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2019-04-01 City Council Agenda Packet
City 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, April 1, 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 Closed Session 5:00-6:00 PM 1. CONFERENCE WITH LABOR NEGOTIATORS City Designated Representatives: City Manager and his Designees Pursuant to Merit System Rules and Regulations (Ed Shikada, Michelle Flaherty, Rumi Portillo, Sandra Blanch, Nicholas Raisch, Molly Stump, Terence Howzell, and Kiely Nose) Employee Organization: (1) Utilities Management and Professional Association of Palo Alto (UMPAPA); (2) Service Employees International Union (SEIU), Local 521; (3) Police Officers’ Association of Palo Alto (PAPOA); (4) Palo Alto Police Managers’ Association (PMA); (5) International Association of Fire Fighters (IAFF), Local 1319; and (6) Palo Alto Fire Chiefs’ Association (FCA) Authority: Government Code Section 54957.6 (a) 2 April 1, 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. Special Orders of the Day 6:00-6:15 PM 2.Adoption of a Resolution Expressing Appreciation to Jim Amores Upon his Retirement 3.Proclamation Honoring National Library Week Agenda Changes, Additions and Deletions City Manager Comments 6:15-6:25 PM Oral Communications 6:25-6:45 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 6:45-6:50 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 4.Approval of Contract Number C19173514 With SP Plus in an Amount Not-to-Exceed $900,000 for Ambassador and Valet Parking Services in Palo Alto Garages and Surface Lots 5.Approval of Contract Number C19174153 With Burns & McDonnell Engineering Company, Inc. in an Amount of $633,456 for the Colorado Power Station High Voltage Circuit Breaker Implementation as Part of the Colorado Power Station Equipment Upgrade Capital Project (EL-19001); Authorization to Negotiate and Execute Related Change Orders in the Amount of $95,018 for a Total Not-to-Exceed Amount of $728,474; and Approval of Budget Amendments in the Electric Fund 6.SECOND READING: Adoption of an Ordinance Amending Various Sections of Title 18 of the Palo Alto Municipal Code Related to Residential and Mixed-use Development Standards Including, but not Limited to, Minimum and Maximum Unit Density, Unit Size, Floor Area Ratio, Height, and Open Space, Including Rooftop Gardens; Parking Requirements Including, but not Limited to, Regulations Related to In-lieu Parking for Downtown Commercial Office Uses and Retail Parking for Mixed-use Projects; Exclusively Residential Projects in Certain Commercial Zoning Districts; Ground-floor Retail and RetailPreservation Provisions; the Entitlement Approval Process; and Other Regulations Governing Residential, Multi-family Residential and Commercial Zoning Districts, all to Promote Housing Development Opportunities in These Zoning Districts in Furtherance of Implementation of the Comprehensive Plan. California Environmental Quality Act (CEQA): Determination of Consistency With the Comprehensive Plan Environmental Impact Report (EIR), Certified and Q & A Q & A 3 April 1, 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. Adopted on November 13, 2017 by Council Resolution Number 9720. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance on October 10, 2018 (FIRST READINGS: December 3, 2018 and January 28, 2019: PASSED) Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 6:50-8:15 PM 7.PUBLIC HEARING/QUASI-JUDICIAL: 3200 El Camino Real [17PLN-00156]: Consideration of an Applicant’s Request to Adopt an Ordinance Amending the Setback Map to Eliminate the 50-foot Special Setback for the Subject Property Adjacent to Hansen Way; and Consideration of a Request for Approval of an Architectural Review Board Application Allowing the Demolition of the Existing Building and Construction of a new 99-Guestroom Hotel Development. The Request Also Includes a Reduction in Parking to be Off-set by Valet Parking. Environmental Assessment: An Initial Study/Mitigated Negative Declaration was Circulated for Public Comment From December 4, 2018 to January 3, 2019. The Planning and Transportation Commission Recommended Adoption of the Applicant’s Proposed Map Amendment on December 12, 2018. Zoning District: Service Commercial (CS) 8:15-9:30 PM 8.PUBLIC HEARING: Adoption of an Ordinance Amending Section 18.18.120 (Grandfathered Uses and Facilities) of the Palo Alto Municipal Code to Adjust Regulations Pertaining to Noncomplying Facilities. California Environmental Quality Act (CEQA): This Ordinance is Within the Scope of the Comprehensive Plan. Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution Number 9720; the Ordinance is Also Exempt From Environmental Review Under CEQA Guidelines Sections 15061(b)(3) and 15305 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. MEMO 4 April 1, 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 Sp. Finance Committee Meeting April 2, 2019 Sp. Policy and Services Committee Meeting April 3, 2019 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Review Enterprise Resource Planning System Status Contracts Awarded by the City Manager and Procurement Officer From July 1, 2018 to December 31, 2018 Progress Report Regarding the Community Development Block Grant (CDBG) Minor Home Repair Program Proclamation Declaring the Month of April to be Earthquake Preparedness Month Green Building Program Update Public Letters to Council Set 1 City of Palo Alto (ID # 10186) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Adoption of a Resolution for Jim Amores Title: Adoption of a Resolution of the City Council Expressing Appreciation to Jim Amores Upon His Retirement From: City Manager Lead Department: Public Works Attachments: Attachment A: Resolution Honoring Jim Amores on his Retirement CITY OF PALO ALTO Resolution EXPRESSING APPRECIATION TO JIM AMORES UPON HIS RETIREMENT WHEREAS, Jim Amores began his career with the City of Palo Alto on March 30, 1987, and has served exemplary throughout his 32-year tenure; and WHEREAS, Jim Amores has enthusiastically served the citizens of Palo Alto for over three decades working in the Public Works Department and managing the sidewalk maintenance program; and WHEREAS, in 2016, Jim completed the thirty-year sidewalk district cycle that he started back in 1987. He also recently completed the sidewalk assessment study which provides direction for the sidewalk program moving forward; and WHEREAS, Jim Amores oversaw the replacement of over 100 miles of sidewalk and installation of 1,865 curb during the sidewalk maintenance program; and WHEREAS, Jim Amores managed multiple maintenance contracts including sidewalk grinding, sweeping and cleaning of parking lots and garages, and purchase of asphalt and concrete materials for City crews, and WHEREAS, Jim Amores has mentored and trained many new engineers during his career on City standards, ADA requirements, field measurements and customer service skills; and WHEREAS, Jim Amores received the 2016 Public Works Engineering Division Employee of the Year award in recognition of superior performance; and WHEREAS, Jim Amores consistently receives compliments from residents and City staff for providing excellent customer service; and WHEREAS, Jim Amores is recognized by his peers and City staff for being professional, hardworking, dependable, caring and for being a team player with a positive attitude. NOW, THEREFORE, LET IT BE RESOLVED, that the Council of the City of Palo Alto hereby gratefully records and extends its sincere appreciation to Jim Amores for his dedication and excellent service rendered to the City. INTRODUCED AND PASSED: April 1, 2019 ATTEST: APPROVED: _____________________ ____________________ City Clerk Mayor APPROVED AS TO FORM: _____________________ ____________________ City Manager City Attorney Attachment A City of Palo Alto (ID # 10180) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: NLW Proclamation Title: Proclamation Honoring National Library Week From: City Manager Lead Department: Library Attachments: • Attachment A: Proclamation Honoring National Library Week Proclamation HONORING NATIONAL LIBRARY WEEK WHEREAS, today’s libraries are not just about books, but what they do for and with people; and WHEREAS, libraries of all types are at the heart of cities, towns, schools and campuses; and WHEREAS, libraries have long served as trusted and treasured institutions where people of all backgrounds can be together and connect; and WHEREAS, libraries and librarians build strong communities through transformative services, programs and expertise; and WHEREAS, libraries, which promote the free exchange of information and ideas for all, are cornerstones of democracy; and WHEREAS, libraries promote civic engagement by keeping people informed and aware of community events and issues; and WHEREAS, librarians and library workers partner with other civic organizations to make sure their community’s needs are being met; and WHEREAS, libraries and librarians empower their communities to make informed decisions by providing free access to information; and WHEREAS, libraries are a resource for all members of the community regardless of race, ethnicity, creed, ability, sexual orientation, gender identity, or socio-economic status, by offering services and educational resources that transform lives and strengthen communities; and WHEREAS, libraries, librarians, library workers and supporters across America are celebrating National Library Week. NOW, THEREFORE, I, Eric Filseth, Mayor of the City if Palo Alto, on behalf of the entire City Council do hereby proclaim April 7-13, 2019 National Library Week and encourage all residents to visit the library explore what is new at your library and engage with your librarians. Because of you, Libraries Transform! Presented: April 1, 2019 ______________________________ Eric Filseth Mayor City of Palo Alto (ID # 9751) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/1/2019 City of Palo Alto Page 1 Council Priority: Transportation and Traffic Summary Title: Contract Award to SP Plus for Parking Ambassador Services Title: Approval of Contract Number C19173514 With SP Plus in an Amount Not to Exceed $900,000 for Ambassador and Valet Parking Services in Palo Alto Garages and Surface Lots From: City Manager Lead Department: Transportation Recommendation: Staff recommends that Council approve and authorize the City Manager or his designee to execute contract C19173514 for an amount not to exceed $900,000 with SP Plus for Parking Ambassador Services for City parking lots and garages over a three-year period. Background: City staff is engaged in several parking management programs to improve parking utilization and maximize parking supply, including parking guidance systems (PGS) and parking wayfinding signage. Staff are also bringing forward a scope of work for the creation of a new parking facility at Lot D (Hamilton and Waverley), in addition to the launching of the Palo Alto TMA which will fund transportation programs for Downtown employees. The ambassador program, if implemented at the two additional garages, may allow up to 150 additional cars to be parked with no increase in capital investment (in addition to the additional 40-50 cars that can be parked in the Alma/High Street garage [Lot R]). The existing valet-assist program at Lot R has been successful in increasing the number of permitted vehicles parked during the day. On average the program allowed for an additional 50 vehicles to be parked per day between from January through May 2015. City of Palo Alto Page 2 Discussion: In early 2014, Staff began significant efforts to address the City’s parking and traffic challenges, particularly in the Downtown core, through a multi-pronged approach. The strategy includes projects to increase parking supply and availability (parking supply measures), improving how the existing parking facilities are utilized and controlled (parking management strategies), and projects to reduce overall traffic demand and encouraging alternatives to driving (transportation demand management strategies). One component of this strategy is more efficient usage of the existing parking capacity, and valet-assist parking is one part of this program. In February 2014, City Council approved a three-year contract with SP Plus that initiated a one- year trial valet-assist program in the Alma/High Street Garage (Lot R) to facilitate an increase in both the number of cars parked in permit spaces and the number of permits sold at that garage. In February 2015, City Council approved a continuation of that program through FY 2019. The contract with SP Plus was amended to extend the term through February 28, 2019. The City undertook a solicitation process for a new three-year contract for parking ambassador services, and staff proposes to award the contract to SP Plus. Services of the program High/Alma South Garage (Lot R) would occur immediately, retaining the existing number of available permits, with expansion to Bryant/Lytton (Lot S) and Cowper/Webster Garage (Lot CW) based on occupancy and need. With the expansion of the ambassador program to multiple locations, with ambassadors stationed in three Downtown parking garages during peak business hours 11:00am to 2:00pm, the City would have added capacity for a total of approximately 150 permit parkers Downtown and will be able to provide additional garage permits concurrent with the Downtown Residential Preferential Parking (RPP) program. Extending services to additional lots, including potentially surface lots and garages beyond Downtown, would be based on an as needed basis and would require a contract amendment. Staff anticipates that the ambassador service could decrease in future years as mitigation efforts reduce parking demand through Transportation Management Association (TMA) initiatives and the proposed construction of a new parking garage. The existing Lot R program is staffed by three valet attendants, stationed at the third floor of the garage. When the permit spaces at the garage are nearing capacity, the ambassadors use signage to direct permit parkers to park in the drive aisle and leave their key with the ambassador. Prior to beginning the program, Lot R occupancy was at capacity during the midday peak parking hours. The proposed contract allows for phased implementation of the valet-assist program to the Bryant/Lytton Garage and Cowper/Webster. An ambassador program at the Bryant/Lytton and Cowper/Webster garages would allow for 75 City of Palo Alto Page 3 additional vehicles to be parked at each garage, providing capacity for 150 total additional vehicles that may remove vehicles from the Downtown RPP non-resident demand. Procurement Process In October 4,2018, the City’s Purchasing Department released a Request for Proposals (RFP) for services including the implementation, support, and related services of a Parking Ambassador Program to continue and enhance the customer experience for valet parking in City parking garages. The due date was 3:00 p.m. November 6, 2018. The City received one response, submitted by SP Plus. Based on the single proposal, staff selected SP Plus for a commencement of contract negotiations, which were completed on March 4, 2019. Resource Impact: The Fiscal Year 2019 (FY19) Adopted Operating Budget for University Avenue Parking Permit Fund includes the majority of funding for this program. The remaining funding needed in FY19 can be absorbed by the amount budgeted for valet services during anticipated garage construction, which is now not expected to occur this fiscal year. The new contract would require staffing each garage with a minimum of one full- or part-time ambassador per week per garage. An additional manager will provide oversight for 10 hours per week for the entire portfolio. The total annual costs for expansion at each garage are as follows: Months Annual Cost Months Annual Cost Months Annual Cost Lot R $29.90 151.67 2 $ 9,070 10 177,672$ 12 108,836$ 12 108,836$ Lot S $29.90 151.67 1 $ 4,535 10 54,418$ 12 54,418$ 12 54,418$ Lot CW $29.90 151.67 1 $ 4,535 10 54,418$ 12 54,418$ 12 54,418$ Manager $29.90 43.33 1 $ 1,296 10 12,957$ 12 15,548$ 12 15,548$ Additional Services 10 -$ 12 65,000$ 12 65,000$ 299,465$ 298,220$ 298,220$ Location Total Cost Estimates 2019 20212020 Monthly cost Hourly Labor Rate Est. Monthly No. of Employees Staff will include funding for future fiscal years in the proposed operating budgets for the University Avenue Parking Permit Fund. With the execution of this contract, services may be expanded to Bryant/Lytton (Lot S) and Cowper/Webster Garage (Lot CW), based on occupancy. If expanded, up to 150 additional permits could be released, resulting in a revenue increase of up to $112,500 in the University Avenue Parking Permit Fund, depending on the timing of releases. City of Palo Alto Page 4 Timeline: Staff expects to implement the new ambassador program at Lot R on April 1, 2019 and phase implementation to the Bryant/Lytton Garage and Cowper/Webster in late 2019. Policy Implications Expansion of the ambassador program to other Downtown garages is consistent with the current Comprehensive Plan Goals: Policy T-45: Provide sufficient parking in the University Avenue/Downtown and California Ave business districts to address long-range needs. Program T-52: Evaluation options to ensure maximum use of the City parking structures in the University Avenue/Downtown and California Avenue areas. Environmental Review: The proposed action would implement operational changes at existing garages and is exempt from review under the California Environmental Quality Act (CEQA) under Class One (CEQA Guidelines Section 15301, Existing Facilities) and because it can be seen with certainty that the proposed action to incrementally increase garage capacity via operational changes could not have a significant effect on the environment (CEQA Guidelines Section 15061(b)(3)). Attachments: Attachment A: SP Plus Contract - C19173514 (PDF) DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 1 CITY OF PALO ALTO CONTRACT NO. C19173514 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND SP PLUS CORPORATION FOR PROFESSIONAL SERVICES This Agreement is entered into on this 1st day of March, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and SP PLUS CORPORATION, a Delaware corporation ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to have the CONSULTANT operate the Parking Ambassador Program at multiple public parking facilities in Downtown Palo Alto (“Project”) and desires to engage a consultant to provide services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from March 1, 2019 through February 28, 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. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 2 SECTION 4. NOT TO EXCEED COMPENSATION. Provided that the Basic Services do not exceed 30,100 total labor hours, the compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Nine Hundred Thousand Dollars ($900,000.00) and 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. If any regulatory changes, or changes in applicable laws, have a material impact on CONSULTANT’s expenses in performing its obligations under this Agreement, CONSULTANT and CITY agree that the parties will negotiate in good faith equitable adjustments in compensation. 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 shall pay invoices within thirty (30) days of receipt. If payment is not made by the CITY to CONSULTANT within said 30-day period, CONSULTANT shall have the right to: (i) charge interest at the highest legal rate permitted by law on the unpaid balance from the date such interest at the highest legal rate permitted by law on the unpaid balance from the date such payment became due and payable; or (ii) at it option, terminate this Agreement upon 30 days’ prior written notice, without waiving or limiting any of its legal remedies (including the right to recover attorney’s fees and other expenses incurred) which CONSULTANT may pursue to collect the amount owed. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 3 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 compensation unless CITY fails to pay CONSULTANT pursuant to the terms herein. 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 Victor Alistar to have supervisory responsibility for the performance, progress, and execution of the Services DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 4 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 Mark Hur, Planning & Community Environment Department, Transportation Division, 250 Hamilton Avenue, Palo Alto, CA 94303, Telephone (650) 329- 2453. 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 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 DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 5 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 Ke y Ratin g Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 6 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 To CONSULTANT: SP Plus Corporation Attn: Legal Department 200 E. Randolph Street, Suite 7700 Chicago, IL 60601 DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 7 With a copy to: SP Plus Corporation Attn: Jason Johnston Senior Vice President 3470 Wilshire Blvd., Suite 400 Los Angeles, CA 90010 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 DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 8 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 4.62.30 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. In the event that the minimum wage set forth in the Minimum Wage Ordinance shall increase above $15.00 per hour, then the hourly rate set forth in the HOURLY RATE SCHEDULE set forth in Exhibit “C-1” shall be increased on a dollar-for-dollar basis. 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. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 9 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 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 DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 10 executed by all the parties, constitute a single binding agreement. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 11 CONTRACT No. C19173514 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 SP PLUS CORPORATION Victor Alistar VP of Operations APPROVED AS TO FORM: Jason Johnston Senior Vice President Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 12 EXHIBIT “A” SCOPE OF SERVICES Project Description CITY is contracting with CONSULTANT to operate the Parking Ambassador Program at multiple public parking facilities in Downtown Palo Alto. CONSULTANT has sufficient experience and knowledge in parking lot operations and was selected through a Request for Proposal selection process as the preferred CONSULTANT for this project. Parking Ambassador Program CONSULTANT will be required to staff a parking facility initially between 9:00 AM and 5:30 PM and guide vehicles with valid Permits issued by CITY to available open parking spaces. As standard marked parking spaces reach capacity CONSULTANT will then be required to guide motorists to parking locations within the drive aisles of the parking garage, issue a Claim Ticket, and take possession of the vehicle until the motorist returns to claim their vehicle. As motorists exit the garage through the course of the day CONSULTANT will be required to move vehicles that block vehicles parked in standard marked spaces and move vehicles parking in the drive aisle in the standard parking marked spaces. CONSULTANT will be required to furnish all signage, kiosks, claim tickets, and lock boxes for vehicle keys, and provide an after-hours contact number for the CONSULTANT so that motorists may contact CONSULTANT to claim their keys during business hours (9:00 AM to 5:30 PM) on weekdays. After the first 90 days of service (referred to as the “initial 90-day monitoring period”), CONSULTANT will attend a meeting with CITY to discuss the program and provide City with a permit utilization report including a detailed expansion plan to Lot S and Lot CW. CITY will evaluate capacity and permit demand, prior to expansion approval. Project Term CONSULTANT will operate every parking facility identified by the CITY using a minimum of two parking ambassadors. CITY shall provide monthly assessments of the program to evaluate the parking ambassador program and CONSULTANT’s operations and performance. Technical Specifications CITY sells 68% additional permits over the available Permit parking supply as usage of the permits varies by season. CONSULTANT will be required to maintain daily reports on the number of vehicles parked within aisles and actively managed by the parking ambassador, time period at which aisle parking begins and relief is observed allowing the parking ambassador to move vehicles back into standard permit parking spaces. CONSULTANT will provide CITY with a report summarizing parking patters. Based on CONSULTANT report, CITY will release additional permits to maximize the parking ambassador program. The parking of vehicles in aisles of the garage will only be permitted with the floors where permit parking is provided. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 13 Lot R Operations CONSULTANT will be required to staff the Lot R parking garage initially between 8:00AM and 6:00PM and guide vehicles with valid Permits issued by CITY to available open parking spaces. As standard marked parking spaces reach capacity CONSULTANT will then be required to guide motorists to parking locations within the driving aisles of the parking garages, issue a Claim Ticket, and take procession of the vehicle until the motorist returns to claim their vehicle. As motorists exit the garage through the course of the day CONSULTANT will be required to move vehicles that block vehicles parked in standard marked spaces and move vehicles parking in the drive aisle into the standard parking marked spaces. . Program Expansion After the initial 90-day monitoring period, CITY may identify Lot S and/or or Lot CW for expansion of the parking ambassador program. Upon direction from CITY to expand the program to an additional lot, CONSULTANT as part of its start-up operations shall prepare a detailed report by CONSULTANT highlighting recommended signage standards, location of signage, any marking improvements. The report shall be submitted to CITY for review and approval a minimum of six weeks prior to the commencement of the parking ambassador operations. CONSULTANT will provide all necessary equipment and supplies for the operations. The report shall also include Standard Operating Procedures (SOPs) on key operations to be defined by CONSULTANT, including but not limited to: Parking Ambassador Program Procedures o Start of Work Day o Break/Lunch o Vehicle Check In o Key Return and Owner Validation o Key Storage and Late Return o Vehicle Storage and Security o Damaged Vehicle Process Facility Security Watch o Report Suspicious Activity/Incidents/Safety Issues Cleanliness o Perform Light Maintenance o Report Property Damage or Vandalism Customer Assistance o Provide General Assistance with Directions and Support o Become Familiar with Transportation Hubs, Downtown Streets, Shopping and Restaurant Options o Troubleshoot Technical Issues on Paystations (Where Applicable) o Answer Questions Regarding Parking Restrictions and Fees o Recommend Long-Term Parking (Annual) Permits o Redirect Vehicles to Another Lot with Available Capacity DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 14 CONSULTANT shall adhere to the Standard Operating Procedures as approved by CITY. CONSULTANT shall also be responsible for procurement of kiosks used by parking attendant, lock boxes, and valet tickets, which shall be reimbursed as a Start Up Cost. Technical details regarding garages provided below. Table 1 Potential Downtown University Avenue Business District Parking Garages Name Previous ID New ID Spaces Cowper/Webster Garage CW A 589 Bryant/Lytton Garage S B 688 Civic Center Garage CC C 692 *High/Alma South Garage R E 211 *Active valet program Table 2 Potential California Avenue Business District Parking Garages/Lots Name ID Spaces Cambridge/Park Lot 1 27 Cambridge/Birch Lot 2 28 Ted Thompson Garage 3 89 Cambridge/Birch Lot 4 28 Cambridge Garage 5 160 Sherman/Park Lot 6 186 Sherman/Birch Lot 7 186 Sherman/Ash Lot 8 147 Birch/Cambridge Lot 9 28 *Sherman/Birch N/A 326 *New parking garage will replace Lot 6 and 7 in 2020 DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 15 Additional Requirements and Restrictions CONSULTANT shall provide special event parking services with four (4) weeks advance notice from CITY. CONSULTANT shall provide multi-part claim checks to persons parking in the parking facilities and follow standard operating processes outlined in the Standard Operating Procedures report. CONSULTANT shall provide all necessary equipment and supplies for operations. Use of parking ambassador program shall be free to the public. CONSULTANT is responsible for all auto damage while in possession of a customer’s vehicle. CONSULTANT will file an accident report and respond to claimant within three (3) days of incident. All damage claims must be reported to the CITY including the responsible ambassador and outcome of the claim. CONSULTANT shall notify customers (i.e., on signage and on claim checks issued to customers) that customers must report any damage claims to a parking ambassador prior to exiting the garage. CONSULTANT will not be responsible for citing any vehicles that exceed the set time restrictions. No free parking permits shall be provided to CONSULTANT or its staff. CONSULTANT must supply own parking or promote public transportation. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 16 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services as specified in Exhibit “A” Scope of Services in accordance with a schedule to be determined by CITY. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 Professional Services Rev. April 27, 2018 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 17 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). If any regulatory changes, or changes in applicable laws, have a material impact on CONSULTANT’s expenses in performing its obligations under this Agreement, CONSULTANT and CITY agree that the parties will negotiate in good faith equitable adjustments in compensation. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 EXHIBIT “C-1” SCHEDULE OF RATES CONSULTANT shall be paid hourly for each ambassador or manager providing the Parking Ambassador Program services at CITY parking facilities. Table below includes the payment compensation schedule for the program including pre-defined pricing for expanding services. The compensation table will define the base project fees for the term of the contract. Location Hourly Labor Rate Est. Monthly No. of Employees Monthly cost 2019 2020 2021 Months Annual Cost Months Annual Cost Months Annual Cost Lot R $29.90 151.67 2 $ 9,070 10 $ 177,672 12 $ 108,836 12 $ 108,836 Lot S $29.90 151.67 1 $ 4,535 10 $ 54,418 12 $ 54,418 12 $ 54,418 Lot CW $29.90 151.67 1 $ 4,535 10 $ 54,418 12 $ 54,418 12 $ 54,418 Manager $29.90 43.33 1 $ 1,296 10 $ 12,957 12 $ 15,548 12 $ 15,548 Additional Services 10 $ - 12 $ 65,000 12 $ 65,000 Total Cost Estimates $ 299,465 $ 298,220 $ 298,220 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 1 DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 1 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 WORKER’S COMPENSATION YES 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. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING EMAIL: chris.anastole@Cityofpaloalto.org III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY DocuSign Envelope ID: 04BDBFAF-C810-416A-9F9E-07695A025E03 $6117e69f24da$D06F4D54566641BDB3E627E584935970.docx / 42290 2 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 ENDEAVOR TO 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 ENDEAVOR TO 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 Certificate Of Completion Envelope Id: 04BDBFAFC810416A9F9E07695A025E03 Status: Completed Subject: Please DocuSign: C19173514 SP Plus contract for garage management - Transportation (2) Final.docx Source Envelope: Document Pages: 20 Signatures: 3 Envelope Originator: Certificate Pages: 2 Initials: 0 Christopher Anastole AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 chris.anastole@cityofpaloalto.org IP Address: 12.220.157.20 Record Tracking Status: Original 3/1/2019 8:31:01 AM Holder: Christopher Anastole chris.anastole@cityofpaloalto.org Location: DocuSign Security Appliance Status: Connected Pool: City of Palo Alto Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Victor Alistar valistar@spplus.com VP of Operations Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 99.64.152.217 Sent: 3/1/2019 8:41:50 AM Viewed: 3/1/2019 9:23:57 AM Signed: 3/1/2019 2:12:14 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jason Johnston jjohnston@spplus.com Senior Vice President Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 174.194.33.124 Signed using mobile Sent: 3/1/2019 2:12:17 PM Resent: 3/1/2019 5:23:47 PM Viewed: 3/2/2019 3:51:41 AM Signed: 3/2/2019 3:52:12 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Mark Hur Mark.Hur@CityofPaloAlto.org Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 12.220.157.20 Sent: 3/2/2019 3:52:15 AM Viewed: 3/4/2019 11:16:10 AM Signed: 3/4/2019 11:18:48 AM Freeform Signing 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 Signer Events Signature Timestamp Madina Klicheva Madina.Klicheva@CityofPaloAlto.org Administrative Associate II City of Palo Alto Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Sent: 3/2/2019 3:52:14 AM Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Certified Delivered Signing Complete Completed Hashed/Encrypted Security Checked Security Checked Security Checked 3/2/2019 3:52:15 AM 3/4/2019 11:16:11 AM 3/4/2019 11:18:48 AM 3/4/2019 11:18:48 AM Payment Events Status Timestamps Carbon Copy Events Status Timestamp City of Palo Alto (ID # 9912) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Gas Circuit Breaker 2 Design-Build Title: Approval of Contract Number C19174153 With Burns & McDonnell Engineering Company, Inc. in an Amount of $633,456 for the Colorado Power Station High Voltage Circuit Breaker Implementation as part of the Colorado Power Station Equipment Upgrade Capital Project (EL-19001); Authorization to Negotiate and Execute Related Change Orders in the Amount of $95,018, for a Total Not-to-Exceed Amount of $728,474; and Approval of Budget Amendments in the Electric Fund From: City Manager Lead Department: Utilities Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract with Burns & McDonnell Engineering Company, Inc. (Attachment A) in an amount not to exceed of $633,456 for purchase and installation of a new high voltage circuit breaker as part of the Colorado Power Station Equipment Upgrade Capital Project (EL-19001); 2. Authorize the City Manager or his designee to negotiate and execute one or more change orders to the contract with Burns & McDonnell Engineering Company, Inc. for related additional, but unforeseen work which may develop during the project; the total of which shall not exceed $95,018 or 15 percent of total contract; the total not-to-exceed amount is $728,474 for the contract; 3. Amend the Fiscal Year 2019 Budget Appropriation Ordinance for the Electric Fund by: a. Increasing the budget appropriation for the Colorado Power Station Equipment Upgrade project (EL-19001) by $600,000 b. Decreasing the budget appropriation for the Underground System Rebuild project (EL-16001) by $150,000; and c. Decreasing the budget appropriation for the Wood Pole Replacement project (EL- 19004) by $300,000; and d. Decreasing the budget appropriation for the SCADA System Upgrade project (EL- 02010) by $150,000; and City of Palo Alto Page 2 Background City of Palo Alto Utilities (CPAU) owns and operates the electric system serving approximately 30,000 customers. At the City’s Colorado Power Station (COP), the system is fed from an 115,000 Volt (115kV) energy source which is stepped down to 60,000 Volts (60kV) as it enters the City’s sub-transmission system, linking nine 12,000 and 4,000 Volt (12kV and 4kV, respectively) distribution substations. CPAU owns and operates three 115kV to 60kV electric power transformers at COP that supply all the electric power to the City of Palo Alto, COP-1, COP-2, and COP-3. The failure of the COP-2 transformer (Staff Report 9562) earlier this year has presented CPAU an opportunity to improve resiliency and reliability of the City’s electrical transmission system by installing a dedicated high voltage circuit breaker for the transformer. Discussion Currently, only two of the three 115kV transformers (COP-1 and COP-3) have high voltage gas circuit breakers. Electrical power transmission networks are protected and controlled by these high-voltage breakers. Instead of a dedicated circuit breaker, COP-2 has been relying on PG&E equipment for transformer protection. The PG&E equipment is outside of the City’s control (maintenance and operations). Adding a new circuit breaker for COP-2, will provide additional protection to the City’s transformer assets and improve resiliency by potentially shortening restoration time in the event of an outage. Burns & McDonnell Engineering Company, Inc. (BMcD) will procure and install an outdoor, 115kV, gas circuit breaker in front of the COP-2 transformer. The timing of this project takes advantage of the open window for construction resulting from the failure of the adjacent COP-2 transformer. Since COP-2 transformer is out of service and incoming transmission lines have been de-energized, this is the ideal opportunity to add a new circuit breaker and perform other transmission system improvements. This design/build implementation includes electrical schematic and wiring diagram design, structural engineering design for the foundation, procurement of the new circuit breaker itself using our utility specifications, installation, and complete testing for a turn-key implementation. City of Palo Alto Page 3 Solicitation Process On December 3, 2018, a notice inviting a Design/Build Request for Proposals (RFP) for the 123kV Gas Circuit Breaker (GCB-2) at Colorado Power Station was posted at City Hall and on the Planet Bids portal: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569&BidID=56452 The Design/Build process was selected because internal staffing and resources are not adequate to facilitate the entire process within the limited time constraint. The industry standard for the bidding period is 3-4 weeks. Bids were received from two qualified bidders on January 14, 2019. Summary of Solicitation Process Proposal Title 123kV Gas Circuit Breaker (GCB-2) at Colorado Power Station Proposal Number 174153 Proposed Length of Project 6 months Number of Proposal packages downloaded 633 Total Days to Respond to Proposal 29 Number of Proposals Received: 2 Company Name Location (City, State) Amount Burns & McDonnell Engineering Company, Inc. Brea, California $633,456 Proposal costs ranged from $633,456 to $1,123,250. Cost of Services The following criteria were used during the evaluation process to identify the successful proposer: • Quality of the proposal • Quality, performance and effectiveness of the solution • Contractor’s experience and past experience • Cost to the City • Proposer’s compliance to technical specifications and commercial terms Resource Impact Amendments to the Electric Fiber Fund are recommended in this report. As of March 5, 2019, there is $441,000 remaining in the budget for capital project EL-19001 (Colorado Power Station Equipment Upgrade). The recommended amendment of $600,000 to EL-19001, in addition to the remaining budget available will be sufficient to fund the circuit breaker ($730,000), transformer pad ($100,000), station power disconnect switch ($100,000), and internal labor to City of Palo Alto Page 4 oversee and inspect these upgrades ($100,000). The increase to EL-19001 will be accompanied by a reduction to other Electric Fund Capital Improvement Projects: EL-19004 (Wood Pole Replacement) in the amount of $300,000, EL-16001 (Underground System Rebuild) in the amount of $150,000, and EL-02010 (SCADA System Upgrade) in the amount of $150,000. Current staffing levels to see this project through to completion prevent City staff from being able to perform this work internally. In addition, the Colorado Power Station Equipment Upgrade is one of the highest priority Electric project which is why funding and staffing are being reallocated from other capital improvement projects. Policy Implications The approval of this Enterprise Fund professional services contract is consistent with existing City policies. This recommendation is consistent with the Council-approved Utilities 2018 Strategic Plan (Staff Report 9022), especially the strategic objectives to: “Establish a proactive infrastructure replacement program, based on planned replacement before failure to support reliability and resiliency.” Environmental Review Approval of the attached contract is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to section 15302 (replacement or reconstruction of existing facilities) of the CEQA Guidelines. Attachments: • Scope of Work GCB-2 • Attachment A - C19174153 Gas Circuit Breaker B1 Contract 4926 (BMcD 2.26.19 - Final) 49534989 Scope of Work Design/Build of 123kV Gas Circuit Breaker (GCB-2) at Colorado Power Station (COP) This design/build project will furnish and install an outdoor, 123 kilo-volt rated vertical, live-tank gas circuit breaker (GCB) in front of the City of Palo Alto Utility’s (CPAU) Colorado Power Station COP-2 transformer. This COP-2 transformer is currently being manufactured. The incoming lines operate at a nominal 115 kilo-volts, and will be deenergized from now through installation. This turn-key installation shall include: • procurement of the circuit breaker, using CPAUs specification (Appendix A). Any exceptions to the specification to be approved by CPAU. The preferred circuit breaker is an ABB type LTB/DCB or PASS, or a Southern States circuit switcher, or equal. Arrangements shall be made for CPAU to participate in the procurement evaluation process and be the final decision-maker, to participate in the manufacturer submittals review and in the factory acceptance tests of all major equipment. ; • Installing structurally sound foundations; • Incorporating the circuit breaker into the bus differential, transformer differential, over-current, and breaker failure protection schemes, concurrently being designed and constructed; • performance of all engineering design including wiring diagrams, AC/DC schematics, conduit layout, power supply diagrams, foundation/structural design, as-builts, and other design as necessary for a complete and full drawing set; • installation of underground conduit the last 50’ to the breaker control cabinet; • receiving, assembling, rigging, and installing the new circuit breaker, pedestals, and foundation(s); • installation of control wiring from the control building to the new circuit breaker cabinet; • breaker testing. • Maintaining a clean job site, free of debris, and without obstruction to the normal operation of the surrounding electric substation facilities. • CPAU will make the overhead wire connection to the 115kV high voltage lines after the circuit breaker testing is complete. A joint commissioning effort will be required before final project acceptance and final retention payment by CPAU. In order of importance, provide optional CTs on the source side of the circuit breaker, then secondly, an optional source side disconnect switch, provided space limitations are met. The new circuit breaker must fit between the driveway and the existing metering PT pedestal, the same as GCB-1 and GCB-3. All structural steel shall be designed, detailed, and fabricated in accordance with the current codes of the American Institute of Steel Construction (AISC), the American Society for Testing and Materials (ASTM), and the American Welding Society (AWS). All related and available electrical, civil, and structural station drawings will be made available to the successful proposer. Approximately half of those exist in electronic format. Some drawings for the sister GCB-1 are attached as appendices for reference. • Appendix A -- Specification 115KVBKR2018 • Appendix B – Photo of old COP-2 transformer being replaced • Appendix C – Photo of sister COP1 and COP2 115kV breakers • Appendix D – Drawing 355-E8.7 Plan View • Appendix E – Drawing CO-E-126 Model, sample outline drawing of the existing GCB-1 • Appendix F – Drawing CO-E-126 Interconnection, sample from GCB-1 and -3 • Appendix G -- Drawing CO-E-128 sample protection block diagram • Appendix H – Drawing CO-E-129 sample Breaker Failure Schematic • Appendix I -- Drawing CO-E-136 sample differential schematic SCHEDULE: The commissioning due date is June 15, 2019. END DESIGN-BUILD CONTRACT 1 2017 DESIGN-BUILD CONTRACT Contract No. C19174153 City of Palo Alto Gas Circuit Breaker123kV at Colorado Power Station DESIGN-BUILD CONTRACT 2 2017 DESIGN-BUILD CONTRACT TABLE OF CONTENTS SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS .................................................................... 4 1.1 Recitals .............................................................................................................................................. 4 1.2 Definitions ......................................................................................................................................... 4 SECTION 2 THE PROJECT ............................................................................................................................. 4 SECTION 3 THE CONTRACT DOCUMENTS ........................................................................................................ 5 3.1 List of Documents .............................................................................................................................. 5 3.2 Order of Precedence.......................................................................................................................... 5 SECTION 4 DBE’S DUTY ..................................................................................................................................... 6 4.1 Relationship of Trust and Confidence ................................................................................................ 6 4.2 Scope of Services ............................................................................................................................... 6 4.3 Design Services .................................................................................................................................. 6 4.4 Construction Services ........................................................................................................................ 8 4.5 DBE’s Subcontractors ........................................................................................................................ 8 4.6 Coordination of Work ........................................................................................................................ 8 4.7 DBE’s Representative ........................................................................................................................ 9 SECTION 5 PROJECT TEAM .......................................................................................................................... 9 SECTION 6 TIME OF COMPLETION .............................................................................................................. 9 6.1 Time is of Essence .............................................................................................................................. 9 6.2 Commencement of Work .................................................................................................................. 9 6.3 Contract Time .................................................................................................................................... 9 6.4 Liquidated Damages ........................................................................................................................ 10 6.5 Adjustments to Contract Time......................................................................................................... 10 SECTION 7 COMPENSATION TO DBE ......................................................................................................... 10 7.1 Contract Sum ................................................................................................................................... 10 7.2 Full Compensation ........................................................................................................................... 10 SECTION 8 STANDARD OF CARE ................................................................................................................ 10 SECTION 9 INDEMNIFICATION .................................................................................................................. 11 9.1 Hold Harmless ................................................................................................................................. 11 9.2 Survival ............................................................................................................................................ 11 SECTION 10 NONDISCRIMINATION ............................................................................................................. 11 SECTION 11 INSURANCE AND BONDS ......................................................................................................... 12 SECTION 12 PROHIBITION AGAINST TRANSFERS ............................................................................................. 12 SECTION 13 NOTICES ................................................................................................................................... 12 13.1 Method of Notice ............................................................................................................................ 12 13.2 Notice Recipients ............................................................................................................................. 12 13.3 Change of Address ........................................................................................................................... 13 SECTION 14 DEFAULT .................................................................................................................................. 13 14.1 Notice of Default ............................................................................................................................. 13 14.2 Opportunity to Cure Default ............................................................................................................ 13 DESIGN-BUILD CONTRACT 3 2017 SECTION 15 CITY’S RIGHTS AND REMEDIES ................................................................................................. 13 15.1 Remedies Upon Default ................................................................................................................... 14 15.2 Delays by Sureties ............................................................................................................................ 14 15.3 Damages to City ..................................................................................................................................... 14 15.4 Suspension by City ........................................................................................................................... 15 15.5 Termination Without Cause .................................................................................................................. 15 15.6 DBE’s Duties Upon Termination ...................................................................................................... 16 SECTION 16 DBE’S RIGHTS AND REMEDIES ................................................................................................. 16 16.1 DBE’S Remedies ............................................................................................................................... 16 16.2 Damages to DBE .............................................................................................................................. 17 SECTION 17 ACCOUNTING RECORDS ........................................................................................................... 17 17.1 Financial Management and City Access ........................................................................................... 17 17.2 Compliance with City Requests ....................................................................................................... 17 SECTION 18 INDEPENDENT PARTIES ............................................................................................................ 17 SECTION 19 NUISANCE ................................................................................................................................ 17 SECTION 20 PERMITS AND LICENSES ........................................................................................................... 18 SECTION 21 WAIVER .................................................................................................................................... 18 SECTION 22 GOVERNING LAW AND VENUE ................................................................................................ 18 SECTION 23 COMPLETE AGREEMENT .......................................................................................................... 18 SECTION 24 SURVIVAL OF CONTRACT ......................................................................................................... 18 SECTION 25 PREVAILING WAGES ................................................................................................................. 18 SECTION 26 NON APPROPRIATION .............................................................................................................. 19 SECTION 27 AUTHORITY .................................................................................................................................... 19 SECTION 28 COUNTERPARTS ............................................................................................................................. 19 SECTION 30 STATUTORY AND REGULATORY REFERENCES .............................................................................. 19 SECTION 31 WORKERS’ COMPENSATION CERTIFICATION ............................................................................... 19 SECTION 32 SPECIAL TERMS .............................................................................................................................. 19 32.1 Cost ................................................................................................................................................ 19 32.2 Delays ............................................................................................................................................. 19 32.3 Beneficial Occupancy ..................................................................................................................... 19 32.4 Proposal ......................................................................................................................................... 20 32.5 Notices ........................................................................................................................................... 20 32.6 Warranties ...................................................................................................................................... 20 32.7 Environmental Controls & Project Site ........................................................................................... 20 32.8 Drawing Submittals/Reviews........................................................................................................... 21 32.9 Payment & Completion ................................................................................................................... 21 32.10 Subcontractors ................................................................................................................................ 21 32.11 Royalties & Patents ......................................................................................................................... 21 DESIGN-BUILD CONTRACT 4 2017 DESIGN-BUILD CONTRACT THIS DESIGN-BUILD CONTRACT (“Contract” or “Agreement”) entered into on March 18, 2019 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and Burns & McDonnell Engineering Company, Inc. d/b/a Burns & McDonnell, a Design-Build Entity ("DBE"), 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. DBE is a corporation duly organized and in good standing in the State of Missouri, DBE’s California Contractor License Number 755238. DBE represents that it is duly licensed by the State of California and has the background, knowledge, and experience to perform the obligations set forth in this Design-Build Contract. C. On December 13, 2018, City issued a Request for Proposals (“RFP”) to DBEs for the Gas Circuit Breaker123kV at Colorado Power Station (“Project”). In response to the RFP, DBE submitted a Proposal. D. City and DBE desire to enter into this Design-Build Contract to provide the Design-Build Services for the Project, and other such 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 the RFP, this Design-Build Contract and/or in the General Conditions. If there is a conflict between the definitions in the RFP, this Design-Build Contract or in the General Conditions, the definitions in this Design-Build Contract shall prevail. SECTION 2 THE PROJECT. The project is the Gas Circuit Breaker123kV at Colorado Power Station, located at Colorado Power Station, 1082 Colorado Avenue, Palo Alto, California. SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Contract”) consist of the following documents which are hereby incorporated by reference. 1) Change Orders DESIGN-BUILD CONTRACT 5 2017 2) Field Orders 3) Design-Build Contract 4) Scope of Work/DBE’s Final Proposal/Non-Collusion Affidavit 5) RFP Addenda 6) Special Provisions [Not Applicable] 7) General Conditions 8) Approved Design Documents (to be developed by DBE) 9) Bridging Documents 10) Performance and Payment Bonds 11) Instructions to Proposers 12) Request for Proposals (except form Agreement included therein) 13) Reports listed in the Contract Documents 14) Public Works Department’s Standard Drawings and Specifications (most current version at time of Proposal) 15) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current version at time of Proposal) 16) City of Palo Alto Traffic Control Requirements 17) City of Palo Alto Truck Route Map and Regulations 18) Pre-Qualification Questionnaire [Not applicable] 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. 6 SECTION 4 DBE’S DUTY. 4.1 Relationship of Trust and Confidence. DBE accepts the relationship of trust and confidence established between it and City by this Contract. DBE agrees to furnish the Design-Build Services necessary for the design and completion of the Project and agrees to furnish efficient business administration and superintendence, and to use its reasonable efforts to complete the Project in a sound way and in the most efficient and economical manner consistent with the best interest of City, all in accordance with prudent industry practices. 4.1.1 DBE represents that it is an independent contractor and that it is familiar with the type of Design-Build Services it is undertaking. 4.1.2 Neither DBE nor any of its agents or employees shall act on behalf of or in the name of City unless authorized in writing by City’s Representative. 4.1.3 DBE shall perform its obligations with integrity, ensuring at a minimum that conflicts of interest, including but not limited to conflicts of interests on the part of any Design Professionals employed by DBE, shall be avoided to the best of its knowledge. 4.2 Scope of Services. DBE shall be responsible for procuring or providing the Design-Build Services for the Project consistent with the Contract Documents. DBE shall exercise reasonable skill and judgment in the procurement and provision of the Design-Build Services, consistent with the applicable industry practices and the terms and conditions of the Contract Documents. 4.3 Design Services. 4.3.1 Architectural and Engineering Services. Architectural and engineering services must be provided by licensed, independent Design Professionals retained by DBE or by licensed employees of DBE, or as permitted by the law of the State of California. DBE may not engage the services of any Design Professional for this Project without obtaining the City’s prior written approval, which approval will not be unreasonably withheld. City’s approval will not be deemed to create any contractual relationship between City and any such Design Professional. DBE must bind its Design Professionals in the same manner as DBE is bound to the City under this Contract, including, but not limited to, the insurance and indemnity requirements set forth herein. All Design Services must be guided by the Bridging Documents and Design Documents which are approved by City. Because the Bridging Documents, Plans, and Drawings were prepared by the City or its Design Consultant, the DBE has a right to rely upon the Bridging Documents, Plans, and Drawings without independent verification. DBE shall notify the City if it discovers any defects in the Bridging Documents, Plans, or Drawings, but the DBE shall not be liable for such documents or any warranties related thereto. 4.3.2 Project Schedule. Within 15 days following the Notice to Proceed, DBE must prepare and submit for City’s review and approval a preliminary Project Schedule showing the timing and sequencing of the Design- Build Services required to complete the Project. Unless otherwise specified by City, the preliminary Project Schedule should include the major phases for the Design Services and for the Construction Services, including, but not limited to, completion of Design Development Documents; Construction Documents; procurement of Subcontractors; construction; final close out; as well as any other milestones applicable to this Project. The Project Schedule shall be updated for City’s review and approval upon completion of each milestone included in the Project Schedule. 4.3.3 Design Development Documents. DBE shall prepare and submit for City’s review and approval the Design Development Documents consistent with the timeframes in the Project Schedule set forth in the Scope of Work. The Design Development Documents must be based on the Bridging Documents, as may be modified by the use permit from or design approvals by City, but must further define the Project, including drawings and 7 outline specifications fixing and describing the Project size, character and site relationships, and other appropriate elements describing, as applicable, the structural, architectural, mechanical and electrical systems. The Design Development Documents shall include, as applicable, plans, sections and elevations; criteria and sizing of major components; equipment sizes and capacities and approximate layouts, including required spaces and clearances; typical details; materials selections and general quality levels. When submitting the Design Development Documents, the DBE shall identify in writing, for City’s approval, all material changes and deviations that have taken place since approval of the Bridging Documents and the Project Schedule. Two printed sets and one electronic/reproducible set of Design Development Documents must be provided to the City. 4.3.4 Construction Documents. DBE shall prepare and submit for City’s review and approval the Construction Documents consistent with the timeframes in the Project Schedule set forth in the Scope of Work. DBE’s submitted Construction Documents shall set forth in detail the quality levels of and the requirements for construction of the Project, and consist of drawings and specifications that comply with applicable codes, laws, and regulations in effect at the time of their preparation at the location of the Project. When submitting the Construction Documents, the DBE shall identify in writing all for City’s approval, all material changes and deviations that have taken place since approval of the Design Development Documents and Project Schedule. Two printed sets and one electronic/reproducible set of Construction Documents must be provided to the City. 4.3.5 Ownership of Documents. 4.3.5.1 Ownership of Tangible Documents. City shall receive ownership of the property rights, except for copyrights, of all documents, drawings, specifications, electronic data and information prepared, provided or procured by DBE, as part of the Design Services which are identified as final deliverables. 4.3.5.2 Use of Documents in Event of Termination. In the event of a termination of this Contract, City shall have the right to use and to reproduce the Design Documents to complete the Project, regardless of whether there has been a transfer of copyright to City. In the event of termination by the City for any reason prior to completion of all Design Documents and Construction Documents contemplated by the Contract Documents, except when documents are marked “FOR CONSTRUCTION” or other marking with similar meaning, the City releases DBE from any liability for such incomplete documents and waives all claims, causes of action, or suits against the City that are related to the use of such incomplete documents (including as may be modified or completed by third-party consultants). 4.3.5.3 City’s Use of Documents After Completion of Project. After completion of the Project, City may reuse or reproduce the Design Documents solely for the purposes of maintaining, operating, or repairing the Project. Should the City or any third party obtaining such Design or Construction Documents through the City either use the Documents for any reason other than for the construction, operation, maintenance, or repair of the project for which they were prepared and intended, or modify such Documents, it shall be at the City’s sole risk and DBE shall have no obligation, responsibilities or liabilities relating to such use or modification. 4.3.5.4 All intellectual property in the deliverables (including the Design Documents) arising from the performance of the Work under this Contract shall be and remain the property of DBE, and may not be used by the City for any purpose other than as contemplated by this Contract for the Project without the express prior written permission of DBE. Nothing contained in this Contract shall be construed as limiting or depriving DBE of its right to use its basic knowledge and skill to design or carry out other projects or work for itself or others, whether or not such projects are similar to the Work to be performed under this Contract. DBE hereby grants to the City an irrevocable (except in the event of a breach of this license), non-exclusive, royalty-free license to 8 utilize DBE’s intellectual property prepared for or provided to the City as part of the Work and deliverables to the extent necessary for the construction, operation, maintenance, or repair of the Project for which they were prepared and intended. City shall not acquire any rights to any of DBE’s or its Subcontractors’ proprietary computer software that may be used in connection with the Work except as separately agreed. DBE shall obtain from its Subcontractors and Design Professionals rights and rights of use that correspond to the rights given by DBE to City in this Contract and DBE shall provide evidence that such rights have been secured. 4.4 Construction Services. 4.4.1 DBE shall provide all labor, materials, equipment and services necessary to perform and timely complete the Construction Services in strict accordance with the Contract Documents, and in an economic and efficient manner in the best interests of City in accordance with prudent industry standards. 4.4.2 DBE is responsible for supervising and directing all aspects of the Work to facilitate the efficient and timely completion of the Work. DBE is solely responsible for, and required to exercise full control over, construction means, methods, techniques, sequences, procedures, and coordination of all portions of the Work, except to the extent that the Contract Documents provide other specific instructions. 4.4.3 DBE shall provide sufficient and competent Subcontractors, administration, staff, and skilled workforce necessary to perform and timely complete the Work in accordance with the Contract Documents. 4.4.4 DBE shall, at all times during performance of the Work, provide a qualified full-time superintendent, acceptable to City, and assistants, as necessary, who must be physically present at the Project site while any aspect of the Work is being performed. 4.4.5 DBE must, at all times, perform the Work in a good workmanlike manner and in full compliance with the Contract Documents and all applicable laws, regulations, codes, standards, and permits. 4.4.6 DBE is solely responsible to City for the acts or omissions of any party or parties performing portions of the Work or providing equipment, materials or services for or on behalf of DBE or its Subcontractors. 4.4.7 DBE shall promptly correct, at DBE’s sole expense, any Work that is deficient or defective in workmanship, materials, and equipment. 4.4.8 DBE shall keep such full and detailed accounts as may be necessary for proper financial management under this Contract. City shall be afforded access to all DBE's financial records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda and similar data relating to Change Order work performed on a reimbursable basis. DBE shall preserve all such records for a period of three years after the Final Payment or longer where required by law. Notwithstanding anything to the contrary herein, in no event shall the City be entitled to audit the composition of any agreed upon fixed rates or percentage multipliers set forth in this Contract, nor shall it be entitled to audit any rates, charges, costs, hours worked, or expenses related to Services performed on a lump sum or fixed price basis. 4.4.9 DBE shall provide periodic written reports to City on the progress of the Work in such detail as is required by City and as agreed to by City and DBE. 4.5 DBE’s Subcontractors. 4.5.1 All Work which is not performed by DBE with its own duly licensed forces shall be performed by Subcontractors. DBE must provide each Subcontractor with a complete set of the Construction Documents and any approved modifications thereto. 9 4.5.2 DBE shall require every Subcontractor and material supplier to be bound to the provisions of the Contract Documents as they apply to the Subcontractor’s or material supplier’s portion(s) of the Work, and to likewise bind their Subcontractors or material suppliers. City reserves the right to reject any Subcontractor or material supplier based upon City’s reasonable belief that the Subcontractor or material supplier is not adequately qualified, or whose performance is unacceptable to the City, or who has a history of unacceptable performance on other public works projects. If a Subcontractor or material supplier is rejected after they begin performance of Work due to previous approval by the City, DBE shall be entitled to a change order to replace such Subcontractor or material supplier. Nothing in these Contract Documents creates a contractual relationship between a Subcontractor or material supplier and City. 4.5.3 If the Contract is terminated, each subcontract agreement shall be assigned by DBE to City, subject to the prior rights of any surety, provided that the City accepts such assignment by written notification, and assumes all rights and obligations of DBE pursuant to each such subcontract agreement. 4.5.4 All Subcontractors bidding on contracts for the Work shall be afforded the applicable protections contained in the Subletting and Subcontracting Fair Practices Act (Public Contract Code Section 4100 et seq.). 4.6 Coordination of Work. City reserves the right to perform or to have performed other work on or adjacent to the Project site while the Work is being performed. DBE is responsible for coordinating its Work with other work being performed on or adjacent to the Project site, and shall avoid hindering, delaying, or interfering with the work of other contractors. The City shall require similar coordination and avoidance of delay by its personnel or separate contractors with DBE and its Work. To the full extent permitted by law, DBE shall hold harmless and indemnify City against any and all claims arising from or related to DBE’s negligent or willful hindrance of, delay to, or interference with the work of another contractor or City’s own forces at the Project site. The roles, obligations, and liabilities of the City’s Design Consultant, separate contractors, and the City’s employees or agents who perform work or services related to DBE’s Work or the Project site remain solely with those parties with respect to such work or services. DBE does not guarantee the performance of or warrant the work, work product, deliverables, materials, or equipment of the City, its Design Consultant or separate contractors, or any employees or agents of any of them. 4.7 DBE’s Representative. DBE shall designate a person who shall be DBE's authorized representative, subject to City’s approval, which shall not unreasonably be withheld. SECTION 5 PROJECT TEAM. In addition to DBE, City has retained, or may retain, a Design Consultant or other consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Contract requires that DBE 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 for performance of the Work set forth in the Contract Documents. 6.2 Commencement of Work. DBE shall commence the Design-Build Services on the date(s) specified in City’s Notice to Proceed. 6.3 Contract Time. The Design-Build Services must begin on the date specified on the City’s Notice to Proceed and shall be completed in accordance with the Project Schedule set forth in the Scope of Work. By executing this Design-Build Contract, DBE expressly waives any claim for delayed early completion. 10 6.4 Liquidated Damages. Pursuant to Government Code Section 53069.85, if DBE 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 ($500.00) per day, subject to a maximum aggregate liability of an amount equal to 10% of the Contract Sum. Such liquidated damages shall serve as the City’s sole and exclusive remedy for DBE’s failure to achieve Substantial Completion due to an Unexcused Delay. 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 set off the amount of liquidated damages assessed against any payments otherwise due to DBE, including, but not limited to, setoff against release of retention. If the total amount of liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from DBE or its sureties. 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 DBE’s failure to achieve Substantial Completion of the entire Work within the Contract Time, except to the extent expressly limited by the terms of this Contract. 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 DBE. 7.1 Contract Sum. DBE shall be compensated for satisfactory completion of the Design-Build Services in compliance with the Contract Documents the Contract Sum of Six Hundred Thirty Three Thousand Four Hundred Fifty Six Dollars ($633,456.00). [This amount includes the Base Proposal and Additive Alternates.] 7.2 Full Compensation. The Contract Sum shall be full compensation to DBE for all Design-Build Services provided by DBE and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Design-Build Services or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Design-Build Services until its Acceptance by City, all known or discoverable risks connected with the Design-Build Services, and any and all expenses incurred due to suspension or discontinuance of the Design-Build Services caused by DBE’s fault, 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. DBE agrees that the Design-Build Services shall be performed by qualified, experienced and well-supervised personnel. All Design-Build Services performed in connection with this Design-Build Contract shall be performed in a manner consistent with the professional 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. 11 SECTION 9 INDEMNIFICATION; LIMITATION OF LIABILITY. 9.1 Hold Harmless. To the fullest extent permitted by law, and except as set forth below in Section 9.2, DBE 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 liabilities of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys’ fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the DBE, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. Notwithstanding the above, nothing in this section shall be construed to require DBE to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence, or willful misconduct of an Indemnified Party. DBE shall pay City for any costs City incurs to enforce this provision. Nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of DBE against City or any other Indemnitee. Pursuant to Public Contract Code Section 9201, City shall timely notify DBE upon receipt of any third-party claim relating to the Contract. 9.2 Professional Indemnity. DBE agrees, to the fullest extent permitted by law, to indemnify each Indemnified Party against costs, damages, or losses, including, without limitation, reasonable attorneys’ fees and expert fees resulting from claims by third parties for personal injury (including death) or property damage to the extent caused by the negligence, recklessness, or willful misconduct of the DBE, its officers, employees, agents or subcontractors in the performance of professional design and engineering services as part of the Work under the Contract Documents. The indemnity obligation under this Section 9.2 shall not include a duty to defend, and DBE shall not be obligated to indemnify any Indemnified Party for its respective negligence or willful misconduct. 9.3 Limitation of Liability. To the fullest extent permitted by law, and notwithstanding any other provision of this Contract, the total aggregate liability of DBE, its officers, directors, employees, agents, and subcontractors, or any of them, to the City and anyone claiming by, through or under the City, for any first-party claims, losses, costs or damages whatsoever resulting from or in any way related to the Project or this Contract, from any cause including, but not limited to, negligence, professional errors or omissions, strict liability, breach of contract, or warranty (express or implied), shall not exceed the sum of Three Million Dollars ($3,000,000). 9.4 Survival. The acceptance of DBE’s services and duties by City shall not operate as a waiver of the right of indemnification. The provisions of this Section 9 shall survive the expiration or early termination of this Agreement. SECTION 10 NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, DBE 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. DBE 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 12 with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. Within ten (10) business days following issuance of the Notice of Award, DBE shall provide City with evidence satisfactory to the City that DBE has obtained insurance by providing a valid certificate of insurance; and has sufficient bonding capacity to provide Performance and Payment Bonds, by providing copies of the required bonds, satisfying all requirements in Article 11 of the General Conditions, or as otherwise approved by the City’s Risk Manager. SECTION 12 PROHIBITION AGAINST TRANSFERS. City is entering into this Design-Build Contract in reliance upon the stated experience and qualifications of the DBE and its Subcontractors as set forth in DBE’s Proposal. Accordingly, DBE shall not assign, hypothecate or transfer this Design- Build 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. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of DBE or of any general partner or joint venturer or syndicate member of DBE, if the DBE is a partnership or joint venture or syndicate or co-tenancy, shall result in changing the control of DBE, shall be construed as an assignment of this Design-Build 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 Design-Build 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 Recipients. All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from DBE to City shall include the Project name and the number of this Design-Build 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 13 AND Copy To: City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Jim Bujtor In addition, copies of all Claims by DBE under this Design-Build Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be delivered personally or sent by certified mail. All notices, demands, requests or approvals from City to DBE shall be addressed to: DBE Name: Marianne Goldsborough Title: T&D Project Manager Address: 140 S. State College Blvd, Ste. 100 Brea, CA, 92821 Phone/Fax: 562-237-9396 Email: mlgoldsborough@burnsmcd.com 13.3 Change of Address. In advance of any change of address, DBE 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 DBE 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 DBE in the manner specified for the giving of notices in the Design- Build Contract, with a copy to DBE’s performance bond surety. 14.2 Opportunity to Cure Default. Except for emergencies, DBE 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, DBE will commence to cure the breach within two (2) Days (or such longer time as City and DBE may reasonably agree) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than twenty (20) Days after the agreed upon time, unless expressly authorized by City. SECTION 15 CITY'S RIGHTS AND REMEDIES. 15.1 Remedies Upon Default. 14 If DBE fails to cure any default of this Design-Build Contract within the time period set forth above in Section 14, then City may pursue any remedies available under law or equity, including, without limitation, the following: 15.1.1 Delete Certain Services. City may, without terminating the Design-Build Contract, delete certain portions of the Design-Build Services, reserving to itself all rights to Losses related thereto. 15.1.2 Perform and Withhold. City may, without terminating the Design-Build Contract, engage others to perform the Design-Build Services or portion thereof that has not been adequately performed by DBE and withhold the cost thereof to City from future payments to DBE related to such portion of Services, reserving to itself all rights to Losses related thereto. 15.1.3 Suspend the Design-Build Contract. City may, without terminating the Design-Build Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Design-Build Contract for as long a period of time as City determines, in its sole discretion, in which event City shall have no obligation to adjust the Contract Sum or Contract Time and shall have no liability to DBE for damages if City directs DBE to resume Design-Build Services. 15.1.4 Terminate the Design-Build Contract for Default. City shall have the right to terminate this Design-Build Contract, in whole or in part, upon the failure of DBE to promptly cure any default as required by Section 14. City’s election to terminate the Design-Build Contract for default shall be communicated by giving DBE a written notice of termination in the manner specified for the giving of notices in the Design-Build Contract. Any notice of termination given to DBE by City shall be effective immediately, unless otherwise provided therein. 15.1.5 Invoke the Performance Bond. City may, with or without terminating the Design-Build 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 Design-Build Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity, except as expressly set forth herein. 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 Design-Build Contract, or prevent the City from terminating the Agreement for its convenience for breaches that are not material. City’s determination of whether there has been noncompliance with the Design-Build Contract so as to warrant exercise by City of its rights and remedies for default under the Design-Build 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 DBE to recover all liquidated damages and Losses suffered by City. 15.2 Delays by Sureties. [Intentionally omitted.] 15.3 Damages to City. 15.3.1 For DBE's Default. City will be entitled to seek recovery of all Losses under law or equity in the event of DBE’s default under the Contract Documents. 15.3.2 Compensation for Losses. 15 In the event that City's undisputed Losses arise from DBE’s default under the Contract Documents, City shall be entitled to deduct the cost of such Losses from monies otherwise payable to DBE. If the undisputed Losses incurred by City exceed the amount payable, DBE shall be liable to City for the difference and shall promptly remit same to City. City may withhold payment for any disputed Losses consistent with the process set forth in the General Conditions. 15.4 Suspension by City 15.4.1 Suspension for Convenience. City may, at any time and from time to time, without cause, order DBE, in writing, to suspend, delay, or interrupt the Design-Build Services 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, DBE shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Design-Build Services 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 Design-Build Services covered by the Suspension Order. If a Suspension Order is canceled or expires, DBE shall resume and continue with the Design-Build Services. 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 Design-Build Services. 15.4.2 Suspension for Cause. In addition to all other remedies available to City, if DBE fails to perform or correct work in accordance with the Contract Documents, City may immediately order the Design-Build Services, or any portion thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction. DBE shall not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by DBE’s fault. City’s right to suspend the Design-Build Services shall not give rise to a duty to suspend the Design-Build Services, and City’s failure to suspend the Design-Build Services shall not constitute a defense to DBE’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 Design-Build Contract in part or in whole upon written notice to DBE. Upon receipt of such notice, DBE 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 DBE’s sole and exclusive compensation for such termination and DBE 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 DBE or its sureties from any of their obligations for Losses arising from or related to the Design-Build Services performed by DBE. 15.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt of a billing from DBE seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the following to DBE as DBE’s sole compensation for performance of the Design-Build Services: .1 For Services Performed. The amount of the Contract Sum allocable to the portion of the Design- Build Services properly performed by DBE as of the date of termination, less sums previously paid to DBE. .2 For Close-out Costs. If termination is effective after the Construction Services have commenced on the site, reasonable costs of DBE and its Subcontractors: (i) Demobilizing and (ii) Administering the close-out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. 16 .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work, or such items not yet delivered but which cannot be cancelled or returned by DBE. .4 Profit Allowance. An allowance for overhead and profit calculated as ten percent (10%) of the sum of the above items listed in 15.5.1.2 and 15.5.1.3. .5 Emergency Termination. The compensation provided in this provision does not apply to termination for emergency pursuant to Section 2.6 of the General Conditions. 15.5.2 Subcontractors. DBE shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by DBE on terms that are consistent with this Design-Build Contract and that afford no greater rights of recovery against DBE than are afforded to DBE against City under this Section. 15.6 DBE’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, DBE shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Design-Build Services 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 Design-Build Services 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 DBE 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 Design-Build Services as may be necessary to preserve and protect Design- Build Services 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 Documents, instructions, or manuals, or other such rights and obligations arising prior to the termination date. SECTION 16 DBE'S RIGHTS AND REMEDIES. 16.1 DBE’s Remedies. DBE may terminate this Design-Build Contract only upon the occurrence of one of the following: 16.1.1 For Work Stoppage. The Work is stopped for thirty (30) consecutive Days, through no act or fault of DBE, any Subcontractor, or any employee or agent of DBE 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. 17 16.1.2 For City's Non-Payment. If City does not pay DBE undisputed sums within sixty (60) Days after receipt of notice from DBE, DBE may terminate the Design-Build Contract thirty (30) days following a second notice to City of DBE’s intention to terminate the Design-Build Contract. 16.2 Damages to DBE. In the event of termination for cause by DBE, City shall pay DBE the sums provided for in Paragraph 15.5.1 above. DBE 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. DBE shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Design-Build Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy DBE's financial 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. DBE 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. Notwithstanding anything to the contrary herein, in no event shall the City be entitled to audit the composition of any agreed upon fixed rates or percentage multipliers set forth in this Contract, nor shall it be entitled to audit any rates, charges, costs, hours worked or expenses related to Services performed on a lump sum or fixed price basis. 17.2 Compliance with City Requests. DBE'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 DBE against City and to DBE's right to receive further payments under the Contract Documents. City many enforce DBE’s obligation to provide access to City of its business and other records referred to in Section 17.1 for inspection 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. Provided, however, that this Section 17 shall not be used by the City in contravention of the applicable rules of civil procedure and discovery in any litigation between the parties. 17.3 Confidential or Proprietary Information. To the extent City desires a copy of any of the above information which DBE deems proprietary or confidential information, City and DBE shall execute a non-disclosure agreement to prevent disclosure of the information to third parties, to the extent allowed by law. SECTION 18 INDEPENDENT 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 DBE or its respective agents, employees, subconsultants, or Subcontractors, except as herein set forth. SECTION 19 NUISANCE. DBE shall not maintain, commit, nor permit the maintenance or commission of any nuisance (as defined by applicable law) in connection in the performance of services under this Design-Build Contract. 18 SECTION 20 PERMITS AND LICENSES. DBE 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 Design-Build Services; provided, however, that the Parties understand as of the Execution Date that no permits are required to be provided by Contractor or included in the Contract Sum. Payment of all costs and expenses for any Contractor licenses required by applicable law for this Work shall be included in the Contract Sum. SECTION 21 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. SECTION 22 GOVERNING LAW AND VENUE. This Design-Build 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. SECTION 23 COMPLETE AGREEMENT. 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. The provisions of the Design-Build Contract which by their nature survive termination of the Design-Build Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit DBE’s books and records, shall remain in full force and effect after Final Completion or any termination or suspension of the Design-Build Contract. SECTION 25 PREVAILING WAGES. The DBE is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations. Copies of these rates may be obtained at the Purchasing Office of the City of Palo Alto. DBE 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. DBE shall comply with the provisions of Sections 1775, 1776, 1777.5, 1810, and 1813 of the Labor Code. Pursuant to Labor Code section 1771.1, for any public works contract subject to Chapter 1 of Part 7 of Division 2 of the California Labor Code, for any Proposal submitted on or after March 1, 2015 and for any contract entered into on or after April 1, 2015, a contractor or subcontractor shall not be qualified to bid on or to be listed in a bid proposal subject to the requirements of section 4104 of the California Public Contract Code, unless that contractor or subcontractor is currently registered and qualified to perform public work pursuant to section 1725.5 of the California Labor Code. Notice: Pursuant to California Labor Code section 1771.4, this Project, if awarded on or after January 15, 2015, is subject to compliance monitoring and enforcement by the California Department of Industrial Relations. 19 SECTION 26 NON APPROPRIATION. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that 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 Design-Build 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. Any termination of this Contract due to non-appropriation shall be considered a termination for the City’s convenience. SECTION 27 AUTHORITY. 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 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. SECTION 29 SEVERABILITY. In case a provision of this Design-Build 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. 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. Pursuant to Labor Code Section 1861, by signing this Contract, DBE certifies as follows: “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.” SECTION 32 SPECIAL TERMS. Notwithstanding anything to the contrary in the Contract Documents, the following shall terms shall apply and govern: 32.1 Costs. All references to costs (including “Allowable Costs”) for DBE’s performance of Work shall include the agreed all-inclusive hourly rates for DBE’s direct employees and agents. Any references to direct costs, prevailing wages, certified payrolls, labor classifications, and similar terms shall only apply to trade laborers of construction Subcontractors. The DBT Markup shall be 10% on reimbursable expenses, and the Subcontractor Markup shall be 10% of Subcontractors’ Allowable Costs. Section 7.2.5 of the General Conditions shall not apply, but DBE agrees that all such items listed therein shall not be double-charged to City within the total of Allowable Costs, DBT Markup, and Subcontractor Markup. 32.2 Delays. All Excusable Delays shall allow DBE to seek and provide evidence for a reasonable Change Order for a Compensable Delay. Excusable Delays shall include delays caused by City or its Separate Contractors for their work related to DBE’s Work at the Site. 21 32.3 Beneficial Occupancy. The parties agree that Beneficial Occupancy is not an applicable concept to this Contract. 32.4 Proposal. All references in the Contract Documents to DBE’s Proposal shall be considered to mean the final Scope of Work agreed in this Contract, conditions existing as of the date of execution of the Contract, or the final Contract Sum agreed in this Contract, as the context allows. 32.5 Notices. All references to the timeframe to provide notice of a claim, dispute, incident, or change for either Party, particularly related to Change Order Requests and incident reports, shall commence upon the date when such party first discovered or obtained knowledge of the occurrence resulting in a potential claim, dispute, incident, or change. 32.6 Warranties. .1 “Defective Work” (or any references to defect or defective, whether or not capitalized) shall mean Work by DBE that is faulty, omitted, incomplete, or deficient because it does not conform to the Applicable Code Requirements, the Contract Documents, or the requirements of any inspection, reference standard, test, code or approval specified in the Contract Documents. .2 The Standard of Care set forth in Section 8 of the Design-Build Contract shall be the only standard and warranty applied to Design Services provided by DBE as part of the Work. The Warranty set forth in Section 3.5 of the General Conditions shall not be in addition to the terms of Article 12 of the General Conditions, but shall be consistent with the following: The Construction Services and equipment procured by DBE for permanent installation into the Work shall be performed in a good and workmanlike manner, free from defects, and in accordance with the technical specifications. Article 12 sets forth the remedies for DBE’s breach of any warranty expressly stated in the Design-Build Contract or Section 3.5 of the General Conditions. The one-year Guarantee to Repair Period shall commence upon Substantial Completion of the Work, and shall not be extended. Ordinary wear and tear, abuse or neglect by City’s operations and maintenance, and damage or defect caused by City’s separate work related to the Project are excepted from this guarantee. .3 THE EXPRESS REPRESENTATIONS AND WARRANTIES PROVIDED IN THIS CONTRACT ARE EXCLUSIVE AND NO OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ARISING FROM COURSE OF DEALING OR TRADE USAGE) SHALL APPLY. THE REMEDIES SET FORTH IN ARTICLE 12 OF THE GENERAL CONDITIONS ARE THE SOLE AND EXCLUSIVE REMEDIES OF CITY FOR ANY FAILURE BY DBT TO COMPLY WITH ITS CORRECTION OBLIGATIONS FOR DEFECTIVE WORK SET FORTH IN SUCH ARTICLE 12. .4 All references to “intended purpose” or similar phrases in the Contract Documents shall mean for the purpose as specified in the Contract Documents or in accordance with the technical specifications in the Contract Documents, as the context allows. .5 All references to a “best” or “highest” standard in the Contract Documents shall mean the standard of care described in Section 8 of Design-Build Contract. 32.7 Environmental Controls and Project Site. .1 DBE has a right to reasonably rely on the geological report and other site conditions and subsurface information provided by the City without independent verification. During the initial phase of engineering for the Work, if DBE determines that additional geological investigation is required, DBE shall promptly request additional information from the City and the City shall provide the additional information at City’s expense. Any material changes to the scope, schedule, or cost of the Work resulting from additional subsurface information or differing conditions shall be incorporated via mutually agreed Change Order. .2 The City is responsible for notifying “Underground Services Alert”, and shall provide DBE with 22 reasonable access to the Site for performance of the Work. DBE is only responsible for hazardous materials it or its Subcontractors bring onto the Site; and has no responsibility for pre-existing hazardous materials discovered on the Site, or for hazardous materials brought by Separate Contractors or other third parties. DBE shall at no time be considered a generator, storer, arranger, or transporter under applicable law, nor provide remediation of any pre-existing hazardous materials even by Change Order. .3 No SWPPP or dust control measures are applicable to this Scope of Work. 32.8 Drawing Submittals/Reviews. The City shall provide feedback within ten (10) days following the Contractor’s submittal of draft drawings for review. There will only be one review period with the City. 32.9 Payments and Completion. .1 Progress Payments. If the City identifies any issues for which it may withhold funds from any of Contractor’s progress payments per the Contract, City shall notify Contractor promptly after receiving an Application for Payment to allow Contractor a reasonable chance to cure such issues prior to withholding. .2 Final Payment and Final Completion. After Contractor achieves Substantial Completion of the Work per the Contract, the City shall have two (2) Business Days to complete its separate testing related to the Project. If Contractor has met all other conditions for Final Completion of the Work per the Contract and the only delay is related to the City’s failure to complete its separate testing through no fault of Contractor, the Contractor shall have a right to submit its application for Final Payment no later than thirty (30) days after Substantial Completion. 32.10 Subcontractors: DBE will be responsible for the performance of the Work, whether by its own forces or through its Subcontractors. DBE will include portions of the Contract Documents in its subcontracts which are applicable to each Subcontractor’s portion of Work. The City shall be a beneficiary of the indemnities, additional insured coverage, and warranties of Subcontractors, but shall not be a full third-party beneficiary of subcontracts. Subcontracts shall be assignable to City upon a termination of DBE’s Work or Contract for cause. 32.11 Royalties and Patents: Any indemnity by DBE for its or its Subcontractors’ infringement of patent or other intellectual property rights shall be for damages suffered by the City resulting from claims by third parties, and not for any claims related to specified designs (including the Bridging Documents) or modifications by the City or others to DBE’s Design Documents or Construction Documents. IN WITNESS WHEREOF, the parties have caused this Design-Build Contract to be executed the date and year first above written. 23 CITY OF PALO ALTO ______________________ City Manager or Designee APPROVED AS TO FORM: City Attorney or Designee APPROVED: Utilities Director DBE By: Name: Title: Date: By: Name: Title: Date: City of Palo Alto (ID # 9974) City Council Staff Report Report Type: Consent Calendar Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Housing Work Plan 2018: Second Reading Title: SECOND READING: Adoption of an Ordinance Amending Various Sections of Title 18 of the Palo Alto Municipal Code Related to Residential and Mixed-use Development Standards Including, but not Limited to, Minimum and Maximum Unit Density, Unit Size, Floor Area Ratio, Height, and Open Space Including Rooftop Gardens; Parking Requirements Including, but not Limited to, Regulations Related to In-lieu Parking for Downtown Commercial Office Uses and Retail Parking for Mixed Use Projects; Exclusively Residential Projects in Certain Commercial Zoning Districts; Ground-floor Retail and Retail Preservation Provisions; the Entitlement Approval Process; and Other Regulations Governing Residential, Multi-family Residential and Commercial Zoning Districts, all to Promote Housing Development Opportunities in These Zoning Districts in Furtherance of Implementation of the Comprehensive Plan. CEQA: Determination of Consistency With the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance on October 10, 2018 (FIRST READINGS: December 3, 2018 and January 28, 2019, PASSED) From: City Manager Lead Department: Planning and Community Environment RECOMMENDATION Staff recommends that the City Council adopt the attached ordinance (Attachment A). BACKGROUND The City Council reviewed the subject ordinance and made motions for approval with modifications on December 3, 2018 and January 28, 2019. The ordinance amends various City of Palo Alto Page 2 sections of Palo Alto Municipal Code to implement new policies to spur greater housing production. A summary of the more substantive changes is provided below: Citywide • Site and Design review will no longer be required for housing projects containing nine or more units. Projects located in environmentally or ecologically sensitive areas and designated with a D-Combining District will continue to be subject to Site and Design review requirements. • Parking for multi-family housing units is reduced from 1.25 and 1.50 spaces, respectively for studios and one-bedroom units, to 1 parking space. Senior housing has a new parking requirement of .75 per unit. 100% affordable housing projects may request a parking reduction up to 100 percent based on maximum anticipated demand1, and guest parking requirements are eliminated. • 100% affordable housing projects will be exempt from the retail preservation requirements, but subject to R- and GF-Combining Districts. Affordable housing is defined as 120% of area median income (AMI), except in CS and CN zoned properties adjacent to El Camino Real, where affordable housing projects must also not exceed an average income greater than 80% of the AMI, not including the manager’s unit. • Rooftop gardens standards are established and apply in areas of the City permitting this form of useable open space (CD-C, CC-2, CN and CS properties adjacent to El Camino Real, with some exceptions). Multi-Family Residential Zones • RM 15 is changed to RM 20 representing an increase in unit density to 20 units per acre. • Minimum density requirements are established, though existing single family and two- family homes in the multi-family districts may be replaced at the same density and not meet the minimum density requirement. No property will be considered a noncomplying use for not meeting the minimum density requirement. • A consistent open space standard of 150 square feet per unit is established. • 100% affordable housing projects are exempt from the retail requirement that applies to some projects in the RM-40 zoning district. • Properties that exceed the maximum density for the property may be re-established at the same density, provided the project complies with all other applicable requirements, including parking. Downtown (CD-C) District • A Housing Incentive Program is established creating a discretionary review and waiver process that allows housing projects to use commercial floor area in addition to 1 This waiver applies Citywide, including the Downtown Parking Assessment. City of Palo Alto Page 3 increased housing floor area; the maximum floor area is 3.0:1. HIP projects are subject to architectural review and are considered an alternative to the State Density Bonus law. Qualifying 100% affordable housing projects may request waivers from any development standards, including parking, provided such requests to do not exceed allowances provided for by the Affordable Housing Overlay. Affordable housing is defined as projects with 120% AMI or less with average household incomes no greater than 60% of AMI. • Exclusively residential projects are permitted in this district – commercial floor area is no longer required to build housing. However, the City’s retail preservation requirements and GF-Combining district standards (ground floor retail) still apply. • Housing density limits have been removed. • Curb cuts (driveway aprons) are precluded from occurring directly from University Avenue. • 75% of rooftop gardens may qualify to meet the useable open space requirements. • No parking is required for up to 1,500 square feet of ground floor retail in a mixed use housing project. • The average unit size for Downtown housing projects shall not exceed 1,500 square feet. • New office development2 above the ground floor will not be permitted to participate in the In-Lieu parking program for a period of one year from the effective date of this ordinance3. CC(2) Properties and CN / CS Properties Adjacent to El Camino Real • A Housing Incentive Program is established creating a discretionary review and waiver process that allows housing projects to use commercial floor area in addition to increased housing floor area; the maximum floor area is 2.0:1 for CC(2) properties and 1.5:1 for CN and CS properties. HIP projects are subject to architectural review and are considered an alternative to the State Density Bonus law. Projects located on CN and CS properties may seek waivers to site coverage as well. Qualifying 100% affordable housing projects may request waivers from any development standards, including parking, provided such requests to do not exceed allowances provided for by the 2 This provision will not apply to projects that have been filed and deemed complete prior to the effective date of the subject ordinance. 3 The City Council motion reads in part ‘…for the period of one year or until the Planning and Transportation Commission returns to the City Council with a detailed study and recommendation.’ Because of the ambiguity associated with the last clause of this motion, staff drafted a defined one year term to this provision. It is not staff’s understanding that the City Council, upon receiving a report and recommendation from the PTC, would seek to immediately revert back to allowing projects with office uses above the ground floor to resume participation in the in-lieu parking program. It is more likely the Council wanted to see a report and ordinance recommendation and that new policies be implemented prior to elimination of this provision. Moreover, it appears to be the Council’s intent that this be accomplished within one year of the effective date of this subject ordinance. City of Palo Alto Page 4 Affordable Housing Overlay. Affordable housing is defined as projects with 120% AMI or less with average household incomes no greater than 60% of AMI. • Exclusively residential projects are permitted in this district – commercial floor area is no longer required to build housing. However, the City’s retail preservation requirements and R-Combining district standards (ground floor retail) still apply. • For projects with ground floor housing, new design standards are established. • Housing density limits have been removed. • 60% of rooftop gardens may qualify to meet the useable open space requirements. • Minimum commercial floor area restrictions no longer apply to housing only or mixed- use housing projects, however, compliance with the City’s retail preservation ordinance and the R-Combining district still apply. • No parking is required for up to 1,500 square feet of ground floor retail in a mixed use housing project. • Curb cuts (driveway aprons) are precluded from occurring directly from California Avenue. The subject ordinance will take effect on the 31st day following Council’s adoption of the ordinance on second reading. The ordinance includes a pipeline provision that exempts projects that have been filed and determined complete for application processing prior to the effective date of the ordinance. However, qualifying exempt projects may opt in and seek to use components of the ordinance, in which case the project would be subject to the ordinance in its entirety. At the time this report was prepared, there was one Downtown project that would be exempt. Since the Council’s action to adopt on first reading the subject ordinance, staff has received complaints from individuals that have recently purchased transferred development rights (TDRs) from the City. The City sold TDRs from the College Terrace Library and Avenidas properties to help fund the City’s Junior Museum and Zoo and Avenidas projects. TDRs are used by developers to increase the amount of commercial floor area when redeveloping Downtown properties. Individuals that purchase TDRs generally expect to participate in the City’s in-lieu parking program. With the subject ordinance’s one year prohibition on using in-lieu parking for office uses above the first floor, one of the recent bidders who has not yet completed the transactional requirements, may cause those TDRs to be released. Based on City procedures the TDRs will either be offered to the next qualifying candidate or re-offered to the public in another round of bidding. The value of future TDRs may be affected by this land use policy prohibiting in-lieu parking if even on a temporary basis. In addition to the Council’s actions on the subject ordinance, staff received direction to return with additional information and recommendations on the following topics: City of Palo Alto Page 5 • For the RM zones, staff is to review the concept of when a project is over the number of units and will not make the project non-compliant and return to Council in 2019 for review. • For the CD-C zone, staff and the Planning and Transportation Commission are to further study decoupled parking, in-lieu parking, and off-site parking for residential developments and return to Council in 2019. • For the CD-C zone, staff and the Planning and Transportation Commission are to analyze the changes to housing production by: (i) Changing the hotel FAR; (ii) Elimination of ability of commercial uses above ground to participate in the in-lieu parking program; and (iii) Methods to match increases in residential FAR with a decrease in commercial FAR for mixed use projects. • For the CC(2) zone, staff is to analyze the interaction of housing production in the CC(2) zones in regards to the hotel FAR and methods to match increases in residential FAR with a decrease in commercial FAR for mixed-use projects Minutes from the prior City Council meetings is included in Attachment B; prior staff reports are available online: November 26, 2018 staff report: https://www.cityofpaloalto.org/civicax/filebank/documents/67731 December 3, 2018 staff report: https://www.cityofpaloalto.org/civicax/filebank/documents/67968 January 28, 2018 staff report: https://www.cityofpaloalto.org/civicax/filebank/documents/68607 Attachments: Attachment A: Housing Workplan Implementation Ordinance (PDF) Attachment B: Combined Meeting Excerpts (11.26.18 12.3.18 and 1.28.19) (PDF) Not Yet Approved 1 2019031501 Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Amending Title 18 (Zoning) of the Palo Alto Municipal Code, Including Chapters 18.04 (Definitions), 18.13 (Multiple Family Residential RM-15, RM-30 and RM-40) Districts), 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, and CS) Districts), 18.18 (Downtown Commercial (CD) District), 18.40 (General Standards and Exceptions), and 18.52 (Parking and Loading Requirements), to Establish or Modify Development Standards for Residential and Mixed-Use Projects Including, But Not Limited to, Minimum and Maximum Unit Density, Unit Size, Floor Area Ratio, Height, and Open Space Including Rooftop Gardens, to Modify Parking Requirements and Adjustments, to Temporarily Limit In-Lieu Parking for Downtown Commercial Office Uses Above the Ground Floor, to Allow Exclusively Residential Projects in Certain Commercial Zoning Districts, to Exempt Certain Affordable Housing Projects from Retail Preservation, to Simplify the Entitlement Process Removing Site and Design Review for Residential and Mixed-Use Projects, and to Make Other Technical Corrections and Clarifications, All to Promote Housing Development Opportunities in the Multi-Family Residential Zoning Districts and Commercial Zoning Districts in Furtherance of Implementation of the Comprehensive Plan The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and Declarations. The City Council finds and declares as follows: A. California is in the midst of a housing crisis due to a severe shortage of housing that is affordable to large segments of the population, including above-moderate and moderate income households and, most acutely, lower-income households. According to the California Department of Housing and Community Development (HCD), throughout the State, housing production averaged less than 80,000 new homes over the last 10 years, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually. The lack of supply, with a deficit that deepens each year, has been a key driver of the lack of affordability for millions of households throughout the State. The majority of Californian renters pay more than 30 percent of their income toward rent, and nearly one-third pay more than 50 percent of their income toward rent. B.In the nine-county Bay Area, which contains job centers that have produced a substantial number of new jobs, the lack of housing affordability is even more severe. The Bay Area continues to produce housing units in insufficient numbers to adequately house both existing and projected populations. Between 2011 and 2015, the Bay Area added 500,000 jobs but built only 65,000 new homes. Limited housing, with increasing demand and constraints on Attachment A Not Yet Approved 2 2019031501 production, have resulted in high housing cost burdens that fall most heavily on lower income households who are more likely to be renters. Between 2000 and 2016, rents increased 24 percent while renter incomes rose just 9 percent. Six of every 10 economically insecure residents are renters and 75 percent of them pay more than 30 percent of their income for housing. C. For Palo Alto, as a job center with among the highest housing prices and greatest jobs to housing imbalances in the Bay Area, the housing shortage threatens the city’s prosperity, diversity, stability, environment, quality of life, and community character. D. The cost pressures associated with substantially increased housing prices and rents have resulted in displacement and contributed to homelessness, separated families, and loss of diversity. Residents in search of affordability are driven to move to far outlying areas, requiring longer commutes to job centers in the Bay Area, including Palo Alto. According to a recent report by the Bay Area Economic Council, more than 100,000 Bay Area mega-commuters travel 90 minutes or more to reach their jobs, contributing to a 78 percent increase since 1990 in the number of mega-commuters crossing county and regional boundaries to get to work. Of the nearly 200,000 commuters crossing regional boundaries in 2013, 69 percent were commuting into the Bay Area for work. This results in health and quality of life impacts to individuals, as well as community-wide and region-wide impacts in terms of increased traffic congestion, air pollution and greenhouse gas emissions. Without the construction of more housing near urban centers and jobs, the State’s ability to achieve its climate change goals is in jeopardy. E. In November 2017, the City adopted an updated Comprehensive Plan that projected 3,545 to 4,420 new housing units between 2015 and 2030, and included policies to encourage housing production. The Council subsequently approved a Housing Work Plan with a recognition that if Palo Alto remains on its current course, the City will fall short of meeting its Regional Housing Needs Assessment (RHNA) allocation of 1,988 units at varying levels of affordability and the goals inherent in the Comprehensive Plan policies. The Housing Work Plan detailed the actions needed to spur the production of housing, and included the proposed zoning changes reflected in this Ordinance to remove barriers and disincentives to housing development at higher densities where appropriate near transit, jobs and services, and that is affordable for a range of income levels. Not Yet Approved 3 2019031501 SECTION 2. Subsection (a)(142) of Section 18.04.030 of Chapter 18.04 (Definitions) of Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC) is amended to read as follows: 18.04.030 Definitions . . . (142) “Usable open space” means outdoor or unenclosed area on the ground, or on a roof, balcony, deck, porch, patio or terrace, designed and accessible for outdoor living, recreation, pedestrian access, or landscaping, but excluding parking facilities, driveways, utility or service areas, or areas with mechanical equipment. Usable open space may be covered if at least 50% open on the sides. Usable open space shall be sited and designed to accommodate all groups including children, seniors, and other adults, different activities, groups, including active and passive recreation and uses, and should be located convenient to the intended users (e.g., residents, employees, or public). Any usable open space that is not landscaped shall be developed to encourage outdoor recreational use and shall include elements such as decks, seating, decorative paved areas and walkways which do not serve as an entrance walkway. Usable open space shall be screened from utility or service areas, and areas with mechanical equipment. Parking, driveways and required parking lot landscaping shall not be counted as usable open space. SECTION 3. The title of Chapter 18.13 of Title 18 (Zoning) of the PAMC is amended to read as follows: Chapter 18.13 MULTIPLE-FAMILY RESIDENTIAL (RM-2015, RM-30 AND RM-40) DISTRICTS SECTION 4. Section 18.13.010 (Purposes) and Section 18.13.040 (Development Standards) of Chapter 18.13 (Multiple Family Residential RM-15, RM-30 and RM-40) Districts) of Title 18 (Zoning) of the PAMC are amended as follows: 18.13.010 Purposes This section specifies regulations for three multiple family residential districts. (a) RM-2015 Low Density Multiple-Family Residence District [RM-2015] The RM-2015 low-density multiple-family residence district is intended to create, preserve and enhance areas for a mixture of single-family and multiple-family housing which is compatible with lower density and residential districts nearby, including single- family residence districts. The RM-2015 residence district also serves as a transition to moderate density multiple-family districts or districts with nonresidential uses. Permitted densities in the RM-2015 residence district range from eight to fifteen twenty dwelling units per acre, with no required minimum density. Not Yet Approved 4 2019031501 (b) RM-30 Medium Density Multiple-Family Residence District [RM-30] The RM-30 medium density multiple-family residence district is intended to create, preserve and enhance neighborhoods for multiple-family housing with site development standards and visual characteristics intended to mitigate impacts on nearby lower density residential districts. Projects at this density are intended for larger parcels that will enable developments to provide their own parking spaces and to meet their open space needs in the form of garden apartments or cluster developments. Permitted densities in the RM-30 residence district range from sixteen to thirty dwelling units per acre, with no required minimum density. (c) RM-40 High Density Multiple-Family Residence District [RM-40] The RM-40 high density multiple-family residence district is intended to create, preserve and enhance locations for apartment living at the highest density deemed appropriate for Palo Alto. The most suitable locations for this district are in the downtown area, in select sites in the California Avenue area and along major transportation corridors which are close to mass transportation facilities and major employment and service centers. Permitted densities in the RM-40 residence district range from thirty-one to forty dwelling units per acre, with no required minimum density. Section 18.13.040 Development Standards (a) Site Specifications, Building Size and Bulk, and Residential Density The site development regulations in Table 2 shall apply in the multiple-family residence districts, provided that more restrictive regulations may be recommended by the Architectural Review Board and approved by the Director of Planning and Community Environment, pursuant to the regulations set forth in Chapter 18.76, performance criteria set forth in Chapter 18.23, and the context-based design criteria set forth in Section 18.13.060. Table 2 Multiple Family Residential Development Table RM-2015 RM-30 RM-40 Subject to regulations in: Minimum Site Specifications Site Area (ft2) 8,500 Site Width (ft) 70 Site Depth (ft) 100 Not Yet Approved 5 2019031501 RM-2015 RM-30 RM-40 Subject to regulations in: Substandard Lot Specifications Site Area (ft2) Less than 8,500 square feet and/or less than 70 feet in width Site Width (ft) Minimum Setbacks Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply Front Yard (ft) 20 20 0-25 (1) 18.13.040(b) On arterial roadways(1) 0-20 (1) 0-20 (1) 0-25 (1) Interior Side Yards (ft) For lots with width of 70 feet or greater 10 10 10 For lots with width of less than 70 feet 6 feet Interior Rear Yards (ft)3 10 10 10 Street Side and Street Rear Yards (ft) 16 16 0-16(2) Maximum Height (ft) 30 35 40 Maximum height for those portions of a site within 50 feet of a more restrictive residential district or a site containing a residential use in a nonresidential district 35 Daylight Planes(7) • Daylight Plane for side and rear lot lines for sites abutting any R-1, R-2, RMD, or RM-2015 district or abutting a site containing a single- family or two-family residential use in a nonresidential district: Initial Height (ft) 10 Angle (degrees) 45 • Daylight Plane for side and rear lot lines for sites abutting a RM-30, RM-40, Planned Community, or nonresidential district that does not contain a single-family or two-family Not Yet Approved 6 2019031501 RM-2015 RM-30 RM-40 Subject to regulations in: residential use: For lots with width of 70 feet or greater None For lots with width of less than 70 feet, limited to the first 10 feet from the property line (no daylight plane beyond 10 feet): Initial Height (ft) 10 Angle (degrees) 45 Maximum Site Coverage: Base 35% 40% 45% Additional area permitted to be covered by covered patios or overhangs otherwise in compliance with all applicable laws 5% 5% 5% Maximum Floor Area Ratio (FAR)(4) 0.5:1 0.6:1 1.0:1 Maximum Residential Density (units) Maximum number of units per acre(3) 2015 30 40 18.13.040(g) Minimum Residential Density (units) Minimum number of units per acre(8) 11 16 21 Minimum Site Open Space(5) (percent) 35 30 20 18.13.040(e) Minimum Usable Open Space (sf per unit)(5) 150200 150 150100 Minimum common open space (sf per unit) 75100 75 7550 18.13.040(e) Minimum private open space (sf per unit) 50 50 50 Performance Criteria See provisions of Chapter 18.23 Ch. 18.23 Landscape Requirements 18.40.130 Parking(6) See provisions of Chapter 18.52 Ch. 18.52 (1) Minimum front setbacks shall be determined by the Architectural Review Board upon review pursuant to criteria set forth in Chapter 18.76 and the context-based criteria outlined in Section 18.13.060. Arterial roadways do not include residential arterials. Not Yet Approved 7 2019031501 (2) Minimum street side setbacks in the RM-40 zone may be from 0 to 16 feet and shall be determined by the Architectural Review Board upon review pursuant to criteria set forth in Chapter 18.76 and the context-based criteria outlined in Section 18.13.060. (3) Provided that, for any lot of 5,000 square feet or greater, two units are allowed, subject to compliance with all other development regulations. (4) Covered parking is not included as floor area in multi-family development, up to a maximum of 230 square feet per required parking space that is covered. Covered parking spaces in excess of required parking spaces count as floor area. (5) Subject to the limitations of Section 18.13.040(e). Usable open space is included as part of the minimum site open space; required usable open space in excess of the minimum required for common and private open space may be used as either common or private usable open space; landscaping may count towards total site open space after usable open space requirements are met. (6) Tandem parking is allowed for any unit requiring two parking spaces, provided that both spaces in tandem are intended for use by the same residential unit. For projects with more than four (4) units, not more than 25% of the required parking spaces shall be in a tandem configuration. (7) Each daylight plane applies specifically and separately to each property line according to the adjacent use. (8) The minimum density for a site may be reduced by the Director if, after the proposal is reviewed by the Architectural Review Board, the Director finds that existing site improvements or other parcel constraints, preclude the development from meeting the minimum density. A site with an existing single-family use or two-family use may be redeveloped at the existing density, either single-family or two-family as applicable. An existing or replaced single-family or two-family residence shall not be considered a nonconforming use, and the provisions of Chapter 18.70 shall not apply, solely based on the minimum density requirement. (b) Setbacks, Daylight Planes and Height - Additional Requirements and Exceptions (1) Setbacks (A) Setbacks for lot lines adjacent to an arterial street, expressway or freeway, as designated in the Palo Alto Comprehensive Plan, shall be a minimum of twenty-five feet (25'), except that lesser setbacks may be allowed or required by the Planning Director, upon recommendation by the Architectural Review Board, where prescribed by the context-based criteria outlined in Section Not Yet Approved 8 2019031501 18.13.060. Special setbacks of greater than 25 feet may not be reduced except upon approval of a design enhancement exception or variance. (B) Required parking spaces shall not be located in a required front yard, nor in the first ten feet (10') adjoining the street property line of a required street side yard. (C) Projections into yards are permitted only to the extent allowed by Section 18.40.070 of this code. (2) Height and Daylight Planes (A) Exceptions to maximum height limitations are permitted only to the extent allowed by Section 18.40.090 of this code. (B) The following features may extend beyond the daylight plane established by the applicable district, provided that such features do not exceed the height limit for the district unless permitted to by Section 18.40.090 of this code: i. Television and radio antennas; ii. Chimneys and flues that do not exceed 5 feet in width, provided that chimneys do not extend past the required daylight plane a distance exceeding the minimum allowed pursuant to Chapter 16.04 of this code. iii. Cornices and eaves, excluding flat or continuous walls or enclosures of usable interior space, provided such features do not extend past the daylight plane more than 4 feet, and so long as they do not encroach into the side setback greater than 2 feet. . . . (e) Usable Open Space The following usable open space regulations shall apply: (1) Required Minimum Site Open Space. Each site shall, at a minimum, have a portion of the site, as prescribed in Table 2, developed into permanently maintained open space. Site open space includes all usable open space plus landscape or other uncovered areas not used for driveways, parking, or walkways. (2) Usable Open Space (Private and Common). Each project shall, at a minimum, have a portion of the site, as prescribed in Table 2, developed into permanently maintained Not Yet Approved 9 2019031501 usable open space, including private and common usable open space areas. Usable open space shall be located protected from the activities of commercial areas and adjacent public streets and shall provide noise buffering from surrounding uses where feasible. Parking, driveways and required parking lot landscaping shall not be counted as usable open space. (A) Private Usable Open Space. Each dwelling unit shall have at least one private usable open space area contiguous to the unit that allows the occupants of the unit the personal use of the outdoor space. The minimum size of such areas shall be as follows: (i) Balconies (above ground level): 50 square feet, the least dimension of which shall is 6 feet. (ii) Patios or yards in the RM-2015 and RM-30 districts: 100 square feet, the least dimension of which is 8 feet for at least 75% of the area. (iii) Patios or yards in the RM-40 district: 80 square feet, the least dimension of which is 6 feet for at least 75% of the area. (B) Common Usable Open Space. The minimum designated common open space area on the site shall be 10 feet wide and each such designated area shall comprise a minimum of 200 square feet. In the RM-30 and RM-40 districts, part or all of the required private usable open space areas may be added to the required common usable open space in a development, for purposes of improved design, privacy, protection and increased play area for children, upon a recommendation of the Architectural Review Board and approval of the Director. (f) Personal Services, Retail Services, and Eating and Drinking Services in the RM-30 and RM-40 Districts Within a single residential development containing not less than 40 dwelling units, personal services, retail services, and eating and drinking services solely of a neighborhood-serving nature to residents in the development or in the general vicinity of the project may be allowed upon approval of a conditional use permit, subject to the following limitations and to such additional conditions as may be established by the conditional use permit: (1) Total gross floor area of all such uses shall not exceed 5,000 square feet or three percent of the gross residential floor area within the development, whichever is smaller, and may not occupy any level other than the ground level or below grade levels. Not Yet Approved 10 2019031501 (2) A maximum of 2,500 square feet of retail and/or service and/or eating and drinking uses shall be allowed per establishment. (3) Personal services, retail services, and eating and drinking services provided in accordance with this section shall not be included in the gross floor area for the site. (4) The conditional use permit for the project may preclude certain uses and shall include conditions that are appropriate to limit impacts of noise, lighting, odors, parking and trash disposal from the operation of the commercial establishment. The hours of operation shall be limited to assure compatibility with the residential use and surrounding residential uses. (5) Allowable Neighborhood-Serving Uses. A neighborhood-serving use primarily serves individual consumers and households, not businesses, is generally pedestrian oriented in design, and does not generate noise, fumes or truck traffic greater than that typically expected for uses with a local customer base. A neighborhood-serving use is also one to which a significant number of local customers and clients can walk, bicycle or travel short distances, rather than relying primarily on automobile access or the provider of the goods or services traveling off-site. Allowable neighborhood-serving personal services, retail services and eating and drinking services may include, but are not limited to, "agent" dry cleaners, flower shops, convenience grocery stores (excluding liquor stores), delicatessens, cafes, fitness facilities, day care facilities, and similar uses found by the Planning Director to be compatible with the intent of this provision. (6) Sign programs, including size, number, color, placement, etc. shall be permitted only as specified in the conditional use permit and by the Planning Director upon recommendation of the Architectural Review Board. (7) Off-street parking and bicycle facilities, in addition to facilities required for residential uses, shall be provided as may be specified by the conditional use permit. However, there shall not be less than one parking space for each employee working or expected to be working at the same time. (8) For any project, other than a 100% affordable housing project, containing forty (40) or greater units and located more than 500 feet from neighborhood commercial services, as determined by the Director, a minimum of 1,500 square feet of neighborhood serving retail, personal service, and/or eating or drinking uses shall be provided, subject to the above limitations. No conditional use permit is required, but the commercial use shall be reviewed by the Architectural Review Board as part of the architectural review approval. A minimum of one parking space for each Not Yet Approved 11 2019031501 employee working or expected to be working at the same time shall be provided. A “100% affordable housing project” as used herein means a multiple-family housing project consisting entirely of affordable units, as defined in Section 16.65.020 of this code, available only to households with income levels at or below 120% of the area median income for Santa Clara County, as defined in Chapter 16.65, and where the average household income does not exceed 80% of the area median income level, except for a building manager’s unit. (g) Below Market Rate Units and Rental Housing Protection (1) In developments of five or more units on sites of less than five acres, not less than fifteen percent (15%) of the units shall be provided at below-market rates (BMR) to very-low, low and moderate income households in accordance with Program H-36 of the Palo Alto Comprehensive Plan Housing Element. In developments of five or more units on sites of five acres or more, not less than twenty percent (20%) of the units shall be provided at below-market rates (BMR). Specified percentages are applied to all proposed units in a project, including those designated as BMR units. (2) Further details of the BMR program requirements, including their applicability to subdivisions and for density bonus purposes, are found in the discussion of Programs H-36 and H-38 of the Palo Alto Comprehensive Plan Housing Element. (3) Below market rate units shall be fully integrated into the development unless good cause is shown for an exception. (g) Redevelopment of Sites with Non-complying Density For a parcel with a residential use that exceeds the maximum unit density of the applicable zoning district, the Director may grant an exception to the maximum unit density standard and allow the parcel to be redeveloped to replace the legally established residential units at the existing density, subject to all of the following: (1) The applicant must make the request for exception under this provision at the time of project application; (2) The project is a residential rental project; (3) The project complies with all other applicable development standards; and (4) The project shall not be eligible for a density bonus under Chapter 18.15 (Density Bonus). The applicant must elect whether to utilize state density bonus law or the exception described herein as an alternative to state density bonus law. Not Yet Approved 12 2019031501 (h) Performance Criteria In addition to all other provisions of this chapter, all multi-family development shall comply with applicable provisions of Chapter 18.23 (Performance Criteria for Multiple Family, Commercial, Industrial Manufacturing and Planned Community Districts). SECTION 5. The Residential Uses portion of Table 1 of subsection (a) of Section 18.16.040 (Land Uses) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, and CS) Districts) of Title 18 (Zoning) of the PAMC is amended as follows: Section 18.16.040 Land Uses The uses of land allowed by this Chapter in each commercial zoning district are identified in the following tables. Land uses that are not listed on the tables are not allowed, except where otherwise noted. Where the last column on the following tables (“Subject to Regulations in”) includes a section number, specific regulations in the referenced section also apply to the use; however, provisions in other sections may apply as well. (a) Commercial Zones and Land Uses Permitted and conditionally permitted land uses for each commercial zone are shown in Table 1: TABLE 1 CD PERMITTED AND CONDITIONALLY PERMITTED USES P = Permitted Use CUP = Conditional Use Permit Required LAND USE CN(4) CC, CC(2) CS(4) Subject to Regulations In: . . . RESIDENTIAL USES Multiple-Family P(1) P(1) P(1) 18.16.060(b) and (c) Home Occupations P P P Residential Care Homes P P P . . . (1) Residential is only permitted: (i) as part of a mixed use development, pursuant to the provisions of Section 18.16.060(b), or (ii) on sites designated as Housing Opportunity Siteshousing inventory sites in the Housing Element of the Comprehensive Plan, (iii) on CN or CS sites on El Not Yet Approved 13 2019031501 Camino Real, or (iv) on CC(2) sites, all pursuant to the provisions of Section 18.16.060(b) and (c). . . . SECTION 6. Subsections (b) and (c) of Section 18.16.060 (Development Standards) of Chapter 18.16 (Neighborhood, Community, and Service Commercial (CN, CC, and CS) Districts) of Title 18 (Zoning) of the PAMC are amended as follows: Section 18.16.060 Development Standards . . . (b) Mixed Uses and Residential Table 4 specifies the development standards for new residential mixed use developments and residential developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlined in Section 18.16.090, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020. Table 4 Mixed Use and Residential Development Standards CN CC CC(2) CS Subject to regulations in: Minimum Site Specifications Site Area (ft2) None required Site Width (ft) Site Depth (ft) Minimum Setbacks Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply Front Yard (ft) 0' - 10' to create an 8' - 12' effective sidewalk width (8) None Required (8) 0' - 10' to create an 8' - 12' effective sidewalk width (8) 0' - 10' to create an 8' - 12' effective sidewalk width (8) Rear Yard (ft) 10' for residential portion; no requirement for commercial portion Not Yet Approved 14 2019031501 CN CC CC(2) CS Subject to regulations in: Rear Yard abutting residential zone district (ft) 10' Interior Side Yard if abutting residential zone district (ft) 10' Street Side Yard (ft) 5' Build-to-Lines 50% of frontage built to setback (1) 33% of side street built to setback (1) Permitted Setback Encroachments Balconies, awnings, porches, stairways, and similar elements may extend up to 6' into the setback. Cornices, eaves, fireplaces, and similar architectural features (excluding flat or continuous walls or enclosures of interior space) may extend up to 4' into the front and rear setbacks and up to 3' into interior side setbacks Maximum Site Coverage 50% 50% 100% 50% Landscape/Open Space Coverage 35% 30% 20% 30% Usable Open Space 20 sq ft per unit for 5 or fewer units (2) , 150 sq ft per unit for 6 units or more (2) Maximum Height (ft) Standard 35' (4) 50' 37' 50' Within 150 ft. of a residential zone district (other than an RM-40 or PC zone) abutting or located within 50 feet of the side 35' 35' (5) 35' (5) 35' (5) Daylight Plane for lot lines abutting one or more residential zoning districts Daylight plane height and slope shall be identical to those of the most restrictive residential zoning district abutting the lot line Residential Density (net) (3) 15 or 20 (9) See sub- section (e) below No maximum 30 30 18.16.060(i) Sites on El Camino Real No maximum No maximum Maximum Residential Floor Area Ratio (FAR) 0.5:1 (4) 0.6:1 0.6:1 Maximum Nonresidential Floor Area Ratio (FAR) 0.4:1 2.0:1 0.4:1 Not Yet Approved 15 2019031501 CN CC CC(2) CS Subject to regulations in: Total Mixed Use Floor Area Ratio (FAR) 0.9:1 (4) 2.0:1 1.0:1 Minimum Mixed Use Ground Floor Commercial FAR (6) 0.15:1(10) 0.15:1(10) 0.25:1 (7) (10) 0.15:1 (10) Parking See Chapters 18.52 and 18.54 (Parking) 18.52, 18.54 (1) Twenty-five-foot driveway access permitted regardless of frontage; build-to requirement does not apply to CC district. (2) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space except as provided below); (3) minimum private open space dimension six feet; and (4) minimum common open space dimension twelve feet. For CN and CS sites on El Camino Real and CC(2) sites that do not abut a single- or two-family residential use or zoning district, rooftop gardens may qualify as usable open space and may count as up to 60% of the required usable open space for the residential component of a project. In order to qualify as usable open space, the rooftop garden shall meet the requirements set forth in Section 18.40.230. (3) Residential density shall be computed based upon the total site area, irrespective of the percent of the site devoted to commercial use. (4) For CN sites on El Camino Real, height may increase to a maximum of 40 feet and the FAR may increase to a maximum of 1.0:1 (0.5:1 for nonresidential, 0.5:1 for residential). (5) For sites abutting an RM-40 zoned residential district or a residential Planned Community (PC) district, maximum height may be increased to 50 feet. (6) Ground floor commercial uses generally include retail, personal services, hotels and eating and drinking establishments. Office uses may be included only to the extent they are permitted in ground floor regulations. (7) If located in the California Avenue Parking Assessment District. (8) A 12-foot sidewalk width is required along El Camino Real frontage. (9) Residential densities up to 20 units/acre only are allowed on CN zoned housing inventory sites identified in the Housing Element. Other CN zoned sites not located on El Camino Real are subject to a maximum residential density of up to 15 units/acre. Not Yet Approved 16 2019031501 (10) In the CC(2) zone and on CN and CS zoned sites on El Camino Real, there shall be no minimum mixed use ground floor commercial FAR for a residential project, except to the extent that the retail preservation requirements of Section 18.40.180 or the retail shopping (R) combining district (Chapter 18.30(A)) applies. (1) Residential and nonresidential mixed use projects shall be subject to site and design review in accord with Chapter 18.30(G), except that mixed use projects with nine or fewer residential units shall only require review by the architectural review board. (12) Nonresidential uses that involve the use or storage of hazardous materials in excess of the exempt quantities prescribed in Title 15 of the Municipal Code, including but not limited to dry cleaning plants and auto repair, are prohibited in a mixed use development with residential uses. (23) Residential mixed use development is prohibited on any site designated with an Automobile Dealership (AD) Combining District overlay. (c) Exclusively Residential Uses Exclusively residential uses are generally prohibited in the CN, CS, and CC, and CC(2) zone districts, except on housing inventory sites identified in the Housing Element, subject to the standards in Section 18.16.060(b), and on CS and CN sites on El Camino Real and CC(2) sites, subject to the following. (1) On CS and CN sites on El Camino Real and on CC(2) sites, where the retail shopping (R) combining district or the retail preservation provisions of Section 18.40.180 do not apply, exclusively residential uses are allowed subject to the standards in Section 18.16.060(b) and the following additional requirements: (A) Residential units shall not be permitted on the ground-floor of development fronting on El Camino Real unless set back a minimum of 15 feet from the property line or the 12-foot effective sidewalk setback along the El Camino Real frontage, whichever is greater. Common areas, such as lobbies, stoops, community rooms, and work-out spaces with windows and architectural detail are permitted on the ground-floor El Camino Real frontage. (B) Parking shall be located behind buildings or below grade, or, if infeasible, screened by landscaping, low walls, or garage structures with architectural detail. . . . Not Yet Approved 17 2019031501 (k) Housing Incentive Program (1) For an exclusively residential or residential mixed-use project in the CC(2) zone or on CN or CS zoned sites on El Camino Real, the Director may waive the residential floor area ratio (FAR) limit and the maximum site coverage requirement after the project with the proposed waiver or waivers is reviewed by the Architectural Review Board, if the Director finds that a project exceeding these standards is consistent with the required architectural review findings. In no event shall the Director approve a commercial FAR that exceeds the standard in Table 4 of Section 18.16.060(b) or a total FAR (including both residential and commercial FAR) in excess of 2.0 in the CC(2) zone or 1.5 in the CN or CS zone. (2) For a 100% affordable housing project in the CC(2) zone or on CN or CS zoned sites on El Camino Real, the Director may waive any development standard including parking after the project with the proposed waiver or waivers is reviewed by the Architectural Review Board, if the Director finds that a project with such waiver or waivers is consistent with the required architectural review findings. In no event shall the Director approve development standards more permissive than the standards applicable to the Affordable Housing (AH) Combining District in Chapter 18.30(J). A “100% affordable housing project” as used herein means a multiple-family housing or mixed-use project in which the residential component consists entirely of affordable units, as defined in Section 16.65.020 of this code, available only to households with income levels at or below 120% of the area median income, as defined in Section 16.65.020, and where the average household income does not exceed 60% of the area median income level, except for a building manager’s unit. (3) This program is a local alternative to the state density bonus law, and therefore, a project utilizing this program shall not be eligible for a density bonus under Chapter 18.15 (Residential Density Bonus). (l) Parking and Vehicular Access on California Avenue Restricted Vehicular access to CC(2) zoned sites on California Avenue which requires vehicular movement across the sidewalk on California Avenue shall be prohibited, except where required by law and as applied to parcels owned, leased or controlled by the City. SECTION 7. Subsections (b) and (c) of Section 18.18.060 (Development Standards) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the PAMC are amended as follows: Not Yet Approved 18 2019031501 Section 18.18.060 Development Standards . . . (b) Mixed Use and Residential Table 3 specifies the development standards for new residential mixed use developments and residential developments. These developments shall be designed and constructed in compliance with the following requirements and the context-based design criteria outlines in Section 18.18.110, provided that more restrictive regulations may be recommended by the architectural review board and approved by the director of planning and community environment, pursuant to Section 18.76.020: TABLE 3 MIXED USE AND RESIDENTIAL DEVELOPMENT STANDARDS CD-C CD-S CD-N Subject to regulations in Section: Minimum Setbacks Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply Front Yard (ft) None required 10' Rear Yard (ft) 10' for residential portion; no requirement for commercial portion Interior Side Yard (ft) No requirement 10' if abutting residential zone 10' if abutting residential zone Street Side Yard (ft) No requirement 5' 5' Permitted Setback Encroachments Balconies, awnings, porches, stairways, and similar elements may extend up to 6' into the setback. Cornices, eaves, fireplaces, and similar architectural features (excluding flat or continuous walls or enclosures of interior space) may extend up to 4' into the front and rear setbacks and up to 3' into interior side setbacks Maximum Site Coverage No requirement 50% 50% Landscape Open Space 20% 30% 35% Not Yet Approved 19 2019031501 CD-C CD-S CD-N Subject to regulations in Section: Coverage Usable Open Space 200 sq ft per unit for 5 or fewer units(1); 150 sq ft per unit for 6 units or more(1) Maximum Height (ft) Standard 50' 50' 35' Within 150 ft. of an abutting residential zone 40'(4) 40'(4) 35'(4) Daylight Plane for lot lines abutting one or more residential zoning districts or a residential PC district Daylight plane height and slope identical to those of the most restrictive residential zone abutting the lot line Residential Density (net)(2) 40 No maximum 30 30 Maximum Weighted Average Residential Unit Size(5) 1,500 sq ft per unit No maximum No maximum Maximum Residential Floor Area Ratio (FAR) 1.0:1(3) 0.6:1(3) 0.5:1(3) Maximum Nonresidential Floor Area Ratio (FAR) 1.0:1(3) 0.4:1 0.4:1 Total Floor Area Ratio (FAR)(3) 2.0:1(3) 1.0:1(3) 0.9:1(3) 18.18.070 Parking Requirement See Chapters 18.52 and 18.54 Chs. 18.52, 18.54 (1) Required usable open space: (1) may be any combination of private and common open spaces; (2) does not need to be located on the ground (but rooftop gardens are not included as open space except as provided below); (3) minimum private open space dimension 6'; and (4) minimum common open space dimension 12'. For CD-C sites that do not abut a single- or two-family residential use or zoning district, rooftop gardens may qualify as usable open space and may count as up to 75% of the required usable open space for the residential component of a project. In order to qualify as usable open space, the rooftop garden shall meet the requirements set forth in Section 18.40.230. Not Yet Approved 20 2019031501 (2) Residential density shall be computed based upon the total site area, irrespective of the percent of the site devoted to commercial use. There shall be no deduction for that portion of the site area in nonresidential use. (3) FAR may be increased with transfers of development and/or bonuses for seismic and historic rehabilitation upgrades, not to exceed a total site FAR of 3.0:1 in the CD-C subdistrict or 2.0:1 in the CD-S or CD-N subdistrict. (4) For sites abutting an RM-40 zoned residential district or a residential Planned Community (PC) district, maximum height may be increased to 50 feet. (5) The weighted average residential unit size shall be calculated by dividing the sum of the square footage of all units by the number of units. For example, a project with ten 800-square foot 1-bedroom units, eight 1,200-square foot 2- bedroom units, and two 1,800-square foot 3-bedroom units would have a weighted average residential unit size of ((10x800)+(8x1200)+(2x1800)) ÷ (10+8+2) = 1,060 square feet. (1) Residential and nonresidential mixed use projects shall be subject to site and design review in accord with Chapter 18.30(G), except that mixed use projects with nine or fewer units shall only require review and approval by the architectural review board. (12) Nonresidential uses that involve the use or storage of hazardous materials in excess of the exempt quantities prescribed in Title 15 of the Municipal Code, including but not limited to dry cleaning plants and auto repair, are prohibited in a mixed use development with residential uses. (c) Exclusively Residential Uses (1) Exclusively residential uses are allowed in the CD-C subdistrict, except in the ground floor (GF) combining district. (2) Exclusively residential uses are generally prohibited in the CD district and CD-N and CD-S subdistricts. Such uses are allowed, however, where a site is designated as a Housing Opportunity Sitehousing inventory site in the Housing Element of the Comprehensive Plan. Such sites shall be developed pursuant to the regulations for the multi-family zone designation (RM-2015, RM-30, or RM- 40) identified for the site in the Housing Element. . . . (l) Housing Incentive Program Not Yet Approved 21 2019031501 (1) For an exclusively residential or residential mixed-use project in the CD-C zone, the Director may waive the residential floor area ratio (FAR) limit after the project with the proposed waiver is reviewed by the Architectural Review Board, if the Director finds that the project exceeding the FAR standard is consistent with the required architectural review findings. In no event shall the Director approve a commercial FAR in excess of 1.0 or a total FAR (including both residential and commercial FAR) in excess of 3.0. Nor shall the use of transferable development rights under Section 18.18.080 be allowed to cause the site to exceed a FAR of 3.0. (2) For a 100% affordable housing project in the CD-C zone, the Director may waive any development standard including parking after the project with the proposed waiver or waivers is reviewed by the Architectural Review Board, if the Director finds that a project with such waiver or waivers is consistent with the required architectural review findings. In no event shall the Director approve a FAR in excess of 3.0 or approve other development standards more permissive than the standards applicable to the Affordable Housing (AH) Combining District in Chapter 18.30(J). A “100% affordable housing project” as used herein means a multiple-family housing or mixed-use project in which the residential component consists entirely of affordable units, as defined in Section 16.65.020 of this code, available only to households with income levels at or below 120% of the area median income, as defined in Section 16.65.020, and where the average household income does not exceed 60% of the area median income level, except for a building manager’s unit. (3) This program is a local alternative to the state density bonus law, and therefore, a project utilizing this program shall not be eligible for a density bonus under Chapter 18.15 (Residential Density Bonus). (m) Parking and Vehicular Access on University Avenue Restricted Vehicular access to CD-C zoned sites on University Avenue which requires vehicular movement across the sidewalk on University Avenue shall be prohibited, except where required by law and as applied to parcels owned, leased or controlled by the City. SECTION 8. Subsection (d) of Section 18.18.090 (Parking and Loading) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) of the PAMC is amended as follows: Section 18.18.090 Parking and Loading . . . (d) In-lieu Parking Provisions Not Yet Approved 22 2019031501 In connection with any expansion of the supply of public parking spaces within the CD commercial downtown district, the city shall allocate a number of spaces for use as "in- lieu parking” spaces to allow development to occur on sites which would otherwise be precluded from development due to parking constraints imposed by monetary contribution to the city to defray the cost of providing such parking. Contributions for each required parking space shall equal the incremental cost of providing a net new parking space in an assessment district project plus cost for the administration of the program, all as determined pursuant to Chapter 16.57 of Title 16 of this code, by the director of planning and community environment, whose decision shall be final. Only sites satisfying one or more of the following criteria, as determined by the director of planning and community environment, shall be eligible to participate in the in-lieu parking program: (1) Construction of on-site parking would necessitate destruction or substantial demolition of a designated historic structure; (2) The site area is less than 10,000 square feet, but of such an unusual configuration that it would not be physically feasible to provide the required on- site parking; (3) The site is greater than 10,000 square feet, but of such an unusual configuration that it would not be physically feasible to provide the required on- site parking; (4) The site is located in an area where city policy precludes curb cuts or otherwise prevents use of the site for on-site parking; or (5) The site has other physical constraints, such as a high groundwater table, which preclude provision of on-site parking without extraordinary expense. Office uses above the ground floor shall not be eligible to participate in the in-lieu parking program for one year from the effective date of Ordinance No. _____, from May 2, 2019 through May 1, 2020. . . . SECTION 9. Section 18.40.180 (Retail Preservation) of Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the PAMC is amended as follows: Section 18.40.180 Retail Preservation (a) Conversion of Retail and Retail-Like Uses Prohibited. (1) Any ground floor Retail or Retail-Like use permitted or operating as of March 2, 2015 may be replaced only by another Retail or Retail-Like use, as permitted in the applicable district. Not Yet Approved 23 2019031501 (A) A ground floor Retail or Retail-Like use in the RT-35 district on properties with frontage on Alma Street between Channing Avenue and Lincoln Avenue may additionally be replaced by a Private Educational Facility use, provided that such use shall not be thereafter replaced by an Office use. (2) The phrase 'use permitted or operating' as used in this section means: (A) A lawfully established use conducting business, including legal non- conforming uses. (B) An established use conducting business without required city approvals, but is a permitted or conditionally permitted use in district. (C) For parcels vacant on March 2, 2015, the last use that was lawfully established, or established without required permits, and permitted or conditionally permitted in the district. (b) Non-conforming Uses. (1) The requirements imposed by subsection (a) shall not apply to Retail or Retail- like uses that are no longer permitted or conditionally permitted in the applicable district. (2) Nothing in this section shall modify the provisions of Chapter 18.70 regarding the expansion, change, discontinuance, or termination of a non-conforming use. (c) Waivers and Adjustments; and Exemptions. (1) Grounds. The following shall be grounds for a request for waiver or adjustment of the requirements contained in this section: (A) Economic Hardship. An applicant may request that the requirements of this section be adjusted or waived based on a showing that applying the requirements of this section would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property; or (B) Alternative Viable Active Use. Except in the GF or R combining districts, an applicant may request that the requirements of this Section 18.40.160 be adjusted or waived based on a showing that: the permitted retail or retail- like use is not viable; the proposed use will support the purposes of the zoning district and Comprehensive Plan land use designation; and the proposed use will encourage active pedestrian-oriented activity and connections. Not Yet Approved 24 2019031501 (2) Documentation. The applicant shall bear the burden of presenting substantial evidence to support a waiver or modification request under this Section and shall set forth in detail the factual and legal basis for the claim, including all supporting technical documentation. Evidence in support of a waiver under subsection (c)(1)(B) must demonstrate the viability of existing and future uses on the site, based on both the site characteristics and the surrounding uses; specifically whether a substitute use could be designed and/or conditioned to contribute to the goals and purposes of the zoning district. Examples of such evidence include: (A) A 10-year history of the site's occupancy and reasons for respective tenants vacating the site; (B) A map that indicates all the existing surrounding uses, both residential and non-residential, within one City-block; include the corresponding zone district on the map; (3) Any request under this section shall be submitted to the Director together with supporting documentation. The Director, in his or her sole discretion, may act on a request for waiver or refer the matter to the City Council. (A) A decision by the Director shall be placed on the City Council's consent calendar within 45 days. (B) Removal of the recommendation from the consent calendar shall require three votes, and shall result in a new public hearing before the City Council, following which the City Council shall take action on the waiver request. (C) The decision of the Council is final. (4) Exemptions. The provisions of this Section 18.40.180 shall not apply to: (A) A 100% affordable housing project not within the Ground Floor (GF) and/or Retail (R) combining districts or on a site abutting El Camino Real . A “100% affordable housing project” as used herein means a multiple-family housing project consisting entirely of affordable units, as defined in Section 16.65.020 of this code, available only to households with income levels at or below 120% of the area median income, as defined in Chapter 16.65, except for a building manager’s unit. (B) A 100% affordable housing project on a site abutting El Camino Real in the CN and CS zone districts outside the Retail (R) combining district. A “100% affordable housing project” as used herein means a multiple-family housing project consisting entirely of affordable units, as defined in Section 16.65.020 of Not Yet Approved 25 2019031501 this code, available only to households with income levels at or below 120% of the area median income, as defined in Chapter 16.65, and where the average household income does not exceed 80% of the area median income level, except for a building manager’s unit. . . . SECTION 10. Chapter 18.40 (General Standards and Exceptions) of Title 18 (Zoning) of the PAMC is amended to add a new Section 18.40.230 (Rooftop Gardens) as follows: Section 18.40.230 Rooftop Gardens Where allowed under this Title, in order to qualify as usable open space, a rooftop garden shall meet the following standards: (a) Permanent fixtures on the rooftop shall be placed so as not to exceed height limit for the applicable zoning district, except: (i) Elevators, stairs and guardrails may exceed the height limit to allow for access to the rooftop useable open space. These fixtures shall be designed to the lowest height and size feasible in order to comply with applicable building codes. (ii) Permanent fixtures associated with the useable open space, such as trellises, shade structures, furniture, and furnishings such as planters, lighting and heaters, may exceed the height limit by up to 12 feet. (iii) For the height limit exceptions in (i) and (ii) above, all fixtures shall not intersect a plane measured at a forty-five degree angle from the edge of the building starting at the rooftop garden surface sloping upward and inward toward the center of the property. (b) The rooftop garden shall be located on the third or higher story. (c) The rooftop garden shall be accessible to all residents of dwelling units on the parcel, but not to commercial tenants of a residential mixed-use development. (d) Structures or fixtures providing a means of access or egress (i.e., stairway, elevator) shall be located away from the building edge to the extent feasible to minimize visibility from the public right-of-way and adjacent buildings and privacy impacts. These access structures or fixtures, when exceeding the height limit, shall be subject to the provisions of subsection (a)(iii) above. (e) Any lighting shall be shielded from public views and have full cutoff fixtures that cast downward-facing light,, or consist of low-level string lights; no up-lighting is permitted. Not Yet Approved 26 2019031501 Lights shall be dimmable to control glare and placed on timers to turn off after 10:00 PM. Photometric diagrams must be submitted by the applicant to ensure there are no spillover impacts into windows or openings of adjacent properties. (f) At least 15% but no more than 25% of the rooftop shall be landscaped with raised beds for gardening, C.3 stormwater planters, or other landscaping. All required landscaped areas shall be equipped with automatic irrigation systems and be properly drained. (g) Rooftop equipment that emit noise and/or exhaust, including but not limited to vents, flues, generators, pumps, air conditioning compressors, and other protrusions through the roof, shall be directed away and screened from the useable open space areas. (h) Rooftop open space noise levels shall not exceed exterior residential noise level as defined by Section 9.10.030(a) of this code. (i) The use of sound amplifying equipment shall be prohibited. Signs shall be affixed adjacent to access elevators and stairs within the rooftop garden providing notice of this prohibition. SECTION 11. Table 1 (Minimum Off-Street Parking Requirements) and Table 2 (Minimum Off- Street Parking Requirements for Parking Assessment Districts) of subsection (c) of Section 18.52.040 (Off- Street Parking, Loading and Bicycle Facility Requirements) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the PAMC are amended as follows: Section 18.52.040 Off- Street Parking, Loading and Bicycle Facility Requirements . . . (c) Tables 1, 2 and 3: Parking, Bicycle, and Loading Requirements Tables 1 and 2 below outline vehicle and bicycle parking requirements in general and for Parking Assessment Districts, respectively. Table 3 outlines loading requirements for each land use. For mixed-use projects, the requirements for each land use shall be applied and required for the overall project. Table 1 Minimum Off-Street Parking Requirements Use Vehicle Parking Requirement (# of spaces) Bicycle Parking Requirement Spaces Class 1 Long Term (LT) and Short Term (ST) RESIDENTIAL USES Multiple-Family Residential 1 per micro unit (2) 1.25 per studio unit 1 per unit 100% - LT Not Yet Approved 27 2019031501 1.5 per 1-bedroom unit 2 per 2-bedroom or larger unit At least one space per unit must be covered Tandem parking allowed for any unit requiring two spaces (one tandem space per unit, associated directly with another parking space for the same unit, up to a maximum of 25% of total required spaces for any project with more than four (4) units) (a) Guest Parking No additional guest parking required For projects exceeding 3 units; 1 space plus 10% of total number of units, provided that if more than one space per unit is assigned or secured parking, then guest spaces equal to 33% of all units is required. 1 space for each 10 units 100%-ST Senior Housing (3) (5) 0.75 per unit . . . RETAIL USES (4) Retail: (a) Intensive (retail not defined as extensive) 1 per 200 sq. ft. of gross floor area 1 per 2,000 sf 20% - LT 80%-ST (b) Extensive (retail with more than 75% of gross floor area used for display, sales and related storage, with demonstrably low parking demand 1 per 350 sq. ft. of gross floor area 1 per 3,500 sf 20% - LT 4080% - ST Not Yet Approved 28 2019031501 generation per square foot of gross floor area) (c) Open lot 1 space for each 500 square feet of sales, display, or storage site area 1 per 5,000 sf 100%-ST Drive-up windows providing services to occupants in vehicles Queue line for 5 cars, not blocking any parking spaces, in addition to other applicable requirements None additional Eating and Drinking Services: (a) With drive-in or take-out facilities 3 per 100 sq. ft. of gross floor area 3 per 400 sf 40% - LT 60% - ST (b) All others 1 space for each 60 gross sq. ft. of public service area, plus 1 space for each 200 gross sq. ft. for all other areas. 1 per 600 sf of public service area, plus 1 per 2,000 sf for other areas . . . (1) Long Term (LT) and Short Term (ST) bicycle spaces as described in Section 18.54.060. (2) A “micro-unit” as used herein means a residential unit of 450 square feet or less. (3) Senior housing for purposes of this provision means an independent living facility, not a convalescent or residential care facility. (4) For residential mixed-use developments in the CD-C zone, CC(2) zone, and on CN and CS zoned sites abutting El Camino Real, the first 1,500 square feet of ground-floor retail uses shall not be counted toward the vehicle parking requirement. (5) Because these parking standards are reduced from the standards otherwise applicable to multiple-family residential development, projects that utilize these reduced parking standards shall not be eligible for further parking reductions through adjustments under Section 18.52.050, Table 4. Table 2 Minimum Off-Street Parking Requirements for Parking Assessment Districts (IF USE IS NOT LISTED, REFER TO TABLE 1 FOR REQUIREMENTS) Not Yet Approved 29 2019031501 Use Vehicle Parking Requirement (# of spaces) Bicycle Parking Requirement Class 1 Spaces For Downtown University Avenue Parking Assessment District: All uses (except residential)2 1 per 250 square feet 1 per 2,500 square feet 40% - LT 60% - ST For California Avenue Parking Assessment District: . . . Retail:2 (a) Intensive 1 per 240 sf of gross floor area 1 per 2,400 sf 20% - LT 80% - ST (b) Extensive 1 per 350 sf of gross floor area 1 per 3,500 sf (c) Open Lot 1 for each 500 square feet of sales, display, or storage site area. 1 per 5,000 sf 100% - LT . . . 1. Long Term (LT) and Short Term (ST) bicycle spaces as described in Section 18.54.060. 2. For residential mixed-use developments in the CD-C zone, CC(2) zone, and on CN and CS zoned sites abutting El Camino Real, the first 1,500 square feet of ground-floor retail uses shall not be counted toward the vehicle parking requirement. SECTION 12. Table 4 (Allowable Parking Adjustments) of Section 18.52.050 (Adjustments by the Director) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the PAMC is amended as follows: Section 18.52.050 Adjustments by the Director Automobile parking requirements prescribed by this chapter may be adjusted by the director in the following instances and in accord with the prescribed limitations in Table 4, when in his/her opinion such adjustment will be consistent with the purposes of this chapter, will not create undue impact on existing or potential uses adjoining the site or in the general vicinity, and will be commensurate with the reduced parking demand created by the development, including for visitors and accessory facilities where appropriate. No reductions may be granted that would result in provision of less than ten (10) spaces on a site. The following are adjustments that apply to developments not located within a parking assessment district. Adjustments within the parking assessment districts are contained in Section 18.52.080. The decision of the regarding parking adjustments may be appealed as set forth in Chapter 18.78 (Appeals). Not Yet Approved 30 2019031501 Table 4 Allowable Parking Adjustments Purpose of Adjustment Amount of Adjustment Maximum Reduction 2a2 On-Site Employee Amenities Square footage of commercial or industrial uses to be used for an on-site cafeteria, recreational facility, and/or day care facility, to be provided to employees or their children and not open to the general public, may be exempted from the parking requirements 100% of requirement for on-site employee amenities Joint Use (Shared) Parking Facilities For any site or sites with multiple uses where the application of this chapter requires a total of or more than ten (10) spaces, the total number of spaces otherwise required by application of Table 1 may be reduced when the joint facility will serve all existing, proposed, and potential uses as effectively and conveniently as would separate parking facilities for each use or site. In making such a determination, the director shall consider a parking analysis using criteria developed by the Urban Land Institute (ULI) or similar methodology to estimate the shared parking characteristics of the proposed land uses. The analysis shall employ the city's parking ratios as the basis for the calculation of the base parking requirement and for the determination of parking requirements for individual land uses. The director may also require submittal and approval of a TDM program 1 to further assure parking reductions are achieved. 20% of total spaces required for the site 100% Affordable Housing (4) Based on maximum anticipated demand; applicant may request up to a 100% reduction in parking. Housing for Seniors The total number of spaces required may be reduced for housing facilities for seniors, commensurate with the reduced 50% of the total spaces required for the site Not Yet Approved 31 2019031501 Purpose of Adjustment Amount of Adjustment Maximum Reduction 2a2 parking demand created by the housing facility, including for visitors and accessory facilities, and subject to submittal and approval of a parking analysis justifying the reduction proposed. Affordable Housing Units and Single Room Occupancy (SRO) Units (3) The total number of spaces required may be reduced for affordable housing and single room occupancy (SRO) units, commensurate with the reduced parking demand created by the housing facility, including for visitors and accessory facilities. The reduction shall consider proximity to transit and support services and the director may require traffic demand management measures1 in conjunction with any approval. a. 40% for Extremely Low Income and SRO Units b. 30% for Very Low Income Units c. 20% for Low Income Units Housing Near Transit Facilities The total number of spaces required may be reduced for housing located within a designated Pedestrian/Transit Oriented area or elsewhere in immediate proximity to public transportation facilities serving a significant portion of residents, employees, or customers, when such reduction will be commensurate with the reduced parking demand created by the housing facility, including for visitors and accessory facilities, and subject to submittal and approval of a TDM program.1 20% of the total spaces required for the site. Transportation and Parking Alternatives Where effective alternatives to automobile access are provided, other than those listed above, parking requirements may be reduced to an extent commensurate with the permanence, effectiveness, and the demonstrated reduction of off-street parking demand effectuated by such alternative programs. Examples of such programs may include, but are not limited to, transportation demand management (TDM) programs or 20% of the total spaces required for the site Not Yet Approved 32 2019031501 Purpose of Adjustment Amount of Adjustment Maximum Reduction 2a2 innovative parking pricing or design solutions.1 (note: landscape reserve requirement is deleted). Combined Parking Adjustments Parking reductions may be granted for any combination of the above circumstances as prescribed by this chapter, subject to limitations on the combined total reduction allowed. a. 30% reduction of the total parking demand otherwise required b. 40% reduction for affordable housing projects c. 50% reduction for senior housing projects Modification to Off- Street Loading Requirements The director may modify the quantity or dimensions of off-street loading requirements for non-residential development based on existing or proposed site conditions; availability of alternative means to address loading and unloading activity; and, upon finding that: 1) the off-street loading requirement may conflict with Comprehensive Plan goals and policies related to site design planning, circulation and access, or urban design principles; and 2) the use of shared on-street loading would not conflict with Comprehensive Plan goals and policies related to site design planning, circulation and access or urban design principles; maximum reduction in one loading space. One loading space may be waived 1. See Section 18.52.050(d) below regarding requirements for TDM programs. 2. No parking reductions may be granted that would result in provision of less than ten (10) parking spaces on site, except for 100% affordable housing projects. 3. No parking reductions may be granted for projects that are entitled to the reduced parking standards in Table 1 of Section 18.52.040 for senior housing. 4. Applies to 100% affordable housing projects and the residential component of 100% affordable housing mixed-use projects. “100% affordable housing” as used herein means a multiple-family housing project consisting entirely of affordable units, as defined in Section 16.65.020 of this code, available only to households with income levels at or below 120% of the area median income, as defined in Chapter 16.65, except for a building manager’s unit. Not Yet Approved 33 2019031501 (a) Combining Parking Adjustments Parking reductions may be granted for any combination of circumstances, prescribed by this chapter, so long as in total no more than a 30% reduction of the total parking demand otherwise required occurs, or no less than a 40% reduction for affordable housing projects (including Single Room Occupancy (SRO) units), or no less than 50% reduction for senior housing projects. . . . SECTION 13. Subsection (c) of Section 18.52.070 (Parking Regulations for CD Assessment District) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the PAMC is amended as follows: Section 18.52.070 Parking Regulations for CD Assessment District . . . (c) In-lieu Parking Provisions In connection with any expansion of the supply of public parking spaces within the CD commercial downtown district, the city shall allocate a number of spaces for use as "in- lieu parking” spaces to allow development to occur on sites which would otherwise be precluded from development due to parking constraints imposed by monetary contribution to the city to defray the cost of providing such parking. Contributions for each required parking space shall equal the incremental cost of providing a net new parking space in an assessment district project plus cost for the administration of the program, all as determined pursuant to Chapter 16.57 of Title 16 of this code, by the director of planning and community environment, whose decision shall be final. Only sites satisfying one or more of the following criteria, as determined by the director of planning and community environment, shall be eligible to participate in the in-lieu parking program: (1) Construction of on-site parking would necessitate destruction or substantial demolition of a designated historic structure; (2) The site area is less than 10,000 square feet, but of such an unusual configuration that it would not be physically feasible to provide the required on- site parking; (3) The site is greater than 10,000 square feet, but of such an unusual configuration that it would not be physically feasible to provide the required on- site parking; Not Yet Approved 34 2019031501 (4) The site is located in an area where city policy precludes curb cuts or otherwise prevents use of the site for on-site parking; or (5) The site has other physical constraints, such as a high groundwater table, which preclude provision of on-site parking without extraordinary expense. Office uses above the ground floor shall not be eligible to participate in the in-lieu parking program for one year from the effective date of Ordinance No. _____, from May 2, 2019 through May 1, 2020. . . . SECTION 14. Section 18.52.080 (Adjustments to Parking Assessment Area Requirements by the Director) of Chapter 18.52 (Parking and Loading Requirements) of Title 18 (Zoning) of the PAMC is amended to add a new subsection (f) as follows: Section 18.52.080 Adjustments to Parking Assessment Area Requirements by the Director . . . (f) Affordable Housing For 100% affordable housing projects, the director may waive up to 100% of the parking requirement based on maximum anticipated demand. “100% affordable housing” as used herein means a multiple-family housing project consisting entirely of affordable units, as defined in Section 16.65.020 of this code, available only to households with income levels at or below 120% of the area median income, as defined in Chapter 16.65, except for a building manager’s unit. SECTION 15. Any and all references to “RM-15” in the Palo Alto Municipal Code or appendices thereto shall mean “RM-20”. SECTION 16. Any provision of the Palo Alto Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 17. This Ordinance shall not apply to any project for which the application has been deemed complete as of the effective date of the Ordinance, for the last required discretionary approval for the project. However, the project applicant may elect to be subject to this Ordinance in which case the Ordinance in its entirety shall apply to the project. SECTION 18. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each Not Yet Approved 35 2019031501 and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 19. The Council finds that the potential environmental impacts related to this Ordinance were analyzed in the Final EIR for the Comprehensive Plan Update, which was certified and adopted by the Council by Resolution No. 9720 on November 13, 2017. The Ordinance is consistent with and implements the program evaluated in the EIR. SECTION 20. This Ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Assistant City Attorney City Manager ____________________________ Director of Planning & Community Environment CITY OF PALO ALTO CITY COUNCIL FINAL MINUTES Page 1 of 33 Special Meeting November 26, 2018 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:06 P.M. Present: DuBois, Filseth, Fine, Holman, Kniss, Kou; Scharff arrived at 5:10 P.M., Tanaka, Wolbach Absent: Special Orders of the Day 1.Proclamation Honoring Sikh Awareness Month. Council Member Wolbach read the proclamation into the record. JJ Singh thanked the Council and Council Member Wolbach for the Proclamation. Sikh Americans had been part of the fabric of America for more than a century. The Sikh religion, founded 549 years ago, was the fifth largest religion in the world. Sikhs had contributed to agriculture, technology, and sports. Maria Bhatia advised that Sikhs began immigrating to California in the 1890s. Of the 500,000 Sikhs in the United States, approximately 40 percent lived in the Bay Area. Sikhs believed in truthfulness, being God-conscious, and community service. Sikhism was more a way of life than a religion. She shared a brief history of Sikhism, emphasizing the effects of the 1947 Partition, 1984 genocide, and 9/11. As a minority, Sikhs faced hate crimes and bullying. Inclusion and diversity appreciation was critical to a successful society. The public was invited to visit the Sikh Gurdwara in San Jose. Mr. Singh on behalf of American Sikhs appreciated the opportunity to share information about Sikhs. Ms. Bhatia presented books to the Palo Alto Library, the Council, and Staff. Council Member Kou appreciated the presentation and shared her experiences with Indian celebrations. MINUTES Page 17 of 33 City Council Meeting Final Minutes: 11/26/18 MOTION PASSED: 9-0 Mr. Keene acknowledged Mr. de Geus' leadership in the project. 12. PUBLIC HEARING: Adoption of an Ordinance Amending Various Sections of Title 18 of the Palo Alto Municipal Code Related to Residential and Mixed-use Development Standards Including, but not Limited to; Minimum and Maximum Unit Density, Unit Size, Floor Area Ratio, Height, and Open Space Including Rooftop Gardens; Parking Requirements Including, but not Limited to; Regulations Related to In- lieu Parking for Downtown Commercial Uses and Retail Parking for Mixed Use Projects; Exclusively Residential Projects in Certain Commercial Zoning Districts; Ground-floor Retail and Retail Preservation Provisions; the Entitlement Approval Process; and Other Regulations Governing Residential, Multi-family Residential and Commercial Zoning Districts, all to Promote Housing Development Opportunities in These Zoning Districts in Furtherance of Implementation of the Comprehensive Plan. California Environmental Quality Act (CEQA): Determination of Consistency With the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance on October 10, 2018. Mayor Kniss announced the item had been divided into five sections, and the Council would discuss the sections one-by-one. Council Members were recused from three of the five sections. The Council might continue one or more sections to a subsequent meeting but would hear public comment on all sections. Jean Eisberg, AICP Lexington Planning, reported the Housing Work Plan identified ways to meet goals for dwelling units. The Housing Element and the Comprehensive Plan contained projections for the number of units that may be built over time. Notably, the City had not produced housing in the quantities stated in the projections. The Housing Work Plan focused on the 2018 Zoning Ordinance revisions and providing incentives and removing constraints for multifamily housing in the Downtown, California Avenue, and El Camino Real Districts. The Housing Work Plan also mentioned removing residential density constraints in the Multifamily Residential (RM) Districts. Over the past year, Staff worked with the Planning and Transportation Commission (PTC) and the Architectural Review Board (ARB), held a community meeting, and met with a number of advisers from the development and architecture community. The development and architecture advisers generally agreed with the contents of the Housing Work Plan including the MINUTES Page 18 of 33 City Council Meeting Final Minutes: 11/26/18 importance of streamlining the review process and modifying zoning standards to reduce constraints. They cited density and parking as the top two issues for site planning, massing, and determining the number of units in a project. They expressed concern that the current zoning standards did not support the City's goals to produce multifamily housing and recommended the City review types of development that it wanted "by right" or through modifications to density, parking, and related standards. Lastly, the advisers raised concerns about the length of time of the entitlement process. Staff held a community meeting in June, and approximately 30 people attended the meeting. Participants supported proposed revisions to development standards and review processes and expressed concerns about potential impacts on existing neighborhoods, traffic, and services. The PTC discussed current zoning standards, supported the draft Ordinance, and recommended the Council consider reinstating the additional guest parking requirement. The main concepts of the draft Ordinance were streamlining the review process, increasing densities, adjusting development standards, and a Housing Incentive Program (HIP). HIP was an alternative to the State Density Bonus Law. The draft Ordinance would affect multifamily uses Citywide, RM Districts, and the Downtown District, the California Avenue District, and the El Camino Real District. Proposed Citywide changes would require 150 square feet of open space per unit in multifamily residential projects; eliminate the site and design review process for residential projects of ten or more units; maintain ARB review and appeals to the City Council for residential projects of ten or more units; exempt 100-percent affordable housing projects from the Retail Preservation Ordinance, except along El Camino Real; and revise parking standards for multifamily residential uses. Proposed changes to multifamily zones would increase the maximum density of the RM-15 zone to RM-20; establish a minimum density; and allow replacement of nonconforming unit density. Changes in the Downtown District would eliminate the maximum residential density; establish a maximum average unit size; exempt the first 1,500 square feet of ground-floor retail from parking requirements within a residential mixed-use building; preclude curb cuts on University Avenue; eliminate the in-lieu parking fee for nonresidential uses above the ground floor; allow 100-percent residential projects except in the Ground-Floor Combining District and sites subject to the Retail Preservation Ordinance; and allow rooftop open space to qualify as usable open space. Many of the proposed changes to the Downtown District would apply to the California Avenue and El Camino Real Districts. By law, a HIP needed to provide more density bonus than allowed under State law and incentivized a developer to utilize the HIP rather than the State Density Bonus Law. The HIP would maintain the ARB review process. Under Senate Bill (SB) 35, projects that met certain affordability requirements and were consistent with the City's zoning and objective standards were eligible for streamlined review such that California Environmental Quality Act (CEQA) and discretionary reviews were MINUTES Page 19 of 33 City Council Meeting Final Minutes: 11/26/18 eliminated and projects near transit were not subject to parking requirements. The HIP could provide more density than SB 35 combined with the Density Bonus Law. In the California Avenue District, the HIP would increase the allowed residential floor area ratio (FAR) from 0.6 to 2.0; allow Affordable Housing Overlay development standards; and maintain discretionary review by the ARB. In the El Camino Real District, proposed changes would require ground-floor design residential standards; preclude ground-floor units that front El Camino Real; and in the HIP eliminate the 50-percent lot coverage requirement. Staff anticipated that the Ordinance would be consistent with the Comprehensive Plan and Final Environmental Impact Report (EIR) and that future projects may be eligible for exemptions under CEQA. Michael Alcheck, Planning and Transportation Commissioner, advised that the PTC's work on the proposed Ordinance included analyses and interaction with Staff and the community. The PTC realized that instituting a commercial cap, an annual limit, or both did not make a residential project in and of itself feasible. A majority of Commissioners consistently expressed strong reservations about reductions in parking standards. One Commissioner repeatedly voiced support for completely reimagining the approach to parking. For many Commissioners, experimenting with parking standards was a questionable endeavor. The PTC did not benefit from regional housing developers' comments. Staff's suggestions were largely responsive to their conversations with residential multifamily developers, but the PTC had no direct input. Therefore, the hurdles presented may not have appeared as large as they may be. Public Hearing was opened at 9:15 P.M. Neilson Buchanan noted residents inside the commercial core would have full access to free and almost-free residential parking permits, but they would not be allowed to park in the commercial core. This would result in a maldistribution of resident parking in the zones closest to the commercial core. Staff had failed to mention this issue. Carol Scott remarked that the proposed Ordinance was not ready for Council review and approval. No meetings were held with residents who would be affected by the proposed Ordinance. Density should not export negative externalities to residential neighborhoods. Developers should take full responsibility for needs created by the developments. The design of the parking study was flawed, and its conclusions were wrong. Bonnie Packer, League of Women Voters of Palo Alto, felt the proposed Ordinance was a first step towards housing for all. The Council should reject the requirement for 100-percent affordable housing projects on El Camino MINUTES Page 20 of 33 City Council Meeting Final Minutes: 11/26/18 Real or in the Ground-Floor Retail Combining District to have retail. Requiring retail in an affordable housing project would essentially kill the project. The Council should direct Staff to return with more possibilities for housing by increasing height and density in certain locations. Bryan Globus stated action was needed to prevent the loss of familial bonds and of a generation of hard workers due to the housing crisis. The proposed Ordinance was a step towards resolving the housing crisis. Max Kapczynski, Palo Alto Forward, indicated the Housing Work Plan would enable the production of all types of housing. Policies must allow the growth of housing. Height and density incentives for 100-percent affordable housing projects and exempting 100-percent affordable housing projects from the Retail Preservation Ordinance would benefit the projects. Paul Machado related that the proposed Ordinance did little to address traffic and parking concerns. The Council should exclude future projects from participating in Residential Preferential Parking Permit (RPP) Programs. Gertrude Reagan supported reasonable changes in the height requirement, expansion of transit zones, and easing the retail requirement. She preferred small units. Jim Jurkovich believed the proposed Ordinance was the wrong approach to creating more housing opportunities. He did not support elimination of the design review process. In the Downtown District, the amount of density should be established rather than determined by the Planning Department. Parking exceptions should be removed from the proposed Ordinance. Grant Dasher advised that a lot of misinformation was being circulated about the proposed Ordinance. The policy decision was made in the Comprehensive Plan, and the policy needed to be implemented. The only way to achieve 300 housing units was to change parking and zoning requirements. The parking requirements should align with the changes proposed in the study. The in- lieu parking fee should not be eliminated. Elaine Uang commented that the PTC recognized that halting commercial development would not incentivize residential development. To encourage residential development, the City needed to zone for it or legalize more residential square footage. The HIP is a good gesture. Most multifamily projects provided more parking than was needed. Roberta Ahlquist believed affordable housing should be defined. The proposal did little to address the needs of low-income workers. While housing was being debated, low and moderate-income housing was being demolished. MINUTES Page 21 of 33 City Council Meeting Final Minutes: 11/26/18 Bob Moss remarked that the proposed Ordinance was one of the worst he had ever seen. Developers made money by building housing in Palo Alto without incentives; incentives were not needed. The retention of ground-floor retail along El Camino was essential. Increasing the density and height were terrible proposals. Randy Tsuda, Palo Alto Housing Chief Executive Officer, urged the Council to adopt a narrowly crafted exemption from the Retail Preservation Ordinance for 100-percent affordable housing projects on El Camino. He opposed a guest parking requirement in addition to the reduced parking standards. One parking space per bedroom provided adequate parking for residents and guests. He supported additional incentives of height and FAR for affordable housing projects in Downtown and California Avenue. John Guislin stated the Staff Report and proposed Ordinance were examples of inadequate data collection, subpar analysis, and biased collection of input. The proposed Ordinance would worsen traffic. Hamilton Hitchings related that the proposed Ordinance enabled mostly luxury apartments and condominiums. Like SB 35, the proposed Ordinance should require 50 percent affordable housing including the 15 percent inclusionary housing. The provision to eliminate the parking requirements for the first 1,500 square feet of retail meant the City would have to build more garages. As currently written, the proposed Ordinance targeted zoning incentives to increase the supply of under-parked luxury housing while doing little to help those who needed quality affordable housing. Mark Mollineaux was impressed with many of the proposals in the Ordinance. Staff did a good job of dealing with hard problems such as parking. He supported eliminating ground-floor retail requirements for 100-percent affordable housing projects along El Camino Real. Paul Leone supported the proposed Ordinance. With the rise of construction costs, the effectiveness of the proposed Ordinance was questionable. The City should create conditions favorable for the construction of affordable housing projects in Palo Alto. Linnea Wickstrom requested the Council's support for proposals that would remove barriers to affordable housing. L. David Baron encouraged the Council to adopt the proposed Ordinance. While the proposed Ordinance would not create sufficient housing to fulfill the Comprehensive Plan goal, additional proposals in the future could. He supported in-lieu parking fees for both residential and commercial projects in Downtown and changes to building height, FAR, parking, and retail MINUTES Page 22 of 33 City Council Meeting Final Minutes: 11/26/18 preservation to encourage 100-percent affordable housing projects. He preferred zoning standards for El Camino Real be implemented through zones rather than standards. David Meyer, SV@Home, advised that the proposed Ordinance reflected best practices that SV@Home supported and that had succeeded across Santa Clara County. For the proposed changes to be effective, they had to be passed as a package. He recommended the Council remove the retail requirement for 100-percent affordable housing projects on El Camino Real and allow increased height and density for 100-percent affordable housing projects in Downtown and California Avenue. Waldemar Kaczmarski suggested the Council give existing residents parking permits in their neighborhoods and then change the parking requirements as needed for new developments. David Adams indicated the parking survey utilized an indirect method of data collection. The RM-15 District should remain as a transition zone, and the review processes should not change. Given the proposed Ordinance, the Ventura neighborhood would be a dumping ground for high-density housing. Beth Rosenthal urged the Council not to approve the proposed Ordinance. The approval of new office development should occur only when sufficient housing was built to address the jobs/housing imbalance. Incentives should be offered to new housing projects only. She suggested the Council delay adoption of the proposed Ordinance until the new City Manager and Council Members took office and obtain additional community input. Peter Rosenthal disputed the data around seniors not needing or having cars. The proposed Ordinance was not the way to address housing issues. The proposed Ordinance would increase traffic and parking problems. Shannon McEntee urged the Council not to relax parking requirements. Because of the cost of housing, the number of people living in each housing unit was increasing, which increased the need for parking. Jerry Underdal saw no point in continuing the item to allow the new Council Members to discuss the issues. Deb Goldeen reported people slept in their cars in rest stops because they worked in the Bay Area but could not afford to live in the Bay Area. The community had been criminally negligent from a social justice perspective for not having a decent housing stock. MINUTES Page 23 of 33 City Council Meeting Final Minutes: 11/26/18 John Kelley commented that the City had to build more housing. Without a series of dramatic steps, additional housing would not be built. He encouraged the Council to treat 100-percent affordable housing projects much more liberally than other types of projects. Becky Sanders advised that the proposal contained no economic analysis that demonstrated how the proposal would increase housing production. The desired results may not occur. The proposed Ordinance would create market- rate housing. Jeff Levinsky reported the proposed Ordinance would not create more low- income housing. The Staff Report admitted the proposed Ordinance potentially would not result in any new housing. The proposed Ordinance encouraged more office development and eliminated opportunities for housing. The Council should insist that any lowered parking requirements only apply to new housing rather than existing buildings. Elaine Meyer suggested the Council continue the item to the new year. The proposed Ordinance contained no increase in set-asides for below-market-rate (BMR) housing. Hilary Bayer believed the Council should end commercial growth in Palo Alto and create incentives to convert existing commercial space to housing until a jobs/housing balance was attained. David Schrom felt the proposal taxed residents by imposing externalities on residents and transferred wealth to people who built at higher densities in Palo Alto. Trina Lovercheck hoped the Council would adopt the proposed Ordinance with revisions to exempt affordable housing projects from the Retail Preservation Ordinance; to lower parking requirements; to allow greater density and height in the Downtown areas; and to preserve ground-floor retail on University Avenue, California Avenue, Midtown, and other retail areas. Loren Brown had submitted a proposal for three potential housing sites on Park Boulevard. Evan Goldin supported the proposed Ordinance, especially the changes in parking requirements. Perhaps the proposed Ordinance could include unbundled parking. Public Hearing was closed at 10:30 P.M. MINUTES Page 24 of 33 City Council Meeting Final Minutes: 11/26/18 Molly Stump, City Attorney, advised the Council to discuss first the sections of the proposed Ordinance for which Council Members needed to recuse themselves. The Council could not ask general questions because the questions would involve the conflicted sections. James Keene, City Manager, recommended the Council identify an appropriate time to break the discussion and end the meeting. Council Member Scharff suggested the Council begin with the first section. Council Member DuBois suggested the Council ask general questions first. Mayor Kniss reiterated the City Attorney's prohibition for general questions. Vice Mayor Filseth asked if a representative of Fehr & Peers was present and if he would be present for the next discussion. Jonathan Lait, Planning and Community Environment Acting Director, did not know if the representative would be present at a future meeting. Vice Mayor Filseth believed parking would be a significant topic and anticipated many questions regarding the parking study. He asked if the Council could discuss the parking study in light of Council Members' conflicts. Ms. Stump indicated the Council could speak with Fehr & Peers about the parking study, its conclusions and methodology. However, Council Members could not discuss policy and applying parking information to policies. Mayor Kniss asked which section the Council as a whole could discuss. Ms. Stump understood Vice Mayor Filseth wanted to discuss the parking study with Fehr & Peers rather than the sections of the proposed Ordinance. Mr. Keene reported the City Attorney may guide Council Members away from policy issues. Council Member Holman had questions that did not relate to specific sections of the Code and wanted an opportunity to ask those questions. Ms. Stump advised that questions, comments, or Motions pertaining to procedural aspects and not pertaining to specific policy proposals could be expressed with the full Council present. Council Member Kou objected to hearing the item at the present time as acting on the proposal was highly unethical. Making a decision on parking and the in-lieu parking fee would affect a property owner directly. MINUTES Page 25 of 33 City Council Meeting Final Minutes: 11/26/18 Mayor Kniss advised that the new Council would have only one new Council Member. Council Member Kou stated the issue was public trust. The Council's action could further public mistrust and cause allegations of Council decisions being made behind closed doors. Mayor Kniss replied that the Council was not conducting business behind any kind of door. Council Member Kou requested the City Clerk provide the letter from the property owner. Council Member Kou clarified that the Motion should continue Item Number 12 and Item Number 6 from the December 3 Agenda. Ms. Stump advised the Council to limit its deliberations to the agendized item. MOTION: Council Member Kou moved, seconded by Council Member DuBois to continue Agenda Item Number 12 to early January 2019. Council Member Kou explained that dates and proposals were put before Council by a property owner. The Council's decision would work towards the dates set as ultimatums. Council Member DuBois felt the new City Council and City Manager should be seated before the Council worked through the issues. The proposal presented many items for discussion and action. He expressed concern that the Council would rush to complete the item prior to the end of the calendar year. Council Member Holman supported the Motion. The public had spoken strongly and positively regarding affordable housing. The Staff Report and its contents were not ready for discussion. The proposed changes may not create any housing. The proposed Ordinance could create some level of market-rate housing but impose parking demand and other ill-defined things onto the community. The Staff Report did not provide data, evidence, or examples that it would create affordable housing as the community interpreted the proposed Ordinance. Council Member Fine would not support the Motion. The topic of housing creation began with a 2017 Colleagues' Memo, which received unanimous support from the Council. The proposed Ordinance aligned with Council goals of 2017 and 2018. It was exceptionally important for the Council not to delay the matter. Staff had followed the process, and actions had been transparent. MINUTES Page 26 of 33 City Council Meeting Final Minutes: 11/26/18 Council Member Wolbach commented that the point of the Colleagues' Memo was to reverse incentives that favored commercial development, large housing units, and pricier housing. The proposed Ordinance attempted to address those incentives. The proposed Ordinance was a first step in addressing housing. He was not clear regarding Council Member Kou's ethical concerns. The debate regarding growth was over, and the question was how to achieve the Comprehensive Plan goal for housing. To say the proposed Ordinance was not ready for discussion was classic analysis paralysis or filibustering. Mayor Kniss would not support the Motion. Vice Mayor Filseth indicated the new Council would be remarkably similar to the current Council. The topics in the proposed Ordinance warranted a great deal of discussion. Clearly, not all the housing contemplated by the Comprehensive Plan goal would be affordable housing. The proposed Ordinance would stimulate the growth of market-rate housing and would not make housing more affordable or more accessible. The economics of market- rate housing came from parking and density. The danger of under-parking projects was increased parking in neighborhoods. If projects were accurately parked and if over-parking existed, there were no costs to externalize onto the neighborhoods. Without altering height limits, setbacks, or other development standards, increasing density within the existing building envelope would improve the economics of housing. Because of the amount of discussion needed to understand the many aspects of the proposed Ordinance, the discussion should begin at the current time. MOTION FAILED: 3-6 DuBois, Holman, Kou yes Mr. Keene inquired whether the Council would discuss the parking study and then possibly continue the item to a subsequent meeting. Council Member Scharff wanted to discuss at least one section. Mayor Kniss announced the Council would ask questions regarding the parking study and then determine how to proceed. Council Member Holman asked if the Council could ask broad, general questions. Ms. Stump advised that the question would determine whether it could be asked. Mayor Kniss directed Council Members to ask questions regarding the parking study rather than parking in general. MINUTES Page 27 of 33 City Council Meeting Final Minutes: 11/26/18 Ms. Stump reiterated the need for the Council to avoid discussing the policy proposals contained in the proposed Ordinance. Vice Mayor Filseth emphasized the importance of understanding under-parked and over-parked. He requested the consultant briefly describe the methodology of the parking study. Ryan Caldera, Fehr & Peers Transportation Engineer, reported the PTC requested a count of cars parked on the street. He first identified if a residential complex was isolated or near other residential complexes. At midnight, he counted the cars parked on streets next to residential complexes and in neighboring commercial parking lots, basically any area in which a resident might park. Vice Mayor Filseth noted the peak parking time for residents was night. He asked if a neighborhood's individual characteristics of parking affected Mr. Caldera's view of parking. Mr. Caldera explained that his counts were more conservative because of those characteristics. In areas where parking was not 100-percent utilized, the cutoffs for residential units were clear. In areas with higher parking utilization, the counts required a bit of engineering judgment and observation of the streets. Vice Mayor Filseth noted the public questioned the accuracy of parking counts. Mr. Caldera stated he was confident in the accuracy of the results. Vice Mayor Filseth asked if counts were fairly consistent between different complexes. Mr. Caldera replied yes. The counts were confirmed by the results from parking lot counts. In most parking lots, he observed vacant parking spaces. Consultants contacted all the units for which they observed onsite parking demand and sought permission to conduct interviews with residents. The Mark was the only unit that permitted resident interviews. Consultants elected not to conduct interviews at units without permission. Survey results from The Mark were anecdotal, but the results showed the residents preferred to park onsite. The residents also felt the right amount of parking included some vacant spaces. During the first round of data collection, consultants conducted five surveys per site at different time periods. The surveys conducted at midnight or later showed the highest parking demand. Surveys were conducted three times on a weekday and twice on the weekend at lunch time and after midnight. The data was supplemented with a second round of surveys. Consultants utilized the highest of the onsite observations and the MINUTES Page 28 of 33 City Council Meeting Final Minutes: 11/26/18 on-street parking results to calculate the number of parking demand vehicles. To calculate the demand rate, consultants divided the number of demand vehicles by the number of units and then by the number of bedrooms for each complex. Consultants did not discuss any type of reduction for affordable demand but left that to Staff's discretion. Surveys did include guest parking spaces. The total demand rate included guest spaces, accessible spaces, leasing office spaces, staff spaces, all parking available onsite. Vice Mayor Filseth asked if consultants collected data from both affordable and market-rate facilities. Mr. Caldera replied yes. Vice Mayor Filseth inquired about observations on the gradation between affordable and market-rate facilities. Mr. Caldera explained that the sample size prevented consultants from finding a statistical difference. There could be a difference, but consultants could not determine a statistically significant difference at the three market-rate observations and the three affordable observations. Vice Mayor Filseth remarked that other studies suggested a difference between parking demand for the two facilities; however, the question was whether the situations were truly comparable. He inquired whether there was a statistical difference for proximity to a Caltrain station. Mr. Caldera indicated there was a difference in demand between those nearest transit and those medium and far from transit. Vice Mayor Filseth requested the amount of the difference. Mr. Caldera was unsure of the exact number, but it was a statistically significant difference. He corrected his earlier comments in that consultants observed a lower demand for senior housing. Vice Mayor Filseth clarified that there was a statistically significant difference between senior housing and general housing but not specifically affordable senior housing versus market-rate senior housing. Council Member DuBois remarked that the consultant saw about 1.31 parking space demand per bedroom over the nine properties. In the past, the City had higher parking requirements; therefore, there were empty spaces. The consultants saw a demand of more than one space per bedroom. Mr. Caldera explained that consultants compared the parking supply at each location with the Palo Alto Municipal Code. All the complexes were over- MINUTES Page 29 of 33 City Council Meeting Final Minutes: 11/26/18 parked based on the Municipal Code, but parking lots at all complexes had vacant spaces. This suggested the parking code may require an over supply. Council Member DuBois advised that the parking results aligned with the suburban guidelines recommendation for 1.2-1.4 spaces per bedroom. He asked if consultants verified that guest parking was occupied or if consultants were indicating on average complexes had vacant guest spaces. Mr. Caldera reported consultants observed the occupancy of guest parking spaces, especially during the overnight period. Guest parking spaces were occupied at no higher rate than other spaces. Council Member Holman asked if the analysis compared parking utilization to the Municipal Code or to the development of the project. Mr. Caldera related that consultants conducted both comparisons. Consultants compared the actual supply to the actual demand. Council Member Holman requested the rationale for conducting the surveys at nine complexes. Mr. Lait did not believe any sample size would be sufficient to answer questions around parking. Staff attempted to draw from published resources and observe local examples. The three categories for observations were affordable housing, senior housing, and market-rate housing and proximities to transit options. Decisions were made based on the cost of the study and the data obtained from the study. Choosing nine complexes was an administrative decision. Council Member Holman commented that it was difficult to draw conclusions from the study because of the small sample size. She inquired about statistical conclusions that could be drawn from an analysis of only one complex. Mr. Caldera clarified that statistical conclusions were drawn from the parking demand. Interviews from The Mark were anecdotal. Council Member Holman requested Mr. Caldera's recommendations for Municipal Code changes for projects near transit. Ms. Stump cautioned Council Members to avoid questions of policy. Council Member Fine requested the names of other cities in the region for which Fehr & Peers had conducted similar studies. MINUTES Page 30 of 33 City Council Meeting Final Minutes: 11/26/18 Mr. Caldera reported his office typically worked in the area from Redwood City south to San Luis Obispo. The firm worked across the West Coast. Offices were located in Denver, Salt Lake City, and Washington, D.C. Council Member Fine asked if the consultants were seeing similar demand profiles for similar projects in the Bay Area. Mr. Caldera answered yes. The findings aligned with typical expectations for apartment complexes in the Bay Area. Council Member Fine asked about the trend for parking requirements and multifamily development and where Palo Alto fell in the spectrum of parking requirements. Mr. Caldera stated Palo Alto's place in the spectrum depended upon the city being compared to Palo Alto. Council Member Fine inquired whether over supply of parking related to vacant parking spaces. Mr. Caldera responded yes. The over supply data reflected the fact that consultants could not determine which on-street parking spaces were part of a complex. Council Member Fine requested possible interactions between the RPP Programs and proposed parking changes. Mr. Caldera indicated he could not address the issue because the consultants did not consider RPP Programs as part of the study. Council Member Fine noted the PTC had reviewed the data and requested follow-up data. The proposed Ordinance did not right-size parking requirements to the level suggested by the data. Council Member Scharff requested confirmation that there was no difference between affordable housing and market-rate housing with respect to parking supply rates. Mr. Caldera observed that the same supply rates could be used for affordable housing and market-rate housing, and both would be accurate. Council Member Scharff requested clarification of the supply rates for affordable housing and market-rate housing per unit and per bedroom. Ms. Eisberg explained that most senior housing units had one bedroom. Therefore, the per bedroom and per unit rates were typically the same. MINUTES Page 31 of 33 City Council Meeting Final Minutes: 11/26/18 Affordable units tended to have two or more bedrooms, which changed the demand rates per unit and per bedroom for affordable projects. More family members could be living in affordable units than in market-rate units. Council Member Scharff asked if affordable units usually had more than two vehicles. Ms. Eisberg could not speak to the number of vehicles. Because Palo Alto had a standard by bedroom, consultants reported the demand rate by bedroom and by unit. Council Member Scharff inquired whether the City should require more parking for a three-bedroom unit than a two-bedroom unit. Mr. Lait suggested Council Members limit their questions to methodology. Vice Mayor Filseth understood the consultants were saying there could be a system requiring parking based on the number of units. Council Member Scharff did not find in the Executive Summary the effect of proximity to transit on parking demand. Mr. Caldera reported the consultants did not suggest any further reductions based on proximity to transit. Generally, a good Transportation Demand Management (TDM) program could reduce trip generation and parking demand rates. The consultants proposed rates based on observed supply and demand. Council Member Scharff inquired whether an urban or suburban setting affected parking rates. Mr. Caldera advised that more parking was typically required for a suburban development, and less parking was required for an urban development. Council Member Scharff asked if the complexes in other cities were suburban or urban. Mr. Caldera indicated much of the historical parking data was obtained in more urban areas near transit. Ms. Eisberg added that the link to Figure 1 contained a map of the literature review. Vice Mayor Filseth noted the over supply range in Table 4 contained quite a bit of variation and requested an explanation of the range. MINUTES Page 32 of 33 City Council Meeting Final Minutes: 11/26/18 Mr. Caldera explained that the range resulted from the inability to link on- street cars to individual complexes. Mayor Kniss asked if the consultants had an answer to the PTC's query regarding where residents park and why. Mr. Caldera reported consultants conducted a resident intercept survey at The Mark to answer the PTC's query. The goals for the survey were to determine if residents parked onsite or offsite, if residents felt safe parking onsite or offsite, why residents parked onsite or offsite, and the residents' perceptions of the general parking supply at The Mark. Anecdotal evidence suggested a perception of having more spaces available was the right amount of parking and a preference for parking onsite. Mayor Kniss remarked that she parked as close as possible to her destination and was puzzled by the PTC's question. Mr. Keene noted the items on the following week's Agenda. If the Council directed, Staff would notice the continuation of Agenda Item Numbers 9 and 10 on the December 3 Agenda. He inquired whether public hearings for the two items should be opened during the December 3 meeting. Ms. Stump advised that the Mayor should open the public hearing and continue it to a date certain. The Council did not need to take public comment. The Council should vote to continue Item Number 12 to December 3 and clarify that the item would not include new Staff presentations or public comment. Mr. Keene would confer with the Mayor and Vice Mayor regarding subsequent dates for Agenda Item Numbers 9 and 10 from the December 3 Agenda. MOTION: Council Member Fine moved, seconded by Council Member Wolbach to continue this item to next week. MOTION PASSED: 9-0 Mayor Kniss announced the Council would take up Agenda Item Number 12 on December 3 at the point the discussion ended on November 26. 14. Approval of a Five-year Operating and Revenue Sharing Agreement With Team Sheeper for Operations of the Rinconada Pool STAFF REQUEST THIS ITEM BE CONTINUED TO DECEMBER 10, 2018. State/Federal Legislation Update/Action None. CITY OF PALO ALTO CITY COUNCIL FINAL MINUTES Page 1 of 52 Special Meeting December 3, 2018 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:03 P.M. Present: DuBois, Filseth, Fine;, Holman arrived at 5:06 P.M., Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Council Member Tanaka participated from The Prince Park Tower Tokyo, Main Lobby 4-8-1 Shibakoen Minato, Tokyo 105-8563 Japan Closed Session 1. CONFERENCE WITH CITY ATTORNEY Subject: Written Liability Claim Against the City of Palo Alto By Keith Bunnell (Claim No. C18-0049) Authority: Government Code Section 54956.9 (e)(3). MOTION: Council Member Scharff moved, seconded by Council Member Fine to go into Closed Session. MOTION PASSED: 7-0 Holman, Tanaka absent Council went into Closed Session at 5:03 P.M. Council returned from Closed Session at 5:46 P.M. Mayor Kniss announced no reportable action from the Closed Session. Special Orders of the Day 2. Appointment of Three Candidates to the Architectural Review Board and Three Candidates to the Parks and Recreation Commission for Three- year Terms Ending December 15, 2021; and two Candidates to the Planning and Transportation Commission for Four-year Terms Ending December 15, 2022. Wynne Furth remarked that her colleagues on the Architectural Review Board (ARB) were well-qualified as architects and as reviewers of design. They FINAL MINUTES Page 8 of 52 City Council Meeting FINAL Minutes: 12/03/18 Denial of a Minor Architectural Review Consistent With Condition of Approval Number 3 From Record of Land Use Action Number 2017-02, for a Previously Approved Mixed-use Building (14PLN-00222), for the Proposed Exterior Building Materials, Colors, and Craftsmanship. Environmental Assessment: Use of Mitigated Negative Declaration Prepared for 14PLN-00222. Zoning District: CD-C(G)(P) (Downtown Commercial With Ground Floor and Pedestrian Shopping Overlay). MOTION FOR AGENDA ITEM NUMBERS 3-5, 7-8 and 10 PASSED: 9-0 MOTION FOR AGENDA ITEM NUMBER 6 PASSED: 6-3 Holman, Kou Tanaka no Council Member Holman advised that she objected to exemptions from Impact Fees. Council Member Kou remarked that the consequences of not assigning parking to units were unknown. The Development Impact Fee exemptions could be used to mitigate parking impacts. Action Items 9. PUBLIC HEARING. Adoption of an Ordinance Amending Chapter 18.18 (Downtown Commercial District) of Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC) to Repeal Section 18.18.040 Regarding a Nonresidential Square Footage Cap in the CD Downtown Commercial Zoning District to Implement and Conform to the Updated Comprehensive Plan; Section 18.18.040 Implemented Policy L-8 of the Prior 1998 Comprehensive Plan, Which was Removed as Part of the Adoption of the Comprehensive Plan Update. California Environmental Quality Act (CEQA), This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720 (Staff REQUESTS THIS ITEM BE CONTINUED TO A DATE UNCERTAIN IN 2019). 10. PUBLIC HEARING: Adoption of an Ordinance Amending Section 18.18.120 (Grandfathered Uses and Facilities) of Chapter 18.18 (Downtown Commercial District) of Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC) to Adjust Regulations Relating to Noncomplying Facilities. California Environmental Quality Act (CEQA); This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720; Alternatively, the Ordinance is Exempt From Environmental Review Under CEQA Guidelines Section 15061(b)(3) (STAFF REQUESTS THIS ITEM BE CONTINUED TO DECEMBER 10, 2018). FINAL MINUTES Page 9 of 52 City Council Meeting FINAL Minutes: 12/03/18 12. PUBLIC HEARING: Adoption of an Ordinance Amending Various Sections of Title 18 of the Palo Alto Municipal Code Related to Residential and Mixed-use Development Standards Including, but not Limited to, Minimum and Maximum Unit Density, Unit Size, Floor Area Ratio, Height, and Open Space Including Rooftop Gardens; Parking Requirements Including, but not Limited to, Regulations Related to In- lieu Parking for Downtown Commercial Uses and Retail Parking for Mixed Use Projects; Exclusively Residential Projects in Certain Commercial Zoning Districts; Ground-floor Retail and Retail Preservation Provisions; the Entitlement Approval Process; and Other Regulations Governing Residential, Multi-family Residential and Commercial Zoning Districts, all to Promote Housing Development Opportunities in These Zoning Districts in Furtherance of Implementation of the Comprehensive Plan. CEQA: Determination of Consistency with the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution No. 9720. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance on October 10, 2018 (Continued From November 26, 2018). [The Council returned to Agenda Item Number 2 before proceeding with this item.] Molly Stump, City Attorney, advised that the Council could ask questions that were not specific to any of the areas. Council Member Holman inquired whether an independent economic analysis was prepared for any of the work before the Council. Jonathan Lait, Planning and Community Environment Interim Director, replied no. Council Member Holman inquired whether any other economic analysis was performed or whether any one provided an economic analysis. Mr. Lait answered not for the specific effort to implement the Work Plan. Staff relied on documents produced as part of the Comprehensive Plan Update, other studies, and some conversations. Staff did not contract for an economic analysis of any of the concepts presented in the proposed Ordinance. Council Member Holman inquired whether any developers, property owners, or architects provided an economic analysis. Mr. Lait responded no. Staff met with developers, property owners, and architects to obtain their opinions regarding concepts Staff was exploring. FINAL MINUTES Page 10 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Holman asked how Staff developed conjectures regarding the impacts of the proposed changes without an economic analysis. Mr. Lait indicated Staff informally solicited some of that information. Because prior zoning changes did not make housing production more onerous, Staff believed the contemplated changes would provide a net benefit to housing production. If the Council wishes, Staff could obtain a pro forma analysis. Council Member Holman asked if Staff met with or held discussions with retail operators. Mr. Lait related that discussions were not held with specific retail tenants. Council Member Holman asked if there was an analysis of permeability as maintaining permeability of parcels had long been a goal. Mr. Lait asked if Council Member Holman meant permeability from a water perspective. Council Member Holman replied yes. Mr. Lait answered no. Council Member Holman asked if there was an analysis of the impacts to the canopy. Mr. Lait responded no. In large part, the existing development standards were retained in the proposed Ordinance. The overall building envelope that could be approved remained intact with the proposed Ordinance. The proposed changes addressed parking, unit density, and similar topics. Staff did not anticipate any changes to the environment. Environmental issues could be addressed through Discretionary Review. Council Member Holman inquired whether Staff believed increased lot coverage could affect the canopy. Mr. Lait explained that Staff was concerned about the impact of any development standard on the canopy. The proposed Ordinance should not trigger environmental concerns. If environmental issues were triggered, they could be addressed in the Individual Review process. Council Member Holman noted the Staff Report did not contain any tables comparing the impacts of the proposed changes with impacts of Senate Bill (SB) 35 and density bonus laws. FINAL MINUTES Page 11 of 52 City Council Meeting FINAL Minutes: 12/03/18 [The Council returned to Agenda Item Number 2 before proceeding with this item.] Mr. Lait clarified that the proposed changes did not exempt the City from SB 35 regulations. Staff did not anticipate receiving any development applications that sought to qualify for SB 35. Depending on housing production, the City could be subject to a lower threshold for onsite affordability on an SB 35 project, in which case Staff anticipated receiving more applications for those types of projects. The purpose of the Housing Incentive Program (HIP) was to create more advantages for redevelopment of sites than those provided by the base zoning district and the State Density Bonus Law. The HIP should be more attractive to potential developers while ensuring the City maintained its design review process. Council Member Holman inquired about a comparison of the impacts of the proposed changes with the impacts of Comprehensive Plan policies and programs. Staff Reports generally explained a change and listed which Comprehensive Plan policies and/or programs the change would implement. Mr. Lait stated the Housing Work Plan tied a number of goals to the Comprehensive Plan. Each task in the Work Plan was derived from any number of housing-related goals. Council Member Holman inquired whether Staff analyzed the potential noise impacts of rooftop gardens used as open space given the lack of Code enforcement efforts. Mr. Lait advised that no noise study was prepared. Staff introduced some design elements to keep rooftop gardens away from the edges of buildings. Rooftop gardens were one means to increase the number of units for a site. Rooftop gardens warranted the Council's deliberation as to the appropriateness and extent of the proposed change. In the coming year, all City departments would respond to the Code enforcement audit prepared by the City Auditor's Office. Council Member Holman inquired regarding the requirement for rooftop garden lighting to be shielded. Mr. Lait explained that the proposed Ordinance addressed lighting and additional setback requirements for lighting. Lighting plans would be required in the review process. [The Council returned to Agenda Item Number 2.] FINAL MINUTES Page 12 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Kou asked if Staff researched the number of below-market- rate (BMR) units and market-rate units produced in Mountain View and the affordability of rental units in Mountain View. Mr. Lait reported Staff did not engage with Mountain View. The proposed Ordinance pertained to both affordable and market-rate units and contained many provisions to spur housing production at different income levels. Council Member Kou wanted to understand the affordability of housing in Mountain View after the construction of many high-density projects. Mr. Lait stated Staff worked diligently to draft language that would not result in significant changes to the character of Palo Alto. He did not know whether the regional production of housing was sufficient to decrease rents. Studies conducted in Seattle following an increase in housing production showed some changes to rental prices and an increase in the number of incentives offered to renters. Council Member Kou expressed concern about noise and lighting from rooftop gardens and the City's ability to enforce the Noise Ordinance. She requested the rationale for Staff not including the Palmer fix in the proposed Ordinance. Mr. Lait indicated the City had contracted with a firm to explore increases in the in-lieu housing requirement and the Palmer fix. Hopefully, that could be presented to the Council in the first half of 2019. Council Member Kou suggested Staff should have prioritized the Palmer fix. Mr. Lait believed that was a policy conversation for the Council. Staff needed to address many aspects of housing and was doing their best to present items to the Council as quickly as possible. James Keene, City Manager, remarked that Staff made a good faith effort to provide some proposals for Council consideration and knew additional work was needed. Staff attempted to respond to the guidance in the Comprehensive Plan and to advance some proposals. If the proposals were not effective, Staff would develop additional proposals. Mayor Kniss requested Council Member Kou conclude her comments. Council Member Kou indicated she had many points to discuss. She requested the rationale for Staff not including Development Impact Fees. Mr. Lait explained that Development Impact Fees were collected for every project subject to the Ordinance when the building permit was issued. FINAL MINUTES Page 13 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Kou asked if increasing Development Impact Fees equivalent to the County of Santa Clara's (County) fees had been discussed. Mr. Lait answered no. Mr. Keene believed a cursory analysis to identify the highest possible and justifiable impact fee, the amount of funds that fee would yield to subsidize affordable housing, and the number of affordable housing units that could be constructed with impact fee funds would be relatively easy to prepare. However, the number of affordable housing units would likely fall far short of the Comprehensive Plan goal. Council Member Fine remarked that the proposed Ordinance was a good opportunity to produce more BMR and market-rate housing. Mountain View was on track to produce approximately 1,100 housing units including approximately 150-160 BMR units. Housing impact fees applied to all housing projects. He asked if the proposed housing minimums would preclude someone from redeveloping at the same number of units per acre. Ms. Stump requested Council Member Fine hold his question until the appropriate section was before the Council for discussion. Council Member DuBois requested the income levels for 100-percent affordable housing as stated in the Municipal Code. Mr. Lait explained that the Code did not define 100-percent affordable housing. The common definition of 100-percent affordable housing was 100 percent deed restricted to affordable housing. Section 16.65.020 listed the definitions for very-low-income households, low-income households, and moderate-income households. Council Member DuBois asked if Staff intended the HIP to be in lieu of SB 35. Mr. Lait advised that the HIP was not in lieu of SB 35. Developers could utilize the incentives of the HIP rather than SB 35. Council Member DuBois asked if projects qualifying for SB 35 would utilize the State's definition of affordability. Mr. Lait reported the State's definition did not extend to 120 percent. Council Member DuBois asked if Staff considered the different definitions of 100 percent affordable housing. The HIP seemed to apply to market-rate housing, while SB 35 applied to BMR housing. FINAL MINUTES Page 14 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait indicated SB 35 applied to any development as long as it was two- thirds residential and 50 percent of units were deed restricted to 80 percent of the average median income (AMI). Council Member DuBois asked if the HIP was 100 percent of units deed restricted up to 120 percent AMI. Mr. Lait related that the HIP could be reviewed in depth with each section presented. Staff was guided in part by the Council's action on the affordable housing overlay. The PTC recommended an AMI threshold, but the Council increased it to 120 percent AMI to be consistent with the moderate-rate income. Council Member DuBois asked if the Ordinance capped the HIP at 120 percent AMI. Mr. Lait clarified that in portions of the Ordinance that discussed incentives for 100-percent affordable housing projects, the AMI could be no more than 120 percent. Council Member DuBois suggested the Council discuss whether rooftop gardens should be the third floor of a building. He inquired whether the proposed Ordinance contained a requirement for the rooftop garden to contain vegetation. Mr. Lait disclosed that 15 percent of rooftop gardens was required to be vegetation. Council Member DuBois asked why the amount of vegetation was limited to 15 percent. Mr. Lait explained that the percentage would distinguish usable open space from unusable open space. Council Member DuBois asked if a developer could move the square footage of the rooftop garden elsewhere in the building envelope. Mayor Kniss noted the Council would discuss rooftop gardens as a section later in the meeting. Mr. Lait was not aware of a loophole that would allow the square footage to be moved elsewhere. He did not believe the rooftop space could be converted to floor area in the building. If the building's height was at the height limit, the developer would need to enclose space above the height limit. If the building's floor area ratio (FAR) was at the maximum amount allowed, adding floor area by enclosing the rooftop garden would be problematic. FINAL MINUTES Page 15 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member DuBois asked if an accessory dwelling unit (ADU) would be allowed on a parcel zoned R-1. Ms. Stump asked Council Member DuBois to hold his question until the appropriate section was presented to the Council. Council Member DuBois asked if the provision for parking for the first 1,500 square feet applied to existing tenants in existing buildings. Mr. Lait would respond after reviewing the Municipal Code. Mayor Kniss announced Citywide revisions would be taken up as Section 5, multifamily zones as Section 1, the Downtown as Section 2, California Avenue as Section 3, and El Camino Real as Section 4. Vice Mayor Filseth advised that he would not participate in this part of the Agenda Item due to his owning property in an RM-15 zone. Council Member Holman advised that she would not be participating in this part of the Agenda Item due to her owning property within 500 feet of an RM- 2 zone. Jean Eisberg, Lexington Planning, reported changes for multifamily zones include increasing the maximum density of the RM-15 zone to 20 units per acre; establishing minimum unit densities; and allowing redevelopment and replacement of existing housing units with nonconforming densities. Mr. Lait reported none of the proposed changes would render a single-family home or a multifamily project that did not comply with the proposed minimum densities as a noncomplying use, and such language needed to be added to the proposed Ordinance. MOTION: Council Member Fine moved, seconded by Council Member Wolbach to accept the following changes related to Multi-Family Zones: A. Unit Density. Replace RM-15 zoning designation, which allows 15 units per acre with a RM-20 designation that allows 20 units per acre, to align with Housing Element density allowance; B. Minimum Density. Establish a minimum unit density as provided below. Allow fewer units when determined by the Planning Director, after review by the Architectural Review Board (ARB), that existing site improvements or parcel constraints preclude meeting this minimum standard: i. RM-20: 11 units/acre FINAL MINUTES Page 16 of 52 City Council Meeting FINAL Minutes: 12/03/18 ii. RM-30: 16 units/acre iii. RM-40: 21 units/acre; C. Non-complying Unit Density. Allow redevelopment and replacement of legally established residential housing units that exceed the maximum unit density allowed for the parcel, subject to the following criteria: i. Other than unit density, the project complies with all applicable development standards. ii. The project is a residential rental project. iii. The development shall not be eligible for a density bonus pursuant to Palo Alto Municipal Code (PAMC) Chapter 18.15. The applicant must elect whether to utilize state density bonus law or the exception described herein as an alternative to state density bonus law; and D. Administrative Code Clean Up. Modify PAMC Section 18.13.040(g) regarding below market rate (BMR) housing units to reflect regulatory requirements of Chapter 16.65 of Title 16. Council Member Wolbach remarked that he would have preferred more aggressive measures, but the proposed Ordinance was a good start. Council Member Scharff asked if anything would become nonconforming as a result of the proposed Ordinance. Mr. Lait advised that a land use would not become nonconforming for failure to comply with the minimum densities established by the proposed Ordinance. He could not think of a use that would become nonconforming based on the standards. Council Member Scharff noted a project with a higher unit density was no longer nonconforming. Mr. Lait clarified that an existing land use with a higher unit density would remain nonconforming after adoption of the proposed Ordinance, but the proposed Ordinance would allow the use to be rebuilt to that density. Council Member Scharff inquired whether the proposed Ordinance should state "a use identified as nonconforming based solely on a higher-than-allowed density is no longer nonconforming." Rebuilding or remodeling a nonconforming property was challenging. FINAL MINUTES Page 17 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait suggested the Council discuss the issue as Staff had not analyzed the issue. Projects for nonconforming uses were subject to limitations. Redeveloping a multifamily building that exceeded unit density and other development standards was not the type of redevelopment Staff wished to incentivize in the proposed Ordinance. Council Member Scharff felt an existing housing development should not be labeled as nonconforming solely because the unit density exceeded the maximum allowed. Mr. Lait requested time to consider the possible consequences of broader language. The language should state clearly that following redevelopment under the proposed Ordinance a nonconforming use was no longer considered nonconforming. Council Member Scharff asked if redevelopment included remodeling. Mr. Lait replied yes as long as the remodel project did not intensify or expand a nonconforming use. Council Member Scharff suggested amending the Motion to direct Staff to remove the designation of noncomplying from projects that exceeded the maximum unit density only by a few units. Council Member Fine requested the effect of the language proposed by Council Member Scharff. Mr. Lait requested time to consider the language and its ramifications. The amendment would pertain to Section 18.70, which had not been noticed. Ms. Stump suggested Staff take the Amendment as direction to return with an analysis in a future phase of the Housing Work Plan. Council Member Scharff wanted to amend the Code at the current time. Mr. Lait advised that a footnote stating "no property that exceeds the maximum unit density allowed for the zone and property shall not be a noncomplying use for the purposes of Chapter 18" could be added to the RM table. Council Member Fine reiterated his request for the practical implications of the language. Council Member Scharff indicated a property owner could remodel the use without the strictures of non-intensification. FINAL MINUTES Page 18 of 52 City Council Meeting FINAL Minutes: 12/03/18 Ms. Stump recommended the Council phrase new concepts as direction to Staff so that Staff could review them in-depth and draft appropriate language. The Council could use a parking lot for new concepts. Council Member Wolbach concurred with the use of a parking lot or a running list of items for Staff and the PTC to develop for the 2019 housing revisions. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to direct Staff to review the concept of when a project is over the number of units, it will not make the project non-compliant, and return to Council in 2019 for review. Council Member Kou asked if the Amendment would include more cars and parking. Council Member Scharff stated the intention of the Amendment was not to allow necessarily more units, but to allow other modifications without the strictures of a nonconforming use. Council Member Kou asked if increasing the number of units was possible. Council Member Scharff did not believe increasing the number of units was possible. Council Member Kou remarked that she supported the Housing Work Plan because she assumed tasks would be prioritized and presented in phases and Staff would obtain good data. She asked how minimum unit density was done prior to the proposed change. Mr. Lait explained that the Code currently did not contain minimum unit densities. For example, a single-family home could be built in a multifamily district, which would foreclose the possibility of a number of units being built on the site. To encourage housing production, a minimum unit density required more than one unit be built on a parcel zoned for multifamily. Council Member DuBois inquired whether a property owner could demolish and rebuild a single-family home or a single-family home with an ADU in an RM zone. Mr. Lait answered no because the new structure would have to comply with the minimum unit density. Council Member DuBois requested clarification of noncomplying. Mr. Lait suggested a hypothetical scenario of a single-family home existing on a parcel zoned for a maximum of five units and a minimum of three units FINAL MINUTES Page 19 of 52 City Council Meeting FINAL Minutes: 12/03/18 under the proposed Ordinance. If the single-family was demolished, the replacement project would have to contain at least three units. Council Member DuBois asked if the home in the scenario could be refurbished or remodeled rather than demolished and rebuilt. Mr. Lait responded yes. Council Member Scharff would not support the Motion if a property owner could not demolish and rebuild a single-family home, a single-family home with an ADU, or a duplex in a multifamily district. Council Member DuBois concurred with Council Member Scharff's sentiments. Council Member Fine related that under Council Member Scharff's comment the minimum unit densities would not apply to single-family homes or duplexes. He inquired regarding the number of single-family homes existing in RM districts. Mr. Lait could provide the number at a later time. Council Member Fine commented that the purpose of the changes was to encourage owners of RM properties to densify their properties. He asked if Council Member Scharff was willing to limit the proposal to single-family homes. Council Member Scharff answered no as duplexes felt like single-family neighborhoods and duplexes were typically exempted with single-family homes. Mayor Kniss noted the Council needed to know the number of single-family homes built in RM districts. Council Member Scharff stated the number would not affect his opinion on the matter. Council Member Wolbach recalled Staff's comments at the beginning of the discussion regarding adding language to the Ordinance. Mr. Lait reiterated the language that a single-family, duplex, or triplex property would not be deemed a noncomplying use for failure to meet the minimum density. Council Member Wolbach recalled Mr. Lait's request for the Council to include language in the Motion. FINAL MINUTES Page 20 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait distinguished Council Member Scharff's last comment from his requested language. Council Member Tanaka left the meeting at 7:58 P.M. Mayor Kniss suggested the Council utilize Vice Mayor Filseth's property as an example because Vice Mayor Filseth's single-family home was located in an RM-15 zone. She asked whether Vice Mayor Filseth could demolish his single- family home and construct a new single-family home with an ADU. Mr. Lait advised that the Motion should clearly state the Council's intention. Council Member Scharff expressed concern for existing owners of single-family homes located in multifamily districts because they would have to sell their homes and lose their low property tax valuations if the proposed Ordinance did not allow them to redevelop their single-family home as a single-family home. Mayor Kniss reported the property would be reassessed under a redevelopment. Council Member Scharff clarified that the property would be partially reassessed. Council Member Fine clarified that the property owner could choose to rebuild in compliance with the minimum density requirements. Council Member Wolbach asked if the amendment should state that the redevelopment would not reduce the number of units such that a duplex could not be rebuilt as a single-family home. Mayor Kniss concurred with Council Member Wolbach's suggestion. Mr. Lait asked if a single-family home with an ADU would qualify. Council Member Scharff replied no. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion to allow a single-family home to be rebuilt as a single-family home and a duplex to be rebuilt as a duplex without meeting the minimum density requirements. Council Member DuBois requested the rationale for noncomplying density requiring rental ownership. FINAL MINUTES Page 21 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait explained that it was a policy consideration to allow the continuation of rental housing in that situation as opposed to converting the rental units to ownership units. Council Member DuBois asked if existing nonconforming ownership units would be forced to convert to rental ownership. Mr. Lait commented that redevelopment of a condominium building was not likely. Council Member DuBois asked Staff to comment regarding the different definitions for affordable housing. Mr. Lait reported the Code required a housing project that exceeded 40 or more units to have a component of retail. An affordable housing project located in an RM zone would not be subject to the retail requirement because of the difficulty in financing an affordable housing project with a retail component. If a project meets the affordable housing requirement of up to 120 percent AMI, the project should be exempt from the requirement. The Council had the discretion to change the AMI threshold. Council Member DuBois did not understand why the requirement for retail in a multifamily project of 40 or more units with a threshold of 120 percent of AMI was removed. Mr. Lait reiterated the Code requirement for retail space in an affordable housing project of 40 or more units. The proposed change would eliminate the requirement for retail space. Council Member DuBois proposed adding language to define affordable housing as 120 percent AMI not to exceed an average of 60 percent AMI excluding the manager's unit. The language would allow a range of units. To qualify for no retail component, the project would have to be mostly BMR units. Council Member Fine indicated the traditional definition of affordable housing had been 100 percent AMI, but the housing crisis had caused many cities to define affordable housing as 120 percent AMI. The purpose of removing retail from affordable housing projects was to prevent the residential units from subsidizing the retail space on the ground floor. Council Member DuBois wanted to continue the exclusion and make the affordable housing truly BMR by adding the average clause. FINAL MINUTES Page 22 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Scharff asked if the elimination of retail from an affordable housing project of 40 units would apply in the R Combining District and the Downtown Combining District. Mr. Lait advised that the proposed changes did not apply to the Downtown district. The project had to be located in an RM district for the retail requirement to be waived. Council Member Scharff asked where the RM districts were located. Ms. Eisberg noted the proposed change stated the housing project was located more than 500 feet from neighborhood commercial services. That language could exclude much of the Downtown area. Council Member Kou asked how the language conformed to walkability to retail. Council Member Scharff remarked that eliminating the requirement would not affect shopping centers. Mayor Kniss asked if a project on Alma would be required to have retail. Mr. Lait answered yes. The retail requirement is intended to provide shopping within walking distance of residences. Council Member DuBois indicated the map of RM zones appeared to include the Midtown Shopping Center. Mr. Lait explained that the map had not been refined to remove those properties in the RM zone that were more than 500 feet away from commercial services. Council Member DuBois related that the Comprehensive Plan called out some shopping districts in the City and asked if that was protected in any way. Mr. Lait did not believe those were RM zoned. Council Member DuBois asked if the Council should discuss parking within each section or as an individual topic. Mr. Lait advised that parking would be considered in the Citywide section. MOTION AS AMENDED RESTATED: Council Member Fine moved, seconded by Council Member Wolbach to accept the following changes related to Multi- Family Zones: FINAL MINUTES Page 23 of 52 City Council Meeting FINAL Minutes: 12/03/18 A. Unit Density. Replace RM-15 zoning designation, which allows 15 units per acre with a RM-20 designation that allows 20 units per acre, to align with Housing Element density allowance; B. Minimum Density. Establish a minimum unit density as provided below. Allow fewer units when determined by the Planning Director, after review by the ARB, that existing site improvements or parcel constraints preclude meeting this minimum standard: iv. RM-20: 11 units/acre v. RM-30: 16 units/acre vi. RM-40: 21 units/acre; C. Non-complying Unit Density. Allow redevelopment and replacement of legally established residential housing units that exceed the maximum unit density allowed for the parcel, subject to the following criteria: i. Other than unit density, the project complies with all applicable development standards. ii. The project is a residential rental project. iii. The development shall not be eligible for a density bonus pursuant to PAMC Chapter 18.15. The applicant must elect whether to utilize state density bonus law or the exception described herein as an alternative to state density bonus law; D. Administrative Code Clean Up. Modify PAMC Section 18.13.040(g) regarding below market rate (BMR) housing units to reflect regulatory requirements of Chapter 16.65 of Title 16; E. Direct Staff to review the concept of when a project is over the number of units, it will not make the project non-compliant and return to Council in 2019 for review; and F. Allow a single-family home to be rebuilt as a single-family home and a duplex to be rebuilt as a duplex without meeting the minimum density requirements. MOTION AS AMENDED PASSED: 6-0 Filseth, Holman recused, Tanaka absent FINAL MINUTES Page 24 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Scharff advised he would not be participating in this part of the Agenda Item due to his owning property within 500 feet of the Downtown Commercial-Community (CD-C) Zoning District. Council took a break at 8:20 P.M. and returned at 8:29 P.M. Ms. Eisberg summarized proposed changes for the Downtown CD-C Zoning District as eliminating the maximum density requirement; establishing a maximum average unit size of 1,500 square feet; exempting the first 1,500 square feet of ground-floor retail from parking requirements within residential mixed-use buildings; precluding curb cuts on University Avenue; eliminating the in-lieu fee option available for commercial space above the ground floor; allowing residential-only development except in the Ground-Floor (GF) Combining District and in areas where the Retail Preservation Ordinance applied; allowing rooftop open spaces; and establishing a HIP. The HIP would increase residential FAR from 1.0 up to 3.0; allow the Affordable Housing Overlay standards without the legislative process; require Discretionary Architectural Review; and prohibit the use of Transferable Development Rights (TDRs). MOTION: Council Member Fine moved, seconded by Council Member Wolbach to accept the following changes related to Downtown CD-C Zoning District: A. Unit Density. Eliminate the unit density requirement restricting the maximum density to 40 units per acre. With the proposed amendment, unit density would be controlled by other existing development standards, such as height, floor area, parking requirements, etc.; B. Unit Size. Establish a maximum average housing unit size of 1,500 square feet, (weighted average by the number of bedrooms); C. Retail Parking. Exempt the first 1,500 square feet of ground-floor retail from parking requirements within residential mixed-use buildings; D. Driveway Approach. Reinforce existing city policy and guidelines to preclude curb cuts on University Avenue, except for City-owned parcels or City-sponsored projects; E. Residential Only Development. Allow housing-only projects to be constructed downtown, except in the ground floor (GF) combining district. Retail preservation ordinance standards apply for market rate housing projects. Note, current zoning standards permit housing only when part of a commercial, mixed use development or on housing opportunity sites (i.e., in the Housing Element); FINAL MINUTES Page 25 of 52 City Council Meeting FINAL Minutes: 12/03/18 F. Open Space. Allow rooftops to qualify for up to 75 percent of the usable open space requirement for the multi-family residential portion of a project, subject to objective performance standards; G. Housing Incentive Program (HIP). Establish a process that would allow property owners to apply to receive greater floor area than otherwise allowed under the zoning code and under State Density Bonus Law through waivers granted by the Director of Planning after review by the ARB. This program would be an alternative to the State Density Bonus Law and SB 35 streamlining, since it allows for more density. Components of the HIP include the following: i. Floor Area Ratio (FAR) waiver to increase residential FAR from 1.0 up to 3.0, except for portion of FAR required to remain commercial by the requirements of the retail preservation ordinance or GF combining district. ii. No TDRs may be used in conjunction with a qualifying HIP project iii. Require discretionary architectural review consistent with PAMC 18.76.020 (Architectural Review); and H. Strike Section 8 of the Ordinance and direct the Planning and Transportation Commission to review it further. Council Member Fine believed the HIP and a number of proposed changes were moving in the right direction. The original Colleagues' Memo was intended to explore unbundled parking and an in-lieu parking program. The PTC proposed removing the in-lieu commercial parking requirements from second-story commercial space. That would be a significant change for the Downtown and would preclude the rebuilding of many commercial structures. The Chamber of Commerce, Downtown property owners, and the business community did not provide feedback regarding the issue. He requested Staff review the concept further. Council Member Wolbach would have preferred more aggressive measures, particularly for parking. The intent of the Colleagues' Memo was to create more incentives for housing development. The Housing Work Plan does not appear to be the proper place to eliminate a requirement that does not pertain to housing. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to direct Staff and the Planning and Transportation Commission to further study decoupled parking, in lieu parking, and offsite parking for residential developments and return to Council in 2019. FINAL MINUTES Page 26 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait advised that Staff intended to return to the Council following the Council Retreat for a discussion of the Housing Work Plan and anticipated amendments. Council Member Wolbach read the parking suggestions from the Colleagues' Memo and requested Staff explore those suggestions. Mr. Lait reported the Staff Report included some additional development standards that would apply to 100-percent affordable housing projects, such as allowing an FAR up to 4.0 and a height up to 60 feet. Staff could present the information following or as part of a Council discussion of the proposed Ordinance. Council Member Holman noted the proposed Ordinance would allow an FAR of 3.0; however, she recalled a discussion of allowing an FAR of 3.0 for hotels in the Downtown only. An FAR of 3.0 in the CD-C District would have significant environmental impacts. Mr. Lait clarified that the table on page 18-19 of the proposed Ordinance contained existing standards. The HIP was set out separately in the proposed Ordinance to highlight it as a waiver from development standards. Ms. Eisberg related that the Comprehensive Plan stated residential development could utilize some commercial FAR allowance in transit-oriented locations. This change would place residential development on par with commercial development. Council Member Holman understood the change would convert commercial FAR to housing FAR. Ms. Eisberg added that a 3.0 FAR project would be 100-percent residential. Under the existing standards, a mixed-use project could have an FAR of 3.0. Council Member Holman remarked that TDRs would be necessary for a 3.0 FAR in a mixed-use project. Mr. Lait indicated based on review of the certified Environmental Impact Report (EIR) and the programmatic nature of the Comprehensive Plan, Staff believed the proposed changes were consistent with Council policies and fell within the environmental analysis. If the Council believed an expanded analysis was required, it could direct Staff to perform an expanded analysis. Council Member Holman felt the provision to allow 75 percent of the required usable open space for the residential component on the rooftop could impact FINAL MINUTES Page 27 of 52 City Council Meeting FINAL Minutes: 12/03/18 ground-floor open space or individual balconies. She requested the rationale for Staff combining private open space with public open space. Mr. Lait disclosed that Commercial Districts did not have a requirement for private open space. Moderating the usable open space requirement would allow more housing units onsite. The PTC felt allowing more usable open space on rooftops was more appropriate in Downtown than in other areas of the City. Council Member Holman commented that the changes were difficult to visualize without drawings. Mr. Lait suggested Staff may request additional funding to prepare drawings for future discussions. Not all projects may achieve an FAR of 3.0 because of other development standards and Building Code provisions. Council Member Holman reiterated her concerns regarding sources of lighting and noise on rooftop gardens. She asked if rooftop lighting was allowed to be pointed directly up. Mr. Lait advised that Subpart (e) on Page 25 of the proposed Ordinance addressed light sources. Additional language could state "no light sources shall be visible from the public right-of-way" and "direct light sources shall be screened from the public right-of-way" and could prohibit up-lighting. Another provision prohibited the use of rooftop gardens after 10:00 P.M. Council Member Holman disclosed that rooftop up-lighting affected bird safety and light pollution; therefore, up-lighting on a rooftop should be prohibited, and light sources should be shielded. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to add to the Ordinance a requirement that for rooftop gardens, no up lighting is allowed and light sources should be shielded. Council Member Holman did not know how the prohibition against amplification equipment would be enforced. Mr. Lait recognized the challenges of enforcing the Noise Ordinance. Alternative language could be "any use of the rooftop open space that generates noise that is audible beyond the property boundaries is a violation of this Ordinance." This language would provide a lower and simpler threshold test for Code Enforcement Officers' and Police Officers' use. Police Officers could respond to disruptive rooftop activities without a noise complaint. FINAL MINUTES Page 28 of 52 City Council Meeting FINAL Minutes: 12/03/18 AMENDMENT: Council Member Holman moved, seconded by Council Member XX to add to the enforcement officers’ tool kit to conduct code enforcement activities if disruptive noise is perceived offsite from the subject property. Mr. Lait questioned whether a discussion of rooftop open space would be appropriate in the Citywide section. Ms. Stump recommended the Council discuss the standards under the Citywide section. Council Member Holman requested clarification of the process to refine standards for the different sections when Council Members were recused from the sections. Mr. Lait clarified that the standards applied Citywide while the percentage of open space allocated to rooftops varied with each section. A discussion of allowing or not allowing roof decks was a Citywide discussion. Within the discussion of Downtown, Staff sought approval of the 75-percent threshold. Ms. Stump advised Council Member Holman that she could propose a specific set of standards for the Downtown only. Staff had proposed a set of standards that would apply throughout the City. Council Member Fine understood Council Member Holman's concern about noise; however, the Amendment was unreasonable. Council Member Holman explained that the Amendment pertained to ongoing, persistent noise. Council Member Fine believed disruptive noise would be a better description of ongoing, persistent noise. Mr. Lait suggested the proposed Ordinance was not the best place to describe noise and enforcement. AMENDMENT RESTATED: Council Member Holman moved, seconded by Council Member XX to add to the enforcement officers’ tool kit to conduct code enforcement activities if disruptive noise is perceived offsite from the subject property. AMENDMENT WITHDRAWN BY THE MAKER Council Member Holman questioned the process for the Director to waive any development standard after the project with the proposed waiver(s) was reviewed by the ARB given the limited number of times the ARB could review a project. FINAL MINUTES Page 29 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait reported a waiver request would be embedded in a proposal and reviewed by Planning Staff who would send a recommendation to the ARB. The application would be subject to the usual ARB process. Council Member Holman felt the language gave the Planning Director a great deal of latitude. Mr. Lait remarked that requesting a waiver would not be as arduous as applying for a variance. Staff expected developers to file applications that exceeded the FAR, and the ARB would act on those applications as long as the ARB could make the required findings. Council Member Holman asked how the ARB would judge spillover parking. Mr. Lait explained that Subpart (2) on Page 21 of the proposed Ordinance dealt with 100-percent affordable housing projects. If the 100-percent affordable housing project met the Federal tax credit standards for funding, the project could follow the standard discretionary review process rather than the legislative process to apply the overlay zone to the property. The Director could waive up to those amounts provided in the Affordable Housing (AH) Overlay. The AH Overlay established different parking standards. Council Member Holman asked if the proposed change allowed projects larger than projects under the AH Overlay. Mr. Lait replied that the proposed change would allow an FAR up to 3.0, while the AH Overlay allowed an FAR up to 2.0. The parking requirement was lower under the AH Overlay. The open space requirement was lower for 100-percent affordable housing projects. Council Member Holman stated the rooftop open space requirement should be consistent, but it was not consistent with the AH Overlay requirement. Mr. Lait advised that the PTC struggled with the issue as well. This subpart was Staff's effort to align the AH Overlay with the goals to streamline review and provide housing incentives. Council Member Holman seemed to recall the funding for affordable housing was 80 percent and less. Mr. Lait indicated the Federal tax credit requirements changed in 2018. Staff attempted to draft the proposed Ordinance so that the standards could change as Federal tax credit requirements change. For a project to be eligible for the HIP, it had to be funded with Federal tax credits. In order to target the income FINAL MINUTES Page 30 of 52 City Council Meeting FINAL Minutes: 12/03/18 level, the proposed Ordinance should create an incentive that streamlined review and allowed developers to take advantage of allowances. Council Member DuBois asked if the meetings with developers included discussions of placing restrictions on commercial development so that housing projects were more attractive than commercial projects. Mr. Lait replied no. Ms. Eisberg reported the discussion focused more on the influence of retail requirements on developers' ability to build residential projects. Council Member DuBois noted that the proposed changes may not result in additional housing because commercial projects remained attractive. The Council needed to consider some penalties as well as incentives to encourage housing production. The hotel FAR could be reduced to 1.5 to incentivize housing. The Council should evaluate the elimination of the in-lieu fee for commercial parking. The Council should encourage the conversion of commercial FAR to residential FAR. Council Member Fine requested more clarity around the methods to convert commercial FAR to residential FAR. Ms. Eisberg related that a residential development was more expensive to construct than a commercial development. Incentive would increase the number of residential units to make up for the cost difference. Council Member DuBois wanted a penalty such as redefining the Downtown mixed-use to be more residential. Ms. Eisberg suggested less FAR, additional development standards, and onsite parking for commercial developments as penalties. Mr. Lait suggested the easiest way to encourage residential development would be to reduce the FAR below 1.0 for commercial development. Council Member Wolbach did not believe it was fair to say penalties were needed for commercial development. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to direct Staff and the Planning and Transportation Commission to analyze interaction of housing production by: A. Changing the hotel Floor Area Ratio (FAR); FINAL MINUTES Page 31 of 52 City Council Meeting FINAL Minutes: 12/03/18 B. Elimination of ability of commercial uses above ground to participate in the in-lieu parking program; and C. Methods to match an increase in residential FAR with a decrease in commercial FAR for mixed-use projects. Council Member Tanaka returned to the meeting at 9:37 P.M. Mr. Keene reminded the Council that Ms. Eisberg would not be present for future meetings and the Council had three additional sections to discuss. Council Member Kou asked if ownership condominiums would be limited to 1,500 square feet. Mr. Lait indicated the 1,500-square-foot maximum applied to rental housing and condominium units. Council Member Kou asked if the individual units would have balconies. Mr. Lait anticipated some units would not have a private balcony. Council Member Kou asked if the rooftop open space would likely be incorporated into projects without balconies. Mr. Lait explained that the purpose of the rooftop open space was to allow a greater number of units inside the building envelope. Council Member Kou asked how rooftop open space would affect nonconforming buildings. Mr. Lait advised that the proposed change was consistent with current requirements for open space. For smaller units, the requirement was 200 square feet per unit. The proposed change was 150 square feet per unit for all units. Council Member Kou asked if the rooftop open space applied to new construction only. Mr. Lait related that existing nonconforming buildings would continue to be nonconforming with respect to the open space requirement. The rooftop open space would typically apply to new construction. Council Member Kou requested advantages and disadvantages for a developer to utilize the HIP. FINAL MINUTES Page 32 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait reported the HIP would allow a maximum building height of 50 feet, an FAR of 3.0, and 100-percent housing projects outside the GF Combining District. With these changes as part of the base district zoning requirement, a project that qualified for the local BMR program could receive a maximum 35-percent bonus in addition to the 3.0 FAR. The HIP also preserved the City's design review process. Council Member Kou asked if a project under SB 35 could have a maximum FAR of 1.0. Mr. Lait answered yes. Council Member Kou requested the minimum distance between a rooftop open space and residences. Mr. Lait explained that a roof deck was not an option if the building abutted a single-family or two-family residential use or zoning district. Council Member Kou suggested noise from a rooftop open space could have less impact on residences directly below the rooftop. She expressed concern about enforcing noise prohibitions. She inquired whether the 150-foot distance between roof decks and residences was a change. Mr. Lait did not believe the City had specific standards for roof decks. If the Council wished to change the standard for roof decks, it should do so in the current discussion. Council Member Kou requested a depiction of a 100-foot area abutting residences located on Lytton. Mr. Lait did not have the tools to prepare a depiction. AMENDMENT: Council Member Kou moved, seconded by Council Member XX to require that rooftop gardens should be 100 feet away from any low-density residential zones. Council Member Fine expressed interest in measuring the distance by number of parcels or properties rather than feet. He requested the rationale for limiting the distance to abutting properties. Mr. Lait explained that Staff chose abutting properties because those properties would suffer the most impacts. Council Member Fine felt the language of abutting properties was likely a stronger standard given the depth of some of the properties on Lytton. FINAL MINUTES Page 33 of 52 City Council Meeting FINAL Minutes: 12/03/18 AMENDMENT WITHDRAWN BY THE MAKER Vice Mayor Filseth requested the circumstances under which a project could propose a 4.0 FAR. Mr. Lait reported that the proposed Ordinance did not contain a provision to allow a 4.0 FAR. Vice Mayor Filseth remarked that the primary focus of the discussion was reducing the open space requirement for spaces other than the rooftop. He inquired whether typical projects provided the majority of the open space requirement through private open space or ground-floor landscaping and gardens. Mr. Lait indicated ownership projects typically provided more private open space than rental projects. Vice Mayor Filseth inquired regarding the grounds on which an appeal of a planning decision could be filed. Mr. Lait stated the existing grounds for an appeal would continue to apply. Vice Mayor Filseth asked if the ARB would consider parking requirements for projects under the proposed Ordinance. Mr. Lait explained that the parking requirement would be set; therefore, there would not be much discussion of parking. Vice Mayor Filseth requested the number of parking spaces that would result from the parking exemption for the first 1,500 square feet of ground-floor retail. Mr. Lait replied six parking spaces. Vice Mayor Filseth asked if a developer could provide required parking by leasing space from another building or parking lot. Mr. Lait indicated a project could provide off-street parking offsite within some parameters. Vice Mayor Filseth inquired regarding the term of a lease for offsite parking. Mr. Lait advised that the deed restriction usually stated the lease would extend for the life of the project. FINAL MINUTES Page 34 of 52 City Council Meeting FINAL Minutes: 12/03/18 Vice Mayor Filseth asked where the six cars would park due to the parking exemption for the first 1,500 square feet of ground-floor retail space. Mr. Lait announced that parking would be discussed under the Citywide section. Vice Mayor Filseth commented that the proposed Ordinance would reduce parking requirements Citywide and exempt some parking for retail. The in- lien parking program contributed to the parking problem. In a perfect Ordinance, the Council would suspend the in-lieu concept pending a PTC discussion and a decision regarding the Downtown parking garage. He proposed deleting Part H from the Motion. Council Member Fine included Part H in the Motion because the Council did not understand where the in-lieu parking program was failing, because Staff did not engage the business community or commercial property owners, and because Staff had not explored the consequences of requiring onsite parking. Vice Mayor Filseth felt Council Member Fine's comments supported suspension of Part H. Part H could incentivize developers to make private agreements for parking. Council Member Fine suggested Section 8 was such a significant change to commercial uses that it did not belong in the proposed Ordinance. Council Member DuBois noted Council Member Fine struck the in-lieu program for both commercial and residential uses. Council Member Wolbach asked if Section 8 allowed an in-lieu program for residential uses. Ms. Eisberg answered no. Vice Mayor Filseth noted the PTC did not consider an in-lieu program for residential because there was no parking. Council Member Fine wanted to understand the impacts of onsite parking and the existing gap for in-lieu parking spaces. Suspending the in-lieu parking program for a year could be reasonable. He inquired whether any pending projects included in-lieu parking. Mr. Lait did not believe there were any pending projects. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to modify the Motion Part H. to state “add language to Section 8 of the Ordinance indicating office uses above the ground floor shall FINAL MINUTES Page 35 of 52 City Council Meeting FINAL Minutes: 12/03/18 not be eligible to participate in the in-lieu parking program for the period of one year or until the Planning and Transportation Commission returns to the City Council with a detailed study and recommendation.” Council Member DuBois asked how the Amendment would affect the proposed Ordinance. Council Member Fine indicated Section 8 would be deleted from the proposed Ordinance and would return to the PTC for further discussion. For the next year, the commercial in-lieu parking program would be suspended. Council Member DuBois stated Section 8 extended the in-lieu parking program to ground-floor commercial space. Mr. Lait suggested the Amendment state a time period. Mayor Kniss announced the Council would take up the Citywide section next. AMENDMENT RESTATED AND INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to modify the Motion Part H. to state “add language to Section 8 of the Ordinance indicating office uses above the ground floor shall not be eligible to participate in the in-lieu parking program for the period of one year or until the Planning and Transportation Commission returns to the City Council with a detailed study and recommendation.” Council Member Holman asked how loading was addressed in Section 18.18.090 of the proposed Ordinance. Mr. Lait advised that Parking and Loading was the existing title of the section. The proposed Ordinance did not change any aspect of loading. Council Member Holman asked if the in-lieu parking program applied to new development rather than current development. Mr. Lait answered yes. Changes of uses within existing buildings would be new development. Council Member Holman requested the Second Reading of the Ordinance return to the Council as an Action Item. Council Member Kou requested the square footage of a project with a 3.0 FAR on a 10,000 square-foot lot. Mr. Lait replied 30,000 square feet. FINAL MINUTES Page 36 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Kou asked what the building would look like. Mr. Lait shared a photo of a 45,000-square-foot building on a 15,000-square- foot lot. MOTION AS AMENDED RESTATED: Council Member Fine moved, seconded by Council Member Wolbach to accept the following changes related to Downtown CD-C Zoning District: A. Unit Density. Eliminate the unit density requirement restricting the maximum density to 40 units per acre. With the proposed amendment, unit density would be controlled by other existing development standards, such as height, floor area, parking requirements, etc.; B. Unit Size. Establish a maximum average housing unit size of 1,500 square feet, (weighted average by the number of bedrooms); C. Retail Parking. Exempt the first 1,500 square feet of ground-floor retail from parking requirements within residential mixed-use buildings; D. Driveway Approach. Reinforce existing city policy and guidelines to preclude curb cuts on University Avenue, except for City-owned parcels or City-sponsored projects; E. Residential Only Development. Allow housing-only projects to be constructed downtown, except in the ground floor (GF) combining district. Retail preservation ordinance standards apply for market rate housing projects. Note, current zoning standards permit housing only when part of a commercial, mixed use development or on housing opportunity sites (i.e., in the Housing Element); F. Open Space. Allow rooftops to qualify for up to 75 percent of the usable open space requirement for the multi-family residential portion of a project, subject to objective performance standards; G. Housing Incentive Program (HIP). Establish a process that would allow property owners to apply to receive greater floor area than otherwise allowed under the zoning code and under State Density Bonus Law through waivers granted by the Director of Planning after review by the ARB. This program would be an alternative to the State Density Bonus Law and SB 35 streamlining, since it allows for more density. Components of the HIP include the following: i. FAR waiver to increase residential FAR from 1.0 up to 3.0, except for portion of FAR required to remain commercial by the FINAL MINUTES Page 37 of 52 City Council Meeting FINAL Minutes: 12/03/18 requirements of the retail preservation ordinance or GF combining district. ii. No TDRs may be used in conjunction with a qualifying HIP project iii. Require discretionary architectural review consistent with PAMC 18.76.020 (Architectural Review); H. Add language to Section 8 of the Ordinance indicating office uses above the ground floor shall not be eligible to participate in the in-lieu parking program for the period of one year or until the Planning and Transportation Commission returns to the City Council with a detailed study and recommendation; I. Direct Staff and the Planning and Transportation Commission to further study decoupled parking, in lieu parking, and off-site parking for residential developments and return to Council in 2019; J. Add to the Ordinance a requirement that for rooftop gardens, no up lighting is allowed and light sources should be shielded; and K. Direct Staff and the Planning and Transportation Commission to analyze interaction of housing production by: i. Changing the hotel FAR; ii. Elimination of ability of commercial uses above ground to participate in the in-lieu parking program; and iii. Methods to match increases in residential FAR with a decrease in commercial FAR for mixed use projects. MOTION AS AMENDED PASSED: 6-1 Kou no, Scharff recused, Tanaka absent Mr. Lait requested the Council take up the proposed parking standards within a half mile of a fixed rail station because three Council Members had to recuse themselves from the discussion. Ms. Stump reported Council Members Kniss, Filseth, and Scharff should recuse themselves from the discussion. Vice Mayor Filseth suspected the Council would be interested in structuring parking standards such that an applicant could choose to utilize new or old standards. He asked if the three recused Council Members could discuss such a structuring of standards. FINAL MINUTES Page 38 of 52 City Council Meeting FINAL Minutes: 12/03/18 Ms. Stump replied no because the proposed standards would impact property located within 500 feet of the recused Council Members' properties. Council Member Scharff noted Google Maps calculated 0.7 mile as the distance between his property interest and a rail station. Ms. Stump advised that the Planning Department's map was used to calculate the distances. Council Member Fine announced all five Council Members must support a Motion for it to pass. The topic of discussion was proposed parking standards for the area within a half mile of a fixed rail station. MOTION: Council Member Wolbach moved, seconded by Council Member Fine to approve the Staff recommendation regarding parking standards for properties within ½-mile of a Fixed Rail Station: A. Micro Unit (<450 square feet) - 0.5; B. Studio - 0.8; C. 1 Bedroom - 0.8; and D. 2+ Bedroom - 1.6 Council Member Wolbach remarked that parking was a key issue for encouraging housing production. The Motion decreased the requirements for studio units and created a new standard for micro units located in the proximity of the California Avenue and the Downtown train stations. The proposed standards were reasonable. Council Member Fine believed there was some slack in parking standards, and the challenge was right-sizing the standards without negatively impacting neighboring areas. Decreasing parking standards near transit was reasonable. Mr. Lait reported the reduction of parking standards for proximity to a fixed rail station was based on the 20-percent reduction contained in the Zoning Code and that applicants could request the reduction. Staff suggested making that existing language by right with an additional requirement for the project to provide the transit passes for each unit. Council Member Fine noted the standards would provide 0.8 space for a micro unit, a studio unit, and a one-bedroom unit and 1.6 spaces for a two-plus- bedroom unit. Ms. Eisberg clarified that the micro unit would have 0.5 space. FINAL MINUTES Page 39 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member DuBois believed community backlash would occur if the standards were reduced too much. He asked if there was a special parking requirement for affordable housing. Ms. Eisberg advised that the existing standard was reduced by 20-40 percent for affordable housing based on income level. Currently, the applicant had to request the waiver. Under the proposed Ordinance, the reduction would occur by right. Council Member DuBois inquired regarding the table for 100-percent affordable housing on page 27 of the proposed Ordinance. Council Member Fine reminded Council Member DuBois that the topic for discussion was parking standards within a half mile of fixed rail stations. Council Member DuBois asked if the entire table on page 27 of the proposed Ordinance was part of the discussion. Ms. Eisberg responded no. One row, multifamily residential near fixed rail station, of the table was open to discussion. Council Member DuBois believed the parking study contained some serious flaws. Car usage was not decreasing, and many households owned two vehicles. He questioned whether low-income residents were being penalized by not having parking. Occupants of micro and studio units were more likely to be individuals and to be car lite. AMENDMENT: Council Member DuBois moved, seconded by Council Member Holman to amend the Motion Part C. to 1.0 and Part D. to 2.0. Ms. Eisberg related that the parking requirements would be the same as the proposed parking requirement for micro and studio units. Council Member Wolbach asked if a developer could request a parking requirement of 0.8 for one-bedroom units. Ms. Eisberg clarified that a developer could request a 20-percent reduction of the 1.5 requirement for a one-bedroom unit. Council Member DuBois recalled that Palo Alto Housing's CEO requested parking standards of one space per bedroom. Council Member Wolbach asked if Council Member DuBois intended to require a waiver to reduce the parking requirements for one and two-bedroom units and allow the parking standards for micro and studio units by right. FINAL MINUTES Page 40 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member DuBois inquired whether this would replace the current language about the 20-percent reduction. Ms. Eisberg explained that that provision could continue to apply to transit locations outside the half-mile from fixed rail. Council Member DuBois clarified that his Amendment would modify the table. Council Member Wolbach asked if a developer could still petition for the 20- percent reduction. Mr. Eisberg replied no. Council Member Holman asked if the category of multifamily residential near fixed rail included 100-percent affordable housing and senior housing. Mr. Lait related that parking standards for guest parking, 100-percent affordable housing, and senior housing were not a part of the discussion. He inquired whether there was interest in allowing a developer to request a parking reduction up to 20 percent. Council Member DuBois responded no. Council Member Holman asked if Staff engaged with residents of affordable housing projects to determine the occupants' needs. Mr. Lait explained that the existing parking standards may not match the demand for parking. The proposed change applied the 20-percent reduction provided in the Code. Council Member Holman commented that some of the larger affordable housing projects were located near rail. The Council had no information regarding the effectiveness of Transportation Demand Management (TDM) programs. SECOND TO THE AMENDMENT WITHDRAWN BY THE SECONDER AMENDMENT FAILED DUE TO LACK OF A SECOND Mr. Lait reiterated that the reduced parking standards could not be used in addition to the 20-percent reduction. The requirement for transit passes would be a condition of approval for projects, and Staff could enforce the condition of approval. Staff continued to refine TDM requirements. Council Member Holman requested the rationale for adopting a requirement that could not be enforced at the current time. FINAL MINUTES Page 41 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mr. Lait clarified that imposing TDM programs on housing was challenging. The action would not adopt a TDM plan. The action would take the highest value element of a TDM plan and make it a Code requirement, which would be relatively easy to enforce. Council Member Kou believed the scope of the parking study was extremely limited. Including housing near the California Avenue station would help tremendously with the parking problem. She questioned whether the parking requirements accounted for growth. Council Member Fine determined that five Council Members would not support the Motion and asked the City Attorney to comment on the procedure. Ms. Stump reported the Council could not adopt a policy without the support of all five Council Members. Mr. Lait had stated the reduction was contained within the existing Code. Staff needed to review one Council Member's conflict more closely, and depending upon that review one Council Member could be allowed to participate in the topic. In addition, Council Member Tanaka could be present for a future discussion of the topic. Council Member Wolbach felt Council Members needed more time to understand the topic. SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Council Member Wolbach to continue the discussion of the proposed parking standards within ½-mile of a fixed rail station to a date uncertain. Council Member Holman questioned the wisdom of continuing the item. Ms. Stump explained that the minority or the majority of the Council present did not have the ability by Ordinance to bind a future Council. If the Council wished to take up the topic in the future, it could do so. SUBSTITUTE MOTION PASSED: 3-2 Holman, Kou no; Filseth, Kniss, Scharff recused; Tanaka absent Council took a break at 11:07 P.M. and returned at 11:09 P.M. Council Member DuBois left the meeting at 11:10 P.M. Council Member Fine reported the Council failed to reach agreement on the parking standards within a half mile of rail stations and continued the topic to a future date. Ms. Eisberg reported the change in the open space standard appeared within the individual districts, but the proposed standard was the same across the FINAL MINUTES Page 42 of 52 City Council Meeting FINAL Minutes: 12/03/18 districts. The proposed standard was 150 square feet of open space per dwelling unit for residential projects. Currently, residential projects of 10 or more units were subject to site and design review. The proposed change would maintain ARB review and appeals to the City Council for residential projects of ten or more units. The next change would exempt 100-percent affordable housing projects from the Retail Preservation Ordinance except along El Camino Real. An affordable housing project located along El Camino Real would need to comply with the Retail Preservation Ordinance. Vice Mayor Filseth noted the exemption did not apply to the GF Combining District and the R Combining District. Ms. Eisberg advised that the proposed parking standards for multifamily residential uses would apply to all zoning districts because the City regulated parking by bedroom. The proposed Citywide parking standard for a micro unit, a studio unit, and a one-bedroom unit was one space and two spaces for a two-plus bedroom unit. The guest parking requirement was included in the proposed Citywide parking standards. Staff proposed the existing reductions in parking requirements for senior housing and affordable housing become by right. MOTION: Council Member Wolbach moved, seconded by Council Member Scharff to approve the following changes related to Citywide Revisions: A. Open Space. Establish a consistent open space requirement for multi- family housing units in multi-family residential and commercial districts of 150 square feet (current code ranges from 100 to 200 square feet depending on the number of units provided). Micro units, defined herein as units with less than 450 square feet, are proposed to have a commensurate requirement of 40 square feet/unit; B. Review Process. Eliminate Site & Design Review, which currently applies to residential and residential mixed-use projects with 10 more units in commercial zones. Site & Design applications are reviewed by the Planning and Transportation Commission (PTC), Architectural Review Board (ARB) and City Council. By contrast, commercial-only development projects and housing projects in multi-family zones are reviewed only by the ARB. The amendment makes the review of housing projects (including mixed-use development) no more burdensome than the review process for commercial projects and retains options for appeals to Council; C. Retail Preservation. Exempt 100 percent affordable housing projects (120 percent Area Median Income [AMI] and below) from the retail FINAL MINUTES Page 43 of 52 City Council Meeting FINAL Minutes: 12/03/18 preservation requirement except in the Ground Floor (GF) and Retail (R) combining districts; and D. Parking. Adjust multifamily parking requirements based on maximum anticipated demand. Coincidentally, the changes generally reflect the standards permitted by State Density Bonus Law. Other changes are proposed to incentivize affordable housing and reflect lower parking demand near transit. Council Member Wolbach hoped future revisions would be more aggressive. He supported the compromise as presented. Council Member Scharff did not believe that affordable housing projects should break the blocks in the California Avenue area. There would probably not be sufficient affordable housing projects along El Camino Real to make it a different street. Multifamily parking requirements should be adjusted based on maximum anticipated demand. He asked if the parking requirement for a micro unit would be one space. Mr. Lait stated there was a benefit in defining the parking requirement for a micro unit at the current time. Council Member Scharff asked if the parking requirements for three-bedroom units and four-bedroom units would be two parking spaces. Mr. Lait replied yes. The existing parking standard required two parking spaces for three-bedroom and four-bedroom units. Council Member Scharff noted the parking requirements would change for studio and one-bedroom units only. Mr. Lait explained that the guest parking requirement would be eliminated. Council Member Scharff requested the proposed parking standards for affordable housing. Ms. Eisberg clarified that the existing reductions, which a developer had to request for affordable housing projects, would become by right reductions. The standard would not change, but applying it would be less difficult. Council Member Scharff remarked that affordable housing projects would allow people to park in the neighborhoods. The parking study indicated the proposed parking requirement was not accurate for affordable housing. Ms. Eisberg explained that the parking study did not show a significant difference between market-rate and affordable housing generation rates. The FINAL MINUTES Page 44 of 52 City Council Meeting FINAL Minutes: 12/03/18 parking study showed excess parking supply for almost all categories. The parking demand rate for senior housing was different. Council Member Scharff did not see a different parking demand rate for low- income housing. Ms. Eisberg added that the demand rates for market-rate and affordable housing were similar. Vice Mayor Filseth commented that the parking standard for a one-bedroom unit would decrease from 1.5 to 1 parking space, and the parking study showed parking demand for both market-rate and affordable housing should be approximately one space. Affordable housing for very-low incomes could receive a 30-percent reduction, which reduced the 1.5 standard to approximately 1. Applying the 30-percent reduction to the proposed parking standard of one would reduce the standard to 0.25, which would under-park the project and increase parking in the neighborhoods. The focus should be on maximum demand. Adding the bonus reduction resulted in a parking standard less than the maximum demand. The question was how to make the parking standard equal the maximum demand so that projects were not under-parked. Mr. Lait indicated the issue was a policy decision for the Council. The proposed parking standard was guided by the Council's action on the AH Overlay, which established a parking standard of 0.75 space per unit. The Council could change the reduction percentages for 100-percent affordable housing projects. AMENDMENT: Council Member Scharff moved, seconded by Vice Mayor Filseth to add a new Part E. to strike the proposed affordable housing standards related to parking for multi-family residential uses; and that an affordable multi-family development may ask for a reduction in parking requirements based on maximum demand. Council Member Fine asked if the Amendment would require the applicant to request the 40-percent, 30-percent, and 20-percent reductions. Council Member Scharff suggested the percentages be deleted and the applicant could request a reduction in parking if it was warranted. Council Member Fine thought that was the current standard. Council Member Scharff believed the reduced parking requirements in addition to the percentage reductions would be too great a reduction. FINAL MINUTES Page 45 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Fine reiterated that parking was a large cost of constructing affordable housing. The applicant's request for parking reductions would be evaluated. Council Member Scharff suggested the applicant could request a reduction if it could demonstrate a reduced demand. Council Member Fine remarked that the Council was not willing to reduce the parking requirement for affordable housing. Council Member Scharff wanted to require sufficient parking to fulfill demand. The Council appeared to be willing to require less parking than the demand for parking because the project was affordable housing. Council Member Wolbach would be willing to entertain the Amendment if there was an opportunity for an affordable housing provider to demonstrate a lower demand when requesting a reduction. He asked if the Amendment proposed retaining the percentage reductions and eliminating the by-right provision. Council Member Scharff wanted to eliminate the reduction percentages and allow the applicant to request a reduction of any justifiable percentage. Council Member Fine clarified that the Code needed to contain a provision that allowed applicants to apply for an exception. Council Member Scharff stated affordable housing providers could apply for an exemption, but the applicant had to justify the exemption. Council Member Wolbach suggested changing the phrase "allow reductions by right" to "allow reductions as justified." Council Member Scharff wanted to eliminate the reduction percentages and allow an affordable housing provider to adjust multifamily parking requirements based on maximum anticipated demand. Mayor Kniss felt the proposed Amendment was too broad and did not provide a starting point. Council Member Wolbach would not accept the Amendment without obtaining the opinions of affordable housing providers. Council Member Fine advised that the Amendment would make parking for affordable housing projects more difficult than the existing standard. Finally, the City did not grant exceptions as a rule. A good compromise would be retaining the reduction percentages. FINAL MINUTES Page 46 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Holman suggested the Amendment include "a reduction of up to 50 percent" as an indication of the maximum reduction a developer could request. INCORPORATED INTO THE AMENDMENT WITH CONSENT OF THE MAKER AND SECONDER to add to the Amendment “up to 50 percent based on maximum…” Council Member Holman expressed confusion regarding Subpart D of the Motion and the Amendment. Mr. Lait clarified that Subpart D contained the proposed changes shown on Page 10 of the Staff Report and Page 26 of the proposed Ordinance. The Amendment proposed striking the affordable housing piece. Council Member Holman would support the Amendment. Council Member Kou inquired whether the parking standards applied to nursing home facilities or affordable housing for developmentally disabled individuals. Mr. Lait reported senior housing did not include convalescent care facilities but affordable housing included housing for individuals with developmental disabilities. Council Member Kou requested the category into which Channing House could be placed. Mr. Lait did not know. Council Member Holman noted Channing House was senior living with some care facility. Mr. Lait remarked that parking standards for commercial or support services included customer, resident, and employee parking. Council Member Kou did not believe affordable housing tenants should be treated differently from market-rate housing tenants. Council Member Scharff felt the Amendment would be much clearer if it stated an applicant could reduce parking standards up to 50 percent. The community did not support affordable housing projects when the projects created externalities in neighborhoods. FINAL MINUTES Page 47 of 52 City Council Meeting FINAL Minutes: 12/03/18 Mayor Kniss noted the Council had not approved an affordable housing project in ten years. Vague standards would be the death of affordable housing projects in the future. She could not support the Amendment. Vice Mayor Filseth commented that affordable housing projects would have more cars than they could accommodate under the Amendment. The justification for a parking reduction would not be based on factual evidence, and the community would not believe the justification. A true compromise between neighbors and affordable housing projects could result in a smaller affordable housing project or the need for additional funding. The Amendment would ask affordable housing applicants to have a true conversation with neighbors and to justify the request for a parking reduction. INCORPORATED INTO THE AMENDMENT WITH CONSENT OF THE MAKER AND SECONDER to add the word “add” to the Amendment so it reads “… and add that an affordable multi-family … .” INCORPORATED INTO THE AMENDMENT WITH CONSENT OF THE MAKER AND SECONDER to change the percentage from 50 to 100. Council Member Holman could not imagine an applicant ever justifying a 100- percent reduction. Council Member Scharff suggested theoretically an affordable housing project could require no parking. Council Member Holman asked if a 100-percent reduction was legal. Ms. Stump answered yes. Council Member Holman inquired about the type of evidence an applicant could provide. Mr. Lait reported the applicant should explain fully the use of the building and provide clear and convincing evidence that a reduction of 70-100 percent was viable. That kind of evidence would be difficult to develop. He needed to discuss deed restrictions and enforcement mechanisms with the City Attorney's Office. Vice Mayor Filseth commented that an affordable housing developer could lease parking from a nearby building such that onsite parking was not needed. Mr. Lait indicated that would be offsite parking, which was permissible. FINAL MINUTES Page 48 of 52 City Council Meeting FINAL Minutes: 12/03/18 INCORPORATED INTO THE AMENDMENT WITH CONSENT OF THE MAKER AND SECONDER to add the word “demonstrated” to the Amendment so it reads “… based on maximum demonstrated demand.” Council Member Kou asked if the applicant would have to state where the cars would be parked. Council Member Holman clarified that the applicant would have to demonstrate the project's demand for parking. Council Member Fine would not support the Amendment as developers needed certainty in order to obtain financing. Mayor Kniss would not support the Amendment because it was too vague. Eliminating requirements was admirable but not attainable. Council Member Scharff raised the meaning of "demonstrated" and suggested the applicant should provide a fact-based maximum anticipated demand. The phrase "maximum anticipated demand" included the concept that it had to be justified. Council Member Holman suggested "anticipated and justifiable demand." Council Member Scharff recommended deleting "demonstrated" in order to avoid a tie vote. INCORPORATED INTO THE AMENDMENT WITH CONSENT OF THE MAKER AND SECONDER to remove the word “demonstrated” from the amendment and replace it with the word “anticipated.” AMENDMENT AS AMENDED RESTATED: Council Member Scharff moved, seconded by Vice Mayor Filseth to amend the Motion to add a new Part E, “ to strike the proposed affordable housing standards related to parking for multi- family residential uses; and add that an affordable multi-family development may ask for a reduction in parking requirements up to 100 percent based on maximum anticipated demand”. AMENDMENT PASSED: 5-2 Fine, Kniss no, DuBois, Tanaka absent Council Member Holman requested the Council continue the remainder of the item to a future meeting as she had several questions but needed to leave the meeting. Mayor Kniss suggested the Council vote on the Motion. FINAL MINUTES Page 49 of 52 City Council Meeting FINAL Minutes: 12/03/18 Council Member Holman reiterated that she had questions regarding retail and open space. Council Member Holman asked if the proposed Ordinance included retail parking. Ms. Eisberg answered yes. Council Member Holman requested Staff point out the provisions of the Motion that referred to retail parking. Ms. Eisberg advised that retail parking appeared on page 29 of the proposed Ordinance. Retail parking was buried in Part D of the Motion. Mr. Lait suggested a deliberative action regarding the waiver of the 1,500 square feet for retail could be added to the Motion. Council Member Holman asked if the Motion included the waiver for retail. Mr. Lait did not believe the Motion directly referenced the waiver for retail. Council Member Holman could vote on the Motion without a direct reference to the retail waiver. She did not support a retail waiver because there had been no outreach to the retail community and because retail needed parking for customers. The Council had no input and no data that supported a 1,500- square-foot exemption. INCORPORATED INTO THE MOTION WITH CONSENT OF THE MAKER AND SECONDER to exempt the first 1,500 square feet of ground-floor retail from parking requirements within residential mixed-use buildings. Council Member Scharff related that adding 1,500 square feet of retail would not induce new car trips and increase parking demand. Council Member Holman believed the retail exemption would create new demand and remove parking need from other existing retail uses or restaurants. Mayor Kniss suggested the Council vote on the Motion. Council Member Holman advised that she was not ready to vote on the Motion. The Motion was not clear. Eliminating the ground-floor retail protections on El Camino Real was not thoughtful. An AH Overlay applied to the area as well. Mayor Kniss called the question. FINAL MINUTES Page 50 of 52 City Council Meeting FINAL Minutes: 12/03/18 Vice Mayor Filseth indicated ground-floor retail was only for 100-percent affordable housing. Council member Wolbach stated that El Camino Real would never be lined with only 100-percent affordable housing projects. Vice Mayor Filseth asked if the PTC would review the 1,500-square-foot exemption as part of parking. Mr. Lait reported the PTC had discussed it. Vice Mayor Filseth clarified that the PTC would review the exemption as part of its review of in-lieu parking and other parking issues. Council Member Holman inquired whether the Motion included rooftop gardens. Council Member Kou remarked that the discussion of the Motion had been limited when the issues affected the entire City. MOTION AS AMENDED RESTATED: Council Member Wolbach moved, seconded by Council Member Scharff to approve the following changes related to Citywide Revisions: A. Open Space. Establish a consistent open space requirement for multi- family housing units in multi-family residential and commercial districts of 150 square feet (current code ranges from 100 to 200 square feet depending on the number of units provided). Micro units, defined herein as units with less than 450 square feet, are proposed to have a commensurate requirement of 40 square feet/unit; B. Review Process. Eliminate Site & Design Review, which currently applies to residential and residential mixed-use projects with 10 more units in commercial zones. Site & Design applications are reviewed by the PTC, ARB and City Council. By contrast, commercial-only development projects and housing projects in multi-family zones are reviewed only by the ARB. The amendment makes the review of housing projects (including mixed-use development) no more burdensome than the review process for commercial projects and retains options for appeals to Council; C. Retail Preservation. Exempt 100 percent affordable housing projects (120 percent AMI and below) from the retail preservation requirement except in the Ground Floor (GF) and Retail (R) combining districts; FINAL MINUTES Page 51 of 52 City Council Meeting FINAL Minutes: 12/03/18 D. Parking. Adjust multifamily parking requirements based on maximum anticipated demand. Coincidentally, the changes generally reflect the standards permitted by State Density Bonus Law. Other changes are proposed to incentivize affordable housing and reflect lower parking demand near transit; E. Strike the proposed affordable housing standards related to parking for multi-family residential uses; and add that an affordable multi-family development may ask for a reduction in parking requirements up to 100 percent based on maximum anticipated demand; and F. Exempt the first 1,500 square feet of ground-floor retail from parking requirements within residential mixed-use buildings. MOTION AS AMENDED PASSED: 5-2 Holman, Kou no, DuBois, Tanaka absent Council Member Holman reiterated that the Motion did not include rooftop gardens. Mr. Lait reported the Motion included the development standards related to rooftops. Mayor Kniss announced the remainder of the item was continued to a date uncertain. State/Federal Legislation Update/Action None Council Member Questions, Comments and Announcements Council Member Fine reported Caltrain's business planning assumed level boarding and grade separations along the entire Corridor. Caltrain was exploring overtake locations based on different scenarios and up to 16 trains per hour. The Rail Committee would follow up on these topics. Council Member Scharff advised that the Metropolitan Transportation Commission (MTC) CASA Committee had released its suggestions. Council Members should review the suggestions and the impacts to local control. Council Member Fine requested the best method to provide input to MTC. Council Member Scharff suggested Council Members attend the MTC meeting or send an email to MTC. CITY OF PALO ALTO CITY COUNCIL FINAL MINUTES Page 1 of 42 Special Meeting January 28, 2019 The City Council of the City of Palo Alto met on this date in the Council Chambers at 6:08 P.M. Present: Cormack, DuBois, Filseth, Fine, Kniss, Kou, Tanaka Absent: Closed Session 1.CONFERENCE WITH LABOR NEGOTIATORS THIS ITEM WILL NOT BE HEARD THIS EVENING. Agenda Changes, Additions and Deletions None. City Manager Comments Mayor Filseth announced that public comment for Agenda Item Number 7 was heard on December 3, 2018; therefore, the Council would not hear additional public comment during the meeting. Ed Shikada, City Manager, reported the North Ventura Coordinated Area Plan (NVCAP) community meeting was scheduled for February 5. Staff was planning a Town Hall meeting for March 11 regarding the NVCAP. More than 160 people attended the third Cubberley Co-Design community meeting. The Council would receive results of the Co-Design community meetings in a Study Session scheduled for February 11. On February 2, the Council would hold its annual Retreat. The Magical Bridge Playground was featured at the World Economic Forum in Davos, Switzerland. Council Member Kniss asked how the Magical Bridge came to be a part of the Forum. Mr. Shikada did not know. FINAL MINUTES Page 10 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member Tanaka commented that the Media Center was an asset, especially for high school students. He questioned whether locating the Media Center closer to or on a Palo Alto high school campus would be more convenient for students. Council Member Cormack appreciated Staff listing alternatives in the Staff Report. She inquired about viewership numbers. Ms. Perdy Pelosi stated Neilsen ratings were not available for community access television. Reports of issues with channels were the best measure of viewership. If the Council wished, she could provide viewership information for online programming. MOTION AS AMENDED RESTATED: Council Member DuBois moved, seconded by Council Member Kniss to: A. Direct Staff to negotiate agreements (real estate purchase and building use) to purchase the Media Center’s building at 900 San Antonio Road, using cable television public, education and government (PEG) fees; B. Direct Staff to negotiate a new agreement between the City of Palo Alto, on behalf of the Joint Powers, and the Media Center for PEG access channel support services that will conform to the terms of the real estate purchase and building use agreements; C. Approve Amendment Number Two to Agreement Number C12142180 between the City of Palo Alto, representing the Joint Powers communities, and the Media Center to extend the existing agreement for six months to June 30, 2019, to allow time to complete the new arrangement for the use of PEG fees; and D. The Media Center shall be provided the first right of refusal should the JPA choose to dispose of the asset MOTION AS AMENDED PASSED: 7-0 7. PUBLIC HEARING: Adoption of an Ordinance Amending Various Sections of Title 18 of the Palo Alto Municipal Code Related to Residential and Mixed-use Development Standards Including, but not Limited to; Minimum and Maximum Unit Density, Unit Size, Floor Area Ratio, Height, and Open Space Including Rooftop Gardens; Parking Requirements Including, but not Limited to; Regulations Related to In- lieu Parking for Downtown Commercial Uses and Retail Parking for Mixed Use Projects; Exclusively Residential Projects in Certain FINAL MINUTES Page 11 of 42 City Council Meeting Final Minutes: 01/28/2019 Commercial Zoning Districts; Ground-floor Retail and Retail Preservation Provisions; the Entitlement Approval Process; and Other Regulations Governing Residential, Multi-family Residential and Commercial Zoning Districts, all to Promote Housing Development Opportunities in These Zoning Districts in Furtherance of Implementation of the Comprehensive Plan. CEQA: Determination of Consistency With the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution Number 9720. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance on October 10, 2018 (Continued From December 3, 2018). Mayor Filseth announced the Council would not hear public comment as it had heard public comment when the Agenda Item was presented in December. Jonathan Lait, Planning and Community Environment Interim Director, reported the Council addressed this item on November 26 and December 3. In Multifamily Residential (RM) districts, the Council changed RM-15 zoning to RM-20, established minimum densities for development, allowed nonconforming properties to be redeveloped under the new requirements, and discussed redevelopment of single-family and duplex properties without requiring them to meet minimum densities. In the Downtown Commercial (CD(C)) district, the Council eliminated the density requirement, established a minimum average unit size, exempted a portion of the retail component and waived some parking in mixed-use developments, precluded curb cuts on University Avenue, and allowed housing-only projects except where preempted by the ground-floor (GF) or retail preservation overlay, allowed rooftops to qualify for a portion of the open space requirement for multifamily buildings, modified open space performance standards, established a Housing Incentive Program (HIP), and created a one-year moratorium on the in-lieu parking program for upper-story office uses. The Council discussed but did not act on possible reductions to parking requirements based on proximity to rail. Regarding Citywide issues, the Council established a consistent open space standard for multifamily housing, eliminated Site and Design Review from multifamily projects but maintained Architectural Review Board (ARB) review, exempted 100-percent affordable housing projects from the retail preservation requirement except in GF and retail shopping (R) combining districts, modified multifamily parking requirements, and exempted 1,500 square feet of ground-floor retail space from parking requirements. In the RM district, the Council would discuss exempting 100-percent affordable housing projects from the requirement for a minimum of 1,500 square feet of neighborhood-serving retail in the RM zone. For the California Avenue (CC(2)) zoning district, the FINAL MINUTES Page 12 of 42 City Council Meeting Final Minutes: 01/28/2019 Council would consider eliminating the maximum residential density requirement, allowing residential-only development except where precluded by the R overlay or the retail preservation requirement, precluding curb cuts on California Avenue except for City projects, allowing rooftop open space to qualify for up to 60 percent of the open space requirement, and implementing an HIP. In the El Camino Real area, the Council would discuss eliminating residential density standards, allowing rooftop open space to qualify for up to 60 percent of the open space requirement, allowing residential-only development except where retail preservation requirements were established, requiring ground-floor residential design standards, and implementing an HIP. With respect to Citywide revisions, Staff requested the Council update the definition of open space and rooftop open space performance standards and clarify the exemption of 100-percent affordable housing projects from the Retail Preservation Ordinance. The proposed Ordinance in Attachment A contained the language originally proposed by Staff and not the Council's December 3 actions. The Council had broad discretion regarding the review process. Staff proposed eliminating Site and Design Review so that housing projects would receive the same review as commercial projects. The Council could revise the proposed Ordinance so that retail preservation exemptions for affordable housing projects were keyed to 80 percent of area median income (AMI). The Municipal Code did not prohibit rooftop decks, but projects often did not propose rooftop decks because of height and accessibility requirements. Mayor Filseth suggested the Council ask general questions prior to Council Members recusing themselves. Molly Stump, City Attorney, recommended the Council ask general questions in an attempt to avoid conflicted topics. Mayor Filseth announced the Council would discuss the RM-15 areas first, the California Avenue area second, and then the El Camino Real area. The proposed Ordinance attempted to balance the community's desire for more housing with not changing the City's landscape. The proposed Ordinance attempted to improve the economics of building housing by reducing parking requirements and increasing unit densities. Mayor Filseth advised he would not be participating in this part of the Agenda Item due to his owning property in an RM-15 zone. Vice Mayor Fine requested Mr. Lait describe the issue for the RM zoning district. Mr. Lait explained that the Code required a multifamily development of 40 or more units in the RM zone to provide 1,500 square feet of neighborhood- FINAL MINUTES Page 13 of 42 City Council Meeting Final Minutes: 01/28/2019 serving retail space. Because developers had difficulty obtaining financing for affordable housing projects with retail space, Staff proposed exempting affordable housing projects from the requirement for neighborhood-serving retail space. In the December meeting, the Council's intention to exempt large affordable housing projects from the retail requirement was not memorialized in the Motion. Council Member DuBois hoped the Council would revisit some of the Citywide issues discussed in the December meeting. The Council should consider more generally some of the amendments it made to the Downtown district. Mr. Lait indicated the Council directed Staff to explore and present those items in a future Agenda Item. Council Member DuBois clarified that some of the components of the Downtown discussion could be applied Citywide. He did not support waiving the retail requirement for affordable housing projects restricted to 20 percent above AMI. He expressed concern that the affordable housing overlay would favor market-rate housing. He wanted to ensure the overlay was attractive to below-market-rate (BMR) projects by providing additional incentives. He proposed retaining the retail exemption for BMR projects. He inquired whether existing retail space in the RM zone had to provide parking for retail employees. Mr. Lait advised that the Council's discussion of parking exemptions in Downtown did not apply in this situation. MOTION: Council Member DuBois moved, seconded by Council Member Kniss to exempt 100-percent affordable housing projects from meeting the minimum 1,500 square feet neighborhood-serving retail requirement in RM zones, with an average not to exceed 60 percent of the area median income, except for a building manager’s unit. Mr. Lait related that Title 16 of the Municipal Code established the parameters of an affordable housing project, which was very-low, low, and moderate housing. Moderate was defined as units at 120 percent of AMI or approximately $125,000 for a family of four. Ed Shikada, City Manager, remarked that Palo Alto's moderate affordable units were significantly less than market rate. Council Member DuBois noted the proposed Ordinance contained multiple definitions of affordable housing. FINAL MINUTES Page 14 of 42 City Council Meeting Final Minutes: 01/28/2019 Mr. Lait clarified that the State utilized the Federal standard and applied the moderate level. The City's moderate level was consistent with the State standard. Across agencies, the income levels were pretty consistent. A 120-percent AMI project would not be perceived as a market-rate project. Council Member DuBois added that the proposed Ordinance contained conditions for projects to qualify for Federal tax credits. If a housing project was restricted to 120 percent, it might not qualify for Federal tax credits. Mr. Lait agreed that it probably would not. Council Member DuBois intended to capture incentives that would allow nonprofit developers of affordable housing to find locations to build in Palo Alto. Perhaps the Motion should include the language about Federal tax credits. Mr. Lait explained that language throughout the proposed Ordinance referred to 120 percent of AMI. Where the language deviated from 120 percent, the intention was to apply by-right the affordable housing overlay. When a project that proposed a deed restriction to Federal tax income levels was subject to the review process, the project would apply for the HIP and take advantage of the elements of the affordable housing overlay. That was the only area where the language was keyed to the 80-percent standard. Council Member DuBois requested the proper wording to limit the retail exemption to those projects. Vice Mayor Fine offered language of projects subsidized at the rate of 100- percent AMI or below. Council Member DuBois wished to ensure a project that was eligible for a retail exemption could qualify for Federal tax credits. Vice Mayor Fine suggested a BMR project at 30 percent could have a source of financing other than Federal tax credits. Council Member DuBois clarified that a project would be eligible for Federal tax credits but would not be required to obtain Federal tax credits. Vice Mayor Fine asked if Council Member DuBois intended to make the retail exemption contingent on a qualification for tax credits. Council Member DuBois explained that a project would qualify as affordable housing under Federal law. FINAL MINUTES Page 15 of 42 City Council Meeting Final Minutes: 01/28/2019 Mr. Lait stated the language of "with an average not to exceed 60 percent of the area median income except for the manager's unit" met Council Member DuBois' intent. Council Member DuBois revised the language to "not to exceed 80 percent." Mr. Lait preferred 60 percent or 120 percent in order to be consistent. Council Member DuBois asked if the financing requirement had increased from 60 percent to 80 percent. Mr. Lait answered yes. Council Member DuBois inquired whether the requirement should be 80 percent throughout the Code. Mr. Lait explained that a provision of the Code provided flexibility for the requirement to change. MOTION RESTATED: Council Member DuBois moved, seconded by Council Member Kniss to exempt 100-percent affordable housing projects from meeting the minimum 1,500 square feet neighborhood-serving retail requirement in RM zones, with an average not to exceed 60 percent of the area median income, except for a building manager’s unit. Council Member Kniss asked if the Motion incorporated the language Mr. Lait suggested. Mr. Lait responded yes. Council Member Cormack asked if most projects in Palo Alto met the 60 percent threshold. Mr. Lait noted the City did not have an extensive track record on the issue. Recent discussions with housing providers disclosed that funding was available at the 60/80 percent threshold. Council Member Cormack inquired whether a project with a threshold of 120 percent would be required to provide retail space. Council Member DuBois explained that the average would be 60 percent such that a few units could meet a threshold of 120 percent. Council Member Cormack asked if a project for which the average exceeded 60 percent would be required to provide retail space. FINAL MINUTES Page 16 of 42 City Council Meeting Final Minutes: 01/28/2019 Mr. Lait answered yes. It would not be restricted to 120 percent; it would be whatever the market would bear. Vice Mayor Fine noted the Council had discussed development standards and levels of subsidy a number of times. AMI was based on standards for the County of Santa Clara, not the City of Palo Alto. The market rate in Palo Alto was roughly twice AMI. He felt 60 percent was too stringent. Palo Alto Housing had reported affordable housing projects could not be a mixed-use project and receive low-income tax credits. Council Member DuBois understood Staff indicated a provision in the proposed Ordinance allowed them to adjust the percentage to 80 percent. Mr. Lait recommended the Motion state 80 percent. The Council may wish to consider changing the language of Number 2 on Packet Page 326 to 80 percent. Council Member DuBois concurred with changing both references to 80 percent. Vice Mayor Fine felt 100 percent would be fair. A project could utilize low- income housing tax credits and other Federal affordable housing financing instruments with a restriction of up to 100 percent. Council Member DuBois proposed 80 percent because of the Federal tax credits and in consideration of people with very low and low incomes. Vice Mayor Fine agreed the City should provide more regulatory flexibility for low-income units. However, the City would be lucky to receive an application for a project at 80 or 100 percent. AMENDMENT: Vice Mayor Fine moved, seconded by Council Member Cormack to change the Motion to state “… not to exceed 100 percent of the area median income … .” Vice Mayor Fine commented that the City could provide flexibility because of the dearth of affordable housing in Palo Alto. Council Member DuBois believed a project above the 80-percent threshold should not have any restrictions against retail. The Council should require 1,500 square feet of retail for a project of 40 units or more. Not requiring retail space was an incentive for developers to provide housing for lower incomes. Council Member Kniss would support the Amendment because of Vice Mayor Fine's argument. FINAL MINUTES Page 17 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member Kou recalled Palo Alto Housing speaking about the difficulty of obtaining tax credits for projects with a threshold of 100 percent. To address the Palo Alto issue, the Council should utilize 80 percent rather than 100 percent. She would not support the Amendment. AMENDMENT FAILED: 3-3 DuBois, Kou, Tanaka no, Filseth recused INCORPORATED INTO THE WITH THE CONSENT OF THE MAKER AND SECONDER to change the Motion to state “… not to exceed 80 percent of the area median income." MOTION AS AMENDED RESTATED: Council Member DuBois moved, seconded by Council Member Kniss to exempt 100 percent affordable housing projects from meeting the minimum 1,500 square feet neighborhood serving retail requirement in RM zones, with an average not to exceed 80 percent of the area median income, except for a building manager’s unit. MOTION AS AMENDED PASSED: 6-0 Filseth recused Council took a break from 8:17 P.M. to 8:25 P.M. Mayor Filseth returned to the meeting at 8:25 P.M. Council Member Kniss advised she would not be participating in this part of the Agenda Item due to her owning property within 500 feet of the California Avenue CC(2) zoning district. Mr. Lait reported Staff proposed eliminating the density standard for residential projects in the CC(2) zone. The existing standards for height, setbacks, and floor area as provided in the Code would be the controls. Residential-only developments would be allowed in the CC(2) zone except in locations where the R overlay and the Retail Preservation Ordinance applied. Currently, housing was allowed in the CC(2) zone in mixed-use projects only. Staff proposed a provision to preclude curb cuts on California Avenue, except for City projects, principally because of Senate Bill (SB) 35. The Council would determine whether a curb cut for a City project would be allowed. Allowing rooftop open space to fulfill up to 60 percent of the open space requirement freed up space for housing units. Consistent with the Downtown Commercial district, Staff proposed an HIP for the California Avenue area in order to preserve local control, to ensure a review process, and to provide for environmental review. As an incentive, the HIP would allow more residential floor area through a waiver process. Currently, an office building could be constructed in the California Avenue area with a 2.0 floor area ratio (FAR) and a residential project with a 0.6 FAR. FINAL MINUTES Page 18 of 42 City Council Meeting Final Minutes: 01/28/2019 Mayor Filseth inquired whether future revisions of the affordable housing overlay development standards would impact this. Mr. Lait explained that a developer could request a waiver to match those standards. If the standards changed, the waiver would change. Council Member Kou asked if the HIP could supersede SB 35. Mr. Lait replied no. The benefits of the HIP were intended to entice a developer to utilize the HIP process rather than the SB 35 process. Council Member Kou inquired whether the HIP would require Planning and Transportation Commission (PTC) review of a project. Mr. Lait responded no. Eliminating Site and Design Review for housing projects created the same review process for housing projects as for commercial projects. Council Member Kou asked if the Planning Director would be the ultimate decision maker. Mr. Lait explained that the ARB provided a recommendation to the Director, and the Director made the decision under the existing process. The Director's decision was appealable to the City Council. Staff did not propose a change to the existing process. Council Member DuBois believed a discussion of housing interaction with hotel FAR and increasing residential FAR in exchange for decreasing commercial FAR would be logical. Mr. Lait advised that the Council could direct Staff to review those concepts. Staff may want to study changing hotel FAR to 2.0 for other parts of the City. He wanted to include some language to clarify that when Staff returned with a work plan for the next year or two. Council Member DuBois asked if the total FAR would remain at 2.0 under the HIP. Mr. Lait clarified that Staff proposed allowing residential FAR to increase from 0.6 up to 2.0. Council Member DuBois asked if a 2.0 FAR had been allowed but not encouraged. Mr. Lait remarked that a 2.0 FAR for residential projects could cause some developers to consider residential rather than commercial projects. The FINAL MINUTES Page 19 of 42 City Council Meeting Final Minutes: 01/28/2019 economics would continue to favor commercial projects, but a 2.0 FAR for residential projects would create some parity between residential and commercial projects. Council Member DuBois inquired whether the California Avenue area included some Neighborhood Commercial (CN) zoning. Mr. Lait reported CN zoning was part of the El Camino Real discussion. The standards applied to some CC(2) zones located on El Camino Real. Council Member DuBois asked if a minimum amount of housing in a mixed- use building was necessary for a project to qualify for the HIP. Mr. Lait indicated a minimum of three units qualified as multifamily under local standards. Council Member DuBois inquired whether a project for a commercial building containing three housing units would qualify for the HIP. Mr. Lait replied yes. Council Member DuBois requested the benefits such a project would achieve. Mr. Lait advised that the project would qualify for the benefits provided by the HIP. Council Member DuBois stated the project could construct three very large housing units and some office space and be exempt from some parking. Mr. Lait explained that the HIP entitled a project to an FAR of up to 2.0 for residential units and a waiver from the affordable housing overlay. Council Member DuBois commented that Senate Bill (SB) 35 focused on affordable housing, while the HIP could provide non-affordable housing. Mr. Lait related that the Downtown Commercial district restricted the average unit size to 1,500 square feet. The Council could direct Staff to consider an average unit size for the California Avenue area. When reviewing projects, Staff encouraged developers to increase the number of housing units by reducing their size. Council Member DuBois expressed concern regarding the interaction of parking requirements and Residential Preferential Parking Permit (RPP) districts. Parking requirements should err in favor of over-parking until a balance could be achieved. He inquired whether the discussion of Citywide issues would include parking. FINAL MINUTES Page 20 of 42 City Council Meeting Final Minutes: 01/28/2019 Mr. Lait reported a discussion of parking occurred previously. Council Member DuBois remarked that any action taken at the end of a long Council meeting should not be considered final. Mr. Lait advised that the Motion from the December meeting was clear with respect to parking. Council Member DuBois noted the Council was attempting to incentivize a large amount of housing in Downtown. Historic studies found the City to be under-parked by more than 1,000 cars. Most parking garages were funded through Business Assessment Districts. The Council may want to consider allowing residents in the Downtown and California Avenue areas to purchase permits in garages and reconsider the number of permits allowed per unit in RPP districts and the types of businesses eligible for parking permits. In December, the Council referred part of the parking analysis to the PTC. He was unclear whether offsite parking meant on-street parking or private offsite parking. He hoped the Council would provide an explicit definition of offsite parking and ask the PTC to make recommendations regarding the impacts on RPP districts. The Staff presentation did not note the Council's referral to the PTC. Mr. Lait concurred that the presentation summarized only those topics before the Council. Council Member DuBois asked which part of the parking discussion was continued. Mr. Lait related that a reduction of the parking requirements for properties located within a half mile of fixed rail stations was continued due to a 3-3 vote. MOTION: Council Member DuBois moved, seconded by Council Member XX to direct the Planning and Transportation Commission to study interactions between the RPP districts and these Ordinance changes. Mayor Filseth asked if Council Member DuBois wished to ensure the instruction to consider offsite parking included interaction with local RPPs. Council Member DuBois clarified that the PTC should evaluate the number of permits, opting out of an RPP as part of a Transportation Demand Management (TDM) program, and the types of businesses eligible to participate in RPP districts. FINAL MINUTES Page 21 of 42 City Council Meeting Final Minutes: 01/28/2019 Mayor Filseth inquired whether language of "include interactions with local RPPs" would provide the PTC with latitude to evaluate the points Council Member DuBois raised. Mr. Shikada responded yes. Council Member DuBois wanted the PTC to evaluate the interactions with RPP districts in Downtown and California Avenue. Mr. Shikada reported the evaluation was already part of the work plan as directed by the Council in December and as part of the sustainability of the RPP Program. The interaction between off-street parking requirements and RPP districts would be evaluated Citywide. Council Member DuBois wanted the evaluation to occur before any RPP applications were submitted. Mr. Shikada understood the priority of parking for the Council and community. MOTION WITHDRAWN BY THE MAKER MOTION: Council Member DuBois moved, seconded by Vice Mayor Fine to approve the following modifications to the Ordinance related to the California Avenue CC(2) Zoning District: A. Unit Density. Eliminate the unit density requirement restricting the maximum density, which is currently 30 dwelling units per acre; B. Residential Only Development. Allow housing-only projects to be constructed, except on properties in the retail shopping (R) combining district or where the retail preservation ordinance applies; C. Driveway Approach. Reinforce existing City policy and guidelines to preclude curb cuts on California Avenue, except for City-owned parcels or City-sponsored projects; D. Open Space. Allow rooftops to qualify for up to 60 percent of the usable open space requirement for the multi-family residential portion of a project, subject to objective performance standards; E. Housing Incentive Program (HIP) i. Increase residential FAR from 0.6 to 2.0; FINAL MINUTES Page 22 of 42 City Council Meeting Final Minutes: 01/28/2019 ii. Allow Affordable Housing Overlay development standards (without legislative process); iii. Discretionary review by ARB required; and F. Direct Staff to analyze the interaction of housing production in the CC(2) zones in regards to the hotel FAR and methods to match increases in residential FAR with a decrease in commercial FAR for mixed-use projects. Council Member DuBois noted Part F of the Motion contained the same language as the Motion for the Downtown zone. The Council incentivized hotel production by increasing the FAR temporarily but never decreased the FAR. The analysis would determine whether the proposed Ordinance would encourage housing if other incentives remained in place. Vice Mayor Fine requested clarification of the Council temporarily increasing hotel FAR. Council Member DuBois explained that hotel FAR had been 1.5, and the Council increased it to 2.0 after the loss of a hotel. The increase in hotel FAR was discussed as a temporary measure to spur hotel production. Vice Mayor Fine asked if the Motion included the Staff recommendation. Council Member DuBois answered yes. Vice Mayor Fine remarked that the Motion did a good job of encouraging housing production without significantly changing the community. He asked if the Planning Director would have the ability to waive some or all restrictions. Mr. Lait reported Staff would review waivers through the usual application review process. Some waivers could be approved and some denied. The waivers were meant to be utilized. Vice Mayor Fine requested an update of the City's status regarding SB 35 and the Regional Housing Needs Assessment (RHNA). Mr. Lait indicated an update would be provided in March. Vice Mayor Fine concurred with evaluating the interactions of the RPP districts and other parking issues with the changes. He did not agree with the linking of increased housing production with decreased hotel FAR, but he would support it in order to see the results of the evaluation. FINAL MINUTES Page 23 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member Kou asked if the City's requirement for 15-percent inclusionary housing was low on the BMR side. Mr. Lait explained that because the City was at the 50-percent mark, the State requirement would be a higher affordable standard than the City's current affordability provision. The City came close to not fulfilling its requirements for the most recent period. If a year passed in which the City failed to produce and issue building permits for housing units, it could fall under the 10-percent provision. In that regard, the City's standard would be higher than the State provision. Council Member Kou inquired whether the HIP required a minimum number of units. Mr. Lait responded that the minimum number was 15 percent. Council Member Kou asked if the affordability requirement was 50 percent under the HIP. Mr. Lait reported a qualifying SB 35 project would have to meet a number of standards including two-thirds of the development would have to be dedicated to residential uses and 50 percent of those residential uses would be subject to an affordability standard. The existing Zoning Code included a 15-percent inclusionary requirement for ownership units and an in-lieu fee for rental housing. The HIP would continue the 15-percent requirement for onsite affordability for ownership units and subject to the in-lieu fees for rental housing. In the future, the Council would consider an Ordinance that would look at increasing the 15 percent to 20 percent. Mr. Shikada explained that under SB 35 a project with two-thirds residential uses and 50-percent affordable would not be required to provide parking if it was located near transit. Also, the project would not be subject to design review or a California Environmental Quality Act (CEQA) analysis. Palo Alto's customary review requirements would be waived if a project chose to proceed under SB 35. The intent of the HIP was to retain the customary review requirements while providing incentives. Council Member Kou requested the rationale for Staff proposing a maximum residential FAR of 2.0 when SB 35 allowed an FAR of 1.0 or 1.35. Mr. Lait clarified that Staff proposed a 3.0 FAR for Downtown, 2.0 for California Avenue, and 1.5 for El Camino Real in order to recognize the different intensities of development in each area and to provide residential development with the same FAR as office development. FINAL MINUTES Page 24 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member Kou noted the 15-percent inclusionary requirement pertained to ownership properties, and rental properties were not addressed. Mr. Lait related that rental properties would be addressed in a separate policy initiative. Council Member Kou wanted a provision that addressed noise pollution and enforcement of noise issues. Mr. Lait recalled the Council's December 3 discussion of the Noise Ordinance and enforcement. Staff had acknowledged that enforcement needed work. Including noise and enforcement in the proposed Ordinance would be difficult. Council Member Kou believed noise issues needed to be addressed. Mayor Filseth clarified the issue as allowing rooftops to qualify towards the open space requirement. He inquired whether a Motion could address the Noise Ordinance for rooftop decks. Ms. Stump advised that the Council could not change the Noise Ordinance itself, but the Council could direct Staff to work on it. Mayor Filseth inquired whether the City had a perceived problem with noise on rooftop decks at the current time independent of the pending Motion. Mr. Lait noted the City received complaints about noise, but the complaints could not be isolated to rooftop decks. There were few rooftop decks in the City. People who chose to live in Downtown, the California Avenue area, or the El Camino Real area might experience a bit more noise due to the different activities in the area. If that was not acceptable from a policy perspective, concerns about noise could moderate the Council's interest in rooftop decks. A rooftop deck would impact the number of units produced on a site. Mayor Filseth understood rooftop decks were currently legal. The intent of the proposed Ordinance was to spur housing production, which meant rooftop decks were favorable with or without the rooftop bonus. A noise problem on rooftop decks appeared to be independent of the proposed Ordinance. If the proposed Ordinance did spur housing production, in all likelihood rooftop decks would be more numerous in the next several years. The Council may need to review it in the future. Mr. Lait reported the Council could impose standards to help mitigate noise impacts. Existing development standards did not allow rooftop access to FINAL MINUTES Page 25 of 42 City Council Meeting Final Minutes: 01/28/2019 exceed the height limit, which probably was part of the reason for the lack of roof decks. Council Member DuBois asked if the Council would discuss rooftop performance standards. Mayor Filseth reported they would be discussed under Citywide issues. Council Member Cormack requested the rationale for proposing 60 percent and 75 percent for usable open space on rooftops. Mr. Lait explained that Staff originally proposed 75 percent for all areas, and the PTC felt each neighborhood warranted a specific percentage. Council Member Cormack requested clarification of the interaction of housing production with the hotel FAR. Council Member DuBois advised that the language of Part F was the same language the Council adopted on December 3 for Downtown. These programs were intended to incentivize housing, but the Council was not changing any commercial zoning requirements. He questioned whether providing housing incentives without decreasing commercial FAR would result in any housing development. Council Member Cormack asked how the interaction would be analyzed. Council Member DuBois reiterated Staff's comment that the issue was a part of the work plan. Council Member Cormack inquired regarding the number of hotels on California Avenue. Mr. Lait did not know. Council Member Cormack asked if Part F required the same analysis of California Avenue as of the Downtown. Mr. Lait answered yes. He did not find any other California Avenue hotels. Council Member Cormack questioned whether the California Avenue area was the right location to reduce hotel FAR. Council Member DuBois believed commercial development would continue until commercial FAR was converted to residential FAR. Council Member Cormack asked if the provision should be applied Citywide. FINAL MINUTES Page 26 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois responded yes; however, the structure of the meeting prevented that. Hotels were allowed only in certain zones. MOTION PASSED: 5-1 Kou no, Kniss recused Council took a break from 9:19 P.M. to 9:31 P.M. Council Member Kniss returned to the meeting at 9:30 P.M. Council Member Kniss commented on the live broadcast of the meeting not indicating the item under discussion. Council Member Cormack agreed that some broadcasts did not have a banner indicating the item being discussed. Mr. Lait reported Staff proposed to eliminate the maximum residential density, to allow rooftop open space to qualify for up to 60 percent of the open space requirement, to allow residential-only development except in locations where precluded by the Retail Preservation Ordinance, to prohibit ground-floor dwelling units from fronting directly on El Camino Real, and to adopt an HIP. On December 3, the Council adopted a Citywide proposal to exempt the first 1,500 square feet of retail space in a mixed-use project from parking requirements. Under the HIP, an applicant could increase the FAR from 0.5 in the CN zone and 0.6 in the Service Commercial (CS) zone up to 1.5 and eliminate or reduce the 50-percent lot coverage requirement. Vice Mayor Fine asked if the phrase "ground-floor design residential standards" was an existing requirement. Mr. Lait advised that the standards were new. Vice Mayor Fine wanted to understand ground-floor design standards. Mr. Lait explained that a residential unit could not face El Camino Real. Vice Mayor Fine shared the schools of thought for locating buildings close to or away from El Camino Real. MOTION: Vice Mayor Fine moved, seconded by Council Member Kniss to approve the following modifications to the Ordinance related to properties adjacent to El Camino Real in the CN and CS Zoning Districts: A. Unit Density. Eliminate the unit density requirement restricting the maximum density, which currently ranges from 15 to 30 dwelling units per acre; FINAL MINUTES Page 27 of 42 City Council Meeting Final Minutes: 01/28/2019 B. Open Space. Allow rooftops to qualify for up to 60 percent of the usable open space requirement for the multi-family residential portion of a project, subject to objective performance standards; C. Residential Only Development. Allow housing-only projects to be constructed except on properties where the retail preservation ordinance applies; D. Ground Floor Residential Design Standards. Adopt objective design standards to create an attractive active appearance for residential development on the ground-floor, while also maintaining privacy for residents: i. Individual dwelling units shall not be permitted on the ground- floor fronting El Camino Real. Instead, the ground-floor frontage on El Camino Real may include common areas, such as lobbies, stoops, community rooms, and work-out spaces with windows and architectural detail to create visualize interest. Ground floor residential would be permitted beyond the common areas or if set back away from El Camino Real; ii. Parking shall be located behind buildings or below grade, or, where those options are not feasible, screened by landscaping, low walls, or structured garages with architectural detail; E. Housing Incentive Program (HIP). i. Increase residential FAR from 0.5 (CN) and 0.6 (CS) to 1.5; ii. Eliminate 50 percent lot coverage requirement; iii. Allow Affordable Housing Overlay development standards (without legislative process); and iv. Discretionary review by ARB required. Vice Mayor Fine noted the proposals were similar to the proposals for Downtown and California Avenue. Council Member Kniss inquired regarding State requirements for rooftop decks. Mr. Lait indicated SB 35 did not address rooftops. Rooftop decks were subject to local zoning requirements. FINAL MINUTES Page 28 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member Kniss asked if there was a way to get around the zoning requirements. Mr. Lait related that the roof deck would have to exceed the height limit. Council Member Kniss requested the impacts to the building of incorporating a rooftop deck into a project. Mr. Lait explained the requirements for elevators and stairs and for permanent features. The building could be designed to the maximum height limit, and the proposed change would allow a stair and elevator to exceed the height limit so that the rooftop could be used as a deck and count toward the open space requirement. Council Member Kniss asked if a floor of the building would have to be removed in order to incorporate a rooftop deck unless the Council provided an exception for access elements to exceed the height limit. Mr. Lait replied yes. The PTC suggested a rooftop deck count towards only 60 percent of the open space requirement so that the building would have some modulation. Council Member DuBois inquired whether the CS and CN zones applied to South Palo Alto rather than the length of El Camino Real. Mr. Lait clarified that the area was primarily south of the University. Town & Country and the hotels were zoned Community Commercial (CC). Staff did not propose any changes to the CC zones. Council Member DuBois asked if the housing in CN and CS zones would be almost identical with the proposed changes. He asked if CN would be protected in any way in terms of neighborhood commercial uses. Mr. Lait advised that Staff proposed only one change to land uses, and that was residential uses could occur on the ground floor if it was not already required as part of retail preservation. Council Member DuBois asked if the proposed change would increase allowed lot coverage from 50 percent to 100 percent. Mr. Lait explained that a developer could request a waiver from the requirement for 50 percent of the lot not to be covered. In theory, lot coverage could increase to 100 percent, which could reduce the height of a building. The waiver would be available through the HIP only. FINAL MINUTES Page 29 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois reiterated his concern about a project with only three housing units being eligible for the HIP. He questioned whether developers would be motivated to include only three housing units in order to obtain 100-percent lot coverage. Mr. Lait noted a waiver request was subject to discretionary approval. The review process would probably not result in the use of waivers for projects with only a few penthouses. Council Member DuBois remarked that the Council had done nothing to make commercial development less attractive in the areas where the Council wanted to incent housing. Housing was more likely to occur in residential areas rather than in more dense areas close to transportation. He inquired whether the policy for replacement of trees would remain in effect. Mr. Lait responded yes. Council Member Kou was concerned about the CS and CN zones abutting single-family homes. Buildings would be massive next to residential homes. The community would raise issues with this. The proposals for El Camino needed additional study. MOTION PASSED: 6-1 Kou no Mr. Lait reported the proposed changes were to redefine open space and to establish open space performance standards. The proposed Ordinance did not provide an exemption from the retail preservation requirement for 100- percent affordable housing projects on El Camino Real. The Council could include an exemption from the retail preservation requirement. The definition of open space was not new. Staff transferred it from one section to another section of the Code. Mayor Filseth requested Staff review the development standards for rooftop decks. Mr. Lait advised that Citywide standards for rooftop decks included prohibiting up-lighting; allowing features that provide access to the rooftop deck to extend above the height limit; allowing permanent features to exceed the height limit by no more than 12 feet; and prohibiting access and permanent features from intersecting a plane measured at a 45-degree angle. Vice Mayor Fine asked if the intersecting a plane standard moved features toward the center of the building. FINAL MINUTES Page 30 of 42 City Council Meeting Final Minutes: 01/28/2019 Mr. Lait answered yes. Additional standards allowed a rooftop garden on a second or higher story; limited use of the deck to residents of the building; required access features to be pushed away from the building edge; required lighting to be turned off at 10:00 P.M.; required 15-25 percent of the rooftop to be landscaped with raised beds; required equipment that emitted noise and/or exhaust to be directed away from open space; required compliance with the City's Noise Ordinance; and prohibited sound-amplifying equipment. Council Member Kniss noted locations of rooftop gardens in the Downtown area. Perhaps Staff could provide the Council with examples of existing rooftop decks. Mr. Lait added that a rooftop deck would be subject to Architectural Review and the standards. Council Member DuBois requested the rationale for limiting shade structures to a height of 12 feet. Mr. Lait explained that 12 feet provided a bit of space between headroom and a structure off the elevator. Council Member DuBois was concerned that a shade structure could be another roof. Mr. Lait added that the shade structure would be subject to the prohibition against intersecting a plane measured 45 degrees from the edge of the building. Depending on the height of the building, the shade structure probably would not be visible from the street. Council Member DuBois asked if there could be a coverage limit for shade structures. Mr. Lait clarified that a portion of a shade structure may count toward floor area. Floor area was not allowed above the height limit. Council Member DuBois inquired whether Staff discussed hours of use. Mr. Lait responded no, other than the lighting cutoff time of 10:00 P.M. A standard limiting the hours of use would be simple to add. Council Member DuBois inquired regarding enforcement of residents only using a rooftop deck. Mr. Lait remarked that someone would complain to the City about a commercial tenant utilizing a roof deck, at which time Staff could pursue the matter through typical Code enforcement means. FINAL MINUTES Page 31 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois expressed concern about allowing a rooftop deck at the second or higher story because of noise and suggested revising the standard to the third or higher story. MOTION: Council Member DuBois moved, seconded by Vice Mayor Fine to approve the following modifications to the Ordinance related to city-wide Rooftop Open Space Performance Standards: A. Permanent fixtures on the rooftop shall be placed so as not to exceed height limit for the applicable zoning district, except: i. Elevators, stairs and guardrails may exceed the height limit to allow for access to the rooftop useable open space as and to the extent required to comply with the Americans With Disabilities Act (ADA). These fixtures shall be designed to the lowest height and size feasible; ii. Permanent fixtures associated with the useable open space, such as trellises, shade structures, furniture, and furnishings such as planters, lighting and heaters, may exceed the height limit by up to 12 feet; iii. For the height limit exceptions in (i) and (ii) above, all fixtures shall not intersect a plane measured at a forty-five-degree angle from the edge of the building starting at the rooftop garden surface sloping upward and inward toward the center of the property; B. The rooftop garden may be located on the second or higher story or on a roof deck; C. The rooftop garden shall be accessible to all residents of dwelling units on the parcel, but not to commercial tenants of a residential mixed-use development; D. Structures or fixtures providing a means of access or egress (i.e., stairway, elevator) shall be located away from the building edge to the extent feasible or screened to minimize visibility from the public right- of-way and adjacent buildings and privacy impacts. These access structures or fixtures, when exceeding the height limit, shall be subject to the provisions of subsection (A)(iii) above; E. Any lighting shall have cutoff fixtures that cast downward-facing light or consist of low-level string lights. Lights shall be dimmable to control glare and placed on timers to turn off after 10:00 PM. Photometric FINAL MINUTES Page 32 of 42 City Council Meeting Final Minutes: 01/28/2019 diagrams must be submitted by the applicant to ensure there are no spillover impacts into windows or openings of adjacent properties; F. At least 15 percent but no more than 25 percent of the rooftop shall be landscaped with raised beds for gardening, C.3 stormwater planters, or other landscaping. All required landscaped areas shall be equipped with automatic irrigation systems and be properly drained; G. Rooftop equipment that emit noise and/or exhaust, including but not limited to vents, flues, generators, pumps, air conditioning compressors, and other protrusions through the roof, shall be directed away and screened from the useable open space areas; H. Rooftop open space noise levels shall not exceed exterior residential noise level as defined by Section 9.10.030(a) of this code; I. The use of sound amplifying equipment shall be prohibited. Signs shall be affixed adjacent to access elevators and stairs within the rooftop garden providing notice of this prohibition; J. Change the Ordinance Section 10, B to replace “second” with “third;” and K. Change the Ordinance Section D to delete “or screened.” Vice Mayor Fine asked if a roof deck on a two-story building would be located at the floor plate of a third story. Mr. Lait replied the finished floor level of the third floor. Vice Mayor Fine questioned whether story or a specific number of feet was the correct measurement. Mr. Lait asked if the intent was to distance the noise from the lower levels to the upper levels. Roof decks were already allowed below the height limit. Staff's intent was to allow a roof deck to exceed the height limit. Vice Mayor Fine asked if the three-story regulation could preclude roof decks that would be desirable. Council Member DuBois asked if roof decks at a height of 25 feet were desirable. Vice Mayor Fine reiterated that a two-story building could have a roof deck under the existing standards. FINAL MINUTES Page 33 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois was concerned that noise would result from roof decks on multifamily housing. Requiring a roof deck at the third story or higher on a multifamily residential building could reduce noise for nearby single-family and R-2 homes. Mayor Filseth asked Council Member DuBois if he intended to prevent low, noisy roof decks. Council Member DuBois answered yes. Mr. Lait reiterated that the existing Code allowed roof decks below the height limit. The proposed Ordinance did not address roof decks below the height limit. Council Member DuBois believed the use of roof decks was a change. Mr. Lait anticipated developers would maximize the number of housing units and place the roof deck atop the maximum number of housing units. He asked if deleting the provision would eliminate the concern. Council Member DuBois responded no because roof decks could be located on multiple levels. Mr. Lait reiterated that the proposed Ordinance did not change an existing policy. Vice Mayor Fine inquired whether a 50-foot building with a roof deck on top could have a secondary roof deck. Mr. Lait answered no. Vice Mayor Fine requested Staff return to the Council if issues arose with implementing a roof deck at the third or higher story. Council Member Cormack asked if the location of the landscaping affected the discussion. Vice Mayor Fine responded no. Mr. Lait clarified that the terms rooftop deck and rooftop garden were used interchangeably. Council Member Kniss inquired regarding the potential demand for rooftop decks. FINAL MINUTES Page 34 of 42 City Council Meeting Final Minutes: 01/28/2019 Mr. Lait reported discussions with developers revealed a number of constraints to providing housing, one of which was the open space requirement. To address it, Staff proposed a roof deck count toward the requirement instead of decreasing the requirement. Council Member Kniss remarked that a rooftop deck was different from a rooftop garden based on the number of plants found on a rooftop garden. Mr. Lait added that landscaping was required to make a rooftop deck more like a garden. Council Member Kniss felt a rooftop deck provided a practical purpose rather than an aesthetic purpose. Mr. Lait requested the Motion include the Citywide up-lighting prohibition established on December 3. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion a new Part L “Include in the Ordinance Citywide up-lighting requirements.” Mr. Lait noted Council Member DuBois requested a change to the definition of open space. Council Member Cormack inquired regarding safety barriers for rooftop decks. Mr. Lait advised that a guardrail or parapet would be required. Staff would not allow a rooftop deck to be established without necessary safety barricades. Council Member Cormack requested the standard height limit of safety barricades. Mr. Lait responded approximately 42 inches. The ARB would review the design of safety barricades. Council Member Cormack was not inclined to limit the hours of use of a roof deck. Council Member Tanaka expressed concern that Part B might eliminate many possibilities and suggested deleting Part B from the Motion. Council Member DuBois advised that Part B was the primary standard he wanted to charge because of noise and privacy issues. FINAL MINUTES Page 35 of 42 City Council Meeting Final Minutes: 01/28/2019 Vice Mayor Fine concurred with Council Member Tanaka. MOTION: Council Member Tanaka moved, seconded by Council Member XXX to remove Part B from the Motion. MOTION FAILED DUE TO THE LACK OF A SECOND Council Member Kou thought Staff would have proposed Code enforcement prior to allowing a rooftop deck to count towards the open space requirement and allowing a building to cover 100 percent of the lot. These properties would abut single-family homes and less dense apartment buildings. The Council should not forget the impacts of these standards on existing residents. MOTION AS AMENDED RESTATED: Council Member DuBois moved, seconded by Vice Mayor Fine to approve the following modifications to the Ordinance related to city-wide Rooftop Open Space Performance Standards: A. Permanent fixtures on the rooftop shall be placed so as not to exceed height limit for the applicable zoning district, except: i. Elevators, stairs and guardrails may exceed the height limit to allow for access to the rooftop useable open space as and to the extent required to comply with the Americans With Disabilities Act (ADA). These fixtures shall be designed to the lowest height and size feasible; ii. Permanent fixtures associated with the useable open space, such as trellises, shade structures, furniture, and furnishings such as planters, lighting and heaters, may exceed the height limit by up to 12 feet; iii. For the height limit exceptions in (i) and (ii) above, all fixtures shall not intersect a plane measured at a forty-five-degree angle from the edge of the building starting at the rooftop garden surface sloping upward and inward toward the center of the property; B. The rooftop garden may be located on the second or higher story or on a roof deck; C. The rooftop garden shall be accessible to all residents of dwelling units on the parcel, but not to commercial tenants of a residential mixed-use development; FINAL MINUTES Page 36 of 42 City Council Meeting Final Minutes: 01/28/2019 D. Structures or fixtures providing a means of access or egress (i.e., stairway, elevator) shall be located away from the building edge to the extent feasible or screened to minimize visibility from the public right- of-way and adjacent buildings and privacy impacts. These access structures or fixtures, when exceeding the height limit, shall be subject to the provisions of subsection (A)(iii) above; E. Any lighting shall have cutoff fixtures that cast downward-facing light or consist of low-level string lights. Lights shall be dimmable to control glare and placed on timers to turn off after 10:00 PM. Photometric diagrams must be submitted by the applicant to ensure there are no spillover impacts into windows or openings of adjacent properties; F. At least 15 percent but no more than 25 percent of the rooftop shall be landscaped with raised beds for gardening, C.3 stormwater planters, or other landscaping. All required landscaped areas shall be equipped with automatic irrigation systems and be properly drained; G. Rooftop equipment that emit noise and/or exhaust, including but not limited to vents, flues, generators, pumps, air conditioning compressors, and other protrusions through the roof, shall be directed away and screened from the useable open space areas; H. Rooftop open space noise levels shall not exceed exterior residential noise level as defined by Section 9.10.030(a) of this code; I. The use of sound amplifying equipment shall be prohibited. Signs shall be affixed adjacent to access elevators and stairs within the rooftop garden providing notice of this prohibition; J. Change the Ordinance Section 10, B to replace “second” with “third;” K. Change the Ordinance Section D to delete “or screened;” and L. Include in the Ordinance Citywide up-lighting requirements. MOTION AS AMENDED PASSED: 6-1 Kou no Mr. Lait requested the Council update the open space requirement. Council Member DuBois expressed concern regarding dwelling units having 150 square feet of open space and micro units having 40 square feet of open space. He suggested the Council passed the requirement without discussion. The people most likely to spend the least amount of time in their units had the least amount of open space. He did not find the requirement FINAL MINUTES Page 37 of 42 City Council Meeting Final Minutes: 01/28/2019 in the proposed Ordinance. Otherwise, the open space requirement was standard throughout the proposed Ordinance at 150 square feet. Council Member Kniss requested Council Member DuBois' preferred amount of open space for micro units. Council Member DuBois wanted to hear his colleagues' comments. Vice Mayor Fine asked if the 150 square feet was based on the average unit size of 1,500 square feet. Mr. Lait explained it was based on existing Code provisions and standardized across unit sizes. Vice Mayor Fine remarked that people who chose to live in a micro unit often spent much of their time in other locations. Council Member Kniss was not inclined to change the amount absent a compelling reason. Most micro-unit dwellers knew the locations of public open space. Council Member Cormack asked if the requirement overlapped with the language of "part or all of the required private usable open space areas may be added to the required." Council Member DuBois clarified that the standards required a specific amount of total open space, which could be divided between private and public open spaces. Council Member Cormack asked if Council Member DuBois wanted a minimum amount of private open space. Council Member DuBois stated the minimum amount was 150 square feet of open space, which could be a combination of public and private open space. However, 40 square feet of open space was required for a micro unit. Mr. Lait reported the existing standards contained a minimum private open space requirement, and private open space was defined differently from common open space. The current standard for private open space in a multifamily zone was 50 square feet. The standards for usable open space were different, which were defined in the proposed Ordinance. Vice Mayor Fine asked if Staff wanted the Council to discuss the definition of usable open space. Mr. Lait answered yes. FINAL MINUTES Page 38 of 42 City Council Meeting Final Minutes: 01/28/2019 MOTION: Vice Mayor Fine moved, seconded by Council Member Kniss to approve the proposed modifications to the definition of “usable open space” in Section 18.04.030 of the Ordinance. Vice Mayor Fine remarked that the language redefined and, in some cases, restricted usable open space. Mayor Filseth requested the impacts of the proposed language. Mr. Lait indicated Staff moved language from one provision into Section 18.04.030. The remaining language expanded the applicability of the space so that developers were aware of all users of the space. The existing Code language did not consider seniors or children as users of open space. Mayor Filseth requested the consequences of changing the existing language. Mr. Lait clarified that the proposed language would allow the ARB to ensure the quality of the space catered to different user groups in a generic way. Mayor Filseth inquired whether a space had to be usable by seniors in order to qualify for open space. Mr. Lait stated Staff was striving for more universal access to and enjoyment of open space. Open space did not have to cover every possible user group. Staff meant to add qualitative purpose to the definition of open space. Council Member Cormack expressed delight with the proposed language as it expanded everyone's view of open space. MOTION PASSED: 6-1 Kou no Council Member DuBois reported the Council needed to discuss the retail exception in the El Camino Real area. Mr. Lait advised that the retail exemption for affordable housing projects in the El Camino Real area was not included in the proposed Ordinance. MOTION: Council Member DuBois moved, seconded by Mayor Filseth to approve the following modifications to the Ordinance related to properties adjacent to El Camino Real in the CN and CS Zoning Districts: A. Exempt 100 percent affordable housing projects (120 percent AMI and below) from the retail preservation requirement, with an average not to exceed 80 percent of the area median income, except in the building manager’s unit. FINAL MINUTES Page 39 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois inquired whether language regarding one parking space for each employee was needed. Mr. Lait recalled the Council addressed the exemption under the Citywide provision on December 3. The PTC had recommended against a retail preservation exemption in the El Camino Real area. If the Council was interested in an exemption for the El Camino area, Staff would add language that would affirmatively allow affordable housing projects to meet the standard. The parking component confused things a bit and was outside the typical regulatory standard that applied elsewhere. Council Member DuBois commented that the exemption for the RM zone required one parking space for employee working. Mr. Lait noted similar exemptions for the Downtown and California Avenue areas did not contain the employee parking standard. Council Member DuBois felt the remainder of the City was similar to the RM zones. The parking standard should be applied to areas of the City outside the Downtown and California Avenue areas. Citywide, the Council had exempted the first 1,500 square feet of retail from parking. Mr. Lait clarified that the 1,500 square feet of retail was separate from the exemption for retail space. The 1,500-square-foot Citywide exemption for mixed-use projects would not require parking for the first 1,500 square feet. Council Member DuBois reiterated that different standards applied to different zones. Parking was required in RM zones but not in other zones. Mr. Lait agreed that the standard for RM zones required one parking space. Council Member DuBois requested the rationale for not requiring a parking space in zones other than CC(2), CS, and CN. Mr. Lait explained that the 1,500 square feet applied to the Downtown area, the California Avenue area, and CN and CS zones on El Camino. The term Citywide was, in actuality, specific to these zones. Council Member DuBois asked which zones were left once the Downtown area, California Avenue area, and CN and CS zones on El Camino were removed. Mr. Lait answered Middlefield, San Antonio, zoning that was not on El Camino, in California Avenue, or in Downtown. FINAL MINUTES Page 40 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois suggested the standard for RM zoning should be applied to those zones. Mr. Lait stated the proposed Ordinance did not affect those areas. The only true Citywide change contained in the proposed Ordinance pertained to the open space standard and the parking standard. Vice Mayor Fine preferred the 100 percent AMI and proposed the Motion include that the developer could apply for a waiver if the project was up to 100 percent AMI. Council Member DuBois noted the Motion applied just to the CS and CN zones along El Camino because the exemption was omitted from the proposed Ordinance. Council Member Cormack requested a location in the ground-floor and retail combining district. Mr. Lait advised that the GF would not apply on El Camino, but the R district might. GF applied to Downtown only. The retail preservation requirement should be protected in locations subject to retail preservation. Under the Motion, Staff would craft carve-out language for 100-percent affordable housing projects at or below 80-percent AMI to be exempt from the retail preservation requirement. MOTION: Council Member DuBois moved, seconded by Mayor Filseth to approve the following modifications to the Ordinance related to properties adjacent to El Camino Real in the CN and CS Zoning Districts: B. Exempt 100 percent affordable housing projects (120 percent AMI and below) from the retail preservation requirement, with an average not to exceed 80 percent of the area median income, except in the building manager’s unit. Council Member Cormack asked if the Motion would cause all three zoning districts to be consistent with the Council's action for the Wilton Court project. Mr. Lait would have to review the Downtown area to ensure the requirement was consistent with the El Camino and California Avenue areas. Council Member DuBois inquired whether the language of "except in the retail combining districts" could be deleted or moved. Mr. Lait recommended the language remain in the Motion because a few properties on El Camino were subject to the R district. FINAL MINUTES Page 41 of 42 City Council Meeting Final Minutes: 01/28/2019 Council Member DuBois suggested the phrase should follow "retail preservation requirement." Mr. Lait noted the Council previously adopted Citywide provisions for 120 percent AMI. The percentage was reduced to 80 for the California Avenue area. Mayor Filseth recalled that the Council changed the percentage for the RM district. Mr. Lait recommended the Council make the percentage 80 across all three areas. Council Member Cormack noted Downtown would be different with 120 percent. She inquired whether there was a policy reason for having a different percentage for Downtown. Mr. Lait encouraged the Council to implement the same standard across all areas. Council Member Cormack asked how the Council could accomplish that. Mayor Filseth indicated the Council could approve the Motion and offer a subsequent Motion for Downtown. Vice Mayor Fine proposed a compromise of 100 percent across all areas. Council Member Cormack would support the compromise. Council Member DuBois reiterated his wish to provide an incentive for 100- percent affordable housing with an average of 80 percent BMR that was tied to Federal funding and credits. Council Member Cormack requested the circumstances under which the Council could change the percentage at some point in the future. Council Member Kniss reported the Council could always revise an Ordinance. Mr. Lait understood the Council was interested in affordable housing projects that qualified for the Federal income tax credit limit. Staff could work with the City Attorney's Office to draft language that tied the exemption to the Federal income tax credit so that any project that qualified for the credit could take advantage of the program. MOTION PASSED: 7-0 FINAL MINUTES Page 42 of 42 City Council Meeting Final Minutes: 01/28/2019 Mayor Filseth commented that the totality of the Council's actions was a significant step toward encouraging housing production. Housing supply and demand in the Region were extremely mismatched. The City of Palo Alto had limited job growth to the point that it was as low as 200 and 300 new jobs a year. The Housing Ordinance and the Accessory Dwelling Unit (ADU) Ordinance should create close to 300 housing units per year. Consequently, Palo Alto was approaching jobs/housing growth sustainability while the Region overall continued to add jobs faster than housing. There was no compelling evidence that some State and Regional measures under discussion would affect the jobs/housing balance. State/Federal Legislation Update/Action None. Council Member Questions, Comments and Announcements Council Member DuBois advised that he would not be present for the Council Retreat but would provide the City Clerk with his thoughts. Council Member Kou announced Racing Hearts would hold its 2019 5K and 10K on March 24. Adjournment: The meeting was adjourned at 11:10 P.M. City of Palo Alto (ID # 10067) City Council Staff Report Report Type: Action Items Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: 3200 El Camino Real: Parmani Hotel Title: PUBLIC HEARING / QUASI-JUDICIAL. 3200 El Camino Real [17PLN- 00156]: Consideration of an Applicant’s Request to Adopt an Ordinance Amending the Setback Map to Eliminate the 50-Foot Special Setback for the Subject Property Adjacent to Hansen Way and Consideration of a Request for Approval of an Architectural Review Board Application Allowing the Demolition of the Existing Building and Construction of a new 99-Guestroom Hotel Development. The Request Also Includes a Reduction in Parking to be Off-set by Valet Parking. Environmental Assessment: An Initial Study/Mitigated Negative Declaration was Circulated for Public Comment From December 4, 2018 to January 3, 2019. The Planning and Transportation Commission Recommended Adoption of the Applicant’s Proposed Map Amendment on December 12, 2018. Zoning District: Service Commercial (CS) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that Council take the following actions: 1. Adopt the attached Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program as set forth in the Record of Land Use Action (Attachment C). 2. Introduce an Ordinance amending the Setback Map to eliminate the special setback for the subject property (Attachment B) including recommended restrictions made by the Planning & Transportation Commission. 3. Adopt the Record of Land Use Action approving the Architectural Review, based on findings and subject to conditions of approval as recommended by the Architectural Review Board. City of Palo Alto Page 2 Executive Summary The 26,878 square foot subject property is located at the southwest corner of Hansen Way and El Camino Real, within the Commercial Service (CS) zoning district (See Attachment A). The property is 100 feet wide along El Camino Real and 276 feet long along Hansen Way. A 50-foot special setback exists along Hansen Way. There is an existing, low scale motel on the site that currently intrudes 25 feet into the 50-foot special setback. The 50-foot special setback extends the full length of the property adjacent to Hansen Way and along all the other properties fronting Hansen Way; it dates from the establishment of the Stanford Research Park and its annexation to the City. The property immediately adjacent to the subject site includes buildings that intrude into the special setback by about 14 feet. Retention of the 50-foot setback would leave only half the property available to be built on (as shown below) making new development unlikely. The applicant proposes a Setback Map amendment to eliminate the 50-foot special setback for this property along Hansen Way. If the Setback Map amendment is granted, then the site would apply the underlying zoning street side setback requirement of zero feet, although the building would be setback 19 feet from the curb given the extra wide right-of-way in this area. Elimination of the special setback would allow for the requested demolition of the two-story motel building and development of a new four-story 99 room hotel with a two-level basement garage. The project also seeks a 20% reduction in the required parking. As part of a Transportation Demand Management (TDM) Plan, the hotel would operate valet parking. The project also includes the removal of the “pork chop” at the El Camino Real and Hansen Way intersection that permits free right turns from El Camino Real to Hansen Way. The removal of this feature is anticipated to improve pedestrian and cyclist movement. The report includes draft findings for consideration of the Setback Map amendment1 and architectural review requests. Both the Planning & Transportation Commission and Architectural Review Board recommend approval of the project’s requests. The project also includes an Initial Study / Mitigated Negative Declaration for consideration (See Attachment E). Background: The project received the following prior reviews by the City Council, Planning & Transportation Commission and Architectural Review Board: City Council: April 4, 2016 (Pre-screening): http://www.cityofpaloalto.org/civicax/filebank/documents/51665 May 1, 2017 (Pre-screening): 1 The City’s Setback Map is established by Palo Alto Municipal Code section 20.08.020. Setback Map amendments are processed in the same manner as Zoning Map amendments under Palo Alto Municipal Code Chapter 18.80. City of Palo Alto Page 3 http://www.cityofpaloalto.org/civicax/filebank/documents/57247 May 1, 2017 (Video) http://midpenmedia.org/city-council-126/ PTC: December 12, 2018: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=68092 video: http://midpenmedia.org/planning-transportation-commission-63- 12122018/ ) ARB: October 1, 2015 (Preliminary): https://www.cityofpaloalto.org/civicax/filebank/documents/49220 June 15, 2017 (Preliminary): https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=58266 October 4, 2018 (1st Formal): http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=66965 December 20, 2018 (2nd Formal): http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=68163 (video: http://midpenmedia.org/architectural-review-board-74-12202018/ ) City Council Prescreening The City Council concluded a prescreening review for a hotel development on the subject property on May 1, 2017 and provided Councilmember perspectives on the policy issue of eliminating the special setback (Setback Map Amendment) for the subject property. The discussion focused on whether the setback issue could be addressed with a Variance or the elimination of the setback in its entirety through an amendment. The Council concluded that the findings for a Variance were more difficult to make. The Council provided guidance that the special setback could be reviewed through an amendment process since the hotel was an allowable use for the site and there was no compelling reason to maintain the special setback for the property. The Council provided comment that the corner plaza area should be carefully designed, that a coffee shop or similar use be located near the corner and that the building elevations be stepped back. Planning & Transportation Commission (PTC) Review The PTC’s December 12th review was limited to the requested Setback Map amendment. In addition, there was discussion on how the elimination of the special setback and the “pork chop island” at the intersection may affect transportation issues such as cyclist safety and transportation network companies (TNC) (Uber, Lyft, etc.) service of the site. The majority of the PTC concluded that the removal of the “pork chop island” would have a positive effect on safety. There was concern that the elimination of the setback could allow for the development City of Palo Alto Page 4 of office use, when housing or hotel uses should be promoted. The PTC recommended approval of the project with the following conditions: 1) Restrict applicability of the special setback change to hotel or residential mixed-use development for the subject property; and 2) Project to comply with the context-based design criteria of the Zoning Code. Architectural Review Board After discussion regarding the project’s design, the ARB recommended approval of the project with conditions that the project return to the ARB Subcommittee to address the following: 1) Review colors to reduce glare; 2) Consider expansion of the podium deck at the second level; 3) Provide additional landscape buffer along El Camino Real sidewalk; 4) Provide additional detailing of the vertical architectural element; 5) Review the vertical height of the mechanical screening on the roof; and 6) Provide additional details on the exterior light fixtures The applicant has submitted information to be reviewed by the ARB Subcommittee, scheduled for March 21, 2019. Discussion The project includes demolition of an existing two-story motel and construction of a new four- story 53,598 square foot hotel (99 guestrooms) with surface parking and two levels of underground parking. To accommodate the development, the proposal includes elimination of the 50-foot special setback along Hansen Way (setback map/zoning amendment application). The project would have a Floor Area Ratio (FAR) of 1.99:1 and a site lot coverage of 39.8%. The project would include a plaza at the corner intersection of Hansen Way and El Camino Real that would feature outdoor seating and have access to a coffee shop. A minor entry into the hotel is located off the plaza and the primary entry is located along Hansen Way adjacent to the driveway onto the site. The four-story contemporary-designed hotel includes modulations along the Hansen Way elevation. At the ground level, a porte cochere provides for vehicular entry and drop off area leading to the lobby of the hotel. The upper floors include terraces or balconies along Hansen Way and El Camino Real. Proposed materials include stone cladding, stone veneer, painted stucco, vision and spandrel glass with aluminum frames and metal paneling. Figure 1: Corner Rendering of Project City of Palo Alto Page 5 Source: Architectural Dimensions, 2018 Parking & Access The project proposes to move the current driveway entry from El Camino Real to Hansen Way to reduce pedestrian and vehicular conflicts. The project also includes the removal of the “pork chop” at the El Camino Real and Hansen Way intersection that permits free right turns from El Camino Real to Hansen Way. This removal will facilitate improved pedestrian and cyclist movement in the area. Implementation of this improvement will require coordination between the applicant, the City, and the State Department of Transportation (CalTrans), which controls the El Camino Real right-of- way. Figure 2 shows the pork chop existing condition and the proposed condition with the sidewalk being extended over the free-right turning lane. The project includes two surface parking spaces, a load space and a ramp that would lead to Figure 2: Depiction of Pork-Chop City of Palo Alto Page 6 two levels of underground parking with standard parking spaces. According to PAMC Section 18.52, the hotel and restaurant(s) would require 103 automobile spaces; the plans indicate 82 proposed automobile spaces (20% reduction) which would be increased by 24 spaces with the use valet parking in the aisle ways. The project then effectively proposes 106 parking spaces with valet service. Per PAMC Section 18.52.050, the decision-making authority may approve a 20% reduction in parking if effective alternatives are proposed. To qualify, this project submitted a TDM Plan that includes valet parking and a 30% reduction in peak hour vehicle trips, as required by the Comprehensive Plan Program T-1.2.3. This TDM Plan will be monitored by the Office of Transportation on an annual basis (PAMC 18.52.050 (d)). A concern by the PTC was that transportation network company (TNC, i.e. Lyft/Uber) operators would stop along El Camino Real causing traffic disruption. The frontage along El Camino Real can be posted as no parking/stopping. The property owner has also indicated they will work with the TNC operators to encourage drop-offs and pick-ups occur under the porte-cochere in front of the lobby, though in practice, it is uncertain the affect this will have on TNC operations. Figure 3: Rendering Along El Camino Real to Hansen Way Intersection Source: Architectural Dimensions, 2018 Special Setback The special setback restricts future development on the property since it encompasses half of the 100-foot wide property along Hansen Way. The elimination of the setback allows the City of Palo Alto Page 7 implementation of the project. Figure 2: Exhibit Showing Special Setback in Relation to Proposal Source: Architectural Dimensions, 2018 Setback Map/Zoning Amendment To implement the development proposal, the special setback needs to be addressed. The project was the subject of two City Council Pre-Screening meetings. Without making any decisions as to the project, in terms of process, the Council found the setback map amendment approach more appropriate as opposed to a variance application. Eliminating the special setback results in a zero-foot setback along Hansen, though there is an existing five-foot monolithic sidewalk that will be replaced with a five-foot sidewalk with a 5 foot planter strip to create a buffer to the roadway. The distance between the building and sidewalk is 10 feet. The total distance between the building and curb is 19 feet: 5 foot planter strip, 5 foot sidewalk, and 9 foot landscape area adjacent to the building. At the PTC meeting, the Commission had concerns that the elimination of the setback would lead to potential development of the site for uses other than a hotel. After further discussion, the PTC concluded through their recommendation that the setback change could occur if the future uses were limited to hotel or mixed-use with residential. A solely commercial use would not be acceptable on the site, since that could contain an office use. The PTC wanted to emphasize residential mixed-use or a hotel use for the site in the future. Corner Plaza At the Pre-Screening hearing, the City Council encouraged the development to include an enhanced corner plaza with a cafe to activate the streetscape. The elimination of the “pork chop” that allows free right turns provides enhanced safety for pedestrians and bicyclist as well as provides the area as an extension to the proposed plaza at the corner. The project includes a small-scale pedestrian oriented coffee shop. These components activate the corner plaza area. City of Palo Alto Page 8 Figure 4: Detail of Corner Plaza Source: Architectural Dimensions, 2018 Resource Impact The proposed project would generate transient occupancy tax (TOT) which would accrue to the City’s general fund and could support planned infrastructure projects. The applicant has projected that the project would generate an additional $1 million in TOT after the third year when compared to TOT collections from this property in 2018. Based on hotels of a similar category and size, staff believes the estimate is reasonable during normal, non-recessionary economic times and the current TOT rate of 15.5%. In keeping with prior Council direction on the Infrastructure Plan, 3.5% of the TOT percentage could be dedicated to the plan. The Council could by policy or annual budget decision appropriate more towards infrastructure. Environmental Review The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the project requires the adoption of a Mitigated Negative Declaration and Mitigation, Monitoring and Reporting Program (Attachments C & E). The Initial Study / Mitigated Negative Declaration was circulated for public comment from December 4, 2018 to January 3, 2019. The Initial Study evaluated the entirety of the project, including the proposed code amendment and construction-related impacts, among others. The study identified mitigations necessary to reduce physical environmental impacts to less than significant for Air Quality, Biology, Cultural Resources, Geology, and Hazards. There are no impacts identified that specifically relate to the proposed project. The City received one comment letter from Caltrans where they commented on the removal of the “pork chop”, the implementation of a Transportation Demand Management (TDM) City of Palo Alto Page 9 program and clarification of the number of driveways. In response to Caltrans, the project’s traffic analysis determined that the improvement would significantly improve pedestrian and bicycle movement by removing the turning conflict. The improvements shown in the plans for the plaza within the Right-of-Way contain only flatwork and no furniture or structure would be located there. The project is subject to the implementation of a TDM program achieving a 30% reduction (Refer to Attachment E). Driveway widths for the project are reduced to enhance pedestrian safety. Attachments: Attachment A: Location Map (PDF) Attachment B: Draft Ordinance (DOCX) Attachment C: Draft Record of Land Use Action (DOCX) Attachment D: Zoning Comparison Table (DOCX) Attachment E: Project Plans & CEQA (DOCX) 50 50 RM- 637 CS CS CS RP 611 52 3225 3239 3255 3295 455 3305 3337 3339 592 572582 3150 3170 3200 3300 607 60 550 447 3 429 451 441 431 3159 411 435 3250425 435 3200 455 460 3201 450 430 400 3263251 0 3802862450456 470 71 299929512905 461 3000 30173001 3128 3127 850 700 600 3398 3111 473 3225 440 620 630 429 660 3215 3275 3327 3399 3333 3201 3051 3101 3160 3260 2 3265 LAMBERT AVENUE EL CAMINO REAL HANSEN WAY EL CAMINO REAL HANSEN WAY WAY ACACIA AVENUE PORTAGE AVENUE OLIVE APE EL CAMINO REAL LCAMINO REAL EL CAMINO REAL EL CAMINO REAL This map is a product of the City of Palo Alto GIS Legend Special Setback Frontages Zone Districts abc Zone District Labels 3200 El Camino Real (Project Site) 0'200' 3200 El Camino RealArea MapwithZoning Districts CITY O F PALO A L TO IN C O R P O RATE D C ALIFOR N IA P a l o A l t oT h e C i t y o f A P RIL 16 1894 This document is a graphic representation only of best available sources. The City of Palo Alto assumes no responsibility for any errors ©1989 to 2018 City of Palo Alto Page 1 of 5 Ordinance No.___ Ordinance of the Council of the City of Palo Alto Amending the Setback Map of the City of Palo Alto to Eliminate the 50-Foot Special Setback Along Hansen Way for 3200 El Camino Real. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. The City Council finds as follows: (A) The Planning and Transportation Commission ("Commission"), after a duly noticed public hearing on December 12, 2018, has recommended that the City Council of the City of Palo Alto ("Council") eliminate the 50-foot special setback along Hansen Way for the subject site (3200 El Camino Real, Exhibit 1 and 2). (B) The Planning and Transportation Commission has reviewed the facts presented at the public hearing, including public testimony and reports and recommendations from the director of planning and community environment or other appropriate city staff. (C) The Planning and Transportation Commission finds that the subject site is within the CS Service Commercial boundary. (D) The Planning and Transportation Commission finds that the elimination of the 50- foot special setback for the subject parcel is in accord with the Palo Alto Comprehensive Plan, in that the Comprehensive Plan designation of the site is CS Service Commercial and that the elimination of the special setback does not cause the site or its proposed development to be inconsistent with the Comprehensive Plan or South El Camino Real Design Guidelines. The project is consistent with the following Comprehensive Goals and Policies: • GOAL L-1: A compact and resilient city providing residents and visitors with attractive neighborhoods, work places, shopping districts, public facilities and open spaces. • Policy L-1.3: Infill development in the urban service area should be compatible with its surroundings and the overall scale and character of the city to ensure a compact, efficient development pattern. • 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. • Policy L-4.3: Encourage street frontages that contribute to retail vitality in all Centers. Reinforce street corners in a way that enhances the pedestrian realm or that form corner plazas. Include trees and landscaping. • Policy L-4.6: Sites within or adjacent to existing commercial areas and corridors are suitable for hotels. Give preference to housing versus hotel use on sites adjacent to predominantly single-family neighborhoods. Page 2 of 5 • Policy L-4.15: Recognize El Camino Real as both a local serving and regional serving corridor, defined by a mix of commercial uses and housing. (E) The Council held a duly noticed public hearing on the matter on April 1, 2019, and has reviewed the Mitigated Negative Declaration prepared for the project and all other relevant information, including staff reports, and all testimony, written and oral, presented on the matter. SECTION 2. The Council finds that the public interest, health and welfare require an amendment to the Setback Map of the City of Palo Alto (PAMC section 20.08.020) as set forth in Section 3. SECTION 3. The Council hereby amends the Setback Map of the City of Palo Alto (PAMC section 20.08.020) to eliminate the 50-foot Special Setback for the subject site (3200 El Camino Real) (Exhibit 1) for Mixed-Use and Hotel uses. The 50-foot Special Setback shall remain for all other land uses. SECTION 4. To the extent permitted by law, the applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the '"indemnified parties) against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack. set aside or void, any pern1it or approval authorized hereby for the Project. including (without limitation) reimbursing the City its actual attorney’s fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. SECTION 5. The Council hereby finds that this setback map amendment is subject to environmental review under the provisions of the California Environmental Quality Act (CEQA). An environmental assessment and mitigated negative declaration was prepared for the project and it has been determined that all potentially adverse impacts that would result from the setback map amendment can be mitigated to a level of insignificance; therefore, the project would have no significant impact on the environment. SECTION 6. This ordinance shall be effective upon the thirty-first (31st) day after its passage and adoption. INTRODUCED: PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST: APPROVED: ______________________________ __________________________ Page 3 of 5 City Clerk Mayor APPROVED AS TO FORM: __________________________ City Manager _______________________________ Deputy City Attorney ___________________________ Director of Planning and Community Environment Page 4 of 5 Exhibit 1 – Legal Description and Map BEGINNING at a point in the Southwesterly line of the San Jose and San Francisco Road (California State Highway) as said road was established by Final Order of Condemnation had in the Superior Court of the State of California in and in for the County of Santa Clara, Case No. 39384, dated and recorded July 1930, in Book 520 of Official Records, at Page 571, Santa Clara County Records; said point of beginning being distant thereon South 56° 55’ East, 1209.49 feet from the point of intersection of the southeasterly line of Page Mill Road with the Southwesterly line of the said San Jose and San Francisco Road; thence running along the Southwesterly line of that certain 2 acre tract of land described in the decree of distribution entered on August 27, 1920 in the “Matter of the Estate of Margaret Crowley, Deceased”, Case No. 11452, a certified copy of which decree was filed for record on August 27, 1920 in Book 506 of Deeds, at Page 509, Santa Clara County Records; thence at right angles and along the Southeasterly line of said 2 acre Tract, south 33° 5’ West, 296 feet to the Southernmost corner thereof; thence at right angles Northwesterly and along the Southwesterly line of said 2 acre tract North 56° 55’ West, 100 feet; thence at right angle Northeasterly and parallel with the southeasterly line of said 2 acre tract North 33° 5’ East, 296 feet to the point of beginning. EXCEPTING THEREFROM that portion granted to the State of California by Deed recorded October 27, 1960, in Book 5963, Page 194, Official Records, described as follows: COMMENCING at the most Northerly corner of the Parcel of Land conveyed to William W. Milner, et ux, by Deed recorded June 7, 1957, in Book 3816 Page 106, Official Records of Santa Clara County; thence along the Northwesterly line of said Parcel south 34° 21’17” West, 20.00 feet; thence 55° 38’43” East, 26.28 feet; thence along a tangent curve to the right with a radius of 104.00 feet, through a central angle of 30° 07’58”, an arc distance of 54.70 feet to a point of compound; thence from a tangent that bears South 25° 30’45” East, along a curve to the right with a radius of 67.00 feet through an angle of 25° 15’54”, an arc distance of 29.54 feet to the southeasterly line of said parcel; thence along last said line North 34° 21’17” East, 53.95 feet to the Northeasterly corner of said property described in said Deed recorded June 7, 1957, in Book 3816, Page 106, Official Records, thence 56° 55’ West, 100.00 feet to the point of commencement. Page 5 of 5 Exhibit 2 – Location Map P a g e | 1 of 34 APPROVAL NO. 2019-____ RECORD OF THE COUNCIL OF THE CITY OF PALO ALTO LAND USE APPROVAL FOR 3200 EL CAMINO REAL: ARCHITECTURAL REVIEW (18PLN-00045) WITH MITIGATED NEGATIVE DECLARATION AND MITIGATION, MONITORING AND REPORTING PROGRAM On April 1, 2019, the Council held a duly noticed public hearing and, after considering all of the evidence presented, approved the Architectural Review application to allow the demolition of an existing two-story motel and the construction of a four-story hotel (99-rooms) with two levels of underground parking. In approving the application, the Council make the following findings, determination and declarations: SECTION 1. Background. A. The project includes a Zoning Amendment to eliminate the 50-foot special setback along Hansen Way; the demolition of an existing two-story motel and the construction of a four-story hotel (99 rooms) with two levels of underground parking, (“The Project”). B. The Project was submitted on February 2, 2018 by Yatin Patel on behalf of Prabhu Corporation and was reviewed by staff for consistency with the City’s Comprehensive Plan, Municipal Code and other relevant policy documents. On October 4, 2018, the Architectural Review Board reviewed the project and provided comments to the applicant. The Planning and Transportation Commission reviewed the project on December 12, 2018 and recommended approval of the Zoning Amendment and the Architectural Review Board reviewed the project for a second time on December 20, 2018 and recommended approval of the Architectural Review. C. On April 1, 2019, the City Council held a duly noticed public hearing, at which evidence was presented and all person were afforded an opportunity to be heard in accordance with the Palo Alto Municipal Code and the Council’s Policies and Procedures. SECTION 2. Environmental Review. On April 1, 2019, the City Council made Environmental determination, that the project requires the adoption of a Mitigated Negative Declaration and Mitigation, Monitoring and Reporting Program. The City as the lead agency for the Project has determined that the project is subject to environmental review under provisions of the California Environmental Quality Act (CEQA) under Guideline section 15070, Decision to Prepare a Negative or Mitigated Negative Declaration. An Initial Study/Mitigated Negative Declaration was prepared in December 2018 for the project and identified potential significant impacts with the implementation of the project. Those impacts can be reduced to a level of less than significant with the incorporation of mitigation measures. On the basis of the whole record before it, that there is no substantial evidence that the project will have significant effect on the environment and that the mitigated negative declaration reflects the lead agency’s independent judgment and analysis. The City of Palo Alto Planning & Community Environment Department is the custodian of these documents. The City Council hereby approves the Mitigated P a g e | 2 of 34 Negative Declaration and incorporates the Mitigation and Monitoring Report attached as Exhibit A into the Record of Land Use. SECTION 3. Exception to Parking Requirements. An exception to the parking requirements of Chapter 18.83 is granted, effective April 1, 2019 and subject to the conditions of approval in Section 7 of this Record, for a 20% reduction in the required number of parking spaces, pursuant to PAMC 18.52.050, Table 4, for parking alternatives, the project provides valet parking that would bring the amount of parking to the site in excess of what is required. SECTION 4. Architectural Review Findings. 1. The design is consistent with applicable provisions of the Palo Alto Comprehensive Plan, Zoning Code, coordinated area plans (including compatibility requirements), and any relevant design guides. The project is consistent with the following Comprehensive Plan Goals and Policies: Comprehensive Plan Goal/Policies Consistency Analysis Service Commercial: Facilities providing citywide and regional services and relying on customers arriving by car. These uses do not necessarily benefit from being in high volume pedestrian areas such as shopping centers or Downtown. Typical uses include auto services and dealerships, motels, lumberyards, appliance stores and restaurants, including fast service types. In almost all cases, these uses require good automobile and service access so that customers can safely load and unload without impeding traffic. In some locations, residential and mixed-use projects may be appropriate in this land use category. Examples of Service Commercial areas include San Antonio Road, El Camino Real and Embarcadero Road northeast of the Bayshore Freeway. Non-residential FARs will range up to 0.4. Consistent with the Comprehensive Plan’s encouragement of housing near transit centers, higher density multi-family housing may be allowed in specific locations. The project proposes a new hotel along El Camino Real. A hotel is consistent with the Service Commercial land use designation description. Policy L-1.3: Infill development in the urban service area should be compatible with its surroundings and the overall scale and character of the city to ensure a compact, efficient development pattern. The project site is surrounded by development and is accessible by all utilities. P a g e | 3 of 34 Policy L-2.2: Enhance connections between commercial and mixed-use centers and the surrounding residential neighborhoods by promoting walkable and bikeable connections and a diverse range of retail and services that caters to the daily needs of residents The project implements the South El Camino Real Design guidelines by providing a wide sidewalk along El Camino Real and enhancing an existing bicycle lane along Hansen Way. In addition, a “pork-chop” island is removed at the intersection to help with pedestrian/ bicyclist safety. A coffee shop is proposed with access along El Camino Real spurring pedestrian activity. Policy L-3.1: Ensure that new or remodeled structures are compatible with the neighborhood and adjacent structures. The project’s design will include elevations with visual interest including landscaped balconies and terraces. Policy L-4.15: Recognize El Camino Real as both a local serving and regional serving corridor, defined by a mix of commercial uses and housing. The project replaces an existing motel with a hotel and adds a coffee shop. Policy T-5.1: All new development projects should manage parking demand generated by the project, without the use of on street parking, consistent with the established parking regulations. As demonstrated parking demand decreases over time, parking requirements for new construction should decrease. The project includes valet parking to create efficient use of the site and the demands of transient customers. The project’s parking study demonstrates that hotel parking demand is lower than 100% of the City’s zoning requirements. Policy T-5.6: Strongly encourage the use of below- grade or structured parking and explore mechanized parking instead of surface parking for new developments of all types while minimizing negative impacts including on groundwater and landscaping where feasible. The project includes two levels of underground parking so that the site is not overwhelmed with surface or structured parking. Policy B-6.5 Strengthen the commercial viability of businesses along the El Camino Real corridor by, for example, encouraging the development of well- designed retail, professional services and housing The hotel project includes a small coffee shop that will attract local users. The project is consistent with the City’s zoning codes, except where an exception is requested for the reduction in parking pursuant to the requirements of the zoning code. The South El Camino Real Design Guidelines are applicable to the project and is located within the Cal- Ventura Corridor Area. The project is consistent or inconsistent with the following Guidelines: P a g e | 4 of 34 Guideline Consistency 3.1.1 Effective Sidewalk Width: Create a 12-foot effective sidewalk width along El Camino Real The project proposes a 12-foot effective sidewalk width. 3.1.2 Sidewalk Setback Design: The design of the sidewalk setback should create an urban “downtown” character. The project includes a plaza at the corner for an outdoor amenity area with direct access to a coffee shop. 3.1.3 Build to lines: Buildings should be built up to the sidewalk to reinforce the definition and importance of the street. The project provides 63% build to the setback along El Camino Real and a 52% build to setback along Hansen Way. 3.1.5 Minimum Height: Buildings should have a minimum height of 25 feet in order to provide presence along El Camino Real. The project is 46’-2” feet in height to the parapets. 3.3.1 Usable Amenities: Landscape and hardscape features should not just be visually appealing, but also function as open space amenities to be used and enjoyed. The project includes outdoor seating areas along El Camino Real and within the plaza area at the corner of El Camino Real and Hansen Way with direct access to a coffee shop. 4.1.8 Expression of Use: Building forms should be articulated as an expression of the building use. The project has been revised to add balconies and terraces along the elevations. 4.2.1 Relationship of Entries to the Street: Buildings should have entries directly accessible and visible from El Camino Real. The coffee shop has an entry along El Camino Real and the hotel has an entry off of Hansen Way. Secondary entries are also located along Hansen Way and El Camino Real. 4.3.6 Design Consistency on All Facades: All exposed sides of a building should be designed with the same level of care and integrity. All four sides of the building use the same variety of materials and level of detail. They are also articulated for visual interest and to reduce massing. 4.4.1 Amenities: Building design should offer amenities to users and the public such as protection from the elements and places for people to gather or retreat. The project provides public and private gathering areas including direct access to a coffee shop. 4.5.1 Flat Roofs and Parapets Encouraged. Flat roofs with parapets are strongly encouraged. The proposed building has a flat roof with parapet design. 4.8.1 Mix of Materials: Juxtaposition of contrasting materials can create interest when carefully integrated. This project includes stucco, glass, and metal in a composed design. P a g e | 5 of 34 2. The project has a unified and coherent design, that: a. creates an internal sense of order and desirable environment for occupants, visitors, and the general community, b. preserves, respects and integrates existing natural features that contribute positively to the site and the historic character including historic resources of the area when relevant, c. is consistent with the context-based design criteria of the applicable zone district, d. provides harmonious transitions in scale, mass and character to adjacent land uses and land use designations, e. enhances living conditions on the site (if it includes residential uses) and in adjacent residential areas. The project includes a single vehicular entry along Hansen Way and pedestrian entries along El Camino Real and Hansen Way. Parking is located below grade so not to overwhelm the site with surface or structured parking. The site is currently fully developed and is completely flat. The project provides adequate setback and elevation modulation that provides harmonious transition in scale, mass and character to adjacent land uses. The project is consistent with the context-based design criteria: 1. Pedestrian and Bicycle Environment The design of new projects shall promote pedestrian walkability, a bicycle friendly environment, and connectivity through design elements The project has a 12-foot sidewalk along El Camino Real; is eliminating the “pork-chop” island at the intersection and is enhancing the bicycle lane along Hansen Way. 2. Street Building Facades Street facades shall be designed to provide a strong relationship with the sidewalk and the street (s), to create an environment that supports and encourages pedestrian activity through design elements The project includes build-to setbacks, outdoor benches and an outdoor plaza area providing an attractive space for pedestrian activity. 3. Massing and Setbacks Buildings shall be designed to minimize massing and conform to proper setbacks The project meets the required setbacks and is consistent with the South El Camino Real Design guidelines. The elevations include uniform fenestration and balconies to provide visual interest. P a g e | 6 of 34 4. Low Density Residential Transitions Where new projects are built abutting existing lower scale residential development, care shall be taken to respect the scale and privacy of neighboring properties The project does not abut lower scale residential development. 5. Project Open Space Private and public open space shall be provided so that it is usable for the residents and visitors of the site The project includes an outdoor plaza at the street intersection that is open to visitors and customers of the hotel. 6. Parking Design Parking shall be accommodated but shall not be allowed to overwhelm the character of the project or detract from the pedestrian environment Parking for the project is located underground. 7. Large Multi-Acre Sites Large sites (over one acre) shall be designed so that street, block, and building patterns are consistent with those of the surrounding neighborhood The site is less than an acre in size. 8. Sustainability and Green Building Design Project design and materials to achieve sustainability and green building design should be incorporated into the project The project will be consistent with the City’s Green Building Ordinance, as further described in Finding #6. 3. The design is of high aesthetic quality, using high quality, integrated materials and appropriate construction techniques, and incorporating textures, colors, and other details that are compatible with and enhance the surrounding area. The project uses a variety of materials including glass, metal and stucco with neutral colors. Together these materials used on the building embody a consistent theme. The applicability of the materials combined with the structures mass creates a distinctive pedestrian-oriented plaza area and interface with El Camino Real and Hansen Way. The use of materials and color and form for the first-floor grounds the building and contributes to the prescribed streetscape identified in the South El Camino Real Design Guidelines. The introduction of stepped-back elevations including balconies and landscaped terraces soften the upper floors. The use of the metal screening and glass at the corner P a g e | 7 of 34 provides a focal point for the building. 4. The design is functional, allowing for ease and safety of pedestrian and bicycle traffic and providing for elements that support the building’s necessary operations (e.g. convenient vehicle access to property and utilities, appropriate arrangement and amount of open space and integrated signage, if applicable, etc.). The project includes a design that facilitates pedestrian activity along the street with a proposed outdoor plaza at the corner intersection. The removal of the pork chop will make the intersection safer for pedestrians and cyclists. 5. The landscape design complements and enhances the building design and its surroundings, is appropriate to the site’s functions, and utilizes to the extent practical, regional indigenous drought resistant plant material capable of providing desirable habitat that can be appropriately maintained. The project includes landscaping on the ground and within balconies along the elevations. Pots were added to the plaza area making the area more pedestrian-oriented. The palette used on the elevations provides relief from what would otherwise be solid stepped back surfaces. The plant palette includes more variety of native plantings. Attention to the north side of the building with green screening complements the transition to the neighboring property. Together, the landscape plan complements the building and its surroundings. The existing redwood trees on the adjacent neighboring property will be protected during construction activities. 6. The project incorporates design principles that achieve sustainability in areas related to energy efficiency, water conservation, building materials, landscaping, and site planning. The project will be consistent with the City’s Green Building Ordinance. The following electives are proposed by the project: • Hardscape alternatives and cool roof reduction • Steel framing • Elevators • 20% indoor water savings • Appliances and fixtures for commercial application • Restoration of areas disturbed by construction • Certified wood • Regional materials • Acoustical ceiling and wall panels • Lighting and thermal comfort controls (single and multi-occupant spaces) P a g e | 8 of 34 SECTION 5. Architectural Review Approval Granted. Architectural Review Approval is hereby granted for the Project by the [Director/City Council] pursuant to PAMC Section 18.77.070 of the Palo Alto Municipal Code, effective April 1, 2019 and subject to the conditions of approval in Section 7 of this Record. SECTION 6. Plan Approval. The plans submitted for Building Permit shall be in substantial conformance with those plans prepared by Architectural Dimensions titled Hotel Parmani 3200 El Camino Real Palo Alto California 94306, consisting of 49 pages, dated December 3, 2018, and received December 4, 2018, except as modified to incorporate the conditions of approval in Section 7. A copy of these plans is on file in the Department of Planning and Community Development. The conditions of approval in Section 7 shall be printed on the cover sheet of the plan set submitted with the Building Permit application. SECTION 7. Conditions of Approval. Department Planning & Community Development 1. CONFORMANCE WITH PLANS. Construction and development shall conform to the approved plans entitled, "Hotel Parmani 3200 El Camino Real, Palo Alto, California,” stamped as received by the City on November 14, 2018 on file with the Planning Department, 250 Hamilton Avenue, Palo Alto, California except as modified by these conditions of approval. 2. BUILDING PERMIT. Apply for a building permit and meet any and all conditions of the Planning, Fire, Public Works, and Building Departments. 3. BUILDING PERMIT PLAN SET. The Architectural Review (AR) approval letter including all Department conditions of approval for the project shall be printed on the plans submitted for building permit. 4. PROJECT MODIFICATIONS: All modifications to the approved project shall be submitted for review and approval prior to construction. If during the Building Permit review and construction phase, the project is modified by the applicant, it is the responsibility of the applicant to contact the Planning Division/project planner directly to obtain approval of the project modification. It is the applicant’s responsibility to highlight any proposed changes to the project and to bring it to the project planner’s attention. 5. PROJECT EXPIRATION. The project approval shall automatically expire after two years from the original date of approval, if within such two-year period, the proposed use of the site or the construction of buildings has not commenced pursuant to and in accordance with the provisions of the permit or approval. Application for a one-year extension of this entitlement may be made prior to the expiration. (PAMC 18.77.090(a)) P a g e | 9 of 34 6. INDEMNITY: To the extent permitted by law, the Applicant shall indemnify and hold harmless the City, its City Council, its officers, employees and agents (the “indemnified parties”) from and against any claim, action, or proceeding brought by a third party against the indemnified parties and the applicant to attack, set aside or void, any permit or approval authorized hereby for the Project, including (without limitation) reimbursing the City for its actual attorneys’ fees and costs incurred in defense of the litigation. The City may, in its sole discretion, elect to defend any such action with attorneys of its own choice. 7. DEVELOPMENT IMPACT FEES: Estimated Development Impact Fees in the amount of $1,070,791.11 plus the applicable public art fee, per PAMC 16.61.040, shall be paid prior to the issuance of the related building permit. 8. IMPACT FEE 90-DAY PROTEST PERIOD. California Government Code Section 66020 provides that a project applicant who desires to protest the fees, dedications, reservations, or other exactions imposed on a development project must initiate the protest at the time the development project is approved or conditionally approved or within ninety (90) days after the date that fees, dedications, reservations or exactions are imposed on the Project. Additionally, procedural requirements for protesting these development fees, dedications, reservations and exactions are set forth in Government Code Section 66020. IF YOU FAIL TO INITIATE A PROTEST WITHIN THE 90-DAY PERIOD OR FOLLOW THE PROTEST PROCEDURES DESCRIBED IN GOVERNMENT CODE SECTION 66020, YOU WILL BE BARRED FROM CHALLENGING THE VALIDITY OR REASONABLENESS OF THE FEES, DEDICATIONS, RESERVATIONS, AND EXACTIONS. If these requirements constitute fees, taxes, assessments, dedications, reservations, or other exactions as specified in Government Code Sections 66020(a) or 66021, this is to provide notification that, as of the date of this notice, the 90- day period has begun in which you may protest these requirements. This matter is subject to the California Code of Civil Procedures (CCP) Section 1094.5; the time by which judicial review must be sought is governed by CCP Section 1094.6. 9. The owner or designee shall implement the following to reduce exposure of future hotel guests and workers to vapor intrusion: • Install a vapor membrane system that envelops the below grade portion of the proposed building, including areas below and above the groundwater table. • Design and operation of the HVAC system to control air flows from sub-grade parking levels upward into occupied levels. • Ventilate the sub-grade parking level with a fan triggered by CO sensors. • Maintain a positive pressure in the hotel lodging space relative to the sub-grade parking levels. • Design and build elevator hoistways within the building to have air relief vents. • Conduct post-construction Indoor Air Monitoring, quarterly for a minimum of two years with potential to reduce frequency to semi-annually following the initial two years. 10. FINAL INSPECTION: A Planning Division Final inspection will be required to determine substantial compliance with the approved plans prior to the scheduling of a Building Division final. Any revisions during the building process must be approved by Planning, including but not limited to; P a g e | 10 of 34 materials, landscaping and hard surface locations. Contact your Project Planner, Sheldon S. Ah Sing at sahsing@m-group.us to schedule this inspection. Department of Development Services - Building Division 11. A site-specific soils report will be required to be submitted for the building construction permit. 12. The allowable area calculation for the proposed Hotel and Parking building shall comply with CBC 506.2.4 for mixed occupancy, multistory buildings. 13. The proposed restaurant and coffee shop will require Santa Clara County Health Department approval to be submitted to the Building Division prior to the Building Permit issuance. 14. The proposed hotel is required to comply with the accessibility requirements of CBC Chapter 11B for Transient Lodging Guest Rooms. 15. The review and approval of this project does not include any other items of construction other than those written in the ARB project review application included with the project plans and documents under this review. If the plans include items or elements of construction that are not included in the written description, it or they may not have been known to have been a part of the intended review and have not, unless otherwise specifically called out in the approval, been reviewed. Public Works Department - Engineering Division 16. STORM WATER TREATMENT: This project shall comply with the storm water regulations contained in provision C.3 of the NPDES municipal storm water discharge permit issued by the San Francisco Bay Regional Water Quality Control Board (and incorporated into Palo Alto Municipal Code Chapter 16.11). These regulations apply to land development projects that create or replace 10,000 square feet or more of impervious surface, and restaurants, retail gasoline outlets, auto service facilities, and uncovered parking lots that create and/or replace 5,000 square feet or more of impervious surface. In order to address the potential permanent impacts of the project on storm water quality, the applicant shall incorporate into the project a set of permanent site design measures, source controls, and treatment controls that serve to protect storm water quality, subject to the approval of the Public Works Department. The applicant shall identify, size, design and incorporate permanent storm water pollution prevention measures (preferably landscape-based treatment controls such as bioswales, filter strips, and permeable pavement rather than mechanical devices that require long-term maintenance) to treat the runoff from a “water quality storm” specified in PAMC Chapter 16.11 prior to discharge to the municipal storm drain system. Effective February 10, 2011, regulated projects, must contract with a qualified third-party reviewer during the planning review process to certify that the proposed permanent storm water pollution prevention measures comply with the requirements of Palo Alto Municipal Code Chapter 16.11. The certification form, 2 copies of approved storm water treatment plan, and a description of Maintenance Task and Schedule must be received by the City from the third-party reviewer prior to planning approval by the Public Works department. Within 45 days of the installation of the required storm water P a g e | 11 of 34 treatment measures and prior to the issuance of an occupancy permit for the building, third-party reviewer shall also submit to the City a certification for approval that the project’s permanent measures were constructed and installed in accordance to the approved permit drawings. • Provision C3 Form • Storm Water Treatment Design Certification • 3rd Party review response letter (stamped/signed) • http://www.scvurpppw2k.com/pdfs/1112/SCVURPPP_C.3_Data_Form_final_2012.pdf 17. STREET TREES: The applicant may be required to replace existing and/or add new street trees in the public right-of-way along the property’s frontage(s). Call the Public Works’ arborist at 650- 496- 5953 to arrange a site visit so he can determine what street tree work, if any, will be required for this project. The site plan submitted with the building permit plan set must show the street tree work that the arborist has determined, including the tree species, size, location, staking and irrigation requirements, or include a note that Public Works’ arborist has determined no street tree work is required. The plan must note that in order to do street tree work, the applicant must first obtain a Permit for Street Tree Work in the Public Right-of-Way from Public Works’ arborist (650- 496-5953). 18. GRADING PERMIT: Separate Excavation and Grading Permit will be required for grading activities on private property that fill, excavate, store or dispose of 100 cubic yards or more based on PAMC Section 16.28.060. Applicant shall prepare and submit an excavation and grading permit to Public Works separately from the building permit set. The permit application and instructions are available at the Development Center and on our website. This application must be submitted to Public Works when applying for a Building Permit. http://www.cityofpaloalto.org/gov/depts/pwd/forms_and_permits.asp 19. EXCAVATION: Plans shall clearly identify the deepest point of excavation including below grade basement slab with note and appropriate dimensions. 20. GRADING & DRAINAGE PLAN: The plan set must include a grading & drainage plan prepared by a licensed professional that includes existing and proposed spot elevations, earthwork volumes, finished floor elevations, area drain and bubbler locations, drainage flow arrows to demonstrate proper drainage of the site. Adjacent grades must slope away from the house a minimum of 2% or 5% for 10-feet per 2013 CBC section 1804.3. Downspouts and splashblocks should be shown on this plan, as well as any site drainage features such as swales, area drains, bubblers, etc. Grading that increases drainage onto, or blocks existing drainage from neighboring properties, will not be allowed. Public Works generally does not allow rainwater to be collected and discharged into the street gutter, but encourages the developer to keep rainwater onsite as much as feasible by directing runoff to landscaped and other pervious areas of the site. http://www.cityofpaloalto.org/civicax/filebank/documents/2717 21. GRADING: Project proposal includes an underground structure. A rough grading plan will need to be present in submittal. P a g e | 12 of 34 22. ADDITIONAL DRAINAGE: Garage drains shall have sand/oil separator indicated. Proposed trash enclosure shall be required to drain to sanitary sewer only. 23. BASEMENT DRAINAGE: Due to high groundwater throughout much of the City and Public Works prohibiting the pumping and discharging of groundwater, perforated pipe drainage systems at the exterior of the basement walls or under the slab are not allowed for this site. A drainage system is, however, required for all exterior basement-level spaces, such as lightwells, patios or stairwells. This system consists of a sump, a sump pump, a backflow preventer, and a closed pipe from the pump to a dissipation device onsite at least 10-feet from the property line and 3-feet from side an rear property lines, such as a bubbler box in a landscaped area, so that water can percolate into the soil and/or sheet flow across the site. Include these dimensions on the plan. The device must not allow stagnant water that could become mosquito habitat. Additionally, the plans must show that exterior basement-level spaces are at least 7-3/4” below any adjacent windowsills or doorsills to minimize the potential for flooding the basement. Public Works recommends a waterproofing consultant be retained to design and inspect the vapor barrier and waterproofing systems for the basement. 24. BASEMENT SHORING: Shoring Plans prepared by a licensed professional are required for the Basement Excavation and shall be submitted with the Grading and Excavation Permit. Shoring for the basement excavation, including tiebacks, must not extend onto adjacent private property or into the City right-of-way without having first obtained written permission from the private property owners and/or an encroachment permit from Public Works. 25. GEOTECHNICAL REPORT: Shall clearly identify the highest projected groundwater level to be encountered in the area of the proposed basement in the future will be ______ feet below existing grade. Provide the following note on the Final Grading Plans. “In my professional judgement, the highest projected groundwater level to be encountered in the area of the proposed basement in the future will be ______ feet below existing grade. As a result, the proposed drainage system for the basement retaining wall will not encounter and pump groundwater during the life of this wall.” 26. DEWATERING: Excavation may require dewatering during construction. Public Works only allows groundwater drawdown well dewatering. Open pit groundwater dewatering is not allowed. Dewatering is only allowed from April through October due to inadequate capacity in our storm drain system. The geotechnical report for this site must list the highest anticipated groundwater level. We recommend that a piezometer be installed in the soil boring. The contractor shall determine the depth to groundwater immediately prior to excavation by using a piezometer or by drilling and exploratory hole. Based on the determined groundwater depth and season the contractor may be required to dewater the site or stop all grading and excavation work. In addition Public Works may require that all groundwater be tested for contaminants prior to initial discharge and at intervals during dewatering. If testing is required, the contractor must retain an independent testing firm to test the discharge water for contaminants Public Works specifies and submit the results to Public Works. P a g e | 13 of 34 27. Public Works reviews and approves dewatering plans as part of a Grading Permit. The applicant can include a dewatering plan in the building permit plan set in order to obtain approval of the plan during the building permit review, but the contractor will still be required to obtain a Grading Permit prior to dewatering. Alternatively, the applicant must include the above dewatering requirements in a note on the site plan. Public Works has a sample dewatering plan sheet and dewatering guidelines available at the Development Center and on our website. http://www.cityofpaloalto.org/gov/depts/pwd/forms_and_permits.asp 28. WORK IN THE RIGHT-OF-WAY: The plans must clearly indicate any work that is proposed in the public right-of-way, such as sidewalk replacement, driveway approach, or utility laterals. The plans must include notes that the work must be done per City standards and that the contractor performing this work must first obtain a Street Work Permit from Public Works at the Development Center. If a new driveway is in a different location than the existing driveway, then the sidewalk associated with the new driveway must be replaced with a thickened (6” thick instead of the standard 4” thick) section. Additionally, curb cuts and driveway approaches for abandoned driveways must be replaced with new curb, gutter and planter strip. 29. Provide the following note on the Site Plan and adjacent to the work within the Public road right- of-way. “Any construction within the city’s public road right-of-way shall have an approved Permit for Construction in the Public Street prior to commencement of this work. THE PERFORMANCE OF THIS WORK IS NOT AUTHORIZED BY THE BUILDING PERMIT ISSUANCE BUT SHOWN ON THE BUILDING PERMIT FOR INFORMATION ONLY.” 30. Provide the following note on the Site Plan and Grading and Drainage Plan: “Contractor shall not stage, store, or stockpile any material or equipment within the public road right-of-way.” Construction phasing shall be coordinate to keep materials and equipment onsite. 31. SIDEWALK, CURB & GUTTER: As part of this project, the applicant is required to replace the existing sidewalks, curbs, gutters and driveway approaches in the public right-of-way along the frontage(s) of the property. The site plan submitted with the building permit plan set must show the extent of the replacement work. The plan must note that any work in the right-of-way must be done per Public Works’ standards by a licensed contractor who must first obtain a Street Work Permit from Public Works at the Development Center. 32. Any existing driveway to be abandoned shall be replaced with standard curb & gutter. This work must be included within a Permit for Construction in the Public Street from the Public Works Department. A note of this requirement shall be placed on the plans adjacent to the area on the Site Plan. 33. PAVEMENT: Hansen Way was resurfaced in 2015 this street is under a moratorium. Any cutting into the pavement will trigger additional pavement requirements. Add the following note to the Site Plan: “Applicant and contractor will be responsible for resurfacing portions of Hansen Way based the roadway surface condition after project completion and limits of trench work. At a minimum pavement resurfacing of the full width of the street along the project frontage may be required.” P a g e | 14 of 34 Plot and label the area to be resurfaced as hatched on the site plan. 34. IMPERVIOUS SURFACE AREA: The project will be creating or replacing 500 square feet or more of impervious surface. Accordingly, the applicant shall provide calculations of the existing and proposed impervious surface areas with the building permit application. The Impervious Area Worksheet for Land Developments form and instructions are available at the Development Center or on our website. 35. STORM WATER POLLUTION PREVENTION: The City's full-sized "Pollution Prevention - It's Part of the Plan" sheet must be included in the plan set. Copies are available from Public Works on our website http://www.cityofpaloalto.org/civicax/filebank/documents/2732 36. CALTRANS: Caltrans review and approval of this project is required. Caltrans right-of-way across El Camino Real extends from back-of-walk to back-of walk. The City has a maintenance agreement with Caltrans that requires the City to maintain the sidewalk and to issue Street Work Permits for work done on the sidewalks by private contractors. Caltrans has retained the right to review and permit new ingress/egress driveways off El Camino Real as well as the installation of Traffic Control devices as part of this project. 37. LOGISTICS PLAN: The contractor must submit a logistics plan to the Public Works Department prior to commencing work that addresses all impacts to the City’s right-of-way, including, but not limited to: pedestrian control, traffic control, truck routes, material deliveries, contractor’s parking, concrete pours, crane lifts, work hours, noise control, dust control, storm water pollution prevention, contractor’s contact, noticing of affected businesses, and schedule of work. Include a copy in resubmittal. Guidelines are attached below: http://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?BlobID=2719 38. STORMWATER MAINTENANCE AGREEMENT: The applicant shall designate a party to maintain the control measures for the life of the improvements and must enter into a maintenance agreement with the City to guarantee the ongoing maintenance of the permanent C.3 storm water discharge compliance measures. The maintenance agreement shall be executed prior to the first building occupancy sign-off. The City will inspect the treatment measures yearly and charge an inspection fee. There is a C.3 plan check fee that will be collected upon submittal for a grading or building permit. 39. SIDEWALK ENCROACHMENT: Add a note to the site plan that says, “The contractor using the city sidewalk to work on an adjacent private building must do so in a manner that is safe for pedestrians using the sidewalk. Pedestrian protection must be provided per the California Building Code requirements. If the height of construction is 8 feet or less, the contractor must place construction railings sufficient to direct pedestrians around construction areas. If the height of construction is more than 8 feet, the contractor must obtain an encroachment permit from Public Works at the Development Center in order to provide a barrier and covered walkway or to close the sidewalk.” P a g e | 15 of 34 40. PUBLIC ACCESS EASEMENT: The property owner shall provide a public access easement for the additional feet of sidewalk between the property line and back of walk and/or building edge on the El Camino Real frontage. Alternatively, the property owner may dedicate the space to the city. The easement or dedication shall be shown on the Tentative and Final maps, or if the applicant chooses not to subdivide the property, show the future easement on plans submitted for a building permit and note that the easement must be recorded prior to building permit final. Additional area behind the property line needed to create a 12-foot wide sidewalk along El Camino Real. Plot and label the Public Access Easement along El Camino Real that provides the 12-foot wide sidewalk. 41. It appears the applicant is proposing to maintain the significant landscaping and decorative paving proposed in the right-of-way. If that is the case, the applicant will be required to enter into a long term maintenance agreement. This agreement will need to be recorded against the property prior to Building or Grading permit issuance. If not, subsequent comments may apply regarding the proposed improvements in the right-of-way. 42. Existing traffic signal on El Camino Real should be shown on plans and shown as to be protected. 43. Existing City storm drainage structures should be shown on plans. Subsequent comments may apply if proposed improvements interfere with existing City storm drain utilities. Department of Community Services - Public Art Division 44. If the applicant chooses to pay to the public art fund in–lieu of commissioning art on site, the funds must be received prior to the issuance of a building permit. Department of Public Works - Water Pollution Prevention Division At the Building permit stage, the project shall demonstrate compliance with the following Municipal Code Sections: a. PAMC 16.09.170, Requirements for Construction; 16.09.040, Standards b. PAMC 16.09.055 Unpolluted Water. c. PAMC 16.09.175 (b) General prohibitions and practices d. PAMC 16.09.180(b)(9) Covered Parking e. PAMC 16.09.180(b)(14) Architectural Copper f. PAMC 16.09.180(b)(5) Condensate from HVAC g. PAMC 16.09.180(b)(6) Copper Piping h. 16.09.180(12) Mercury Switches i. PAMC 16.09.205(a) Cooling Systems, Pools, Spas, Fountains, Boilers and Heat Exchangers j. PAMC 16.09.165(h) Storm Drain Labeling k. Designated Food Service Establishment (FSE) Projects: i. Grease Control Device (GCD) Requirements, PAMC Section 16.09.075 & Cited Building/Plumbing Codes P a g e | 16 of 34 ii. Drainage Fixture Requirements, PAMC Section 16.09.075 & Cited Building/Plumbing Codes iii. Covered Dumpsters, Recycling and Tallow Bin Areas PAMC, 16.09.075(q)(2) iv. Large Item Cleaning Sink, PAMC 16.09.075(m)(2)(B) Department of Public Works - Garbage/Recycling Division 40. Ensure the interior of this facility complies with Municipal Code 5.20.108 (see attachment provided). Public area restrooms must have color-coded labeled compost service for paper towels and garbage service for any diaper changing stations. If the dining and coffee shop areas are self- service (no hotel wait staff) then waste stations must be available to patrons. The waste stations must have 3-sort color-coded labeled containers for garbage (black), recycling (blue) and compost (green). Kitchen area must have the appropriate number of 3-sort color-coded labeled waste stations for garbage, recycling and compost. The fitness area should have the appropriate waste containers, as needed (recycle for water bottles and compost for paper towels/tissues). Guest rooms must also have 3-sort color-coded labeled containers for garbage (black), recycling (blue) and compost (green). 41. Ensure the trash enclosure is large enough to accommodate at least 3 bins sized 3 or 4 cubic yards, plus room for customer access and maneuverability. See Enclosure Guidelines for bins dimensions. Department of Utilities - Electrical Division 42. Industrial and large commercial customers must allow sufficient lead-time for Electric Utility Engineering and Operations (typically 8-12 weeks after advance engineering fees have been paid) to design and construct the electric service requested. 43. A completed Utility Service Application and a full set of plans must be included with all applications involving electrical work. The Application must be included with the preliminary submittal. 44. The applicant shall submit a request to disconnect all existing utility services and/or meters including a signed affidavit of vacancy, on the form provided by the Building Inspection Division. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued after all utility services and/or meters have been disconnected and removed. 45. All utility meters, lines, transformers, backflow preventers, and any other required equipment shall be shown on the landscape and irrigation plans and shall show that no conflict will occur between the utilities and landscape materials. In addition, all aboveground equipment shall be screened in a manner that is consistent with the building design and setback requirements. 46. Contractors and developers shall obtain permit from the Department of Public Works before digging in the street right-of-way. This includes sidewalks, driveways and planter strips. P a g e | 17 of 34 47. At least 48 hours prior to starting any excavation, the customer must call Underground Service Alert (USA) at 1-800-227-2600 to have existing underground utilities located and marked. The areas to be checked for underground facility marking shall be delineated with white paint. All USA markings shall be removed by the customer or contractor when construction is complete. 48. The customer is responsible for installing all on-site substructures (conduits, boxes and pads) required for the electric service. No more than 270 degrees of bends are allowed in a secondary conduit run. All conduits must be sized according to California Electric Code requirements and no 1/2 – inch size conduits are permitted. All off-site substructure work will be constructed by the City at the customer’s expense. Where mutually agreed upon by the City and the Applicant, all or part of the off-site substructure work may be constructed by the Applicant. 49. All primary electric conduits shall be concrete encased with the top of the encasement at the depth of 30 inches. No more than 180 degrees of bends are allowed in a primary conduit run. Conduit runs over 500 feet in length require additional pull boxes. 50. All new underground conduits and substructures shall be installed per City standards and shall be inspected by the Electrical Underground Inspector before backfilling. 51. For services larger than 1600 amps, a transition cabinet as the interconnection point between the utility’s padmount transformer and the customer’s main switchgear may be required. See City of Palo Alto Utilities Standard Drawing SR-XF-E-1020. The cabinet design drawings must be submitted to the Electric Utility Engineering Division for review and approval. 52. For underground services, no more than four (4) 750 MCM conductors per phase can be connected to the transformer secondary terminals; otherwise, bus duct or x-flex cable must be used for connections to padmount transformers. If customer installs a bus duct directly between the transformer secondary terminals and the main switchgear, the installation of a transition cabinet will not be required. 53. The customer is responsible for installing all underground electric service conductors, bus duct, transition cabinets, and other required equipment. The installation shall meet the California Electric Code and the City Standards. 54. Meter and switchboard requirements shall be in accordance with Electric Utility Service Equipment Requirements Committee (EUSERC) drawings accepted by Utility and CPA standards for meter installations. 55. Shop/factory drawings for switchboards (400A and greater) and associated hardware must be submitted for review and approval prior to installing the switchgear to: Gopal Jagannath, P.E. Supervising Electric Project Engineer Utilities Engineering (Electrical) 1007 Elwell Court P a g e | 18 of 34 Palo Alto, CA 94303 56. For 400A switchboards only, catalog cut sheets may be substituted in place of factory drawings. 57. All new underground electric services shall be inspected and approved by both the Building Inspection Division and the Electrical Underground Inspector before energizing. 58. The customer shall provide as-built drawings showing the location of all switchboards, conduits (number and size), conductors (number and size), splice boxes, vaults and switch/transformer pads. 59. The follow must be completed before Utilities will make the connection to the utility system and energize the service: • All fees must be paid. • All required inspections have been completed and approved by both the Building Inspection Division and the Electrical Underground Inspector. • All Special Facilities contracts or other agreements need to be signed by the City and applicant. • Easement documents must be completed. Department of Utilities - WGW Division PRIOR TO ISSUANCE OF DEMOLITION PERMIT 60. Prior to demolition, the applicant shall submit the existing water/wastewater fixture unit loads (and building as-built plans to verify the existing loads) to determine the capacity fee credit for the existing load. If the applicant does not submit loads and plans they may not receive credit for the existing water/wastewater fixtures. 61. The applicant shall submit a request to disconnect all utility services and/or meters including a signed affidavit of vacancy. Utilities will be disconnected or removed within 10 working days after receipt of request. The demolition permit will be issued by the building inspection division after all utility services and/or meters have been disconnected and removed. FOR BUILDING PERMIT 62. The applicant shall submit a completed water-gas-wastewater service connection application - load sheet per parcel/lot for City of Palo Alto Utilities. The applicant must provide all the information requested for utility service demands (water in fixture units/g.p.m., gas in b.t.u.p.h, and sewer in fixture units/g.p.d.). The applicant shall provide the existing (prior) loads, the new loads, and the combined/total loads (the new loads plus any existing loads to remain). 63. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. Plans for new wastewater laterals and mains need to include new wastewater pipe profiles showing existing potentially conflicting utilities especially storm drain pipes, electric and communication duct banks. Existing duct banks need to P a g e | 19 of 34 be daylighted by potholing to the bottom of the ductbank to verify cross section prior to plan approval and starting lateral installation. Plans for new storm drain mains and laterals need to include profiles showing existing potential conflicts with sewer, water and gas. 64. The applicant shall submit improvement plans for utility construction. The plans must show the size and location of all underground utilities within the development and the public right of way including meters, backflow preventers, fire service requirements, sewer mains, sewer cleanouts, sewer lift stations and any other required utilities. 65. CPAU recommends the water, gas, and wastewater utilities connection shall be connected to mains on Hansen Way. 66. The applicant must show on the site plan the existence of any auxiliary water supply, (i.e. water well, gray water, recycled water, rain catchment, water storage tank, etc). 67. The applicant shall be responsible for installing and upgrading the existing utility mains and/or services as necessary to handle anticipated peak loads. This responsibility includes all costs associated with the design and construction for the installation/upgrade of the utility mains and/or services. 68. An approved reduced pressure principle assembly (RPPA backflow preventer device) is required for all existing and new water connections from Palo Alto Utilities to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive. The RPPA shall be installed on the owner's property and directly behind the water meter within 5 feet of the property line. RPPA’s for domestic service shall be lead free. Show the location of the RPPA on the plans. 69. An approved reduced pressure detector assembly is required for the existing or new water connection for the fire system to comply with requirements of California administrative code, title 17, sections 7583 through 7605 inclusive (a double detector assembly may be allowed for existing fire sprinkler systems upon the CPAU’s approval). reduced pressure detector assemblies shall be installed on the owner's property adjacent to the property line, within 5’ of the property line. Show the location of the reduced pressure detector assembly on the plans. 70. All backflow preventer devices shall be approved by the WGW engineering division. Inspection by the utilities cross connection inspector is required for the supply pipe between the meter and the assembly. 71. The applicant shall pay the capacity fees and connection fees associated with new utility service/s or added demand on existing services. The approved relocation of services, meters, 62. hydrants, or other facilities will be performed at the cost of the person/entity requesting the relocation. 72. Each unit or place of business shall have its own water and gas meter shown on the plans. Each parcel shall have its own water service, gas service and sewer lateral connection shown on the P a g e | 20 of 34 plans. 73. A new water service line installation for domestic usage is required. For service connections of 4- inch through 8-inch sizes, the applicant's contractor must provide and install a concrete vault with meter reading lid covers for water meter and other required control equipment in accordance with the utilities standard detail. Show the location of the new water service and meter on the plans. (water services should be connected to water main on Hensen Way) 74. A new water service line installation for fire system usage is required. Show the location of the new water service on the plans. The applicant shall provide to the engineering department a copy of the plans for fire system including all fire department's requirements. 75. A new gas service line installation is required. Show the new gas meter location on the plans. The gas meter location must conform to utilities standard details (above ground gas meter system is prefer). 76. A new sewer lateral installation per lot is required. Show the location of the new sewer lateral on the plans 77. The applicant shall secure a public utilities easement for facilities installed in private property. The applicant's engineer shall obtain, prepare, record with the county of Santa Clara, and provide the utilities engineering section with copies of the public utilities easement across the adjacent parcels as is necessary to serve the development. 78. Where public mains are installed in private streets/PUEs for business/condominium and town home projects the CC&Rs and final map shall include the statement: “Public Utility Easements: If the City’s reasonable use of the Public Utility Easements, which are shown as P.U.E on the Map, results in any damage to the private/Common Area, then it shall be the responsibility of the Business/Association, and not of the City, to Restore the affected portion(s) of the Private/Common Area. This Section may not be amended without the prior written consent of the City”. 79. All existing water and wastewater services that will not be reused shall be abandoned at the main per WGW utilities procedures (abandoned by CPAU). 80. Utility vaults, transformers, utility cabinets, concrete bases, or other structures cannot be placed over existing water, gas or wastewater mains/services. Maintain 1’ horizontal clear separation from the vault/cabinet/concrete base to existing utilities as found in the field. If there is a conflict with existing utilities, Cabinets/vaults/bases shall be relocated from the plan location as needed to meet field conditions. Trees may not be planted within 10 feet of existing water, gas or wastewater mains/services or meters. New water, gas or wastewater services/meters may not be installed within 10’ or existing trees. Maintain 10’ between new trees and new water, gas and wastewater services/mains/meters. P a g e | 21 of 34 81. To install new gas service by directional boring, the applicant is required to have a sewer cleanout at the front of the building. This cleanout is required so the sewer lateral can be videoed for verification of no damage after the gas service is installed by directional boring. 82. All utility installations shall be in accordance with the City of Palo Alto current utility standards for water, gas & wastewater. 83. The applicant shall obtain an encroachment permit from Caltrans for all utility work in the El Camino Real right-of-way. The applicant must provide a copy of the permit to the WGW engineering section. Department of Public Works - Urban Forestry Division PRIOR TO DEMOLITION, BUILDING OR GRADING PERMIT ISSUANCE 84. BUILDING PERMIT SUBMITTAL- PROJECT ARBORIST CERTIFICATION LETTER. Prior to submittal for staff review, attach a Project Arborist Certification Letter that he/she has; (a) reviewed the entire building permit plan set submittal and, (b)* verified all his/her updated TPR mitigation measures and changes are incorporated in the plan set, (c) affirm that ongoing Contractor/Project Arborist site monitoring inspections and reporting have been arranged with the contractor or owner (see Sheet T-1) and, (d) understands that design revisions (site or plan changes) within a TPZ will be routed to Project Arborist/Contractor for review prior to approval from City. * (b above) Other information. The Building Permit submittal set shall be accompanied by the project site arborist’s typed certification letter that the plans have incorporated said design changes for consistency with City Standards, Regulations and information: a. Applicant/project arborist’s final revised Tree Protection Report (TPR) with said design changes and corresponding mitigation measures. (e.g.: if Pier/grade beam=soils report w/ specs required by Bldg. Div.; if Standard foundation= mitigation for linear 24” cut to all roots in proximity) b. Palo Alto Tree Technical Manual Construction Standards, Section 2.00 and PAMC 8.10.080. c. Specialty items. Itemized list of any activity impact--quantified and mitigated, in the Tree Protection Zone (TPZ) for each tree. d. Oaks, if present. That landscape and irrigation plans are consistent with CPA Tree Technical Manual, Section 5.45 and Appendix L, Landscaping under Native Oaks and PAMC 18.40.130. 85. BUILDING PERMIT CORRECTIONS/REVISIONS--COVER LETTER. During plan check review, provide a separate cover letter with Correction List along with the revised drawings when resubmitting. State where the significant tree impacts notes occur (bubble) and indicate the sheet number and/or detail where the correction has been made. Provide: 1) corresponding revision number and 2) bubble or highlights for easy reference. Responses such as “see plans or report” or “plans comply” are not acceptable. Your response should be clear and complete to assist the re-check and approval process for your project. P a g e | 22 of 34 86. TREE APPRAISAL & SECURITY DEPOSIT AGREEMENT. (Reference: CPA Tree Technical Manual, Section 6.25). Prior to the issuance of a grading or building permit, the applicant shall prepare and secure a tree appraisal and security deposit agreement stipulating the duration and monitoring program. The appraisal of the condition and replacement value of all trees to remain shall recognize the location of each tree in the proposed development. Listed separately, the appraisal may be part of the Tree Survey Report. For the purposes of a security deposit agreement, the monetary market or replacement value shall be determined using the most recent version of the “Guide for Plan Appraisal”, in conjunction with the Species and Classification Guide for Northern California. The appraisal shall be performed at the applicant’s expense, and the appraiser shall be subject to the Director’s approval. a. SECURITY DEPOSIT AGREEMENT. Prior to grading or building permit issuance, the applicant shall post a security deposit for the 150% of the appraised replacement value of the Designated Trees: (ID numbers to be determined), to be retained and protected.. The total amount for this project is: $__To Be Determined with Urban Forestry staff. The security may be a cash deposit, letter of credit, or surety bond and shall be filed with the Revenue Collections/Finance Department or in a form satisfactory to the City Attorney. b. SECURITY DEPOSIT & MONITORING PROGRAM. The project sponsor shall provide to the City of Palo Alto an annual tree evaluation report prepared by the project arborist or other qualified certified arborist, assessing the condition and recommendations to correct potential tree decline for trees remain and trees planted as part of the mitigation program. The monitoring program shall end two years from date of final occupancy, unless extended due to tree mortality and replacement, in which case a new two-year monitoring program and annual evaluation report for the replacement tree shall begin. Prior to occupancy, a final report and assessment shall be submitted for City review and approval. The final report shall summarize the Tree Resources program, documenting tree or site changes to the approved plans, update status of tree health and recommend specific tree care maintenance practices for the property owner(s). The owner or project sponsor shall call for a final inspection by the Planning Division Arborist. c. SECURITY DEPOSIT DURATION. The security deposit duration period shall be two years (or five years if determined by the Director) from the date of final occupancy. Return of the security guarantee shall be subject to City approval of the final monitoring report. A tree shall be considered dead when the main leader has died back, 25% of the crown is dead or if major trunk or root damage is evident. A new tree of equal or greater appraised value shall be planted in the same area by the property owner. Landscape area and irrigation shall be readapted to provide optimum growing conditions for the replacement tree. The replacement tree that is planted shall be subject to a new two-year establishment and monitoring program. The project sponsor shall provide an annual tree evaluation report as originally required. 87. PLAN SET REQUIREMENTS. The final Plans submitted for building permit shall include P a g e | 23 of 34 a. SHEET T-1, BUILDING PERMIT. The building permit plan set will include the City’s full-sized, Sheet T-1 (Tree Protection-it's Part of the Plan!), available on the Development Center website at http://www.cityofpaloalto.org/civicax/filebank/documents/31783. The Applicant shall complete and sign the Tree Disclosure Statement and recognize the Project Arborist Tree Activity Inspection Schedule. Monthly reporting to Urban Forestry/Contractor is mandatory. (Insp. #1: applies to all projects; with tree preservation report: Insp. #2-6 applies; with landscape plan: Insp. #7 applies.) b. The Tree Preservation Report (TPR). All sheets of the Applicant’s TPR approved by the City for full implementation by Contractor, ArborResources, Inc., shall be printed on numbered Sheet T-1 (T-2, T-3, etc) and added to the sheet index. 88. PLANS--SHOW PROTECTIVE TREE FENCING. The Plan Set (esp. site, demolition, grading & drainage, foundation, irrigation, tree disposition, utility sheets, etc.) must delineate/show Type I or Type II fencing around each Regulated Trees, using a bold dashed line enclosing the Tree Protection Zone as shown on Standard Dwg. #605, Sheet T-1, and the City Tree Technical Manual, Section 6.35-Site Plans; or using the Project Arborist’s unique diagram for each Tree Protection Zone enclosure. 89. SITE PLAN REQUIREMENTS: Plans with Public Trees shall show (a) Type II street tree fencing enclosing the entire parkway strip or, (b) Type I protection to the outer branch dripline (for rolled curb & sidewalk or no-sidewalk situations.) c. Add Site Plan Notes. i. Note #1. Apply to the site plan stating, "All tree protection and inspection schedule measures, design recommendations, watering and construction scheduling shall be implemented in full by owner and contractor, as stated on Sheet T-1, in the Tree Protection Report and the approved plans”. ii. Note #2. All civil plans, grading plans, irrigation plans, site plans and utility plans and relevant sheets shall add a note applying to the trees to be protected, including neighboring trees stating: "Regulated Tree--before working in this area contact the Project Site Arborist at 650-654-3351 "; iii. Note #3. Utility (sanitary sewer/gas/water/backflow/electric/storm drain) plan sheets shall include the following note: “Utility trenching shall not occur within the TPZ of the protected tree. Contractor shall be responsible for ensuring that no trenching occurs within the TPZ of the protected tree by contractors, City crews or final landscape workers. See sheet T-1 for instructions.” iv. Note #4. “Basement or foundation plan. Soils Report and Excavation for basement construction within the TPZ of a protected tree shall specify a vertical cut (stitch piers may be necessary) in order to avoid over-excavating into the tree root zone. Any variance from this procedure requires Urban Forestry approval, please call (650) 496- 5953.” v. Note #5. “Pruning Restrictions. No pruning or clearance cutting of branches is permitted on City trees. Contractor shall obtain a Public Tree Permit from Urban Forestry (650-496-5953) for any work on Public Trees” P a g e | 24 of 34 90. TREE REMOVAL—PROTECTED & RIGHT-OF-WAY TREES. Existing trees (Publicly-owned or Protected) to be removed, as shown accurately located on all site plans, require approval by the Urban Forestry Tree Care Permit prior to issuance of any building, demolition or grading permit. Must also be referenced in the required Street Work Permit from Public Works Engineering. d. Add plan note for each tree to be removed, “Tree Removal. Contractor shall obtain a completed Urban Forestry Tree Care Permit # _____________ (contractor to complete) separate from the Building or Street Work Permit. Permit notice hanger and conditions apply. Contact (650-496-5953).” e. Copy the approval. The completed Tree Care Permit shall be printed on Sheet T-2, or specific approval communication from staff clearly copied directly on the relevant plan sheet. The same Form is used for public or private Protected tree removal requests available from the Urban Forestry webpage: http://www.cityofpaloalto.org/gov/depts/pwd/trees/default.asp 91. LANDSCAPE PLANS f. Include all changes recommended from civil engineer, architect and staff, including planting specifications if called for by the project arborist, g. Provide a detailed landscape and irrigation plan encompassing on-and off-site plantable areas out to the curb as approved by the Architectural Review Board. A Landscape Water Use statement, water use calculations and a statement of design intent shall be submitted for the project. A licensed landscape architect and qualified irrigation consultant will prepare these plans, to include: i. All existing trees identified both to be retained and removed including street trees. ii. Complete plant list indicating tree and plant species, quantity, size, and locations. iii. Irrigation schedule and plan. iv. Fence locations. v. Lighting plan with photometric data. vi. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. vii. All new trees planted within the public right-of-way shall be installed per Public Works (PW) Standard Planting Diagram #603 or 604 (include on plans), and shall have a tree pit dug at least twice the diameter of the root ball. viii. Landscape plan shall include planting preparation details for trees specifying digging the soil to at least 30-inches deep, backfilled with a quality topsoil and dressing with 2-inches of wood or bark mulch on top of the root ball keeping clear of the trunk by 1-inch. ix. Automatic irrigation shall be provided to all trees. For trees, Standard Dwg. #513 shall be included on the irrigation plans and show two bubbler heads mounted on flexible tubing placed at the edge of the root ball. Bubblers shall not be mounted inside an aeration tube. The tree irrigation system shall be connected to a separate valve from other shrubbery and ground cover, pursuant to the City's Landscape Water Efficiency Standards. Irrigation in the right-of-way requires a street work permit per CPA Public Works standards. P a g e | 25 of 34 x. Landscape Plan shall ensure the backflow device is adequately obscured with the appropriate screening to minimize visibility (planted shrubbery is preferred, painted dark green, decorative boulder covering acceptable; wire cages are discouraged). h. Add Planting notes to include the following mandatory criteria: i. Prior to any planting, all plantable areas shall be tilled to 12” depth, and all construction rubble and stones over 1” or larger shall be removed from the site. ii. Note a turf-free zone around trees 36” diameter (18” radius) for best tree performance. i. Add note for Mandatory Landscape Architect (LA) Inspections and Verification to the City. The LA of record shall verify the performance measurements are achieved with a separate letters of verification to City Planning staff, in addition to owner’s representative for each of the following: i. All the above landscape plan and tree requirements are in the Building Permit set of plans. ii. Percolation & drainage checks have been performed and are acceptable. iii. Fine grading inspection of all plantable areas has been personally inspected for tilling depth, rubble removal, soil test amendments are mixed and irrigation trenching will not cut through any tree roots. iv. Tree and Shrub Planting Specifications, including delivered stock, meets Standards in the CPA Tree Technical Manual, Section 3.30-3.50. Girdling roots and previously topped trees are subject to rejection. 92. TREE PROTECTION VERIFICATION. Prior to demolition, grading or building permit issuance, a written verification from the contractor that the required protective fencing is in place shall be submitted to the Building Inspections Division. The fencing shall contain required warning sign and remain in place until final inspection of the project. DURING CONSTRUCTION 93. EXCAVATION RESTRICTIONS APPLY (TTM, Sec. 2.20 C & D). Any approved grading, digging or trenching beneath a tree canopy shall be performed using ‘air-spade’ method as a preference, with manual hand shovel as a backup. For utility trenching, including sewer line, roots exposed with diameter of 1.5 inches and greater shall remain intact and not be damaged. If directional boring method is used to tunnel beneath roots, then Table 2-1, Trenching and Tunneling Distance, shall be printed on the final plans to be implemented by Contractor. 94. PLAN CHANGES. Revisions and/or changes to plans before or during construction shall be reviewed and responded to by the (a) project site arborist, ArborResources, (650-496-5953, or (b) landscape architect with written letter of acceptance before submitting the revision to the Building Department for review by Planning, PW or Urban Forestry. 95. CONDITIONS. All Planning Department conditions of approval for the project shall be printed on the plans submitted for building permit. P a g e | 26 of 34 96. TREE PROTECTION COMPLIANCE. The owner and contractor shall implement all protection and inspection schedule measures, design recommendations and construction scheduling as stated in the TPR & Sheet T-1, and is subject to code compliance action pursuant to PAMC 8.10.080. The required protective fencing shall remain in place until final landscaping and inspection of the project. Project arborist approval must be obtained and documented in the monthly activity report sent to the City. The mandatory Contractor and Arborist Monthly Tree Activity Report shall be sent monthly to the City (pwps@cityofpaloalto.org) beginning with the initial verification approval, using the template in the Tree Technical Manual, Addendum 11. 97. TREE DAMAGE. Tree Damage, Injury Mitigation and Inspections apply to Contractor. Reporting, injury mitigation measures and arborist inspection schedule (1-5) apply pursuant to TTM, Section 2.20-2.30. Contractor shall be responsible for the repair or replacement of any publicly owned or protected trees that are damaged during the course of construction, pursuant to Title 8 of the Palo Alto Municipal Code, and city Tree Technical Manual, Section 2.25. 98. GENERAL. The following general tree preservation measures apply to all trees to be retained: No storage of material, topsoil, vehicles or equipment shall be permitted within the tree enclosure area. The ground under and around the tree canopy area shall not be altered. Trees to be retained shall be irrigated, aerated and maintained as necessary to ensure survival. PRIOR TO OCCUPANCY 99. URBAN FORESTRY DIGITAL FILE & INSPECTION. The applicant or architect shall provide a digital file of the landscape plan, including new off-site trees in the publicly owned right-of-way. A USB Flash Drive, with CAD or other files that show species, size and exact scaled location of each tree on public property, shall be delivered to Urban Forestry at a tree and landscape inspection scheduled by Urban Forestry (650-496-5953). 100. LANDSCAPE CERTIFICATION LETTER. The Planning Department shall be in receipt of a verification letter that the Landscape Architect has inspected all trees, shrubs, planting and irrigation and that they are installed and functioning as specified in the approved plans. 101. PROJECT ARBORIST CERTIFICATION LETTER. Prior to written request for temporary or final occupancy, the contractor shall provide to the Planning Department and property owner a final inspection letter by the Project Arborist. The inspection shall evaluate the success or needs of Regulated tree protection, including new landscape trees, as indicated on the approved plans. The written acceptance of successful tree preservation shall include a photograph record and/or recommendations for the health, welfare, mitigation remedies for injuries (if any). The final report may be used to navigate any outstanding issues, concerns or security guarantee return process, when applicable. POST CONSTRUCTION 102. MAINTENANCE. All landscape and trees shall be maintained, watered, fertilized, and pruned according to Best Management Practices-Pruning (ANSI A300-2008 or current version) and the City P a g e | 27 of 34 Tree Technical Manual, Section 5.00. Any vegetation that dies shall be replaced or failed automatic irrigation repaired by the current property owner within 30 days of discovery. Department of Development Services - Green Building Division 103. Green Building Requirements for Non-Residential Projects. For design and construction of non-residential projects, the City requires compliance with the mandatory measures of Chapter 5, in addition to use of the Voluntary Tiers. (Ord. 5220 § 1 (part), 2013). The following are required for Building Approval: 104. The project is a new nonresidential construction project greater than 1,000 square feet and therefore must comply with California Green Building Standards Code Mandatory plus Tier 2 requirements, as applicable to the scope of work. PAMC 6.14.180 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. The submittal requirements are outlined here: www.cityofpaloalto.org/gov/depts/ds/green_building/default.asp. 105. The project is a new building over 10,000 square feet and therefore must meet the commissioning requirements outlined in the California Energy Code section. The project team shall submit the Owner’s Project Requirements (OPR), and Basis of Design (BOD), and Commissioning Plan in accordance with 5.410.2.3. 106. The project is a nonresidential projects exceeding $100,000 valuation and therefore must acquire an Energy STAR Portfolio Manager Rating and submit the rating to the City of Palo Alto once the project has been occupied after 12 months. PAMC 16.14.250 (Ord. 5220 § 1 (part), 2013). The Energy Star Project Profile shall be submitted to the Building Department prior to permit issuance. Submittal info can be found at: https://www.cityofpaloalto.org/gov/depts/utl/business/benchmarking_your_building.asp. 107. The project is a nonresidential new construction projects with a landscape of any size included in the project scope and therefore must comply with Potable water reduction Tier 2. Documentation is required to demonstrate that the Estimated Total Water Use (ETWU) falls within a Maximum Applied Water Allowance (MAWA) using the appropriate evapotranspiration adjustment factor (ETAF) designated by the prescribed potable water reduction tier. PAMC 16.14.220 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. The submittal requirements are outlined on the following site: http://www.cityofpaloalto.org/gov/depts/utl/residents/resrebate/landscape.asp. 108. The project is outside the boundaries of the recycled water project area and is greater than 1,000 square feet and therefore must install recycled water infrastructure for irrigation systems. PAMC 16.14.230 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. 109. The project is either new construction or a rehabilitated landscape and is greater than 1,000 square feet and therefore must install a dedicated irrigation meter related to the recycled water P a g e | 28 of 34 infrastructure. PAMC 16.14.230 (Ord. 5220 § 1 (part), 2013). The project applicant shall indicate the requirements on the Permit Plans. 110. The project includes a new or altered irrigation system and therefore must be designed and installed to prevent water waste due to overspray, low head drainage, or other conditions where water flows onto adjacent property, non-irrigated areas, walks, roadways, parking lots, or structures. PA 16.14.300 (Ord. 5220 § 1 (part), 2013). 111. The project includes a new or altered irrigation system and therefore the irrigation must be scheduled between 8:00 p.m. and 10:00 a.m. unless weather conditions prevent it. Operation of the irrigation system outside the normal watering window is allowed for auditing and system maintenance. Total annual applied water shall be less than or equal to maximum applied water allowance (MAWA) as calculated per the potable water use reduction tier. PAMC 16.14.310 (Ord. 5220 § 1 (part), 2013). ). The project applicant shall indicate the requirements on the Permit Plans. 112. The project is a nonresidential new construction project and has a value exceeding $25,000 and therefore must meet Enhanced Construction Waste Reduction Tier 2. PAMC 16.14.240 (Ord. 5220 § 1 (part), 2013). The project shall use the Green Halo System to document the requirements. 113. The project includes non-residential demolition and therefore must meet the Enhanced Construction Waste Reduction - Tier 2. PAMC 16.14.270 (Ord. 5220 § 1 (part), 2013). The project shall use the Green Halo System to document the requirements. 114. The project is a new non-residential structure and therefore must comply with the City of Palo Alto Electric Vehicle Charging Ordinance 5263. The project shall provide Conduit Only, EVSE-Ready Outlet, or EVSE Installed for at least 25% of parking spaces, among which at least 5% (and no fewer than one) shall be EVSE Installed. The requirements shall be applied separately to accessible parking spaces. See Ordinance 5263 for EVSE definitions, minimum circuit capacity, and design detail requirements. PAMC 16.14.380 (Ord. 5263 § 1 (part), 2013) See https://www.cityofpaloalto.org/civicax/filebank/documents/43818 for additional details. The following are required at Post-Construction after 12 months of occupancy. The project is a non-residential projects exceeding $100,000 valuation and therefore must acquire an Energy STAR Portfolio Manager Rating and submit the rating to the City of Palo Alto once the project has been occupied after 12 months. PAMC 16.14.250 (Ord. 5220 § 1 (part), 2013). Submittal info can be found at: https://www.cityofpaloalto.org/gov/depts/utl/business/benchmarking_your_building.asp. SECTION 8. Term of Approval. 1. Exception to Parking Requirements. The time limits for the Exception to Parking Requirements shall be the same as the time limits for the Architectural Review. 2. Architectural Review Approval. The approval shall be valid for two years from the original date of approval. [Or specify a different term for a phased project – see 16.48.130(a)] P a g e | 29 of 34 PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: APPROVED: _________________________ ____________________________ City Clerk Director of Planning and Community Environment APPROVED AS TO FORM: ___________________________ Senior Asst. City Attorney PLANS AND DRAWINGS REFERENCED: 1. Those plans prepared by Architectural Dimensions titled “Hotel Parmani”, consisting of 49 pages, dated December 3, 2018, and received December 5, 2018. P a g e | 30 of 34 EXHIBIT A “MITIGATION, MONITORING AND REPORTING PROGRAM Avoidance/Mitigation Measures Mitigation and Monitoring Responsibility Monitoring Action Schedule Air Quality [Source: Section 4.3.3 of Initial Study] MM AIR-1: Implementation of the following mitigation measures would reduce community risk impacts from construction to a less than significant level. All mobile diesel-powered off-road equipment larger than 25 horsepower and operating on-site for more than two days continuously (or 20 hours in total) shall meet U.S. EPA particulate matter emissions standards for Tier 2 engines equipped with CARB-certified Level 3 Diesel Particulate Filters or equivalent. Implementation: Project contractor Monitoring: City of Palo Alto Department of Planning and Community Environment, BAAQMD Observation of conditions by Building Inspectors during construction During constructi on Biological Resources [Source: Section 4.4.2 of Initial Study] MM BIO-1.1: The project owner or designee shall schedule demolition and construction activities to avoid the nesting season. The nesting season for most birds, including most raptors in the San Francisco Bay area extends from February 1st through August 31st. • If it is not possible to schedule demolition and construction between September 1st and January 31st to avoid the nesting season, pre-construction surveys for nesting raptors and other migratory nesting birds shall be conducted by a qualified ornithologist, as approved by the City of Palo Alto, to identify active nests that may be disturbed during project implementation on-site and within 250 feet of the site. Projects that commence demolition and/or construction activities between February 1st and August 31st shall conduct a pre-construction survey for nesting birds no more than 14 days prior to initiation of construction, demolition activities, or tree removal. • If an active nest is found in or close enough to the project area to be disturbed by construction activities, a qualified ornithologist shall determine the extent of a construction- free buffer zone (typically 250 feet for raptors and 100 feet Implementation: Project applicant Monitoring: City of Palo Alto Department of Planning and Community Environment, City of Palo Alto- approved/qualified ornithologist, CDFW Pre-construction surveys to be conducted by a qualified ornithologist for nesting raptors and other migratory birds Findings shall be reported to Director of Planning and Community Environment No more than 14 days prior to demolitio n, grading, constructi on or tree removal, if occurring between February 1st and August 31st P a g e | 31 of 34 Avoidance/Mitigation Measures Mitigation and Monitoring Responsibility Monitoring Action Schedule for other birds) around the nest, to ensure that raptor or migratory bird nests would not be disturbed during ground disturbing activities. California Department of Fish and Wildlife (CDFW) will notified, as appropriate. The construction-free buffer zones shall be maintained until after the nesting season has ended and/or the ornithologist has determined that the nest is no longer active. • The ornithologist shall submit a report indicating the results of the survey and any designated buffer zones to the satisfaction of the City of Palo Alto prior to any grading, demolition, and/or building permit. Cultural Resources [Source: Section 4.5.3 of Initial Study] MM CUL-1.1: In the event any significant cultural materials (including fossils) are encountered during construction grading or excavation, construction within a radius of 50 feet of the find would be halted, the Director of Planning shall be notified, and a qualified archaeologist shall examine the find and make appropriate recommendations regarding the significance of the find and the appropriate treatment of the resource. Recommendations could include collection, recordation, and analysis of any significant cultural materials. A report of findings documenting any data recovered during monitoring shall be submitted to the Director of Planning. Implementation: Project contractor Monitoring: City of Palo Alto Department of Planning and Community Environment, City of Palo Alto- approved/qualified archaeologist Qualified archaeologist shall examine any cultural materials encountered during construction activities Findings shall be reported to Director of Planning and Community Environment During constructi on MM CUL-1.2: Pursuant to Section 7050.5 of the Health and Safety Code, and Section 5097.94 of the Public Resources Code of the State of California in the event of the discovery of human remains during construction, there shall be no further excavation or disturbance of the site or any nearby area reasonably suspected to overlie adjacent remains. The Santa Clara County Coroner shall be notified and shall make a determination as to whether the remains are Native American. If the Coroner determines that the remains are not subject to his authority, he shall notify the Native Implementation: Project contractor Monitoring: City of Palo Alto Department of Planning and Community Environment, Santa Santa Clara County Coroner shall determine the status of remains, if encountered NAHC shall identify During constructi on P a g e | 32 of 34 Avoidance/Mitigation Measures Mitigation and Monitoring Responsibility Monitoring Action Schedule American Heritage Commission (NAHC) who shall attempt to identify descendants of the deceased Native American. If no satisfactory agreement can be reached as to the disposition of the remains pursuant to this state law, then the land owner shall reinter the human remains and items associated with Native American burials on the property in a location not subject to further subsurface disturbance. If the Director of Planning finds that the archaeological find is not a significant resource, work would resume only after the submittal of a preliminary archaeological report and after provisions for reburial and ongoing monitoring are accepted. Clara County Coroner, NAHC descendants of the deceased, if remains are Native American Submittal and acceptance of an archaeological report to the Director of Planning and Community Environment MM CUL-2: In the event that a tribal cultural resource is found during construction, the NAHC will be contacted for information regarding the appropriate tribe and/or persons to notify. Once the appropriate tribal representatives are notified, consultation will take place consistent with AB 52 requirements. Mitigation measures that may be considered to avoid significant impacts (if there is no agreement on appropriate mitigation in discussions with the tribal representative) may include: • Avoidance and preservation of the resources in place, including: - Planning and construction to avoid the resources and protect the cultural and natural context; - Planning greenspace, parks, or other open space, to incorporate the resources with culturally appropriate protection and management criteria; • Treating the resource with culturally appropriate dignity, taking into account the tribal cultural values and meaning of the resource, including, but not limited to, the following: - Preservation in place; - Protecting the cultural character and integrity of the resource; - Protecting the traditional use of the resource; Implementation: Project contractor and project applicant Monitoring: City of Palo Alto Department of Planning and Community Environment, NAHC Notification of Director of Planning and Community Environment if tribal cultural materials are encountered Coordination with NAHC to ensure appropriate tribal representatives are notified Tribal consultation to determine appropriate mitigation measures for the tribal resources discovered During constructi on P a g e | 33 of 34 Avoidance/Mitigation Measures Mitigation and Monitoring Responsibility Monitoring Action Schedule - Protecting the confidentiality of the resource; - Permanent conservation easements or other interests in real property, with culturally appropriate management criteria for the purposes of preserving or utilizing the resources or places. Geology and Soils [Source: Section 4.7.3 of Initial Study] MM GEO-1: Geotechnical Design Considerations. The project owner or designee shall implement all the measures and conditions set forth in the Geotechnical Investigation prepared by Murray Engineers, Inc. in June 2018 or provide an acceptable equivalent to the satisfaction of the Director of Public Works Engineering to reduce hazards related to expansive or unstable soils. These include but are not limited to: - Foundation design (mat foundation, basement water proofing, lateral loads, and settlement) - Spread footing foundations for detached landscape improvements - Drilled pier foundations (at-grade foundations) - Basement retaining walls (mat foundation, subsurface drainage, lateral load) - Slabs-on-grade (at-grade features outside the basement, exterior slabs) - Vapor retarder - Flexible pavements (asphaltic concrete) - Earthwork (clearing and site preparation, material for fill, compaction, temporary slopes and excavations, and surface drainage) Implementation: Project contractor and project applicant Monitoring: City of Palo Alto Director of Public Works Engineering Approval of mitigation measures and conditions by the City of Palo Alto Director of Public Works Engineering Observation of conditions by Building Inspectors during construction Prior to and during constructi on activities Hazards and Hazardous Materials [Source: Section 4.9.3 of Initial Study] MM HAZ-1: A Construction Risk Management Mitigation Plan shall be developed by the applicant to reduce exposure of construction workers and surrounding receptors to contaminated on-site soil, groundwater and soil vapor during development. Elements of this plan should include the following: Implementation: Project contractor and applicant Monitoring: City of Palo Alto Approval of Construction Risk Management Mitigation Plan by Director of Department of Prior to and during constructi on activities P a g e | 34 of 34 Avoidance/Mitigation Measures Mitigation and Monitoring Responsibility Monitoring Action Schedule • Develop a Site Health and Safety Plan that includes provisions to monitor and protect construction workers from benzene or TCE-contaminated soil vapor exposure; • Develop a Storm Water Pollution Prevention Plan for construction to prevent or minimize potential contaminated runoff from on-site soils; • Obtain the relevant underground construction permits and approvals to ensure that dewatering of contaminated groundwater and subsequent disposal or reuse of groundwater is conducted in accordance with local and state regulations; • Follow recommended dust control measures to reduce worker and public exposure to on-site contaminants that may be attached to airborne dust particles; • Comply with excavation and shoring guidelines regarding the proper handling, storage, and disposal of contaminated and/or wet impacted soil to ensure that workers or nearby residents would not be exposed should such soils be encountered; • Characterize and properly reuse or dispose of excavated soil to ensure that construction workers or nearby residents are not exposed to contaminated soil; • Comply with groundwater extraction and disposal guidelines in order to minimize the volume of extracted groundwater and ensure that appropriate remediation occurs. Department of Planning and Community Environment Planning and Community Environment Observation of conditions by Building Inspectors during construction ATTACHMENT D ZONING COMPARISON TABLE 3200 El Camino Real, 18PLN-00045 Table 1: COMPARISON WITH CHAPTER 18.16 (CS DISTRICT) Exclusively Non-residential Development Standards Regulation Required Existing Proposed Minimum Site Area, width and depth None 0.61 acres (100’ x 258’) 0.61 acres (100’ x 258’) Minimum Front Yard 0-10 feet to create an 8-12 foot effective sidewalk width (1), (2), (8) 2 feet 10’-9” Rear Yard None 5 feet 10 feet to trash enclosure/13’-9” to building Interior Side Yard None 3 feet Varies (4’-7” to 11’-7”) Street Side Yard None 3 feet 0 feet (19 foot setback from curb) Build-to-lines 50% of frontage built to setback on El Camino Real 33% of side street built to setback on Hansen Way (7) Not compliant 63% (63 feet) along El Camino Real 52% (135 feet) along Hansen Way Special Setback 50 feet – see Chapter 20.08 & zoning maps 50 feet 0 feet (19 foot setback from curb) Max. Site Coverage None 48.3% (13,000 sf) 40.9% (11,002 sf) Max. Building Height 50 feet 25 feet 49’-8” Max. Floor Area Ratio (FAR) 2.0:1 for hotels 18.18.060(d) 0:62:1 (16,603 sf) 1.99:1 (53,658 sf) (1) No parking or loading space, whether required or optional, shall be located in the first 10 feet adjoining the street property line of any required yard. (2) Any minimum front, street side, or interior yard shall be planted and maintained as a landscaped screen excluding areas required for access to the site. A solid wall or fence between 5 and 8 feet in height shall be constructed along any common interior lot line.. (6) The initial height and slope shall be identical to those of the most restrictive residential zone abutting the site line in question. (7) 25 foot driveway access permitted regardless of frontage, build-to requirement does not apply to CC district. (8) A 12 foot sidewalk width is required along El Camino Real frontage Table 1: COMPARISON WITH CHAPTER 18.16 (CS DISTRICT) continued Exclusively Non-residential Development Standards Topic Requirement Proposed Hours of Operation (18.16.040 (b)) Businesses with activities any time between the hours of 10:00 p.m. and 6:00 a.m. shall be required to obtain a conditional use permit. The director may apply conditions of approval as are deemed necessary to assure compatibility with the nearby residentially zoned property The hotel operates 24 hours daily. 18.16.080 Performance Standards. All development in the CS district shall comply with the performance criteria outlined in Chapter 18.23 of the Zoning Ordinance, including all mixed use development 18.16.090 Context-Based Design Criteria. As further described in a separate attachment, development in a commercial district shall be responsible to its context and compatible with adjacent development, and shall promote the establishment of pedestrian oriented design. Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) for Hotel Type Required Existing Proposed Vehicle Parking 1 per guestroom for a total of 99 parking spaces Eating and Drinking – 1 space per 60 sf of public area and 1 space per 200 sf of service area, less up to 75% if approved by the Director for shared use = 4 spaces Total = 103 spaces 22 spaces 82 spaces Providing additional 24 spaces through valet operations. Condition of approval to ensure valet operations plan is maintained. Bicycle Parking 1 per 10 guestrooms (100% short term) equals 10 spaces Eating and Drinking - 1 per 600 sf of public area and 1 space per 200 sf of service area = 2 spaces Total = 12 spaces None 10 spaces *condition of approval to achieve compliance. Loading Space 1 loading spaces for 10,000 - 99,999 sf 1 space 1 space The hotel use is subject to the following additional restrictions per PAMC Section 18.16.060(d) (d) Hotel Regulations (1) The purpose of these regulations is to allow floor area for development of hotels in excess of floor area limitations for other commercial uses, in order to provide a visitor-serving use that results in an enhanced business climate, increased transient occupancy tax and sales tax revenue, and other community and economic benefits to the city. (2) Hotels, where they are a permitted use, may develop to a maximum FAR of 2.0:1, subject to the following limitations: (A) The hotel use must generate transient occupancy tax (TOT) as provided in Chapter 2.33 of the Palo Alto Municipal Code; and (B) No room stays in excess of thirty days are permitted, except where the city council approves longer stays through an enforceable agreement with the applicant to provide for compensating revenues. (3) Hotels may include residential condominium use, subject to: (A) No more than twenty-five percent of the floor area shall be devoted to condominium use; and (B) No more than twenty-five percent of the total number of lodging units shall be devoted to condominium use; and (C) A minimum FAR of 1.0 shall be provided for the hotel/condominium building(s); and (D) Where residential condominium use is proposed, room stays for other hotel rooms shall not exceed thirty days. (4) Violation of this chapter is subject to enforcement action for stays in excess of thirty days not permitted under the provisions of this chapter, in which case each day of room stay in excess of thirty days shall constitute a separate violation and administrative penalties shall be assessed pursuant to Chapters 1.12 and 1.16. Attachment E Project Plans and Initial Study/Mitigated Negative Declaration Hardcopies of project plans and the Initial Study are provided to Board members. These plans and environmental documents are available to the public online and/or by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Directions to review Project plans online: 1. Go to: bit.ly/PApendingprojects 2. Scroll down to find “3200 El Camino Real” and click the address link 3. On this project specific webpage you will find a link to the project plans and other important information Direct Link to Project Webpage: https://www.cityofpaloalto.org/news/displaynews.asp?NewsID=2716 March 28. 2019 Yatin Patel 3200 El Camino Real Palo Alto, CA 94306 Honorable Mayor Filseth, Vice Mayor Fine. and Members of the City Council c/o Sheldon Ah-Sing sahsing1a)111-group.us 250 Hamilton Avenue Palo Alto, CA 9430 I VIA EMAIL Re: 3200 El Camino Real: Hotel Parmani (17PLN-00156)-April 1, 2019 Agenda Dear Honorable Mayor Filseth. Vice Mayor Fine. and Members of the City Council: I look forward to returning to City Counci 1 on Apri I l, 2019 for your consideration of our project's approval, which includes the necessary removal of a 50' special setback restriction on our site. My family and I are grateful that ARB and PTC have given their respective recommendations to proceed atler a comprehensive, detailed four (4) year process. PTC's recommendation and City Council's concurrence with PTC to eliminate the 50' special setback restriction on our parcel will allow us to create what one ARB member described as "the most neighborhood friendly hotel design in the city that we have seen,'· replacing an aging I 940s-era structure with an attractive and functional building that reflects the authentic hospitality in our City. Having said that, we do have one request that deviates from the PTC recommendation. The PTC recommended that the 50' special setback be eliminated only with regard to Mixed-Uses or Hotel uses. For the reasons explained below, we respectfully request that prior to adopting the Ordinance enclosed in your packet as Attachment B to the staff report that you modify Section 3 to remove this restriction as follows: SECTION 3. The Council hereby amends the Setback map of the City of Palo Alto (PAMC section 20.08.020) to eliminate the 50-foot Special Setback for the subject site (3200 El Camino Real) (Exhibit 1) for ~fo(ed Use and Hotel uses. the 50 foot Special Setback shall remain for all other land uses. We have genuine concerns about replacing one restriction with yet another. Thank you all in advance for considering our concerns. City of Palo Alto (ID # 9960) City Council Staff Report Report Type: Action Items Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Grandfathered Facilities Ordinance (First Reading) Title: PUBLIC HEARING: Adoption of an Ordinance Amending Section 18.18.120 (Grandfathered Uses and Facilities) of the Palo Alto Municipal Code to Adjust Regulations Pertaining to Noncomplying Facilities. California Environmental Quality Act (CEQA): This Ordinance is Within the Scope of the Comprehensive Plan. Environmental Impact Report (EIR) certified and adopted on November 13, 2017 by Council Resolution No. 9720; the Ordinance is Also Exempt From Environmental Review Under CEQA Guidelines Sections 15061(b)(3) and 15305 From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends the City Council adopt on first reading the attached ordinance amending Section 18.18.120 of the Palo Alto Municipal Code to allow non-complying (grandfathered) facilities in the Commercial Downtown zoning district to convert an existing use to another permitted use, except for a conversion from residential uses to non-residential uses. The attached ordinance requires a property owner asserting that the City’s regulations are pre- empted by state or federal law to provide documentary evidence sufficient to support that assertion and creates a process for the City Council to consider a waiver of such regulations. Executive Summary The subject ordinance modifies regulations that restrict the type of land uses that are permitted in noncomplying buildings Downtown. A noncomplying building is one that does not meet current development standards, such as height or maximum floor area. Downtown has regulations that are different from other parts of the City. Current Downtown regulations preclude the change from one land use to another in a noncomplying building. This is a relatively new requirement and is believed to have been adopted initially as result of an administrative error that occurred in 2016. Prior to this time, land uses in noncomplying City of Palo Alto Page 2 buildings could be replaced with any other permitted or, if approved, conditionally permitted use. The subject ordinance corrects this apparent error while furthering the City’s policy in support of preserving housing. The Planning and Transportation Commission recommended that the non-complying (grandfathered) facilities provision be amended to allow such facilities to convert existing uses to other uses consistent with the zoning, except for the conversion of existing housing units to any non-residential use. The PTC further recommended the removal of a provision in the attached ordinance allowing the City Council to consider a property owner’s assertion that the City’s regulations conflict with State law. Staff recommends retention of this provision to preserve City control over the application of its land use regulations and to support the City’s position in the event of litigation. Background The zoning code regulates the size and use of property in the City. Overtime, with changes in policy direction, codes are amended and some buildings or uses no longer comply with the zoning code. When this occurs, the building or use is considered noncomplying (other terms include nonconforming and grandfathered). The zoning code anticipates these conditions and generally allows for the limited continuation of such buildings or uses. Palo Alto treats noncomplying buildings and uses differently in the Downtown district than it does for the rest of the City. In 2016, a large number of amendments were made to the zoning code, including the chapter regulating Downtown noncomplying buildings (also called facilities) and uses. The written form in which amendments are typically presented to decision-makers is by showing the existing regulatory text and using a strikeout format for text being deleted and underlining for text being added. The 2016 text amendment to the noncomplying facilities language sought to memorialize prior Council direction related to minor changes in the building envelope (size/area) of noncomplying buildings. However, other text was changed without being shown in strikeout or underline formatting. This language prevents a Downtown property owner from changing the type of land use that exists in a noncomplying building to another use. For instance, a restaurant is not able to convert to a retail store, despite both uses being permitted by the code and having the same parking requirement. Although the new language was duly enacted by the Council, because the change was inadvertent, no policy discussion occurred at that time. Staff learned of this apparently inadvertent change last summer and first proposed to restore the code to the original language at the City Council’s December 10, 2018 meeting1. Staff 1 Staff report: https://www.cityofpaloalto.org/civicax/filebank/blobdload.aspx?t=62472.03&BlobID=67962 Minutes: https://www.cityofpaloalto.org/civicax/filebank/documents/68556 City of Palo Alto Page 3 presented a temporary ordinance to Council without a recommendation from Planning and Transportation Commission (PTC) to allow Council action before the end of the year. Staff worked on this timeline to provide the Council with an opportunity to expedite a resolution for the large number of Downtown properties2 unexpectedly impacted by this language and to allow the Council the option of responding to a time-limited offer from a specific property owner affected by this language to provide certain benefits to its tenants. City Council, in its review, declined to act on the temporary ordinance and directed staff to present a permanent ordinance to the PTC. Council also directed that the ordinance include a restriction on the conversion of existing residential uses to a non-residential use as well as an exception that allows a waiver from this provision upon a finding that the requirement violates State law. Planning and Transportation Commission Review On January 30, 20193, the PTC conducted a public hearing and considered an ordinance that reflected Council’s direction. In its review, the PTC recommended non-residential uses in non- complying buildings be allowed to convert to other permitted or conditionally permitted uses. The Commission also supported the policy to restrict existing housing units from converting to non-residential uses. However, the Commission did not favor legislating a waiver or similar process to address the potential for pre-emption by state or federal law. During its deliberation, although staff provided general advice favoring a waiver process, the Commission expressed frustration with staff’s inability to provide analysis of specific legal risks in a public forum. In the absence of this information, the PTC approved another motion encouraging the City Council to receive a legal opinion regarding the proposed waiver provision. The City Attorney’s Office received this request and will respond as appropriate to the City Council. Discussion The attached ordinance amends Palo Alto Municipal Code (PAMC) section 18.18.120 (b)(2). This is the section that regulates noncomplying buildings in the Downtown and presently prohibits the conversion of an existing use to any other permitted, or conditionally permitted use. The subject ordinance would amend section 18.18.120(b) to allow noncomplying buildings to 2 The City has 257 CD zoned properties (not include airspace subdivisions). Staff estimates that over 40% of those properties exceed the maximum floor area ratio (FAR) allowed in the district, which is 1.0 for commercial and 1.0 for residential, or 2.0 for a mixed-used development. Properties that received transferred development rights, or TDRs, may extend up to a maximum 3.0 FAR. Twelve (12) Downtown properties contain multi-family residential housing units in mixed-use or stand-alone buildings and provide 188 units (plus an additional 54 condominium units). This unit count does not include two-family or single-family homes. Four properties are listed as an historic resource containing 141 units; two of these properties exceed allowed FAR and contain 121 residential units. 3 Staff report: https://www.cityofpaloalto.org/civicax/filebank/documents/68694 Draft minutes: https://www.cityofpaloalto.org/civicax/filebank/documents/69663 City of Palo Alto Page 4 convert to any other permitted or conditionally permitted use, except that nonconforming buildings in residential use would be prohibited from converting to non-residential uses. An excerpt of the ordinance is provided below: 18.18.120 Non-complying (Grandfathered) Uses and Facilities … (b) Non-complying (Grandfathered) Facilities (1) Any noncomplying facility existing on August 28, 1986 and which, when built, was a complying facility, may remain as a legal noncomplying grandfathered facility and shall not be subject to the provisions of Chapter 18.70. (2) The legal noncomplying grandfathered facilities in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site for continual use and occupancy, by the same use, provided such remodeling, improvement, or replacement complies with all of the following: (A) shall not result in increased floor area; (B) shall not relocate below grade floor area to above grade portions of the building; (C) shall not result in an increase of the height, length, building envelope, building footprint, or any other increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070; (E) The Director may approve minor changes to the building’s footprint, height, length, and the building envelope through Architectural Review of minor aesthetic architectural improvements and to improve pedestrian-orientation provided there is no increase to the degree of any non-complying feature. (F) The residential portion of any legal noncomplying facility shall not be converted to a non-residential land use or reduced in area or number of units. An applicant asserting that the operation of this subsection (F) is preempted by state or federal law shall submit a statement of its position with all supporting documentary evidence at the time it applies for a change of use. The City Council shall hold at least one noticed public hearing in accordance with the procedures set forth in PAMC 18.77.080 to consider City of Palo Alto Page 5 whether to waive or adjust the requirements of one or more provisions of Titles 18 or 21. The City Council may seek additional information including, without limitation, third party peer review paid for at the applicant’s expense. The portion of the text being deleted in subsection (2) restores the code to the pre-2016 standard. This amendment provides the path for Downtown property owners with noncomplying buildings to change from an existing use to another permitted or conditionally permitted use. It addresses issues currently experienced by numerous properties, including the former Cheesecake Factory and the former North Face site. It also provides clarity for a majority of other Downtown properties that currently do not comply with today’s development standards. The first sentence of subsection (F) prohibits the conversion of a residential use in a noncomplying building to a non-residential use and prevents a reduction to the number of housing units. The remaining sentences in subsection (F) establish a waiver process, of the type that the Council directed and the Planning Commission objected to. With respect to the Commission, staff contends a waiver provision is in the best interest of the City and the public and recommends that the Council enact it. In general, it is permissible for a city to prohibit converting from residential to non-residential uses. In practice, however, a restriction of this type will often apply in combination with other local laws that further restrict changes in land uses. These might include, for example, historic preservation requirements and restrictions on converting rental housing to ownership housing (often called “condo conversion” restrictions). If a property owner claims that the combination of City regulations, as applied to that owner’s property, violates the owner’s rights under pre- emptive state or federal law, the waiver provision in subsection (F) will serve several important purposes. First, a waiver provision will require the property owner to present all of its claims and supporting evidence to the City Council first, for the Council’s evaluation and consideration, before seeking relief in Superior Court. This gives the City Council and the public it serves the opportunity to fully understand the arguments and evidence of a property owner who claims local law violates its rights. And if litigation is filed later, the City can seek to limit the scope of the dispute to evidence submitted to the City as part of its administrative hearing. Second, and most important, if the Council is persuaded during the administrative hearing that the combination of City land use regulations acts to impermissibly burden or violate pre- emptive state or federal law, the City Council will have an opportunity to decide how to adjust City land use regulations to comply with state and federal law while also advancing the public City of Palo Alto Page 6 interest to the maximum extent possible. In other words, where there is a legal problem, it is often the case that there is more than one way to solve it. As the elected representatives of the community, the City Council is in the best position to understand and give expression to the community’s best interest. Therefore, it is the Council, not the property owner or the court, that should have the first and primary opportunity to fashion a solution, with the public interest foremost in mind. The waiver provision gives the Council this opportunity. Without the waiver provision, the property owner would skip the Council and go straight to court, where the legal issues and proposed remedies would be framed by the property owner and potentially determined by the court. The City would be a represented party but likely not in a decision- making role. Finally, the waiver provision will protect the City’s laws from “facial” challenge, a kind of challenge that often can be filed quickly, based solely on the language of an ordinance. With the waiver language, a property owner who claims they are harmed by the City’s laws will need to establish a violation of their rights based on the facts of a specific development application (often called an “as applied” challenge). By removing one type of potential challenge, the waiver provision may bolster the City’s ability to defend its local laws against legal challenge. Whether to include a waiver provision is a policy decision for the Council to make. Policy Implications The ordinance seeks to restore a prior regulatory framework that appears to have been inadvertantly changed several years ago. The policy is also updated to reflect the City’s interest in preserving housing opportunities. While not supported by the PTC, the ordinance includes a waiver provision that allows the Council to consider adjustments to the zoning code or subdivision law in the event an owner persuades the Council that the new policy impermissibly burdens or violates pre-emptive state or federal law. Without the waiver, staff is concerned the ordinance is at a higher risk of a receiving a facial challenge and that a resolution to any particular property would be decided by a Court as opposed to the City Council. Resource Impact Land use policy influences how property is used and those decisions may result in adjustments to various taxes and permit fees collected by the City. This ordinance, however, restores and updates a long standing city policy and is not anticipated to have a signficant budgetary or fiscal impact. Timeline Following adoption of the subject ordinance, staff will return one more time to present the second reading of the ordinance on Council consent calendar. Thereafter, the ordinance would be effective on the 31st day following second reading adoption. City of Palo Alto Page 7 Environmental Review Because staff was unaware of the language restricting changes in use at the time, the Comprehensive Plan Environmental Impact Report (EIR) was prepared assuming that non- complying facilities could freely convert to other permitted uses. As a result, this proposed ordinance is within the scope of the Comprehensive Plan EIR certified and adopted on November 13, 2017 by Council Resolution No. 9720. Alternatively, the Ordinance is exempt from environmental review under CEQA Guidelines Sections 15061(b)(3) and 15305. Attachments: ORD Amending PAMC Section 18.18.120 (CD-C - Grandfathered Uses and Facilities) March 2019 (DOCX) jb SL/Amending ORD 18.18 (DC) District 1 ** NOT YET ADOPTED ** DRAFT Ordinance No. ____ Ordinance of the Council of the City of Palo Alto Amending Section 18.18.120 (Grandfathered Uses and Facilities) of Chapter 18.18 (Downtown Commercial District) of Title 18 (Zoning) of the Palo Alto Municipal Code (PAMC) to Adjust Regulations Relating to Noncomplying Facilities. The Council of the City of Palo Alto ORDAINS as follows: SECTION 1. Findings and declarations. The City Council finds and declares as follows: A. Section 18.18.120 of the Palo Alto Municipal Code governs permissible noncomplying uses and facilities in the Downtown Commercial zone district. B. In 2016, the provisions of Section 18.18.120 governing noncomplying facilities seeking to remodel, improve, or replace site improvements were updated to: 1) allow minor modifications to building envelope through Architectural Review; and 2) require that such facilities maintain continual use and occupancy for the same use. C. The requirement that noncomplying facilities maintain continual use and occupancy for the same use has resulted in potentially unintended consequences, including the inability to change among similar permitted and conditionally permitted uses in noncomplying facilities, such as a change from eating and drinking services to retail uses. SECTION 2. Section 18.18.120 (Grandfathered Uses and Facilities) of Chapter 18.18 (Downtown Commercial (CD) District) of Title 18 (Zoning) is hereby amended to read as follows: 18.18.120 Non-complying (Grandfathered) Uses and Facilities (a) Non-complying (Grandfathered) Uses (1) The following uses and facilities may remain as legal noncomplying (grandfathered) uses, and shall not require a conditional use permit or be subject to the provisions of Chapter 18.70: (A) Any use which was being conducted on August 28, 1986; or (B) A use not being conducted on August 28, 1986, if the use was temporarily discontinued due to a vacancy of 6 months or less before August 28, 1986; or (C) Any office use existing on April 16, 1990 on a property zoned CD and GF combining, which also existed as a lawful conforming use prior to August 28, 1986, notwithstanding any intervening conforming use. (2) The legal noncomplying grandfathered uses in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site, for continual use jb SL/Amending ORD 18.18 (DC) District 2 and occupancy by the same use, provided such remodeling, improvement, or replacement complies with all of the following: (A) shall not result in increased floor area; (B) shall not relocate below grade floor area to above grade portions of the building; (C) shall not result in an increase of the height, length, building envelope, building footprint or any other increase in the size of the improvement. For purposes of this section, “building envelope” shall mean the three dimensional shape and size occupied by an existing building. It is not the maximum, buildable potential of the site; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070; or (E) in the case of medical, professional, general business or administrative office uses of a size exceeding 5,000 square feet in the CD-S or CD-N district that are deemed legal noncomplying grandfathered pursuant to subsection (1), such remodeling, improvement, or replacement shall not result in increased floor area devoted to such office uses. (F) The Director may approve minor changes to the building’s footprint, height, length, and the building envelope through Architectural Review of minor aesthetic architectural improvements and to improve pedestrian-orientation provided there is no increase to the degree of any non-complying feature. (3) If a legal noncomplying grandfathered use deemed existing pursuant to subsection (1) ceases and thereafter remains discontinued for 12 consecutive months, it shall be considered abandoned and may be replaced only by a conforming use. (4) A use deemed legal noncomplying grandfathered pursuant to subsection (1) which is changed to or replaced by a conforming use shall not be reestablished, and any portion of a site or any portion of a building, the use of which changes from a legal noncomplying grandfathered use to a conforming use, shall not thereafter be used except to accommodate a conforming use. (b) Non-complying (Grandfathered) Facilities (1) Any noncomplying (grandfathered) facility existing on August 28, 1986 and which, when built, was a complying facility, may remain as a legal noncomplying grandfathered facility and shall not be subject to the provisions of Chapter 18.70. (2) The legal noncomplying grandfathered facilities in subsection (1) shall be permitted to remodel, improve, or replace site improvements on the same site for continual use and occupancy, by the same use, provided such remodeling, improvement, or replacement complies with all of the following: (A) shall not result in increased floor area; (B) shall not relocate below grade floor area to above grade portions of the building; (C) shall not result in an increase of the height, length, building envelope, building footprint, or any other increase in the size of the improvement; (D) shall not increase the degree of noncompliance, except pursuant to the exceptions to floor area ratio regulations set forth in Section 18.18.070; (E) The Director may approve minor changes to the building’s footprint, height, length, and the building envelope through Architectural Review of minor jb SL/Amending ORD 18.18 (DC) District 3 aesthetic architectural improvements and to improve pedestrian-orientation provided there is no increase to the degree of any non-complying feature. (F) The residential portion of any legal noncomplying facility shall not be converted to a non-residential land use or reduced in area or number of units. An applicant asserting that the operation of this subsection (F) is preempted by state or federal law shall submit a statement of its position with all supporting documentary evidence at the time it applies for a change of use. The City Council shall hold at least one noticed public hearing in accordance with the procedures set forth in PAMC 18.77.080 to consider whether to waive or adjust the requirements of one or more provisions of Titles 18 or 21. The City Council may seek additional information including, without limitation, third party peer review paid for at the applicant’s expense. SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 4. The Council finds that the Ordinance is within the scope of and in furtherance of the Comprehensive Plan 2030 which was evaluated in that certain Final Environmental Impact Report (“Final EIR”) certified and for which findings were adopted by Council Resolution Nos. 9720 and 9721 on November 13, 2017, all in accordance with the California Environmental Quality Act (“CEQA”). Pursuant to Section 15168 of the State CEQA Guidelines, the City has determined that no new effects would occur from and no new mitigation measures would be required for the adoption of this Ordinance. The Council further and alternatively finds, that even if this Ordinance were not within the scope of the Comprehensive Plan 2030, it would be exempt from environmental review under Sections 15061(b)(3) and 15305 of the State CEQA Guidelines. SECTION 5. This Ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: jb SL/Amending ORD 18.18 (DC) District 4 ABSTENTIONS: NOT PARTICIPATING: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ Deputy City Attorney City Manager ____________________________ Director of Planning & Community Environment City of Palo Alto (ID # 9826) City Council Staff Report Report Type: Informational Report Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Enterprise Resource Planning System Status Title: Review Enterprise Resource Planning System Status From: City Manager Lead Department: IT Department Executive Summary The City recently engaged in a comprehensive request for proposal (RFP) process for a new Enterprise Resource Planning (ERP) software system, to identify key strategic partners and evaluate potential solutions to replace our existing ERP system, which supports core financial and human resource management functions citywide. The RFP was issued in Aug 2017 and the City received 13 proposals. Through a rigorous committee evaluation process during 2018, three proposals were shortlisted to progress to the final round. After thorough consideration, it was determined that an upgrade to our current SAP environment would be more appropriate than a complete system replacement at this time. The RFP was therefore cancelled on November 14th, 2018 and the vendors were notified of the cancellation. An upgrade to the current SAP system will avoid the risks, costs, and management challenges associated with migration to a new ERP during a time of considerable related operational and management changes, including but not limited to leadership transitions in the Administrative Services, Utilities, and Information Technology departments. This upgrade will enhance our current SAP environment by introducing an intuitive and user-friendly interface that will support mobile devices and enable currently underutilized features to maximize productivity. In effect, the upgrade now proposed to our ERP environment will ensure the City enjoys a fully functional ERP system that meets all our identified needs at a lower cost and level of effort than that required by a transition to an entirely new system, which would have provided inconsequential added features at a significant cost. Background The City currently utilizes the SAP ERP system to support its major financial and human resource management functions and utility billing processes. The City’s history with SAP began in 2002, when the City selected SAP as its preferred vendor for an ERP system with the purpose of integrating various business processes within the City and to pave the path for the City to move in the direction of electronic government. In fiscal year 2003, the implementation of the SAP Enterprise Central Component (ECC 6.0) and SAP core modules were completed, and the City of Palo Alto Page 2 SAP system has been running in the City since 2003. The ERP system supports Accounting, Finance, Purchasing, Project Management, Plant Maintenance, Budget Controls, Payroll, Human Resource Management, and Service Order Management. In 2009, the City completed a major upgrade to the SAP ERP system, which also replaced the former utility billing system (Banner) with the implementation of the SAP IS-U module, Customer Relationship Management (CRM), Utilities Customer Electronic Services (also known as My Utilities Account customer portal) and Business Intelligence systems (BI) for the Utilities department. Both business and technology needs evolved since the current ERP solution was selected and implemented, and the current system has reached end of life support. We recognized that these factors require us to either upgrade our current environment or move to a new supported environment. Therefore, the City engaged Plante Moran in 2014 to perform a comprehensive assessment of the City’s SAP ERP environment and identify key strategic options and recommendations. This engagement not only reviewed the core SAP functions but also included the identification and review of major best-of-breed and third-party systems used by the City. Ultimately, this report outlined three paths forward for the City to consider: 1. Status quo with investment 2. Upgrade SAP 3. New ERP Environment The full ERP System Evaluation Report from 2014, including recommendations for issuance and consideration of an RFP, can be found here: https://www.cityofpaloalto.org/civicax/filebank/documents/48789. Discussion Selection and implementation of an ERP system is one of the largest and most complex projects a City can undertake. In August 17, 2017, an RFP for the Finance and Human Resources ERP System was issued. (A separate process for evaluating support for Utility Billing and Customer Service, which was also incorporated into this process, is addressed briefly at the end of this memo). An evaluation team of staff from the Information Technology, Administrative Services, Utilities, Police and Public Works departments spend a year evaluating the proposals from thirteen vendors who responded to the RFP. City staff completed a robust evaluation process, helping to ensure that the best decision for the city has been made and that the future ERP roadmap will be successfully implemented. The RFP evaluation committee used six criteria to evaluate the proposals: Functional Fit, Implementation Methodology, Compliance with Technical Requirements, Support and Maintenance, Strategic Fit and Total Cost of Ownership. Below is a summary of the ERP RFP evaluation results and process. Financial Summary of the Proposals (as identified by each vendor*): • One-time implementation costs ranged from $3 million to $6.7 million • Annual maintenance costs ranged from $800,000 to $900,000 City of Palo Alto Page 3 • 10-year cumulative costs ranged from $12.5 million to $16.5 million * These cost estimates do not include an evaluation of City staffing costs for backfill or ongoing support resource requirements. Summary of ERP Evaluation Effort: Ultimately, the evaluation team short-listed three vendors who represented some of the leading ERP solutions and invited them to provide demonstrations of their systems. Multiple demonstrations spread across four days per vendor, over five hundred individual staff hours were invested in evaluating proposals, twelve reference calls and two site visits were completed to assist in the evaluation of each vender across the six criteria. One major note identified by the evaluation team was that the cost of new implementation would be significantly higher than proposed by the vendors with the additional cost of hiring temporary staff required to backfill positions, train users and develop new interfaces. Staff estimated that a new ERP implementation would take over three years to configure and implement citywide. After considering all the feedback from the ERP evaluation team on the shortlisted proposals, the priorities of the organization, and current resources limitations, staff determined the best course of action would be to pursue the second option from the 2014 Plante Moran report: an upgrade to the current SAP environment. The upgrade cost of the current SAP environment is estimated at $4 million which includes financial/human resources system software and services, hardware, project staffing and other costs. The scope of this upgrade includes moving from the current SAP ECC 6.0 Enhancement package (EHP) 2.0 to SAP ECC 6.0 EHP 8.0. The recurring annual SAP licensing cost for EHP 8.0 is estimated at $350,000. When compared to a new ERP, the annual licensing cost is approximately $550,000 less annually. Considering the cost benefit of an upgrade option, the staff further focused on how the upgrade path addresses the challenges encountered in our current environment and meeting all the requirements identified during the ERP planning phase. The team also revisited the findings from the RFP evaluation phase which further supported the decision of upgrading SAP over new ERP implementation. New ERP Vs. Proposed SAP ERP (Upgrade) Cost Comparison: ERP Options One-time Implementation Cost Annual/Recurring Licensing Cost Implementation Timeline New ERP ~ $6M ~ $900K ~ 36 months Proposed SAP Upgrade to EHP 8.0 ~ $4M ~ $350K ~ 24 months Below are some of the benefits of the SAP Upgrade option: City of Palo Alto Page 4 Increase user friendliness and intuitiveness of system • In the current landscape, navigation is complex and cumbersome. End users must memorize transaction codes and there is no web-based graphical interface. The upgraded environment will utilities SAP’s latest and most innovative user interface applications to enable web/mobile interface and intuitive access to everyday tasks of reporting, approvals, time entry and many additional tasks. • SAP’s upgraded environment will support single sign-on functionality, which will enhance user experience to connect to various SAP applications seamlessly using one login credential. End users will never have to remember their SAP user-id/password in the new upgraded SAP environment, and associated helpdesk calls for password resets will be avoided. Facilitate further automation of business processes • The upgraded environment will enhance ERP workflow approval capabilities by providing more flexibility in configuring various processes and approval cycles. Improve quality and reliability of information for decision making • Utilizing available SAP Data Migration Tools as part of the SAP upgrade activity, we will be able to convert and cleanse legacy ERP data and address data quality issues. A newly cleansed data set will form the basis for reliable information. Ineffective reporting capabilities • In the current environment, the processing time of report generation can be time consuming. The upgraded ERP environment will offer better organized data and new apps to provide one-click navigation access to frequently used reports customized to each user. Improve System Flexibility • The upgraded SAP application will offer improved integration tools to stabilize current integration points with various third-party solutions. This feature can also enable easier future integrations and provide additional flexibility in deploying newer solutions. In addition to the benefits mentioned above, Staff recognizes the carry forward of organizational knowledge of current SAP users. This will lead to a significant reduction of effort involved in user training and an easier adoption of the upgraded environment. The city will be able to benefit from a more user-friendly interface, mobile friendly workflows and timesheets, faster and easier access to necessary operational reports enabling data driven decisions. We can anticipate tight integration with key external solutions such as GIS (Geographic Information System) Spatial Mapping solution, Smart Water Metering Technologies, and SAP business intelligence and reporting solution. While it is expected that all major financial and human resource functions will be maintained within this upgraded SAP, many business processes will see improvements or changes to increase efficiency and improved controls. In order to take advantage of all these new features of an upgraded SAP application, the City City of Palo Alto Page 5 will need the expertise of a third-party consulting firm to implement the upgraded SAP environment on a supported hardware and database platform. As part of the SAP upgrade project, staff will return to Council to seek approval for purchase of required software, hardware and professional services. Impact on CIS Implementation: Apart from this analysis of the core Finance and Human Resource functions of the ERP system, the Utilities Department is working through the evaluation of a separate RFP process for a Utilities Billing and Customer Information System (CIS), and currently is in the final stages of decision making. Depending on the outcome of this evaluation, the original planned timeline and sequence in which the ERP and CIS systems were to be implemented or upgraded may be impacted. One scenario is the CIS project may be delayed allowing for the ERP to be upgraded and stabilized, after which the integration with and deployment of a new CIS could commence. The advantage of the proper sequencing of the ERP and CIS implementations is that staff can reduce integration efforts to one single time, rather than integration of CIS with our current SAP environment and a second integration after the SAP environment has been upgraded. In addition, the Utilities Department recently developed a five-year strategic technology roadmap including replacement of the ERP and CIS systems and deployment of Advanced Metering Infrastructure (AMI)-base smart grid system. All these projects require significant planning, financial and staffing resources and system integration. Depending on the completion of the CIS implementation for integration purposes, the AMI project schedule could potentially be impacted as well as other technology projects on the Utilities Technology Roadmap. Staff will return to Council with an update regarding the CIS Evaluation once the analysis is completed. Resource Impact Upgrading the SAP environment is expected to cost approximately $4 million in one-time expenses and $350,000 ongoing. These costs will be funded out of the Information Technology Fund with existing funds both for the implementation costs as well as the ongoing license costs. City of Palo Alto (ID # 10022) City Council Staff Report Report Type: Informational Report Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Contracts Awarded by the City Manager Title: Contracts Awarded by the City Manager and Procurement Officer from July 1, 2018 to December 31, 2018 From: City Manager Lead Department: Administrative Services The Palo Alto Municipal Code (PAMC) Section 2.30.710 requires the City Manager to provide a biannual report to Council consisting of contracts awarded by the City Manager or the Purchasing Manager for: 1) general and professional services in excess of $25,000; and 2) public works and goods in excess of $65,000. Attachment A fulfills this PAMC reporting requirement. For informational purposes, Attachment B is an excerpt from the Palo Alto Municipal Code that sets forth exemptions from competitive solicitation, as noted for certain contracts on Attachment A. Attachments: • Attachment A: List of Services, Goods & Materials Awarded by City Manager and Chief Procurement Officer • Attachment B: Municipal Code Excerpts ATTACHMENT A Service Contracts Awarded ($25,000 and above) July 1 to December 31, 2018 Services Contract Contract Awarded To Award Date Award Amount Bidding Exemption* or Number of Bids Sent/Received Description S18170539 GALEB PAVING 7/10/2018 194,675.00 29 / 5 ITT and Byxbee Trail Base S19172971 UTILISMART CORPORATION 7/11/2018 59,000.00 2.30.360(d) Professional Services Related to SmartMeter Data Services S19171559 STATEWIDE TRAFFIC SAFETY AND S 7/18/2018 85,000.00 3 / 1 Utilities Construction On‐Call Traffic Control Services S19172815 TRANSFORMER CONSULTING SERVICE 7/19/2018 70,000.00 2.30.360(i)Colorado Transformer Consulting Services S19172959A CARAHSOFT TECHNOLOGY CORP. 7/19/2018 83,844.60 2.30.360(j)DocuSign Enterprise Pro for Government S19172747 LCG CONSULTING 7/24/2018 50,000.00 2.30.360(d)CAISO Transmission Assessment S19173259 WATERTIGHT RESTORATION INC 8/6/2018 25,531.00 3 / 3 Parking Lot R Repair Services and Materials S19173285 CARAHSOFT TECHNOLOGY CORP. 8/7/2018 30,971.87 2.30.360(j)Monitored Firewall S19173175 R&M SERVICES SOLUTIONS INC 8/14/2018 33,000.00 3 / 3 Water Line Stop Repair S19173238 KOFF & ASSOCIATES INC 8/15/2018 25,000.00 2.30.360(i)Classification Study S19173390 ELISA LARSON LAW PC 8/17/2018 65,000.00 2.30.360(g)Legal Counsel Services S19170212 SAN FRANCISCO DAILY, LLC 8/20/2018 58,076.00 2 / 2 Adjudicated Newspaper Services S19171890 AIMS COMPANIES 8/21/2018 87,425.00 18 / 1 Three Year Sewer Lateral Video S19173219 CHRISTINA STANKOVICH 8/21/2018 30,000.00 2.30.360(i)Costume Design Services S19173380 KIS 8/28/2018 37,614.00 2.30.360(j)Barracuda Firewall Updates and Replacements S19172131 Cooper Compliance Corporation 8/31/2018 39,900.00 42 / 12 WECC NERC Consultant S19173260 LOPEZ FENCE 9/11/2018 38,290.80 6 / 5 Foothills Park Nursery/Shop Chain‐link Fence S19173378 DLT SOLUTIONS LLC 9/13/2018 43,794.83 2.30.360(j)Autodesk Subscription Renewal S19172075 CONSOLIDATED ENGINEERING 9/26/2018 85,000.00 30 / 11 On‐Call Soils and Materials Testing S19172537 KONE INC 10/4/2018 35,442.00 2.30.360(j)Elevator Maintenance S19173377 PITNEY BOWES SOFTWARE, INC. 10/9/2018 59,787.52 2.30.360(d)Service and Maintenance Renewal S19173139 RAFTELIS FINANCIAL CONSULTING 10/17/2018 36,720.00 2.30.360(i) Water Cost of Service Analysis for Rate Review Alternatives S19172086 MCCAMPBELL ANALYTICAL INC 10/25/2018 66,000.00 13 / 2 Chronic Toxicity Testing List of Services, Goods & Materials Awarded by City Manager and Chief Procurement Officer.xlsx 2/28/2019 ATTACHMENT A Service Contracts Awarded ($25,000 and above) July 1 to December 31, 2018 Services Contract Contract Awarded To Award Date Award Amount Bidding Exemption* or Number of Bids Sent/Received Description S19173495 Capital Accounting Partners, L 10/25/2018 50,000.00 2.30.360(i)Development Services Fee Study S19173926 COLUMBIA TELECOMMUNICATIONS C 10/25/2018 32,240.00 2.30.360(i)Wireless Communication Application Review S19173656 PlaceWorks 10/26/2018 66,876.00 2.30.360(b)Comprehensive Plan and Additional Support S19173967 MELISSA OLSEN CAVALLO 11/5/2018 48,000.00 2.30.360(i) Cable Joint Powers Authority Administrative Services S19173085 DPI INC 11/7/2018 233,169.00 13 / 3 Sewer Main Replacement at Palo Alto JMZ S19172116 TESTAMERICA LABORATORIES,INC. 11/21/2018 32,000.00 19 / 3 Laboratory Analytical Services S19171516 WOODARD & CURRAN INC 11/27/2018 82,500.00 25 / 2 EIR for Advanced Water Purification Facility S19174154 COLUMBIA TELECOMMUNICATIONS C 11/28/2018 43,820.00 2.30.360(i)Small Cell Wireless Facility Engineering Analysis S19174170 BIBLIOTHECA ITG LLC 12/3/2018 46,639.58 2.30.360(d) Annual Support and Maintenance for Children's Library Self‐Check Machines S19174229 TOCHI 12/12/2018 25,000.00 4 / 2 City Hall 4th Floor Remodel ‐ Data and Telecom S19173020 TOCHI 12/14/2018 124,080.00 725 / 3 City Hall 4th Floor Remodel ‐ Demolition, Walls, Ceiling, and Mechanical S19172977 THE PERMANENTE MEDICAL GROUP 12/17/2018 25,000.00 2.30.360(i)Occupational/Pre‐Employment Services S19171986 SHELTERBELT BUILDERS INC. 12/18/2018 25,000.00 6 / 3 Open Space Foothills Park Fire Break Maintenance S19174212 TOCHI 12/18/2018 47,080.00 3 / 3 City Hall 4th Floor Remodel ‐ Electrical S19172869 MCGUIRE AND HESTER 12/19/2018 51,000.00 12 / 1 Recycled Water Pipeline S19173995 ONE SOURCE ENGINEERING INC. 12/19/2018 133,144.02 13 / 3 Ventura Boiler Replacement List of Services, Goods & Materials Awarded by City Manager and Chief Procurement Officer.xlsx 2/28/2019 ATTACHMENT A Service Contracts Awarded ($85,000 and above) July 1 to December 31, 2018 Goods Contract Contract Awarded To Award Date Award Amount Bidding Exemption* or Number of Bids Sent/Received Description 4619000013 OLIN CHLOR ALKALI PRODUCTS 7/5/2018 96,750.00 9 / 4 Bulk Sodium Hypochlorite 4619000018 R & B COMPANY 7/6/2018 105,000.00 2.30.360(d)Utility Pipes, Valves and Fittings 4619000025 GRANITE ROCK COMPANY 7/9/2018 120,000.00 9 / 4 Sand and Rock Gravel 4619000039 LN CURTIS & SONS 7/17/2018 120,000.00 2.30.360 (d) Purchase and Repair/Replacement of Fire Equipment 4519000073 KEYSTONE ELECTICAL MANUFACTURI 7/31/2018 192,756.01 8 / 1 Maybell Substation Doors 4519000077 FOLSOM LAKE FORD 8/1/2018 209,456.60 2.30.360(j)Five Ford Interceptors for Police 4519000126 National Auto Fleet Group 8/21/2018 89,153.28 2.30.360(j)Chevy Silverado 4619000104 SEL ENGINEERING SERVICES, INC 8/27/2018 160,000.00 2.30.360(e)Assorted SEL Substation Protective Relays 4619000107 TRAYER ENGINEERING CORP 9/13/2018 225,000.00 2.30.360(d) Submersible Load Break Switches and Fault Interrupters 4519000186 GOLDEN GATE SYSTEMS 9/28/2018 67,992.42 2.30.360(j)Toshiba Portege X30 Notebook Computers 4519000189 HARRIS CORPORATION 10/1/2018 79,811.69 2.30.360(e)Police Mobile Radios 4619000108 HILL BROTHERS CHEMICAL COMPANY 10/1/2018 111,000.00 10 / 3 Magnesium Hydroxide 4519000213 National Auto Fleet Group 10/18/2018 77,010.84 2.30.360(j)Two Chevy Bolt EV's, 5 Door Wagon 4519000215 National Auto Fleet Group 10/18/2018 105,091.92 2.30.360(j)Two Ford F‐150 Trucks 4519000233 TRI PACIFIC SUPPLY 10/22/2018 66,642.28 2.30.360(d)Hot Tapping & Flow Stopping Tool Kit System 4519000234 National Auto Fleet Group 10/23/2018 85,241.85 2.30.360(j)Three Ford F‐150 Trucks 4519000238 GOLDEN GATE SYSTEMS 10/25/2018 99,309.36 2.30.360(j)HP Elite Desk 800 Hardware 4519000249 National Auto Fleet Group 10/29/2018 114,013.09 2.30.360(j)One Ford F‐350 4519000269 National Auto Fleet Group 11/14/2018 183,348.90 2.30.360(j)One Peterbilt 520 Chassis Paccar PX‐9 Engine 4519000270 WW GRAINGER INC 11/14/2018 115,785.25 2.30.360(j)One Tennant Green Machine Model 636 4519000310 COOPER POWER SYSTEMS 12/5/2018 128,805.30 2.30.360(d)Service Kit for TPG Main Control Board 4519000311 WATTCO EMERGENCY EQUIPMENT 12/5/2018 72,111.05 2 / 2 Outfit One Fire Chevy Suburban Command Vehicle 4519000312 ABB 12/6/2018 222,994.38 3 / 3 Outdoor Oil‐Filled Station Service Voltage Transformer 4619000128 SIEMENS INDUSTRY, INC. 12/16/2018 80,000.00 140 / 7 Outdoor SF6 72.5 KV Circuit Breaker List of Services, Goods & Materials Awarded by City Manager and Chief Procurement Officer.xlsx 2/28/2019 ATTACHMENT B Excerpt from the Palo Alto Municipal Code 2.30.200 Procurement officer contract award authority. The Procurement Officer may award and sign the following contracts: (e) Software and hardware purchase, licensing and Maintenance Contracts. Notwithstanding Subsection 2.30.200(c), the Procurement Officer may award and sign contracts other than general services agreements, including, without limitation, vendor‐based standard form hardware and software purchase and licensing contracts, for the purchase of hardware and software, the licensing of software, and the maintenance of hardware and software, where the term of licensing or maintenance services does not exceed five years and the contract price, excluding sales tax or use tax, does not exceed $85,000.00 per year in the first contract year and does not exceed the sum of $85,000.00 and any unexpended monies carried forward from a prior contract year, in any subsequent contract year. The contracts referred to herein may include contracts for data storage services, which shall be subject to the city's information security policies, terms, conditions and other requirements established by the chief information officer. 2.30.360 Exemptions from competitive solicitation requirements. The following are exemptions from the informal and formal competitive solicitation requirements of this chapter, except as otherwise provided. These exemptions will be narrowly interpreted and applied. The department requesting an exemption shall provide all relevant information supporting the application of the exemption to the Procurement Officer. Based upon this information, the Procurement Officer shall make a recommendation to the City Manager and the City Manager shall determine whether an exemption from the competitive solicitation requirements applies. Nothing herein is intended to preclude the use of competitive solicitations, as practicable. (b) Whenever solicitations of bids or proposals would for any reason be impracticable, unavailing or impossible, provided that in the case of a public works project, the project is not otherwise required by the charter to be formally bid. These situations are those where solicitations of bids or proposals would not be useful or produce any operational or financial advantage for the city. Situations where solicitations of bids or proposals would be impracticable, unavailing or impossible, include, without limitation, the following: (2) Due to circumstances beyond the control of the city, the time necessary to use the competitive solicitation process, procedures and requirements would result in a substantial economic loss to the city or the substantial interference with a required city operation; (c) Where competitive bids or requests for proposals have been solicited and no bid or proposal has been received, or where no bid or proposal meeting the requirements of the invitation to bid or request for proposal has been received, provided that, in the case of a public works project, the project is not otherwise required by the charter to be formally bid. ATTACHMENT G Excerpt from the Palo Alto Municipal Code (d) Contracts for goods, wholesale commodities and services, general services or professional services available from only one source, where the Procurement Officer has determined, in writing, there is no adequate substitute or equivalent provider. Examples of acceptable sole source acquisitions or purchases may include, without limitation: equipment or services for equipment, for which there is no comparable competitive product or service except that provided by the equipment manufacturer, distributor or dealer; proprietary products sold directly by the manufacturer; a component or replacement part, for which there is no commercially available substitute and which can be obtained only from the manufacturer; goods where there is only one authorized distributor in the area; and goods where compatibility with goods in use by the city is an overriding consideration. All requests for sole source acquisitions or purchases shall be supported by written documentation (facsimile or electronic mail may be used), approved by the office or department head, and forwarded to the Procurement Officer. (e) Contracts for goods where, pursuant to Section 2.30.900, the City Manager has determined that standardization of the supplies, materials or equipment is permissible. (g) Legal services contracts, including, without limitation, the services of outside counsel, consultants and other experts needed for litigation, administrative or other legal proceedings. (h) Professional services contracts for private development related studies and services whenever the services are funded wholly by private developers. (i) Professional services contracts, where the estimated total expenditure by the city, regardless of term, does not exceed $50,000.00. (j) Cooperative purchases, with one or more other public agencies or through a cooperative purchasing agency, provided the services are solicited using methods substantially similar to those required by this chapter, as determined by the Procurement Officer. (k) The use of another governmental or public agency's contract or substantially the same contract terms provided: (i) the agency uses a solicitation method substantially similar to the method required by this chapter; (ii) the contract is consistent with the requirements specified in this municipal code; and (iii) the Procurement Officer determines that the city will realize overall value to utilizing the other agency's contract or contract terms compared to the city performing its own solicitation. City of Palo Alto (ID # 10142) City Council Staff Report Report Type: Informational Report Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: CDBG: Minor Home Repair Program Progress Report Title: Progress Report Regarding the Community Development Block Grant Minor Home Repair Program. From: City Manager Lead Department: Planning and Community Environment Recommendation This is an informational report and no action is requested. Background A well-maintained housing stock is one of the City of Palo Alto’s most valuable resources. The City recognizes the need to maintain and enhance the viability and character of the community and allow for lower income households to perform necessary repairs to maintain their housing. The City of Palo Alto offered financial assistance to lower income households through its Minor Repair Program in the form of grants. The assistance provided by the program is funded through the City’s Community Development Block Grant (CDBG) Program. Grants are available to very low-income and low-income homeowners. Grants are used for emergency repairs and specific projects, such as ADA accessibility. Grant maximums are set at $10,000. Assistance is available to eligible owner-occupants of single- family, duplexes and condominiums. Discussion: Habitat for Humanity East Bay/ Silicon Valley serves as Program Administrator for the City’s Minor Home Repair Program. Habitat has experience and capacity to administer, manage, City of Palo Alto Page 2 and oversee effective use of the City’s grant funds and has successfully done so on similar projects. The agency was recently awarded the contract to serve as Program Administrator for the Alameda County Measure A1 Home Preservation Loan Program. In addition, Habitat serves as Home Rehabilitation Program Administrator for Contra Costa County, and the Cities of Walnut Creek, Livermore and Pleasanton. In Fiscal Year 2015, Habitat for Humanity East Bay/Silicon Valley, Inc was awarded $1 million in CalHome funds for the agency’s Home Repair program. In Fiscal Year 2016-2017, Habitat was awarded funds from City of Hayward, City of Fremont, City of Milpitas, and City of San Jose to provide grant- and loan-based repair and rehabilitation awards to low-income homeowners in those cities. Given that Fiscal Year 2017-18 (Agreement executed in May of 2017) was the first year of the Minor Home Repair Program, Habitat focused on conducting marketing and outreach to engage the community and increase awareness of the new program. To date, Habitat has contacted the Veteran’s Affairs Hospital Geriatrics Department, Avenidas (the premier senior service organization in the city), Cubberley Community Center, Mitchell Park Community Center, Palo Alto City Library, Palo Alto Housing Corporation, and Santa Clara County Department of Aging and Adult Services. Additionally, informational flyers were made part of the utility bills in the month of January 2019 to increase awareness about the program. Habitat also conducted two informational sessions explaining the program to potential participants which were promoted to the hundreds of low-income homeowners participating in PA Housing’s Below Market Rate (BMR) homeownership program. Thus far, only 5 clients are verified and grants have been approved. After contributing a significant level of marketing and outreach to engage the community and increase awareness of the new program via the avenues outlined above, the response has been minimal. When the program was first introduced, asset caps of $50,000 for a younger family, and $100,000 for families with titleholders who are over age 62 and/or disabled, were set. Due to the lack of applications, City Staff, with Habitat’s recommendation, removed the asset cap. Similar programs Habitat administer in areas with comparable income mixes do not have an asset cap. Removing the cap allows more residents to be eligible and therefore access the services. The asset cap also tended to penalize retired people who have limited incomes to undertake repairs. Despite removing the asset cap, the number of applicants expressing interest relative to the amount of awareness-building that was undertaken in the community was relatively slight. City of Palo Alto Page 3 The delay in expending funds for this project is a concern due to the Department of Housing and Urban Development’s (HUD) timeliness requirement for CDBG funds. The annual grants the City receives from HUD remain in a line of credit until there are actual expenditures for projects. HUD annually checks that as of April 30th no more than one and a half times the amount of the current year’s grant remains in the line of credit. The first year this happens, the City is sent a warning notice. If in the following year there remains a higher than allowable amount in the line of credit, HUD will take away the City’s grant amount that exceeds the limit. Currently there are enough expenditures for projects other than Habitat’s to meet the requirement in 2019. Staff will continue to work with Habitat to market the program and increase participation. City of Palo Alto (ID # 10190) City Council Staff Report Report Type: Informational Report Meeting Date: 4/1/2019 City of Palo Alto Page 1 Summary Title: Proclamation-Earthquake Preparedness Month Title: Proclamation Declaring the Month of April to be Earthquake Preparedness Month From: City Manager Lead Department: Office of Emergency Services Attachments: • Attachment A: Proclamation Declaring the Month of April 2019 Earthquake Preparedness Month Proclamation DECLARING THE MONTH OF APRIL 2019 EARTHQUAKE PREPAREDNESS MONTH WHEREAS, the State of California has proclaimed April to be Earthquake Preparedness Month; and WHEREAS, the City of Palo Alto recognizes the importance of preparing for earthquakes and the possible consequences of a major seismic event; and WHEREAS, the City of Palo Alto has developed an Emergency Services Volunteer (ESV) program that is comprised of Amateur Radio (ham) operators, Block Preparedness Coordinators (which includes Neighborhood Watch), and other specialties such as our Community Emergency Response Team (CERT); and WHEREAS, earthquakes can overwhelm the City and other government agencies, thus each individual, business, and other organization must bear responsibility by taking steps for preparedness, mitigation, response, and recovery; and WHEREAS, the City's Office of Emergency Services has helpful information posted on www.cityofpaloalto.org/preparedness. NOW, THEREFORE, I, Eric Filseth, Mayor of the City if Palo Alto, on behalf of the entire City Council do hereby declare the month of April to be Earthquake Preparedness Month in the City of Palo Alto. I call upon all citizens and entities of the Palo Alto Community to join together to improve our resilience before the next Big One. Presented: April 1, 2019 ______________________________ Eric Filseth Mayor City of Palo Alto (ID # 10208) City Council Staff Report Report Type: Informational Report Meeting Date: 4/1/2019 City of Palo Alto Page 1 Council Priority: Climate/Sustainability and Climate Action Plan Summary Title: Green Building Program Update Title: Green Building Program Update From: City Manager Lead Department: City Manager Executive Summary This memo provides an interim update on the City of Palo Alto’s recent efforts related to its Green Building Program. The City’s Sustainability Implementation Plan (SIP) commits to exploring green building, energy efficiency, and electrification policy options that go beyond code minimum in the next update to our building codes. The next applicable code update cycles will be the adoption of the 2019 California Code of Regulations, Title 24, that incorporates the 2019 California Green Building Code and 2019 California Energy Code. Once adopted, these regulations will be enforceable starting on January 1st, 2020. Staff will return to Council in the latter half of 2019 with proposed regulations to provide increased standards to these codes. In the interim, this memo summarizes the City’s work over the last year in support of this effort and summaries recent progress in related ongoing programs to support green building in Palo Alto. Background Every three years, the State of California adopts new building standards that are codified in Title 24 of the California Code of Regulations, referred to as the California Building Standards Code. Since 2008, Palo Alto has a history of developing requirements that are more stringent than the baseline State requirements in the California Green Building and Energy Codes; we refer to our more stringent requirements as “reach codes” because they reach beyond the state standards. Energy efficiency requirements reside in chapter 16.17 of the Palo Alto Municipal Code, which adopts and modifies the current version of the California Energy Code. Water efficiency, electric vehicle charging, material conservation, resource efficiency, and indoor air quality requirements reside in chapter 16.14 of the Palo Alto Municipal Code which adopts and modifies the current version of the California Green Building Code. City of Palo Alto Page 2 These local energy and green building regulations are intended to create a new generation of efficient, environmentally responsible, and healthy buildings. The current energy requirements in the Palo Alto Municipal Code include specific cost-effective compliance options that are triggered on permit applications for the following project types: 1) new single-family residential, 2) new multi-family residential, and 3) new commercial construction. More detailed information about the City’s Energy Reach Code Ordinance may be found in the staff report for the last update to this portion of the code from May 2, 2016 (ID #6796), when the Council voted 9-0 to adopt and amend the code as recommended. Discussion This staff report will summarize staff progress in three areas: • Green Building Summit and Green Building Technical Advisory Group: Community engagement and policy development efforts to inform our green building and energy code updates; • Statewide and Regional efforts: the City of Palo Alto has partnered with other jurisdictions to strengthen broader coalitions to promote sustainability gains in the green building arena; and • Ongoing Green Building Compliance and Incentive Programs: the City of Palo Alto continues to provide exceptional customer service support and financial incentives to strengthen the impact of the City’s green building priorities. Green Building Summit and Green Building Technical Advisory Group Several years ago, City staff convened a multi-disciplinary stakeholder committee, the Green Building Advisory Group (GBAG), to gain knowledge and suggestions for consideration into municipal code changes. GBAG is comprised of architects, engineers, energy modelers, developers, and contractors, and has met regularly since 2013 to help staff develop new recommendations for local green building and energy policies. On February 22, 2018, the City of Palo Alto hosted the “Green Building Summit” at Mitchell Park Community Center. The summit included the GBAG members and a panel of several distinguished guest experts, including Commissioner Andrew McAllister of the California Energy Commission, and Jason McLennan, the creator of the Living Building Challenge and an internationally-recognized leader in green building and sustainability. More than 50 community members joined with City staff from multiple departments to explore ways to address local priorities in the upcoming 2019 California Code of Regulations, Tile 24 update around energy efficiency, water efficiency, electrification, emissions, indoor air quality, and construction waste and debris management. Following the Green Building Summit, the Green Building Technical Advisory Committee (TAC), a sub-committee of the Green Building Advisory Group (GBAG), was convened for a vetting effort to explore building electrification and energy efficiency measures along with other green City of Palo Alto Page 3 building subject areas, as directed by the Sustainability Implementation Plan (SIP). The TAC convened for ten community meetings between May and December of 2018 to review and discuss possible changes to the municipal code. The first four meetings were related to energy efficiency, emissions, and electrification, including one meeting dedicated to the topic of electric vehicles. Another three meetings were related to indoor air quality, material conservation and resource efficiency, construction waste and debris management, and water efficiency. There were also three final meetings to summarize the suggestions for future green building and energy reach policies. All agendas and meetings minutes are posted on the city’s Green Building Advisory Group webpage. As part of the 2018 TAC effort, the City of Palo Alto sponsored the preparation of an Energy Reach Code Cost-Effectiveness Analysis that examined possible energy efficiency measures, including building electrification, for buildings within Palo Alto. In order to codify local energy efficiency requirements, the California Energy Commission requires that a cost-effectiveness study be conducted and filed in the case of a local amendment to the California Energy Code. It is required that the City demonstrate to the California Energy Commission, using a cost- effectiveness study, that the amendments to the code are financially responsible to the commercial and residential applicants. The study analyzes building design strategies that are more stringent than the upcoming 2019 California Energy Code, which goes into effect starting January 1st, 2020. When the TAC reviewed the findings of the City-sponsored study in late 2018, some members of the group expressed concerns that the findings may have been limited by the specificity of the original scope of the study. At about this time, staff learned of a newly forming statewide effort to conduct a more comprehensive cost-effectiveness study. City staff therefore decided to postpone the development of recommendations to the City Council pending the outcome of the statewide study projected to be released on June 30th, 2019. Statewide and Regional Efforts Palo Alto has joined a consortium of approximately thirty-five jurisdictions from throughout California to perform the statewide research project on building electrification. The results of the Palo Alto study were released during the beginning of the statewide study and helped the policy researchers by informing the direction of the statewide study. Participation in the statewide effort will help participating jurisdictions in the development of local Energy code changes. This will allow for new regulations to be based on the most robust statewide body of knowledge. While preliminary data is beginning to emerge from the statewide effort, the final report is anticipated at the end of June. Palo Alto staff will reconvene stakeholders to gather additional policy input once the final report has been analyzed, with the goal of bringing policy recommendations to the City Council in the second half of calendar year 2019. In addition to the statewide cost-effectiveness study, Palo Alto is partnering with the Bay Area Regional Energy Network (BayREN), a collaboration of local governments from nine counties in City of Palo Alto Page 4 the Bay Area, to implement a regional market transformation program for heat-pump water heaters. Heat-pump water heaters (HPWH) are a focus of attention because they are far more energy efficient that gas-fueled water heaters. Heat pump systems also eliminate GHG emissions associated with gas-fired space heaters while improving air quality within the dwelling units. The BayREN program has been awarded grant funding from the Bay Area Air Quality Management District (BAAQMD) and will provide contractor training, consumer education, and a HPWH incentive to distributors throughout the Bay Area. The regional program approach seeks to catalyze market transformation and address the persistent barriers that are less effectively addressed on a local scale. This program is expected to launch in spring of 2019. This is an example of focusing on market readiness, in addition to enforcing regulations, to more effectively promote the adoption of energy saving practices and equipment. Ongoing Green Building Compliance and Incentive Programs Codes are only effective if they are followed. Palo Alto’s Development Services Department has developed a Green Building Program to support compliance with the City’s green building and energy regulations. The program provides applicants with informative resources to streamline compliance with, and support understanding of, Palo Alto’s Green Building ordinances. The City’s Green Building Compliance webpage outlines requirements in the planning entitlement, plan check, inspection and post-occupancy phases for residential and commercial projects. The webpage provides 24/7 access to on-demand video trainings to help residential and non- residential project applicants understand the requirements and submittal process for permit applications. Additional videos have been created to promote Zero Net Energy strategies. In addition to the Green Building Compliance Program operated by the Development Services Department, Palo Alto’s Utilities Department has developed several financial incentive opportunities that support the Green Building Program. A heat-pump water heater pilot program was launched in spring of 2016 to encourage residents to replace their gas water heaters with more efficient heat-pump water heaters (HPWHs). The pilot program website provides information on rebate levels (up to $1,500), qualifying models that meet the minimum efficiency standard required by the California Energy Commission, and installation considerations. In May 2017, the program was expanded to include rebates for new construction projects. The HPWH pilot website was updated with a new look and feel in December 2017. In the past two years, the City has hosted two HPWH workshops with representatives from HPWH manufacturers providing overview of their products for homeowners, contractors and building professionals. As of December 2018, the City has paid rebates for 36 HPWHs, including 13 rebates paid to a new, all electric multi-family building. In July 2018, the Utilities Department was awarded a 2018 Climate Protection Grant in the amount of $296,220 from BAAQMD to implement a Multi-family Gas Furnace to Heat Pump Retrofit pilot program. The pilot will target up to three low-income apartment buildings to replace existing in-unit gas wall furnaces with high efficiency air source heat pumps. This City of Palo Alto Page 5 program will identify the technical and logistical hurdles of retrofitting the gas wall furnaces with heat pump units, and will conclude with a summary of the retrofit cost, energy savings and avoided GHG emissions in a case study. An RFP was issued to implement this pilot program in December 2018 and an implementation vendor was selected in February 2019. The City is also supporting green building through its Electric Vehicle (EV) Charger Rebate Program, launched in January 2017. The program currently offers incentives of up to $18,000 for multi-unit dwellings (MUDs) and up to $30,000 for schools and nonprofit organizations. The scope of the rebates includes financial support to upgrade electrical infrastructure and install EV chargers, also known as Electric Vehicle Supply Equipment (EVSEs), for communal use. To date, 28 properties have applied to participate in the EV Charger Rebate Program. To further encourage EV charger installations for existing buildings, the Utilities Department issued an RFP for EV Solutions and Technical Assistance. The contract is currently being finalized and is expected to be executed in April. Resource Impact The Development Services Department’s Green Building Program was funded with a $300,000 non-salary expense appropriation for Fiscal Year 2019. The costs are recovered through development fees. Other City departments’ sustainability allocations are also approved by City Council, through the annual budget process, and are typically cost recovery due the enterprise nature of Utilities, Zero Waste and the Water Quality Control Treatment Plant.