.90 6,020,008.00 Sunset - North 7,525,896.84 28,782,094.16 36,307,991.00 Groundwater 3,400,973.67 2,963,110.33 6,364,084.00 Recycled Water 1,548,036.76 11,316,958.24 12,864,995.00 Total SF Regiona1 12,530,635.37 49,026,442.63 61,557,078.00 SF Local 45,405,787.71 106,407,313.30 151,813,101.01 Sunol Valley Subregional Calaveras Dam 9,065,945.51 15,993,818.49 25,059,764.00 Stand-by Power 556,398.67 1,207,319.33 1,763,718.00 Pipeline Readiness 649,566.31 4,942,205.69 5,591,772.00 SAPS Upgrade 213,423.44 1,748,134.56 1,961,558.00 SVWTP Finished Water Res 3,317,203.82 7,838,383.18 11,155,587.00 Irvington Tunnel 4,084,139.65 18,247,176.35 22,331,316.00 Alameda Creek Fishery 656,765.00 1,327,119.00 1,983,884.00 SVWTP 40 mgd Addition 25,378.75 3,474,585.25 3,499,964.00 Total Sunol Valley Subregional 18,568,821.15 54,778,741.85 73,347,563.00 Page 1 of 2 This certificate is for illustration only. It was prepared in 2006 and shown groundwater and recycled water projects as regional instead of locaL. In addition, it does not reflect expenditures for the portions of regional assets which in rate base as of June 30, 2008 nor what is expected to be added to rate base through June 30, 2009. For these reasons, the percentages shown for regional and local projects are not accurate. Page 2 of 2 ATTACHMENT L-3 WATER ENTERPRISE REVENUE BOND 2006 SERIES A ANNUAL REPORT ON EXPENDITURES OF AND EARNINGS ON PROCEEDS AS OF JUNE 30, 2009 (Section 5.04 A) Project Number REGIONAL PROGRAM San Joaquin Region San Joaquin Pipeline System Rehabilitation Tesla Advance Disinfection Tesla Portal Disinfection Total San Joaquin Region CUW373 Regional CUW384 Regional CUW387 Regional CUW352 Regional CUW355 Regional CUW359 Regional CUW370 Regional CUW374 Regional CUW381 Regional CUW382 Regional CUW386 Regional CUW353 Regional CUW363 Regional CUW368 Regional CUW380 Regional CUW389 Regional CUW393 Regional CUW354 Regional CUW356 Regional CUW357 Regional CUW361 Regional CUW365 Regional CUW366 Regional CUW367 Regionai CUW369 Regional CUW371 Regional CUW378 Regional CUW379 Regional CUW390 Regional CUW391 Regional CUW358 Regional CUW372 Regional CUW388 Regional CUW392 Regional CUW394 Regional LOCAL PROGRAM CUW307 Local CUW310 Local CUW319 Local CUW334 Local CUW335 Local CUW337 Local CUW306 Local CUW309 Local CUW314 Locai CUW318 Local CUW320 Local CUW321 Local CUW322 Local CUW323 Local CUW324 Local Project Description Sunol Valley Region Alameda Creek Fishery Enhancement Stand-by Power - Various Locations New Irvington Tunnel/Alameda Siphon NO.4 Pipeline Readiness Improvements Calaveras Dam Replacement svwp 40 mgd Addition svwP Finished Water Reservoir San Antonio Pump Station Upgrade Total Sunol Valley Region Bay Division Region Seismic Upgrade BDPL 3 & 4 SCADA Phase II/Security Upgrades BDPL Reliability Upgrades BDPL 3 & 4 Crossover E8MUD Intertie BDPL 4 Slipline Total Bay Division Region Peninsula Region Lower Crystal Springs Dam Improvement Crystal Springs 8ypass Tunnel Adit Leak Repairs ~~fE~~E~~~';~;OO '"' ,m~:.""..m",..'.'.~,:,'\'.:,e,JJt,'.-.:.~.;\~,~~\\ Crytal Springs/San Andreas Transmission _~, " , _) _ Crystal Springs Pipleine 2 Replacement i'"' \ \'.,; '\ San Andreas Pipeline 3 Installation 'f; è\ \ " ,\'(0,'1Desalination /_ 'r~ \. '\ /~\_\~~)! ,.:Y Baden & San Pedro Valve L9íel¡prcìÌ!èn~-!tS Total Peninsula Region '\ \\, .~;~¿\;;,.. \2;'.\;/ San Francisco Region Sunset Reservoir Upgrades - North 8asin- University Mound Reservoir Upgrades - North Basin Total San Francisco Region System-Wide PEIR Program Management Services Watershed Land Acquisition Total System-Wide Total Regional Program Reservoirs Summit Reservoir Rehabilitation New Northwest Reservoir Hunters Point Reservoir Rehabilitation Stanford Heights Reservoir Rehabilitation Potrero Heights Reservoir Rehabilitation Sutro Reservoir Rehabilitation Total Reservoirs Pump Stations/Tanks Crocker Amazon Pump Station Upgrade Lake Merced Pump Station Upgrade La Grande Tank Upgrade Forest Hill Tank Rehabilitation Forest Hilll Pump Station Upgrade Forest Knoll Pump Station Upgrade Lincoln Park Pump Station Upgrade Alemany Pump Station Upgrade Mount Davidson Pump Station Upgrade Page 1 of2 Net Financing Proceeds' 1,398,565 6,041,269 22,522,605 29,962,439 1,983,884 1,763,718 22,331,316 5,591,772 25,059,764 3,499,964 11,155,587 1,961,558 73,347,563 21,234,846 1,313,461 45,235,465 21,239,846 10,743,922 1,219,251 100,986,791 4,2J.°Ata 18¡4Q6,O~~ . ir1',.9tsN'03\ ..\\3_92,i.~213 \. \\:C,¡75, 1 09 v' 6,457,624 3,656,979 916,364 5,737,829 6,288,936 3,435,064 652,092 3,023,744 60,090,650 6,020,008 36,307,991 42,327,999 8,308,050 13,323,598 502,660 22,134,308 -328,849,750 Appropriated Interest Earnings' Adjusted Project Funding Expenditures Thru 6/30/093 Remaining Balance Project Number CUW326 Local CUW326 Local CUW327 Local CUW328 Local CUW329 Local CUW330 Local CUW331 Local CUW332 Local CUW333' Local CUW338 Local CUW339 Local CUW340 Local CUW304 Local CUW308 Local CUW311 Local CUW312 Local CUW313 Local CUW315 Local CUW316 Local CUW301 Local CUW302 Local CUW364 Local CUW303 Local CUW305 Local WATER ENTERPRISE REVENUE BOND 2006 SERIES A ANNUAL REPORT ON EXPENDITURES OF AND EARNINGS ON PROCEEDS AS OF JUNE 30, 2009 (Section 5.04 A) Project Description Palo Alto Pump Station Upgrade Sktview-AquaVista Pump Station Upgrade Summit Pump Station Upgrade McLaren #1 Tank Rehabilitation Potrero Heights Tank Seismic Upgrade Forest Knoll Tank Seismic Upgrade Lincoln Park Tank Seismic Upgrade McLaren #2 Tank Rehabilitation Mount Davidson Tank Seismic Upgrade La Grande Pump Station Upgrade Potrero Heights Pump Station Upgrade Vista Francisco Pump Station Upgrade Total Pump StationslTanks Net Financing Proceeds1 PipelinesNalves North University Mound System Upgrade Motorize Key Valves Sunset Circulation Improvements Lincoln Way Transmission Line Noe Valley Transmission Main, Phase 2 EasUWest Transmission MainFulton ~ Sixth Ave Main Replacement ','"TloalPipelinesNalves "'1/;;2:'\,\ \:,' .). Water SupplylWater Quality .. (!. \ ¡':::) j \.iGroundwater ~(~, \\ ~ :\ ,! (. ,:.j' Recycled Water. it, \ \Y";¿. .,' Lawrence-Livermore Natioita.1 täi,oj~t~iY.Wáter Quality Improvements Total Water SupplylWater Q"Ii~Ir,:~j'/ \J':;' /)\)f§j\~\ f,:\'\\' Miscellaneous Vehicle SerVice Facility Upgrade Fire Protection at CCD Total Miscellaneous Total Local Program Grand Total Regional and Local Programs Unappropriated. Interest Earnings Percent of Net Proceeds. Percent of Net Proceeds and Earnings4 'Net financing proceeds available on date of issue (i.e. deposit to project fund) 'Cumulative net of arbitrage rebate liability3Cumulative 'If financing sources Substantially Expended, proceed allocations are then fixed Page 2 of 2 Appropriated Interest Eamings2 Adjusted Project Funding Expenditures Thru 6/30/09' Remaining Balance RE V E N U E - F U N u t : D C A P I T A L A D D I T I O N S ( S e c t i o n 5 . 0 4 . 8 ) Su b f u n d : 5 W C P F W C F - W h o l e s a l e C u s t o m e r C a p i t a l F u n d ( W a t e r ) AT I A C H M E N I M - 1 Pa g e 1 o f 2 Pr o j e c t e d F A M I S a s o f J u l y 1 , 2 0 0 9 ( D a y 1 o f N e w B u d g e t Y e a r ) A B C D E F Wh o l e s a l e C u s t o m e r C a p i t a l F u n d ( 5 W C P F W C F ) G= C . D - F H I= G . H Ba s e d o n P r o p o r t i o n a t e A n n u a l W a t e r D e l i v e r i e s o f . . . 68 . 7 % Pr o j e c t T i t l e CU W 2 6 2 R e g i o n a l W a t e r R n R - T r e a t m e n t F a c i l i t i e s CU W 2 6 3 R e g i o n a l W a t e r R n R - C o n v e y a n c e f T r a n s m i s s i o n S y s t e m s CU W 2 6 4 R e g i o n a l W a t e r - W a t e r s h e d s I R O W M a n a g e m e n t FU W 1 0 0 R e g i o n a l W a t e r - F a c i l t i e s M a i n t e n a n c e CU W 2 6 1 R e g i o n a l W a t e r - S t o r a g e FY 2 0 0 9 . 1 0 Ap p r o v e d Bu d g e t - To t a l R e g i o n a l $ 1 , 0 0 0 , 0 0 0 $ 7 . 0 0 0 , 0 0 0 $ 5 0 0 , 0 0 0 $ 3 , 7 0 0 , 0 0 0 FY 2 0 0 9 - 1 0 Ap p r o v e d Bu d g e t - WH O L E S A L E SH A R E $ 6 8 7 , 0 0 0 $ 4 , 8 0 9 , 0 0 0 $ 3 4 3 , 5 0 0 $ 2 , 5 4 1 , 9 0 0 Pr o j e c t e d Ex p e n d e d & To t a l Fi s c a l Y e a r En c u m b e r e d Ap p r o p r i a t e d , En c u m b e r e d Pr o j e c t e d Ap p r o p r i a t i o n - A l l Y e a r s A c t u a l 2 0 0 9 - 1 0 A c t u a l Bu t N o t Un e n c u m b e r e d th r o u g h Su r p l u s 1 Al l Y e a r s A Ex p e n d i t u r e s A E x p e n d i t u r e s A Ex p e n d e d A Ba l a n c e A 6/ 3 0 / 2 0 1 0 (S h o r t a l l ) $ 68 7 , 0 0 0 $ $ '$ $ 68 7 , 0 0 0 . $ 22 9 , 0 0 0 $ 45 8 . 0 0 0 $ 4, 8 0 9 , 0 0 0 $ $ $ $ 4, 8 0 9 , 0 0 0 $ 1, 6 0 3 , 0 0 0 $ 3,2 0 6 , 0 0 0 $ 34 3 . 5 0 0 $ $ $ $ 34 3 , 5 0 0 $ 11 4 , 0 0 0 $ 22 9 . 5 0 0 $ 2, 5 4 1 , 9 0 0 $ - $ $ - $ 2, 5 4 1 , 9 0 0 $ 84 7 , 0 0 0 $ 1, 6 9 4 . 9 0 0 Re g i o n a l T o t a l ~ _ . ~ $ So u r c e : . S F P U C C o m m i s s i o n A p p r o v e d B u d g e t , F e b r u a r y 2 0 0 9 , S a m e F o r m a t . F A M I S - C i t y ' s O f f i c i a l F i n a n c i a l S y s t e m o f R e c o r d RE V E N U E - F U N D E D C A P I T A L A D D I T I O N S ( S e c t i o n 5 . 0 4 . 8 ) Su b f u n d : 5 W C P F W C F - W h o l e s a l e C u s t o m e r C a p i t a l F u n d ( W a t e r ) .. Pr o j e c t e d F A M I S . a s o f J u n e 3 0 , 2 0 1 0 (L a s t D a y o f B u C l g e t Y e a r ) Ba s e d o n P r o p o r t i o n a t e A n n u a l W a t e r D e l i v e r i e s o f 0 0 ' Wh o l e s a l e C u s t o m e r C a p i t a l F u n d ( 5 W C P F W C F ) 68 . 7 % FY 2 0 0 9 - 1 0 Pr o j e c t e d FY 2 0 0 9 - 1 0 Ap p r o v e d Ex p e n d e d & Ap p r o v e d Bu d g e t - To t a l Fi s c a l Y e a r En c u m b e r e d Ap p r o p r i a t e d , En c u m b e r e d Pr o j e c t e d Bu d g e t - WH O L E S A L E Ap p r o p r i a t i o n - A l l Y e a r s A c t u a l 2 0 0 9 - 1 0 A c t u a l Bu t N o t Un e n c u m b e r e d th r o u g h Su r p l u s 1 Pr o j e c t Ti t l e To t a l R e g i o n a l SH A R E Al l Y e a r s A Ex p e n d i t u r e s A Ex p e n d i t u r e s A Ex p e n d e d A Ba l a n c e A 6/ 3 0 / 2 0 1 1 (S h o r t a l l ) CU W 2 6 2 R e g i o n a l W a t e r R n R - T r e a t m e n t F a c i l i t i e s $ 1,0 0 0 , 0 0 0 $ 68 7 , 0 0 0 $ 68 7 , 0 0 0 $ 23 5 . 0 0 0 $ 23 5 , 0 0 0 $ $ 45 2 , 0 0 0 $ 40 9 . 0 0 0 $ 43 . 0 0 0 CU W 2 6 3 R e g i o n a l W a t e r R n R - C o n v e y a n c e f T r a n s m i s s i o n S y s t e m s $ 7, 0 0 0 , 0 0 0 $ 4,8 0 9 . 0 0 0 $ 4, 8 0 9 , 0 0 0 $ 1, 3 9 5 , 0 0 0 $ 1, 3 9 5 , 0 0 0 $ 25 , 0 0 0 $ 3, 3 8 9 , 0 0 0 $ 1,5 8 9 . 0 0 0 $ 1. 8 0 0 , 0 0 0 CU W 2 6 4 R e g i o n a l W a t e r - W a t e r s h e d s I R O W M a n a g e m e n t $ 50 0 , 0 0 0 $ 34 3 . 5 0 0 $ 34 3 , 5 0 0 $ 11 5 , 0 0 0 $ 11 5 . 0 0 0 $ 50 , 0 0 0 $ 17 8 , 5 0 0 $ 35 . 5 0 0 $ 14 3 , 0 0 0 FU W 1 0 0 R e g i o n a l W a t e r - F a c i l i t i e s M a i n t e n a n c e $ 3, 7 0 0 , 0 0 0 $ 2,5 4 1 , 9 0 0 $ 2, 5 4 1 , 9 0 0 $ 85 0 , 0 0 0 $ 85 0 , 0 0 0 $ 12 3 , 0 0 0 $ 1, 5 6 8 , 9 0 0 $ 76 8 , 9 0 0 $ 80 0 , 0 0 0 CU W 2 6 1 Re g i o n a l W a t e r - S t o r a g e $ - $ Re g i o n a l T o t a l $ 1 2 , 2 0 0 , 0 0 0 $ 8 , 3 8 1 , 4 0 0 $ 2, 5 9 5 , 0 0 0 \ $ 2 , 5 9 5 , 0 0 0 . 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Updated Actual Information Through Most Recent Fiscal Year (Due in November) Each year, the SFPUC will provide a report on the status of the regional revenue funded projects with the following information: Project-level information (through close-out) 1 Scope of project 2 Current cost estimate/budget. 3 . Expected milestone dates (ie, design, environmental, construction period, close-out, etc.) 4 Contract status 5 Reasons for status changes from prior report. 6 Other information relevant to whether project is on time/on budget. 7 For most recently completed fiscal year and estimated for current year: 8 Total expenditures (capital and operating); amounts paid from other sources. 9 Amount of encumbered and unencumbered appropriations 10 Application of any unused appropriations Wholesale Capital Fund 11 Beginning balance, deposits, capital expenditures (by project), earnings, ending balance. 12 Components of ending balance; wholesale portion of: 13 Appropriated and encumbered 14 Appropriated but unencumbered Part 8. Proposed Appropriations for Upcoming Year (Due in March) 15 Project information, to the extent not provided in Part A 16 Expected funding needs for regional projects 17 Unused or excess appropropriations carried over. 18 Proposed appropriation for upcoming fiscal year. Amended Attachment M-3 Wholesale Capital Fund and Balancing Account Adjustment Reference Amended Section 6.08E A. Cash Flow in Wholesale Capital Fund FYE 2010 FYE 2011 FYE 2012 FYE 2013 FYE 2014 FYE 2015 FYE 2016 FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 1 Beginning Total Balance (1)- 8,818,323 12,404,275 15,761,658 16,268,065 9,084,304 17,243,583 32,251,212 29,842,765 33,698,785 41,548,944 47,366,205 36,848,850 21,206,239 2 Annual Appropriation (2)10,476,724 8,636,920 21,737,468 11,285,643 18,668,585 15,432,451 21,138,051 11,184,265 17,847,379 26,424,000 26,420,000 13,210,000 13,210,000 13,210,000 3 Annual Expenditures (3)(1,778,695) (5,202,897) (18,553,119) (10,916,349) (5,758,565) (7,331,312) (6,245,954) (13,892,649) (14,361,409) (18,089,498) (16,723,232) (28,485,215) (33,563,793) (22,018,000) 4 Interest Earnings (4)120,294 151,929 173,034 137,113 180,672 58,140 115,532 299,936 370,050 475,153 664,783 757,859 711,183 409,280 June 30 Balances Before Balancing Account Transfers 5 Total Balance (5)8,818,323 12,404,275 15,761,658 16,268,065 29,358,756 17,243,583 32,251,212 29,842,765 33,698,785 42,508,440 51,910,495 32,848,850 17,206,239 12,807,520 6 Amount Encumbered as of June 30 (6)(1,927,466) (1,000,000) (1,000,000) (1,000,000) (2,000,000) (2,000,000) 7 Unencumbered Balance (7)n/a n/a n/a n/a 27,431,290 n/a n/a n/a n/a 41,508,440 50,910,495 31,848,850 15,206,239 10,807,520 8 Transfer From/(To) Balancing Account (8)n/a n/a n/a n/a (20,274,452) n/a n/a n/a n/a (959,496) (4,544,290) 4,000,000 4,000,000 4,000,000 Ending Balances After Balancing Account Transfers 9 Ending Total Balance (9)8,818,323 12,404,275 15,761,658 16,268,065 9,084,304 17,243,583 32,251,212 29,842,765 33,698,785 41,548,944 47,366,205 36,848,850 21,206,239 16,807,520 10 Unencumbered Ending Balance (10)n/a n/a n/a n/a 7,156,838 n/a n/a n/a n/a 40,548,944 46,366,205 35,848,850 19,206,239 14,807,520 B. Calculation of Target Balance 11 Target WCF Balance (11)7,156,838 40,548,944 46,366,205 40,559,076 34,346,800 29,062,000 C. Calculation of Remaining Cumulative Appropriation 12 Cumulative Appropriation Since FYE 2010 (12)10,476,724 19,113,644 40,851,112 52,136,755 70,805,340 86,237,791 107,375,842 118,560,107 136,407,486 162,831,486 189,251,486 202,461,486 215,671,486 228,881,486 13 Cumulative Expenditures Since FYE 2010 (13)(1,778,695) (6,981,592) (25,534,711) (36,451,060) (42,209,626) (49,540,938) (55,786,891) (69,679,540) (84,040,949) (102,130,447) (118,853,679) (147,338,893) (180,902,686) (202,920,686) 14 Total Remaining Cumulative Appropriation (14)28,595,715 36,696,854 51,588,951 48,880,567 52,366,537 60,701,040 70,397,808 55,122,593 34,768,800 25,960,800 15 Amount Encumbered as of June 30 (15)(1,927,466) - (1,000,000) (1,000,000) (1,000,000) (2,000,000) (2,000,000) 16 Unencumbered Remaining Cumulative Appropriation (16)n/a n/a n/a 26,668,249 n/a n/a n/a n/a 59,701,040 69,397,808 54,122,593 32,768,800 23,960,800 17 D. Lesser of Target Balance and Unencumbered Remaining Cumulative Appropriation Lesser of Target Balance (line 11) and Unencumbered Remaining Appropriation (line 16) (17)40,548,944 46,366,205 40,559,076 32,768,800 23,960,800 E. Calculation of Excess Fund Balance and Refund to Wholesale Customers Through Balancing Account 18 Is Unencumbered Balance (line 7) more than line 17? (18)Yes Yes No No No 19 Excess WCF Balance (applied as a negative entry on line 8) (19)959,496 4,544,290 - - - F. Calculation of Deficiency Fund Balance and Charge to Wholesale Customers Through Balancing Account (This Section is Only Applicable in Any Year When Line 18 is No) 20 Is Unencumbered Balance (line 7) less than line 17? (20)Yes Yes Yes 21 Tentative Amount Before Application of $4 million cap (21)8,710,226 17,562,561 13,153,280 22 Is line 21 more than $4,000,000 maximum? (22)Yes Yes Yes 23 Balancing Account Charge (applied as a positive entry on line 8):4,000,000 4,000,000 4,000,000 Original 5 Year True-up Method FYEs 2010-2018 Amended Annual True-Up (FYE 2019 and Beyond) See Notes on Page 2 Page 1 of 2 Notes: (1) Beginning Total Balance (encumbered and unencumbered). Equal to the prior year ending total balance after balancing account transfers (line 9). (2) Wholesale Share of Revenue Funded Appropriations for Regional capital projects, adjusted for de-appropriations which have been factored into a wholesale revenue requirement, if applicable. FYE 2015 and forward are subject to compliance audit and 7.06 review. Detail by Regional project in the format used in the 2010 - 2014 true-up to be separately provided. (3) Wholesale Share of actual Regional capital expenditures funded from Revenue Funded Capital, determined based on proportionate water use in the year of expenditure. Figures from FYE 15 and forward are subject to 7.06 and compliance audit review. Detail by Regional project in the format used in the 2010 - 2014 true-up to be separately provided. The figures in line 3 for FYE 18 and on are for illustrative purposes only. (4) Line 1 times the assumptions below for the SFPUC pool rate. FYE 2010 - 2014 figures are actual and tie to the first 5 year review. Pool rate assumptions:0.640%0.670%0.930%1.240%1.410%1.600%1.600%1.930%1.930% (5) Total encumbered and unencumbered balance of the Wholesale Capital Fund before Balancing Account adjustments: Line 1 + line 2 + line 3 + line 4. (6) Wholesale Share of the encumbrances for purchase orders or contracts in connection with revenue-funded Regional capital projects; calculated using the proportional annual use of the true-up year. Entered as a negative number. Not applicable in years with no true-up (FYEs 2010-13 and 2015-18). FYE 2014 figure is actual. FYE 2019 and forward are plug numbers included for illustration. (7) Unencumbered Balance Before Balancing Account transfers: Line 5 + line 6. FYE 2014 figure is actual. Not applicable (n/a) in years with no true-up (FYEs 2010-13 and 2015-18). (8) Negative entries represent refunds to the Wholesale Customers through the Balancing Account and are calculated per Section E below, except for 2014 which is actual pursuant to the original 6.08E. Positive entries represent charges to the Wholesale Customers through the Balancing Account and are calculated per Section F below. (9) Total Ending Balance After Balancing Account Transfers = Line 5 + line 8. (10) Unencumbered Ending Balance After Balancing Account Transfers = Line 7 + line 8. Must not exceed the amount on line 17, which is the lesser of the Target Balance (line 11) and the Unencumbered Remaining Cumulative Appropriation (line 16). (11) Starting in FYE 2019, the Target Balance is calculated by the formula below, where CY represent the Current Year (for which the transfer is being calculated), CY-1 is the prior year, CY-2 is 2 years prior, etc.: [line 2: CY]*(4/5) + [line 2: CY-1]*(3/5) + [line 2: CY-2]*(2/5) +[line 2: CY-3]*(1/5); rounded to the nearest dollar. The FYE 2014 figure is the actual target balance under the original section 6.08E. (12) Cumulative Appropriations Since FYE 2010 = prior year line 12 + current year line 2. (13) Cumulative Expenditures Since FYE 2010 = prior year line 13 + current year line 3. Does not include encumbrances. (14) Total Remaining Cumulative Appropriation (encumbered and unencumbered) = line 12 + line 13. (15) Amount encumbered as of June 30 = line 6. Encumbrances are not cumulative. (16) Unencumbered Remaining Cumulative Appropriation = line 14 + line 15. (17) Lesser of Target Balance (line 11) and Unencumbered Remaining Cumulative Appropriation (line 16). Used in formulas in line 19 (Section E) and line 21 (Section F), as applicable. (18) If Yes, go to line 19 for calculation of the excess unencumbered balance. If No, go to line 20. (19) Calculation of Excess Balance: If line 18 = Yes, then line 7 minus line 17. The result appears as a negative amount on line 8. (20) If yes, then go to lines 21-23 for calculation of charge to Wholesale Customers. (21) Initial step in calculating charge: If line 20 = Yes, then line 17 minus line 7; go to line 22. (22) If the result on line 21 is greater than $4,000,000, then the charge to the Wholesale Customers is capped at $4,000,000. (23) Equal to the lesser of line 21 or $4,000,000. The result appears as a positive number on line 8. See Notes on Page 2 Page 2 of 2 BA L A N C I N G A C C O U N T I R A T E S E T T I N G C A L C U L A T I O N RE F E R E N C E S E C T I O N 6 . 0 3 . A . 3 . a St e p 1 : A. B a l a n c i n g A c c o u n t a s o f J u n e 3 0 , 2 0 0 7 B. I n t e r e s t o n B a l a n c i n g A c c o u n t a t P o o l e d I n v e s t m e n t R a t e f o r F i s c a l Y e a r C. W h o l e s a l e R e v e n u e s f o r F i s c a l Y e a r D. W h o l e s a l e R e v e n u e R e q u i r e m e n t f o r F i s c a l Y e a r E. S e t t l e m e n t C r e d i t s o r O t h e r A d j u s t m e n t s F. 1 9 8 4 A g r e e m e n t B a l a n c i n g A c c o u n t C r e d i t s G. B a l a n c i n g A c c o u n t a s o f J u n e 3 0 , 2 0 0 8 St e p 2 : A. B a l a n c i n g A c c o u n t a s o f J u n e 3 0 , 2 0 0 8 B. I n t e r e s t o n B a l a n c i n g A c c o u n t a t P o o l e d I n v e s t m e n t R a t e f o r F i s c a l Y e a r C. W h o l e s a l e R e v e n u e s f o r F i s c a l Y e a r " À ' n D. W h o l e s a l e R e v e n u e R e q u i r e m e n t f o r F i s c a l Y e a r / ? - \ \ ' \ \ \ // . . , \ . ¡ \ E. S e t t l e m e n t C r e d i t s o r O t h e r A d j u s t m e n t s , ; : t ; / : " , , ~ ~ t ' \ F. 1 9 8 4 A g r e e m e n t B a l a n c i n g A c c o u n t Cr e d i t s / ~ ~ ~ l \ \ U ) \ : v G. B a l a n c i n g A c c o u n t a s o f J u n e 3 0 , 2 0 0 9 . : : \ c . ~ . \ \ ' \ ' ~ ' , _ ¿ : / ' . L , \ ' \ ~ ~ ; ) - ;. . . : ) ¡ , ! \ ' \ \ \ \ \ ' v St e p 3 : . , . , ( - ' i \ ' ) i 4 : , " V . l // / . \ - ~ \ . . . . l ; j ; 1 ~ \ / ; ' A. B a l a n c i n g A c c o u n t a s o f J u n e 3 0 , 2 0 0 9 / ; , . Y - , l ( \ ? \ , ~ ~ j 3 ' Ç B. I n t e r e s t o n B a l a n c i n g A c c o u n t a t P o o l e d I n v e s t m e n t R a 1 a A ó r , ; l I s ~ t y e ~ \ r \ ; C. W h o l e s a l e R e v e n u e s f o r ~ i s c a l Y e a r . f \ n \ ; ~ - = ) \ J . 1 , ; - - D. W h o l e s a l e R e v e . n u e R e q u i r e m ~ n t f o r F i s c a l y , \ ~ ; ~ r \ \ ' \ ; 1 \ , ( 2 / ; / E. S e t t l e m e n t C r e d i t s o r O t h e r A d J u s t m e n t s ç " , ~ , \ ' \ k ' c 1 F. 1 9 8 4 A g r e e m e n t B a l a n c i n g A c c o u n t ü t ~ 1 t ~ \ ' \ \ ; ; j - . / G. B a l a n c i n g A c c o u n t a s o f J u n e 3 0 , 2 0 1 a i \ \ i \ ~ ) \ : : / H. N e t C h a n g e i n W h o l e s a l e R e v e n u e C o \ \ ~ ~ â g É ! i. T o t a l R e v e n u e D e f i c i e n c y o r S u r p l u s ' ~ ' . J. P r o j e c t e d W a t e r S a l e s i n C c f K. D e f i c i e n c y o r ( S u r p l u s ) $ / C c f L. D e f i c i e n c y o r ( S u r p l u s ) C c f a s a P e r c e n t a g e o f R e v e n u e s FY 2 0 0 7 - 0 8 $1 2 , 8 8 2 , 0 0 0 $5 5 4 , 0 0 0 ($ 1 1 3 , 9 3 2 , 0 0 0 ) $1 1 9 , 2 2 4 , 0 0 0 $2 , 4 4 8 , 6 1 4 $0 $2 1 , 1 7 6 , 6 1 4 84 , 6 2 1 , 2 4 0 AT T A C H M E N T N - 1 Pa g e 1 FY 2 0 0 8 - 0 9 FY 2 0 0 9 - 1 0 // \ ., . . . . ( , J " _ : ) \ / \ \ \ í . " , \ . \ (~ S ? ) , i l : \ \ l ì J /; ; . 1 ~ ' P i ~ ' \ ' \ - ' , . , , ; v 1 J ò ' ' \ ~ . J l A c \ 0" I , f ' \ ' ! / i J ¡ \ . ; ' ' ~ ' , ' t . f \ \ ~ / : J '1 " \ / . , /1 \ " ' ' ' , i ' , / \\ l \ \ / \ \ ; \ . II , . . \ . " ' b \ i ' 1 7 6 6 1 4 \ - \ \ , ' ~ ~ 1 I \ \ \ ~ / $ 5 2 9 0 0 0 , ; ) , \) - : - $ 1 2 3 , 6 0 4 , 0 0 0 $1 2 0 , 5 6 2 , 0 0 0 $2 1 , 0 0 0 $0 $1 8 , 6 8 4 , 6 1 4 $0 $0 -$ 1 2 7 , 4 8 5 , 9 0 0 $1 4 0 ' , 9 9 4 , 7 3 3 $2 1 , 0 0 0 $1 , 9 9 7 , 2 2 0 $1 5 , 5 2 7 , 0 5 3 $4 , 4 8 8 , 2 3 3 $2 0 , 0 1 5 , 2 8 6 83 , 2 0 5 , 6 0 0 85 , 9 2 0 , 0 0 0 $0 . 2 3 15 . 7 % No t e : D o l l a r a m o u n t s a r e f o r i l l u s t r a t i v e p u r p o s e s o n l y . T h e P a r t i e s h a v e n o t a g r e e d o n t h e a m o u n t o f t h e b a l a n c i n g a c c o u n t a s o f J u n e 3 0 , 2 0 0 7 , re v e n u e r e q u i r e m e n t f o r F Y 2 0 0 7 - 0 8 , s e t t l e m e n t c r e d i t s f o r F Y 2 0 0 7 - 0 8 , a n d t h e a m o u n t o f t h e b a l a n c i n g a c c o u n t a s o f J u n e 3 0 , 2 0 0 9 . BA L A N C I N G A C C O U N T I R A T E S E T T I N G C A L C U L A T I O N ME T H O D O F C A L C U L A T I O N RE F E R E N C E S E C T I O N 6 . 0 3 . A . 3 . a AT T A C H M E N T N - 1 Pa g e 2 N = T h e y e a r f o r w h i c h r a t e s a r e b e i n g s e t N- 1 = T h e c u r r e n t y e a r N- 2 = T h e m o s t r e c e n t l y c o m p l e t e d y e a r f o r w h i c h a c t u a l r e s u l t s a r e a v a i l a b l e Ca l c u l a t i o n M e t h o d : St e p 1 D e t e r m i n e t h e a c t u a l r e v e n u e d i f f e r e n t i a l f o r y e a r N - 2 A. E n t e r t h e b e g i n n i n g a m o u n t o f t h e B a l a n c i n g A c c o u n t B. C a l c u l a t e t h e i n t e r e s t e a r n e d at t h e P o o l e d I n v e s t m e n t A c c o u n t R a t e f o r ( A ) C. E n t e r t h e a c t u a l W h o l e s a l e r e v e n u e s b i l l e d D. E n t e r t h e W h o l e s a l e R e v e n u e R e q u i r e m e n t E. E n t e r s e t t l e m e n t c r e d i t s o r a d j u s t m e n t s , i f a n y F. E n t e r c a r r y - o v e r 1 9 8 4 A g r e e m e n t c r e d i t s ow e d t h e C i t y , i f a n y G. C a l c u l a t e t h e e n d i n g a m o u n t o f t h e B a l a n c i n g A c c o u n t St e p 2 St e p 3 De t e r m i n e t h e p r o j e c t e d r e v e n u e d i f f e r e n t i a l f o r y e a r N - 1 A. E n t e r t h e b e g i n n i n g a m o u n t o f t h e B a l a n c i n g A c c o u n t ; t h i s i s t h e s a m e a m o u n t a s G i n S t e p 1 B. C a l c u l a t e t h e i n t e r e s t e a r n e d a t t h e P o o l e d I n v e s t m e n t A c c o u n t R a t e f o r ( A ) C. E n t e r t h e a c t u a l W h o l e s a l e r e v e n u e s b i l l e d D. E n t e r t h e W h o l e s a l e R e v e n u e R e q u i r e m e n t E. E n t e r s e t t l e m e n t c r e d i t s o r a d j u s t m e n t s , i f a n y F. E n t e r c a r r y - o v e r 1 9 8 4 A g r e e m e n t c r e d i t s o w e d t h e C i t y , i f a n y G. C a l c u l a t e t h e e n d i n g a m ò u n t o f t h e B a l a n c i n g A c c o u n t De t e r m i n e t h e p r o j e c t e d r e v e n u e d i f f e r e n t i a l f o r y e a r N A. E n t e r t h e b e g i n n i n g a m o u n t o f t h e B a l a n c i n g A c c o u n t ; t h i s i s t h e s a m e a m o u n t a s G i n S t e p 2 B. C a l c u l a t e t h e i n t e r e s t e a r n e d a t t h e P o o l e d I n v e s t m e n t A c c o u n t R a t e f o r ( A ) C. E n t e r t h e a c t u a l W h o l e s a l e r e v e n u e s b i l l e d D. E n t e r t h e W h o l e s a l e R e v e n u e R e q u i r e m e n t E. E n t e r s e t t l e m e n t c r e d i t s o r a d j u s t m e n t s , i f a n y F. E n t e r c a r r y - o v e r 1 9 8 4 A g r e e m e n t c r e d i t s o w e d t h e C i t y , i f a n y G. C a l c u l a t e t h e e n d i n g a m o u n t o f t h e B a l a n c i n g A c c o u n t H. E n t e r t h e n e t c h a n g e i n t h e W h o l e s a l e R e v e n u e C o v e r a g e , i f a p p l i c a b l e i. C a l c u l a t e t h e t o t a l r e v e n u e d e f i c i e n c y o r s u r p l u s ( G ) + ( H ) J. E n t e r t h e p r o j e c t e d w a t e r s a l e s t o W h o l e s a l e C u s t o m e r s i n C c f K. C a l c u l a t e t h e r e q u i r e d i n c r e a s e i n t h e c o m m o d i t y p o r t i o n o f t h e r a t e b y d i v i d i n g ( I ) b y ( J ) L. C a l c u l a t e t h e r e q u i r e d i n c r e a s e i n r e v e n u e s b y d i v i d i n g ( I ) b y ( C ) WH O L E S A L E R E V E N U E R E Q U I R E M E N T S C H E D U L E S CA L C U L A T I O N O F W H O L E S A L E R E V E N U E R E Q U I R E M E N T FI S C A L Y E A R 2 0 0 9 - 1 0 RE F E R E N C E A R T I C L E 5 AT I A C H M E N T N - 2 SC H E D U L E 1 EX P E N S E C A T E G O R Y CO N T R A C T S C H E D U L E RE F E R E N C E R E F E R E N C E TO T A L DI R E C T DI R E C T R E T A I L W H O L E S A L E RE G I O N A L JO I N T E X P E N S E AL L O C A T I O N FA C T O R WH O L E S A L E SH A R E OP E R A T I N G A N D M A I N T E N A N C E E X P E N S E : SO U R C E O F S U P P L Y PU M P I N G TR E A T M E N T TR A N S M I S S I O N & D I S T R I B U T I O N CU S T O M E R A C C O U N T S 2 5. 0 5 ( A ) 5. 0 5 ( B ) 50 5 ( C ) 5. 0 5 ( D ) 5. 0 5 ( E ) SC H 8 . 1 SC H 8 . 1 SC H 8 . 1 SC H 8 . 1 SC H 8 . 1 95 3 $ i8 2 $ 05 3 $ 23 2 $ !1 3 $ /' \ /: / " \ ~ . , \ ' $ p , ! , g ~ : ~ t : d \ " A N N U A L U S E ' - / : ~ ' \ , 4 ' 8 ' ; 8 t , \ A f ' N U A L U S E ' ,- c r , . , . $ , \ , * ~ 5 , Ò : 5 a ' A N N U A L U S E ' ,, , : ' r " ~ , \ \ ' i ¡ ' 1 ! ! 2 3 , i s 2 . ! l 4 6 \ A N N U A L U S E ' i\ ; f Ì l 4 \ $ , \ i ) : ( / \ ; . ) V 2 % \ ' \ \ , \ \ v " \ O \ 15 \ 1 M ) ) k ) s i ~ 7 9 , 5 7 2 ._ ~ ~ : . : $$$$$ 9, 3 6 4 , 5 6 8 33 4 , 2 1 0 20 , 8 2 1 . 3 7 2 15 , 9 0 2 , 6 9 0 15 1 , 0 4 4 TO T A L O & M CO M P O S I T E % ( W H O L E S A L E S H A R E I T O T A L O & M ) 5. 0 6 ( C ) 46 , 5 7 3 , 8 8 3 42 . 0 7 % AD M I N I S T R A T I V E A N D G E N E R A L E X P E N S E S : CO W C A P SE R V I C E S O F S F P U C B U R E A U S OT H E R A & G CO M P L I A N C E A U D I T 5. 0 6 ( A ) 5. 0 6 ( B ) 5. 0 6 ( C ) 5. 0 6 ( D ) $ 1,2 3 8 , 0 0 9 CO M P O S I T E O & M $ 52 0 , 8 5 7 $ 14 , 2 8 6 . 8 6 7 AN N U A L U S E ' $ 9. 7 7 0 , 7 8 8 $ 8, 9 6 2 , 5 8 6 CO M P O S I T E O & M $ 3. 7 7 0 , 7 4 9 $ 20 0 , 0 0 0 50 % $ 10 0 , 0 0 0 $ 24 . 6 8 7 , 4 6 2 $ 14 . 1 6 2 , 3 9 4 TO T A L A & G PR O P E R T Y T A X E S 5. 0 7 $ $ 1,4 1 7 , 2 9 3 AN N U A L US E ' $ 96 9 . 2 8 7 CA P I T A L . C O S T R E C O V E R Y PR E - 2 0 0 9 A S S E T S DE B T S E R V I C E O N N E W A S S E T S . , . - , RE V E N U E F U N D E D A S S E T S - A P P R O P R I A T E D T O W H O L E S A L E C A P I T k . b f u A i , c i \ \~ . " ì ?~ ' - - \ ' - - \ ~A \ \ \ \ " \ \ \ . '\ \ \ ' ~ ' \ ' \ , / - ' \\ \ : \ V ~ ~ \ \ : / . ) \; \ " \ ; / TO T A L C A P I T A L C O S T R E C O V E R Y \ . - .' b . O S , .S : 0 4 ( Ä l " ' . 8 , 0 4 , ( B 1 WH O L E S A L E S H A R E H E T C H H E T C H Y W A T E R & P O W E R 5. 0 4 SC H 4 $ 24 , 0 5 1 . 3 2 6 $ 17 , 9 5 2 . 9 3 1 $ 8, 3 8 1 , 4 0 0 $ 50 , 3 8 5 . 6 5 7 $ 28 , 9 0 3 . 5 1 2 $ 1 4 0 , 9 9 4 , 7 3 3 $ 4, 4 8 8 , 2 3 3 WH O L E S A L E R E V E N U E R E Q U I R E M E N T . W H O L E S A L E R E V E N U E C O V E R A G E ' 'P r o p o r t i o n a l A n n u a l U s e ( 6 8 . 3 9 % ) 2W a t e r E n t e r p r i s e S h a r e o f C u s t o m e r A c c u n t s E x p e n s e s ( 6 2 % o f T o t a l C u s t o m e r A c c u n t s E x p e n s e s ) '2 5 % o f W h o l e s a l e S h a r e o f D e b t S e r v i c e ''1 WH O L E S A L E R E V E N U E R E Q U I R E M E N T S C H E D U L E S WA T E R E N T E R P R I S E C A P I T A L C O S T R E C O V E R Y - A N N U A L D E B T S E R V I C E FI S C A L Y E A R 2 0 0 9 - 1 0 RE F E R E N C E S E C T I O N 5 . 0 4 . A AT I A C H M E N T N - 2 SC H E D U L E 2 5, 5 6 1 , 3 8 6 $ 5 6 , 1 8 1 , 9 3 2 1, 2 7 6 , 3 3 8 $ 1 0 , 9 1 9 , $ ' ; 4, 2 8 5 , 0 4 8 $ 4 § , 2 1 , 1 ; 1 ~ ; ~ ( " ' \ \ ~ ~ ' \ ' \ - / \ \ $ , 1 5 6 , 1 8 ' h S ' S 2 ' \ / I " " \ \ . ~ " ' \ ,; ; , \ - c ' ~ \ 1 0 1 9 V ~ i 3 , t \ : ? 'A ~ \ ' . : , \ \ $ \ ' 4 6 . 2 1 1 j 4 i r; " . \ ' , " \ ~ ' . ' ' . \ \ . , i i // \ ( . ~ 1 , ~ \ \ \ , \ . \ , \ \ . . _ . : / IN T E R E S T P A Y M E N T ( N E T ) $ 2 3 , 3 / 5 ~ 3 \ , 3 8 8 J ~ ' ( ) ~ \ 5 1 ? 1 . ; e e \ , \ , \ ) RE T A I L P R O J E C T S $ , J f ~ 4 P 9 6 ~ $ ~ , 1 ~ 7 1 6 ! , 9 3 , 8 ; d - ' RE G I O N A L P R O J E C T S A \ ; ~ ' s ¡ ~ ~ 8 ~ , ~ ~ \ ~ ~ ~ t . J l 4 8 ': ) ~ ' \ \ ' \ \ " _ _ \ \ \ ' \ \ / 3 . 1 TO T A L P R I N C I P A L A N D I N T E R E S T P A Y M , S t J T \ \ " \ \ 3 ~ \ \ 1  ~ ~ ~ \ ¿ i ' 5 , 5 6 1 , 3 8 6 RE T A I L P R O J E C T S ~ \ " \ \ \ l \ 0 ~ 1 W Í ? ~ ? ~ 1 , 2 7 6 , 3 3 8 RE G I O N A L P R O J E C T S \ \ \ \ \ , \ : / ~ ? l ; ~ 9 5 ' J 6 4 , 2 8 5 , 0 4 8 \ \ \ \ ~ ; ; ~ ~ / ~ \ ~ " \ , \ , v \ \ ; / / " 6 8 . 3 9 % 6 8 . 3 9 % \' \ . ' ? \: \ 1 / " $ 1 5 , 0 2 2 , 3 8 7 $ 2 , 9 3 0 , 5 4 4 US E O F B O N D P R O C E E D S RE T A I L P R O J E C T S RE G I O N A L P R O J E C T S PR I N C I P A L P A Y M E N T RE T A I L P R O J E C T S RE G I O N A L P R O J E C T S IN T E R E S T P A Y M E N T ( G R O S S ) RE T A I L P R O J E C T S . RE G I O N A L P R O J E C T S IN T E R E S T P A Y M E N T ( C A P I T A L I Z E D ) RE T A I L P R O J E C T S RE G I O N A L P R O J E C T S PR O P O R T I O N A L A N N U A L U S E WH O L E S A L E S H A R E 20 0 6 B O N D IS S U E S E R I E S A 20 0 9 B O N D IS S U E AL L SE R I E S XX B O N D IS S U E AL L SE R I E S xx . x X % YV . Y Y % ('; , ~) \ " \ . \ 7" ( ~ Ç \ " , ~ l \ /' _ ~ \ \ " \ ' - , \ ' ? . \ (í ~ ' \ ' \ \ \ \ \ \ , il . ' ? " - \ c ' , ' \ \ \ , , / " ' . ' ' , ~ \ \ \ \ \ ' \ - \ ~ . ~ ~ \ \ ) -1 \ \ ' i ~ \ ' ' \ " , , \ . . / . / \\ ) \ ~ ' \ ' " \ . , ) , ' 1 ; : / \ / ) ' , ' J , ' 'i "- ¿ / zz . Z Z % No t e : A l l o c a t i o n o f b o n d p r o c e e d s s h o w n a r e f o r i l l u s t r a t i v e p u r p o s e s o n l y . R e g i o n a l p r o j e c t s w i l n o t i n c l u d e b o n d pr o c e e d s u s e d t o c o n s t r u c t o r a c q u i r e a s s e t s c a p i t a l i z e d p r i o r t o 7 / 1 1 0 9 . R e g i o n a l p r o j e c t s a l s o w i l n o t i n c l u d e i n - c i t y gr o u n d w a t e r o r i n - c i t y r e c y c l e d w a t e r p r o j e c t s . 2- 0 0 8 B O N D IS S U E A L L SE R I E S 31 . 6 1 % 68 . 3 9 % 19 . 4 2 % 80 . 5 8 % 22 . 9 5 % 77 . 0 5 % $$$ 8, 7 6 5 , 0 0 0 2, 7 7 0 , 6 1 7 5, 9 9 4 , 3 8 4 $ 2 3 , 3 5 3 , 3 8 8 $ $ 7 , 3 8 2 , 0 0 6 $ $ 1 5 , 9 7 1 , 3 8 2 $ 68 . 3 9 % XX B - O N D IS S U E AL L SE R I E S XX B O N D IS S U E AL L SE R I E S "'; . - : . ' " . XX . X X % r \ X V ' YY . Y Y ~ / / \ ' \ \ \ ' i \ _ ' - ' \ ; 1 \ (~ ~ \ \ \ ) ) \ \ ~ A \ \ - \ \ \ \ \ ~ ~ ( r - ' ~ . '\ , \ \ ) \ S \ ; 5 ? - v'~ ' / zz . Z Z % zz . Z Z % XX B O N D IS S U E AL L ~ S E R I E S TO T A L A L L OU T S T A N D I N G BO N D S xx . x x % _ YY , Y Y % $ 8, 7 6 5 , 0 0 0 $ 2, 7 7 0 , 6 1 7 $ 5, 9 9 4 , 3 8 4 $ 8 5 , 0 9 6 , 7 0 6 $ 19 , 5 6 8 , 8 7 5 $ 6 5 , 5 2 7 , 8 3 1 $ 3 7 , 6 7 9 . 7 7 4 $ 1 1 , 4 2 8 , 9 6 1 $ 2 6 , 2 5 0 . 8 1 3 zz . Z Z % $ 1 7 , 9 5 2 , 9 3 1 (T O S C H E D U L E 1 ) WH O L E S A L E R E V E N U E R E Q U I R E M E N T S C H E D U L E S WA T E R E N T E R P R I S E C A P I T A L C O S T R E C O V E R Y . R E V E N U E F U N D E D C A P I T A L P R O J E C T S FI S C A L Y E A R 2 0 0 9 . 1 0 RE F E R E N C E S E C T I O N 5 . 0 4 . B AT I A C H M E N T N - 2 SC H E D U L E 3 AL L O C A T I O N FA C T O R TO T A L A L L Y E A S AP P R O P R I A T I O N A C T U A L AL L Y E A R S E X P E N D I T U R E S PR O J E C T AP P R O P R I A T I O N C L A S S I F I C A T I O N WH O L E S A L E SH A R E FY 2 0 0 9 - 1 0 A C T U A L E N C U M B E R E D , N O T A P P R O P R I A T E D , EX P E N D I T U R E S E X P E N D E D U N E N C U M B E R E D BA L A C E /,~ CU H 9 8 0 T r e a s u r e I s l a n d I m p r o v e m e n t P r o j e c t CU W 2 5 3 F a c i l i t i e s S e c u r i t y CU W 2 6 0 L o c a l W a t e r R & R CU W 6 8 6 A u t o m a t e d M e t e r R e a d i n g S y s t e m To t a l L o c a l CU W 2 0 2 R e p l a c e P r e s t r e s s e d C o n c r e t e C y l r P i p e CU W 2 6 1 R e g i o n a l W a t e r R & R - S t o r a g e CU W 2 6 2 R e g i o n a l W a t e r R & R - T r e a t m e n t F a c i l i t i e s CU W 2 6 3 R e g i o n a l W a t e r R & R C o n v e y a n c e f T r a n s m i s s i o n CU W 2 6 4 R e g i o n a l W a t e r s h e d s / R O W M a n a g e m e n t FU W 1 0 0 R e g i o n a l F a c i l i t i e s M a i n t e n a n c e To t a l R e g i o n a l TO T A L A L L P R O J E C T S /Ý ~ r ' , / j 0. 0 % $ $ - $ _ ç : . / ) : ~ \ \ 0. 0 % $ $ - $ _ ' ( \ ' \ - Ç , ~ \ \ 0. 0 % $ $ - $ , ; : ' ; " - ' . \ 1 \ \ ' . . ~ $ \ , \ $ $ , ' \ / ' , , , . 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B . 1 AT T A C H M E N T N - 2 SC H E D U L E 5 XX B O N D X X B o N D X X B O N D X X B O N D X X B O N D ) ( O N D - X X B O N D T O T A L A L L IS S U E A L L I S S U E A L L I S S U E A L L I S S U E A L L I S S U E A L L I S S U E A L L I S S U E A L L O U T S T A N D I N SE R I E S S E R I E S S E R I E S S E R I E S S E R I E S S E R I E S S E R I E S G B O N D S ,, / \ US E O F B O N D P R O C E E D S PO W E R P R O J E C T S WA T E R P R O J E C T S JO I N T P R O J E C T S PR I N C I P A L P A Y M E N T PO W E R SH A R E WA T E R SH A R E JO I N T S H A R E (- s ~ ~ ; : ~ \ i. ' \ , \ ' , \ ~ . ~ - , ' t / \ - ' ? ' \\ \ \ \ \ " \ \ v ' ) ; . 0 ' \' ~ ) I \ " ~ - \. , i . ; , ) ... : . ; / xx . X X % X X . X ? % ~ . / j , / . ) Ó ( X X % _ YV . Y V % y v . ' f . % \ f / Y ' ( Y V % ZZ . Z Z % d ' ~ z : d . z ~ , \ . . ' Z ; Z Z % r \ 0 . \ \ 1 \ \ \ ' . \ ' ." ' / " " ' % ~ I " ' \ , \ \ \ ~ . r ~ . , \ " V . . _ \ ' i , " - " r ' . . \ ' ~ . ; . 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' \ ë ' ~ ~ ! 5 1 , 5 4 8 , . , . , \ " , ' \ ' . ~ . , , ' $ 2 4 3 , 4 5 6 $ - . \ \ 6 : Y t i 3 1 \ ) 1 \ \ " 1 , 2 0 7 . 8 6 4 $ 5 2 5 , 9 0 2 . ~ ( \ 1 , ; 1 9 S , f ; 0 ~ : $ / v \ \ P 2 , 6 0 9 , 1 6 6 $ 9 6 6 , 9 5 9 . 5 \ \ 2 \ t 4 ~ ~ ~ ; $ 4 , 7 9 7 , 3 9 1 $ 4 ~ 7 , 9 $ 8 $ " , \ , ' ~ , 3 Q o ì t ' 3 4 ' t ' $ 2 , 2 7 2 , 0 7 4 $ r / " ( \ - ' , $ , \ . ~ . . . ) \ . . . - $ 43 2 , 2 6 3 $ . . t ' , . " \ ? ' Q 1 \ 5 5 6 , $ ' . \ / 6 5 7 , 6 3 7 $ .! / ' : " : ~ ' \ \ ' \ . ~ \ \ " \ . - \ . \ \ 34 , 7 5 2 . 0 0 0 $ ( 1 2 , 7 3 1 , 0 0 0 ) $ 4 8 . 2 8 2 , 5 2 1 $ 5 , 3 7 5 , 6 . 5 6 ¡ ' $ c , ; ' " . \ ' . \ ~ 8 7 , g , 6 5 i " : V 8 , 1 7 8 , 4 2 4 $ 1 4 , 2 8 6 , 8 6 7 (T O S C H E 9 _ U L t ' t ) ' \ t t O ¥ ~ l : ~ U . U ¡ \ È . M / ( T O S C H E D U L E 1 ) ( T O S C H E D U L E 1 ) :r " ' \ ~ \ \ \ J ' \ ' \ . \ . . . ' \ i l . r \ , \ \ . . . \ . / /\ ( ) . j ! , ( ' ! \ " \ " \ ' ' \ . . " \ ~ \\ \ ' \ ' \ \ - , \ 1 \ " - \ 1 ,\ , - . ~ ; ' \ \ ' ~ " ~ ; \ : : \ \ ~ ' Y ; ' 1 ". \ ' " \ \ , \ \ : J ! j " , ) - , , s l f ~ ~ ~ \ ( ~ 0 ~ ~ ~ \ ~ \ \ ~ ~ j . c\ \ \ . ' . " . M ~ ' I , - ; ) "\ ' \ \ \ \ ? , \ ( ' 0 . , . /' \ ' \ \ J \ " j ' \ ; / (- \ \ \ ' - " \ ' ~ " l 0 J ' " , : : . : / \ \ \ \ \ \ ; : ; \ \ . . - ~ ; . . ) \ \ \ \ . . ; : . / \ \ . / ~ ) \ \ . " \ ) ) ~ ; . r \, \ \ . ; ; / / \;- ; . . 7, 6 0 9 , 1 1 4 $ 4, 0 8 1 , 9 8 1 $ 8, 8 1 7 , 6 8 7 $ 18 , 0 4 8 , 1 5 8 $ 7, 6 7 8 , 4 8 3 $ 12 , 2 6 2 , 4 2 8 $ 3, 8 8 2 , 4 5 5 $ $$$ (1 , 8 3 5 , 3 5 7 ) $ $$$ (1 2 , 2 6 2 , 4 2 8 ) 'A d j u s t m e n t f o r T r a n s f e r o f S C A D A E x p e n d i t u r e s t o T & D J o i n t ( $ 1 , 7 3 0 , 0 0 0 ) 11 . 1 3 % 7, 6 0 9 , 1 1 4 $ 4, 0 8 1 , 9 8 1 $ 8, 8 1 7 , 6 8 7 $ 16 , 2 1 2 , 8 0 1 $ 7, 6 7 8 , 4 8 3 $ $$ 84 7 , 1 8 0 45 4 , 4 7 8 98 1 , 7 3 9 1, 8 0 5 , 0 9 3 85 4 , 9 0 3 3, 8 8 2 , 4 5 5 5. 9 6 % 1, 1 4 8 , 8 2 4 36 . 3 7 % $ 2, 7 6 7 , 6 8 2 $ 7, 6 0 9 , 1 1 4 $ 1, 4 8 4 , 7 4 9 $ 4, 0 8 1 , 9 8 1 $ 3, 2 0 7 , 2 8 0 $ 8, 8 1 7 , 6 8 7 $ 5, 8 9 7 , 1 2 3 $ 16 , 2 1 2 , 8 0 1 $ 2,7 9 2 , 9 1 4 $ 7, 6 7 8 , 4 8 3 $ $ $ 1, 4 1 2 , 1 7 5 $ 3, 8 8 2 , 4 5 5 $ 17 , 5 6 1 , 9 2 3 $ 48 , 2 8 2 , 5 2 1 WHOLESALE REVENUE REQUIREMENT SCHEDULES SERVICES OF SFPUC BUREAUS - ANNUAL SALARIES FISCAL YEAR 2009-10 REFERENCE SECTION 5.05.B ATIACHMENT N-2 SCHEDULE 7.1 DEPARTMENT/DIVISION ALLOCATION GROUP FACTOR CODE SALARIES PERCENTAGE HETCH HETCHY POWER WATER JOINT WATER SHARE POWER SHARE 1 $6,677,939 2 $1,775,910 $9,428,450 45%2 $4.242,803 55%1 $5.185,648 WATER ADMINISTRATION (WTR01) RETAIL SHARE REGIONAL SHARE HETCH HETCHY WATER SHARE 33.4% 33.3% 33.3% $ 3 $ 4 $ 2 $ 1,009.246 336,415 .,' 336,41h\\ 33"'116, \'\! \¿\\'\ \... ~,\ 3 1"~:7;3~é,~~ \ \ ./c. :\,~~\4 '~\\1~~~~~i;)\) ,'\ if ,~.:\" ,,\ ~ $\ ':18J184.689 .' ;;:;~.~\\\ \:\ '\ \\ ~ \ ..~~~'NATURAL RESOURCES (WTR06) , ...... \('\(';/\ \ \\\'J :\ \~ '4:",$ 4,682.073 WATE~ RESOURCE PLANNING,;;;,'r~), n. \ \ \ \\ '.j' $ WATER CONSERVATION ..,(')\ \;: :i '\ Ù \, \ \ \;/ 3 $ RETAIL WATER RESOURf;i: F-'nNNIl\'G¡. '\\..."\.;.'(/ 3 $ REGIONAL SHARE (Ni.r\S\;1-Ã~I~~l,'\ \'i\ .:~;I ~ 4 $ '- ' . " ,,\" -'" " ~,' CDD(WTR03) WATER QUALITY (WTR04) WATER SUPPLY & TREATMENT (WTR05) 1,419,760 355,703 1,064,057 WASTEWATER \ )5 $38,757,578 SALARIES BY GROUP COOE , HETCH HE'Tel\jy. ,.f'oÌNE'" .1 $11,863.587 HETCH HEl-y),i'Y'-IkÀTÈR 2 $6,355,129\\\/v $WATER - RETAIL 3 18,049,040 WATER- REGIONAL 4 $31,529,823 WASTEWATER 5 $38,757,578 TOTAL SALARIES $106,555,156 6.27% 1.67% 3.98%.;,,~") 4.87% V ,.;10', , (~~~\:~',ìO'3';'t\ v:;v \, \:) .,t ,~,) -'" )-&~1'9% 6.83% 17.05% 4.39% 0.33% 1.00% 36.37% 11.13% (TO SCHEDULE 7) 5.96% (TO SCHEDULE 7) 16.94% (TO SCHEDULE 7) 29.59% (TO SCHEDULE 7) 36.37% (TO SCHEDULE 7) 100.00% WHOLESALE REVENUE REQUIREMENT SCHEDULES CALCULATION OF THE WHOLESALE REVENUE REQUIREMENT FISCAL YEAR 2009-10 WATER ENTERPRISE SUMMARY OF OPERATING EXPENSES ATIACHMENT N-2 SCHEDULE 8.1 - $ 23,252,946 $ .J)~\A1'6';;32- $ - L2:~"- - - $ . 23,252,9~6l$\'\L\~11h\~ - $ 13:.Rer."8.~~\ \.~ \~t¡~43,g,~~ 1~,i,t-\t~ \~'~~'~~~~g43,9~~ /\ .,\ i: ' 'Ii \ '\ \;)l:) 3,854,000 $ ,'; (', \',,- ,,' ~ ag-S f\~Y. $" 4342682\ ~ '\ ;/. i i $1/-" '\ ,$ "\ \. '.;:: - $ 3,854,099 $( fi~\\~\ '; "~$\ \) 488,682 $'r \. \'\ l~ ,.\ .'"\" ,\ \ \\ \\Ì\ \\ \ ,j-$ (', , \ $'\ , \, \ \ \\ )\.\'/$ 30445053("-", \ \ \~ \ '\ \ ) \ \', -$ ,-' '. "","' \$ , / $--\-\..\L.'-tr\_\~--i -"/'$ \\ \\ \ \, \\ \~. $ ,-,j - $ ..\; ",)~. \ \.' ,,\ \ \ '\ ~\ ,~- .\ \~/~ ~l. \ '\ \. \ ,:) ':\ \.\ '0)Customer Accounts ,//",: \ ",~ \'S \, \ ~;'4Ó'1/j 69' $ Adjustments to Customer AgÇ0U~~tSt)¡ \ ': \~ \l~ \) ,_:/ - $ Adjusted Customer ACGéÙ!:i\s" ~) \ ,"", ¡~ ~, "\;r-7,401, 169 $I \v , \ \ ' '\ /\ "d~4 r\\ Q::/ 1" '" \'\ \\ \1 '" Total Adjusted opar~tli;91\EXPè.rse,\ ,\" ,,,:i;; $ 'f\ ~" \"\" - " "" 'V\' 1I'~,'\j ~"\\\\\GeneraJ\\~~drr!~istrat'ive ~\pén);e \? COt(It'AI"? \ '\ \'\D' ,-.:/" ~ \ \ \ \ ")" ,Servi.h~\ò~ S~'ltJC\l3ureaus \ \'\ \~../\\//~J) Other èlJ~'erai-'&Administrative Adjustm'aMs to General & Administrative Adjusted General & Administrative Operating Expenses Transmission & Distributions Adjustments to Transmission & Distribution Adjusted Transmission & Distribution Source of Supply Adjustments to Source of Supply Adjusted Source of Supply Pumping Adjustments to Pumping Adjusted Pumping Treatment Adjustments to Treatment Adjusted Treatment Compliance Audit Total General & Administrative Propert Taxes Total Source: FAMIS/EIS Note: All adjustments to be separately identified above Retail Regional TotalWholesale $ $ $ 30,163,286 $ - $ 30,163,286 $ $ $ $ 1,251,062 $ - $ 1,251,062 $ $ $ $4,342,682 $ - $ 30,445,053 $ 30,445,053 30,445,053 151,044 $ - $ 151,044 $ - $ - $ - $ 7,552,213 7,552,213 42,669,517 $151,044 $67,879,572 $110,700,133 $ $ $ 8,178,424 $ $ - $ 1,238,009 $ 14,286,867 $ 1,238,009 22,465,291 $ $ $ 4,009,891 $ - $ 4,009,891 $ - $ - $ - $ 8,962,586 $ - $ 8,962,586 $ 12,972,477 12,972,477 $ $ $ $ 100,000 $ 100,000 $- $ 200,000 12,288,315 $100,000 $24,487,462 $ 36,875,777 - $- $1,417,293 $ 1,417,293 54,957,832 $251,044$93,784,327 $ 148,993,203 Page 9 of 10 WHOLESALE REVENUE REQUIREMENT SCHEDULES CALCULATION OF THE WHOLESALE REVENUE REQUIREMENT FISCAL YEAR 2009-10 HETCHY HETCHY WATER & POWER SUMMARY OF OPERATING EXPENSES Operating Expenses Purchased Power & Wheeling Adjustments to Purchased Power & Wheeling Adjusted Purchased Power & Wheeling Operations Hydraulic Generation Transmission & Distribution Water Quality Expense Adjustments to Operations Adjusted Operations Maintenance Hydraulic Generation Transmission & Distribution Water Quality Expense Adjustments to Maintenance Adjusted Maintenance Totat General & Administrative Propert Taxes Total Source: FAMIS/EIS Note: All adjustments to be separately identified above Power Water . Joint $ $ $28,953.676 28,953,676 $ $ $ $ $ 2.900,291 $ $ - $ - $ 2,900,291 $ 28,95i6î6 \~;;J;"'\e A ,,¡/'\ \ \;.~ \ \- $ 3,200,.~~-'\ ~\ ',~ \ ~.1('Öu,t'S5,~ $ .., \ /\ \$,\ .\;, \ '\ \ \;~')9,557,862 $ (' \ \ ';),$.)/' '9JS57,862 - \t;~~~~\~t~rr\y/ -9,557,.e6,f ,$\( ,\ 3.~O\')í3~, \~ 15.658,547. (-ù '" \., \. \ v if "i', ((\" ~\\ "~\ \';:Y $ 1,840.096 $ r"" 3a\~\r\ \-')8,581.952 $ $ 3,359) 8t\ $ \\ \( \\.,l::. - $$ -;' \ \$ \ \ ,; /$ - $$ ,. :ßt" , \\ \~. \ ',¿; ) - $ - $~, ,7' . \ -'ç.,..:S/~:\. \.~,o ' $\ 3;,,38,622 $ 8,581,952 $~;" 't/. ,/' \. \'~\ \;) Total Adjusted Operating Expe~:~I\~~:,;'\\ \~:~\\\~~:'?:~2P¡( $ 12,796,484 $ General & Administrative ExnehS~;'\ \) ) \ "" \ ~\'COWCAP " '. . . " /11 'i. ,. Services of SFPUC,Bùr~\ä.ui;~ \\) $ ".\ \ \\\ "t,'" \ v'Customer_~cc~l!rts \ \ \ \ 'í 'J,¡ Adjuslrt 0'f~stoiiap ;~c'chts Adjuste o,,~r:~ibo.uHts :..~~"Other ~.&;:Administrative Adjustme to General & Administrative Adjusted General & Administrative $ 5.375.656 $ $ $ $ 347,403 $ - $ 347,403 $ $ $ $ 14.913,071 $ - $ 14,913.071 $ $20,636,130 $ $ $57,538,136 $ $ 2,879.651 $ - $ - $ - $ 36.070 $ - $ 36.070 $ 2,915,721 $ - $- $ 15,712,205 $ 11,782,346 $ 1,139,579 $ - $ 10.632.340 $ - $ 10,632,340 $ 11,771,919 $ 452,000 $ 24,006,265 $ Total $ $ $ 28,953,676 13.660,670 3,359,385 (151,42) 16.868,613 61,480.836 1.139.579 8,255,307 - $ - $ - $ 347,403 347,403 25,581,481 25,581,481 35,323,770 452,000 97.256,606 ATTACHMENT N-2 SCHEDULE 8.2 '?zI-ZW:¡:i ~ mw ~ w..c(mw..o:i 3:ozc( ~zw:¡W0:5aw0: w::zw ¡¡0:w..c(mw..o:i 3:. ..m .w c(.. .c( am uiO:ww..I- Uc( - 3: lio c( ~ iiu uw z""w00:O:w Q. U.U. w00:wI-.. U :: c(00:wI-:i zu 0m u ':",' I~/~ ' \~,~\'~'~ '0~\\\~..,...,,,~_:;. 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I- ATTACHMENT 0 STATEMENT OF WHOLESALE REVENUE REQUIREMENTI CHANGES IN BALANCING ACCOUNT YEAR ENDED JUNE 30 (Section 7.02.B) FY 2008-09 Allocation to Wholesale Customers FY 2009-10 Allocation to Wholesale Customers Difference Wholesale Revenue Requirement Calculation: Operating and maintenance (O&M) expense: San Francisco Water Enterprise: Source of supply Pumping Purification Transmission and distribution Customer Accounts Total SFWE operating and maintenance $9,133,025 $9,364,568 $231,543 $325,946 $334,210 $8,264 $20,437,460 $20,821,372 $383,912 $9,350,279 $15,902,690 $6,552,411 $224,255 $151,044 $(73,211) $39,470,965 $46,573,884 $7,102,919 Hetch Hetchy Water and Power (HHWP): Operating expenses Maintenance expenses Total HHWP operating and maintenance \ .... 7,484,165 $;(-2;$75,621) 4,831 ,890/'d.;t\,~05,650 12,316,0?'t\ \(:~ (~\,~69,971) /;::',, '¡\ 1, \ \\ ,":":) \. "I,/;/ "\l ~!:- \ \\ '~ \,. ;:;/~~\\ \(J )' \\ \\) ,,\~\) '~~ /l\ \\ ((~ "~ ': l. i\. I(\¿$ 512,438;~ fi $ \ \\i 'g?,q;iiÆ(0 . $ 8,419$ 1e2~e4'(" \! :i $ \ \\J ~4ß),68 $ 186,604\(\~.. '\ li (, /J :"""' "., . '\ \k/S:~O'\., \t,4~~ ,., ,y~ .9,770,788 ($(', ~\~'!i . .\ '\$ 1 959 603 .- \\ '$\1\ \\ä~S':i~7,t,g;:/' $ Ú70:749\ " " ~." ') ,;" r v/'~', \ '\ \ '. $\ "':¡\:;) $ 3,280,434;':'\ \\ i.' \ $ '.".j 95338 $ 100000I !, \. \ \ \\, \. i , \ \ ) \ \ \ \,.$ 18,824,396 $ 19,751,399\ $ 10,359,786 $ 4,526,240 $ 14,886,026 $ $ $ Administrative and general (A&G) expenses: COWCAP SFWE HHWP SF Public Utilities Commission: SFWE HHWP Other A&G - SFWE Other A&G - HHWP Compliance audit Total administrative and general expenses $ 2,308,953 $ (398,019) $ (4,464,050) $ 3,280,434 $ 4,662 $ 927,003 p~o:~r; taxes (outside city Oniy)~,. :~:\ \) )', i\'\ HHWP ,/',\/\ \ 'I,,' \\(\;)...:.,:f ;r;'';) '\ '\ \ \\ _;,\~'', Total propert taxes ,,;:~ \\ \\ \\ """, "\\ \\ v,. ,.~ \\ \~ \\ \'".::: '\ \ % \;'"", 1\ \ \ ~ ,?\!\ ,,;)Capital Cost Re'" ~verv~, \1" 1\ \1\\ ,I¡i.' '\',.., \''0 '-'''Pre-2009 A' \ \ \/-,,~ )!SFWE ~ ..\ V)C:/,,1,/..:\ ."/HHWP '. \ Ý.\y',;~ Debt Service o\~JiJ~'Assets SFWE HHWP Revenue Funded Assets SFWE HHWP Total Capital Cost Recovery ',.~J $ 964,040 $ 120,923 $ 1,084,963 $ $ $ 969,287 139,732 1,109,019 $ $ $ 5,247 18,809 24,056 Balancing Account June 30 $24,051,326 $3,118,033 $17,952,931 $ $8,381,400 $7,740,688 $46,378,941 $61,244,378 $14,865,437 $120,645,291 $140,994,735 $20,349,444 $21,176,614 $ $529,415 $ $ (123,604,000)$(147,247,500) $$ $$4,488,233 $$ $21,006 $21,006 $$1,997,220 $18,768,326 $253,694 Total Wholesale Revenue Requirement Balancing Account July 1 Interest on adjusted beginning balance Wholesale revenues biled Excess use charges biled Wholesale Revenue Coverage Reserve Other adjustments Settlement adjustments 1984 Agreement Balancing Account Credits Attachment P REPRESENTATION LETTER Certification Pursuant to Water Sales Agreement (the Agreement) between the City and County of San Francisco (San Francisco) and certain wholesale customers in the counties of San Mateo, Santa Clara, and Alameda (the Wholesale Customers) effective July 1,2009. Each of the undersigned certifies that: 1. I have reviewed San Francisco Water Department and Retch Retchy Water & Power Deparment Report on the Calculation of the Wholesale Revenue Requirement and Statement of Changes in the Balancing Account (the Statement) for the year ended June 30, 200X; Based on my knowledge, this report and Statement do not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report; Based on my knowledge, the Statement and other financial information included in the report, fairly presents in all material respects the proper costs incurred and allocated to the Wholesale Customers in accordance with the provisions of the Agreement. The below certifying officers and I are responsible for establishing and maintaining internal control over financial reporting and have: Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting for purposes ofthe preparation of the Statement. Evaluated the effectiveness of the allocation procedures to ensure compliance with the terms of the Agreement. Attachment P, Page 1 1870057.1 The Statement fully complies with the contractual requirements of the Agreement and fairly presents, in all material respects, the allocation of costs to the Wholesale Customers in accordance with the Agreement. General Manager, SFPUC Date Assistant General Manager & Chief Financial Offcer, SFPUC Date Finance Director, SFPUC Date Accounting Manager, SFPUC Date Financial Planning Manager, SFPUC Date Senior Rates Administrator, SFPUC Date Attachment P, Page 2 1870057.1 Legend f: 21] Service Area - Streams/Rivers Attachment Q-1 i l: ;=--,,----------+---�c;s ......... ;.... ______ ,.,- Maximum Service Area -North San Jose Municipal Water \\oakland-01\data\GISIBAWSCA\Project\2018_07 _ServiceAreas\Attach_ Q-1_SantaClara-ServiceArea.mxd 9/14/2018 11 :45:29 AM Legend L rn M Service Area A: Existing service area Attachment Q-2 (Z2I Service Area B: Expanded service area, for operational purposes only . , . -Streams/Rivers " .. '! ·1 " .:; >lh•h It.th •.11•1 11 :, GI ., ,, ,, (I ,• � .. •,t ··� Ji ,1 l1,;.q11(r. 1,\1,,1; ,\ Cup0•1li110 l\lVt!:,0 \',' 'dll I J ··'·t .... "'------!.' \ ,., t �!,....i;'��--..... �::-:T���::1--"'"'."'."""',.,:r,�ol/,j,,iliol,..Q.; ..... �-.:_:.,-,� ... T ... , .. ,. ,, . ,, I· I ( \ ,,,,,., 'h .,'"'' '; li•I r..:..-,yr,'4111 llttlt f I ® Maximum Service Area -City of Santa Clara \\oakland-01\data\GISIBAWSCA\Project\2018 _07 _ ServlceAreas\Attach_ Q-2_ SantaClara-ServlceAreaExisting.mxd 9/27/2018 3:49:40 PM I I i ·',' ATTACHMENT R – CLASSIFICATION OF EXISTING SYSTEM ASSETS 1 15049417.1 ATTACHMENT R-1 INTRODUCTION TO ATTACHMENT R Attachment R is composed of three documents (1) this R-1 Introduction to Attachment R, (2) R-2 Special Classification of Discrete Projects for 2018 WSA Amendment Purposes, and (3) R-3 Major Hetch Hetchy Enterprise Existing System Assets. These R series attachments provide a record for purposes of maintaining the historical basis for the allocation of capital costs and operating expenses associated with Existing System Assets generally, with greater detail provided for major Hetch Hetchy Enterprise Existing System Assets due to the complexity of tracking the Water-Only, Power-Only, and Joint classifications as inputs to the Wholesale Revenue Requirement under Sections 5.08 and 5.09 of the Agreement. Attachment R-2, Special Classification of Discrete Projects for 2018 WSA Amendment Purposes defines a limited number of capital projects involving five Hetch Hetchy Enterprise Existing System Assets where the parties have agreed to classify defined capital project costs separately from the assets’ underlying classification listed on Attachment R-3. The classification listed in Attachment R-3 will continue to control the allocation of capital costs and operating expenses once the defined capital projects described in Attachment R-2 are complete. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets is a record of major assets at the "facility group" level (see below) as of January 1, 2019. The table contains six columns and 578 rows. The facility groups are broken down into individual facilities or assets. The facility group name and classification are provided for each asset. Assets listed on Attachment R-3 are classified as Joint, Water-Only, or Power-Only. Each asset is also assigned a unique identification ("ID") number for ease of reference. Attachment R-3 is not a complete record of all Hetch Hetchy Enterprise Existing System Assets. General Explanation of Classification. A “facility group” is a location where a group of facilities is located. A single facility may constitute a facility group. A “facility” is a primary asset in a facility group whose function determines its classification and the classification of appurtenances or sub-assets. An appurtenance is an asset or sub-asset that supports the function of the facility to which it is appurtenant. In most cases the classification of the appurtenance is determined by the classification of the facility to which the appurtenance belongs. The function of the appurtenance may not necessarily control its classification. The classification of appurtenant assets generally follows the classification of the facility group served. These appurtenant assets include security, offices/housing, and utilities serving the facility group such as domestic water, wastewater, communications and solid waste disposal. Power distribution assets that provide power to a facility group (e.g. lower voltage power distribution lines) generally carry the classification of the facility group served, but do not include power generation or higher voltage transmission lines for export of power elsewhere, which remain classified as Power-Only. With limited exceptions for roads exclusively accessing Power-Only facilities, roads and bridges are classified as Joint because most roads serve multiple facilities or Joint facilities. Equipment and rolling stock are generally classified as Joint unless the asset has a specialized purpose serving the Power function. Capital costs and operating expenses related to Camp Mather are charged to Power in order to segregate these costs from the Wholesale Revenue Requirement. 1 15048734.1 ATTACHMENT R-2 SPECIAL CLASSIFICATION OF DISCRETE PROJECTS FOR 2018 WSA AMENDMENT PURPOSES Asset Asset Classification Project Project Classification1 Lower Cherry Aqueduct Joint Lower Cherry Aqueduct Project Water2 Mountain Tunnel Joint Mountain Tunnel Interim Work Water3 Mountain Tunnel Joint Mountain Tunnel Long Term Repairs Water3 Mountain Tunnel Joint Mountain Tunnel Flow Control Facility (FCF) Project Joint5 Kirkwood Penstock Power Kirkwood Penstock Project Joint4 Moccasin Powerhouse Penstock Power Moccasin Penstock Project Joint4 Moccasin Lower Dam Water Moccasin Dam Interim Repairs Joint5 Moccasin Lower Dam Water Moccasin Dam Long-Term Improvements Joint5 These Project Classifications are Exceptions to the Fixed Asset Classifications in Attachment R-3 Attachment R-3 lists major Hetch Hetchy Enterprise Existing System Assets and their agreed- upon classifications (Power, Joint or Water). The classification for all Existing System Assets is fixed and applies to all related expenditures, including capital, regulatory, operating and maintenance expenses, and whether the expenditure alters, rebuilds or replaces the asset, and any appurtenances. 1 Expires June 30, 2034 2 Project capital costs may include costs incurred in FY 2013-14 and subsequent Fiscal Years until project is complete 3 Project capital costs may include costs incurred in FY 2011-12 and subsequent Fiscal Years until project is complete 4 Project capital costs may include costs incurred in FY 2009-10 and subsequent Fiscal Years until project is complete 5 Project capital costs may include costs incurred in FY 2017-18 and subsequent Fiscal Years until project is complete 2 15048734.1 In 2018, the parties agreed to classify certain capital projects (but not the underlying asset classifications shown on Attachment R-3) for a select number of Hetch Hetchy Enterprise Existing System Assets. These projects are defined below. These project-related classification changes, shown on this Attachment R-2, are part of the 2018 amendments to the Agreement and are not precedential for any other asset-related capital cost or operating expense. The capital costs for the projects defined below shall be allocated in accordance with the project classifications shown on this Attachment R-2 so long as the projects are approved by the SFPUC following necessary CEQA review. Once the project, as defined below, is complete and the Commission adopts a project administrative closeout resolution authorizing final payment to the contractor(s), the separate project classification expires and all subsequent capital costs and operating expenses related to the asset will follow the existing asset classification shown on Attachment R-3. The project classification exceptions will expire on June 30, 2034 and all future capital and operating costs and expenses will follow the asset classification, even if a project has not been completed by the SFPUC by that date. Unless specified otherwise, the capital costs for each project specified below includes costs incurred by the SFPUC for the construction of the project using debt or revenue funding, along with all project-related planning costs, engineering costs, engineering services, costs to obtain project-related regulatory permits, fees for environmental consultants, mitigation costs, legal fees, and other costs that are required to construct and place the project in operation as a water conveyance or power generation facility, or to serve both functions. The allocation of project capital costs includes expenditures incurred in fiscal years prior to FY 2018-19 where noted. Project Classification Descriptions6 1. Lower Cherry Aqueduct Project means repairs along the Lower Cherry Aqueduct system from and including the Cherry Creek Diversion Dam downstream to and including a connection to the pool behind Early Intake Dam, including expenditures incurred in FY 2013- 14 and subsequent fiscal years until the project is complete. 2. Mountain Tunnel Interim Work means the investigations, interim repairs to the tunnel as well as improvements to access roads and adits for Adit 5/6 and Adit 8/9 already funded or included in the FY 2017-18 ten-year CIP, including expenditures incurred in FY 2011-12 and subsequent fiscal years until the project is complete. 3. Mountain Tunnel Long Term Repairs means repair or replacement of tunnel lining not performed as part of the Mountain Tunnel Interim Work, contact grouting of the entire tunnel lining, completion of hydraulic improvements, installation of steel lining in sections of the tunnel to accommodate increased pressure, extension of the siphon crossing under the South Fork of the Tuolumne River, an enlarged concrete portal and bulkhead at Early Intake, and roadway access improvements to tunnel entry points at the South Fork Tuolumne River crossing, Adit 8-9 and Adit 5-6. Project capital costs include costs incurred in FY 2011-12 and subsequent fiscal years until the project is complete. 6 SFPUC and BAWSCA discussed and agreed to omit the following projects from this special project classification: 1) Early Intake Diversion Dam and Reservoir, 2) Moccasin Power Tunnel, and 3) Kirkwood Generator Bypass and Moccasin Generator #1 & 2 Bypasses. All capital costs and operating expenses related to these assets will follow the existing asset classification shown on Attachment R-3. 3 15048734.1 4. Mountain Tunnel Flow Control Facility (FCF) Project means construction of a FCF at the downstream end of Mountain Tunnel to reduce lining damage by eliminating the daily cycling between open channel and pressurized flow conditions inside the tunnel, and to allow access to the tunnel when the elevation of the water surface in Priest Reservoir is higher than the elevation of Priest Portal. The project consists of constructing a bypass tunnel, a FCF access shaft and related appurtenances, installing flow control valves and associated mechanical, electrical, and instrumentation as well as construction of a new Mountain Tunnel adit at Priest Reservoir, and a new access road to the FCF. The bypass will be fully steel lined to accommodate higher operating pressures, and a concrete plug will be constructed at the upstream end where water is diverted into the FCF. Project capital costs include costs incurred in FY 2017-18 and subsequent fiscal years until the project is complete. 5. Kirkwood Penstock Project means repair, rehabilitation or replacement of the penstock between the Canyon Portal Valve House and the outside of the northern wall of the Kirkwood Powerhouse. The Joint classification for this project would exclude valves, electronic controls and other appurtenances needed for power operations but not for delivery of water to the Bay Area. Project capital costs include costs incurred in FY 2009-10 and subsequent fiscal years until the project is complete. 6. Moccasin Dam Interim Repairs means repairs and improvements related to damage caused by the March 22, 2018 storm with the goal of returning the reservoir to service at a restricted water pool elevation. The interim measures include repairs and improvements to the Moccasin Creek Diversion Dam and Bypass, Moccasin Reservoir, access and automation improvements at Gate No. 3 Tower, the Lower Moccasin Dam Auxiliary Spillway, and the downstream channel of Moccasin Creek. Project capital costs include costs incurred in FY 2017-18 and subsequent fiscal years until the project is complete. 7. Moccasin Dam Long-Term Improvements means upgrading the Moccasin Reservoir facilities to meet long-term operational and dam safety needs, including the Lower Moccasin Dam, Moccasin Creek Diversion Dam, spillways, outlet works, and other appurtenant facilities, excluding the Moccasin Low Head Hydropower Plant and appurtenances. The work consists of repairs and upgrades to restore the capability to accommodate changes in flow associated with water delivery and power generation, provide hydraulic control for delivery of water to the Bay Area, permit the discharge of excess water downstream to Don Pedro Reservoir, and satisfy State regulatory requirements and guidelines. The Joint classification for this project would include all work, regardless of whether or not specific elements are required by the State of California. Project capital costs include costs incurred in FY 2017-18 and subsequent fiscal years until project is complete. 8. Moccasin Penstock Project means the repair, rehabilitation or replacement of the Moccasin Penstocks to ensure reliable water delivery to the Bay Area and support power generation at Moccasin Powerhouse. Project facilities would extend from the western end of the Moccasin Power Tunnel to the eastern wall of the Moccasin Powerhouse. The Joint classification for this project would exclude valves, electronic controls and other appurtenances needed for power operations but not for delivery of water to the Bay Area. Project capital costs include costs incurred in FY 2009-10 and subsequent fiscal years until the project is complete. Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 1 CPSCADA Canyon Tunnel CANYON PORTAL SCADA RTU (FUT.)Joint 1 2 OSHCANTNL Canyon Tunnel OSHAUGHNESSY CANYON POWER TUNNEL Joint 2 3 CV Cherry and Eleanor Dams/Compounds CHERRY VALLEY DAMS AND BUILDINGS Joint 3 4 CVBLDGS Cherry and Eleanor Dams/Compounds CHERRY VALLEY BUILDINGS Joint 4 5 CVFUEL Cherry and Eleanor Dams/Compounds CHERRY VALLEY FUELING STATION Joint 5 6 CVPS Cherry and Eleanor Dams/Compounds CHERRY VALLEY PUMP STATION Power 6 7 ELBAT Cherry and Eleanor Dams/Compounds ELEANOR BATTERY BANK Joint 7 8 ELCOT Cherry and Eleanor Dams/Compounds COTTAGE, LAKE ELEANOR Joint 8 9 ELDORM Cherry and Eleanor Dams/Compounds DORM, COOKHOUSE, GARAGE LAKE ELEANOR Joint 9 10 ELDWSCT Cherry and Eleanor Dams/Compounds LAKE ELEANOR WATER TANK Joint 10 11 ELEANOR Cherry and Eleanor Dams/Compounds LAKE ELEANOR EQUIPMENT Joint 11 12 ELWHSE Cherry and Eleanor Dams/Compounds WAREHOUSE, LAKE ELEANOR Joint 12 13 CVPSPRORLY Cherry and Eleanor Dams/Compounds CHERRY VALLEY PUMP STATION PROTECTIVE RELAYS Power 13 14 CVDM Cherry and Eleanor Dams/Compounds CHERRY VALLEY DAM Joint 14 15 CVDWS Cherry and Eleanor Dams/Compounds CHERRY VALLEY DOMESTIC WATER SYSTEM Joint 15 16 CVVH Cherry and Eleanor Dams/Compounds CHERRY VALLEY VALVE HOUSE Joint 16 17 ELNCHRTNL Cherry and Eleanor Dams/Compounds ELEANOR - CHERRY TUNNEL Joint 17 18 ELNRDM Cherry and Eleanor Dams/Compounds ELEANOR DAM Joint 18 19 ICP Early Intake Dam and Reservoir INTAKE CAMP EQUIPMENT AND GROUNDS Joint 19 20 ICPCT Early Intake Dam and Reservoir INTAKE CAMP COTTAGES Joint 20 21 ICPFUEL Early Intake Dam and Reservoir INTAKE CAMP FUELING SYSTEM Joint 21 22 ICPLINERIGSH Early Intake Dam and Reservoir INTAKE CAMP LINEMENS RIGGING SHED BUILDING NA 22 23 ICPMAIL This row not included by SFPUC INTAKE MAIL SHACK NA 23 24 ICPSAND Early Intake Dam and Reservoir INTAKE CAMP SAND STORAGE BUILDING Joint 24 25 ICPSEW Early Intake Dam and Reservoir INTAKE CAMP SEWAGE SYSTEM Joint 25 26 ICPTV Early Intake Dam and Reservoir INTAKE CAMP TV SYSTEM Joint 26 27 ICPWSTN Early Intake Dam and Reservoir INTAKE WEATHER STATION Joint 27 28 IWSSCADA Early Intake Dam and Reservoir INTAKE DOMESTIC WATER SYS RTU Joint 28 29 ICPEL Early Intake Dam and Reservoir INTAKE CAMP ELECTRICAL SYSTEM Joint 29 30 ICPDWSBFP Early Intake Dam and Reservoir INTAKE DOMESTIC WATER BACK FLOW PREVENTERS, ICP Joint 30 31 ICPPOOL Early Intake Dam and Reservoir INTAKE CAMP SWIMMING POOL Joint 31 32 ICPWTS Early Intake Dam and Reservoir INTAKE CAMP WATER SYSTEM Joint 32 33 ICPDM Early Intake Dam and Reservoir INTAKE CAMP DAM Joint 33 34 INTRES Early Intake Dam and Reservoir INTAKE RESERVOIR Joint 34 35 GPL Holm Powerhouse 22.9KV-GRANITE PORTAL LINE Power 35 36 H1 Holm Powerhouse HOLM UNIT #1 Power 36 37 H1PRORLY Holm Powerhouse HPH UNIT #1 PROTECTIVE RELAYS Power 37 38 H2 Holm Powerhouse HOLM UNIT #2 Power 38 39 H2PRORLY Holm Powerhouse HPH UNIT #2 PROTECTIVE RELAYS Power 39 40 HAX Holm Powerhouse HPH EXCITERS, GOVERNORS, TAIL RACE AND OTHER Power 40 41 HL2TTGE Holm Powerhouse HPH LINE #2 TRANSFER TRIP GE Power 41 42 HPH Holm Powerhouse HOLM POWERHOUSE Power 42 43 HPHBATTERY Holm Powerhouse HPH BATTERY SYSTEM Power 43 44 HPHPEN Holm Powerhouse HOLM POWERHOUSE PENSTOCK Power 44 45 HPHPRORLYTMP Holm Powerhouse TEMP HOLING SPOT FOR PRO RLYS Power 45 46 HPHRF#1 Holm Powerhouse HOLM POWERHOUSE ROOF FAN #1 Power 46 47 HPHRF#2 Holm Powerhouse HOLM POWERHOUSE ROOF FAN #2 Power 47 48 HPHWW Holm Powerhouse HPH TSOV, SLIDE GATES AT TAILRACE, ETC Power 48 49 HPRORLY Holm Powerhouse HPH PROTECTIVE RELAYS Power 49 50 HSPARES Holm Powerhouse ALL HOLM POWERHOUSE SPARES Power 50 51 HVH Holm Powerhouse HOLM VALVE HOUSE Power 51 11/16/2018 15048696_1.xlsx 1 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 52 CVPWRTNL Holm Powerhouse CHERRY POWER TUNNEL Power 52 53 GPSCADA Holm Powerhouse GRANITE PORTAL SCADA RTU (FUT.)Power 53 54 H1ASCADA Holm Powerhouse HPH UNIT 1 ANNUNCIATOR RTU Power 54 55 H2ASCADA Holm Powerhouse HPH UNIT 2 ANNUNCIATOR RTU Power 55 56 HPHSCADA Holm Powerhouse HOLM POWERHOUSE SCADA RTU Power 56 57 HPHVMS Holm Powerhouse HPH VIBRATION MONITORING SYSTEM Power 57 58 KPH2SCADA Kirkwood Powerhouse KPH PENSTOCK MONITORING SYS RTU Power 58 59 KPH Kirkwood Powerhouse KIRKWOOD POWERHOUSE Power 59 60 KPHB Kirkwood Powerhouse KPH BATHROOM Power 60 61 KPHOFFICE Kirkwood Powerhouse KPH OPERATOR OFFICE Power 61 62 KVH Kirkwood Powerhouse KIRKWOOD VALVE HOUSE Joint 62 63 K1 Kirkwood Powerhouse KIRKWOOD UNIT #1 Power 63 64 K1PRORLY Kirkwood Powerhouse KPH UNIT #1 PROTECTIVE RELAYS Power 64 65 K2 Kirkwood Powerhouse KIRKWOOD UNIT #2 Power 65 66 K2PRORLY Kirkwood Powerhouse KPH UNIT #2 PROTECTIVE RELAYS Power 66 67 K3 Kirkwood Powerhouse KIRKWOOD UNIT #3 Power 67 68 K3PRORLY Kirkwood Powerhouse KPH UNIT #3 PROTECTIVE RELAYS Power 68 69 KAX Kirkwood Powerhouse KPH EXCITERS, GOVERNORS, TAIL RACE AND OTHER Power 69 70 KAXBKR5211 Kirkwood Powerhouse KPH BREAKER LOCATION 52-11 MATHER / ICP LINE Power 70 71 KAXBKR5212 Kirkwood Powerhouse KPH BREAKER LOCATION 52-12 CANYON PORTAL LINE Power 71 72 KAXBKR5221 Kirkwood Powerhouse KPH BREAKER LOCATION 52-21 MATHER / ICP LINE Power 72 73 KAXBKR5222 Kirkwood Powerhouse KPH BREAKER LOCATION 52-22 MATHER 22KV LINE Power 73 74 KAXBKR52S1 Kirkwood Powerhouse KPH1 BREAKER LOCATION 52-S1 STATION SERVICE Power 74 75 KAXBKR52S2 Kirkwood Powerhouse KPH2 BREAKER LOCATION 52-S2 STATION SERVICE Power 75 76 KAXBKR52S3 Kirkwood Powerhouse KPH3 BREAKER LOCATION 52-S3 STATION SERVICE Power 76 77 KAXBKRBT Kirkwood Powerhouse KPH BREAKER LOCATION 52-BUS TIE Power 77 78 KAXBKRBT23 Kirkwood Powerhouse KPH BREAKER LOCATION 23-BUS TIE Power 78 79 KAXBKRBT32 Kirkwood Powerhouse KPH BREAKER LOCATION 32-BUS TIE Power 79 80 KAXBKRSS1 Kirkwood Powerhouse KPH1 BREAKER LOCATION 52-SS1 STATION SERVICE Power 80 81 KAXBKRSS2 Kirkwood Powerhouse KPH2 BREAKER LOCATION 52-SS2 STATION SERVICE Power 81 82 KAXBKRSS3 Kirkwood Powerhouse KPH3 BREAKER LOCATION 52-SS3 STATION SERVICE Power 82 83 KAXBREAKERS Kirkwood Powerhouse KIRKWOOD POWERHOUSE BREAKERS Power 83 84 KPHBATTERY Kirkwood Powerhouse KPH BATTERY SYSTEM Power 84 85 KPHDCV Kirkwood Powerhouse KPH DELUGE CONTROL VALVE Power 85 86 KPHGENBRK Kirkwood Powerhouse KPH SPARE GENERATOR BREAKER Power 86 87 KPHOILFLT Kirkwood Powerhouse KPH PORTABLE XFMR OIL FILTER Power 87 88 KPHPEN Kirkwood Powerhouse KIRKWOOD POWERHOUSE PENSTOCK Power 88 89 KPHRF Kirkwood Powerhouse KPH RECIRCULATING FAN Power 89 90 KPRORLY Kirkwood Powerhouse KPH PROTECTIVE RELAYS Power 90 91 KSPARES Kirkwood Powerhouse ALL KIRKWOOD POWERHOUSE SPARES Power 91 92 KPHAXWPV Kirkwood Powerhouse KPH AUX WHEEL PIT VENT Power 92 93 KPHBYPSYS Kirkwood Powerhouse KPH GENERATOR BYPASS Power 93 94 KPHWW Kirkwood Powerhouse KPH TSOV, SLIDE GATES AT TAILRACE, ETC Power 94 95 K1ASCADA Kirkwood Powerhouse KPH UNIT 1 ANNUNCIATOR RTU Power 95 96 K2ASCADA Kirkwood Powerhouse KPH UNIT 2 ANNUNCIATOR RTU Power 96 97 KPH1SCADA Kirkwood Powerhouse KPH SCADA RTU Power 97 98 VIBMONSYS Kirkwood Powerhouse ALL VIBRATION MONITORING SYSTEMS & EQUIPMENT Power 98 99 KPHVMS Kirkwood Powerhouse KPH VIBRATION MONITORING SYSTEM Power 99 100 KPHTRBMTR Kirkwood Powerhouse KPH TURBIDIMETER Water 100 102 RAKERLANDS Support Systems, Utilities and Other RAKER ACT LANDS & US LAND APPLICATIONS Joint 102 103 SJLANDS Support Systems, Utilities and Other SAN JOAQUIN COUNTY LANDS Joint 103 11/16/2018 15048696_1.xlsx 2 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 104 STANISLANDS Support Systems, Utilities and Other STANISLAUS COUNTY LANDS Joint 104 105 TUOLUMNELAN Support Systems, Utilities and Other TUOLUMNE & MARIPOSA COUNTY LANDS Joint 105 106 CC Lower Cherry Creek Aqueduct CHERRY CREEK EQUIPMENT AND BUILDING Joint 106 107 CCAQ Lower Cherry Creek Aqueduct CHERRY CREEK AQUEDUCT Joint 107 108 CCDDM Lower Cherry Creek Aqueduct CHERRY CREEK DIVERSION DAM Joint 108 109 CHDIVTUN Lower Cherry Creek Aqueduct CHERRY DIVERSION TUNNEL Joint 109 110 CVDIVCANAL Lower Cherry Creek Aqueduct CHERRY TO INTAKE DIVERSION CANAL Joint 110 118 MLSSCADA Moccasin Administrative Compound MOCCASIN LIFT STATION RTU Joint 118 119 MPHWS Moccasin Administrative Compound MOCCASIN WEATHER STATION Joint 119 120 MWSSCADA Moccasin Administrative Compound MOCCASIN DOMESTIC WATER SYS RTU Joint 120 121 EQP-HH Moccasin Administrative Compound NON-AUTOMOTIVE EQUIPMENT Joint 121 122 ETESTEQUIP Moccasin Administrative Compound ELECTRONIC TEST EQUIPMENT Joint 122 126 MCPARC Moccasin Administrative Compound MOCCASIN ARCHIVES / RECORDS OFFICE Joint 126 127 MCPBH Moccasin Administrative Compound MOCCASIN BUNKHOUSE Joint 127 128 MCPBLPRK Moccasin Administrative Compound MOCCASIN CAMP BALL PARK Joint 128 129 MCPCARP Moccasin Administrative Compound MOCCASIN CARPENTER SHOP BUILDING Joint 129 130 MCPCARPORT Moccasin Administrative Compound SHOP AREA CAR PORTS Joint 130 131 MCPCH Moccasin Administrative Compound MOCCASIN CLUBHOUSE/ADMIN. BLDG.Joint 131 132 MCPCM Moccasin Administrative Compound MOCCASIN CONSTRUCTION MANAGEMENT OFFICES, MOCCASIN Joint 132 133 MCPCOT10 Moccasin Administrative Compound COTTAGE 10 Joint 133 134 MCPCOT13 Moccasin Administrative Compound CMB SURVEY ADMINISTRATIVE OFFICE Joint 134 135 MCPCOT14 Moccasin Administrative Compound ITS ADMINISTRATIVE OFFICE Joint 135 136 MCPCOT15 Moccasin Administrative Compound GUEST COTTAGE 15 Joint 136 137 MCPCOT16 Moccasin Administrative Compound MOCCASIN FINANCE OFFICE Joint 137 138 MCPCOT17 Moccasin Administrative Compound TRAINING OFFICE Joint 138 139 MCPCOT18 Moccasin Administrative Compound EXERCISE BUILDING Joint 139 140 MCPCOT36 Moccasin Administrative Compound WATERSHED ADMINISTRATIVE OFFICE Joint 140 141 MCPCOT41 Moccasin Administrative Compound GUEST COTTAGE 41 Joint 141 142 MCPCRDBRD Moccasin Administrative Compound MCP CARDBOARD COMPACTOR Joint 142 143 MCPCT Moccasin Administrative Compound MOCCASIN CAMP COTTAGES Joint 143 144 MCPELEC Moccasin Administrative Compound MOCCASIN CAMP ELECTRIC SHOP Joint 144 145 MCPENG Moccasin Administrative Compound MOCCASIN ENGINEERING OFFICE Joint 145 146 MCPFIREGAR Moccasin Administrative Compound MOCCASIN FIRE TRUCK GARAGE Joint 146 147 MCPFLDOFF Moccasin Administrative Compound MOCCASIN FIELD OFFICE BUILDING Joint 147 148 MCPFUEL Moccasin Administrative Compound MOCCASIN CAMP FUELING STATION Joint 148 149 MCPGARD Moccasin Administrative Compound MOCCASIN GARDENERS SHOP Joint 149 150 MCPGREENHS Moccasin Administrative Compound MOCCASIN GREENHOUSE Joint 150 151 MCPLINE Moccasin Administrative Compound MOCCASIN POWER LINE SHOP BUILDING Power 151 152 MCPMACHSP Moccasin Administrative Compound MOCCASIN MACHINE AND AUTO SHOP BLDG Joint 152 153 MCPMERC Moccasin Administrative Compound MOCCASIN EMERGENCY RESPONSE CENTER Joint 153 154 MCPMNTFAC Moccasin Administrative Compound MOCCASIN MAINTENANCE FACILITY Joint 154 156 MCPOMPH Moccasin Administrative Compound MOCC CAMP OLD MOCCASIN POWERHOUSE: Long term storage Joint 156 157 MCPPAINTSP Moccasin Administrative Compound MOCCASIN CAMP PAINT SHOP Joint 157 158 MCPPLAN Moccasin Administrative Compound PLANNING AND SCHEDULING BUILDING Joint 158 159 MCPPLUMB Moccasin Administrative Compound MOCCASIN PLUMBERS SHOP Joint 159 160 MCPPOOL Moccasin Administrative Compound MOCCASIN CAMP SWIMMING POOL Joint 160 161 MCPRECFAL Moccasin Administrative Compound MOCCASIN RECREATIONAL FACILITY Joint 161 162 MCPSAWMIL Moccasin Administrative Compound MOCCASIN SAWMILL FACILITY Joint 162 163 MCPSCADATRLR Moccasin Administrative Compound MOCCASIN SCADA TRAILER, MOCCASIN Joint 163 164 MCPSCHOOL Moccasin Administrative Compound MOCCASIN SCHOOL BUILDING Joint 164 165 MCPSEWLIFT1 Moccasin Administrative Compound MOCCASIN CAMP SEWAGE LIFT STATION 1 Joint 165 11/16/2018 15048696_1.xlsx 3 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 166 MCPSEWSYS Moccasin Administrative Compound MOCCASIN CAMP SEWAGE SYSTEM Joint 166 167 MCPTECH Moccasin Administrative Compound MOCCASIN CAMP TECH SHOP Joint 167 168 MCPTGSTMPFAC Moccasin Administrative Compound MOCCASIN TEMPORARY GUEST ACCOMMODATIONS Joint 168 169 MCPTOOLRM Moccasin Administrative Compound MOCCASIN TOOL ROOM BUILDING Joint 169 170 MCPUEB Moccasin Administrative Compound MOCCASIN Bldg 57 Joint 170 171 MCPWHSE Moccasin Administrative Compound MOCCASIN WAREHOUSE & SHOPS BLDG Joint 171 173 MCPSL Moccasin Administrative Compound MOCCASIN CAMP STREET LIGHTS Joint 173 174 MCPDWS Moccasin Administrative Compound MOCCASIN DOMESTIC WATER SYSTEM Joint 174 175 MCPDWSBFP Moccasin Administrative Compound MOCCASIN DOMESTIC WATER SYSTEM BACK FLOW PREVENTER Joint 175 176 ELECTDVCS Moccasin Administrative Compound SMALL ELECTRONIC DEVICES AND EQUIPMENT, MOCCASIN Joint 176 177 MCPWQ2 Moccasin Administrative Compound MCP WATER QUALITY BUILDING 2 Water 177 178 MCPWQLABS Moccasin Administrative Compound MCP WATER QUALITY LABS Water 178 179 MPFLOSCADA Moccasin Powerhouse MPH PENSTOCK FLOW MTRING SCADA RTU Power 179 180 MPH Moccasin Powerhouse MOCCASIN POWERHOUSE Power 180 181 MPHAUXCMP Moccasin Powerhouse MPH AUX. AIR COMPRESSOR Power 181 182 MPHCR Moccasin Powerhouse MPH MAIN CONTROL ROOM Joint 182 183 MPHHWT Moccasin Powerhouse MOCCASIN POWERHOUSE HOT WATER TANK Joint 183 184 MPHOILROOM Moccasin Powerhouse MPH OIL TREATMENT ROOM Power 184 185 MPHSTOR Moccasin Powerhouse MOCCASIN PH STORAGE BUILDING Power 185 186 M1 Moccasin Powerhouse MOCCASIN UNIT #1 Power 186 187 M1PRORLY Moccasin Powerhouse MPH UNIT #1 PROTECTIVE RELAYS Power 187 188 M2 Moccasin Powerhouse MOCCASIN UNIT #2 Power 188 189 M2PRORLY Moccasin Powerhouse MPH UNIT #2 PROTECTIVE RELAYS Power 189 190 MAX Moccasin Powerhouse MPH EXCITERS, GOVERNORS, TAIL RACE AND OTHER Power 190 191 MAX52BT Moccasin Powerhouse 52-BT BUS TIE CIRCUIT BREAKER LOCATION Power 191 192 MAXBRK Moccasin Powerhouse MOCCASIN POWERHOUSE CIRCUIT BREAKERS Power 192 193 MAXBRKSS1 Moccasin Powerhouse 52-SS1 STATION SERVICE CIRCUIT BREAKER LOCATION Power 193 194 MAXBRKSS2 Moccasin Powerhouse VILLAGE XFMR 52-SS2 STATION SERVICE LOCATION Power 194 195 MBRK52S1 Moccasin Powerhouse 52-S1 CIRCUIT BREAKER LOCATION Power 195 196 MBRK52S2 Moccasin Powerhouse 52-S2 CIRCUIT BREAKER LOCATION Power 196 197 MPHBATTERY Moccasin Powerhouse MPH BATTERY SYSTEM Power 197 198 MPHDELVAL Moccasin Powerhouse MPH DELUGE VALVE SYSTEM Power 198 199 MPHMCB Moccasin Powerhouse MPH MAIN CONTROL BOARD Power 199 200 MPHPEN Moccasin Powerhouse MOCCASIN POWERHOUSE PENSTOCK Power 200 201 MPRORLY Moccasin Powerhouse MPH PROTECTIVE RELAYS Power 201 202 MSPARES Moccasin Powerhouse ALL MPH SPARE EQUIPMENT Power 202 203 MSY Moccasin Powerhouse MOCCASIN SWITCHYARD Power 203 204 MSYLIGHTS Moccasin Powerhouse MSY MERCURY VAPOR LIGHTS Power 204 205 PWRSCHED Moccasin Powerhouse MPH POWER SCHEDULING COMPUTERS Power 205 206 MOCCPWTUS Moccasin Powerhouse MOCCASIN POWER TUNNEL SURGE SHAFT Power 206 207 MPHBYPSYS1 Moccasin Powerhouse MPH GENERATOR BYPASS #1 Power 207 208 MPHBYPSYS2 Moccasin Powerhouse MPH GENERATOR BYPASS #2 Power 208 209 MPHWW Moccasin Powerhouse MPH TSOV, SLIDE GATES AT TAILRACE, ETC Power 209 210 BNVMSCPU Moccasin Powerhouse BENTLY-NEVADA VIBRATION MONITORING SYS CENTRAL PRO Power 210 211 MPHSCADA Moccasin Powerhouse MOCCASIN POWERHOUSE SCADA RTU Power 211 212 PMBSCADA Moccasin Powerhouse PG&E MAIL BOX SCADA RTU Power 212 213 MLHSCADA Moccasin Administrative Compound MOCCASIN LOW-HEAD PWR STA SCADA RTU Power 213 214 MLHVMS Moccasin Administrative Compound MOCC. LOWHEAD VIBRATION MONITORING SYSTEM Power 214 215 MPHVMS Moccasin Administrative Compound MPH VIBRATION MONITORING SYSTEM Power 215 216 MLH Moccasin Administrative Compound MOCCASIN LOW HEAD POWER PLANT Power 216 217 MLHPEN Moccasin Administrative Compound MOCCASIN LOWHEAD PENSTOCK Power 217 11/16/2018 15048696_1.xlsx 4 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 218 M3 Moccasin Administrative Compound MOCCASIN LOWHEAD UNIT Power 218 219 MLHBATTERY Moccasin Administrative Compound MOCCASIN LOW-HEAD BATTERY SYS Power 219 220 MLHMCB Moccasin Administrative Compound MOCC LOWHEAD MAIN CONTROL BOARD Power 220 221 MLHPRORLY Moccasin Administrative Compound MLH PROTECTIVE RELAYS Power 221 222 MLHTS Moccasin Administrative Compound MOCCASIN LOW HEAD TELEPHONE SYSTEM Power 222 223 MPHRESBYP Moccasin Administrative Compound MOCCASIN RESERVOIR BYPASS Water 223 224 MLHPRGCTRL Moccasin Administrative Compound MLH PROGRAMABLE CONTROLLER Power 224 225 MCPFHDWM Moccasin Administrative Compound DOMESTIC WATER METERS / HATCHERY Joint 225 226 MCPBR Moccasin Administrative Compound MCP TIMBER BRIDGE / TRASH RACK Water 226 227 MCPCANAL Moccasin Administrative Compound MOCCASIN CANAL Water 227 228 MCPRES Moccasin Administrative Compound MOCCASIN CAMP RESERVOIR Water 228 229 MOCCLDM Moccasin Administrative Compound MOCCASIN LOWER DAM, MOCCASIN Water 229 230 MOCCUDM Moccasin Administrative Compound MOCCASIN CREEK UPPER DIVERSION DAM , MOCCASIN Water 230 231 MG3SCADA Moccasin Administrative Compound MOCCASIN GATE NO. 3 RTU NA 231 232 FTHTNLJACPU Moccasin Administrative Compound MOCCASIN RESERVOIR TURBIDITY SUPPLY JACK PUMP SITE Water 232 233 KBP Mountain Tunnel KIRKWOOD/INTAKE BYPASS SYSTEM Joint 233 234 MTNTNLDIV Mountain Tunnel MOUNTAIN TUNNEL AND ADITS Joint 234 235 SF Mountain Tunnel SOUTH FORK EQUIPMENT & BUILDINGS Joint 235 236 SFFUEL Mountain Tunnel SOUTH FORK FUELING STATION Joint 236 237 SFOFF Mountain Tunnel SOUTH FORK OFFICE BUILDING Joint 237 238 MT1-2AD Mountain Tunnel MTN TNL DIV 1-2 TUNNEL ACCESS Joint 238 239 MT3-4AD Mountain Tunnel MTN TNL DIV 3-4 TUNNEL ACCESS Joint 239 240 MT5-6AD Mountain Tunnel MTN TNL DIV 5-6 TUNNEL ACCESS Joint 240 241 MT8-9AD Mountain Tunnel MTN TNL DIV 8-9 TUNNEL ACCESS Joint 241 242 MTBIGCRSH Mountain Tunnel MTN TNL DIV BIG CREEK SHAFT,Joint 242 243 MTDSFC Mountain Tunnel SOUTH FORK CROSSING Joint 243 244 MTEIAD Mountain Tunnel MTN TNL DIV ACCESS AT EARLY INTAKE Joint 244 TBD Mountain Tunnel Flow Control Facility Joint TBD 245 MTPROUT Mountain Tunnel Mountain Tunnel Priest Outlet Joint 245 246 MTSECGROT Mountain Tunnel MTN TNL DIV SECOND GARROTE SHAFT,Joint 246 247 SFDWS Mountain Tunnel SOUTH FORK DOMESTIC WATER SYSTEM Joint 247 248 OSHSCADA O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM RTU Joint 248 249 OSHSG O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY STREAM GAUGE Joint 249 250 OSHWSTN O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WEATHER STATION Joint 250 251 OSH O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM AND AREA BLDGS.Joint 251 252 OSHCT O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY COTTAGES Joint 252 253 OSHEL O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY CAMP ELECTRICAL Joint 253 254 OSHEQP O'Shaughnessy Dam and Reservoir/CompoundALL OSHAUGHNESSY EQUIPMENT Joint 254 255 OSHDIVTNL O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DIVERSION TUNNEL Joint 255 256 OSHDM O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM Joint 256 257 OSHDMWELLAU O'Shaughnessy Dam and Reservoir/CompoundOSH DOMESTIC WELL AUXILIARY BUILDING Joint 257 258 OSHDWS O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM DOMESTIC WTR SYS Joint 258 259 OSHDWSBFP O'Shaughnessy Dam and Reservoir/CompoundOSH DOMESTIC WATER BACK FLOW PREVENTERS, OSH Joint 259 260 OSHDWW O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DOMESTIC WATER WELL SYSTEM, OSH Joint 260 261 OSHFUEL O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY FUELING STATION Joint 261 262 OSHG1 O'Shaughnessy Dam and Reservoir/CompoundOSH DAM GALLERY #1 Joint 262 263 OSHG2 O'Shaughnessy Dam and Reservoir/CompoundOSH DAM GALLERY #2 Joint 263 264 OSHGAR5 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY GARAGE #5 Joint 264 265 OSHGAR7 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY GARAGE #7 Joint 265 266 OSHRCKSCRN O'Shaughnessy Dam and Reservoir/CompoundROCK SCREENING PLANT NA 266 267 OSHSEWSYS O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY SEWAGE SYSTEM Joint 267 11/16/2018 15048696_1.xlsx 5 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 268 OSHSTORE3 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY STORE HOUSE 3 Joint 268 269 OSHSTORE6A O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY STORE HOUSE 6-A Joint 269 270 OSHWDSHD3A O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WOODSHED 3-A Joint 270 271 OSHWH12 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WAREHOUSE #12 Joint 271 272 OSHWLHSE O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WELL HOUSE Joint 272 273 OSHWTRSHED O'Shaughnessy Dam and Reservoir/CompoundHETCH HETCHY RESERVOIR WATERSHED water quality activities NA 273 274 OWQSCADA O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WATER QUALITY RTU Water 274 275 OLDOAKYD Facilities West of Moccasin Gate Tower 120/240V-OLD OAKDALE YARD LINE Joint 275 276 OAKCT Facilities West of Moccasin Gate Tower OAKDALE EMPLOYEE COTTAGE Joint 276 277 OAKDALE Facilities West of Moccasin Gate Tower OLD OAKDALE YARD Joint 277 278 OAKGAR Facilities West of Moccasin Gate Tower OAKDALE GARAGE Joint 278 279 OAKLINE Facilities West of Moccasin Gate Tower OAKDALE LINE SHOP BUILDING Joint 279 280 OAKOFFICE Facilities West of Moccasin Gate Tower OAKDALE OFFICE BUILDING Joint 280 281 OAKWHSE Facilities West of Moccasin Gate Tower OAKDALE WAREHOUSE BUILDING Joint 281 282 CPL Support Systems, Utilities and Other 2.4KV-CANYON PORTAL LINE Joint 282 283 CRL Support Systems, Utilities and Other 22.9KV-CHERRY RIDGE LINE Joint 283 284 CRLC Support Systems, Utilities and Other 22.9KV-CHERRY COMP TO RISER ACCROSS DAM LINE Joint 284 285 CRLCH Support Systems, Utilities and Other 22.9KV-CHERRY COMPOUND LINE Joint 285 286 HL Support Systems, Utilities and Other 22.9KV-HOLM LINE Joint 286 287 ICL Support Systems, Utilities and Other 22.9KV-INTAKE CAMP LINE Joint 287 288 INTCMP Support Systems, Utilities and Other (OLD) INTAKE CAMP LINE NA 288 289 INT-OSH Support Systems, Utilities and Other 22.9KV-INTAKE TO OSH LINE Joint 289 290 IRL Support Systems, Utilities and Other 22.9KV-INTAKE RADIO SITE LINE Joint 290 291 KRT Support Systems, Utilities and Other (OLD) KPH TO RIDGE LINE TIE LINE NA 291 292 MATA Support Systems, Utilities and Other MATHER "A" LINE Power 292 293 MATB Support Systems, Utilities and Other 2.4KV-MATHER "B" LINE Power 293 294 MCPA Support Systems, Utilities and Other 2.4KV-MOCCASIN CAMP "A" LINE Joint 294 295 MCPB Support Systems, Utilities and Other 2.4KV-MOCCASIN CAMP "B" LINE Joint 295 296 MPL Support Systems, Utilities and Other 2.4KV-MOCCASIN PEAK LINE Joint 296 297 OAKPORT Support Systems, Utilities and Other 120/240V-OAKDALE PORTAL LINE Water 297 298 POLES Support Systems, Utilities and Other DISTRIBUTION POLE LINES Joint 298 299 PRL Support Systems, Utilities and Other 2.4KV-PRIEST RESERVOIR LINE Joint 299 300 PRLN Support Systems, Utilities and Other PRIEST RESERVOIR COMM/SIGNAL LINE Joint 300 301 RLT Support Systems, Utilities and Other (OLD) RIDGE LINE TIE LINE NA 301 302 RRLINE Support Systems, Utilities and Other 120/240V-ROCK RIVER LINE Water 302 303 SJVHLN Support Systems, Utilities and Other 120/240V-SAN JOAQUIN VALVE HOUSE LINE Water 303 304 MAXBRKVT1 Support Systems, Utilities and Other VILLAGE XFMR 1, CIRCUIT BREAKER, MPH1 LOCATION Joint 304 305 MAXBRKVT2 Support Systems, Utilities and Other VILLAGE XFMR 2 CIRCUIT BREAKER LOCATION Joint 305 306 TESLP Support Systems, Utilities and Other 12KV-TESLA PORTAL LINE Water 306 307 INTHSFPWLACV Support Systems, Utilities and Other TOP INTAKE HILL/ SOUTH FORK RIVER TOWER LINE ROADS Joint 307 308 ISYL Support Systems, Utilities and Other 22.9KV-INTAKE SWITCHYARD LINE Power 308 309 ISYOILFLT Support Systems, Utilities and Other TRAILER MOUNTED OIL FILTER Power 309 310 ISYPLCCOMM Support Systems, Utilities and Other ISY POWER LINE CARRIER EQUIP Power 310 312 ISY Support Systems, Utilities and Other INTAKE SWITCHYARD Power 312 313 ISYB Support Systems, Utilities and Other ISY BOGUE UNIT Power 313 314 ISYBUSTIE Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. BUS TIE Power 314 315 ISYCRB Support Systems, Utilities and Other INTAKE SWITCHYARD CONTROL ROOM/BUILDING Power 315 316 ISYLIGHTS Support Systems, Utilities and Other SWITCHYARD LIGHTS Power 316 317 ISYLINE1 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 1 Power 317 318 ISYLINE10 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 10 Power 318 319 ISYLINE11 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 11 Power 319 11/16/2018 15048696_1.xlsx 6 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 320 ISYLINE2 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 2 Power 320 321 ISYLINE2.4 Support Systems, Utilities and Other INTAKE CAMP LINE 2.4KV Power 321 322 ISYLINE5 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 5 Power 322 323 ISYLINE6 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 6 Power 323 324 ISYLINE9 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 9 Power 324 325 ISYPRORLY Support Systems, Utilities and Other ISY PROTECTIVE RELAYS Power 325 326 LINE11TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINE 11 Power 326 327 LINE1-2TWR Support Systems, Utilities and Other TOWERS FOR TRANSMISSION LINES 1 & 2 Power 327 328 LINE3-4TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 3 & 4 Power 328 329 LINE5-6TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 5 & 6 Power 329 330 LINE7-8TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 7 & 8 Power 330 331 LINE910TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 9 & 10 Power 331 333 MSYLINE3 Support Systems, Utilities and Other MSY H.V. LINE 3 Power 333 334 MSYLINE4 Support Systems, Utilities and Other MSY H.V. LINE 4 Power 334 335 MSYLINE5 Support Systems, Utilities and Other MSY H.V. LINE 5 Power 335 336 MSYLINE6 Support Systems, Utilities and Other MSY H.V. LINE 6 Power 336 337 122OSS Support Systems, Utilities and Other OAKDALE SUBSTATION (TID)Power 337 338 CSPRORLY Support Systems, Utilities and Other CALAVERUS SUBSTATION PROTECTIVE RELAYS Power 338 339 CSSPARES Support Systems, Utilities and Other ALL CAL SUB SPARE EQUIPMENT Power 339 340 MID_TID_SUBS Support Systems, Utilities and Other NON HETCH HETCHY SUBSTATIONS Power 340 341 ROP Support Systems, Utilities and Other ROP SWITCH ROOM Power 341 342 STSUB Support Systems, Utilities and Other STANDIFORD SUBSTATION, MODESTO Power 342 343 DAVISSUB This row not included by SFPUC DAVIS SUB STATION NA 343 344 WDCALSUB Support Systems, Utilities and Other CALAVERAS SUBSTATION Power 344 345 ISYSCADA Support Systems, Utilities and Other INTAKE SWITCHYARD SCADA RTU Power 345 346 CALSCADA Support Systems, Utilities and Other CALAVERAS SUB SCADA RTU Power 346 347 ROPREVMTR Support Systems, Utilities and Other JEM TWO ELEMENT METER Power 347 348 ROPREVREC Support Systems, Utilities and Other ROP REVNUE METERING RECORDER Power 348 349 TISSCADA Support Systems, Utilities and Other TREASURE ISLAND SCADA RTU Power 349 350 REVMETERS Support Systems, Utilities and Other PROJECT BILLABLE REVENUE METERS Power 350 351 PRSTSCADA Priest Regulating Dam and Reservoir PRIEST RESERVOUR SCADA RTU Power 351 352 WPVSCADA Priest Regulating Dam and Reservoir WEST PORTAL VALVEHOUSE RTU Power 352 353 PRBYPASS Priest Regulating Dam and Reservoir PRIEST BYPASS SYSTEM FROM MTN TUNNEL TO GATE TOWER Joint 353 354 PRCANAL Priest Regulating Dam and Reservoir PRIEST CANAL Power 354 355 AUXBUIER Priest Regulating Dam and Reservoir PRIEST RES. AUXILIARY BUILDING ELECTRICAL ROOM Joint 355 356 AUXBUIGR Priest Regulating Dam and Reservoir PRIEST RES. AUXILIARY BUILDING GENERATOR ROOM Joint 356 357 AUXBUIMR Priest Regulating Dam and Reservoir PRIEST RES. AUXILIARY BUILDING MECHANICAL ROOM Joint 357 358 PRGTTWRMN Priest Regulating Dam and Reservoir PRIEST GATE TOWER MAIN , PRIEST Power 358 360 PRMCPWLCRDCV Support Systems, Utilities and Other PRIEST TO MOCCASIN POWER LINE ROADS Power 360 361 PRSRES Priest Regulating Dam and Reservoir PRIEST RESERVOIR Power 361 362 WESTPORTAL Priest Regulating Dam and Reservoir WEST PORTAL EQUIPMENT Power 362 363 MOCCPWTUN Priest Regulating Dam and Reservoir MOCCASIN POWER TUNNEL Power 363 364 PRIESTCOTT Priest Regulating Dam and Reservoir PRIEST COTTAGE Joint 364 365 PRIESTDM Priest Regulating Dam and Reservoir PRIEST DAM Power 365 366 PRWT1 Priest Regulating Dam and Reservoir PRIEST DOMESTIC WATER TANK Joint 366 367 MCPSTORE MOCCASIN GENERAL STORE BLDG 367 368 KPHASS KIRKWOOD P.H. AUTO SPRINKLER SYSTEM 368 369 ELSURVCAB ELEANOR-MIGUEL MEADOW SURVEY CABIN 369 370 GRP (OLD) GRANITE PORTAL LINE 370 371 JONESPOINT JONES POINT MICROWAVE COMMUNICATION SITE 371 372 JPCSBATA JONES POINT BATTERY BANK *A* (3-12 VOLT GELL CELL 372 11/16/2018 15048696_1.xlsx 7 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 373 JPCSBATB JONES POINT BATTERY BANK *B* (3-12 VOLT GELL CELL 373 374 JPCSBLDG JONES POINT COMM SITE EQUIP BUILDING 374 375 JPDISH1 JONES PIONT ANTENNA DISH PATH 1 TO DUCKWALL REPEAT 375 376 JPDISH2 JONES PIONT ANTENNA DISH PATH 2 TO INTAKE SWITCHYA 376 377 JPPVCTRLA JONES POINT PHOTOVOLTAIC CHARGER CONTROL BATTERY B 377 378 JPPVCTRLB JONES POINT PHOTOVOLTAIC CHARGER CONTROL BATTERY B 378 379 JPSOLPNLA JONES POINT SOLAR PANNELS *A*379 380 JPSOLPNLB JONES POINT SOLAR PANNELS *B*380 381 JPTOWER JONES PIONT TOWER STRUCTURE 381 382 JPTXALARM JONES POINT REPEATER TRANSMIT ALARM UNIT 382 383 MCPTV MOCCASIN CABLE TELEVISION SYS 383 384 OAKLAND OAKLAND EQUIPMENT AND BUILDINGS 384 385 BMIS MAINFRAME COMPUTER IN S.F.385 386 HH-RRAS ASSETS THAT ARE RETIRED OR NO LONGER IN SERVICE 386 387 SANFRAN SAN FRANCISCO EQUIPMENT & BUILDINGS 387 388 VALDIV VALLEY DIVISION EQUIPMENT 388 389 1155MKT 1155 MARKET STREET 389 390 COLLEGE SF CITY COLLEGE 390 391 MOSCONE MOSCONE CENTER 391 392 TESCT TESLA COTTAGE 392 393 TESGAR TESLA GARAGE 393 394 TESLAFUEL TESLA PORTAL FUELING STATION 394 395 MOCCPENSRDCV Support Systems, Utilities and Other MOCCASIN CAMP PENSTOCK SOUTH SIDE ROAD CULVERT Joint 395 396 PRIESTAUXBUI Support Systems, Utilities and Other PRIEST RES. AUXILIARY BUILDING, CONTROL ROOM, SUBS Joint 396 397 PRIESTDIRDCV Support Systems, Utilities and Other PRIEST DIRT ROADS PRIEST CULVERT Joint 397 398 PRIESTDIRTRD Support Systems, Utilities and Other PRIEST AREA DIRT ROADS, PRIEST Joint 398 399 PRIESTPARDCV Support Systems, Utilities and Other PRIEST AREA PAVED ROADS, PRIEST CULVERT Joint 399 400 PRIESTPAVERD Support Systems, Utilities and Other PRIEST AREA PAVED ROADS, PRIEST Joint 400 401 PRIESTRDS Support Systems, Utilities and Other PRIEST AREA ROADS, PRIEST Joint 401 402 OSHBR Support Systems, Utilities and Other OSHAUGHNESSY TIMBER BRIDGE Joint 402 403 OSHROADS Support Systems, Utilities and Other OSH AREA ROADS Joint 403 404 CSTRGTNACRCV Support Systems, Utilities and Other PIPELINE TUNNEL RD. - CULVERTS Joint 404 405 CSTRGTNLACCR Support Systems, Utilities and Other PIPELINE TUNNEL RD. - BIRD RD TO ALAMEDA EAST Joint 405 406 DRDTOEEMRD Support Systems, Utilities and Other POWER LINE ACCESS RD - DIRT ACC. RD TO 2 TOWERS Joint 406 407 EMRYRDACCRD Support Systems, Utilities and Other PIPELINE & PWRLINE ACCESS RD (EMERY RD - BIRD RD)Joint 407 408 EMRYRDACRDCV Support Systems, Utilities and Other PIPELINE & PWRLINE ACCESS RD CULVERTS Joint 408 409 FRHYPWLACCRD Support Systems, Utilities and Other FERRETTI ROAD TO HWY 120 TOWER LINE ROADS Joint 409 410 FRHYPWLACRCV Support Systems, Utilities and Other FERRETTI ROAD TO HWY 120 TOWER LINE ROADS Joint 410 411 FTDMPRACC Support Systems, Utilities and Other MARSHES FLAT TO MOCCASIN PEAK RADIO SITE ROAD ,Joint 411 412 FTDMPRACCCV Support Systems, Utilities and Other MARSHES FLAT TO MOCCASIN PEAK RADIO SITE ROAD ,Joint 412 413 HYMRPWLACCR Support Systems, Utilities and Other HWY 120 TO MERRELL ROAD TOWER LINE ROADS Joint 413 414 ICPCHEL Support Systems, Utilities and Other CHERRY OIL TO ELEANOR ROAD, INTAKE /ELEANOR Joint 414 415 ICPCHELCV Support Systems, Utilities and Other CHERRY OIL TO ELEANOR ROAD CULVERT Joint 415 416 ICPCHERRY Support Systems, Utilities and Other ROAD FROM INTAKE TO CHERRY VALLEY, EARLY INTAKE Joint 416 417 ICPCHERRYCV Support Systems, Utilities and Other ROAD FROM INTAKE TO CHERRY VALLEY, EARLY INTAKE CULV Joint 417 418 ICPHILLRD Support Systems, Utilities and Other ROAD-INTAKE HILL FROM RED HILLS TO INTAKE Joint 418 419 ICPHILLRDCV Support Systems, Utilities and Other ROAD INTAKE HILLFROM RED HILLS TO INTAKE, CULVERTS Joint 419 420 ICPHPHRD Support Systems, Utilities and Other CHERRY OIL TO HPH ROAD,INTAKE/HPH ROAD Power 420 421 ICPHPHRDCV Support Systems, Utilities and Other CHERRY OIL ROADTO HPH ROAD,INTAKE/HPH ROAD CULVERT Power 421 422 ICPMATHER Support Systems, Utilities and Other ROAD FROM TOP OF INTAKE HILL TO CAMP MATHER Joint 422 423 ICPREDHILL Support Systems, Utilities and Other ROADWAY-HWY120 TO INTAKE HILL EARLY INTAKE Joint 423 11/16/2018 15048696_1.xlsx 8 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 424 ICPREDHILLCV Support Systems, Utilities and Other ROADWAY-HWY120 TO INTAKE HILL EARLY INTAKE Joint 424 425 ICPROADS Support Systems, Utilities and Other INTAKE/CHERRY/MATHER/ELEANOR AREA ROADS Joint 425 426 J59RRRPLACRD Support Systems, Utilities and Other POWER LINE ACCESS RD - RD J59 TO ROCK RIVER ROAD Joint 426 428 MCDIRTRDSCV Support Systems, Utilities and Other MOCCASIN DIRT ROADS CULVERTS Joint 428 429 MCPAVERDS Support Systems, Utilities and Other MOCCASIN AREA PAVED ROADS Joint 429 430 MCPAVERDSCV Support Systems, Utilities and Other MOCCASIN AREA PAVED ROADS CULVERTS Joint 430 431 MCPROADS Support Systems, Utilities and Other MOCCASIN AREA ROADS Joint 431 433 MCPRRGCV Support Systems, Utilities and Other MOCCASIN TO PRIEST RAILROAD GRADE , MOCCASIN Joint 433 434 MOCCPENSTSRD Support Systems, Utilities and Other MOCCASIN AREA ROADS PENSTOCK SOUTH SIDE MCP Joint? 434 435 MOCTOMARSFL Support Systems, Utilities and Other MOCCASIN TO MARSH FLAT TOWER 239S TOWER LINE Joint 435 436 MRPCPWLACCRD Support Systems, Utilities and Other MERRELL ROAD TO PRIEST TOWER LINE ROADS Joint 436 437 MRPCPWLACRCV Support Systems, Utilities and Other MERRELL ROAD TO PRIEST TOWER LINE ROADS Joint 437 438 MSJPWLACCRD Support Systems, Utilities and Other POWER LINE ACCESS RD - BIRD RD TO MISSION SAN JOSE Joint 438 439 MT5-6ACRO Support Systems, Utilities and Other MOUNTAIN TUNNEL ACCESS ROAD TO 5-6 ADIT Joint 439 440 MT5-6ACROCV Support Systems, Utilities and Other MOUNTAIN TUNNEL ACCESS ROAD TO 5-6 ADIT CULVERT Joint 440 441 RMBWPLACCRD Support Systems, Utilities and Other PIPELINE ACCESS RD - RMB TO EMERY RD Joint 441 442 RMBWPLACRDC Support Systems, Utilities and Other PIPELINE ACCESS CULVERT RD - RMB TO EMERY RD Joint 442 443 RMBWPWLACCR Support Systems, Utilities and Other POWER LINE ACCESS RD - RMB TO J59 Joint 443 444 RRRLIMPTWLRD Support Systems, Utilities and Other POWER LINE ACCESS RD - ROCK RIVER ROAD LIME PIT Joint 444 446 SFRFRPWLACV Support Systems, Utilities and Other SOUTH FORK RIVER TO FERRETTI ROAD TOWER LINE ROADS Joint 446 447 WESTPORTALRD Support Systems, Utilities and Other WEST PORTAL AREA ROADS Joint 447 448 WILRDTODACRD Support Systems, Utilities and Other POWER LINE ACCESS RD - WILMS ROAD TO DIRT ACC. RD Joint 448 449 WPPAVERDSCV Support Systems, Utilities and Other WEST PORTAL AREA PAVED ROADS CULVERT Joint 449 450 INTHSFPWLACC Support Systems, Utilities and Other TOP INTAKE HILL/ SOUTH FORK RIVER TOWER LINE ROADS Joint 450 451 MARSFLDONPCV Support Systems, Utilities and Other MARSH FLAT TO DON PEDRO TOWER 243S TO TOWER 258S Joint 451 452 MARSFLTODONP Support Systems, Utilities and Other MARSH FLAT TO DON PEDRO TOWER 243S TO TOWER 258S Joint 452 453 MOCMARSFLCCV Support Systems, Utilities and Other MOCCASIN TO MARSH FLAT TOWER 239S TOWER LINE Joint 453 454 MOCMARSFLCV Support Systems, Utilities and Other MOCCASIN TO MARSH FLAT TOWER 239S TOWER LINE Joint 454 455 PRMCPWLACCRD Support Systems, Utilities and Other PRIEST TO MOCCASIN TOWER LINE ROADS Joint 455 456 VDPLACCRD Support Systems, Utilities and Other ALL PIPELINE ACCESS ROADS Joint 456 457 ICPMATHERCV Support Systems, Utilities and Other ROAD FROM TOP OF INTAKE HILL TO CAMP MATHER CULVER Joint 457 458 V-HH-EQP Support Systems, Utilities and Other HEAVY EQUIPMENT Joint 458 459 DWTXALARM Support Systems, Utilities and Other DUCKWALL REPEATER TRANSMIT ALARM UNIT Joint 459 460 MPRRALMRX Support Systems, Utilities and Other MPR REPEATER ALARM RECEIVER Joint 460 461 MPRSCADA Support Systems, Utilities and Other MOCCASIN PEAK RADIO SITE RTU Joint 461 462 SCADA Support Systems, Utilities and Other HHWP SCADA SYSTEM Joint 462 463 SCADAMSTER Support Systems, Utilities and Other NEW L&G 6800 SCADA MASTER NA 463 464 SCADAMSTR Support Systems, Utilities and Other SCADA MASTER STATION A & B NA 464 465 SCADAMSTR-TG Support Systems, Utilities and Other SCADA MASTER, NEW TG8000 EMS SCADA NA 465 466 HHMOCCNET Support Systems, Utilities and Other PROJECT NOVELL 386 NETWORK NA 466 467 BLKNGCARR Support Systems, Utilities and Other BLOCKING CARRIER SYSTEMS Power 467 468 BORCS Support Systems, Utilities and Other BURNOUT RIDGE COMMUNICATION SITE Joint 468 469 BORMICROWAV Support Systems, Utilities and Other BURN OUT RIDGE MICROWAVE COMMUNICATION SITE Joint 469 470 COMM Support Systems, Utilities and Other HHWP COMMUNICATION SYSTEMS Joint 470 471 COMPTREQP Support Systems, Utilities and Other COMPUTER EQUIP, ELECTRONIC DEVICES & SECURITY KEYS Joint 471 472 CTSMICROWAVE Support Systems, Utilities and Other CHERRY MICROWAVE COMMUNICATION SITE Joint 472 473 CVCS Support Systems, Utilities and Other CHERRY VALLEY COMMUNICATION SITE Joint 473 474 DATACOMM Support Systems, Utilities and Other DATA COMMUNICATION SYSTEMS Joint 474 475 DUCKWALL Support Systems, Utilities and Other DUCKWALL MICROWAVE COMMUNICATION SITE Joint 475 476 DWCSBATA Support Systems, Utilities and Other COMM SITE BATTERY BANK *A* (5-12 VOLT GELL CELL BA Joint 476 477 DWCSBATB Support Systems, Utilities and Other COMM SITE BATTERY BANK *B* (5-12 VOLT GELL CELL BA Joint 477 11/16/2018 15048696_1.xlsx 9 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 478 DWCSBLDG Support Systems, Utilities and Other DUCKWALL COMM SITE EQUIP BUILDING Joint 478 479 DWDISH1 Support Systems, Utilities and Other DUCKWALL ANTENNA DISH PATH 1 TO JONES POINT REPEAT Joint 479 480 DWDISH2 Support Systems, Utilities and Other DUCKWALL ANTENNA DISH PATH 2 TO MOCCASIN PEAK REPE Joint 480 481 DWPVCTRLA Support Systems, Utilities and Other DUCKWALL PHOTOVOLTAIC CHARGER CONTROL BATTERY BANK Joint 481 482 DWPVCTRLB Support Systems, Utilities and Other DUCKWALL PHOTOVOLTAIC CHARGER CONTROL BATTERY BANK Joint 482 483 DWSOLPNLA Support Systems, Utilities and Other DUCKWALL SOLAR PANNELS *A*Joint 483 484 DWSOLPNLB Support Systems, Utilities and Other DUCKWALL SOLAR PANNEL*B*Joint 484 485 DWTOWER Support Systems, Utilities and Other DUCKWALL TOWER STRUCTURE Joint 485 486 ICPRAD Support Systems, Utilities and Other ICP RADIO BUILDING Joint 486 487 ICPRADIOSITE Support Systems, Utilities and Other EARLY INTAKE RADIO SITE Joint 487 488 IRSMICROWAVE Support Systems, Utilities and Other INTAKE MICROWAVE COMMUNICATION SITE Joint 488 489 MCPMICROWAV Support Systems, Utilities and Other MOCCASIN CAMP MICROWAVE COMMUNICATION SITE BUILDING Joint 489 490 MCPRADST Support Systems, Utilities and Other OLD MOCCASIN RADIO STATION BLDG NA 490 491 MICROCOMM Support Systems, Utilities and Other MICROWAVE COMMUNICATION SYSTEMS Joint 491 492 MPR Support Systems, Utilities and Other MOCCASIN PK. RADIO SITE Joint 492 493 MPRBLDG Support Systems, Utilities and Other MOCCASIN PK. RADIO SITE BUILDING Joint 493 494 MPRFRBBA Support Systems, Utilities and Other MPR FLOTROL RECTIFIER BATT BANK A Joint 494 495 MPRFRBBB Support Systems, Utilities and Other MPR FLOTROL RECTIFIER BATT BANK B Joint 495 496 MPRGEN Support Systems, Utilities and Other MOCCASIN PEAK RADIO SITE STAND-BY GENERATOR / LP Joint 496 497 MPRGENCU Support Systems, Utilities and Other MPR STNBY GENERATOR CTRL UNIT Joint 497 498 MPRHAL Support Systems, Utilities and Other MOCC PEAK RADIO BUILDING HALON SYS Joint 498 499 OPTICCOMM Support Systems, Utilities and Other OPTICAL FIBER COMMUNICATION SYSTEMS Joint 499 500 PPPCS Support Systems, Utilities and Other POOPENAUT PASS COMMUNICATION SITE Joint 500 501 PPPMICROWAVE Support Systems, Utilities and Other POOPANAUNT PASS MICROWAVE COMMUNICATION SITE Joint 501 502 RADIOCOMM Support Systems, Utilities and Other RADIO COMMUNICATION SYSTEMS Joint 502 503 TELCOMM Support Systems, Utilities and Other TELEPHONE COMMUNICATION SYSTEMS Joint 503 504 TRANFTRIP Support Systems, Utilities and Other TRANSFER TRIP SYSTEMS Power 504 505 WESTPORTCS Support Systems, Utilities and Other WEST PORTAL COMMUNICATION SITE Joint 505 506 PWRLNCARR Support Systems, Utilities and Other POWER LINE CARRIER SYSTEMS Power 506 507 HHKEYS Support Systems, Utilities and Other HETCH HETCHY SECURITY KEYS, MOCCASIN Joint 507 508 WSBSCADA Facilities West of Moccasin Gate Tower WARNERVILLE SHOP BLDG RTU Joint 508 509 WSYSCADA Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD SCADA RTU Joint 509 510 WSYCRB Facilities West of Moccasin Gate Tower WSY CONTROL ROOM/BUILDING, WSY Power 510 511 WSYCT Facilities West of Moccasin Gate Tower WARNERVILLE COTTAGES Joint 511 512 WSYDWS Facilities West of Moccasin Gate Tower WARNERVILLE DOMESTIC WATER SYSTEM , WARNERVILLE Joint 512 513 WSYFUEL Facilities West of Moccasin Gate Tower WARNERVILLE FUELING STATION Joint 513 514 WSYSHPS Facilities West of Moccasin Gate Tower WARNERVILLE SHOPS/OFFICE BUILDING Joint 514 515 WSY Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD/SUBSTATION Power 515 516 WSY115KVT1 Facilities West of Moccasin Gate Tower 115KV NUMBER 1 TRANSFORMER BUS Power 516 517 WSY115KVT2 Facilities West of Moccasin Gate Tower 115KV NUMBER 2 TRANSFORMER BUS Power 517 518 WSY115KVT3 Facilities West of Moccasin Gate Tower 115KV NUMBER 3 TRANSFORMER BUS Power 518 519 WSYBUSTIE Facilities West of Moccasin Gate Tower WARNERVILLE SW YARD BUS TIE 230KV Power 519 520 WSYDELG Facilities West of Moccasin Gate Tower WARNERVILLE SUB DELUGE SYSTEM Power 520 521 WSYLINE5 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD H.V. LINE 5 Power 521 522 WSYLINE6 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD H.V. LINE 6 Power 522 523 WSYLINE7 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD 115KV LINE 7 Power 523 524 WSYLINE8 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD 115KV LINE 8 Power 524 525 WSYPGEL2BG Facilities West of Moccasin Gate Tower WSY PGE LINE 2 BELLOTA GREGG Power 525 526 WSYPRORLY Facilities West of Moccasin Gate Tower WSY PROTECTIVE RELAYS Power 526 527 WSYSUMP Facilities West of Moccasin Gate Tower WARNERVILLE SWITCH YARD SUMP PUMP Power 527 528 WSYTB1 Facilities West of Moccasin Gate Tower 230KV NUMBER 1 TRANSFORMER BUS Power 528 11/16/2018 15048696_1.xlsx 10 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 529 WSYTB2&3 Facilities West of Moccasin Gate Tower 23OKV BUS FOR NUMBER 2&3 XFMR Power 529 530 WSYDWBFP Facilities West of Moccasin Gate Tower WARNERVILLE BACK FLOW PREVENTERS, WSY Joint 530 531 OPVSCADA Facilities West of Moccasin Gate Tower OAKDALE PORTAL VALVEHOUSE RTU Water 531 532 ARVHSCADA Facilities West of Moccasin Gate Tower ALBERS RD VALVE HOUSE SCADA RTU Water 532 533 101PJ4VH Facilities West of Moccasin Gate Tower SJPL3 and SJPL4 JUNCTION VALVEHOUSE Water 533 534 ALBERVH Facilities West of Moccasin Gate Tower ALBERS RD VALVE HOUSE Water 534 535 ALMPORTAL Facilities West of Moccasin Gate Tower ALAMEDA EAST PORTAL Water 535 536 AVH Facilities West of Moccasin Gate Tower ALAMEDA VALVE HOUSE #2 Water 536 537 CASHCRVH Facilities West of Moccasin Gate Tower CASHMAN CREEK VALVE HOUSE Water 537 538 CSTRNGTNL Facilities West of Moccasin Gate Tower COAST RANGE TUNNEL / TESLA - SUNOL Water 538 539 EMERYCOAUX Facilities West of Moccasin Gate Tower EMERY ROAD CROSSOVER AUX CONTROL BUILDING Water 539 540 EMERYCOVH Facilities West of Moccasin Gate Tower EMERY ROAD CROSSOVER VALVE HOUSE Water 540 541 FTDBRNAD Facilities West of Moccasin Gate Tower FOOTHILL TNL BROWNS TUNNEL ACCESS Water 541 542 FTDRMBE Facilities West of Moccasin Gate Tower FOOTHILL TUNNEL RED MNTN BAR EAST Water 542 543 FTDRMBSIPH Facilities West of Moccasin Gate Tower RED MNTN BAR SIPHON , RED MOUNTAIN BAR Water 543 544 FTDRMBSS Facilities West of Moccasin Gate Tower RED MNTN BAR EAST SURGE SHAFT , RED MOUNTAIN BAR Water 544 545 FTHTNLDIV Facilities West of Moccasin Gate Tower FOOTHILL TUNNEL DIVISION Water 545 546 OAKPORTAL Facilities West of Moccasin Gate Tower OAKDALE PORTAL VALVE HOUSES Water 546 547 PELICANCOVH Facilities West of Moccasin Gate Tower PELICAN CROSSOVER VALVE HOUSE Water 547 548 PELICANXOAUX Facilities West of Moccasin Gate Tower PELICAN CROSSOVER AUX CONTROL BUILDING Water 548 549 PL2THSEAUX Facilities West of Moccasin Gate Tower SJPL2, THROTTLING STATION #1, AUXILIARY Water 549 550 PL2THSWAUX Facilities West of Moccasin Gate Tower SJPL2, THROTTLING STATION #2, AUXILIARY Water 550 551 RMBGATHOU Facilities West of Moccasin Gate Tower RED MOUNTAIN BAR WEST GATE HOUSE, RMB Water 551 552 RMBSCADA Facilities West of Moccasin Gate Tower RED MTN. BAR SLIDE GATE RTU Water 552 553 ROSELCOAUX Facilities West of Moccasin Gate Tower ROSELLE AVE CROSSOVER AUX BUILDING Water 553 554 ROSELCOVH Facilities West of Moccasin Gate Tower ROSELLE AVE. CROSSOVER VALVE HOUSE Water 554 555 RR Facilities West of Moccasin Gate Tower ROCK RIVER Water 555 556 RRLSCADA Facilities West of Moccasin Gate Tower ROCK RIVER LIME PLANT RTU Water 556 557 SJCSCADA Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE CROSS-OVER RTU Water 557 558 SJPL Facilities West of Moccasin Gate Tower SAN JOAQUIN VALLEY PIPELINES Water 558 559 SJPL2THSE Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE 2, THROTTLING STATION #1 Water 559 560 SJPL2THSW Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE 2, THROTTLING STATION #2 Water 560 561 SJPL3THS Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE 3,4 THROTTLING STATION Water 561 562 SJVH Facilities West of Moccasin Gate Tower SAN JOAQUIN VALVE HOUSE Water 562 563 SJVHAUXBLDG Facilities West of Moccasin Gate Tower SAN JOAQUIN VALVE HOUSE AUXILLARY BUILDING Water 563 564 SJVSCADA Facilities West of Moccasin Gate Tower SAN JOAQUIN VALVEHOUSE RTU Water 564 565 TESCHLOR Facilities West of Moccasin Gate Tower TESLA CHLORINATION BUILDING Water 565 566 TESGENHSE Facilities West of Moccasin Gate Tower TESLA GENERATOR HOUSE Water 566 567 TESLA-HH Facilities West of Moccasin Gate Tower TESLA PORTAL EQUIPMENT AND BLDGS Water 567 568 TESPORTAL Facilities West of Moccasin Gate Tower TESLA PORTAL VALVE HOUSES Water 568 569 TESPUMPHSE Facilities West of Moccasin Gate Tower TESLA PUMPHOUSE Water 569 570 TPVSCADA Facilities West of Moccasin Gate Tower TESLA PORTAL VALVEHOUSE RTU Water 570 571 TSLDWS Facilities West of Moccasin Gate Tower TESLA DOMESTIC WATER SYSTEM Water 571 572 TSLSEWSYS Facilities West of Moccasin Gate Tower TESLA PORTAL SEWAGE SYSTEM Water 572 573 TUTF Facilities West of Moccasin Gate Tower TESLA ULTRAVIOLET TREATMENT FACILITY Water 573 574 TUVH Facilities West of Moccasin Gate Tower TESLA ULTRAVIOLET VALVE HOUSE Water 574 575 VDHHSHAFT Facilities West of Moccasin Gate Tower HETCH HETCHY SURGE SHAFT Water 575 576 VDOAKOVR Facilities West of Moccasin Gate Tower FTHL TNL OAKDALE PORTAL OVERFLOW SHAFT Water 576 577 VDPEDROADT Facilities West of Moccasin Gate Tower FOOTHILL TNL PEDRO ACCESS Water 577 578 VDRMBW Facilities West of Moccasin Gate Tower RED MNTN BAR WEST Water 578 11/16/2018 15048696_1.xlsx 11 AMENDED AND RESTATED WATER SUPPLY AGREEMENT between THE CITY AND COUNTY OF SAN FRANCISCO and WHOLESALE CUSTOMERS in ALAMEDA COUNTY, SAN MATEO COUNTY AND SANTA CLARA COUNTY JULY 2009 NOVEMBER 2018 ATTACHMENT C -i- 1840795.8 TABLE OF CONTENTS Article 1. Parties, Effective Date, And Defined Terms .............................................................. 1 1.01. Definitions ................................................................................................................. 1 1.02. Parties ...................................................................................................................... 1 1.03. Effective Date ........................................................................................................... 2 Article 2. Term; Amendments During Term .............................................................................. 4 2.01. Term ......................................................................................................................... 4 2.02. Extension and Renewal of Term ............................................................................... 4 2.03. Amendments ............................................................................................................ 5 Article 3. Water Supply ............................................................................................................ 8 3.01. Supply Assurance ..................................................................................................... 8 3.02. Allocation of Supply Assurance ................................................................................. 9 3.03. Wholesale Customer Service Areas ........................................................................10 3.04. Permanent Transfers of Individual Supply Guarantees ............................................12 3.05. Restrictions on Resale .............................................................................................13 3.06. Conservation; Use of Local Sources; Water Management Charge ..........................13 3.07. Restrictions on Purchases of Water from Others; Minimum Annual Purchases .......14 3.08. Water Quality ...........................................................................................................15 3.09. Completion of WSIP ................................................................................................15 3.10. Regional Water System Repair, Maintenance and Operation ..................................16 3.11. Shortages ................................................................................................................16 3.12. Wheeling of Water from Outside SFPUC System ....................................................19 3.13. Limits on New Customers ........................................................................................19 3.14. Measurement of Water ............................................................................................21 3.15. New Sources of Water Supply to Maintain Supply Assurance .................................23 3.16. New Sources of Water Supply to Increase Supply Assurance .................................24 3.17. Westside Basin Groundwater Storage and Recovery Project ..................................24 3.18. Water Supply Agreement Amendment Required. ....................................................29 Article 4. Implementation of Interim Supply Limitation. ............................................................31 4.01. Interim Supply Limitation Imposed by SFPUC .........................................................31 4.02. Retail and Wholesale Customer Allocations Under Interim Supply Limitation ..........31 4.03. Transfers of Interim Supply Allocations ....................................................................31 4.04. Environmental Enhancement Surcharge ..................................................................32 4.05. San Jose/ Santa Clara Interim Supply Allocation and Process for Reduction/ Termination. .............................................................................................................34 -ii- 1840795.8 4.06. San Francisco Decisions in 2028 Regarding Future Water Supply ..........................36 4.07. Retained Discretion of SFPUC and Wholesale Customers ......................................36 Article 5. Wholesale Revenue Requirement ...........................................................................39 5.01. Scope of Agreement ................................................................................................39 5.02. General Principles ...................................................................................................39 5.03. Capital Cost Recovery - Existing Regional Assets ...................................................41 5.04. Capital Cost Contribution - New Regional Assets ....................................................43 5.05. Water Enterprise Operation and Maintenance Expenses .........................................45 5.06. Water Enterprise Administrative and General Expenses ..........................................47 5.07. Water Enterprise Property Taxes .............................................................................49 5.08. Hetch Hetchy Enterprise Expenses .........................................................................50 5.09. Hetch Hetchy Enterprise Capital Costs ....................................................................52 5.10. Additional Agreements Related to Financial Issues .................................................52 5.11. Classification of Existing System Assets. .................................................................55 Article 6. Integration of Wholesale Revenue Requirement with SFPUC Budget Development and Rate Adjustments .............................................................................................58 6.01. General ....................................................................................................................58 6.02. Budget Development ...............................................................................................58 6.03. Rate Adjustments ....................................................................................................58 6.04. Rate Structure .........................................................................................................60 6.05. Balancing Account ...................................................................................................61 6.06. Wholesale Revenue Coverage Reserve ..................................................................63 6.07. Working Capital Requirement ..................................................................................65 6.08. Wholesale Capital Fund ...........................................................................................66 6.09. SFPUC Adoption of Regional Water System 10-Year Capital Improvement Program .............................................................................................68 Article 7. Accounting Procedures; Compliance Audit ..............................................................73 7.01. SFPUC Accounting Principles, Practices .................................................................73 7.02. Calculation of and Report on Wholesale Revenue Requirement ..............................74 7.03. Appointment of Compliance Auditor .........................................................................75 7.04. Conduct of Compliance Audit ..................................................................................76 7.05. Issuance of Compliance Auditor’s Report ................................................................78 7.06. Wholesale Customer Review ...................................................................................79 Article 8. Other Agreements of the Parties ..............................................................................81 8.01. Arbitration and Judicial Review ................................................................................81 8.02. Attorneys’ Fees ........................................................................................................85 8.03. Annual Meeting and Report .....................................................................................86 -iii- 1840795.8 8.04. 8.04 Administrative Matters Delegated to BAWSCA ................................................87 8.05. Preservation of Water Rights; Notice of Water Rights Proceedings .........................88 8.06. SFPUC Rules and Regulations ................................................................................88 8.07. Reservations of, and Limitations on, Claims ............................................................89 8.08. Prohibition of Assignment ........................................................................................91 8.09. Notices ....................................................................................................................92 8.10. Incorporation of Attachments ...................................................................................93 8.11. Interpretation ...........................................................................................................93 8.12. Actions and Approvals by San Francisco .................................................................93 8.13. Counterparts ............................................................................................................93 8.14. Limitations on Damages ..........................................................................................94 8.15. Force Majeure .........................................................................................................94 8.16. No Third-Party Beneficiaries ....................................................................................95 8.17. Good Faith and Fair Dealing ....................................................................................95 Article 9. Implementation and Special Provisions Affecting Certain Wholesale Customers .....96 9.01. 9.01 General; Individual Water Sales Contracts .......................................................96 9.02. California Water Service Company ..........................................................................96 9.03. City of Hayward .......................................................................................................98 9.04. Estero Municipal Improvement District .....................................................................99 9.05. Stanford University ..................................................................................................99 9.06. City of San Jose and City of Santa Clara ............................................................... 100 9.07. City of Brisbane, Guadalupe Valley Municipal Improvement District, Town of Hillsborough........................................................................................................... 101 -iv- 1840795.8 LIST OF ATTACHMENTS A Definitions B Wholesale Customer Regional Water System Purchases 2007-2008 (Section 1.03) C List of Agencies and Individual Supply Guarantees (Section 3.02) D Procedure for Pro Rata Reduction of Individual Supply Guarantees if Total Use Exceeds 184 MGD (Section 3.02) E Minimum Quantities for Dual Source Agencies (Section 3.07.C) F Sample Individual Water Sales Contract (Section 9.01) G Water Quality Notification and Communications Plan (Section 3.08.B) H Tier 1 Shortage Plan (Section 3.11.C) I NOT USED J Water Use Measurement and Tabulation (Section 3.14) K-1 Wholesale Customers’ Share of Net Book Value of Existing Assets (Section 5.03) K-2 Wholesale Customers’ Share of the Book Value of Revenue-Funded Capital Expenditures (Section 5.03) K-3 25 Year Payoff Schedule for Existing Rate Base - Water Enterprise Regional Assets and One Direct Annual Payments for Wholesale AssetShare of 6/30/09 Net Plant & CWIP (Water Assets) (Section 5.03) K-4 25 Year Payoff ScheduleAnnual Payments for Existing Rate Base - Wholesale Share of 6/30/09 Net Plant & CWIP (Hetch Hetchy Water Assets and Water-Related Portion of Joint Assets) (Section 5.03) K-5 Unexpended Appropriations for Revenue-Funded Regional Assets 10-Year Payoff Schedules for Existing Rate Base (Section 5.03) L-1 Identification of WSIP Projects as Regional/Retail (Section 5.04) L-2 Certificate of Use of Proceeds (Section 5.04.A) L-3 Annual Report on Expenditures of and Earnings on Proceeds (Section 5.04.A) M-1 Revenue-Funded Capital Additions (Section 5.04.B) M-2 Revenue-Funded Capital Annual Reporting Requirements (Section 5.04.B) M-3 Wholesale Revenue-Funded Capital Fund and Balancing Account Adjustment (Section 6.08) -v- 1840795.8 N-1 Balancing Account/Rate Setting Calculation Table (Section 6.03.A.3.a) N-2 Wholesale Revenue Requirement Schedules (Section 6.03.A.3.b) N-3 Schedule of Projected Water Sales, Wholesale Revenue Requirement and Wholesale Rates (Section 6.03.A.3.c) O Statement of Wholesale Revenue Requirement/Changes in Balancing Account (Section 7.02.B.1) P Management Representation Letter (Section 7.02.B.5) Q-1 San Jose and Service Area (Section 9.06) Q-2 Santa Clara Service AreasArea (Section 9.06) R Classification of Existing System Assets (Section 5.11) 1 AMENDED AND RESTATED WHOLESALE WATER SUPPLY AGREEMENT Introductory Statement Both San Francisco, as the Regional Water System owner and operator, and its Wholesale Customers share a commitment to the Regional Water System providing a reliable supply of high quality water at a fair price, and achieving these goals in an environmentally sustainable manner. Article 1. Parties, Effective Date, and Defined Terms 1.01. Definitions The capitalized terms used in this Agreement shall have the meanings set forth in Attachment A. 1.02. Parties The parties to this Agreement are the City and County of San Francisco and such of the following entities (all of which purchase water from San Francisco) as have executed this Agreement: Alameda County Water District California Water Service Company City of Brisbane City of Burlingame City of Daly City City of East Palo Alto City of Hayward City of Menlo Park City of Millbrae City of Milpitas City of Mountain View City of Palo Alto 2 City of Redwood City City of San Bruno City of San José City of Santa Clara City of Sunnyvale Coastside County Water District Estero Municipal Improvement District Guadalupe Valley Municipal Improvement District Mid-Peninsula Water District North Coast County Water District Purissima Hills Water District Skyline County Water District Stanford University Town of Hillsborough Westborough Water District The entities listed above which have executed this Agreement shall be collectively referred to as the “Wholesale Customers.” 1.03. Effective Date A. Except as provided in subsection C, this Agreement shall become effective only when it has been approved by San Francisco and by each of the entities listed in Section 1.02 and when San Francisco and each of those entities (except for the City of Hayward) have entered into an Individual Water Sales Contract as provided in Section 9.01. B. If San Francisco and all of the entities listed in Section 1.02 approve this Agreement and (except for the City of Hayward) an Individual Water Sales Contract on or before July 1, 2009, the effective date shall be July 1, 2009. If San Francisco and all of the entities listed in Section 1.02 approve this Agreement and (except for the City of Hayward) an Individual Water Sales Contract after July 1, 2009 but on or before September 1, 2009, the effective date shall be the date on which the last entity listed in Section 1.02 approves this Agreement and, if required, an Individual Water Sales Contract. C. If by September 1, 2009 this Agreement has been approved by fewer than all of the entities listed in Section 1.02 or fewer than all of such entities (other than the City of Hayward) have entered into an Individual Water Sales Contract, but it has been approved by 3 entities representing at least 75% in number and 75% of the water purchased from SFPUC by all listed agencies during FY 2007-08 (i.e., 173.39 MGD), then San Francisco shall have the option to waive the requirement in subsection A that all listed agencies have approved this Agreement and an Individual Water Sales Contract as a condition precedent to this Agreement and any Individual Water Sales Contract becoming effective. San Francisco shall have 60 days from September 1, 2009 (i.e., until October 31, 2009) within which to decide whether or not to waive the condition. If San Francisco decides to waive the condition, those listed agencies that have approved this Agreement and Individual Water Sales Contract before October 31, 2009 will be bound thereby and this Agreement and Individual Water Sales Contracts will become effective as to them, as of the date of San Francisco’s waiver. For purposes of determining whether listed agencies that have approved this Agreement represent at least 75% of the water purchased during FY 2007-08, the quantity of water attributable to each listed entity shall be as set forth on Attachment B. D. The provisions of Article 9 that apply to fewer than all Wholesale Customers (i.e., Sections 9.02 - 9.07) shall not become effective unless San Francisco and the entity to which the section applies have each approved (1) this Agreement, and (2) the underlying Individual Water Sales Contract, unless otherwise provided in Article 9. This provision does not affect the continued enforceability of provisions in those sections that derive from independently enforceable judgments, orders or agreements. 4 Article 2. Term; Amendments During Term 2.01. Term The term ("Term") of this Agreement shall be twenty five (25) years. The Term shall begin on July 1, 2009, regardless of whether the Effective Date is before or after that date, and shall end on June 30, 2034. Except as provided in Article 9, the term of all Individual Water Sales Contracts shall also begin on July 1, 2009 and end on June 30, 2034. 2.02. Extension and Renewal of Term A. In December 2031, the SFPUC may provide written notice to the Wholesale Customers that it is willing to extend the Term of this Agreement. Between January 1, 2032 and June 30, 2032, any Wholesale Customer may accept the SFPUC's offer to extend the Term by providing a written notice of extension to the SFPUC. If such notices of extension are received from Wholesale Customers representing at least two-thirds in number as of June 30, 2032 and seventy five percent (75%) of the quantity of water delivered by the SFPUC to all Wholesale Customers during fiscal year 2030-31, the Term shall be extended for another five (5) years ("First Extension Term"), through June 30, 2039. No party to this Agreement which does not wish to remain a party during the Extension Term shall be compelled to do so by the actions of other parties under this section. B. In December 2036, the SFPUC may provide written notice to the Wholesale Customers that it is willing to extend the Term of this Agreement. Between January 1, 2037 and June 30, 2037, any Wholesale Customer may accept the SFPUC's offer to extend the Term by providing a written notice of extension to the SFPUC. If such notices of extension are received from Wholesale Customers representing at least two-thirds in number as of June 30, 2037 and seventy five percent (75%) of the quantity of water delivered by the SFPUC to all Wholesale Customers during fiscal year 2035-36, the Term shall be extended for another five (5) years ("Second Extension Term"), through June 30, 2044. No party to this Agreement which does not wish to remain a party during the Extension Term shall be compelled to do so by the actions of other parties under this section. C. After the expiration of the Term, and, if applicable, the Extension Terms, this Agreement may be renewed by mutual consent of the parties, subject to any modifications thereof which may be determined at that time. If fewer than all of the parties desire to renew this Agreement beyond its Term, with or without modifications, the SFPUC and the Wholesale 5 Customers who wish to extend the Agreement shall be free to do so, provided that no party to this Agreement which does not wish to become a party to such a renewed Agreement shall be compelled to do so by the actions of other parties under this section. 2.03. Amendments A. Amendments to Agreement; General 1. This Agreement may be amended with the written consent of all parties. 2. This Agreement may also be amended with the written consent of San Francisco and of Wholesale Customers representing at least two-thirds in number (i.e., 18 as of July 1, 2009) and seventy five percent (75%) of the quantity of water delivered by San Francisco to all Wholesale Customers during the fiscal year immediately preceding the amendment. 3. No amendment which adversely affects a Fundamental Right of a Wholesale Customer may be made without the written consent of that customer. Amendments to Article 5 which merely affect the allocation of costs between City Retail customers on the one hand and Wholesale Customers collectively on the other, and amendments to Articles 6 and 7 which merely alter budgetary, accounting and auditing procedures do not affect Fundamental Rights and may be made with the consent of parties meeting the requirements of Section 2.03.A.2. 4. When an amendment has been approved by San Francisco and the number of Wholesale Customers required in Section 2.03.A.2, San Francisco shall notify each of the Wholesale Customers in writing of the amendment's adoption. Notwithstanding any provision of law or this Agreement, any Wholesale Customer that claims that the amendment violates its Fundamental Rights under Section 2.03.A.3, shall have 30 days from the date San Francisco delivers the notice of its adoption in which to challenge the amendment’s validity through a judicial action. If no such action is filed within 30 days, the amendment shall be finally and conclusively deemed to have been adopted in compliance with this section. B. Amendments to Article 9 1. Notwithstanding the provisions of Sections 2.03.A.2 and 2.03.A.3, any provision of Article 9 which applies only to an individual Wholesale Customer may be amended with the written concurrence of San Francisco and the Wholesale Customer to which it applies; 6 provided that the amendment will not, directly or indirectly, adversely affect the Fundamental Rights of the other Wholesale Customers. 2. Before making any such amendment effective, San Francisco shall give notice, with a copy of the text of the proposed amendment, to all other Wholesale Customers. The Wholesale Customers shall have 30 days in which to object to the amendment on the ground that it is not permissible under this subsection. If no such objection is received by San Francisco, the proposed amendment shall become effective. If one or more Wholesale Customers object to the amendment, San Francisco, the individual Wholesale Customer with which San Francisco intends to effect the amendment, and the Wholesale Customer(s) which lodged the objection shall meet to discuss the matter. 3. If the dispute cannot be resolved and San Francisco and the Wholesale Customer involved elect to proceed with the amendment, either San Francisco or the Wholesale Customer shall give written notice of such election to each Wholesale Customer that has objected. Any Wholesale Customer that has objected to such amendment shall have 30 days from receipt of this notice within which to commence an action challenging the validity of such amendment, and such amendment shall be deemed effective as of the end of this 30-day period unless restrained by order of court. C. Amendments to Attachments. The following attachments may be amended with the written concurrence of San Francisco and BAWSCA on behalf of the Wholesale Customers: Attachment Name G January 2006 Water Quality Notification and Communications Plan J Water Use Measurement and Tabulation L-1 Identification of WSIP Projects as Regional/Retail N-1 Balancing Account/Rate Setting Calculation Table N-2 Wholesale Revenue Requirement Schedules N-3 Schedule of Projected Water Sales, Wholesale Revenue Requirement and Wholesale Rates P Management Representation Letter 7 R Classification of Existing System Assets (subject to Section 5.11) Amendments to these attachments shall be approved on behalf of San Francisco by the Commission and on behalf of BAWSCA by its Board of Directors, unless the Commission by resolution delegates such authority to the General Manager of the SFPUC or the Board of Directors by resolution delegates such authority to the General Manager/CEO of BAWSCA. D. Amendments to Individual Water Sales Contracts. Individual Water Sales Contracts described in Section 9.01 may be amended with the written concurrence of San Francisco and the Wholesale Customer which is a party to that Individual Water Sales Contract; provided that the amendment is not inconsistent with this Agreement or in derogation of the Fundamental Rights of other Wholesale Customers under this Agreement. 8 Article 3. Water Supply 3.01. Supply Assurance A. San Francisco agrees to deliver water to the Wholesale Customers up to the amount of the Supply Assurance. The Supply Assurance is for the benefit of the entities listed in Section 1.02, irrespective of whether or not they have executed this Agreement. Water delivered by San Francisco to Retail Customers shall not be included in the Supply Assurance. Until December 31, 2018, the foregoing commitment is subject to Article 4. B. Both the Supply Assurance and the Individual Supply Guarantees identified in Section 3.02 are expressed in terms of daily deliveries on an annual average basis and do not themselves constitute a guarantee by San Francisco to meet peak daily or hourly demands of the Wholesale Customers, irrespective of what those peak demands may be. The parties acknowledge, however, that the Regional Water System has been designed and constructed to meet peak daily and hourly demands and that its capacity to do so has not yet been reached. San Francisco agrees to operate the Regional Water System to meet peak requirements of the Wholesale Customers to the extent possible without adversely affecting its ability to meet peak demands of Retail Customers. This Agreement shall not preclude San Francisco from undertaking to meet specific peak demand requirements of individual Wholesale Customers in their Individual Water Sales Contracts. C. The Supply Assurance is perpetual and shall survive the expiration or earlier termination of this Agreement. Similarly, the Individual Supply Guarantees identified in Section 3.02 and/or the Individual Water Sales Contracts are perpetual and shall survive the expiration or earlier termination of this Agreement or the Individual Water Sales Contracts. D. Notwithstanding the Supply Assurance established by this section, the Individual Supply Guarantees identified in Section 3.02 and the Individual Water Sales Contracts, the amount of water made available by San Francisco to the Wholesale Customers is subject to reduction, to the extent and for the period made necessary by reason of water shortage, Drought, Emergencies, or by malfunctioning or rehabilitation of facilities in the Regional Water System. Any such reduction will be implemented in accordance with Section 3.11. The amount of water made available to the Wholesale Customers may not be reduced, however, merely because the water recycling and groundwater projects which the WSIP envisions to be constructed within San Francisco, or the conservation programs intended to reduce water use 9 by Retail Customers that are included in the WSIP, do not generate the yield or savings (10 MGD combined) anticipated by San Francisco. 3.02. Allocation of Supply Assurance A. Pursuant to Section 7.02 of the 1984 Agreement, a portion of the Supply Assurance has been allocated among 24 of the 2726 Wholesale Customers. These Individual Supply Guarantees are also expressed in terms of annual average metered deliveries of millions of gallons per day and are listed in Attachment C. B. Three Wholesale Customers do not have Individual Supply Guarantees. The cities of San Jose and Santa Clara do not have an Individual Supply Guarantees because San Francisco has provided water to them on a temporary and interruptible basis as described in Sections 4.05 and 9.06. The City of Hayward does not have an Individual Supply Guarantee because of the terms of the 1962 contract between it and San Francisco, as further described in Section 9.03. C. If the total amount of water delivered by San Francisco to Hayward and to the Wholesale Customers that are listed on Attachment C exceeds 184 MGD over a period of three consecutive fiscal years (i.e., July 1 through June 30), then the Individual Supply Guarantees of those Wholesale Customers listed on Attachment C shall be reduced pro rata so that their combined entitlement and the sustained use by Hayward does not exceed 184 MGD. The procedure for calculating the pro rata reduction in Individual Supply Guarantees is set out in Attachment D. 1. The provisions of this subsection C are not in derogation of the reservation of claims to water in excess of the Supply Assurance which are contained in Section 8.07. Nor do they constitute an acknowledgement by Wholesale Customers other than Hayward that San Francisco is obligated or entitled to reduce their Individual Supply Guarantees in the circumstances described herein. The provisions of this subsection C shall, however, be operative unless and until a court determines that its provisions violate rights of the Wholesale Customers derived independently of this Agreement. 2. The foregoing paragraph is not intended to and shall not constitute a contractual commitment on the part of San Francisco to furnish more water than the Supply Assurance to the Wholesale Customers or a concession by San Francisco that the provisions of this subsection violate any rights of the Wholesale Customers. 10 D. Notwithstanding the reservation of claims contained in Sections 3.02.C and 8.07, it shall be the responsibility of each Wholesale Customer to limit its purchases of water from San Francisco so as to remain within its Individual Supply Guarantee. San Francisco shall not be liable to any Wholesale Customer or be obligated to supply more water to any Wholesale Customer individually or to the Wholesale Customers collectively than the amount to which it or they are otherwise entitled under this Agreement due to the use by any Wholesale Customer of more water than the amount to which it is entitled under this Agreement. E. San Francisco shall install such new connections between the Regional Water System and the distribution system of any Wholesale Customer that are necessary to deliver the quantities of water to which the Wholesale Customer is entitled under this Agreement. San Francisco shall have the right to determine the location of such connections, in light of the need to maintain the structural integrity of the Regional Water System and, where applicable, the need to limit peaking directly off of Regional Water System pipelines by a Wholesale Customer's individual retail customers, the need to ensure that a Wholesale Customer's individual retail customers have access to alternative sources of water in the event of a reduction in San Francisco's ability to provide them with water, and other factors which may affect the desirability or undesirability of a particular location. San Francisco's decisions regarding the location of new connections and the location, size and type of any new meters shall not be reviewable by a court except for an abuse of discretion or failure to provide a Wholesale Customer with connections and meters adequate to deliver the quantity of water to which it is entitled under this Agreement. 3.03. Wholesale Customer Service Areas A. Each of the Individual Water Sales Contracts described in Section 9.01 will contain, as an exhibit, a map of the Wholesale Customer’s service area. A Wholesale Customer may not deliver water furnished to it by San Francisco outside the boundary of its service area without the prior written consent of San Francisco, except for deliveries to another Wholesale Customer on an emergency and temporary basis pursuant to Section 3.07.B. B. If a Wholesale Customer wishes to expand its service area, it shall request San Francisco's consent to the expansion and provide information reasonably requested by San Francisco about the amount of water projected to be purchased from San Francisco to meet demand within the area proposed to be added to the service area. 11 C. San Francisco may refuse a Wholesale Customer's request to expand its service area on any reasonable basis. If San Francisco denies a request by a Wholesale Customer to expand its service area, or fails to act on the request for six months after it has been submitted, the Wholesale Customer may challenge San Francisco's denial or delay in court. Such a challenge may be based on the Wholesale Customers’ claim, reserved in Section 8.07, that San Francisco is obligated under federal or state law to furnish water, included within its Individual Supply Guarantee, to it for delivery outside its then-existing service area and that it is entitled to enlarge its service area to supply water to such customers. San Francisco reserves the right to contest any such claim on any applicable ground. This subsection does not apply to San Jose and Santa Clara, whose maximum service areas are fixed pursuant to Section 9.06. D. This section will not prevent San Francisco and any Wholesale Customer, other than San Jose and Santa Clara, from agreeing in an Individual Water Sales Contract or an amendment thereto that:  the Wholesale Customer may expand its service area without subsequent San Francisco approval to a definitive size but no larger, or  the Wholesale Customer will not expand its service area beyond its present limits without San Francisco approval and waiving the provisions of this section with respect to any additional expansion. E. If two or more Wholesale Customers agree to adjust the boundaries of their respective service areas so that one assumes an obligation to serve customers in an area that was previously within the service area of another Wholesale Customer, they may also correspondingly adjust their respective Individual Supply Guarantees. Such adjustments are not subject to the requirements of Section 3.04 and shall require only the consent of San Francisco and the Wholesale Customers involved, so long as the Supply Assurance and the Individual Supply Guarantees of other Wholesale Customers are not affected. Service area boundary adjustments that would result in the expansion of any California Water Service Company service areas are subject to the requirements of Section 9.02.D. Any adjustment of service area boundaries that would result in the supply of water in violation of this Agreement or the Act shall be void. F. San Francisco acknowledges that it has heretofore consented in writing to deliveries of water by individual Wholesale Customers outside their service area boundaries and 12 agrees that nothing in this Agreement is intended to affect such prior authorizations, which remain in full force and effect according to their terms. Such authorizations shall be identified in the Individual Water Sales Contracts. 3.04. Permanent Transfers of Individual Supply Guarantees A. A Wholesale Customer that has an Individual Supply Guarantee may transfer a portion of it to one or more other Wholesale Customers, as provided in this section. B. Transfers of a portion of an Individual Supply Guarantee must be permanent. The minimum quantity that may be transferred is 1/10th of a MGD. C. Transfers of portions of Individual Supply Guarantees are subject to approval by the SFPUC. SFPUC review is limited to determining (1) whether a proposed transfer complies with the Act, and (2) whether the affected facilities in the Regional Water System have sufficient capacity to accommodate delivery of the increased amount of water to the proposed transferee. D. The participants in a proposed transfer shall provide notice to the SFPUC specifying the amount of the Individual Supply Guarantee proposed to be transferred, the proposed effective date of the transfer, which shall not be less than 60 days after the notice is submitted to the SFPUC, and the Individual Supply Guarantees of both participants resulting from the transfer. The SFPUC may require additional information reasonably necessary to evaluate the operational impacts of the transfer. The SFPUC will not unreasonably withhold or delay its approval; if the SFPUC does not act on the notice within 60 days, the transfer will be deemed to have been approved. E. Within 30 days after the transfer has become effective, both the transferor and the transferee will provide notice to the SFPUC and BAWSCA. By September 30 of each year during the Term, the SFPUC and BAWSCA will prepare an updated Attachment C to reflect transfers occurring during the immediately preceding fiscal year. F. Amounts transferred will remain subject to pro rata reduction under the circumstances described in Section 3.02.C and according to the formula set forth in Attachment D. 13 3.05. Restrictions on Resale Each Wholesale Customer agrees that it will not sell any water purchased from San Francisco to a private party for resale by such private party to others in violation of the Act. Each Wholesale Customer also agrees that it will not sell water purchased from San Francisco to another Wholesale Customer without prior written approval of the SFPUC, except on a temporary and emergency basis as permitted in Section 3.07.B.2. The SFPUC agrees that it will not unreasonably withhold its consent to a request by a Wholesale Customer to deliver water to another Wholesale Customer for resale. 3.06. Conservation; Use of Local Sources; Water Management Charge A. In order to support the continuation and expansion of water conservation programs, water recycling, and development of alternative supplies within the Wholesale Customers’ service areas, the SFPUC will, if requested by BAWSCA, include the Water Management Charge in water bills sent to Wholesale Customers. The SFPUC will deliver all Water Management Charge revenue to BAWSCA monthly and shall deliver an annual accounting of Water Management Charge revenue to BAWSCA within 90 days after the end of each fiscal year. The SFPUC’s obligations to collect and deliver Water Management Charge revenue to BAWSCA under this subsection are conditioned on BAWSCA’s delivery to the SFPUC of an annual report describing the projects and programs on which Water Management Charge funds received from the SFPUC during the previous fiscal year were expended and an estimate of the amount of water savings attributable to conservation programs and of the yield of alternative supplies developed. This report will be due within 180 days after the end of each fiscal year during which Water Management Charge funds were received. B. The SFPUC will work together with BAWSCA to explore ways to support water conservation programs, recycling projects, and conjunctive use alternatives outside the Wholesale Service Area, in particular projects and programs that have the potential to increase both flows in the lower Tuolumne River (downstream of New Don Pedro Reservoir) and water deliveries to the Regional Water System. C. Each Wholesale Customer shall take all actions within its legal authority related to water conservation that are necessary to insure that the SFPUC (a) remains eligible for (i) state and federal grants and (ii) access to the Drought Water Bank operated by the California Department of Water Resources, as well as other Drought-related water purchase or transfer 14 programs, and (b) complies with future legal requirements imposed on the Regional Water System by the federal government, the State, or any other third party as conditions for receiving funding or water supply. D. San Francisco and each Wholesale Customer agree that they will diligently apply their best efforts to use both surface water and groundwater sources located within their respective service areas and available recycled water to the maximum feasible extent, taking into account the environmental impacts, the public health effects and the effects on supply reliability of such use, as well as the cost of developing such sources. 3.07. Restrictions on Purchases of Water from Others; Minimum Annual Purchases A. Each Wholesale Customer (except for Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale) agrees that it will not contract for, purchase or receive, with or without compensation, directly or indirectly, from any person, corporation, governmental agency or other entity, any water for delivery or use within its service area without the prior written consent of San Francisco. B. The prohibition in subsection A does not apply to: 1. recycled water; 2. water necessary on an emergency and temporary basis, provided that the Wholesale Customer promptly gives San Francisco notice of the nature of the emergency, the amount of water that has been or is to be purchased, and the expected duration of the emergency; or 3. water in excess of a Wholesale Customer’s Individual Supply Guarantee. C. Alameda County Water District and the cities of Milpitas, Mountain View and Sunnyvale may purchase water from sources other than San Francisco, provided that San Francisco shall require that each purchase a minimum annual quantity of water from San Francisco. These minimum quantities are set out in Attachment E and shall also be included in the Individual Water Sales Contracts between San Francisco and each of these four Wholesale Customers. The minimum purchase requirement in these Individual Water Sales Contracts will be waived during a Drought or other period of water shortage if the water San Francisco makes available to these Wholesale Customers is less than its minimum purchase quantity. 15 3.08. Water Quality A. San Francisco shall deliver treated water to Wholesale Customers (except Coastside County Water District, which receives untreated water from Crystal Springs and Pilarcitos Reservoirs) that complies with primary maximum contaminant level and treatment technique standards at the regulatory entry points designated in the San Francisco Regional Water System Domestic Water Supply Permit (currently Permit No. 02-04-04P3810001) issued by the California Department of Public Health (CDPH). B. San Francisco will provide notice to the Wholesale Customers in accordance with the Water Quality Notification and Communications Plan (current version dated January 2006), attached hereto as Attachment G. San Francisco will regularly update its plan in consultation with the Wholesale Customers and the CDPH. The next update will be completed one year after the Effective Date and include expanded coverage of secondary maximum contaminant level exceedances and water quality communication triggers. The plan will note that the Wholesale Customers will receive the same notification no later than the San Francisco water system (currently Permit No. 02-04-01P3810011) except for distribution-related issues. C. San Francisco and the Wholesale Customers will establish a Water Quality Committee. The Water Quality Committee will meet at least quarterly to collaboratively address water quality issues, such as Water Quality Notification and Communications Plan updates, regulatory issues, and water quality planning studies/ applied research. San Francisco and each Wholesale Customer will designate a representative to serve on the committee. There will be a Chair and Vice Chair position for the Water Quality Committee. The Chair and Vice Chair positions will be held by San Francisco and the Wholesale Customers and rotate between them on an annual basis. 3.09. Completion of WSIP San Francisco will complete construction of the physical facilities in the WSIP by December 31, 201530, 2021. The SFPUC agrees to provide for full public review and comment by local and state interests of any proposed changes that delay previously adopted project completion dates or that delete projects. The SFPUC shall meet and consult with BAWSCA before proposing to the Commission any changes in the scope of WSIP projects which reduce their capacity or ability to achieve adopted levelsLevel of service goalsService Goals and 16 Objectives. The SFPUC retains discretion to determine whether to approve the physical facilities in the WSIP until after it completes the CEQA process as set forth in Section 4.07. 3.10. Regional Water System Repair, Maintenance and Operation A. San Francisco will keep the Regional Water System in good working order and repair consistent with prudent utility practice. B. San Francisco will submit reports to its Retail and Wholesale Customers on the "State of the Regional Water System," including reports on completed and planned maintenance, repair or replacement projects or programs, by September of every even- numbered year, with reports to start in September 2010. C. San Francisco will cooperate with any audit of the SFPUC's asset management practices that may be initiated and financed by BAWSCA or the Wholesale Customers. BAWSCA may contract with third parties to conduct the audits. San Francisco will consider the findings and recommendations of such audits and will provide a written response indicating agreement with the recommendations, or disagreement with particular recommendations and the reasons why, within 90 calendar days after receipt. D. San Francisco will continue to operate its reservoirs in a manner that assigns higher priority to the delivery of water to the Bay Area and the environment than to the generation of electric power. The SFPUC, as the Regional Water System operator, is solely responsible for making day-to-day operational decisions. 3.11. Shortages A. Localized Water Reductions. Notwithstanding San Francisco's obligations to deliver the Supply Assurance to the Wholesale Customers collectively and the Individual Supply Guarantees to Wholesale Customers individually, San Francisco may reduce the amount of water available or interrupt water deliveries to specific geographical areas within the Regional Water System service area to the extent that such reductions are necessary due to Emergencies, or in order to install, repair, rehabilitate, replace, investigate or inspect equipment in, or perform other maintenance work on, the Regional Water System. Such reductions or interruptions may be imposed by San Francisco without corresponding reductions or interruptions in the amount of water available to SFPUC water users outside the specific geographical area where reductions or interruptions are necessary, if the system's ability to 17 supply water outside the specific geographical area has not been impaired. In the event of such a reduction or interruption, San Francisco will restore the supply of water to the specific geographical area as soon as is possible. Except in cases of Emergencies (during which oral notice shall be sufficient), San Francisco will give the affected Wholesale Customer(s) reasonable written notice of such localized reductions or interruptions, the reasons therefor, and the probable duration thereof. B. System-Wide Shortages and SFPUC Response to Regional Emergencies. Following a major system emergency event, the SFPUC will work closely with its Wholesale Customers to monitor customer demand, including the demand source. In the event that any individual Wholesale Service Area or Retail Service Area customer’s uncontrolled distribution system leaks could result in major water waste and endanger the supply provided by the Regional Water System as a whole, flow through some customer connections may need to be temporarily reduced or terminated. SFPUC will work closely with customers to assess the nature of the demand (e.g. fire-fighting versus leakage), so that public health and safety protection can be given top priority. 1. All emergencies that require use of non-potable source water will require use of chlorine, or other suitable disinfectant, if feasible. 2. San Francisco will use its best efforts to meet the seismic reliability and delivery reliability levelLevel of service goalsService Goals and Objectives adopted by the Commission in conjunction with the WSIP. San Francisco will distribute water on an equitable basis throughout the Regional Water System service area following a regional Emergency, subject to physical limitations caused by damage to the Regional Water System. 3. San Francisco's response to Emergencies will be guided by the then- current version of the ERRP. The SFPUC shall periodically review, and the Commission may amend, the ERRP to ensure that it remains an up-to-date and effective management tool. 4. The SFPUC will give the Wholesale Customers notice of any proposal to amend the ERRP in a manner that would affect them. The notice will be delivered at least thirty days in advance of the date on which the proposal is to be considered by the Commission and will be accompanied by the text of the proposed amendment. C. Shortages Caused by Drought; Acquisition of Dry Year Supplies. Notwithstanding San Francisco's obligations to deliver the Supply Assurance to the Wholesale 18 Customers collectively and the Individual Supply Guarantees to Wholesale Customers individually, San Francisco may reduce the amount of water available to the Wholesale Customers in response to Drought. 1. The Tier 1 Shortage Plan (Attachment H) will continue to be used to allocate water from the Regional Water System between Retail and Wholesale Customers during system-wide shortages of 20% or less. 2. San Francisco and the Wholesale Customers may negotiate in good faith revisions to the Tier 1 Shortage Plan to adjust for and accommodate anticipated changes due to demand hardening in the SFPUC's Wholesale and Retail Service Areas. Until agreement is reached, the current Tier 1 Shortage Plan will remain in effect. 3. The SFPUC will honor allocations of water among the Wholesale Customers (“Tier 2 Allocations”) provided by BAWSCA or if unanimously agreed to by all Wholesale Customers. If BAWSCA or all Wholesale Customers do not provide the SFPUC with Tier 2 Allocations, then the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers. For Regional Water System shortages in excess of 20%, San Francisco shall (a) follow the Tier 1 Shortage Plan allocations up to the 20% reduction, (b) meet and discuss how to implement incremental reductions above 20% with the Wholesale Customers, and (c) make a final determination of allocations above the 20% reduction. After the SFPUC has made the final allocation decision, the Wholesale Customers shall be free to challenge the allocation on any applicable legal or equitable basis. 4. San Francisco will use its best efforts to identify potential sources of dry year water supplies and establish the contractual and other means to access and deliver those supplies in sufficient quantity to meet a goal of not more than 20 percent system-wide shortage in any year of the design drought. 5. San Francisco will cooperate with BAWSCA to improve water supply reliability. As an example of such cooperation, San Francisco may invite a representative of BAWSCA to attend and participate in meetings with third parties for development of dry year water supplies. If San Francisco does not invite a BAWSCA representative to attend a specific scheduled meeting, it will promptly (within 30 days of any such meeting) provide BAWSCA with a written or oral report on the meeting, including any decisions reached at it, as well as information about planned subsequent meetings. Progress in securing dry year water supplies 19 will be reported to the SFPUC and the BAWSCA board of directors during the first quarter of each calendar year. 3.12. Wheeling of Water from Outside SFPUC System Subject to the Wheeling Statute, the SFPUC will not deny use of Regional Water System unused capacity for wheeling when such capacity is available for wheeling purposes during periods when the SFPUC has declared a water shortage emergency under Water Code Section 350 if the following conditions are met: A. The transferor pays reasonable charges incurred by the SFPUC as a result of the wheeling, including capital, operation, maintenance, administrative and replacement costs (as such are defined in the Wheeling Statute). B. Wheeled water that is stored in the Regional Water System spills first. C. Wheeled water will not unreasonably: (1) impact fish and wildlife resources in Regional Water System reservoirs; (2) diminish the quality of water delivered for consumptive uses; or (3) increase the risk of exotic species impairing Regional Water System operations. The transferor may at its own expense provide for treatment to mitigate these effects. D. Priority will be given to wheeling by Wholesale Customers or BAWSCA over arrangements for third-party public entities. 3.13. Limits on New Customers A. New Wholesale Customers Prior to December 31, 20182028. Until December 31, 20182028, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless: 1. It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations as provided in Section 4.07; 2. It concurrently completes any necessary environmental review under CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; and 3. This Agreement is amended to incorporate any commitments to proposed new wholesale customers and to San Jose and Santa Clara, and to address the effects, if any, 20 of the new customer(s) on water supply reliability, water quality and cost to existing customers of the Regional Water System. B. New Wholesale Customers After December 31, 20182028. As of January 1, 20192029, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless: 1. It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations as provided in Section 4.07; 2. It concurrently completes any necessary environmental review under CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; 3. Doing so increases the reliability of the Regional Water System; and 4. This Agreement is concurrently amended (a) to reflect that increased reliability by means of an increased commitment by San Francisco to deliver water during Droughts and (b) to address the effects, if any, of the new customer(s) on water supply, water quality and cost to existing customers of the Regional Water System. C. New Retail Customers. San Francisco may enter into new retail water service obligations outside of the City and County of San Francisco: 1. Only in Alameda, San Mateo, Santa Clara, San Joaquin and Tuolumne Counties; 2. That are within or immediately adjacent to areas in which it currently serves other Retail Customers; and 3. Until the aggregate additional demand represented by the new retail customers reaches 0.5 MGD. The limitations on serving new Retail Customers described in this subsection do not apply to historical obligations to supply water that may be contained in prior agreements between the SFPUC or its predecessor the Spring Valley Water Company, and individual users or property owners located adjacent to Regional Water System transmission pipelines. D. Water Exchanges and Cost Sharing Agreements with Other Water Suppliers. Subject to completion of necessary environmental review under CEQA, San 21 Francisco may at any time enter into water exchanges or cost sharing agreements with other water suppliers to enhance dry year or normal year water deliveries, provided that San Francisco cannot incur new water service obligations to such other water suppliers unless the requirements for taking on new wholesale customers in subsections A and B above are met. 3.14. Measurement of Water A. The parties recognize that continuous and accurate measurement of water deliveries to and from the Regional Water System and maintenance of complete and accurate records of those measurements is necessary (1) for the costs of the Regional Water System to be allocated in accordance with this Agreement, (2) for implementation of other provisions of this Agreement, and (3) for effective operation and maintenance of a water system serving a large urbanized region. B. It is the responsibility of the SFPUC to obtain and record these measurements. To do so, the SFPUC shall install, maintain and operate measuring and recording equipment at the following locations: (1) inputs to the Regional Water System from all water sources (“System Input Meters”), (2) internal flow meters to support operation of the Regional Water System (“In- Line Meters”), (3) deliveries to the City at the San Francisco-San Mateo County line (“County- Line Meters”) and to three reservoirs in San Francisco (“In-City Terminal Reservoir Meters”), (4) deliveries to SFPUC Retail Customers located outside the boundaries of the City, and (5) deliveries to the Wholesale Customers, as described and illustrated in Attachment J. C. The SFPUC shall inspect, test, service, and calibrate the measuring and recording equipment installed at the locations described in subsection B and will repair or replace them when necessary, in order to ensure that their accuracy is consistent with specifications provided in Attachment J. D. The SFPUC shall continue to contract with a qualified independent metering consultant to perform periodic inspection, testing, servicing and calibration of the County-Line Meters, the In-City Terminal Reservoir Meters, and the System Input and In-Line Meters described in Attachment J, as well as the portion of the SFPUC’s Supervisory Control and Data Acquisition (SCADA) system that utilizes the flow signals produced by that measuring and recording equipment. The method, schedule and frequency for calibration and maintenance of the County-Line Meters and the In-City Terminal Reservoir Meters are specified in 22 Attachment J. The SFPUC shall provide copies of the metering consultant's reports to BAWSCA. E. System Input Meters measure water deliveries into the Regional Water System from sources such as Hetch Hetchy and the SFPUC’s water treatment plants. System Input Meters also measure deliveries from the Regional Water System to outside sources or from such sources to the Regional Water System through interties with the Santa Clara Valley Water District and the East Bay Municipal Utility District. In-Line Meters measure internal system flows and are located on the Bay Division Pipelines and other main transmission pipelines. These meters are collectively referred to as the “System Input and In-line Meters.” Similar to the County-Line Meters, the System Input and In-Line Meters have secondary metering equipment, such as differential pressure transmitters and flow recorders. The System Input and In-Line Meters, and all associated secondary metering equipment, shall be calibrated and maintained according to the method, schedule, and frequency specified in the Procedures Manual described in subsection G, below. F. The locations of the smaller and more numerous meters described in subsection B (4) and (5) are not illustrated in Attachment J; however, they are also critical in the determination of cost allocations, and accordingly require continued maintenance and calibration. It is the responsibility of the SFPUC to maintain the accuracy of these meters and their secondary metering equipment. G. The SFPUC will prepare a Procedures Manual which will describe in detail the procedures for periodic inspection, testing, servicing and calibration of the measuring and recording equipment described in subsection B. Once the Procedures Manual is completed, the SFPUC and BAWSCA may agree that it should supersede some or all of the requirements in Attachment J regarding the County-Line and the In-City Terminal Reservoir Meters. Unless and until such an agreement is reached and documented, however, the requirements in Attachment J, Section D will continue in force as minimum standards for meter maintenance and calibration of the County-Line and In-City Terminal Reservoir Meters (subject to modification under the circumstances described in Attachment J, Section A.4). H. If BAWSCA and the SFPUC are unable to agree on the water use calculations required by Attachment J for a particular year, the Wholesale Customers may file a demand for arbitration challenging the SFPUC's determination of the Wholesale Revenue Requirement for 23 that year on the basis of its reliance on disputed water use calculations. Such a challenge must be brought in the manner and within the time specified in Section 8.01. 3.15. New Sources of Water Supply to Maintain Supply Assurance A. Urgent Reductions of Existing Surface Water Supplies. Sudden and unanticipated events may require San Francisco to act promptly to protect the health, safety and economic well-being of its Retail and Wholesale Customers. Such sudden events include, but are not limited to drought, earthquakes, terrorist acts, catastrophic failures of facilities owned and operated by San Francisco, and other natural or man-made events. If such events diminish San Francisco’s ability to maintain the Supply Assurance, San Francisco may increase the Wholesale Revenue Requirement to pay for planning, evaluation and implementation of replacement sources of supply when such needs arise and without the prior approval of the Wholesale Customers. San Francisco will keep the Wholesale Customers informed of actions being taken under this subsection, progress made, and contingency actions the Wholesale Customers may need to consider taking. To the extent appropriate and applicable, San Francisco will act in accordance with Section 3.11 and the ERRP. Nothing in this subsection limits San Francisco’s obligations under Section 3.11 to pursue additional sources of supply to augment supplies available during drought. B. Non-Urgent Reductions of Existing Surface Water Supplies. Climate change, regulatory actions and other events may impact San Francisco’s ability to maintain the Supply Assurance from its existing surface water supplies, but on timescales long enough to permit San Francisco to collaborate with its Wholesale Customers on how best to address possible impacts to water supply. If such events diminish San Francisco’s ability to maintain the Supply Assurance, San Francisco may increase the Wholesale Revenue Requirement to pay for planning, evaluation and implementation of replacement sources of supply when such needs arise and without the prior approval of the Wholesale Customers. San Francisco will keep the Wholesale Customers informed of actions being taken under this subsection, progress made, and contingency actions the Wholesale Customers may need to consider taking. San Francisco will solicit input and recommendations from BAWSCA and the Wholesale Customers, and take those recommendations into consideration. Prior to Commission approval of plans or taking other actions that would impact the Wholesale Revenue Requirement, San Francisco will hold a public hearing to receive written and oral comments. Nothing in this subsection modifies San 24 Francisco’s obligation to maintain the ability to provide the Supply Assurance under this Agreement. 3.16. New Sources of Water Supply to Increase Supply Assurance A. Surface Water Supplies From Existing Watersheds After 2018. The Commission action in SFPUC Resolution Number 08-0200, adopted October 30, 2008 requires certain decisions by San Francisco regarding whether to supply more than 265 MGD from its watersheds following 2018. Such decisions are to be made by December 31, 2018, subject to the exercise of San Francisco's retained CEQA discretion in Section 4.07. San Francisco's future decisions may include an offer to increase the Supply Assurance at the request of some or all of its Wholesale Customers. Costs associated with providing additional water from its existing water supplies in San Mateo, Santa Clara, Alameda, Tuolumne, and Stanislaus Counties shall be allocated to Wholesale and Retail Customers as described in Article 5. B. New Water Supplies. If San Francisco seeks to develop additional water supplies from new sources to increase the Supply Assurance available to Wholesale Customers, studies and resulting water supply projects will be conducted jointly with BAWSCA under separate agreement(s) specifying the purpose of the projects, the anticipated regional benefits and how costs of studies and implementation will be allocated and charged. Nothing in this Agreement shall serve as precedent for the allocation of such new supply capital costs between Retail and Wholesale Customers or associated operational expenses, which shall only occur following approval of both parties and amendment of this Agreement, if necessary, under Section 2.03. 3.17. Westside Basin Conjunctive Use ProgramGroundwater Storage and Recovery Project Subject to completion of necessary CEQA review as provided in Section 4.07In August 2014, the SFPUC may approved a WSIP project called the Groundwater Storage and Recovery Project (“Project”), which authorized the SFPUC to enter into an agreement governing the operation of the Project with the citiesParticipating Pumpers entitled “Agreement for Groundwater Storage and Recovery from the Southern Portion of the Westside Groundwater Basin by and among the San Francisco Public Utilities Commission, the City of Daly City and , the City of San Bruno, and the California Water Service Company, South San Francisco Service Area ("Participating Pumpers") governing the operation of the South Westside 25 Basin Conjunctive Use Program (“Program”), a WSIP Project.” (“Project Operating Agreement”), which became effective on December 16, 2014. The Program would produceProject produces Regional benefits for all customers of the Regional Water System by making use of available groundwater storage capacity in the Southern portion of the Westside Basin through the supply of additional surface water (“In Lieu Water”) to the Participating Pumpers from the Regional Water System, in exchange for a corresponding reduction in groundwater pumping at existing wells owned by the Participating Pumpers. The new groundwater supply that would accrueaccrues to storage as a result of delivery of In Lieu Water would thenwill be recovered from the SFPUC basin storage accountStorage Account during water shortages using new SFPUC Regional Program wellsProject Facilities or Shared Facilities operated by the Participating Pumpers and the SFPUC. Program Project mitigation capital costs and annual Project operations and maintenance expenses and water supplies are expected toshall be allocated as follows: A. All In Lieu Water delivered to the Participating Pumpers shall be (1) temporary and interruptible in nature and (2) at the sole discretion of the SFPUC based on the total volume of water available to the Regional Water System. B. All In Lieu Water delivered to the Participating Pumpers shall be considered a delivery of water to storage and shall not be construed to affect or increase the Individual Supply Guarantees of these wholesale customersWholesale Customers or to otherwise entitle them to any claim of water in excess of their Individual Supply Guarantees or their Interim Supply Allocations. Furthermore, Environmental Enhancement Surcharges authorized under Section 4.04 will not be applied by the SFPUC to any quantity of In Lieu Water that is delivered to the Participating Pumpers, but will instead be based solely on Participating Pumper water deliveries in excess of their respective Interim Supply Allocations.. C. In the event that it is necessary to reduce the Participating Pumpers’ aggregate designated quantity of groundwater production allocation pursuant to Section 4.7 of the Project Operating Agreement, the SFPUC may supply an annual maximum of up to 500 acre feet of Participating Pumper Replacement Water from the Regional Water System at a price comparable to the Participating Pumpers’ then-current groundwater cost, as may be adjusted annually as provided for in Section 4.7 of the Project Operating Agreement. Each of the Participating Pumpers may elect to take delivery of its share of Participating Pumper 26 Replacement Water either as interruptible surface water deliveries from the Regional Water System or as a transfer of storage credits from the SFPUC Storage Account. All revenue received from such water sales or transfers shall be considered revenue related to the sale of water and allocated between Retail Customers and Wholesale Customers on the basis of Proportional Water Use. All volumes of Participating Pumper Replacement Water delivered shall not be construed to affect or increase the Individual Supply Guarantees of these Wholesale Customers or to otherwise entitle them to any claim of water in excess of their Individual Supply Guarantees. D. Any operation and maintenance expenses incurred by the Participating Pumpers and the SFPUC that are related to the operation of Regional Program wellsProject Facilities and related assetsShared Facilities for Project purposes shall be included as Regional pumping expenses under Section 5.05.B of this Agreement and included as part of the Wholesale Revenue Requirement. For rate setting purposes, estimated Regional ProgramProject operation and maintenance expenses shall be used as set forth in Section 6.01. of this Agreement. Operation and maintenance expenses associated with the Participating Pumpers' existing wellsExisting Facilities that do not provide Regional benefits shall not be included in the Wholesale Revenue Requirement. On a case-by-case basis, the SFPUC may include Participating Pumper existing well operation and maintenance expenses associated operation of the Participating Pumpers’ Existing Facilities in the Wholesale Revenue Requirement provided that such expenses (1) are solely attributable to Regional ProgramProject operations for a Regional benefit and (2) are not caused by the Participating Pumper's failure to operate and maintain its existing wells in a reasonable and prudent manner consistent with water utility industry standards. The SFPUC shall provide the Wholesale Customers with copies of Project Operation and Maintenance Expenses documentation provided by the Participating Pumpers under Section 9.2 of the Project Operating Agreement. E. The Project Mitigation, Monitoring and Reporting Program (“MMRP”) adopted by the SFPUC included mitigation measure HY-6 to prevent well interference impacts to the Irrigation Well Owners. In mitigation measure HY-6, the SFPUC agreed to provide standby supplies of Irrigation Well Owner Replacement Water from the Regional Water System, to alter Project operations, and implement other actions (e.g., well replacement) to avoid well interference impacts that require the consent of the Irrigation Well Owners. The SFPUC’s Project mitigation and other obligations to the Irrigation Well Owners are memorialized in substantially identical “Groundwater Well Monitoring and Mitigation Agreements” with one or 27 more of the Irrigation Well Owners. For purposes of this Agreement, water supplies, and the capital costs and operations and maintenance expenses associated with providing Irrigation Well Owner Replacement Water and implementing other mitigation actions identified in the Project MMRP, shall be allocated as follows: 1. Irrigation Well Owner Replacement Water shall be limited to a cumulative maximum of 1.76 mgd and shall be delivered only in volumes necessary for mitigating well interference impacts as provided in the Project MMRP. The supply of Irrigation Well Owner Replacement Water by the SFPUC shall not be considered a new water supply commitment to Retail Customers or Wholesale Customers under Section 3.13 of this Agreement. The annual volume of Irrigation Well Owner Replacement Water supplied shall be metered and allocated as water from the Regional Water System during shortages between Retail Customers and Wholesale Customers in proportion to and consistent with the provisions of the Shortage Allocation Plan. All revenue received from Irrigation Well Owners for metered deliveries of Irrigation Well Owner Replacement Water shall be considered revenue related to the sale of water and allocated between Retail Customers and Wholesale Customers on the basis of Proportional Water Use. 2. All Project capital costs incurred by the SFPUC in complying with the mitigation measures in the Project MMRP shall be considered Regional capital costs under Section 5.04 of this Agreement. 3. Operations and maintenance expenses incurred by the SFPUC in maintaining Project mitigation assets described in the Project MMRP shall be considered Regional transmission and distribution expenses under Section 5.05.D of this Agreement. Well pumping expenses that are required to be paid by the SFPUC in the agreements with the Irrigation Well Owners shall be considered Regional pumping expenses under Section 5.05.B of this Agreement. 4. Any wheeling charges imposed by California Water Service Company for delivery of Irrigation Well Owner Replacement Water shall be considered Regional transmission and distribution expenses under Section 5.05.D of this Agreement. E.F. The SFPUC will audit (1) operation and maintenance expenses submitted by the Participating Pumpers, and (2) well pumping expenses submitted by the Irrigation Well Owners, for reimbursement to confirm that such costs were incurred, respectively, as a result of (1) operating Regional Program wells and related assets.Project Facilities and Shared Facilities for 28 a Regional benefit and (2) complying with mitigation obligations in the Project MMRP. Costs associated with the use of Program facilitiesProject Facilities or Shared Facilities for Direct Retail or Direct Wholesale purposes, or that do not otherwise provide Regional benefits, shall not be included in the Wholesale Revenue Requirement. The SFPUC is responsible for resolving disputes with the Participating Pumpers and Irrigation Well Owners concerning expense allocations. ProgramProject expense documentation, including documentation of negotiation and settlement of disputed costs, will be available for review during the Compliance Audit described in Section 7.04. of this Agreement. The Wholesale Customers may dispute the SFPUC’s resolution of expense allocations through the arbitration provisions in Section 8.01 of this Agreement. F.G. The SFPUC may direct the Participating Pumpers to recover water from the SFPUC basin storage accountStorage Account for any type of shortage referenced in Section 3.11. of this Agreement. Water recovered from the SFPUC basin storage accountStorage Account using Regional Program wellsProject Facilities and Shared Facilities may be used for (1) the benefit of all Regional Water System customers; (2) Retail Customers; or (3) one or more of the Participating Pumpers. The Wholesale Revenue Requirement shall only include operation and maintenance expenses incurred due to the operation of Program wells for Regional benefitsProject Facilities and Shared Facilities for Regional benefits, including expenses incurred due to compliance with mitigation measures in the Project MMRP. G.H. All water recovered during shortages caused by drought from the SFPUC basin storage accountStorage Account for Regional benefit, by the Participating Pumpers and by the SFPUC for delivery to Retail and Wholesale Customers during Shortages caused by Drought, shall be used to free up a comparable volume of surface water from the Regional Water System for allocation in accordance with the Tier 1 Shortage Plan. H.I. If the ProgramProject is terminated for any reason, including breach of the Program agreementProject Operating Agreement by one or more of the Participating Pumpers or the SFPUC, a force majeure event as specifically defined by the Project Operating Agreement, or due to regulatory action or legal action, then: 1. Any water remaining in the SFPUC Regional storage accountStorage Account shall be used for the benefit of all customers of the Regional Water System; 29 2. Outstanding eligible operation and maintenance expenses, including costs incurred during recovery of remaining stored water, will be allocated as provided in this sectionSection 3.17 of this Agreement; and 3. TheIf Project Facilities are no longer capable of being used for a Regional benefit, the Wholesale Customers will be credited with their share of proceeds from disposition of Program facilitiesProject Facilities or reimbursed their share of such capital costs for any Program facilitiesProject Facilities which are retained by the SFPUC for Direct Retail benefit and not used for the benefit of the Wholesale Customers, on the basis of (a) original cost less depreciation and outstanding related Indebtedness or (b) original cost less accumulated depreciation for revenue funded Regional Program facilities. Project Facilities. J. In the event that a Participating Pumper establishes the occurrence of a force majeure event as defined in the Project Operating Agreement, the SFPUC may enter into negotiations with the Participating Pumper to take over the operation of the portion of any Shared Facilities used for Project purposes for continued Regional use. If the SFPUC cannot reach agreement regarding the continued use of Shared Facilities for ongoing Regional benefit, the Participating Pumper shall reimburse the SFPUC and the Wholesale Customers for their respective shares of previously incurred Project capital costs used to upgrade the Shared Facilities on the basis of (a) original cost less depreciation and outstanding related Indebtedness or (b) original cost less accumulated depreciation for revenue funded Shared Facilities. In the event that the SFPUC seeks to take over the operation of Shared Facilities for Direct Retail use, or one or more Wholesale Customers seeks to negotiate with a Participating Pumper to take over the operation of Shared Facilities for individual use or Direct Wholesale use, the party or parties benefiting from such transfer of Shared Facilities shall reimburse the other parties to this Agreement with their respective shares of previously incurred Project capital costs on the basis described in the previous sentence, or as the parties may otherwise agree. 3.18. Water Supply Agreement Amendment Required. San Francisco may not change the existing condition of the Hetch Hetchy Reservoir by: 1. Abandoning or decommissioning O'Shaughnessy Dam; or 2. Draining Hetch Hetchy Reservoir, except for purposes of (i) repair, rehabilitation, maintenance, improvement, or reconstruction of O'Shaughnessy Dam or appurtenances, (ii) supplying water to the Bay 30 Area during drought, or (iii) meeting water release requirements under the Raker Act, or federal or state law, unless the parties enter into an amendment to the Water Supply Agreement, in full force and effect, adopted in accordance with Section 2.03. The amendment shall state, or restate, as the case may be: A. The level of service goals for seismic reliability and delivery reliability adopted by the Commission in conjunction with such proposed changes to the Regional Water System, provided such goals are at least as protective of the Wholesale Customers as the Level of Service Goals and Objectives; B. The level of water quality to be delivered, which is currently provided for in Section 3.08, and C. The specific cost allocation procedures, written as an amendment to Article 5, which apply to (1) the abandonment or decommissioning of O'Shaughnessy Dam, or (2) the draining of Hetch Hetchy Reservoir, and (3) the development, operation and maintenance of New Regional Assets that may be required to replace water supplied by Hetch Hetchy Reservoir and delivered to the Bay Area. In the event that the parties are not able to agree upon and approve an amendment to the Water Supply Agreement as set forth above, San Francisco may not abandon or decommission O'Shaughnessy Dam or drain Hetch Hetchy Reservoir. 31 Article 4. Implementation of Interim Supply Limitation. 4.01. Interim Supply Limitation Imposed by SFPUC In adopting the WSIP in Res. No. 08-0200, the Commission included full implementation of all proposed WSIP capital improvement projects to achieve level of service goalsLevel of Service Goals and Objectives relating to public health, seismic safety, and delivery reliability, but decided to adopt a water supply element that includes the Interim Supply Limitation. This article describes how the parties will implement the Interim Supply Limitation imposed by the SFPUC between the Effective Date and December 31, 2018., and how the SFPUC will conduct water supply planning after December 31, 2018. 4.02. Retail and Wholesale Customer Allocations Under Interim Supply Limitation The Interim Supply Limitation is allocated as follows between Retail and Wholesale Customers: Retail Customers' allocation: 81 MGD Wholesale Customers' allocation: 184 MGD The Wholesale Customers' collective allocation of 184 MGD under the Interim Supply Limitation includes the demand of the cities of San Jose and Santa Clara, whose demand is not included in the Supply Assurance, as provided in Section 3.02.B. By December 31st, 2010, the Commission will establish each Wholesale Customer's Interim Supply Allocation at a public meeting. 4.03. Transfers of Interim Supply Allocations A. Any Wholesale Customer, including Hayward, may transfer a portion of its Interim Supply Allocation to one or more other Wholesale Customers, as provided in this section. All Wholesale Customers are also eligible transferees, including California Water Service Company up to its Individual Supply Guarantee. B. Transfers of a portion of an Interim Supply Allocation must be prospective. The duration of a transfer cannot be less than the balance of the fiscal year. The minimum quantity that may be transferred is 1/10th of a MGD. 32 C. Transfers of portions of Interim Supply Allocations are subject to approval by the SFPUC. SFPUC review is limited to determining (1) whether a proposed transfer complies with the Act, and (2) whether the affected facilities in the Regional Water System have sufficient capacity to accommodate delivery of the increased amount of water to the proposed transferee. D. The participants in a proposed transfer shall provide notice to the SFPUC specifying the amount of the Interim Supply Allocation proposed to be transferred and the proposed effective date of the transfer, which shall not be less than 60 days after the notice is submitted to the SFPUC. The SFPUC may require additional information reasonably necessary to evaluate the operational impacts of the transfer. The SFPUC will not unreasonably withhold or delay its approval; if the SFPUC does not act on the notice within 60 days, the transfer will be deemed to have been approved. E. Within 30 days after the transfer has become effective, both the transferor and the transferee will provide written notice to the SFPUC and BAWSCA. F. Transfers of Interim Supply Allocations shall continue in effect until the earlier of (1) delivery of written notice to the SFPUC by the transfer participants that the transfer has been rescinded or (2) December 31, 2018. 4.04. Environmental Enhancement Surcharge A. Establishment of Environmental Enhancement Surcharge. Beginning with wholesale water rates for fiscal year 2011-2012, and continuing for the duration of the Interim Supply Limitation, the Commission will establish the Environmental Enhancement Surcharge concurrently with the budget-coordinated rate process set forth in Article 6 of this Agreement. The monetary amount of the Environmental Enhancement Surcharge per volume of water, such as dollars per acre-foot, will be equivalent for Retail Customer use in excess of 81 MGD and Wholesale Customer use in excess of 184 MGD. The Environmental Enhancement Surcharge will be simple to calculate so that Wholesale Customers can estimate potential surcharges for budgeting purposes and establish retail rates within their service areas. B. Application of Environmental Enhancement Surcharge. Beginning in fiscal year 2011-12, the Environmental Enhancement Surcharge will be levied only if and when combined Retail Customer and Wholesale Customer purchases exceed the Interim Supply Limitation of 265 MGD and if the fund described in subsection D below has been established by 33 the San Francisco Board of Supervisors. In that event, the Environmental Enhancement Surcharge will apply to Retail Customers for use in excess of 81 MGD and to individual Wholesale Customers for use in excess of their Interim Supply Allocations established by the Commission pursuant to Section 4.02. 1. Environmental Enhancement Surcharges related to the Retail Customers’ use in excess of their 81 MGD Retail Customer Allocation will be paid by the SFPUC, and no portion of such surcharges may be allocated to Wholesale Customers. The method of recovering the Environmental Enhancement Surcharges imposed upon Retail Customers shall be within the sole discretion of the SFPUC. 2. Environmental Enhancement Surcharges related to the individual Wholesale Customers’ use in excess of their respective Interim Supply Allocations will be paid to the SFPUC by individual Wholesale Customers. C. Collection of Environmental Enhancement Surcharge. Notwithstanding the budget-coordinated rate setting process contemplated in Article 6 of this Agreement, the Environmental Enhancement Surcharge for any given year will be determined retrospectively based on actual annual usage during the fiscal year in excess of the Interim Supply Allocation and paid in equal monthly installments over the remainder of the immediately following fiscal year. D. Establishment of Fund for Environmental Enhancement Surcharge Proceeds. Environmental Enhancement Surcharges paid by the SFPUC and by Wholesale Customers will be placed into a restricted reserve fund. The SFPUC will request the San Francisco Board of Supervisors to establish this fund by ordinance and, if adopted, the fund will be subject to the following restrictions: 1. Interest earnings will stay in the reserve fund. 2. The reserve fund shall (a) be subject to automatic appropriation; (b) require unexpended and unencumbered fund balances to be carried forward from year to year; and (c) not be transferred to the San Francisco General Fund. 3. The reserve fund may be used only for specific environmental restoration and enhancement measures for the Sierra and local watersheds, such as those included in the Watershed Environmental Improvement Program. 34 4. Environmental Enhancement Surcharge proceeds shall be expended in an expeditious manner. Any Environmental Enhancement Surcharge proceeds that remain in the reserve fund as of December 31, 2018 shall be used to complete projects previously approved under subsection E. Upon completion of the identified projects, the balance of any unexpended sums in the reserve fund shall be distributed to BAWSCA and the SFPUC in proportion to the total amount of surcharges assessed to the Wholesale and Retail Customers, respectively. B.E. Use of Environmental Enhancement Surcharge Proceeds. Specific uses of Environmental Enhancement Surcharges will be decided by the SFPUC and BAWSCA General Managers following input from environmental stakeholders and other interested members of the public. If parties are unable to agree, then they will jointly select a third person to participate in making the decision. 4.05. San Jose/ Santa Clara Interim Supply Allocation and Process for Reduction/ Termination. San Francisco will supply a combined annual average of 9 MGD to the cities of San Jose and Santa Clara through 20182028. Water supplied by San Francisco may only be used in the existing defined service areas in the northern portions of San Jose and Santa Clara shown on Attachment Q-1 and Q-2, respectively. San Francisco may reduce the quantity of water specified in this section when it establishes the Interim Supply Allocations for Wholesale Customers in Section 4.02. The establishment of Interim Supply Allocations for San Jose and Santa Clara shall not be considered a reduction of supply within the meaning of this section, provided that the Interim Supply Allocations assigned to San Jose and Santa Clara do not effect a reduction greater than the aggregate average reduction in Individual Supply Guarantees for Wholesale Customers that have such guarantees. The application of Interim Supply Allocations to San Jose and Santa Clara is, and water supply planning after December 31, 2018, are subject to the following provisions: A. In December 2010 and in each December thereafter through 20172027, the SFPUC shall prepare and the Commission shall consider, at a regularly scheduled public meeting, a Water Supply Development Report detailing progress made toward (1) meeting the Interim Supply Limitation by June 30, 2018 and (2) developing additional water supplies that will allow the Commission to designate San Jose and Santa Clara as permanent Wholesale 35 Customers of the Regional Water System with a combined Individual Supply Guarantee of up to 9 MGD by the end of the Term on June 30, 2034. B. The annual Water Supply Development Report shall be based on water purchase projections and work plans for achieving the Interim Supply Limitation in the Retail and Wholesale Service Areas. The projections and work plans will be prepared by the SFPUC for the Retail Customers and by BAWSCA for the Wholesale Customers, respectively, and submitted to the Commission in June of each year beginning in 2010. C. If the Commission finds that the projections in the Water Supply Development Report show that (1) the Interim Supply Limitation will not be met by June 30, 2018, as a result of Wholesale Customers' projected use exceeding 184 MGD, or (2) the purchases of the Wholesale Customers, including San Jose and Santa Clara, are projected to exceed 184 MGD before June 30, 2028, the Commission may issue a conditional five-ten year notice of interruption or reduction in supply of water to San Jose and Santa Clara. D. Upon issuance of the conditional notice of interruption or reduction, the SFPUC will prepare a new analysis of water supply that will be utilized by the San Francisco Planning Department in its preparation of any necessary documentation under CEQA pursuant to Section 4.07 on the impacts of interrupting or reducing service to San Jose and Santa Clara. E. Such notice of interruption or reduction will be rescinded if the Commission finds, based upon a subsequent annual Water Supply Development Report, that (1) sufficient progress has been made toward meeting the Interim Supply Limitation, or (2) projections show that the Interim Supply Limitationprojected purchases of the Wholesale Customers, including San Jose and Santa Clara, will be metnot exceed 184 MGD by June 30, 20182028. F. In no case shall any interruption or reduction of service to San Jose or Santa Clara pursuant to this section become effective less than two years from the completion of the CEQA process (not including resolution of any appeals or litigation) or fiveten years from the notice, whichever is longer. If the five-ten year notice is issued after 20132018, such interruption or reduction would occurbe effective after 20182028. G. If deliveries to San Jose and Santa Clara are interrupted, existing turnout facilities to San Jose and Santa Clara will remain in place for possible use during emergencies. 36 H. San Francisco and the cities of San Jose and Santa Clara will cooperate with BAWSCA and the Santa Clara Valley Water District in the identification and implementation of additional water sources and conservation measures for the cities’ service areas that are relevant to the water supply and the possible offer of permanent status for the two cities by the SFPUC. 4.06. San Francisco Decisions in 20182028 Regarding Future Water Supply A. By December 31, 20182028, San Francisco will have completed any necessary CEQA review pursuant to Section 4.07 that is relevant to making San Jose and Santa Clara permanent customers of the Regional Water System and will decide whether or not to make San Jose and Santa Clara permanent customers of the Regional Water System. with a combined Individual Supply Guarantee of 9 MGD allocated equally between the two cities, as well as how much water in excess of 9 MGD it will supply to San Jose and Santa Clara. San Francisco will make San Jose and Santa Clara permanent customers only if, and to the extent that, San Francisco determines that Regional Water System long term water supplies are available. In the event that San Francisco decides to afford permanent status to San Jose and Santa Clara, this Agreement will be amended pursuant to Section 2.03. B. By December 31, 20182028, San Francisco will have completed any necessary CEQA review pursuant to Section 4.07 and will decide how much water, if any, in excess of the Supply Assurance it will supply to Wholesale Customers from the Regional Water System to meet their projected future water demands until the year 20302040, and whether to offer a corresponding increase in the Supply Assurance as a result of its determinationthese determinations. 4.07. Retained Discretion of SFPUC and Wholesale Customers A. This Agreement contemplates discretionary actions that the SFPUC and the Wholesale Customers may choose to take in the future that could result in physical changes to the environment ("Discretionary Actions"). The Discretionary Actions include decisions to: 1. Develop additional or alternate water resources by the SFPUC or one or more Wholesale Customers; 2. Implement the physical facilities comprising the WSIP by December 31, 2015; 30, 2021; 37 3. Approve wheeling proposals by Wholesale Customers; 4. Approve new wholesale customers and water exchange or cost sharing agreements with other water suppliers; 5. Provide additional water to San Jose and/or Santa Clara; 6. Offer permanent status to San Jose and/or Santa Clara; 7. Reduce or terminate supply to San Jose and/or Santa Clara; 8. Provide additional water to Wholesale Customers in excess of the Supply Assurance to meet their projected future water demands; and 9. Offer a corresponding volumetric increase in the Supply Assurance. ; and 10. Implement the Hetch Hetchy Water and Power projects listed in Attachment R-2. The Discretionary Actions may require the SFPUC or Wholesale Customers to prepare environmental documents in accordance with CEQA prior to the SFPUC or the Wholesale Customers determining whether to proceed with any of the Discretionary Actions. Accordingly, and notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement commits the SFPUC or the Wholesale Customers to approve or carry out any Discretionary Actions that are subject to CEQA. Furthermore, the SFPUC’s or Wholesale Customers’ decisions to approve any of these Discretionary Actions are subject to the requirement that San Francisco and each Wholesale Customer, as either a “Lead Agency” (as defined in Section 21067 of CEQA and Section 15367 of the CEQA Guidelines) or a “Responsible Agency” (as defined in Section 21069 of CEQA and Section 15381 of the CEQA Guidelines) shall have completed any CEQA-required environmental review prior to approving a proposed Discretionary Action. B. In considering any proposed Discretionary Actions, the SFPUC and Wholesale Customers retain absolute discretion to: (1) make such modifications to any of the proposed Discretionary Actions as may be necessary to mitigate significant environmental impacts; (2) select feasible alternatives to the proposed Discretionary Actions that avoid significant adverse impacts; (3) require the implementation of specific measures to mitigate the significant adverse environmental impacts as part of the decision to approve the Discretionary Actions; (4) balance the benefits of the proposed Discretionary Actions against any significant environmental impacts before taking final actions to approve the proposed Discretionary Actions 38 if such significant impacts cannot otherwise be avoided; or (5) determine not to proceed with the proposed Discretionary Actions. 39 Article 5. Wholesale Revenue Requirement 5.01. Scope of Agreement This Article shall be applicable only to the water rates charged by San Francisco to the Wholesale Customers. Nothing contained in this Agreement shall limit, constrain, or in any way affect the rates which San Francisco may charge for water sold to Retail Customers or the methodology by which such rates are determined. 5.02. General Principles This Article sets forth the method by which the Wholesale Customers’ collective share of expenses incurred by the SFPUC in delivering water to them will be determined. This collective share is defined as the “Wholesale Revenue Requirement.” A. The SFPUC currently operates several enterprises, including the Water Enterprise, the Wastewater Enterprise, and the Hetch Hetchy Enterprise. B. The Wastewater Enterprise is responsible for treating sewage within San Francisco and provides no benefit to the Wholesale Customers. C. The Hetch Hetchy Enterprise is responsible for storing and transmitting water to the Water Enterprise, generating hydroelectric power and transmitting it to San Francisco, generating electric power within San Francisco, and distributing electricity and steam heat within San Francisco. Its water supply operations provide benefits to the Wholesale Customers. D. The Water Enterprise delivers water to both Retail Customers, which are located both within and outside San Francisco, and to the Wholesale Customers, all of which are located outside San Francisco. E. This Article implements two general principles as follows: (1) the Wholesale Customers should not pay for expenses of SFPUC operations from which they receive no benefit and (2) the Wholesale Customers should pay their share of expenses incurred by the SFPUC in delivering water to them on the basis of Proportional Annual Use unless otherwise explicitly provided in this Agreement. F. To implement these general principles, the Wholesale Revenue Requirement will consist of, and be limited to, the Wholesale Customers’ shares of the following categories of expense: 40 1. Capital cost recovery of Water Enterprise Existing Assets, and Hetch Hetchy Enterprise Existing Assets classified as Water-Only and the Water-Related portion of Joint assets (Section 5.03) 2. Contribution to the capital cost of Water Enterprise New Regional Assets (Section 5.04) 3. Water Enterprise operation and maintenance expenses, including power purchased from the Hetch Hetchy Enterprise that is used in the operation of the Water Enterprise (Section 5.05) 4. Water Enterprise administrative and general expenses (Section 5.06) 5. Water Enterprise property taxes (Section 5.07) 6. The Water Enterprise’s share of the Hetch Hetchy Enterprise’s operation and maintenance, administrative and general, and property tax expenses (Section 5.08) 7. The Water Enterprise’s share of the Hetch Hetchy Enterprise’s capital cost of New Assets classified as Water-Only and the Water-Related portion of Joint assets (Section 5.09) In each of these cost categories, Direct Retail Expenses will be allocated entirely to Retail Customers. Direct Wholesale Expenses will be allocated entirely to the Wholesale Customers. Regional Expenses will be allocated between Retail Customers and Wholesale Customers as provided in this Article. G. For purposes of establishing the rates to be charged Wholesale Customers, expenses will be based on the budget for, and estimates of water purchases in, the following fiscal year, as provided in Article 6. For purposes of accounting, the Wholesale Revenue Requirement will be determined on the basis of actual expenses incurred and actual water use, as provided in Article 7. H. In addition, rates charged to Wholesale Customers may include the Wholesale Customers’ contribution to a Wholesale Revenue Coverage Reserve, as provided in Section 6.06, which is not included in the Wholesale Revenue Requirement itself. 41 5.03. Capital Cost Recovery - Existing Regional Assets A. SFPUC has previously advanced funds to acquire or construct Existing Assets used and useful in the delivery of water to both Wholesale Customers and Retail Customers. The parties estimate that the Wholesale Customers’ share of the net book value of these assets, as of the expiration of the 1984 Agreement on June 30, 2009, will be approximately $366,734,424, as shown on Attachment K-1. B. In addition, SFPUC has also previously advanced funds received from Retail Customer revenues to acquire or construct assets included in Construction-Work-In-Progress (CWIP) as of June 30, 2009. The parties estimate that the Wholesale Customers’ share of the book value of these revenue funded capital expenditures, as of the expiration of the 1984 Agreement on June 30, 2009, will be approximately $15,594,990, as shown on Attachment K-2. The Wholesale Customers shall pay their share of the cost of Existing Assets and revenue- funded CWIP by amortizing the amounts shown on Attachment K-1 and Attachment K-2 over 25 years at an interest rate of 5.13 percent. The amounts to be included in the Wholesale Revenue Requirement pursuant to this section shall be the sum of the annual principal and interest amounts shown on Attachments K-3 (for Water Enterprise Regional Assets and the one Direct Wholesale Asset) and K-4 (for Hetch Hetchy Enterprise Water-Only Assets and the Water-Related portion [45 percent] of Joint assets) calculated on the basis of monthly amortization of principal as set forth on Attachments K-3 and K-4. C. In addition, the Commission has previously appropriated funds, advanced through rates charged to Retail Customers, for construction of capital projects. Some of these projects are active, and have unexpended balances of appropriated funds that are not included in CWIP as of June 30, 2009. These projects, and the associated balances, are shown on Attachment K-5. Expenditures of funds from these balances during FY 2009-10, FY 2010-11 and FY 2011-12 will be reviewed in FY 2012-13. The SFPUC will prepare a report showing the amount expended in each year on each project and the total expended during all years on all projects that are categorized as Regional or, in the case of Hetch Hetchy Enterprise, are categorized as either Water-Only or Joint. The wholesale share of that total will be determined using the allocation principles in this Agreement based on Proportional Water Use during those three years. The result, plus accrued interest at the rate specified in Section 6.05.B, will be calculated by the SFPUC and its calculation reviewed by the Compliance Auditor as part of the Compliance Audit for FY 2012-13. The audited total will be paid based on a schedule of level 42 annual principal and interest amounts over ten years at an interest rate of 4.00%, calculated on a monthly amortization basis. All or any portion of the balance may be prepaid. The first year’s payment will be included in the Wholesale Revenue Requirement for FY 2014-15. D. The parties agree that the Wholesale Customers’ share of the net book values of Existing Regional Assets as of June 30, 2008 as shown on Attachment K-1 are accurate. The compliance audit conducted on the calculation of the FY 2008-09 Suburban Revenue Requirement required by the 1984 Agreement will determine the actual amounts of depreciation on, and capital additions to, plant in service during that fiscal year. Those amounts will be compared to the corresponding estimates shown on Attachments K-1 and K-2. The differences will be added to or subtracted from the estimated asset values shown on Attachments K-1 and K-2 and the amortization schedules in Attachments K-3 and K-4 will be recalculated. The wholesale allocation factors shall be fixed at 70.1% for the Water Enterprise Existing Assets and 64.2% for Hetch Hetchy Enterprise Existing Assets for both the preliminary and final payment schedules. The SFPUC will prepare and provide to the Wholesale Customers revised Attachments K-1 through K-4 based on the Wholesale Customers’ share of the net book value of the assets placed in service as of June 30, 2009 used to provide water service to the Wholesale Customers and the net book value of revenue-funded CWIP expended as of June 30, 2009. The revised Attachments K-1 through K-4 shall be approved by the General Manager of the SFPUC and the General Manager/CEO of BAWSCA and will be substituted for the original Attachments K-1 through K-4. E. The original Attachments K-1 through K-4, based on estimates, shall be used for estimating the Wholesale Revenue Requirement for the fiscal year beginning July 1, 2009. The revised Attachments, based on audited actuals, shall be used to determine the actual Wholesale Revenue Requirement for FY 2009-10 and to determine the Wholesale Revenue Requirement(s) in all subsequent years, except as may be provided elsewhere in this Agreement. F. The Wholesale Customers, acting through BAWSCA, may prepay the remaining unpaid Existing Assets principal balance, in whole or in part, at any time without penalty or early payment premium. Any prepayments will be applied in the month immediately following the month in which the prepayment is made and the revised monthly amount(s) will be used to calculate the Wholesale Revenue Requirement. Any partial prepayments must be in an amount at least equal to $10 million. In the event of a partial prepayment, an updated schedule for the 43 remaining payments shall be prepared reflecting the unpaid balance after prepayment, amortized through the end of FY 2034, calculated as provided in this section. The updated schedule, approved by the General Manager of the SFPUC and the General Manager/CEO of BAWSCA, will be substituted for Attachment K-3 and/or Attachment K-4. 5.04. Capital Cost Contribution - New Regional Assets A. Debt-Funded Capital Additions. The Wholesale Customers shall pay the wholesale share of Net Annual Debt Service for New Regional Assets. The Regional projects in the WSIP are identified in Attachment L-1. 1. The amount of Net Annual Debt Service for New Regional Assets will be determined for each series of Indebtedness issued. Until the proceeds of a particular series are Substantially Expended, the amount attributable to specific projects will be based on the expected use of proceeds shown in the “Certificate Regarding Use of Proceeds” executed by the SFPUC General Manager on behalf of the Commission in connection with the sale of the Indebtedness, provided such certificate identifies the use of proceeds at a level of detail equivalent to that shown on Attachment L-2, which is a copy of the certificate prepared for the 2006 Revenue Bonds, Series A. If a certificate does not identify the use of proceeds at that level of detail, the SFPUC General Manager shall prepare and execute a separate certificate which does identify the use of proceeds at the level of detail shown on Attachment L-2 and deliver it to BAWSCA within 15 days from the closing of the sale of the Indebtedness. 2. After the proceeds of a series are Substantially Expended, the SFPUC General Manager will prepare and execute a certificate showing the actual expenditure of proceeds at a level of detail equivalent to the initial General Manager certificate. The resulting allocation of Net Debt Service to New Regional Assets for a series of bonds will be used in the fiscal year in which the proceeds have been Substantially Expended and thereafter. Differences between the amount of Net Debt Service paid by Wholesale Customers prior to that year and the amount of Net Debt Service that they should have paid during that time based on the actual expenditure of proceeds will be taken into account in calculation of the balancing account for the fiscal year in which the proceeds were Substantially Expended. The application of the remaining proceeds shall be proportionate to the allocation of the Net Debt Service to New Regional Assets. 3. The Wholesale Customers’ share of Net Annual Debt Service for the New Regional Assets that are categorized as Direct Wholesale will be 100 percent. (None of the 44 projects in the WSIP are categorized as Direct Wholesale.) The Wholesale Customers’ share of Net Annual Debt Service for all other New Regional Assets will be determined each year and will be equal to the Wholesale Customers’ Proportional Annual Use. 4. If Indebtedness is issued by the SFPUC to refund the 2006 Revenue Bonds, Series A or to refund any other long-term Indebtedness issued after July 1, 2009, the Net Annual Debt Service attributable to proceeds used for refunding will be allocated on the same basis as the Indebtedness being refunded. 5. The SFPUC will prepare an annual report showing for each issue of Indebtedness and through the most recently completed fiscal year: (1) net financing proceeds available to pay project costs, (2) actual earnings on proceeds, (3) actual expenditures by project. The report shall be substantially in the form of Attachment L-3 and shall be delivered to BAWSCA on or before November 30 of each year, commencing November 2009. 6. In addition to Net Debt Service, Wholesale Customers will pay a proportionate share of annual administrative costs associated with Indebtedness, such as bond trustee fees, credit rating agency fees, letter of credit issuer fees, San Francisco Revenue Bond Oversight Committee fees, etc., but only to the extent such fees are neither paid from proceeds of Indebtedness nor included in SFPUC operation and maintenance or administrative and general expenses. B. Revenue-Funded Capital Additions. The Wholesale Customers shall pay the wholesale share of the appropriation contained in the SFPUC annual budget for each year to be used to acquire or construct New Regional Assets. If such appropriations are reimbursed from proceeds of Indebtedness, the Wholesale Customers will be credited for prior payments made under this Section 5.04.B. The Wholesale Customers’ share of the annual appropriation for revenue-funded New Regional Assets that are categorized as Direct Wholesale will be 100 percent. (None of the Repair and Replacement projects in the SFPUC’s most recent capital improvement program updated on February 10, 2009, is categorized as Direct Wholesale.) The Wholesale Customers’ share of the annual appropriation for all other revenue-funded New Regional Assets will be determined each year and will be equal to the Wholesale Customers’ Proportional Annual Use in each fiscal year. The amount appropriated in each fiscal year for the wholesale share of New Regional Assets shall be contributed to the Wholesale Capital Fund described in Section 6.08 and reported on and administered as shown in that section and Attachments M-1 through M-3. 45 5.05. Water Enterprise Operation and Maintenance Expenses There are five categories of Water Enterprise Operation and Maintenance Expenses, described below: A. Source of Supply 1. Description: This category consists of the costs of labor, supervision and engineering; materials and supplies; and other expenses incurred in the operation and maintenance of collecting and impounding reservoirs, dams, wells and other water supply facilities located outside San Francisco; watershed protection; water supply planning; and the purchase of water. 2. Allocation: Direct Retail expenses, including water supply planning for Retail operations (such as City Retail water conservation programs), will be assigned to the Retail Customers. Regional expenses will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date there are no Direct Wholesale expenses in the Source of Supply category.) B. Pumping 1. Description: This category consists of the costs of labor, supervision and engineering; materials and supplies; and other expenses incurred in the operation and maintenance of water pumping plants, ancillary structures and equipment and surrounding grounds; and fuel and power purchased for pumping water. 2. Allocation: Direct Retail expenses will be assigned to the Retail Customers. Regional expenses will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date there are no Direct Wholesale expenses in the Pumping category.) C. Treatment 1. Description: This category consists of the costs of labor, supervision and engineering; materials and supplies and other expenses incurred in the operation and maintenance of water treatment plants and drinking water quality sampling and testing. The 46 cost of water quality testing will not include expenses incurred on behalf of the Wastewater Enterprise. Any remaining costs, after adjusting for the Wastewater Enterprise, will be reduced by the amount of revenue received for laboratory analyses of any type performed for agencies, businesses and/or individuals other than the Water and Hetch Hetchy Enterprises. 2. Allocation: Direct Retail expenses will be assigned to the Retail Customers. Regional expenses will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date there are no Direct Wholesale expenses in the Treatment category.) D. Transmission and Distribution 1. Description: This category consists of the cost of labor, supervision and engineering; materials and supplies; and other expenses incurred in the operation and maintenance of transmission and distribution pipelines, appurtenances, meters (other than those expenses payable by individual Wholesale Customers pursuant to Section 5.10.C.3), distribution reservoirs storing treated water, craft shops and auto shops servicing vehicles used for operation and maintenance of the Regional Water System rather than for Direct Retail facilities, and miscellaneous facilities related to the transmission and distribution of water. 2. Allocation: Direct Retail Transmission and Distribution expenses will be assigned to the Retail Customers. Regional Transmission and Distribution expenses will be allocated between Retail and Wholesale Customers on the basis of Proportional Annual Use. Expenses incurred for the operation and maintenance of three terminal reservoirs, i.e., Sunset Reservoir (North and South Basins), University Mound Reservoir (North and South Basins), and Merced Manor Reservoir, as well as transmission pipelines delivering water to them, are classified as Regional expenses notwithstanding the location of the reservoirs within San Francisco. Direct Wholesale expenses will be assigned to the Wholesale Customers. (As of the Effective Date the only Direct Wholesale expenses in the Transmission and Distribution category are associated with the Palo Alto pipeline.) E. Customer Services 1. Description: This category consists of labor; materials and supplies; and other expenses incurred for meter reading, customer record keeping, and billing and collection for the Water Enterprise. 47 2. Allocation: Customer Services expenses will be allocated among the Water Enterprise, the Wastewater Enterprise, and Hetch Hetchy Enterprise in proportion to the time spent by employees in Customer Services for each operating department/enterprise. The Water Enterprise’s share of Customer Services expense will be allocated 98 percent to the Retail Customers and two percent to the Wholesale Customers, as illustrated on Attachment N- 2, Schedule 1. 5.06. Water Enterprise Administrative and General Expenses Administrative and General expenses consist of the Water Enterprise’s share of the cost of general government distributed through the full-cost Countywide Cost Allocation Plan, the services of SFPUC support bureaus, Water Enterprise administrative and general expenses that cannot be directly assigned to a specific operating and maintenance category, and the cost of the Compliance Audit. These four subcategories, and the method by which costs in each are to be calculated and allocated, are as follows: A. Countywide Cost Allocation Plan 1. Description: This subcategory consists of the Water Enterprise’s share of the costs of San Francisco general government and other City central service departments which are not directly billed to the Water Enterprise or other operating departments. All San Francisco operating departments are assigned a prorated share of these costs through the full- cost Countywide Cost Allocation Plan (COWCAP) prepared annually by the San Francisco Controller. 2. Allocation: The Water Enterprise’s assigned share of central government costs as shown in the annual full-cost COWCAP prepared by the San Francisco Controller, will be allocated between Retail Customers and Wholesale Customers on the basis of the composite percentage of the allocated expenses in the five categories of operation and maintenance expense described in Section 5.05. The composite wholesale percentage shown on Attachment N-2, Schedule 1 is 42.07 percent, derived by dividing the wholesale share of Operation and Maintenance expenses ($46,573,883) by total Operation and Maintenance expenses ($110,700,133). 48 B. Services of SFPUC Bureaus 1. Description: This subcategory consists of the support services provided to the Water Enterprise by the SFPUC Bureaus, which presently consist of the General Manager’s Office, Business Services, External Affairs, and Infrastructure Bureau. Business Services presently includes Financial Services, Information Technology Services, Human Resource Services, Fleet Management, and Customer Services. 2. Allocation: There are three steps involved in determining the Wholesale Customers’ share of SFPUC Bureau costs. a. Step One: Bureau expenses which have either been recovered separately or which provide no benefit to Wholesale Customers will be excluded. Examples of Bureau expenses recovered separately include (1) Customer Services expenses, which are recovered as provided in Section 5.05.E, and (2) Infrastructure expenses, which are assigned to individual projects and capitalized. An example of a Bureau expense that provides no benefit to Wholesale Customers is Information Technology Services expenses for support of the San Francisco Municipal Railway. In addition, the SFPUC will continue its practice of assigning City Attorney Office expenses charged to the General Manager's Office for projects or lawsuits that relate to only one enterprise directly to that enterprise. For example, costs related to a lawsuit involving the Wastewater Enterprise will not be assigned to the Water Enterprise. b. Step Two: Bureau expenses adjusted as provided in Step One will be allocated among the Water Enterprise, the Wastewater Enterprise and the Hetch Hetchy Enterprise on the basis of the actual salaries of employees in each enterprise or department, as illustrated on Attachment N-2, Schedule 7. c. Step Three: The amount allocated to the Water Enterprise through Step Two will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. C. Water Enterprise Administrative and General 1. Description: This category includes expenses incurred by the Water Enterprise that are not readily assignable to specific operating divisions. This category includes the following expenses: a. Water Administration: This includes the costs of labor and other expenses of the administrative section of the Water Enterprise, supervision and engineering 49 expenses, professional services, travel and training, equipment purchases, and materials and supplies not directly assignable to a specific operating unit. b. Services Provided by Other City Departments: This includes charges of other San Francisco departments directly billed to the Water Enterprise administration by other San Francisco departments for services ordered by the Water Enterprise, such as legal services, risk management, telecommunications, employee relations, purchasing, mail services, and workers compensation claims paid. c. Litigation and Claims Paid: This includes charges incurred for attorney services and claims and judgments paid in litigation arising from the operation of the Water Enterprise. 2. Allocation: In each of these three subcategories, expenses that benefit only Retail Customers will be excluded. For example, the cost of claims and judgments resulting from a break in or leak from pipelines or reservoirs in the Retail Service Area (with the exception of the three terminal reservoirs and pipelines delivering water to them) will be assigned to the Retail Customers. Remaining Water Enterprise Administrative and General expenses will be allocated between Retail Customers and Wholesale Customers on the basis of the composite percentage of allocated operation and maintenance expense categories described in Section 5.05. D. Compliance Audit. The cost of the Compliance Audit described in Section 7.04 will be assigned 50 percent to the Retail Customers and 50 percent to the Wholesale Customers. 5.07. Water Enterprise Property Taxes A. Description: This category consists of property taxes levied against property owned by San Francisco located in Alameda, San Mateo and Santa Clara counties and used and managed by the SFPUC. B. Allocation: All property taxes paid, net of (1) reimbursements received from lessees and permit holders, and (2) refunds from the taxing authority, are Regional expenses. Net property taxes will be allocated between Retail Customers and Wholesale Customers on the basis of Proportional Annual Use. 50 5.08. Hetch Hetchy Enterprise Expenses A. Introduction. There are two steps involved in determining the amount of the Wholesale Customers’ share of Hetch Hetchy Enterprise expenses. 1. The first step is to determine the Water Enterprise’s share of Hetch Hetchy Enterprise operation expenses, maintenance expenses, administrative and general expenses, and property taxes. 2. The second step is to determine the Wholesale Customers’ share of expenses allocable to the Water Enterprise. B. Determination of the Water-Related Portion of Hetch Hetchy Enterprise Expenses 1. Operation and Maintenance Expenses: This category consists of the cost of labor, materials and supplies, and other expenses incurred in operating and maintaining Hetch Hetchy Enterprise physical facilities. a. Description: Expenses associated exclusively with the production and distribution of hydroelectric power (e.g., generating plants and power transmission lines and towers, transformers and associated electric equipment, purchased power, wheeling charges, rental of power lines, etc.) are categorized as Power-Only and are allocated to power. Expenses associated exclusively with the operation and maintenance of facilities that serve only the water function (e.g., water transmission pipelines and aqueducts, activities related to compliance with federal and state drinking water quality laws, etc.) are categorized as Water- Only and are allocated entirely to water. Expenses associated with the operation and maintenance of facilities that serve both the water and power functions (e.g., dams, security programs, etc.) are categorized as Joint and are reallocated as 55 percent Power-Related and 45 percent Water-Related. 2. Administrative and General Expenses: There are three subcategories of Hetch Hetchy Enterprise Administrative and General expenses. a. Full-Cost Countywide Cost Allocation Plan: This subcategory consists of the cost of San Francisco general government and other City central service departments which are not directly billed to operating departments but allocated through the full- cost Countywide Cost Allocation Plan described in Section 5.06.A. Costs in this subcategory 51 are classified as Joint, and are reallocated as 55 percent Power-Related and 45 percent Water- Related. b. SFPUC Bureau Costs: This subcategory consists of the expenses described in Section 5.06.B. One hundred percent of Customer Services expenses allocated to the Hetch Hetchy Enterprise are categorized as Power-Only. The remaining amount of Bureau expenses allocated to the Hetch Hetchy Enterprise pursuant to Section 5.06.B will be reallocated between power and water in proportion to the salaries of Hetch Hetchy Enterprise employees assigned to each function as shown on Attachment N-2, Schedule 7.1. c. Other Administrative and General: This subcategory includes payments to the United States required by the Act, labor, supervision and engineering and other costs not readily assignable to a specific operation or maintenance function or program. Costs related to power administration (such as long range planning and policy analysis for energy development, administration of power contracts, and administration of work orders to City departments for energy services) are Power-Only costs. Costs related to water administration (such as legal and professional services for the protection of the City's water rights) are Water- Only costs and will be assigned to the Water Enterprise. Costs related to both power administration and water administration (such as general administration, office rents, office materials and supplies, and services of other City departments benefitting to both power and water are Joint administrative and general costs and are reallocated as 55 percent Power- Related and 45 percent Water-Related. 3. Property Taxes. This category consists of property taxes levied against property owned by San Francisco in Tuolumne, Stanislaus, San Joaquin, and Alameda counties and operated and managed by the Hetch Hetchy Enterprise. Allocation: Property taxes are classified as Joint costs. They will be reallocated as 55 percent Power-Related and 45 percent Water-Related. C. Calculation of Wholesale Customers’ Share of Hetch Hetchy Enterprise Expenses. The Water Enterprise’s share of Hetch Hetchy Enterprise expenses consist of 100 percent of Water-Only expenses and the Water-Related portion (45%) of Joint expenses. The Wholesale Customers’ share of the sum of the Water Enterprise’s share of Hetch Hetchy Enterprise expenses determined under subsection B shall be calculated by multiplying that dollar amount by Adjusted Proportional Annual Use. 52 5.09. Hetch Hetchy Enterprise Capital Costs A. Introduction. Wholesale Customers are also allocated a share of Hetch Hetchy Enterprise capital costs. B. Components of Capital Costs. The components of Hetch Hetchy Enterprise capital costs are as follows: 1. Existing Assets Cost Recovery. The Wholesale Customers’ repayment of their share of Hetch Hetchy Existing Assets (Water-Only and the Water-Related portion [45 percent] of Joint assets) is shown on Attachment K-4 accompanying Section 5.03. 2. Debt Service on New Assets. The Water Enterprise will be assigned 100 percent of Net Annual Debt Service attributable to acquisition and construction of New Hetch Hetchy Enterprise assets that are Water-Only and the Water-Related portion (45 percent) of Net Annual Debt Service on New Hetch Hetchy Enterprise Joint assets. The provisions of Section 5.04.A apply to debt service on New Hetch Hetchy Enterprise assets. 3. Revenue-Funded Capital Additions. The Water Enterprise will be assigned 100 percent of capital expenditures from revenues for New Hetch Hetchy Enterprise assets that are Water-Only and the Water-Related portion (45 percent) of such expenditures for new Hetch Hetchy Enterprise Joint assets. The provisions of Section 5.04.B apply to the payment of New revenue-funded Hetch Hetchy Enterprise assets. C. Calculation of Wholesale Customers’ Share of Hetch Hetchy Enterprise Capital Costs. The Wholesale Customers’ share of the Net Annual Debt Service and revenue funded capital expenditures determined under subsections B.2 and 3 shall be calculated by multiplying that dollar amount by Adjusted Proportional Annual Use. 5.10. Additional Agreements Related to Financial Issues A. Wholesale Customers Not Entitled to Certain Revenues. The Wholesale Customers have no entitlement to any of the following sources of revenue to the SFPUC. 1. Revenues from leases or sales of SFPUC real property. 2. Revenues from the other utility services such as the sale of electric power, natural gas and steam. 53 3. Revenues from the sale of water to customers and entities other than the Wholesale Customers. 4. Revenues earned from the investment of SFPUC funds other than funds contributed by the Wholesale Customers to the Wholesale Revenue Coverage Reserve described in Section 6.06 or the Wholesale Capital Fund described in Section 6.08. Wholesale Customers are also entitled to the benefit of earnings on proceeds of Indebtedness (through expenditure on New Regional Assets and /or application to Debt Service) and to interest on the Balancing Account as provided in Section 6.05.B. 5. Revenues not related to the sale of water. B. Wholesale Customers Not Charged with Certain Expenses. The Wholesale Customers will not be charged with any of the following expenses: 1. Capital costs for assets constructed or acquired prior to July 1, 1984 other than Existing Asset costs that are repaid pursuant to Section 5.03. 2. Expenses incurred by the SFPUC for generation and distribution of electric power, including Hetch Hetchy Enterprise Power-Only expenses and the Power-Related share of Hetch Hetchy Enterprise Joint expenses. An exception to this is Regional energy costs incurred by the Water Enterprise, for which Wholesale Customers are charged on the basis of Proportional Annual Use. 3. Expenses incurred by SFPUC in providing water to Retail Customers. 4. Expenses associated with the SFPUC’s accruals or allocations for uncollectible Retail Water accounts. 5. Attorneys’ fees and costs incurred by the Wholesale Customers that a court of competent jurisdiction orders San Francisco to pay as part of a final, binding judgment against San Francisco as provided in Section 8.03.B.2. 6. Any expenses associated with funding any reserves (other than the required Wholesale Revenue Coverage Reserve described in Section 6.06) accrued and not anticipated to be paid within one year unless such reserve is established by mutual agreement of the SFPUC and BAWSCA. 7. Any expenses accrued in respect to pending or threatened litigation, damage or personal injury claims or other loss contingencies unless projected to be paid within 54 one year. Otherwise, such expenses will be charged to the Wholesale Customers when actually paid. 8. Any expense associated with installing, relocating, enlarging, removing or modifying meters and service connections at the request of an individual Wholesale Customer. 9. The Retail Customers’ portion of any Environmental Enhancement Surcharges imposed to enforce the Interim Supply Limitation set forth in Section 4.04. C. Revenues Not Credited to Payment of Wholesale Revenue Requirement. The following payments by Wholesale Customers, individually or collectively, are not credited as Wholesale revenues for purposes of Section 6.05.B: 1. Payments by individual Wholesale Customers of the Environmental Enhancement Surcharge imposed to enforce the Interim Supply Limitation set forth in Section 4.04. 2. Payments of attorneys’ fees and costs incurred by San Francisco that a court of competent jurisdiction orders the Wholesale Customers to pay as part of a final, binding judgment against the Wholesale Customers, as provided in Section 8.03.B.3. 3. Payments by individual Wholesale Customers for installation, relocation, enlargement, removal or modification of meters and service connections requested by, and charged to, a Wholesale Customer. 4. Payments applied to the amortization of the ending balance in the balancing account under the 1984 Agreement, pursuant to Section 6.05.A. 5. Payments of the Water Management Charge which are delivered to BAWSCA pursuant to Section 3.06. 6. Payments directed to the Wholesale Revenue Coverage Reserve pursuant to Section 6.06. 7. Prepayments authorized by Sections 5.03.C and 5.03.F. D. Other 1. The Wholesale Customers will receive a proportional benefit from funds received by the SFPUC from (a) governmental grants, rebates, reimbursements or other subventions, (b) private-sector grants for Regional capital or operating purposes of the Water 55 Enterprise and the Water-Only and Water-related portion of Joint Hetch Hetchy Water Enterprise expenses, or (c) a SFPUC use of taxable bonds. 2. The Wholesale Customers will receive a proportionate benefit from recovery of damages, including liquidated damages, by SFPUC from judgments against or settlements with contractors, suppliers, sureties, etc., related to Regional Water System projects and the Water-Only and Water-Related portion of Joint Hetch Hetchy Enterprise projects. 3. The SFPUC will continue to charge Wholesale Customers for assets acquired or constructed with proceeds of Indebtedness on which Wholesale Customers paid Debt Service during the Term of this Agreement on the “cash” basis (as opposed to the “utility” basis) after the expiration or earlier termination of this Agreement. The undertaking in this Section 5.10.D.3 will survive the expiration or earlier termination of this Agreement. 5.11. Classification of Existing System Assets. Existing System Assets of the Regional Water System include the water storage, transmission, and treatment systems owned and operated by San Francisco in Tuolumne, Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco Counties. These assets are managed by either the Water Enterprise or the Hetch Hetchy Enterprise and the assets have been classified for purposes of cost allocation. A. Water Enterprise Assets. Water Enterprise assets are currently managed, operated, and maintained by the Water Enterprise and are generally located west of Alameda East Portal, in addition to the treatment facilities located at Tesla and the Thomas Shaft Emergency Disinfection Facility. These assets are classified as Direct Retail, Direct Wholesale, or Regional. B. Hetch Hetchy Enterprise Assets. Hetch Hetchy Enterprise assets are currently managed, operated and maintained by the Hetch Hetchy Enterprise and are generally located east of the Alameda East Portal of the Coast Range Tunnel in Sunol Valley, Alameda County. These assets are classified as Power-Only, Water-Only, or Joint, in accordance with Sections 5.08 and 5.09. Through the Wholesale Revenue Requirement, the Wholesale Customers pay Existing System Asset capital costs and operating expenses in accordance with Section 5.02.F and do not pay capital costs or operating expenses associated with assets classified as Direct Retail, Power-Only, and the Power-Related portion of Joint assets. 56 C. Attachment R Documents Classifications. To facilitate WSA administration, Attachment R documents the classification of major Existing System Assets operated by the Hetch Hetchy Enterprise. Attachment R consists of three documents: R-1 Introduction, R-2 Special Classification of Discrete Projects for 2018 Amendment Purposes, and R-3 Major Hetch Hetchy Enterprise Existing System Assets. Attachment R may be modified as specified in Section 5.11.D and in the manner set forth in Section 2.03.C. D. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets is Not Exhaustive. Existing System Assets include, but are not limited to, land; fixed infrastructure such as dams, tunnels, buildings, water treatment plants and pipelines; equipment such as pumps and vehicles; and related appurtenances. Major Hetch Hetchy Enterprise Existing System Assets, and their classifications, are listed in Attachment R-3. Attachment R-3 does not include all assets of the Regional Water System, but represents the parties' best efforts to document major Hetch Hetchy Enterprise Existing System Assets that would incur capital costs and operating expenses subject to cost allocation. The classification of assets listed on R-3 may not be changed during the Term, any Extension Term, and any renewal of the Agreement, however, Attachment R-3 may be modified by mutual agreement in accordance with Section 2.03.C to (1) add an asset that was inadvertently omitted, (2) to add a new asset, and (3) remove a destroyed or obsolete asset. In the event that the parties cannot agree on the classification of any omitted or new assets, the dispute shall be subject to arbitration under Section 8.01. E. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets Classifications are Fixed. The classification of the major Hetch Hetchy Enterprise Existing System Assets is fixed and shall control the allocation of capital costs and operating expenses for the remainder of the Term, any Extension Terms, and any renewal of the Agreement. However, changes may be proposed in accordance with subsection G below. Capital costs and operating expenses are meant to be inclusive of all costs related to assets, including, but not limited to, any alterations, additions, improvements, rehabilitation, replacement of assets, and equipment that is appurtenant thereto. Since asset classifications are fixed in Attachment R-3, asset classifications may not be modified by mutual agreement in accordance with Section 2.03.C. F. Attachment R-2, Special Classification of Discrete Projects for 2018 Amendment Purposes. Past, ongoing and future capital projects involving five Hetch Hetchy 57 Enterprise Existing System Assets defined in Attachment R-2 have classifications that differ from the underlying asset classifications. These project-related classification changes shown on Attachment R-2, are part of the 2018 amendments to the Agreement and are not precedential for any other asset-related capital cost or operating expense. With the exception of the defined projects related to the five assets listed on R-2, the capital projects for all assets follow the asset classifications. Capital projects listed on Attachment R-2 must be approved by the SFPUC following necessary CEQA review. G. Five Year Notice of Intent to Renegotiate Cost Allocation. In the event San Francisco or the Wholesale Customers, which may be represented by BAWSCA, wish to propose and negotiate a change in Existing System Asset classifications, or a change in the Water-Related portion (45 percent) of Joint expenses, for the next Water Supply Agreement, such party must provide the other at least 5 years' written notice prior to the expiration of the Term or Extension Term, or the renewal of the Agreement. At a minimum, the noticing party must provide a comprehensive analysis of the financial and rate impacts of the proposed change at least two years prior to the expiration of the Term or Extension Term, or the renewal of the Agreement. To meet this requirement, the parties may agree to jointly analyze, under a separate agreement, system capacity and usage and/or new assets, as well as other possible alternative cost allocation methodologies. Either party may also unilaterally initiate such studies by consultants of their choice and bear all their own costs. 58 Article 6. Integration of Wholesale Revenue Requirement with SFPUC Budget Development and Rate Adjustments 6.01. General A. The purpose of the allocation bases set forth in Article 5 is to determine the Wholesale Revenue Requirement for each fiscal year. The Wholesale Revenue Requirement can only be estimated in advance, based on projected costs and water deliveries. These projections are used to establish water rates applicable to the Wholesale Customers. B. After the close of each fiscal year, the procedures described in Article 7 will be used to determine the actual Wholesale Revenue Requirement for that year, based on actual costs incurred, allocated according to the provisions of Article 5, and using actual water delivery data. The amount properly allocated to the Wholesale Customers shall be compared to the amount billed to the Wholesale Customers for the fiscal year, other than those identified in Section 5.10.C. The difference will be entered into a balancing account to be charged to, or credited to, the Wholesale Customers, as appropriate. C. The balancing account shall be managed as described in Section 6.05. 6.02. Budget Development The SFPUC General Manager will send a copy of the proposed SFPUC budget to BAWSCA at the same time as it is sent to the Commission. In addition, a copy of materials submitted to the Commission for consideration at meetings prior to the meeting at which the overall SFPUC budget is considered (including (a) operating budgets for the Water Enterprise and the Hetch Hetchy Enterprise, (b) budgets for SFPUC Bureaus, and (c) capital budgets for the Water Enterprise and the Hetch Hetchy Enterprise) will also be sent to BAWSCA concurrently with their submission to the Commission. 6.03. Rate Adjustments A. Budget Coordinated Rate Adjustments. Adjustments to the rates applicable to the Wholesale Customers shall be coordinated with the budget development process described in this section except to the extent that Sections 6.03.B and 6.03.C authorize emergency rate increases and drought rate increases, respectively. If the SFPUC intends to increase wholesale water rates during the ensuing fiscal year, it will comply with the following procedures: 59 1. Adjustments to the wholesale rates will be adopted by the Commission at a regularly scheduled meeting or at special meeting, properly noticed, called for the purpose of adjusting rates or for taking any other action under the jurisdiction of the Commission. 2. The SFPUC will send a written notice by mail or electronic means to each Wholesale Customer and to BAWSCA of the recommended adjustment at least thirty (30) days prior to the date of the meeting at which the Commission will consider the proposed adjustment. The notice will include the date, time and place of the Commission meeting. 3. The SFPUC shall prepare and provide to each Wholesale Customer and to BAWSCA the following materials: (a) a table illustrating how the increase or decrease in the Wholesale Revenue Requirement and wholesale rates were calculated, substantially in the form of Attachment N-1, (b) a schedule showing the projected expenses included in the Wholesale Revenue Requirement for the fiscal year for which the rates are being proposed, and supporting materials, substantially in the form of Attachment N-2, and (c) a schedule showing projected water sales, Wholesale Revenue Requirements and wholesale rates for the fiscal year for which rates are being set and the following four years, substantially in the form of Attachment N-3. These materials will be included with the notification required by Section 6.03.A.2. 4. Rate adjustments will be effective no sooner than thirty (30) days after adoption of the wholesale rate by the Commission. 5. San Francisco will use its best efforts to provide the Wholesale Customers with the information described above. San Francisco's failure to comply with the requirements set forth in this section shall not invalidate any action taken by the Commission (including, but not limited to, any rate increase or decrease adopted). In the event of such failure, the Wholesale Customers may either invoke arbitration, as set forth in Section 8.01, or seek injunctive relief, to compel San Francisco to remedy the failure as soon as is reasonably practical, and San Francisco shall be free to oppose the issuance of the requested judicial or arbitral relief on any applicable legal or equitable basis. The existence of this right to resort to arbitration shall not be deemed to preclude the right to seek injunctive relief. 6. Because delays in the budget process or other events may cause San Francisco to defer the effective date of Wholesale Customer rate adjustments until after the beginning of San Francisco's fiscal year, nothing contained in this Agreement shall require San Francisco to make any changes in the water rates charged to Wholesale Customers effective at 60 the start of San Francisco's fiscal year or at any other specific date. Nothing in the preceding sentence shall excuse non-compliance with the provisions of Section 6.02 and this section. B. Emergency Rate Increases. The Commission may adjust the Wholesale Customers’ rates without complying with the requirements of Section 6.03.A in response to an Emergency that damages the Regional Water System and disrupts San Francisco’s ability to maintain normal deliveries of water to Retail and Wholesale Customers. In such an Emergency, the Commission may adopt an emergency rate surcharge applicable to Wholesale Customers without following the procedures set forth in this section, provided that any such rate surcharge imposed by the Commission shall be applicable to both Retail and Wholesale Customers and incorporate the same percentage increase for all customers. Any emergency rate surcharge adopted by the Commission shall remain in effect only until the next-budget coordinated rate- setting cycle. C. Drought Rates. If the Commission declares a water shortage emergency under Water Code Section 350, implements the Tier 1 Shortage Plan (Attachment H) described in Section 3.11.C, and imposes drought rates on Retail Customers, it may concurrently adjust wholesale rates independently of coordination with the annual budget process. Those adjustments may be designed to encourage water conservation and may constitute changes to the structure of the rates within the meaning of Section 6.04. The parties agree, however, that, in adopting changes in rates in response to a declaration of water shortage emergency, the Commission shall comply with Section 6.03.A.1 and 2 but need not comply with Section 6.04.B. Drought Rate payments and payments of excess use charges levied in accordance with the Tier 1 Shortage Plan described in Section 3.11.C constitute Wholesale Customer Revenue and count towards the Wholesale Revenue Requirement. The SFPUC may use these revenues to purchase additional water for the Wholesale Customers from the State Drought Water Bank or other willing seller. 6.04. Rate Structure A. This Agreement is not intended and shall not be construed to limit the Commission’s right (a) to adjust the structure of the rate schedule applicable to the Wholesale Customers (i.e., the relationship among the several charges set out therein) or (b) to add, delete, or change the various charges which make up the rate schedule, provided that neither such charges nor the structure of the rate schedule(s) applicable to the Wholesale Customers shall be arbitrary, unreasonable, or unjustly discriminatory as among said customers. The 61 SFPUC will give careful consideration to proposals for changes in the rate schedule made jointly by the Wholesale Customers but, subject to the limitations set out above, shall retain the sole and exclusive right to determine the structure of the rate schedule. B. If the SFPUC intends to recommend that the Commission adopt one or more changes to the structure of wholesale rates (currently set forth in SFPUC Rate Schedule W-25), it shall prepare and distribute to the Wholesale Customers and BAWSCA a report describing the proposed change(s), the purpose(s) for which it/they are being considered, and the estimated financial effect on individual Wholesale Customers or classes of customers. Wholesale Customers may submit comments on the report to the SFPUC for sixty (60) days after receiving the report. The SFPUC will consider these comments and, if it determines to recommend that the Commission adopt the change(s), as described in the report or as modified in response to comments, the SFPUC General Manager shall submit a report to the Commission recommending specific change(s) in the rate structure. Copies of the General Manager’s report shall be sent to all Wholesale Customers and BAWSCA at least thirty (30) days prior to the Commission meeting at which the changes will be considered. C. The SFPUC may recommend, and the Commission may adopt, changes in the structure of wholesale rates at any time. However, the new rate schedule implementing these changes will become effective at the beginning of the following fiscal year. 6.05. Balancing Account A. Balancing Account Established Under 1984 Agreement. The amount of credit in favor of San Francisco as of the expiration of the term of 1984 Agreement (June 30, 2009) is not known with certainty as of preparation and execution of this Agreement. It will not be known with certainty until the Compliance Audit for FY 2008-09 is completed and disputes, if any, that the Wholesale Customers or the SFPUC may have with the calculation of the Suburban Revenue Requirement for that fiscal year and for previous fiscal years have been settled or decided by arbitration. The parties anticipate that the amount of the credit in favor of San Francisco as of June 30, 2009 may be within the range of $15 million to $20 million. In order to reduce the credit balance due San Francisco under the 1984 Agreement in an orderly manner, while avoiding unnecessary fluctuations in wholesale rates, the parties agree to implement the following procedure. 62 1. In setting wholesale rates for FY 2009-10, SFPUC will include a balancing account repayment of approximately $2 million. 2. In setting wholesale rates for FY 2010-11 and following years, SFPUC will include a balancing account repayment of not less than $2 million and not more than $5 million annually until the full amount of the balance due, plus interest at the rate specified in Section 6.05.B, is repaid. 3. The actual ending balance as of June 30, 2009 will be determined, by the parties’ agreement or arbitral ruling, after the Compliance Audit report for FY 2008-09 is delivered to BAWSCA. That amount, once determined, will establish the principal to be amortized through subsequent years’ repayments pursuant to this Section 6.05.A. B. Balancing Account Under This Agreement 1. Operation. After the close of each fiscal year, the SFPUC will compute the costs allocable to the Wholesale Customers for that fiscal year pursuant to Article 5, based on actual costs incurred by the SFPUC and actual amounts of water used by the Wholesale Customers and the Retail Customers. That amount will be compared to the amounts billed to the Wholesale Customers for that fiscal year (including any Excess Use Charges, but excluding revenues described in Section 5.10.C). The difference will be posted to a “balancing account” as a credit to, or charge against, the Wholesale Customers. Interest shall also be posted to the balancing account calculated by multiplying the amount of the opening balance by the average net interest rate, certified by the Controller as earned in the San Francisco Treasury for the previous fiscal year on the San Francisco County Pooled Investment Account. Interest, when posted, will carry the same mathematical sign (whether positive or negative) as carried by the opening balance. The amount posted to the balancing account in each year shall be added to, or subtracted from, the balance in the account from previous years. The calculation of the amount to be posted to the balancing account shall be included in the report prepared by the SFPUC pursuant to Section 7.02. The opening balance for fiscal year 2009-10 shall be zero. 2. Integration of Balancing Account with Wholesale Rate Setting Process. If the amount in the balancing account is owed to the Wholesale Customers (a positive balance), the SFPUC shall take it into consideration in establishing wholesale rates. However, the SFPUC need not apply the entire amount to reduce wholesale rates for the immediately ensuing 63 year. Instead, the SFPUC may prorate a positive ending balance over a period of up to three successive years in order to avoid fluctuating decreases and increases in wholesale rates. a. If a positive balance is maintained for three successive years and represents 10 percent or more of the Wholesale Revenue Requirement for the most recent fiscal year, the SFPUC shall consult with BAWSCA as to the Wholesale Customers’ preferred application of the balance. The Wholesale Customers shall, through BAWSCA, direct that the positive balance be applied to one or more of the following purposes: (a) transfer to the Wholesale Revenue Coverage Reserve, (b) amortization of any remaining negative balance from the ending balancing account under the 1984 Agreement, (c) prepayment of the existing asset balance under Section 5.03, (d) water conservation or water supply projects administered by or through BAWSCA, (e) immediate reduction of wholesale rates, or (f) continued retention for future rate stabilization purposes. In the absence of a direction from BAWSCA, the SFPUC shall continue to retain the balance for rate stabilization in subsequent years. b. If the amount in the balancing account is owed to the SFPUC (a negative balance), the SFPUC shall not be obligated to apply all or any part of the negative balance in establishing wholesale rates for the immediately ensuring year. Instead, the SFPUC may prorate the negative balance in whole or in part over multiple years in order to avoid fluctuating increases and decreases in wholesale rates. 6.06. Wholesale Revenue Coverage Reserve A. The SFPUC may include in wholesale rates for any fiscal year an additional dollar amount (“Wholesale Revenue Coverage”), which for any fiscal year shall equal the following: 1. The lesser of (i) 25% of the Wholesale Customers’ share of Net Annual Debt Service for that fiscal year determined as described in Section 5.04.A, or (ii) the amount necessary to meet the Wholesale Customers’ proportionate share of Debt Service coverage required by then-current Indebtedness for that fiscal year, minus 2. A credit for (i) the actual amounts previously deposited in the “Wholesale Revenue Coverage Reserve” (as defined in subsection B below), (ii) accrued interest on the amounts on deposit in the Wholesale Revenue Coverage Reserve, and (iii) an amount equal to any additional interest that would have accrued on the actual amounts previously deposited in the Wholesale Revenue Coverage Reserve assuming no withdrawals had been made therefrom. 64 B. During each fiscal year, the SFPUC will set aside and deposit that portion of revenue equal to Wholesale Revenue Coverage into a separate account that the SFPUC will establish and maintain, to be known as the “Wholesale Revenue Coverage Reserve.” Deposits into the Wholesale Revenue Coverage Reserve shall be made no less frequently than monthly. The Wholesale Revenue Coverage Reserve shall be credited with interest at the rate specified in Section 6.05.B. The SFPUC may use amounts in the Wholesale Revenue Coverage Reserve for any lawful purpose. Any balance in the Wholesale Revenue Coverage Reserve in excess of the Wholesale Revenue Coverage amount as of the end of any fiscal year (as calculated in subsection 6.06(A) above) shall be applied as a credit against wholesale rates in the immediately following fiscal year unless otherwise directed by BAWSCA. C. Within 180 days following the later of expiration of the Term or final payment of Debt Service due on Indebtedness issued during the Term to which Wholesale Customers were contributing, SFPUC shall rebate to the Wholesale Customers an amount equal to the Wholesale Revenue Coverage amount in effect for the fiscal year during which the Term expires or the final payment of Debt Service on Indebtedness is made based on each Wholesale Customer’s Proportional Annual Use in the fiscal year during which the Term expires or the final payment of debt service on Indebtedness is made. D. SFPUC shall provide a schedule of debt issuance (with assumptions), and the Wholesale Customers’ share of Net Annual Debt Service (actual and projected) expected to be included in wholesale rates starting in 2009-10 through the expected completion of the WSIP. The schedule is to be updated annually prior to rate setting. If estimated Debt Service is used in rate setting, the SFPUC must be able to demonstrate that the Water Enterprise revenues will be sufficient to meet the additional bonds test for the proposed bonds and rate covenants for the upcoming year. E. Conditions in the municipal bond market may change from those prevailing in 2009. If, prior to expiration of the Term, the SFPUC determines that it would be in the best financial interest of both Retail Customers and Wholesale Customers of the Regional Water System for the Debt Service coverage requirement to be increased in one or more series of proposed new Indebtedness above 1.25%, or for the coverage covenant to be strengthened in other ways, it will provide a written report to BAWSCA. The report will contain (1) a description of proposed covenant(s) in the bond indenture; (2) an explanation of how savings are expected to be achieved (e.g., increase in the SFPUC’s credit rating over the then-current level; ability to 65 obtain credit enhancement, etc.); (3) the estimated all-in true interest cost savings; (4) a comparison of the Wholesale Revenue Requirements using the Debt Service coverage limitation in subsection A and under the proposed methodology; and (5) a comparison of the respective monetary benefits expected to be received by both Retail and Wholesale Customers. The SFPUC and BAWSCA agree to meet and confer in good faith about the proposed changes. F. Any increase in Debt Service coverage proposed by the SFPUC shall be commensurate with Proportional Water Use by Retail and Wholesale Customers. If the SFPUC demonstrates that an increase in Debt Service coverage will result in equivalent percentage reductions in total Wholesale and Retail Debt Service payments over the life of the proposed new Indebtedness, based on Proportional Water Use, BAWSCA may agree to a modification of the Wholesale Revenue Coverage requirement in subsection A. If BAWSCA does not agree to a proposed modification in coverage requirements in the covenants for new Indebtedness, SFPUC may nevertheless proceed with the modification and the issuance of new Indebtedness. Any Wholesale Customer, or BAWSCA, may challenge an increase in the Wholesale Revenue Requirement resulting from the modification in Debt Service coverage through arbitration as provided in Section 8.01.A. If the arbitrator finds that the increase in Debt Service coverage (1) did not and will not result in equivalent percentage reductions in total Wholesale and Retail Debt Service payments over the life of the proposed new Indebtedness, based on Proportional Water Use, or (2) was not commensurate with Proportional Water Use, the arbitrator may order the Wholesale Revenue Requirement to be recalculated both retrospectively and prospectively to eliminate the differential impact to Wholesale or Retail Customers, subject to the limitation in Section 8.01.C. 6.07. Working Capital Requirement A. The SFPUC maintains working capital in the form of unappropriated reserves for the purpose of bridging the gap between when the SFPUC incurs operating expenses required to provide service and when it receives revenues from its Retail and Wholesale Customers. The Wholesale Customers shall fund their share of working capital as part of the annual Wholesale Revenue Requirement calculation. The amount of wholesale working capital for which the Wholesale Customers will be responsible will be determined using the 60-day standard formula approach. B. Applying this approach, annual wholesale working capital equals one-sixth of the wholesale allocation of operation and maintenance, administrative and general, and property tax 66 expenses for the Water and Hetch Hetchy Enterprises. Wholesale working capital shall be calculated separately for the Water and Hetch Hetchy Enterprises. C. Each month, the sum of the Water Enterprise and Hetch Hetchy Enterprise working capital components will be compared with the ending balance in the Wholesale Revenue Coverage Reserve to determine if the Wholesale Customers provided the minimum required working capital. If the Wholesale Revenue Coverage Reserve is greater than the total Water Enterprise and Hetch Hetchy Enterprise working capital requirement, the Wholesale Customers will have provided their share of working capital. If the Wholesale Revenue Coverage Reserve is less than the total Water Enterprise and Hetch Hetchy Enterprise working capital requirement, the Wholesale Customers will be charged interest on the difference, which will be included in the adjustment to the Balancing Account under Section 6.05.B for the subsequent fiscal year. 6.08. Wholesale Capital Fund A. The SFPUC currently funds revenue-funded capital projects through annual budget appropriations that are included in rates established for that fiscal year and transferred to a capital project fund from which expenditures are made. Consistent with the San Francisco Charter and Administrative Code, the SFPUC appropriates funds in advance of construction in order to maintain a positive balance in the capital project fund. The capital project fund also accrues interest and any unspent appropriations in excess of total project costs. It is the SFPUC’s practice to regularly monitor the capital project fund balance to determine whether a surplus has accumulated, which can be credited against the next fiscal year’s capital project appropriation. B. The SFPUC shall establish a comparable Wholesale Revenue-Funded Capital Fund (Wholesale Capital Fund) to enable the Wholesale Customers to fund the wholesale share of revenue-funded New Regional Assets. The Wholesale Capital Fund balance is zero as of July 1, 2009. The SFPUC may include in wholesale rates for any fiscal year an amount equal to the wholesale share of the SFPUC’s appropriation for revenue funded New Regional Assets for that year, which sum will be credited to the Wholesale Capital Fund. The wholesale share of other sources of funding, where legally permitted and appropriately accounted for under GAAP, will also be credited to the Wholesale Capital Fund, together with interest earnings on the Wholesale Capital Fund balance. 67 C. The SFPUC will expend revenues appropriated and transferred to the Wholesale Capital Fund only on New Regional Assets. The annual capital appropriation included in each fiscal year’s budget will be provided to BAWSCA in accordance with Section 6.02 and will take into account the current and projected balance in the Wholesale Capital Fund, as well as current and projected unexpended and unencumbered surplus, as shown on attachment M-1, which will be prepared by the SFPUC each year. D. Commencing on November 30, 2010 and thereafter in each fiscal year during the Term, the SFPUC will also provide an annual report to BAWSCA on the status of individual revenue-funded New Regional Assets, substantially in the form of Attachment M-2. E. In order to prevent the accumulation of an excessive unexpended and unencumbered surplusbalance in the Wholesale Capital Fund, the status of the fund balance will be reviewed through the annual Compliance Audit at five-year intervals, commencing in FY 2018-19. The FY 2018-19 Compliance Audit and the Wholesale Customer/BAWSCA review under Section 7.06 shall include Wholesale Capital Fund appropriations, expenditures and interest earnings for FY 2014-15. Any excess fund balance (i.e., an accumulated unexpended, through 2017-18 for the purpose of determining whether a Balancing Account transfer is required. If the June 30 unencumbered amount in excess of ten percent (10%)balance of the wholesale share of total capital appropriations for New Regional Assets during the five preceding years) willWholesale Capital Fund exceeds the lesser of the following: (i) the Target Balance; (ii) the unencumbered remaining cumulative appropriations, the amount of such excess shall be transferred to the credit of the Wholesale Customers to the Balancing Account described in Section 6.05. Attachment M-3 illustrates the operation of this review process, covering FY 2009-10 through FY 2013-14 and FY 2014-15 through 2018-19. In order to avoid funding delays for New Regional Asset capital projects resulting from prior year transfers of excess Wholesale Capital fund balances to the Wholesale Customers, if the June 30 unencumbered balance of the Wholesale Capital Fund is below the lesser of the following: (i) the Target Balance; (ii) the unencumbered remaining cumulative appropriation, such deficiency shall be posted to the Balancing Account described in Section 6.05 as a charge to the Wholesale Customers. Notwithstanding the foregoing, no such charge to the Wholesale Customers shall exceed $4 million annually. Amended Attachment M-3 illustrates the process for determining the Wholesale Capital Fund balance as of June 30, 2019. 68 I.F. Three years prior to the end of the Term, the SFPUC and BAWSCA will discuss the disposition of the Wholesale Capital Fund balance at the end of the Term. Absent agreement, any balance remaining in the Wholesale Capital Fund at the end of the Term shall be transferred to the Balancing Account, to the credit of the Wholesale Customers. 6.09. SFPUC Adoption of Regional Water System 10-Year Capital Improvement Program A. Established Level of Service Goals and Objectives. In approving the WSIP, the Commission adopted Level of Service Goals and Objectives that are, in part, used to develop capital programs related to water, including the 10-Year Capital Improvement Program for the Regional Water System (“10-Year CIP”). BAWSCA and the Wholesale Customers shall have the opportunity to review and provide written or oral comments on any changes to the Level of Service Goals and Objectives that may be submitted to the Commission for approval. B. Submittal of an Asset Management Policy. Prior to December 31, 2020, the SFPUC shall develop and submit to the Commission for approval an Asset Management Policy applicable to the Regional Water System. C. Coordination of 10-Year CIP and SFPUC Budget Meetings. The Commission annually reviews, updates, and adopts a 10-Year CIP pursuant to Section 8B.123 of the San Francisco Charter. At two-year intervals, the Commission holds two budget meetings concerning the 10-Year CIP. Over the course of the two budget meetings, the SFPUC reviews its budget priorities, potential changes to projects in the previously adopted 10-Year CIP, and the potential financial implications of such changes. In the event that Charter amendments are placed on the ballot that could alter or amend the City’s budget preparation and adoption efforts, BAWSCA shall be notified in advance of any proposed change that could result in a less robust CIP development effort, and BAWSCA and the SFPUC shall meet to consider BAWSCA’s comments on maintaining a robust CIP development effort. D. Mid-cycle Changes to the 10-Year CIP. The SFPUC shall include within the Water Enterprise Capital Improvement Program Quarterly Projects Reports that it provides to the Commission (“CIP Quarterly Projects Reports”) discussion of any material changes proposed to projects that are included in the most recently adopted 10-Year CIP. The SFPUC defines a material change as a change that applies to a CIP project whose approved CIP budget is equal to or greater than $5,000,000 that results in one or more of the following: 69 1. Increases the cost of the CIP project by more than 10%. 2. Increases the schedule of the CIP project by extending said schedule by 12 calendar months or greater. 3. Affects the SFPUC’s ability to meet the Level of Service Goals and Objectives. The SFPUC shall also include within the CIP Quarterly Projects Reports discussion of any new capital project that is not included in the most recently adopted 10-Year CIP if the SFPUC has 1) begun spending on the project and 2) anticipates that it will require total funding in excess of $5,000,000. For such projects, the parties recognize that the work may be of an urgent nature and that details of those projects may be developing quickly to address a critical need. The SFPUC commits that, for these projects, an expanded discussion will be provided in quarterly reports generated 6 months following the creation of the project in the City’s finance and accounting system. At a minimum, the discussion will include: 1) a detailed scope of work, 2) schedule, 3) cost breakdown, and 4) proposed source of funding. This level of detail shall continue to be included in subsequent quarterly reports through either the completion of the work or until the work is included as part of an adopted 10-Year CIP. E. BAWSCA and Wholesale Customer Notice and Review. Beginning in 2020, at least 30 days before the first budget meeting, the SFPUC shall provide BAWSCA and the Wholesale Customers with written notice of the dates of the two budget meetings. At least 30 days before the first budget meeting, the SFPUC shall also provide BAWSCA and the Wholesale Customers with a draft of the 10-Year CIP and meet with those same parties to review potential candidate projects that it is considering for inclusion in the 10-Year CIP. Final materials for the first budget meeting will be made available to BAWSCA and the Wholesale Customers no less than 14 days prior to that budget meeting. Final materials for the second budget meeting will be made available to BAWSCA and the Wholesale Customers on the same date that they are made available to the Commission. Prior to the Commission’s adoption of the 10-Year CIP at the second budget meeting, San Francisco shall respond, in writing, to all written comments by BAWSCA and the Wholesale Customers on the 10-Year CIP that were submitted prior to the date of the first budget meeting. F. Contents of Draft 10-Year CIP – Projects in Years One and Two of 10-Year Schedule. The SFPUC’s CIP projects generally fall into three categories: defined projects, placeholder concepts that could become projects, and programmatic spending for expenses 70 likely to be made but for which there is no schedule. Projects in the near-term years of the 10- Year CIP have more definition than those in the outer years, and as a result more detailed information is available for them. For each project listed that has significant expected expenditures identified in the first two years of the 10-Year CIP, the draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall include the following elements: 1. Project name. 2. Project description and justification. 3. Description of the project’s relationship to the Level of Service Goals and Objectives. 4. Project asset classification for cost-allocation purposes, pursuant to Attachment R for Hetch Hetchy Enterprise assets, or as Regional or Retail for Water Enterprise assets. 5. Project schedule where applicable, broken down by phase, through to completion. 6. Total project budget estimate including a proposed inflation rate. G. Contents of Draft 10-Year CIP – Projects Listed After First Two Years of 10- Year Schedule. For each project that is listed in years three through ten of the 10-Year CIP, the draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall include the following elements: 1. Project name. 2. Project description and justification. 3. Description of the project’s relationship to the Level of Service Goals and Objectives. 4. Project asset classification for cost-allocation purposes, pursuant to Attachment R for Hetch Hetchy Enterprise assets, or as Regional or Retail for Water Enterprise assets. 5. Project schedule information that forms the basis for project planning if available. 6. Total project budget estimate. H. Additional Contents of Draft 10-Year CIP. The draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall also include the following: 71 1. A discussion of any changes to projects in the previously adopted 10- Year CIP, the reasons for such changes, any impact of the proposed changes on the SFPUC’s ability to achieve the Level of Service Goals and Objectives, and the SFPUC’s proposal for meeting the specific Level of Service Goals and Objectives in question. 2. A discussion of factors that have influenced the 10-Year CIP budget or identified projects, or have the potential to influence the overall budget or the number, cost and scale of identified projects, such as rate increase considerations, local rate setting policies, etc. 3. A discussion of how the CIP will be staffed. 4. A cash flow estimate for each project included as part of the first five years of the 10-Year CIP that considers historical spending and changes in the amount of work to be done. 5. Project spreadsheets that separate new projects from existing projects. 6. A summary roll-up for Regional costs, including all programmatic costs budgeted in the 10-Year CIP. I. Quarterly Reporting and Meetings. 1. CIP Quarterly Projects Reports. The SFPUC shall include within the CIP Quarterly Projects Reports a detailed status update of each Regional project in the 10-Year CIP that has an estimated cost greater than $5 million and a summary of the work completed to date for such projects. The CIP Quarterly Projects Reports shall focus on the first two years’ projects in the 10-Year CIP, but shall also demonstrate a connection to the 10-Year CIP asset classification and the Level of Service Goals and Objectives. The CIP Quarterly Projects Reports shall identify any Regional project in the 10-Year CIP with an estimated cost greater than $5 million that is behind schedule, and, for each project so identified, shall describe the SFPUC’s plan and timeline for either making up the delay or adopting a revised project schedule. In each fourth quarter of the fiscal year CIP Quarterly Projects Report, the SFPUC will also address the status of Regional projects in the 10-Year CIP that have an estimated cost of less than $5 million, noting any such projects that are behind schedule and describing the SFPUC’s plan and timeline for either making up the delay or adopting a revised project schedule. 72 2. Quarterly Meetings. If requested by BAWSCA, the SFPUC shall hold quarterly meetings with BAWSCA to review each CIP Quarterly Projects Report, during which the SFPUC shall present information and detail about the individual projects and overall implementation of the 10-Year CIP, as well as the need for re-prioritization and/or the proposal of new candidate projects for consideration as part of the next update of the 10-Year CIP. As part of the meeting held in each fourth quarter of the fiscal year, the SFPUC shall provide additional information and detail regarding the CIP development schedule and associated coordination proposed with BAWSCA. 73 Article 7. Accounting Procedures; Compliance Audit 7.01. SFPUC Accounting Principles, Practices A. Accounting Principles. San Francisco will maintain the accounts of the SFPUC and the Water and Hetch Hetchy Enterprises in conformity with Generally Accepted Accounting Principles. San Francisco will apply all applicable pronouncements of the Governmental Accounting Standards Board (GASB) as well as statements and interpretations of the Financial Accounting Standards Board and Accounting Principles Board opinions issued on or before March 30, 1989, unless those pronouncements or opinions conflict with GASB pronouncements. B. General Rule. San Francisco will maintain the accounting records of the SFPUC and the Water and Hetch Hetchy Enterprises in a format and level of detail sufficient to allow it to determine the annual Wholesale Revenue Requirement in compliance with this Agreement and to allow its determination of the Wholesale Revenue Requirement to be audited as provided in Section 7.04. C. Water Enterprise. San Francisco will maintain an account structure which allows utility plant and operating and maintenance expenses to be segregated by location (inside San Francisco and outside San Francisco) and by function (Direct Retail, Regional and Direct Wholesale). D. Hetch Hetchy Enterprise. San Francisco will maintain an account structure which allows utility plant and operating and maintenance expenses to be segregated into Water Only, Power Only and Joint categories. E. SFPUC. San Francisco will maintain an account structure which allows any expenses of SFPUC bureaus that benefit only the Wastewater Enterprise, the Power-Only operations of the Hetch Hetchy Enterprise or Retail Customers to be excluded from the Wholesale Revenue Requirement. F. Utility Plant Ledgers. San Francisco will maintain subsidiary plant ledgers for the Water and Hetch Hetchy Enterprises that contain unique identifying numbers for all assets included in the rate base and identify the original cost, annual depreciation, accumulated depreciation, date placed in service, useful life, salvage value if any, source of funding (e.g., bond series, revenues, grants), and classification for purposes of this Agreement. 74 G. Debt. San Francisco will maintain documentation identifying: 1. The portion of total bonded debt outstanding related to each series of each bond issue. 2. The portion of total interest expense related to each series of each bond issue. 3. The use of proceeds of each bond issue (including proceeds of commercial paper and/or other interim financial instruments redeemed or expected to be redeemed from bonds and earnings on the proceeds of financings) in sufficient detail to determine, for each bond issue, the proceeds and earnings of each (including proceeds and earnings of interim financing vehicles redeemed by a bond issue) and the total amounts expended on Direct Retail improvements and the total amounts expended on Regional improvements. H. Changes in Accounting. Subject to subsections A thru G, San Francisco may change the chart of accounts and accounting practices of the SFPUC and the Water and Hetch Hetchy Enterprises. However, the allocation of any expense to the Wholesale Customers that is specified in the Agreement may not be changed merely because of a change in (1) the accounting system or chart of accounts used by SFPUC, (2) the account to which an expense is posted or (3) a change in the organizational structure of the SFPUC or the Water or Hetch Hetchy Enterprises. I. Audit. San Francisco will arrange for an audit of the financial statements of Water and Hetch Hetchy Enterprises to be conducted each year by an independent certified public accountant, appointed by the Controller, in accordance with Generally Accepted Auditing Standards. 7.02. Calculation of and Report on Wholesale Revenue Requirement A. Within five months after the close of each fiscal year, San Francisco will prepare a report showing its calculation of the Wholesale Revenue Requirement for the preceding fiscal year and the change in the balancing account as of the end of that fiscal year. The first such report will be prepared by November 30, 2010 and will cover fiscal year 2009-10 and the balancing account as of June 30, 2010. B. The report will consist of the following items: 75 1. Statement of changes in the balancing account for the fiscal year being reported on, and for the immediately preceding fiscal year, substantially in the form of Attachment O. 2. Detailed supporting schedules 8.1 through 8.2 substantially in the form of Attachment N-2. 3. Description and explanation of any changes in San Francisco’s accounting practices from those previously in effect. 4. Explanation of any line item of expense (shown on Attachment N-2, schedules 1 and 4) for which the amount allocated to the Wholesale Customers increased by (a) ten percent or more from the preceding fiscal year, or (b) more than $1,000,000. 5. Representation letter signed by the SFPUC General Manager and by other SFPUC financial staff shown on Attachment P, as the General Manager may direct, subject to change in position titles at the discretion of the SFPUC. C. The report will be delivered to the BAWSCA General Manager by the date identified in Subsection A. 7.03. Once the report has been delivered to BAWSCA, San Francisco will, upon request: 1. Provide BAWSCA with access to, and copies of, all worksheets and supporting documents used or prepared by San Francisco during its calculation of the Wholesale Revenue Requirement; 2. Make available to BAWSCA all supporting documentation and calculations used by San Francisco in preparing the report; and 3. Promptly provide answers to questions from BAWSCA staff about the report. 7.04. Appointment of Compliance Auditor A. Purpose. The purpose of this section is to provide for an annual Compliance Audit by an independent certified public accountant of the procedures followed and the underlying data used by San Francisco in calculating the Wholesale Revenue Requirement for the preceding fiscal year. The annual Compliance Audit shall also determine whether the Wholesale Revenue Requirement has been calculated in accordance with the terms of the Agreement and whether amounts paid by the Wholesale Customers in excess of or less than 76 the Wholesale Revenue Requirement have been posted to the balancing account, together with interest as provided in Section 6.05. B. Method of Appointment. The Controller shall select an independent certified public accountant (“Compliance Auditor”) to conduct the Compliance Audit described below. The Compliance Auditor may be the same certified public accountant engaged by the Controller to audit the financial statements of the Water and Hetch Hetchy Enterprises. Subject to approval by the Controller and the General Manager of the SFPUC, the Compliance Auditor shall have the authority to engage such consultants as it deems necessary or appropriate to assist in the audit. The terms of this Article shall be incorporated into the contract between San Francisco and the Compliance Auditor, and the Wholesale Customers shall be deemed to be third-party beneficiaries of said contract. 7.05. Conduct of Compliance Audit A. Standards. The Compliance Auditor shall perform the Compliance Audit in accordance with Generally Accepted Auditing Standards. In particular, its review shall be governed by the standards contained in Section AU 623 (Reports on Specified Elements, Accounts or Items of a Financial Statement) of the AICPA, Professional Standards, as amended from time to time. B. Preliminary Meeting; Periodic Status Reports; Access to Data. Prior to commencing the audit, the Compliance Auditor shall meet with San Francisco and BAWSCA to discuss the audit plan, the procedures to be employed and the schedule to be followed. During the course of the audit, the Compliance Auditor shall keep San Francisco and BAWSCA informed of any unforeseen problems or circumstances which could cause a delay in the audit or any material expansion of the audit’s scope. The Compliance Auditor shall be given full access to all records of the SFPUC and the Water and Hetch Hetchy Enterprises that the Auditor deems necessary for the audit. C. Audit Procedures. The Compliance Auditor shall review San Francisco’s calculation of the Wholesale Revenue Requirement and the underlying data in order to carry out the purpose of the audit described in Section 7.03.A and to issue the report described in Section 7.05. At a minimum, the Compliance Auditor shall address the following: 77 1. Water Enterprise Operating and Maintenance Expenses. The Compliance Auditor shall review Water Enterprise cost ledgers to determine whether the recorded operating and maintenance expenses fairly reflect the costs incurred, were recorded on a basis consistent with applicable Generally Accepted Accounting Principles, and were allocated to the Wholesale Customers as provided in this Agreement. 2. Water Enterprise Administrative and General Expenses. The Compliance Auditor shall review Water Enterprise cost ledgers and other appropriate financial records, including those of the SFPUC, to determine whether the recorded administrative and general expenses fairly reflect the costs incurred by or allocated to the Water Enterprise, whether they were recorded on a basis consistent with applicable Generally Accepted Accounting Principles, whether SFPUC charges were allocated to the Water Enterprise in accordance with this Agreement, and whether the amount of administrative and general expenses allocated to the Wholesale Customers was determined as provided by this Agreement. 3. Property Taxes. The Compliance Auditor shall review Water Enterprise cost ledgers to determine whether the amount of property taxes shown on the report fairly reflects the property tax expense incurred by San Francisco for Water Enterprise property outside of San Francisco and whether there has been deducted from the amount to be allocated (1) all taxes actually reimbursed to San Francisco by tenants of Water Enterprise property under leases that require such reimbursement and (2) any refunds received from the taxing authority. The Compliance Auditor also shall determine whether the amount of property taxes allocated to the Wholesale Customers was determined as provided in this Agreement. 4. Debt Service. The Compliance Auditor shall review SFPUC records to determine whether debt service, and associated coverage requirements, were allocated to the Wholesale Customers as provided in this Agreement. 5. Amortization of Existing Assets in Service as of June 30, 2009. The Compliance Auditor shall review both Water and Hetch Hetchy Enterprise records to determine whether the payoff amount for Existing Assets allocated to the Wholesale Customers as shown on Attachment K-1 through K-4 was calculated as provided in Section 5.03 of this Agreement. 6. Revenue-Funded Capital Appropriations/Expenditures. The Compliance Auditor shall review San Francisco’s calculation of actual expenditures on the wholesale share of revenue-funded New Regional Assets and remaining unexpended and unencumbered project 78 balances in the “Wholesale Capital Fund” described in Section 6.08, to determine whether the procedures contained in that section were followed. 7. Hetch Hetchy Expenses. The Compliance Auditor shall determine whether Hetch Hetchy Enterprise expenses were allocated to the Wholesale Customers as provided in this Agreement. D. Use of and Reliance on Audited Financial Statements and Water Use Data 1. In performing the audit, the Compliance Auditor shall incorporate any adjustments to the cost ledgers recommended by the independent certified public accountant, referred to in Section 7.01.I, which audited the financial statements of the Water and Hetch Hetchy Enterprises. The Compliance Auditor may rely upon the work performed by that independent certified public accountant if the Compliance Auditor reviews the work and is willing to take responsibility for it as part of the compliance audit. 2. In performing the Compliance Audit and issuing its report, the Compliance Auditor may rely on water use data furnished by the Water Enterprise, regardless of whether the Wholesale Customers contest the accuracy of such data. The Compliance Auditor shall have no obligation to independently verify the accuracy of the water use data provided by San Francisco; however, the Compliance Auditor shall disclose in its report any information which came to its attention suggesting that the water use data provided by San Francisco are inaccurate in any significant respect. E. Exit Conference. Upon completion of the audit, the Compliance Auditor shall meet with San Francisco and BAWSCA to discuss audit findings, including (1) any material weakness in internal controls and (2) adjustments proposed by the Compliance Auditor and San Francisco’s response (i.e., booked or waived). 7.06. Issuance of Compliance Auditor’s Report A. San Francisco will require the Compliance Auditor to issue its report no later than nine months after the fiscal year under audit (i.e., March 31 of the following calendar year). The Compliance Auditor’s report shall be addressed and delivered to San Francisco and BAWSCA. The report shall contain: 79 1. A statement that the Auditor has audited the report on the calculation of the Wholesale Revenue Requirement and changes in the balancing account, and supporting documents, prepared by San Francisco as required by Section 7.02. 2. A statement that the audit was conducted in accordance with auditing standards generally accepted in the United States of America, and that the audit provides a reasonable basis for its opinion. 3. A statement that in the Compliance Auditor’s opinion the Wholesale Revenue Requirement was calculated by San Francisco in accordance with this Agreement and that the change in the balancing account shown in San Francisco’s report was calculated as required by this Agreement and presents fairly, in all material respects, changes in and the balance due to (or from) the Wholesale Customers as of the end of the fiscal year under audit. 7.07. Wholesale Customer Review A. One or more Wholesale Customers, or BAWSCA, may engage an independent certified public accountant (CPA) to conduct a review (at its or their expense) of San Francisco’s calculation of the annual Wholesale Revenue Requirement and a review of changes in the balancing account. B. If a Wholesale Customer or BAWSCA wishes such a review to be conducted it will provide written notice to SFPUC within 30 days of the date the Compliance Auditor’s report is issued. The notice will identify the CPA or accounting/auditing firm that will conduct the review and the specific aspects of the Compliance Auditor’s report that are the subject of the review. If more than one notice of review is received by the SFPUC, the requesting Wholesale Customers shall combine and coordinate their reviews and select a lead auditor to act on their behalf for the purposes of requesting documents and conducting on-site investigations. C. San Francisco will cooperate with the CPA appointed by a Wholesale Customer or BAWSCA. This cooperation includes making requested records promptly available, making knowledgeable SFPUC personnel available to timely and truthfully answer the CPA’s questions and directing the Compliance Auditor to cooperate with the CPA. D. The Wholesale Customer’s review shall be completed within 60 days after the date the Compliance Auditor’s report is issued. At the conclusion of the review, representatives of San Francisco and BAWSCA shall meet to discuss any differences between them concerning San Francisco’s compliance with Articles 5 or 6 of this Agreement during the preceding fiscal 80 year or San Francisco’s calculation of the Wholesale Revenue Requirement for the preceding fiscal year. If such differences cannot be resolved, the dispute shall be submitted to arbitration in accordance with Section 8.01. 81 Article 8. Other Agreements of the Parties 8.01. Arbitration and Judicial Review A. General Principles re Scope of Arbitration. All questions or disputes arising under the following subject areas shall be subject to mandatory, binding arbitration and shall not be subject to judicial determination: 1. the determination of the Wholesale Revenue Requirement, which shall include both the calculations used in the determination and the variables used in those calculations; 2. the SFPUC’s adherence to accounting practices and conduct of the Compliance Audit; and 3. the SFPUC’s classification of new or omitted assets for purposes of determining the Wholesale Revenue Requirement. All other questions or disputes arising under this Agreement shall be subject to judicial determination. Disputes about the scope of arbitrability shall be resolved by the courts. B. Demand for Arbitration. If any arbitrable question or dispute should arise, any Wholesale Customer or the SFPUC may commence arbitration proceedings hereunder by service of a written Demand for Arbitration. Demands for arbitration shall set forth all of the issues to be arbitrated, the general contentions relating to those issues, and the relief sought by the party serving the Demand. Within 45 days after service of a Demand upon it, any Wholesale Customer or the SFPUC may serve a Notice of Election to become a party to the arbitration and a Response to the issues set forth in the Demand. The Response shall include the party’s general contentions and defenses with respect to the claims made in the Demand, and may include any otherwise arbitrable claims, contentions and demands that concern the fiscal year covered by the Demand. If a timely Notice of Election and Response is not filed by any such entity, it shall not be a party to the arbitration but shall nonetheless be bound by the award of the arbitrator. If no party to this Agreement serves a timely Notice of Election and Response, the party seeking arbitration shall be entitled to the relief sought in its Demand for Arbitration without the necessity of further proceedings. Any claims not made in a Demand or Response shall be deemed waived. 82 If a Demand or Notice of Election is made by the SFPUC, it shall be served by personal delivery or certified mail to each Wholesale Customer at the address of such customer as set forth in the billing records of the SFPUC. If a Demand or Notice of Election is made by a Wholesale Customer, service shall be by certified mail or personal delivery to the General Manager, SFPUC, 1155 Market Street, 11th525 Golden Gate Avenue, 13th Floor, San Francisco, California 9410394102, and to each of the other Wholesale Customers. If arbitration is commenced, the Wholesale Customers shall use their best efforts to formulate a single, joint position with respect thereto. In any event, with respect to the appointment of arbitrators, as hereinafter provided, all Wholesale Customers that take the same position as to the issues to be arbitrated shall jointly and collectively be deemed to be a single party. C. Limitations Period. All Demands For Arbitration shall be served within twelve months of receipt by BAWSCA of the Wholesale Revenue Requirement Compliance Auditor’s Report for that year. If a party fails to file a Demand within the time period specified in this subsection, that party waives all present and future claims with respect to the fiscal year in question. If no such Demand is served within the twelve month period specified above, the SFPUC’s determination of the Wholesale Revenue Requirement for that year shall be final and conclusive. Whether any particular claim is barred by the twelve month limitations period provided for herein shall be for the arbitrator to determine. Prior to the expiration of the twelve month limitations period, the parties to the dispute may agree by written stipulation to extend the period by up to six additional months. The Arbitrator may order the alteration or recalculation of underlying Water Enterprise and/or Hetch Hetchy Enterprise accounts or asset classifications. Such changes shall be used to calculate the Wholesale Revenue Requirement for the fiscal year in dispute and shall also be used to determine future Wholesale Revenue Requirements, if otherwise applicable, even though the existing entries in such accounts or the asset classifications, in whole or in part, predate the twelve month period described above, so long as a timely arbitration Demand has been filed in accordance with this subsection. D. Number and Appointment of Arbitrators. All arbitration proceedings under this section shall be conducted by a single arbitrator, selected by the SFPUC and a designated representative of the Wholesale Customers or each group of Wholesale Customers that take the same position with respect to the arbitration, within 75 days after service of the Demand. If the parties to the arbitration cannot agree on an arbitrator within 75 days, any party may petition 83 the Marin County Superior Court for the appointment of an arbitrator pursuant to Code of Civil Procedure Section 1281.6 (or any successor provision). E. Guidelines for Qualifications of Arbitrators. The Wholesale Customers and the SFPUC acknowledge that the qualifications of the arbitrator will vary with the nature of the matter arbitrated, but, in general, agree that such qualifications may include service as a judge or expertise in one or more of the following fields: public utility law, water utility rate setting, water system and hydraulic engineering, utility accounting methods and practices, and water system operation and management. The parties to the arbitration shall use their best efforts to agree in advance upon the qualifications of any arbitrator to be appointed by the Superior Court. F. Powers of Arbitrator; Conduct of Proceedings 1. Except as provided in this section, arbitrations under this section shall be conducted under and be governed by the provisions of California Code of Civil Procedure Sections 1282.2 through 1284.2 (hereinafter, collectively, “Code sections”), and arbitrators appointed hereunder shall have the powers and duties specified by the Code sections. 2. Within the meaning of the Code sections, the term “neutral arbitrator” shall mean the single arbitrator selected by the parties to the arbitration. 3. Unless waived in writing by the parties to the arbitration, the notice of hearing served by the arbitrator shall not be less than 90 days. 4. The lists of witnesses (including expert witnesses), and the lists of documents (including the reports of expert witnesses) referred to in Code of Civil Procedure Section 1282.2 shall be mutually exchanged, without necessity of demand therefore, no later than 60 days prior to the date of the hearing, unless otherwise agreed in writing by the parties to the arbitration. Upon application of any party, or on his or her own motion, the arbitrator may schedule one or more prehearing conferences for the purposes of narrowing and/or expediting resolution of the issues in dispute. Strict conformity to the rules of evidence is not required, except that the arbitrator shall apply applicable law relating to privileges and work product. The arbitrator shall consider evidence that he or she finds relevant and material to the dispute, giving the evidence such weight as is appropriate. The arbitrator may limit testimony to exclude evidence that would be immaterial or unduly repetitive, provided that all parties are afforded the opportunity to present material and relevant evidence. 84 5. Within thirty days after the close of the arbitration hearing, or such other time as the arbitrator shall determine, the parties will submit proposed findings and a proposed remedy to the arbitrator. The parties may file objections to their adversary’s proposed findings and remedy within a time limit to be specified by the arbitrator. The arbitrator shall not base his or her award on information not obtained at the hearing. 6. The arbitrator shall render a written award no later than twelve months after the arbitrator is appointed, either by the parties or by the court, provided that such time may be waived or extended as provided in Code of Civil Procedure Section 1283.8. 7. The provisions for discovery set forth in Code of Civil Procedure Section 1283.05 are incorporated into and made part of this Agreement, except that: (a) leave of the arbitrator need not be obtained for the taking of depositions, including the depositions of expert witnesses; (b) the provisions of Code of Civil Procedure Section 2034.010 et seq., relating to discovery of expert witnesses, shall automatically be applicable to arbitration proceedings arising under this Agreement without the necessity for a formal demand pursuant to Section 2034.210 and the date for the exchange of expert discovery provided by Sections 2034.260 and 2034.270 shall be not later than 60 days prior to the date for the hearing; and (c) all reports, documents, and other materials prepared or reviewed by any expert designated to testify at the arbitration shall be discoverable. In appropriate circumstances, the arbitrator may order any party to this Agreement that is not a party to the arbitration to comply with any discovery request. 8. For the purposes of allocation of expenses and fees, as provided in Code of Civil Procedure Section 1284.2, if any two or more Wholesale Customers join together in a single, joint position in the arbitration, those Wholesale Customers shall be deemed to be a single party. If any Wholesale Customer or customers join together with the SFPUC in a single joint position in the arbitration, those Wholesale Customers and the SFPUC together shall be deemed to be a single party. 9. Subject to any other limitations imposed by the Agreement, the arbitrator shall have power to issue orders mandating compliance with the terms of the Agreement or enjoining violations of the Agreement. With respect to any arbitration brought to redress a claimed wholesale overpayment to the SFPUC, the arbitrator’s power to award monetary relief shall be limited to entering an order requiring that an adjustment be made in the amount posted to the balancing account for the fiscal year covered by the Demand. 85 10. All awards of the arbitrator shall be binding on the SFPUC and the Wholesale Customers regardless of the participation or lack thereof by any Wholesale Customer or the SFPUC as a party to the arbitration proceeding. The parties to an arbitration shall have the power to modify or amend any arbitration award by mutual consent. The arbitrator shall apply California law. 8.02. Attorneys’ Fees A. Arbitration or Litigation Between San Francisco and Wholesale Customers Arising under the Agreement or Individual Water Sales Contracts. Each party will bear its own costs, including attorneys’ fees, incurred in any arbitration or litigation arising under this Agreement or the Individual Water Sales Contracts between San Francisco and the Wholesale Customers. Notwithstanding the foregoing, and subject to the limitations contained herein, the SFPUC may allocate to the Wholesale Customers as an allowable expense, utilizing the composite rate used for allocating other Water Enterprise administrative and general expenses, any attorneys’ fees and costs incurred by the SFPUC in connection with arbitration and/or litigation arising under this Agreement and/or the Individual Water Sales Contracts. Attorneys’ fees incurred by the SFPUC for attorneys employed in the San Francisco City Attorney’s office shall be billed at the hourly rates charged for the attorneys in question by the San Francisco City Attorney’s Office to the SFPUC. Attorneys’ fees incurred by the SFPUC for attorneys other than those employed in the San Francisco City Attorney’s Office shall be limited to the hourly rates charged to the SFPUC for attorneys and paralegals with comparable experience employed in the San Francisco City Attorney’s office and in no event shall exceed the highest hourly rate charged by any attorney or paralegal employed in the City Attorney’s Office to the SFPUC. B. Arbitration or Litigation Outside of Agreement Concerning the SFPUC Water System or Reserved Issues 1. The attorneys’ fees and costs incurred by the SFPUC in litigation between San Francisco and one or more of the Wholesale Customers arising from matters outside of the Agreement, including, without limitation, litigation and/or arbitration concerning the issues specifically reserved in the Agreement, shall be allocated between the Retail Customers and the Wholesale Customers utilizing the composite rate used for allocating other Water Enterprise administrative and general expenses. 2. If, in any litigation described in subsection B.1 above, attorneys’ fees and costs are awarded to one or more of the Wholesale Customers as prevailing parties, the 86 SFPUC’s payment of the Wholesale Customers’ attorneys’ fees and costs shall not be an allowable expense pursuant to subsection A. 3. If, in any litigation described in subsection B.1, the SFPUC obtains an award of attorneys’ fees and costs as a prevailing party against one or more of the Wholesale Customers, any such award shall be reduced to offset the amount of the SFPUC’s fees and costs, if any, that have already been paid by the Wholesale Customers in the current or any prior fiscal years pursuant to subsection B.1 and the provisions of Articles 5 and 6 of the Agreement. 4. Nothing contained in this Agreement, including this subsection, shall authorize a court to award attorneys’ fees and costs to a prevailing party as a matter of contract and/or the provisions of Civil Code Section 1717, in litigation between San Francisco and one or more of the Wholesale Customers arising from matters outside of the Agreement, including, without limitation, litigation and/or arbitration concerning the issues specifically reserved in the Agreement. C. Attorneys Fees and Costs Incurred by the SFPUC in Connection with the Operation and Maintenance of the SFPUC Water Supply System. All attorneys’ fees and costs incurred by the SFPUC in connection with the operation and maintenance of the SFPUC’s water supply system shall be allocated between Retail Customers and the Wholesale Customers utilizing the composite rate used for allocating other Water Enterprise administrative and general expenses. 8.03. Annual Meeting and Report A. The parties wish to ensure that the Wholesale Customers may, in an orderly way, be informed of matters affecting the Regional Water System, including matters affecting the continuity and adequacy of their water supply from San Francisco. For this purpose, the General Manager of the SFPUC shall meet annually with the Wholesale Customers and BAWSCA during the month of February, commencing February 2010. At these annual meetings, the SFPUC shall provide the Wholesale Customers a report on the following topics: 1. Capital additions under construction or being planned for the Regional Water System, including the status of planning studies, financing plans, environmental reviews, permit applications, etc.; 87 2. Water use trends and projections for Retail Customers and Wholesale Customers; 3. Water supply conditions and projections; 4. The status of any administrative proceedings or litigation affecting San Francisco’s water rights or the SFPUC’s ability to deliver water from the watersheds which currently supply the Regional Water System; 5. Existing or anticipated problems with the maintenance and repair of the Regional Water System or with water quality; 6. Projections of Wholesale Revenue Requirements for the next five years; 7. Any other topic which the SFPUC General Manager places on the agenda for the meeting; 8. Any topic which the Wholesale Customers, through BAWSCA, request be placed on the agenda, provided that the SFPUC is notified of the request at least 10 days before the meeting. B. The General Manager of the SFPUC, the Assistant General Manager of the Water Enterprise, and the Assistant General Manager of Business Services-CFO will use their best efforts to attend the annual meetings. If one or more of these officers are unable to attend, they will designate an appropriately informed assistant to attend in their place. 8.04. Administrative Matters Delegated to BAWSCA A. The Wholesale Customers hereby delegate the authority and responsibility for performing the following administrative functions contemplated in this Agreement to BAWSCA: 1. Approval of calculations of Proportional Annual Water Use required by Section 3.14 and Attachment J, “Water Use Measurement and Tabulation”; 2. Approval of amendments to Attachments J and K-3 and K-4, “25-Year Payoff Schedules for Existing Rate Base”; 3. Agreement that the Water Meter and Calibration Procedures Manual to be prepared by the SFPUC may supersede some or all of the requirements in Attachment J, as described in Section 3.14; 88 4. Conduct of Wholesale Customer review of SFPUC’s calculation of annual Wholesale Revenue Requirement/Change in Balancing Account described in Section 7.06; 5. Approval of an adjustment to Wholesale Revenue Coverage as described in Section 6.06. B. A majority of the Wholesale Customers may, without amending this Agreement, delegate additional administrative functions to BAWSCA. To be effective, such expanded delegation must be evidenced by resolutions adopted by the governing bodies of a majority of the Wholesale Customers. In 2014, all twenty-six Wholesale Customers adopted resolutions delegating authority to BAWSCA to initiate, defend and settle arbitration for the matters that, pursuant to Section 8.01 of this Agreement, are subject to mandatory, binding arbitration. C. Unless otherwise explicitly stated, the administrative authority delegated to BAWSCA may be exercised by the General Manager/CEO of BAWSCA, rather than requiring action by the BAWSCA Board of Directors. In addition, the Wholesale Customers may, with the consent of BAWSCA, delegate to BAWSCA the initiation, defense, and settlement of arbitration proceedings provided for in Section 8.01. 8.05. Preservation of Water Rights; Notice of Water Rights Proceedings A. It is the intention of San Francisco to preserve all of its water rights, irrespective of whether the water held under such water rights is allocated under this Agreement. Nothing in this Agreement shall be construed as an abandonment, or evidence of an intent to abandon, any of the water rights that San Francisco presently possesses. B. San Francisco shall use its best efforts to give prompt notice to BAWSCA of any litigation or administrative proceedings to which San Francisco is a party involving water rights to the Regional Water System. The failure of San Francisco to provide notice as required by this section, for whatever reason, shall not give rise to any monetary liability. 8.06. SFPUC Rules and Regulations The sale and delivery of all water under this Agreement shall be subject to such of the “Rules and Regulations Governing Water Service to Customers” of the Water Enterprise adopted by the Commission, as those rules and regulations may be amended from time to time, as are (1) applicable to the sale and delivery of water to the 89 Wholesale Customers, (2) reasonable, and (3) not inconsistent with either this Agreement or with an Individual Water Sales Contract. The SFPUC will give the Wholesale Customers notice of any proposal to amend the Rules and Regulations in a manner that would affect the Wholesale Customers. The notice will be delivered at least thirty days in advance of the date on which the proposal is to be considered by the Commission and will be accompanied by the text of the proposed amendment. 8.07. Reservations of, and Limitations on, Claims A. General Reservation of Raker Act Contentions. The 1984 Agreement resolved a civil action brought against San Francisco by certain of the Wholesale Customers. Plaintiffs in that action contended that they, and other Wholesale Customers that are municipalities or special districts, were “co-grantees” within the meaning of Section 8 of the Act and were entitled to certain rights, benefits and privileges by virtue of that status. San Francisco disputed those claims. Nothing in this Agreement, or in the Individual Water Sales Contracts, shall be construed or interpreted in any way to affect the ultimate resolution of the controversy between the parties concerning whether any of the Wholesale Customers are “co-grantees” under the Act and, if so, what rights, benefits and privileges accrue to them by reason of that claimed status. B. Claims Reserved but not Assertable During Term or Portions Thereof. The following claims, which San Francisco disputes, are reserved but may not be asserted during the Term (or portions thereof, as indicated): 1. The Wholesale Customers’ claim that the Act entitles them to water at cost. 2. The Wholesale Customers’ claim that San Francisco is obligated under the Act or state law to supply them with additional water in excess of the Supply Assurance. This claim may not be asserted unless and until San Francisco decides not to meet projected water demands of Wholesale Customers in excess of the Supply Assurance pursuant to Section 4.06. 3. The claim by San Jose and Santa Clara that they are entitled under the Act, or any other federal or state law, to permanent, non-interruptible status and to be charged rates identical to those charged other Wholesale Customers. This claim may not be asserted 90 unless and until San Francisco notifies San Jose or Santa Clara that it intends to interrupt or terminate water deliveries pursuant to Section 4.05. 4. The Wholesale Customers’ claim that the SFPUC is not entitled to impose a surcharge for lost power generation revenues attributable to furnishing water in excess of the Supply Assurance. This claim may not be asserted unless and until SFPUC furnishes water in excess of the Supply Assurance during the Term and also includes such a surcharge in the price of such water. 5. Claims by Wholesale Customers (other than San Jose and Santa Clara, whose service areas are fixed) that SFPUC is obligated under the Act or state law to furnish water, within their Individual Supply Guarantee, for delivery to customers outside their existing service area and that Wholesale Customers are entitled to enlarge their service areas to supply those customers. Such claims may be asserted only after compliance with the procedure set forth in Section 3.03, followed by SFPUC’s denial of, or failure for six months to act on, a written request by a Wholesale Customer to expand its service area. C. Waived Activities. The Wholesale Customers (and the SFPUC, where specified) will refrain from the following activities during the Term (or portions thereof, as specified): 1. The Wholesale Customers and the SFPUC will not contend before any court, administrative agency or legislative body or committee that the methodology for determining the Wholesale Revenue Requirement (or the requirements for (a) amortization of the ending balance under the 1984 Agreement, or (b) contribution to the Wholesale Revenue Coverage) determined in accordance with this Agreement violates the Act or any other provision of federal law, state law, or San Francisco’s City Charter, or is unfair, unreasonable or unlawful. 2. The Wholesale Customers will not challenge the transfer of funds by the SFPUC to any other San Francisco City department or fund, provided such transfer complies with the San Francisco City Charter. The transfer of its funds, whether or not permitted by the City Charter, will not excuse the SFPUC from its failure to perform any obligation imposed by this Agreement. 3. The Wholesale Customers and the SFPUC will not assert monetary claims against one another based on the 1984 Agreement other than otherwise arbitrable claims arising from the three fiscal years immediately preceding the start of the Term (i.e., FYs 91 2006-07, 2007-08 and 2008-09). Such claims, if any, shall be governed by the dispute resolution provisions of this Agreement, except that the time within which arbitration must be commenced shall be 18 months from delivery of the Compliance Auditor’s report. D. Other 1. This Agreement shall determine the respective monetary rights and obligations of the parties with respect to water sold by the SFPUC to the Wholesale Customers during the Term. Such rights and obligations shall not be affected by any judgments or orders issued by any court in litigation, whether or not between parties hereto, and whether or not related to the controversy over co-grantee status, except for arbitration and/or litigation expressly permitted in this Agreement. No judicial or other resolution of issues reserved by this section will affect the Wholesale Revenue Requirement which, during the Term, will be determined exclusively as provided in Articles 5, 6 and 7 of this Agreement. 2. Because delays in the budget process or other events may cause the SFPUC to defer the effective date of changes in wholesale rates until after the beginning of the fiscal year, this Agreement does not require the SFPUC to make changes in wholesale rates effective at the start of the fiscal year or at any other specific date. 3. The Wholesale Customers do not, by executing this Agreement, concede the legality of the SFPUC’s establishing Interim Supply Allocations, as provided in Article 4 or imposing Environmental Enhancement Surcharges on water use in excess of such allocations. Any Wholesale Customer may challenge such allocation when imposed and/or such surcharges if and when levied, in any court of competent jurisdiction. 4. The furnishing of water in excess of the Supply Assurance by San Francisco to the Wholesale Customers shall not be deemed or construed to be a waiver by San Francisco of its claim that it has no obligation under any provision of law to supply such water to the Wholesale Customers, nor shall it constitute a dedication by San Francisco to the Wholesale Customers of such water. 8.08. Prohibition of Assignment A. This Agreement shall be binding on, and shall inure to the benefit of, the parties and their respective successors and permitted assigns. Each Wholesale Customer agrees that it will not transfer or assign any rights or privileges under this Agreement, either in whole or in part, or make any transfer of all or any part of its water system or allow the use thereof in any 92 manner whereby any provision of this Agreement will not continue to be binding on it, its assignee or transferee, or such user of the system. Any assignment or transfer in violation of this covenant, and any assignment or transfer that would result in the supply of water in violation of the Act, shall be void. B. Nothing in this section shall prevent any Wholesale Customer (except the California Water Service Company and Stanford) from entering into a joint powers agreement or a municipal or multi-party water district with any other Wholesale Customer (except the two listed above) to exercise the rights and obligations granted to and imposed upon the Wholesale Customers hereunder, nor shall this section prevent any Wholesale Customer (except the two listed above) from succeeding to the rights and obligations of another Wholesale Customer hereunder as long as the Wholesale Service Area served by the Wholesale Customers involved in the succession is not thereby enlarged. 8.09. Notices A. All notices and other documents that San Francisco is required or permitted to send to the Wholesale Customers under this Agreement shall be sent to each and all of the Wholesale Customers by United States mail, first class postage prepaid, addressed to each Wholesale Customer at the address to which monthly water bills are mailed by the Water Enterprise. B. All notices or other documents which the Wholesale Customers are required or permitted to send to San Francisco under this Agreement shall be sent by United States mail, first class postage prepaid, addressed as follows: General Manager San Francisco Public Utilities Commission 1155 Market Street, 11th525 Golden Gate Avenue, 13th Floor San Francisco, CA 9410394123 C. Each Wholesale Customer is a member of BAWSCA. San Francisco shall send a copy of each notice or other document which it is required to send to all Wholesale Customers to BAWSCA addressed as follows: General Manager/CEO Bay Area Water Supply and Conservation Agency 155 Bovet Road, Suite 302650 93 San Mateo, CA 94402 The failure of San Francisco to send a copy of such notices or documents to BAWSCA shall not invalidate any rate set or other action taken by San Francisco. D. Any party (or BAWSCA) may change the address to which notice is to be sent to it under this Agreement by notice to San Francisco (in the case of a change desired by a Wholesale Customer or BAWSCA ) and to the Wholesale Customer and BAWSCA (in the case of a change desired by San Francisco). The requirements for notice set forth in Section 8.01 concerning arbitration shall prevail over this section, when they are applicable. 8.10. Incorporation of Attachments Attachments A through QR, referred to herein, are incorporated in and made a part of this Agreement. 8.11. Interpretation In interpreting this Agreement, or any provision thereof, it shall be deemed to have been drafted by all signatories, and no presumption pursuant to Civil Code Section 1654 may be invoked to determine the Agreement’s meaning. The marginal headings and titles to the sections and paragraphs of this Agreement are not a part of this Agreement and shall have no effect upon the construction or interpretation of any part hereof. 8.12. Actions and Approvals by San Francisco Whenever action or approval by San Francisco is required or contemplated by this Agreement, authority to act or approve shall be exercised by the Commission, except if such action is required by law to be taken, or approval required to be given, by the San Francisco Board of Supervisors. The Commission may delegate authority to the General Manager in accordance with the San Francisco City Charter and Administrative Code, except for actions that this Agreement requires to be taken by the Commission. 8.13. Counterparts Execution of this Agreement may be accomplished by execution of separate counterparts by each signatory. San Francisco shall deliver its executed counterpart to BAWSCA and the counterpart which each Wholesale Customer executes shall be delivered to 94 San Francisco. The separate executed counterparts, taken together, shall constitute a single agreement. 8.14. Limitations on Damages A. Unless otherwise prohibited by this Agreement, general or direct damages may be recovered for a breach of a party’s obligations under this Agreement. No party is liable for, or may recover from any other party, special, indirect or consequential damages or incidental damages, including, but not limited to, lost profits or revenue. No damages may be awarded for a breach of Section 8.17. B. The limitations in subsection A apply only to claims for damages for an alleged breach of this Agreement. These limitations do not apply to claims for damages for an alleged breach of a legal duty that arises independently of this Agreement, established by constitution or statute. C. If damages would be an inadequate remedy for a breach of this Agreement, equitable relief may be awarded by a court in a case in which it is otherwise proper. D. This section does not apply to any claim of breach for which arbitration is the exclusive remedy pursuant to Section 8.01.A. 8.15. Force Majeure A. Excuse from Performance. No party shall be liable in damages to any other party for delay in performance of, or failure to perform, its obligations under this Agreement, including the obligations set forth in Sections 3.09 and 4.06, if such delay or failure is caused by a “Force Majeure Event.” B. Notice. The party claiming excuse shall deliver to the other parties a written notice of intent to claim excuse from performance under this Agreement by reason of a Force Majeure Event. Notice required by this section shall be given promptly in light of the circumstances, and, in the case of events described in (c), (d) or (e) of the definition of Force Majeure Event only, not later than ten (10) days after the occurrence of the Force Majeure Event. Such notice shall describe the Force Majeure Event, the services impacted by the claimed event, the length of time that the party expects to be prevented from performing, and the steps which the party intends to take to restore its ability to perform. 95 C. Obligation to Restore Ability to Perform. Any suspension of performance by a party pursuant to this section shall be only to the extent, and for a period of no longer duration than, required by the nature of the Force Majeure Event, and the party claiming excuse shall use its best efforts to remedy its inability to perform as quickly as possible. 8.16. No Third-Party Beneficiaries This Agreement is exclusively for the benefit of the parties and not for the benefit of any other Person. There are no third-party beneficiaries of this Agreement and no person not a party shall have any rights under or interests in this Agreement. No party may assert a claim for damages on behalf of a person other than itself, including a person that is not a party. 8.17. Good Faith and Fair Dealing San Francisco and the Wholesale Customers each acknowledge their obligation under California law to act in good faith toward, and deal fairly with, each other with respect to this Agreement. 96 Article 9. Implementation and Special Provisions Affecting Certain Wholesale Customers 9.01. General; Individual Water Sales Contracts A. As described in Section 1.03, San Francisco previously entered into Individual Water Sales Contracts with each of the Wholesale Customers. The term of the majority of Individual Water Sales Contracts will expire on June 30, 2009, concurrently with the expiration of the 1984 Agreement. Except as provided below in this Article, each of the Wholesale Customers will execute a new Individual Water Sales Contract with San Francisco concurrently with its approval of the Agreement. B. The Individual Water Sales Contracts will describe the service area of each Wholesale Customer, identify the location and size of connections between the Regional Water System and the Wholesale Customer’s distribution system, provide for periodic rendering and payment of bills for water usage, and in some instances contain additional specialized provisions unique to the particular Wholesale Customer and not of general concern or applicability. A sample Individual Water Sales Contract is provided at Attachment F. The Individual Water Sales Contracts between San Francisco and the Wholesale Customers will not contain any provision inconsistent with Articles 1 through 8 of this Agreement except (1) as provided below in this Article or (2) to the extent that such provisions are not in derogation of the Fundamental Rights of other Wholesale Customers under this Agreement. Any provisions in an Individual Water Sales Contract which are in violation of this section shall be void. 9.02. California Water Service Company A. The parties recognize that the California Water Service Company is an investor- owned utility company and, as such, has no claim to co-grantee status under the Act, which specifically bars private parties from receiving for resale any water produced by the Hetch Hetchy portion of the Regional Water System. Accordingly, the following provisions shall apply to the California Water Service Company, notwithstanding anything to the contrary elsewhere in this Agreement. B. The total quantity of water delivered by San Francisco to the California Water Service Company shall not in any calendar year exceed 47,400 acre feet, which is the estimated average annual production of Local System Water. If San Francisco develops additional Local System Water after the Effective Date, it may (1) increase the maximum 97 delivery amount stated herein; and (2) increase the Supply Assurance, but not necessarily both. San Francisco has no obligation to deliver water to California Water Service Company in excess of the maximum stated herein, except as such maximum may be increased by San Francisco pursuant to this subsection. The maximum annual quantity of Local System Water set forth in this subsection is intended to be a limitation on the total quantity of water that may be allocated to California Water Service Company, and is not an Individual Supply Guarantee for purposes of Section 3.02. The maximum quantity of Local System Water set forth in this subsection is subject to reduction in response to (1) changes in long-term hydrology or (2) environmental water requirements that may be imposed by or negotiated with state and federal resource agencies in order to comply with state or federal law or to secure applicable permits for construction of Regional Water System facilities. San Francisco shall notify California Water Service Company of any anticipated reduction of the quantity of Local System Water set forth in this subsection, along with an explanation of the basis for the reduction. C. Notwithstanding anything in Section 8.08 to the contrary, California Water Service Company shall have the right to assign to a public agency having the power of eminent domain all or a portion of the rights of California Water Service Company under any contract between it and San Francisco applicable to any individual district of California Water Service Company in connection with the acquisition by such public agency of all or a portion of the water system of California Water Service Company in such district. In the event of any such assignment of all the rights, privileges and obligations of California Water Service Company under such contract, California Water Service Company shall be relieved of all further obligations under such contract provided that the assignee public agency expressly assumes the obligations of California Water Service Company thereunder. In the event of such an assignment of a portion of the rights, privileges and obligations of California Water Service Company under such contract, California Water Service Company shall be relieved of such portion of such obligations so assigned thereunder provided that the assignee public agency shall expressly assume such obligations so assigned to it. D. Should California Water Service Company seek to take over or otherwise acquire, in whole or in part, the service obligations of another Wholesale Customer under Section 3.03.E, it will so inform San Francisco at least six months prior to the effective date of the sale and provide information concerning the total additional demand proposed to be served, in order that San Francisco may compare the proposed additional demand to the then-current estimate of Local System Water. In this regard, California Water Service Company has notified 98 the SFPUC that it has reached an agreement to acquire the assets of Skyline County Water District (“Skyline”) and assume the responsibility for providing water service to customers in the Skyline service area. California Water Service Company has advised the SFPUC that, on September 18, 2008, the California Public Utilities Commission approved California Water Service Company’s acquisition of Skyline. The SFPUC anticipates approving the transfer of Skyline’s Supply Guarantee as shown on Attachment C to California Water Service Company and the expansion of California Water Service Company’s service area to include the current Skyline service area before the Effective Date of this Agreement. All parties to this Agreement authorize corresponding modifications of Attachment C, as well as any of the Agreement’s other provisions, to reflect the foregoing transaction without the necessity of amending this Agreement. E. Nothing in this Agreement shall preclude San Francisco from selling water to any county, city, town, district, political subdivision, or other public agency for resale to customers within the service area of the California Water Service Company. Nothing in this Agreement shall require or contemplate any delivery of water to California Water Service Company in violation of the Act. F. Nothing in this Agreement shall alter, amend or modify the Findings of Fact and Conclusions of Law and the Judgment dated May 25, 1961, in that certain action entitled City and County of San Francisco v. California Water Service Company in the Superior Court of the State of California in and for the County of Marin, No. 23286, as modified by the Quitclaim Deed from California Water Service Company to San Francisco dated August 22, 1961. The rights and obligations of San Francisco and California Water Service Company under these documents shall continue as therein set forth. 9.03. City of Hayward A. San Francisco and the City of Hayward (“Hayward”) entered into a water supply contract on February 9, 1962 (“the 1962 contract”) which provides, inter alia, that San Francisco will supply Hayward with all water supplemental to sources and supplies of water owned or controlled by Hayward as of that date, in sufficient quantity to supply the total water needs of the service area described on an exhibit to the 1962 contract “on a permanent basis.” The service area map attached as Exhibit C to the 1962 contract was amended in 1974 to remove an area of land in the Hayward hills and in 2008 to make minor boundary adjustments identified in SFPUC Resolution No. 08-0035. 99 B. The intention of the parties is to continue the 1962 contract, as amended, in effect as the Individual Water Sales Contract between San Francisco and Hayward. Accordingly, it shall not be necessary for San Francisco and Hayward to enter into a new Individual Water Sales Contract pursuant to this Article and approval of this Agreement by Hayward shall constitute approval of both this Agreement and an Individual Water Sales Contract for purposes of Section 1.03. The 1962 contract, as amended, will continue to describe the service area of Hayward, while rates for water delivered to Hayward during the Term shall be governed by Article 5 hereof. The 1962 contract, as amended, will continue in force after the expiration of the Term. 9.04. Estero Municipal Improvement District A. San Francisco and the Estero Municipal Improvement District (“Estero”) entered into a water supply contract on August 24, 1961, the term of which continues until August 24, 2011 (“the 1961 Contract”). The 1961 Contract provides, inter alia, that San Francisco will supply Estero with all water supplemental to sources and supplies of water owned or controlled by Estero as of that date, in sufficient quantity to supply the total water needs of the service area described on an exhibit to the 1961 Contract. B. The intention of the parties is to terminate the 1961 Contract and replace it with a new Individual Water Sales Contract which will become effective on July 1, 2009. The new Individual Water Sales Contract will describe the current service area of Estero. The Individual Supply Guarantee applicable to Estero shall be 5.9 MGD, rather than being determined as provided in the 1961 Contract. 9.05. Stanford University A. The parties recognize that The Board of Trustees of The Leland Stanford Junior University (“Stanford”) operates a non-profit university, and purchases water from San Francisco for redistribution to the academic and related facilities and activities of the university and to residents of Stanford, the majority of whom are either employed by or students of Stanford. Stanford agrees that all water furnished by San Francisco shall be used by Stanford only for domestic purposes and those directly connected with the academic and related facilities and activities of Stanford, and no water furnished by San Francisco shall be used in any area now or hereafter leased or otherwise used for industrial purposes or for commercial purposes 100 other than those campus support facilities that provide direct services to Stanford faculty, students or staff such as the U.S. Post Office, the bookstore and Student Union. Nothing in this Agreement shall preclude San Francisco from selling water to any county, city, town, political subdivision or other public agency for resale to Stanford or to customers within the service area of Stanford. B. Notwithstanding anything in Section 8.08 to the contrary, Stanford shall have the right to assign to a public agency having the power of eminent domain all or a portion of the rights of Stanford under this Agreement or the Individual Water Sales Contract between it and San Francisco in connection with the acquisition by such public agency of all or a portion of Stanford’s water system. In the event of any such assignment of all the rights, privileges, and obligations of Stanford under such contract, Stanford shall be relieved of all further obligations under such contract, provided that the assignee public agency expressly assumes Stanford’s obligations thereunder. In the event of such an assignment of a portion of the rights, privileges, and obligations of Stanford under such contract, Stanford shall be relieved of such obligations so assigned thereunder, provided that the assignee public agency shall expressly assume such obligations so assigned to it. Nothing in this Agreement shall require or contemplate any delivery of water to Stanford in violation of the Act. 9.06. City of San Jose and City of Santa Clara A. Continued Supply on Temporary, Interruptible Basis. During the term of the 1984 Agreement, San Francisco provided water to the City of San Jose (“San Jose”) and the City of Santa Clara (“Santa Clara”) on a temporary, interruptible basis pursuant to SFPUC Resolution No. 85-0256. Subject to termination or reduction of supply as provided in Section 4.05 of this Agreement, San Francisco will continue to supply water to San Jose and Santa Clara on a temporary, interruptible basis pending a decision by the Commission, pursuant to Section 4.05.H, as to whether to make San Jose and Santa Clara permanent customers of the Regional Water System. San Francisco will furnish water to San Jose and Santa Clara at the same rates as those applicable to other Wholesale Customers pursuant to this Agreement. Water delivered to San Jose and Santa Clara after July 1, 2009 may be limited by the SFPUC’s ability to meet the full needs of all its other Retail and Wholesale Customers. The service areas of San Jose and Santa Clara set forth in their Individual Water Sales Contracts may not be 101 expanded using the procedure set forth in Section 3.03. The combined annual average water usage of San Jose and Santa Clara shall not exceed 9 MGD. The allocation of that total amount between San Jose and Santa Clara shall be as set forth in their Individual Water Sales Contracts. B. Reservation of Rights. In signing this Agreement, neither San Jose nor Santa Clara waives any of its rights to contend, in the event that San Francisco (1) elects to terminate or interrupt water deliveries to either or both of the two cities prior to 20182028 using the process set forth in Section 4.05, or (2) does not elect to take either city on as a permanent customer in 20182028, that it is entitled to permanent customer status, pursuant to the Act or any other federal or state law. Santa Clara's reservation of rights is limited to its existing Service Area A, as shown on Attachment Q-2. Service Area B, south of Highway 101, was added in 2018 solely for the operational convenience of Santa Clara. Santa Clara waives its right to make claims described in this Section 9.06.B and Section 8.07.B.3 with respect to Service Area B. In signing this Agreement, San Francisco does not waive its right to deny any or all such contentions. 9.07. City of Brisbane, Guadalupe Valley Municipal Improvement District, Town of Hillsborough A. The parties acknowledge that San Francisco has heretofore provided certain quantities of water to the City of Brisbane (“Brisbane”), Guadalupe Valley Municipal Improvement District (“Guadalupe”) and the Town of Hillsborough (“Hillsborough”) at specified rates or without charge pursuant to obligations arising out of agreements between the predecessors of San Francisco and these parties, which agreements are referred to in judicial orders, resolutions of the SFPUC and/or the 1960 contracts between San Francisco and Brisbane, Guadalupe and Hillsborough. The parties intend to continue those arrangements and accordingly agree as follows: 1. Nothing in this Agreement is intended to alter, amend or modify the terms of SFPUC Resolution No. 74-0653 or the indenture of July 18, 1908 between the Guadalupe Development Company and the Spring Valley Water Company. 2. Nothing in this Agreement is intended to alter, amend or modify the Findings of Fact and Conclusions of Law and Judgment dated May 25, 1961 in that certain action entitled City and County of San Francisco v. Town of Hillsborough in the Superior Court of the State of California in and for the County of Marin, No. 23282, as modified by the 102 Satisfaction of Judgment filed October 23, 1961 and the Compromise and Release between Hillsborough and San Francisco dated August 22, 1961. The rights and obligations of Hillsborough under these documents shall continue as therein set forth. 3. Nothing in this Agreement is intended to affect or prejudice any claims, rights or remedies of Guadalupe or of Crocker Estate Company, a corporation, or of Crocker Land Company, a corporation, or of San Francisco, or of their successors and assigns, respectively, with respect to or arising out of that certain deed dated May 22, 1884, from Charles Crocker to Spring Valley Water Works, a corporation, recorded on May 24, 1884, in Book 37 of Deeds at page 356, Records of San Mateo County, California, as amended by that certain Deed of Exchange of Easements in Real Property and Agreement for Trade in Connection Therewith, dated July 29, 1954, recorded on August 4, 1954, in Book 2628, at page 298, Official Records of said San Mateo County, or with respect to or arising out of that certain action involving the validity or enforceability of certain provisions of said deed entitled City and County of San Francisco v. Crocker Estate Company, in the Superior Court of the State of California in and for the County of Marin, No. 23281. /// /// /// /// /// /// /// /// /// /// 15075846.1 Attachment A - Definitions “1984 Agreement” refers to the 1984 Settlement Agreement and Master Water Sales Contract between the City and County of San Francisco and certain Suburban Purchasers in San Mateo County, Santa Clara County and Alameda County, which expires on June 30, 2009. “Act” refers to the Raker Act, 38 Stat. 242, the Act of Congress, enacted in 1913, that authorized the construction of the Hetch Hetchy system on federal lands. “Adjusted Proportional Annual Use” means the respective percentages of annual water use, as adjusted to reflect deliveries of water by the Hetch Hetchy Enterprise to outside City Retail Customers. The adjustment is calculated each year as described in Section B of Attachment J and is shown on lines 18 and 19 of Table 1 of that Attachment. “Agreement” refers to this Water Supply Agreement, by and among San Francisco and the Wholesale Customers who approve this Agreement in accordance with Section 1.03. “BAWSCA” refers to the Bay Area Water Supply and Conservation Agency established pursuant to Division 31 of the California Water Code (Water Code §§81300-81461) or its successor and permitted assigns. “CEQA” refers to the California Environmental Quality Act found at §§21000 et seq. of the Public Resources Code and the Guidelines for the California Environmental Quality Act found at §§15000 et seq. of Title 14 of the California Code of Regulations, as amended from time to time. “Commission” means the governing board of the SFPUC, whose members, as of the date of this Agreement, are appointed by the Mayor of San Francisco and confirmed by the San Francisco Board of Supervisors. “Compliance Audit” refers to the annual audit of the Wholesale Revenue Requirement by the Compliance Auditor required by Sections 7.03 through 7.05. “Compliance Auditor” refers to the independent certified public accountant chosen by the San Francisco Controller to conduct each fiscal year’s audit of the SFPUC’s calculation of the Wholesale Revenue Requirement as provided in Section 7.03.B. 15075846.1 “Countywide Cost Allocation Plan” refers to the full costs of the Water and Hetch Hetchy Enterprises’ prorated share of San Francisco city government expenses that are not directly billed to city departments, as determined by the Controller of the City and County of San Francisco. “Debt Service” means principal and interest paid during a fiscal year on Indebtedness incurred by the SFPUC for the 2006 Revenue Bonds, Series A, and subsequently issued Indebtedness (exclusive of 2006 Revenue Bonds Series B and C), the proceeds of which are used or are scheduled to be used for the acquisition or construction of New Regional Assets or to refund such Indebtedness. “Direct Retail” refers to Regional Water System capital or operating expenditures that are incurred to provide water service solely to Retail Customers. “Direct Wholesale” refers to Regional Water System capital or operating expenditures that are incurred to provide water service solely to one or more Wholesale Customers. “Drought” means a water shortage caused by lack of precipitation, as reflected in resolutions of the Commission calling for voluntary or mandatory water rationing based on evaluation of water stored or otherwise available to the Regional Water System, whether or not the Commission declares a water shortage emergency pursuant to Water Code §§ 350 et seq., as amended from time to time. “Effective Date” refers to the date this Agreement will become effective in accordance with the terms of Section 1.03. “Emergency” means a sudden, non-drought event, such as an earthquake, failure of Regional Water System infrastructure or other catastrophic event or natural disaster that results in an insufficient supply of water available to the Retail or Wholesale Service Areas for basic human consumption, firefighting, sanitation, and fire protection. “Encumbrance” or “Encumber” refers to the process by which the City Controller certifies the availability of amounts previously appropriated by the Commission for specifically identified SFPUC capital projects performed either by third parties or through work orders to other City departments. 15075846.1 “Environmental Enhancement Surcharge” means the surcharge to be imposed by the SFPUC on individual parties to this Agreement whose use exceeds their Interim Supply Allocation when the collective use of water by all parties to this Agreement is in excess of the Interim Supply Limitation. “ERRP” refers to a SFPUC document entitled Emergency Response and Recovery Plan: Regional Water System (“ERRP”) dated August 23, 2003, and updated November 2006. “Excess Use Charges” are monthly charges set by the SFPUC, in the form of multipliers, that are applied to the Wholesale Customer water rates during times of mandatory rationing if a Wholesale Customer's water usage is greater than its shortage allocation. Excess Use Charges are further described in Section 4 of the Tier 1 Shortage Plan (Attachment H). “Existing Assets” refers to Regional and Hetch Hetchy Water-Only and Water-Related capital assets plant in service as of June 30, 2009. “Existing System Assets” refers to all Water Enterprise and Hetch Hetchy Enterprise assets and assets that are components of, or appurtenances thereto. Existing Assets are a subset of the Existing System Assets for repayment of capital costs under Section 5.03. “Existing Facilities” means those wells and associated infrastructure owned by the Participating Pumpers and in existence as of the effective date of the Project Operating Agreement, and any replacements of Existing Facilities irrespective of location. “Force Majeure Event” means an event not the fault of, and beyond the reasonable control of, the party claiming excuse which makes it impossible or extremely impracticable for such party to perform obligations imposed on it by this Agreement, by virtue of its effect on physical facilities and their operation or employees essential to such performance. Force Majeure Events include (a) an “act of God” such as an earthquake, flood, earth movement, or similar catastrophic event, (b) an act of the public enemy, terrorism, sabotage, civil disturbance or similar event, (c) a strike, work stoppage, picketing or similar concerted labor action, (d) delays in construction caused by unanticipated negligence or breach of contract by a third party or inability to obtain essential materials after diligent and timely efforts; or (e) an order or regulation issued by a federal or state regulatory agency after the Effective Date or a judgment or order entered by a federal or state court after the Effective Date. 15075846.1 “Fundamental Rights” of Wholesale Customers are their status as parties to this Agreement, their allocation of water recognized in Section 3.02, their protection against arbitrary, unreasonable, or unjustly discriminatory rates provided in Section 6.04, and any specific rights described in Article 9. “Groundwater Storage and Recovery Project” refers to a WSIP project for groundwater storage and recovery in the Southern portion of the Westside Basin approved in SFPUC Resolution No. 14-0127 dated August 12, 2014. “Hetch Hetchy Enterprise” refers to Hetch Hetchy Water and Power Enterprise, a SFPUC operating department. “In Lieu Water” refers to Regional Water System water, subject to the limitations set forth in Section 9.02 of this Agreement for water delivered to California Water Service Company, that the SFPUC delivers at no charge on an interruptible basis to the Participating Pumpers, to replace groundwater that the Participating Pumpers refrain from pumping using their Existing Facilities during storage periods under the Project Operating Agreement. “Include” and its variants mean “including but not limited to” whenever used in this Agreement, regardless of whether or not it is capitalized. “Indebtedness” includes revenue bonds, bond anticipation notes, certificates of participation (excluding certificates of participation towards which SFPUC contributes debt service as an operating expense), and commercial paper. “Individual Water Sales Contract” refers to the contracts between each Wholesale Customer and San Francisco contemplated in Section 9.01 that details customer-specific matters such as location of service connections, service area maps and other matters specific to that customer. “Individual Supply Guarantee” refers to each Wholesale Customer’s share of the Supply Assurance, as shown in Attachment C. “Interim Supply Allocation” refers to each Wholesale Customer’s share, to be established by the SFPUC pursuant to Section 4.02, of the Interim Supply Limitation. 15075846.1 “Interim Supply Limitation” refers to the 265 MGD annual average limitation on water deliveries until December 31, 2018 from Regional Water System watersheds imposed by the SFPUC in its approval of the WSIP in Resolution Number 08-0200 dated October 30, 2008. “Irrigation Well Owners” refers to the Hills of Eternity, Home of Peace, and Salem Cemetery; Eternal Home Cemetery; Woodlawn Cemetery; Holy Cross Cemetery; Italian Cemetery; Olivet Cemetery; Cypress Lawn Cemetery; and the California Golf Club, located within the Southern portion of the Westside Basin. “Irrigation Well Owner Replacement Water” refers to water supplied by the Regional Water System delivered on a standby basis by the SFPUC, or wheeled through California Water Service Company's South San Francisco District System, for delivery to Irrigation Well Owners as may be necessary under the MMRP. “Joint,” when used in connection with Hetch Hetchy Enterprise assets or expenses, refers to assets used or expenses incurred in providing both water supply (“Water-Related”) and in the generation and transmission of electrical energy (“Power-Related”). “Level of Service Goals and Objectives” refers to the “Phased WSIP Goals and Objectives” adopted by the Commission in Resolution No. 08-0200 dated October 30, 2008 as part of the approval of the WSIP and any amendments that may be adopted by the Commission. “Local System Water” refers to Regional Water System water supplies developed in San Mateo, Alameda and Santa Clara Counties or otherwise not produced by the Hetch Hetchy Enterprise under rights of way granted by the Raker Act. “MGD” refers to an average flow rate of one million gallons per day over a specific time period, often a year. For example, one MGD is equal to 365 million gallons per year or 1,120 acre feet per year. “Mitigation, Monitoring and Reporting Program or “MMRP” refers to the CEQA required program of mitigation and monitoring adopted by the SFPUC as part of Groundwater Storage and Recovery Project approval in Resolution No. 14-0127. “Net Annual Debt Service” refers to debt service less payments made from proceeds of Indebtedness (e.g., capitalized interest), earnings on bond proceeds (e.g., reserve fund 15075846.1 earnings) used to pay Debt Service, and interest paid from renewed commercial paper, or from reserve fund liquidation. “New Assets” refers to Regional and Hetch Hetchy Water-Only and Water-Related capital assets added to Regional Water System plant in service after June 30, 2009. “New Regional Assets” refers to New Assets placed in service on or after July 1, 2009 that are used and useful in delivering water to Wholesale Customers. The following four categories comprise New Regional Assets: 1. 1. Water Enterprise Regional Assets 2. 2. Water Enterprise Direct Wholesale Assets 3. 3. Hetch Hetchy Water Only Assets 4. 4. Water-Related portion (45 percent) of Hetch Hetchy Joint Assets “Participating Pumpers” refers to the Wholesale Customers pumping groundwater who are parties to the Project Operating Agreement; specifically, the cities of Daly City and San Bruno and the California Water Service Company, South San Francisco Service Area. “Participating Pumper Replacement Water” refers to the quantity of Regional Water System water that may be made available by the SFPUC to some or all of the Participating Pumpers in accordance with Section 4.7 of the Project Operating Agreement. “Power-Only,” when used with reference to Hetch Hetchy Enterprise capital costs and operating and maintenance expenses, means capital costs and expenses that are incurred solely for the construction and operation of assets used to generate and transmit electrical energy. “Power-Related” refers to the power related portion (55%) of Joint Hetch Hetchy Enterprise assets or expenses. “Prepayment” refers to payments of principal and interest amounts not due in the year the prepayment is made, as described in Section 5.03. “Project Facility or Facilities” refers to all Groundwater Storage and Recovery Project assets, such as Project wells and all related fixed assets (e.g., real property, water treatment, connecting pipelines) that are acquired or constructed by the SFPUC pursuant to the Project 15075846.1 Operating Agreement and operated as Regional Water System assets for the allocation of capital costs and operation and maintenance expenses under this Agreement. “Project Operating Agreement” refers to the “Agreement for Groundwater Storage and Recovery from the Southern Portion of the Westside Groundwater Basin by and among the San Francisco Public Utilities Commission, the City of Daly City, the City of San Bruno, and California Water Service Company,” dated as of December 16, 2014. “Proportional Annual Use” means the shares of deliveries from the Regional Water System used by City Retail Customers and by the Wholesale Customers in a fiscal year, expressed as a percentage. The percentages of annual use are calculated each year as described in Section B of Attachment J and are shown on lines 10 and 11 of Table 1 of that Attachment. “Proportional Water Use” refers the general principle of allocating Regional Water System costs based on the relative purchases of water by Retail and Wholesale Customers. “Regional,” when used with reference to Water Enterprise capital assets and operating expenses, refers to assets and expenses that benefit Wholesale and Regional Customers. “Regional Water System” means the water storage, transmission and treatment system operated by the SFPUC in Tuolumne, Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco counties, including projects constructed under the WSIP, but excluding Direct Retail and Direct Wholesale assets. “Retail Customers” means any customer that purchases water from San Francisco that is not a Wholesale Customer, whether located inside or outside of San Francisco. “Retail Service Area” means the areas where SFPUC sells water to Retail Customers. “Retail Water” means water sold by the SFPUC to its Retail Customers within and outside San Francisco. “San Francisco” refers to the City and County of San Francisco. “SFPUC” refers to the San Francisco Public Utilities Commission as an operating department of San Francisco, the General Manager of which reports to the Commission. 15075846.1 “SFPUC Bureaus” refers to the portions of the SFPUC that provide support services to the SFPUC Operating Departments. These presently consist of the General Manager’s Office, Business Services, and External Affairs. “SFPUC Operating Departments” refers to the Water, Hetch Hetchy and Wastewater Program Enterprises under the control and management of the SFPUC pursuant to the San Francisco Charter. “SFPUC Storage Account” refers to the book account maintained by the SFPUC showing the amount of water stored in the Southern Westside Basin pursuant to the Project Operating Agreement. “Shared Facilities” refers to an Existing Facility that is owned by a Participating Pumper, as upgraded through the expenditure of Regional capital costs under Section 5.04 of this Agreement and operated in part as a Project Facility. “Substantially Expended”: A bond issue series is substantially expended when 98% of the proceeds and investment earnings contributed to the project fund have been expended. “Supply Assurance” means the 184 MGD maximum annual average metered supply of water dedicated by San Francisco to public use in the Wholesale Service Area (not including San Jose and Santa Clara) in the 1984 Agreement and Section 3.01 of this Agreement. “Target Balance,” for purposes of determining the Wholesale Capital Fund unencumbered balance under Section 6.08.E and amended Attachment M-3 beginning in FY 2018-19, means the sum of (i) the current year (FY 2018-19) wholesale share of the revenue funded capital appropriation for New Regional Assets pursuant to Section 5.04.B times the quotient of 4 divided by 5; plus (ii) the wholesale appropriation for the prior year (FY 2017-18) times the quotient of 3 divided by 5; plus (iii) the wholesale appropriation for the 2nd year prior (FY 2016- 17) times the quotient of 2 divided by 5; plus (iv) the wholesale appropriation for the third year prior (FY 2015-16) times the quotient of 1 divided by 5. Such appropriations shall take into account any de-appropriations and/or reimbursements from bond proceeds or other sources. The fiscal years in parentheses used in this definition are for illustration purposes only. “Term” means the 25-year term commencing July 1, 2009, including one or both 5-year extensions authorized by Section 2.02.A and B. 15075846.1 “Tier 1 Shortage Plan” refers to the Water Shortage Allocation Plan (Attachment H) adopted by the SFPUC and the Wholesale Customers in conjunction with this Agreement describing the method for allocating water between the SFPUC and the Wholesale Customers collectively for shortages of up to 20% of deliveries from the Regional Water System, as amended from time- to-time. “Water Enterprise” refers to the San Francisco Water Department (SFWD), an SFPUC Operating Department. “Water Management Charge” refers to the charge collected by San Francisco on behalf of BAWSCA for local water resource development in the Wholesale Service Area pursuant to Section 3.06 of this Agreement. “Water-Only,” when used with reference to Hetch Hetchy Enterprise capital costs and operating and maintenance expenses, means capital costs and expenses that are incurred solely for the construction and operation of assets used to protect water quality or to provide for the delivery of water for consumptive purposes. “Water-Related” refers to the water related portion (45%) of Joint Hetch Hetchy Enterprise assets or expenses. “Water Supply Development Report” refers to the annual report prepared pursuant to Section 4.05, and submitted to the Commission for purposes of estimating whether Regional Water System demand will be within the Interim Supply Limitation by June 30, 2018. “Wheeling Statute” refers to Article 4 of Chapter 11 of the California Water Code, as amended from time to time. “Wholesale Capital Fund” is the account established by the SFPUC for deposit of Wholesale Customer revenue that is used to fund the wholesale share of revenue-funded New Regional Assets, as described in Section 6.08. “Wholesale Customer” or “Customers” means one or more of the 2726 water customers identified in Section 1.0102 that are contracting for purchase of water from San Francisco pursuant to this Agreement. 15075846.1 “Wholesale Revenue Coverage” refers to the additional dollar amount included in wholesale rates each fiscal year that is charged to Wholesale Customers by the SFPUC for their proportionate share of Debt Service coverage under Section 6.06.A. “Wholesale Revenue Coverage Reserve” refers to the account established by the SFPUC for deposit of Wholesale Revenue Coverage under Section 6.06.B. “Wholesale Revenue Requirement” means the calculated Wholesale Customer portion of SFPUC Regional Water System capital and operating costs as determined in accordance with the provisions of Article 5 of this Agreement, formerly called the “Suburban Revenue Requirement” in the 1984 Agreement. “Wholesale Service Area” means the combined service areas of the Wholesale Customers, as delineated on the service area maps attached to each Individual Water Sales Contract. “WSIP” refers to the Water System Improvement Program approved by the Commission in Resolution No. 08-0200 on October 30, 2008, as amended from time to time. ATTACHMENT C 15049631.4 INDIVIDUAL SUPPLY GUARANTEES (1) (2) WHOLESALE CUSTOMER 100 Cubic Feet (per year)1* Million Gallons Per Day (MGD)1 Alameda County Water District 6,714,439 13.760 California Water Service Company**2 17,320,807 35.499 City of Brisbane 224,435 0.460 City of Burlingame 2,553,753 5.234 City of Daly City 2,094,386 4.292 City of East Palo Alto 1,689,713957,813 3.4631.963 City of Menlo Park 2,174,231 4.456 City of Millbrae 1,538,120 3.152 City of Milpitas 4,504,533 9.232 City of Mountain View 6,079,7156,567,648 12.46013.460 City of Palo Alto 8,087,7308,331,697 16.57517.075 City of Redwood City 5,333,115 10.930 City of San Bruno 1,583,899 3.246 City of Sunnyvale 6,138,122 12.580 Coastside County Water District 1,061,453 2.175 Estero Municipal Improvement District 2,878,807 5.900 Guadalupe Valley Municipal Improvement District 254,436 0.521 Mid-Peninsula Water District 1,898,707 3.891 North Coast County Water District 1,872,928 3.838 Purissima Hills Water District 792,832 1.625 Skyline County Water District 88,537 0.181 Stanford University 1,479,764 3.033 Town of Hillsborough 1,995,644 4.090 Westborough Water District 644,172 1.320 Total:***3 79,004,278 161.913 Footnotes: 1. 100 Cubic feet per year = Million Gallons per Day / 0.00000204946. Figures in column (1) are calculated using unrounded MGD values and are more precise than the figures listed in column (2) 2. Includes quantities from Los Trancos County Water District and Palomar Park Water District. 1.3. Total does not equal sum of MGD figures due to rounding. Total is not 184 MGD because the table does not include the City of Hayward. Cordilleras Mutual Water Association is not a party to this Agreement, but it has its own Supply assurance of 3,007 hundred cubic feet (CCF). * 100 Cubic feet equals MGD divided by 0.00000204946. Figures in this column are 15049631.4 calculated using unrounded MGD values and are more precise than the figures listed in column (2). ** Includes quantities from Los Trancos County Water District and Palomar Park Water District. *** Total does not equal sum of MGD figures due to rounding. Total is not 184 MGD because table does not include the City of Hayward. **** Cordilleras Mutual Water Association is not a party to this Agreement, but it has its own Supply Assurance of 3,007 hundred cubic feet (CCF). Amendment 1: Oversight of SFPUC's Capital Improvement Program (CIP) (Sec. 6.09) ATTACHMENT D 1 15118379.1 6.09 SFPUC Adoption of Regional Water System 10-Year Capital Improvement Program A. Established Level of Service Goals and Objectives. In approving the WSIP, the Commission adopted Level of Service Goals and Objectives that are, in part, used to develop capital programs related to water, including the 10-Year Capital Improvement Program for the Regional Water System (“10-Year CIP”). BAWSCA and the Wholesale Customers shall have the opportunity to review and provide written or oral comments on any changes to the Level of Service Goals and Objectives that may be submitted to the Commission for approval. B. Submittal of an Asset Management Policy. Prior to December 31, 2020, the SFPUC shall develop and submit to the Commission for approval an Asset Management Policy applicable to the Regional Water System. C. Coordination of 10-Year CIP and SFPUC Budget Meetings. The Commission annually reviews, updates, and adopts a 10-Year CIP pursuant to Section 8B.123 of the San Francisco Charter. At two-year intervals, the Commission holds two budget meetings concerning the 10-Year CIP. Over the course of the two budget meetings, the SFPUC reviews its budget priorities, potential changes to projects in the previously adopted 10-Year CIP, and the potential financial implications of such changes. In the event that Charter amendments are placed on the ballot that could alter or amend the City’s budget preparation and adoption efforts, BAWSCA shall be notified in advance of any proposed change that could result in a less robust CIP development effort, and BAWSCA and the SFPUC shall meet to consider BAWSCA’s comments on maintaining a robust CIP development effort. D. Mid-cycle Changes to the 10-Year CIP. The SFPUC shall include within the Water Enterprise Capital Improvement Program Quarterly Projects Reports that it provides to the Commission (“CIP Quarterly Projects Reports”) discussion of any material changes proposed to projects that are included in the most recently adopted 10- Year CIP. The SFPUC defines a material change as a change that applies to a CIP project whose approved CIP budget is equal to or greater than $5,000,000 that results in one or more of the following: 2 15118379.1 1. Increases the cost of the CIP project by more than 10%. 2. Increases the schedule of the CIP project by extending said schedule by 12 calendar months or greater. 3. Affects the SFPUC’s ability to meet the Level of Service Goals and Objectives. The SFPUC shall also include within the CIP Quarterly Projects Reports discussion of any new capital project that is not included in the most recently adopted 10-Year CIP if the SFPUC has 1) begun spending on the project and 2) anticipates that it will require total funding in excess of $5,000,000. For such projects, the parties recognize that the work may be of an urgent nature and that details of those projects may be developing quickly to address a critical need. The SFPUC commits that, for these projects, an expanded discussion will be provided in quarterly reports generated 6 months following the creation of the project in the City’s finance and accounting system. At a minimum, the discussion will include: 1) a detailed scope of work, 2) schedule, 3) cost breakdown, and 4) proposed source of funding. This level of detail shall continue to be included in subsequent quarterly reports through either the completion of the work or until the work is included as part of an adopted 10-Year CIP. E. BAWSCA and Wholesale Customer Notice and Review. Beginning in 2020, at least 30 days before the first budget meeting, the SFPUC shall provide BAWSCA and the Wholesale Customers with written notice of the dates of the two budget meetings. At least 30 days before the first budget meeting, the SFPUC shall also provide BAWSCA and the Wholesale Customers with a draft of the 10-Year CIP and meet with those same parties to review potential candidate projects that it is considering for inclusion in the 10- Year CIP. Final materials for the first budget meeting will be made available to BAWSCA and the Wholesale Customers no less than 14 days prior to that budget meeting. Final materials for the second budget meeting will be made available to BAWSCA and the Wholesale Customers on the same date that they are made available to the Commission. Prior to the Commission’s adoption of the 10-Year CIP at the second budget meeting, San Francisco shall respond, in writing, to all written comments by BAWSCA and the Wholesale Customers on the 10-Year CIP that were submitted prior to the date of the first budget meeting. 3 15118379.1 F. Contents of Draft 10-Year CIP – Projects in Years One and Two of 10-Year Schedule. The SFPUC’s CIP projects generally fall into three categories: defined projects, placeholder concepts that could become projects, and programmatic spending for expenses likely to be made but for which there is no schedule. Projects in the near-term years of the 10-Year CIP have more definition than those in the outer years, and as a result more detailed information is available for them. For each project listed that has significant expected expenditures identified in the first two years of the 10-Year CIP, the draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall include the following elements: 1. Project name. 2. Project description and justification. 3. Description of the project’s relationship to the Level of Service Goals and Objectives. 4. Project asset classification for cost-allocation purposes, pursuant to Attachment R for Hetch Hetchy Enterprise assets, or as Regional or Retail for Water Enterprise assets. 5. Project schedule where applicable, broken down by phase, through to completion. 6. Total project budget estimate including a proposed inflation rate. G. Contents of Draft 10-Year CIP – Projects Listed After First Two Years of 10-Year Schedule. For each project that is listed in years three through ten of the 10- Year CIP, the draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall include the following elements: 1. Project name. 2. Project description and justification. 3. Description of the project’s relationship to the Level of Service Goals and Objectives. 4. Project asset classification for cost-allocation purposes, pursuant to Attachment R for Hetch Hetchy Enterprise assets, or as Regional or Retail for Water Enterprise assets. 5. Project schedule information that forms the basis for project planning if available. 4 15118379.1 6. Total project budget estimate. H. Additional Contents of Draft 10-Year CIP. The draft 10-Year CIP made available to BAWSCA and the Wholesale Customers shall also include the following: 1. A discussion of any changes to projects in the previously adopted 10- Year CIP, the reasons for such changes, any impact of the proposed changes on the SFPUC’s ability to achieve the Level of Service Goals and Objectives, and the SFPUC’s proposal for meeting the specific Level of Service Goals and Objectives in question. 2. A discussion of factors that have influenced the 10-Year CIP budget or identified projects, or have the potential to influence the overall budget or the number, cost and scale of identified projects, such as rate increase considerations, local rate setting policies, etc. 3. A discussion of how the CIP will be staffed. 4. A cash flow estimate for each project included as part of the first five years of the 10-Year CIP that considers historical spending and changes in the amount of work to be done. 5. Project spreadsheets that separate new projects from existing projects. 6. A summary roll-up for Regional costs, including all programmatic costs budgeted in the 10-Year CIP. I. Quarterly Reporting and Meetings. 1. CIP Quarterly Projects Reports. The SFPUC shall include within the CIP Quarterly Projects Reports a detailed status update of each Regional project in the 10-Year CIP that has an estimated cost greater than $5 million and a summary of the work completed to date for such projects. The CIP Quarterly Projects Reports shall focus on the first two years’ projects in the 10-Year CIP, but shall also demonstrate a connection to the 10-Year CIP asset classification and the Level of Service Goals and Objectives. The CIP Quarterly Projects Reports shall identify any Regional project in the 10-Year CIP with an estimated cost greater than $5 million that is behind schedule, and, for each project so identified, shall describe the SFPUC’s plan and timeline for either making up the delay or 5 15118379.1 adopting a revised project schedule. In each fourth quarter of the fiscal year CIP Quarterly Projects Report, the SFPUC will also address the status of Regional projects in the 10-Year CIP that have an estimated cost of less than $5 million, noting any such projects that are behind schedule and describing the SFPUC’s plan and timeline for either making up the delay or adopting a revised project schedule. 2. Quarterly Meetings. If requested by BAWSCA, the SFPUC shall hold quarterly meetings with BAWSCA to review each CIP Quarterly Projects Report, during which the SFPUC shall present information and detail about the individual projects and overall implementation of the 10-Year CIP, as well as the need for re-prioritization and/or the proposal of new candidate projects for consideration as part of the next update of the 10- Year CIP. As part of the meeting held in each fourth quarter of the fiscal year, the SFPUC shall provide additional information and detail regarding the CIP development schedule and associated coordination proposed with BAWSCA. Amendment 2: Tier 1 Drought Allocataion Plan (Attachment H; Sec. 2.1) 1 ATTACHMENT H WATER SHORTAGE ALLOCATION PLAN This Interim Water Shortage Allocation Plan (“Plan”) describes the method for allocating water between the San Francisco Public Utilities Commission (“SFPUC”) and the Wholesale Customers collectively during shortages caused by drought. The Plan implements a method for allocating water among the individual Wholesale Customers which has been adopted by the Wholesale Customers. The Plan includes provisions for transfers, banking, and excess use charges. The Plan applies only when the SFPUC determines that a system-wide water shortage due to drought exists, and all references to “shortages” and “water shortages” are to be so understood. This Plan was adopted pursuant to Section 7.03(a) of the 1984 Settlement Agreement and Master Water Sales Contract and has been updated to correspond to the terminology used in the June 2009 Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County and Santa Clara County ("Agreement"). SECTION 1. SHORTAGE CONDITIONS 1.1. Projected Available SFPUC Water Supply. The SFPUC shall make an annual determination as to whether or not a shortage condition exists. The determination of projected available water supply shall consider, among other things, stored water, projected runoff, water acquired by the SFPUC from non-SFPUC sources, inactive storage, reservoir losses, allowance for carryover storage, and water bank balances, if any, described in Section 3. 1.2 Projected SFPUC Purchases. The SFPUC will utilize purchase data, including volumes of water purchased by the Wholesale Customers and by Retail Customers (as those terms are used in the Agreement) in the year immediately prior to the drought, along with other available relevant information, as a basis for determining projected system-wide water purchases from the SFPUC for the upcoming year. 1.3. Shortage Conditions. The SFPUC will compare the available water supply (Section 1.1) with projected system-wide water purchases (Section 1.2). A shortage condition exists if the SFPUC determines that the projected available water supply is less than projected system-wide water purchases in the upcoming Supply Year (defined as the period from July 1 through June 30). When a shortage condition exists, SFPUC will determine whether voluntary or mandatory actions will be required to reduce purchases of SFPUC water to required levels. 1.3.1 Voluntary Response. If the SFPUC determines that voluntary actions will be sufficient to accomplish the necessary reduction in water use throughout its service area, the SFPUC and the Wholesale Customers will make good faith efforts to reduce their water purchases to stay within their annual shortage allocations and associated monthly water use budgets. The SFPUC will not impose excess use charges during periods of voluntary rationing, but may suspend the 2 prospective accumulation of water bank credits, or impose a ceiling on further accumulation of bank credits, consistent with Section 3.2.1 of this Plan. 1.3.2 Mandatory Response. If the SFPUC determines that mandatory actions will be required to accomplish the necessary reduction in water use in the SFPUC service area, the SFPUC may implement excess use charges as set forth in Section 4 of this Plan. 1.4. Period of Shortage. A shortage period commences when the SFPUC determines that a water shortage exists, as set forth in a declaration of water shortage emergency issued by the SFPUC pursuant to California Water Code Sections 350 et seq. Termination of the water shortage emergency will be declared by resolution of the SFPUC. SECTION 2. SHORTAGE ALLOCATIONS 2.1. Annual Allocations between the SFPUC and the Wholesale Customers. The annual water supply available during shortages will be allocated between the SFPUC and the collective Wholesale Customers as follows: Level of System Wide Reduction in Water Use Required Share of Available Water SFPUC Share Wholesale Customers Share 5% or less 6% through 10% 11% through 15% 16% through 20% 35.5% 36.0% 37.0% 37.5% 64.5% 64.0% 63.0% 62.5% The water allocated to the SFPUC shall correspond to the total allocation for all Retail Customers. Customers. In the event that the SFPUC share of the available water supply in the above table results in Retail Customers having a positive allocation (i.e., a supply of additional water rather than a required percentage reduction in water use), the SFPUC’s percentage share of the available water supply in the table shall be reduced to eliminate any positive allocation to Retail Customers, with a corresponding increase in the percentage share of the available water supply allocated to the Wholesale Customers. For any level of required reduction in system-wide water use during shortages, the SFPUC shall require Retail Customers to conserve a minimum of 5%, with any resulting reallocated supply credited to storage for inclusion in calculation of projected available water SFPUC water supply in a subsequent year (Section 1.1). The parties agree to reevaluate the percentages of the available water supply allocated to Retail and Wholesale Customers by May 1, 2028. 2.2 Annual Allocations among the Wholesale Customers. The annual water supply allocated to the Wholesale Customers collectively during system wide shortages of 20 percent or less will 3 be apportioned among them based on a methodology adopted by all of the Wholesale Customers, as described in Section 3.11(C) of the Agreement. In any year for which the methodology must be applied, the Bay Area Water Supply and Conservation Agency (“BAWSCA”) will calculate each Wholesale Customer’s individual percentage share of the amount of water allocated to the Wholesale Customers collectively pursuant to Section 2.1. Following the declaration or reconfirmation of a water shortage emergency by the SFPUC, BAWSCA will deliver to the SFPUC General Manager a list, signed by the President of BAWSCA’s Board of Directors and its General Manager, showing each Wholesale Customer together with its percentage share and stating that the list has been prepared in accordance with the methodology adopted by the Wholesale Customers. The SFPUC shall allocate water to each Wholesale Customer, as specified in the list. The shortage allocations so established may be transferred as provided in Section 2.5 of this Plan. If BAWSCA or all Wholesale Customers do not provide the SFPUC with individual allocations, the SFPUC may make a final allocation decision after first meeting and discussing allocations with BAWSCA and the Wholesale Customers. The methodology adopted by the Wholesale Customers utilizes the rolling average of each individual Wholesale Customer’s purchases from the SFPUC during the three immediately preceding Supply Years. The SFPUC agrees to provide BAWSCA by November 1 of each year a list showing the amount of water purchased by each Wholesale Customer during the immediately preceding Supply Year. The list will be prepared using Customer Service Bureau report MGT440 (or comparable official record in use at the time), adjusted as required for any reporting errors or omissions, and will be transmitted by the SFPUC General Manager or his designee. 2.3. Limited Applicability of Plan to System Wide Shortages Greater Than Twenty Percent. The allocations of water between the SFPUC and the Wholesale Customers collectively, provided for in Section 2.1, apply only to shortages of 20 percent or less. The SFPUC and Wholesale Customers recognize the possibility of a drought occurring which could create system-wide shortages greater than 20 percent despite actions taken by the SFPUC aimed at reducing the probability and severity of water shortages in the SFPUC service area. If the SFPUC determines that a system wide water shortage greater than 20 percent exists, the SFPUC and the Wholesale Customers agree to meet within 10 days and discuss whether a change is required to the allocation set forth in Section 2.1 in order to mitigate undue hardships that might otherwise be experienced by individual Wholesale Customers or Retail Customers. Following these discussions, the Tier 1 water allocations set forth in Section 2.1 of this Plan, or a modified version thereof, may be adopted by mutual written consent of the SFPUC and the Wholesale Customers. If the SFPUC and Wholesale Customers meet and cannot agree on an appropriate Tier 1 allocation within 30 days of the SFPUC’s determination of water shortage greater than 20 percent, then (1) the provisions of Section 3.11(C) of the Agreement will apply, unless (2) all of the Wholesale Customers direct in writing that a Tier 2 allocation methodology agreed to by them be used to apportion the water to be made available to the Wholesale Customers collectively, in lieu of the provisions of Section 3.11(C). 4 The provisions of this Plan relating to transfers (in Section 2.5), banking (in Section 3), and excess use charges (in Section 4) shall continue to apply during system-wide shortages greater than 20 percent. 2.4. Monthly Water Budgets. Within 10 days after adopting a declaration of water shortage emergency, the SFPUC will determine the amount of Tier 1 water allocated to the Wholesale Customers collectively pursuant to Section 2.1. The SFPUC General Manager, using the Tier 2 allocation percentages shown on the list delivered by BAWSCA pursuant to Section 2.2, will calculate each Wholesale Customer’s individual annual allocation. The SFPUC General Manager, or his designee, will then provide each Wholesale Customer with a proposed schedule of monthly water budgets based on the pattern of monthly water purchases during the Supply Year immediately preceding the declaration of shortage (the “Default Schedule”). Each Wholesale Customer may, within two weeks of receiving its Default Schedule, provide the SFPUC with an alternative monthly water budget that reschedules its annual Tier 2 shortage allocation over the course of the succeeding Supply Year. If a Wholesale Customer does not deliver an alternative monthly water budget to the SFPUC within two weeks of its receipt of the Default Schedule, then its monthly budget for the ensuing Supply Year shall be the Default Schedule proposed by the SFPUC. Monthly Wholesale Customer water budgets will be derived from annual Tier 2 allocations for purposes of accounting for excess use. Monthly Wholesale Customer water budgets shall be adjusted during the year to account for transfers of shortage allocation under Section 2.5 and transfers of banked water under Section 3.4. 2.5. Transfers of Shortage Allocations. Voluntary transfers of shortage allocations between the SFPUC and any Wholesale Customers, and between any Wholesale Customers, will be permitted using the same procedure as that for transfers of banked water set forth in Section 3.4. The SFPUC and BAWSCA shall be notified of each transfer. Transfers of shortage allocations shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. Transfers of shortage allocations shall be in compliance with Section 3.05 of the Agreement. The transferring parties will meet with the SFPUC, if requested, to discuss any effect the transfer may have on its operations. SECTION 3. SHORTAGE WATER BANKING 3.1. Water Bank Accounts. The SFPUC shall create a water bank account for itself and each Wholesale Customer during shortages in conjunction with its resale customer billing process. Bank accounts will account for amounts of water that are either saved or used in excess of the shortage allocation for each agency; the accounts are not used for tracking billings and payments. When a shortage period is in effect (as defined in Section 1.4), the following provisions for bank credits, debits, and transfers shall be in force. A statement of bank balance for each Wholesale Customer will be included with the SFPUC’s monthly water bills. 5 3.2. Bank Account Credits. Each month, monthly purchases will be compared to the monthly budget for that month. Any unused shortage allocation by an agency will be credited to that agency’s water bank account. Credits will accumulate during the entire shortage period, subject to potential restrictions imposed pursuant to Section 3.2.1. Credits remaining at the end of the shortage period will be zeroed out; no financial or other credit shall be granted for banked water. 3.2.1. Maximum Balances. The SFPUC may suspend the prospective accumulation of credits in all accounts. Alternatively, the SFPUC may impose a ceiling on further accumulation of credits in water bank balances based on a uniform ratio of the bank balance to the annual water allocation. In making a decision to suspend the prospective accumulation of water bank credits, the SFPUC shall consider the available water supply as set forth in Section 1.1 of this Plan and other reasonable, relevant factors. 3.3. Account Debits. Each month, monthly purchases will be compared to the budget for that month. Purchases in excess of monthly budgets will be debited against an agency’s water bank account. Bank debits remaining at the end of the fiscal year will be subject to excess use charges (see Section 4). 3.4. Transfers of Banked Water. In addition to the transfers of shortage allocations provided for in Section 2.5, voluntary transfers of banked water will also be permitted between the SFPUC and any Wholesale Customer, and among the Wholesale Customers. The volume of transferred water will be credited to the transferee’s water bank account and debited against the transferor’s water bank account. The transferring parties must notify the SFPUC and BAWSCA of each transfer in writing (so that adjustments can be made to bank accounts), and will meet with the SFPUC, if requested, to discuss any affect the transfer may have on SFPUC operations. Transfers of banked water shall be deemed to be an emergency transfer and shall become effective on the third business day after notice of the transfer has been delivered to the SFPUC. If the SFPUC incurs extraordinary costs in implementing transfers, it will give written notice to the transferring parties within ten (10) business days after receipt of notice of the transfer. Extraordinary costs means additional costs directly attributable to accommodating transfers and which are not incurred in non-drought years nor simply as a result of the shortage condition itself. Extraordinary costs shall be calculated in accordance with the procedures in the Agreement and shall be subject to the disclosure and auditing requirements in the Agreement. In the case of transfers between Wholesale Customers, such extraordinary costs shall be considered to be expenses chargeable solely to individual Wholesale Customers and shall be borne equally by the parties to the transfer. In the case of transfers between the SFPUC and a Wholesale Customer, the SFPUC’s share of any extraordinary transfer costs shall not be added to the Wholesale Revenue Requirement. 3.4.1. Transfer Limitations. The agency transferring banked water will be allowed to transfer no more than the accumulated balance in its bank. Transfers of estimated prospective banked credits and the “overdrafting” of accounts shall not be permitted. The price of transfer water originally derived from the SFPUC system is to be determined by the transferring parties and is not specified herein. Transfers of banked water shall be in compliance with Section 3.05 of the 6 Agreement. SECTION 4. WHOLESALE EXCESS USE CHARGES 4.1. Amount of Excess Use Charges. Monthly excess use charges shall be determined by the SFPUC at the time of the declared water shortage consistent with the calendar in Section 6 and in accordance with Section 6.03 of the Agreement. The excess use charges will be in the form of multipliers applied to the rate in effect at the time the excess use occurs. The same excess use charge multipliers shall apply to the Wholesale Customers and all Retail Customers. The excess use charge multipliers apply only to the charges for water delivered at the rate in effect at the time the excess use occurred. 4.2 Monitoring Suburban Water Use. During periods of voluntary rationing, water usage greater than a customer’s allocation (as determined in Section 2) will be indicated on each SFPUC monthly water bill. During periods of mandatory rationing, monthly and cumulative water usage greater than a Wholesale Customer’s shortage allocation and the associated excess use charges will be indicated on each SFPUC monthly water bill. 4.3. Suburban Excess Use Charge Payments. An annual reconciliation will be made of monthly excess use charges according to the calendar in Section 6. Annual excess use charges will be calculated by comparing total annual purchases for each Wholesale Customer with its annual shortage allocation (as adjusted for transfers of shortage allocations and banked water, if any). Excess use charge payments by those Wholesale Customers with net excess use will be paid according to the calendar in Section 6. The SFPUC may dedicate excess use charges paid by Wholesale Customers toward the purchase of water from the State Drought Water Bank or other willing sellers in order to provide additional water to the Wholesale Customers. Excess use charges paid by the Wholesale Customers constitute Wholesale Customer revenue and shall be included within the SFPUC's annual Wholesale Revenue Requirement calculation. SECTION 5. GENERAL PROVISIONS GOVERNING WATER SHORTAGE ALLOCATION PLAN 5.1. Construction of Terms. This Plan is for the sole benefit of the parties and shall not be construed as granting rights to any person other than the parties or imposing obligations on a party to any person other than another party. 5.2. Governing Law. This Plan is made under and shall be governed by the laws of the State of California. 5.3. Effect on Agreement. This Plan describes the method for allocating water between the SFPUC and the collective Wholesale Customers during system-wide water shortages of 20 percent or less. This Plan also provides for the SFPUC to allocate water among the Wholesale Customers in accordance with directions provided by the Wholesale Customers through BAWSCA under Section 2.2, and to implement a program by which such allocations may be voluntarily transferred among the Wholesale Customers. The provisions of this Plan are 7 intended to implement Section 3.11(C) of the Agreement and do not affect, change or modify any other section, term or condition of the Agreement. 5.4. Inapplicability of Plan to Allocation of SFPUC System Water During Non-Shortage Periods. The SFPUC’s agreement in this Plan to a respective share of SFPUC system water during years of shortage shall not be construed to provide a basis for the allocation of water between the SFPUC and the Wholesale Customers when no water shortage emergency exists. 5.5. Termination. This Plan shall expire at the end of the Term of the Agreement.. The SFPUC and the Wholesale Customers can mutually agree to revise or terminate this Plan prior to that date due to changes in the water delivery capability of the SFPUC system, the acquisition of new water supplies, and other factors affecting the availability of water from the SFPUC system during times of shortage. SECTION 6. ALLOCATION CALENDAR 6.1. Annual Schedule. The annual schedule for the shortage allocation process is shown below. This schedule may be changed by the SFPUC to facilitate implementation. 8 6.1.1 In All Years Target Dates 1.SFPUC delivers list of annual purchases by each Wholesale Customer during the immediately preceding Supply Year November 1 2.SFPUC meets with the Wholesale Customers and presents water supply forecast for the following Supply Year February 3.SFPUC issues initial estimate of available water supply February 1 4.SFPUC announces potential first year of drought (if applicable) February 1 5.SFPUC and Wholesale Customers meet upon request to exchange information concerning water availability and projected system- wide purchases February 1-May 31 6.SFPUC issues revised estimate of available water supply, and confirms continued potential shortage conditions, if applicable March 1 7.SFPUC issues final estimate of available water supply April 15th or sooner if adequate snow course measurement data is available to form a robust estimate on available water supply for the coming year. 8.SFPUC determines amount of water available to Wholesale Customers collectively April 15th or sooner if adequate snow course measurement data is available to form a robust estimate on available water supply for the coming year. In Drought Years Target Dates 9.SFPUC formally declares the existence of water shortage emergency (or end of water shortage emergency, if applicable) under Water Code Sections 350 et. seq. April 15-3130 10.SFPUC declares the need for a voluntary or mandatory response April 15-3130 11.BAWSCA submits calculation to SFPUC of individual Wholesale Customers’ percentage shares of water allocated to Wholesale Customers collectively April 15- 3130 12.SFPUC determines individual shortage allocations, based on BAWSCA’s submittal of individual agency percentage shares to SFPUC, and monthly water budgets (Default Schedule) April 25—May 10 13.Wholesale Customers submit alternative monthly water budgets (optional) May 8-May 24 14.Final drought shortage allocations are issued for the Supply Year beginning July 1 through June 30 June 1 15.Monthly water budgets become effective July 1 16.Excess use charges indicated on monthly Suburban bills August 1 (of the beginning year) through June 30 (of the succeeding year) 9 17.Excess use charges paid by Wholesale Customers for prior year August of the succeeding year Amendment 3: 2018 Decisions (Sec. 3.13, 4.01, 4.05, 4.06, 9.06, Attachment Q) (i) 15076185.1 3.13 Limits on New Customers New Wholesale Customers Prior to December 31, 20182028. Until December 31, 20182028, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless: It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations as provided in Section 4.07; It concurrently completes any necessary environmental review under CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; and This Agreement is amended to incorporate any commitments to proposed new wholesale customers and to San Jose and Santa Clara, and to address the effects, if any, of the new customer(s) on water supply reliability, water quality and cost to existing customers of the Regional Water System. New Wholesale Customers After December 31, 20182028. As of January 1, 20192029, San Francisco will not enter into contracts to supply water to any entity other than a Wholesale Customer (whether permanent or temporary, firm or interruptible) unless: It completes any necessary environmental review under CEQA of the proposed new wholesale water service obligations as provided in Section 4.07; It concurrently completes any necessary environmental review under CEQA as provided in Section 4.07 and commits to make both San Jose and Santa Clara permanent customers with Individual Supply Guarantees equal to at least 9 MGD; Doing so increases the reliability of the Regional Water System; and This Agreement is concurrently amended (a) to reflect that increased reliability by means of an increased commitment by San Francisco to deliver water during Droughts and (b) to address the effects, if any, of the new customer(s) on water supply, water quality and cost to existing customers of the Regional Water System. New Retail Customers. San Francisco may enter into new retail water service obligations outside of the City and County of San Francisco: (i) 15076185.1 Only in Alameda, San Mateo, Santa Clara, San Joaquin and Tuolumne Counties; That are within or immediately adjacent to areas in which it currently serves other Retail Customers; and Until the aggregate additional demand represented by the new retail customers reaches 0.5 MGD. The limitations on serving new Retail Customers described in this subsection do not apply to historical obligations to supply water that may be contained in prior agreements between the SFPUC or its predecessor the Spring Valley Water Company, and individual users or property owners located adjacent to Regional Water System transmission pipelines. Water Exchanges and Cost Sharing Agreements with Other Water Suppliers. Subject to completion of necessary environmental review under CEQA, San Francisco may at any time enter into water exchanges or cost sharing agreements with other water suppliers to enhance dry year or normal year water deliveries, provided that San Francisco cannot incur new water service obligations to such other water suppliers unless the requirements for taking on new wholesale customers in subsections A and B above are met. 15076188.1 4.01 Interim Supply Limitation Imposed by SFPUC In adopting the WSIP in Res. No. 08-0200, the Commission included full implementation of all proposed WSIP capital improvement projects to achieve level of service goalsLevel of Service Goals and Objectives relating to public health, seismic safety, and delivery reliability, but decided to adopt a water supply element that includes the Interim Supply Limitation. This article describes how the parties will implement the Interim Supply Limitation imposed by the SFPUC between the Effective Date and December 31, 2018. , and how the SFPUC will conduct water supply planning after December 31, 2018. (1) 15076192.1 4.05 San Jose/ Santa Clara Interim Supply Allocation and Process for Reduction/ Termination. San Francisco will supply a combined annual average of 9 MGD to the cities of San Jose and Santa Clara through 20182028. Water supplied by San Francisco may only be used in the existing defined service areas in the northern portions of San Jose and Santa Clara shown on Attachment Q-1 and Q-2, respectively. San Francisco may reduce the quantity of water specified in this section when it establishes the Interim Supply Allocations for Wholesale Customers in Section 4.02. The establishment of Interim Supply Allocations for San Jose and Santa Clara shall not be considered a reduction of supply within the meaning of this section, provided that the Interim Supply Allocations assigned to San Jose and Santa Clara do not effect a reduction greater than the aggregate average reduction in Individual Supply Guarantees for Wholesale Customers that have such guarantees. The application of Interim Supply Allocations to San Jose and Santa Clara is, and water supply planning after December 31, 2018, are subject to the following provisions: A. In December 2010 and in each December thereafter through 20172027, the SFPUC shall prepare and the Commission shall consider, at a regularly scheduled public meeting, a Water Supply Development Report detailing progress made toward (1) meeting the Interim Supply Limitation by June 30, 2018 and (2) developing additional water supplies that will allow the Commission to designate San Jose and Santa Clara as permanent Wholesale Customers of the Regional Water System with a combined Individual Supply Guarantee of up to 9 MGD by the end of the Term on June 30, 2034. B. The annual Water Supply Development Report shall be based on water purchase projections and work plans for achieving the Interim Supply Limitation in the Retail and Wholesale Service Areas. The projections and work plans will be prepared by the SFPUC for the Retail Customers and by BAWSCA for the Wholesale Customers, respectively, and submitted to the Commission in June of each year beginning in 2010. C. If the Commission finds that the projections in the Water Supply Development Report show that (1) the Interim Supply Limitation will not be met by June 30, 2018, as a result of Wholesale Customers' projected use exceeding 184 MGD, or (2) the purchases of the Wholesale Customers, including San Jose and Santa Clara, are projected to exceed 184 MGD (1) 15076192.1 before June 30, 2028, the Commission may issue a conditional five-ten year notice of interruption or reduction in supply of water to San Jose and Santa Clara. D. Upon issuance of the conditional notice of interruption or reduction, the SFPUC will prepare a new analysis of water supply that will be utilized by the San Francisco Planning Department in its preparation of any necessary documentation under CEQA pursuant to Section 4.07 on the impacts of interrupting or reducing service to San Jose and Santa Clara. E. Such notice of interruption or reduction will be rescinded if the Commission finds, based upon a subsequent annual Water Supply Development Report, that (1) sufficient progress has been made toward meeting the Interim Supply Limitation, or (2) projections show that the Interim Supply Limitationprojected purchases of the Wholesale Customers, including San Jose and Santa Clara, will be metnot exceed 184 MGD by June 30, 20182028. F. In no case shall any interruption or reduction of service to San Jose or Santa Clara pursuant to this section become effective less than two years from the completion of the CEQA process (not including resolution of any appeals or litigation) or fiveten years from the notice, whichever is longer. If the five-ten year notice is issued after 20132018, such interruption or reduction would occurbe effective after 20182028. G. If deliveries to San Jose and Santa Clara are interrupted, existing turnout facilities to San Jose and Santa Clara will remain in place for possible use during emergencies. H. San Francisco and the cities of San Jose and Santa Clara will cooperate with BAWSCA and the Santa Clara Valley Water District in the identification and implementation of additional water sources and conservation measures for the cities’ service areas that are relevant to the water supply and the possible offer of permanent status for the two cities by the SFPUC. (1) 15076198.1 4.06 San Francisco Decisions in 20182028 Regarding Future Water Supply A. By December 31, 20182028, San Francisco will have completed any necessary CEQA review pursuant to Section 4.07 that is relevant to making San Jose and Santa Clara permanent customers of the Regional Water System and will decide whether or not to make San Jose and Santa Clara permanent customers of the Regional Water System. with a combined Individual Supply Guarantee of 9 MGD allocated equally between the two cities, as well as how much water in excess of 9 MGD it will supply to San Jose and Santa Clara. San Francisco will make San Jose and Santa Clara permanent customers only if, and to the extent that, San Francisco determines that Regional Water System long term water supplies are available. In the event that San Francisco decides to afford permanent status to San Jose and Santa Clara, this Agreement will be amended pursuant to Section 2.03. B. By December 31, 20182028, San Francisco will have completed any necessary CEQA review pursuant to Section 4.07 and will decide how much water, if any, in excess of the Supply Assurance it will supply to Wholesale Customers from the Regional Water System to meet their projected future water demands until the year 20302040, and whether to offer a corresponding increase in the Supply Assurance as a result of its determinationthese determinations. 15076205.1 9.06 City of San Jose and City of Santa Clara Continued Supply on Temporary, Interruptible Basis. During the term of the 1984 Agreement, San Francisco provided water to the City of San Jose (“San Jose”) and the City of Santa Clara (“Santa Clara”) on a temporary, interruptible basis pursuant to SFPUC Resolution No. 85-0256. Subject to termination or reduction of supply as provided in Section 4.05 of this Agreement, San Francisco will continue to supply water to San Jose and Santa Clara on a temporary, interruptible basis pending a decision by the Commission, pursuant to Section 4.05.H, as to whether to make San Jose and Santa Clara permanent customers of the Regional Water System. San Francisco will furnish water to San Jose and Santa Clara at the same rates as those applicable to other Wholesale Customers pursuant to this Agreement. Water delivered to San Jose and Santa Clara after July 1, 2009 may be limited by the SFPUC’s ability to meet the full needs of all its other Retail and Wholesale Customers. The service areas of San Jose and Santa Clara set forth in their Individual Water Sales Contracts may not be expanded using the procedure set forth in Section 3.03. The combined annual average water usage of San Jose and Santa Clara shall not exceed 9 MGD. The allocation of that total amount between San Jose and Santa Clara shall be as set forth in their Individual Water Sales Contracts. Reservation of Rights. In signing this Agreement, neither San Jose nor Santa Clara waives any of its rights to contend, in the event that San Francisco (1) elects to terminate or interrupt water deliveries to either or both of the two cities prior to 20182028 using the process set forth in Section 4.05, or (2) does not elect to take either city on as a permanent customer in 20182028, that it is entitled to permanent customer status, pursuant to the Act or any other federal or state law. Santa Clara's reservation of rights is limited to its existing Service Area A, as shown on Attachment Q-2. Service Area B, south of Highway 101, was added in 2018 solely for the operational convenience of Santa Clara. Santa Clara waives its right to make claims described in this Section 9.06.B and Section 8.07.B.3 with respect to Service Area B. In signing this Agreement, San Francisco does not waive its right to deny any or all such contentions. Legend f: 21] Service Area - Streams/Rivers Attachment Q-1 i l: ;=--,,----------+---�c;s ......... ;.... ______ ,.,- Maximum Service Area -North San Jose Municipal Water \\oakland-01\data\GISIBAWSCA\Project\2018_07 _ServiceAreas\Attach_ Q-1_SantaClara-ServiceArea.mxd 9/14/2018 11 :45:29 AM Legend L rn M Service Area A: Existing service area Attachment Q-2 (Z2I Service Area B: Expanded service area, for operational purposes only . , . -Streams/Rivers " .. '! ·1 " .:; >lh•h It.th •.11•1 11 :, GI ., ,, ,, (I ,• � .. •,t ··� Ji ,1 l1,;.q11(r. 1,\1,,1; ,\ Cup0•1li110 l\lVt!:,0 \',' 'dll I J ··'·t .... "'------!.' \ ,., t �!,....i;'��--..... �::-:T���::1--"'"'."'."""',.,:r,�ol/,j,,iliol,..Q.; ..... �-.:_:.,-,� ... T ... , .. ,. ,, . ,, I· I ( \ ,,,,,., 'h .,'"'' '; li•I r..:..-,yr,'4111 llttlt f I ® Maximum Service Area -City of Santa Clara \\oakland-01\data\GISIBAWSCA\Project\2018 _07 _ ServlceAreas\Attach_ Q-2_ SantaClara-ServlceAreaExisting.mxd 9/27/2018 3:49:40 PM I I i ·',' Amendment 4: Asset Classification (Sec. 5.11) 1 15118377.1 Section 5.11. Classification of Existing System Assets. Existing System Assets of the Regional Water System include the water storage, transmission, and treatment systems owned and operated by San Francisco in Tuolumne, Stanislaus, San Joaquin, Alameda, Santa Clara, San Mateo and San Francisco Counties. These assets are managed by either the Water Enterprise or the Hetch Hetchy Enterprise and the assets have been classified for purposes of cost allocation. A. Water Enterprise Assets. Water Enterprise assets are currently managed, operated, and maintained by the Water Enterprise and are generally located west of Alameda East Portal, in addition to the treatment facilities located at Tesla and the Thomas Shaft Emergency Disinfection Facility. These assets are classified as Direct Retail, Direct Wholesale, or Regional. B. Hetch Hetchy Enterprise Assets. Hetch Hetchy Enterprise assets are currently managed, operated and maintained by the Hetch Hetchy Enterprise and are generally located east of the Alameda East Portal of the Coast Range Tunnel in Sunol Valley, Alameda County. These assets are classified as Power-Only, Water-Only, or Joint, in accordance with Sections 5.08 and 5.09. Through the Wholesale Revenue Requirement, the Wholesale Customers pay Existing System Asset capital costs and operating expenses in accordance with Section 5.02.F and do not pay capital costs or operating expenses associated with assets classified as Direct Retail, Power-Only, and the Power- Related portion of Joint assets. C. Attachment R Documents Classifications. To facilitate WSA administration, Attachment R documents the classification of major Existing System Assets operated by the Hetch Hetchy Enterprise. Attachment R consists of three documents: R-1 Introduction, R-2 Special Classification of Discrete Projects for 2018 Amendment Purposes, and R-3 Major Hetch Hetchy Enterprise Existing System Assets. Attachment R may be modified as specified in Section 5.11.D and in the manner set forth in Section 2.03.C. D. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets, is Not Exhaustive. Existing System Assets include, but are not limited to, land; fixed infrastructure such as dams, tunnels, buildings, water treatment plants and pipelines; equipment such as pumps and vehicles; and related appurtenances. Major Hetch Hetchy Enterprise Existing System Assets, and their classifications, are listed in Attachment R-3. Attachment R-3 does not include all assets of the Regional Water System, but represents the parties' best efforts to document major Hetch Hetchy Enterprise Existing System Assets that would incur capital costs and operating expenses subject to cost allocation. The classification of assets listed on R-3 may not be 2 15118377.1 changed during the Term, any Extension Term, and any renewal of the Agreement, however, Attachment R-3 may be modified by mutual agreement in accordance with Section 2.03.C to (1) add an asset that was inadvertently omitted, (2) to add a new asset, and (3) remove a destroyed or obsolete asset. In the event that the parties cannot agree on the classification of any omitted or new assets, the dispute shall be subject to arbitration under Section 8.01. E. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets, Classifications are Fixed. The classification of the major Hetch Hetchy Enterprise Existing System Assets is fixed and shall control the allocation of capital costs and operating expenses for the remainder of the Term, any Extension Terms, and any renewal of the Agreement. However, changes may be proposed in accordance with subsection G below. Capital costs and operating expenses are meant to be inclusive of all costs related to assets, including, but not limited to, any alterations, additions, improvements, rehabilitation, replacement of assets, and equipment that is appurtenant thereto. Since asset classifications are fixed in Attachment R-3, asset classifications may not be modified by mutual agreement in accordance with Section 2.03.C. F. Attachment R-2, Special Classification of Discrete Projects for 2018 Amendment Purposes. Past, ongoing and future capital projects involving five Hetch Hetchy Enterprise Existing System Assets defined in Attachment R-2 have classifications that differ from the underlying asset classifications. These project-related classification changes shown on Attachment R-2 are part of the 2018 amendments to the Agreement and are not precedential for any other asset-related capital cost or operating expense. With the exception of the defined projects related to the five assets listed on R-2, the capital projects for all assets follow the asset classifications. Capital projects listed on Attachment R-2 must be approved by the SFPUC following necessary CEQA review. G. Five Year Notice of Intent to Renegotiate Cost Allocation. In the event San Francisco or the Wholesale Customers, which may be represented by BAWSCA, wish to propose and negotiate a change in Existing System Asset classifications, or a change in the Water-Related portion (45 percent) of Joint expenses, for the next Water Supply Agreement, such party must provide the other at least 5 years' written notice prior to the expiration of the Term or Extension Term, or the renewal of the Agreement. At a minimum, the noticing party must provide a comprehensive analysis of the financial and rate impacts of the proposed change at least two years prior to the expiration of the Term or Extension Term, or the renewal of the Agreement. To meet this requirement, the parties may agree to jointly analyze, under a separate agreement, system capacity and usage, and/or new assets, as well as other possible alternative cost allocation methodologies. Either party may also unilaterally initiate such studies by consultants of their choice and bear all their own costs. ATTACHMENT R – CLASSIFICATION OF EXISTING SYSTEM ASSETS 1 15049417.1 ATTACHMENT R-1 INTRODUCTION TO ATTACHMENT R Attachment R is composed of three documents (1) this R-1 Introduction to Attachment R, (2) R-2 Special Classification of Discrete Projects for 2018 WSA Amendment Purposes, and (3) R-3 Major Hetch Hetchy Enterprise Existing System Assets. These R series attachments provide a record for purposes of maintaining the historical basis for the allocation of capital costs and operating expenses associated with Existing System Assets generally, with greater detail provided for major Hetch Hetchy Enterprise Existing System Assets due to the complexity of tracking the Water-Only, Power-Only, and Joint classifications as inputs to the Wholesale Revenue Requirement under Sections 5.08 and 5.09 of the Agreement. Attachment R-2, Special Classification of Discrete Projects for 2018 WSA Amendment Purposes defines a limited number of capital projects involving five Hetch Hetchy Enterprise Existing System Assets where the parties have agreed to classify defined capital project costs separately from the assets’ underlying classification listed on Attachment R-3. The classification listed in Attachment R-3 will continue to control the allocation of capital costs and operating expenses once the defined capital projects described in Attachment R-2 are complete. Attachment R-3, Major Hetch Hetchy Enterprise Existing System Assets is a record of major assets at the "facility group" level (see below) as of January 1, 2019. The table contains six columns and 578 rows. The facility groups are broken down into individual facilities or assets. The facility group name and classification are provided for each asset. Assets listed on Attachment R-3 are classified as Joint, Water-Only, or Power-Only. Each asset is also assigned a unique identification ("ID") number for ease of reference. Attachment R-3 is not a complete record of all Hetch Hetchy Enterprise Existing System Assets. General Explanation of Classification. A “facility group” is a location where a group of facilities is located. A single facility may constitute a facility group. A “facility” is a primary asset in a facility group whose function determines its classification and the classification of appurtenances or sub-assets. An appurtenance is an asset or sub-asset that supports the function of the facility to which it is appurtenant. In most cases the classification of the appurtenance is determined by the classification of the facility to which the appurtenance belongs. The function of the appurtenance may not necessarily control its classification. The classification of appurtenant assets generally follows the classification of the facility group served. These appurtenant assets include security, offices/housing, and utilities serving the facility group such as domestic water, wastewater, communications and solid waste disposal. Power distribution assets that provide power to a facility group (e.g. lower voltage power distribution lines) generally carry the classification of the facility group served, but do not include power generation or higher voltage transmission lines for export of power elsewhere, which remain classified as Power-Only. With limited exceptions for roads exclusively accessing Power-Only facilities, roads and bridges are classified as Joint because most roads serve multiple facilities or Joint facilities. Equipment and rolling stock are generally classified as Joint unless the asset has a specialized purpose serving the Power function. Capital costs and operating expenses related to Camp Mather are charged to Power in order to segregate these costs from the Wholesale Revenue Requirement. 1 15048734.1 ATTACHMENT R-2 SPECIAL CLASSIFICATION OF DISCRETE PROJECTS FOR 2018 WSA AMENDMENT PURPOSES Asset Asset Classification Project Project Classification1 Lower Cherry Aqueduct Joint Lower Cherry Aqueduct Project Water2 Mountain Tunnel Joint Mountain Tunnel Interim Work Water3 Mountain Tunnel Joint Mountain Tunnel Long Term Repairs Water3 Mountain Tunnel Joint Mountain Tunnel Flow Control Facility (FCF) Project Joint5 Kirkwood Penstock Power Kirkwood Penstock Project Joint4 Moccasin Powerhouse Penstock Power Moccasin Penstock Project Joint4 Moccasin Lower Dam Water Moccasin Dam Interim Repairs Joint5 Moccasin Lower Dam Water Moccasin Dam Long-Term Improvements Joint5 These Project Classifications are Exceptions to the Fixed Asset Classifications in Attachment R-3 Attachment R-3 lists major Hetch Hetchy Enterprise Existing System Assets and their agreed- upon classifications (Power, Joint or Water). The classification for all Existing System Assets is fixed and applies to all related expenditures, including capital, regulatory, operating and maintenance expenses, and whether the expenditure alters, rebuilds or replaces the asset, and any appurtenances. 1 Expires June 30, 2034 2 Project capital costs may include costs incurred in FY 2013-14 and subsequent Fiscal Years until project is complete 3 Project capital costs may include costs incurred in FY 2011-12 and subsequent Fiscal Years until project is complete 4 Project capital costs may include costs incurred in FY 2009-10 and subsequent Fiscal Years until project is complete 5 Project capital costs may include costs incurred in FY 2017-18 and subsequent Fiscal Years until project is complete 2 15048734.1 In 2018, the parties agreed to classify certain capital projects (but not the underlying asset classifications shown on Attachment R-3) for a select number of Hetch Hetchy Enterprise Existing System Assets. These projects are defined below. These project-related classification changes, shown on this Attachment R-2, are part of the 2018 amendments to the Agreement and are not precedential for any other asset-related capital cost or operating expense. The capital costs for the projects defined below shall be allocated in accordance with the project classifications shown on this Attachment R-2 so long as the projects are approved by the SFPUC following necessary CEQA review. Once the project, as defined below, is complete and the Commission adopts a project administrative closeout resolution authorizing final payment to the contractor(s), the separate project classification expires and all subsequent capital costs and operating expenses related to the asset will follow the existing asset classification shown on Attachment R-3. The project classification exceptions will expire on June 30, 2034 and all future capital and operating costs and expenses will follow the asset classification, even if a project has not been completed by the SFPUC by that date. Unless specified otherwise, the capital costs for each project specified below includes costs incurred by the SFPUC for the construction of the project using debt or revenue funding, along with all project-related planning costs, engineering costs, engineering services, costs to obtain project-related regulatory permits, fees for environmental consultants, mitigation costs, legal fees, and other costs that are required to construct and place the project in operation as a water conveyance or power generation facility, or to serve both functions. The allocation of project capital costs includes expenditures incurred in fiscal years prior to FY 2018-19 where noted. Project Classification Descriptions6 1. Lower Cherry Aqueduct Project means repairs along the Lower Cherry Aqueduct system from and including the Cherry Creek Diversion Dam downstream to and including a connection to the pool behind Early Intake Dam, including expenditures incurred in FY 2013- 14 and subsequent fiscal years until the project is complete. 2. Mountain Tunnel Interim Work means the investigations, interim repairs to the tunnel as well as improvements to access roads and adits for Adit 5/6 and Adit 8/9 already funded or included in the FY 2017-18 ten-year CIP, including expenditures incurred in FY 2011-12 and subsequent fiscal years until the project is complete. 3. Mountain Tunnel Long Term Repairs means repair or replacement of tunnel lining not performed as part of the Mountain Tunnel Interim Work, contact grouting of the entire tunnel lining, completion of hydraulic improvements, installation of steel lining in sections of the tunnel to accommodate increased pressure, extension of the siphon crossing under the South Fork of the Tuolumne River, an enlarged concrete portal and bulkhead at Early Intake, and roadway access improvements to tunnel entry points at the South Fork Tuolumne River crossing, Adit 8-9 and Adit 5-6. Project capital costs include costs incurred in FY 2011-12 and subsequent fiscal years until the project is complete. 6 SFPUC and BAWSCA discussed and agreed to omit the following projects from this special project classification: 1) Early Intake Diversion Dam and Reservoir, 2) Moccasin Power Tunnel, and 3) Kirkwood Generator Bypass and Moccasin Generator #1 & 2 Bypasses. All capital costs and operating expenses related to these assets will follow the existing asset classification shown on Attachment R-3. 3 15048734.1 4. Mountain Tunnel Flow Control Facility (FCF) Project means construction of a FCF at the downstream end of Mountain Tunnel to reduce lining damage by eliminating the daily cycling between open channel and pressurized flow conditions inside the tunnel, and to allow access to the tunnel when the elevation of the water surface in Priest Reservoir is higher than the elevation of Priest Portal. The project consists of constructing a bypass tunnel, a FCF access shaft and related appurtenances, installing flow control valves and associated mechanical, electrical, and instrumentation as well as construction of a new Mountain Tunnel adit at Priest Reservoir, and a new access road to the FCF. The bypass will be fully steel lined to accommodate higher operating pressures, and a concrete plug will be constructed at the upstream end where water is diverted into the FCF. Project capital costs include costs incurred in FY 2017-18 and subsequent fiscal years until the project is complete. 5. Kirkwood Penstock Project means repair, rehabilitation or replacement of the penstock between the Canyon Portal Valve House and the outside of the northern wall of the Kirkwood Powerhouse. The Joint classification for this project would exclude valves, electronic controls and other appurtenances needed for power operations but not for delivery of water to the Bay Area. Project capital costs include costs incurred in FY 2009-10 and subsequent fiscal years until the project is complete. 6. Moccasin Dam Interim Repairs means repairs and improvements related to damage caused by the March 22, 2018 storm with the goal of returning the reservoir to service at a restricted water pool elevation. The interim measures include repairs and improvements to the Moccasin Creek Diversion Dam and Bypass, Moccasin Reservoir, access and automation improvements at Gate No. 3 Tower, the Lower Moccasin Dam Auxiliary Spillway, and the downstream channel of Moccasin Creek. Project capital costs include costs incurred in FY 2017-18 and subsequent fiscal years until the project is complete. 7. Moccasin Dam Long-Term Improvements means upgrading the Moccasin Reservoir facilities to meet long-term operational and dam safety needs, including the Lower Moccasin Dam, Moccasin Creek Diversion Dam, spillways, outlet works, and other appurtenant facilities, excluding the Moccasin Low Head Hydropower Plant and appurtenances. The work consists of repairs and upgrades to restore the capability to accommodate changes in flow associated with water delivery and power generation, provide hydraulic control for delivery of water to the Bay Area, permit the discharge of excess water downstream to Don Pedro Reservoir, and satisfy State regulatory requirements and guidelines. The Joint classification for this project would include all work, regardless of whether or not specific elements are required by the State of California. Project capital costs include costs incurred in FY 2017-18 and subsequent fiscal years until project is complete. 8. Moccasin Penstock Project means the repair, rehabilitation or replacement of the Moccasin Penstocks to ensure reliable water delivery to the Bay Area and support power generation at Moccasin Powerhouse. Project facilities would extend from the western end of the Moccasin Power Tunnel to the eastern wall of the Moccasin Powerhouse. The Joint classification for this project would exclude valves, electronic controls and other appurtenances needed for power operations but not for delivery of water to the Bay Area. Project capital costs include costs incurred in FY 2009-10 and subsequent fiscal years until the project is complete. Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 1 CPSCADA Canyon Tunnel CANYON PORTAL SCADA RTU (FUT.)Joint 1 2 OSHCANTNL Canyon Tunnel OSHAUGHNESSY CANYON POWER TUNNEL Joint 2 3 CV Cherry and Eleanor Dams/Compounds CHERRY VALLEY DAMS AND BUILDINGS Joint 3 4 CVBLDGS Cherry and Eleanor Dams/Compounds CHERRY VALLEY BUILDINGS Joint 4 5 CVFUEL Cherry and Eleanor Dams/Compounds CHERRY VALLEY FUELING STATION Joint 5 6 CVPS Cherry and Eleanor Dams/Compounds CHERRY VALLEY PUMP STATION Power 6 7 ELBAT Cherry and Eleanor Dams/Compounds ELEANOR BATTERY BANK Joint 7 8 ELCOT Cherry and Eleanor Dams/Compounds COTTAGE, LAKE ELEANOR Joint 8 9 ELDORM Cherry and Eleanor Dams/Compounds DORM, COOKHOUSE, GARAGE LAKE ELEANOR Joint 9 10 ELDWSCT Cherry and Eleanor Dams/Compounds LAKE ELEANOR WATER TANK Joint 10 11 ELEANOR Cherry and Eleanor Dams/Compounds LAKE ELEANOR EQUIPMENT Joint 11 12 ELWHSE Cherry and Eleanor Dams/Compounds WAREHOUSE, LAKE ELEANOR Joint 12 13 CVPSPRORLY Cherry and Eleanor Dams/Compounds CHERRY VALLEY PUMP STATION PROTECTIVE RELAYS Power 13 14 CVDM Cherry and Eleanor Dams/Compounds CHERRY VALLEY DAM Joint 14 15 CVDWS Cherry and Eleanor Dams/Compounds CHERRY VALLEY DOMESTIC WATER SYSTEM Joint 15 16 CVVH Cherry and Eleanor Dams/Compounds CHERRY VALLEY VALVE HOUSE Joint 16 17 ELNCHRTNL Cherry and Eleanor Dams/Compounds ELEANOR - CHERRY TUNNEL Joint 17 18 ELNRDM Cherry and Eleanor Dams/Compounds ELEANOR DAM Joint 18 19 ICP Early Intake Dam and Reservoir INTAKE CAMP EQUIPMENT AND GROUNDS Joint 19 20 ICPCT Early Intake Dam and Reservoir INTAKE CAMP COTTAGES Joint 20 21 ICPFUEL Early Intake Dam and Reservoir INTAKE CAMP FUELING SYSTEM Joint 21 22 ICPLINERIGSH Early Intake Dam and Reservoir INTAKE CAMP LINEMENS RIGGING SHED BUILDING NA 22 23 ICPMAIL This row not included by SFPUC INTAKE MAIL SHACK NA 23 24 ICPSAND Early Intake Dam and Reservoir INTAKE CAMP SAND STORAGE BUILDING Joint 24 25 ICPSEW Early Intake Dam and Reservoir INTAKE CAMP SEWAGE SYSTEM Joint 25 26 ICPTV Early Intake Dam and Reservoir INTAKE CAMP TV SYSTEM Joint 26 27 ICPWSTN Early Intake Dam and Reservoir INTAKE WEATHER STATION Joint 27 28 IWSSCADA Early Intake Dam and Reservoir INTAKE DOMESTIC WATER SYS RTU Joint 28 29 ICPEL Early Intake Dam and Reservoir INTAKE CAMP ELECTRICAL SYSTEM Joint 29 30 ICPDWSBFP Early Intake Dam and Reservoir INTAKE DOMESTIC WATER BACK FLOW PREVENTERS, ICP Joint 30 31 ICPPOOL Early Intake Dam and Reservoir INTAKE CAMP SWIMMING POOL Joint 31 32 ICPWTS Early Intake Dam and Reservoir INTAKE CAMP WATER SYSTEM Joint 32 33 ICPDM Early Intake Dam and Reservoir INTAKE CAMP DAM Joint 33 34 INTRES Early Intake Dam and Reservoir INTAKE RESERVOIR Joint 34 35 GPL Holm Powerhouse 22.9KV-GRANITE PORTAL LINE Power 35 36 H1 Holm Powerhouse HOLM UNIT #1 Power 36 37 H1PRORLY Holm Powerhouse HPH UNIT #1 PROTECTIVE RELAYS Power 37 38 H2 Holm Powerhouse HOLM UNIT #2 Power 38 39 H2PRORLY Holm Powerhouse HPH UNIT #2 PROTECTIVE RELAYS Power 39 40 HAX Holm Powerhouse HPH EXCITERS, GOVERNORS, TAIL RACE AND OTHER Power 40 41 HL2TTGE Holm Powerhouse HPH LINE #2 TRANSFER TRIP GE Power 41 42 HPH Holm Powerhouse HOLM POWERHOUSE Power 42 43 HPHBATTERY Holm Powerhouse HPH BATTERY SYSTEM Power 43 44 HPHPEN Holm Powerhouse HOLM POWERHOUSE PENSTOCK Power 44 45 HPHPRORLYTMP Holm Powerhouse TEMP HOLING SPOT FOR PRO RLYS Power 45 46 HPHRF#1 Holm Powerhouse HOLM POWERHOUSE ROOF FAN #1 Power 46 47 HPHRF#2 Holm Powerhouse HOLM POWERHOUSE ROOF FAN #2 Power 47 48 HPHWW Holm Powerhouse HPH TSOV, SLIDE GATES AT TAILRACE, ETC Power 48 49 HPRORLY Holm Powerhouse HPH PROTECTIVE RELAYS Power 49 50 HSPARES Holm Powerhouse ALL HOLM POWERHOUSE SPARES Power 50 51 HVH Holm Powerhouse HOLM VALVE HOUSE Power 51 12/21/2018 15118437_1.xlsx 1 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 52 CVPWRTNL Holm Powerhouse CHERRY POWER TUNNEL Power 52 53 GPSCADA Holm Powerhouse GRANITE PORTAL SCADA RTU (FUT.)Power 53 54 H1ASCADA Holm Powerhouse HPH UNIT 1 ANNUNCIATOR RTU Power 54 55 H2ASCADA Holm Powerhouse HPH UNIT 2 ANNUNCIATOR RTU Power 55 56 HPHSCADA Holm Powerhouse HOLM POWERHOUSE SCADA RTU Power 56 57 HPHVMS Holm Powerhouse HPH VIBRATION MONITORING SYSTEM Power 57 58 KPH2SCADA Kirkwood Powerhouse KPH PENSTOCK MONITORING SYS RTU Power 58 59 KPH Kirkwood Powerhouse KIRKWOOD POWERHOUSE Power 59 60 KPHB Kirkwood Powerhouse KPH BATHROOM Power 60 61 KPHOFFICE Kirkwood Powerhouse KPH OPERATOR OFFICE Power 61 62 KVH Kirkwood Powerhouse KIRKWOOD VALVE HOUSE Joint 62 63 K1 Kirkwood Powerhouse KIRKWOOD UNIT #1 Power 63 64 K1PRORLY Kirkwood Powerhouse KPH UNIT #1 PROTECTIVE RELAYS Power 64 65 K2 Kirkwood Powerhouse KIRKWOOD UNIT #2 Power 65 66 K2PRORLY Kirkwood Powerhouse KPH UNIT #2 PROTECTIVE RELAYS Power 66 67 K3 Kirkwood Powerhouse KIRKWOOD UNIT #3 Power 67 68 K3PRORLY Kirkwood Powerhouse KPH UNIT #3 PROTECTIVE RELAYS Power 68 69 KAX Kirkwood Powerhouse KPH EXCITERS, GOVERNORS, TAIL RACE AND OTHER Power 69 70 KAXBKR5211 Kirkwood Powerhouse KPH BREAKER LOCATION 52-11 MATHER / ICP LINE Power 70 71 KAXBKR5212 Kirkwood Powerhouse KPH BREAKER LOCATION 52-12 CANYON PORTAL LINE Power 71 72 KAXBKR5221 Kirkwood Powerhouse KPH BREAKER LOCATION 52-21 MATHER / ICP LINE Power 72 73 KAXBKR5222 Kirkwood Powerhouse KPH BREAKER LOCATION 52-22 MATHER 22KV LINE Power 73 74 KAXBKR52S1 Kirkwood Powerhouse KPH1 BREAKER LOCATION 52-S1 STATION SERVICE Power 74 75 KAXBKR52S2 Kirkwood Powerhouse KPH2 BREAKER LOCATION 52-S2 STATION SERVICE Power 75 76 KAXBKR52S3 Kirkwood Powerhouse KPH3 BREAKER LOCATION 52-S3 STATION SERVICE Power 76 77 KAXBKRBT Kirkwood Powerhouse KPH BREAKER LOCATION 52-BUS TIE Power 77 78 KAXBKRBT23 Kirkwood Powerhouse KPH BREAKER LOCATION 23-BUS TIE Power 78 79 KAXBKRBT32 Kirkwood Powerhouse KPH BREAKER LOCATION 32-BUS TIE Power 79 80 KAXBKRSS1 Kirkwood Powerhouse KPH1 BREAKER LOCATION 52-SS1 STATION SERVICE Power 80 81 KAXBKRSS2 Kirkwood Powerhouse KPH2 BREAKER LOCATION 52-SS2 STATION SERVICE Power 81 82 KAXBKRSS3 Kirkwood Powerhouse KPH3 BREAKER LOCATION 52-SS3 STATION SERVICE Power 82 83 KAXBREAKERS Kirkwood Powerhouse KIRKWOOD POWERHOUSE BREAKERS Power 83 84 KPHBATTERY Kirkwood Powerhouse KPH BATTERY SYSTEM Power 84 85 KPHDCV Kirkwood Powerhouse KPH DELUGE CONTROL VALVE Power 85 86 KPHGENBRK Kirkwood Powerhouse KPH SPARE GENERATOR BREAKER Power 86 87 KPHOILFLT Kirkwood Powerhouse KPH PORTABLE XFMR OIL FILTER Power 87 88 KPHPEN Kirkwood Powerhouse KIRKWOOD POWERHOUSE PENSTOCK Power 88 89 KPHRF Kirkwood Powerhouse KPH RECIRCULATING FAN Power 89 90 KPRORLY Kirkwood Powerhouse KPH PROTECTIVE RELAYS Power 90 91 KSPARES Kirkwood Powerhouse ALL KIRKWOOD POWERHOUSE SPARES Power 91 92 KPHAXWPV Kirkwood Powerhouse KPH AUX WHEEL PIT VENT Power 92 93 KPHBYPSYS Kirkwood Powerhouse KPH GENERATOR BYPASS Power 93 94 KPHWW Kirkwood Powerhouse KPH TSOV, SLIDE GATES AT TAILRACE, ETC Power 94 95 K1ASCADA Kirkwood Powerhouse KPH UNIT 1 ANNUNCIATOR RTU Power 95 96 K2ASCADA Kirkwood Powerhouse KPH UNIT 2 ANNUNCIATOR RTU Power 96 97 KPH1SCADA Kirkwood Powerhouse KPH SCADA RTU Power 97 98 VIBMONSYS Kirkwood Powerhouse ALL VIBRATION MONITORING SYSTEMS & EQUIPMENT Power 98 99 KPHVMS Kirkwood Powerhouse KPH VIBRATION MONITORING SYSTEM Power 99 100 KPHTRBMTR Kirkwood Powerhouse KPH TURBIDIMETER Water 100 102 RAKERLANDS Support Systems, Utilities and Other RAKER ACT LANDS & US LAND APPLICATIONS Joint 102 103 SJLANDS Support Systems, Utilities and Other SAN JOAQUIN COUNTY LANDS Joint 103 12/21/2018 15118437_1.xlsx 2 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 104 STANISLANDS Support Systems, Utilities and Other STANISLAUS COUNTY LANDS Joint 104 105 TUOLUMNELAN Support Systems, Utilities and Other TUOLUMNE & MARIPOSA COUNTY LANDS Joint 105 106 CC Lower Cherry Creek Aqueduct CHERRY CREEK EQUIPMENT AND BUILDING Joint 106 107 CCAQ Lower Cherry Creek Aqueduct CHERRY CREEK AQUEDUCT Joint 107 108 CCDDM Lower Cherry Creek Aqueduct CHERRY CREEK DIVERSION DAM Joint 108 109 CHDIVTUN Lower Cherry Creek Aqueduct CHERRY DIVERSION TUNNEL Joint 109 110 CVDIVCANAL Lower Cherry Creek Aqueduct CHERRY TO INTAKE DIVERSION CANAL Joint 110 118 MLSSCADA Moccasin Administrative Compound MOCCASIN LIFT STATION RTU Joint 118 119 MPHWS Moccasin Administrative Compound MOCCASIN WEATHER STATION Joint 119 120 MWSSCADA Moccasin Administrative Compound MOCCASIN DOMESTIC WATER SYS RTU Joint 120 121 EQP-HH Moccasin Administrative Compound NON-AUTOMOTIVE EQUIPMENT Joint 121 122 ETESTEQUIP Moccasin Administrative Compound ELECTRONIC TEST EQUIPMENT Joint 122 126 MCPARC Moccasin Administrative Compound MOCCASIN ARCHIVES / RECORDS OFFICE Joint 126 127 MCPBH Moccasin Administrative Compound MOCCASIN BUNKHOUSE Joint 127 128 MCPBLPRK Moccasin Administrative Compound MOCCASIN CAMP BALL PARK Joint 128 129 MCPCARP Moccasin Administrative Compound MOCCASIN CARPENTER SHOP BUILDING Joint 129 130 MCPCARPORT Moccasin Administrative Compound SHOP AREA CAR PORTS Joint 130 131 MCPCH Moccasin Administrative Compound MOCCASIN CLUBHOUSE/ADMIN. BLDG.Joint 131 132 MCPCM Moccasin Administrative Compound MOCCASIN CONSTRUCTION MANAGEMENT OFFICES, MOCCASIN Joint 132 133 MCPCOT10 Moccasin Administrative Compound COTTAGE 10 Joint 133 134 MCPCOT13 Moccasin Administrative Compound CMB SURVEY ADMINISTRATIVE OFFICE Joint 134 135 MCPCOT14 Moccasin Administrative Compound ITS ADMINISTRATIVE OFFICE Joint 135 136 MCPCOT15 Moccasin Administrative Compound GUEST COTTAGE 15 Joint 136 137 MCPCOT16 Moccasin Administrative Compound MOCCASIN FINANCE OFFICE Joint 137 138 MCPCOT17 Moccasin Administrative Compound TRAINING OFFICE Joint 138 139 MCPCOT18 Moccasin Administrative Compound EXERCISE BUILDING Joint 139 140 MCPCOT36 Moccasin Administrative Compound WATERSHED ADMINISTRATIVE OFFICE Joint 140 141 MCPCOT41 Moccasin Administrative Compound GUEST COTTAGE 41 Joint 141 142 MCPCRDBRD Moccasin Administrative Compound MCP CARDBOARD COMPACTOR Joint 142 143 MCPCT Moccasin Administrative Compound MOCCASIN CAMP COTTAGES Joint 143 144 MCPELEC Moccasin Administrative Compound MOCCASIN CAMP ELECTRIC SHOP Joint 144 145 MCPENG Moccasin Administrative Compound MOCCASIN ENGINEERING OFFICE Joint 145 146 MCPFIREGAR Moccasin Administrative Compound MOCCASIN FIRE TRUCK GARAGE Joint 146 147 MCPFLDOFF Moccasin Administrative Compound MOCCASIN FIELD OFFICE BUILDING Joint 147 148 MCPFUEL Moccasin Administrative Compound MOCCASIN CAMP FUELING STATION Joint 148 149 MCPGARD Moccasin Administrative Compound MOCCASIN GARDENERS SHOP Joint 149 150 MCPGREENHS Moccasin Administrative Compound MOCCASIN GREENHOUSE Joint 150 151 MCPLINE Moccasin Administrative Compound MOCCASIN POWER LINE SHOP BUILDING Power 151 152 MCPMACHSP Moccasin Administrative Compound MOCCASIN MACHINE AND AUTO SHOP BLDG Joint 152 153 MCPMERC Moccasin Administrative Compound MOCCASIN EMERGENCY RESPONSE CENTER Joint 153 154 MCPMNTFAC Moccasin Administrative Compound MOCCASIN MAINTENANCE FACILITY Joint 154 156 MCPOMPH Moccasin Administrative Compound MOCC CAMP OLD MOCCASIN POWERHOUSE: Long term storage Joint 156 157 MCPPAINTSP Moccasin Administrative Compound MOCCASIN CAMP PAINT SHOP Joint 157 158 MCPPLAN Moccasin Administrative Compound PLANNING AND SCHEDULING BUILDING Joint 158 159 MCPPLUMB Moccasin Administrative Compound MOCCASIN PLUMBERS SHOP Joint 159 160 MCPPOOL Moccasin Administrative Compound MOCCASIN CAMP SWIMMING POOL Joint 160 161 MCPRECFAL Moccasin Administrative Compound MOCCASIN RECREATIONAL FACILITY Joint 161 162 MCPSAWMIL Moccasin Administrative Compound MOCCASIN SAWMILL FACILITY Joint 162 163 MCPSCADATRLR Moccasin Administrative Compound MOCCASIN SCADA TRAILER, MOCCASIN Joint 163 164 MCPSCHOOL Moccasin Administrative Compound MOCCASIN SCHOOL BUILDING Joint 164 165 MCPSEWLIFT1 Moccasin Administrative Compound MOCCASIN CAMP SEWAGE LIFT STATION 1 Joint 165 12/21/2018 15118437_1.xlsx 3 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 166 MCPSEWSYS Moccasin Administrative Compound MOCCASIN CAMP SEWAGE SYSTEM Joint 166 167 MCPTECH Moccasin Administrative Compound MOCCASIN CAMP TECH SHOP Joint 167 168 MCPTGSTMPFAC Moccasin Administrative Compound MOCCASIN TEMPORARY GUEST ACCOMMODATIONS Joint 168 169 MCPTOOLRM Moccasin Administrative Compound MOCCASIN TOOL ROOM BUILDING Joint 169 170 MCPUEB Moccasin Administrative Compound MOCCASIN Bldg 57 Joint 170 171 MCPWHSE Moccasin Administrative Compound MOCCASIN WAREHOUSE & SHOPS BLDG Joint 171 173 MCPSL Moccasin Administrative Compound MOCCASIN CAMP STREET LIGHTS Joint 173 174 MCPDWS Moccasin Administrative Compound MOCCASIN DOMESTIC WATER SYSTEM Joint 174 175 MCPDWSBFP Moccasin Administrative Compound MOCCASIN DOMESTIC WATER SYSTEM BACK FLOW PREVENTER Joint 175 176 ELECTDVCS Moccasin Administrative Compound SMALL ELECTRONIC DEVICES AND EQUIPMENT, MOCCASIN Joint 176 177 MCPWQ2 Moccasin Administrative Compound MCP WATER QUALITY BUILDING 2 Water 177 178 MCPWQLABS Moccasin Administrative Compound MCP WATER QUALITY LABS Water 178 179 MPFLOSCADA Moccasin Powerhouse MPH PENSTOCK FLOW MTRING SCADA RTU Power 179 180 MPH Moccasin Powerhouse MOCCASIN POWERHOUSE Power 180 181 MPHAUXCMP Moccasin Powerhouse MPH AUX. AIR COMPRESSOR Power 181 182 MPHCR Moccasin Powerhouse MPH MAIN CONTROL ROOM Joint 182 183 MPHHWT Moccasin Powerhouse MOCCASIN POWERHOUSE HOT WATER TANK Joint 183 184 MPHOILROOM Moccasin Powerhouse MPH OIL TREATMENT ROOM Power 184 185 MPHSTOR Moccasin Powerhouse MOCCASIN PH STORAGE BUILDING Power 185 186 M1 Moccasin Powerhouse MOCCASIN UNIT #1 Power 186 187 M1PRORLY Moccasin Powerhouse MPH UNIT #1 PROTECTIVE RELAYS Power 187 188 M2 Moccasin Powerhouse MOCCASIN UNIT #2 Power 188 189 M2PRORLY Moccasin Powerhouse MPH UNIT #2 PROTECTIVE RELAYS Power 189 190 MAX Moccasin Powerhouse MPH EXCITERS, GOVERNORS, TAIL RACE AND OTHER Power 190 191 MAX52BT Moccasin Powerhouse 52-BT BUS TIE CIRCUIT BREAKER LOCATION Power 191 192 MAXBRK Moccasin Powerhouse MOCCASIN POWERHOUSE CIRCUIT BREAKERS Power 192 193 MAXBRKSS1 Moccasin Powerhouse 52-SS1 STATION SERVICE CIRCUIT BREAKER LOCATION Power 193 194 MAXBRKSS2 Moccasin Powerhouse VILLAGE XFMR 52-SS2 STATION SERVICE LOCATION Power 194 195 MBRK52S1 Moccasin Powerhouse 52-S1 CIRCUIT BREAKER LOCATION Power 195 196 MBRK52S2 Moccasin Powerhouse 52-S2 CIRCUIT BREAKER LOCATION Power 196 197 MPHBATTERY Moccasin Powerhouse MPH BATTERY SYSTEM Power 197 198 MPHDELVAL Moccasin Powerhouse MPH DELUGE VALVE SYSTEM Power 198 199 MPHMCB Moccasin Powerhouse MPH MAIN CONTROL BOARD Power 199 200 MPHPEN Moccasin Powerhouse MOCCASIN POWERHOUSE PENSTOCK Power 200 201 MPRORLY Moccasin Powerhouse MPH PROTECTIVE RELAYS Power 201 202 MSPARES Moccasin Powerhouse ALL MPH SPARE EQUIPMENT Power 202 203 MSY Moccasin Powerhouse MOCCASIN SWITCHYARD Power 203 204 MSYLIGHTS Moccasin Powerhouse MSY MERCURY VAPOR LIGHTS Power 204 205 PWRSCHED Moccasin Powerhouse MPH POWER SCHEDULING COMPUTERS Power 205 206 MOCCPWTUS Moccasin Powerhouse MOCCASIN POWER TUNNEL SURGE SHAFT Power 206 207 MPHBYPSYS1 Moccasin Powerhouse MPH GENERATOR BYPASS #1 Power 207 208 MPHBYPSYS2 Moccasin Powerhouse MPH GENERATOR BYPASS #2 Power 208 209 MPHWW Moccasin Powerhouse MPH TSOV, SLIDE GATES AT TAILRACE, ETC Power 209 210 BNVMSCPU Moccasin Powerhouse BENTLY-NEVADA VIBRATION MONITORING SYS CENTRAL PRO Power 210 211 MPHSCADA Moccasin Powerhouse MOCCASIN POWERHOUSE SCADA RTU Power 211 212 PMBSCADA Moccasin Powerhouse PG&E MAIL BOX SCADA RTU Power 212 213 MLHSCADA Moccasin Administrative Compound MOCCASIN LOW-HEAD PWR STA SCADA RTU Power 213 214 MLHVMS Moccasin Administrative Compound MOCC. LOWHEAD VIBRATION MONITORING SYSTEM Power 214 215 MPHVMS Moccasin Administrative Compound MPH VIBRATION MONITORING SYSTEM Power 215 216 MLH Moccasin Administrative Compound MOCCASIN LOW HEAD POWER PLANT Power 216 217 MLHPEN Moccasin Administrative Compound MOCCASIN LOWHEAD PENSTOCK Power 217 12/21/2018 15118437_1.xlsx 4 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 218 M3 Moccasin Administrative Compound MOCCASIN LOWHEAD UNIT Power 218 219 MLHBATTERY Moccasin Administrative Compound MOCCASIN LOW-HEAD BATTERY SYS Power 219 220 MLHMCB Moccasin Administrative Compound MOCC LOWHEAD MAIN CONTROL BOARD Power 220 221 MLHPRORLY Moccasin Administrative Compound MLH PROTECTIVE RELAYS Power 221 222 MLHTS Moccasin Administrative Compound MOCCASIN LOW HEAD TELEPHONE SYSTEM Power 222 223 MPHRESBYP Moccasin Administrative Compound MOCCASIN RESERVOIR BYPASS Water 223 224 MLHPRGCTRL Moccasin Administrative Compound MLH PROGRAMABLE CONTROLLER Power 224 225 MCPFHDWM Moccasin Administrative Compound DOMESTIC WATER METERS / HATCHERY Joint 225 226 MCPBR Moccasin Administrative Compound MCP TIMBER BRIDGE / TRASH RACK Water 226 227 MCPCANAL Moccasin Administrative Compound MOCCASIN CANAL Water 227 228 MCPRES Moccasin Administrative Compound MOCCASIN CAMP RESERVOIR Water 228 229 MOCCLDM Moccasin Administrative Compound MOCCASIN LOWER DAM, MOCCASIN Water 229 230 MOCCUDM Moccasin Administrative Compound MOCCASIN CREEK UPPER DIVERSION DAM , MOCCASIN Water 230 231 MG3SCADA Moccasin Administrative Compound MOCCASIN GATE NO. 3 RTU NA 231 232 FTHTNLJACPU Moccasin Administrative Compound MOCCASIN RESERVOIR TURBIDITY SUPPLY JACK PUMP SITE Water 232 233 KBP Mountain Tunnel KIRKWOOD/INTAKE BYPASS SYSTEM Joint 233 234 MTNTNLDIV Mountain Tunnel MOUNTAIN TUNNEL AND ADITS Joint 234 235 SF Mountain Tunnel SOUTH FORK EQUIPMENT & BUILDINGS Joint 235 236 SFFUEL Mountain Tunnel SOUTH FORK FUELING STATION Joint 236 237 SFOFF Mountain Tunnel SOUTH FORK OFFICE BUILDING Joint 237 238 MT1-2AD Mountain Tunnel MTN TNL DIV 1-2 TUNNEL ACCESS Joint 238 239 MT3-4AD Mountain Tunnel MTN TNL DIV 3-4 TUNNEL ACCESS Joint 239 240 MT5-6AD Mountain Tunnel MTN TNL DIV 5-6 TUNNEL ACCESS Joint 240 241 MT8-9AD Mountain Tunnel MTN TNL DIV 8-9 TUNNEL ACCESS Joint 241 242 MTBIGCRSH Mountain Tunnel MTN TNL DIV BIG CREEK SHAFT,Joint 242 243 MTDSFC Mountain Tunnel SOUTH FORK CROSSING Joint 243 244 MTEIAD Mountain Tunnel MTN TNL DIV ACCESS AT EARLY INTAKE Joint 244 TBD Mountain Tunnel Flow Control Facility Joint TBD 245 MTPROUT Mountain Tunnel Mountain Tunnel Priest Outlet Joint 245 246 MTSECGROT Mountain Tunnel MTN TNL DIV SECOND GARROTE SHAFT,Joint 246 247 SFDWS Mountain Tunnel SOUTH FORK DOMESTIC WATER SYSTEM Joint 247 248 OSHSCADA O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM RTU Joint 248 249 OSHSG O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY STREAM GAUGE Joint 249 250 OSHWSTN O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WEATHER STATION Joint 250 251 OSH O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM AND AREA BLDGS.Joint 251 252 OSHCT O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY COTTAGES Joint 252 253 OSHEL O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY CAMP ELECTRICAL Joint 253 254 OSHEQP O'Shaughnessy Dam and Reservoir/CompoundALL OSHAUGHNESSY EQUIPMENT Joint 254 255 OSHDIVTNL O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DIVERSION TUNNEL Joint 255 256 OSHDM O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM Joint 256 257 OSHDMWELLAU O'Shaughnessy Dam and Reservoir/CompoundOSH DOMESTIC WELL AUXILIARY BUILDING Joint 257 258 OSHDWS O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DAM DOMESTIC WTR SYS Joint 258 259 OSHDWSBFP O'Shaughnessy Dam and Reservoir/CompoundOSH DOMESTIC WATER BACK FLOW PREVENTERS, OSH Joint 259 260 OSHDWW O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY DOMESTIC WATER WELL SYSTEM, OSH Joint 260 261 OSHFUEL O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY FUELING STATION Joint 261 262 OSHG1 O'Shaughnessy Dam and Reservoir/CompoundOSH DAM GALLERY #1 Joint 262 263 OSHG2 O'Shaughnessy Dam and Reservoir/CompoundOSH DAM GALLERY #2 Joint 263 264 OSHGAR5 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY GARAGE #5 Joint 264 265 OSHGAR7 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY GARAGE #7 Joint 265 266 OSHRCKSCRN O'Shaughnessy Dam and Reservoir/CompoundROCK SCREENING PLANT NA 266 267 OSHSEWSYS O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY SEWAGE SYSTEM Joint 267 12/21/2018 15118437_1.xlsx 5 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 268 OSHSTORE3 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY STORE HOUSE 3 Joint 268 269 OSHSTORE6A O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY STORE HOUSE 6-A Joint 269 270 OSHWDSHD3A O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WOODSHED 3-A Joint 270 271 OSHWH12 O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WAREHOUSE #12 Joint 271 272 OSHWLHSE O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WELL HOUSE Joint 272 273 OSHWTRSHED O'Shaughnessy Dam and Reservoir/CompoundHETCH HETCHY RESERVOIR WATERSHED water quality activities NA 273 274 OWQSCADA O'Shaughnessy Dam and Reservoir/CompoundOSHAUGHNESSY WATER QUALITY RTU Water 274 275 OLDOAKYD Facilities West of Moccasin Gate Tower 120/240V-OLD OAKDALE YARD LINE Joint 275 276 OAKCT Facilities West of Moccasin Gate Tower OAKDALE EMPLOYEE COTTAGE Joint 276 277 OAKDALE Facilities West of Moccasin Gate Tower OLD OAKDALE YARD Joint 277 278 OAKGAR Facilities West of Moccasin Gate Tower OAKDALE GARAGE Joint 278 279 OAKLINE Facilities West of Moccasin Gate Tower OAKDALE LINE SHOP BUILDING Joint 279 280 OAKOFFICE Facilities West of Moccasin Gate Tower OAKDALE OFFICE BUILDING Joint 280 281 OAKWHSE Facilities West of Moccasin Gate Tower OAKDALE WAREHOUSE BUILDING Joint 281 282 CPL Support Systems, Utilities and Other 2.4KV-CANYON PORTAL LINE Joint 282 283 CRL Support Systems, Utilities and Other 22.9KV-CHERRY RIDGE LINE Joint 283 284 CRLC Support Systems, Utilities and Other 22.9KV-CHERRY COMP TO RISER ACCROSS DAM LINE Joint 284 285 CRLCH Support Systems, Utilities and Other 22.9KV-CHERRY COMPOUND LINE Joint 285 286 HL Support Systems, Utilities and Other 22.9KV-HOLM LINE Joint 286 287 ICL Support Systems, Utilities and Other 22.9KV-INTAKE CAMP LINE Joint 287 288 INTCMP Support Systems, Utilities and Other (OLD) INTAKE CAMP LINE NA 288 289 INT-OSH Support Systems, Utilities and Other 22.9KV-INTAKE TO OSH LINE Joint 289 290 IRL Support Systems, Utilities and Other 22.9KV-INTAKE RADIO SITE LINE Joint 290 291 KRT Support Systems, Utilities and Other (OLD) KPH TO RIDGE LINE TIE LINE NA 291 292 MATA Support Systems, Utilities and Other MATHER "A" LINE Power 292 293 MATB Support Systems, Utilities and Other 2.4KV-MATHER "B" LINE Power 293 294 MCPA Support Systems, Utilities and Other 2.4KV-MOCCASIN CAMP "A" LINE Joint 294 295 MCPB Support Systems, Utilities and Other 2.4KV-MOCCASIN CAMP "B" LINE Joint 295 296 MPL Support Systems, Utilities and Other 2.4KV-MOCCASIN PEAK LINE Joint 296 297 OAKPORT Support Systems, Utilities and Other 120/240V-OAKDALE PORTAL LINE Water 297 298 POLES Support Systems, Utilities and Other DISTRIBUTION POLE LINES Joint 298 299 PRL Support Systems, Utilities and Other 2.4KV-PRIEST RESERVOIR LINE Joint 299 300 PRLN Support Systems, Utilities and Other PRIEST RESERVOIR COMM/SIGNAL LINE Joint 300 301 RLT Support Systems, Utilities and Other (OLD) RIDGE LINE TIE LINE NA 301 302 RRLINE Support Systems, Utilities and Other 120/240V-ROCK RIVER LINE Water 302 303 SJVHLN Support Systems, Utilities and Other 120/240V-SAN JOAQUIN VALVE HOUSE LINE Water 303 304 MAXBRKVT1 Support Systems, Utilities and Other VILLAGE XFMR 1, CIRCUIT BREAKER, MPH1 LOCATION Joint 304 305 MAXBRKVT2 Support Systems, Utilities and Other VILLAGE XFMR 2 CIRCUIT BREAKER LOCATION Joint 305 306 TESLP Support Systems, Utilities and Other 12KV-TESLA PORTAL LINE Water 306 307 INTHSFPWLACV Support Systems, Utilities and Other TOP INTAKE HILL/ SOUTH FORK RIVER TOWER LINE ROADS Joint 307 308 ISYL Support Systems, Utilities and Other 22.9KV-INTAKE SWITCHYARD LINE Power 308 309 ISYOILFLT Support Systems, Utilities and Other TRAILER MOUNTED OIL FILTER Power 309 310 ISYPLCCOMM Support Systems, Utilities and Other ISY POWER LINE CARRIER EQUIP Power 310 312 ISY Support Systems, Utilities and Other INTAKE SWITCHYARD Power 312 313 ISYB Support Systems, Utilities and Other ISY BOGUE UNIT Power 313 314 ISYBUSTIE Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. BUS TIE Power 314 315 ISYCRB Support Systems, Utilities and Other INTAKE SWITCHYARD CONTROL ROOM/BUILDING Power 315 316 ISYLIGHTS Support Systems, Utilities and Other SWITCHYARD LIGHTS Power 316 317 ISYLINE1 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 1 Power 317 318 ISYLINE10 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 10 Power 318 319 ISYLINE11 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 11 Power 319 12/21/2018 15118437_1.xlsx 6 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 320 ISYLINE2 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 2 Power 320 321 ISYLINE2.4 Support Systems, Utilities and Other INTAKE CAMP LINE 2.4KV Power 321 322 ISYLINE5 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 5 Power 322 323 ISYLINE6 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 6 Power 323 324 ISYLINE9 Support Systems, Utilities and Other INTAKE SWITCHYARD H.V. LINE 9 Power 324 325 ISYPRORLY Support Systems, Utilities and Other ISY PROTECTIVE RELAYS Power 325 326 LINE11TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINE 11 Power 326 327 LINE1-2TWR Support Systems, Utilities and Other TOWERS FOR TRANSMISSION LINES 1 & 2 Power 327 328 LINE3-4TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 3 & 4 Power 328 329 LINE5-6TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 5 & 6 Power 329 330 LINE7-8TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 7 & 8 Power 330 331 LINE910TWR Support Systems, Utilities and Other TRANSMISSION TOWERS, LINES 9 & 10 Power 331 333 MSYLINE3 Support Systems, Utilities and Other MSY H.V. LINE 3 Power 333 334 MSYLINE4 Support Systems, Utilities and Other MSY H.V. LINE 4 Power 334 335 MSYLINE5 Support Systems, Utilities and Other MSY H.V. LINE 5 Power 335 336 MSYLINE6 Support Systems, Utilities and Other MSY H.V. LINE 6 Power 336 337 122OSS Support Systems, Utilities and Other OAKDALE SUBSTATION (TID)Power 337 338 CSPRORLY Support Systems, Utilities and Other CALAVERUS SUBSTATION PROTECTIVE RELAYS Power 338 339 CSSPARES Support Systems, Utilities and Other ALL CAL SUB SPARE EQUIPMENT Power 339 340 MID_TID_SUBS Support Systems, Utilities and Other NON HETCH HETCHY SUBSTATIONS Power 340 341 ROP Support Systems, Utilities and Other ROP SWITCH ROOM Power 341 342 STSUB Support Systems, Utilities and Other STANDIFORD SUBSTATION, MODESTO Power 342 343 DAVISSUB This row not included by SFPUC DAVIS SUB STATION NA 343 344 WDCALSUB Support Systems, Utilities and Other CALAVERAS SUBSTATION Power 344 345 ISYSCADA Support Systems, Utilities and Other INTAKE SWITCHYARD SCADA RTU Power 345 346 CALSCADA Support Systems, Utilities and Other CALAVERAS SUB SCADA RTU Power 346 347 ROPREVMTR Support Systems, Utilities and Other JEM TWO ELEMENT METER Power 347 348 ROPREVREC Support Systems, Utilities and Other ROP REVNUE METERING RECORDER Power 348 349 TISSCADA Support Systems, Utilities and Other TREASURE ISLAND SCADA RTU Power 349 350 REVMETERS Support Systems, Utilities and Other PROJECT BILLABLE REVENUE METERS Power 350 351 PRSTSCADA Priest Regulating Dam and Reservoir PRIEST RESERVOUR SCADA RTU Power 351 352 WPVSCADA Priest Regulating Dam and Reservoir WEST PORTAL VALVEHOUSE RTU Power 352 353 PRBYPASS Priest Regulating Dam and Reservoir PRIEST BYPASS SYSTEM FROM MTN TUNNEL TO GATE TOWER Joint 353 354 PRCANAL Priest Regulating Dam and Reservoir PRIEST CANAL Power 354 355 AUXBUIER Priest Regulating Dam and Reservoir PRIEST RES. AUXILIARY BUILDING ELECTRICAL ROOM Joint 355 356 AUXBUIGR Priest Regulating Dam and Reservoir PRIEST RES. AUXILIARY BUILDING GENERATOR ROOM Joint 356 357 AUXBUIMR Priest Regulating Dam and Reservoir PRIEST RES. AUXILIARY BUILDING MECHANICAL ROOM Joint 357 358 PRGTTWRMN Priest Regulating Dam and Reservoir PRIEST GATE TOWER MAIN , PRIEST Power 358 360 PRMCPWLCRDCV Support Systems, Utilities and Other PRIEST TO MOCCASIN POWER LINE ROADS Power 360 361 PRSRES Priest Regulating Dam and Reservoir PRIEST RESERVOIR Power 361 362 WESTPORTAL Priest Regulating Dam and Reservoir WEST PORTAL EQUIPMENT Power 362 363 MOCCPWTUN Priest Regulating Dam and Reservoir MOCCASIN POWER TUNNEL Power 363 364 PRIESTCOTT Priest Regulating Dam and Reservoir PRIEST COTTAGE Joint 364 365 PRIESTDM Priest Regulating Dam and Reservoir PRIEST DAM Power 365 366 PRWT1 Priest Regulating Dam and Reservoir PRIEST DOMESTIC WATER TANK Joint 366 367 MCPSTORE MOCCASIN GENERAL STORE BLDG 367 368 KPHASS KIRKWOOD P.H. AUTO SPRINKLER SYSTEM 368 369 ELSURVCAB ELEANOR-MIGUEL MEADOW SURVEY CABIN 369 370 GRP (OLD) GRANITE PORTAL LINE 370 371 JONESPOINT JONES POINT MICROWAVE COMMUNICATION SITE 371 372 JPCSBATA JONES POINT BATTERY BANK *A* (3-12 VOLT GELL CELL 372 12/21/2018 15118437_1.xlsx 7 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 373 JPCSBATB JONES POINT BATTERY BANK *B* (3-12 VOLT GELL CELL 373 374 JPCSBLDG JONES POINT COMM SITE EQUIP BUILDING 374 375 JPDISH1 JONES PIONT ANTENNA DISH PATH 1 TO DUCKWALL REPEAT 375 376 JPDISH2 JONES PIONT ANTENNA DISH PATH 2 TO INTAKE SWITCHYA 376 377 JPPVCTRLA JONES POINT PHOTOVOLTAIC CHARGER CONTROL BATTERY B 377 378 JPPVCTRLB JONES POINT PHOTOVOLTAIC CHARGER CONTROL BATTERY B 378 379 JPSOLPNLA JONES POINT SOLAR PANNELS *A*379 380 JPSOLPNLB JONES POINT SOLAR PANNELS *B*380 381 JPTOWER JONES PIONT TOWER STRUCTURE 381 382 JPTXALARM JONES POINT REPEATER TRANSMIT ALARM UNIT 382 383 MCPTV MOCCASIN CABLE TELEVISION SYS 383 384 OAKLAND OAKLAND EQUIPMENT AND BUILDINGS 384 385 BMIS MAINFRAME COMPUTER IN S.F.385 386 HH-RRAS ASSETS THAT ARE RETIRED OR NO LONGER IN SERVICE 386 387 SANFRAN SAN FRANCISCO EQUIPMENT & BUILDINGS 387 388 VALDIV VALLEY DIVISION EQUIPMENT 388 389 1155MKT 1155 MARKET STREET 389 390 COLLEGE SF CITY COLLEGE 390 391 MOSCONE MOSCONE CENTER 391 392 TESCT TESLA COTTAGE 392 393 TESGAR TESLA GARAGE 393 394 TESLAFUEL TESLA PORTAL FUELING STATION 394 395 MOCCPENSRDCV Support Systems, Utilities and Other MOCCASIN CAMP PENSTOCK SOUTH SIDE ROAD CULVERT Joint 395 396 PRIESTAUXBUI Support Systems, Utilities and Other PRIEST RES. AUXILIARY BUILDING, CONTROL ROOM, SUBS Joint 396 397 PRIESTDIRDCV Support Systems, Utilities and Other PRIEST DIRT ROADS PRIEST CULVERT Joint 397 398 PRIESTDIRTRD Support Systems, Utilities and Other PRIEST AREA DIRT ROADS, PRIEST Joint 398 399 PRIESTPARDCV Support Systems, Utilities and Other PRIEST AREA PAVED ROADS, PRIEST CULVERT Joint 399 400 PRIESTPAVERD Support Systems, Utilities and Other PRIEST AREA PAVED ROADS, PRIEST Joint 400 401 PRIESTRDS Support Systems, Utilities and Other PRIEST AREA ROADS, PRIEST Joint 401 402 OSHBR Support Systems, Utilities and Other OSHAUGHNESSY TIMBER BRIDGE Joint 402 403 OSHROADS Support Systems, Utilities and Other OSH AREA ROADS Joint 403 404 CSTRGTNACRCV Support Systems, Utilities and Other PIPELINE TUNNEL RD. - CULVERTS Joint 404 405 CSTRGTNLACCR Support Systems, Utilities and Other PIPELINE TUNNEL RD. - BIRD RD TO ALAMEDA EAST Joint 405 406 DRDTOEEMRD Support Systems, Utilities and Other POWER LINE ACCESS RD - DIRT ACC. RD TO 2 TOWERS Joint 406 407 EMRYRDACCRD Support Systems, Utilities and Other PIPELINE & PWRLINE ACCESS RD (EMERY RD - BIRD RD)Joint 407 408 EMRYRDACRDCV Support Systems, Utilities and Other PIPELINE & PWRLINE ACCESS RD CULVERTS Joint 408 409 FRHYPWLACCRD Support Systems, Utilities and Other FERRETTI ROAD TO HWY 120 TOWER LINE ROADS Joint 409 410 FRHYPWLACRCV Support Systems, Utilities and Other FERRETTI ROAD TO HWY 120 TOWER LINE ROADS Joint 410 411 FTDMPRACC Support Systems, Utilities and Other MARSHES FLAT TO MOCCASIN PEAK RADIO SITE ROAD ,Joint 411 412 FTDMPRACCCV Support Systems, Utilities and Other MARSHES FLAT TO MOCCASIN PEAK RADIO SITE ROAD ,Joint 412 413 HYMRPWLACCR Support Systems, Utilities and Other HWY 120 TO MERRELL ROAD TOWER LINE ROADS Joint 413 414 ICPCHEL Support Systems, Utilities and Other CHERRY OIL TO ELEANOR ROAD, INTAKE /ELEANOR Joint 414 415 ICPCHELCV Support Systems, Utilities and Other CHERRY OIL TO ELEANOR ROAD CULVERT Joint 415 416 ICPCHERRY Support Systems, Utilities and Other ROAD FROM INTAKE TO CHERRY VALLEY, EARLY INTAKE Joint 416 417 ICPCHERRYCV Support Systems, Utilities and Other ROAD FROM INTAKE TO CHERRY VALLEY, EARLY INTAKE CULV Joint 417 418 ICPHILLRD Support Systems, Utilities and Other ROAD-INTAKE HILL FROM RED HILLS TO INTAKE Joint 418 419 ICPHILLRDCV Support Systems, Utilities and Other ROAD INTAKE HILLFROM RED HILLS TO INTAKE, CULVERTS Joint 419 420 ICPHPHRD Support Systems, Utilities and Other CHERRY OIL TO HPH ROAD,INTAKE/HPH ROAD Power 420 421 ICPHPHRDCV Support Systems, Utilities and Other CHERRY OIL ROADTO HPH ROAD,INTAKE/HPH ROAD CULVERT Power 421 422 ICPMATHER Support Systems, Utilities and Other ROAD FROM TOP OF INTAKE HILL TO CAMP MATHER Joint 422 423 ICPREDHILL Support Systems, Utilities and Other ROADWAY-HWY120 TO INTAKE HILL EARLY INTAKE Joint 423 12/21/2018 15118437_1.xlsx 8 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 424 ICPREDHILLCV Support Systems, Utilities and Other ROADWAY-HWY120 TO INTAKE HILL EARLY INTAKE Joint 424 425 ICPROADS Support Systems, Utilities and Other INTAKE/CHERRY/MATHER/ELEANOR AREA ROADS Joint 425 426 J59RRRPLACRD Support Systems, Utilities and Other POWER LINE ACCESS RD - RD J59 TO ROCK RIVER ROAD Joint 426 428 MCDIRTRDSCV Support Systems, Utilities and Other MOCCASIN DIRT ROADS CULVERTS Joint 428 429 MCPAVERDS Support Systems, Utilities and Other MOCCASIN AREA PAVED ROADS Joint 429 430 MCPAVERDSCV Support Systems, Utilities and Other MOCCASIN AREA PAVED ROADS CULVERTS Joint 430 431 MCPROADS Support Systems, Utilities and Other MOCCASIN AREA ROADS Joint 431 433 MCPRRGCV Support Systems, Utilities and Other MOCCASIN TO PRIEST RAILROAD GRADE , MOCCASIN Joint 433 434 MOCCPENSTSRD Support Systems, Utilities and Other MOCCASIN AREA ROADS PENSTOCK SOUTH SIDE MCP Joint? 434 435 MOCTOMARSFL Support Systems, Utilities and Other MOCCASIN TO MARSH FLAT TOWER 239S TOWER LINE Joint 435 436 MRPCPWLACCRD Support Systems, Utilities and Other MERRELL ROAD TO PRIEST TOWER LINE ROADS Joint 436 437 MRPCPWLACRCV Support Systems, Utilities and Other MERRELL ROAD TO PRIEST TOWER LINE ROADS Joint 437 438 MSJPWLACCRD Support Systems, Utilities and Other POWER LINE ACCESS RD - BIRD RD TO MISSION SAN JOSE Joint 438 439 MT5-6ACRO Support Systems, Utilities and Other MOUNTAIN TUNNEL ACCESS ROAD TO 5-6 ADIT Joint 439 440 MT5-6ACROCV Support Systems, Utilities and Other MOUNTAIN TUNNEL ACCESS ROAD TO 5-6 ADIT CULVERT Joint 440 441 RMBWPLACCRD Support Systems, Utilities and Other PIPELINE ACCESS RD - RMB TO EMERY RD Joint 441 442 RMBWPLACRDC Support Systems, Utilities and Other PIPELINE ACCESS CULVERT RD - RMB TO EMERY RD Joint 442 443 RMBWPWLACCR Support Systems, Utilities and Other POWER LINE ACCESS RD - RMB TO J59 Joint 443 444 RRRLIMPTWLRD Support Systems, Utilities and Other POWER LINE ACCESS RD - ROCK RIVER ROAD LIME PIT Joint 444 446 SFRFRPWLACV Support Systems, Utilities and Other SOUTH FORK RIVER TO FERRETTI ROAD TOWER LINE ROADS Joint 446 447 WESTPORTALRD Support Systems, Utilities and Other WEST PORTAL AREA ROADS Joint 447 448 WILRDTODACRD Support Systems, Utilities and Other POWER LINE ACCESS RD - WILMS ROAD TO DIRT ACC. RD Joint 448 449 WPPAVERDSCV Support Systems, Utilities and Other WEST PORTAL AREA PAVED ROADS CULVERT Joint 449 450 INTHSFPWLACC Support Systems, Utilities and Other TOP INTAKE HILL/ SOUTH FORK RIVER TOWER LINE ROADS Joint 450 451 MARSFLDONPCV Support Systems, Utilities and Other MARSH FLAT TO DON PEDRO TOWER 243S TO TOWER 258S Joint 451 452 MARSFLTODONP Support Systems, Utilities and Other MARSH FLAT TO DON PEDRO TOWER 243S TO TOWER 258S Joint 452 453 MOCMARSFLCCV Support Systems, Utilities and Other MOCCASIN TO MARSH FLAT TOWER 239S TOWER LINE Joint 453 454 MOCMARSFLCV Support Systems, Utilities and Other MOCCASIN TO MARSH FLAT TOWER 239S TOWER LINE Joint 454 455 PRMCPWLACCRD Support Systems, Utilities and Other PRIEST TO MOCCASIN TOWER LINE ROADS Joint 455 456 VDPLACCRD Support Systems, Utilities and Other ALL PIPELINE ACCESS ROADS Joint 456 457 ICPMATHERCV Support Systems, Utilities and Other ROAD FROM TOP OF INTAKE HILL TO CAMP MATHER CULVER Joint 457 458 V-HH-EQP Support Systems, Utilities and Other HEAVY EQUIPMENT Joint 458 459 DWTXALARM Support Systems, Utilities and Other DUCKWALL REPEATER TRANSMIT ALARM UNIT Joint 459 460 MPRRALMRX Support Systems, Utilities and Other MPR REPEATER ALARM RECEIVER Joint 460 461 MPRSCADA Support Systems, Utilities and Other MOCCASIN PEAK RADIO SITE RTU Joint 461 462 SCADA Support Systems, Utilities and Other HHWP SCADA SYSTEM Joint 462 463 SCADAMSTER Support Systems, Utilities and Other NEW L&G 6800 SCADA MASTER NA 463 464 SCADAMSTR Support Systems, Utilities and Other SCADA MASTER STATION A & B NA 464 465 SCADAMSTR-TG Support Systems, Utilities and Other SCADA MASTER, NEW TG8000 EMS SCADA NA 465 466 HHMOCCNET Support Systems, Utilities and Other PROJECT NOVELL 386 NETWORK NA 466 467 BLKNGCARR Support Systems, Utilities and Other BLOCKING CARRIER SYSTEMS Power 467 468 BORCS Support Systems, Utilities and Other BURNOUT RIDGE COMMUNICATION SITE Joint 468 469 BORMICROWAV Support Systems, Utilities and Other BURN OUT RIDGE MICROWAVE COMMUNICATION SITE Joint 469 470 COMM Support Systems, Utilities and Other HHWP COMMUNICATION SYSTEMS Joint 470 471 COMPTREQP Support Systems, Utilities and Other COMPUTER EQUIP, ELECTRONIC DEVICES & SECURITY KEYS Joint 471 472 CTSMICROWAVE Support Systems, Utilities and Other CHERRY MICROWAVE COMMUNICATION SITE Joint 472 473 CVCS Support Systems, Utilities and Other CHERRY VALLEY COMMUNICATION SITE Joint 473 474 DATACOMM Support Systems, Utilities and Other DATA COMMUNICATION SYSTEMS Joint 474 475 DUCKWALL Support Systems, Utilities and Other DUCKWALL MICROWAVE COMMUNICATION SITE Joint 475 476 DWCSBATA Support Systems, Utilities and Other COMM SITE BATTERY BANK *A* (5-12 VOLT GELL CELL BA Joint 476 477 DWCSBATB Support Systems, Utilities and Other COMM SITE BATTERY BANK *B* (5-12 VOLT GELL CELL BA Joint 477 12/21/2018 15118437_1.xlsx 9 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 478 DWCSBLDG Support Systems, Utilities and Other DUCKWALL COMM SITE EQUIP BUILDING Joint 478 479 DWDISH1 Support Systems, Utilities and Other DUCKWALL ANTENNA DISH PATH 1 TO JONES POINT REPEAT Joint 479 480 DWDISH2 Support Systems, Utilities and Other DUCKWALL ANTENNA DISH PATH 2 TO MOCCASIN PEAK REPE Joint 480 481 DWPVCTRLA Support Systems, Utilities and Other DUCKWALL PHOTOVOLTAIC CHARGER CONTROL BATTERY BANK Joint 481 482 DWPVCTRLB Support Systems, Utilities and Other DUCKWALL PHOTOVOLTAIC CHARGER CONTROL BATTERY BANK Joint 482 483 DWSOLPNLA Support Systems, Utilities and Other DUCKWALL SOLAR PANNELS *A*Joint 483 484 DWSOLPNLB Support Systems, Utilities and Other DUCKWALL SOLAR PANNEL*B*Joint 484 485 DWTOWER Support Systems, Utilities and Other DUCKWALL TOWER STRUCTURE Joint 485 486 ICPRAD Support Systems, Utilities and Other ICP RADIO BUILDING Joint 486 487 ICPRADIOSITE Support Systems, Utilities and Other EARLY INTAKE RADIO SITE Joint 487 488 IRSMICROWAVE Support Systems, Utilities and Other INTAKE MICROWAVE COMMUNICATION SITE Joint 488 489 MCPMICROWAV Support Systems, Utilities and Other MOCCASIN CAMP MICROWAVE COMMUNICATION SITE BUILDING Joint 489 490 MCPRADST Support Systems, Utilities and Other OLD MOCCASIN RADIO STATION BLDG NA 490 491 MICROCOMM Support Systems, Utilities and Other MICROWAVE COMMUNICATION SYSTEMS Joint 491 492 MPR Support Systems, Utilities and Other MOCCASIN PK. RADIO SITE Joint 492 493 MPRBLDG Support Systems, Utilities and Other MOCCASIN PK. RADIO SITE BUILDING Joint 493 494 MPRFRBBA Support Systems, Utilities and Other MPR FLOTROL RECTIFIER BATT BANK A Joint 494 495 MPRFRBBB Support Systems, Utilities and Other MPR FLOTROL RECTIFIER BATT BANK B Joint 495 496 MPRGEN Support Systems, Utilities and Other MOCCASIN PEAK RADIO SITE STAND-BY GENERATOR / LP Joint 496 497 MPRGENCU Support Systems, Utilities and Other MPR STNBY GENERATOR CTRL UNIT Joint 497 498 MPRHAL Support Systems, Utilities and Other MOCC PEAK RADIO BUILDING HALON SYS Joint 498 499 OPTICCOMM Support Systems, Utilities and Other OPTICAL FIBER COMMUNICATION SYSTEMS Joint 499 500 PPPCS Support Systems, Utilities and Other POOPENAUT PASS COMMUNICATION SITE Joint 500 501 PPPMICROWAVE Support Systems, Utilities and Other POOPANAUNT PASS MICROWAVE COMMUNICATION SITE Joint 501 502 RADIOCOMM Support Systems, Utilities and Other RADIO COMMUNICATION SYSTEMS Joint 502 503 TELCOMM Support Systems, Utilities and Other TELEPHONE COMMUNICATION SYSTEMS Joint 503 504 TRANFTRIP Support Systems, Utilities and Other TRANSFER TRIP SYSTEMS Power 504 505 WESTPORTCS Support Systems, Utilities and Other WEST PORTAL COMMUNICATION SITE Joint 505 506 PWRLNCARR Support Systems, Utilities and Other POWER LINE CARRIER SYSTEMS Power 506 507 HHKEYS Support Systems, Utilities and Other HETCH HETCHY SECURITY KEYS, MOCCASIN Joint 507 508 WSBSCADA Facilities West of Moccasin Gate Tower WARNERVILLE SHOP BLDG RTU Joint 508 509 WSYSCADA Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD SCADA RTU Joint 509 510 WSYCRB Facilities West of Moccasin Gate Tower WSY CONTROL ROOM/BUILDING, WSY Power 510 511 WSYCT Facilities West of Moccasin Gate Tower WARNERVILLE COTTAGES Joint 511 512 WSYDWS Facilities West of Moccasin Gate Tower WARNERVILLE DOMESTIC WATER SYSTEM , WARNERVILLE Joint 512 513 WSYFUEL Facilities West of Moccasin Gate Tower WARNERVILLE FUELING STATION Joint 513 514 WSYSHPS Facilities West of Moccasin Gate Tower WARNERVILLE SHOPS/OFFICE BUILDING Joint 514 515 WSY Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD/SUBSTATION Power 515 516 WSY115KVT1 Facilities West of Moccasin Gate Tower 115KV NUMBER 1 TRANSFORMER BUS Power 516 517 WSY115KVT2 Facilities West of Moccasin Gate Tower 115KV NUMBER 2 TRANSFORMER BUS Power 517 518 WSY115KVT3 Facilities West of Moccasin Gate Tower 115KV NUMBER 3 TRANSFORMER BUS Power 518 519 WSYBUSTIE Facilities West of Moccasin Gate Tower WARNERVILLE SW YARD BUS TIE 230KV Power 519 520 WSYDELG Facilities West of Moccasin Gate Tower WARNERVILLE SUB DELUGE SYSTEM Power 520 521 WSYLINE5 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD H.V. LINE 5 Power 521 522 WSYLINE6 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD H.V. LINE 6 Power 522 523 WSYLINE7 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD 115KV LINE 7 Power 523 524 WSYLINE8 Facilities West of Moccasin Gate Tower WARNERVILLE SWITCHYARD 115KV LINE 8 Power 524 525 WSYPGEL2BG Facilities West of Moccasin Gate Tower WSY PGE LINE 2 BELLOTA GREGG Power 525 526 WSYPRORLY Facilities West of Moccasin Gate Tower WSY PROTECTIVE RELAYS Power 526 527 WSYSUMP Facilities West of Moccasin Gate Tower WARNERVILLE SWITCH YARD SUMP PUMP Power 527 528 WSYTB1 Facilities West of Moccasin Gate Tower 230KV NUMBER 1 TRANSFORMER BUS Power 528 12/21/2018 15118437_1.xlsx 10 Major Hetch Hetchy Enterprise Existing System Assets Attachment R-3 Maximo Record Number Maximo ID Location SFPUC Facility Group Facility Classification Maximo Record Number 529 WSYTB2&3 Facilities West of Moccasin Gate Tower 23OKV BUS FOR NUMBER 2&3 XFMR Power 529 530 WSYDWBFP Facilities West of Moccasin Gate Tower WARNERVILLE BACK FLOW PREVENTERS, WSY Joint 530 531 OPVSCADA Facilities West of Moccasin Gate Tower OAKDALE PORTAL VALVEHOUSE RTU Water 531 532 ARVHSCADA Facilities West of Moccasin Gate Tower ALBERS RD VALVE HOUSE SCADA RTU Water 532 533 101PJ4VH Facilities West of Moccasin Gate Tower SJPL3 and SJPL4 JUNCTION VALVEHOUSE Water 533 534 ALBERVH Facilities West of Moccasin Gate Tower ALBERS RD VALVE HOUSE Water 534 535 ALMPORTAL Facilities West of Moccasin Gate Tower ALAMEDA EAST PORTAL Water 535 536 AVH Facilities West of Moccasin Gate Tower ALAMEDA VALVE HOUSE #2 Water 536 537 CASHCRVH Facilities West of Moccasin Gate Tower CASHMAN CREEK VALVE HOUSE Water 537 538 CSTRNGTNL Facilities West of Moccasin Gate Tower COAST RANGE TUNNEL / TESLA - SUNOL Water 538 539 EMERYCOAUX Facilities West of Moccasin Gate Tower EMERY ROAD CROSSOVER AUX CONTROL BUILDING Water 539 540 EMERYCOVH Facilities West of Moccasin Gate Tower EMERY ROAD CROSSOVER VALVE HOUSE Water 540 541 FTDBRNAD Facilities West of Moccasin Gate Tower FOOTHILL TNL BROWNS TUNNEL ACCESS Water 541 542 FTDRMBE Facilities West of Moccasin Gate Tower FOOTHILL TUNNEL RED MNTN BAR EAST Water 542 543 FTDRMBSIPH Facilities West of Moccasin Gate Tower RED MNTN BAR SIPHON , RED MOUNTAIN BAR Water 543 544 FTDRMBSS Facilities West of Moccasin Gate Tower RED MNTN BAR EAST SURGE SHAFT , RED MOUNTAIN BAR Water 544 545 FTHTNLDIV Facilities West of Moccasin Gate Tower FOOTHILL TUNNEL DIVISION Water 545 546 OAKPORTAL Facilities West of Moccasin Gate Tower OAKDALE PORTAL VALVE HOUSES Water 546 547 PELICANCOVH Facilities West of Moccasin Gate Tower PELICAN CROSSOVER VALVE HOUSE Water 547 548 PELICANXOAUX Facilities West of Moccasin Gate Tower PELICAN CROSSOVER AUX CONTROL BUILDING Water 548 549 PL2THSEAUX Facilities West of Moccasin Gate Tower SJPL2, THROTTLING STATION #1, AUXILIARY Water 549 550 PL2THSWAUX Facilities West of Moccasin Gate Tower SJPL2, THROTTLING STATION #2, AUXILIARY Water 550 551 RMBGATHOU Facilities West of Moccasin Gate Tower RED MOUNTAIN BAR WEST GATE HOUSE, RMB Water 551 552 RMBSCADA Facilities West of Moccasin Gate Tower RED MTN. BAR SLIDE GATE RTU Water 552 553 ROSELCOAUX Facilities West of Moccasin Gate Tower ROSELLE AVE CROSSOVER AUX BUILDING Water 553 554 ROSELCOVH Facilities West of Moccasin Gate Tower ROSELLE AVE. CROSSOVER VALVE HOUSE Water 554 555 RR Facilities West of Moccasin Gate Tower ROCK RIVER Water 555 556 RRLSCADA Facilities West of Moccasin Gate Tower ROCK RIVER LIME PLANT RTU Water 556 557 SJCSCADA Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE CROSS-OVER RTU Water 557 558 SJPL Facilities West of Moccasin Gate Tower SAN JOAQUIN VALLEY PIPELINES Water 558 559 SJPL2THSE Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE 2, THROTTLING STATION #1 Water 559 560 SJPL2THSW Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE 2, THROTTLING STATION #2 Water 560 561 SJPL3THS Facilities West of Moccasin Gate Tower SAN JOAQUIN PIPELINE 3,4 THROTTLING STATION Water 561 562 SJVH Facilities West of Moccasin Gate Tower SAN JOAQUIN VALVE HOUSE Water 562 563 SJVHAUXBLDG Facilities West of Moccasin Gate Tower SAN JOAQUIN VALVE HOUSE AUXILLARY BUILDING Water 563 564 SJVSCADA Facilities West of Moccasin Gate Tower SAN JOAQUIN VALVEHOUSE RTU Water 564 565 TESCHLOR Facilities West of Moccasin Gate Tower TESLA CHLORINATION BUILDING Water 565 566 TESGENHSE Facilities West of Moccasin Gate Tower TESLA GENERATOR HOUSE Water 566 567 TESLA-HH Facilities West of Moccasin Gate Tower TESLA PORTAL EQUIPMENT AND BLDGS Water 567 568 TESPORTAL Facilities West of Moccasin Gate Tower TESLA PORTAL VALVE HOUSES Water 568 569 TESPUMPHSE Facilities West of Moccasin Gate Tower TESLA PUMPHOUSE Water 569 570 TPVSCADA Facilities West of Moccasin Gate Tower TESLA PORTAL VALVEHOUSE RTU Water 570 571 TSLDWS Facilities West of Moccasin Gate Tower TESLA DOMESTIC WATER SYSTEM Water 571 572 TSLSEWSYS Facilities West of Moccasin Gate Tower TESLA PORTAL SEWAGE SYSTEM Water 572 573 TUTF Facilities West of Moccasin Gate Tower TESLA ULTRAVIOLET TREATMENT FACILITY Water 573 574 TUVH Facilities West of Moccasin Gate Tower TESLA ULTRAVIOLET VALVE HOUSE Water 574 575 VDHHSHAFT Facilities West of Moccasin Gate Tower HETCH HETCHY SURGE SHAFT Water 575 576 VDOAKOVR Facilities West of Moccasin Gate Tower FTHL TNL OAKDALE PORTAL OVERFLOW SHAFT Water 576 577 VDPEDROADT Facilities West of Moccasin Gate Tower FOOTHILL TNL PEDRO ACCESS Water 577 578 VDRMBW Facilities West of Moccasin Gate Tower RED MNTN BAR WEST Water 578 12/21/2018 15118437_1.xlsx 11 Amendment 5: Wholesale Capital Fund (Sec. 6.08.E; Attachment M-3) (i) 15076207.1 E. In order to prevent the accumulation of an excessive unexpended and unencumbered surplusbalance in the Wholesale Capital Fund, the status of the fund balance will be reviewed through the annual Compliance Audit at five-year intervals, commencing in FY 2018-19. The FY 2018-19 Compliance Audit and the Wholesale Customer/BAWSCA review under Section 7.06 shall include Wholesale Capital Fund appropriations, expenditures and interest earnings for FY 2014-15. Any excess fund balance (i.e., an accumulated unexpended, through 2017-18 for the purpose of determining whether a Balancing Account transfer is required. If the June 30 unencumbered amount in excess of ten percent (10%) of the wholesale share of total capital appropriations for New Regional Assets during the five preceding years) willbalance of the Wholesale Capital Fund exceeds the lesser of the following: (i) the Target Balance; (ii) the unencumbered remaining cumulative appropriations, the amount of such excess shall be transferred to the credit of the Wholesale Customers to the Balancing Account described in Section 6.05. In order to avoid funding delays for New Regional Asset capital projects resulting from prior year transfers of excess Wholesale Capital fund balances to the Wholesale Customers, if the June 30 unencumbered balance of the Wholesale Capital Fund is below the lesser of the following: (i) the Target Balance; (ii) the unencumbered remaining cumulative appropriation, such deficiency shall be posted to the Balancing Account described in Section 6.05 as a charge to the Wholesale Customers. Notwithstanding the foregoing, no such charge to the Wholesale Customers shall exceed $4 million annually. Amended Attachment M-3 illustrates the operation of this review process, covering FY 2009-10 through FY 2013-14 and FY 2014-15 through 2018-19. for determining the Wholesale Capital Fund balance as of June 30, 2019. Amended Attachment M-3 Wholesale Capital Fund and Balancing Account Adjustment Reference Amended Section 6.08E A.Cash Flow in Wholesale Capital Fund FYE 2010 FYE 2011 FYE 2012 FYE 2013 FYE 2014 FYE 2015 FYE 2016 FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021 FYE 2022 FYE 2023 1 Beginning Total Balance (1)- 8,818,323 12,404,275 15,761,658 16,268,065 9,084,304 17,243,583 32,251,212 29,842,765 33,698,785 41,548,944 47,366,205 36,848,850 21,206,239 2 Annual Appropriation (2)10,476,724 8,636,920 21,737,468 11,285,643 18,668,585 15,432,451 21,138,051 11,184,265 17,847,379 26,424,000 26,420,000 13,210,000 13,210,000 13,210,000 3 Annual Expenditures (3)(1,778,695) (5,202,897) (18,553,119) (10,916,349) (5,758,565) (7,331,312) (6,245,954) (13,892,649) (14,361,409) (18,089,498) (16,723,232) (28,485,215) (33,563,793) (22,018,000) 4 Interest Earnings (4)120,294 151,929 173,034 137,113 180,672 58,140 115,532 299,936 370,050 475,153 664,783 757,859 711,183 409,280 June 30 Balances Before Balancing Account Transfers 5 Total Balance (5)8,818,323 12,404,275 15,761,658 16,268,065 29,358,756 17,243,583 32,251,212 29,842,765 33,698,785 42,508,440 51,910,495 32,848,850 17,206,239 12,807,520 6 Amount Encumbered as of June 30 (6)(1,927,466) (1,000,000) (1,000,000) (1,000,000) (2,000,000) (2,000,000) 7 Unencumbered Balance (7)n/a n/a n/a n/a 27,431,290 n/a n/a n/a n/a 41,508,440 50,910,495 31,848,850 15,206,239 10,807,520 8 Transfer From/(To) Balancing Account (8)n/a n/a n/a n/a (20,274,452) n/a n/a n/a n/a (959,496) (4,544,290) 4,000,000 4,000,000 4,000,000 Ending Balances After Balancing Account Transfers 9 Ending Total Balance (9)8,818,323 12,404,275 15,761,658 16,268,065 9,084,304 17,243,583 32,251,212 29,842,765 33,698,785 41,548,944 47,366,205 36,848,850 21,206,239 16,807,520 10 Unencumbered Ending Balance (10)n/a n/a n/a n/a 7,156,838 n/a n/a n/a n/a 40,548,944 46,366,205 35,848,850 19,206,239 14,807,520 B.Calculation of Target Balance 11 Target WCF Balance (11)7,156,838 40,548,944 46,366,205 40,559,076 34,346,800 29,062,000 C.Calculation of Remaining Cumulative Appropriation 12 Cumulative Appropriation Since FYE 2010 (12)10,476,724 19,113,644 40,851,112 52,136,755 70,805,340 86,237,791 107,375,842 118,560,107 136,407,486 162,831,486 189,251,486 202,461,486 215,671,486 228,881,486 13 Cumulative Expenditures Since FYE 2010 (13)(1,778,695) (6,981,592) (25,534,711) (36,451,060) (42,209,626) (49,540,938) (55,786,891) (69,679,540) (84,040,949) (102,130,447) (118,853,679) (147,338,893) (180,902,686) (202,920,686) 14 Total Remaining Cumulative Appropriation (14)28,595,715 36,696,854 51,588,951 48,880,567 52,366,537 60,701,040 70,397,808 55,122,593 34,768,800 25,960,800 15 Amount Encumbered as of June 30 (15)(1,927,466) - (1,000,000) (1,000,000) (1,000,000) (2,000,000) (2,000,000) 16 Unencumbered Remaining Cumulative Appropriation (16)n/a n/a n/a 26,668,249 n/a n/a n/a n/a 59,701,040 69,397,808 54,122,593 32,768,800 23,960,800 17 D. Lesser of Target Balance and Unencumbered Remaining Cumulative Appropriation Lesser of Target Balance (line 11) and Unencumbered Remaining Appropriation (line 16) (17)40,548,944 46,366,205 40,559,076 32,768,800 23,960,800 E. Calculation of Excess Fund Balance and Refund to Wholesale Customers Through Balancing Account 18 Is Unencumbered Balance (line 7) more than line 17? (18)Yes Yes No No No 19 Excess WCF Balance (applied as a negative entry on line 8) (19)959,496 4,544,290 - - - F. Calculation of Deficiency Fund Balance and Charge to Wholesale Customers Through Balancing Account (This Section is Only Applicable in Any Year When Line 18 is No) 20 Is Unencumbered Balance (line 7) less than line 17? (20)Yes Yes Yes 21 Tentative Amount Before Application of $4 million cap (21)8,710,226 17,562,561 13,153,280 22 Is line 21 more than $4,000,000 maximum? (22)Yes Yes Yes 23 Balancing Account Charge (applied as a positive entry on line 8):4,000,000 4,000,000 4,000,000 Original 5 Year True-up Method FYEs 2010-2018 Amended Annual True-Up (FYE 2019 and Beyond) See Notes on Page 2 Page 1 of 2 Notes: (1) Beginning Total Balance (encumbered and unencumbered). Equal to the prior year ending total balance after balancing account transfers (line 9). (2) Wholesale Share of Revenue Funded Appropriations for Regional capital projects, adjusted for de-appropriations which have been factored into a wholesale revenue requirement, if applicable. FYE 2015 and forward are subject to compliance audit and 7.06 review. Detail by Regional project in the format used in the 2010 - 2014 true-up to be separately provided. (3) Wholesale Share of actual Regional capital expenditures funded from Revenue Funded Capital, determined based on proportionate water use in the year of expenditure. Figures from FYE 15 and forward are subject to 7.06 and compliance audit review. Detail by Regional project in the format used in the 2010 - 2014 true-up to be separately provided. The figures in line 3 for FYE 18 and on are for illustrative purposes only. (4) Line 1 times the assumptions below for the SFPUC pool rate. FYE 2010 - 2014 figures are actual and tie to the first 5 year review. Pool rate assumptions:0.640%0.670%0.930%1.240%1.410%1.600%1.600%1.930%1.930% (5) Total encumbered and unencumbered balance of the Wholesale Capital Fund before Balancing Account adjustments: Line 1 + line 2 + line 3 + line 4. (6) Wholesale Share of the encumbrances for purchase orders or contracts in connection with revenue-funded Regional capital projects; calculated using the proportional annual use of the true-up year. Entered as a negative number. Not applicable in years with no true-up (FYEs 2010-13 and 2015-18). FYE 2014 figure is actual. FYE 2019 and forward are plug numbers included for illustration. (7) Unencumbered Balance Before Balancing Account transfers: Line 5 + line 6. FYE 2014 figure is actual. Not applicable (n/a) in years with no true-up (FYEs 2010-13 and 2015-18). (8) Negative entries represent refunds to the Wholesale Customers through the Balancing Account and are calculated per Section E below, except for 2014 which is actual pursuant to the original 6.08E. Positive entries represent charges to the Wholesale Customers through the Balancing Account and are calculated per Section F below. (9) Total Ending Balance After Balancing Account Transfers = Line 5 + line 8. (10)Unencumbered Ending Balance After Balancing Account Transfers = Line 7 + line 8. Must not exceed the amount on line 17, which is the lesser of the Target Balance (line 11) and the Unencumbered Remaining Cumulative Appropriation (line 16). (11)Starting in FYE 2019, the Target Balance is calculated by the formula below, where CY represent the Current Year (for which the transfer is being calculated), CY-1 is the prior year, CY-2 is 2 years prior, etc.: [line 2: CY]*(4/5) + [line 2: CY-1]*(3/5) + [line 2: CY-2]*(2/5) +[line 2: CY-3]*(1/5); rounded to the nearest dollar. The FYE 2014 figure is the actual target balance under the original section 6.08E. (12)Cumulative Appropriations Since FYE 2010 = prior year line 12 + current year line 2. (13)Cumulative Expenditures Since FYE 2010 = prior year line 13 + current year line 3. Does not include encumbrances. (14)Total Remaining Cumulative Appropriation (encumbered and unencumbered) = line 12 + line 13. (15)Amount encumbered as of June 30 = line 6. Encumbrances are not cumulative. (16)Unencumbered Remaining Cumulative Appropriation = line 14 + line 15. (17)Lesser of Target Balance (line 11) and Unencumbered Remaining Cumulative Appropriation (line 16). Used in formulas in line 19 (Section E) and line 21 (Section F), as applicable. (18)If Yes, go to line 19 for calculation of the excess unencumbered balance. If No, go to line 20. (19)Calculation of Excess Balance: If line 18 = Yes, then line 7 minus line 17. The result appears as a negative amount on line 8. (20)If yes, then go to lines 21-23 for calculation of charge to Wholesale Customers. (21)Initial step in calculating charge: If line 20 = Yes, then line 17 minus line 7; go to line 22. (22)If the result on line 21 is greater than $4,000,000, then the charge to the Wholesale Customers is capped at $4,000,000. (23)Equal to the lesser of line 21 or $4,000,000. The result appears as a positive number on line 8. See Notes on Page 2 Page 2 of 2 Amendment 6: WSIP Completion Date (Sec. 3.09; 4.07) 15075974.1 3.09 Completion of WSIP San Francisco will complete construction of the physical facilities in the WSIP by December 31, 201530, 2021. The SFPUC agrees to provide for full public review and comment by local and state interests of any proposed changes that delay previously adopted project completion dates or that delete projects. The SFPUC shall meet and consult with BAWSCA before proposing to the Commission any changes in the scope of WSIP projects which reduce their capacity or ability to achieve adopted levelsLevel of service goalsService Goals and Objectives. The SFPUC retains discretion to determine whether to approve the physical facilities in the WSIP until after it completes the CEQA process as set forth in Section 4.07. 15076202.1 4.07 Retained Discretion of SFPUC and Wholesale Customers A. This Agreement contemplates discretionary actions that the SFPUC and the Wholesale Customers may choose to take in the future that could result in physical changes to the environment ("Discretionary Actions"). The Discretionary Actions include decisions to: 1. Develop additional or alternate water resources by the SFPUC or one or more Wholesale Customers; 2. Implement the physical facilities comprising the WSIP by December 31, 2015; 30, 2021; 3. Approve wheeling proposals by Wholesale Customers; 4. Approve new wholesale customers and water exchange or cost sharing agreements with other water suppliers; 5. Provide additional water to San Jose and/or Santa Clara; 6. Offer permanent status to San Jose and/or Santa Clara; 7. Reduce or terminate supply to San Jose and/or Santa Clara; 8. Provide additional water to Wholesale Customers in excess of the Supply Assurance to meet their projected future water demands; and 9. Offer a corresponding volumetric increase in the Supply Assurance. ; and 10. Implement the Hetch Hetchy Water and Power projects listed in Attachment R-2. The Discretionary Actions may require the SFPUC or Wholesale Customers to prepare environmental documents in accordance with CEQA prior to the SFPUC or the Wholesale Customers determining whether to proceed with any of the Discretionary Actions. Accordingly, and notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement commits the SFPUC or the Wholesale Customers to approve or carry out any Discretionary Actions that are subject to CEQA. Furthermore, the SFPUC’s or Wholesale Customers’ decisions to approve any of these Discretionary Actions are subject to the requirement that San Francisco and each Wholesale Customer, as either a “Lead Agency” (as defined in Section 21067 of CEQA and Section 15367 of the CEQA Guidelines) or a “Responsible Agency” (as defined in Section 21069 of CEQA and Section 15381 of the CEQA Guidelines) shall have completed any CEQA-required environmental review prior to approving a proposed Discretionary Action. 15076202.1 B. In considering any proposed Discretionary Actions, the SFPUC and Wholesale Customers retain absolute discretion to: (1) make such modifications to any of the proposed Discretionary Actions as may be necessary to mitigate significant environmental impacts; (2) select feasible alternatives to the proposed Discretionary Actions that avoid significant adverse impacts; (3) require the implementation of specific measures to mitigate the significant adverse environmental impacts as part of the decision to approve the Discretionary Actions; (4) balance the benefits of the proposed Discretionary Actions against any significant environmental impacts before taking final actions to approve the proposed Discretionary Actions if such significant impacts cannot otherwise be avoided; or (5) determine not to proceed with the proposed Discretionary Actions. Amendment 7: Regional Groundwater Storage and Recover Project (RGSRP) (Sec. 3.17) A. 15076183.1 3.17 Westside Basin Conjunctive Use ProgramGroundwater Storage and Recovery Project Subject to completion of necessary CEQA review as provided in Section 4.07In August 2014, the SFPUC may approved a WSIP project called the Groundwater Storage and Recovery Project (“Project”), which authorized the SFPUC to enter into an agreement governing the operation of the Project with the citiesParticipating Pumpers entitled “Agreement for Groundwater Storage and Recovery from the Southern Portion of the Westside Groundwater Basin by and among the San Francisco Public Utilities Commission, the City of Daly City and , the City of San Bruno, and the California Water Service Company, South San Francisco Service Area ("Participating Pumpers") governing the operation of the South Westside Basin Conjunctive Use Program (“Program”), a WSIP Project.” (“Project Operating Agreement”), which became effective on December 16, 2014. The Program would produceProject produces Regional benefits for all customers of the Regional Water System by making use of available groundwater storage capacity in the Southern portion of the Westside Basin through the supply of additional surface water (“In Lieu Water”) to the Participating Pumpers from the Regional Water System, in exchange for a corresponding reduction in groundwater pumping at existing wells owned by the Participating Pumpers. The new groundwater supply that would accrueaccrues to storage as a result of delivery of In Lieu Water would thenwill be recovered from the SFPUC basin storage accountStorage Account during water shortages using new SFPUC Regional Program wellsProject Facilities or Shared Facilities operated by the Participating Pumpers and the SFPUC. Program Project mitigation capital costs and annual Project operations and maintenance expenses and water supplies are expected toshall be allocated as follows: A. All In Lieu Water delivered to the Participating Pumpers shall be (1) temporary and interruptible in nature and (2) at the sole discretion of the SFPUC based on the total volume of water available to the Regional Water System. B. All In Lieu Water delivered to the Participating Pumpers shall be considered a delivery of water to storage and shall not be construed to affect or increase the Individual Supply Guarantees of these wholesale customersWholesale Customers or to otherwise entitle them to any claim of water in excess of their Individual Supply Guarantees or their Interim Supply Allocations. Furthermore, Environmental Enhancement Surcharges authorized under Section 4.04 will not be applied by the SFPUC to any quantity of In Lieu Water that is delivered A. 15076183.1 to the Participating Pumpers, but will instead be based solely on Participating Pumper water deliveries in excess of their respective Interim Supply Allocations.. B.C. In the event that it is necessary to reduce the Participating Pumpers’ aggregate designated quantity of groundwater production allocation pursuant to Section 4.7 of the Project Operating Agreement, the SFPUC may supply an annual maximum of up to 500 acre feet of Participating Pumper Replacement Water from the Regional Water System at a price comparable to the Participating Pumpers’ then-current groundwater cost, as may be adjusted annually as provided for in Section 4.7 of the Project Operating Agreement. Each of the Participating Pumpers may elect to take delivery of its share of Participating Pumper Replacement Water either as interruptible surface water deliveries from the Regional Water System or as a transfer of storage credits from the SFPUC Storage Account. All revenue received from such water sales or transfers shall be considered revenue related to the sale of water and allocated between Retail Customers and Wholesale Customers on the basis of Proportional Water Use. All volumes of Participating Pumper Replacement Water delivered shall not be construed to affect or increase the Individual Supply Guarantees of these Wholesale Customers or to otherwise entitle them to any claim of water in excess of their Individual Supply Guarantees. C.D. Any operation and maintenance expenses incurred by the Participating Pumpers and the SFPUC that are related to the operation of Regional Program wellsProject Facilities and related assetsShared Facilities for Project purposes shall be included as Regional pumping expenses under Section 5.05.B of this Agreement and included as part of the Wholesale Revenue Requirement. For rate setting purposes, estimated Regional ProgramProject operation and maintenance expenses shall be used as set forth in Section 6.01. of this Agreement. Operation and maintenance expenses associated with the Participating Pumpers' existing wellsExisting Facilities that do not provide Regional benefits shall not be included in the Wholesale Revenue Requirement. On a case-by-case basis, the SFPUC may include Participating Pumper existing well operation and maintenance expenses associated operation of the Participating Pumpers’ Existing Facilities in the Wholesale Revenue Requirement provided that such expenses (1) are solely attributable to Regional ProgramProject operations for a Regional benefit and (2) are not caused by the Participating Pumper's failure to operate and maintain its existing wells in a reasonable and prudent manner consistent with water utility industry standards. The SFPUC shall provide the Wholesale Customers with copies of Project A. 15076183.1 Operation and Maintenance Expenses documentation provided by the Participating Pumpers under Section 9.2 of the Project Operating Agreement. E. The Project Mitigation, Monitoring and Reporting Program (“MMRP”) adopted by the SFPUC included mitigation measure HY-6 to prevent well interference impacts to the Irrigation Well Owners. In mitigation measure HY-6, the SFPUC agreed to provide standby supplies of Irrigation Well Owner Replacement Water from the Regional Water System, to alter Project operations, and implement other actions (e.g., well replacement) to avoid well interference impacts that require the consent of the Irrigation Well Owners. The SFPUC’s Project mitigation and other obligations to the Irrigation Well Owners are memorialized in substantially identical “Groundwater Well Monitoring and Mitigation Agreements” with one or more of the Irrigation Well Owners. For purposes of this Agreement, water supplies, and the capital costs and operations and maintenance expenses associated with providing Irrigation Well Owner Replacement Water and implementing other mitigation actions identified in the Project MMRP, shall be allocated as follows: Irrigation Well Owner Replacement Water shall be limited to a cumulative maximum of 1.76 mgd and shall be delivered only in volumes necessary for mitigating well interference impacts as provided in the Project MMRP. The supply of Irrigation Well Owner Replacement Water by the SFPUC shall not be considered a new water supply commitment to Retail Customers or Wholesale Customers under Section 3.13 of this Agreement. The annual volume of Irrigation Well Owner Replacement Water supplied shall be metered and allocated as water from the Regional Water System during shortages between Retail Customers and Wholesale Customers in proportion to and consistent with the provisions of the Shortage Allocation Plan. All revenue received from Irrigation Well Owners for metered deliveries of Irrigation Well Owner Replacement Water shall be considered revenue related to the sale of water and allocated between Retail Customers and Wholesale Customers on the basis of Proportional Water Use. All Project capital costs incurred by the SFPUC in complying with the mitigation measures in the Project MMRP shall be considered Regional capital costs under Section 5.04 of this Agreement. Operations and maintenance expenses incurred by the SFPUC in maintaining Project mitigation assets described in the Project MMRP shall be considered A. 15076183.1 Regional transmission and distribution expenses under Section 5.05.D of this Agreement. Well pumping expenses that are required to be paid by the SFPUC in the agreements with the Irrigation Well Owners shall be considered Regional pumping expenses under Section 5.05.B of this Agreement. Any wheeling charges imposed by California Water Service Company for delivery of Irrigation Well Owner Replacement Water shall be considered Regional transmission and distribution expenses under Section 5.05.D of this Agreement. D.F. The SFPUC will audit (1) operation and maintenance expenses submitted by the Participating Pumpers, and (2) well pumping expenses submitted by the Irrigation Well Owners, for reimbursement to confirm that such costs were incurred, respectively, as a result of (1) operating Regional Program wells and related assets.Project Facilities and Shared Facilities for a Regional benefit and (2) complying with mitigation obligations in the Project MMRP. Costs associated with the use of Program facilitiesProject Facilities or Shared Facilities for Direct Retail or Direct Wholesale purposes, or that do not otherwise provide Regional benefits, shall not be included in the Wholesale Revenue Requirement. The SFPUC is responsible for resolving disputes with the Participating Pumpers and Irrigation Well Owners concerning expense allocations. ProgramProject expense documentation, including documentation of negotiation and settlement of disputed costs, will be available for review during the Compliance Audit described in Section 7.04. of this Agreement. The Wholesale Customers may dispute the SFPUC’s resolution of expense allocations through the arbitration provisions in Section 8.01 of this Agreement. E.G. The SFPUC may direct the Participating Pumpers to recover water from the SFPUC basin storage accountStorage Account for any type of shortage referenced in Section 3.11. of this Agreement. Water recovered from the SFPUC basin storage accountStorage Account using Regional Program wellsProject Facilities and Shared Facilities may be used for (1) the benefit of all Regional Water System customers; (2) Retail Customers; or (3) one or more of the Participating Pumpers. The Wholesale Revenue Requirement shall only include operation and maintenance expenses incurred due to the operation of Program wells for Regional benefitsProject Facilities and Shared Facilities for Regional benefits, including expenses incurred due to compliance with mitigation measures in the Project MMRP. A. 15076183.1 F.H. All water recovered during shortages caused by drought from the SFPUC basin storage accountStorage Account for Regional benefit, by the Participating Pumpers and by the SFPUC for delivery to Retail and Wholesale Customers during Shortages caused by Drought, shall be used to free up a comparable volume of surface water from the Regional Water System for allocation in accordance with the Tier 1 Shortage Plan. G.I. If the ProgramProject is terminated for any reason, including breach of the Program agreementProject Operating Agreement by one or more of the Participating Pumpers or the SFPUC, a force majeure event as specifically defined by the Project Operating Agreement, or due to regulatory action or legal action, then: Any water remaining in the SFPUC Regional storage accountStorage Account shall be used for the benefit of all customers of the Regional Water System; Outstanding eligible operation and maintenance expenses, including costs incurred during recovery of remaining stored water, will be allocated as provided in this sectionSection 3.17 of this Agreement; and TheIf Project Facilities are no longer capable of being used for a Regional benefit, the Wholesale Customers will be credited with their share of proceeds from disposition of Program facilitiesProject Facilities or reimbursed their share of such capital costs for any Program facilitiesProject Facilities which are retained by the SFPUC for Direct Retail benefit and not used for the benefit of the Wholesale Customers, on the basis of (a) original cost less depreciation and outstanding related Indebtedness or (b) original cost less accumulated depreciation for revenue funded Regional Program facilitiesProject Facilities. J. In the event that a Participating Pumper establishes the occurrence of a force majeure event as defined in the Project Operating Agreement, the SFPUC may enter into negotiations with the Participating Pumper to take over the operation of the portion of any Shared Facilities used for Project purposes for continued Regional use. If the SFPUC cannot reach agreement regarding the continued use of Shared Facilities for ongoing Regional benefit, the Participating Pumper shall reimburse the SFPUC and the Wholesale Customers for their respective shares of previously incurred Project capital costs used to upgrade the Shared Facilities on the basis of (a) original cost less depreciation and outstanding related Indebtedness or (b) original cost less accumulated depreciation for revenue funded Shared A. 15076183.1 Facilities. In the event that the SFPUC seeks to take over the operation of Shared Facilities for Direct Retail use, or one or more Wholesale Customers seeks to negotiate with a Participating Pumper to take over the operation of Shared Facilities for individual use or Direct Wholesale use, the party or parties benefiting from such transfer of Shared Facilities shall reimburse the other parties to this Agreement with their respective shares of previously incurred Project capital costs on the basis described in the previous sentence, or as the parties may otherwise agree. Excerpted Draft Minutes of the February 6, 2019 Utilities Advisory Commission Meeting ITEM 1: ACTION: Utilities Advisory Commission Recommendation that the City Council Adopt a Resolution Approving the November 2018 Amended and Restated Water Supply Agreement Between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County and Authorizing the City Manager to Execute the Amended and Restated Water Supply Agreement. Jonathan Abendschein, Assistant Director of Resource Management, introduced Nicole Sandkulla, General Manager of Bay Area Water Supply and Conservation Agency (BAWSCA), who was instrumental in achieving the negotiated amendments. Chair Danaher requested Ms. Sandkulla share information regarding BAWSCA. Nicole Sandkulla reported BAWSCA is a special district, which was enabled in 2002 through special legislation sponsored by the 26 wholesale water customers of the San Francisco Regional Water System (System). BAWSCA's 26 member agencies, also known as wholesale customers, serve 1.8 million residential customers and more than 40,000 businesses and community organizations across three counties. The wholesale customers rely on the System for some to all of their water supply. The wholesale customers are connected through a Water Supply Agreement (WSA), which is a unique structure in a wholesale/retail relationship for water. The contract resulted from a lawsuit filed by the City of Palo Alto against the City and County of San Francisco (San Francisco) in the 1970s. The contract exists to protect the financial and water supply interests of the wholesale customers. BAWSCA has a staff of eight and an office located in San Mateo. The Board of Directors is comprised of one representative from each member agency. BAWSCA focuses its efforts on the goal of a reliable supply of high- quality water at a fair price. The WSA was renegotiated most recently in 2009. BAWSCA administers the WSA on behalf of the wholesale customers and ensures each agency pays its fair share in proportion to its use. In administering the contract, BAWSCA discovered some provisions that needed amending. BAWSCA proposed some amendments, and San Francisco proposed some amendments. Negotiations have produced a solid set of amendments that do not stray from policy positions embedded in the contract. In answer to Commissioner Trumbull's inquiry regarding audits of BAWSCA by an agency similar to the Local Agency Formation Commission of Santa Clara County (LAFCO), Sandkulla advised that the San Mateo and Santa Clara LAFCOs reviewed BAWSCA in 2005 to ensure efforts were not duplicated and boundary issues had been resolved. The reviews found no issues. Abendschein indicated staff requests review of the contract so that the item can be placed on the City Council's March 4 Consent Calendar. Adoption needs to occur quickly. Lisa Bilir, Resource Planner, disclosed that in September the City authorized BAWSCA to negotiate with San Francisco to amend the WSA, and the negotiations led to the proposed ATTACHMENT E amendments. Importantly, the amendments do not change the basic contract structure of the WSA or the City's fundamental rights. Amendment 1 concerns oversight of the San Francisco Public Utilities Commission (SFPUC) Capital Improvement Program (CIP). SFPUC has an ongoing CIP to maintain the integrity of the System. Wholesale customers are responsible for a portion of capital projects with an estimated cost of $2 billion over ten years. Amendment 1 establishes a formal process for SFPUC and BAWSCA to engage in development of a 10-year CIP and to comment on proposed changes to the water supply and delivery targets. Under the amendment, BAWSCA and wholesale customers will have the ability to oversee and scrutinize SFPUC's capital program, which is a major factor in rate setting. Amendment 2 concerns the Tier 1 Drought Plan, which is the formula SFPUC uses to allocate water between retail and wholesale customers during drought. If the Tier 1 formula had been applied during the most recent drought, retail customers would have been allocated more water during the drought than during non-drought years. The Tier 1 formula was not applied during the recent drought because of state-mandated drought reductions. Amendment 2 will correct the Tier 1 Drought Plan to require retail customers conserve at least 5 percent of water during a drought. Amendment 2 benefits Palo Alto by ensuring a more equitable allocation of water during a drought. Amendment 3, an administrative amendment, extends the time for SFPUC to make water supply decisions from 2018 to 2028 so that SFPUC can gather information regarding future water supplies. System costs are allocated one-third to retail customers and two-thirds to wholesale customers based on usage of the customer groups. In addition, System costs for facilities known as the Hetch Hetchy Enterprise are allocated 55 percent to power customers and 45 percent to water customers. Because of the cost allocation, proper designation of assets as water, power, or joint is very important. In answer to Vice Chair Schwartz's query regarding use of the formula to calculate the proportional annual water usage when reviewing rate design, Abendschein reported the concept may be raised in future discussions of electric financial forecasts and rate studies and electric cost of service and rate adjustments. Vice Chair Schwartz felt the concept of proportional usage could be an equitable method for setting rates. Bilir continued the presentation, stating in fiscal year 2010-2011 the SFPUC unilaterally changed the classification of a small number of Hetch Hetchy Enterprise assets from power to joint, which would have added $50 million in obligations to the wholesale customers. BAWSCA disputed the changes and has been trying to resolve it. Amendment 4 resolves the dispute and the issue more broadly by documenting and fixing the asset classification for each asset in the Hetch Hetchy Enterprise. The amendment reflects SFPUC and BAWSCA's agreement for a specific cost allocation for seven capital projects that are very important to SFPUC and wholesale customers, even though the underlying asset may have a different classification than the project. Amendment 4 fixes the asset classifications of 500 assets, prevents any future unilateral changes, mitigates the financial risk for two high-risk and possibly very expensive projects, eliminates the need for an expensive new pipeline, and ensures power customers pay toward critically needed projects that maintain and enhance system reliability. Overall, Amendment 4 ensures wholesale customers pay only their fair share for upcoming capital work. In response to Commissioner Segal's inquiry about the unilateral change being a change in the use of the assets or a mistake, Sandkulla reported the use of the asset and the asset's function did not change. The assets were older and had been paid off. The SFPUC accounting department determined the assets were new because they had been paid off, and the classification could be changed because the assets were new. In addition, water runs through the asset; therefore, the classification could be changed from power to joint. The change was made administratively, and BAWSCA staff questioned it. Commissioner Segal understood the amendment would prevent a unilateral change of an asset classification, and the process to jointly change a classification could take five years. In answer to her question about BAWSCA's ability to change a classification to benefit wholesale customers, Sandkulla explained that BAWSCA agreed to reclassify projects rather than assets because the projects would benefit the wholesale customers. That consideration may be employed again used in the future. In reply to Commissioner Forssell's request for descriptions of the two high-risk and possibly very expensive projects, Sandkulla reported one project involved installing a valve at the end of the Mountain Tunnel to maintain greater control of flow. SFPUC wanted to designate the project as a water project, but BAWSCA wanted it to remain a joint project. The second project proposed interim repairs to the Moccasin Dam. BAWSCA accepted the classification of the project as water in order to have repairs performed quickly, but the dam remains a joint project. Bilir further reported the Wholesale Capital Fund is a fund for revenue collected from wholesale customers for a set of capital projects funded by revenues. The balance is currently reconciled every five years. Amendment 5 provides for annual reconciliation, which will match the SFPUC's budget requirement, appropriation process, and project spending needs. Regardless of the frequency of reconciliation, wholesale customers continue to be responsible for actual revenue-funded capital expenditures. This amendment ensures SFPUC has the necessary resources for capital improvements that benefit Palo Alto without holding an excessive amount of wholesale customer funds. Amendment 6 will update the Water Supply Improvement Program completion date from December 31, 2015 to an estimated date of December 31, 2021. Amendment 7 more accurately describes the operational details of the Regional Groundwater Storage and Recovery Project (RGSRP), which benefits the region. Palo Alto is not a party to this project. On December 11, 2018, the SFPUC approved the Amended and Restated WSA pending approval by wholesale customers. BAWSCA recommends member agencies adopt the amendments by March 31, 2019. In answer to Commissioner Trumbull's inquiry regarding environmental analysis, Bilir advised that the City Attorney's Office has approved a statement indicating this is not considered a project. In response to Commissioner Johnston's question about the number of wholesale customers that have approved the amendments and about the possibility of wholesale customers raising questions, Sandkulla reported five member agencies have approved the amendments. The remaining agencies have scheduled the amendments for consideration and anticipate taking action prior to March 31. She did not expect any wholesale customers raising questions or concerns. Commissioner Johnston understood the amendments provide BAWSCA some ability to get insight into the CIP and asked if BAWSCA or wholesale customers could object to capital improvements. Sandkulla remarked that BAWSCA and wholesale customers could do very little to influence capital improvements. SFPUC does not report to anybody, but a public process has been effective in obtaining SFPUC cooperation. In reply to Commissioner Forssell's query regarding SFPUC's allocation increasing under the Tier 1 Drought Plan in small drought conditions, Sandkulla explained that the percentages in the table are not as effective as anticipated in 2001. Changes in water conservation and differences in demand make determining the right number for future use difficult. The easier approach is to retain the table, but at a minimum require SFPUC to cut back water use by 5 percent. If the table overcomes it, there would be more of a cutback. The amendment includes language for a future discussion of the issue. With respect to Commissioner Forssell's question about the 5- percent being a reduction of the previous year's use or a reduction of the total, Sandkulla advised that the cutback is based on water use just prior to the drought. The calculation is not perfect, and San Francisco ultimately accepted a minimum cutback. In response to Commissioner Forssell's request for information about the need for an expensive new pipeline, Sandkulla reported in January 2018 SFPUC included a project for a new water-only pipeline in its CIP. The new pipeline would parallel the existing Moccasin pipeline. The Moccasin pipeline is a power facility, but water and power use it. SFPUC proposed a new pipeline because Moccasin may not be a cost-effective power operation. If the new pipeline was eliminated from the CIP, SFPUC was not willing to invest in repairing the Moccasin pipeline; therefore, it probably would fail. BAWSCA supported a repair project because repairs to a pipeline cost considerably less than constructing a new pipeline. The pipeline will remain a joint asset, but water and power will share the repair cost. ACTION: Commissioner Trumbull moved to recommend the City Council adopt a resolution approving the November 2018 Amended and Restated Water Supply Agreement between the City and County of San Francisco and Wholesale Customers in Alameda County, San Mateo County, and Santa Clara County and authorize the City Manager to execute the Amended and Restated Water Supply Agreement. Commissioner Johnston seconded the motion. The motion carried 6-0 with Chair Danaher, Vice Chair Schwartz, and Commissioners Forssell, Johnston, Segal, and Trumbull voting yes, and Commissioner Ballantine absent. City of Palo Alto (ID # 10025) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: Approval of a License Agreement with Crown Castle at 799 Embarcadero Title: Approval of a License Agreement With Crown Castle Towers 06-2 LLC for Placement of Telecommunications Facilities on City Owned Property Located at 799 Embarcadero From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that Council approve and authorize the City Manager to execute the attached license from the City of Palo Alto to Crown Castle Towers for the development and operation of telecommunications facilities at Fire Station Number Three on City owned property located at 799 Embarcadero Avenue (Attachment A). BACKGROUND On November 17, 1997, Council approved a set of four telecommunications policy statements (Attachment B). Policy 4, which addresses the use of City-owned and leased property for telecommunications infrastructure, recognizes that City land and facilities could be used to support the competitive delivery of telecommunications services and also reduce the adverse impacts associated with the development of the necessary infrastructure by reducing the total number of sites needed by wireless service providers. This policy encourages qualified outside parties to use designated City-owned or leased property and facilities for siting telecommunications infrastructure when these are compatible with the primary use of the property and are used in a manner that is consistent with City real estate policy, zoning, legal, environmental, and other requirements as necessary. On May 8, 2000, City of Palo Alto and Sprint Spectrum L.P., entered a lease agreement at the subject site to facilitate the operation of a telecommunication system facility (Attachment C). In 2005, Global Signal acquired the rights to manage the site. Crown Castle acquired Global Signal in 2007. The City of Palo Alto, per the City Council 2014 Infrastructure Plan, recently embarked on the demolition of the existing Fire Station No. 3 building and construction of a new structure to replace the old building. As a result of this new construction, the Crown Castle agreement was terminated, and their telecommunication infrastructure was removed in 2018. However, a City of Palo Alto Page 2 replacement facility was anticipated in the City’s plans for the new Rinconada Fire Station and was approved in concept as part of the Architectural Review for the fire station. Crown Castle applied for new planning approval from the City of Palo Alto Planning Department and obtained approval on November 9, 2018 (Attachment D). The approval of this license will allow Crown Castle to resume its operation at this location and generate revenue for the City of Palo Alto. The new wireless communication facility will have the latest transmission technology installed, which will improve broadband capacity from the old tower, and serve a greater area than before. DISCUSSION The wireless facilities proposed by Crown Castle to be placed on the site consist of 1) six antennas mounted on a new 67-foot tall mono-pine tower behind the new Fire Station; and 2) ground equipment, consisting of enclosed equipment pads and cabinets, covering an area of approximately 379 square feet to be placed directly below the tower. The equipment cabinet is fully self-serviced, and will be connected to power, fiber, and back-up power supply. Crown Castle will take care of the arrangements for fiber and power (Attachment E, Exhibit C). In accordance with the intent of Telecommunications Policy #4 to reduce adverse impacts of telecommunications infrastructure, use of this site by Crown Castle has the advantage of being a site previously occupied by a tower and wireless equipment; it is not adjacent to any residence and located in high traffic area. The site, zoned Public Facility (PF), has been and is designated to be used for City facilities including the future City Fire Station No. 3 which is under construction. The Property is not located in the public right-of-way and the City is licensing the Property in its proprietary capacity; thus neither 47 U.S.C. Sections 253, 332(c)(7) or 1455(a), the FCC rules promulgated thereunder, nor California Government Code Section 65964.1 applies to this License Agreement or the City’s decision to lease the Property to Licensee. The City and Licensee entered into a License Agreement dated June 1, 2018, for the temporary use of portions of the Property (“Temporary Agreement”) during the construction of the new fire station. That agreement expires on August 27, 2020. The parties now desire to enter into a longer-term license agreement, which, upon its effective date, will supersede the Temporary Agreement. Crown Castle shall construct certain wireless communications facilities (WCFs) to replace the cell receiver/sender that was on the flag pole in front of the former Fire Station 3, consisting of a support structure being a new 67-foot tall mono-pine (the Tower), an equipment shelter for placement of the base station equipment, a back-up emergency power generator and/or batteries and coaxial cables and other conduits connecting the equipment shelter to the antennas on the Tower, and related improvements and structures and uses incidental thereto. The mono-pine will be located in the northwest corner of the parcel behind the new Fire Station. The project will also include the installation of a new masonry wall to match the fire City of Palo Alto Page 3 station’s masonry walls that will fence the area from public access and screen wireless equipment. Crown Castle intends to use portions of the Property which consists of approximately 379 square feet, along with three underground utility areas of approximately 50 feet, 131 feet, and 129 square feet (the Premises), all of which are shown and described in Attachment E, Exhibit C, to construct, maintain and operate wireless communications facilities. The WCFs will replace a wireless communications facility previously approved and owned by Licensee under CUP application 99-UP-37. Crown Castle will have exclusive use of the Premises, as well as the non- exclusive right to use a portion of the Property for ingress and egress and operating cabling and associated hardware. Major terms of the new license agreement (Attachment E) include a 10-year term with the option to renew for two additional terms of five years each; annual rent of $40,800 based on an appraisal dated January 11, 2019 (Attachment F), to be increased annually by three percent; and use conditions to accommodate both the needs of the licensee and other occupants/users of the property. The Term will be extended automatically for two additional terms of five years each (each an Extension Term), unless Licensee provides the City with written notice of intent not to extend the then-current term. License conditions require the use to comply with applicable laws and regulations regarding electromagnetic emissions, and to meet all other applicable federal, state and local laws and regulations regarding environmental and occupational safety. RESOURCE IMPACT The proposed license will generate annual income to the City’s General Fund in the amount of $40,800 per year adjusted annually with a three percent increase. This rent amount is supported by a current appraisal and is consistent with what other local agencies charge for similar rental uses. This revenue is part of the Rents and Leases General Fund revenue estimate. POLICY IMPLICATION The proposed license is consistent with Policy #4 of the Telecommunications Policy Statements approved by Council on November 17, 1997 and with City Policies and Procedures 1-11, Leased Use of City Land/Facilities. TIMELINE Construction and operation of the facility will begin shortly following execution of the License and approval of all required permits. ENVIRONMENTAL REVIEW The project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15303 (Small Structures) of the CEQA guidelines. On November 1, 2018, the Director of Planning and Community Environment approved a Wireless City of Palo Alto Page 4 Communications Facility permit for the proposed facility at the proposed location, after making the required determination that the use will not be detrimental or injurious to property or improvements in the vicinity, or to the public health, safety, general welfare or convenience; and that the proposed use will be located and conducted in a manner in accordance with the Palo Alto Comprehensive Plan and Title 18 of the Palo Alto Municipal Code. Attachments: • Attachment A: Aerial Map • Attachment B: Telecommunication Policy • Attachment C: Sprint 799 Embarcadero Lease 2000 • Attachment D: Approval Letter - 799 Embarcadero • Attachment E: Crown Castle License Agreement • Attachment F: Appraisal - 799 Embarcadero Rd Jan 2019 • Attachment G: Certificate of Liability Insurance ATTACHMENT A ATTACHMENT B ATTACHMENT C Sp rint Reference No.: SF-13-XC-825 (A) LEASE # This Lease (LEASE) is made this �#I day of H� , 2000 by and between the City of Palo Al to , a municipal corpoation, (CITY) and Sprint Spectrum L.P., a Delaware limited partnership (TENANT). RECITALS A. CITY owns the property located at 799 Embarcadero Road, Palo Alto, California 94303, commonly referred to as. Fire Station No. 3 and/or •Rinconada"'Station (PROPERTY). B. TENANT desires to lease the PREMISES (as defined in Cla use I) to operate a personal communications service (PCS) system fa cili ty. C. CITY agrees to permit Tenant's use of the PREMISES, under the terms and conditions set forth below. Now, therefore , in consideration of these covenants, terms and conditions, the parties hereto mutually agree as follows : I. PREMISES (RL 3.0) S Subj ect to the terms and conditions set forth in this LEASE , CITY leases to TENANT that portion (PREMISES) of the PROPERTY described and shown in Exhibit B. Exhibit. B is .attached to and, by this reference , made a part of th is LEASE. Unless specifically provided elsewhere in this LEASE , TENANT accepts the PREMISES "as-is" on the date of execution of this LEASE. CITY hereby grants TENANT reasonable rights of ingre ss and egress as shown on Exhibit B. In addition to the le.ased PREMISES, CITY hereby grants to TENANT a non-exclusive easement (EASEMENT) in and through that portion of the PROPERTY, which is also described and shown in Exhibit B, for the sole purpose of constntcting and installing cabling and associated hardware incidental to the purposes of th is Lease, together with the ri�ht to ingress and egress thereon . Except as otherwise noted in this Lease, all terms and conditions of this Lease shall apply to the EASEMENT. The EASEMENT shall be effective during the term of this 000120 sdl 0032305 1 ) •· Lease and shall terminate without further notice as of the date of termination of the Lease . tr. PURPOSE (RL 4.0) S The purpose ·of this LEASE is to provide for the installation, maintenance, and operation, at TENANT expense, of a personal communications service (PCS ) system facility. III . REQUIRED AND OPTIONAL S£RVICES AND USES (RL 5.0) S In furtherance of the purposes stated above , the following required ·and optional services and uses shall be provided, permitted or prohibited: A. Required Services and Uses. Throughout the term of this LEASE · TENANT shall . us.e the PREMISES as one of TENANT 1 s PCS sites for furnishing telephone, radio and telecommunications services to the public that TENANT is legally authorized to provide during the term of this LEASE. TENANT shall use the PREMISES for the purpose of installing, removing, replacing, maintaining, modffying and operating, at its expense, a·Pcs system facility, :i,ncluding without limitation an antenna structure, base equipment, back-up .Power sources (including generators and fuel storage tanks ), cable, ·wiring and fixtures (PCS FACILITY). TENANT's ·use shall be subj ect to the following conditions: 1. TENANT' s operations on the PREMISES shall comply at all ·times with all applicable federal laws and regulations regarding electromagnetic emissions . TENANT shall conduct all necessary tests after its antenna facilities are ·constructed on the PREMISES to ensure that its PCS FACILITY 2 . 000120 sdl 0032305 is in compliance . The tests shall be. conducted by a licensed professional sngineer, and the results shall be provided to CITY. After the installation of . the PCS FACILITY, TENANT shall conduct safety training classes for CITY personnel as reasonably required to inform them about working safely with the PCS FACILITY . In constructing and operating shall · include the following operating procedures: the PCS FACILITY, TENANT items in its plans and a. TENANT shall not permit any unreasonable odors, smoke, dust, gas, substances , noise or vibrations to emanate 2 000120 sdl 0032305 b. c. () from the PCS FACILITY, .nor take any action which would constitute a nuisance or would disturb, obstruct or endanger any other tenants or occupants of the site or interfere with their use of their respective premises. TENANT' s operation of the PCS FACILITY· shall at all times be conducted ih compliance with all applicable federal, state and local' laws and regulations, including but n6t limited to laws and regulations regarding environmental and occupational safety. TENANT s.hall submit all required hazardous materials filings and obtain all required approvals prior to installing its batteries or any other ha zardous materials . CITY agrees that its personnel shall only enter the PREMISES in the event of an emergency. CITY agrees that its personnel shall not touch, tamper with, alter or attempt to open the PCS .FAC ILITY or a)1y of TENANT' s other equipment ancillary thereto on the PREMISES. d. TENANT shall install a fire extinguisher ins ide its structure on the PREMISES . e. TENANT shall post a prominent notice on the PREMISES listing its emerg·ency procedures, warnings and emergency contacts . f. TENANT shall install fencing around the PCS FACILITY, which shall be designed and constructed in a manner to blend in with the Fire Station and the surroundings on the PROPERTY. Such fencing shall.be subject to CITY's approval, which approval shall not be unreasonably withheld, conditioned, or delayed. CITY shall provide TENANT a written list of the Fire Captains of each station, and TENANT shall provide to each such Fire. Captain the combination of TENANT' s lock (or ·a key, as appropriate) on its fence surrounding the PCS FACILITY. g. TENANT shall mainta in all improvements that it places on the PROPERTY, including the fence, flagpole, and the mounting equipment for the flag. CITY shall be responsible for raising and taking down the flag each day h. TENANT's service lights in the PREMISES shall remain ...-' off unless its service personnel are in the area and 3 :· •. ) ' . \ ) require tfie rignts to be turned on to conduct their operations. B. Co-location .. TENANT shall· construct and operate its antenna · tower on the PREMISES so .as to accommodate co-location by one or more other telecommunications providers, and shall make such facilities available to one or more other telecommunications providers on commercially reasonable terms. Any sublease or license ·between TENANT and ·another telecommunications provider. shall be subj ect to CITY approval, which approval shall not be unreasonably withheld, conditioned, or dela�ed . C. · Restricted Uses. The above listed services and uses, both required and optional, shall be the only services and uses permitted upon or from the PREMISES . TENANT agrees not to use the PREMISES for any .other purpose nor to engage in , or permit, any other business· activity within or from the .. PREMISES .. IV . TERM (RL 6.0) S . The term of this LEASE shall be for a period of five (5) years, commencing on the date TENANT receives the· last permit required for installation of the PCS FACILITY (COMMENCEMENT bATE) . . . v. OPTION TO EXTEND (RL 6.2) S ;Ji;. The term of this LEASE shall be automatically extended for two (2) additional terms of five (5) years each (each a RE:NEWAL TERM), unless TENANT provides CITY notice of its intention not to renew not less than ninety. (90) days prior to the expiration of the TERM or any RENEWAL TERM, and provided TENANT is not in default hereunder (beyond any grace or cure periods) · at the time TENANT would be required to · notify CITY of its intent not to renew . The automatit extensions pursuant to this Clause V shall be void if TENANT has received froin CITY more than three notices of TENANT.' s default hereunder during any five (5) year TERM or RENEWAL TERM, even if the defaults we·re corrected during the 30-day period allowed under Clause XX (DEFAULT IN TERMS OF THE LEASE BY TENANT) . VI. CONSIDERATION/RENT (RL 7. 2) $ " A. Rent . As partial consideration for use of the PREMISES , TENANT agrees to pay to CITY ·annual rent of Fifteen Thousand Six Hundred Dollars ($15,600) per year, subject to adj ustment as 000120 sdl 0032305 4 ./) provided in Clause VII, payable in advance in accordance with. Clause VIII (RENT PAYMENT PROCEDURE) . B. ·Non-Monetary Consideration. In addition to the rent set forth . in subparagraph A above, TENANT agrees to perform the following services or provide the following public benefits on behalf of CITY: In the event of an emergency which the CITY's Fire Chief deems requires . the temporary use of PCS. telephones by CITY (EMERGENCY), TENANT shall provide CITY Up to (ten) 10 PCS telephones (PHONES) and service, at no charge, for CITY's temporary use . In the event of an EMERGENCY, CITY's .Fire Chief (or other agent previously designated in writing) shall, during normal business hours, ·contact the acting Manager of TENANT 's store located at 499 University Avenue, Palo Alto, CA 94301 (PALO ALTO STORE) (telephone (650 ) 614-9140 ), which Manager shall provide CITY with up to ten (10) of the highest quality PCS telephones available at the PALO ALTO STORE at the time of the EMERGENCY. As soon as is .practical following the EMERGENCY, CITY shall return the PHONES to the . PALO ALTO STORE and reimburse ·TENANT for . any loss or damage thereto. CITY acknowledges that" it shall be entitled to a cumulative total of not more than ten ( 10) PHONES ·in the event of ·an EMERGENCY, regardless of the number of lease or other agreements it enters into with TENANT or of the number of PCS Facilities TENANT may be installing, operating, or planning to install or operate in the city of Palo Alto,.California . . TENANT's liability to CITY for any breach of the obligation set forth in this Clause VI .B. sh all be limite� to the so le and exclusive remedy of liquidated damages in an amount equal to TENANT' s cost · of the PHONES .. · C.ITY shall. not be entitled i:o any consequential or incidental damages from TENANT as a result of any such failure. The parties agree that the provision for liquidated damages set forth above is a reasonable remedy given that the obligation to provide the PHONES to the CITY will arise only in the event of an emergency situatio.n , ·the circumstances of which are uncertain, and the'l:efore it is difficult to ascertain TENANT's ability to provide the PHONES· should the need arise . Furthermore, CITY shall indemnify, defend, and hold TENANT harmless_from and against any and all costs (including attorney's fees) and claims of liability or loss arising from CITY's use ·of the PHONES (including without limitation any loss or interruption of service) or TENANT 's failure to provide the PHONES to CITY pursuant to this C1ause VI .B. This indemnity obligation shall survive the termination of this LEASE. TENANT 's indemnity obligation set forth in Clause 12 of Exhibit 000120 sdl 0032305 5 /') .\. . A hereto (HOLD HARMLESS) shall not apply to any claims for costs or liability. ar ising f�om CITY's use of the PHONES (including without limitation any loss or interruption of service) or TENANT's failure to provide the PHONES to CITY pursuant· to this Clause VI.B. VII . REVISION OF RENTALS (RL 7.3) S The . rental specified in· Clause VI (CONSIDERATION/RENT ) shall be subject to automat ic annual adj ustments in proportion to changes in the Consumer Price Index, All Urban Consumers, (base years 1982-1984 = 100) for San Francisco-Oakland-San Jose CSMA published by the U.S. Department of Labor, Bureau of Labor Statistics or any replacement index published by said Bureau (INDEX). The automatic adjustment shall be effective on each anniversary of the commencement date of the term of this tEASE and shall be calculated in accordance with the following formula : X = A (B/C) Where: X = Adj usted rental . A = Rental at the Commencement of the LEASE. B = INDEX·for the second calendar month prior to the month .in which that rent.al rate adj ustment is to become · effect ive · (or, if the INDEX is not published for that month, the INDEX for the third c�lendar month prior to the month ·.in which the rental rate adjustment is to become effective) C = Monthly index for the second calendar month prior to the date of this LEASE (or, if the INDEX was not published for that month, the INDEX for the third calendar month prior to the date of this LEASE) . VIII. RENT PAYMENT PROCEDURE (RL 10.0) S A. Until the COMMENCEMENT DATE, rent hereunder shall be a one-time aggregate payment of one hundred .dollars ($1.00), receipt of which CITY hereby acknowledg_es. On the COMMENCEMENT DATE, TENANT shall pay to CITY rent for the first year of the term as set forth in Clause VI (CONSIDERATION/RENT ) . B. Commencing on the first anniversary of the COMMENCEMENT DATE, on or before each . anniversary of the COMMENCEMENT DATE, TENANT 000120 sdl 0032305 6 '. �') ) shall pay to . · CITY rent as set forth in Clause VI (CONSIDERAT ION/RENT ), as revised pursuant to Clause VII. C. Rental payments shall be delivered to the Revenue Collections Division, 250 Hamilton Avenue, PO Box 10250, Palo Alto, CA 94303. The designated place of payment may be changed at any time by CITY upon ten ( 10) days written notice to TENANT . Rental payments may be made by check made payabie to the City of Palo Alto . D. Acceptance of Late or Incorrect Rent: TENANT specifically agrees that acceptance of any late or incorrect rentals submitted by TENANT shall not constitute an acquiescence or waiver by CITY and shall not prevent CITY from enforcing any remedy provided in this.LEASE. IX. MAI NTENANCE AND REPAIR (RL 14.1) NS TENANT at its expense, shall perform all maintenance and repairs, including all paint ing, and all maintenance of .landscapecl areas necessary to keep the PREMISES and all of TENANT.' s related imp rovements thereto in first-class order, repair and condition, and shall keep the E'REMISES in a safe,. clean, wholesome, and sanitary condition to the complete satisfaction of CITY, and in compliance with all applicable laws , throughout the term of. this LEASE. . In addition, TENANT shall maintain, at its expense, all equipment , trade fixtures and any other improvements installed by TENANT upon the PREMIS.ES required for the maintenance and opel!:ation of the PCS FACILITY. TENANT waives the right to make repairs at the expense of CITY and the benefit of the provisions of Sections 1941 and 1942 of the Civil Code of California relating thereto; and further agrees that if and when any repairs, alterations, additions or betterments shall be made by it as required by this paragraph, it shall promptly pay for all labor done or materials · furnished and shall keep the PREMISES free and clear of any lien or encumbrance of any kind whatsoever. Should TENANT fail to make any repairs or perform any maintenance work for which it is liable, CITY shall have the option to make the repairs and TENANT within .ten (10) days of rec·eipt. of a bill therefor from the Real Property Manager, reimburse CITY for the cost of such repairs, including a fifteen percent (15%) administrative overhead . fee; The making of such repairs or performance of maintenance by CITY shall in no event be construed as a waiver of the duty of TENANT to make repairs or perform maintenance as provided in this clause. · 000120 sdl 0032305 7 () ) X. MAINTENANCE OBLIGATIONS OF CITY (RL 14.2) S CITY shall ma intain or cause to be maintained, including repair and replacement as necessary, common areas serving the PREMISES but outside the .PREMISES, including public roadways, and main utility facilities. Except for the main utility facilities, CITY shall not be required to ma intain, repair, or replace·• iinprovements const ructed within the PREMISES ; provided, however, CITY may, at its sole discretion, repair othe.r CITY-constructed facilities in order to protect the PREMISES or other CITY-owned property. XI . CONSTRUCTION AND/OR ALTERATION BY TENANT (RL 15.1) S A. CITY's Consent . No structures, . improvements, or facilities shall be constructed, erected, altered, or made within the PREMISES without the prior written consent of the CITY (by action of CITY's City Council if .required by City of Palo Alto procedures or ordinances, or otherwise by CITY's City Manager or designee), which consent shall not be unreasonably withheld, conditioned, or delayed.·. Any conditions relating to the manner, method, design, and construction of the structures, improvements, or facilities established by CJ:TY shall be conditions of this clause as thorigh originally stated herein. TENANT. may, at any time and at its· sole expense, install and place business fixtures and equipment within any building on the PREMISES, provided such fixtures and installation have been reviewed and approved by CITY' s City Manager. · B. Strict Compliance with Plans and Specifications. All improvements constructed by TENANT within the PREMISES shall be constructed in an efficient and workmanlike manner and in strict compliance with detailed plans and specifications approved by the CITY (by action of CITY's City Council if required by city of Palo Alto procedures or ordinances, or otherwise· by CITY's City Manager or designee, and which approval shall not b.e unreasonably withheld, conditioned, or delayed) and applicable City of Palo Alto codes and ordinances. C. Certificate of Inspection. Upon comp letion bf construction of any building, TENANT shall submit to CITY' s Real Property Manager, a Certificate of Inspection, verifying that the construction was completed in conformance with Title 20 of the California Code of Regulations for residential construction, or in conformance with Title 24 of the California Code of Regulations for non-residential construction. 000120 sdl 0032305 8 XI I. OWNERSHIP OF IMPROVEMENTS (RL 16.0) NS A. Improvements to Realty; All improvements constructed, erected or installed upon the PREMISES must be free and clear of all liens, claims or liability for labor or material . Upon expiration or termination of this Lease, CITY may .at its option require TENANT to remove TENANT construct.e d improvements including, but not limited to, the foundations, and may further require TENANT to repair to the satisfaction of CITY any damage to the PREMISES cause.ct by such removal; provided, that TENANT may, but shall not be required to, remove underground conduit installed by it during the·term of this LEASE · B. Personal Property. Title to all equipment, furniture, furnishings and trade fixtures placed by TENANT upon the PREMISES (including without limitation the PCS FACILITY ) shall remain in TENANT, and replacements, substitutions and' modifications thereof may be made by TENANT throughout the term of this LEASE. TENANT may remove such fixtures and furnishings upon expiration of this LEASE if TENANT is not ·then ·in def.au! t under this LEASE, provided that TENANT shall repair to the satisfaction of CITY any damage to the PREMISES and improvements caused by su.ch removal. XI II. AS BUILT .PLANS (RL 15.5) S Upon completion·of any major TENANT-constructed improvements, TENANT shall provide CITY' s Real Property Manager with a .complete set of reproducible "as built plans '' reflecting actual construction within or upon the PREMISES . TENANT shall also provide CITY's Real Property Manager with a statement signed by TENANT under penalty of perjury certified as to accuracy and of actual construction costs for all such improvements. XIV. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS (NS) If the PREMISES are, in whole or in part, damaged or destroyed, then: (1) if wholly damaged or destroyed so that the PREMISES are rendered permanently unusable for reconstruction of a PCS FACILITY, this .LEASE shall then terminate and TENANT shall be liable for the rent only up to the time of such destruction and any rent prepaid by TENANT shall be returned to TENANT; but (2) if only partially de stroyed and still usable for construction of a PCS FACILITY, TENANT shall, within a 000120 sdl 0032305 9 �·) ( ) reasonable time, repair the PREMISES with a reasonable reduction of rent.from the time .of such partial destruction until the PREMI SES are again as fully usable by TENANT as they were before such partial damage or destruction; provided, however, that ·TENANT shall not be required to rebuild the PCS FACILITY or repair the PREMISES. if: . ( i) such partial damage or destruction shall occur within one (1) year· prior to the expiration of the LEASE, and (ii) TENANT continues to pay the rental amounts .due hereunder and t':he PREMISES are maintained ·in a · safe and sanitary condition. A·decision as to whether partially destroyed or partially condemned PREMISES is still usable for reconstruction of a PCS FACILITY shall be mad.e jointly by C:ITY and TENANT, and, if they cannot agree, J:iy an arbitrator · reasonably acceptable to both parties . TENANT shall have the right to operate a temporary' PCS FACILrTY on the PROPERTY during any repair or reconstruction of the PREM:ISES, including the right to operate such generators or other back-up power supply · sources as TENANT determines may be required. XV . UTILITIES (RL 17.0) S TENANT shall be responsible for and shall pay, prior to delinquency, all charges for utilities supplied to the PCS FACILITY. XV I. INSURANCE (RL 18. 0) S TENANT shall maintain insurance acceptable to CITY in full force and effect throughout the term of this LEASE . Minimum Scope of Insurance Coverage shail be at least as broad as : 1) Insurance ·services Office Commercial General Liability coverage (occurrence form CG 0001). 2) Insurance Services . Office form number CA 0001 (Ed. 1/87 ) covering Automobile Liability, code 1 (any auto). 3) ·Workers ' Compensation insurance as required by the State of California and Employer's Liability Insurance . 4) Course of Construction insurance form providing coverage for "all risks" of loss . 000120 sdl 0032305 10 ( ) / ) The policy or policies of insurance maintained by TENANT shall provide the following limits and coverages: POLICY MINIMUM LIMITS OF LIABILITY ( 1} WORKERS I COMPENSATION (2) COMPREHENSIVE AUTOMOBILE Statutory Bodily Injury LIABILITY, Property Damage including owned, hired, and non-owned automobiles (3) COMPREHENSIVE . GENERAL .LIABILITY · Bodily Inj ury including Property Damage products and Personal Injury completed operations , broad form contractual, and personal injury. Deductibles 'and Seif-Insured Retentions $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 ea .. person ea . occurrence ea. occurrence ea. person ea . occurrence aggregate ea. occurr.ence ea . occurrence · Any deductibles or self-insured retentions must be declared to and :approved by . the CITY . At the option of the CITY either : the insurer shall reduce or eliminate such deductibles or self-insured retentions as . respects the CITY, its officers, ·officials, employees and volunteers; or the TENANT shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expense·s .. Insurance sha).l be in full force and effect commencing on the first day of the term of this LEASE. Each insurance policy required by this LEASE shall contain the following clauses : 1. "Each insurance policy required by this clause shall be endorsed to �tate that coverage shall not be suspended, voided, canceled by either party, reduced in coverage or in limits except after thirty (3b} days ' prior written notice by certified mail, return receipt requested, has been given to the CITY." 2. "All rights of subrogation are hereby wai v.ed against the CITY OF PALO ALTO and the members of the City Council and 000 <20 sdl 0032305 11 () elective or appointive officers or employees, when acting within the scope of their employment or appointment." 3. "The CITY OF PALO ALTO is named as a loss payee on the property and course of construction insurance · policies described above." · 4. "The CITY, its officers, officials, employees, agents and volunteers are ·to be covered as insureds as respects: liability arising out of activities performed by or on behalf of the TENANT ; products and completed operations of the TENANT; premises owned, occupied or used by the TENANT; or automobiles owned, leased, . hired or borrowed by the TENANT. The coverage shall contain no special limitations on the s·cope of protection afforded to the CITY, its officers,· officials, employees, agents or volunteers." . 5. "For any claims related to this Lease, the TENANT ' s insurance· coverage shall be primary insurance as respects the CITY, ·its officers·, officials, employees, agents and volunteers . Any insurance or self-insurance maintained by the CITY, its officers, officials, employees, agents or volunteers shall be excess of the TENANT 's insurance and shall not contribute with it ." 6. ."Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to t.he CITY, its officers, officials, employees, agents or volunteers ." 7. "The TENANT' s insurance shall Insured against whom claim is except w.ith respect to the liability." apply separately made or . suit is limits ©f . the to ea.ch brought, insurer's Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best 's rating of no less than A-:X. XVI I. INSURANCE (RL 18.2) TENANT agrees to deposit with CITY' s Real Property Manager, on or before the effective date of this LEASE, certificates of insurance necessary to satisfy CITY that the insurance provisions of this LEASE have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with CITY during the entire term of 000120 sdl 0032305 12 /). this LEASE . Should TENANT not provide evidence of ·such required coverage at least three ( 3) days prior to the expiration of any existing in surance coverage, CITY may purchase such insurance, on behalf of and at the expense of TENANT for the period of non:.. compliance. CITY shall retain the right at any time to review the coverage , form, and amount of the insurance required hereby. If, in the op inion of ·cITY' s Risk Manager, the insurance provisions in this LEASE do not provide adequate protection for CITY, CITY's Real Property Manager may require TENANT to obtain insurance sufficient in coverage , form, and amount to provide adequate protection as determined by ·CITY' s Risk Manager and TENANT . CITY'S requirements shall be reasonable and shall be designed to assure protection'from and against the kind and extent of risk which exists at the time a change in insurance is required. CITY' s Real Property Mahager shall notify TENANT in writing of changes in the insurance· requirements . If TENANT does not deposit adequate evidence of in surance with CITY incorporating such changes within sixty (60) days of receipt ·Of such notice , or in the event TENANT fails to maintain in effect any required insurance coverage ,. TENANT shall be in default under this LEASE without further notice to TENANT . The procuring of such required policy or policies of insurance shall not be construed to limit TENANT'S liability hereunder nor to fulfill the indemnificat ion provision and requirements of this LEASE. Notwithstanding the policy or policies of insurance, TENANT shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this LEASE or with use or occupancy of the PREMISES . . . • XV I II. AS SIGNING, SUBLETTING, AND ENCUMBERING (RL 19 .0) S ·Any mortgage , pledge , hypothecation, encumbrance, transfer, sublease, or assignment (collectively referred to as ENCUMBRANCE) of TENANT'S interest in the PREMISES, or any part or portion thereof, shall first be approved in writing by .the City Manager or designee, which approval shall not be unreasonably withheld, conditioned, or delayed; provided, however, that TENANT shall have the right to sublease or assign . its rights under this LEASE to any of its subsidiarie s, affiliates, or successor legal entities or to any entity acquiring substantially all of the assets of TENANT . Should CITY consent to any ENCUMBRANCE , such consent shall not constitute a waiver of any of the terms , covenants, or conditions of 000120 sdl 0032305 13 () \, ) this' LEASE . Such terms, covenants, or conditions shall apply to each and every ENCUMBRANCE hereunder and shall be severally binding upon each and every assignee, transferee, subtenant, or other successor in interest of TENANT . Any document to encumber, transfer, sublet, or assign the PREMISES or any part ·thereof shall incorporate directly or by reference all the provisions of .this LEASE. Subj ect to TENANT 's right to sublease or assign as set forth above, CITY agrees that it will not arbitrarily withhold consent to any. encumbrance, but CITY may withhold consent at its sole discretion if any of the following conditions exist: A. TENANT or any of its successors or assigns is in default of any term, covenant, or condition of this LEASE, whether notice of default has or has not been given by CITY; B. The prospective ENCUMBRANCER does not indicate in .writing that such ENCUMBRANCE is subj ect to all the terms , covenants, and conditions of this LEASE'; c. All the terms, . covenants, and conditions of the proposed ENCUMBRANCE including the consideration therefore of any and every kind, have not been revealed in writing to CITY; D. Intentionally Omitted; E. The processing fee required by CITY and set forth in the then current Palo Alto Municipal Fee Schedule has not been paid to CITY; F. If an assignment or sublease is proposed, and TENANT has not provided CITY with sufficient information to permit CITY to completely evaluate the background, skills , financial position, proposed operating plan changes and references of the prospective assignee or subtenant ; or The above list is not inclusive but is intended to give TENANT some idea of the types of situation where CITY may withhold its consent to any ENCUMBRANCE . Hypothecation of the leasehold interest created by this LEASE is expressly prohibited and any attempted hypothecation shall be null arid void. · XIX .. DEFAULT IN TERMS OF THE LEASE BY TENANT ( RL 2 0. 0) S Should TENANT default in the performance of any covenant, condition, or agreement contained in this LEASE and such default is not 000120 sdl 0032305 14 ) corrected within thirty (30) days of receipt of a notice of default from CITY, .CITY .may: A. Terminate this LEASE and all . rights of TENANT and those · who claim under TENANT, stemming from this LEASE, shall end at the time of such termination; B. At CITY's sole option, cure any such default by performance of any act, including .payment of money, and the cost thereof, plus reasonable administrative cost, shall become immediately due and. payable by TENANT to CITY; C. Seek an action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of CI.TY; D.· Beek a mandamus or other suit, actioh or proceeding at law or in equity to enforce its rights against TENANT and any of its officers, agents, and employees and its assigns, and to compel it to perform and carry out its duties and obligations under the law and its covenants and agreements w.ith CITY as provided herein; or E. Pursue any other remedy available by law or specifically provided in other clauses of this LEASE . However, in the event of a default which cannot reasonably be cured within thirty (30) days, TENANT shall have a reasonable period of time (as determined .by the City Manager) to cure the default . Each and all of the remedies.given to CITY hereunder or by any law now or hereafter enacted, are cumulative and the exercise of one right or remedy shall not impair the right to CITY to exercise any or all · other remedies . In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or .abandoned, then, and in every such case, CITY and TENANT shall be restored to its and their former. position and rights and .remedies as if no such suit, action or proceedings had been brought or taken. In addition to a violation or breach of any other provision of this LEASE, TENANT shall be considered to be in default under this LEASE should TENANT : A. voluntarily · file or have involuntarily filed against it any petition under any bankruptcy or insolvency .act or law; or B. be adj udicated a bankrupt . 000120 sdl 0032305 15 () ) XX. NOTICES (RL 23.0) S All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder give by either party to the other, shall be in writing and shall be sufficiently given and served upon the other party if (1) personally served, (2) sent by United States Certified niail, postage prepaid, (3) ·sent by express deli very service, or ( 4) · in the case of a facsimile , if sent to the telephone number (s) set forth· below during normal business hours of the receiving party and followed· within 48 hours by delivery of hard copy of the material sent by facsimile, in accordance with (1), (2) or (3) above . Personal service shall include, without limitation, service by delivery service and service by facsimile transmission. Delivery of notices. properly addressed shall . be deemed complete when the notice is physically deliveied to the Real Property Manager or the City Clerk. All notices pursuant to this LEASE shall be addressed. as set forth below or as either party may subsequently designate by written notice . TO: CITY Real Property Manager City of Palo Alto P.O. Box 10250 250 Hamilton Avenue . Palo Alto, CA. 94303 FAX: (650) 329-2468 with a copy to : City Clerk, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (650) 329-2646 and City Attorney, City of Palo Alto P.O .. Box 10250 250 Hamilton Avenue Palo Alto CA 94303 FAX: (650) 329-2646 000120 sdl 0032305 16 TO: TENANT Sprint ·· Spectrum, L. P. 4683 Chabot Drive, Suite 100 Pleasanton, CA 94588 Attn: . Property Sp ecialist,· Palo Alto ·Cascade No . .SF--Y.fJ-fj;J.;;:-(4) FAX: (925) 468-7313 Sprint Spectrum, L.P. 4�00 Main Street, 12th Floor Kansas .City, MO 64112 Robbins, Palmer & Allen, LLP 1901 Harrison St ., Suite 1550 Oakland, CA 94612 Attn: John Boat FAX: (510) 446-1946 I ) XXI . ATTACHMENT TO JiEASE (RL 24. 0) S This LEASE includ.es the following exhibits, which are .attached hereto and by this reference incorporated into this LEASE: Exhibit A -.General Conditions Exhibit B -Description of PREMISES and EA SEMENT Exhibit C -Memorandum of LEASE The inclusion of clauses in Exhibit A (GENERAL CONDITIONS ) is not in any way intended to lessen the importance .· of such clauses, but rather is merely done to enhance the organization of this LEASE. In the event of a conflict between the foregoing Clauses and the provisions of Exhibit A, the foregoing Clauses .. shall prevail. II II II II II II II II II II II II II II II II 000120 sdl 0032305 17 ( ) IN WITNESS WHEREOF, the parties have executed this LEASE the day and year first above written. CITY: CITY OF PALO ALTO (LESSOR) ATTEST: By:. �l:�/� �· Print ame: :�; I .;;,,, Its�sfity Clerk APPROVED AS TO FORM: By : �G"-.-h---W . (!�"'-"­Pr int Name: ..S'.-L.c � <t. .vi iJ. CJ..s<- TENANT: Its� Senior Asst. City Attorney ""'OIOOEND� FOR APPROVAL' �--�·fli n By : . . .Q A..A-..1 • Print Na El: Em/Iv /.jart�/rso 'I Its : Asst. City Manager By' . ��. Print Name: RM:6ai GZ1T4i:Vlf Its : Fire Chief By:lf�fJ,� Printame: =�m w, E�£L-n?J??t/ · Its: Real Property Manager 000120 ·sdl 0032305 18 ') EXHIBIT A GENERAL CONDITIONS 1. DEFINITIONS (R.L 27 .1) S ( ) CITY shall · mean the City Council of the City of Palo Al to, a municipal corporation. The City Manager is hereby authorized to take any actions under this LEASE on behalf of CITY except for termination of this LEASE. Clauses in this LEASE . refer to specific officers or employees of CITY. Should these positions be eliminated or the title changes, it is understood and agreed that such references shall be considered to be to the new title for renamed positions or to the replacement official designated with the responsibilities of any, eliminated position. Any reference to a City officer or employee includes a reference to the officer 's or employee's des.ignated representative. 2. PARTNERSHIP/CORPORATE AUTHORITY & LIABILITY (RL 27 .2) S If TENANT is a partnership, each general partner: A, represents and �arrants that the partnership is a duly qualified partnership authorized to do business in Santa Clara County; and B. shall be jointly and severally liable for performance of the terms and provisions of thi.s .LEASE. If TENANT is a corporation, each individual signing .this LEASE on behalf of TENANT represents and warrants that; A. he is duly authorized to do so in accordance with an adopted. Resolution of TENANT'S Board of Directors or in accordance with the Bylaws of the corporation ; and B. TENANT is a duly qualified corporation authorized to do business in State of California. As used in this LEASE, the term "TENANT" shall include TENANT, its agents , sublessees, concessionaires, or licensees, or any person acting under contract with TENANT; however, the definition of TENANT ·used herein, shall not be construed to authorize or permit any sublease or licenses not authorized or permitted elsewhere .in this LEASE. 000120 sdl 0032305 19 () 3. TIME (RL 27 . 3) S Time is of the essence of this LEASE . 4. SIGNS (RL 27 . 4) S ) TENANT agrees not to 'construct, maintain, or allow any sign to be placed upon the PREMISES except as may be approved by CITY. Unapproved signs , banners , etc., may be removed by CITY . 5. PERMITS AND LICENSES (RL 27 .5) S TENANT shall be required to obtain ·any and all permits and/or licenses which may be required in connection with the operation of the ·PCS FACILITY and any approved TENANT construction upon the PREMISES as set forth in this LEASE. . 6. MECHANICS tIENS (RL 27 .6) S TENANT shall at all times indemnify and save CITY ha{mless from all claims for labor or materials supplied in connection with TENANT 'S construction, . repair, alteration,. or installation of structures, improvements, equipment, or facilities within the PREMISES; and from the cost of defending again�t such claims, including attorney fees. TENANT shall provide CITY with at ·least ten (10) days written not ice prior to commencement of any work which could give rise to a mechanics lien or stop notice . ·CITY reserves the right to enter upon PREMISES for the purposes of posting Notices of Non-Responsibility. In the event a lien is imposed upon the PREMISES as a result of such ·construction, repair, alteration, or installation by TENANT, TENANT shall either : A. Record a valid Release of Lien; or B. Deposit sufficient cash with CITY to cover the amount of the claim on the lien in question and authorize payment to the extent of said deposit to any subsequent judgment holder that may arise as a matter of public record from litigation with regard to lienholder claim; or C. Procure and record a bond in accordance with Section 3143 of the Civil Code, .which releases the PREMISES from the claim ·Of the lien from any action brought to foreclose the lien . 000120 sdl 0032305 20 /) / ) Should TENANT fail to accomplish one of the three optional actions within fifteen (15) days after the fi ling of such a lien, the LEASE shall be in default . · 7. LEASE ORGANIZATION AND RULES OF CONSTRUCTION (RL 27 . 7) S Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders . Unl.ess the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations., including public bodies , as well as natural persons . . The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms , as used in this agreement , refer to this agreement . . All the terms and provisions hereof shall be construed to effectuate ·the purposes set forth herein, arid to sustain the validity hereof. The. titles and headings of the sect ions· of this agreement have . been inserted for convenience of reference only, are not to be considered a part hereof and shall not in any way modify or restrict any of the terms of provisions hereof or be considered or given any effect in construing this agreement or any provision hereof in ascertaining intent , if any question of intent shall .arise. 8. AMENDMENTS (RL 27 .8) S This LEASE sets forth all of the agreements and understandings of the parties and any modifications must be written and properly executed by both parties. 9. UNLAWFUL USE (RL 27 .9) S TENANT shall not erect, place upon, operate, or maintain· any improvements within the PREMISES, nor any business conducted or carried on therein or therefrom, in violation of the terms of this LEASE, or of any regulation, order of law, statute, or ordinance of a governmental agency· having jurisdiction over TENANT'S use of the PREMISES . 000120 sdl 0032305 21 C) 10 . NONDISCRIMINATION (RL 27 .10) S Revised 8-19-93 TENANT and its employees shall not discriminate against any person because of race, color, religion, ancestry, age, sex, national origin , disab_ility or sexual . preference. TENANT shall not discriminate against any employee or applicant for employment because of ra·ce, color, religion,· ancestry, sex, age , national origin, disability or sexual preference . TENAN.T covenants to meet all requirements of the Palo Alto Municipal Code pertaining to nondiscrimination in employment. If TENANT is found in violation of the nondiscrimination provision of · the State of California Fair Employment Practices Act or similar provisions of federal law or executive order in the conduct of its· activities under this LEASE by the State of California Fair Employment Practices Commission or the ·equivalent fe�eral agency. or officer, it shall thereby be found in default under this LEASE, and such default shall constitute a. material breach of this LEASE . CITY shq.11 then have the power to cancel or suspend this LEASE in �hole or in part . . 11 . INSPECTION (RL 27 .11) S CITY' s employees and agents shall _have the r_ight at all reasonable · times to inspect the PREMISES to determine if t,h.e provisions of this LEASE are being complied with. 12 . HOL_D HARMLESS (RL 27 .12) S CITY and TENANT each indemnifies the other against and holds the other harmless from any and all costs (including reasonable attorneys' fees) and claims of liability or loss which arise out of the ownership , use and/or occupancy of the · PREMISES ·by the ;Lndemnifying party. This indemnity does . not · apply to any claims arising from the sole negligence or intentional misconduct of the indemnified party. Tenan . t '. s obligatiori under this Clause shall not \ apply to any claims arising from CITY's use of the PHONES (including without limitation any loss or interruption of service) or TENANT 's failure to provide the PHONES to CITY pursuant to Clause Vl.B. The indemnity obligations unde·r this Clause will survive the termination o·f this LEASE . 13 . TAXES AND ASSESSMENTS (RL 27 .13) S This LEASE may create a possessory interest which is subject to the payment of· taxes levied on such interest . It is understood and agreed that all taxes and assessments (including but not limited to 000120 sdl 0032305 22 ( ) / ) the possessory interest tax) which become due and payable upon the PREMISES or upon fixtures, equipment or other property installed or constructed by Tenant thereon, shall be the .full responsibility of TENANT and TENANT shall pay the taxes and assessments prior to delinquency. 14. SUCCESSORS IN INTEREST (RL 27 .14) S Unless otherwise provided in this LEASE, the terms, covenants, and conditions contained herein shall apply to and bind .the heirs, successors, executors,· administrators, and assigns of all the ·parties hereto, all of whom shall be jointly and severally li°able hereunder. 15. CIRCUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE MAJEURE) RL 27.15) S If either party hereto shall be · delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause without fault and beyond the control of the party obligated (financial inability excepted), performance of such act shall .be excused for the period of the delay and the period for the performance of any such act shall be extended l:or a period equivalent .t o the period of such delay. 16. PARTIAL INVALIDITY (RL 27.16) S If any term, covenant, condition, or provision of this LEASE is determined to be . invalid, void, or unenforc.eable, by a court of competent jurisdiction, the rema inder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby. 17. WAIVER OF RIGHTS (RL 27.17) S The failure of CITY or TENANT to insist upon strict performance of any of the terms, covenants, or conditions of this LEASE shall not be deemed a waiver of any right or remedy that CITY or TENANT may have, arid shall not be deemed a waiver of the right to require strict performance of all the terms, covenants, and conditions of the LEASE thereafter, nor a waiver of any remedy for the subsequent breach or default of any term, covenant, or condition of the LEASE . 000120 sdl 0032305 23 () 18 . COSTS OF SUSTAINING AN ACTION FCiR BREACH OR DEFAULT (RL 27.lS)S In the event .e ither CITY or TENANT .·commences legal action aga1nst the other claiming a breach or default of this LEASE, the prevailing party in such litigation shall be entitled to recover from the other cost of sustaining such action, including reasonable attorney fees, as may be .fixed by the Court. · 19. RESERVATIONS TO .CITY (RL 27.19) S The PREMISES are accepted "as is" and "where is" by TENANT subject to any and all existing easements, ai:id encumbrances . CITY reserves the right to install, lay , construct, maintain, repair, and operate such sanitary sewers , ·drains, storm water sewers , pipelines, manholes, and . connections; water, oil, and gas pipelines; telephone and telegraph power lines ; and the applications and appurtenances necessary or convenient for connection therewith, in , over, upoh, through, across and along the PREMISES or any part thereof, and to enter the PREMISES for any and all such purposes . CITY also reserves the right to grant franchises, easements, rights 'of way, and permits, in ,' over, upon, through, across, and along any and all portions of the PREMISES . No right reserved by CITY in this clause shall be so exercised· as to interfere unreasonably with TENANT'S operation hereunder. In exercising the rights reserved in this Clause, CITY shall take all reasonable steps to avoid any physical ·encroachment ·o nto the PREMISES . In the event CITY' s exercise of the rights· reserved in this Clause results in either of the two occurrences described in clause (a) or (b) of Provision 33, which is not cured by' CITY within a reasonable time following writtet¢,notice from TENANT, TENANT may terminate this LEASE up on written notice to CITY. CITY agrees that rights granted to third parties by reason of this clause shall contain provisions that the .surface of the land shall be restored as nearly as practicable to the original condition upon the completion of ahy construction . 20 . HOLDING OVER (RL 27.20) S In the event TENANT shall continue in possession of the PREMISES after the term of the LEASE, such possession shall not be considered a renewal of this LEASE but a tenancy from month to month and shall be governed by the conditions , and covenants contained in this LEASE. 000120 sdl 0032305 24 () 21 . CONDITION OF PREMISES UPON TERMINAT ION (RL 27 . 21) S Upon termination of this LEASE, except as otherwise agreed to herein, TENANT shall redeliver ·possession of the PREMISES to CITY in substantially the same condition that existed immediately prior to TENANT ' s occupancy, reasonable· wear .and tear, flood, earthquake,. war, and any act of war excepted. 22. DISPOSITION OF ABANDONED PERSONAL PROPERTY (RL 27.22) S . If TENANT abandons the PREMISES or is dispossessed thereof by pro.cess of law or otherwise, title to any personal property belonging to TENANT and left on the PREMISES forty-five ( 45) days after such abandonment or dispossession shall be deemed to have been .transferred to CITY if not .removed by TENANT within fifteen (15) days after CITY gives written notice of such abandonment to TENANT . CITY shall have the right to remove and to dispose of such .property without liability therefor to .TENANT or to any person claiming under TENANT, and shall have no need to account therefor. 23. QUIT.CLAIM OF TENANT 'S INTEREST UPON TERMINATION (RL 27 . 23) S Upon termination · of this LEASE for any . reason, including but not limited to termination because of default by TENANT, TENANT shall, at CITY'S request execute, acknowledge and deliver to CITY within five (5) days after receipt of written demand thereof, a good. and .sufficient deed whereby all rights, title, and interest· of. TENANT in the PREMISES, is quitclaimed to CITY . Should TENANT fail or refuse to deliver the required deed to CITY, ·CITY may prepare and record ·a notice reciting the failure · of TENANT to execute, acknowledge and deliver such deed and the notice shall be conclusive evidence of the termination of this LEASE, and of all right of TENANT or those claiming under TENANT in and to the PREMISES . 24. CITY's RIGHT TO RE-ENTER (RL 27.24) S TENANT agrees to yield and peaceably deliver possession of the PREMISES to CITY on the date of termination of this LEASE, whatsoever the reason for such termination . Upon giving written notice of termination to. TENANT, CITY shall have the right to re-enter and take possession of the PREJ\'IISES on the date such termination becomes effective without further notice of any kind and without institution of regular legal proceedings . Termination of the LEASE and re�entry of the PREMISES by CITY shall in no way alter . 000120 sdl 0032305 25 or diminish any obligation of TENANT under the LEASE terms and shall not constitute an acceptance or surrender. . . . TENANT waives any .and all rights of redemption under any existing or future law or statute in the event of eviction from or dispossession of the PREMISES for any reason or in the event CITY re-enters and lawfully re-takes possession of the PREMISES . 25. CONFLICT OF INTEREST (RL 27.25) S TENANT warrants and covenants that no official or employee of CITY ·nor any business entity in which -any official or employee of CITY · is int erested: (1) has been employed or retained to solicit or aid in the procuring of this agreement ; or ( 2) will be employed ·in the performance of this agreement without the divulgence of such fact to . CITY . In the event that CITY determines that the employment of any such official, employee or business entity is not compatible with such official 's or employee's duties as an official or employee of · CITY, TENANT upon request of .CITY shall immediately terminate such emp loyment. · 26. EMINENT DOMAIN (RL 27 .26) S In the event the whole or arty part of the PREMISES are condemned by a public entity in the lawful exercise of its power of eminent domain, this LEASE shall cease as to the part condemned . The date of . such termination shall be the effective date of possession of the whole or part of the PREMISES by the condemning public entity .. If only a part is condemned and the condemnation of that part does not substantially impair the capacity of the remainder to be used for the purposes required by this LEASE, as determined by TENANT, TENANT shall continue to be bound by the terms, covenants and conditions. of this LEASE. However, the then current minimum annual rent shall be reduced in proportion to the relationship that th_e compensation paid by the condemning public entity for the portion condemned bears to the value of the entire PREMISES as of the date of possession of the part condemned. If the condemnation of a part of the PREMISES substantially impairs the capacity of the remainder to be us ed for the purposes required by this LEASE, TENANT may: A. Terminate this LEASE and thereby be absolved of obligations under this LEASE . which have not accrued as of the date of possession by the condemning public entity; or 000120 sdl 0032305 26 I) B. Continue tc;> occupy the remaining PREMISES and thereby continue to be bound by the terms , covenants and conditions of this LEASE. If TENANT elects to continue in possession of the reinainder of the PREMISES, the then current annual minimum rental shall be redu6ed in pr6portion to the relationship thaf the compensation paid by the condemning public entity for the. part condemned bears to the value of the entire leased PREMISES · as of the date of possession by the condemning public entity. TENANT shall provide CITY with written notice advising CITY of TENANT 'S choice within thirty ( 30) days of Tenant's receipt of written notice from CITY or from the condemning public entity, whichever notice TENANT receives first, of possession of the part condemned by the condemning public:;: entity. CITY shall be entitled to and shall receive all compensation re lated to the condemnation of all .or part of the PREMISES by the exercise of eminent domain except that TENANT shall be entitled to that portion of the compensation ·which . represents the value of the TENANT constructed improvements for the remainder of the LEASE term. The am ount to which TENANT shall be entitled shall not exceed the actual cost of improvements constructed .by TENANT reduced in proportion to the relationship of the remaining LEASE term to the original LEASE term, using a .straight line approach. 27 . CHANGES IN PRICE INDICES (RL 27.27) S Clauses contained in this LEASE may provide for adj ustment .based on the Consumer Price Index, component indices, or other indices. Should these indices be changed, altered or cease to be published, the following conditions shall apply: A. If the subj ect index is changed so that the base year differs from that used as of the month in which the term commences, the subject index shall be converted in accordance with the conversion factor published by the publisher of that index; B. ·If the subject index is discontinued or revised during the LEASE term, such index shall be replaced by another government index or computation which will obtain substantially the same result as would be obtained if the subj ect index had not been discontinued or revised . 28. POST-ACQUISIT ION TENANCY (RL 27 .28) S TENANT hereby acknowledges that its occupancy of the PREMISES is subsequent to acquisition of the PREMISES by CITY . TENANT further 000120 sdl 0032305 27 ) understands and agrees that as a post-acquisition tenant, TENANT i's not eligible and furthermore waives all claims for relocation assistance and benefits under federal, state or local law. 29. HA ZARDOUS SUBSTANCES (RL. 27.29) S A. Definition . As used herein,. the term "Hazardous Materials" means .any · substance or material which has been determined by any state·, federal or local governmental authority to be capable of posing risk of injury to health, safety, and property, including petroleum and petroleum products and all of those materials and substances designated · as. hazardous or toxic by the U.S. Environmental Protection Agency, the California Water Quality Control Board, the U.S. Department of Labor, the California Department of Industrial Relations, the California Department of Health Services, the California Health and Welfare Agency in connection with the Safe Water and Toxic Enforcement Act of 1986, the U.S. Department of Transportation, the U.S. Department of Agriculture, the U.S. Consumer Product Safety Commission, the U.S .. Department o.f Health and Human Services,. the U.S. Food and Drug Administration or any other governmental agency now or hereafter authorized to regulate materials and substances in the environment . Without limiting the generality.of the foregoing, the term "Hazardous Materials" shall include all of those ma terials and substances defined as "toxic materials" in Sections 66680 through 66685 of �itle 22 of the California Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time . B. TENANT ' s Use of .PREMISES . During the term of this LEASE, TENANT shall abide and be bound by all of the following requirements : i. TENANT shall comply with all laws now or hereafter in effect relating to the use of Hazardous Materials on, under or about the PREMISES, and TENANT shall not contaminate the PREMISES, or its subsurface, with any Hazardous Materials. ii. TENANT shall restrict its use of Hazardous Materials at the PREMISES .to those kinds of materials. that are normally used in constructing personal telecommunications systems .. Disposal of any Hazardous Materials at the Premises is strictly prohibited. Storage of such permissible Hazardous Materials is allowed only in accordance with all applicable laws now or hereafter in effect . All safety and monitoring features of any storage facilities shall be approved by CITY'S Fire Chief in a·ccordance with all laws . 000120 sdl 0032305 28 () ) iii. TENANT shall be solely and fully responsible for the reporting of all Hazardous . Materials · releases to the appropriate public agencies, when such releases are caused by or result from TENANT 's ac tivities on the PREMISES . TENANT shall immediately inform CITY of any release of Hazardous Materials , whether or not the release is in quantities that would otherwise be reportable t6 a public . agency. iv. TENANT shall be solely and fully responsible and liable for any . such releases which are caused by TENANT at the . Premises, or into CITY's sewage cir storm drainage systems . TENANT shall take al l necessary precautions to prevent any of its Hazardous Materials from entering into any storm or sewage drain system or from being released on the Premises. TENANT .shall rem6ve releases of its Hazardous Materials in accordance with all laws . In addition to all other rights and remedies of CITY hereunder,· if the release of Hazardous Materials caused by TENANT is not removed by TENANT within ninety ( 90 ) days after discovery by TENANT, CITY or any other third party, CITY may pay to have the same removed and TENANT shall reimburse CITY for such costs within five (5) days of CITY's ·demand for payment . v. CITY represents that it has no knowledge of any Ha?ardous Materials on or under the PREMISES or . PROPERTY� TENANT will not introduce or use any ·such substance on · the PREMISES in violation of any applicable law. CITY shall indemnify and hold TENANT harmless .from and against all claims ,. actions, damages, fines, liabilities, costs and expenses (including attorneys ' and expert fees) ari0dng, directly or indirectly, from the deposit of any Hazardous Materials on or under the PROPERTY or the PREMISES prior to the commencement of the LEASE, unless said materials were actually deposited onto the PROPERTY or PREMISES by TENANT . This obligation to indemnify TENANT shall include damages, costs and expenses incurred in connection with any investigation, cleanup, remediation, monitoring, removal or restoration related to the presence of any substance . This indemnity shall survive the expiration or termination of . this LEASE . TENANT shall indemnify and hold CITY harmless from and against all claims , actions, damages, fines, liabilities, costs and expenses (including attorneys ' and expert fees) arising, directly or indirectly, from the deposit by TENANT of any Hazardous Materials on or under the PREMISES during the LEASE term, .unless said materials were actually deposited onto the PREMISES by CITY; provided, however, that this indemnity obligation shall not 000120 sdl 0032305 29 '. ) apply to claims, actions , pamages, fin�s, .liabilities, costs and expenses, (including attorneys ' and expert .fees)· arising from vandalism to the PREMISES by third parties. This obligation to indemnify CITY shall include damage�, costs . and expenses incurred in . connection with any investigation, cleanup; remediation,· monitoring, removal or restoration related to the presence of any substance . This indemnity shall survive the expiration· or termination· of this LEASE. vi . TENANT ' s · and CITY' s obligations under this Clause shall survive the expiration or earlier termina.tion of this LEASE . 30. ALL COVENANTS ARE .CONDITIONS (RL 27.30) S All provisions of the LEASE are expressly made conditions . 31 . PARTIES OF INTEREST (RL 27 . 31 ) S ·Nothing in .this agreement , expressed or implied, is intended to, or shal.l be construed to, .confer upon or to give to any person or party other than CITY and. TENANT the covenants, condition or stipulations hereof. All covenants, stipulations, promises and agreements in this LEASE shall be for the sole and exclusive benefit of CITY .and TENANT . 32. RECORDATION OF LEASE (RL 27 .32) S Neither CITY nor TENANT shall record this LEASE; however, upon request CITY and TENANT agree to. execute and deliver to the other a recordable Memorandum' of this LEASE .in a form substantially identical to the one attached as Exhibit D hereto. 33. INTERFERENCE TENANT will resolve technical interference problems with other equipment located at the PREMISES as of the commencement date of this LEASE or with an,y equipment that TENAN.T attaches to the PREMISES at any future date when TENANT desires to add additional equipment to the PREMISES . Notwithstanding anything to the contrary contained herein, CITY will not permit or suffer the installation of any future equipment which (a) results in technical interference problems with TENANT 'S then existing equipment, or . (b) physically encroaches onto the PREMISES. 000120 sdl 0032305 30 C) C) 34 .. TERMINATION Notwithstanding anything to the · contrary contained in this LEAS.E, TENANT may terminate. this LEASE at any time by notice to CITY (i) upon payment of a cancellation· fee in the equivalent amount of one ( 1) month rent if .TENANT ,. after reasonable effort, does not · obtain all permits , consents, ·easements, non-disturbance agreements or other approvals (collectively, "approval"r reasonably desired by TENANT or required from any governmental authority or any third party �related to or reasonably necessary to operate the PCs FACILITY, or if any such approval is canceled, expires or is withdrawn ·or terminated; or (ii) without further liability if CITY fails to have proper 'ownership of the PREMISES or PROPERTY or authority to enter into this LEASE; or (iii) upon payment of a cancellation fee in the equivalent amount of six (6) months . rent if TENANT, .for any other reason, in its sole discretion, determin.es that it will be unable to use the PREMISES . Upon termination, CITY shall retain all prepaid rent , unless termination is pursuant to (ii) above is a result of CITY's default . 000120 sdl 0032305. 31 /) CAl VADA SURVEYING, INC. EXHIBIT B LEGAL DESCRIPTION SPRINT PCS SITE NUMBER: SF13XC825 SITE NA ME: RINCONADA A PORTION OF RINCONADA PARK, WITHIN THE GROUNDS OF FIRE STATION #3 OF THE CITY OF PALO ALTO, COUNTY OF SANTA CLARA, STA TE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: UTILITY EASEMENT A STRIP OF LAND 5 FEET WIDE, 2.50 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: STRIP A COMMENCING AT A POINT ON THE CENTERLiNE OF EMBARCADERO ROAD. OCCUPIED BY A !" .IRON PIPE AT THE INTERSECTION OF ENBARCADERO ROAD & NEWE.LL ROAD; THENCE ALONG THE CENTERLINE OF EMBARCADERO ROAD S7!000'20"W; 8,81 FEET THENCE NORTH ALONG THE CENTERI.TNE OF NEWELL ROAD N00°46'47"E, 61.98 FEET; THENCE LEAVING SAID CENTERLINE N89°13'13"W, 26.64 FEET; THENCE N81°26'35"W, 13.48 FEET TO THE TRUE POINT OF BEGINNING; THENCE N8 l 026'35"W, 13.83 FEET TO. A POJNT HEREINAFTER REFERRED TO AS POINT "A"; THENCE N30°18'36"W, ll.40 FEET TO. A POINT HEREINAJ.'TER REFERRED TO AS PO.INT "B''. · ·' THE SIDELINES ARE TO BE LENGTHENED OR SHORTENED TO MEET THE WESTERLY RJGHTCOF­. WAY OF NEWELL ROAD AND THE LEASE AREA AS DESCRlBED BELOW. · STRil'B BEGINNING AT POINT "A" AS DESCRIBED ABOVE; THENCE S26°06' l 3"E, 30.30 FEET T0 THE END OF· SAID STRIP. THE SIDELINES ARE TO BE LENGTHENED OR SHORTENED TO MEET THE WESTERLY RIGHT-OF­ WA Y OF NEWELL ROAD AND "STRIP A" AS DESCRIBED ABOVE. LEASE AREA BEGINNING AT POINT "B" AS DESCRIBED ABOVE; THENCE S88°55'2l"E, J.98 .FEET; THENCE N0°46'46"E, 12.25 FEET; nIENCE N88°55'2l"W, 2.9 .50 FEET; THENCE S0°46'46"W. 12.25 FEET; THENCE 0 . S88 55'2l"E, 6.00 FEET TO A POINT HEREINAFTER REFERRED TO AS POINT "C": THENCE S88°55'2l"E, 19.52 FEET TO THE POINT OF BEGINNING. CONTAINING 361 SQUARE FEET OF LAND, MORE OR LESS. ACCESS EASEMENT A STRIP OF LAND 12 FEET WIDE, 6.00 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: BEGINNING AT POINT "C" AS DESCRIBED ABOVE; THENCE S00'46'46"W, 27.16 FEET; THENCE S39°06'43"W, 38.22 FEET; THENCE S00°46'46"W, 18 FEET MORE OR LESS TO nIE NORTHWESTERL y RlGHT-OF-WA Y OF EMBARCADERO ROAD AND THE END OF SAID STRlP. CORPORATE: 108 Business Center Drive • Corona, CA 91720 Phone 1909) 280-9960 • Fax (909) 280-9746 Page 1 of2 99175 02/07/00 ARIZONA: 7905 East Greenway Road, Suite 207 •-scottsdale, AZ 85260 Phone 16021 596-6514 •Fax 16021 596-2674 () '.) CAL VADA SURVEYING, INC. THE SIDELINES ARE TO BE LENGTHENED OR SHORTENED TO MEET THE NORTHWESTERLY RIGHT­ OF-WA Y OF EMBARCADERO ROAD AND THE LEASE AREA AS DESCRIBED ABOVE. CONTAINING 1,003 SQUARE FEET OF LAND, MORE OR LESS. SAID DESCRIPTIONS ARE SHOWN ON EXHIBIT B-1 ATTACHED HEREIN AND MADE A PART THEREOF. EDWARD L. SCHENET P.L.S. 4240 Pag� 2 of 2 99175 02/07/00 CORPORATE: 108 Business Center Drive • Corona, CA 91720 ARIZONA: 7905 East Greenway Road, Suite 201 •Scottsdale, AZ 85260 Phone (909) 280-9960 •Fax (909) 280-9746 Phone (602} 596-6514 •Fax (6021 590-2674 .. ------------------(·� ____________________ _,.! \ \ ,. EXHIBIT ''B -i '' SITE NUMBER: RINCONADA SITE NAME: SF1 3XC825 PLAT TO ACCOMPANY DESCRIPTION --H-OPKINS Jol + -ROAD � � -��J L __ . ___ - I SPRINT PCS I ;.; LEASE AREA -- � '• ;;; 1-STORY BUILDING � · ' "FIRESTATION #3" "' 40 ' Graphic • • 1-;;--...J I Scale .. ' SCALE: 1 "•30' I . I • I l /, I L--- --��V· �c;\'vE�o -- )';:IA �SSOR'S PARCEL NO.: 3-460-01 SITE ADDRESS: 1120 HOPKINS AVE. CAL VADA PALO ALTO, CA 94301 SANTA CLARA COUNTY SURVEYING, INC. 108 Business _Center Drive Corona ..... ____ . P.O.C. LINE TABLE LINE BEARING LENGTH L1 N81'26'35"W 13.48' L2 N81'26'35"W 13.83' L3 N30'18'36"W 11.40' L4 S88'55'21 "E 3.98' L5 NOD' 46' 46 "E 12.25' L6 S00'46'46"W 12.25' L7 S88'55'21 "E 6.00' Job No 99175 Phone: 909 280-9960 Fax: 909 280-9746 c) Site Name : EXHIBIT C TO · LEASE /) .\ MEMORANDUM OF AGREEMENT Site I.D. No. : THIS MEMORANDUM OF AGREEMENT is made and entered into as 'of �������' 2000, by and between , a (''Owner") and SPRINT SPECTRUM L.P;, a Delaware ·1imi ted partnership ( "SSLP") . WITNESSETH: That Owner hereby leases to SSLP and SSLP hereby leas.es from Owner that certain real property . (the "Property") ·in the State of California, County of , City of commonly known as · , a legal description of which is -,-��-.,-�-,,,---,-�-,-,-�.,,,--���,-------,-----,-� shown in Exhibit C · attached hereto and incorporated herein by reference, under the terms and conditions of the unrecorded Lease by and between Owner and SSLP dated , 2000 and incorporated herein by reference (the "Agreement ") for an initial term of five (5) years, and two · (2) subsequent optional extension terms of five (5) years each, pursuant to the terms of the Agreement. The Agreement provides for grant of rights of access to the Property and to electrical and telephone facilities serving the Property. · IN WITNESS WHEREOF, the parties have executed this Memorandum as of ·the day and year first above written. SPRINT SPECTRUM a Delaware Owner: City of Palo Alto, a municipal corporation By : �rf'J-. Print Naffi: �lz_.. KJ?;IT Its : Mayor 000120 sdl 0032305 32 C) ACKNOWLEDGMENT ATTACHED [FORM DOCUMENT -PLEASE INITIAL O.NLY -NOT FOR EXECUTION] TENANT Initials \\ \\ \\ \\ \\ \ \. \\ \\ \\ \\ \\ \\ 000120 sdl 0032305 33 ) Sprint PCS Reference No. SF-13-XC-825(A) ADDENDUM TO LEASE This Addendum to Lease (the "Addendum") is entered into concurrently with and is intended to be made a part of that certain lease (the "LEASE") entered into between Sprint Spectrum L.P., a Delaware limited partnership ("TENANT") and the City of Palo Alto, a municipal corporation ("CITY") dated as of Ma·� K , 2000. Under the LEASE, CITY is leasing to TENANT a portion of CITY's property loca d at 799 Embarcadero Road, Palo Alto, California, 94303, commonly referred to as Fire Station No. 3 and/or "Rinconada" Station, for the purpose of TENANT installing and operating a communications facility. CITY and TENANT are entering into this Addendum to include additional provisions to the LEASE; all defined terms contained in the LEASE and used in this Addendum shall have the same meaning as provided in the LEASE and, except as set forth in this Addendum, all of the terms and conditions of the LEASE shall remain unchanged and in full force and effect. 1. CITY Telecommunications Policy. TENANT acknowledges that CITY has commenced evaluation and preparation of comprehensive telecommunications policies, procedures and implementation materials related to telecommunications uses within the CITY (collectively referred to herein as the "Telecommunications Policy"). TENANT acknowledges receipt of the City Manager's report dated March 6, 2000 which recommended for approval a consultant contract between the CITY and an independent firm for preparation of documents related to the Telecommunications Policy, and understands that the City Counsel approved that contract. TENANT acknowledges that the Telecommunications Policy may include (among other things) the establishment of guidelines and/or ordinances governing the siting of telecommunications facilities within the City of Palo Alto, including facilities on private land and on City-owned land. In light of the pending Telecommunications Policy, TENANT and CITY agree as follows: (a) TENANT agrees that it will abide by all lawful terms and conditions of the Telecommunications Policy adopted by CITY to the extent they relate to TENANT's communications facility on the PROPERTY. In this regard, the following procedure shall apply: (i) Within ninety (90) days of the adoption of the Telecommunications Policy, if CITY finds that TENANT's facility at the PROPERTY is not in compliance with the Telecommunications Policy, then CITY shall deliver to TENANT a written notice ("compliance notice") specifying the items of non-compliance. Such notice shall include reasonably detailed items of non-compliance, a copy of the applicable provisions of the Telecommunications Policy and, if appropriate, actions required to be undertaken by TENANT to bring its facility into compliance. TENANT acknowledges that such notice may include a requirement to relocate TENANT's facility, if required, under the Telecommunications Policy. If CITY fails to deliver such compliance notice within said ninety day period, TENANT's communications facility on the PROPERTY shall thereafter be deemed compliant with all of the terms and conditions of the Telecommunications Policy, unless later actions of TENANT cause its communications facility to become non-compliant. (ii) TENANT shall have six (6) months after its receipt of the compliance notice to bring its facility into compliance under the Telecommunications Policy. If TENANT fails or refuses to bring its facility into compliance within such six month period, CITY may terminate the G�CUENTS\ISBISPRINl\Nor<)o•m C_,,lifornio\DOCs\SF-JJ-XC-S2_1{A)\Addcnduni.wpd Much 28. 2000 1 () () Sprfnt PCS Reference No. SF-13-XC-825(A) LEASE on thirty (30) days written notice to TENANT, whereupon TENANT shall remove its communications facility as required under the LEASE and the parties shall have no further obligations under the LEASE, except for those obligations which expressly survive the termination of the LEASE. 2. Condemnation Proceedings. TENANT agrees that, if TENANT's facility must be relocated or modified to comply with the Telecommunications Policy or if the.LEASE is terminated due to TENANT's failure or refusal to comply with .the Telecommunications Policy, as set forth above, TENANT shall not initiate condemnation proceedings against the CITY for the purpose of acquiring a leasehold interest, fee interest or other right to use the PREMISES previously leased to TENANT under the LEASE. SIGNATURE PAGE FOLLOWS G:\CLlENTS\ISB\SPRlNT\Norlh<in California\Docs\'lf'-13·XC·825(A)\Add<ndum.wpd Morch28.2CW 2 ( } CITY: CITY OF PALO ALTO (LESSOR) By: Its: l' ;<mi� Mayor ) ATTEST: By:�-� Print Name: Id.flu " J..k!JJ;}f/211 Its1)sff:City c1irk ' APPROVED AS TO FORM: By: ./b_,� r). <!.-(L,,-<-- I Print Name: ,S,lA s .A n vJ Ca.s-e.-Its: Senior Asst. City Attorney PROPERTY DESCRIPTION APPROV By: Print N It�. Public Works/Engineering RECOMMENDED FOR APPROVAL: "'--.. //'. LI {\ By: 4J.QP-A-.-!." ¥b,d Print Name: Ern 1/'( Ha rr/-VO IJ Its: Asst. Ci Manage By: ·� Print Name: _ _J�d:ll:��t-f<.>.i>l�l Jltl-Its: Fire Chief By: �a:"ii'� Print Name: AA/AP? 11/.fe.u#!M,/ Its: Real Property Manager O:\CLIENTS\JSlll,'lPRJNl\Norlhern Co!if<>1nio\Does�F-IJ.XC·825(A)\Addendunl.wpd Mor<h 28.2000 3 ·�) Sprint PCS Reference No. SF-13-XC825(A) TENANT: SPRINT SPECTRUM LP., a Delawar�_er_s_hi_p-;-7"-;T -- By: Print N11me: awrence Doherty Its: IR 10nal Director of Site Development -West ATTACHMENT D 1 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC LICENSE AGREEMENT BETWEEN CITY OF PALO ALTO AND CROWN CASTLE TOWERS 06-2 LLC This License Agreement (this “Agreement”), dated as of _________________, 2019 (the “Effective Date”), is entered into by the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”), and CROWN CASTLE TOWERS 06-2 LLC, a Delaware limited liability company (the “Licensee”) (individually, a “Party”; collectively, the “Parties”), in reference to the following: RECITALS: A. The City owns real property located at 799 Embarcadero Road, Palo Alto, California 94303 (the “Property”), as more particularly described in Exhibit B, attached hereto and made a part hereof. B. The Property is not located in the public right-of-way and the City is licensing the Property in its proprietary capacity; thus neither 47 U.S.C. Sections 253, 332(c)(7) or 1455(a), the FCC rules promulgated thereunder, nor California Government Code Section 65964.1 applies to this License Agreement or the City’s decision to lease the Property to Licensee. C. The City and Licensee entered into a License Agreement dated June 1, 2018, for the use of portions of the Property (“Temporary Agreement”). That agreement expires on August 27, 2020. The parties now desire to enter into a longer-term license agreement, which, upon its effective date, will supersede the Temporary Agreement. D. The Licensee desires to use portions of the Property which consists of approximately three hundred seventy-nine and one quarter (379.25) square feet, along with utility areas (the “Premises”), all of which are shown and described more particularly in Exhibit C, attached hereto and made a part hereof, to construct, maintain and operate wireless communications facilities (“WCFs”). The WCFs will replace a wireless communications facility previously approved and owned by Licensee under CUP application 99-UP-37. G. The City desires to permit the Licensee’s use of the Premises under the covenants, terms and conditions (the “Provisions”) set forth below. AGREEMENT: In consideration of Recitals A through G, which are made a substantive part of this Agreement, and the following Provisions, the Parties agree, as follows: DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 ATTACHMENT E 2 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC Section 1.0 PREMISES 1.1 Subject to the Provisions hereof, the City grants to the Licensee a right to use the Premises. The Licensee shall construct certain WCFs, consisting of a support structure (the “Tower”), an equipment shelter for placement of the Licensee’s base station equipment, a back-up emergency power generator and/or batteries and coaxial cables and other conduits connecting the Licensee’s equipment shelter to the antennas on the Tower, and related improvements and structures and uses incidental thereto. 1.2 The City grants to the Licensee a right to the non-exclusive use of a portion of the Property for the sole purpose of operating cabling and associated hardware, including utility runs incidental to the WCFs between the WCFs and the Tower, together with the right to ingress and egress thereon. 1.3 In addition to the Licensee’s use of the Premises, the City grants to the Licensee a non- excusive temporary construction easement (the “TCE”) in and through that portion of the Property, described at Exhibit E, for the sole purpose of affording the Licensee with access to the Premises for the initial installation of the WCFs. The term of the TCE is coterminous with this Agreement; without further notice by the City the TCE shall terminate at the same time as this Agreement. Section 2.0 PURPOSE 2.1 The purpose of this Agreement is to provide for the continuation of the uninterrupted service, replacement, maintenance, modification, upgrade and operation of the WCFs at the Premises at the Licensee’s sole cost and expense. Section 3.0 ALLOWABLE SERVICES AND USES 3.1 Permitted Uses. The Licensee may use the Premises to provide the following: A. During the Term, the Licensee shall use the Premises only for the purpose of installing, removing, replacing, maintaining, modifying, upgrading and operating, at its sole cost and expense, the WCFs for furnishing telephone, radio and telecommunications services to its customers. The WCFs consist of radio, telephone and communications equipment and antennas installed and used to send and receive radio signals to and from cellular telephones and other mobile devices and to connect those signals to radio, telephone or other wireless communications facilities either directly, by means of cables or indirectly, by means of transmitting and receiving facilities (including microwave antennas and GPS antenna) located at the Premises. B. The Licensee’s uses of the Property and the Premises shall be subject to the following terms and conditions: DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 3 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 1. The Licensee’s use of the Property is non-exclusive, and its use of the Premises is exclusive. 2. The Licensee’s operations at the Premises shall comply at all times with all applicable laws, rules and regulations regarding electromagnetic emissions. The Licensee shall conduct reasonably necessary tests after its WCFs are constructed at the Premises to ensure that its WCFs are in compliance with all applicable laws, rules and regulations regarding electromagnetic emissions. The tests shall be conducted by a licensed professional engineer, and the written results of such tests shall be delivered to the City’s Real Property Manager consistent with section 16.2 of this Agreement. 3. In constructing and operating its WCFs, the Licensee shall comply with and include the following items in its plans and operating procedures for its facilities: a. The Licensee shall not permit any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, nor take any action which would constitute a nuisance or would disturb, obstruct or endanger any other occupants or use of the site or interfere with their use of their respective premises. b. The Licensee shall operate the Premises in a manner that will not cause interference to the City as of the Effective Date, including, but not limited to, any irrigation system and landscaping installed by the City. Prior to any construction at the Premises, the Licensee shall coordinate its placement of its WCFs to ensure that placement does not conflict with the City’s irrigation systems and landscaping. The Licensee shall repair any damage to the City’s property caused by the construction of its WCFs, including, but not limited to, any damage caused to the City’s irrigation system and landscaping. c. The Licensee’s operations shall at all times be conducted in compliance in all applicable federal, state and local laws, rules and regulations, including, but not limited to, laws and regulations regarding environmental and occupational safety and all Federal Communications Commission requirements. The Licensee shall submit all required hazardous materials filings (if required) and obtain all required approvals prior to installing its batteries or any other hazardous materials. d. Prior to engaging in any new construction at the Premises, the Licensee shall provide the City with evidence that all permits required from any agencies having pre-construction jurisdiction over the proposed development, DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 4 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC including but not limited to building permits and street opening permits, have been authorized and are available. e. The Licensee shall post a visible, prominent notice on the Premises listing its emergency procedures, warnings, and emergency contacts. f. The Licensee shall maintain all improvements that it places at the Property, including the fence, structure and the equipment. g. The Licensee’s service lights in the Premises shall remain off unless its service personnel are in the area and require the lights to be turned on to conduct their operation. 3.2 Restricted Uses. The above-referenced services and uses shall be the only services and uses permitted at, on, or from the Premises. The Licensee shall not use the Premises for any other purpose, or to engage in, or permit, any other business activity within or from the Premises. Section 4.0 TERM; EXTENSION OF TERM 4.1 This Agreement shall be effective and binding on the Parties as of the Effective Date. The initial term (“Term”) of this Agreement shall commence on the earlier to occur of (a) the first day of the month in which building permits for the WCFs are issued, or (b) nine (9) months after the date of full execution of this Agreement (the “Commencement Date”), and end on the date that is ten (10) years thereafter (the “Expiration Date”). The Temporary Agreement shall terminate upon the Effective Date of this Agreement, except that Licensee shall continue to pay the monthly rental fee of $100 per month until payment of the License Fee under this Agreement is made, pursuant to Section 5.3 (A) below. 4.2 The Term will be extended automatically for two (2) additional terms of five (5) years each (each an “Extension Term”), unless Licensee provides the City with written notice of intent not to extend the then-current term. In order to be effective, such notice must be delivered, consistent with Section 16 of this Agreement, no later than three (3) months prior to the expiration of the then-current term. Extension terms are subject to the annual increase set forth in 5.1, A, below. Section 5.0 LICENSE FEE; PAYMENT PROCEDURE; LATE PAYMENT FEE 5.1 Fees. A. License Fees. Licensee shall pay the City a license fee (the “License Fee”) of Forty Thousand Eight Hundred and No/100 Dollars ($40,800.00) per year (adjusted annually as provided herein) as consideration for Licensee’s use of the Premises, which shall become due and payable in accordance with the payment procedures DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 5 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC set forth in section 5.3 below. The License Fee will increase by three percent (3.0%) each contract year. B. Telecommunication Application Processing Fee. The Licensee shall pay a one-time fee of Two Thousand Three Hundred Eighty-Nine Dollars ($2,389.00) (the “Application Fee”) to the City. The Application Fee shall be due within sixty (60) days after the Effective Date. In the event that the Licensee does not pay the Application Fee on or before the date due, the Licensee shall be deemed in breach of this Agreement and the City may terminate this Agreement according to Section 14.1.A.1 below. C. Failure to pay. The Licensee shall be deemed in default and subject to Termination provisions of section 14 of this Agreement and/or Late Payment Fee provisions of section 5.4 if the applicable Application Fee is not paid in accordance with section 5.1(B) and/or the License Fee is not paid within fifteen (15) days following Licensee’s receipt of notice from the City that such Application Fee or License Fee is past the due dates set forth in Section 5.3 below. 5.2 [Intentionally omitted]. 5.3 Payment Procedures A. License Fee Payment Schedule. 1. First Year. The License Fee for the first year shall be due and payable to the City within sixty (60) days after the Commencement Date. 2. Subsequent Years. For all subsequent contract years, the License Fee shall be due and payable on the anniversary of the Commencement Date. In the event this Agreement expires or is otherwise terminated, the City will not return any portion of the License Fee. B. Payment Delivery. The License Fee shall be made payable by check or other negotiable instrument to “CITY OF PALO ALTO” and delivered to or at the Revenue Collections Division, 250 Hamilton Avenue, PO Box 10250, Palo Alto, CA 94303. The designated place of payment may be changed at any time by the City upon thirty (30) days’ prior written notice to the Licensee. C. No Waiver. The Licensee agrees that the City’s acceptance of any applicable ‘late paid’ or ‘incorrect amount’ License Fee shall not constitute a waiver by the City of any default or breach and shall not bar the City from enforcing its right to collect the Late Payment Fee or exercising any other remedy provided in this Agreement or by applicable law. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 6 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC D. Rental Documentation. The City hereby agrees to provide to Licensee a complete and fully executed Internal Revenue Service Form W-9 upon execution of this Agreement, and from time to time during the Term of this Agreement upon Licensee’s written request. 5.4 Late Payment Fee. If the City does not receive payment of the License Fee or the Application Fee within five (5) days of the applicable fee’s date due, or payment of any other sum then due and payable by the Licensee, then the Licensee shall pay a fee equal to two percent (2%) of the applicable fee then due and payable yet remaining unpaid (the “Late Payment Fee”) plus an administrative fee of forty-five dollars ($45.00) or any fee established by the Municipal Fee Schedule, whichever fee is higher (the “Administrative Fee”). The total sum of all fees (as applicable, the License Fee, the Application Fee, the Late Payment Fee, the Administrative Fee or the Overhead Fee) then due and owning shall become immediately due and payable to the City. A. The City’s acceptance of any fee or fees due and payable by the Licensee that is or are paid late shall in no event constitute a waiver of the Licensee’s default with respect to such overdue payment, nor shall the Licensee’s failure to pay bar the City from exercising any other rights and remedies granted hereunder or by any provision of law. Section 6.0 MAINTENANCE AND REPAIR 6.1 WCF Maintenance and Repairs. The Licensee, at its sole cost and expense, shall perform its WCF’s maintenance and repairs, including, without limitation, all painting and all maintenance of landscaped areas necessary to keep the Premises and all improvements thereto in first-class order, repair and condition, and shall keep the Premises in a safe, clean, wholesome, and sanitary condition to the satisfaction of the City, and in compliance with all applicable laws, during the Term. 6.2 Other Maintenance and Repairs. A. The Licensee shall maintain, at its expense, all equipment, trade fixtures and any other improvements it installs at the Premises that are required for the maintenance and operation of the Premises. The Licensee waives the right to make repairs at the expense of the City and the benefit of the provisions of Sections 1941 and 1942 of the California Civil Code relating thereto; and further agrees that if and when any repairs, alterations, additions or betterments shall be made by the Licensee as required by this Agreement, the Licensee shall promptly pay for all labor done or materials furnished and shall keep the Premises free and clear of any lien or encumbrance of any kind whatsoever. B. If the Licensee fails to commence any repairs or perform any maintenance work, for which it is responsible hereunder, within thirty (30) days of receipt of written notice DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 7 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC from the City, the City shall have the option to make the repairs, provided that the City shall not perform any work on Licensee’s Tower, except to the extent necessary to protect public health and safety and invoice the Licensee for those costs, and the Licensee shall within ten (10) days of receipt of a bill therefor from the Real Property Manager, reimburse the City for the cost of such repairs, which payment shall include a fifteen percent (15%) administrative overhead fee (the “Overhead Fee”). Following the initial thirty (30) days’ written notice, the City shall provide notice to Licensee specifying the date and time of the City’s proposed entry at least five (5) days in advance of the City’s entry. The City’s performance of such repairs or performance of maintenance shall in no event be construed as a waiver of the duty of the Licensee to make repairs or perform maintenance as required by this Agreement. Section 7.0 CONSTRUCTION AND/OR ALTERATION BY THE LICENSEE 7.1 City’s Consent. A. WCFs and other facilities shall not be constructed, erected, or made within the Premises without the prior written consent of the City (for example, by action of the City Council, if required by City ordinances, resolutions, policies, rules or regulations or otherwise by the City’s City Manager or designee), which consent shall not be unreasonably withheld. The City shall be deemed to have approved any construction if the City, acting by the Real Property Manager, does not provide the basis, in writing, of the disapproval or approval within thirty (30) days after the Licensee’s submission of such request for consent; provided, however, the Real Property Manager will use reasonable efforts to act upon the request for consent within thirty (30) days of receipt thereof. B. The Licensee shall have the right to construct the Premises (including the base station radio equipment) in approximately the configuration shown on the plans, attached at Exhibit C (subject to all necessary architectural review, zoning approvals and building permits). Any conditions relating to the manner, method, design, and construction of the structures, improvements, or facilities established by the City shall be conditions of this Section as though originally stated herein. C. The Licensee may replace, substitute or modify any part of the WCFs without the City’s consent provided that such replacements, substitutions and modifications are contained within the Licensee’s equipment enclosure or do not materially alter the size or weight of the Licensee’s improvements at the Premises and provided that the Licensee complies with applicable City ordinances, resolutions, policies, rules and regulations relating to zoning approvals and building permits applicable to the WCFs. The Parties acknowledge that City ordinances, resolutions, policies, rules and regulations applicable to the WCFs do not generally require architectural review, DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 8 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC zoning approvals or building permits, for replacements, substitutions or modifications that do not expand the size of the Premises. 7.2 Trade Fixtures. The Licensee may, at any time and at its sole cost and expense, install and place business fixtures and equipment within any structure at the Premises, provided that written notice of such fixtures and their installation have been provided to the City’s Real Property Manager. 7.3 Strict Compliance with Plans and Specifications. All improvements constructed by the Licensee at the Premises shall be constructed in an efficient and workmanlike manner and in strict compliance with detailed plans and specifications approved by the City (by action of the City Council, if required by City ordinances, resolutions, policies, rules or regulations or otherwise by decision of the City’s City Manager or designee), and applicable City ordinances, resolutions, policies, rules or regulations and these plans, attached at Exhibit C, have been approved by the City. 7.4 Building Permit Final Inspection. Upon completion of construction of any building, structure or facility, the Licensee shall submit to the Real Property Manager, a copy of the building permit issued to the Licensee, which shows the final inspection has been completed and approved, in writing, by the City. Section 8.0 OWNERSHIP OF IMPROVEMENTS 8.1 Improvements to Real Property. All improvements constructed, erected or installed at the Premises must be free and clear of all liens, claims, or liability for labor or material. Upon the expiration or earlier termination of this Agreement, the City at its option may require the Licensee to remove its improvements including, but not limited to, the foundations, and may further require the Licensee to repair to the satisfaction of the City any damage to the Premises caused by such removal within ninety (90) days after the Licensee’s receipt of the City’s request that the Licensee shall remove such improvements; provided, that the Licensee may be required to remove underground conduit installed by it during the Term and provided that the Licensee receives the City’s request to remove such improvements within fifteen (15) days from the expiration or earlier termination of this Agreement. 8.2 Personal Property. Title to the Tower, all improvements, equipment, furniture, furnishings and trade fixtures placed by the Licensee at the Premises shall remain the property of the Licensee, and replacements, substitutions and modifications thereof may be made by the Licensee during the Term. The Licensee will remove all of its equipment, fixtures and furnishings within ninety (90) days after the expiration or earlier termination of this Agreement, provided that the Licensee shall repair to the reasonable satisfaction of the Real Property Manager any damage to the Premises and improvements caused by such removal. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 9 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC A. The City acknowledges the Licensee may enter into financing arrangements, including issuance of promissory notes and financial and security agreements for the financing of the Licensee’s equipment (the “Collateral”) with a third party financing entity and may in the future enter into additional financing arrangements with other financing entities. In connection therewith, City, subject to Section 7.1 requirements, consents to the assignment of rights in the Collateral, disclaims any interest in the Collateral, as fixtures or otherwise, and agrees the Collateral shall be exempt from execution, foreclosure, sale, levy, attachment, or distress for any license fee or any other fee due or to become due and payable to the City, and such Collateral may be removed at any time without recourse to legal proceedings. Section 9.0 “AS BUILT” PLANS 9.1 Upon completion of any major The Licensee-constructed improvements, the Licensee shall provide the Real Property Manager with a complete set of reproducible "as built plans," reflecting the actual construction at the Premises. Section 10.0 DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS 10.1 If the Premises are, in whole or in part, damaged or destroyed, then: A. If wholly damaged or destroyed so that the Premises are rendered permanently unusable for reconstruction of a WCF site, this Agreement shall terminate and the Licensee shall be liable for the License Fee up to the time of such damage or destruction and any License Fee pre-paid by the Licensee shall be returned; or B. If only partially damaged or destroyed and still usable for construction or use as a WCF, the Licensee shall, within a reasonable time, not to exceed thirty (30) days from the date of the Licensee’s receipt of notice of the damage or destruction, notify the City, in writing, of its intent to either: 1. terminate this Agreement, in which case Licensee shall be liable for the License Fee only up to the time of City’s receipt of Licensee’s notice and any License Fee prepaid by the Licensee applicable to the period after receipt of such notice shall be returned to the Licensee, or 2. continue operating under this Agreement, in which case, the Licensee within a reasonable time shall repair the Premises and the WCFs, with a proportional and reasonable reduction of the License Fee from the date notice is received by the City until the date the Premises and the WCFs are usable. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 10 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC Section 11.0 UTILITIES CHARGES 11.1 Payment Required. The Licensee shall pay, prior to delinquency, all charges for utilities goods and services delivered or supplied to the Premises by the City at the rate charged by the City’s Department of Utilities and/or Department of Public Works or any other City department. Section 12.0 INSURANCE 12.1 General. Unless the City’s insurance risk manager agrees, in writing, to accept the Licensee’s self-insurance in fulfillment of these insurance requirements, the Licensee shall obtain and maintain at all times during the Initial Term and the Extension Term, if any, commercial general liability insurance and commercial automotive liability insurance protecting the Licensee in an amount of two million dollars ($2,000,000) per occurrence (combined single limit), including death, bodily injury and property damage, and not less than two million dollars ($2,000,000) aggregate, for each personal injury or death liability, products-completed operations, and each accident. Such insurance, pursuant to ISO Form No. GC2010 or equivalent or other commercially reasonable form acceptable to the City’s insurance risk manager, shall include the City, its council members, officers, employees, and agents as an additional insured as respects liability arising out of the Licensee’s negligent performance of any Work that it performs or may be authorized to perform under this Agreement. Coverage shall be provided in accordance with the limits specified and the Provisions indicated herein. Claims-made policies are not acceptable. Such limits may be satisfied by a combination of primary and umbrella policies. Licensee will make best efforts to notify the City within 30 days of receipt of notice from its insurer regarding any cancellation or termination of any insurance policies. The Licensee shall be responsible for notifying the City of such change or cancellation. 12.2 Certificates. The Licensee shall file the required original certificate(s) of insurance with blanket additional insured endorsements with the City’s insurance risk manager, with a copy to the Utilities Director, subject to the City’s prior approval. The certificate(s) shall clearly state or provide: A. Policy number; name of insurance company; name, address and telephone number of the agent or authorized representative; name and address of insured; project name and address; policy expiration date; and specific required coverage amounts; B. That the Licensee’s required insurance is primary as respects any other valid or collectible insurance that the City may possess, including any self-insured retentions the City may have, and any other insurance the City does possess shall be considered excess insurance only and shall not be required to contribute with this insurance. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 11 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 12.3 Notice. The certificate(s) of insurance with blanket additional insured endorsements and notices shall be mailed to: (a) City of Palo Alto, Utilities Department, P.O. Box 10250, Palo Alto, CA 94303, Attn.: Electrical Engineering Manager; and (b) City of Palo Alto, Public Works Department, P.O. Box 10250, Palo Alto, CA 94303, Attn.: Supervising Project Engineer. 12.4 Other Coverage. Unless the City permits the Licensee to self-insure, the Licensee shall obtain and maintain at all times during the Initial Term and the Extension Term, if any, statutory workers’ compensation and employer’s liability insurance or qualify as a self- insurer in an amount not less than one hundred thousand dollars ($100,000) or such other amounts as required by Law, and furnish the City with a certificate showing proof of such coverage. 12.5 Insurance Rating. Any insurance provider of the Licensee shall be admitted and authorized to do business in California and shall be rated at least A-:VII in Best’s Key Rating Guide. Insurance certificates issued by non-admitted insurance companies will not be acceptable to the City. 12.6 Deductibles. Prior to the execution of this Agreement, any self-insured retentions must be stated on the certificate(s) of insurance, which shall be sent to the City, and any deductibles shall be reported, in writing, to the City’s insurance risk manager. Notwithstanding the foregoing, the immediately preceding sentence shall not apply to Licensee so long as Licensee maintains a net worth of no less than $100 million, as currently evidenced by the net worth letter attached hereto as Exhibit D and made a part hereof. “Cross liability”, “severability of interest” or “separation of insureds” clauses shall be made a part of the commercial general liability and commercial automobile liability policies. Section 13.0 ASSIGNING, SUBLETTING, AND ENCUMBRANCES 13.1 This Agreement conveys no property rights in the Property or the Premises except as specifically provided herein to the Licensee. Except as provided in Sections 8.2. 13.2 or 13.3, any attempted mortgage, pledge, hypothecation, encumbrance, transfer, sublicense, or assignment (collectively, an “Encumbrance”) of the Licensee’s interest in the Premises, or any part or portion thereof, shall be void and of no effect. 13.2 The Licensee shall have the right to assign its rights under this Agreement, in whole or in part, to any of its parent companies, subsidiaries, affiliates, or successor legal entities, or to any entity acquiring substantially all the assets of the Licensee in the market defined by the Federal Communications Commission in which the Property is located, or as otherwise permitted by applicable law. As used herein, “affiliates” means an entity which is controlled by, controls, or is under common control with, Licensee. Licensee shall deliver written notification of any such assignment within ten (10) days following the assignment, and shall further provide City written documentation showing that any such assignee has DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 12 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC affirmatively assumed all the relevant obligations under this Agreement, arising from and after the date of such assignment with respect to the portion of the rights assigned. As to other parties, this Agreement may not be sold, assigned or transferred without the written consent of the other Party, which consent will not be unreasonably withheld, delayed or conditioned. This Agreement is personal to the Licensee; any unrelated third party shall apply for a new agreement with the City upon the expiration or earlier termination of this Agreement. 13.3 The Licensee shall have the right to sublicense use of the Premises for co-location with the City’s prior consent, such consent not to be unreasonably withheld, conditioned or delayed, provided that the Licensee shall comply with all applicable laws and regulations, including all applicable zoning and permitting requirements. Section 14.0 TERMINATION OF AGREEMENT 14.1 Termination by the City. A. The City may terminate this Agreement upon the occurrence of any of the following events: 1. Upon a breach by the Licensee regarding any provision of this Agreement, which the Licensee has not commenced to cure within the time specified, or if no time period is specified, within thirty (30) days of receipt of written notice of default from the City. Following the expiration of the applicable cure period, the City shall provide at least five (5) days’ notice to the Licensee prior to the effective date of termination pursuant to this Section. 2. If the Licensee files a petition under any chapter of the U.S. Bankruptcy Code, (or any similar petition under any insolvency law of any jurisdiction), or has filed against it any such petition which is not dismissed within sixty (60) days of the date filed, or if the Licensee proposes any dissolution, liquidation or composition, with creditors, makes an assignment for the benefit of its creditors, or if a receiver, trustee, custodian or similar agent is appointed with respect to or takes possession of any material portion of the property or business of the Licensee. 3. If the City determines, in its sole and reasonable discretion, that it requires the Property or Premises or any portion thereof for security reasons due to federal, state or local law or regulation related to the design, maintenance or protection of critical infrastructure, or as otherwise may be necessary to protect the safety of City’s critical infrastructure facilities. City agrees to provide Licensee with twelve (12) months advanced written notice of any such need for property, except in cases where federal, state or local law or regulation require the City to act sooner. If Licensee has not been able to relocate within the 12-month period, upon Licensee’s request City may allow Licensee to remain on the Premises an additional twelve DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 13 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC (12) months, based upon documentation of need provided by Licensee. City’s authorization in such instance shall not be unreasonably withheld. City will make a good faith effort to work with Licensee to identify an alternative location reasonably acceptable to the Parties and Licensee shall be allowed, if necessary, in Licensee’s reasonable determination, to place a temporary installation on the Property in a mutually agreeable location until the earlier to occur of (a) Licensee’s WCF on such alternative location is operational, or (b) the expiration of twenty-four (24) months after the date Licensee first installed such temporary installation. B. Upon the occurrence of any of the events described in this section, the City may: 1. Seek an action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the City; 2. Seek a mandamus or other suit, action or proceeding at law or in equity to enforce its rights against the Licensee and any of its officers, agents, and employees and its assigns, and to compel it to perform and carry out its duties and obligations under the law and its covenants and agreements with the City, as provided herein; or 3. Pursue any other remedy available by law or specifically provided in this Agreement. C. Notwithstanding anything to the contrary contained herein however, in the event of a default or breach which cannot reasonably be cured within the specified period (or if no period is specified within thirty (30) days), the Licensee shall have such additional period of time as determined by City to cure any default or breach of this Agreement. City’s determination shall be based upon documentation provided by Licensee about the time needed to cure the default or breach, and any extension shall not be unreasonably withheld. Each and all of the remedies given to the City hereunder or by any law now or hereafter enacted, are cumulative and the exercise of one right or remedy shall not impair the right to the City to exercise any or all other remedies. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, then, and in every such case, the Parties shall be restored to its and their former position and rights and remedies as if no such suit, action or proceedings had been brought or taken. 14.2 Termination of this Agreement by the Licensee. A. The Licensee may terminate this Agreement at any time upon 180 days prior written notice to the City; provided that in the event of such early termination, no portion of the then current year's License Fee shall be refunded to the Licensee if that fee has already been paid to the City but if not already paid to the City then the DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 14 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC Licensee shall only be required to pay the License Fee for the period ending on the effective date of such termination. The right of the City to collect the License Fee from the Licensee shall survive the early termination of this Agreement. Section 15.0 RESERVED Section 16.0 NOTICES 16.1 All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designations hereunder to be given by either Party to the other, shall be in writing and shall be sufficiently given and served upon the other Party if (1) personally served on the City, (2) sent by United States Postal Service certified mail, postage, prepaid, or (3) sent by express delivery service. Personal service shall include, without limitation, service by delivery service. Delivery of notices properly addressed shall be deemed complete when the notice is physically delivered or upon refusal of delivery by the Real Property Manager or the City Clerk or by the Licensee. 16.2 All notices issued pursuant to this Agreement shall be addressed as set forth below or as either Party may subsequently designate by written notice. TO: THE CITY TO: THE LICENSEE Real Property Manager Crown Castle Towers 06-2 LLC CITY of Palo Alto c/o Crown Castle USA Inc. P.O. Box 10250 2000 Corporate Drive 250 Hamilton Avenue Canonsburg, PA 15317 Palo Alto, CA 94303 FAX: (650) 329-2468 With a copy to: City Clerk, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto, CA 94303 FAX: (650) 329-2646 And City Attorney, City of Palo Alto P.O. Box 10250 250 Hamilton Avenue Palo Alto CA 94303 FAX: (650) 329-2646 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 15 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC Section 17.0 ATTACHMENTS TO AGREEMENT 17.1 This Agreement includes the following exhibits, which are attached hereto and by this reference incorporated into this Agreement: Exhibit A – General Conditions Exhibit B - Description of the Property Exhibit C – Premises- Equipment Site and Tower Exhibit D – Net Worth Letter/10K Exhibit E – Temporary Construction Easement 17.2 Exhibit A (GENERAL CONDITIONS) contains standard City general conditions applicable to this Agreement; in the event of a conflict between the foregoing clauses in this Agreement and the provisions of Exhibit A, the foregoing clauses shall take precedence. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 16 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date. THE CITY: THE LICENSEE: Crown Castle Towers 06-2 LLC, a Delaware limited liability company __________________________ ______________________________ City Manager Name: Its: APPROVED AS TO FORM: __________________________ City Attorney ATTEST: RECOMMENDED FOR APPROVAL: ___________________________ _____________________________ City Clerk Real Property Manager DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 Senior Transaction Manager Lisa A. Sedgwick 17 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC EXHIBIT A GENERAL CONDITIONS 1. GENERAL: “City” also shall mean the Council of the City of Palo Alto. Clauses in this Agreement refer to specific officers or employees of the City. Should these positions be eliminated or the title changes, it is understood and agreed that such references shall be considered to be to the new title for renamed positions or to the replacement official designated with the responsibilities of any eliminated position. Any reference to a City officer or employee includes a reference to the officer's or employee's designated representative. 2. PARTNERSHIP/CORPORATE AUTHORITY & LIABILITY If the Licensee is a partnership, each general or limited partner: A. represents and warrants that the partnership is a duly qualified partnership authorized to do business in Santa Clara County; and B. shall be jointly and severally liable for performance of the terms and provisions of this Agreement. If the Licensee is a corporation, each individual signing this Agreement on behalf of the Licensee represents and warrants that; A. he is duly authorized to do so in accordance with an adopted Resolution of the Licensee's Board of Directors or in accordance with the Bylaws of the corporation; and B. The Licensee is a duly qualified corporation authorized to do business in State of California. 3. TIME Time is of the essence of this Agreement. 4. SIGNS The Licensee agrees not to construct, maintain, or allow any sign to be placed upon the Premises except as may be approved by the City, provided that the City shall not unreasonably withhold, condition or delay its approval of any signs required by law to be placed upon the Premises. Any other signs, banners, etc., may be removed by the City. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 18 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 5. PERMITS AND LICENSES The Licensee shall be required to obtain any and all permits and/or licenses which may be required in connection with the operation of, and any approved Licensee construction upon, the Premises set forth in this Agreement. The City shall reasonably cooperate, in its proprietary capacity as the Property owner, with Licensee’s efforts to obtain and maintain all such permits and/or licenses. 6. MECHANICS LIENS The Licensee shall at all times indemnify and save the City harmless from all claims for labor or materials supplied to the extent arising from the Licensee’s construction, repair, alteration, or installation of structures, improvements, equipment, or facilities within the Premises, and from the cost of defending against such claims, including reasonable attorney fees. The Licensee shall provide the City with at least ten (10) days written notice prior to commencement of any work which could give rise to a mechanics lien or stop notice. Upon at least forty-eight (48) hours’ notice to the Licensee, the City reserves the right to enter upon the Premises for the purposes of posting Notices of Non-Responsibility; the Licensee may accompany the City’s representative during any such entry. In the event a lien is imposed upon the Premises as a result of such construction, repair, alteration, or installation by the Licensee, the Licensee shall either: A. Record a valid release of lien; or B. Deposit sufficient cash with the City to cover the amount of the claim on the lien in question and authorize payment to the extent of said deposit to any subsequent judgment holder that may arise as a matter of public record from litigation with regard to lienholder claim; or C. Procure and record a bond in accordance with Section 8424 of the Civil Code, which releases the Premises from the claim of the lien from any action brought to foreclose the lien. Should the Licensee fail to accomplish one of the three optional actions within the statutory period after the filing of such a lien, Licensee shall be deemed in breach of this Agreement and the City may terminate this Agreement according to the provisions of Section 14 of the Agreement. 7. ORGANIZATION AND RULES OF CONSTRUCTION Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 19 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC The terms "hereby", "hereof", "hereto", "herein", "hereunder" and any similar terms, as used in this Agreement, refer to this Agreement. All the terms and provisions hereof shall be construed to effectuate the purposes set forth herein, and to sustain the validity hereof. The titles and headings of the sections of this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall not in any way modify or restrict any of the terms of provisions hereof or be considered or given any effect in construing this Agreement or any provision hereof in ascertaining intent, if any question of intent shall arise. 8. AMENDMENTS This Agreement sets forth all of the agreements and understandings of the Parties and any modifications must be written and properly executed by both Parties. 9. UNLAWFUL USE The Licensee agrees that no improvements shall be erected, placed upon, operated, nor maintained within the Premises, nor any business conducted or carried on therein or therefrom, in violation of the terms of this Agreement, or of any regulation, order of law, statute, or ordinance of a governmental agency having jurisdiction over the Licensee’s use of the Premises. 10. NONDISCRIMINATION The Licensee and its employees shall not discriminate against any person because of race, color, religion, ancestry, age, sex, national origin, disability, sexual preference, housing status, marital status, familial status, weight or height of such person. The Licensee shall not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, sex, age, national origin, disability, sexual preference, housing status, marital status, familial status, weight or height of such person. The Licensee covenants that in all of the activities the licensee conducts or allows to be conducted on the Premises, the Licensee shall accept and enforce the statements of policy set forth in Palo Alto Municipal Code Section 9.73.010 regarding human rights and nondiscrimination. If the Licensee is found in violation of the provisions of Palo Alto Municipal Code Section 9.73.010 by a court or administrative body of competent jurisdiction or in violation of the nondiscrimination provision of the State of California Fair Employment Practices Act or similar provisions of federal law or executive order in the conduct of its activities under this Agreement by the State of California Fair Employment Practices Commission or the equivalent federal agency or officer, it shall thereby be found in default under this Agreement, and such default shall constitute a material breach of this Agreement. The City shall then have the power to cancel or suspend this Agreement in whole or part. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 20 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 11. INSPECTION The City’s employees and agents shall have the right at all reasonable times to inspect the Premises to determine if the provisions of this Agreement are being complied with provided that reasonable prior written notice has been provided to the Licensee, according to Section 16 of the Agreement, to allow the Licensee to accompany any such inspection. Notwithstanding the foregoing, the City shall not, and shall not have the right to, touch or otherwise interfere with any of the licensee’s equipment, fixtures, or improvements located within the Premises. 12. HOLD HARMLESS The Licensee agrees to indemnify, hold harmless and defend the City, its officers, agents and employees against any and all claims, liability, demands, damages and costs (including reasonable attorneys' fees) (collectively, the “Claims”) to the extent arising out of the negligence, recklessness or willful misconduct of the Licensee, except to the extent such Claims are caused by the negligence, recklessness or willful misconduct of the City, its officers, agents, contractors and/or employees. 13. TAXES AND ASSESSMENTS This Agreement may create a possessory interest which is subject to the payment of taxes levied on such interest. It is understood and agreed that all documented increases in taxes and assessments attributable to Licensee’s use of the Premises (including but not limited to the possessory interest tax) which become due and payable upon the Premises or upon the Licensee’s fixtures, equipment, or other property installed or constructed thereon by the Licensee, shall be the full responsibility of the Licensee and the Licensee shall pay the taxes and assessments prior to delinquency. 14. SUCCESSORS IN INTEREST Unless otherwise provided in this Agreement, the terms, covenants, and conditions contained herein shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the Parties hereto. 15. CIRCUMSTANCES WHICH EXCUSE PERFORMANCE (FORCE MAJEURE) If either Party hereto shall be delayed or prevented from the performance of any act required hereunder by reason of acts of God, restrictive governmental laws or regulations, or other cause without fault and beyond the control of the Party obligated (financial inability excepted), performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 21 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 16. PARTIAL INVALIDITY If any term, covenant, condition, or provision of this Agreement is determined to be invalid, void, or unenforceable, by a court of competent jurisdiction, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired, or invalidated thereby. 17. WAIVER OF RIGHTS The failure of the City or the Licensee to insist upon strict performance of any of the terms, covenants, or conditions of this Agreement shall not be deemed a waiver of any right or remedy that either Party may have, and shall not be deemed a waiver of the right to require strict performance of all the terms, covenants, and conditions of the Agreement thereafter, nor a waiver of any remedy for the subsequent breach or default of any term, covenant, or condition of this Agreement. 18. COSTS OF SUSTAINING AN ACTION FOR BREACH OR DEFAULT In the event either Party commences legal action against the other Party claiming a breach or default of this Agreement, the prevailing Party in such litigation shall be entitled to recover from the other cost of sustaining such action, including reasonable attorney fees, as may be fixed by the court. 19. RESERVATIONS TO CITY The Premises are accepted "as is" and "where is" by the Licensee subject to any and all existing easements, and Encumbrances. The City reserves the right to install, lay, construct, maintain, repair, and operate such sanitary sewers, drains, storm water sewers, pipelines, manholes, and connections; water, oil, and gas pipelines; telephone and telegraph power lines; and the applications and appurtenances necessary or convenient for connection therewith, in, over, upon, though, across and along the Premises. Notwithstanding anything to the contrary contained here, no right reserved by the City in this clause shall be so exercised as to interfere unreasonably with the Licensee’s operation hereunder. The City agrees that rights granted to third parties by reason of this clause shall contain provisions that the surface of the land shall be restored as nearly as practicable to the original condition upon the completion of any construction. 20. HOLDING OVER In the event the Licensee shall continue in possession of the Premises after the expiration or earlier termination of this Agreement, such possession shall not be considered a renewal of this Agreement but a tenancy from month to month and shall be governed by the conditions, and covenants contained in this Agreement. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 22 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 21. CONDITION OF PREMISES UPON TERMINATION Upon termination of this Agreement, except as otherwise agreed to herein, the Licensee shall redeliver possession of the Premises to the City in substantially the same condition that existed immediately prior to the Licensee’s occupancy, reasonable wear and tear, flood, earthquake, war, and any act of war or other casualty beyond the control of the Licensee excepted. 22. DISPOSITION OF ABANDONED PERSONAL PROPERTY If the Licensee abandons the Premises, as defined by applicable law, or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to the Licensee and left on the Premises for at least forty-five (45) days after such abandonment or dispossession shall be deemed to have been transferred to the City. The City shall have the right to remove and to dispose of such property without liability therefor to the Licensee or to any person claiming under the Licensee, and shall have no need to account therefor. In no event shall Licensee be deemed to have abandoned the Premises as long as Licensee continues to pay the License Fee to the City. 23. RELINQUISHMENT OF THE LICENSEE'S INTEREST UPON TERMINATION Upon termination of this Agreement for any reason, including but not limited to termination because of default by the Licensee, the Licensee shall, at the City’s request execute, acknowledge and deliver to the City within thirty (30) days after receipt of written demand thereof, a written document, signed by an official recognized under Section 313 of the California Corporations Code, certifying the Licensee’s relinquishment of the Premises. Should the Licensee fail or refuse to deliver the required certification to the City, and the Parties are not then in any dispute or in disagreement regarding termination of this Agreement or an event of breach or default hereunder, the City may prepare and record a notice reciting the failure of the Licensee to execute, acknowledge and deliver such certification and the notice shall be conclusive evidence of the termination of this Agreement, and of all right of the Licensee or those claiming under the Licensee in and to the Premises. 24. CITY'S RIGHT TO RE-ENTER The Licensee agrees to yield and peaceably deliver possession of the Premises to the City after the removal period described in Section 8.1. Upon giving written notice of termination to the Licensee, the City shall have the right to re-enter and take possession of the Premises after the removal period described in Section 8.1. Termination of the Agreement and re-entry of the Premises by the City shall in no way alter or diminish any obligation of the Licensee under the Agreement terms and shall not constitute an acceptance or surrender. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 23 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC The Licensee waives any and all rights of redemption under any existing or future law or statute in the event of eviction from or dispossession of the Premises for any reason or in the event the City re-enters and lawfully re-takes possession of the Premises. 25. CONFLICT OF INTEREST The Licensee warrants and covenants that no official or employee of the City nor any business entity in which any official or employee of the City is interested: (1) has been employed or retained to solicit or aid in the procuring of this Agreement to Licensee’s reasonable knowledge; or (2) will be employed in the performance of this Agreement without the divulgence of such fact to the City. In the event that the City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or employee of the City, the Licensee upon request of the City shall immediately terminate such employment. Violation of this provision constitutes a serious breach of this Agreement and the City may terminate this Agreement as a result of such violation. 26. EMINENT DOMAIN In the event the whole or any part of the Premises is condemned by a public entity in the lawful exercise of its power of eminent domain, this Agreement shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the Premises by the condemning public entity. 27. [Intentionally deleted.] 28. POST-ACQUISITION LICENSE The Licensee hereby acknowledges that its occupancy of the Premises is subsequent to acquisition of the Premises by the City. The Licensee further understands and agrees that as a post- acquisition licensee, the Licensee is not eligible and furthermore waives all claims for relocation assistance and benefits under federal, state or local law. 29. HAZARDOUS SUBSTANCES A. Definition. As used herein, the term "Hazardous Materials" means any substance or material which has been determined by any state, federal or local governmental authority to be capable of posing risk of injury to health, safety, and property, including petroleum and petroleum products and all of those materials and substances designated as hazardous or toxic by the U.S. Environmental Protection Agency, the California Water Quality Control Board, the U.S. Department of Labor, the California Department of Industrial Relations, the California Department of Health Services, the California Health and Welfare Agency in connection with the Safe Water and Toxic Enforcement Act of 1986, the U.S. Department of DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 24 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC Transportation, the U.S. Department of Agriculture, the U.S. Consumer Product Safety Commission, the U.S. Department of Health and Human Services, the U.S. Food and Drug Administration or any other governmental agency now or hereafter authorized to regulate materials and substances in the environment. Without limiting the generality of the foregoing, the term "Hazardous Materials" shall include all of those materials and substances defined as "toxic materials" in Sections 66680 through 66685 of Title 22 of the California Code of Regulations, Division 4, Chapter 20, as the same may be amended from time to time. B. USE OF PREMISES. During the Term, the Licensee shall abide and be bound by all of the following requirements: 1. The Licensee shall comply with all laws now or hereafter in effect relating to the use of Hazardous Materials on, under or about the Premises, and the Licensee shall not contaminate the Premises, or its subsurfaces, with any Hazardous Materials in violation of applicable law. 2. The Licensee shall restrict its use of Hazardous Materials at the Premises to those kinds of materials that are normally used in constructing and operating communications facilities. Disposal of any Hazardous Materials at the Premises are strictly prohibited. Storage of such permissible Hazardous Materials is allowed only in accordance with all applicable laws now or hereafter in effect. All safety and monitoring features of any storage facilities shall be approved by the City’s Fire Chief in accordance with all laws. 3. The Licensee shall be solely and fully responsible for the reporting of all Hazardous Materials releases to the appropriate public agencies, when such releases are caused by or result from the Licensee’s activities at the Premises. The Licensee shall immediately inform the City of any release of Hazardous Materials, whether or not the release is in quantities that would otherwise be reportable to a public agency. 4. The Licensee shall be solely and fully responsible and liable for any such releases which are caused by the Licensee at the Premises, or into the City’s sewage or storm drainage systems. The Licensee shall take all necessary precautions to prevent any of its Hazardous Materials from entering into any storm or sewage drain system or from being released on the Premises. The Licensee shall remove releases of its Hazardous Materials in accordance with all laws. In addition to all other rights and remedies of the City hereunder, if the release of Hazardous Materials caused by the Licensee is not removed by the Licensee or the Licensee has not commenced removal within ninety (90) days after the Licensee’s receipt of written notice from the City or any other third party, the City may pay to have the same DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 25 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC removed and the Licensee shall reimburse the City for such costs within thirty (30) days of the City’s demand for payment. 5. The City represents that it has no knowledge of any Hazardous Materials on or under the Premises or the Property. The Licensee will not introduce or use any such substance at the Premises in violation of any applicable law. The City shall indemnify and hold the Licensee harmless from and against all claims, actions, damages, fines, liabilities, costs and expenses (including attorneys’ and expert fees) arising, directly or indirectly, from the deposit of any Hazardous Materials on or under the Property or the Premises, unless said materials were actually deposited on the Property or the Premises by the Licensee. This obligation to indemnify the Licensee shall include damages, costs and expenses incurred in connection with any investigation, cleanup, remediation, monitoring, removal or restoration related to the presence of any substance. This indemnity shall survive the expiration or termination this Agreement. The Licensee shall indemnify and hold harmless the City from and against all claims, actions, damage, fines, liabilities, costs and expenses (including attorneys’ and expert fees) arising, directly or indirectly, from the deposit by the Licensee of any Hazardous Materials on or under the Property or the Premises during the Term, unless said materials were actually deposited onto the Property or the Premises by the City; provided however, that this indemnity shall not apply to claims, actions, damages, fines, liabilities, costs and expenses, (including attorneys’ and expert fees) arising from acts or omissions by third parties. This obligation to indemnify by either Party shall include damage, costs and expenses incurred in connection with any investigation, cleanup, remediation, monitoring, removal or restoration related to the presence of any substance. This indemnity shall survive the expiration or termination of this Agreement. 6. Each Party’s obligations under this Clause shall survive the expiration or earlier termination of this Agreement. 30. ALL COVENANTS ARE CONDITIONS All provisions of the Agreement are expressly made conditions. 31. PARTIES OF INTEREST Nothing in this Agreement, expressed or implied, is intended to, or shall be construed to, confer upon or to give to any person or party other than the City and the Licensee the covenants, condition or stipulations hereof. All covenants, stipulations, promises and agreements in this Agreement shall be for the sole and exclusive benefit of the City and the Licensee. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 26 Site Name: Fire Station #3 Cell Site Rinc LICENSE AGREEMENT Business Unit #: 830757 CROWN CASTLE TOWERS 06-2 LLC 32. INTERFERENCE The Licensee agrees to install equipment of the type and frequency which will not cause harmful interference which is measurable in accordance with then-existing industry standards to any equipment of the City or other licensees of the Property which existed on the Property prior to the date this Agreement is executed by the Parties. In the event any after-installed the Licensee’s equipment causes such interference, and after the City has notified the Licensee in writing of such interference, the Licensee will take all commercially reasonable steps necessary to correct and eliminate the interference, including but not limited to, at the Licensee’s option, powering down such equipment and later powering up such equipment for intermittent testing. In no event will the City be entitled to terminate this Agreement or relocate the equipment as long as the Licensee is making a good faith effort to remedy the interference issue. The City agrees that the City and/or any other licensees or tenants of the Property who in the future take an interest in the Property will be permitted to install only such equipment that is of the type and frequency which will not cause harmful interference which is measurable in accordance with then-existing industry standards to the then-existing equipment of the Licensee. The Parties acknowledge that there will not be an adequate remedy at law for noncompliance with the provisions of this Section and therefore, either Party shall have the right to equitable remedies, such as, without limitation, injunctive relief and specific performance. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 Exhibit "C" DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 X X X K R NO. DATE ISSUE DESCRIPTION 7/25/16 ARB MAJOR PROJECT SUBMITTAL10/11/16 ARB MAJOR PROJECT RE-SUBMITTAL 10/26/16 SCHEMATIC DESIGN11/21/16 ARB MAJOR PROJECT RE-SUBMITTAL 21/12/17 ARB MAJOR PROJECT RE-SUBMITTAL 3 2/16/17 ARB MAJOR PROJECT RE-SUBMITTAL 45/22/17 DESIGN DEVELOPMENT7/21/17 PERMIT SET - NOT FOR CONSTRUCTION 1 09/12/17 PERMIT COMMENTS - REVISION 1 NOTE: If this drawing is not 34"x22" it has been revised from its original size and thescales noted on drawing/details are no longer applicable. © 2017 Shah Kawasaki Architects Drawing No. Drawing Title ConsultantArchitect of Record 799 EMBARCADERO ROADPALO ALTO, CA 94303 SKA Project Number: 15716 PALO ALTO FIRE STATION #3 2 10/6/17 PERMIT COMMENTS - REVISION 2 TREE PROTECTION PLAN 1 1 LEGEND TREE PROTECTION NOTES 1. BEFORE WORKING IN REGULATED TREE AREAS, CONTACT THE PROJECT SITE ARBORIST AT 1-650-964-7664. 2. REMOVAL OF A CITY OWNED TREE (I.E. RIGHT-OF-WAY) URBAN FORESTRY SECTIONREQUIREMENTS (650-496-5953; http://www.cityofpaloalto.org/depts/pwd/trees/default.asp) : a. TREE REMOVAL POSTING.EACH TREE TO BE REMOVED SHALL BE VISIBLY POSTED WITH A COMPLETEDTREE REMOVAL NOTICE FORM (8.5"x11", SEALED IN PROTECTIVE PLASTIC) NOLESS THAN 14 CALENDAR DAYS FROM THE DATE OF POSTING. b. TREE REMOVAL PERMIT. A COMPLETED AND APPROVED APPLICATION FOR THE PROJECT STREET WORK (INCLUDING REMOVALS) ISSUED BY THE URBAN FORESTRY SECTION MUST BE AVAILABLE AT THE JOB SITE. ARBORIST NOTES IRRIGATION DURING CONSTRUCTION NOTES REPORT REFERENCE TREE TAG TREES TO REMAIN TREE MAINTENCE LEGEND TREE NAME TRUNKDIAMETER(INCHES) REPORT REFERENCE TREE TAG TREES TO BE REMOVED TREE NAME TRUN DIAMETER INCHES 1. FOR TREE #1, RETAIN EXISTING LEAF LITTER INPLANTER, MANUALLY SPREAD 4" LAYER OF WOODCHIPS, PROVIDE SUPPLEMENTAL WATER, HIGHLYSELECTIVE PRUNING PER DIRECTIONS BY PROJECTARBORIST, CLEAR ROOT COLLAR, AND INSTALLPROTECTION FENCING. 2. FOR TREE #3, MANUALLY SPREAD A 4" LAYER OF WOOD CHIPS, PROVIDE SUPPLEMENTAL WATER, HIGHLY SELECTIVE PRUNING PER DIRECTIONS BY PROJECT ARBORIST, AND INSTALL PROTECTION FENCING. 3. FOR TREE #5, MANUALLY REMOVE IVY, SPREAD A 4" LAYER OF WOOD CHIPS, PROVIDE SUPPLEMENTALWATER, HIGHLY SELECTIVE PRUNING PERDIRECTIONS BY PROJECT ARBORIST, CLEAR ROOTCOLLAR, AND INSTALL PROTECTION FENCING. 4. FOR TREES #1 AND #5, HIGHLY SELECTIVE PRUNINGIS REQUIRED TO ACHIEVE BUILDING AND VERTICALCLEARANCES. PRUNING SHALL OCCUR BEFOREMOBILIZING DEMOLITION EQUIPMENT TO THE SITE AS WELL AS ONCE DRIVEWAY AND BUILDING FOOTPRINTS HAVE BEEN STAKED. CONTRACTOR TO COORDINATE WITH PROJECT AND CITY ARBORISTS WITH DIRECT SUPERVISION BY THE PROJECT ARBORIST. FENCING SHALL BE NOFARTHER THAN 24 INCHESFROM THE PROPOSED ADARAMP AND PLAZA AREAEDGING/WALL. FENCING SHALL BE NOFARTHER THAN 4 TO 5 FEETFROM THE PROPOSED BUILDING FOUNDATION. FENCING SHALL BE NOFARTHER THAN 12 INCHESFROM THE CURBS/ EDGING OF THE PROPOSED DRIVE AISLE AND PARKING LOT EDGE. TREE PROTECTION CARE NOTES 1 2 SEE NOTE ON SHEET A-1 FOR COA FINDING #5 (FOR REFERENCE ONLY - PERMITTED BY OTHERS) DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 NO. DATE ISSUE DESCRIPTION 7/25/16 ARB MAJOR PROJECT SUBMITTAL10/11/16 ARB MAJOR PROJECT RE-SUBMITTAL 10/26/16 SCHEMATIC DESIGN11/21/16 ARB MAJOR PROJECT RE-SUBMITTAL 21/12/17 ARB MAJOR PROJECT RE-SUBMITTAL 3 2/16/17 ARB MAJOR PROJECT RE-SUBMITTAL 45/22/17 DESIGN DEVELOPMENT7/21/17 PERMIT SET - NOT FOR CONSTRUCTION 1 09/12/17 PERMIT COMMENTS - REVISION 1 NOTE: If this drawing is not 34"x22" it has been revised from its original size and thescales noted on drawing/details are no longer applicable. © 2017 Shah Kawasaki Architects Drawing No. Drawing Title ConsultantArchitect of Record 799 EMBARCADERO ROADPALO ALTO, CA 94303 SKA Project Number: 15716 PALO ALTO FIRE STATION #3 2 10/6/17 PERMIT COMMENTS - REVISION 2 ARBORIST REPORT I 1 2 SEE NOTE ON SHEET A-1 FOR COA FINDING #5 (FOR REFERENCE ONLY - PERMITTED BY OTHERS) DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 NO. DATE ISSUE DESCRIPTION 7/25/16 ARB MAJOR PROJECT SUBMITTAL10/11/16 ARB MAJOR PROJECT RE-SUBMITTAL 10/26/16 SCHEMATIC DESIGN11/21/16 ARB MAJOR PROJECT RE-SUBMITTAL 21/12/17 ARB MAJOR PROJECT RE-SUBMITTAL 3 2/16/17 ARB MAJOR PROJECT RE-SUBMITTAL 45/22/17 DESIGN DEVELOPMENT7/21/17 PERMIT SET - NOT FOR CONSTRUCTION 1 09/12/17 PERMIT COMMENTS - REVISION 1 NOTE: If this drawing is not 34"x22" it has been revised from its original size and thescales noted on drawing/details are no longer applicable. © 2017 Shah Kawasaki Architects Drawing No. Drawing Title ConsultantArchitect of Record 799 EMBARCADERO ROADPALO ALTO, CA 94303 SKA Project Number: 15716 PALO ALTO FIRE STATION #3 2 10/6/17 PERMIT COMMENTS - REVISION 2 ARBORIST REPORT II 1 3 SEE NOTE ON SHEET A-1 FOR COA FINDING #5 (FOR REFERENCE ONLY - PERMITTED BY OTHERS) DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 NO. DATE ISSUE DESCRIPTION 7/25/16 ARB MAJOR PROJECT SUBMITTAL10/11/16 ARB MAJOR PROJECT RE-SUBMITTAL 10/26/16 SCHEMATIC DESIGN11/21/16 ARB MAJOR PROJECT RE-SUBMITTAL 21/12/17 ARB MAJOR PROJECT RE-SUBMITTAL 3 2/16/17 ARB MAJOR PROJECT RE-SUBMITTAL 45/22/17 DESIGN DEVELOPMENT7/21/17 PERMIT SET - NOT FOR CONSTRUCTION 1 09/12/17 PERMIT COMMENTS - REVISION 1 NOTE: If this drawing is not 34"x22" it has been revised from its original size and thescales noted on drawing/details are no longer applicable. © 2017 Shah Kawasaki Architects Drawing No. Drawing Title ConsultantArchitect of Record 799 EMBARCADERO ROADPALO ALTO, CA 94303 SKA Project Number: 15716 PALO ALTO FIRE STATION #3 2 10/6/17 PERMIT COMMENTS - REVISION 2 ARBORIST REPORT III 1 4 SEE TREE PROTECTION PLAN, L1.1 FOR TREE INVENTORY SITE LOCATIONS. SEE NOTE ON SHEET A-1 FOR COA FINDING #5 (FOR REFERENCE ONLY - PERMITTED BY OTHERS) DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 08-16-2018 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 Item 6. Selected Financial Data Our selected historical consolidated financial and other data set forth below have been derived from our consolidated financial statements. The information set forth below should be read in conjunction with "Item 1. Business," "Item 7. MD&A" and our consolidated financial statements. Our formerly 77.6% owned subsidiary that operated towers in Australia ("CCAL") is presented on a discontinued operations basis for all periods presented. See note 3 to our consolidated financial statements for further discussion of our sale of CCAL in May 2015. Years Ended December 31, 2017 (a)2016 (a)2015 (a)2014 (a)2013 (a) (In thousands of dollars, except per share amounts) Statement of Operations Data: Net revenues: Site rental $ 3,669,191 $ 3,233,307 $ 3,018,413 $ 2,866,613 $ 2,371,380 Network services and other 686,414 687,918 645,438 672,143 494,371 Net revenues 4,355,605 3,921,225 3,663,851 3,538,756 2,865,751 Operating expenses: Costs of operations(b): Site rental 1,143,914 1,023,350 963,869 906,152 686,873 Network services and other 419,787 417,171 357,557 400,454 304,144 Total costs of operations 1,563,701 1,440,521 1,321,426 1,306,606 991,017 General and administrative 426,698 371,031 310,921 257,296 213,519 Asset write-down charges 17,322 34,453 33,468 14,246 13,595 Acquisition and integration costs 61,431 17,453 15,678 34,145 25,574 Depreciation, amortization and accretion 1,242,408 1,108,551 1,036,178 985,781 741,342 Operating income (loss)1,044,045 949,216 946,180 940,682 880,704 Interest expense and amortization of deferred financing costs (590,682)(515,032)(527,128)(573,291)(589,630) Gains (losses) on retirement of long-term obligations (3,525)(52,291)(4,157)(44,629)(37,127) Interest income 18,761 796 1,906 315 956 Other income (expense)1,994 (8,835)57,028 11,993 (3,902) Income (loss) from continuing operations before income taxes 470,593 373,854 473,829 335,070 251,001 Benefit (provision) for income taxes(c)(26,043)(16,881)51,457 11,244 (191,000) Income (loss) from continuing operations 444,550 356,973 525,286 346,314 60,001 Discontinued operations: Income (loss) from discontinued operations, net of tax ——19,690 52,460 33,900 Net gain (loss) from disposal of discontinued operations, net of tax ——979,359 —— Income (loss) from discontinued operations, net of tax ——999,049 52,460 33,900 Net income (loss)444,550 356,973 1,524,335 398,774 93,901 Less: Net income (loss) attributable to the noncontrolling interest ——3,343 8,261 3,790 Net income (loss) attributable to CCIC stockholders 444,550 356,973 1,520,992 390,513 90,111 Dividends on preferred stock and losses on purchases of preferred stock (58,294)(32,991)(43,988)(43,988)(11,363) Net income (loss) attributable to CCIC common stockholders $ 386,256 $ 323,982 $ 1,477,004 $ 346,525 $ 78,748 Income (loss) from continuing operations attributable to CCIC common stockholders, per common share - basic(d)$ 1.01 $ 0.95 $ 1.45 $ 0.91 $ 0.16 Income (loss) from continuing operations attributable to CCIC common stockholders, per common share - diluted(d)$ 1.01 $ 0.95 $ 1.44 $ 0.91 $ 0.16 Weighted-average common shares outstanding (in thousands): Basic(d)(e)381,740 340,349 333,002 332,302 298,083 Diluted(d)(e)383,221 340,879 334,062 333,265 299,293 Dividends/distributions declared per share of common stock $ 3.90 $ 3.61 $ 3.35 $ 1.87 $— 24 Page 27 of 108Document 2/4/2019https://www.sec.gov/Archives/edgar/data/1051470/000105147018000082/cci10-k123117.htm DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 Years Ended December 31, 2017 (a)2016 (a)2015 (a)2014 (a)2013 (a) (In thousands of dollars, except per share amounts) Other Data: Summary cash flow information: Net cash provided by (used for) operating activities $2,044,186 $1,782,264 $1,794,025 $1,600,197 $1,171,059 Net cash provided by (used for) investing activities (10,494,021)(1,410,232)(1,959,734)(1,216,709)(5,459,285) Net cash provided by (used for) financing activities 8,195,152 (96,292)(935,476)(462,987)4,063,133 Ratio of earnings to fixed charges(f)1.5 1.5 1.6 1.4 1.3 Ratio of earnings to combined fixed charges and preferred stock dividends and losses on purchases of preferred stock(f)1.4 1.4 1.5 1.3 1.3 Balance Sheet Data (at period end): Cash and cash equivalents $314,094 $567,599 $178,810 $151,312 $200,526 Property and equipment, net 12,932,885 9,805,315 9,580,057 8,982,783 8,764,031 Total assets 32,229,570 22,675,092 21,936,966 21,026,827 20,466,028 Total debt and other long-term obligations 16,159,620 12,171,142 12,149,959 11,804,412 11,465,620 Total CCIC stockholders' equity(e)(g)12,339,082 7,557,115 7,089,221 6,716,225 6,926,717 (a)Inclusive of the impact of acquisitions. See note 4 to our consolidated financial statements for a discussion of our acquisitions during 2015, 2016 and 2017. In addition, during 2014, we acquired several portfolios of land interests under towers and during 2013, we acquired rights to approximately 9,100 towers through the AT&T Acquisition. (b)Exclusive of depreciation, amortization and accretion, which are shown separately. (c)See note 11 to our consolidated financial statements regarding our income taxes, including our REIT status. (d)Basic net income (loss) attributable to CCIC common stockholders, per common share, excludes dilution and is computed by dividing net income (loss) attributable to CCIC common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) attributable to CCIC common stockholders, per common share is computed by dividing net income (loss) attributable to CCIC common stockholders by the weighted-average number of common shares outstanding during the period, plus any potential dilutive common share equivalents, including shares issuable (1) upon the vesting of restricted stock awards and restricted stock units as determined under the treasury stock method and (2) upon conversion of convertible preferred stock securities (including the currently outstanding 6.875% Convertible Preferred Stock, which was issued in 2017, and the formerly outstanding 4.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share ("4.50% Convertible Preferred Stock") which was issued in 2013 and converted to common stock in 2016), as determined under the if-converted method. See note 2 to our consolidated financial statements. (e)During 2017, we issued shares of our common stock in connection with (1) our May 2017 issuance of 4.75 million shares of common stock, which generated net proceeds of $442 million ("May 2017 Common Stock Offering") to partially fund the Wilcon Acquisition in June 2017, (2) our July 2017 issuance of 40.15 million shares of common stock, which generated approximately $3.8 billion ("July 2017 Common Stock Offering") to partially fund the Lightower Acquisition in November 2017 and (3) our ATM Program. During 2016, we issued shares of our common stock in connection with (1) our ATM Program, the proceeds of which we utilized to partially fund our acquisition of Tower Development Corporation ("TDC Acquisition") in April 2016, (2) the conversion of our then outstanding 4.50% Convertible Preferred Stock to common stock and (3) our November 2016 issuance of 11.4 million shares of common stock, which generated net proceeds of $1.0 billion ("November 2016 Common Stock Offering") to partially fund the FiberNet Acquisition. See note 12 to our consolidated financial statements. In October 2013, we issued 41.4 million shares of common stock, which generated net proceeds of $3.0 billion to partially fund the AT&T Acquisition. (f)For purposes of computing the ratio of earnings to fixed charges, earnings represent income (loss) before income taxes and fixed charges less interest capitalized. Fixed charges consist of interest expense, amortized premiums, discounts and capitalized expenses related to indebtedness, interest capitalized and the interest component of operating lease expense. (g)During 2017, we issued 1.65 million shares of 6.875% Convertible Preferred Stock, which generated net proceeds of approximately $1.6 billion ("6.875% Convertible Preferred Stock Offering") to partially fund the Lightower Acquisition in November 2017. During 2013, we issued 9.8 million shares of 4.50% Convertible Preferred Stock, which generated net proceeds of $950.9 million to partially fund the AT&T Acquisition. 25 Page 28 of 108Document 2/4/2019https://www.sec.gov/Archives/edgar/data/1051470/000105147018000082/cci10-k123117.htm DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 2/5/2019 Exhibit https://www.sec.gov/Archives/edgar/data/1051470/000105147018000082/ex-21123117.htm 1/3 EX-21 3 ex-21123117.htm SUBSIDIARIES OF CROWN CASTLE INTERNATIONAL CORP EXHIBIT 21 CROWN CASTLE INTERNATIONAL CORP. SUBSIDIARIES Subsidiary Jurisdiction ofIncorporation CC FN Holdings LLC Delaware CC Holdings GS V LLC Delaware CC Sunesys Fiber Networks LLC Delaware CC Towers Guarantor LLC Delaware CC Towers Holding LLC Delaware CCATT LLC Delaware CCATT Holdings LLC Delaware CCGS Holdings Corp. Delaware CCT2 Holdings LLC Delaware CCTM1 LLC Delaware CCTM Holdings LLC Delaware CCTMO LLC Delaware Crown Atlantic Company LLC Delaware Crown Castle Atlantic LLC Delaware Crown Castle CA Corp. Delaware Crown Castle BP ATT LLC Delaware Crown Castle GT Company LLC Delaware Crown Castle GT Corp. Delaware Crown Castle GT Holding Sub LLC Delaware Crown Castle International Corp. de Puerto Rico Puerto Rico Crown Castle Investment Corp. Delaware Crown Castle Investment II Corp. Delaware Crown Castle NG Central LLC Delaware Crown Castle NG East LLC Delaware Crown Castle NG Networks LLC Delaware Crown Castle NG West LLC Delaware Crown Castle Operating Company Delaware Crown Castle PT Inc. Delaware Crown Castle PR LLC Puerto Rico Crown Castle Solutions LLC Delaware Crown Castle South LLC Delaware Crown Castle Towers 06-2 LLC Delaware Crown Castle Towers LLC Delaware Crown Castle USA Inc. Pennsylvania Crown Communication LLC Delaware Fibernet Direct Holdings LLC Delaware Fibernet Direct Texas LLC Delaware Fibernet Direct TEL LLC Delaware Fibernet Direct Florida LLC Delaware Fibertech Holdings Corp. Delaware Fibertech Networks, LLC Delaware Fiber Technologies Networks, L.L.C. New York Global Signal Acquisitions LLC Delaware DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 EXHIBIT E TEMPORARY CONSTRUCTION EASEMENT City of Palo Alto hereinafter called Grantor, hereby grants to Crown Castle Towers 06-2 LLC, a Delaware limited liability company, hereinafter called Grantee, a temporary easement, as defined below, to be used in connection with Grantee’s Cell Tower Installation project, upon, over and across that certain real property in the City of Palo Alto, County of Santa Clara, State of California, identified as 799 Embarcadero Road, County Assessor’ s Parcel Number 003-46-006. Said temporary easement is defined as follows: (a) the temporary right to use for working strips and laydown and staging areas, including the right to locate construction equipment thereon, the areas outlined by the heavy dashed lines on the map attached hereto and made a part hereof (and thereon designated TCE Map); (b) the temporary right to use the gated driveway which is delineated on the TCE M ap attached hereto and made a part hereof; (c) the temporary right to use a crane within the area outlined in red on the TCE Map attached hereto and made a part hereof. Consideration for this temporary easement shall be included in the License Fee of the Agreement. Upon completion of its Cell Tower Installation project, Grantee agrees to restore said temporary easement areas to a condition as nearly as practicable to their condition prior to their use by Grantee. Grantee agrees to indemnify Grantor against any loss and damage which shall be caused by any wrongful or negligent act or omission of Grantee or of its agents or employees in the course of their employment, provided, however, that this indemnity shall not extend to that portion of such loss or damage that shall have been caused by Grantor’s comparative negligence or willful misconduct. This easement is temporary and shall terminate either upon the date of completion of Grantee’ s Cell Tower Installation or nine (9) months after the date of full execution of the Agreement , whichever occurs first. Grantee obtained the right to excavate for, install, replace, maintain and use its existing underground electrical and communications conduits across Grantors’ real property under and by virtue of the License Agreement dated June 1, 2018 and executed by Grantor on August 28, 2018. Dated this _______ day of ______________________, 2019. DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 CITY OF PALO ALTO, a California chartered municipal corporation By___________________________________ Name_________________________________ Title__________________________________ DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 ;;; PALO ALTO FIRE STATION #3 799 EMBARCADERO ROAD Crown Castle - TCE Map ))(                                                     6<0%2/'(6&5,37,21 &08:$//CC+LJK6HJPHQWHG3HULPHWHU&08:DOOZLWKRUQDPHQWDOLURQIHQFLQJLQIRRWJDSV6HH$UFKLWHFWXUDO3ODQVIRUGHWDLOVDQGGHVFULSWLRQV 251$0(17$/,521)(1&( $&&(66*$7(6HH$UFKLWHFWXUDO3ODQVIRUGHWDLOVDQGGHVFULSWLRQV $8720$7,&9(+,&8/$5*$7(C:LGHRUQDPHQWDOLURQ UROOLQJJDWH6HH$UFKLWHFWXUDO3ODQVIRUGHWDLOVDQGGHVFULSWLRQV &29(5('75$6+(1&/2685(6HH$UFKLWHFWXUDO3ODQVIRUGHWDLOVDQGGHVFULSWLRQV (0(5*(1&<*(1(5$7253DGORFDWLRQDQGSURWHFWLYH EROODUGV6HH$UFKLWHFWXUDO3ODQVIRUGHWDLOVDQGGHVFULSWLRQV 9(+,&8/$5&21&5(7(3$9,1*3DUNLQJORWLQVLGHJDWH :$/.:$<5$03$'$$FFHVVLEOHFRQFUHWHZDONZD\UDPSZLWKUDLOLQJ 9(+,&8/$53(50($%/(3$9(56[&RQFUHWHSDUNLQJORWSDYHUV3DFLILF,QWHUORFN3DYLQJVWRQH,QF+\GUR)OR 7HFKQRORJ\3DYHU&RORU&KDUFRDO2UHTXDO)LQDOFRORUVHOHFWLRQWREHGHWHUPLQHGE\DUFKLWHFW 3('(675,$13(50($%/(3$9(56[&RQFUHWH SDUNLQJORWSDYHUV3DFLILF,QWHUORFN3DYLQJVWRQH,QF +\GUR)OR7HFKQRORJ\3DYHU&RORU5HG2UHTXDO)LQDO FRORUVHOHFWLRQWREHGHWHUPLQHGE\DUFKLWHFW+HUULQJERQHSDWWHUQ &21&5(7(3$9,1*3OD]DDUHDDQGSHGHVWULDQZDONZD\V %5,&.%$1',1*67(36 :$/.21%$5.7KLFNOD\HU&LW\SURYLGHGUHF\FOHGEDUNZLWK5HGZRRGKHDGHU %,25(7(17,21$5($ %$5.08/&+$OOODQGVFDSHDUHDVLQFOXGLQJDUHDVXQGHUH[LVWLQJWUHHVWRUHFHLYHWKLFNOD\HU&LW\SURYLGHGUHF\FOHGEDUNPXOFK7UHHVVXSSOHPHQWHGZLWKH[LVWLQJWUHHOLWWHUUHSODFHG )/$*32/($PHULFDQ)ODJSROH&RXUW\DUG6HULHV (66%0GLDPHWHU KLJKH[WHUQDOVLQJOHVWDWLRQDU\DOXPLQXPFOHDWVDWLQDOXPLQXP2UHTXDO 02180(176,*1([LVWLQJ&LW\6WDQGDUG)LUH6WDWLRQ6LJQWREHUHORFDWHGSHUSODQ %(1&+%DFNHGEHQFKZLWKDUPUHVWV/DQGVFDSH)RUPV$UFDWD%HQFKSRZGHUFRDWHG&RORU%URQ]H3RO\VLWH5HF\FOHGSODVWLFVHDWPDWHULDO&RORU'ULIWZRRG2UHTXDO(PEHGGHGLQVWDOODWLRQ 75$6+5(&(37$&/('LDPHWHUFDVWDOXPLQXPWUDVKUHFHSWDFOH/DQGVFDSH)RUPV&KDVH3DUN/LWWHU5HFHSWDFOHJDOORQVLGHRSHQLQJVW\OHSRZGHUFRDWHG&RORU%URQ]H2UHTXDO6XUIDFHPRXQWLQVWDOODWLRQ '5,1.,1*)2817$,1'ULQNLQJIRXQWDLQZLWKERWWOHILOOLQJVWDWLRQDQGSHWERZO:LOORXJKE\,QGXVWULHV&:%)53%+&3(7ZLWKDWWDFKDEOHSHWIRXQWDLQSRZGHUFRDWHG&RORU%OXH2UHTXDO$'$&RPSOLDQW %,.(5$&.%LNHUDFNVQHDUSDUNLQJORWHQWU\'HUR%LNH+RRSJDOYDQL]HGSRZGHUFRDWHG&RORU6HSLD%URZQ2UHTXDO(PEHGGHGLQVWDOODWLRQ %,.(5(3$,567$7,216HUYLFHVWDWLRQIRUELNHUHSDLUDQGPDLQWHQDQFH'HUR)L[LW6WDWLRQZLWK$LU.LWJDOYDQL]HGSRZGHUFRDWHG&RORU6HSLD%URZQ2UHTXDO6XUIDFHPRXQWLQVWDOODWLRQ %,.(/2&.(56LQJOHELF\FOHVWRUDJHORFNHUZLWKQRIORRULQJDQG8/RFN3DGORFN+DQGOH'HUR%LNH/RFNHUJDOYDQL]HGSRZGHUFRDWHG&RORU6HSLD%URZQ2UHTXDO6XUIDFHPRXQWLQVWDOODWLRQ 3$5.,1*/27/,*+7,1*6HFXULW\SDUNLQJORWSROHOLJKWLQJ 3$7+:$</,*+7,1*3DWKZD\/('EROODUGOLJKWLQJ6HH (OHFWULFDO3ODQV 1(:6+58%$1'*5281'&29(53/$17,1*6HH 3ODQWLQJ3ODQ/IRUGHVFULSWLRQVDQGOD\RXW 1(:3$5.3/$17,1*1HZWUHHVVKUXEVDQGYLQHVSODQWHG DW3DUNVLGHRIZDOO,UULJDWHGE\)LUH6WDWLRQLUULJDWLRQV\VWHP &2%%/(6721(08/&+ULYHUFREEOHODQGVFDSHDUHDGHHS +($9<'87<9(+,&8/$5&21&5(7(3$9,1*GULYHZD\ 9$5<,1*+(,*+7&85%                                  1(:3$5.,1* /276+$'( 75((6 2876,'(2) :$// 3$5.'(',&$7,21/,1( 3$5.'(',&$7,21/,1( 08/7,7581.60$//$&&(1775(( 08/7,7581.60$//$&&(1775(( (;,67,1*75(( (;,67,1*5(':22'75(( (;,67,1*75(( 5$03 52: $57)($785( 5$03 %$&.)/2:'(9,&(/2&$7,21 %2//$5'6 2&7<3,&$/  Gated Driveway Area (Crane permissible) TCE Work Area (Crane permissible) DocuSign Envelope ID: EA85F6A7-CAF8-4D0E-9DDF-973D7F515176 A CROWN CASTLE TELECOMMUNICATIONS FACILITY Fire Station #3 at Rinconada Park 799 Embarcadero Road Palo Alto, California 94303 SUMMARY APPRAISAL REPORT Date of Report: January 11, 2019 Colliers File #: SAN180699 PREPARED FOR Tamara Erickson, Senior Government Site Specialist Crown Castle 1505 Westlake Avenue North, Suite 800 Seattle, WA 98109 PREPARED BY COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES ATTACHMENT F LETTER OF TRANSMITTAL © 2018 COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES 9820 Willow Creek Road, Suite 300 San Diego, CA 92131 USA MAIN +1 858 860 3800 FAX +1 858 860 3900 WEB www.colliers.com January 11, 2019 Tamara Erickson, Senior Government Site Specialist Crown Castle 1505 Westlake Avenue North, Suite 800 Seattle, WA 98109 Re: An Existing Crown Castle Telecommunications Facility Fire Station #3 at Rinconada Park 799 Embarcadero Road Palo Alto, Santa Clara County, California 94303 Colliers File # SAN180699 Dear Ms. Erickson: In accordance with your request and authorization, we have prepared a market-rent appraisal of the referenced property. Our analysis is presented in the following Appraisal Report. The subject of this appraisal consists of a new wireless-telecommunications facility that will replace a Sprint monopole built in 2000 at Fire Station #3 in Rinconada Park in the city of Palo Alto. The ground lease for that facility expired in 2014. The renewal of this lease was put on hold when the City started the process of rebuilding their fire station. Crown Castle secured a temporary two-year license for a 379.25-square-foot site near the northwest corner of the property, and obtained zoning approval to build a new 67’ faux redwood tree and a concrete-block equipment enclosure. The agreement also includes (3) non-exclusive utility areas of 50 square feet, 131 square feet and 129 square feet. Crown Castle is now asking for a new long-term ground-license agreement, which prompted the need for this appraisal assignment. As of the date of this report, Crown Castle does not have a sublessee signed yet. The following appraisal sets forth the most pertinent data gathered, the techniques employed, and the reasoning leading to the opinion of value. The analyses, opinions and conclusions were developed based on, and this report has been prepared in conformance with, the guidelines and recommendations set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. LETTER OF TRANSMITTAL CONTINUED SAN180699 © 2018 COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES 2 The purpose of this report is the determination of market rent for the subject facility. It is our understanding that our market-rent estimate will be used as the basis for negotiating terms for a new ground lease with the City of Palo Alto. (Note): Although the subject is currently encumbered with a temporary ground license, we have assumed that it will be secured with a ground lease moving forward. Historically, licenses have been granted to a specific party for a specific use, and offer less protection to the property owner than a ground lease. In the marketplace, ground leases are used more often than licenses. Therefore, since we are estimating market value (in the form of market ground rent), we have also assumed that a ground lease will be used, and that it will be based on market terms. Our assignment focuses on the determination of market rent for the subject site based on a survey and analysis of competing telecommunications ground leases in the area. We hereby submit the following report, which shows the methods used to arrive at our survey conclusions. Based on the supporting data contained in the attached appraisal report, we have determined the following estimates, based on a valuation date of January 3, 2019. Market Ground Rent for Subject Site: $3,400 per month or $40,800 per year (Year 1) This is a Narrative Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2 of the Uniform Standards of Professional Appraisal Practice. As such, it presents a discussion of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraiser’s file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraiser is not responsible for unauthorized use of this report. It should be noted that the appraisers have not previously appraised this site. Date of Appraisal: January 11, 2019 Date of Valuation: January 3, 2019 Appraisal Report Type: Market Rent Analysis Owner/Ground Lessor: City of Palo Alto Owner of Telecommunications Improvements/Potential Ground Lessee: Crown Castle Sublessee: None currently Client of the Appraisal: Crown Castle Crown Castle Site ID: 830757 Crown Castle Site Name: Rinconada Intended Use of the Appraisal: The appraisal report will be used to determine a market rental rate for a new Crown Castle wireless- telecommunications facility. Intended Users of the Appraisal: Crown Castle LETTER OF TRANSMITTAL CONTINUED SAN180699 © 2018 COLLIERS INTERNATIONAL VALUATION & ADVISORY SERVICES 3 Highest and Best Use: y Current Use: Vacant land (part of existing fire-station site) y Highest and Best Use “As Vacant”: Telecommunications y Highest and Best Use “As Improved”: Maintain existing use We appreciate having the opportunity to be of service and will be pleased to discuss any comments or questions that you may have regarding this report. Respectfully submitted, Colliers International Valuation & Advisory Services Sean Heath, MAI, AI-GRS Thomas D. Heath, MAI Valuation Services Director Valuation Services Director Certified General Appraiser #AG 008315 Certified General Appraiser #AG 007301 858.860.3845 858.860.3845 sean.heath@colliers.com tom.heath@colliers.com SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. OTHER: (Per accident) (Ea accident) $ $ N / A SUBR WVD ADDL INSD THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED?(Mandatory in NH) DESCRIPTION OF OPERATIONS belowIf yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2016 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIREDAUTOS ONLY Willis of Pennsylvania, Inc.c/o 26 Century BlvdP.O. Box 305191Nashville, TN 372305191 USA Crown Castle InternationalSee Attached Named Insured List1220 Augusta Dr. Suite 600Houston, TX 77057 Re: 830757 City, Its council members, officers, agents, and employees are included as Additional Insureds under the GeneralLiability policy as their interest may appear and as required by written agreement and only with respect to theliability arising out of the operations performed by or on behalf of the Named Insured. City, Its council members,officers, agents, and employees are included as additional insureds as their interest may appear with respect to the City of Palo AltoAttn: Real Estate Division250 Hamilton AvePalo Alto, CA 94301 01/31/2019 1-877-945-7378 1-888-467-2378 certificates@willis.com Federal Insurance Company 20281 Travelers Property Casualty Company of Ame Berkshire Hathaway Specialty Insurance Com 25674 22276 Lexington Insurance Company 19437 W10015140 A 1,000,000 1,000,000 10,000 1,000,000 2,000,000 2,000,000 7021-02-28 04/01/2018 04/01/2019 B 1,000,000 04/01/201904/01/2018TC2JCAP-474M9749TIL18 C 5,000,000 25,000 47-UMO-303445-02 04/01/2018 04/01/2019 5,000,000 TC2JUB-474M969-4-18B 1,000,000No04/01/2018 04/01/2019 1,000,000 1,000,000 D Professional Liability Aggregate03171113811/19/2018 11/19/2019 105050717474277SR ID:BATCH: 1,000,000.00 Page 1 of 2ATTACHMENT G ACORD 101 (2008/01) The ACORD name and logo are registered marks of ACORD © 2008 ACORD CORPORATION. All rights reserved. THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM, FORM NUMBER:FORM TITLE: ADDITIONAL REMARKS ADDITIONAL REMARKS SCHEDULE Page of AGENCY CUSTOMER ID: LOC #: AGENCY CARRIER NAIC CODE POLICY NUMBER NAMED INSURED EFFECTIVE DATE: Crown Castle InternationalSee Attached Named Insured List1220 Augusta Dr. Suite 600Houston, TX 77057 Automobile Liability for liability arising out of the operations or work performed by the named insured if required bywritten agreement. It is further agreed that such insurance as is afforded shall be Primary and Non-Contributory with any other insurancein force for or which may be purchased by Additional Insureds if agreed in written contract. Automobile Liability isPrimary and Non-Contributory for owned autos. 2 2 Willis of Pennsylvania, Inc. See Page 1 See Page 1 See Page 1 See Page 1 25 Certificate of Liability Insurance W10015140CERT:1050507BATCH:17474277SR ID: Crown Castle International Corp. Consolidated Subsidiaries as Named Insureds Entity Name 5/16/2018 Edition 24/7 Chesapeake Holdings, LLC Crown Castle International Corp.Global Signal GP LLC 24/7 Mid-Atlantic Network of Virginia, LLC Crown Castle International Corp. de Puerto Rico Global Signal Holdings III LLC 24/7 Mid-Atlantic Network, LLC Crown Castle International LLC Global Signal Holdings IV LLC Access Fiber Group Holdings LLC Crown Castle Investment Corp.Global Signal Operating Partnership, L.P. Access Fiber Group, Inc. Crown Castle Investment II Corp.Global Signal Services LLC AirComm of Avon, L.L.C.Crown Castle MM Holding Corp. GoldenState Towers, LLC Atlantic Coast Communications LLC Crown Castle MM Holding LLC GS Savings Inc. CA - CLEC LLC Crown Castle MU LLC GSPN Intangibles LLC CC Castle International LLC Crown Castle MUPA LLC High Point Management Co. LLC CC Edge LLC Crown Castle NG Atlantic LLC ICB Towers, LLC CC Edge Solutions LLC Crown Castle NG Central LLC InfraSource FI, LLC CC Finance LLC Crown Castle NG East LLC InSITE Fiber of Virginia LLC CC FN Holdings LLC Crown Castle NG Networks LLC InSITE Solutions LLC CC Holdings GS V LLC Crown Castle NG West LLC Interstate Tower Communications LLC CC Site Acquisitions II LLC Crown Castle Operating Company Intracoastal City Towers LLC CC Sunesys Fiber Networks LLC Crown Castle Operating LLC IX2 Center, LLC CC TM PA LLC Crown Castle Orlando Corp.IX2 Wilshire, LLC CC Towers Guarantor LLC Crown Castle PR LLC JBCM Towers LLC CC Towers Holding LLC Crown Castle PR Solutions LLC Light Tower Clearinghouse LLC CC TS LLC Crown Castle PT Inc.Light Tower Fiber New York, Inc. (NY) CCATT Holdings LLC Crown Castle Puerto Rico Corp.Light Tower Holdings LLC CCATT LCC Crown Castle Services LLC Light Tower Management, Inc. CCATT PR LLC Crown Castle Solutions LLC Light Tower Metro Fiber LLC CCGS Holdings Corp.Crown Castle South LLC Lightower Fiber Infrastructure Corp. CCPE Acquisitions LLC Crown Castle TDC LLC Lightower Fiber Networks I, LLC CCPR VI Tower Newco LLC Crown Castle TLA LLC Lightower Fiber Networks II, LLC n/k/a Crown Castle Fiber LLC CCS & E LLC Crown Castle Towers 05 LLC LTS Buyer LLC CCT2 Holdings LLC Crown Castle Towers 06-2 LLC LTS Group Holdings LLC CCTM Holdings LLC Crown Castle Towers 09 LLC LTS Intermediate Holdings A LLC CCTM1 LLC Crown Castle Towers LLC LTS Intermediate Holdings B LLC CCTM2 LLC Crown Castle USA Inc.LTS Intermediate Holdings C LLC CCTMO LLC Crown Communication LLC Md7 Capitol One, LLC Chesapeake Fiber, LLC Crown Communication New York, Inc.Mobile Media California LLC Coastal Antennas LLC Crown Mobile Systems, Inc. Mobile Media National LLC ComSite Venture, Inc. DAS Development Corporation Modeo LLC Coverage Plus Antenna Systems LLC Fiber Technologies Networks, L.L.C.MW Cell REIT 1 LLC Cross Connect Solutions, Inc. (PA)Fibernet Direct Florida LLC MW Cell TRS 1 LLC Crown Atlantic Company LLC Fibernet Direct Holdings LLC NEON Transcom, Inc. Crown Castle AS LLC Fibernet Direct TEL LLC NewPath Networks Holding LLC Crown Castle Atlantic LLC Fibernet Direct Texas LLC NewPath Networks LLC Crown Castle Augusta LLC Fibertech Facilities Corp. (NY)NY - CLEC LLC Crown Castle BP ATT LLC Fibertech Holdings Corp.OP 2 LLC Crown Castle CA Corp.Fibertech Networks, LLC OP LLC Crown Castle Fiber LLC f/k/a Lightower Fiber Networks II, LLC Freedom Telecommunications, LLC P3 CHB-1, LLC Crown Castle GS III Corp.Global Signal Acquisitions II LLC P3 Holdings 2014 LLC Crown Castle GT Company LLC Global Signal Acquisitions III LLC P3 OASA-1, LLC Crown Castle GT Corp.Global Signal Acquisitions IV LLC P3 PBA-1, LLC Crown Castle GT Holding Sub LLC Global Signal Acquisitions LLC PA - CLEC LLC Crown Castle International Corp. Consolidated Subsidiaries as Named Insureds Entity Name 5/16/2018 Edition Pinnacle San Antonio L.L.C.Towers Finco LLC Pinnacle St. Louis LLC TriStar Investors LLC Pinnacle Towers Acquisition Holdings LLC TVHT, LLC Pinnacle Towers Acquisition LLC WA - CLEC LLC Pinnacle Towers Asset Holding LLC WCP Wireless Lease Subsidiary, LLC Pinnacle Towers Canada, Inc. WCP Wireless Site Funding LLC Pinnacle Towers III LLC WCP Wireless Site Holdco LLC Pinnacle Towers Limited WCP Wireless Site Non-RE Funding LLC Pinnacle Towers LLC WCP Wireless Site Non-RE Holdco LLC Pinnacle Towers V Inc.WCP Wireless Site RE Funding LLC PR Site Development Corporation WCP Wireless Site RE Holdco LLC PR TDC Corporation Wilcon Holdings LLC Princeton Ancillary Services II LLC Wilcon Operations LLC Princeton Ancillary Services III LLC Wilshire Connection, LLC Radio Station WGLD LLC Wilshire Services, LLC RGP Tower Group, LLC Wireless Funding, LLC Shaffer & Associates, Inc.Wireless Realty Holdings II, LLC Sidera Networks UK Limited (UK)Wireless Revenue Properties, LLC Sidera Networks, Inc.Yankee Metro Parent, Inc. Sierra Towers, Inc. Sunesys Enterprise LLC Sunesys of Massachusetts, LLC Sunesys of Virginia, Inc. Sunesys, LLC Thunder Towers LLC Tower Development Corporation Tower Systems LLC Tower Technology Company of Jacksonville LLC Tower Ventures III, LLC TowerOne 2012, LLC TowerOne Allentown 001, LLC TowerOne Bethlehem 001, LLC TowerOne Doylestown, LLC TowerOne East Rockhill 001, LLC TowerOne Marple, LLC TowerOne Middletown 001, LLC TowerOne Middletown 002, LLC TowerOne Middletown 003, LLC TowerOne North Coventry, LLC TowerOne Partners, LLC TowerOne Richland, LLC TowerOne Upper Pottsgrove 002, LLC TowerOne Upper Pottsgrove, LLC TowerOne Warminster 001, LLC TowerOne Warrington 002, LLC Towers Finco II LLC Towers Finco III LLC City of Palo Alto (ID # 10028) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Council Priority: Climate/Sustainability and Climate Action Plan Summary Title: Approve RWQCP Contract Amendments with Mountain View, Los Altos, and Stanford University Title: Approval of Addendum Number 9 to the Basic Agreement With the Cities of Mountain View and Los Altos and Amendment Number 6 to Contract Number C869 With the Board of Trustees of the Leland Stanford Junior University Related to the Regional Water Quality Control Plant's Near Term Capital Improvement Program Funding From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute the following contract amendments between the City of Palo Alto (City) and the Regional Water Quality Control Plant (RWQCP) partners regarding the financing for planning and design and the repayment approach for three capital improvement program projects at the RWQCP, the Primary Sedimentation Tank Replacement, the Secondary Process Upgrades, and the Laboratory and Environmental Services Building (collectively, the “Projects”): a. Addendum No. 9 to the Basic Agreement with the cities of Mountain View and Los Altos (Attachment A); and b. Amendment No. 6 to Agreement No. C869 with the Board of Trustees of the Leland Stanford Junior University (Attachment B). Background The RWQCP, originally constructed in 1934, has undergone several expansions and upgrades. The RWQCP is now an advanced (tertiary treatment) facility that provides treatment and disposal of wastewater for Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. A Long Range Facilities Plan (LRFP) was prepared in 2012 to provide a plan for future capital improvement program projects including WQ-14003 Primary Sedimentation Tank Replacement, WQ-19001 Secondary Process Upgrades, and WQ- City of Palo Alto Page 2 14002 Laboratory and Environmental Services Building. The previous amendments to the partner’s agreements regarding the three Projects were approved by Council on October 17, 2016 (CMR #7144). In those amendments, the financing of planning and design for the Projects had been specified to be completed solely by low interest State Revolving Fund (SRF) loans from the State Water Resources Control Board (SWRCB). However, staff found that the SRF loans for planning and design, while eligible for such funding, are unlikely to be funded. Planning and design loans were once more common; however, the current high demand for SRF funds, primarily for the construction phase alone, has severely restricted the issuance of planning and design loans. Therefore, staff prepared the proposed amendments to address other financing alternatives for the Projects, such as utility revenue bonds. Discussion The proposed Addendum No. 9 with Mountain View and Los Altos (Attachment A) and Amendment No. 6 with Stanford University (Attachment B) would provide the City with the legal authority to: a. pursue financing options for the Projects via State Revolving Fund (SRF) loans from the State Water Resources Control Board (SWRCB) or other project financing options such as utility revenue bonds; b. use the SRF loan reimbursement funds from the Sludge Dewatering and Truck Loadout Facility project design cost and soft costs of approximately $3.4 million to finance the initial planning and design costs of the Projects (WQ-14003 Primary Sedimentation Tank Replacement, WQ-19001 Secondary Process Upgrades, and WQ-14002 Laboratory & Environmental Services Building), whose total planning and design costs are expected to total approximately $5.8 million; c. bill Partners in the form of quarterly payments for any additional planning and design expenses exceeding the SRF loan reimbursement funds for the Projects, which could be as much as approximately $2.4 million; and d. roll any remaining, yet unbilled, planning and design expenses into the debt financing instrument selected. The City of Palo Alto has four agreements with its five Partner Communities, which cover Operating and Capital expenses. The Agreement with Mountain View and Los Altos and is often referred to as the Basic Agreement, as it is with the two larger entities. There are three individual agreements with the East Palo Alto Sanitary District (EPASD), Stanford University, and Los Altos Hills. These Agreements call for the Partner entities to approve Major Capital projects, with the exception of the Los Altos Hills Agreement. As the smallest of the Partners, Los Altos Hills is to pay their share of Capital costs, but their Agreement does not call for or require their approval. City of Palo Alto Page 3 The proposed two Agreement Amendments document approval of the Projects and establish acceptance of, and responsibilities for, the terms and conditions of the Projects’ planning and design expenses and the financing options with respect to three of the Partners. The following partner agencies approved these two amendments to the relevant partner agreements on the dates listed below. Stanford University August 21, 2018 Mountain View City Council March 20, 2018 Los Altos City Council September 11, 2018 The East Palo Alto Sanitary District (EPASD) has not yet approved an amendment to its partner agreement with Palo Alto to incorporate these provisions. After that occurs, staff will return to Council for approval of the amendment to the agreement with EPASD. The original agreement with the Town of Los Altos Hills does not call for or require their Major Capital Project approval, as stated above, and therefore no amendment is included here. Resource Impact No significant financial impacts are associated with the approval of the Partner Agreement addendum and amendment. Providing alternative funding sources to an SRF loan does not obligate the City to proceed with the Projects, nor constitute a commitment to any one funding source. The resource impact of proceeding with the Projects will be evaluated upon Council approval of each Project. Staff will continue to pursue the low-interest SRF loan options while considering and preparing for potential revenue bonds as an alternative funding solution. Environmental Review Approval of the addendum and amendments to the partner agencies’ agreements are not actions that require California Environmental Quality Act (CEQA) review. These actions do not meet the definition of a project for the purposes of CEQA, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because they are administrative governmental activities which will not cause a direct or indirect physical change in the environment. Attachments: • Attachment A: PA-MV-LA_C2963_Addm_9 • Attachment B: Stanford CPA Amendment No. 6 to Contact C869 ADDENDUM NO. NINE TO THE BASIC AGREEMENT BETWEEN THE CITY OF PALO ALTO, THE CITY OF MOUNTAIN VIEW AND THE CITY OF LOS ALTOS FOR THE ACQUISITION, CONSTRUCTION AND MAINTENANCE OF A JOINT SEWER SYSTEM This Addendum No. Nine (9) to the Basic Agreement for the Acquisition, Construction and Maintenance of a Joint Sewer System is made and entered into on _______________________, by and among the CITY OF PALO ALTO (“Palo Alto”), the CITY OF MOUNTAIN VIEW (“Mountain View”), and the CITY OF LOS ALTOS (“Los Altos”) (individually, a “Party”, collectively, the “Parties”), all municipal corporations under the laws of the State of California. R E C I T A L S: A. The Parties have entered into that certain Basic Agreement Between the City of Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction, and Maintenance of a Joint Sewer System, executed on October 10, 1968, as amended by the Addenda described below (collectively, the “Basic Agreement”). The Basic Agreement has been amended eight times by addenda, as follows: Addendum No. One (1) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of December 5, 1977; Addendum No. Two (2) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of January 14, 1980; Addendum No. Three (3) to an Agreement By and Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of April 9, 1985; Addendum No. Four (4) to the Agreement By and Between the Cities of Mountain View, Los Altos, and Palo Alto as further amended and dated May 30, 1991; Addendum No. Five (5) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of July 31, 1992; Addendum No. Six (6) to Basic Agreement Between the City of Palo Alto, the City of Mountain View, and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of March 16, 1998; and Addendum No. Seven (7) to Basic Agreement Between the City of Palo Alto, the City of Mountain View, and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of April 15, 2009; Addendum No. Eight (8) to the Basic Agreement between the City of Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction, and Maintenance of a Joint Sewer System dated as of October 17, 2016 (collectively, the “Addenda”). B. Palo Alto owns and operates the sanitary sewerage treatment and disposal works and system (the “Joint System”) pursuant to the Basic Agreement, and is responsible for making capital additions to the Joint System. Under the Basic Agreement, any major capital additions for the replacement of obsolete or worn-out units require an agreement by the Parties amending the Basic Agreement. The Parties agreed in Addendum No. Eight (8) to improve the Joint System by planning and designing the rehabilitation of the primary sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service building, and constructing and implementing a sludge dewatering and load-out facility (individually, “Project”, collectively, the “Projects”). The Parties also agreed to provide for the sharing of costs associated with the Projects through State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”). Palo DocuSign Envelope ID: 031D9792-C2E0-428A-9AE1-2DF64F0F9C5F Alto was authorized to seek a SRF loan for a maximum amount of $6.75 million for planning/design work for three of the projects (primary sedimentation tanks, the fixed film reactors, and the new laboratory/Environmental Service building). However, due to the current statewide demand for SRF funding, SRF applications for planning/design work are unlikely to be given priority over applications for construction work. Therefore, Palo Alto needs the flexibility to use various financing options including SRF, bond financing, or other financing options, to fund the planning/design work for the Projects identified in Addendum No. Eight (8). C. Addendum No. Eight (8) also authorized Palo Alto to seek a SRF loan for a maximum amount of $28 million for the design and construction of the sludge dewatering and load-out facility, which Palo Alto was granted. Prior to the receipt of the SRF loan for design, Palo Alto utilized the annual minor capital budget funded by the Parties to fund the planning and design costs for the Sludge Dewatering and Load-out Facility Project with the intent to reimburse the minor capital budget once the SRF loan funds were received. Now that Palo Alto has received the SRF loan funds for the design of the sludge dewatering and load-out facility (approximately $3.4 million), the Parties desire to use this funding reimbursed to the minor capital budget for initial funding of planning and design for the primary sedimentation tanks rehabilitation, the fixed film reactors (or other secondary process) upgrades, and the new laboratory/Environmental Service building. D. The Parties desire to address the funding mechanism for the remainder of the design costs for the primary sedimentation tanks rehabilitation, the fixed film reactors (or other secondary process) upgrades, and the new laboratory/Environmental Service building, and reserve for a future amendment to the Basic Agreement the financing plans for construction of these projects. NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this Addendum No. Nine (9), the Basic Agreement is hereby amended, as follows: Section 1. Paragraph 38 of the Basic Agreement is hereby amended to read, as follows: “38. IMPLEMENTATION OF THE PROJECTS. Palo Alto, Mountain View, and Los Altos hereby approve the Projects for planning/design of the primary sedimentation tanks, the fixed film reactors (or other secondary process) upgrades, a new laboratory/Environmental Service building, and the design/construction of a sludge dewatering and load-out facility (the “Projects”). Each Party shall pay its share of the Projects Costs, in proportion to the capacity it owns in the Joint System or portion thereof as shown in Exhibit “H” to Addendum No. Six (6) to the Basic Agreement. “Project Costs” means all costs incurred in connection with the planning, design, construction and implementation of the Projects. Without limiting the generality of the foregoing, Project Costs shall include, but not be limited to: design, engineering, and other consultants’ fees and costs, including fees incurred pursuant to agreements with engineers, contractors and other consulting, design and construction professionals; environmental analysis and approval costs, including cost of compliance with the California Environmental Quality Act; deposits, applicable permit fees; all costs to apply for and secure necessary permits from all required regional, state, and federal agencies; plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any contracts. DocuSign Envelope ID: 031D9792-C2E0-428A-9AE1-2DF64F0F9C5F The Parties authorize Palo Alto to pursue State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) or other project financing (i.e. utility revenue bonds) to fund the costs of the Projects. The maximum amount of the planning/design financing sought for the planning/design of the primary sedimentation tanks, the fixed film reactors (or other secondary process) upgrades, and a new laboratory/Environmental Service building will be $6.75 million. Construction financing of these three projects would be approved by the Parties through a future amendment to the Basic Agreement. The maximum amount of the SRF construction loan sought for the design/construction of a sludge dewatering and load-out facility will be $28 million. The loan will have a thirty-year repayment term. The repayments of the SRF loan shall be treated in the same manner as debt services under the Basic Agreement and its Addenda, and repaid by the Parties in the same proportionate shares as shown on Exhibit “H” to Addendum No. Six (6) to the Basic Agreement. The Parties further agree that, if necessary, each Party shall secure the funding necessary for repayment of the SRF loan, operations, and/or maintenance of the Projects, following any appropriate process executed under California Constitution article XIII C and D (Proposition 218). If the SWRCB terminates its loan commitment unexpectedly following execution of the planning and/or construction contract(s) for the Projects or the Project, Palo Alto shall notify the Parties promptly. Following notification of the termination of the SRF loan commitment, the Parties shall meet in a timely manner to discuss alternative funding sources and strategies for completion of the Projects. If the Parties are unable to agree on new funding sources in a timely manner, then Palo Alto shall have the right to terminate the Project or the Projects. The Parties shall remain responsible for Project costs and loans incurred, whether before or after termination of the Project/Projects, in connection with the termination of the Project planning/design/construction contract, in the same proportion to each organization’s share of plant capacity, as stated in Exhibit “H” to Addendum No. Six (6) of the Basic Agreement. Total project costs shall not exceed the authorized maximum financing amount approved by Parties without prior approval of each party’s governing body. Unless earlier terminated, the obligations and responsibilities of the Parties shall commence with the execution of Addendum No. Eight (8) to the contract and be in force for the term of the SRF loan or other financing. Mountain View and Los Altos shall pay their respective shares of any Project Costs within thirty (30) business days of receipt of the quarterly billing statement sent by Palo Alto. Palo Alto shall not send more than one invoice in any thirty-day period. If a Party disputes the correctness of an invoice, it shall pay the invoice in full and the dispute shall be resolved after payment in accordance with Section 19 of the Basic Agreement, and shall not offset against any payment due. Section 2. Paragraph 39 is hereby added to the Basic Agreement to read, as follows: “39. OPTIONAL FUNDING MECHANISM FOR THE PLANNING AND DESIGN OF THE PROJECTS. Palo Alto utilized the annual minor capital budget funded by the DocuSign Envelope ID: 031D9792-C2E0-428A-9AE1-2DF64F0F9C5F Parties to fund the Sludge Dewatering and Load-out Facility project design, with the intent to reimburse the annual minor capital budget once the SRF loan for that project phase was received. The Parties agree that Palo Alto may use the SRF loan reimbursement funds for the Sludge Dewatering and Load-out Facility project design (soft costs only of approximately $3.4+- million, referred to in this Section 39 as the “Reimbursement Funds”) to finance the initial planning and design costs of the three projects (primary sedimentation tanks, fixed film reactors (or other secondary process) upgrades, and a new laboratory/Environmental Service building). After the Reimbursement Funds are exhausted, any additional planning and design expenses for the three projects shall be paid by the Parties in quarterly payments in the same proportionate shares as shown on Exhibit “H” to Addendum No. Six (6) to the Basic Agreement. Once construction financing for these three projects is secured, Palo Alto may roll any remaining, yet unbilled, planning and design expenses into the debt financing instrument. Section 3. All references to “fixed film reactors” in Addendum No. Eight (8) to the Contract shall be amended to read “fixed film reactors (or other secondary process) upgrades”. Section 4. Except as modified herein, the Basic Agreement shall remain unchanged, and is hereby ratified and confirmed. [SIGNATURE PAGE FOLLOWS] DocuSign Envelope ID: 031D9792-C2E0-428A-9AE1-2DF64F0F9C5F DocuSign Envelope ID. U3109792-C2E0-420A-9AE1-2DF64FOF9C5F lN WITNESS WHEREOF, the purties have by their duly authorized reprcscntalives cxccukd this Addendum as or the date tirsl written above. ATTEST: City Clerk APPROVEL) AS ro FORM: Dt:!puly City Altorney APPROVED AS TO CONTENT: City Manager APPROVED AS TO fOR:'vl: APPROVED AS TO CONTENT: flNJ\NCIJ\L APPHOVJ\L: DocuSignoc/ by: SM~ N.t-d.u{µ{tr1 dssis/-o.w ~i:W.di&.tministrative St:!rvices Director APPROVED AS TO FORM: Qt:;1~;C ViA6 =OVED AS TO CONTENT: Signatur"" not required pi;:r Los Altos City Manag<.:r CITY or PALO Al.TO ijy: Mayor CITY OF LOS ALTOS ~y~~~ ~R.1' City ~ '"'- Christopher Jordan 1 Stanford CPA Amendment 6 version 2018-07-09 {00439139;3} AMENDMENT NO. SIX TO CONTRACT NO. C869 BETWEEN THE CITY OF PALO ALTO AND THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY This Amendment No. Six (6) to the Contract is made and entered into on _______________________, by and between the CITY OF PALO ALTO, a chartered city and a chartered municipal corporation of the State of California (“City”) and the BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the laws of the State of California (“Stanford”) (individually, a “Party”; collectively, the “Parties”). R E C I T A L S: A. The Parties have entered into that certain Contract Between Palo Alto and Stanford, executed on November 30, 1956, as amended by the Addendum and Amendments described below (collectively, the “Contract”). The Contract has been amended five times as follows: Addendum No. One (1) to the Contract Between the City of Palo Alto and Stanford, dated as of June 11, 1971; Amendment No. Two (2) to the Contract Between the City of Palo Alto and Stanford, dated as of November 2, 1998; Amendment No. Three (3) to the Contract Between the City of Palo Alto and Stanford, dated as of March 16, 2009; Amendment No. Four (4) to the Contract Between the City of Palo Alto and Stanford, dated as of October 17, 2016, and: Amendment No. 5 to the Contract Between the City of Palo Alto and Stanford, dated as of August 13, 2018. B. Palo Alto owns and operates the sewage system (the “System”) pursuant to the Contract, and is responsible for making capital additions to the System. Under the Contract, prior to commencement of construction of any capital additions or enlargements of the System, City and Stanford shall agree upon the terms of payment by Stanford of its proportionate cost. The Parties now desire to agree upon the sharing of costs associated with the planning and design of the primary sedimentation tanks rehabilitation, the fixed film reactors (or other secondary process) upgrades, a new laboratory/Environmental Service building, and the design and construction of a sludge dewatering and load-out facility (individually, the “Project”, collectively, the “Projects”). The Projects will become part of the regional water quality control plant (the “Plant”), which is owned and operated by Palo Alto as part of the System. Through Amendment No. Four (4), the Parties authorized the City to pursue State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) to fund the costs of the Projects. The City was authorized to seek a SRF loan for a maximum amount of $6.75 million for planning/design work for three of the projects (primary sedimentation tanks, the fixed film reactors, and the new laboratory/Environmental Service building). However, due to the current statewide demand for SRF funding, SRF applications for planning/design work are unlikely to be given priority over applications for construction work. Therefore, the City needs the flexibility to use various financing options including SRF, bond financing, or other financing options, to fund the planning/design work for the Projects identified in Amendment No. Four (4). DocuSign Envelope ID: 41C1B947-CBA4-4E0E-9709-0C36A974F6EF 2 Stanford CPA Amendment 6 version 2018-07-09 {00439139;3} C. Amendment No. Four (4) also authorized the City to seek a SRF loan for a maximum amount of $28 million for the design and construction of the sludge dewatering and load-out facility, which the City was granted. Prior to the receipt of the SRF loan for design, the City utilized the annual minor capital budget funded by the Parties to fund the planning and design costs for the Sludge Dewatering and Load-out Facility Project, with the intent to reimburse the minor capital budget once the SRF loan funds were received. Now that the City has received the SRF loan funds for design of the sludge dewatering and load-out facility (approximately $3.4 million), the Parties desire to use this funding to reimburse the minor capital budget for initial funding of planning and design for the primary sedimentation tanks rehabilitation, the fixed film reactors (or other secondary process) upgrades, and the new laboratory/Environmental Service building. D. The Parties desire to address the funding mechanism for the remainder of the design costs for the primary sedimentation tanks rehabilitation, the fixed film reactors (or other secondary process) upgrades, and the new laboratory/Environmental Service building, and reserve for a future Contract amendment the financing plans for construction of these projects. NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this Amendment No. Six (6), the Contract is hereby amended as follows: Section 1. Paragraph 24 of the Contract is hereby amended to read, as follows: “24. IMPLEMENTATION OF THE PROJECTS. Palo Alto and Stanford hereby approve the planning/design of the primary sedimentation tanks rehabilitation, the fixed film reactors (or other secondary process) upgrades, a new laboratory/Environmental Service building, and the design/construction of a sludge dewatering and load-out facility (individually, the “Project”, collectively, the “Projects”). Each Party shall pay its share of the Project Costs for the Projects in proportion to the capacity it owns in the Joint System or portion thereof as shown in Exhibit “H” to Amendment No. Two (2) to the Contract. “Project Costs” means all costs incurred in connection with the planning, design, and implementation of the Projects and all costs incurred in the construction of the sludge dewatering and load- out facility. Without limiting the generality of the foregoing, Project Costs shall include, but not be limited to: design, engineering, and other consultants’ fees and costs, including fees incurred pursuant to agreements with engineers, contractors and other consulting, design and construction professionals; environmental analysis and approval costs, including cost of compliance with the California Environmental Quality Act; deposits, applicable permit fees; all costs to apply for and secure necessary permits from all required regional, state, and federal agencies; plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any contracts. The Parties authorize Palo Alto to pursue State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) or other project financing (i.e. utility revenue bonds) to fund the costs of the Projects. The maximum amount of the planning/design financing sought for the planning/design of the primary DocuSign Envelope ID: 41C1B947-CBA4-4E0E-9709-0C36A974F6EF 3 Stanford CPA Amendment 6 version 2018-07-09 {00439139;3} sedimentation tanks, the fixed film reactors (or other secondary process) upgrades, and a new laboratory/Environmental Service building will be $6.75 million. Construction financing of these three projects would be approved by the Parties through a future amendment to the Contract. The maximum amount of the SRF construction loan sought for the design/construction of a sludge dewatering and load-out facility will be $28 million. The loan will have a thirty-year repayment term. The SRF loan shall be repaid by the Parties in the same proportionate shares as shown on Exhibit “H” to Amendment No. Two (2) to the Contract. If the SWRCB terminates its loan commitment unexpectedly following execution of the planning and/or construction contract(s) for the Project or the Projects, the City shall notify the Parties promptly. Following notification of the termination of the SRF loan commitment, the Parties shall meet in a timely manner to discuss alternative funding sources and strategies for completion of the Projects. If the Parties are unable to agree on new funding sources in a timely manner, then the City shall have the right to terminate the Project or Projects immediately. The Parties shall remain responsible for Project Costs incurred, whether before or after termination of the Project/Projects, in connection with the termination of the Project planning/design/construction contract(s), in the same proportion to each organization’s share, as shown on Exhibit “H” to Amendment No. Two (2) to the Contract. Stanford shall pay its share of any Project Costs within ten (10) business days of receipt of the annual billing statement sent by Palo Alto. If Stanford disputes the correctness of an invoice, it shall pay the invoice in full and the dispute shall be resolved after payment in accordance with the Contract, and shall not offset against any payment due. Section 2. Paragraph 25 is hereby added to the Contract to read, as follows: “25. OPTIONAL FUNDING MECHANISM FOR THE PLANNING AND DESIGN OF THE PROJECTS. The City utilized the annual minor capital budget funded by the Parties to fund the Sludge Dewatering and Load-out Facility project design, with the intent to reimburse the annual minor capital budget once the SRF loan for that project phase was received. The Parties agree that the City may use the SRF loan reimbursement funds for the Sludge Dewatering and Load-out Facility project design (soft costs only of approximately $3.4+- million, referred to in this Section 25 as the “Reimbursement Funds”) to finance the initial planning and design costs of the three projects (primary sedimentation tanks, fixed film reactors (or other secondary process) upgrades, and a new laboratory/Environmental Service building). After the Reimbursement Funds are exhausted, any additional planning and design expenses for the three projects shall be paid by the Parties in quarterly payments in the same proportionate shares as shown on Exhibit “H” to Amendment No. Two (2) to the DocuSign Envelope ID: 41C1B947-CBA4-4E0E-9709-0C36A974F6EF 4 Stanford CPA Amendment 6 version 2018-07-09 {00439139;3} Contract. Once construction financing for these three projects is secured, the City may roll any remaining, yet unbilled, planning and design expenses into the debt financing instrument. Section 3. All references to “fixed film reactors upgrades” in Amendment No. Four (4) to the Contract shall be amended to read “fixed film reactors (or other secondary process) upgrades”. Section 4. Except as modified herein, the Contract shall remain unchanged, and is hereby ratified and confirmed. [SIGNATURE PAGE FOLLOWS] DocuSign Envelope ID: 41C1B947-CBA4-4E0E-9709-0C36A974F6EF 5 Stanford CPA Amendment 6 version 2018-07-09 {00439139;3} IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment as of the date first written above. ATTEST: __________________________________ City Clerk APPROVED AS TO FORM: __________________________________ City Attorney or Designee APPROVED AS TO CONTENT: __________________________________ City Manager or Designee CITY OF PALO ALTO By: __________________________________ Mayor THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY By: __________________________________ Name: __________________________________ Title: __________________________________ DocuSign Envelope ID: 41C1B947-CBA4-4E0E-9709-0C36A974F6EF Tom W. Zigterman Director - Water Resources and Civil Infrastructure Certificate Of Completion Envelope Id: 41C1B947CBA44E0E97090C36A974F6EF Status: Completed Subject: Please DocuSign: Stanford CPA Amendment No. 6 version 2018-07-09.pdf Source Envelope: Document Pages: 5 Signatures: 1 Envelope Originator: Certificate Pages: 2 Initials: 0 Maybo AuYeung AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Maybo.AuYeung@CityofPaloAlto.org IP Address: 12.220.157.20 Record Tracking Status: Original 8/16/2018 4:43:36 PM Holder: Maybo AuYeung Maybo.AuYeung@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: City of Palo Alto Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Tom W. Zigterman twz@stanford.edu Security Level: Email, Account Authentication (None) Signature Adoption: Drawn on Device Using IP Address: 171.67.107.108 Sent: 8/16/2018 4:45:20 PM Resent: 8/20/2018 3:37:54 PM Viewed: 8/21/2018 7:40:32 AM Signed: 8/21/2018 7:43:23 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Jamie Allen James.Allen@CityofPaloAlto.org Manager Water Quality Control Plant City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/21/2018 7:43:24 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Julia Nussbaum juliann@stanford.edu Security Level: Email, Account Authentication (None) Sent: 8/21/2018 7:43:24 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Carbon Copy Events Status Timestamp Sandra Lee Sandy.Lee@cityofpaloalto.org Security Level: Email, Account Authentication (None) Sent: 8/21/2018 7:43:24 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 8/21/2018 7:43:24 AM Certified Delivered Security Checked 8/21/2018 7:43:24 AM Signing Complete Security Checked 8/21/2018 7:43:24 AM Completed Security Checked 8/21/2018 7:43:24 AM Payment Events Status Timestamps City of Palo Alto (ID # 10055) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: Contract Amendment with Muncipal Resources Group Title: Approval of Amendment Number 2 to Contract Number S16164688 to add $100,000 for a Total Not-to Exceed Amount of $400,000 With Municipal Resources Group for Professional Human Resources Consulting Services From: City Manager Lead Department: Human Resources Recommended Motion Staff recommends that the City Council approve and authorize the City Manager or his designee to execute Amendment 2 to S16164688 (Attachment A) with Municipal Resource Group LLC for professional Human Resources consulting services, increasing the contract limit by $100,000 for a revised total amount not to exceed $400,000 through July 31, 2019. Background On February 27, 2017, Council approved Contract S16164688 with Municipal Resources Group to provide the City with professional Human Resources services. Municipal Resources Group provides specialized assistance with public sector employment matters, including workplace investigations, organizational studies, and highly sensitive personnel-related work. Discussion The City of Palo Alto’s Human Resources Department is organized into five major divisions with 16 full-time staff who provide citywide support for recruitment, benefits, employee and labor relations, training, personnel transactions and workers’ compensation. In addition to the budgeted full-time staff, it is necessary to supplement the work by bringing in outside experts with specialized HR expertise. Specialized expertise required in Human Resources include preparing for grievance and arbitration appeals, conducting City of Palo Alto Page 2 workplace investigations with licensed Private Investigators (PI’s) for complaints that involve allegations of harassment or discrimination, facilitation or specialized training in response to workplace conflicts, executive coaching, compensation reviews, re- organization studies and other consultation for particularly sensitive or complex workplace issues. Under the existing contract with Municipal Resources Group, specialized expertise has been utilized to assist with grievance and arbitration cases in the Utilities department, executive advice for the City Audtior’s office, reclassification studies and assistance to multiple departments under consideration for re-organization (e.g., Planning, Development Services). In 2017 when this contract was established, the Human Resources Director anticipated approximately $300k would be necessary in specialized consulting work. However, the number of sensitive personnel issues, investigations, reorganizations, reclassification studies, professional coaching and specialized training required throughout the organization were greater than anticipated and additional funds are necessary for this contract. An amendment to increase the contract to a total of $400k is required to respond to immediate needs. Upon completion of this amendment, the Human Resources Department will publish an RFP and review the market for services beginning with the next fiscal year. MRG is a consulting firm that provides local government clients with project managers, trainers, facilitators and subject-matter experts specific to public sector human resources issues. As a consulting service, MRG’s project managers apply their independent judgement and professional expertise to determine the best methods for completing their deliverables. In addition to possessing the necessary licenses, certificates and/or specialized skills to complete client assignments, MRG’s consultants also utilize their own equipment, including laptops and cellphones. The scope of work for the MRG contract is focused on highly sensitive projects that require industry expertise and extensive knowledge of employment law and human resources best practices. Timeline, Resource Impact, Policy Implications (If Applicable) The added cost for MRG’s contract will be absorbed by the existing budget in the Human Resources Department and by the respective departments that require specialized services; therefore, no additional funding is necessary to support this contract. Environmental Review Approval of this contract is exempt under the California Environmental Quality Act (CEQA) Guidelines section 15061(b) (3), because it can be seen with certainty that City of Palo Alto Page 3 there is no possibility that the activity in question may have a significant effect on the environment. Attachments:  Attachment A: S16164688 MRG AMENDMENT NO 2 DocuSign Envelope ID: 24F09D82-2E55-4A93-8239-F72714EC01CE 1 of 2 Revision July 20, 2016 AMENDMENT NO. 2 TO CONTRACT NO. S16164688 BETWEEN THE CITY OF PALO ALTO AND MUNICIPAL RESOURCE GROUP, LLC This Amendment No. 2 to Contract No. S16164688 (“Contract”) is entered into March 11, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MUNICIPAL RESOURCE GROUP, LLC, a California Limited Liability Company, located at 675 Hartz Avenue, Suite 300, Danville, CA 94526 ("CONSULTANT"). R E C I T A L S A. The Contract was entered into between the parties for the provision of additional resources for the Human Resource Department. B. City intends to increase the compensation by $100,000.00 from $300,000.00 to $400,000.00 for the continuation of services as specified in Exhibit “A” Scope of Services. C. The parties wish to amend the Contract. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 4 COMPENSATION is hereby amended to read as follows: “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 Four Hundred Thousand Dollars ($400,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”.” SECTION 2. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. Attachment A DocuSign Envelope ID: 24F09D82-2E55-4A93-8239-F72714EC01CE 2 of 2 Revision July 20, 2016 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 MUNICIPAL RESOURCE GROUP, LLC Mary Egan Partner APPROVED AS TO FORM: City of Palo Alto (ID # 10092) City Council Staff Report Report Type: Consent Calendar Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: Approve Organizational Development and Leadership Training Consulting Agreements Title: Approval of Four Professional Services Agreements With: (1) BluePoint Planning; (2) Bovo Tighe; (3) Management Partners; and (4) Municipal Resource Group for Organizational Development Over a Three Year Term, all Subject to an Aggregate Not-to-Exceed Amount of $450,000 From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council approve and authorize the City Manager or his designee to execute the attached four (4) contracts for organizational development consulting services with BluePoint Planning (Attachment A – C19174514), Bovo Tighe (Attachment B – C19173138), Management Partners (Attachment C – C19174516), and Municipal Resource Group (Attachment D – C19174515). In total, all four (4) separate consulting contracts are subject to an aggregate not-to-exceed amount of $450,000 over the three year term of each of the agreements; subject to the annual appropriation of funds. Executive Summary In August 2018, the City issued Request for Proposal (RFP) with the objective to secure one or more consultant(s) to assist the City in planning and implementing organizational change management, providing leadership training, and developing a performance management system. Seven vendors responded to the City’s RFP and six consultants were selected for consideration based on the quality of their proposal, experience, responsiveness and cost to provide consulting services. After interviews and presentations, the City recommends awarding the contract to four of the consultants. The four consultants are BluePoint Planning, Bovo Tighe, Management Partners, and Municipal Resource Group and staff proposes a three year term with all four contracts subject to an aggregate not-to-exceed amount of $450,000. Award of the four contracts will allow the City to use objective criteria to solicit and select the firm with the most appropriate skills and experience for individual assignments that arise in this area over the three year term of the agreements and the suite of four vendors will ensure that City of Palo Alto Page 2 there are options available for the City as projects arise. Background The City consists of 18 departmental units: City Attorney, City Auditor, City Clerk, City Council, City Manager, Administrative Services, Community Services, Fire, Human Resources, Information Technology, Library, Office of Emergency Services, Office of Sustainability, Planning, Police, Public Works, Transportation and Utilities. The City is undergoing multiple transitions at its middle, senior and executive management levels. With baby boomers retiring and a highly competitive job market, cities throughout the region have been seeing more turnover and vacancies at the middle and top levels of their organizations. Over the past several years, the City has retained multiple consultants for organizational development, strategic planning, communication, and leadership training for various departments, including Administrative Services, City Clerk, Community Services, Development Services, Human Resources, Libraries, Planning & Community Environment, and Utilities. Given continuous business improvement and professional development needs throughout the City, ranging from an entire department to individual managers, the set of proposed contracts will provide City flexibility to address organizational and individual needs in an effective and streamlined manner. The City has engaged with the four firms in the past on various occasions with specific activities. The firms have demonstrated the ability to provide timely response when needed and excellent professional services. Discussion Staff anticipates that the four consultants identified in this staff report can assist the City with a broad array of organizational development, performance management and leadership training. The RFP allowed consultants to respond to one or more of the following areas: Organizational Effectiveness Assessment and Implementation • Assessment of the effectiveness of the team and its practices to meet current and future demands; • Assessment of organizational performance and identification of priority areas for improvement; • Recommendation of organizational structure changes and business process improvements to enhance service delivery and optimize operational and team performance; • Development of action plans, strategies and/or techniques to enhance service delivery and operational performance. Performance Management • Identification of goals, operational and service metrics, and benchmarks; City of Palo Alto Page 3 • Development of a dashboard or tracking tool to measure and show progress towards goals; • Training and communication of the performance management system; • Support for implementation and continuous refinement of performance measurement system. Leadership Development • Coaching for individual leaders plus measurement tool to ensure successful development; • Coaching for executive team or managers to enhance performance, productivity and teamwork; • Development and implementation of a tool to measure leadership development such as individual development plan, 360 evaluation, self-assessment, questionnaires, and program metrics. • Leadership academies and team facilitation to build a culture of effective leadership, communication, innovation and collaboration. Succession Planning and Knowledge Transfer • Identification of critical and at-risk positions including skillset gaps in departments; • Development of a talent management program which identifies, develops, and retains high internal performers and attracts high external performers; • Development of a succession plan identifying core competencies, critical skills, training, and timeline. • Development and implementation of a tool, repository or an approach to retain essential institutional knowledge. • Recruitment services to seek highly qualified and skilled talent. Individual and Team Accountability, Rewards, and Recognition • Training, workshops, and coaching to establish a culture of high accountability and performance. • Facilitation of team meetings and team building activities to set goals, priorities, responsibilities, and expectations including measurements of team effectiveness. • Development and implementation of approaches and programs to recognize individual and team accomplishments and successes. The RFP also stated that more than one consulting firm may be retained to perform the assignments outlined in the scope of work and that award of a contract would not guarantee that the consultant would be awarded any specific area or assignment. The selected four consultants ranked in the top four based on the evaluation criteria. All of the selected vendors demonstrated an in-depth knowledge of the industry, municipal experience, and ability to provide flexibility in responding to the array of the City’s organizational needs over the next three years. City of Palo Alto Page 4 Council approval of the consulting agreements will enable staff to utilize the agreements for various projects and/or assignments however does not guarantee any work will be carried out with any of the consultants over the term of the agreements. The contracts set each consultant’s rates and the general type of work they may be engaged in upon City request and selection. When staff has a specific project or assignment that requires consulting services, City staff will have the option to either award the project or assignment to one of the four vendors or solicit proposals from amongst the four vendors. Upon selection, an assignment with a scope, timeline, and budget will be established with the selected vendor. Resource Impact Staff anticipates spending no more than the $450,000 not-to-exceed amount in aggregate over the three years for all projects and assignments and is subject to the annual appropriation of funds. Departments seeking consulting services will fund the assignments through their existing training and development budgets. The agreements expressly do not guarantee any work to vendors during the term of the contracts, but merely sets each consultant’s rates and the general type of work they may engage in upon City request, solicitation and selection. When work is performed under a City request, staff will ensure that the aggregate total compensation to all four consultants does not exceed the aggregate $450,000 limit. No funds will be encumbered until an individual project or assignment budget has been established. Environmental Review Approval of the Contracts does not require review under the California Environmental Quality Act (“CEQA”) because the scope of work of these consulting contracts is not a project under CEQA. Attachments: •Attachment A - C19174514 Blue Point Planning •Attachment B - C19173138 Bovo Tighe •Attachment C - C19174516 Management Partners •Attachment D - C19174515 Municipal Resource Group Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C19174514 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BLUE POINT PLANNING, LLC, FOR PROFESSIONAL SERVICES This Agreement is entered into on this 4th day of March, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and BLUE POINT PLANNING, LLC, a California Limited Liability Company, located at 1950 Mountain Blvd, Suite 3, Oakland, CA 94611, Telephone (510)338-0373 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to utilize organizational development services (“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. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 ATTACHMENT A Professional Services Rev. April 27, 2018 2 The term of this Agreement shall be from the date of its full execution through March 3, 2022, unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. 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 Four Hundred Fifty Thousand Dollars ($450,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount; provided however CONSULTANT acknowledges that the compensation paid to it likely will be less than $450,000.00, as CITY has appropriated that amount to payments to be made under four contracts, of which this Agreement is one. The four contracts shall be administered by City Manager’s Office to ensure that the total aggregate of compensation paid for these four contracts will not exceed Four Hundred Fifty Thousand Dollars ($450,000.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 3 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 CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 4 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 Mindy Flynn Craig as the Principal to have supervisory responsibility for the performance, progress, and execution of the Services and Victoria Reichenberg as the Deputy Project Manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is David Yuan, Utilities Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2522. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 5 of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) 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, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 6 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 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 DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 7 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person 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 CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 8 otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 9 action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 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. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 10 CONTRACT No. C19174514 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: BLUE POINT PLANNING, LLC Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: HOURLY RATE SCHEDULE EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Principal Mindy Craig Professional Services Rev. April 27, 2018 11 EXHIBIT “A” SCOPE OF SERVICES The CONSULTANT may be asked to perform Services on an on-call basis, using the form included as Exhibit “A-1”, in one or more of the following areas: 1)Organizational Effectiveness Assessment and Implementation – Provide CITY with professional services related to organizational development including: a.Assessment of the effectiveness of the team and its practices to meet current and future demands; b.Assessment of organizational performance and identification of priority areas for improvement; c.Recommendation of organizational structure changes and business process improvements to enhance service delivery and optimize operational and team performance; d.Development of action plans, strategies and/or techniques to enhance service delivery and operational performance. 2)Performance Management – Assist CITY in the development and implementation of a performance management system including: a.Identification of goals, operational and service metrics, and benchmarks; b.Development of a dashboard or tracking tool to measure and show progress towards goals; c.Training and communication of the performance management system; d.Support for implementation and continuous refinement of performance measurement system. 3)Leadership Development – Provide CITY with professional services to develop effective leadership and management skills including: a.Coaching for individual leaders plus measurement tool to ensure successful development; b.Coaching for executive team or managers to enhance performance, productivity and teamwork; c.Development and implementation of a tool to measure leadership development such as individual development plan, 360 evaluation, self-assessment, questionnaires, and program metrics. d.Leadership academies and team facilitation to build a culture of effective leadership, communication, innovation and collaboration. 4)Succession Planning and Knowledge Transfer – Assist CITY in the development of a succession planning strategy based on current and future organizational needs including: a.Identification of critical and at-risk positions including skillset gaps in departments; DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 12 b. Development of a talent management program which identifies, develops, and retains high internal performers and attracts high external performers; c. Development of a succession plan identifying core competencies, critical skills, training, and timeline. d. Development and implementation of a tool, repository or an approach to retain essential institutional knowledge. e. Recruitment services to seek highly qualified and skilled talent. 5) Individual and Team Accountability, Rewards, and Recognition – Assist CITY in the development of strategies to communicate and exercise individual and team accountability and success including: a. Training, workshops, and coaching to establish a culture of high accountability and performance. b. Facilitation of team meetings and team building activities to set goals, priorities, responsibilities, and expectations including measurements of team effectiveness. c. Development and implementation of approaches and programs to recognize individual and team accomplishments and successes. Deliverables CONSULTANT’s deliverables will be determined on a task -by -task basis, as specified on a form substantially in the form of Exhibit “A-1”. Deliverables may include one-time written reports, periodic written reports and updates, oral presentations, recommendations and analysis. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 13 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER CONSULTANT hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5. BUDGET CODE:_______________COST CENTER______________COST ELEMENT________ WBS/CIP___ _______PHASE___ 6. CITY PROJECT MANAGER’S NAME/DEPARTMENT________________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: WORK TO BE PERFORMED SCHEDULE OF WORK BASIS FOR PAYMENT & FEE SCHEDULE DELIVERABLES REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: ______________________ BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 14 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services in accordance with the timelines and deadlines specified in the applicable Task Order from CITY. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. If specified in the applicable Task Order, CONSULTANT shall provide the CITY with a detailed schedule of work. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 15 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. 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: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 16 EXHIBIT “C-1” HOURLY RATE SCHEDULE Consulting Level 2019 Billing Rate* ($/hour) Principle-in-Charge/PM $175 Senior Consultant/Deputy PM $175 Senior Consultant $250 Project Associate $90 *Annual escalation of billing rates not to exceed 3% effective the beginning of each calendar year DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 17 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 18 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 8EC450E7-EE92-4B5D-87CC-6191211252D6 Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C19173138 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND BOVO-TIGHE, LLC FOR PROFESSIONAL SERVICES This Agreement is entered into on this 4th day of March, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and BOVO-TIGHE, LLC, a California Limited Liability Company, located at 4280 Gold Run Drive, Oakley, California, 94561, Telephone No. (425) 641-0799 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to utilize organizational development services (“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. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through March 3, 2022, DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 ATTACHMENT B Professional Services Rev. April 27, 2018 2 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. 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 Four Hundred Fifty Thousand Dollars ($450,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount; provided however CONSULTANT acknowledges that the compensation paid to it likely will be less than $450,000.00, as CITY has appropriated that amount to payments to be made under four contracts, of which this Agreement is one. The four contracts shall be administered by City Manager’s Office to ensure that the total aggregate of compensation paid for these four contracts will not exceed Four Hundred Fifty Thousand Dollars ($450,000.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 3 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 CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 4 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 David Tighe to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is David Yuan, Utilities Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2522. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 5 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, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 6 construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 7 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person 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 CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 8 consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 9 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 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. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 10 CONTRACT No. C19173138 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: BOVO-TIGHE, LLC Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: HOURLY RATE SCHEDULE EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Principal Brooke Bovo Dave Tighe Principal Professional Services Rev. April 27, 2018 11 EXHIBIT “A” SCOPE OF SERVICES The CONSULTANT may be asked to perform Services on an on-call basis, using the form included as Exhibit “A-1”, in one or more of the following areas: 1)Organizational Effectiveness Assessment and Implementation – Provide CITY with professional services related to organizational development including: a.Assessment of the effectiveness of the team and its practices to meet current and future demands; b.Assessment of organizational performance and identification of priority areas for improvement; c.Recommendation of organizational structure changes and business process improvements to enhance service delivery and optimize operational and team performance; d.Development of action plans, strategies and/or techniques to enhance service delivery and operational performance. 2)Performance Management – Assist CITY in the development and implementation of a performance management system including: a.Identification of goals, operational and service metrics, and benchmarks; b.Development of a dashboard or tracking tool to measure and show progress towards goals; c.Training and communication of the performance management system; d.Support for implementation and continuous refinement of performance measurement system. 3)Leadership Development – Provide CITY with professional services to develop effective leadership and management skills including: a.Coaching for individual leaders plus measurement tool to ensure successful development; b.Coaching for executive team or managers to enhance performance, productivity and teamwork; c.Development and implementation of a tool to measure leadership development such as individual development plan, 360 evaluation, self-assessment, questionnaires, and program metrics. d.Leadership academies and team facilitation to build a culture of effective leadership, communication, innovation and collaboration. 4)Succession Planning and Knowledge Transfer – Assist CITY in the development of a succession planning strategy based on current and future organizational needs including: a.Identification of critical and at-risk positions including skillset gaps in departments; DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 12 b.Development of a talent management program which identifies, develops, and retains high internal performers and attracts high external performers; c.Development of a succession plan identifying core competencies, critical skills, training, and timeline. d.Development and implementation of a tool, repository or an approach to retain essential institutional knowledge. e.Recruitment services to seek highly qualified and skilled talent. 5)Individual and Team Accountability, Rewards, and Recognition – Assist CITY in the development of strategies to communicate and exercise individual and team accountability and success including: a.Training, workshops, and coaching to establish a culture of high accountability and performance. b.Facilitation of team meetings and team building activities to set goals, priorities, responsibilities, and expectations including measurements of team effectiveness. c.Development and implementation of approaches and programs to recognize individual and team accomplishments and successes. Deliverables CONSULTANT’s deliverables will be determined on a task -by -task basis, as specified on a form substantially in the form of Exhibit “A-1”. Deliverables may include one-time written reports, periodic written reports and updates, oral presentations, recommendations and analysis. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 13 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER CONSULTANT hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5. BUDGET CODE:_______________COST CENTER______________COST ELEMENT________ WBS/CIP___ _______PHASE___ 6. CITY PROJECT MANAGER’S NAME/DEPARTMENT________________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: WORK TO BE PERFORMED SCHEDULE OF WORK BASIS FOR PAYMENT & FEE SCHEDULE DELIVERABLES REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: ______________________ BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 14 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services in accordance with the timelines and deadlines specified in the applicable Task Order from CITY. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. If specified in the applicable Task Order, CONSULTANT shall provide the CITY with a detailed schedule of work. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 15 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. 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: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 16 EXHIBIT “C-1” HOURLY RATE SCHEDULE Consulting Level 2019 Billing Rate* ($/hour) Senior Consultant $250 Assessor/Consultant $200 Consultant/Trainer $200 Project Associate $90 Seminar/Coaching Billing Rate* Trainer Foundations of Leadership Excellence Achieving Personal Accountability $395 per participant (Minimum of 10 Participants) Trainer Time Management for the Information Age Communication That Counts $295 per participant (Minimum of 10 Participants) Trainer Personal Performance and Overcoming Self-Limiting Belief $900 per participant (Minimum of 10 Participants) Coach (3 Months @ $900.) $900 per month per leader $2,700 per participant *Annual escalation of billing rates not to exceed 3% effective the beginning of each calendar year DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 17 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 18 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 79FB6D28-B21C-42A6-BEC7-6CA124FA35B3 Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C19174516 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MANAGEMENT PARTNERS, INC, INCORPORATED FOR PROFESSIONAL SERVICES This Agreement is entered into on this 4th day of March, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MANAGEMENT PARTNERS, INC. INCORPORATED, an Ohio corporation, located at 2107 N. First Street, STE 470, San Jose, California, 95131 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to utilize organizational development services (“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. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through March 3, 2022, DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD ATTACHMENT C Professional Services Rev. April 27, 2018 2 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. 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 Four Hundred Fifty Thousand Dollars ($450,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount; provided however CONSULTANT acknowledges that the compensation paid to it likely will be less than $450,000.00, as CITY has appropriated that amount to payments to be made under four contracts, of which this Agreement is one. The four contracts shall be administered by City Manager’s Office to ensure that the total aggregate of compensation paid for these four contracts will not exceed Four Hundred Fifty Thousand Dollars ($450,000.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 3 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 CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 4 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 Nancy Hetrick as the Project Director to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is David Yuan, Utilities Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2522. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 5 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, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 6 construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 7 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person 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 CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 8 consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 9 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 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. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 10 CONTRACT No. C19174516 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: MANAGEMENT PARTNERS, INC, INCORPORATED Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: HOURLY RATE SCHEDULE EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Gerald E. Newfarmer President & CEO Professional Services Rev. April 27, 2018 11 EXHIBIT “A” SCOPE OF SERVICES The CONSULTANT may be asked to perform Services on an on-call basis, using the form included as Exhibit “A-1”, in one or more of the following areas: 1)Organizational Effectiveness Assessment and Implementation – Provide CITY with professional services related to organizational development including: a.Assessment of the effectiveness of the team and its practices to meet current and future demands; b.Assessment of organizational performance and identification of priority areas for improvement; c.Recommendation of organizational structure changes and business process improvements to enhance service delivery and optimize operational and team performance; d.Development of action plans, strategies and/or techniques to enhance service delivery and operational performance. 2)Performance Management – Assist CITY in the development and implementation of a performance management system including: a.Identification of goals, operational and service metrics, and benchmarks; b.Development of a dashboard or tracking tool to measure and show progress towards goals; c.Training and communication of the performance management system; d.Support for implementation and continuous refinement of performance measurement system. 3)Leadership Development – Provide CITY with professional services to develop effective leadership and management skills including: a.Coaching for individual leaders plus measurement tool to ensure successful development; b.Coaching for executive team or managers to enhance performance, productivity and teamwork; c.Development and implementation of a tool to measure leadership development such as individual development plan, 360 evaluation, self-assessment, questionnaires, and program metrics. d.Leadership academies and team facilitation to build a culture of effective leadership, communication, innovation and collaboration. 4)Succession Planning and Knowledge Transfer – Assist CITY in the development of a succession planning strategy based on current and future organizational needs including: a.Identification of critical and at-risk positions including skillset gaps in departments; DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 12 b.Development of a talent management program which identifies, develops, and retains high internal performers and attracts high external performers; c.Development of a succession plan identifying core competencies, critical skills, training, and timeline. d.Development and implementation of a tool, repository or an approach to retain essential institutional knowledge. e.Recruitment services to seek highly qualified and skilled talent. 5)Individual and Team Accountability, Rewards, and Recognition – Assist CITY in the development of strategies to communicate and exercise individual and team accountability and success including: a.Training, workshops, and coaching to establish a culture of high accountability and performance. b.Facilitation of team meetings and team building activities to set goals, priorities, responsibilities, and expectations including measurements of team effectiveness. c.Development and implementation of approaches and programs to recognize individual and team accomplishments and successes. Deliverables CONSULTANT’s deliverables will be determined on a task -by -task basis, as specified on a form substantially in the form of Exhibit “A-1”. Deliverables may include one-time written reports, periodic written reports and updates, oral presentations, recommendations and analysis. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 13 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER CONSULTANT hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5. BUDGET CODE:_______________COST CENTER______________COST ELEMENT________ WBS/CIP___ _______PHASE___ 6. CITY PROJECT MANAGER’S NAME/DEPARTMENT________________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: WORK TO BE PERFORMED SCHEDULE OF WORK BASIS FOR PAYMENT & FEE SCHEDULE DELIVERABLES REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: ______________________ BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 14 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services in accordance with the timelines and deadlines specified in the applicable Task Order from CITY. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. If specified in the applicable Task Order, CONSULTANT shall provide the CITY with a detailed schedule of work. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 15 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. 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: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 16 EXHIBIT “C-1” HOURLY RATE SCHEDULE *Annual escalation of billing rates not to exceed 3% effective the beginning of each calendar year Consulting Level 2019 Billing Rate* ($/hour) President and CEO $300 Regional Vice President $250 Corporate Vice President $220 Partner $200 Special Advisor $190 Senior Manager $175 Senior Management Advisor $155 Peer Reviewer $125 Management Advisor $105 Management Analyst $85 DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 17 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 18 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 481D0AE2-027A-45CB-8C14-8F1AF04B19CD Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C19174515 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND MUNICIPAL RESOURCE GROUP, LLC FOR PROFESSIONAL SERVICES This Agreement is entered into on this 4th day of March, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and MUNICIPAL RESOURCE GROUP, LLC, a California Limited Liability Company, located at 675 Hartz Avenue, Suite 300, Danville, CA 94526 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to utilize organizational development services (“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. Optional On-Call Provision (This provision only applies if checked and only applies to on- call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through March 3, 2022, unless terminated earlier pursuant to Section 19 of this Agreement. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 ATTACHMENT D Professional Services Rev. April 27, 2018 2 SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Four Hundred Fifty Thousand Dollars ($450,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount; provided however CONSULTANT acknowledges that the compensation paid to it likely will be less than $450,000.00, as CITY has appropriated that amount to payments to be made under four contracts, of which this Agreement is one. The four contracts shall be administered by City Manager’s Office to ensure that the total aggregate of compensation paid for these four contracts will not exceed Four Hundred Fifty Thousand Dollars ($450,000.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 3 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 CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 4 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 Mary Egan Craig as the Managing Partner to have supervisory responsibility for the performance, progress, and execution of the Services and Wayne Tanda as the Project Manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is David Yuan, Utilities Department, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone: (650) 329-2522. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 5 performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 6 provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 7 To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person 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 CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 8 (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 9 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 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. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 10 CONTRACT No. C19174515 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: MUNICIPAL RESOURCE GROUP, LLC Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: HOURLY RATE SCHEDULE EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Partner Mary Egan Professional Services Rev. April 27, 2018 11 EXHIBIT “A” SCOPE OF SERVICES The CONSULTANT may be asked to perform Services on an on-call basis, using the form included as Exhibit “A-1”, in one or more of the following areas: 1) Organizational Effectiveness Assessment and Implementation – Provide CITY with professional services related to organizational development including: a. Assessment of the effectiveness of the team and its practices to meet current and future demands; b. Assessment of organizational performance and identification of priority areas for improvement; c. Recommendation of organizational structure changes and business process improvements to enhance service delivery and optimize operational and team performance; d. Development of action plans, strategies and/or techniques to enhance service delivery and operational performance. 2) Performance Management – Assist CITY in the development and implementation of a performance management system including: a. Identification of goals, operational and service metrics, and benchmarks; b. Development of a dashboard or tracking tool to measure and show progress towards goals; c. Training and communication of the performance management system; d. Support for implementation and continuous refinement of performance measurement system. 3) Leadership Development – Provide CITY with professional services to develop effective leadership and management skills including: a. Coaching for individual leaders plus measurement tool to ensure successful development; b. Coaching for executive team or managers to enhance performance, productivity and teamwork; c. Development and implementation of a tool to measure leadership development such as individual development plan, 360 evaluation, self-assessment, questionnaires, and program metrics. d. Leadership academies and team facilitation to build a culture of effective leadership, communication, innovation and collaboration. 4) Succession Planning and Knowledge Transfer – Assist CITY in the development of a succession planning strategy based on current and future organizational needs including: a. Identification of critical and at-risk positions including skillset gaps in departments; DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 12 b. Development of a talent management program which identifies, develops, and retains high internal performers and attracts high external performers; c. Development of a succession plan identifying core competencies, critical skills, training, and timeline. d. Development and implementation of a tool, repository or an approach to retain essential institutional knowledge. e. Recruitment services to seek highly qualified and skilled talent. 5) Individual and Team Accountability, Rewards, and Recognition – Assist CITY in the development of strategies to communicate and exercise individual and team accountability and success including: a. Training, workshops, and coaching to establish a culture of high accountability and performance. b. Facilitation of team meetings and team building activities to set goals, priorities, responsibilities, and expectations including measurements of team effectiveness. c. Development and implementation of approaches and programs to recognize individual and team accomplishments and successes. Deliverables CONSULTANT’s deliverables will be determined on a task -by -task basis, as specified on a form substantially in the form of Exhibit “A-1”. Deliverables may include one-time written reports, periodic written reports and updates, oral presentations, recommendations and analysis. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 13 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER CONSULTANT hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The CONSULTANT shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT $__________________________________ 5. BUDGET CODE:_______________COST CENTER______________COST ELEMENT________ WBS/CIP___ _______PHASE___ 6. CITY PROJECT MANAGER’S NAME/DEPARTMENT________________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE:  WORK TO BE PERFORMED  SCHEDULE OF WORK  BASIS FOR PAYMENT & FEE SCHEDULE  DELIVERABLES  REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ ----------------------------------------------------------------------------------------------------------------------------------- I hereby authorize the performance of I hereby acknowledge receipt and acceptance the work described above in this Task Order. of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: APPROVED: CITY OF PALO ALTO COMPANY NAME: ______________________ BY:__________________________________ BY:____________________________________ Name ________________________________ Name __________________________________ Title_________________________________ Title___________________________________ Date _________________________________ Date ___________________________________ DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 14 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services in accordance with the timelines and deadlines specified in the applicable Task Order from CITY. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. If specified in the applicable Task Order, CONSULTANT shall provide the CITY with a detailed schedule of work. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 15 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. 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: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 16 EXHIBIT “C-1” HOURLY RATE SCHEDULE Consulting Level 2019 Billing Rate* ($/hour) Principal Consultant $215 Seminar/Coaching 2019 Billing Rate* Leadership Training $5,250 / day $2,650 / half-day Executive Retreat $6,500 / day *Annual escalation of billing rates not to exceed 3% effective the beginning of each calendar year DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 17 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 Professional Services Rev. April 27, 2018 18 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 29C07CCD-BB65-4B6F-A8C8-0604CA5B3FD6 City of Palo Alto (ID # 10101) City Council Staff Report Report Type: Action Items Meeting Date: 3/4/2019 City of Palo Alto Page 1 Council Priority: Fiscal Sustainability Summary Title: FY 2020 - FY 2029 Long Range Financial Forecast Title: Acceptance of the Fiscal Year 2020 - Fiscal Year 2029 Long Range Financial Forecast From: City Manager Lead Department: Administrative Services Recommendation Finance Committee and staff recommend that the City Council accept the Fiscal Year 2020 – Fiscal Year 2029 Long Range Financial Forecast (Attachment A) (LRFF) and include deltas in the assumptions from the Long Range Financial Forecast when the budget is presented. Executive Summary The LRFF, which details the projected financial outlook through the Fiscal Year (FY) 2020 – FY 2029, was presented to the Finance Committee on November 28, 2018 (Attachment A, staff report 9764, www.cityofpaloalto.org/civicax/filebank/documents/67825). Action minutes of the Finance Committee meeting are attached as well for reference (Attachment B, www.cityofpaloalto.org/civicax/filebank/documents/68123). Of major note, for the first time, this LRFF incorporates direction from the City Council to budget pension costs more conservatively than CalPERS’ projections. Detailed explanation and analysis of the LRFF and assumptions can be found in the original staff report presented to the Finance Committee. The Finance Committee accepted the LRFF by a 3-1 vote (Chair Scharff, then-Vice Mayor Filseth, Councilmember Kou voted for; Councilmember Tanaka voted against) and directed that the LRFF be forwarded to the City Council for approval. In addition, the Committee directed staff to describe changes to the assumptions used in the LRFF as part of the annual budget process. There were motions to amend the recommendation, including changing the Compound Annual Growth Rate (CAGR), including the Unfunded Actuarial Liability (UAL) for both pension and retiree healthcare, and lowering the assumption about Property Tax revenue growth. These motions each failed due to lack of a second. City of Palo Alto Page 2 ATTACHMENT A: FY 2020 – FY 2029 Long Range Financial Forecast The FY 2020 – FY 2029 Long Range Financial Forecast marks the beginning of the FY 2020 annual budget development process. It includes projected General Fund financials over the next ten years based on current City Council approved service levels as well as two alternative financial models. The current base case financial forecast projects a $2.8 million gap in the General Fund in FY 2020 and a range between annual gaps of up to $4.5 million to surpluses of $18.2 million in the final years of the forecast. The base case is intended to provide a launching point that can assist in measuring the impacts of major policy interventions against a likely ‘status quo’ version of the future. The forecast assumes that the City will continue to provide the same levels of service and that external events continue to unfold based on current expectations. Attachment A to this report contains the full FY 2020 – FY 2029 LRFF as presented to the Finance Committee in November 2018. The LRFF discusses the financial climate of both the national and local economy and reviews the base case for the LRFF including revenue and expense modeling assumptions, as well as two alternative scenarios 1) Normal Cost calculated at CalPERS Discount Rate (phase-in to 7.0 percent by FY 2021) and 2) Major Tax Revenue Sensitivity Analysis. As discussed above, it is important to note that the FY 2020 – FY 2029 LRFF includes, for the first time, a lower rate of return for pension fund earnings (6.2%) than CalPERS’ current projections (7.0%), for the calculation of a portion of pension contributions (normal cost only). This change in methodology is consistent with City Council direction and increases anticipated expenses by $3.9 million in FY 2020. Looking forward, the City will face a number of pressures as it strives to ensure financial sustainability, one of its City Council approved priorities for 2019. The City will continue to proactively identify solutions to ensure cost-effective service delivery and the City’s long-term financial sustainability. The FY 2019 Adopted Operating Budget the City reduced ongoing expenses by more than $2.3 million in the General Fund. Since budget adoption and in continuing discussion with the Finance Committee regarding fiscal sustainability, another $4.0 million in budget reductions, of which $0.6 million is ongoing, has been identified to close the General Fund gap in FY 2019. The City is also currently reviewing all City services as part of the strategic action approved by City Council on December 17, 2018 (see staff report 9925, https://www.cityofpaloalto.org/civicax/filebank/documents/68153). Recognizing that the City will actively continue discussions with some of is bargaining units and with the Finance Committee surrounding the salary and benefit assumptions, staff has included a third alternative scenario with this report. This scenario is meant to help address questions from the Finance Committee regarding the variability seen year-over-year in salaries and benefits growth throughout the forecast. The scenario is meant to be used as a forecasting tool that models the impact of changes in the budgetary assumptions for salaries, not as a commitment to future negotiations. This additional scenario models the impact of a one City of Palo Alto Page 3 percent change in budgetary assumptions for bargaining units beyond the term of the existing Memoranda of Agreements (MOAs) and is discussed in greater detail below. Alternative Forecast #3: Change in Long Range Financial Forecast Assumptions Related to Salary for Bargaining Units Outside of MOA Terms During the Finance Committee’s discussion of the LRFF, there was conversation about the appropriate methodology for modeling salary and benefit increases year-over-year. The LRFF assumes two percent general wage adjustments in the forecast years beyond the terms of the existing MOAs (discussed in Attachment A). This is consistent with prior City Council direction to use the two percent figure as a forecasting assumption, not as a commitment for future negotiations. As part of the expense sensitivity analysis on the City’s finances, a third alternative forecast is presented here that analyzes a general wage adjustment of three percent for all employees in years when MOAs have not yet been negotiated. As with the other models in the LRFF, this model is for forecasting purposes and is not a commitment to future labor negotiations. In this third alternative scenario, wider gaps between revenues and expenses in the initial years would occur, as expected. Through the ten years of the forecast, this change in the modeling assumptions would increase expenses significantly. In FY 2020 through FY 2022, expenses would increase by $715,000, $1.3 million, and $2.4 million, respectively. The City has MOAs in place with its safety units through the conclusion of FY 2021, therefore the budgetary impact of the one percent increase to these groups can first be seen in FY 2022: International Association of Fire Fighters (IAFF), Fire Chief’s Association (FCA), Palo Alto Peace Officers’ Association (PAPOA), and Police Management Association (PMA). FY 2022 illustrates the full cost of an additional one percent raise for the General Fund, as this is the first year of the forecast in which this change would impact all bargaining units. Overall, the general trends of the base case continue even in this third alternative scenario. The base case projected that by FY 2024, the City would have a positive net one-time surplus; in this third alternative scenario the City does not generate a positive net one-time surplus until FY 2027. The City would maintain a nominal surplus beginning in FY 2022 if the gaps of FY 2020 and FY 2021 were solved in a structural (ongoing) manner. City of Palo Alto Page 4 Table 13: FY 2020 – FY 2029 Long Range Financial Forecast Alternative Forecast #3 Adopted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total Revenue $214,497 $227,108 $233,938 $241,315 $248,921 $256,571 $264,392 $273,133 $281,311 $290,856 $299,948 5.9%3.0%3.2%3.2%3.1%3.0%3.3%3.0%3.4%3.1% Total Expenditures $210,706 $230,631 $239,780 $246,901 $254,108 $260,555 $267,014 $273,902 $277,681 $284,005 $291,272 9.5%4.0%3.0%2.9%2.5%2.5%2.6%1.4%2.3%2.6% Net One-Time Surplus/(Gap)$3,791 ($3,522)($5,842)($5,586)($5,187)($3,984)($2,621)($768)$3,630 $6,851 $8,677 Cumulative Net Operating Margin (One-Time)-$8,354 Net Operating Margin (3,522) (2,320) 257 399 1,203 1,363 1,853 4,398 3,221 1,826 Cumulative Net Operating Margin $8,677 Table 14: FY 2020 – FY 2029 Long Range Financial Forecast Net Operating Margin Alternative Forecast #3 SPACE Attachments: • ATTACHMENT A: FY 2020 - FY 2029 Long Range Financial Forecast • ATTACHMENT B: 11-28-2018 Finance Committee Action Minutes City of Palo Alto (ID # 9764) Finance Committee Staff Report Report Type: Action Items Meeting Date: 11/28/2018 City of Palo Alto Page 1 Summary Title: FY 2020 - FY 2029 Long Range Financial Forecast Title: Review and Forward the FY 2020 - FY 2029 Long Range Financial Forecast From: City Manager Lead Department: Administrative Services RECOMMENDATION Staff recommends that the Finance Committee review, comment, and forward the Fiscal Year 2020 to 2029 General Fund Long Range Financial Forecast (Base Case) for City Council approval. EXECUTIVE SUMMARY The Fiscal Year (FY) 2020 to 2029 General Fund Long Range Financial Forecast (LRFF), marks the beginning of the FY 2020 annual budget process. It includes projected General Fund financials over the next ten years based on current City Council approved service levels as well as alternative financial models. The current Base Case financial forecast projects a gap in the General Fund of $2.8 million in FY 2020 and a range between annual gaps of up to $4.5 million to significant surpluses in the final years of the forecast. The Base Case provides a preliminary forecast that can assist in gauging effects of major policy interventions against a likely “status quo” version of the future. It assumes that the world continues to change and unfold in line with current expectations. City staff will continue to review and refine these projections to establish the FY 2020 Base Budget and provide direction to Departments on the FY 2020 budget process. Based on this Forecast, it is anticipated that guidance to prioritize spending will again be critical to ensure financial stability. Looking forward, the City continues to face several pressures from the 2014 Council approved Infrastructure Plan including a new public safety building, the growing costs of pension benefits, and the ongoing labor negotiations for many of the City’s largest employee units. The policy direction from the City Council regarding proactively addressing the pension obligations, including the most recent direction to assume a lower discount rate in calculating pension costs, is contained in the base case forecast model. If this direction were excluded from the model, the General Fund would reflect the tough choices and the hard work of the City during ATTACHMENT A City of Palo Alto Page 2 the FY 2019 Budget process to structurally balance the budget. The City will continue to face critical choices in order to balance future financial challenges and any unforeseen program needs or an economic downturn. The review of this Long Range Financial Forecast and the planning that follows it will be critical since the City is facing many requests and has identified several key programs that the community would like to fund and complete. Included in this report and subsequent documents are the following: - Overview of the current financial status of the General Fund as of the FY 2019 Adopted Budget - Discussion of the current financial climate of the United States to the City of Palo Alto - Review of the Base Case for the Long Range Financial Forecast including Revenue and Expense modeling assumptions - Alternative Scenarios including a) normal cost calculated at CalPERS Discount Rate (phase-in to 7.0 Percent by FY 2021) and b) an economic downturn modeled in FY 2022 of the forecast BACKGROUND Annually the Office of Management and Budget produces a ten-year Long Range Financial Forecast (LRFF). The LRFF reflects staff’s best estimates on the projected revenues and expenditures over the next ten years based on the information currently available. It is important to note that the LRFF is a planning document and is separate and distinct from the development of the City’s Adopted Operating Budget. There are assumptions and parameters modeled in the LRFF, but these assumptions are revised and refined as more information becomes available through the budget adoption process. The LRFF does contain a comprehensive review of the costs to provide current City Council approved service levels, including looking at current contracts, updates to salaries and benefits based on the current population of employees and the current labor contracts in effect. The LRFF also reviews the status of the current economy and various economically sensitive revenues such as Sales Tax, Documentary Tax, Property Tax, and Transient Occupancy Tax to explain key trends in those areas. This Forecast allows staff and City Council to look at both the short-term and long-term financial status of current service levels in the General Fund and inform daily policy decisions and ongoing long-term goals and challenges. Since the great recession, the City has approved many strategies to mitigate rising costs, especially the rising increase in salaries and benefits. Strategies that have been used include: a second pension tier, employees sharing in health plan cost increases, and ending the employer- paid member contributions for pensions. Negotiations with bargaining units have included employees not only paying their full portion of CalPERS contributions but also beginning a cost- sharing program wherein employees contribute a certain percentage of the City’s required pension contribution. City of Palo Alto Page 3 The City Council continues to invest in the community and approved significant improvements in June 2014 with the Infrastructure Plan in the original amount of $125.8 million. However, other projects identified in the plan are estimated to cost substantially more due to updated designs, rising construction costs, and minimum and prevailing wage requirements. These changes have led to an anticipated funding gap of approximately $76 million for the Infrastructure Plan projects. Capital projects are one example of known items that are not fully included in this Forecast, both the capital cost to build as well as the operating and maintenance costs once these projects are completed and these new facilities are actively used will be refined as information becomes available. Palo Alto serves a diverse community with a broad range of unique services that adds to the significant complexity of managing a balanced budget and healthy long-range financial outlook. The demands and conflicts emerging from our vibrant economy have heightened the intensity of the “Palo Alto Process” with new analyses and data generation demands and deep dives into complex problem solving within an engaged public process across a wide range of issues. These forecast figures present staff with the challenge of prioritizing the growing needs of the City with the long-term sustainability of these needs. The Economy The economy is healthy at a national level. As of the end of September, the national gross domestic product (GDP) increased 3.5 percent while the national consumer price index (CPI) has grown 2.3 percent. The economy has gained from a rebound in consumer spending, employment growth, and substantial tax cuts. The nation is operating at what is considered “full employment” levels, at 3.7 percent unemployment as of September 2018. At the same time, massive tax cuts have driven budget deficits and higher interest rates. It is anticipated that the national job market may slow and the make-up of the market may change as immigration decelerates and labor participation from the Baby-Boomer generation shrinks. The local economy continues to outpace the unemployment rate at the state and national level. As of the end of September, California maintained 4.1 percent unemployment and the unemployment rate for the Bay Area region was lower at 2.5 percent. Despite local housing and transportation challenges, companies continue to plan expansion in Palo Alto and communities that surround our City. Compared to other regions in California, the Bay Area experienced the strongest job growth at 2.1 percent last quarter and is expected to slow in the short term. Although there is enough economic momentum to generate growth for the remainder of the year, reports from the Center for Continuing Study of the California Economy, UCLA’s Anderson School of Management, and Bank of the West Economics point to sharply lower economic growth in the short term and higher interest over the next two fiscal years. It is expected that GDP will fall to near 1 percent in the next 12 to 18 months. Regionally, demand for employees has driven the local real estate market so far up that, for some communities, it has become prohibitively expensive for businesses. Bay Area job growth is anticipated to decelerate from 2 percent in 2019 to 0.3 percent in 2020. City of Palo Alto Page 4 The foundations of the local economy – stable housing market, diverse and favorable mix of business segments, and academic and medical properties – provide the City a bulwark against an economic downturn in the medium term. DISCUSSION Included in this section are both the Base Case and alternative scenarios. As with all forecasts, there is uncertainty regarding the revenue and expenditure estimates contained in this document. For example, General Fund revenues may exceed or fall below expectations based on changes in economic or non-economic conditions. Various cost elements can also vary from year to year. Base Case The following table displays the projected General Fund revenues and expenditures over the next decade and the total cumulative surplus. In addition to the cumulative surplus, the incremental surplus or shortfall (assuming each preceding surplus or shortfall is addressed completely with ongoing solutions in the year it appears) for each year of the forecast is included. Because it is the City’s goal to remain in balance on an ongoing basis, the incremental figure is useful in that it shows the additional surplus and/or shortfall attributed to a particular fiscal year. To the extent that a shortfall is not resolved, or a surplus is not expended on an ongoing basis, it is important to understand that the remaining budget gap or surplus will carry over to the following year. For example, in FY 2019, the City structurally balanced both FY 19 and FY 2020 with known variables at the time. This reduced expenses on an ongoing basis by more than $2.3 million. Had this discipline not been exercised and had reserves been used instead, the FY 2020 gap would be even larger, estimated to be at least $5.1 million. Instead, this FY 2020-2029 Long Range Financial Forecast anticipates smaller gaps ranging from $2.8 million in FY 2020 to a gap of $4.5 million in FY 2021 with surpluses beginning in FY 2024 at $0.8 million and increasing through the term of the forecast. TABLE 1: FY 2020-2029 Long Range Financial Forecast Base Case City of Palo Alto Page 5 TABLE 2: FY 2020-2029 Long Range Financial Forecast Net Operating Margin Base Case Revenue Assumptions As discussed in the Economy section of this report, the Bay Area economy is anticipated to outperform the state and the nation. Despite a projected slowdown in Bay Area job growth, major expansion for Silicon Valley companies and a stable local housing market result in healthy and robust tax revenues for the City throughout the term of the forecast. Tax revenues constitute nearly 60 percent of General Fund resources. In FY 2020, the forecast projects a $9.1 million, or 7.2 percent, tax revenue increase compared to the levels in the Adopted FY 2019 Budget. In total, revenues are anticipated to increase by $12.6 million, or 5.9%, from the Adopted FY 2019 Budget of $214.5 million to $227.1 million in FY 2020. City of Palo Alto Page 6 TABLE 3: FY 2020 - 2029 General Fund Revenue Forecast Base Case Revenue & Other Sources Adopted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 CAGR 10 Years Sales Taxes $31,246 $34,286 $35,754 $37,000 $38,154 $39,302 $40,426 $41,546 $42,759 $44,063 $45,498 3.8% Property Taxes 45,332 48,193 51,181 54,231 57,235 60,285 63,426 67,289 71,508 76,078 80,970 6.0% Transient Occupancy Tax- General Purpose 16,699 17,977 18,444 18,933 19,473 20,018 20,618 21,260 21,908 22,556 23,188 3.3% Transient Occupancy Tax- Infrastructure 8,350 8,406 8,625 8,853 9,106 9,361 9,641 9,941 10,244 10,547 10,843 2.6% Documentary Transfer Tax 7,434 8,359 8,631 8,905 9,174 9,484 9,851 10,188 10,547 10,928 11,325 4.3% Utility Users Tax 16,092 17,026 17,519 18,024 18,407 18,768 19,109 19,497 19,811 20,168 20,526 2.5% Other Taxes and Fines 2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 0.0% Subtotal: Taxes 127,185 136,279 142,186 147,978 153,581 159,250 165,103 171,753 178,809 186,372 194,382 4.3% Charges for Services 20,630 22,057 22,870 23,551 24,230 24,788 25,323 25,955 26,010 26,464 26,534 2.5% Stanford Fire & Dispatch Services 7,384 7,829 7,992 8,128 8,273 8,395 8,486 8,580 8,651 8,763 8,810 1.8% Permits and Licenses 8,949 9,065 9,169 9,252 9,337 9,406 9,474 9,555 9,563 9,620 9,669 0.8% Return on Investments 1,166 1,197 1,230 1,266 1,304 1,346 1,390 1,432 1,475 1,519 1,563 3.0% Rental Income 15,807 16,120 15,272 14,766 15,153 15,551 15,961 16,384 16,819 17,267 17,729 1.2% From Other Agencies 1,150 370 370 370 370 370 370 370 370 370 370 -10.7% Charges to Other Funds 10,093 11,103 11,471 11,770 12,092 12,357 12,595 12,894 12,837 13,100 13,300 2.8% Other Revenue 2,361 2,361 2,313 2,314 2,315 2,316 2,316 2,317 2,318 2,319 2,321 -0.2% Total Non-Tax Revenue 67,540 70,102 70,688 71,418 73,073 74,528 75,915 77,487 78,043 79,422 80,296 1.7% Operating Transfers-In 19,772 20,727 21,063 21,918 22,267 22,793 23,374 23,893 24,459 25,062 25,271 2.5% BSR Contribution (One-Time) Golf Operating Loss Reserve Liquidation Total Source of Funds $214,497 $227,108 $233,938 $241,315 $248,921 $256,571 $264,392 $273,133 $281,311 $290,856 $299,948 Sales Tax The sales tax revenue forecast is driven by strong personal income and spending growth and a larger share of consumer spending online. New and innovative retail formats have helped revive physical retail presence. Stores that were once strictly online are now finding physical presence within communities. As the nation transitions from a shopping center country to online, a surge in online retail sales displace tax revenue from traditional industry segments to state and county pools. Based on activity and receipts for the recent quarter close, it is estimated that sales tax revenue will exceed the FY 2019 Adopted Budget by $1.2 million, or 3.9 percent, and will generate a total of $32.4 million by year-end. In FY 2020, sales tax is expected increase to $34.3 million, or 9.7 percent, above the FY 2019 Budget. This revenue category is currently tracking above budgeted levels in FY 2019 and it is anticipated that appropriate adjustments will be brought forward for the FY 2019 Budget through the mid-year budget process. Segments contributing to this growth include electronic equipment, restaurants, furniture/appliance, and auto leases. Department and drug store sales continue to experience declines. The FY 2020 – FY 2029 LRFF anticipates a compounded annual growth rate (CAGR) of 3.8% through the term of the forecast, with FY 2020’s significant growth over FY 2019’s Adopted Budget level tapering down through the out-years. Property Tax Property tax revenue is the General Fund’s largest revenue source and represents 21 percent of total revenues. Over the last three-year period, property tax revenue has grown 17 percent, from $36.6 million in FY 2016 to $42.8 million (unaudited) in FY 2018. The FY 2019 Adopted Budget assumes $45.3 million in total property tax and is expected to grow to $46.2 million, or $0.9 million, by year-end. This trend continues in FY 2020, where property tax revenue is expected to increase by additional $2.0 million, or 4.2 percent, to total $48.2 million. City of Palo Alto Page 7 TABLE 4: City of Palo Alto Property Tax Actuals and Forecast through FY 2029 City staff meets with the County quarterly to obtain the latest assessed valuation and assessment roll data used to forecast of property tax revenues. The above graph displays nine years of actual revenue and 11 years of forecast, including the year-end projection for FY 2019. The forecast assumes the anticipated cooling of the housing market and an economic downturn that is spread over the length of the 10-year forecast. Over the 20-year period displayed, there has been some unpredictability in the revenue growth rate, from a negative 1.1 percent in FY 2011 to a high of 11.5 percent in FY 2015. Meeting the property tax revenue forecast is contingent on maintaining property turn over and the median sales price. Data for the first four months of FY 2019 show that compared to the same time prior year, property sales volume is 7.3 percent lower while price is 9.8 percent higher. According to Zillow, as of November 2018, residential median sales price in Palo Alto is $3.3 million, an increase of 8.0 percent over the prior year. Included in this revenue source category are excess Educational Revenue Augmentation Funds, or ERAF, which is not considered a permanent local revenue source. The FY 2019 forecast assumes $2.3 million in excess ERAF funds and this amount is reduced to $1.3 million in FY 2020 to reflect closer alignment with historical collection levels. City of Palo Alto Page 8 Transient Occupancy Tax (TOT) In FY 2019, TOT revenue is expected to reach $25.5 million, $0.5 million or 2.2 percent above the FY 2018 unaudited revenue amount. Compared to the FY 2019 Adopted Budget, this is a slight increase of 1.7 percent, or $0.4 million. TOT realized double digit growth in FY’s 2015 and 2016 due the 2 percent rate increase (from 12 percent to 14 percent tax rate), the recovering economy, and the addition of the three large hotels. Since then, TOT revenue has moderated therefore modest growth is anticipated for FY 2020 and beyond. FY 2020 is forecasted to be $0.9 million, or 3.6 percent, above the current FY 2019 estimate, totaling $26.4 million. Average occupancy rates average 84.1 percent for the first two month of the fiscal year, compared to 81.7 percent in the same prior year period. At the same time, average room rates have increased from $265 to $272 per day, a 2.6 percent increase, compared to prior year. According to August 2019 TRENDS® in the Hotel Industry – Northern California Performance Report, the average daily room rate in Palo Alto is higher than that of the San Jose/Peninsula Area, while hotel occupancy is trending the same as the region. TABLE 5: Northern California Hotel – Motel Business Trends as of August 2018 Table source: TRENDS® in the Hotel Industry Northern California, compiled and produced by CBRE Hotels, Consulting Recently, the voters approved an additional increase in the rate of Transient Occupancy Tax of 1.5 percentage points, from a tax rate of 14.0 percent to 15.5 percent. Due to the timing of this approval, no revenues anticipated as a result of this increase have been factored into this forecast. This rate increase is estimated to generate additional receipts of approximately $2.6 million annually. City of Palo Alto Page 9 Utility User’s Tax (UUT) The UUT is levied on electric, gas, and water consumption, as well as on telephone usage. In total, FY 2019 revenues were originally budgeted at $16.1 million and are currently estimated at $16.3 million in FY 2019 before rising to $17.0 million in FY 2020. UUT telephone revenues rose from $5.5 million in FY 2017 to $6.0 million in FY 2018 (unaudited). This revenue has realized double digit growth and is forecasted to reach $6.3 million in FY 2020. UUT revenue from Utility sales came in at $9.4 million in FY 2018 and is anticipated to reach nearly $10.1 million in FY 2019. Rate increases of 6.0 percent for electric, 4.0 percent for gas, and 3.0 percent for water consistent with the financial plans discussed in Spring 2018 with Finance Committee and City Council, are the primary drivers of this revenue growth. This revenue is expected to rise to $10.7 million in FY 2020. Documentary Transfer Tax In FY 2015, documentary transfer taxes peaked at $10.1 million. This milestone was a consequence of several large commercial transactions on Page Mill Road and in the Stanford Research Park. Since that time, transfer taxes have moderated somewhat, with $9.2 million earned in FY 2018. Given that revenue from July through October in FY 2019 is running nearly 9.8 percent above the same period in FY 2018, staff will likely modify the FY 2019 Adopted Budget at midyear from $7.4 million up to $8.3 million. For FY 2020, revenues are expected remain consistent with FY 2019 projected levels at $8.4 million. As in past years, this revenue source is challenging to forecast since it is highly dependent on sales volume and the mix of commercial and residential sales. The transactions through October (217) are running lower than those through October of last year (234), however, the total value of these transactions has increased by 9.8 percent. The Palo Alto housing market remains stable despite the decline in number of transactions because the growth in total value is robust. Although pressure on the housing market and local economy will either drive or slow down property turnover, there is enough of a baseline trend in the Palo Alto housing market to signal a stable 3.1 to 3.9 percent growth in revenue over the length of this forecast. City of Palo Alto Page 10 Rental Income Rental Income of $16.1 million primarily reflects rent from the City’s Enterprise Funds and the Cubberley Community Center and reflects growth of approximately 2 percent from the FY 2019 Adopted Budget of $15.8 million. The declines at the beginning of the forecast in FY 2021 and FY 2022 represent the phase-out of payments from the Refuse Fund associated with the Landfill and the steady growth after that models a general 3.0 percent increase for this area partially offset by minor adjustments throughout the forecast. Rental revenue annual increase is typically based on a review of the change in the California Consumer Price Index (CCPI) in the San Francisco Bay Area from the December to December period. It is expected that revenues will be reviewed and revised subsequent to this forecast based on updated information. Charges for Services and Permits and Licenses Revenues in the ‘Charges for Services’ and the ‘Permits and Licenses’ categories are anticipated to be $22.1 million and $9.1 million, respectively, in Fiscal Year 2020. This represents growth from the Fiscal Year 2019 Adopted Budget levels of $20.6 million for ‘Charges for Services’ and $8.9 million for ‘Permits and Licenses’. These increases in revenue estimates are primarily driven by the cost to provide services to the community, ranging from recreational activities to development activities. Therefore, revenues are impacted by personal service costs, the primary cost driver for providing these services, and are modeled to grow in line with the average increase in general salaries and benefits increases included in the Forecast. In the base case, the Normal Cost of pensions associated with the Discount Rate of 6.2% is not included in cost-recovery modeling in these categories. As part of the FY 2020 Budget and the municipal fee development process, the City will need to examine the implications of including this marginal cost in charges for services and permits and licenses. Additionally, this budget category includes revenues associated with the recently renovated Golf Course. Stanford Fire and Dispatch Services The City has two separate agreements with Stanford University to provide its response and emergency dispatch services. The City and Stanford have entered into a new agreement effective July 1, 2018 outlining both terms for service levels and a new cost allocation methodology as the baseline for the contract costs. The new fire agreement services contract extends through June 30, 2023 with a renewal through 2028 unless otherwise terminated. As part of this new contract, a new staffing deployment model for suppression and medical services was approved by the City Council in October 2017 and deployed in January 2018. This forecast assumes this new staffing model and in accordance with the new contract, increases to this revenue from Stanford have been aligned with the average growth of the expenses in the Fire Department over the forecast period. City of Palo Alto Page 11 Charges to Other Funds The main source of revenues in this category is General Fund administrative cost allocation plan charges to the Enterprise and Internal Service Funds. Internal support departments such as Administrative Services, Human Resources, and Council Appointees provide services to Enterprise and Internal Service Funds. The costs for these services are recovered through the administrative cost allocation plan charges. The FY 2020 estimate for Charges to Other Funds of $11.1 million reflects growth of 10.0 percent from the FY 2019 Adopted Budget of $10.1 million. This is attributed to the assumed increases in salary and benefits costs and the restoration of expenses such as workers’ compensation and general liability that were subsidized by the respective Internal Service Fund on a one-time basis in FY 2019. After the first year of FY 2020, growth is more moderate ranging from 0 percent up to 3.3 percent annual increases throughout the forecast period. Operating Transfers-in Operating Transfers-in materialize as expenses in other funds throughout the City and as a revenue in the General Fund. This budget category includes the equity transfer from the Electric and Gas funds. In accordance with a methodology approved by the City Council in June 2009, the equity transfer is calculated by applying a rate of return on the capital asset base of the Electric and Gas funds. This rate of return is based on PG&E's rate of return on equity as approved by the California Public Utilities Commission (CPUC). Using the Utility Department’s projections from the Electric and Gas Five Year Financial Forecasts, as approved by the City Council in spring 2018, the equity transfer from the Electric and Gas funds are projected to increase over the course of this forecast from $19.9 million in FY 2020 to $24.8 million in FY 2029. Overall, the Operating Transfers-in are estimated to increase slightly to $20.7 million in FY 2020, a 4.8 percent increase from the FY 2019 Adopted Budget level of $19.8 million. Expense Assumptions As part of developing the FY 2020 Forecast expenditure budget, the General Fund expense categories have been adjusted by removing FY 2019 Adopted Budget one-time expenses and updating major cost elements such as salary and benefits costs. The tables below display the expense forecast and when compared to the FY 2018 Adopted Budget, growth of 2.6 percent is expected in FY 2019, with growth ranging from 1.5 percent to 3.7 percent throughout the ten- year forecast. City of Palo Alto Page 12 TABLE 6: FY 2020-2029 General Fund Expense Forecast Base Case Expenditures & Other Uses Adopted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 CAGR 10 Years Salary 70,469$ 78,029$ 80,751$ 82,730$ 84,835$ 86,761$ 88,548$ 90,317$ 92,083$ 93,845$ 95,607$ 3.1% Benefits 54,935 60,378 62,416 64,366 66,295 67,733 68,771 70,277 69,192 70,141 71,278 2.6% Subtotal: Salary & Benefits 125,404 138,408 143,167 147,097 151,130 154,494 157,318 160,594 161,275 163,986 166,884 2.9% Contract Services 22,025 21,607 22,030 22,552 23,018 23,454 23,881 24,313 24,750 25,178 25,478 1.5% Supplies & Material 3,521 3,558 3,628 3,697 3,767 3,837 3,907 3,977 4,046 4,116 4,189 1.8% General Expense 6,183 10,454 10,726 11,005 11,289 11,580 11,877 12,682 12,901 13,531 14,364 8.8% Debt Service 613 0 0 0 0 0 0 0 0 0 0 N/A Rents & Leases 1,690 1,751 1,804 1,858 1,914 1,971 2,030 2,091 2,154 2,218 2,285 3.1% Facilities & Equipment 522 532 543 553 564 574 584 595 605 616 628 1.9% Allocated Charges 19,850 21,345 21,891 22,393 22,843 23,307 23,689 24,133 24,528 24,965 25,414 2.5% Total Non Sal/Ben Before Transfers 54,404 59,247 60,621 62,059 63,395 64,723 65,968 67,790 68,984 70,624 72,357 2.9% Operating Transfers-Out 5,725 4,869 4,899 4,955 5,039 5,033 5,092 5,156 5,182 5,212 5,271 -0.8% Transfer to Infrastructure - Base/Cubb 16,823 18,987 21,161 21,545 21,937 22,339 22,752 23,175 23,609 24,055 24,512 3.8% Transfer to Infrastructure - TOT 8,350 8,406 8,625 8,853 9,105 9,360 9,641 9,941 10,244 10,548 10,843 2.6% Total Use of Funds $210,706 $229,916 $238,472 $244,508 $250,606 $255,948 $260,771 $266,655 $269,292 $274,424 $279,867 2.9% Salary and Benefits The table above (also available in Attachment A) depicts the estimated General Fund salaries and benefits costs for the next decade. Over the forecast period, the salaries and benefits costs gradually increase in comparison to the total expenditure budget. In FY 2020, salaries and benefits costs represent approximately 60 percent of the General Fund budget expenditures and remain near that level of General Fund budget expenditures through FY 2029. Salary Consistent with the City’s salary budget methodology for recent budgets, positions are budgeted at the actual rate of pay of employees including benefits as of Fall 2018. Then, by position, salary costs are updated in accordance with applicable Memorandum of Agreements (MOA) between the City and its labor groups and the Management and Professional Personnel and Council Appointees Compensation Plan(s). The safety (Police and Fire) bargaining units recently concluded bargaining with MOAs that continue through Fiscal Year 2022 as approved by the City Council. The main bargaining unit for miscellaneous employees in the General Fund, Service Employees International Union (SEIU), is currently in negotiations with the City. The SEIU MOA expires December 31, 2018. The Forecast assumes step increases for employees in applicable positions, including SEIU, IAFF, and PAPOA and merit increases for Management and Professional employees. General wage adjustments of 2% are included in each year of the Forecast for all employees in years when there is not a MOA in effect. This is consistent with prior Council direction to use the 2 percent increase as a forecasting model, not as a commitment to future negotiations. If agreements are negotiated with salary increases greater than presumed in the forecast, then expenses will increase accordingly. City of Palo Alto Page 13 Benefits Pension: The Forecast includes pension rates from CalPERS as of the June 30, 2017 valuation for the City’s Miscellaneous and Safety plans for the first six years of the Forecast and modeled by the City for the final years of the Forecast. This methodology is necessary as CalPERS only provides projected pension rates for the next six years. CalPERS has implemented some changes with significant impacts to the City’s pension liability lowering the discount rate from 7.5 percent to 7.0 percent over three years. For Fiscal Year 2020, the second year of this three- year phase in, CalPERS used a 7.25 percent discount rate. CalPERS determines the City’s total contributions for a given Fiscal Year as the sum of two factors: Normal Cost (NC) and Unfunded Accrued Liability (UAL). The Normal Cost (NC) is a variable cost that increases or decreases directly with the salary levels of the City and is sometimes referred to as a ‘pay-go’ cost. It represents the necessary funding for the City to pay for employees presuming that CalPERS makes its stated investment returns. However, in a year that CalPERS does not make its stated investment return, a loss in assets is realized. The accumulation of these losses represents the City’s Unfunded Accrued Liability (UAL), which is calculated by CalPERS and is sometimes referred to as the ‘catch-up’ cost. The UAL is calculated over an amortized period with defined annual payments, similar to a mortgage. CalPERS then blends these payments into a percentage of payroll for reference. For the miscellaneous plan, the projected pension contribution rate will increase from the current 32.6 percent in FY 2019 to 35.6 percent in FY 2020. This includes the continued phase-in of the lower discount rate for the unfunded accrued liability (UAL), which will be completed in FY 2021. The rate continues to increase to a peak of 43.1 percent of payroll in FY 2026 as a result of actuarial impacts before tapering down to 37.0 percent in FY 2029. This projection is consistent with prior actuarial assessments done by Bartel Associates which anticipated a slight decline in pension costs associated with various amortization factors including the pay-down of previously sustained losses. The Safety plan follows a similar trend line, with the increases plateauing in the out years of the Forecast. In the first year, the safety plan is projected to grow to 59.4 percent of payroll from the current 55.6 percent of payroll and increase to 73.7 percent in FY 2025 before tapering down beginning in FY 2026. As with the miscellaneous plan, this initial growth is primarily driven by the phase-in of the 7.0 percent discount rate instead of the previous 7.5 percent discount rate. This growth stabilizes in the out years of the Forecast and returns to a lower level of 66.0 percent by FY 2029. The table below shows CalPERS’ projected FY 2019 – FY 2029 blended retirement rates. It should be noted that the numbers in FY 2026 are not provided by CalPERS (they only provide a forecast through FY 2025) but have been calculated by the City using a methodology consistent with CalPERS actuarial analysis. These rates are before the employee pick-ups of the employer share are factored in; that pick-up materializes as savings in the City’s pension costs. The forecast does presume that employees in the miscellaneous plan will pick up 1% of the City of Palo Alto Page 14 employer pension cost for miscellaneous plan members, and that safety plan members will pick up percentages consistent with their MOAs, ranging from the current 3% to 4% depending on the year and the unit. TABLE 7: CalPERS’ Projected FY 2019-2029 Blended Retirement Rates (percentage of payroll) FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Miscellaneous 32.6 35.6 38.2 40.0 41.4 41.9 42.5 43.1 38.5 37.9 37.0 Safety 55.6 59.4 64.1 68.0 71.1 72.7 73.7 70.0 68.9 67.5 66.0 On October 29, 2018 the City Council approved a significant change in assumptions for the development of financial planning, beginning with this base case for the Long-Range Financial Forecast. The City Council directed that staff include the NC for pension benefits in the budget assuming an equivalent of 6.2 percent discount rate and transfer additional funding beyond CalPERS actuarial determined contribution levels to the 115 Trust Fund. A preliminary calculation was done to capture the marginal increases associated with recognizing a 6.2 percent discount rate for the City’s Normal Cost payments. The implication of this marginal increase is approximately $3.9 million in additional pension expenses in this Long-Range Financial Forecast beginning in FY 2020 compared to previous assumptions. These additional funds would be contributed directly to the City’s IRS Section 115 irrevocable Pension Trust Fund and would augment the current principal deposits of $7.6 million. The City’s Unfunded Accrued Liability (UAL), calculated by CalPERS, remains at the CalPERS discount rate assumption phasing down to 7.0 percent in FY 2021. The marginal costs of the lower discount rates do taper as the forecast continues through to the end of the ten-year term. It is anticipated the City will spend a total of $32.3 million on pension costs in FY 2020, increasing to a peak of $35.6 million in FY 2026 before the downward trend starts at the end of the forecast. These expenses represent approximately 14% of the General Fund’s total expenses. Alternative Forecast #1, contemplates how the Long Range Financial Forecast would change if the marginal costs associated with the lower discount rate were excluded from the forecast. Retiree Medical: Retiree Medical is based on the most recent actuarial study prepared by Bartel Associates, which is completed every two years. The last actuarial study was done in FY 2018 and presented to the City Council as part of the Fiscal Year 2019 Adopted Budget. The table below details the cost to the General Fund for every year based on that actuarial study, excluding the implied subsidy. Consistent with City Council direction, as recommended by staff, the City continues to budget for the full payment of the Actuarial Determined Contribution (ADC) for retiree healthcare. Since CalPERS blends active employees with pre-Medicare retirees and charges the same medical premium, even though younger employees on average consume less healthcare and thereby subsidize older employees and retirees, there is an implied subsidy that effectively lowers the funding necessary to meet the ADC. City of Palo Alto Page 15 TABLE 8: FY 2020 – FY 2029 Retiree Medical General Fund Contributions FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 General Fund $9.1M $9.3M $9.6M $9.9M $10.2M $10.5M $10.8M $11.1M $11.5M $11.8M The City’s CERBT Trust, which contains prefunding for the City’s Other Post Employment Benefit (OPEB) liabilities, maintains a very health fund balance. The CERBT Trust currently has over $100 million in assets. As the City continues through the next few years, there will be important impacts to examine associated with Retiree Medical as there may be opportunities over the course of this forecast to subsidize the City’s ADC payments with withdrawals from the OPEB CERBT Trust. That savings could possibly be used for other competing priorities, such as prepaying an additional portion of the City’s pension UAL. Healthcare: Consistent with the most recent labor agreements between the City and its bargaining units in the General Fund, the City’s contribution amounts towards medical costs for employees are based on a flat rate contribution from the City, with the employee contributing towards the remaining medical plan premium. Like salaries, healthcare costs are updated in accordance with applicable Memorandum of Agreements (MOA) between the City and its labor groups and the Management and Professional Personnel and Council Appointees Compensation Plan(s). This Forecast assumes an inflation factor of four percent on healthcare costs to the City in each year of the Forecast for all employees in years when there is not a MOA in effect. This forecast does presume lower growth than the four percent that has been modeled in the past for dental and vision costs. These costs underwent adjustments during CY 2018, including a downward adjustment for dental, and as a result of that increases of only two percent are modeled through this forecast. Contract Services This FY 2020 forecast assumes $21.6 million in contract services, a 1.9 percent decrease from the FY 2019 Adopted Budget of $22.0 million. This decrease is driven primarily by $780,000 in grant expenses that were recognized on a one-time basis as part of the FY 2019 Adopted Operating Budget. This budget category includes important contract increases for contractual obligations already approved by the City Council, including significant contracts such as tree maintenance, landscape maintenance, operations at the newly renovated Golf Course, and janitorial services. Throughout the Forecast, a 2.0 percent annual escalator was modeled to capture anticipated growth in this expense category beginning in FY 2020. Supplies and Materials The FY 2019 Adopted Budget for the General Fund included $3.5 million for Supplies and Materials, which is anticipated to grow modestly to $3.6 million in FY 2020. An escalator of 2.0 percent was applied to this expense category to capture anticipated growth over the course of the forecast. City of Palo Alto Page 16 General Expense This category includes costs for travel and meetings, telephone and non-city utilities, contingency accounts, bank card service charges, and subsidies and grants provided through the Human Services Resource Allocation Program (HSRAP). The FY 2019 Adopted Budget of $6.2 million is somewhat understated because it includes the $4.0 million in General Fund expense reductions as directed by the City Council during the adoption of the FY 2019 Budget. The conversation between staff and the Finance Committee regarding that $4.0 million and where the lower expenses will be realized is ongoing. The FY 2020 forecast for this category does not continue that reduction, which is why this category increases to $10.5 million. Over the course of the forecast, increases of 2.0 percent were modeled. These figures do not include General Expenses for the Cubberley Lease, which is explained in further detail below. General Expense - Cubberley Lease: In FY 2015, the City and Palo Alto Unified School District (PAUSD) agreed to an extension of the Cubberley Lease by five years starting January 1, 2015 and expiring December 31, 2019. As part of the lease agreement, the City Council approved creation of a fund for Cubberley infrastructure improvements. Based on the new lease, $1.9 million is transferred to the Cubberley Property Infrastructure Fund annually. Therefore, the $1.9 million is classified as an Operating Transfer Out which is discussed in further detail below. With the Cubberley infrastructure funds set aside, the FY 2019 Budget includes $6.3 million for Cubberley Lease payments. In accordance with the lease agreement, the Forecast assumes a 3.0 percent annual CPI increase for the lease payments to the PAUSD for the Cubberley facility. For planning purposes in this Forecast, it is assumed that the current agreement will continue during the entire Forecast period. Rents and Leases The Rents and Leases expense category for FY 2020 is estimated to increase by 3.6 percent from $1.7 million in FY 2019 to $1.8 million in FY 2020. This increase includes the lease for some of the Development Services Department staff at 526 Bryant Street. The growth throughout the forecast is projected at 3.0 percent due to the continued pressure on this expense category. It is important to note that if the City must continue renting space for operations of departments like Development Services and if the current rent environment persists, that this expense category could increase even more. Facilities and Equipment The Facilities and Equipment expense category is expected to experience a slight increase of 2.0 percent from $522,000 to $533,000, from FY 2019 to FY 2020. This budget category includes subscription payments for equipment like public safety radios as well as other non-capital equipment. Growth of approximately 2.0 percent is modeled through the forecast to capture anticipated increases. City of Palo Alto Page 17 Allocated Charges Allocated Charges represent expense allocations by the City’s Enterprise and Internal Service Funds for services and products they provide to General Fund departments. The FY 2019 Adopted Budget for the General Fund included $19.8 million for these expenses, including utilities usage, general liability insurance, technology costs, vehicle equipment maintenance and replacement costs and other charges. The allocated charges for general liability expenses and workers’ compensation were subsidized on a one-time basis in FY 2019, which is not continued in the forecast in FY 2020. The FY 2020 allocated charges in the Forecast update the revenues and expenses for these various allocations based on the information available at the time of the Forecast development. FY 2020 is anticipated to experience an increase of 7.5 percent to a total of $21.3 million. This increase is driven primarily by the restoration of the full allocation of costs associated with the general liability expenses and workers’ compensation funds. Operating Transfers Out Operating Transfers Out include transfers from the General Fund to the Debt Service Fund, the Technology Fund, and other funds. The transfer level for the FY 2019 Adopted Budget was $5.7 million; this included a one-time transfer of $1.2 million from the City’s General Fund to its irrevocable Section 115 Trust Fund through the General Benefits Fund to prefund pension obligations. As a result of removing that transfer, the Operating Transfers Out are anticipated to be $4.9 million in FY 2020. (The costs associated with the lower discount rate and correspondingly higher Normal Cost, as directed by the City Council, are included in the Salary and Benefits category beginning in FY 2020.) The main reason for the year-over-year increase in this category, even after adjusting for the one-time transfer to the benefits fund, is that the City shifted how it is paying for its debt service. Although no expenses are anticipated in the Debt Service category in the General Fund in FY 2020 budget, transfers to the debt service fund are included for the debt issued associated with the golf course. These payments continue throughout the term of the forecast. Transfer to Infrastructure In FY 2019, the adopted General Fund transfer to the Capital Improvement Fund is $25.2 million, which includes the base transfer of $16.8 million and $8.4 million from additional TOT proceeds generated through a two percentage point TOT increase as well as through the addition of new hotels. Incremental TOT increases from the rate increase and new hotels are dedicated to the Capital Improvement Fund to support the Infrastructure Plan, consistent with City Council direction. This transfer is anticipated to increase to $17.1 million for the base transfer in FY 2020 and an additional $8.4 million for the dedicated TOT funds per Council priorities. This budget category also includes the separate $1.9 million transfer to the Cubberley Property Infrastructure Fund, described earlier in this document. This transfer remains consistent throughout this Forecast despite the sunset date of the current lease terms for Cubberley to capture the anticipated costs. City of Palo Alto Page 18 The transfers to the Capital Improvement Fund are anticipated to remain generally consistent with the FY 2019 Adopted Budget for the next few years, with slight increases annually over the forecast period. Both the TOT and base transfers to the Capital Improvement Fund are anticipated to increase each year of the forecast period. The TOT transfer captures the growth anticipated from the construction of new hotels. Both the TOT transfer and the base transfer increase over the term of the forecast to capture anticipated CPI increases as well. Budget Stabilization Reserve The City's Budget Stabilization Reserve (BSR) serves as the primary General Fund reserve. By policy, the BSR is maintained in the range of 15 to 20 percent of General Fund operating expenditures, with a target of 18.5 percent. Any reduction to the reserve below 15 percent requires City Council approval. At the discretion of the City Manager, any BSR balance above 18.5 percent may be transferred to the Infrastructure Reserve (IR), which was established to provide funding for maintenance and rehabilitation of the City’s capital assets. The BSR is used to fund unanticipated one-time costs as opposed to ongoing or recurring operating expenditures. The City's intent is to fund ongoing programs and services with ongoing dollars. This forecast assumes that the BSR meets or exceeds the City Council approved minimum of 15 percent of anticipated expenses in any given year. The City has held a long-standing practice of maintaining a BSR balance of no less than 15 percent of General Fund operating expenses. At the close of Fiscal Year 2018, the BSR is anticipated to remain above the 18.5 percent target at $51.4 million. It should be noted that this includes the $4.0 million referral from City Council related to prefunding pension obligations. It is anticipated that other qualifications for the balance of the BSR will be further clarified through the Comprehensive Annual Financial Report and the Year-End process for FY 2018. Establishing sound fiscal reserve policies have been a strong factor in the City being rated AAA by rating agencies. Assumptions NOT Included in Forecast It should be noted that this Forecast does not include several potential impacts to the FY 2020 projected budget and the out years of the Forecast. Below is a list of a few items not included. This is not intended to be a comprehensive list or in any priority order. Labor negotiations: Although the City has recently concluded negotiations with four safety units, these contracts only extend through the first few years of the forecast. These safety units are the Palo Alto Peace Officers Association (PAPOA), the International Association of Fire Fighters (IAFF), Fire Chiefs Association (FCA), and Police Management Association (PAPMA). Each of those contracts expire June 30, 2021. Additionally, the Service Employees International Union (SEIU) MOA expires at the conclusion of the 2018 calendar year. After an agreement is reached with SEIU, it will need to be incorporated into future budgets and forecasts, as applicable. Additionally, as discussed above, this Forecast models only modest increases to salaries in years where there is not a contract. This region’s competition for a qualified workforce remains a significant pressure on the City’s anticipated salary costs. City of Palo Alto Page 19 Capital Infrastructure Plan: As referenced earlier, the June 2014 Council approved Infrastructure Plan of $125.8 million in projects was based on construction and design costs with data from 2012. As construction costs have increased and the City is required to pay prevailing wages, the Plan’s funding status has shifted. The FY 2019 Adopted Capital Budget anticipated that this Plan would cost $249.9 million. In addition, this Forecast does not assume ongoing operating and maintenance impacts as a result of the Infrastructure Plan, such as the operating costs associated with the new Public Safety building, but future forecasts will incorporate operating cost impacts as the specific projects are designed and implemented. Grade Separation: The city is currently in the process of exploring four locations for grade separations. As the City continues the process of deciding not only how many locations will have grade separation but also what kind of grade separation will be pursued the financial impacts are difficult to define. Additionally, it may make sense to undertake a coordinated area plan for transit in the downtown area to synchronize with the grade separation process. Costs for these items are not included in this forecast. Parks Master Plan: The Parks Master Plan was finalized in 2017, however, when approved it identified a need to develop a funding strategy. As such, this Forecast does not yet contemplate the necessary investments to execute this plan. Junior Museum and Zoo: In November 2014, the City Council directed staff to negotiate a capital lease with the Friends of the Junior Museum and Zoo for the reconstruction of the Junior Museum and Zoo. This Forecast does not assume any additional capital or ongoing operating costs related to the renovated building and changes in programming as a result of the new building. This is an especially important variable to consider as future budgets are developed since the impacts will materialize at the beginning of the forecast and continue. Other Capital Improvement Projects: A number of both assets and planned projects remain on the horizon, however, none have resulted in formalized capital improvement projects. Major improvements such as an update to the animal care shelter, rail grade separation, the former ITT site, and the acquisition of land or assets are not factored into the Forecast. City owned assets operated by non-profit organizations: This Forecast does not include any additional capital investments for the Avenidas Senior Center (beyond the current $5 million pledge), the Palo Alto History Museum, the Ventura Child Care Center, the Junior Museum and Zoo, nor the Sea Scout Building. Cubberley Community Center Master Plan: The City has started the process of designing a Cubberley Community Center Master Plan, however, costs to implement that master plan in excess of the dedicated Cubberley infrastructure funding as agreed to between the PAUSD and the City are not assumed in this Forecast. In addition, the lease agreement with the PAUSD is set to expire in December 2019. City of Palo Alto Page 20 Loans for special projects: From time to time the City’s General Fund will assist other City operations with modest cash flow loans to bridge fiscal years. For example, the City has provided over $3 million in loans to the Airport Fund as it works to secure significant grant funding from the Federal Aviation Administration (FAA) for capital improvement costs. Other initiatives may need a similar type of short-term loan in order to fund the capital costs necessary to implement though none have been assumed in this forecast. Cadillac Healthcare Federal Excise Tax: A 40 percent excise tax will be imposed on the value of health insurance benefits that exceed a certain threshold. CalPERS may be able to design healthcare premiums to stay below the threshold and discussions are in the preliminary stage. Congress did delay the implementation of this tax from calendar year 2020 to calendar year 2022. However, if the tax is implemented and applicable, the City may have to pay the tax. Greater CalPERS City contribution increases: Currently, CalPERS assumes an annual investment return of 7.0 percent. Further, the CalPERS Board approved a gradual de-risking strategy, which is intended to reduce the assumed investment return to 6.5% over the next 20 years. This Forecast assumes that CalPERS will meet the annual investment return. However, staff and the Finance Committee continue to discuss the City’s best options for addressing the unfunded pension liability. At the City Council’s direction, this forecast does include the marginal costs associated with a lower discount rate on the normal cost. However, if CalPERS experiences investment returns lower than it has presumed in its actuarial model, it is anticipated that there may be even greater impacts on the City’s finances. Tax revenue alignment with updated Comprehensive Plan: The City Council recently completed updating its Comprehensive Plan, including the potential fiscal impact of various land use scenarios. The fiscal impact of this plan and various land use scenarios are not factored into this Forecast. Changes in the local, regional, and national economy: This Forecast assumes a moderately growing local economy. Any changes may have positive or negative impacts on economically sensitive revenues such as Sales Tax and the Transient Occupancy Tax. City of Palo Alto Page 21 Alternative Forecast #1: Normal Cost calculated at CalPERS Discount Rate (phase-in to 7.0 percent by FY 2021) As discussed in the Salary and Benefits section above, the base forecast includes approximately $3.9 million in additional pension expenses in this Long-Range Financial Forecast. These costs capture the direction from City Council to budget the Normal Cost using a 6.2 percent discount rate to proactively prefund the City’s pension liability. This assumption deviates from the current CalPERS actuarial assumptions for investment earnings; CalPERS currently assumes a phase-in to 7.0 percent discount rate by FY 2021. This alternative scenario models the impact of assuming CalPERS rates for both the NC and UAL portions of the City’s annual pension contributions. The summary table for this alternative forecast and the Net Operating Margin graph for this alternative forecast are below. Additional discussion for this alternative follows these figures. TABLE 9: FY 2020 – FY 2029 Long Range Financial Forecast Alternative Forecast #1 Adopted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total Revenue $207,042 $227,108 $233,938 $241,315 $248,921 $256,571 $264,392 $273,133 $281,311 $290,856 $299,948 9.7%3.0%3.2%3.2%3.1%3.0%3.3%3.0%3.4%3.1% Total Expenditures $210,426 $226,033 $235,292 $241,479 $247,736 $253,283 $258,718 $264,994 $268,506 $273,945 $279,573 7.4%4.1%2.6%2.6%2.2%2.1%2.4%1.3%2.0%2.1% Net One-Time Surplus/(Shortfall)($3,384)$1,075 ($1,354)($164)$1,185 $3,288 $5,675 $8,139 $12,805 $16,911 $20,376 Cumulative Net Operating Margin (One-Time)$67,936 Net Operating Margin $1,075 ($2,430)$1,190 $1,349 $2,103 $2,386 $2,465 $4,666 $4,106 $3,465 Cumulative Net Operating Margin $20,376 Assumes that the annual shortfalls are solved with ongoing solutions and annual surpluses are spent for ongoing expenditures. TABLE 10: FY 2020-2029 Long Range Financial Forecast Net Operating Margin Alternative Forecast #1 City of Palo Alto Page 22 The General Fund would run a slight surplus in the first year and then alternate between slight deficits and surpluses before trending to surpluses in FY 2024 in this scenario. However, no annual contribution to the City’s Section 115 Pension Trust Fund is presumed in this model. This scenario represents the significant efforts the City has taken over the past few years to structurally balance the budget through reprioritization of work and reductions to the City’s full-time staffing in order to help contain rising pension costs. Alternative Forecast #2: Major Tax Revenue Sensitivity Analysis This alternative scenario models the potential impact that might be seen if the economy contracted, for modeling purposes this is assumed to occur in FY 2022, and the growth that would be anticipated for the remainder of the forecast. The lower revenue estimates would continue through the forecast but would recover somewhat toward the final years of the forecast. These lower revenue estimates through first nine years of the forecast would significantly constrain the City’s resources. As discussed in the base case, FY 2020 total tax receipts account for nearly 60 percent of the General Fund’s total revenues. The base case assumes that average tax receipts grow $9.1 million, or 7.2%, above the Fiscal Year 2019 Adopted Budget of $127.2 million to reach a total of $136.3 million in FY 2020. The growth tapers somewhat after that but remains between 4.3 percent and 3.5 percent over the ten years of the forecast. If tax revenue slowed, like patterns experienced by the City of Palo Alto during prior recessions, but all other assumptions remained constant, the loss in revenue would be approximately $15.3 million in FY 2022. Under this alternative, the City’s expenses would be projected to exceed revenues in all but the final two years of the forecast. The greatest one-time gap would be in Fiscal Year 2023, with $24.0 million more in expenses than revenues, before narrowing to $3.0 million more in expenses than revenues in FY 2027 and then closing in FY 2028. The summary table for this Alternative and the corresponding graph showing the Net Operating Margin are included below. TABLE 11: FY 2020 – FY 2029 Long Range Financial Forecast Alternative Forecast #2 Adopted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total Revenue $207,042 $227,108 $233,100 $225,984 $226,565 $232,555 $242,938 $254,692 $266,323 $279,817 $293,398 9.7%2.6%-3.1%0.3%2.6%4.5%4.8%4.6%5.1%4.9% Total Expenditures $210,426 $229,916 $238,472 $244,508 $250,606 $255,948 $260,771 $266,655 $269,292 $274,424 $279,867 9.3%3.7%2.5%2.5%2.1%1.9%2.3%1.0%1.9%2.0% Net One-Time Surplus/(Shortfall)($3,384)($2,807)($5,372)($18,524)($24,041)($23,393)($17,832)($11,964)($2,970)$5,393 $13,531 Cumulative Net Operating Margin (One-Time)-$87,979 Net Operating Margin ($2,807)($2,565)($13,151)($5,517)$648 $5,560 $5,869 $8,994 $8,363 $8,138 Cumulative Net Operating Margin $13,531 Assumes that the annual shortfalls are solved with ongoing solutions and annual surpluses are spent for ongoing expenditures. City of Palo Alto Page 23 TABLE 12: FY 2020-2029 Long Range Financial Forecast Net Operating Margin Alternative Forecast #2 Conclusion The FY 2020 Long Range Financial Forecast puts in perspective the growing desires and the limited resources available to complete them all in a timely manner. The City structurally balanced with the adoption of the budget in FY 2019 and now needs to continue to exercise financial prudence in order to not only meet its obligations and demands on service delivery but also proactively prefund its pension liability. This balance will require extensive conversations with the community regarding what the City’s priorities are and how that balance can best be achieved. Through these conversations, a continued scrutiny of the expansion and enhancement of existing services, the addition of new services, and the priorities of the community will be necessary. As the Committee and Council continue to discuss major projects such as pension, infrastructure, and grade separation the ability to manage expectations and implement innovative solutions will be critical. A prioritization of needs and ensuring that we operate within resources that are available are essential to preserving the City’s sound financial future. RESOURCE IMPACT Financial implications from this report and input from the Finance Committee will be considered in the City Manager’s development of the Proposed Fiscal Year 2020 budget. ENVIRONMENTAL IMPACT This report is not a project for the purposes of the California Environmental Quality Act. Environmental review is not required. Attachments: City of Palo Alto Page 24 • Attachment A: Long Range Financial Report Base Case Revenue Tables • Attachment B: Long Range Financial Report Base Case Expense Tables FY 2020‐2029 Long Range Financial Forecast Base Case Revenue Table ATTACHMENT A Revenue & Other Sources Adopted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 CAGR 10  Years Sales Taxes $31,246 $34,286 $35,754 $37,000 $38,154 $39,302 $40,426 $41,546 $42,759 $44,063 $45,498 3.8% Property Taxes 45,332          48,193 51,181 54,231 57,235 60,285 63,426 67,289 71,508 76,078 80,970 6.0% Transient Occupancy Tax‐ General Purpose 16,699          17,977 18,444 18,933 19,473 20,018 20,618 21,260 21,908 22,556 23,188 3.3% Transient Occupancy Tax‐ Infrastructure 8,350             8,406 8,625 8,853 9,106 9,361 9,641 9,941 10,244 10,547 10,843 2.6% Documentary Transfer Tax 7,434             8,359 8,631 8,905 9,174 9,484 9,851 10,188 10,547 10,928 11,325 4.3% Utility Users Tax 16,092          17,026    17,519   18,024   18,407    18,768   19,109     19,497     19,811    20,168     20,526   2.5% Other Taxes and Fines 2,032             2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 2,032 0.0% Subtotal: Taxes 127,185           136,279    142,186   147,978    153,581    159,250    165,103      171,753     178,809     186,372     194,382   4.3% Charges for Services 20,630 22,057 22,870 23,551 24,230 24,788 25,323 25,955 26,010 26,464 26,534 2.5% Stanford Fire & Dispatch Services 7,384             7,829 7,992 8,128 8,273 8,395 8,486 8,580 8,651 8,763 8,810 1.8% Permits and Licenses 8,949             9,065 9,169 9,252 9,337 9,406 9,474 9,555 9,563 9,620 9,669 0.8% Return on Investments 1,166             1,197 1,230 1,266 1,304 1,346 1,390 1,432 1,475 1,519 1,563 3.0% Rental Income 15,807          16,120 15,272 14,766 15,153 15,551 15,961 16,384 16,819 17,267 17,729 1.2% From Other Agencies 1,150             370 370 370 370 370 370 370 370 370 370 ‐10.7% Charges to Other Funds 10,093          11,103 11,471 11,770 12,092 12,357 12,595 12,894 12,837 13,100 13,300 2.8% Other Revenue 2,361             2,361 2,313 2,314 2,315 2,316 2,316 2,317 2,318 2,319 2,321 ‐0.2% Total Non‐Tax Revenue 67,540             70,102       70,688      71,418      73,073       74,528      75,915       77,487        78,043       79,422       80,296      1.7% Operating Transfers‐In 19,772          20,727 21,063 21,918 22,267 22,793 23,374 23,893 24,459 25,062 25,271 2.5% BSR Contribution (One‐Time) Golf Operating Loss Reserve Liquidation Total Source of Funds $214,497 $227,108 $233,938 $241,315 $248,921 $256,571 $264,392 $273,133 $281,311 $290,856 $299,948 3.4% Revenue & Other Sources 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Sales Taxes 9.7% 4.3% 3.5% 3.1% 3.0% 2.9% 2.8% 2.9% 3.0% 3.3% Property Taxes 6.3% 6.2% 6.0% 5.5% 5.3% 5.2% 6.1% 6.3% 6.4% 6.4% Transient Occupancy Tax ‐ General Purpose 7.7% 2.6% 2.7% 2.9% 2.8% 3.0% 3.1% 3.0% 3.0% 2.8% Transient Occupancy Tax ‐ Infrastructure 0.7% 2.6% 2.6% 2.9% 2.8% 3.0% 3.1%3.0% 3.0% 2.8% Documentary Transfer Tax 12.4% 3.3% 3.2% 3.0% 3.4% 3.9% 3.4% 3.5% 3.6% 3.6% Utility Users Tax 5.8% 2.9% 2.9% 2.1% 2.0% 1.8% 2.0% 1.6% 1.8% 1.8% Other Taxes and Fines 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Subtotal: Taxes 7.2% 4.3% 4.1% 3.8% 3.7% 3.7% 4.0% 4.1% 4.2% 4.3% Charges for Services 6.9% 3.7% 3.0% 2.9%2.3% 2.2% 2.5%0.2% 1.7% 0.3% Stanford Fire & Dispatch Services 6.9% 2.1% 1.7% 1.8%1.5% 1.1% 1.1%0.8% 1.3% 0.5% Permits and Licenses 1.3% 1.1% 0.9% 0.9%0.7% 0.7% 0.9%0.1% 0.6% 0.5% Return on Investments 2.7% 2.8% 2.9% 3.0% 3.2% 3.3% 3.0% 3.0% 3.0% 2.9% Rental Income 2.0%‐5.3%‐3.3% 2.6% 2.6% 2.6%2.6% 2.7% 2.7% 2.7% From Other Agencies ‐67.8% 0.0% 0.0% 0.0% 0.0%0.0% 0.0% 0.0% 0.0% 0.0% Charges to Other Funds 10.0% 3.3% 2.6% 2.7% 2.2% 1.9% 2.4%‐0.4% 2.1% 1.5% Other Revenue 0.0%‐2.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% Total Non‐Tax Revenue 3.8% 0.8% 1.0% 2.3% 2.0% 1.9% 2.1% 0.7% 1.8% 1.1% Operating Transfers‐In 4.8% 1.6% 4.1% 1.6% 2.4%2.5% 2.2% 2.4% 2.5% 0.8% BSR Contribution (One‐Time) Golf Operating Loss Reserve Liquidation Total Source of Funds 5.9% 3.0% 3.2% 3.2% 3.1% 3.0% 3.3% 3.0% 3.4% 3.1% FY 2019‐2028 General Fund Long Range Financial Forecast Base Case Expense Table ATTACHMENT B Expenditures & Other Uses Adopted  2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 CAGR  10  Years Salary 70,469$   78,029$  80,751$  82,730$  84,835$  86,761$  88,548$   90,317$  92,083$  93,845$  95,607$  3.1% Benefits 54,935     60,378 62,416 64,366 66,295 67,733 68,771   70,277 69,192 70,141 71,278 2.6% Subtotal: Salary & Benefits 125,404   138,408 143,167 147,097 151,130 154,494 157,318   160,594 161,275 163,986 166,884 2.9% Contract Services 22,025   21,607 22,030 22,552 23,018 23,454 23,881   24,313 24,750 25,178 25,478 1.5% Supplies & Material 3,521     3,558 3,628 3,697 3,767 3,837 3,907 3,977 4,046 4,116 4,189 1.8% General Expense 6,183     10,454 10,726 11,005 11,289 11,580 11,877 12,682 12,901 13,531 14,364 8.8% Debt Service 613       0000000000N/A Rents & Leases 1,690     1,751 1,804 1,858 1,914 1,971 2,030 2,091 2,154 2,218 2,285 3.1% Facilities & Equipment 522       532 543 553 564 574 584 595 605 616 628 1.9% Allocated Charges 19,850   21,345 21,891 22,393 22,843 23,307 23,689 24,133 24,528 24,965 25,414 2.5% Total Non Sal/Ben Before Transfers 54,404     59,247   60,621   62,059   63,395   64,723   65,968     67,790   68,984   70,624   72,357   2.9% Operating Transfers‐Out 5,725     4,869   4,899   4,955   5,039   5,033   5,092     5,156   5,182   5,212   5,271    ‐0.8% Transfer to Infrastructure ‐ Base/Cubb 16,823   18,987 21,161 21,545 21,937 22,339 22,752   23,175 23,609 24,055 24,512 3.8% Transfer to Infrastructure ‐ TOT 8,350     8,406   8,625   8,853   9,105   9,360   9,641     9,941   10,244 10,548 10,843 2.6% Total Use of Funds $210,706 $229,916 $238,472 $244,508 $250,606 $255,948 $260,771 $266,655 $269,292 $274,424 $279,867 2.9% Expenditures & Other Uses Adopted  2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Salary N/A 10.7% 3.5% 2.5% 2.5% 2.3% 2.1% 2.0% 2.0% 1.9% 1.9% Benefits N/A 9.9% 3.4% 3.1% 3.0% 2.2% 1.5% 2.2%‐1.5% 1.4% 1.6% Subtotal: Salary & Benefits N/A 10.4% 3.4% 2.7% 2.7% 2.2% 1.8% 2.1% 0.4% 1.7% 1.8% Contract Services N/A ‐1.9% 2.0% 2.4% 2.1% 1.9% 1.8% 1.8% 1.8% 1.7% 1.2% Supplies & Material N/A 1.0% 2.0% 1.9% 1.9% 1.9% 1.8% 1.8% 1.8% 1.7% 1.8% General Expense N/A 69.1% 2.6% 2.6% 2.6% 2.6% 2.6% 6.8% 1.7% 4.9% 6.2% Debt Service N/A ‐100.0% N/A N/A N/A N/A N/A N/A N/A N/A N/A Rents & Leases N/A 3.6% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Facilities & Equipment N/A 2.0% 2.0% 1.9% 1.9% 1.9% 1.8% 1.8% 1.8% 1.7% 2.0% Allocated Charges N/A 7.5% 2.6% 2.3% 2.0% 2.0% 1.6% 1.9% 1.6% 1.8% 1.8% Total Non Sal/Ben Before Transfers N/A 8.9% 2.3% 2.4% 2.2% 2.1% 1.9% 2.8% 1.8% 2.4% 2.5% Operating Transfers‐Out N/A ‐14.9% 0.6% 1.2% 1.7%‐0.1% 1.2% 1.3% 0.5% 0.6% 1.1% Transfer to Infrastructure ‐ Base/Cubb N/A 12.9% 11.4% 1.8% 1.8% 1.8% 1.8% 1.9% 1.9% 1.9% 1.9% Transfer to Infrastructure ‐ TOT N/A 0.7% 2.6% 2.6% 2.8% 2.8% 3.0% 3.1% 3.0% 3.0% 2.8% Total Use of Funds N/A 9.1% 3.7% 2.5% 2.5% 2.1% 1.9% 2.3% 1.0% 1.9% 2.0% 11/19/2018 FINANCE COMMITTEE ACTION MINUTES Page 1 of 3 Special Meeting November 28, 2018 Chairperson Scharff called the meeting to order at 6:36 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth, Kou, Scharff, Tanaka Agenda Items 1.Review Recommended $4 Million in General Fund Savings and Approve Corresponding Budget Amendments in Various Funds and the Table of Organization. MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend to the City Council to: 1.Amend the Fiscal Year 2019 Budget Appropriation for various funds; 2.Amend the Fiscal Year 2019 Table of Organization for the General Fund to: a.Eliminate 1.0 Performance Auditor I in the Office of the City Auditor; and b.Reduce 1.4 Building Serviceperson-Lead and reduce 0.75 Building Serviceperson positions; and 3.Amend the Fiscal Year Table of Organization for Other Funds to increase by 1.4 Building Serviceperson-Lead and increase by 0.75 Building Serviceperson. MOTION PASSED: 4-0 2.Review and Forward the FY 2020 - FY 2029 Long Range Financial Forecast. ATTACHMENT B ACTION MINUTES Page 2 of 3 Sp. Finance Committee Meeting Action Minutes: 11/28/18 MOTION: Council Member Tanaka moved, seconded by Council Member XX recommend to the City Council that the Finance Committee review, comment, and forward the Fiscal Year 2020 to 2029 General Fund Long Range Financial Forecast (Base Case) for City Council approval and to make the following change: to change the Property Tax estimate to 5.5 percent. MOTION RESTATED: Council Member Tanaka moved, seconded by Council Member xx to recommend to the City Council that the Finance Committee review, comment, and forward the Fiscal Year 2020 to 2029 General Fund Long Range Financial Forecast (Base Case) to City Council for approval, including the delta’s for the budget, and to make the following changes: 1. Use a 5.25 percent increase for the Compound Annual Growth Rate; and 2. Include the Unfunded Actuarial Liability for Pension and Retiree Healthcare Trusts. MOTION FAILED DUE TO LACK OF A SECOND MOTION: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend the City Council accept the Long-Range Financial Forecast and forward to the Council for approval. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to include delta’s in the Long-Range Financial Forecast. MOTION RESTATED: Chair Scharff moved, seconded by Vice Mayor Filseth to recommend to the City Council to accept the Long-Range Financial Forecast and forward to the Council for approval and to include delta’s in the Long Range Financial Forecast. MOTION AS AMENDED PASSED: 3-1 Tanaka No Future Meetings and Agendas MOTION: Chair Scharf moved, seconded by Vice Mayor Filseth to hold the next Finance Committee Meeting at 2:00 PM on Tuesday, December 4, 2018. ACTION MINUTES Page 3 of 3 Sp. Finance Committee Meeting Action Minutes: 11/28/18 MOTION PASSED: 4-0 ADJOURNMENT: Meeting was adjourned at 8:26 P.M. City of Palo Alto (ID # 10000) City Council Staff Report Report Type: Informational Report Meeting Date: 3/4/2019 City of Palo Alto Page 1 Summary Title: 4th Quarter 2018 ADU Development Activity Report Title: 4th Quarter 2018 ADU Development Activity Report From: City Manager Lead Department: Planning and Community Environment Recommendation This is an informational report and no action is requested. Background The City Council adopted Ordinance No. 54121 on May 8, 2017, which amended Title 18 (Zoning) of the Palo Alto Municipal Code to implement State requirements related to Accessory Dwelling Units (ADU) and to encourage the construction of ADUs. At the time of the adoption of the regulations, the City Council directed staff to provide quarterly reports on permits filed for the construction of ADUs. The City Council received the last development report summary on November 5, 2018 (Report #94692). Discussion In the fourth quarter of 2018, a total of 11 ADU building permit applications were filed. All the applications are under review. Ten of the ADU applications were in the R-1 single family zone and one was in RM-30 zone. The majority of applications filed (82%) were in South Palo Alto. Five of the ADU applications were for construction of new units while the remaining six applications were for conversions of existing spaces, namely detached garages. In this reporting quarter, all the ADU applications were for one bedroom units. The unit sizes ranged from 300 to 790 square feet, with an average unit size of 507 square feet. Only one 1 Ordinance 5412: http://www.cityofpaloalto.org/civicax/filebank/documents/57945 2 Staff Report 9469: https://www.cityofpaloalto.org/civicax/filebank/documents/67435 City of Palo Alto Page 2 project proposes utilizing the floor area bonus allowed under the City’s ordinance. The City has not yet received an application for a Junior Accessory Dwelling Unit. Additional details about the applications received are provided in Attachment A. With the implementation of the State regulations in 2017, the City experienced a significant increase in ADU permit activity; prior to this implementation there was an average of four ADU permits per year. In the last quarter of 2018, the City received 11 ADU applications, bringing the total for the calendar year to 54. Table 1 provides a summary of key ADU permit activity since January 2017 when the new State laws became effective. Table 1: Summary of ADU Permit Activity since January 1, 2017 Year Permits Filed Permits Issued Construction Completed 2017 28 22 10 2018 54 23 1 Total 82 45 11 Source: Planning Department Accela Data, January 23, 2019. ADU Code Updates The local ADU regulations have been in effect for about a year and a half and in that time staff has encountered some challenges in implementing the regulations and suggested some revisions to the ordinance. In November 2018, the City Council approved a variety of modifications to the ADU regulations (Report 96313) that included two significant amendments: removal of a minimum lot size requirement to construct an ADU, and waiver of development impact fees for establishment of a JADU and garage-conversion to an ADU with no permitted expansion. The general ADU code changes became effective December 6, 2018 (Ordinance 54534) and the amendment on the waiver of development impact fees was effective January 17, 2019 (Second Reading Report 98985). Attachments: Fourth Quarter 2018 ADU Data (PDF) 3 Staff Report 9631: https://www.cityofpaloalto.org/civicax/filebank/documents/66765 4Ordinance 5453: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=48913.8&BlobID=68391 5Staff Report 9898: https://www.cityofpaloalto.org/civicax/filebank/documents/68059 At t a c h e d De t a c h e d At t a c h e d G a r a g e Co n v e r s i o n De t a c h e d G a r a g e Co n v e r s i o n Ot h e r A c c e s s o r y Sp a c e C o n v e r s i o n 1 North Palo Alto RM-30 12/20/2018 No x 486 2 North Palo Alto R-1 12/20/2018 No x 794 3 South Palo Alto R-1 12/12/2018 No x 400 4 South Palo Alto R-1 (7000) 12/05/2018 No x 507 5 South Palo Alto R-1 (10000) 11/20/2018 No x 365 6 South Palo Alto R-1 (10000) 11/16/2018 No x 510 7 South Palo Alto R-1 11/15/2018 No x 470 8 South Palo Alto R-1 (S) 11/09/2018 No x 400 9 South Palo Alto R-1 11/05/2018 No x 377 10 South Palo Alto R-1 10/10/2018 No x 328 11 South Palo Alto R-1 10/01/2018 Yes x 421 Source: Planning Department Accela Data 2018. Includes Building Permit applications filed from October 1, 2018 through December 31, 2018 ADU Building Permit Applications Filed between October 1, 2018 to December 31, 2018 # Pr o j e c t L o c a t i o n Zo n i n g Da t e F i l e d Bu i l d i n g P e r m i t Is s u e d New ADU Converted ADU AD U S i z e ( S Q F T ) City of Palo Alto (ID # 10072) City Council Staff Report Report Type: Informational Report Meeting Date: 3/4/2019 City of Palo Alto Page 1 Council Priority: Land Use and Transportation Planning Summary Title: 2018 Annual Palo Alto Airport Noise Report Title: 2018 Annual Palo Alto Airport Noise Report, Identifying Noise Trends in the Surrounding Areas and Determining Compliance With Established Voluntary Noise Abatement Procedures From: City Manager Lead Department: Public Works Recommendation This is an informational report only and no Council action is required. Discussion The purpose of the Palo Alto Airport Annual Aircraft Noise Complaints Report is to identify noise trends in the surrounding areas and determine compliance with established voluntary noise abatement procedures. Attachment A is the annual report prepared by the Public Works Department’s Airport Division staff on the aircraft noise complaints received during the 2018 calendar year. The Palo Alto Airport (PAO) receives noise complaints via e-mail at pao@cityofpaloalto.org and a designated hotline, 650-329-2405. Staff reviews and responds timely to all complaints, ascertaining from complainants their contact information and the date, time, and description of the offending occurrence. Staff reviews and compiles the data to determine flying activity trends. Staff contacts pilots when violations are observed or reported, advising them of established procedures, requesting compliance, and reminding them about our city’s strong commitment to limiting community impacts from airplane noise. This report is generated on an annual basis and posted to the airport’s webpage: www.cityofpaloalto.org/PAO. Courtesy copies to: Palo Alto Airport Association Attachments: •Attachment A: Palo Alto Airport - 2018 Annual Aircraft Noise Complaints Report PALO ALTO AIRPORT PUBLIC WORKS DEPARTMENT 2018 ANNUAL NOISE COMPLAINTS REPORT (January2018 to December 2018) AUG 2014 –SEPT 2015 (Q4 2014 –Q3 2015)* Vision: Palo Alto Airport strives to balance the rights of pilots to fly with the rights of neighbors to a peaceful living environment. This document is a report of the noise complaints received by the airport in 2018. Airport staff uses this information to identify trends in neighboring communities. These trends inform communications between airport staff and pilots on the issue of noise. Attachment A Introduction: The following is a report of noise complaints received by Palo Alto Airport (PAO) in 2018. The Federal Aviation Administration (FAA) defines air travel routes and procedures, including defining separation distances between aircraft, determining hazards to aviation and all other safety criteria for aircraft, and is responsible for directing and enforcing the movement of aircraft in flight. Although organizations can petition the FAA regarding flight procedures, the FAA has the final say in what is safe and acceptable. The Airport Noise and Capacity Act (ANCA) of 1990 federally prohibits public-use airports from restricting airspace in any way. The FAA measures noise based on the Yearly Day and Night Average Sound Level (DNL) and the Community Noise Equivalent Level (CNEL). While both are essentially the same, airports in California use the CNEL method to measure noise. CNEL is a method of averaging single event aircraft noise into a weighted 24-hour average. The system adds penalties to all events occurring during the evening (7pm – 10pm) and the night (10pm – 7am). The Santa Clara County Airport Land Use Commission (SCC ALUC) performed a noise study for the Palo Alto Airport using the CNEL to determine the noise contours for 55, 60, 65, and 70 decibels. The contour map is included as Attachment A. Regarding safety and altitude, the FAA has in place Federal Aviation Regulations (FARs) that establish Minimum Safe Altitudes (MSAs) for aircraft. For fixed wing aircraft, the minimum is 1000 feet above ground when over congested areas and 500 feet when not over congested areas. These minimum altitudes apply to all fixed wing aircraft except when necessary for landing and takeoff operations. Helicopters are exempt from these altitude restrictions due to the nature of their flight. These minimum altitudes are enforced by the FAA Flight Standards District Office in San Jose, not by Palo Alto Airport. Palo Alto Airport cannot tell pilots when or where to fly; the airport, however, does have voluntary noise abatement procedures that Palo Alto Airport recommends that pilots follow. (See the Noise Abatement Procedures section below.) The airport receives noise complaints via email at pao@cityofpaloalto.org and a noise complaint hotline 650-329-2405. Airport staff review and timely respond to all complaints, ascertaining as much information from complainants, including contact information, date, time and description of the occurrence. Various flight trackers can be used in an attempt to help identify the aircraft involved and verify if FAA regulations or Palo Alto Airport procedures were violated. The airport staff reviews and compiles all data to determine trends with flying activities. Purpose: The purpose of the Palo Alto Airport Annual Noise Report is to identify noise trends in the surrounding areas and determine compliance with established voluntary noise abatement procedures. Airspace: The Palo Alto Airport airspace is unique. The congested Bay Area airspace is dominated by SFO Class Bravo airspace, which encompasses a 30 nautical mile radius around SFO. Underneath the Class Bravo airspace lays the Class Charlie airspace of Oakland and San Jose international airports. Finally, Moffett Airfield lies approximately 4 nautical miles to the southeast of Palo Alto Airport. As a result, Palo Alto Airport airspace ends only 1.5 nautical miles southeast of the Palo Alto Airport’s single runway (Runway 13/31). To land at Palo Alto Airport, aircraft must turn before entering Moffett’s airspace, resulting in aircraft having to space themselves in traffic patterns over the peninsula when take- off/landing volumes peak. The FAA’s Air Traffic Control Tower (ATCT) at Palo Alto Airport has a letter of agreement with Moffett’s ATCT providing Palo Alto Airport aircraft with extensions into Moffett airspace when Moffett airfield is not in use. The additional airspace is a useful mitigation tool during busy times. Further restrictions in Palo Alto Airport airspace come from San Jose Class C airspace, starting at 1500 feet Mean Sea Level, just southeast of Palo Alto Airport and SFO Class B airspace, starting at 2500 feet Mean Sea Level, just northeast of the Palo Alto Airport. Both are identified on the Palo Alto Airport Sectional Map: San Jose Class C is shown with thick magenta lines and SFO Class B is shown with thick blue lines. These restrictions play a vital role in aircraft departures, in turn influencing noise abatement procedures for the Palo Alto Airport. Noise Abatement Procedures: Noise abatement procedures are voluntary procedures that the airport asks pilots to follow. The airport is prohibited from restricting airspace. Palo Alto Airport staff will speak with individual pilots and educate them about the voluntary noise abatement procedures. The Palo Alto Airport cannot levy fines on pilots that violate the voluntary noise procedures. For illustrated noise abatement procedures reference Palo Alto Airport Pilots Handout included as Attachment B. The noise abatement procedures depend on the runway that is in use at the time. Depending on weather patterns, aircraft can depart on Runway 31 to the northeast or Runway 13 to the south east. Approximately 90% of the time, weather conditions require the use of Runway 31. Pilots are asked to not make a left crosswind departure from Runway 31, but instead make a “Left Dumbarton Departure” (fly to the Dumbarton Auto Bridge before making a left turn and flying over East Palo Alto) or a right 270 degree turn before departing to the south or west. When aircraft are using Runway 13, pilots are asked to make Palo Alto Airport Sectional Map Palo Alto Airport in Green PAO Airspace highlighted in Red Source: http://vfrmap.com/?type=vfrc&lat=37.461&lon=-122.115&zoom=10 a left 270 degree turn. In addition to these procedures, pilots are asked to climb to 1500 feet or above ground before crossing Highway 101 and reduce power when safely able. For arrivals, it is standard practice and necessary for pilots to descend to pattern altitude before entering the traffic pattern around PAO, sometimes requiring aircraft to descend below the 1500 feet minimum over Palo Alto. As these aircraft are descending to land the engines are generally powered back and quieter than ascending aircraft. Airport staff continuously engages with tenants and pilots about the voluntary noise abatement procedures, always noting that safety always supersedes noise. Findings: The Palo Alto Airport remains one of the busiest general aviation airports in the bay area with an average of 163,360 operations per year since 2009, significantly less than the average of 195,800 operations per year between 1999 and 2008 (Table 1). An operation is defined as either a takeoff or a landing and a touch-and-go procedure will account for two operations. Table 1. Airport Operations Air Taxi Military Total Air Taxi Military Total 1999 13 8 205436 2009 1650 301 155556 2000 2 0 197283 2010 2077 6 158217 2001 29 370 216483 2011 1572 8 170389 2002 62 1 208755 2012 1700 16 176564 2003 17 1 212981 2013 1628 14 172653 2004 619 12 199453 2014 1518 22 179900 2005 2397 28 184821 2015 1082 118 172132 2006 1932 17 176570 2016 708 52 153238 2007 1440 318 181883 2017 872 146 148769 2008 1697 280 174332 2018 760 133 146181 Average 820.8 103.5 195800 Average 1357 82 163360 During the 2018 Calendar year, the Airport logged 110 total noise complaints from 32 households. Table 2 shows the number of complaints by quarter, and includes the totals from 2017. Table 3 sorts the complaints logged into three sections. The first one is PAO which includes all complaints that involve aircraft that performed an operation at the airport. The next section is General which includes complaints that did not include a specific aircraft or incident of noise. These complaints may or may not Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2018 Total 2017 Complaints 70 7 21 12 110 1098 Households 10 4 15 7 32 62 Table 2. Complaints Received involve aircraft from PAO. The last section is Non-PAO, which include aircraft that are not based or did not operate at the airport. These flights could include CHP, Coast Guard, Air Taxis, Survey and/or banner towing operations. Also included in Table 3 are the totals for 2017. Table 4 below provides a detailed breakdown of the 110 PAO related complaints by city. Most complaints came from Sunnyvale, with 62 complaints logged from 3 households. Palo Alto was the second most impacted city, with 26 complaints from 12 households. Table 5 below shows the general type of aircraft identified as causing noise complaints at the airport. There are 2 types of engines for aircraft utilizing PAO. The first is reciprocating which is similar to an automobile engine, and the second is turboprop which is a turbine engine with a propeller that produces thrust. Aircraft are further differentiated by “multi” and “single” which denotes the number of engines for the aircraft. In the case of PAO, all multi engine aircraft have 2 engines. As Table 5 shows, single reciprocating aircraft produced the largest portion of noise complaints. This class of aircraft represents most of the fleet at PAO and usually consists of Cessna, Pipers and Cirrus aircraft. There were 2 complaints where staff was unable to identify the type of aircraft involved in the flight. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2018 Total 2017 PAO 68 7 15 10 100 1033 General 0 0 2 0 2 14 Non-PAO 2 0 4 2 8 51 Table 3. Aircraft Association City C H C H C H C H C H C H Atherton 1 1 Cupertino 1 1 East Palo Alto 1 1 1 1 2 2 7 2 Fremont 1 1 1 1 3 1 Hayward 1 1 Los Altos 1 1 5 1 1 1 7 2 3 1 Menlo Park 1 1 2 2 3 3 12 2 Millbrae 1 1 Mountain View 1 1 1 1 1 1 Palo Alto 3 2 4 1 9 7 10 5 26 11 31 4 Portola Valley 1 1 4 4 5 5 San Carlos 1 1 1 1 4 3 San Rafeal 1 1 Scotts Valley 1 1 1 1 Sunnyvale 62 3 62 3 983 21 Unknown 1 1 West San Jose 1 1 Woodside 1 1 1 1 2 2 Total 70 10 7 4 21 15 12 7 110 32 1033 44 Total 2018 Total 2017 Table 4. PAO Noise Complaints by City Quarter 1 Quarter 2 Quarter 3 Quarter 4 Table 6 below shows the number of violations of the established noise abatement procedures. Airport staff makes every effort to talk to all pilots that violate these procedures, but it is difficult to talk to all transient pilots about noise abatement procedures. It is not the role of the FAA Air Traffic Control Tower to advise pilots of the noise abatement procedures, but the City has develop a working relationship with the ATCT and Air Controllers do advise pilots of the noise abatement procedures when they have the ability. Helicopter Multi- Reciprocating Multi- Turboprop Single- Reciprocating Single- Turboprop Unknown 2018 Complaints 2 8 2 81 5 2 2017 Complaints 19 49 53 776 113 23 Table 5. Aircraft Type Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Tenant 4 2 0 3 9 Transient 2 0 0 0 2 Unknown 0 0 0 0 0 Total 6 2 0 3 11 Complaints 70 4 21 12 107 Operations 31503 39572 41332 33774 146181 % Compliance 99.9%99.9%100%99.9%99.9% Table 6. Observed Violations of Noise Abatement Procedures Following is a noise contour map for PAO, adopted by the Santa Clara County Airport Land Use Commission (SCC ALUC) in their 2008 Comprehensive Land Use Plan, reflecting the forecasted noise contours for Palo Alto Airport in 2022. SCC ALUC used the Integrated Noise Model which considers airport altitude, mean temperature, runway configuration, aircraft flight track definition, aircraft departure and approach profiles, aircraft traffic volume and fleet mix, and flight track utilization by aircraft types. All data is entered into the CNEL formula to prepare the noise contours for Palo Alto Airport. The 65 decibel (db) noise level of the airport extends beyond the airport boundaries, but is only over Palo Alto Golf Course, Palo Alto Baylands Nature Preserve, and the salt marshes in San Mateo County. Refer to https://www.sccgov.org/sites/dpd/DocsForms/Documents/ALUC_20081119_PAO_CLUP.pdf, for a more detailed description of how the SCC ALUC prepared this map. Attachment A PAO Noise Contour Map 2022 Forecasted Palo Alto Airport Noise Contour Map Attachment B PAO Pilot Handout Santa Clara County created a Pilot Handout for Palo Alto Airport that described the noise abatement procedures. When the City of Palo Alto assumed control of the airport, the existing noise abatement procedures were adopted, with one exception, “pilots must maintain 1500 feet or above across Highway 101” was replaced with “Aircraft are asked to climb to and maintain at least 1500 feet before crossing Highway 101.” The change is consistent with the voluntary nature of noise abatement procedures as airports are federally prohibited from instructing pilots how to fly. Bayside Pattern – 800ft Left 270 Right 270 Peninsula Side Pattern – 1000ft Left Dumbarton Departure Not to be used for navigation Safety First Be Aware Palo Alto Airport Lies under SFO Class B Airspace Key Pattern Noise Abatement Departures RWY 31 RWY 13 Noise Abatement Procedures Please fly neighborly and be aware of the surrounding communities. There are noise sensitive areas to the west and south of the Airport. Aircraft are asked to climb and maintain at least 1500 feet before crossing Highway 101. Fly over the bay whenever possible. Please use reduced power setting whenever possible to reduce noise impacts. Even a reduction in a 200 RPM can significantly reduce noise. Safety Always Supersedes Noise Abatement Palo Alto Airport General Information Bayside Pattern Alt - 800 feet Peninsula Side Pattern Alt – 1000 feet MSL ATCT hours of operation – 0700 – 2100 hrs ATC / CTA Frequency – 118.600 ATC Ground Frequency – 125.000 Fuel Frequencies – 122.85 or 122.95 Airport Office Phone # – (650) 329-2444 320 Preferred West Bound Departures Runway 31 Left Dumbarton Departure When departing runway 31 turn right 10 on takeoff and climb over the bay. Fly straight to Dumbarton Auto Bridge before making a left turn to fly over the peninsula or to the south. Cross Highway 101 at or above 1500 feet. Left 270 Departure After takeoff climb over the bay while making a 270 turn and heading west or south over the peninsula. Cross Highway 101 at or above 1500 feet. Runway 13 Right 270 Departure After takeoff turn right over and climb over the bay while making a 270 turn and heading west or south over peninsula. Cross Highway 101 at or above 1500 feet. Palo Alto Airport asks for your cooperation in reducing the noise impact of aircraft on the neighboring communities. BE A GOOD NEIGHBOR – FLY SAFELY AND QUEITLY CAUTION The Palo Alto Baylands preserve is located immediately to the north of the airport. Watch for birds on or near the airport. Be alert for bikes & pedestrians crossing a levee road 290’ from departure end to Runway 31. EMBAJ[ADERO WAY HARBOR ROAD PALO ALTO MUNICIPAL GOl.f COURSE • Aircraft Movement Areas (ATC CommunicationRequired in This Area Only) ·NOTTO SCALE· NOTTO BE USED FOR NAVIGATION SAFETY FIRST I Fuel Dumping Station NOISE ABATEMENT INFORMATION THERE ARE NOISE SENSITIVE AREAS WEST AND SOUTH OFTHE AIRPORT. AIRCRAFT ARRIVING OVER THESE AREAS MUST MAINTAIN ATLEAST 1,500 FEET UNTIL CROSSING THE BAYSHORE FREEWAY(US 101).WHENTHE ATC TOWER IS CLOSED, ALL AIRCRAFT ARE REQUESTI:DTO USE A STANDARD TRAFFIC PATIERN ON THE BAY INORTH·EAST) SIDE OF THE AIRPORT. NO DOWNWIND DEPARTURES ON THE SOUTH-WEST SIDE OF THE AIRPORT. CAUTION THE PALO ALTO BAYLANDS PRESERVE IS LOCATED IMMEDIATELY TO THE NORTH· EAST OFTHE AIRPORT. WATCH FOR BIRDS ON OR NEARTHE AIRPORT. CAUTION PALOAL10 MUNICIPAL GOlf COURSE BE ALERT FOR BIKES & PEDESTRIANS CROSSING A LEVEE ROAD 80' FROM APPROACH END TO RUNWAY 13 ALIGNMENT= 306.1• 2,443 Ft x 65 Ft -LIGHTED • REIL ELEVATION 4' ~· Attachment C Map of Palo Alto Households This map shows the approximate location and number of complaints from households within Palo Alto. This map was generated using GISt by airport staff. 12 1 1 1 2 2 1 1 1 Note: There were 2 callers that did not provide addresses. Each caller logged 1 complaint with Airport Staff.