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HomeMy WebLinkAbout2017-02-13 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. February 13, 2017 Regular Meeting Council Chambers 6:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 10 days preceding the meeting. 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. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Special Orders of the Day 6:00-6:15 PM 1. Fire Safety Month Poster Award Recognition to Palo Alto Unified School District Students for Excellence in Design, Art and Messaging (Continued From January 9, 2017) 2. American Construction Inspectors Association (ACIA) Presentation of the 2016 Industry Leadership of the Year Award 3. Proclamation of the Council of the City of Palo Alto Honoring Pastor Paul Bains 4. Proclamation of the Council of the City of Palo Alto Honoring Clarence B. Jones 5. Appointment of Three Candidates to the Historic Resources Board (HRB) and Four Candidates to the Parks & Recreation Commission (PRC) for Terms Ending December 15, 2019; and Appointment of one Candidate to the PRC and one Candidate to the Planning & 2 February 13, 2017 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. Transportation (PTC) Commission to two Unexpired Terms Ending December 15, 2018 Study Session 6:15-7:00 PM 6. Request for a Pre-screening Study Session to Rezone the Vacant Property at 4146 El Camino Real (Near Thain Way) From Low Density Multiple-Family Residence District (RM-15) to Medium Density Multiple-Family Residence District (RM-30) Agenda Changes, Additions and Deletions City Manager Comments 7:00-7:10 PM Oral Communications 7:10-7:20 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. Minutes Approval 7:20-7:25 PM 7. Approval of Action Minutes for the January 28, 2017 Council Meeting Consent Calendar 7:25-7:30 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 8. Adoption of a Resolution Establishing Pledge Sources of Revenue for Repayment of State Revolving Fund (SRF) Loans for Planning, Design and Construction of Wastewater Treatment Enterprise Fund Facilities at the Palo Alto Regional Water Quality Control Plant (RWQCP), and Repealing Resolution Number 9631 9. Policy and Services Committee Recommends That the City Council Accept the Auditor's Office Quarterly Report as of September 30, 2016 10. Finance Committee Recommends That the City Council Accept Macias Gini & O'Connell's (MGO) Audit of the City of Palo Alto's Financial Statements as of June 30, 2016 11. Approval of an Amendment to Stewardship Agreement Number S13147834 With Santa Clara County Fire Safe Council for an Additional Amount of $181,500 Annually for Three Years for a Total Amount Not-to-Exceed $987,630 to Implement Elements of the Foothills Fire Plan (an Interdepartmental Initiative of Fire, Community Services, and Public Works) and Extend the Term two Years to June 30, 2020 3 February 13, 2017 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. 12. Adoption of a Resolution Approving the 2017 City of Palo Alto Utilities Legislative Policy Guidelines 13. Approval of an Amendment of an Existing Funding Agreement With the Palo Alto Transportation Management Association (PATMA) and Silicon Valley Community Foundation Extending the Term of the Agreement for two Years (to December 2018) and Providing $100,000 per Year Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 7:30-9:00 PM 14. PUBLIC HEARING: Adoption of an Ordinance Amending Chapter 18 of the Palo Alto Municipal Code Making Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground Floor Combining District to Certain Properties Located Downtown; Modifying the Definition of Retail; Adding Regulations to Improve Pedestrian Oriented Design Standards in the Downtown; and Related Changes. The Proposed Ordinance is Exempt From the California Environmental Quality Act (CEQA) per Section 15308. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance 9:00-10:30 PM 15. Adoption of a Resolution Amending Resolutions 9473 and 9577 to Continue the Downtown Residential Preferential Parking (RPP) Program With Minor Modifications and Finding the Action Exempt From the California Environmental Quality Act Inter-Governmental Legislative Affairs Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using 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. 4 February 13, 2017 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. Policy and Services Committee Meeting February 14, 2017 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report City of Palo Alto Sales Tax Digest Summary First Quarter Sales (January - March 2016) City of Palo Alto Sales Tax Digest Summary Second Quarter Sales (April - June 2016) Public Letters to Council Set 1 City of Palo Alto (ID # 7720) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Proclamation Honoring Pastor Paul Bains Title: Proclamation of the Council of the City of Palo Alto Honoring Pastor Paul Bains From: City Manager Lead Department: City Clerk Attachments:  Attachment A: Proclamation Honoring Pastor Paul Bains Proclamation Honoring Pastor Paul Bains WHEREAS, Pastor Paul Bains has been a longtime positive force for good in both East Palo Alto and Palo Alto; and WHEREAS, Pastor Paul Bains is the Co-founder and President of Project WeHOPE (We Help Other People Excel), an East Palo Alto based homeless and supportive housing shelter that opened in 2009 and assists homeless and at-risk adults in East Palo Alto and surrounding San Mateo County and Santa Clara County communities; and WHEREAS, the 55 bed Project WeHOPE shelter has evolved into a year-round supportive housing/emergency shelter which offers on-site life skills classes, anger management, 12-step recovery, communications, financial education, health and nutrition, art therapy, and exercise classes. In 2016, Project WeHOPE found permanent homes for 16 individuals; and WHEREAS, Project WeHOPE launched the Kids N.O.W. Food Program, standing for "Kid's Nutrition on Weekends," a program which provides weekly fresh food for families in need. Project WeHOPE also provides Thanksgiving and Christmas holiday dinners for less fortunate community members; and WHEREAS, Pastor Paul Bains and Project WeHOPE launched Dignity on Wheels in 2015, a mobile shower and laundry program which regularly provides service at nine sites in San Mateo and Santa Clara counties and is at the Opportunity Center in Palo Alto every Saturday morning; and WHEREAS, Pastor Paul Bains was sworn in as the Chaplain of the Palo Alto Police Department on October 27, 2010 and developed the Police Department’s chaplaincy program to improve opportunities for relationship building between staff and the community. As Chaplain, he supports officers when making death notifications to community members and provides support to employees when needed; and WHEREAS, Pastor Paul Bains is a member of the Police Department’s Critical Incident Stress Management Team and has been part of “Family Day,” which provides information to officers’ families to better understand the life of a police officer and how it extends into their personal lives. NOW, THEREFORE, I, H. Gregory Scharff, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby recognize Pastor Paul Bains and extend appreciation for his years of valuable contributions and service to the community. Presented: February 13, 2017 ______________________________ H. Gregory Scharff Mayor City of Palo Alto (ID # 7734) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Proclamation Honoring Clarence B. Jones Title: Proclamation of the Council of the City of Palo Alto Honoring Clarence B. Jones From: City Manager Lead Department: City Clerk Attachments:  Attachment A: Proclamation Honoring Clarence B. Jones Proclamation Honoring Clarence B. Jones WHEREAS, Palo Alto is proud to honor as one of our most esteemed residents, Clarence B. Jones, veteran of the historic Civil Rights Movement, author, accomplished speaker, scholar, business leader, and close associate of Dr. Martin Luther King, Jr.; and WHEREAS, Clarence B. Jones served as political advisor, personal attorney and speech writer for Dr. Martin Luther King, Jr., beginning in 1961, participated in the writing of Dr. King’s historic 1963 “I Have a Dream” speech, and helped to negotiate the end of the Attica Prison inmate rebellion in New York in 1971; and WHEREAS, Clarence B. Jones is the author of two books, “What Would Martin Say?” and “Behind the Dream: The Making of the Speech that Transformed a Nation,” and continues to be a much requested speaker and featured legacy documentary subject; and WHEREAS, Clarence B. Jones has been honored with numerous awards and recognitions and honorary degrees by universities, civic, legal and faith organizations, business associations, and international venues; and WHEREAS, Clarence B. Jones is today a Scholar in Residence at the Stanford Martin Luther King, Jr. Research and Education Institute, and a Diversity Visiting Professor at the University of San Francisco; and WHEREAS, Clarence B. Jones generously contributes to our local community by participating in educational and civil rights programs, including Youth Community Service students and the 2013 “Let Freedom Ring” 50th Anniversary of the March on Washington here in Palo Alto; and WHEREAS, Clarence B. Jones continues to challenge us here in Silicon Valley to address issues of equity in employment, education, and housing. NOW, THEREFORE, I, H. Gregory Scharff, Mayor of the City of Palo Alto, on behalf of the City Council, do hereby recognize Clarence B. Jones as a community hero and extend appreciation for his years of valuable contributions and service. Presented: February 13, 2017 ______________________________ H. Gregory Scharff Mayor CITY OF PALO ALTO OFFICE OF THE CITY CLERK February 13, 2017 The Honorable City Council Palo Alto, California Appointment of Three Candidates to the Historic Resources Board and Four Candidates to the Parks & Recreation Commission (PRC) for Terms Ending December 15, 2019; and Appointment of one Candidate to the PRC and one Candidate to the Planning &Transportation Commission to Unexpired Terms Ending December 15, 2018 On Monday, February 13, 2017, the Council is scheduled to appoint: three (3) candidates to the Historic Resources Board; four (4) candidates to the Parks & Recreation Commission (PRC) for terms ending December 15, 2019 and one (1) candidate to the PRC for a term expiring on December 15, 2018; and one (1) candidate to the Planning & Transportation Commission for an unexpired term ending December 15, 2018. Voting will be by paper ballot. Background On January 30, 2017, Council decided not to re-interview applicants for the Historic Resources Board (HRB). On February 11, 2017, the Council interviewed 11 applicants for the Parks & Recreation Commission and 12 applicants for the Planning & Transportation Commission. Historic Resources Board Vote to appoint three (3) three-year terms on the Historic Resources Board (HRB) expiring on December 15, 2019. The first three candidates to receive at least five votes (required) will be appointed. The 4 HRB Candidates are as follows: 1. Bower, David (Incumbent) 2. Bunnenberg, Beth (Incumbent) 3. Corey, Brandon 4. DiCicco, Patt (Incumbent) Parks and Recreation Commission Vote to appoint four (4) three-year terms on the Parks and Recreation Commission (PRC) expiring on December 15, 2019. The first four candidates to receive at least five votes (required) will be appointed; and Page 2 Following the vote to appoint 4 three-year terms, vote to appoint one (1) unscheduled vacant term on the PRC expiring on December 15, 2018. The first candidate to receive at least five votes (required) will be appointed. The 11 PARC Candidates are as follows: 1. Grant Dasher 2. Rebecca Eisenberg 3. Jeff Greenfield 4. Doug Hagan 5. Jeff LaMere 6. Steven Lee 7. Alice Mansell 8. Ryan McCauley 9. Don McDougall 10. Keith Reckdahl (Incumbent) 11. Ellen Turbow Planning and Transportation Commission Vote to appoint one (1) unscheduled vacant term on the Planning and Transportation Commission expiring on December 15, 2018. The first candidate to receive at least five votes (required) will be appointed. The 12 PTC Candidates are as follows: 1. Dexter Dawes 2. Claude Ezran 3. Brian Hamachek 4. David Hirsch 5. Natasha Kachenko 6. Gabriel Kralik 7. Susan Monk 8. Christian Pease 9. Jessica Resmini 10. Reshma Singh 11. Curtis Smolar 12. Greer Stone On February 1, 2017, the City Clerk’s Office learned that Srinivasan Subramanian withdrew his application for the Planning and Transportation Commission. Some applications may be redacted at the request of the applicant. A full set of non-redacted applications have been provided to Council Members directly. Page 3 ATTACHMENTS:  Attachment A: HRB - Bower, David (PDF)  Attachment B: HRB - Bunnenberg, Beth (PDF)  Attachment C: HRB - Corey, Brandon (PDF)  Attachment D: HRB - DiCicco, Patt (PDF)  Attachment E: PRC - Dasher, Grant (PDF)  Attachment F: PRC - Eisenberg, Rebecca (PDF)  Attachment G: PRC - Greenfield, Jeff (PDF)  Attachment H: PRC - Hagan, Doug (PDF)  Attachment I: PRC - LaMere, Jeff (PDF)  Attachment J: PRC - Lee, Steven (PDF)  Attachment K: PRC - Mansell, Alice (PDF)  Attachment L: PRC - McCauley, Ryan (PDF)  Attachment M: PRC - McDougall, Don (PDF)  Attachment N: PRC - Reckdahl, Keith (PDF)  Attachment O: PRC - Turbow, Ellen (PDF)  Attachment P: PTC - Dawes, Dexter (PDF)  Attachment Q: PTC - Ezran, Claude (PDF)  Attachment R: PTC - Hamachek, Brian (PDF)  Attachment S: PTC - Hirsch, David (PDF)  Attachment T: PTC - Kachenko, Natasha (PDF)  Attachment U: PTC - Kralik, Gabriel (PDF)  Attachment V: PTC - Monk, Susan (PDF)  Attachment W: PTC - Pease, Christian (PDF)  Attachment X: PTC - Resmini, Jessica (PDF)  Attachment Y: PTC - Singh, Reshma (PDF)  Attachment Z: PTC - Smolar, Curtis (PDF)  Attachment AA: PTC - Stone, Greer (PDF) Department Head: Beth Minor, City Clerk Page 4 Historic Resources Board Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci Conflict of Interest Code require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: B0785A6B-D436-4D60-8732-4C5AD86AE27A Historic Resources Board Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Historic Resources Board that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: B0785A6B-D436-4D60-8732-4C5AD86AE27A Historic Resources Board Application 3 of 5 2. Please describe an issue that recently came before the Board that is of particular interestto you and describe why you are interested in it. If you have never been to a Board meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: B0785A6B-D436-4D60-8732-4C5AD86AE27A Historic Resources Board Application 4 of 5 4. Please identify a project or projects that you find to be examples of good historic architecture, and explain why. You may attach samples, identify project addresses, or provide links. If you attach samples, Staff may request that you bring hard copy print outs to the interviews. 5. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for: Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings California Environmental Quality Act DocuSign Envelope ID: B0785A6B-D436-4D60-8732-4C5AD86AE27A Historic Resources Board Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: B0785A6B-D436-4D60-8732-4C5AD86AE27A September 8, 2016 David Bower Birth Date February, 1951, Palo Alto, California Education San Francisco State University, San Francisco, California 1973-1975 B.A. in Communications, May 1975 Foothill College, Los Altos, California 1970-1973 Liberal Arts Major Washington University, St. Louis, Missouri 1969-1970 Liberal Arts Major Honors Professional Experience President, David Bower Incorporated, Palo Alto, California. Residential construction and consulting 2007 to present President, Bower Loops Builders, Palo Alto, California. Residential construction company. 2001 to 2007 President, David Bower Builders, Palo Alto, California. Residential construction company. 1979 to 2001 President, Designs In Wood, Palo Alto, California. Residential construction company. 1975-1979 Licensed contractor in the State of California 1979 to present Community Activities Board of Directors, Treasurer, Western Ballet, Mountain View, California. 1989-1993 Board of Directors, Treasurer, Palo Alto Chamber Orchestra, Palo Alto, California. 1995-1997 Board of Directors, Pelican Homeowners Association, Pajaro Dunes, Watsonville, California. 2005 to present. Current President Chairman, Design Committee, Pajaro Dunes Association, Watsonville, California. April 2006 to January 2015 Board member, Palo Alto Historic Resources Board, Palo Alto, California June 2007 to present Chairman, Palo Alto Historic Resources Board, Palo Alto, California June 2009 to October 2011 Board member, City of Palo Alto Infrastructure Blue Ribbon Commission, November 2010 to December 2011 Board member, Pajaro Dunes Geologic Hazard Abatement District, July 2014 to present Committee Member, City of Palo Alto Storm Drain Drain Blue Ribbon Committee, April-July 2016 Memberships NARI (National Association of the Remodeling Industry), 1993 to 2013 International Conference of Building Officials, 2004 to 2014 Build It Green, 2009 to 2014 DocuSign Envelope ID: B0785A6B-D436-4D60-8732-4C5AD86AE27A Historic Resources Board Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci Conflict of Interest Code require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 9F73D1A9-0709-4E09-81AD-708322A2489A Historic Resources Board Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Historic Resources Board that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 9F73D1A9-0709-4E09-81AD-708322A2489A Historic Resources Board Application 3 of 5 2. Please describe an issue that recently came before the Board that is of particular interestto you and describe why you are interested in it. If you have never been to a Board meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 9F73D1A9-0709-4E09-81AD-708322A2489A Historic Resources Board Application 4 of 5 4. Please identify a project or projects that you find to be examples of good historic architecture, and explain why. You may attach samples, identify project addresses, or provide links. If you attach samples, Staff may request that you bring hard copy print outs to the interviews. 5. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for: Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings California Environmental Quality Act DocuSign Envelope ID: 9F73D1A9-0709-4E09-81AD-708322A2489A Historic Resources Board Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 9F73D1A9-0709-4E09-81AD-708322A2489A Historic Resources Board Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci Conflict of Interest Code require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 6D46859B-68C3-43C5-93D1-B9F791017462 Historic Resources Board Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Historic Resources Board that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 6D46859B-68C3-43C5-93D1-B9F791017462 Historic Resources Board Application 3 of 5 2. Please describe an issue that recently came before the Board that is of particular interestto you and describe why you are interested in it. If you have never been to a Board meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Historic Resources Board achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 6D46859B-68C3-43C5-93D1-B9F791017462 Historic Resources Board Application 4 of 5 4. Please identify a project or projects that you find to be examples of good historic architecture, and explain why. You may attach samples, identify project addresses, or provide links. If you attach samples, Staff may request that you bring hard copy print outs to the interviews. 5. Historic Resources Board Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Land Use Element Palo Alto Municipal Code Chapter 16.49 Secretary of the Interiors Standards for: Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings California Environmental Quality Act DocuSign Envelope ID: 6D46859B-68C3-43C5-93D1-B9F791017462 Historic Resources Board Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 6D46859B-68C3-43C5-93D1-B9F791017462 Personal Information Note: The PARC regularly meets the fourth Tuesday of the month at 7:00 p.m. Parks and Recreation Commission Application 1 of 5 Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ___ Yes ___ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3                                                                               Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3                                                                                                                                                                                                                                   Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3                                                                                                                                                                                                                                                                    Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3                                                              Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3  DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3 Grant Woodson Dasher 3085 Middlefield Rd. tn. Palo Alto, CA 94306 Edycatjon: AB. Mathematics, magna cum /aude. Harvard College, 2009. Phi Beta Kappa. Secondary field in Computer Science. Work Experience: The White House. Digital Services Expert Washington, DC 2015 • Worked in the Obama administration while on leave from Google on implementation of a new computer system for processing immigration benefits • Collaborated with USCIS agency personnel and White House personnel on digitizing the naturalization and green card renewal processes. • Key player in deploying smart card authentication for the Department of Homeland Security, which significantly reduces the chance of phishing attacks that can compromise sensitive citizen data. • Consulted for other agencies such as the Office of Personnel Management and the Department of Education on authentication and identity issues. Google, Inc. Staff Software Engineer Mountain View, CA 2015-present; Cambridge, MA 2009-2015 (full time); New York, NY 2007, 2008 (intern) • Software engineer on Cloud Authentication and identity, working on helping large organizations transition to the Cloud and avoid security issues like phishing. • Currently, manage a team of 5 focused on Identity issues in the Google Cloud Platform • Previously, software engineer on google.com search, working on providing the best search results to users with a focus on multimedia content (images, videos). • Played a key leadership role in many major Google launches and products such as Knowledge Graph and Universal Search. • Point person for ranking issues involving multimedia and scanned book content on google.com. • Promoted three times in four years (one of only a handful people at the company were promoted three times in that period). • Previously, managed a team of about seven people working on multimedia features on google.com. • Completed two internships on local search and Google docs; both led to launches. • For last three years, volunteered time in a unique MIT-industry collaboration to offer "industry experience" to MIT students taking class on performance optimization. DocuSign Envelope ID: FFAE8F7E-0242-4ED9-8997-573C184C1DD3 Volunteer activities: Silicon Valley Urban Debate League. Volunteer Palo Alto, CA 2015-present • Run the "tab room" for every SVUDL tournament • SVUDL helps students who primarily live in lower income parts of Silicon Valley gain valuable policy and advocacy skills through weekend debate activities. Boston Urban Debate League. Volunteer, Judge Boston, MA 2009-2014 • Volunteered judging and tab room support for urban inner city debate in the Boston area at several tournaments per year. • Ran weekly "practice" for UDL students in 2010 experimental program to get kids off the streets and into classrooms. Harvard Computer Society Cambridge, MA 2005-2009 • President and key leader of organization in 2008. • Key player in negotiating with university to secure long-term support relationship and funds. • Key architect in designing new infrastructure that still serves all underground mailing lists and most student group websites five years later. Patents: • Dynamic image display area and image display within web search results. US 8346815 82. Assigned to Google, Inc. • Images For Query Answers. US 20170017668. Assigned to Google, Inc. Parks and Recreation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your Application, DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Rebecca L. Eisenberg, Esq. 2345 Waverley St. Palo Alto, CA 94301 (415) 235-8078 rebecca@privateclientlegal.com OVERVIEW: Effective attorney and general counsel for organizations & individuals. Detail-oriented, empathetic, efficient. Problem-solver. EDUCATION: Harvard Law School, J.D., June 1993 Editor, Harvard Law Review. Harvard Law Record, journalist and columnist. contributor and editor. ABA, President of Harvard Law Chapter. Graduated Cum Laude. Stanford University, B.A. Psychology/Decision Sciences, June 1990 Phi Beta Kappa elected junior year. Departmental distinction. Boothe Prize for Excellence in Writing. Cap & Gown Honor Society; Phi Psi Honor Society. President, Stanford Undergraduate Psychology Association (SUPA). Peer Tutor, Calculus, Stanford Center for Teaching & Learning. Orientation Coordinator, Transfer Students, Stanford Office of Residential Education, 1989. Program Advisor, Ujamaa and Naranja, Stanford Office of Residential Education, 1987-1988. Peer Counselor, the Bridge, 1987-1990. Teaching Assistant, Prof. Philip Zimbardo, Psychology 1, 1987-1990. PROFESSIONAL EXPERIENCE: Private Client Legal Advisors, San Francisco, CA Principal & Founder, 1/2013 - Present Operate boutique legal services firm, providing following services: Serve as outside GC for nonprofit organizations, technology companies, angel funds, entrepreneurs and executives. Locate, hire and manage specialized outside counsel; serve as intermediary between client and firms. Assist a variety of clients with matters involving regulatory compliance, employment matters, compensation, Fair Pay Act compliance, HR policies, financings and corporate transactions, as well as commercial agreements, licensing, employment disputes, litigation management, dispute resolution, public relations, and other business and legal affairs on behalf of founders, executives, non-profits, companies and start-ups. Analyze, negotiate and advise firms, companies and individuals on their real estate and finance-related documents warrants, convertible notes, stock purchase agreements, articles of incorporation and related corporate documents; provide actionable advice for stakeholders regarding different options and potential outcomes based on quantitative analysis of liquidity flowing through cap tables, interest accruing over time, types of collateral, and otherwise. Handle governance issues on behalf of a variety of organizations, including Board Meetings, public filings, and regulatory and legal compliance; ensure compliance with privacy laws and disclosure mandates. Provide legal consulting on Human Resources issues, including compensation, compliance and risk reduction. Vouch Financial Inc., San Francisco, CA General Counsel, Head of Human Resources & Corporate Secretary 5/14 to 3/15 first GC & Head of HR (4th employee), handled all legal & HR matters, including: Built and established legal department and legal function, including budget and hiring plan. Served as Board Secretary, drafted board resolutions, shareholder consents and board meeting minutes. Ensured compliance with all governance regulatory compliance including privacy and disclosure requirements. Secured new company office space, negotiated real estate transactions, handled office improvements and renovations in cost-effective and efficient, yet highly successful manner. Handled 2 rounds of venture capital financing, as well as venture debt line; advised on all financial transactions. Established compliant HR system & structure, with a focus on risk reduction, recruiting & retention; established all legal and HR form agreements, company manuals and policies; trained employees on compliance. Created compensation programs with focus on compliance, recruiting and retention. DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Ensured regulatory and legal compliance with lending regulations (state and federal). Drafted company outward- and inward-facing policies, including privacy policies, user agreements, loan agreements, guarantor agreements, terms of use, license agreements, electronic communications agreements, credit consents and other legal agreements for website users, borrowers and guarantors. Negotiated all contracts with strategic business partners, investors, lenders, customers, and vendors. reddit Inc., San Francisco, CA General Counsel, Head of Finance and Head of Human Resources, 1/12 to 1/13 andled all legal, finance and HR matters for reddit, including: Negotiated and executed successful spin-off of reddit Inc. from Advance/Conde Nast. Served as Board Secretary; drafted & distributed resolutions, consents and board minutes. Legal, Human Resources and Finance departments. ensured regulatory and legal compliance, trained employees, drafted all employee agreements and policies. Handled, managed and trained staff members to respond to all Subpoenas, DMCA requests, infringement letters and other inbound legal communications. Established compensation systems and ensured compliance and consistency. Create . handled investment round and all corporate legal matters. Negotiated all commercial agreements; drafted all standard contracts; handled all other legal matters. Trulia, Inc., San Francisco, CA General Counsel, 3/10 to 12/11 andled all legal issues for this fast-paced Internet start-up in the real estate industry, including: Handled M & A transactions, including acquisition of start-up Movity. Handled financial transactions, including closing high-figure loan financing. Handled, drafted, negotiated all other corporate and commercial transactions, including business development, sales, licensing, co-marketing and other commercial contracts, as well as real estate leases and transactions. Handled human resources issues, including handbooks, terminations, separation agreements and stock issues. Managed IP portfolio, including patents and trademarks. Managed litigation, including several patent infringement lawsuits; obtained very favorable settlement. Handled legal issues in product development, including terms of use, privacy policies and issuing associated with User Generated Content. Served on Senior Management Team, contribute to corporate strategy. Pure Digital Technologies, Inc., San Francisco, CA General Counsel, 9/08-9/09 Handled all legal issues for this consumer electronics technology company that provides the popular line of Flip Video handheld digital video camcorders. Handled successful Exit: Merger of Pure Digital with Cisco Systems, Inc in $615 million transaction. Led $630 Million merger with Cisco, in addition to all other corporate transactions. Successfully settled multi-million dollar (claimed) patent suit, managed all other litigation and threatened litigation. Handled all commercial transactions, licensing, sales and business development deal support (technology, software, content, co-marketing), including with Facebook, Product (RED), YouTube, MySpace, AOL and other industry leaders. Led HR legal organization, provided advice, contracts, separations, consulting, conflict management. Handled intellectual property portfolio: patents, trademarks, copyrights. Leader on executive management team, provided strategic decision making, interfaced with Board of Directors. Managed and hired resources, handled legal budget of approximately $4 million. AdBrite, Inc., San Francisco, CA Vice President, General Counsel & Secretary of the Board, 3/07-9/08 andled all legal matters for this Internet startup in the online advertising space. Handled corporate governance/securities: minutes, resolutions Negotiated/drafted all commercial transactions: licensing, sales, real estate Handled Intellectual Property: Managed IP portfolio, all patents, copyrights, trademarks, DMCA. Successfully avoided litigation/managed risk: disposed of issues before they lead to lawsuits; create policies. Provided executive management, leadership. PayPal, Inc., an eBay Company, San Jose, CA DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Senior Counsel,Senior Director, Assistant Secretary 7/01-3/07 Joined company as second attorney, and assisted with IPO, Secondary Offering and Public Company Merger. Corporate development: assisted with IPO, secondary offering and public company merger with eBay Inc. Commercial Transactions: Handled all commercial transactions for the company. Sales: Supported sales team for $1.5 billion revenue company; create standardized documents and train salesforce. Intellectual property: Advised executives on intellectual property matters & compliance, handle IP licenses and strategy. International: supported business clients in Asia, Europe and Canada. Product Development: Analyzed all product specifications; drafted licenses and terms. User Agreement and Privacy Policy: drafting and maintenance, enforcement. Marketing and Content: Reviewed all marketing and other content; advised company on issues and risks. Management: Build and managed commercial legal team comprised of ten attorneys and staff. Risk management, litigation management, departmental processes. Ecast, Inc. (Internet-based music and games company), San Francisco, CA Vice President of Legal and New Market Development, 9/99-6/01 Helped raise more than $18 M for the company, worked with investors. Managed strategic and business development as well as most legal and corporate development. Successfully closed deals including: digital music licensing with all 5 major labels, film/gaming licenses, wireless distribution deals , $7 million dollar software license/equity investment agreement with UK company. As the first licensed attorney to join the executive team of this fast-paced start-up, also served as lead on risk management, compliance and marketing review, as well as delivered competitive analysis and business strategy. Cole Valley Group Consulting, San Francisco, CA Consultant: Internet business strategy, M&A advising & marketing, 10/95-10/99 Provided strategic, technical marketing and business development services for numerous clients including Pixar, Quokka, Yoga Journal, Adjacency, Inc. (now Sapient), StarMine, Cyborganic Media, MediaCast, Sound Exchange Records, Electric Minds, Verbum and ChemisTree, among other start-ups and new media companies. Wrote over 10 business plans for start-ups, which as a group raised over $30M in venture financing; consulted start- ups and established companies on mergers & acquisitions and other exit strategies; advised on intellectual property strategies. Consulted on intellectual property and strategic legal matters, including contributing to Rembrandts in the Closet, book on IP business strategies written by SmartPatents CEO (now Aurigin). CBS MarketWatch, San Francisco, CA -4/01 ews site; contributed over 100 columns. Columns covered both technology strategic issues as well as high tech legal issues, including a high profile series on Awarded WELL journalism award for column which revealed privacy strategy behind WebMD/Healtheon merger. The San Francisco Examiner Internet business columnist, 6/97-10/99 Wrote Net Skink, a bi-s Business Section. Cyborganic Media Director, Product Management and Corporate Development, 11/95-10/97 Very early member of start-up team on this too-early MYSPACE-like company (community and content aggregator) Web product, GeekCereal.com. Hired, trained, managed and edited group of 12 individuals creating, updating and managing Web site GeekCereal.com. Contributed to Cyborganic business plan, helped raise angel funding. U.S. Court of Appeals, 5th Circuit, Houston, TX Judicial Law Clerk, Chief Judge Carolyn Dineen King, 8/95-11/95. DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E U.S. District Court, District of Columbia, Washington, DC Judicial Law Clerk, Honorable Gladys Kessler, 8/94-7/95. U.S. District Court, Central District of California, Los Angeles, CA Judicial Law Clerk, Honorable A. Andrew Hauk, 8/93-8/94. Morrison & Foerster, San Francisco, CA Summer Associate, business law and litigation, 1992. Ross & Hardies, Chicago, IL Summer Associate, business law and litigation, 1991. BAR: Active Member of the California Bar and the Federal Bar, Central District of California, sworn in 1993. BOARD MEMBERSHIPS: Board of Directors, Legal Momentum (formerly known as the National Organization for Women Legal Defense Fund national board), 2009-2012. Board of Directors, Craigslist Foundation, Treasurer, Founding member, 1999-2007. Board of Advisors, Kiva.org (Microfinance Nonprofit), 2006-2009. Board of Advisors, The Webby Awards, and Member, International Academy of Arts and Sciences, 2003-present. Board of Advisors, Skinny Scoop www.theskinnyscoop.com -present. PUBLICATIONS: Regulatory Affairs: Rebecca Eisenberg, Proposed Rule Amendments to Regulation D, Form D and Rule 156 Under the Securities Act, https://www.sec.gov/comments/s7-06-13/s70613-460.pdf Rebecca Eisenberg, Nordlinger v. Hahn: the , Harvard Law Review, 1992 (available upon request). Academic Writing: Rebecca Eisenberg, Beyond Bray: Obtaining Federal Jurisdiction to Stop Anti-Abortion Violence, 6 Yale Journal of Law and Feminism 155 (1994). http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1086&context=yjlf Note, Pornography, Equality, and a Discrimination-Free Workplace: A Comparative Perspective, 106 Harvard Law Review 1075 (1993). http://www.omino.com/~dom/clips/porno.html Book Note, An Unladylike Response to Legal Conceptions of Women (reviewing Faludi, Backlash), 105 Harvard Law Review 2104 (1992). http://www.omino.com/~dom/clips/faludi.html Popular Media Writing: Weekly column, Net Skink, San Francisco Chronicle 1996-1999. Weekly column, Nouveau Geek, CBS MarketWatch, 1997-2000. Regular contributor, Wired, Red Herring, Upside, Fast Company, Time Daily, Entertainment Weekly, Ms. Magazine. List of published clips available by request and online: http://www.omino.com/~dom/clips/ EDUCATION / VOLUNTEER ROLES: Special Gifts / Fundraising / Development Committee, Stanford Homecoming Reunion 1995, 2000, 2005, 2010, 2015. Harvard Law School Celebration 55 Committee; Harvard Law School Celebration 60 Committee. Reunion and Fundraising Coordinator, Whitefish Bay High School, Whitefish Bay, WI. Development Committee, Brandeis Hillel Day School, San Francisco, CA Room Parent, Brandeis Hillel Day School, San Francisco, CA Parent Volunteer, Walter Hays Elementary School, Palo Alto, CA Parent Volunteer, Jordan Middle School, Palo Alto, CA DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E AWARDS & SPEAKING ROLES: Award Winner, Top 25 Women on the Web, 1999 (Judge, Top 25 Women on the Web 2000, 2001). Award Winner, WELL Writing Award, Journalism and Overall Grand Prize, 2000. s Hardball with Chris Matthews, and PBS Computer Chronicles and Internet Café. Expert on consumer protection online; featured in full-length chapter interview in the 2000 book, Web Rules: How the Internet is Changing the Way Consumers Make Choices by Tom Murphy. Harvard Law School, 2013; Panelist, 2008, led by United States Supreme Court Associate Justice Elena Kagan. DocuSign Envelope ID: 1AF7E9E8-F34E-42F5-8AC8-6C1B992BBF7E Parks and Recreation Commission Application 1 of 6 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 8EE6D56B-01FC-4263-BB53-4450236D5D97 • BS Engineering, Harvey Mudd College Parks and Recreation Commission Application 2 of 6 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: DocuSign Envelope ID: 8EE6D56B-01FC-4263-BB53-4450236D5D97 Current Recreation Activities: • Hiking: I enjoy frequent 7-10+ mile hikes in the local open spaces. I typically hike the Foothills Park – Los Trancos Trail (my favorite) a couple times per month. • Soccer: PAASL player for the past 18 years. • Biking: My preferred method of transportation around town is bicycle. • Trees and Plants: a new passion is learning to identify botanical species. • Gardening: I enjoy vegetable and landscape gardening at home. Parks and Recreation Commission Application 3 of 6 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? I have resided in South Palo Alto for the past eighteen years with my wife. We have raised our two daughters here in the Palo Alto School system. Over the years, my family and I have been fortunate to enjoy many wonderful resources and services that our community offers. From “Story Time” at the library and dance recitals at Cubberley to Mitchell Park “gopher holes” and May Fete parades; from swimming and art lessons to Kidz Love Soccer and Hi-Fives Camps; from block parties and Foothills Park picnics to family bike outings for “Hot Dog” shows and the Jr. Museum and Zoo; from soccer games and street fairs to Canopy Tree Walks and watching pelicans soar in the Baylands, my family and I truly appreciate and understand many special aspects of Palo Alto. My family also has a track record of contributing within our community. I am very passionate about Palo Alto and many of my pursuits connect directly with our community’s resources and services. My personal passions include soccer, hiking, trees and plants, biking around town, and general environmentalism and sustainability. While I have outlined goals below that I am interested in accomplishing as a Parks and Rec Commissioner, this is not an agenda. These are goals aligned with the in-progress Master Plan. My ultimate aspiration is to give back to and contribute to our community. I have worked directly with the Community Services staff for many years on soccer and field-related matters. I have tremendous respect for this team and would look forward to working with them more closely. More recently, as part of my efforts with Canopy, I have also worked with Public Works staff, and would look forward to broadening this relationship as well. Having worked as a systems engineer and project manager for 30+ years developing professional video products, I thrive on collaborating with others to find creative solutions to difficult problems. I am very detail oriented and organized, and I envision many opportunities to “dig in” if I am selected for this role. I feel privileged to have time and energy to offer. I would be honored to serve our city, contribute to the implementation of our new Master Plan, and learn and grow along the way. Parks and Recreation Commission Application 4 of 6 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 8EE6D56B-01FC-4263-BB53-4450236D5D97 Parks and Recreation Commission Application 5 of 6 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 8EE6D56B-01FC-4263-BB53-4450236D5D97 Parks and Recreation Commission Application 6 of 6 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your Application, DocuSign Envelope ID: 8EE6D56B-01FC-4263-BB53-4450236D5D97 Parks and Recreation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 41E55154-BDCE-401D-A26C-C096EFA3D176 Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 41E55154-BDCE-401D-A26C-C096EFA3D176 Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 41E55154-BDCE-401D-A26C-C096EFA3D176 Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 41E55154-BDCE-401D-A26C-C096EFA3D176 Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your Application, DocuSign Envelope ID: 41E55154-BDCE-401D-A26C-C096EFA3D176 Parks and Recreation Commission Application 1 of 5 Personal Information Note: The PARC regularly meets the fourth Tuesday of the month at 7:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ___ Yes ___ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936                                       Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936                                                                                                                                                                                                                            Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936                                                                                                                                                                                                                                                                                                         Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936  Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936                                                                                                                                                                                                                                                                                                                                                    DocuSign Envelope ID: 1C5157BF-4776-4AA0-97E6-5BB97FE90936 Parks and Recreation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 527D431E-ED9A-4C70-8EF0-8EEE2D4FADF2 Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 527D431E-ED9A-4C70-8EF0-8EEE2D4FADF2 Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 527D431E-ED9A-4C70-8EF0-8EEE2D4FADF2 Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 527D431E-ED9A-4C70-8EF0-8EEE2D4FADF2 Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your Application, DocuSign Envelope ID: 527D431E-ED9A-4C70-8EF0-8EEE2D4FADF2 Parks and Recreation Commission Application 1 of 5 Personal Information Note: The PARC regularly meets the fourth Tuesday of the month at 7:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ___ Yes ___ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 27D9C1F1-6C1D-4307-AF4E-041E17B40165                                         Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 27D9C1F1-6C1D-4307-AF4E-041E17B40165                                                                                                                                                                                                                   Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 27D9C1F1-6C1D-4307-AF4E-041E17B40165                                                                                                                                                                                                                                                   Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 27D9C1F1-6C1D-4307-AF4E-041E17B40165      Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 27D9C1F1-6C1D-4307-AF4E-041E17B40165  Parks and Recreation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: A147EBCC-FB60-40AC-9559-C19DA7AA2697 Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: A147EBCC-FB60-40AC-9559-C19DA7AA2697 Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: A147EBCC-FB60-40AC-9559-C19DA7AA2697 Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: A147EBCC-FB60-40AC-9559-C19DA7AA2697 Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your Application, DocuSign Envelope ID: A147EBCC-FB60-40AC-9559-C19DA7AA2697 -2- PROFESSIONAL EXPERIENCE (continued) Judge Mary Ellen Coster Williams, United States Court of Federal Claims, Washington, DC Judicial Extern September to December 2007 and January to May 2009 My primary responsibilities included researching and preparing draft opinions regarding federal procurement, tax and non-tort litigation claims against the U.S. Government. Federal Trade Commission, Seattle, WA Law Clerk July and August 2007 I researched and prepared antitrust and consumer protection cases, interviewed fraud victims, assisted in a Hart-Scott-Rodino review and drafted affidavits and memos. CrowleyFleck PLLP, Helena, MT Summer Associate May to July 2007 I completed regulatory analyses for two large cross-border power transmission projects and worked on several employment and professional malpractice cases. Gonzaga University, Spokane, WA and Florence, Italy Student Life Coordinator, Gonzaga-in-Florence Program August 2005 to July 2006 As part of the leadership life programs, including large-scale travel excursions in Europe and Africa. Adjunct Instructor of Political Science Fall 2004 government institutions and fiscal policy. I researched and prepared lesson plans, lectured three times per week, wrote the final exam and evaluated student performance. Student Body President May 2003 to May 2004 Following a lively campaign, I was elected to serve as student body president during my senior year at Gonzaga. I led a staff of 17 people, designed and implemented comprehensive policy initiatives and served on numerous faculty, administration and board committees. San Diego, CA Paralegal Specialist Major Frauds Division January to August 2005 Assistant U.S. Attorneys and FBI agents to investigate, organize and prepare large corporate fraud and public corruption cases for presentation to a grand jury and trial. United States Forest Service, Townsend, MT Forestry Aide Wildland Firefighter Summer 2002 I served as an initial responder on a fire engine and battled several significant wildfires as part of a 20-person fire crew deployed in Montana, Colorado and Yellowstone National Park. Office of United States Senator Max Baucus, Washington, D.C. Senate Intern Spring 2002 As an intern during college, I covered the Environment and Public Works Committee and researched the economic impact of NAFTA on U.S. workers. COMMUNITY ACTIVITIES AND INTERESTS Santa Clara County Historical Heritage Commission member, Silicon Valley Campaign for Legal Services Amicus Committee member; past middle school mentor and high school youth group teacher; outdoors enthusiast and an avid runner. My academic interests are centered on national security law, the intersection of antitrust and intellectual property regimes and immigration policy. DocuSign Envelope ID: A147EBCC-FB60-40AC-9559-C19DA7AA2697 Parks and Recreation Commission Application 1 of 5 Personal Information Note: The PARC regularly meets the fourth Tuesday of the month at 7:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ___ Yes ___ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 0E5D4247-D0B6-4A6B-8CA8-9878BEDDDC6A                                   Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 0E5D4247-D0B6-4A6B-8CA8-9878BEDDDC6A                                                                                                                                                                                                                                                                                                                                      Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 0E5D4247-D0B6-4A6B-8CA8-9878BEDDDC6A                                                                                                                                                                                                                                                                                  Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 0E5D4247-D0B6-4A6B-8CA8-9878BEDDDC6A                                                                 Parks and Recreation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 0E5D4247-D0B6-4A6B-8CA8-9878BEDDDC6A                      Parks and Recreation Commission Application 1 of 5 Application deadline: January 27, 2017 at Personal Information Note: The PARC regularly meets the fourth Tuesday of the month at 7:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No California state law and the Ci require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ___ Yes ___ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 06CD49F9-CD7B-4D07-8F34-66AE90AC3D9A                                            Parks and Recreation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: 1. What is it about the Parks and Recreation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 06CD49F9-CD7B-4D07-8F34-66AE90AC3D9A                                                                                                                                                                                   Parks and Recreation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particularinterest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Parks and Recreation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 06CD49F9-CD7B-4D07-8F34-66AE90AC3D9A                                                                                                                                                     Parks and Recreation Commission Application 4 of 5 4. Parks and Recreation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan: Community Services and Facilities Element Natural Environment Element Baylands Master Plan Park Dedication Ordinance (Municipal Code) Bicycle - Pedestrian Transportation Plan Youth Master Plan Cubberley Community Advisory Committee Report DocuSign Envelope ID: 06CD49F9-CD7B-4D07-8F34-66AE90AC3D9A                                   Parks and Recreation Commission Application 5 of 5 Application deadline: January 27, 2017 at Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address providing the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 06CD49F9-CD7B-4D07-8F34-66AE90AC3D9A  Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commissionmeeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 DEXTER B. DAWES June 2016RESUME 1997-Present Independent Investor and DirectorCurrently serve on the following corporate, non-profit and community boards:Paterson Paper Company, Sparks, Nevada Director. Paterson manufactures paper products primarily for the restaurant trade.Foothill-DeAnza Community College Audit and Finance Committee, Oversees the finances of a 45,000 student junior college district. Meredith Vineyard Estates, Forestville, CA Director. Produces and markets award winning Pinot Noir and Sauvignon Blanc. Previous Board assignments include: 2007-2016 Channing House Retirement Community, Director of a 188 unit total care facility (a Community Care Retirement Community) including full medical facility. Chairman of the Board, Chairman of Contract Dispute Committee. 2001-2015 SteriFx Corp, Shreveport, LA Director. SteriFx is a specialty chemical manufacturer producing a unique antimicrobial safe for use on humans. Member Audit Committee 1989-2014 Lester Electrical, Lincoln, Nebraska Director. Lester is a leading manufacturer of battery chargers for the mobile equipment market, including golf carts, wheel chairs, construction equipment. Member of Audit Committee: Chair of Compensation Committee1987-2013 Embarcadero Publications, Palo Alto, California - Director. Embarcadero is the publisher of five community newspapers including the Palo Alto Weekly. 2006-2008 Foothill-De Anza Bond Oversight Committee, Serve on citizens committee to oversee a $500 million bonded capital program. Chair FY 2008.1998-2009 Taraval LLC, Menlo Park, California Director. Taraval is the management company for Taraval Seed Capital Fund, L.P.2001-2002 Chairman of the Board and CEO - SteriFx, Inc., Shreveport, LA. A startup specialty chemical company organized by Taraval Associates Seed Capital Fund. SteriFx has a patented anti-microbial compound that is safe for humans. It is used in food processing plants and has important uses for the military and homeland defense. 1997-2000 Chairman of the Board and Director Puffin Designs, Inc., Sausalito, CA Co-founded and guided this producer of software for production of special effects for video and film. Sold to Pinnacle Systems, Inc.(later Avid Technologies) in May, 2000. City of Palo Alto Utilities, Commissioner for 11 years. The $170 million per year operation supplies all electric, water, sewer and gas to the business and citizens of Palo Alto.National Association of Corporate Directors. Served on a Blue Ribbon Committee to develop a policy on the Role of the Boards of Directors in Strategic Planning in 2001.Moto Photo, Inc., Dayton Ohio Director. Moto was a NASDAQ listed franchiser of one hour photo processing labs. Chair of Audit CommitteeHGP Industries, Dallas, Texas. HGP was manufacturer of glass for commercial buildings and for the automobile trade.Lucas Brothers, Inc., Baltimore, Maryland. Lucas distributed office supplies and office furniture.Regan National Advertising, Baltimore, Maryland. Regan was an operator of billboards in several states.American Elgin, Inc, Union City, New Jersey. AE was a manufacturer of HVAC products for the building trades.U.S Souvenir, Inc. Honolulu, Hawaii A marketer of souvenir items in the Pacific region.Dickshire Distributing, El Paso, Texas. Dickshire distributed Coors and other beers in the El Paso region.Fold Pak Corporation, Newark, New York. Fold Pak was a manufacturer of folding cartons for the food industry. Employment History 1989-1996 President and CEO-John Hancock Capital Growth Management, Inc.Wholly owned subsidiary of John Hancock Mutual Life Insurance Co.Managing General Partner of Capital Growth Funds One, II and IIIManaged all phases of the private Investment Funds with subscribed capital of $250 million. Valued potential acquisitions and investments in portfolio companies, structured and closed investments, served on boards of directors to assist in growth and development of the companies, conceived and executed strategies for exiting investments which have included initial public offerings, sale of the company or sale of the position in the company to another investor. 1975-1998 Chairman and CEO-Bangert, Dawes, Reade, Davis & Thom, Inc. Investment Bankers- San Francisco and New York Organized an investment/merchant bank with four partners (from the former firm) to perform services for clients and invest pasmall capitalization buy-outs. 1972-1975 President and CEO- Bangert and Company Investment Bankers- New York and San Francisco. Specialists in ESOP financing.1963-1972 Various financial positions with manufacturers in the San Francisco Bay Area, including Ford Aerospace, Applied Radiation and Consolidated Fibres. DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 Education MBA Harvard Business School 1963- Concentration in FinanceAB Harvard College 1958- Majored in Applied Sciences Military Lt. USN serving aboard two aircraft carriers in the Pacific.Assistant Navigator and Senior Watch Officer Personal Married with three grown children. Enjoy outdoors, woodworking and extensive family travel in Asia, South America, Europe and Africa DocuSign Envelope ID: 28BAC6C2-FA06-49B2-86FB-36CA1856D094 Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: C4A7E229-AF1D-46D7-B739-7EB444287606 Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: C4A7E229-AF1D-46D7-B739-7EB444287606 Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commissionmeeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: C4A7E229-AF1D-46D7-B739-7EB444287606 Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: C4A7E229-AF1D-46D7-B739-7EB444287606 Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: C4A7E229-AF1D-46D7-B739-7EB444287606 __ __ __ __ __ __ PersonalInformation Name: Address: Cell Phone: Home / Office Phone: E-mail: Are you a Palo Alto Resident?Yes No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members?Yes No Are you available and committed to complete the term applied for?Yes No California state law requires appointed board and commission members to file a detailed disclosure oftheir financial interests, Fair Political Practices Commission, Conflict of Interest (Form 700). Do you have an investment in, or do you serve as an officer or director of, a company doing business inPalo Alto which you believe is likely to: 1) engage in business with the City; 2) provide products or services for City projects; or 3) be affected by decisions of the board or commission you are applying for?Yes No Excluding your principal residence, do you own real property in Palo Alto?Yes No How did you Learn about the vacancy on the Planning and Transportation Commission? CommunityGroup Email from City Clerk Palo Alto Weekly Daily Post CityWebsite Flyer Other:_ _ List relevant education, training, experience, certificates of training, licenses, or professional registration: Page 1 Planning & Transportation Commission 160 Lowell Avenue Brian Hamachek 650-556-4141 650-556-4141 brian@brianhama.com University of California at Santa Barbara, Computer Science DocuSign Envelope ID: BA92A7BA-1B75-44AE-B08B-21848D8139B3 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteer and civic organizations: Page 2Planning & Transportation Commission Nearby CEO Expert Judge - Palo Alto Civic Hackathon Program Participant - Palo Alto Community Emergency Response Team Alumni Advisor - Stanford StartX Student Mentor - Stanford Technology Ventures Program Volunteer - Hack Palo Alto Captain - Palo Alto USTA TeamMember - Palo Alto Tennis ClubFounder - Palo Alto Tennis Meetup DocuSign Envelope ID: BA92A7BA-1B75-44AE-B08B-21848D8139B3 1. What is it about the Planning and Transportation Commission that is compatible with yourexperience and of specific interest to you, and why? 2. Please describe an issue that recently came before the Commission that is of particular interestto you and describe why you are interested in it. If you have never been to a Commission meetingyou can view an archive here:LINK. Page 3Planning & Transportation Commission I am very interested in phase 2 of the Embarcadero Road Improvement Project. I grew up a few blocks from Town and Country, attended Palo Alto High School, and later lived in a home only a block off Embarcadero Road. I have driven, walked, and biked the length of Embarcadero Road thousands of times over the past three decades. I have seen the amount of traffic on it explode. I have experienced the anxiety of riding a bike along the underpass at Alma. I have stood at the corner of Emerson while waiting for a break in traffic so I could quickly dart across as a pedestrian. I think that this experience gives me a very unique perspective in understanding the pain points and evaluating theproposed solutions. I have lived in Palo Alto nearly my entire life, so this commission is of particular interest to me because of the direct role it's members have on protecting and guiding Palo Alto's future. My professional experience as a technology executive has given me many relevant skills, but it is my extensive personal history and deep affection for our city thatmakes me such a valuable resource to this commission. DocuSign Envelope ID: BA92A7BA-1B75-44AE-B08B-21848D8139B3 3. If appointed, what specific goals would you like to see the Planning and TransportationCommission achieve, and why? How would you suggest accomplishing this? 4. Planning and Transportation Commission Members work with the documents listed below. Ifyou have experience with any of these documents, please describe that experience. Experiencewith these documents is not required for selection. Palo Alto Comprehensive Plan LINK Zoning Code LINK CityCharter LINK California Environmental QualityAct LINK El Camino Real Design Guidelines LINK El Camino Real Master Plan Study LINK and Appendices LINK Area Plans such as the South of Forest Avenue (SOFA) I and II Plans LINK Baylands Master Plan LINK Page 4Planning & Transportation Commission Ultimately, I would like to see the commission continue to preserve the unique character of Palo Alto. This city is at a critical point in time, and the decisions made by this commission will determine the type of city Palo Alto becomes. There is no denying that many aspects of the city need to change to accommodate the changing reality of thelarger Bay Area, but the changes need to be done thoughtfully and always with the goalof preserving what makes the city so amazing. I think my first-hand experience growing up, studying, working, starting a business, and living in both an apartment and homes here allows me to understand many different point of views and develop the best solutions for everyone. Having attended/watched many PTC meetings and in order to better understand theissues of the city, I have, over the years, become somewhat familiar with the Palo Alto Comprehensive Plan, the City Charter, and the El Camino Real Master Plan. I am currently far less familiar with the other documents. DocuSign Envelope ID: BA92A7BA-1B75-44AE-B08B-21848D8139B3 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, “No state or local agency shall post the home address or telephone number of any elected or appointed official on the Internet without firstobtaining the written permission of that individual.” The full code is attached. This consent form will notbe redacted and will be attached to the Application and posted to the City’s website. The full code can be read here:LINK Read the code, and check only ONE option below: I give permission for the City of Palo Alto to post to the City’s website the attached Board andCommission Application intact. I have read and understand my rights under Government CodeSection 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email addressfrom the attached Board and Commission Application prior to posting to the City’s website. I amproviding the following alternate information and request that they use the following contactinformationinstead. Address: Cell Phone: Home / Office Phone: E-mail: Signature: _ _ _ Date: Page 5 Planning & Transportation Commission DocuSign Envelope ID: BA92A7BA-1B75-44AE-B08B-21848D8139B3 Planning and Transportation Commission Application 1 of 5 Personal Information Note: The PTC regularly meets the second and last Wednesdays of the month at 6:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 18B109B1-9D89-452E-8869-A7EF2DC7ABEC                                                Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 18B109B1-9D89-452E-8869-A7EF2DC7ABEC                                                                                                                                                                                                                                                                                                                              al area viability. Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 18B109B1-9D89-452E-8869-A7EF2DC7ABEC                                                                                                                                                                                                                                                                                                                                                                          Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: 18B109B1-9D89-452E-8869-A7EF2DC7ABEC                                                                                                                          Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 18B109B1-9D89-452E-8869-A7EF2DC7ABEC  Additional Information                                                                                                                                                                                                                                    DocuSign Envelope ID: 18B109B1-9D89-452E-8869-A7EF2DC7ABEC Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: F180A914-14E1-4DFC-ABCD-F659CB86C2D4 Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: F180A914-14E1-4DFC-ABCD-F659CB86C2D4 Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commissionmeeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: F180A914-14E1-4DFC-ABCD-F659CB86C2D4 Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: F180A914-14E1-4DFC-ABCD-F659CB86C2D4 Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: F180A914-14E1-4DFC-ABCD-F659CB86C2D4 Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commissionmeeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF GABRIEL PATRICK KRALIK PAGE 2 Created, with outside corporate counsel, model agreements for the conversion of foreign research and development teams into separate corporate entities with contract-based milestones for the development of product maintenance and software version iterations adding incremental feature sets. Utilizing this model, converted Shanghai development operations into a third-party service provider. Directed post-divestiture representation of Corel in a dispute over the novation of U.S. Government defense contracts. Co-negotiated post-transaction modifications to global revenue sharing agreement for WinDVD software including to resolve industry standard royalty obligations. PPC Syracuse, NY October 2008 to June 2012 Global designer, manufacturer, and supplier of connector technology products for telecommunications industries, including broadband, satellite, and wireless sectors; privately-owned company has operations in the U.S., Denmark, China, and St. Kitts. Broadband division was sold to Belden in 2012 for $517 Million. VICE PRESIDENT, GENERAL COUNSEL, CHIEF PATENT COUNSEL & CORPORATE SECRETARY portfolio. Built and managed an internal and external legal framework to advance corporate objectives of growth, profitability, and innovation. Grew $25M in annual broadband connector product revenue by obtaining and enforcing two General Exclusion orders through successful litigation of coaxial cable connector patents in proceedings before the International Trade Commission, the Court of Appeals for the Federal Circuit and through Customs import detention proceedings. revenue gains in the broadband, satellite and wireless divisions; attained a #18 global ranking in the 2011 Institute of atent Power survey for telecom equipment and in the 2008 Wall Street Journal rankings for Excellence in Technology Strength. Saved $3M in annual legal costs through negotiated alternative-fee arrangements with outside legal firms and the establishment of a seven-person internal legal department responsible for handling corporate, commercial, litigation support and worldwide patent prosecution practice areas. Directed legal representation to support and protect the U.S., Denmark, St. Kitts, and mainland China. Participated in the creation and updating of -year strategic plan together with business, finance and manufacturing leads. the Custom Electronic Design and Installation Association market sector, devising and executing successful trademark registrations and designing form agreements for product distribution. Steered corporate acquisition of Evolution Broadband, conducting intellectual property due diligence to inform acquisition strategy. India, Brazil and China, and the dissolution and consolidation of certain U.S. (real-estate holding companies), the U.K. and St. Kitts entities. Coordinated representation of leading to the construction and expansion of its Upstate New York research, development and production operations. Represented PPC in local government hearings to obtain zoning variances needed for approval of facility construction projects in East Syracuse, New York. Served as Secretary to the Board of Directors, drafting minutes and resolutions and managing corporate governance. Served as a director of multiple international affiliate entities. Managed Employment disputes including EEOC Complaint matters. Provided oversight to the resolution of workplace disputes. Developed management training modules for anti-harassment and Defended PPC in a federal district court trade secret misappropriation case brought by competitor subsequent to the hiring of a C-level sales executive, winning dismissal of the allegations. Defended PPC in State Court landlord-tenant dispute concerning rent obligations due in the context of a roof collapse that had necessitated transfer of manufacturing and finished product warehouse operations. Litigated to favorable conclusion a commercial dispute with the supplier of automated product assembly equipment based on failure to achieve contract milestones and operation requirements related to output, versatility and quality. DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF GABRIEL PATRICK KRALIK PAGE 5 MORGAN & FINNEGAN New York, NY 1989 to 1996 LITIGATION ASSOCIATE behalf of RVI in the District of Delaware for patent rights covering ibuprofen-pseudoephedrine combination over-the-counter medication (verdict later overturned on appeal on obviousness grounds). Represented clients on intellectual property litigation and prosecution matters, including Procter & Gamble, W.L. Gore, Syva, Brown & Williamson, Richardson-Vicks, Beam-Tech, AccuScan and Sibjet. EDUCATION Notre Dame Law School Notre Dame, IN Juris Doctor - 1989 University of Notre Dame Notre Dame, IN Bachelor of Science in Chemical Engineering 1982 ADMISSIONS State Bars of New York, New Jersey and California; Supreme Court of the United States; U.S. Court of Appeals for the Federal and Second Circuits; U.S. District Courts of New Jersey, Southern District of New York, Eastern District of New York, Western District of New York, Northern District of New York; .United States Court of International Trade; and United States Patent & Trademark Office (Registration No. 34,855). PROFESSIONAL TRAINING, PROJECTS AND PUBLIC SERVICE 2015 Program Mediator and Case Developer, Santa Clara County Office of Human Relations 2015 Vice President, Saint Frances Cabrini Foundation 2014 Graduate of the County of Santa Clara Dispute Resolution Mediation Skills Program; 2012 Graduate of the Pepperdine University School of Law STAR Mediation Program; 2004 Candidate for Mayor, City of Pleasanton, CA.; and 2000 Candidate for Justice, New York Supreme Ct, 9th District. DocuSign Envelope ID: ABED7E65-893F-4303-8034-9161889A24DF Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 62F27E7A-1A96-4720-B5FA-C1B4A710DD66 Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 62F27E7A-1A96-4720-B5FA-C1B4A710DD66 Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commissionmeeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 62F27E7A-1A96-4720-B5FA-C1B4A710DD66 Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: 62F27E7A-1A96-4720-B5FA-C1B4A710DD66 Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 62F27E7A-1A96-4720-B5FA-C1B4A710DD66 Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3)be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 5F7C374C-54BD-4AB5-A773-D92AA77CC305 Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 5F7C374C-54BD-4AB5-A773-D92AA77CC305 Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: 5F7C374C-54BD-4AB5-A773-D92AA77CC305 Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ______ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 5F7C374C-54BD-4AB5-A773-D92AA77CC305 Planning and Transportation Commission Application 1 of 5 Personal Information Note: The PTC regularly meets the second and last Wednesdays of the month at 6:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: F22C0405-E248-4426-962E-44D377D8DAF8                              Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: F22C0405-E248-4426-962E-44D377D8DAF8                                                                                                                                                                                      Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: F22C0405-E248-4426-962E-44D377D8DAF8 Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: F22C0405-E248-4426-962E-44D377D8DAF8 Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: F22C0405-E248-4426-962E-44D377D8DAF8  Planning and Transportation Commission Application 1 of 5 Personal Information Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you have an investment in, or do you serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: AB9CA60A-9495-4B78-888E-99227AC1BC5F Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: AB9CA60A-9495-4B78-888E-99227AC1BC5F Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commissionmeeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: AB9CA60A-9495-4B78-888E-99227AC1BC5F Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: AB9CA60A-9495-4B78-888E-99227AC1BC5F Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from roviding the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: AB9CA60A-9495-4B78-888E-99227AC1BC5F Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 574C15A4-26E6-414B-9156-2E0A4D2E2282                                                                                                    Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 574C15A4-26E6-414B-9156-2E0A4D2E2282                                                                         Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: 574C15A4-26E6-414B-9156-2E0A4D2E2282                                                  Planning and Transportation Commission Application 1 of 5 Personal Information Note: The PTC regularly meets the second and last Wednesdays of the month at 6:00 p.m. Name: Address: Cell Phone: ____ Home / ____ Office Phone: E-mail: Are you a Palo Alto Resident? ____ Yes ____ No Do you have any relatives or members of your household who are employed by the City of Palo Alto, who are currently serving on the City Council, or who are Commissioners or Board Members? ____ Yes ____ No Are you available and committed to complete the term applied for? ____ Yes ____ No require appointed board and commission members to file a detailed disclosure of their financial interests, Fair Political Practices Commission, Conflict of Interest, Form 700. Do you or your spouse have an investment in, or do you or your spouse serve as an officer or director of, a company doing business in Palo Alto which you believe is likely to; 1) engage in business with the City, 2) provide products or services for City projects, or 3) be affected by decisions of the board or commission you are applying for? ____ Yes ____ No Excluding your principal residence, do you or your spouse own real property in Palo Alto? ____ Yes ____ No How did you learn about this vacancy? ____ Community Group ____ Email from City Clerk ____ Palo Alto Weekly ____ Daily Post ____ City Website ____ Flyer Other: List relevant education, training, experience, certificates of training, licenses, or professional registration: DocuSign Envelope ID: 3AC443F5-FC1A-4204-AF13-7D03C082D982                                             Planning and Transportation Commission Application 2 of 5 Employment Present or Last Employer: Occupation: Describe your involvement in community activities, volunteering or with civic organizations: 1. What is it about the Planning and Transportation Commission that is compatible with your experience and of specific interest to you, and why? DocuSign Envelope ID: 3AC443F5-FC1A-4204-AF13-7D03C082D982                                                                                                                                                                                                                                                                                                                                                                                                                         Planning and Transportation Commission Application 3 of 5 2. Please describe an issue that recently came before the Commission that is of particular interest to you and describe why you are interested in it. If you have never been to a Commission meeting you can view an archived video from the Midpen Media Center: 3. If appointed, what specific goals would you like to see the Planning and Transportation Commission achieve, and why? How would you suggest accomplishing this? DocuSign Envelope ID: 3AC443F5-FC1A-4204-AF13-7D03C082D982                                                                                                                                                                                                                                                                                                                                                                                                   Planning and Transportation Commission Application 4 of 5 4. Planning and Transportation Commission Members work with the documents listed below. If you have experience with any of these documents, please describe that experience. Experience with these documents is not required for selection. Palo Alto Comprehensive Plan Zoning Code City Charter California Environmental Quality Act El Camino Real Design Guidelines El Camino Real Master Plan Study and Appendices Area Plans such as the South of Forest Avenue (SOFA) I and II Plans Baylands Master Plan DocuSign Envelope ID: 3AC443F5-FC1A-4204-AF13-7D03C082D982                                                                          Planning and Transportation Commission Application 5 of 5 Consent to Publish Personal Information on the City of Palo Alto Website California Government Code Section 6254.21 states, in part, This consent form will not be redacted and will be attached The full code can be read here: Read the code, and check only ONE option below: _ I give permission for the City of Palo Alto Commission Application intact. I have read and understand my rights under Government Code Section 6254.21. I may revoke this permission at any time by providing written notice to the Palo Alto City Clerk. OR I request that the City of Palo Alto redact my home address, phone numbers, and email address from the following alternate information and request that they use the following contact information instead. Address: Cell Phone: ____ Home / ____ Office Phone: ___________________________________________________ E-mail: ____________________________________________ The phone number / address can be non-public and different than the address collected on page one. Signature: Date: (Optional) Additional Attachment(s) If you would like to submit a resume, work sample, etc. along with your DocuSign Envelope ID: 3AC443F5-FC1A-4204-AF13-7D03C082D982  City of Palo Alto (ID # 7271) City Council Staff Report Report Type: Study Session Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: 4146 El Camino Real: Prescreening for Zone Change Title: Request for a Pre-Screening Study Session to Rezone the Vacant Property at 4146 El Camino Real (Near Thain Way) From Low Density Multiple-Family Residence District (RM-15) to Medium Density Multiple- Family Residence District (RM-30) From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council conduct a preliminary review of the applicant’s request to rezone the property at 4146 El Camino Real from Low Density Multifamily Residential (RM- 15) to Medium Density Multifamily Residential (RM-30). This is a study session intended to receive public and City Councilmember comments; no formal action is requested. Executive Summary The applicant seeks preliminary feedback from the City Council concerning a proposal to rezone 4146 El Camino Real from RM-15 to RM-30. No change to the site’s Comprehensive Plan land use designation is necessary, as the proposal is consistent with the existing land use designation. A prescreening review is required for this type of legislative change prior to application submittal. A prescreen will allow the City Council and the public a preview of the proposed rezone and issues that may arise from the proposal. The Council could also offer comments as to any aspect of the project, including the appropriateness of the contemplated zoning district and urban design considerations if the proposal were to move forward. The applicant has provided preliminary massing and design information, which serve to illustrate the proposal, but should not be considered final or proposed designs. Based on the City Council’s comments at this evening’s study session, the applicant will prepare applications with a more fully developed design proposal which will be reviewed for code compliance and will be subject to environmental and architectural review. Background City of Palo Alto Page 2 The project site is comprised of a single parcel identified as 4146 El Camino Real. A location map showing the property, and surrounding properties, is attached (Attachment A). The total area of the site is 33,541 square feet. The site is currently vacant with the exception of a single billboard sign. The site was previously occupied by a single family residence that was demolished in 1997. The site is currently zoned RM-15, which allows up to 15 dwelling units per acre. Based on the lot size, that equates to a potential development yield of 11 dwelling units, with the potential for 35% more units if a State density bonus is requested. Context The site’s Comprehensive Plan land use designation is Multi Family Residential. The project is also included in the City’s Housing Element as an opportunity site. The property’s primary street frontage is located on State Highway 82, otherwise known as El Camino Real an arterial roadway according to the City’s Comprehensive Plan. Typical uses along El Camino Real in this area include multifamily developments, restaurants, hotels, and other commercial and retail uses. Adjacent uses to the northeast, across El Camino Real include retail (Starbucks Coffee), commercial office (WSO2), personal services (Think Tank Learning), (Opus Music Studio) and eating and drinking uses (Subway Sandwiches). Adjacent uses to the northwest and to the southwest include a multifamily condominium development known as Barron Square (PC 3023). To the southeast is a hotel use (The Zen Hotel). Multifamily residential buildings in the area are primarily between two and three stories tall. Figure 1 shows the project zoning and surrounding zoning districts. Figure 1: Zoning Map Showing Subject Parcel and Surrounding Parcels City of Palo Alto Page 3 Source: City of Palo Alto Planning & Community Environment Department, December 2016 Prior Preliminary Architectural Review The project was the subject of a Preliminary Architectural Review by the Architectural Review Board (ARB) on May 15, 2014. The full report is available at the following link: https://www.cityofpaloalto.org/civicax/filebank/documents/40407. The proposed concept included the development of two, three-story buildings for 21 residential condominiums. Those units would be a combination of one to two bedrooms set on a podium above parking. The request required a rezone from RM-15 to RM-30. The ARB was supportive of the increased density and asked that the project continue to study the building frontage, rhythm and connection to the street. The ARB also stressed that community pedestrian connections should be developed that connect the Barron Square neighborhood to the El Camino Real businesses and services. There were concerns from the neighbors regarding the size of the project, the City of Palo Alto Page 4 visual impacts of the project and vehicle access from the project to neighboring properties within Barron Square. The development proposal did not proceed. Discussion The primary focus of the request is to seek comments on the proposal to rezone from RM-15 to RM-30. While the supporting documentation for the project includes development site plans and elevations, these can only be considered as concepts at this time (Attachments B and C). The concepts help frame what could potentially be developed at the site. If there is support for the rezone by the City Council, then the applicant could apply for a Major Architectural Review, where the rigorous evaluation of development plans would occur. The proposal would also be subject to environmental review. Summary of Key Issues The request is to evaluate whether it is appropriate to allow additional density on the site. Based on the size of the subject property, the current zoning designation allows a maximum of 11 dwelling units, consistent with the zoning designation density range between eight and 15 dwelling units per acre. The proposed zoning designation would allow up to 23 dwelling units, which is consistent with the RM-30 density range between 16 and 30 dwelling units per acre. Up to 35% more units could be allowed if a State density bonus is requested, as described further below. Development Standards The table below summarizes the development standards that are different between the RM-15 and RM-30 designations and what those differences would equate to for potential development. All other applicable development standards are the same between the two districts. Table 1: Comparison of Development Standards between RM-15 and RM-30 where Different1 Development Standards RM-15 RM-30 Difference upon Rezone Maximum Height (ft.) 30 35 +5 ft. (Three stories can be accommodated in both districts) Maximum Site Coverage (Base) 35% 40% + 1,677 sf Maximum Floor Area Ratio (FAR) 0.5:1 0.6:1 + 3,354 sf Maximum Dwelling Units per Acre 15 30 + 12 units Minimum Site Open Space (%) 35 30 -1,677 sf City of Palo Alto Page 5 Development Standards RM-15 RM-30 Difference upon Rezone Minimum Usable Open Space (sf per unit)2 200 150 +3,450 sf Minimum Common Open Space (sf per unit)2 100 75 +625 sf 1Pursuant to the State density bonus law, increased density and development concessions may be available to exceed these standards if a percentage of the units are affordable. See Palo Alto Municipal Code Section 18.15. 2 Based on maximum dwelling unit yield for site Surrounding Context This stretch of El Camino Real is not considered a “safe route to school” to the schools within the vicinity of the site. Students are directed to take El Camino Way instead. Just north of the project (4100 El Camino Real) is a development approved in 1998 that includes three-story dwelling units (pictured below). Source: Google, December 2016. The photograph below depicts the site as it currently exists. City of Palo Alto Page 6 Source: Google, December 2016. The photograph below is taken from the cul-de-sac on Thain Way looking towards the subject site. Source: Google, December 2016. Prescreening Considerations Palo Alto Municipal Code (PAMC) Section 18.79.010 states that the purposes of a preliminary review are: a) To maximize opportunities for meaningful public discussion of development projects, at the earliest feasible time, for the guidance of the public, project proponents and city decision makers. Prescreening is intended to focus on purpose, scope, conceptual design and other similar matters and is not intended to involve review of complete drawings and documentation. b) To focus public and environmental review of development projects on the issues of greatest significance to the community, including, but not limited to, planning concerns, neighborhood compatibility, Comprehensive Plan consistency, economics, social costs and benefits, fiscal costs and benefits, technological factors, and legal issues. These procedures are not intended to permit or foreclose debate on the merits of approval or disapproval of any given development project. c) To provide members of the public with the opportunity to obtain early information about development projects in which they may have an interest. City of Palo Alto Page 7 d) To provide project proponents with the opportunity to obtain early, non-binding preliminary comments on development projects to encourage sound and efficient private decisions about how to proceed. e) To encourage early communication between elected and appointed public officials and staff with respect to the implementation of city policies, standards, and regulations on particular development projects. f) To facilitate orderly and consistent implementation of the City's Comprehensive Plan and development regulations. The preliminary schematic drawings communicate a concept plan as is appropriate for this stage of project consideration. It is not intended to demonstrate the actual proposal, but to demonstrate possible massing, site planning, circulation and parking for the site. As stated previously, through the review process consistency with the zoning code standards would be evaluated. Affordable Housing Based on the maximum allowable dwelling units, a future development project would have to provide three below market rate units, which is one more unit than if the site would remain in the RM-15 zoning district. Based on State law, the City would be required to grant a density bonus and other incentives or concessions to the project if it contains one of the following: At least 5% of the housing units are restricted to very low income residents; at least 10% of the housing units are restricted to lower income residents; and at least 10% of the housing units in a for-sale common interest development are restricted to moderate income residents. The density bonus is based on a sliding scale based on the percentage of affordable units at each income level and the density bonus level is capped at 35%. Under the State density bonus law, reduced parking requirements and development concessions are also available to projects with affordable units, as provided in Section 18.15 of the Palo Alto Municipal Code. Policy Implications The subject property is located in the Multiple Family Residential Land Use Designation of the Comprehensive Plan. According to the Comprehensive Plan, the permitted number of housing units will vary by area, depending on existing land use, proximity to major streets and public transit, distance to shopping, and environmental problems. Net densities will range from eight to 40 units and eight to 90 persons per acre. Density should be on the lower end of the scale next to single family residential areas. Densities higher than what is permitted by zoning may be allowed where measurable community benefits will be derived, services and facilities are available, and the net effect will be compatible with the overall Comprehensive Plan. The proposed rezone would be consistent with the Comprehensive Plan land use designation. Several Comprehensive Plan policies are applicable to the site and the neighborhood including, but not limited to: City of Palo Alto Page 8 Land Use Policy L-5 Maintain the scale and character of the City. Avoid land uses that are overwhelming and unacceptable due to their size and scale. Land Use Policy L-6 Where possible, avoid abrupt changes in scale and density between residential and non-residential areas and between residential areas of different densities. To promote compatibility and gradual transitions between land uses, place zoning district boundaries at mid-block locations rather than along streets wherever possible. which indicates to avoid abrupt changes in scale and density between residential and non-residential areas and between residential areas of different densities. Land Use Policy L-12 Preserve the character of residential neighborhoods by encouraging new or remodeled structures to be compatible with the neighborhood and adjacent structures. Land Use Policy L-14 Design and arrange new multifamily buildings, including entries and outdoor spaces, so that each unit has a clear relationship to a public street. Housing Policy H1.4 Ensure that new developments provide appropriate transitions from higher density development to single-family and low-density residential districts to preserve neighborhood character. Housing Policy H2.1 Identify and implement strategies to increase housing density and diversity, including mixed-use development and a range of unit styles, near community services. Emphasize and encourage the development of affordable and mixed income housing to support the City’s fair share of the regional housing needs and to ensure that the City’s population remains economically diverse. Housing Policy H3.1 Encourage, foster, and preserve diverse housing opportunities for very low-low-, and moderate income households. Timeline Following the prescreening review, the applicant will consider the comments received and determine how they want to proceed. Formal applications and public hearings before the Architectural Review Board, Planning Commission and City Council would be required to advance the proposed conceptual project. Environmental Assessment Environmental review is not required for a prescreening, as no formal action will be taken on City of Palo Alto Page 9 the proposal. The prescreening is not considered to be a project under CEQA. If a formal rezoning application is filed, a complete environmental assessment (Initial Study) will be prepared in compliance with CEQA guidelines, prior to any formal hearing of the rezoning. The environmental review process for the project would include an evaluation of traffic and aesthetics amongst other topics. Attachments:  Attachment A: Site Location Map  Attachment B: Applicant Request Letter  Attachment C Project Plans  Attachment D: Public Comments Legend ·-··� ���� .. Easementl:::::J Zone Districts abc Zone District Labels •Tree 1::::::::::,1 Project Site The City of Palo Alto This map is a product of the City of Palo Al to GI S -- 0' 141• Thisd:x:urreitisapf'icll:!l)"ese"iGtionorlyotbes1a\8i!ati:sa.r.JteS. TheCityoiPa6oAlt>as9.mS roiesporsitilityi:rart{ex:rs�»Zl16CityoiPa6oAlt> 4146 El Camino Real Prescreening 16PLN-00239 August 26, 2016 City of Palo Alto Department of Planning & Community Environment 250 Hamilton Avenue, 5th floor Palo Alto, CA 94303 Re: 4146 El Camino Real – zone change prescreening Mayor Burt and fellow Council Members: Attached is Hayes Group Architect’s submittal package for a prescreening of a zone change proposal for 4146 El Camino for your consideration. The project applicant is Hayes Group Architects on behalf of the owner, Su Juan. SUMMARY Ms. Juan and her family once lived in the single-family home that occupied the property until it was torn down in 1997. Since that time the site has been vacant. In 2011 an application to rezone the property from RM15 to RM30 was filed but never advanced at the city. In 2012 Hayes Group Architects was contacted to initiate a new application on behalf of Ms. Juan to rezone the property as originally proposed. On April 16, 2013, a neighborhood meeting was held with Barron Square residents to understand their concerns and to introduce the project to them. Barron Square is a multi-family, PC development to the rear of the property, accessed from Thain Way. Six residents attended the meeting to express their concerns that mostly focused on site access, safety, density and potential shadows. The most critical concern focused on keeping the project separate from their neighborhood, accessed from El Camino Real. Preliminary plans were submitted to the city and on May 15, 2014, a preliminary architectural review was conducted by the ARB. The ARB’s comments were supportive of the increased density and asked that we continue to study the building frontage, rhythm and connection to the street. They understood the neighbor’s concerns about preventing vehicle access through their neighborhood but stressed that community pedestrian connections should be developed that connect the Barron Square neighborhood to the El Camino Real businesses and services. Since the preliminary hearing the project has not advanced until now. EXISTING CONDITIONS The site is located along El Camino Real, just north of Maybell Avenue. To the south is the Zen hotel, to the east, across El Camino Real, are commercial buildings and mixed-use buildings, and to the North and West is a townhouse subdivision, Barron Square. The property is 33,571 square feet (.77 ac) currently zoned RM15 permitting a density yield of eleven (11) units. The property’s comprehensive plan designation is Multifamily Residential. It fronts onto El Camino Real in the “Triangle Area” an area that is considered a “node” area in the South El Camino Real Guidelines. Node areas are identified as place making areas for more pedestrian oriented activities including a mixture of business services, retail shops, transit services and living opportunities. Neighboring properties on the same side of the street are mostly zoned PC. Across Maybell, to the south, properties are CS permitting 30 dua in a mixed-use project. Directly across the street are CN zoned properties allowing 15 dua in a mixed-use project. PROPOSED PROJECT We propose to rezone the site from RM-15 to RM-30, and seek the Council’s concurrence for the rezone. The attached plans show a concept that could be developed if the rezone moves forward. We understand that any concept would need to be fully evaluated through the City’s Architectural Review process. Realistically, the site could accommodate twenty-one (21), three-story multi-family residential condominiums with 1 level below-grade parking. Based on the preliminary feedback we received from the ARB and the public, the project would be designed with access to the site from El Camino Real, avoiding any disruption to the Barron Square neighborhood. The concept for the site planning is to reinforce the street edge, provide a residential scale to the massing and organize the buildings to provide outdoor yard opportunities on both the front and back of the units. As depicted in the initial concept shown to the ARB and the public, the buildings will be located away from the Barron Square neighborhood, at the El Camino Real setback to reinforce the street. There will be a variety of one and two bedroom units totaling twenty-one (21) total units. Pursuant to the City’s inclusionary housing policy, three units would be affordable units. Higher residential densities are appropriate for this area of the El Camino Real corridor as is evidenced by the adjoining zoning of CS, allowing RM30 residential densities, to the south and RM30 and additional higher density PC projects to the north. Other than the CN commercial zoning across the street, this is the only RM15 zoned parcel on the west side for the entire section of El Camino Real. The RM30 zone allows 35-foot height limits while the RM15 zone allows 30 feet. Along the El Camino real corridor taller buildings are desire to better define the edge and strengthen the corridor. Setbacks are identical between the two zones. HOUSING ELEMENT 4146 El Camino Real is listed on the Housing Element Inventory of sites with a realistic unit yield consistent with the existing RM15 zoning. However, the biggest theme identified in the Housing Element is the high cost of housing in our community for all income segments due to the shortage of housing opportunities. There is limited land available. The Housing Element indicates that only 0.5% of land in the city is vacant and available for development. 4146 El Camino Real is included in this 0.5% and should be developed for housing in a responsible manner. The Housing Element promotes increased densities along El Camino Real, a major transportation corridor. Although it is a small project, increasing the density from 15 dua to 30 dua through this zone change will be a step in the right direction for responsible land use. PARKING Parking for the project will make no request for parking concessions and would be fully parked in accordance with PAMC 18.52. We look forward to a staff review and scheduling of a prescreening hearing so that we can determine how to proceed with the development of this property. Sincerely, Ken Hayes, AIA Principal cc: Su Juan Attachment C Hardcopies of project plans are provided to Planning and Transportation Commissioners. These plans are available to the public by visiting the Planning and Community Environmental Department on the 5th floor of City Hall at 250 Hamilton Avenue. Directions to review Project plans online: Go to: https://paloalto.buildingeye.com/planning Search for “4146 El Camino Real ” and open the record by clicking on the green dot Review the record details and open the “more details” option (make sure the details option shows Application #16PLN-00239 at the top) Use the “Records Info” drop down menu and select “Attachments” Open the attachment named “4146ECR_PreScreeningARB_fullSet.pdf .” CITY OF PALO ALTO OFFICE OF THE CITY CLERK February 13, 2017 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the January 28, 2017 Council Meeting Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS:  Attachment A: 01-28-17 DRAFT Action Minutes (DOCX) Department Head: Beth Minor, City Clerk Page 2 CITY OF PALO ALTO CITY COUNCIL DRAFT ACTION MINUTES Page 1 of 3 Special Meeting January 28, 2017 The City Council of the City of Palo Alto met on this date in the Palo Alto Art Center Auditorium, 1313 Newell Road, at 9:10 A.M. Present: DuBois, Filseth, Fine, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Mayor’s Welcome, Overview of the Day, Retreat Orientation and Discussion of Future Retreats Study Session 1. Fiscal Year 2016 National Citizens Survey and Performance Report. Council took a break at 10:57 A.M. and returned at 11:20 A.M. 2. 2016 Council Workplan Performance Report. Action Items 3. Council Annual Priority Setting. A. Process Foundation. Council took a break at 12:05 P.M. and returned at 12:19 P.M. B. Individual Nominees (Council Member Explanation). C. Final Grouping Into Priorities, Vote and Approval of Priorities and 2017 Key Projects. MOTION: Mayor Scharff moved, seconded by Vice Mayor Kniss to adopt the following 2017 Council Priorities: A. Transportation; and B. Housing; and DRAFT ACTION MINUTES Page 2 of 3 City Council Meeting Draft Action Minutes: 1/28/17 C. Infrastructure; and D. Healthy City, Healthy Community; and E. Budget and Finance. SUBSTITUTE MOTION: Council Member DuBois moved, seconded by Council Member Holman to adopt the following 2017 Council Priorities: A. Budget and Finance; and B. Infrastructure; and C. Healthy City, Healthy Community; and D. Built Environment: Housing, Transportation, and Commercial Development. INCORPORATED INTO THE SUBSTITUTE MOTION to add to the Substitute Motion, “living up to City agreements.” (New Part E) AMENDMENT TO THE SUBSTITUTE MOTION: Council Member Filseth moved, seconded by Council Member DuBois to remove Part E from the Substitute Motion. AMENDMENT TO THE SUBSTITUTE MOTION PASSED: 6-3 Holman, Kniss, Wolbach no SUBSTITUTE MOTION RESTATED: Council Member DuBois moved, seconded by Council Member Holman to adopt the following 2017 Council Priorities: A. Budget and Finance; and B. Infrastructure; and C. Healthy City, Healthy Community; and D. Built Environment: Housing, Transportation, and Commercial Development. SUBSTITUTE MOTION FAILED: 4-5 DuBois, Filseth, Holman, Kou yes MOTION RESTATED: Mayor Scharff moved, seconded by Vice Mayor Kniss to adopt the following 2017 Council Priorities: A. Transportation; and DRAFT ACTION MINUTES Page 3 of 3 City Council Meeting Draft Action Minutes: 1/28/17 B. Housing; and C. Infrastructure; and D. Healthy City, Healthy Community; and E. Budget and Finance; and MOTION PASSED: 7-2 Holman, Kou Council Member Kniss left the meeting at 1:50 P.M. MOTION: Council Member DuBois moved, seconded by Council Member Fine to continue the Agenda Item as it pertains to project prioritization to the next Council Retreat. MOTION PASSED: 8-0 Kniss absent 4. Wrap-up and Next Steps. Adjournment: The meeting was adjourned at 1:58 P.M. City of Palo Alto (ID # 7597) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Adopt Pledged Revenue Resolution for Repayment of State Revolving Fund (SRF) Loans. Title: Adoption of a Resolution Establishing Pledge Sources of Revenue for Repayment of State Revolving Fund (SRF) Loans for Planning, Design and Construction of Wastewater Treatment Enterprise Fund Facilities at the Palo Alto Regional Water Quality Control Plant (RWQCP), and Repealing Resolution Number 9631 From: City Manager Lead Department: Public Works Recommendation The Utilities Advisory Commission and Staff recommend that Council: 1.Repeal Resolution No. 9631 (Attachment C) and replace it with a Resolution (Attachment A) pledging an additional source of revenue for the repayment of two State Revolving Fund loans from the State Water Resources Control Board: one loan for design and construction of the Regional Water Quality Control Plant sludge dewatering and load-out facility and one for planning and design of three additional projects,the laboratory/environmental services building, primary sedimentation tank rehabilitation, and fixed film reactor rehabilitation projects. EXECUTIVE SUMMARY The State Water Resources Control Board is requiring pledged revenues from both the City’s Wastewater Collection fund and its Wastewater Treatment fund as back-up in order to obtain low interest loans from the State for Wastewater Treatment projects. The State considers the two City funds to be fully interrelated since only one group of ratepayers and one Proposition 218 Process is involved. This approach has been used by the City before and keeps the interest rate at half City of Palo Alto Page 2 of what it would otherwise be. It also allows the City to retire its sludge incinerators and reduce greenhouse gasses dramatically. It is therefore recommended by the Utilities Advisory Commission and Staff that Council repeal earlier Resolution 9631 and adopt a new one (Attachment A). This action is not anticipated to impact the City’s Wastewater Collection fund, because agreements with the Wastewater Plant’s Partner Agencies have been obtained in which they individually agree to repay their portion of the State loans. Background The State Water Resources Control Board (SWRCB)administers the State Revolving Fund (SRF)program. The SRF program has a fixed amount of funds available each fiscal year and provides loans to wastewater treatment agencies on a first-come-first-served basis. Under this program, eligible projects can apply for loans with interest rates that are roughly half of the State General Obligation Rate. These favorable terms help lower total project costs, minimizing the financial impacts of projects on rate-payers. On October 17, 2016, Council adopted resolutions authorizing the City Manager to file applications for SRF loans for construction of the sludge dewatering and truck load out facility (CWSRF Project No. 8104) and planning/design of the laboratory/environmental services building, the primary sedimentation tank rehabilitation, and fixed film reactor rehabilitation projects (CWSRF Project No. 8091-110) and pledging repayment sources for the SRF loans (SR ID #7144/Attachment B). Discussion Section 603 of the Federal Clean Water Act Amendments requires each financing recipient to establish one or more pledged sources of revenue for SRF assistance. Resolution No. 9631 pledged net revenues of the City’s Wastewater Treatment enterprise fund for repayment of SRF financing for CWSRF Project No. 8104 and CWSRF Project No. 8091-110. However,the SWRCB subsequently determined that the City must also pledge Wastewater Collection revenues for the SRF loans, which is consistent with past SRF loan pledges for the Regional Water Quality Control Plant.On February 1, 2017, the Utilities Advisory Commission recommended that Council adopt a new resolution pledging both funds,and repeal the earlier resolution (Attachment D).The current Staff Report is forwarding that recommendation to Council. City of Palo Alto Page 3 Resource Impact No additional funds are associated with the adoption of the substitute resolution. Pledging the Wastewater Collection revenues in addition to Wastewater Treatment revenues is not anticipated to impact either fund. Timeline SRF draft agreement development July 2016 –February 2017 Palo Alto Council approval of SRF Agreements February 2017 Policy Implications Adoption of the resolution does not represent a change in existing policies. Environmental Review The Council’s pledge of revenues to repay State Revolving Fund financing for the above-referenced Projects does not meet the definition of a project for the purposes of the California Environmental Quality Act, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b) (5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Council approved an Initial Study/Mitigated Negative Declaration for the sludge-dewatering and loadout facility project on March 28, 2016 (Staff Report ID# 6424). Attachments: ·Attachment A: Resolution Pledged Revenue ·Attachment B: SR 7144 Approve Seven Documents ·Attachment C: Resolution 9631 Pledged Revenue To Be Rescinded ·Attachment D: Utilities Advisory Commission staff report (February 1, 2017) Attachment A NOT YET APPROVED 161220 jb 6053827 1 Resolution No. _____ Resolution of the Council of the City of Palo Alto Establishing Pledged Sources of Revenue For Repayment of Funding Pursuant to the Federal Clean Water Act Amendments and Repealing Resolution 9631 RECITALS A. The CITY OF PALO ALTO (the “City”) desires to finance the costs of planning, design, and/or construction of certain public facilities and improvements relating to its wastewater system, including the planning/design of primary sedimentation tanks, fixed film reactors, and the laboratory/environmental service building, and the construction of a sludge treatment and load-out facility (the “Projects”) that were identified in the Regional Water Quality Control Plant’s Long Range Facility Plan. B. The City intends to finance the planning, design, and/or construction of the Projects or portions of the Projects with moneys (“Project Funds”) provided by the State of California, acting by and through the State Water Resources Control Board (the “Water Board”). C. Section 603(d)(1)(C) of the Federal Clean Water Act Amendments require each financing recipient to establish one or more pledged sources of revenue for Clean Water State Revolving fund (CWSRF) financial assistance. D. Revenue will be considered pledged when the City passes a resolution committing a source of funds for repayment. E. On October 17, 2016 the City Council adopted Resolution No. 9631, pledging revenues of its Wastewater Treatment enterprise fund to repayment of Clean Water State Revolving Fund financial assistance incurred for the planning, design, and/or construction of the Projects, and, in response to additional direction from the Water Board, now wishes to repeal Resolution No. 9631 and adopt this Resolution, in order to pledge revenue from both its Wastewater Treatment and Wastewater Collection enterprise funds to repayment of Clean Water State Revolving Fund financial assistance for the Projects. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The City of Palo Alto hereby pledges Net Revenues of its Wastewater Treatment enterprise fund and Wastewater Collection enterprise fund to repayment of any and all Clean Water State Revolving Fund financing incurred for CWSRF Project No. 8104, including the planning/design of primary sedimentation tanks, fixed film reactors, and laboratory/environmental service building and CWSRF Project No. 8091-110, including the design and construction of a sludge dewatering and load-out facility. Net Revenues of the City’s Wastewater Treatment enterprise and Wastewater Collection enterprise are defined as follows: Attachment A NOT YET APPROVED 161220 jb 6053827 2 "Net Revenues" means, with respect to the Wastewater Treatment enterprise and Wastewater Collection enterprise, for any period of computation, the amount of the Gross Revenues received from the Wastewater Treatment enterprise and Wastewater Collection enterprise during such period, less the amount of Maintenance and Operation Costs of the Wastewater Treatment enterprise and Wastewater Collection enterprise becoming payable during such period. "Gross Revenues" means, for any period of computation, all gross charges received for, and all other gross income and revenues derived by the City from, the ownership or operation of the Wastewater Treatment enterprise and Wastewater Collection enterprise or otherwise arising from the Wastewater Treatment enterprise and Wastewater Collection enterprise during such period, including but not limited to (a) all Charges received by the City for use of the Wastewater Treatment enterprise and Wastewater Collection enterprise, (b) all receipts derived from the investment of funds, (c) transfers from (but exclusive of any transfers to) any stabilization reserve funds, and (d) all moneys received by the City from other public entities whose inhabitants are served pursuant to contracts with the City. "Maintenance and Operation Costs" means the reasonable and necessary costs spent or incurred by the City for maintaining and operating the Wastewater Treatment enterprise and Wastewater Collection enterprise, calculated in accordance with sound accounting principles, including the cost of supply of water, gas and electric energy under contracts or otherwise, the funding of reasonable reserves, and all reasonable and necessary expenses of management and repair and other expenses to maintain and preserve the Wastewater Treatment enterprise and Wastewater Collection enterprise in good repair and working order, and including all reasonable and necessary administrative costs of the City attributable to the Wastewater Treatment enterprise and Wastewater Collection enterprise and, any financing instruments incurred to finance improvements to the Wastewater Treatment enterprise and Wastewater Collection enterprise, such as salaries and wages and the necessary contribution to retirement of employees, overhead, insurance, taxes (if any), expenses, compensation and indemnification of any bond trustee or other lender, and fees of auditors, accountants, attorneys or engineers, and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of any financing instrument related to the Wastewater Treatment enterprise and Wastewater Collection enterprise, but excluding depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. "Charges" means fees, tolls, assessments, rates and rentals prescribed under applicable law by the City Council for the services and facilities of the Wastewater Treatment enterprise and Wastewater Collection enterprise. Attachment A NOT YET APPROVED 161220 jb 6053827 3 This pledged source of revenue shall remain in effect until such financing is fully discharged unless modification or change of such dedication is approved in writing by the State Water Resources Control Board. SECTION 2: The Council’s pledge of the revenues to repay State Revolving Fund financing for the above-referenced Projects does not meet the definition of a project for the purposes of the California Environmental Quality Act, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Council approved an Initial Study/Mitigated Negative Declaration for the sludge-dewatering and loadout facility project on March 28, 2016 (Staff Report ID# 6424). SECTION 3: Resolution No. 9631, adopted on October 17, 2016, is hereby repealed. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: _________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ Senior Deputy City Attorney City Manager ______________________________ Director of Public Works ______________________________ Director of Administrative Services City of Palo Alto (ID # 7144) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/17/2016 City of Palo Alto Page 1 Summary Title: Partner Agreements and Resolutions for Sludge Dewatering & Loadout Facility Title: Adoption of Three Resolutions to Execute State Revolving Fund (SRF) Financial Assistance Applications, Designate the Amount of Project Expenditures to be Reimbursed by SRF Proceeds, and Pledge Revenue for Repayment of SRF Loans; Amend the 2009 SRF Assistance Agreement; and Authorize Contract Amendments with RWQCP Partners Mountain View and Los Altos, East Palo Alto Sanitary District, and the Board of Trustees o f the Leland Stanford Junior University for the Funding of the Sludge Dewatering and Load Out Facility, the Primary Sedimentation Tank Rehabilitation, the Fixed Film Reactor Rehabilitation, and the Laboratory Environmental Services Building for the Wastewater Treatment Enterprise Fund Facilities at the Palo Alto Regional Water Quality Control Plant (RWQCP) From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council 1.Adopt a Resolution (Attachment A) authorizing the City Manager or his designee to execute State Revolving Fund Financial Assistance Applications from the State Water Resources Control Board (SWRCB) on behalf of the Palo Alto Regional Water Quality Control Plant (RWQCP) for the planning, design, and construction of projects identified in the RWQCP’s Long Range Facility Plan; 2.Adopt a Resolution (Attachment B) designating the amount of sludge dewatering and loadout facility project expenditures to be reimbursed by proceeds from the State Revolving Fund; 3.Adopt a Resolution (Attachment C) pledging a dedicated source of revenue for the repayment of two State Revolving Fund loans from the SWRCB: one Attachment B City of Palo Alto Page 2 for the construction of the sludge treatment facility, and one for the planning of three additional projects: the laboratory/environmental services building, the primary sedimentation tank rehabilitation, and fixed film reactor rehabilitation projects; 4. Amend the City’s existing 2009 State Revolving Fund Financial Assistance Agreement to be Subordinate to 1995 and 1999 Utility Revenue Bonds, and on parity with the City’s 2007 SRF loan (Attachment D); and 5. Authorize the City Manager or his designee to execute the following contract amendments with the RWQCP partners for the construction of the sludge dewatering facility: a. Addendum No. 8 to the Basic Agreement with the cities of Mountain View and Los Altos (Attachment E); b. Amendment No. 6 to Agreement No. C237 with East Palo Alto Sanitary District (Attachment F); and c. Amendment No. 4 to Agreement No. C869 with the Board of Trustees of the Leland Stanford Junior University (Attachment G). Executive Summary A facility to replace the sewage sludge (“biosolids”) incinerators at the Regional Water Quality Control Plant (RWQCP) has been designed (Capital Improvement Program (CIP) project WQ-14001) and Council is being asked to approve the application for a low interest loan from the State Water Resources Control Board for construction. The facility will dewater the biosolids and allow it to be loaded onto trucks and taken offsite for further treatment, until further treatment units can be built onsite. The type of further treatment has not been decided, and could be anaerobic digestion, gasification, or another technology. Council is also being asked to approve the application for a second low interest loan from the state to conduct planning for the next three major projects, collectively referred to as Projects, the laboratory/environmental services building, the primary sedimentation tank rehabilitation, and fixed film reactor rehabilitation (CIP projects WQ-14002, WQ-14003, and WQ-14004, respectively). To finalize the applications, Council authorization of several resolutions is required. Background The RWQCP, originally constructed in 1934, has undergone several expansions City of Palo Alto Page 3 and upgrades. The RWQCP is now an advanced (tertiary treatment) facility that provides treatment and disposal of wastewater for Palo Alto, Mountain View, Los Altos, Los Altos Hills, East Palo Alto Sanitary District, and Stanford University. A Long Range Facilities Plan (LRFP) was prepared in 2012 to provide a plan for future capital projects. A Biosolids Facility Plan (BFP) was completed in 2014 to map the management of biosolids when the sewage sludge incinerators are decommissioned. State Revolving Fund Program The State Water Resources Control Board (SWRCB), Division of Financial Assistance administers the Clean Water State Revolving Fund (SRF) program. The SRF program has a fixed amount of funds available each year and provides loans to agencies on a first-come-first-served basis primarily for construction of wastewater treatment projects. The program’s low interest rates, roughly half of the State General Obligation Rate and currently 1.7%, and other favorable terms help lower total project costs, maximizing benefits to rate-payers and partner agencies. Previously the City obtained SRF loans for the Ultraviolet Disinfection Facility ($8.5 million, 20-year term) and Palo Alto/Mountain View recycled water pipeline project ($9.0 million, 20-year term). Sludge Dewatering and Truck Loadout Facility Project Council directed staff in May 2014 to initiate the design of the sludge dewatering and truck loadout facility (CMR ID# 4744). Council approved a contract with CH2MHILL Engineers in January 2015 to provide design and environmental consulting services for the sludge dewatering and truck loadout facility to be located at the RWQCP (CMR ID# 5295). Component One of BFP is a new sludge dewatering and truck loadout facility, which will allow the retirement of the City’s two sewage sludge incinerators. The facility will be used to load trucks with dewatered sludge to be hauled to a regional facility outside of Palo Alto for further treatment, such as composting, gasification and/or anaerobic digestion. Staff will return to Council for approval of the sludge hauling contract and identification of final treatment/disposal location(s) after commencement of facility construction, closer to the anticipated date of the sludge dewatering facility startup in early 2020. City of Palo Alto Page 4 In March 2016, Council approved the Mitigated Negative Declaration, the Mitigation and Monitoring Program, and the Record of Land Use approving the Site and Design Review and Architectural Review application for the new dewatering facility at RWQCP (CMR ID# 6424). Discussion Staff has submitted two draft applications to the SWRCB for SRF financing including an application for 1) construction of the sludge dewatering and truck loadout facility (CIP project WQ-14001) and 2) planning/design of the primary sedimentation tank rehabilitation, fixed film reactor rehabilitation, and the laboratory/environmental services building (CIP projects WQ-14002, WQ-14003, and WQ-14004), (all four collectively referred to as the Projects). Each of these Projects is further described in the LRFP. To finalize the applications, Council authorization of several resolutions is required. Staff is pursuing two SRF loans: one for the planning, design, construction, and construction management of the sludge dewatering and loadout facility, estimated at $30 million, and one for the planning/design of the primary sedimentation tank rehabilitation, fixed film reactor rehabilitation, and the laboratory/environmental services building projects, estimated at $6.75 million. The RWQCP partner agencies (Mountain View, Los Altos, East Palo Alto Sanitary District, and Stanford University) have already approved the Projects, pursuit of the SRF loans to fund the Projects, and agreed to repay their share of financial obligations. City of Palo Alto has final approval of the Projects and loans as the lead agency and SRF loan applicant. Staff will return to Council for approval of the (a) final SRF loans, (b) sludge dewatering construction contract, and (c) sludge dewatering construction management contract. Several steps in the loan process will require Council action, including approval of the final loan amounts, and staff will return to Council accordingly. The items currently brought for Council approval are: 1. Adoption of Authorizing Resolution (Attachment A) Authorizing the City Manager or his designee to apply for SRF loans for capital improvement projects identified in the Long Range Facility Plan. While initially staff plans to apply for two SRF loans, one to fund the sludge dewatering construction project and one to fund planning of the sedimentation tank City of Palo Alto Page 5 rehabilitation, fixed film reactor rehabilitation, and laboratory/environmental sciences building, the resolution is drafted to authorize the City’s application for any of the capital improvement projects listed in the LRFP. The resolution also authorizes the City Manager or his designee, the Director of Public Works or the Manager of the Water Quality Control Plant, to execute SRF financial assistance agreements and any amendments with the SWRCB. SRF applications will be submitted after Council approval of a funding strategy and final construction contract for the relevant facilities. 2. Adoption of Reimbursement Resolution (Attachment B) The SRF program requires the City to pay in advance for certain tasks such as planning and design (eligible allowances) to be reimbursed by the SRF loan. Through the Reimbursement Resolution, Council will designate a maximum of $30 million in advance funding for expenditures for the sludge dewatering project. Staff anticipates returning to Council at a later date with any reimbursement resolutions required for the other three projects. 3. Adoption of Pledged Sources of Revenue Resolution (Attachment C) Section 603 of the Federal Clean Water Act requires each financing recipient to establish one or more pledged sources of revenue to be eligible for SRF assistance. The City will pledge the Net Revenues of its Wastewater Treatment enterprise fund for both SRF loans being sought this year. In compliance with existing bond covenants and the requirements of Proposition 218, the revenue pledge for both new SRF loans will be subordinate to the 1995 Storm Drain and Water Enterprise Bonds, the 1999 Storm Drain, Wastewater Collection and Treatment Bonds, the 2007 SRF loan for the Mountain View/Moffett Area Reclaimed Water Pipeline Project and the 2009 SRF loan for the Ultraviolet Disinfection Project. 4. Amend the 2009 SRF Financial Assistance Agreement (Attachment D) The City’s bond counsel advised that the City’s existing 2009 SRF Financial Assistance Agreement be amended so the City’s pledge of revenues as security for its 2009 SRF repayment obligation is subordinate to the City’s 1995 and 1999 Utility Revenue Bonds, and on parity with the City’s 2007 SRF loan. SWRCB agreed to this modification in concept. The City’s bond counsel has drafted the attached Amendment No. 1 to the City’s 2009 SRF Financial City of Palo Alto Page 6 Assistance Agreement and the City is awaiting feedback from SWRCB’s legal department. 5. Approval of Changes to Partner Agencies’ Agreements (Attachments E, F & G) Except for Los Altos Hills, partner agencies are required to approve the Projects and promise to repay the SRF loans which will finance each Project’s planning and construction. The City prepared amendments were made to each of the partner agency’s relevant agreement, which each agency approved on the dates listed below. Mountain View City Council October 13, 2015 Stanford University January 25, 2016 Los Altos City Council February 23, 2016 Board of East Palo Alto Sanitary District Board September 22, 2016 The Addendum and Amendments document the partner agencies’ approval of the Projects and establish the partner agencies’ acceptance of, and responsibilities for, the terms and conditions of SRF Financial Assistance Agreements and Project costs. Timeline Palo Alto Council approval of SRF Application Submittal, Reimbursement and Revenue Pledge Resolutions* October 17, 2016 Palo Alto Council approval of Sludge Dewatering Construction Contract and SRF Construction Loan January 2017 Construction Notice To Proceed February 2017 Sludge Dewatering Project completion February 2019 * If approved, staff anticipates bringing the SRF loan agreement for the three planning projects to Council in 2017 Resource Impact No financial impacts are associated with the adoption of the resolutions, amendment of the 2009 SRF loan or approval of the Partner Agreement addendum and amendments. City of Palo Alto Page 7 Applying for SRF funds does not obligate the City to proceed with the Projects. The resource impact of proceeding with Projects will be evaluated at the time Council approval for each Project is requested. Funding for the design and environmental consulting services for the dewatering facility was in the Wastewater Treatment Fund CIP project WQ-80021 and the fund reserve will be reimbursed with the SRF loan principal. Repayment of the sludge dewatering 30-year SRF loan is expected to begin in 2020, a year after construction completion, and would be included as an expense in the Fiscal Year 2020 Wastewater Treatment Fund operating budget. Approximately 62% of the fund’s operating expenses are offset by revenue from the RWQCP partner agencies. Policy Implications Adoption of the resolutions, amendment of the 2009 SRF loan and approval of the addendum and amendments to the partner agencies’ agreements do not represent a change in existing policies. Environmental Review The City of Palo Alto performed an environmental review for the sludge dewatering and loadout facility under provisions of the California Environmental Quality Act (CEQA). An Initial Study/Mitigated Negative Declaration was prepared for the project and approved by Council on March 28, 2016 (CMR ID# 6424). Adoption of the SRF application and funding resolutions, amendment of the 2009 SRF agreement and approval of the addendum and amendments to the partner agencies’ agreements are not actions that require CEQA review. These actions do not meet the definition of a project for the purposes of CEQA, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because they are administrative governmental activities which will not cause a direct or indirect physical change in the environment. Attachments:  Attachment A: Resolution Authorizing FINAL (PDF)  Attachment B: Resolution Reimbursement (PDF)  Attachment C: Resolution Pledged Revenue (PDF)  Attachment D: Amendment 1 2009 SRF Loan Agreemnt (DOCX) City of Palo Alto Page 8  Attachment E: Amendment 8 Palo Alto--Mountain View--Los Altos (PDF)  Attachment F: Amendment 6 EPASD (PDF)  Attachment G: Amendment 4 Stanford University (DOCX) NOT YET APPROVED 160928 jb 6053825 1 Resolution No. ______ Resolution of the Council of the City of Palo Alto Approving the City’s Submittal of a Financial Assistance Application to the State Water Resources Control Board for Capital Improvement Projects Applicable to the Regional Water Quality Control Plant R E C I T A L S A. The State of California State Water Resources Control Board (the “Board”) has a funding program entitled “Clean Water State Revolving Fund,” and pursuant to this program, the Board makes funds available for various capital water-related projects. B. The City of Palo Alto (the “City”) owns and operates the Regional Water Quality Control Plant (the “Plant”), and engages in various capital improvement projects to improve and maintain the Plant. C. The City wishes to apply for State Revolving Fund funds to cover the cost of certain capital improvement projects identified in the attached Long Range Facility Plan, Exhibit A. D. The first State Revolving Fund application the City submits will cover the sludge dewatering and load-out facility construction project. City staff anticipates seeking multiple State Revolving Fund applications for other capital improvement projects identified in the Long Range Facility Plan, under the authority granted by Council via this resolution. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The Council hereby finds that it is in the City and the public’s interest in the health, safety and welfare of the community to file Financial Assistance Application(s) with the Board to seek funds made available under the State Revolving Fund for any of the CIP projects listed in Exhibit A. SECTION 2. The Council hereby authorizes and directs the City Manager or his designee, the Director of Public Works or the Manager of the Plant, to: (a) File and sign, for and on behalf of the City of Palo Alto, a Financial Assistance Application for a financing agreement from the Board for the planning, design, and construction of projects identified in the Plant’s Long Range Facility Plan, Exhibit A. (b) Provide the assurances, certifications, and commitments required for the financial assistance application, including executing a financial assistance agreement from the Board and any amendments or changes thereto. (c) Represent the City in carrying out the City’s responsibilities under the financing agreement, including certifying disbursement requests on behalf of the city and compliance with applicable state and federal laws. NOT YET APPROVED 160928 jb 6053825 2 SECTION 3. The Council finds that the filing of a Financial Assistance Application with the State Water Resources Control Board does not constitute a project requiring California Environmental Quality Act (CEQA) review. This action does not meet the definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. An Initial Study/Mitigated Negative Declaration was prepared for the sludge dewatering and loadout facility project and approved by Council on March 28, 2016 (Staff Report ID# 6424). Implementation of the primary sedimentation tanks, fixed film reactors, and the laboratory/environmental service building projects is subject to future CEQA analysis. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ _____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _____________________________ Senior Deputy City Attorney City Manager _____________________________ Director of Public Works _____________________________ Director of Administrative Services NOT YET APPROVED 160928 jb 6053826 Resolution No. _________ Resolution of the Council of the City of Palo Alto Authorizing the Reimbursement of Funding for the Regional Water Quality Control Plant Sludge Dewatering and Loadout Facility Project from the State Water Resource Control Board R E C I T A L S A. The City of Palo Alto (the “City”) desires to finance the costs of constructing and/or reconstructing certain public facilities and improvements relating to its water and wastewater system, including certain treatment facilities, pipelines and other infrastructure (the "Project"). B. The City intends to finance the construction and/or reconstruction of the Project or portions of the Project with moneys ("Project Funds") provided by the State of California, acting by and through the State Water Resources Control Board (State Water Board). C. The State Water Board may fund the Project Funds with proceeds from the sale of obligations the interest upon which is excluded from gross income for federal income tax purposes (the "Obligations"). D. Prior to either the issuance of the Obligations or the approval by the State Water Board of the Project Funds the City has incurred certain capital expenditures (the "Expenditures") with respect to planning and design of the Project from available moneys of the City. E. The City has determined that those moneys to be advanced on and after the date hereof to pay the Expenditures are available only for a temporary period and it is necessary for the State Water Board to reimburse the City for the Expenditures from the proceeds of the Obligations. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The City hereby states its intention and reasonably expects to reimburse Expenditures paid prior to the issuance of the Obligations or the approval by the State Water Board of the Project Funds. SECTION 2. The reasonably expected maximum principal amount of the Project Funds is $30,000,000. SECTION 3. This resolution is being adopted no later than 60 days after the date on which the City will expend moneys for the construction portion of the Project costs to be reimbursed with Project Funds. SECTION 4. Each City expenditure will be of a type properly chargeable to a capital account under general federal income tax principles. NOT YET APPROVED 160928 jb 6053826 SECTION 5. To the best of our knowledge, the City is not aware of the previous adoption of official intents by the City that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued. SECTION 6. This resolution is adopted as official intent of the City in order to comply with Treasury Regulation §1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Project costs. SECTION 7. All the recitals in this Resolution are true and correct and this City so finds, determines and represents. SECTION 8. The Council finds that its authorization of funding reimbursement does not constitute a project requiring review under the California Environmental Quality Act (CEQA) or CEQA Guidelines. This action does not meet the definition of a project under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: _________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ Senior Deputy City Attorney City Manager ______________________________ Director of Public Works ______________________________ Director of Administrative Services NOT YET APPROVED 160928 jb 6053827 1 Resolution No. _____ Resolution of the Council of the City of Palo Alto Establishing One or More Pledged Sources of Revenue For Repayment of Funding Pursuant to The Federal Clean Water Act Amendments R E C I T A L S A. The City of Palo Alto (the “City”) desires to finance the costs of planning, design, and/or construction of certain public facilities and improvements relating to its wastewater system, including the planning/design of primary sedimentation tanks, fixed film reactors, and the laboratory/environmental service building, and the construction of a sludge treatment and load-out facility (the “Projects”) that were identified in the Regional Water Quality Control Plant’s Long Range Facility Plan. B. The City intends to finance the planning, design, and/or construction of the Projects or portions of the Projects with moneys (“Project Funds”) provided by the State of California, acting by and through the State Water Resources Control Board (the “Water Boards”). C. Section 603(d)(1)(C) of the Federal Clean Water Act Amendments require each financing recipient to establish one or more pledged sources of revenue for Clean Water State Revolving fund (CWSRF) financial assistance. D. Revenue will be considered pledged when the City adopts a resolution committing a source of funds for repayment. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The City of Palo Alto hereby pledges Net Revenues of its Wastewater Treatment enterprise fund to repayment of any and all Clean Water State Revolving Fund financing incurred for CWSRF Project No. 8104, including the planning/design of primary sedimentation tanks, fixed film reactors, and a laboratory/environmental service building, and CWSRF Project No. 8091-110, including the design and construction of a sludge dewatering and load-out facility. Net Revenues of the City’s Wastewater Treatment enterprise, and other terms relevant to this action, are defined as follows: "Net Revenues" means, with respect to the Wastewater Treatment enterprise, for any period of computation, the amount of the Gross Revenues received from the Wastewater Treatment enterprise during such period, less the amount of Maintenance and Operation Costs of the Wastewater Treatment enterprise becoming payable during such period. "Gross Revenues" means, for any period of computation, all gross charges received for, and all other gross income and revenues derived by the City from, the ownership or operation of the Wastewater Treatment enterprise or otherwise arising from the Wastewater Treatment enterprise during such period, including but not limited to (a) all Charges received by NOT YET APPROVED 160928 jb 6053827 2 the City for use of the Wastewater Treatment enterprise, (b) all receipts derived from the investment of funds, (c) transfers from (but exclusive of any transfers to) any stabilization reserve funds, and (d) all moneys received by the City from other entities whose customers are served pursuant to contracts between those entities and the City. "Maintenance and Operation Costs" means the reasonable and necessary costs spent or incurred by the City for maintaining and operating the Wastewater Treatment enterprise, calculated in accordance with sound accounting principles, including the cost of supply of water, gas and electric energy under contracts or otherwise, the funding of reasonable reserves, and all reasonable and necessary expenses of management and repair and other expenses to maintain and preserve the Wastewater Treatment enterprise in good repair and working order, and including all reasonable and necessary administrative costs of the City attributable to the Wastewater Treatment enterprise and any financing instruments incurred to finance improvements to the Wastewater Treatment enterprise, such as salaries and wages and the necessary contribution to retirement of employees, overhead, insurance, taxes (if any), expenses, compensation and indemnification of any bond trustee or other lender, and fees of auditors, accountants, attorneys or engineers, and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of any financing instrument related to the Wastewater Treatment enterprise, but excluding depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. "Charges" means fees, tolls, assessments, rates and rentals prescribed under applicable law by the City Council for the services and facilities of the Wastewater Treatment enterprise. This pledged source of revenue shall remain in effect until such financing is fully discharged unless modification or change of such dedication is approved in writing by the State Water Resources Control Board. SECTION 2: The Council’s pledge of the revenues to repay State Revolving Fund financing for the above-referenced projects does not meet the definition of a project for the purposes of the California Environmental Quality Act, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Council approved an Initial Study/Mitigated Negative Declaration for the sludge-dewatering and loadout facility project on March 28, 2016 (Staff Report ID# 6424). / / / / / / / / NOT YET APPROVED 160928 jb 6053827 3 Implementation of the primary sedimentation tanks, fixed film reactors, and the laboratory/environmental service building projects is subject to future CEQA analysis. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: _________________________ ______________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: __________________________ ______________________________ Senior Deputy City Attorney City Manager ______________________________ Director of Public Works ______________________________ Director of Administrative Services Attachment D AMENDMENT NO. 1 TO PROJECT FINANCE AGREEMENT STATE REVOLVING FUND PROJECT NO. C-06-5044-110 AGREEMENT NO. 09-814-550 This Amendment No. 1 to Project Finance Agreement (including all exhibits and attachments hereto, this “Amendment No. 1”) is dated as of ____, 2016, and is by and between the State Water Resources Control Board, an administrative and regulatory agency of the State of California (the “State Water Board”), and the City of Palo Alto, a charter city duly organized and existing under the laws of the State of California (the “Recipient”). WITNESSETH WHEREAS, the State Water Board and the Recipient previously entered into Project Finance Agreement No. 09-814-550 (the “Original Agreement”) to provide financing for the Project described therein; WHEREAS, the Original Agreement provides that the Recipient’s Obligation under the Original Agreement is secured by a lien on and pledge of Net Revenues in priority as specified in Exhibit F to the Original Agreement; WHEREAS, Exhibit D of the Original Agreement provides that that the Recipient’s obligations under the Original Agreement shall be secured on a parity with the outstanding 1999 Series A Revenue Bonds; WHEREAS, the State Water Board and the Recipient wish to amend Exhibits D and F to correct the priority relationship of the Obligation to other System Obligations; NOW, THEREFORE, in consideration of the premises and of the mutual representations, covenants and agreements herein set forth, the State Water Board and the Recipient, each binding itself, its successor and assigns, do mutually promise, covenant and agree as follows: ARTICLE I DEFINITIONS All capitalized terms used in this Amendment No. 1 and not defined in this Amendment No. 1 have the meaning given such terms in the Original Agreement. ARTICLE II AMENDMENT OF THE ORIGINAL AGREEMENT 2.1 Section D of the Original Agreement is hereby amended and restated in its entirety as shown on Attachment 1. 2.2 Section F of the Original Agreement is hereby amended and restated in its entirety as shown on Attachment 2. ARTICLE III MISCELLANEOUS 3.1 In the event of any conflict between the Original Agreement and this Amendment No. 1, the terms of this Amendment No. 1 shall govern. Otherwise, the Original Agreement shall remain in full force and effect. 3.2 This contract is governed by and shall be interpreted in accordance with the laws of the State of California. 3.3 The State Water Board and the Recipient hereby agree that any action arising out of this Amendment No. 1 shall be filed and maintained in the Superior Court in and for the County of Sacramento, California, or in the United States District Court in and for the Eastern District of California. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. CITY OF PALO ALTO By: Name: Title: Date: STATE WATER RESOURCES CONTROL BOARD By: Name: Title: Date: City of Palo Alto Amendment No. 1 to Agreement No.: 09-814-550 Project No.: C-06-5044-110 Attachment 1 AMENDMENT OF EXHIBIT D Exhibit D of the Original Agreement is hereby amended and restated in its entirety as follows: EXHIBIT D -- SPECIAL CONDITIONS Special condition as follows: D.1 The financing agreement shall be subordinate to the outstanding 1999 Series A Revenue Bonds; and D.2 The financing agreement shall be subordinate to the outstanding 1995 Series A Revenue Bonds; and D.3 The City of Palo Alto shall fund a reserve fund of one year’s debt service and maintain it throughout the term of the financing agreement. Attachment 2 AMENDMENT OF EXHIBIT F Exhibit F of the Original Agreement is hereby amended and restated in its entirety as follows: EXHIBIT F -- SCHEDULE OF SYSTEM OBLIGATIONS Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has no outstanding System Obligations: The following outstanding debt is senior to the Obligation: Title Interest Rate Total Amount Amount Remaining End Date 1995 Utility Revenue Bonds 5-0-6.25% $8,640,000 $5,650,000 June 1, 2020 1999 Utility Revenue Bonds 3.25-5.25% $17,735,000 $14,670,000 June 1, 2024 The following outstanding debt is on parity with the Obligation: Title Interest Rate Total Amount Amount Remaining End Date Mountain View/Moffett Area Reclaimed Water Pipeline Project SRF Contract #07- 814-550-0 Project #C-06-4132-110 0%* $9,000,000 $9,000,000 June 30, 2029 * Local Match Financing The following outstanding debt is subordinate to the Obligation: Title Interest Rate Total Amount Amount Remaining End Date Not Applicable ADDENDUM NO. EIGHT TO THE BASIC AGREEMENT BETWEEN THE CITY OF PALO ALTO, THE CITY OF MOUNTAIN VIEW AND THE CITY OF LOS ALTOS FOR THE ACQUISITION, CONSTRUCTION AND MAINTENANCE OF A JOINT SEWER SYSTEM This Addendum No. Eight (8) to the Basic Agreement for the Acquisition, Construction and Maintenance of a Joint Sewer System is made and entered into on _______________________, by and among the CITY OF PALO ALTO (“Palo Alto”), the CITY OF MOUNTAIN VIEW (“Mountain View”), and the CITY OF LOS ALTOS (“Los Altos”) (individually, a “Party”, collectively, the “Parties”), all municipal corporations under the laws of the State of California. R E C I T A L S: A. The Parties have entered into that certain Basic Agreement Between the City of Palo Alto, the City of Mountain View and the City of Los Altos for the Acquisition, Construction, and Maintenance of a Joint Sewer System, executed on October 10, 1968, as amended by the Addenda described below (collectively, the “Basic Agreement”). The Basic Agreement has been amended seven times by addenda, as follows: Addendum No. One (1) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of December 5, 1977; Addendum No. Two (2) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of January 14, 1980; Addendum No. Three (3) to an Agreement By and Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of April 9, 1985; Addendum No. Four (4) to the Agreement By and Between the Cities of Mountain View, Los Altos, and Palo Alto as further amended and dated May 30, 1991; Addendum No. Five (5) to Basic Agreement Between the Cities of Palo Alto, Mountain View, and Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System, dated as of July 31, 1992; Addendum No. Six (6) to Basic Agreement Between the City of Palo Alto, the City of Mountain View, and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of March 16, 1998; and Addendum No. Seven (7) to Basic Agreement Between the City of Palo Alto, the City of Mountain View, and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated as of April 15, 2009 (collectively, the “Addenda”). B. Palo Alto owns and operates the sanitary sewerage treatment and disposal works and system (the “Joint System”) pursuant to the Basic Agreement, and is responsible for making capital additions to the Joint System. Under the Basic Agreement, any major capital additions for the replacement of obsolete or worn-out units require an agreement by the Parties amending the Basic Agreement. The Parties now desire to agree upon and implement projects to improve the Joint System by planning and designing the rehabilitation of the primary sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service building, and constructing and implementing a sludge dewatering and load-out facility (individually, “Project”, collectively, the “Projects”). The Parties also agree to provide for the sharing of costs associated with the Projects. The Projects will become part of the regional water quality control plant (the “Plant”), which is owned and operated by Palo Alto as part of the Joint System. NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this Addendum No. Eight (8), the Basic Agreement is hereby amended, as follows: Section 2. Paragraph 38 is hereby added to the Basic Agreement to read, as follows: “38. IMPLEMENTATION OF THE PROJECTS. Palo Alto, Mountain View, and Los Altos hereby approve the Projects for planning/design of the primary sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service building, and the design/construction of a sludge dewatering and load-out facility (the “Projects”). Each Party shall pay its share of the Projects Costs, in proportion to the capacity it owns in the Joint System or portion thereof as shown in Exhibit “H” to Addendum No. Six (6) to the Basic Agreement. “Project Costs” means all costs incurred in connection with the planning, design, construction and implementation of the Projects. Without limiting the generality of the foregoing, Project Costs shall include, but not be limited to: design, engineering, and other consultants’ fees and costs, including fees incurred pursuant to agreements with engineers, contractors and other consulting, design and construction professionals; environmental analysis and approval costs, including cost of compliance with the California Environmental Quality Act; deposits, applicable permit fees; all costs to apply for and secure necessary permits from all required regional, state, and federal agencies; plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any contracts. The Parties authorize Palo Alto to pursue State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) to fund the costs of the Projects. The maximum amount of the SRF planning/design loan sought for the planning/design of the primary sedimentation tanks, the fixed film reactors, and a new laboratory/Environmental Service building will be $6.75 million. The maximum amount of the SRF construction loan sought for the design/construction of a sludge dewatering and load-out facility will be $28 million. The loan will have a thirty-year repayment term. The repayments of the SRF loan shall be treated in the same manner as debt services under the Basic Agreement and its Addenda, and repaid by the Parties in the same proportionate shares as shown on Exhibit “H” to Addendum No. Six (6) to the Basic Agreement. The Parties further agree that, if necessary, each Party shall propose to raise their sewer use rates for the repayment of the SRF loan, operations, and/or maintenance of the Projects, following any appropriate process executed under California Constitution article XIII C and D (Proposition 218). If the SWRCB terminates its loan commitment unexpectedly following execution of the planning and/or construction contract(s) for the Projects or the Project, Palo Alto shall notify the Parties promptly. Following notification of the termination of the SRF, the Parties shall meet in a timely manner to discuss alternative funding sources and strategies for completion of the Projects. If the Parties are unable to agree on new funding sources in a timely manner, then Palo Alto shall have the right to terminate the Project or the Projects. The Parties shall remain responsible for Project costs and loans incurred, whether before or after termination of the Project/Projects, in connection with the termination of the Project planning/design/construction contract, in the same proportion to each organization’s share of plant capacity, as stated in Exhibit “H” to Addendum No. Six (6) of the Basic Agreement. Total project costs shall not exceed the authorized maximum SRF loan approved by Parties without prior approval of each party’s governing body. Unless earlier terminated, the obligations and responsibilities of the Parties shall commence with the execution of this addendum No. Eight and be in force for the term of the SRF loan. Mountain View and Los Altos shall pay their respective shares of any Project Costs within thirty (30) business days of receipt of the quarterly billing statement sent by Palo Alto. Palo Alto shall not send more than one invoice in any thirty-day period. If a Party disputes the correctness of an invoice, it shall pay the invoice in full and the dispute shall be resolved after payment in accordance with Section 19 of the Basic Agreement, and shall not offset against any payment due. Section 1. Paragraph 27. TERM. is amended to read as follows: The Basic Agreement shall commence upon execution and will terminate on December 31, 2060, provided that any party hereto who wishes to withdraw from the Basic Agreement shall tender written notice of withdrawal at least ten (10) years preceding the date of withdrawal. Section 3. Except as modified herein, the Basic Agreement shall remain unchanged, and is hereby ratified and confirmed. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Addendum as of the date first written above. ATTEST: __________________________________ City Clerk APPROVED AS TO FORM: __________________________________ Deputy City Attorney APPROVED AS TO CONTENT: __________________________________ City Manager CITY OF PALO ALTO By: __________________________________ Mayor ATTEST: __________________________________ City Clerk APPROVED AS TO FORM: __________________________________ City Attorney APPROVED AS TO CONTENT: __________________________________ FINANCIAL APPROVAL: ________________________________ Finance and Administrative Services Director CITY OF MOUNTAIN VIEW By: __________________________________ City Manager ATTEST: __________________________________ City Clerk APPROVED AS TO FORM: __________________________________ City Attorney APPROVED AS TO CONTENT: __________________________________ City Manager CITY OF LOS ALTOS By: __________________________________ Mayor AMENDMENT NO. SIX TO CONTRACT RESTATEMENT AND AMENDMENT NO. C237 BETWEEN THE CITY OF PALO ALTO AND THE EAST PALO ALTO SANITARY DISTRICT This Amendment No. Six (6) to the Contract Restatement and Amendment No. C237 is made and entered into on _______________________, by and between the CITY OF PALO ALTO, a chartered municipal corporation of the State of California (the “City”) and East Palo Alto Sanitary District, a public corporation under the laws of the State of California (the “District”) (individually, a “Party”, collectively, the “Parties”). R E C I T A L S: A. On March 11, 1940, the Parties entered into a contract, “Contract Restatement and Amendment No. C237,” whereby the City agreed to provide treatment of the District’s wastewater, which contract was subsequently amended by amendments dated September 10, 1963, June 25, 1964, and May 1971 (the “Original Agreement”); B. On October 10, 1968, the City joined with the cities of Mountain View and Los Altos to fund the construction, operation, and maintenance of a regional sewage treatment plant (the “Treatment Plant”) that is part of a sewerage system (“System”), owned and operated by the City; C. In May 1971, the City and District agreed that the District’s share of the primary/secondary design capacity of the Treatment Plant would be 2.25 mgd (ADWF). The Treatment Plant was subsequently expanded to include tertiary treatment, and the District’s share of tertiary capacity was established at 1.9 mgd (ADWF); D. On March 16, 1989, the Parties restated and amended the Original Agreement (the “1989 Agreement”) to provide for the District’s participation in financing an expansion of the Treatment Plant’s capacity from 35.0 primary/secondary capacity to 38.0 mgd (ADWF) (40.0 AAF) and from a tertiary capacity of 30.6 mgd to 38.0 mgd ADWF (40.0 AAF); E. On May 30, 1989, the Parties amended the 1989 Agreement to revise the billing and payment provisions in Paragraph 6.b of the 1989 Agreement (“Amendment No. 1”); F. On December 18, 1989, the Parties amended the 1989 Agreement to provide specific measures and procedures for complying with federal and state laws and regulations regarding wastewater collection, transmission, treatment and disposal in Paragraph 9 of the 1989 Agreement (“Amendment No. 2”); G. On December 7, 1998, the Parties amended the 1989 Agreement to add Paragraph 26 to permit the rehabilitation of the City’s incinerators (“Amendment No. 3”); H. On November 19, 2003, the Parties executed an agreement entitled “Settlement and Release Agreement” and amended Paragraphs 6.a and 8 of the 1989 Agreement on June 2, 2005 to be consistent with the Settlement and Release Agreement (“Amendment No. 4”); I. On March 19, 2009, the Parties amended the 1989 Agreement to add Paragraph 28, which provided for the funding, design, and construction of an ultra violet treatment system at the Treatment Plan (“Amendment No. 5”). The 1989 Agreement and Amendment Nos. 1-5 are referred to collectively, herein as the “Contract.” J. The City owns and operates the System pursuant to the Contract, is responsible for making capital additions to the System, and intends to renovate the Treatment Plant. The Parties desire to amend the Contract to clarify the indemnity provision applicable to the Contract and to set forth the terms of their agreement for the sharing of costs associated with the planning and design of the rehabilitation of the primary sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service building, and the design and construction of a sludge dewatering and load-out facility (individually, the “Project”, collectively, the “Projects”). The Projects are set forth in more detail in Exhibit I, attached to this Amendment No. Six. The Projects will become part of the Treatment Plant, which is owned and operated by the City as part of the System. NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this Amendment No. Six (6), the Contract is hereby amended as follows: Section 1. Paragraph 29 is hereby added to the Contract to read, as follows: “29. IMPLEMENTATION OF THE PROJECTS. City and District hereby approve the Projects. Each Party shall pay its share of Project Costs for the Projects in proportion as it owns capacity in the Joint System or portion thereof, as shown in Exhibit “H” to Amendment No. Three (3) to the Contract. “Project Costs” means all costs incurred in connection with the planning, design, construction and implementation of the Projects. Without limiting the generality of the foregoing, Project Costs shall include, but not be limited to: design, engineering, and other consultants’ fees and costs, including fees incurred pursuant to agreements with engineers, contractors and other consulting, design and construction professionals; environmental analysis and approval costs, including cost of compliance with the California Environmental Quality Act; deposits, applicable permit fees; all costs to apply for and secure necessary permits from all required regional, state, and federal agencies; plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any contracts. The Parties authorize the City to pursue State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) to fund the costs of the Projects. The maximum amount of the SRF planning/design loan sought for the planning/design of the primary sedimentation tanks, the fixed film reactors, and a new laboratory/Environmental Service building will be $6.75 million. The maximum amount of the SRF construction loan sought for the design/construction of a sludge dewatering and load-out facility will be $28 million. The loan will have a thirty year repayment term. The SRF loan shall be repaid in the same proportionate share, as shown on Exhibit “H” to Amendment No. Three (3) to the Contract. The Parties further agree that, if necessary, each Party shall raise their sewer use rates for the repayment of the SRF loan, operations, and/or maintenance of the Project, following any appropriate process under California Constitution article XIII C and D (Proposition 218). If the SWRCB terminates its loan commitment unexpectedly following execution of the planning and/or construction contract(s) for a Project or the Projects, Palo Alto shall notify the Parties promptly. Following notification of the termination of the SRF, the Parties shall meet in a timely manner to discuss alternative funding sources and strategies for completion of the Projects. If the Parties are unable to agree on new funding sources in a timely manner, then Palo Alto shall have the right to terminate the Project or the Projects immediately. The Parties shall remain responsible for Project Costs and loans incurred, whether before or after termination of the Project, in connection with the termination of the Project construction contract, in the same proportion to each organization’s share, as shown on Exhibit “H” to Amendment No. Three (3) to the Contract. Unless earlier terminated, the obligations and responsibilities of the Parties shall commence with the execution of this amendment and be in force for the life of the SRF loan. Pursuant to Paragraph 6.c of the Contract, the City will supply the District with all information supporting the City’s determinations regarding the Project Costs, including but not limited to, information relating to the computation of the relative shares of each organization. The City will make available all such information (historical and current) to the District’s auditors, on request. District shall pay its share of any Project Costs within ten (10) business days of receipt of the quarterly billing statement sent by the City. If District disputes the correctness of an invoice, it shall pay the invoice in full and the dispute shall be resolved after payment in accordance with the Contract, and shall not offset against any payment due. The Parties shall undertake any dispute resolution in accordance with Paragraph 10 of the Contract. Section 2. Paragraph 19 of the Contract and Paragraph 7 of Amendment No. 2 are hereby deleted and replaced with the following: Indemnity. Each of the Parties shall defend, indemnify and hold the other party harmless of and from all claims, liabilities, actions, causes of action, proceedings, damages, fines, penalties, costs, expenses, attorneys’ fees or any other forms of pecuniary or non- pecuniary relief which result from: (i) That party's violation of laws and regulations governing the collection, transmission, treatment and disposal of wastewater or wastewater byproducts, including, without limitation, laws and regulations governing disruption of treatment processes or operations, degradation of sludge quality, and NPDES permit violations attributable to the conduct of that party or other persons, including industrial waste dischargers for whom that party exercises regulatory responsibility. (ii) That party's failure to exercise reasonable care in the operation and maintenance of its wastewater facilities. Section 3. Except as modified herein, the Contract shall remain unchanged, and is hereby ratified and confirmed. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment No. Six to the Contract Restatement and Amendment No. C237 Between the City of Palo Alto and The East Palo Alto Sanitary District as of the date first written above. ATTEST: __________________________________ City Clerk APPROVED AS TO FORM: __________________________________ Deputy City Attorney APPROVED AS TO CONTENT: __________________________________ City Manager CITY OF PALO ALTO By: __________________________ Mayor ATTEST: __________________________________ APPROVED AS TO FORM: __________________________________ Attorney APPROVED AS TO CONTENT: __________________________________ EAST PALO ALTO SANITARY DISTRICT By: __________________________ Name: . Title: . EXHIBIT I PROJECT DESCRIPTION / DEPICTION ATTACHMENT G AMENDMENT NO. FOUR TO CONTRACT NO. C869 BETWEEN THE CITY OF PALO ALTO AND THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY This Amendment No. Four (4) to the Contract is made and entered into on _______________________, by and between the CITY OF PALO ALTO, a chartered city and a chartered municipal corporation of the State of California (“City”) and the BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the laws of the State of California (“Stanford”) (individually, a “Party”; collectively, the “Parties”). R E C I T A L S: A. The Parties have entered into that certain Contract Between Palo Alto and Stanford, executed on November 30, 1956, as amended by the Addendum and Amendments described below (collectively, the “Contract”). The Contract has been amended three times as follows: Addendum No. One (1) to the Contract Between the City of Palo Alto and Stanford, dated as of June 11, 1971; Amendment No. Two (2) to the Contract Between the City of Palo Alto and Stanford, dated as of November 2, 1998; and Amendment No. Three (3) to the Contract Between the City of Palo Alto and Stanford, dated as of March 16, 2009. B. Palo Alto owns and operates the sewerage system (the “System”) pursuant to the Contract, and is responsible for making capital additions to the System. Under the Contract, prior to commencement of construction of any capital additions or enlargements of the System, City and Stanford shall agree upon the terms of payment by Stanford of its proportionate cost. The Parties now desire to agree upon the sharing of costs associated with the planning and design of the rehabilitation of the primary sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service building, and the design and construction of a sludge dewatering and load-out facility (individually, the “Project”, collectively, the “Projects”). The Projects will become part of the regional water quality control plant (the “Plant”), which is owned and operated by Palo Alto as part of the System. NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth in this Amendment No. Four (4), the Contract is hereby amended as follows: Section 1. Paragraph 24 is hereby added to the Contract to read, as follows: “24. IMPLEMENTATION OF THE PROJECTS. Palo Alto and Stanford hereby approve the planning/design of the rehabilitation of the primary sedimentation tanks, the fixed film reactors, a new laboratory/Environmental Service building, and the design/construction of a sludge dewatering and load-out facility (individually, the “Project”, collectively, the “Projects”). Each Party shall pay its share of the Project Costs for the Projects in proportion to the capacity it owns in the Joint System or portion thereof as shown in Exhibit “H” to Amendment No. 2 to the Contract. “Project Costs” means all costs incurred in connection with the planning, design, construction and implementation of the Projects. Without limiting the generality of the foregoing, Project Costs shall include, but not be limited to: design, engineering, and other consultants’ fees and costs, including fees incurred pursuant to agreements with engineers, contractors and other consulting, design and construction professionals; environmental analysis and approval costs, including cost of compliance with the California Environmental Quality Act; deposits, applicable permit fees; all costs to apply for and secure necessary permits from all required regional, state, and federal agencies; plan check fees, and inspection fees; construction costs; initial maintenance; attorneys’ fees and costs; insurance; interest from the date of payment on any contracts. The Parties authorize Palo Alto to pursue State Revolving Fund (“SRF”) loans from the State Water Resources Control Board (“SWRCB”) to fund the costs of the Projects. The maximum amount of the SRF planning/design loan sought for the planning/design of the primary sedimentation tanks, the fixed film reactors, and a new laboratory/Environmental Service building will be $6.75 million. The maximum amount of the SRF construction loan sought for the design/construction of a sludge dewatering and load-out facility will be $28 million. The loan will have a thirty-year repayment term. The SRF loan shall be repaid by the Parties in the same proportionate shares as shown on Exhibit “H” to Amendment No. Two to the Contract. If the SWRCB terminates its loan commitment unexpectedly following execution of the planning and/or construction contract(s) for the Project or the Projects, Palo Alto shall notify the Parties promptly. Following notification of the termination of the SRF, the Parties shall meet in a timely manner to discuss alternative funding sources and strategies for completion of the Projects. If the Parties are unable to agree on new funding sources in a timely manner, then Palo Alto shall have the right to terminate the Project or Projects immediately. The Parties shall remain responsible for Project Costs and loans incurred, whether before or after termination of the Project/Projects, in connection with the termination of the Project planning/design/construction contract(s), in the same proportion to each organization’s share, as shown on Exhibit “H” to Amendment No. Two (2) to the Contract. Unless earlier terminated, the obligations and responsibilities of the Parties shall commence with the execution of this Amendment No. Four and be in force for the term of the SRF loan. Stanford shall pay its share of any Project Costs within ten (10) business days of receipt of the annual billing statement sent by Palo Alto. If Stanford disputes the correctness of an invoice, it shall pay the invoice in full and the dispute shall be resolved after payment in accordance with the Contract, and shall not offset against any payment due. Section 2. Except as modified herein, the Contract shall remain unchanged, and is hereby ratified and confirmed. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment as of the date first written above. ATTEST: __________________________________ City Clerk APPROVED AS TO FORM: Deputy City Attorney APPROVED AS TO CONTENT: __________________________________ City Manager CITY OF PALO ALTO By: __________________________________ Mayor ATTEST: __________________________________ APPROVED AS TO FORM: __________________________________ Attorney APPROVED AS TO CONTENT: __________________________________ THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIOR UNIVERSITY By: __________________________________ Name: __________________________________ Title: __________________________________ 160928 jb 6053827 1 Resolution No. 9631 Resolution of the Council of the City of Palo Alto Establishing One or More Pledged Sources of Revenue For Repayment of Funding Pursuant to The Federal Clean Water Act Amendments R E C I T A L S A. The City of Palo Alto City and/or construction of certain public facilities and improvements relating to its wastewater system, including the planning/design of primary sedimentation tanks, fixed film reactors, and the laboratory/environmental service building, and the construction of a sludge treatment and load­out facility that were identified in the Regional Water Quality Control Long Range Facility Plan. B. The City intends to finance the planning, design, and/or construction of the Projects or portions of the Projects . C. Section 603(d)(1)(C) of the Federal Clean Water Act Amendments require each financing recipient to establish one or more pledged sources of revenue for Clean Water State Revolving fund (CWSRF) financial assistance. D. Revenue will be considered pledged when the City adopts a resolution committing a source of funds for repayment. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The City of Palo Alto hereby pledges Net Revenues of its Wastewater Treatment enterprise fund to repayment of any and all Clean Water State Revolving Fund financing incurred for CWSRF Project No. 8104, including the planning/design of primary sedimentation tanks, fixed film reactors, and a laboratory/environmental service building, and CWSRF Project No. 8091­110, including the design and construction of a sludge dewatering and load­out facility , and other terms relevant to this action, are defined as follows: "Net Revenues" means, with respect to the Wastewater Treatment enterprise, for any period of computation, the amount of the Gross Revenues received from the Wastewater Treatment enterprise during such period, less the amount of Maintenance and Operation Costs of the Wastewater Treatment enterprise becoming payable during such period. "Gross Revenues" means, for any period of computation, all gross charges received for, and all other gross income and revenues derived by the City from, the ownership or operation of the Wastewater Treatment enterprise or otherwise arising from the Wastewater Treatment enterprise during such period, including but not limited to (a) all Charges received by DocuSign Envelope ID: 20B08DF8-BEC8-4A2E-94C6-F71DD76B96EF 160928 jb 6053827 2 the City for use of the Wastewater Treatment enterprise, (b) all receipts derived from the investment of funds, (c) transfers from (but exclusive of any transfers to) any stabilization reserve funds, and (d) all moneys received by the City from other entities whose customers are served pursuant to contracts between those entities and the City. "Maintenance and Operation Costs" means the reasonable and necessary costs spent or incurred by the City for maintaining and operating the Wastewater Treatment enterprise, calculated in accordance with sound accounting principles, including the cost of supply of water, gas and electric energy under contracts or otherwise, the funding of reasonable reserves, and all reasonable and necessary expenses of management and repair and other expenses to maintain and preserve the Wastewater Treatment enterprise in good repair and working order, and including all reasonable and necessary administrative costs of the City attributable to the Wastewater Treatment enterprise and any financing instruments incurred to finance improvements to the Wastewater Treatment enterprise, such as salaries and wages and the necessary contribution to retirement of employees, overhead, insurance, taxes (if any), expenses, compensation and indemnification of any bond trustee or other lender, and fees of auditors, accountants, attorneys or engineers, and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of any financing instrument related to the Wastewater Treatment enterprise, but excluding depreciation, replacement and obsolescence charges or reserves therefor and amortization of intangibles or other bookkeeping entries of a similar nature. "Charges" means fees, tolls, assessments, rates and rentals prescribed under applicable law by the City Council for the services and facilities of the Wastewater Treatment enterprise. This pledged source of revenue shall remain in effect until such financing is fully discharged unless modification or change of such dedication is approved in writing by the State Water Resources Control Board. SECTION 2: financing for the above­referenced projects does not meet the definition of a project for the purposes of the California Environmental Quality Act, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Council approved an Initial Study/Mitigated Negative Declaration for the sludge­dewatering and loadout facility project on March 28, 2016 (Staff Report ID# 6424). / / / / / / / / DocuSign Envelope ID: 20B08DF8-BEC8-4A2E-94C6-F71DD76B96EF 160928 jb 6053827 3 Implementation of the primary sedimentation tanks, fixed film reactors, and the laboratory/environmental service building projects is subject to future CEQA analysis. INTRODUCED AND PASSED: October 17, 2016 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Senior Deputy City Attorney City Manager Director of Public Works Director of Administrative Services DocuSign Envelope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n October 17, 2016, Council adopted three resolutions authorizing the City Manager to file applications for SRF loans for construction of the sludge dewatering and truck load out facility (CWSRF Project No. 8190-110) and planning/design of the laboratory/environmental services building, the primary sedimentation tank rehabilitation, and fixed film reactor rehabilitation projects (CWSRF Project No. 8104-110), designating the amount of project expenditures to be reimbursed by SRF proceeds, pledging repayment revenue for the SRF loans, and authorizing amendments with RWQCP Partners to obligate their SRF loan repayment (SR#7144 I Attachment B). DISCUSSION Section 603 of the Federal Clean Water Act Amendments requires each financing recipient to establish one or more pledged sources of revenue for SRF assistance. Resolution No. 9631 pledged revenues of the City's Wastewater Treatment enterprise fund for repayment of SRF financing for CWSRF Project No. 8190-110 and CWSRF Project No. 8104-110. After Council's adoption of Resolution No. 9631, and the SWRCB's review of the City's SRF application, the SWRCB determined that the City must also pledge Wastewater Collection revenues for repayment of the SRF loans. The dual pledge of funds has been required on past debts, including SWRCB SRF loans for a 2007 recycled water pipeline project and a 2009 ultraviolet disinfection facility project as well as the City's 1999 bond issuance for RWQCP and storm drain improvements. Therefore, staff proposes that Council adopt a new resolution pledging both funds, and repealing the earlier resolution. Securing these SRF loans will also allow the City to retire its sludge incinerators, reducing greenhouse gasses dramatically. All of the five Wastewater Treatment Plant's Partner Agencies have executed agreements in which they individually agree to repay the Palo Alto Wastewater Treatment Fund their portion of the State loans, which will be paid annually by the Wastewater Treatment Fund. Pledging of the Wastewater Collection Fund is consistent with the actions taken by the Partner agencies. NEXT STEPS Construction Contract Bid Opening SRF Installment Sales Agreement development Palo Alto Council approval of SRF Installment Sales Agreement RESOURCE IMPACT February 2017 February 2017 March 2017 No new additional funds are associated with the adoption of the substitute resolution. Pledging the Wastewater Collection revenues in addition to Wastewater Treatment revenues is not anticipated to negatively impact the viability of either fund. Loan expenses, which are directly paid by the Wastewater Treatment Fund to the State, have been included in budget planning for each fund. Each of the Wastewater Treatment Plant Partner Agencies has executed agreements in which they agree to repay their portion of the State loans. The construction loan for the sludge dewatering and truck loadout facility is estimated to be $27.8 million with an annual debt service payment required for 30 years. Based on an Page 2 of 3 estimated 1.8% interest rate, the Palo Alto portion of the debt service is estimated .at $0.458 million per year (37.89% share) and the other five partner agencies portion is estimated at $0.750 million per year (62.11% share). The estimated $6.75 million planning and design loan for the primary sedimentation tank rehabilitation, fixed film reactor rehabilitation, an.d the environmental services/laboratory building is a 10-year loan that can be refinanced into a 30- year SRF construction loan. Based on an estimated 1.8% interest rate, the Palo Alto portion of the ten-year debt service payment for the planning loan is estimated at $0.282 million per year {37.89% share) and the other five partner agencies portion is estimated at $0.462 million per year {62.11% share) for ten years. POLICY IMPLICATIONS Adoption of the resolution does not represent a change in existing policies. ENVIRONMENTAL REVIEW The Commission's recommendation that Council approve a revenue pledge resolution to repay State Revolving Fund financing for the above-referenced Projects does not meet the definition of a project for the purposes of the California Environmental Quality Act, under Public Resources Code Section 21065 and CEQA Guidelines Section 15378{b}(S), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Council approved an Initial Study/Mitigated Negative Declaration for the sludge-dewatering and loadout facility project on March 28, 2016 (Staff Report ID# 6424). ATTACHMENTS A. Resolution 9631: Resolution of the Council of the City of Palo Alto Establishing One or More Pledged Sources of Revenue For Repayment of Funding Pursuant to The Federal Clean Water Act Amendments B. Staff Report 7144 Partner Agreements and Resolutions for Sludge Dewatering & Loadout Facility C. Adoption of a Resolution Establishing Pledge Sources of Revenue for Repayment of State Revolving Fund {SRF) Loans for Planning, Design and Construction of Wastewater Treatment Enterprise Fund Facilities at the Palo Alto Regional Water Quality Control Plant (RWQCP), a~d Re ealing Resolution No. 9631 PREPARED BY: MES ALLEN, Manager, Water Quality Control Plant REVIEWED BY: HIL BOBEL, Assistant Director of Public Works ':?:?~Division APPROVED BY: ~ ED SHIKADA Utilities General Manager Page 3 of 3 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR February 13, 2017 The Honorable City Council Palo Alto, California Policy and Services Committee Recommendation to Accept the Auditor's Office Quarterly Report as of September 30, 2016 The Office of the City Auditor recommends acceptance of the Auditor’s Office Quarterly Report as of September 30, 2016. At its meeting on November 29, 2016, the Policy and Services Committee approved and unanimously recommended the City Council accept the report. The Policy and Services Committee minutes are included in this packet. Respectfully submitted, Harriet Richardson City Auditor ATTACHMENTS:  Attachment A: Auditor's Office Quarterly Report as of September 30, 2016 (PDF)  Attachment B: Policy and Services Committee Meeting Minutes Excerpt (November 29, 2016) (PDF) Department Head: Harriet Richardson, City Auditor Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 15, 2016 The Honorable City Council Palo Alto, California Auditor's Office Quarterly Report as of September 30, 2016 RECOMMENDATION The City Auditor’s Office recommends the Policy and Services Committee review and recommend to the City Council acceptance of the Auditor’s Office Quarterly Report as of September 30, 2016. SUMMARY OF RESULTS In accordance with the Municipal Code, the City Auditor prepares an annual work plan and issues quarterly reports to the City Council describing the status and progress towards completion of the work plan. This report provides the City Council with an update on the first quarter for FY 2017. Respectfully submitted, Harriet Richardson City Auditor ATTACHMENTS:  Attachment A: Auditor's Office Quarterly Report as of September 30, 2016 (PDF) Department Head: Harriet Richardson, City Auditor Attachment A Page 2 Attachment A Quarterly Report as of September 30, 2016 Office of the City Auditor “Promoting honest, efficient, effective, economical, and fully Accountable and transparent city government.” Attachment A Fiscal Year (FY) 2017 First Quarter Update (July – September 2016) Overview The audit function is essential to the City of Palo Alto’s public accountability. The mission of the Office of the City Auditor, as mandated by the City Charter and Municipal Code, is to promote honest, efficient, effective, economical, and fully accountable and transparent city government. We conduct performance audits and reviews to provide the City Council and City management with information and evaluations regarding how effectively and efficiently resources are used; the adequacy of internal control systems; and compliance with policies, procedures, and regulatory requirements. Taking appropriate action on our audit recommendations helps the City reduce risks and protect its good reputation. Highlights of Activities During the Quarter Below is a summary of our audit and project work for the first quarter of FY 2017: Title Objective(s) Start Date End Date Status Results/Comments Citywide Analytic Development and Continuous Monitoring: Procure-to-Pay Determine if data analytics and continuous monitoring can help the City detect duplicate vendor or vendor payment records. 06/15 12/16 In Process This audit is in the reporting phase. The scheduled date of presentation to Policy and Services Committee is February 2017. Fee Schedules Audit Evaluate City processes for establishing fees to determine if the fees cover the cost of services provided when expected. The specific fees to be reviewed will be narrowed down during the planning phase of the audit. 06/15 12/16 In Process The audit is focusing on Community Services fees and is in the field work phase. The estimated date of presentation to Policy and Services Committee is December 2016. Utilities Customer Service: Rate and Billing Accuracy Audits Evaluate whether the Utilities Department properly implements rates and accurately bills customers. 06/15 12/16 and TBD In Process The audit is in the reporting phase for water billings. Due to the variety of issues we identified, we will issue a report on the accuracy of water billings and do field work for gas and electric billings after we conduct the enterprise resource planning system audits. The estimated date for presenting water billings to Policy and Services Committee is December 2016. We will estimate the date for presenting the gas and electric billings when we begin field work for that audit. Attachment A Title Objective(s) Start Date End Date Status Results/Comments Citywide Analytic Development and Continuous Monitoring: Overtime Determine if implementing a continuous monitoring process for overtime could improve the City’s oversight and management of overtime. 06/15 12/16 In Process The project is in the field work phase. The scheduled date of presentation to Policy and Services Committee is February 2017. Sustainable Purchases Assess the City’s purchasing practices to determine if environmental sustainability is adequately considered in all purchases as appropriate. 03/16 12/16 In Process The project is in the planning phase. The scheduled date of presentation to Policy and Services Committee is February 2017. Hydromax Crossbore Contract Evaluate the work performed under this contract to determine if the City is taking an appropriate approach to this work, getting appropriate line inspection data from this effort, and allocating an appropriate level of contractor oversight. 09/16 12/16 In Process The project is in the planning phase. The estimated date of presentation to Policy and Services Committee is February 2017. Other Monitoring and Administrative Assignments Below is a summary of other assignments as of September 30, 2016: Title Objective(s) Status Results/Comments Sales and Use Tax Allocation Reviews 1)Identify businesses that do business in Palo Alto that may have underreported or misallocated their sales and use tax and submit inquiries to the state for review and tax reallocation. 2)Monitor sales taxes received from the Stanford University Medical Center Project and notify Stanford of any differences between their reported taxes and state sales tax information, in accordance with the development agreement. 3)Provide Quarterly Status Updates and Sales Tax Digest Summaries for Council review. Ongoing 1)Total sales and use tax recoveries for the first quarter were $7,301 from our inquiries and $254,114 from the vendor inquiries, for a total of $261,415 year-to-date. Due to processing delays at the State Board of Equalization, there are 65 potential misallocations waiting to be researched and processed: 20 from our office and 45 from the vendor. 2)We receive calendar-year sales tax information for the Stanford project about six months after the end of the calendar year. We will report the sales tax information for this project in our June 2017 quarterly report. 3)Quarterly sales tax reports are published on the Office of the City Auditor website at www.cityofpaloalto.org/gov/depts/aud/reports/default.asp. Attachment A Title Objective(s) Status Results/Comments City Auditor Advisory Roles Provide guidance and advice to key governance committees within the City. Ongoing The City Auditor serves as an advisor to the Utilities Risk Oversight Committee, Information Security Steering Committee, and Information Technology Governance Review Board. We have recently taken on an advisory role for the strategic and technical planning groups for planning the new Enterprise Resource Planning (ERP) system. Status of Audit Recommendations Seventy-three recommendations were open at the beginning of FY 2017, and none were closed. We did not add any additional recommendations during the first quarter of FY 2017. Below is a summary of open audit recommendations, by audit, as of September 30, 2016: Audit Title Report Date Status Report Dates Due Date of Next Status Report Total Recommendations Implemented During Quarter Open Citywide Cash Handling and Travel Expense 09/15/10 11/10/15 09/23/14 09/10/13 10/22/12 04/19/11 Past Due 11 0 2 Contract Oversight: Trenching and Installation of Electrical Substructure 11/05/13 12/15/15 09/23/14 Past Due 6 0 2 Inventory Management 02/18/14 09/23/14 Past Due 14 0 14 Utility Meters: Procurement, Inventory, and Retirement 03/10/15 None Past Due 15 0 15 Police Department: Palo Alto Animal Services 04/22/15 03/22/16 Past Due 8 0 8 Parking Funds 12/15/15 None Past Due 8 0 8 Disability Rates and Workers’ Compensation 05/10/16 None 02/14/17 15 0 15 Cable Franchise and Public, Education, and Government (PEG) Fees 06/14/16 None 03/08/17 9 0 9 Attachment A Fraud, Waste, and Abuse Hotline Administration The hotline review committee, composed of the City Auditor, the City Attorney, and the City Manager, or their designees, meets as needed to review hotline-related activities. We received three hotline complaints during the first quarter of FY 2017, two of which were related to the same case. The chart below summarizes the status of complaints received in each fiscal year since the hotline was implemented. Source: City of Palo Alto hotline case management system as of September 30, 2016 We recently sent a survey to about 60 local government audit offices that manage a hotline to seek input about how they manage their hotlines to ensure they receive calls when fraud, waste, or abuse are suspected and how they triage and investigate valid complaints. We have received about 25 responses so far and are compiling the results. We will present a discussion item on this topic at the Policy & Services Committee meeting on November 29, 2016. 0 0 0 00 2 4 6 8 10 Q1 Q2 Q3 Q4 FY 2017 Quarter # Implemented Recommendations 73 0 20 40 60 80 100 FY 2017 # Open Recommendations From Prior Fiscal Years From Fiscal Year 2017 1 2 7 3 2 13 1 0 2 4 6 8 10 12 14 16 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Status of Complaints Received by Fiscal Year Closed Complaints Open Complaints Attachment A POLICY AND SERVICES COMMITTEE TRANSCRIPT Page 1 of 9  Special Meeting Tuesday, November 29, 2016 Chairperson DuBois called the meeting to order at 6:09 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: DuBois (Chair), Kniss, Scharff Absent: Berman Oral Communications None. Agenda Items 1.Auditor's Office Quarterly Report as of September 30, 2016. Chair DuBois: We're going to proceed with Item Number 1: The Auditor's Quarterly Report. Harriet Richardson, City Auditor: Harriet Richardson, City Auditor, Good evening Mr. Chair and members of the Committee. Harriet Richardson, City Auditor here to present the statues quarterly Report for July through September 2016. We have several audits in progress and I'll say up front, right now, a lot of these dates that we had originally scheduled for presenting these audits to Policy and Services have been pushed out because of other items but I will tell you what the revised states are as we go. The first one is, continuous monitoring audit on procured pay, which is really accounts payable. Looking at whether or not continuous monitoring can help the City detect duplicate vendor or duplicate vendor payment records and identifying a process to minimize that. That audit is in the reporting phase and it scheduled to be presented in February 2017. I do expect that one to be ready to go then. The fees schedules audit, we’re looking at the processes for establishing fees with the focus on Community Services Department and whether or not how well those fees align with the City’s policy on cost recovery and as of the end of September, that audit was in the field work phase. That audit has now out (Inaudible) so for official response to the City Manager’s Office and this is one that’s been pushed out. We do expect to publish it by the end of the calendar year but it’s been pushed out for presentation to Policy and Services to February. Utilities customer service rate, billing and accuracy audits; so, we are looking at the way the Utilities Department implements rates and whether or not it Attachment B TRANSCRIPT    Page 2 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 accurately bills customers. This was originally going to be a single audit on water, gas and electricity billings but because of the number of issues we identified in water, we’ve stopped work on gas and electric and are going to issue a separate report on water. We were originally planning to publish the report by the end of December with presentation now pushed out to February. The auditor who’s been working on that has been out sick since early November so, we will be pushing it. Whether or not we’ll make that deadline – that time line of publishing by the end of December, we’re going to try for that but I’m not sure that we’ll make it, depends when she comes back. Then we’ll start the second part, the gas and electric after we do the Enterprise Resource Planning (ERP) audits that we have planned, which I consider a higher priority given the time line for the ERP planning process. We have another continuous monitoring audit that was looking at over time and whether or not the City can implement procedures that might help them better monitor than manage their overtime by having more detailed data that could be analyzed by continuous monitoring process. That audit is in progress right now and it’s another one that’s been pushed out. It’s now scheduled for presentation in March 2017. Sustainable purchases audit, we’re looking at how well the City’s implemented its Sustainable Purchase Policy in the purchases that it makes of products that the City buys. That one is also in progress, it’s in filed work right now and I expect that one to be done, either by the end of year or early January. That one was scheduled for February and that one is being pushed out to March Policy and Services Committee. I think all of these dates are on the Policy and Services draft agenda, that they go over at the end of the Committee meeting. The [Hydromax Crossbore Contract], that one’s in progress right now. We’re looking to see whether or not the work performed under that contract – whether the City took an appropriate approach to identifying the work needed to be done and has applied the appropriate level of contractor oversight. I expect that one to be done either by the end of this month or early January and again that’s one that’s been pushed out. It’s been pushed out for presentation to March. Even though these audits have been pushed out on their presentation dates, we will publish them as they are completed. On the other work that we do, sales and used tax allocation; for the first quarter, we have recovered a total of $261,415 to date. About $7,300 of that is from the work that our office does and about $254,000 of that is from work that our consultant does, $220,000 of that $254,000 was a large lump sum recovery due to a reallocation from the third quarter of 2006 thru the second quarter of 2014 and our consultant had done a lot of work appealing to the State franchise – the State Board of Equalization, excuse me, State Board of Equalization regarding this miss allocation that had been throughout the State and recovered a large sum of money for quite a number of jurisdictions. Our quarterly reports, we do get an Information Report from the consultant that we publish regularly and those are available Attachment B TRANSCRIPT    Page 3 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 on our web site and we present them as information reports to the Council. We also continue with our advisory roles for the Utilities Risk Oversight Committee, the Information Security Steering Committee and the Information Technology Governance Review Board. We’ve recently taken on an oversight role for strategic and technical planning for the Enterprise Resource Planning System and we’re treating that as a separate, non-audit service, where we are looking at things – how the Department of Information of Technology is implementing the process planning – the project and their plans for implementation so that if we see anything that if, for example, if we came in after the fact and then audited, we would have said, oh you should have done this different. We can make some recommendations as we go so, this isn’t an actual audit, it’s a non-audit service because we are making recommendations as we go rather than producing findings after the fact like we typically do. The status of audit recommendations, we have seven audits – eight audits, excuse me, eight audits that have open audit recommendations. Several of them are past due on the due date for the next Status Report. The contract oversight for utility or the – not the contract oversight, the inventory management and utility meters’ ones, we’ve had some meeting scheduled to talk about where the disagreement is between our office and the departments that are responsible for implementing the recommendations but again the auditor who is responsible for those, is the auditor who’s been out sick so, we’ve had to reschedule those and so those have been postponed to January to have that discussion. On the other audits, we are taking a new approach on how we’re going to start doing the statue reports. My office is going to take back responsibility for sending out the notifications that the audits are due for status report and we’ll start doing that again in January and then we’re going to coordinate with the City Manager’s Office for – it’s still going to be their report to present to Policy and Services but we will validate the recommendation – the status reports first to determine whether the recommendations actually have been implemented when they say they have and then the City Manager’s Office will take the Report and present it for Policy and Services Committee. It’s taken us a little while to kind of work through how we can make this process work because it wasn’t working so well and now I think we’ve got a plan to get these moving along. No recommendations where implemented during the first quarter of this year and there are 73 open recommendations for those eight audits. The Fraud, Waste and Abuse hotline, we received three complaints during the first quarter of FY 17. Two of those were – one of those was closed and two of them are open right now. Those two will probably be reported as closed during the next reporting period. So, we’ve only received a total of 29 since inception of the hotline in 2013 and this is another area where we’ve had to push out the presentation to Policy and Services but I will be coming to Policy and Services, it’s currently scheduled for February 2017, to discuss a Attachment B TRANSCRIPT    Page 4 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 new approach for how we should manage complaints. Get information out there about what appropriate to report through the hotline and what’s not appropriate and by doing that, I’m hoping that we’ll get complaints that are the right type of complaints and we did recently have one that was actually a very good appropriate complaint for the hotline and it resulted in the expected outcoming as far as action taken to resolve the issue. I’m hoping that by getting more information out there about what’s appropriate – I think that particular one was a result of a presentation I had given to a department where I was able to explain a little bit about the hotline and the complaint came in shortly thereafter and it was the legitimate type of complaint we would expect to see related to fraud, waste or abuse. That concludes my presentation and if you have any questions, I’m here to answer them. Council Member Kniss: Looking at Packet Page 6, where we’re talking about the calendar year sales tax information and you’re saying that comes in about six months after the end of the calendar year. Ms. Richardson: That’s the Stanford – the Stanford information comes in about six months after the end of the calendar year. That’s for the Stanford Hospital project. Council Member Kniss: Right. I don’t want to mix apples and oranges but knowing the School Board had difficulties with one of the projections that they had, I’m going to presume this is nothing like that, correct? Mr. Richardson: No and we don’t project what that will be. We get a report – they track – we have an agreement with Stanford, that for all of the work done at the hospital, that the sales tax for that project will come directly to the City for materials that they use; anything that’s eligible for sale tax and they track it and then after they’ve compiled it, it takes them about six months for them to get the report to us. Then, we have a way of validating that that is the right information and then we report it after that. So, usually, we report it in the June Quarterly Report, at the end of the fiscal year. Council Member Kniss: This, though – without knowing or remembering what the amount are, I’m going to guess that these are certainly a far less amount than what we get from the shopping center? Ms. Richardson: That information is in our quarterly – the quarterly information reports and I don’t know the numbers off the top of my head but I could get those to you. Attachment B TRANSCRIPT    Page 5 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 Council Member Kniss: I guess I could look at them myself too but it just would seem – this is interesting. This has to do with (Inaudible) project? Ms. Richardson: Yes, and the numbers that I present here are only the numbers that we pursue, where we think there’s been a miss allocation or an under-reporting of sales tax. Everything else that comes through the City, it’s millions of dollars, we don’t report that in this report. James Keene, City Manager: What is the figure we’re looking at? I might be able to shed some light on. Ms. Richardson: It’s the… (Crosstalk) Council Member Kniss: Sales and Use tax. Ms. Richardson: Sales and Use tax. Mr. Keene: Yes. Council Member Kniss: For the hospital project. Mr. Keene: Oh, ok, for the – I’m sorry. I thought you were talking about the shopping center. Council Member Kniss: I was, I said comparatively because I wouldn't think that the hospital project would be bringing in a lot of sales tax dollars. Hadn’t even thought about it as a significant… Ms. Richardson: My guess is that it’s quite a bit less. I want to say… Mr. Keene: Well, traditionally we would generally estimate that we get about a quarter of our sales tax actually, from the shopping center. Council Member Kniss: From the shopping center but not from the hospital project? Ms. Richardson: No. Mr. Keene: We are running it – you know, we typically run between 25 and 30 million dollars total in sale tax. Council Member Kniss: Right. We are delighted to have a shopping center but I’m simply looking at this and – just because that odd thing had Attachment B TRANSCRIPT    Page 6 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 happened with the school. I can see that this is quite different but looking at it, just a flag went off. Thanks. Vice Mayor Scharff: Alright, just briefly. In terms of closing audit recommendations, we did nothing in the last quarter or in terms of the closing amount it shows that we’ve worked towards doing it. (Inaudible) Quick status update. Mr. Keene: I doubt it. Ms. Richardson: I can tell you that two… (Crosstalk). Mr. Keene: My apologies. Ms. Richardson: The two that have been our focus really, have been the inventory management and the utility meters because they have some substantial recommendations in them but like I said, we’ve had to keep rescheduling these meetings because the auditor who is working on those has been sick for the past month; not in the office. Those really have been our focus. We’ve had to reschedule those meetings a couple of times before that and right now they’re scheduled for January. Vice Mayor Scharff: That’s for which audit? Ms. Richardson: That’s the inventory management and utility meters’ audits. Vice Mayor Scharff: Ok, so the two big ones (Inaudible) (Crosstalk). Council Member Kniss: Greg, you didn’t turn on your mic. Mr. Keene: I didn’t mean to be flipped there Mr. Vice Mayor. I just actually Harriet is in a better position to tell you… Vice Mayor Scharff: She just took the bullet for you. She said it was their fault. Mr. Keene: … what might be blocking… Ms. Richardson: Yes, I will say the rescheduling has been due to my office and I’m hoping that auditor will be back next week. Vice Mayor Scharff: So, what about the other ones? You know, like the police department? Attachment B TRANSCRIPT    Page 7 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 Ms. Richardson: That’s the animal services audit. Vice Mayor Scharff: Yeah. Ms. Richardson: That one is in the City Manager’s hands. Mr. Keene: I don’t know if this is an entirely legitimate rational but the parallel work that we have going on with the assessment of the shelter operations and the transfer you know, has sort of slowed down our response there as we kind of continue to kind of both work through the meet and confer process with labor and try to arrive to the final conclusion with pets in need folks. Vice Mayor Scharff: That makes total sense. What about disability rates and workers comp? Those are still 15 out of 15 (Inaudible). Ms. Richardson: That one wasn’t actually due yet till February so, that we’re good on. Vice Mayor Scharff: Oh, we’re good on that? Ok, you’re right because I see past due and then I don’t see past due, you’re right. Ok. Alright. Mr. Keene: Took a bullet and dodged a bullet. Vice Mayor Scharff: She’s all good for you tonight. That’s all I have. Council Member Kniss: So, let’s follow up on that though with someone who has – this person has been out for quite a while? Ms. Richardson: She’s been out for pretty much all of November. Council Member Kniss: Do you ever consider ever using a contractor in that case? Ms. Richardson: We haven’t and I don’t have the budget for contractors. Chair DuBois: Couple questions on the continuous monitoring kinds of studies. How are those designed and how are you evaluating whether they’re effective? Ms. Richardson: For example, on the Accounts payable Audit, what we were looking at is we looked at the vendor master file and we also looked at a sample of invoices. We have some software called ACL, it’s an audit software that can look at the full database of records without having to do a sample Attachment B TRANSCRIPT    Page 8 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 and you can put some commands in there to tell it to pull out things that would likely be duplicates and so by doing that, we get a list of potential and then we sort through those to identify which ones are actuals and which ones may be considered false positives and that did help us identify some issues with the vendor master file and also some duplicate payments. Then we worked with Administrative Services Department (ASD) to identify -- for example, those duplicates, did they catch them and correct them or where they still duplicate that they needed to pursue. So, by doing that sort of script with that software, you can monitor on an ongoing basis, did we have a potential duplicate and check it out if you didn’t – if it didn’t come to your attention just through the normal process. Chair DuBois: Ultimately, are you saying, yes this is worthwhile and then there’s some software being purchased or? Ms. Richardson: ASD was looking at the software but I’m not sure if they’re going to purchase it. They’re going to look at the cost benefit to see if it's worth purchasing, given what we’ve found in the audit. Chair DuBois: Same thing with over time… Ms. Richardson: Yes. Chair DuBois: …if you see enough that it pays for the software. Ms. Richardson: Right. Chair DuBois: Ok, I don’t know if you have any early results from the [Crossbore Contract] or should we just wait? Ms. Richardson: Yeah, it’s a little bit early on that on. We are looking at the potential risk with that contract and we’ve had some preliminary meetings with utilities so, we know where some of the issues likely are but we haven’t confirmed any of that yet. Chair DuBois: Then, do you know what the year to date – the previous year to date was? How are we doing on total recovered sales tax? Ms. Richardson: I don’t have that number with me. This year – last year was quite low, it was lower than normal. I believe it was less than 70,000 for the year… Chair DuBois: For the year? Ok. Attachment B TRANSCRIPT    Page 9 of 9 Policy and Services Committee Special Meeting Final Minutes 11/29/16 Ms. Richardson: … and this is going to be quite a bit higher, primarily because that $220,000 that the vendor – our consultant recovered… (Crosstalk). Chair DuBois: That what I was just (Inaudible) (Crosstalk) that was pretty significant. Ms. Richardson: It’s a number that fluctuates quite a bit. Last year was quite a bit low compared to prior years but this year’s going to be quite a bit higher, compared to prior years. Chair DuBois: My last question on the audit recommendation status report. Do we ever end up with recommendations that we just agree that we’re not going to fix and should we show that on here? Ms. Richardson: One of the things since I’ve been here that I’ve talked with the City Manager’s office about and departments. If a recommendation doesn’t make sense at this point, things change – some of these recommendations are quite old and they may not make sense anymore. If that’s the case, I’ve been open to saying, we can close it out and then we treat it as a closed recommendation so, it would just not show up in the open column anymore. Chair DuBois: So, these are really 73 significant open issues? Ms. Richardson: Correct. Chair DuBois: That’s good to know. I think that’s it. Any other questions? Alright, thank you. MOTION: Council Member Kniss moved, seconded by Vice Mayor Scharff to recommend the City Council accept the Auditor’s Office Quarterly Report as of September 30, 2016. MOTION PASSED: 3-0 Berman absent Attachment B CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR February 13, 2017 The Honorable City Council Palo Alto, California Finance Committee Recommendation to Accept Macias Gini & O'Connell's (MGO) Audit of the City of Palo Alto's Financial Statements as of June 30, 2016 The Office of the City Auditor recommends acceptance of Macias Gini & O’Connell’s (MGO) Audit of the City of Palo Alto’s Financial Statements as of June 30, 2016, and Management Letter. At its meeting on November 15, 2016, the Finance Committee approved and unanimously recommended the City Council accept this report. The Finance Committee minutes are included in this packet. Respectfully submitted, Harriet Richardson City Auditor ATTACHMENTS:  Attachment A: Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2016, and Management Letter (PDF)  Attachment B: Finance Committee Meeting Minutes Excerpt (November 15, 2016) (PDF) Department Head: Harriet Richardson, City Auditor Page 2 CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR November 15, 2016 The Honorable City Council Palo Alto, California Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2016 and Management Letter RECOMMENDATION We recommend the Finance Committee review and forward to the City Council for approval the City of Palo Alto’s audited financial statements for the fiscal year ended June 30, 2016, and the accompanying reports provided by Macias Gini & O’Connell LLP. DISCUSSION The City Charter requires that the City Council, through the City Auditor, engage an independent certified public accounting firm to conduct the annual financial audit. The selected firm reports the results of the audit, in writing, to the City Council. Macias Gini & O’Connell LLP, a certified public accounting firm, conducted the audits of the City’s financial statements for the fiscal year ended June 30, 2016. The Administrative Services Department provides the Comprehensive Annual Financial Report (CAFR) and Single Audit Report, including the following Independent Auditor’s Reports, to the Finance Committee:  Independent Auditor’s Reports on the Financial Statements (CAFR)  Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards (Single Audit Report)  Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A‐133 (Single Audit Report) We are providing copies of the following financial statements and reports, as prepared by MGO:  Report to the City Council (the “Management Letter”) – Attachment A  Regional Water Quality Control Plant, Independent Auditor’s Report and Financial Statements for the year ended June 30, 2016 – Attachment B  Palo Alto Public Improvement Corporation (a Component Unit of the City of Palo Alto), Annual Financial Report for the year ended June 30, 2016 – Attachment C Attachment A Page 2  General Obligation Bonds, Capital Projects Fund (a Fund of the City of Palo Alto), Independent Auditor’s Reports, Financial Statements, and Independent Accountant’s Report for the year ended June 30, 2016 – Attachment D  Independent Accountant’s Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit for the year ended June 30, 2016 – Attachment E  Cable TV Franchise, Independent Auditor’s Report and Statements of Franchise Revenues and Expenditures for the years ended December 31, 2015 and 2014 – Attachment F I would like to express appreciation to Macias Gini & O’Connell, and Laura Kuryk and her staff in the Administrative Services Department for their hard work and cooperation during the audit. Respectfully submitted, Harriet Richardson City Auditor ATTACHMENTS:  Attachment A: Report to the City Council (PDF)  Attachment B: Regional Water Quality Control Plant (PDF)  Attachment C: Public Improvement Corporation (PDF)  Attachment D: GO Bonds for Library Projects Report (PDF)  Attachment E: GANN (PDF)  Attachment F: Cable TV Franchise (PDF) Department Head: Harriet Richardson, City Auditor Attachment A Page 3 Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2016 Attachment A Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2016 Table of Contents Page(s) Transmittal Letter ........................................................................................................................................... i Required Communications ....................................................................................................................... 1 - 3 Current Year Recommendations ................................................................................................................... 4 Status of Prior Year Recommendations ........................................................................................................ 4 Attachment A Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 i Honorable Mayor and the Members of the City Council of the City of Palo Alto Palo Alto, California We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Palo Alto, California (City), as of and for the year ended June 30, 2016. Professional standards require that we provide you with information about responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. Professional standards also require that we communicate to you the following information related to our audit. The information on page 1 through 4 satisfies these requirements. In planning and performing our audit of the City’s financial statements in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. This communication is intended solely for the information and use of the Mayor and City Council, the Finance Committee, management and others within the City, and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 2, 2016 Attachment A This page is intentionally left blank. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2016 1 REQUIRED COMMUNICATIONS We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Palo Alto (City) as of and for the year ended June 30, 2016. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 6, 2016. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1. As described in Note 1(n) to the City’s basic financial statements, the City implemented four new Governmental Accounting Standards Board (GASB) pronouncements: Statement No. 72, Fair Value Measurement and Application; Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68 and amendments to certain provisions of GASB Statements No. 67 and 68; Statement No. 76, Hierarchy of Generally Accepted Accounting Principles for State and Local Governments; and Statement No. 79, Certain External Investments Pools and Pool Participants. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:  Fair value of investments. The City’s investments are generally carried at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City’s investments are classified as level 2 of the fair value hierarchy established by GASB Statement No. 72 and are valued using prices determined by the use of matrix pricing techniques maintained by the pricing vendors for these securities. The City’s investment in the money market mutual fund, California Local Agency Investments Fund and California Asset Management Program are not subject to the fair value hierarchy.  Estimated allowance for losses on notes and loans receivable. The allowance for losses on notes and loans receivable was based on management’s estimate regarding the likelihood of collectability.  Useful life estimates for capital assets. The estimated useful lives of capital assets were based on management’s estimate of the economic life of its capital assets. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2016 2  Landfill post-closure Liability. The City has estimated, based on a study conducted by consultants, the post-closure costs of the Palo Alto landfill based on what it would cost to perform all currently mandated post-closure care. Actual post-closure care costs may be higher due to inflation variances, changes in technology, or changes in State or federal regulations.  Valuation of the net other postemployment benefits (OPEB) asset. The net OPEB asset is the amount of cumulative City contributions that exceeded the actuarially determined annual required contributions, which is based upon certain approved actuarial assumptions.  Annual required contributions to pension and other postemployment benefit plans. The City is required to contribute to its pension and OPEB plans at an actuarially determined rate and to measure these benefit costs based upon certain approved actuarial assumptions.  Claims loss reserve. The City is exposed to a variety of risks of loss due to general liability, workers’ compensation and other claims and records an estimate of these losses based on actuarial studies performed by third party actuaries. These studies are prepared based on the City’s prior claims history, which is used as a basis for extrapolating losses for known and incurred but not reported claims. Actual loss experience may vary from these estimates. We evaluated the key factors and assumptions used to develop the accounting estimates described above in determining that they are reasonable in relation to the City’s basic financial statements taken as a whole. Certain financial statements disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were the disclosure of the City’s Pension Plans in Note 11, the Retiree Health Benefits in Note 12 and the Commitments and Contingencies in Note 16. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated November 2, 2016. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2016 3 Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to Management’s Discussion and Analysis, the schedule of changes in the net pension liability and related ratios and the schedule of employer pension contributions, which is required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual nonmajor fund financial statements and schedules and the schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on them. Attachment A CITY OF PALO ALTO Report to the City Council For the Year Ended June 30, 2016 4 CURRENT YEAR RECOMMENDATIONS None noted. STATUS OF PRIOR YEAR RECOMMEDATIONS None noted. Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Independent Auditor’s Report and Financial Statements For the Year Ended June 30, 2016 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT For the Year Ended June 30, 2016 Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Financial Statements: Statement of Net Expenditures ............................................................................................................... 3 Statement of Quarterly Billings .............................................................................................................. 4 Notes to the Financial Statements ........................................................................................................... 5 Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 1 Independent Auditor’s Report The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have audited the accompanying financial statements of the City of Palo Alto Regional Water Quality Control Plant (Plant), an enterprise operation of the City of Palo Alto, California (City), for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Plant’s financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Basic Agreement between the City, the City of Mountain View and the City of Los Altos for the Acquisition, Construction and Maintenance of a Joint Sewer System, dated October 10, 1968, and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998, as described in Note 2 to the financial statements. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues, expenditures and quarterly billings of the Plant for the year ended June 30, 2016, in accordance with the financial reporting provisions of the Basic Agreement between the City, the City of Mountain Attachment A 2 View and the City of Los Altos for the Acquisition, Construction and Maintenance of a Joint Sewer System, dated October 10, 1968, and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998, described in Note 2 to the financial statements. Basis of Accounting As discussed in Note 2 to the financial statements, the financial statements are prepared in accordance with the financial reporting provisions of the Basic Agreements between the City, City of Mountain View and the City of Los Altos, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Restriction on Use This report is intended solely for the information and use of the City Council and management of the Cities of Palo Alto, Mountain View and Los Altos, and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 2, 2016 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Statement of Net Expenditures City of City of City of Total Mountain View Los Altos Palo Alto Direct Expenditures: Source control program 1,258,597$ 483,931$ 126,237$ 648,429$ Public outreach 126,741 48,732 12,712 65,297 Permitting and enforcement 1,073,337 287,272 17,039 769,026 Operations and maintenance 13,246,594 5,093,316 1,328,633 6,824,645 System improvement CIP (Note 3)2,792,222 1,073,609 280,060 1,438,553 Total Direct Expenditures 18,497,491 6,986,860 1,764,681 9,745,950 Indirect Administrative Expenditures (Note 4): Source control program 797,056 306,468 79,945 410,643 Public outreach 1,048 403 105 540 Permitting and enforcement 390,059 265,175 15,729 109,155 Operations and maintenance 2,724,168 1,047,442 273,234 1,403,492 Total Indirect Administrative Expenditures 3,912,331 1,619,488 369,013 1,923,830 Debt Service Expenditures (Note 5): Refunding 1990 Series A Bonds 284,015 144,848 22,153 117,014 1999 Wastewater Treatment New Project 540,402 204,758 51,176 284,468 2009 State Water Resource Loan 555,726 210,565 52,627 292,534 Total Debt Service Expenditures 1,380,143 560,171 125,956 694,016 Total Expenditures 23,789,965 9,166,519 2,259,650 12,363,796 Deduct Joint Systems Revenues (Note 6)(261,564) (100,571) (26,235) (134,758) Net Expenditures 23,528,401$ 9,065,948$ 2,233,415$ 12,229,038$ For the Year Ended June 30, 2016 See accompanying notes to the financial statements. 3 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Statement of Quarterly Billings City of City of Mountain View Los Altos Billings by Quarter, Beginning: July 1, 2015 2,080,802$ 547,739$ October 1, 2015 2,446,120 617,739 January 1, 2016 2,171,414 551,866 April 1, 2016 2,458,726 611,874 Total quarterly billings 9,157,062 2,329,218 Net expenditures 9,065,948 2,233,415 Excess of total billings over net expenditures 91,114$ 95,803$ For the Year Ended June 30, 2016 See accompanying notes to the financial statements. 4 Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements For the Year Ended June 30, 2016 5 NOTE 1 – THE REPORTING ENTITY The Cities of Palo Alto, Mountain View and Los Altos (the Members) participate jointly in the cost of maintaining and operating the Regional Water Quality Control Plant and related system (the Plant). The Members share the original costs of acquisition and construction of the Plant in the same proportions as the allocation of capacity rights to them. The City of Palo Alto (the City) is the owner and administrator of the Plant. The Cities of Mountain View and Los Altos are entitled to use a portion of the capacity of the Plant for a period of 50 years as set forth in the Basic Agreement between the City, the City of Mountain View and the City of Los Altos for Acquisition, Construction and Maintenance of a Joint Sewer System dated October 10, 1968 and subsequent letters of agreement dated December 5, 1977, January 14, 1980, April 9, 1985, July 3, 1990, July 31, 1992 and March 16, 1998. The original agreement, as amended, may terminate any time after 50 years provided that written notice of withdrawal is tendered ten years preceding the date of withdrawal. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Plant is an enterprise that is operated by the City and its operations are accounted for as an enterprise fund in the City’s basic financial statements. The accompanying financial statements are intended to present the Plant’s net expenditures and quarterly billings by the Plant to the Cities of Mountain View and Los Altos pursuant to the agreement of the Members as described above and are not intended to be a complete presentation of the Plant’s financial position or results of operations. Additionally, the capital cost and the outstanding debt of the Plant are not presented in these statements but are presented in the basic financial statements of the City. Plant expenditures, and joint system revenues, debt service and industrial waste compliance expenditures are shared by the Members based on agreed upon allocation percentages. The expenditures and, including indirect administrative expenditures (see Note 4), are allocated to each of the Members based primarily on their respective percentages of the annual sewage flow and treatment needed for suspended solids, chemical oxygen demand and ammonia. Revenues from services, fines and penalties are allocated to each of the Members in the same proportions as those of expenditures. Debt service payments are allocated based on percentages established at the time of bond issuance. Industrial waste compliance (Public Outreach and permitting and enforcement) charges are allocated to Members primarily based on upon the number of industries and efforts required to maintain compliance with sewage use ordinances and other regulations from Environmental Protection Agency. The percentages used for the year ended June 30, 2016, to allocate expenditures and revenues were: City of City of City of Mountain View Los Altos Palo Alto Public outreach, source control program, operations and maintenance, system improvement 38.45% 10.03% 51.52% CIP and joint system revenues Debt services expenditures: Refunding 1990 Series A Bonds 51.00% 7.80% 41.20% 1999 Wastewater Treatment New Project 37.89% 9.47% 52.64% 2009 State Water Resources Loan 37.89% 9.47% 52.64% Permitting and enforcement 37.75% 2.24% 60.01% Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements (continued) For the Year Ended June 30, 2016 6 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City is allocated 51.52% of total usage of the treatment plant. The City does not fully utilize its percentage allocation. Therefore, the City has entered into separate contracts to allocate portions of its excess to other entities. Fiscal year 2016 allocations are as follows: East Palo Alto Sanitary District 6.68% Stanford University 7.00% Town of Los Altos Hills 1.51% Remaining City percentages 36.33% Total 51.52% The agreement the City has with the above entities has no effect on the partnership agreement between the Members. Billings are made in advance and are based on the adopted budget for the plant and estimated sewage flow. Excess billings (over) under net expenditures are offset against the subsequent year payments during the second quarter of the subsequent fiscal year. NOTE 3 – SYSTEM IMPROVEMENT CIP (MINOR CAPITAL) The basic agreement between the Members, dated October 10, 1968, provides that the administrator of the Plant is responsible for capital additions. These capital additions should be for the replacement of obsolete or worn-out units, or minor capital additions to improve the efficiency of the Plant’s operations. Per an addendum to the agreement dated March 16, 1998, the Members agreed that capital additions should not exceed $1.9 million in 1998-99 (base year). For future years, the base year amount will be adjusted annually based on increases to the Consumer Price Index-Urban Wage Earners and Clerical Workers for the San Francisco-Oakland-San Jose area. For fiscal year 2015-16, the adjusted capital additions limit is $2,931,879. Actual System Improvement CIP expenditures amounted to $2,792,222 for fiscal year 2016. As of June 30, 2016, the remaining capital additions limit accumulated but unspent is $13,896,335, of which commitments of $1,671,676 have been carried forward to fiscal year 2017. NOTE 4 – INDIRECT ADMINISTRATIVE EXPENDITURES Indirect expenditures include those costs allocated from the City’s General Fund administrative services, which supports all operating departments of the City. Other indirect expenses are administrative charges from the City’s Internal Services Funds. These allocations are applied on a uniform basis throughout the City. The allocations are in accordance with the subsequent letter of agreement dated April 9, 1985. NOTE 5 – DEBT SERVICE EXPENDITURES Debt service expenditures include principal repayments, interest expense and amortization of bond discount reduced by any interest income earned from investments with the fiscal agent, related to the 1999 Series A Bonds (split for the portions used for the “New Project” and refunding of the 1990 Series A Bonds) and the 2009 State Water Resources loan. Attachment A CITY OF PALO ALTO REGIONAL WATER QUALITY CONTROL PLANT Notes to the Financial Statements (continued) For the Year Ended June 30, 2016 7 NOTE 5 – DEBT SERVICE EXPENDITURES (Continued) In prior years, the City, City of Mountain View, City of Los Altos, Town of Los Altos Hills, East Palo Alto Sanitary District and Stanford University agreed to issue bonds (1999 Series A Bonds) to finance the rehabilitation of the Wastewater Treatment System’s two sludge incinerators and to refund the existing 1990 Series A Bonds. In October 2009, the City approved the 2009 State Water Resources Loan to finance the Ultraviolet Disinfection Project. The principal amount of the debt outstanding as of June 30, 2016 are allocated as follows: 1999 Wastewater Refunding of 2009 Treatment 1990 Series A State Water New Project Bonds Resources Loan Total City of Palo Alto 1,301,255$ 447,027$ 2,606,447$ 4,354,729$ City of Mountain View 1,292,049 911,937 2,588,005 4,791,991 City of Los Altos 322,928 139,473 646,831 1,109,232 East Palo Alto Sanitary District 260,524 212,785 521,836 995,145 Stanford University 179,366 73,313 359,275 611,954 Town of Los Altos Hills 53,878 3,576 107,919 165,373 Total 3,410,000$ 1,788,111$ 6,830,313$ 12,028,424$ As required by the Indenture, the City established a debt service reserve fund for the Bonds (the “Reserve Account”), with a minimum funding level requirement in the Reserve Account (the “Reserve Requirement”). At the time it issued the Bonds, the City satisfied the Reserve Requirement with a deposit into the Reserve Account of a surety bond (the “Surety Bond”) in the amount of $1,647,300 issued by Ambac Indemnity Corporation (renamed to Ambac Assurance Corporation in 1997). NOTE 6 – JOINT SYSTEM REVENUES The Plant’s joint system revenues for the year ended June 30, 2016 total $261,564, which consisted of the following: Septic hauling services 210,831$ Other miscellaneous revenues 3,010 Salt water marsh services 7,500 Utility service to other utility funds 40,223 261,564$ NOTE 7 – RELATED PARTY TRANSACTIONS During fiscal year 2016, the Plant paid the City $2,619,123 for utility costs. Such costs are included in the Statement of Net Expenditures as source control program, permitting and enforcement, and operations and maintenance expenditures. Vehicle replacement charges of $51,157 were paid to the City’s Equipment Replacement Fund, which is included in the Statement of Net Expenditures as operations and maintenance expenditures. Attachment A 8 This page is intentionally left blank. Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Annual Financial Report For the Year Ended June 30, 2016 Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) For the Year Ended June 30, 2016 Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Management’s Discussion and Analysis (Unaudited) .............................................................................. 3 Basic Financial Statements Government-wide Financial Statements: Statement of Net Position ................................................................................................................... 5 Statement of Activities ....................................................................................................................... 6 Debt Service Fund Financial Statements: Balance Sheet ..................................................................................................................................... 7 Statement of Revenues, Expenditures and Changes in Fund Balance ................................................ 8 Notes to the Basic Financial Statements .................................................................................................. 9 Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 1 Independent Auditor’s Report The Honorable Mayor and Members of the City Council of the City of Palo Alto, California We have audited the accompanying financial statements of the governmental activities and the major fund of Palo Alto Public Improvement Corporation (Corporation), a component unit of the City of Palo Alto, California (City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the Corporation’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Corporation as of June 30, 2016, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Attachment A 2 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 3 through 4 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Walnut Creek, California November 2, 2016 Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Management’s Discussion & Analysis (Unaudited) For the Year Ended June 30, 2016 3 The Palo Alto Public Improvement Corporation (Corporation), a component unit of the City of Palo Alto (City), follows the provisions of Governmental Accounting Standards Board (GASB) Statement No. 34 (GASB 34), Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments. The Corporation is controlled by the City and was organized to assist the City in financing public improvements. The Corporation issues debt and turns the proceeds of the debt over to the City under lease agreements that provide a revenue source for the repayment of this debt. The Corporation has one debt issue outstanding and has turned the proceeds over to the City, which pledged certain lease payments as collateral for this debt as discussed in Note 4 to the financial statements. FISCAL YEAR 2016 FINANCIAL HIGHLIGHTS GASB 34 requires the issuance of government-wide financial statements as well as fund financial statements. The government-wide financial statements report the balance of the Corporation’s long-term debt while the individual fund statements do not. In fiscal year 2002, the Corporation issued its 2002B Downtown Parking Improvements Certificates of Participation (COPs) in the amount of $3.6 million. In fiscal year 2005, a partial redemption was completed by placing excess construction and debt service reserve funds into an escrow account to defease $900 thousand of the 2002B Downtown Parking Improvements COPs. As of June 30, 2016, the 2002B Downtown Parking Improvements COPs comprise the Corporation’s outstanding debt. At the government-wide level, interest and fiscal agent charges were $80 thousand for fiscal year 2016, a decrease of $10 thousand from the prior year. The interest on leases on the assets securing this COP issue was $83 thousand, a decrease of $9 thousand from the prior year. The interest on leases from the City exceeded interest and fiscal agent charges by $3 thousand, thereby resulting in an increase in net position of $3 thousand over the prior year. The Corporation ended fiscal year 2016 with total assets of $1.4 million, a decrease of $0.1 million from the prior year. Total assets consist of $251 thousand in cash and investments and $1.1 million of leases receivable from the City of Palo Alto. Total liabilities were $1.2 million, a decrease of $0.1 million from the prior year, and included $185 thousand of current liabilities as well as $975 thousand of long-term debt due in more than one year. At the fund level, the Corporation’s revenues nearly equaled the expenditures. As of June 30, 2016, the Corporation had one fund, the Debt Service Fund, which reported a $251 thousand restricted fund balance. Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Management’s Discussion & Analysis (Unaudited) For the Year Ended June 30, 2016 4 OVERVIEW OF THE CORPORATION’S BASIC FINANCIAL STATEMENTS The Basic Financial Statements are in two parts: 1) Management’s discussion and analysis (this part), 2) The basic financial statements, which include the government-wide and the fund financial statements, along with the notes to these financial statements. The basic financial statements comprise the government-wide financial statements and the fund financial statements. These two sets of financial statements provide two different views of the Corporation’s financial activities and financial positions, both short-term and long-term. The government-wide financial statements provide a long-term view of the Corporation’s activities as a whole, and comprise the statement of net position and the statement of activities. The statement of net position provides information about the financial position of the Corporation as a whole, including all its long-term liabilities on the full accrual basis, similar to that used by corporations. The statement of activities provides information about all the Corporation’s revenues and expenses on the full accrual basis, with the emphasis on measuring net revenues or expenses of the Corporation’s program. The statement of activities explains in detail the change in net position for the year. The fund financial statements report the Corporation’s operations in more detail than the corporate-wide statements and focus primarily on the short-term activities of the debt service fund. Fund financial statements measure only current revenues and expenditures; current assets, liabilities and fund balances; and they exclude capital assets and long-term debt. Together, these statements along with the notes to the financial statements are called the basic financial statements. DEBT ADMINISTRATION The Corporation issues debt in the form of COPs for future lease receipts from the City of Palo Alto. Legally, these COPs issues are the Corporation’s debt only; the City is liable only for the payment of the amounts set forth in the lease securing each COPs issue. As of June 30, 2016, the Corporation has one outstanding debt related to the 2002B Downtown Parking Improvement projects with an outstanding balance of $1.1 million. ECONOMIC OUTLOOK AND MAJOR INITIATIVES The economy of the City and its major initiatives for the coming year are discussed in detail in the City’s Comprehensive Annual Financial Report. CONTACTING THE CORPORATION’S FINANCIAL MANAGEMENT These Basic Financial Statements are intended to provide citizens, taxpayers, investors, and creditors with a general overview of the Corporation’s finances. Questions about these financial statements should be directed to the Finance Department of the City of Palo Alto, 250 Hamilton Avenue, Palo Alto, CA 94301. Attachment A Assets Cash and investments held for operations 13,635$ Cash and investments held by trustee 237,331 Investment in leases to the City of Palo Alto 1,135,000 Total assets 1,385,966 Liabilities Interest payable 24,592 Long-term debt: Due in one year 160,000 Due in more than one year 975,000 Total liabilities 1,159,592 Net Position Restricted for debt service 226,374$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Statement of Net Position June 30, 2016 See accompanying notes to financial statements. 5 Attachment A Expenses Interest and fiscal agent charges 80,275$ Program revenues Interest on leases from the City of Palo Alto 83,525 Net program revenues 3,250 General revenues Investment earnings 151 Change in net position 3,401 Net position, beginning of the year 222,973 Net position, end of the year 226,374$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Statement of Activities For the Year Ended June 30, 2016 See accompanying notes to financial statements. 6 Attachment A Assets Cash and investments held for operations 13,635$ Cash and investments held by trustee 237,331 Investment in leases to City of Palo Alto 1,135,000 Total assets 1,385,966$ Deferred Inflows of Resources Unavailable lease receipt from the City of Palo Alto 1,135,000$ Fund balance Restricted for debt service 250,966 Total deferred inflows of resources and fund balance 1,385,966$ Reconciliation of fund balance to net position Fund balance restricted for debt service 250,966$ Adjustment to remove deferred inflows of resources from the balance sheet 1,135,000 Some liabilities, including bonds payable, are not due and payable in the the current period and therefore are not reported in the Fund: Interest payable (24,592) Long-term debt due within one year (160,000) Long-term debt due in more than one year (975,000) Net position of governmental activities 226,374$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Balance Sheet June 30, 2016 Debt Service Fund See accompanying notes to financial statements. 7 Attachment A Revenues: Lease receipts from the City of Palo Alto: Principal 150,000$ Interest 83,525 Investment earnings 151 Total revenues 233,676 Expenditures: Debt service: Principal repayment 150,000 Interest and fiscal agent charges 83,525 Total expenditures 233,525 Net change in fund balance 151 Fund balance, beginning of the year 250,815 Fund balance, end of the year 250,966$ Reconciliation of net change in fund balance to change in net position Net change in fund balance - debt serivce fund 151$ Amounts reported for governmental activities in the statement of activities are different because: Repayment of bond principal is an expenditure in the governmental funds, but in the statement of net position the repayment reduces long-term liabilities. 150,000 Some amounts reported in the statement of revenues, expenditures and changes in fund balances reflect the collection of an asset which are not includable as revenues and expenditures on the statement of activities. Change in deferred inflows of resources (150,000) Change in interest payable 3,250 Change in net position of governmental activities 3,401$ PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2016 Debt Service Fund See accompanying notes to financial statements. 8 Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2016 9 NOTE 1 – DESCRIPTION OF REPORTING ENTITY The Palo Alto Public Improvement Corporation (the Corporation) was incorporated in September 1983 under the General Nonprofit Corporation Law of the State of California to acquire, construct and lease capital improvement projects. The Corporation is exempt from federal income taxes under Section 501(c)(4) of the Internal Revenue Code. The Corporation provides financing of public capital improvements for the City through the issuance of Certificates of Participation (COPs), a form of debt which allows investors to participate in a stream of future lease payments. Proceeds from the COPs are used to construct projects which are leased to the City for lease payments which are sufficient in timing and amount to meet the debt service requirements of the COPs. The Corporation is an integral part of the City of Palo Alto (City). It primarily services the City and its governing body is composed of the City Council. Therefore, the financial data of the Corporation has also been included as a blended component unit within the City’s comprehensive annual financial report for the year ended June 30, 2016. NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation Government-wide Statements: The statement of net position and the statement of activities include the financial activities of the Corporation. Eliminations have been made to minimize the double counting of internal activities. The statement of activities presents a comparison between direct expenses and program revenues for each function of the Corporation’s activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including investment earnings, are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the Corporation’s funds. The emphasis of fund financial statements is on major individual funds, of which the Corporation only reports one debt service fund. (b) Major Fund Major funds are defined as funds that have either assets, liabilities, revenues or expenditures equal to ten percent of their fund-type total and five percent of the grand total. The Corporation has one fund which is reported as a major governmental fund in the accompanying financial statements: Debt Service Fund – This fund accounts for debt service payments on the Corporation’s long-term debt. (c) Investment in Leases Improvements financed by the Corporation are leased to the City for their entire estimated useful life and will become the City property at the conclusion of the lease during the year ended June 30, 2022. The Corporation therefore records the present value of the lease and considers the leased improvement to have been sold for this amount when leased. Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2016 10 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Net Position The government-wide financial statements utilize a net position presentation. Net position is further categorized as net investment in capital assets, restricted and/or unrestricted. As of June 30, 2016, the entire net position was considered restricted. Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. (e) Deferred Inflows of Resources A deferred inflow of resources is defined as an acquisition of net position or fund balances applicable to a future reporting period and will not be recognized as an inflow of resources (revenue) until that time. On the governmental fund balance sheet, the lease receipts from the City corresponding to the debt are recorded as deferred inflows of resources since the balances are not current financial resources. The City considers revenues susceptible to accrual to be available if the revenues are collected within ninety days after year-end, except for property taxes, which are available if collected within sixty days after year-end. (f) Fund Balances At June 30, 2016, the Corporation’s governmental fund’s fund balances include the following classification: Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. (g) Effects of New Pronouncements During the year ended June 30, 2016, the Corporation implemented Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application. This statement addresses accounting and financial reporting issues related to fair value measurements. See Note 3 to the financial statements for related disclosure. (h) Estimates The preparation of basic financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE Under the provisions of the Corporation’s COPs issues, a trustee holds and invests the Corporation’s cash held for purposes of bond reserves. Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2016 11 NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE (Continued) (a)Interest Rate Risk Interest rate risk is the risk that a change in market interest rates will adversely affect the fair value of an investment. Normally, the longer it takes an investment to reach maturity, the greater will be that investment’s sensitivity to changes in market rates. Information about the sensitivity of the fair values of the Corporation’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Corporation’s investments by maturity: Investment Type Amount Maturity Date Money Market Mutual Fund 237,331$ 34 days (b)Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. As of June 30, 2016, the Fund’s investments in money market mutual funds are rated AAAm by Standard & Poor’s. (c)Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Corporation’s investments in money market mutual funds are not subject to the fair value hierarchy. (d)Investment Policy The Corporation must maintain required amounts of cash and investments with trustees under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged as reserves to be used if the Corporation fails to meet its obligation under these debt issues. The California Government Code (Code) requires these funds to be invested in accordance with bond indentures or State statutes. All these funds have been invested as permitted under the Code. The Investment Policy is described in detail in the City of Palo Alto Comprehensive Annual Financial Report. The table below identifies the investment types that are authorized by the City’s Investment Policy. The table also identifies certain provisions of the City’s Investment Policy that address interest rate risk, credit risk and concentration of credit risk. Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2016 12 NOTE 3 – CASH AND INVESTMENTS HELD BY TRUSTEE (continued) Maximum Maturity Minimum Credit Quality Maximum Percentage of Portfolio Maximum Investment in One Issuer U.S. Government Securities 10 years (*) N/A No Limit No Limit U.S. Government Agency Securities 10 years (*) N/A No Limit (A) No Limit Certificates of Deposit 10 years (*) N/A 20% 10% of the par value of portfolio Bankers Acceptances 180 days N/A 30% $5 million Commercial Paper 270 days P-1/A-1+ 15% $3 million (B) Local Agency Investment Fund N/A N/A No Limit $50 million per account Short-Term Repurchase Agreements 1 year N/A No Limit No Limit City of Palo Alto Bonds N/A N/A No Limit No Limit Money Market Deposit Accounts N/A N/A No Limit No Limit Mutual Funds N/A N/A 20% 10% Negotiable Certificates of Deposit 10 years (*) N/A 10% $5 million Medium-Term Corporate Notes 5 years AA 10% $5 million 10 years (*) AA/AA2 10% No Limit (A) (B) The lesser of $3 million or 10% of outstanding commercial paper of any one institution. (*) The maximum maturity is based on the Investment Policy that is approved by the City Council and is less restrictive than the California Governmental Code. Authorized Investment Type Bonds of State of California Municipal Agencies Callable and multi-step securities are limited to no more than 25% of the par value of the portfolio, provided that: 1) the potential call dates are known at the time of purchase, 2) the interest rates at which they "step-up" are known at the time of purchase, 3) the entire face value of the security is redeemed at NOTE 4 – CERTIFICATES OF PARTICIPATION The Corporation’s changes in long-term debt are presented below: Balance Balance Amount due June 30, 2015 Retirements June 30, 2016 in one year Governmental Activity Debt: Certificates of Participation 2002B Downtown Parking 6.50%; due 03/01/2022 1,285,000$ 150,000$ 1,135,000$ 160,000$ Attachment A PALO ALTO PUBLIC IMPROVEMENT CORPORATION (A Component Unit of the City of Palo Alto) Notes to the Basic Financial Statements For the Year Ended June 30, 2016 13 NOTE 4 – CERTIFICATES OF PARTICIPATION (Continued) On January 16, 2002, the Corporation issued the 2002B Downtown Parking Improvements Certificates of Participation (2002B COPs) in the amount of $3.6 million to finance the construction of certain improvements to the non-parking area contained in the City’s Bryant/Florence Garage complex. Principal payments are due annually on March 1 and interest payments are due semi-annually on March 1 and September 1 and are payable from lease revenues received from the City. The 2002B COPs are secured by lease revenues received by the Corporation from any City of Palo Alto General Fund revenue source. Future annual debt service on the 2002B COPs is shown below: For the Year Interest Total Ending June 30, Principal Payment Payment 2017 160,000$ 73,776$ 233,526$ 2018 170,000 63,376 233,776 2019 185,000 52,326 233,376 2020 195,000 40,300 237,326 2021 205,000 27,626 235,300 2022 220,000 14,300 234,300 1,135,000$ 271,704$ 1,407,604$ Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Independent Auditor’s Reports, Financial Statements, and Independent Accountant’s Report For the Year Ended June 30, 2016 Attachment A Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) For the Year Ended June 30, 2016 Table of Contents Page Independent Auditor’s Report ................................................................................................................... 1 Financial Statements: Balance Sheet ......................................................................................................................................... 3 Statement of Revenues, Expenditures and Changes in Fund Balance .................................................... 4 Notes to the Financial Statements ........................................................................................................... 5 Other Reports: Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ....................................... 9 Independent Accountant’s Report on Compliance with Measure N .................................................... 11 Status of Current Year and Prior Year Findings ................................................................................... 13 Attachment A Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 1 Independent Auditor’s Report The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California Report on the Financial Statements We have audited the accompanying financial statements of the City of Palo Alto General Obligation Bonds Capital Projects Fund (Fund), a fund of the City of Palo Alto, California (City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund as of June 30, 2016, and the changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Attachment A 2 Emphasis of a Matter As discussed in Note 2(a) to the financial statements, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2016, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 2, 2016 on our consideration of the City’s internal control over the Fund’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Fund’s financial reporting and compliance. Walnut Creek, California November 2, 2016 Attachment A Assets Restricted cash and investments (Note 3)710,783$ Fund Balance Restricted for capital projects 710,783$ CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND Balance Sheet June 30, 2016 (A Fund of the City of Palo Alto) See accompanying notes to financial statements. 3 Attachment A Revenues Investment income 15,857$ Expenditures Capital outlay: Downtown Library 4,086 Mitchell Park Library and Community Center 813,134 Rinconada Library construction and improvements 600,831 Temporary Facility 14,290 Temporary Library at Art Center Auditorium 19,587 Total capital outlay 1,451,928 Debt service: Interest and fiscal charges 228 Total expenditures 1,452,156 Deficiency of revenues under expenditures (1,436,299) Other Financing Uses Intergovernmental transfers to the City of Palo Alto (3,018,485) Net change in fund balance (4,454,784) Fund balance, beginning of the year 5,165,567 Fund balance, end of year 710,783$ Changes in Fund Balance For the Year Ended June 30, 2016 CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND Statement of Revenues, Expenditures and (A Fund of the City of Palo Alto) See accompanying notes to financial statements. 4 Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Notes to the Financial Statements For the Year Ended June 30, 2016 5 NOTE 1 – BACKGROUND On November 4, 2008, more than two thirds of registered voters of the City of Palo Alto (City) approved Measure N and authorized the issuance and sale of general obligation bonds not to exceed $76,000,000 to be used to construct a new energy-efficient Mitchell Park Library and Community Center, expand and renovate the Main Library, and renovate the Downtown Library. Funds will also be used to provide additional space to expand library collections, add new children’s and group program areas, replace outdated lighting, provide modern ventilation and air conditioning systems and ensure seismic safety and enhance disabled access. On June 9, 2010, the City issued General Obligation Bonds, Election of 2008, Series 2010 (2010 Library Bonds) to finance the costs of constructing a new energy efficient, environmentally friendly Mitchell Park Library and Community Center, renovating and expanding Main Library, and renovating the Downtown Library, including enhancements at all three facilities for seismic safety and disabled access, expanded space for library collections, meeting and study areas, and new air conditioning, ventilation and lighting systems (Project). Proceeds from the 2010 Library Bonds included par of $55,305,000 and a premium on issue of $3,766,208 for a total of $59,071,208. During the fiscal year ended June 30, 2013, the City issued General Obligation Bonds, Election of 2008, Series 2013A (2013A Library Bonds) for the remaining authorized amount of $20,695,000. The premium on issue was $1,011,615 for the total proceeds of $21,706,615. Specific projects approved by the City Council to be funded by the 2010 and 2013A Library Bonds proceeds are as follows: Reimbursement From Bond Funds Encumbrances Outstanding Downtown Library Improvements 4,167,260$ 36,803$ Mitchell Park Library 44,732,971 219,298 Library and Community Center Temporary Facility 522,702 - Temporary Main Library 534,746 127,382 Rinconada Library New Construction and Improvements 22,399,874 229,053 Total 72,357,553$ 612,536$ As of June 30, 2016 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (a) Reporting Entity The accompanying financial statements present only the financial position and the changes in financial position of the General Obligation Bonds Capital Projects Fund (Fund) and do not purport to, and do not, present fairly the City’s financial position as of June 30, 2016, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Notes to the Financial Statements For the Year Ended June 30, 2016 6 NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Basis of Presentation A capital projects fund (governmental fund) is used to account for the City’s General Obligation Bond Projects activities. Capital projects funds are used to account for financial resources (e.g., bond proceeds and investment income) that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition of land or acquisition and construction of major governmental facilities. This fund is a set of self-balancing accounts which comprise its assets, liabilities, fund balance, revenues and expenditures. (c) Basis of Accounting Basis of accounting refers to when revenues and expenditures are recognized. The projects are accounted for in a governmental fund type, and the modified accrual basis of accounting is used. Under the modified accrual basis, revenues are recognized when they become measurable and available as net current assets. Expenditures are recognized when they are incurred. The City considers revenues susceptible to accrual to be available if the revenues are collected within ninety days after year-end, except for property taxes, which are available if collected within sixty days after year-end. (d) Fund Balance Fund balance is reported in specific classifications (nonspendable, restricted, committed, assigned and unassigned), which create a hierarchy primarily based on the extent to which the Fund is bound to the constraints of the specific purposes for which funds can be spent. The Fund only has restricted fund balance at June 30, 2016. Restricted fund balance includes amounts when constraints placed on use of resources are either: (1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or (2) imposed by law through constitutional provisions or enabling legislation. The City will spend the most restricted dollars in accordance with restrictions imposed before less restricted resources in the following order: (a) committed; (b) assigned and (c) unassigned. (e) Effects of New Pronouncements During the year ended June 30, 2016, the City implemented Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application. This statement addresses accounting and financial reporting issues related to fair value measurements. See Note 3 to the financial statements for related disclosure. (f) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund of the City of Palo Alto) Notes to the Financial Statements For the Year Ended June 30, 2016 7 NOTE 3 – RESTRICTED CASH AND INVESTMENTS (a) Project Fund Investment Policy Pursuant to terms of the 2010 and 2013A Library Bonds trust agreement, bond proceeds to be used for project costs were remitted to and are maintained by the City as agent for the bondholders. The City’s Investment Policy allows it to invest in a variety of types of investments subject to maturity maximums, concentration limitations, and minimum credit quality requirements. Allowed investment types are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code, which includes the California Asset Management Program (CAMP) Pool. CAMP Pool is an investment pool offered by the California Asset Management Trust (Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its participants to invest certain proceeds of debt issues and surplus funds. CAMP Pool’s investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code. (b) Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The Fund’s investments in CAMP Pool is not subject to the fair value hierarchy and are measured at net asset value. (c) Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. As of June 30, 2016, the Fund’s investments in the amount of $710,783 are invested in CAMP Pool with a weighted average maturity of 45 days. (d) Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. As of June 30, 2016, the Fund’s investments in CAMP Pool are rated AAAm by Standard & Poor’s. NOTE 4 – INTERGOVERNMENTAL TRANSFERS TO THE CITY OF PALO ALTO During the year ended June 30, 2016, the Fund transferred excess project savings of $3,018,485 to the City’s Library Projects Debt Service Fund. On June 27, 2016, the transferred funds were used for debt service payments for the 2010 and 2013A Library Bonds. Attachment A 8 This page is left intentionally blank. Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 9 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based On an Audit of Financial Statements Performed In Accordance with Government Auditing Standards The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the City of Palo Alto General Obligation Bonds Capital Projects Fund (Fund), a fund of the City of Palo Alto, California (City), as of and for the year ended June 30, 2016, and the related notes to the financial statements, and have issued our report thereon dated November 2, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City’s internal control over the Fund’s financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Fund’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Attachment A 10 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Walnut Creek, California November 2, 2016 Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 11 Independent Accountant’s Report on Compliance with Measure N The Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have examined the City of Palo Alto’s (City) compliance with certain provisions of Measure N for the year ended June 30, 2016 as follows: a)Proceeds from the sale of general obligation bonds (Bonds) were used only for the purposesspecified in Measure N; b)Proceeds from the Bonds were deposited into a Library/Community Center Project Construction Fund held by the City; and c)The Administrative Services Director of the City filed an annual report with the City Council no later than November 1, containing pertinent information regarding the amount of funds collectedand expended, as well as the status of the Library/Community Center project listed in theMeasure. Management is responsible for the City’s compliance with those requirements. Our responsibility is to express an opinion on the City’s compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the City’s compliance with specified requirements. In our opinion, the City complied, in all material respects, with the aforementioned requirements for the year ended June 30, 2016. This report is intended solely for the information and use of the City Council, the Oversight Committee, the City Auditor and the City’s management and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 2, 2016 Attachment A 12 This page is left intentionally blank. Attachment A CITY OF PALO ALTO GENERAL OBLIGATION BONDS CAPITAL PROJECTS FUND (A Fund to the City of Palo Alto) Status of Current Year and Prior Year Findings For the Year Ended June 30, 2016 13 Current Year Findings: No matters were noted. Status of Prior Year Findings: No matters were noted. Attachment A CITY OF PALO ALTO, CALIFORNIA Independent Accountant’s Report on Applying Agreed–Upon Procedures Related to the Article XIII-B Appropriations Limit For the Year Ended June 30, 2016 Attachment A Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 1 Independent Accountant’s Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit Honorable Mayor and the Members of the City Council, of City of Palo Alto, California We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet of the City of Palo Alto, California (City), for the year ended June 30, 2016. These procedures, which were agreed to by the City and recommended by the California Committee on Municipal Accounting (CCMA) (as presented in the CCMA White Paper titled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The City’s management is responsible for the Appropriations Limit Worksheet. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed worksheets setting forth the calculations necessary to establish the City’s appropriations limit and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Finding: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Worksheet, we added prior year’s limit to total adjustments, and compared the resulting amount to the current year’s limit. Finding: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Worksheet to the worksheets described in No. 1 above. Finding: No exceptions were noted as a result of our procedures. 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet to the prior year appropriations limit adopted by the City Council. Finding: No exceptions were noted as a result of our procedures. Attachment A 2 We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the Appropriations Limit Worksheet. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIII-B of the California Constitution. This report is intended solely for the information and use of the City Council and City management and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited. Walnut Creek, California November 2, 2016 Attachment A CITY OF PALO ALTO, CALIFORNIA Appropriations Limit Worksheet For the Year Ended June 30, 2016 3 2014-2015 appropriations limit, as adopted 135,167,260$ Adjustment factors: Population 1.0113 Inflation 1.0382 Total adjustment factors (rounded)1.0499 Total adjustments 6,749,126 2015-2016 appropriation limit, as adopted 141,916,386$ Attachment A    4 This page is left intentionally blank. Attachment A CABLE TV FRANCHISE Independent Auditor’s Report and Statements of Franchise Revenues and Expenditures For the Years Ended December 31, 2015 and 2014 Attachment A CABLE TV FRANCHISE For the Years Ended December 31, 2015 and 2014 Table of Contents Page Independent Auditor’s Report ....................................................................................................................... 1 Financial Statements: Statements of Franchise Revenues and Expenditures ............................................................................. 3 Notes to the Financial Statements ........................................................................................................... 4 Attachment A Century City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 2121 N. California Boulevard, Suite 750 Walnut Creek, CA 94596 1 Independent Auditor’s Report Honorable Mayor and Members of the City Council of the City of Palo Alto Palo Alto, California We have audited the accompanying Statements of Franchise Revenues and Expenditures of the Cable TV Franchise (Franchise) for the years ended December 31, 2015 and 2014, and the related notes to the financial statements, which collectively comprise the Franchise’s financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Amended and Restated Joint Exercise of Powers Agreement signed on June 9, 2009, between the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara and the Town of Atherton for the provision of cable television and video services as described in Note 1 of the financial statements. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and expenditures of the Franchise for the years ended December 31, 2015 and 2014, in accordance with the financial reporting provisions of the Amended and Restated Joint Exercise of Powers Agreement signed on June 9, 2009, between the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara, and the Town of Atherton for the provision of cable television and video services, described in Note 1 to the financial statements. Attachment A 2 Basis of Accounting As discussed in Note 1 to the financial statements, the financial statements are prepared in accordance with the financial reporting provisions of the Amended and Restated Joint Exercise of Powers Agreement signed on June 9, 2009, between the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara, and the Town of Atherton, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter. Restriction on Use This report is intended solely for the information and use of the governing bodies and management of the City of Palo Alto, the City of East Palo Alto, the City of Menlo Park, the County of San Mateo, the County of Santa Clara and the Town of Atherton, and is not intended to be and should not be used by anyone other than these specified parties. Walnut Creek, California November 2, 2016 Attachment A 2015 2014 Revenues: Franchise fees $ 1,892,859 $ 1,829,378 Expenditures: Franchise administration 42,762 46,838 Consulting fees 20,324 4,752 Total expenditures 63,086 51,590 Net receipts $ 1,829,773 $ 1,777,788 Amount Percent Amount Percent Allocation of Net Receipts: City of Palo Alto $ 891,371 48.7% $ 864,439 48.6% City of Menlo Park 489,704 26.8% 474,995 26.7% City of East Palo Alto 192,530 10.5% 182,051 10.2% Town of Atherton 134,488 7.3% 127,302 7.2% County of Santa Clara 96,111 5.3% 99,360 5.6% County of San Mateo 25,569 1.4% 29,641 1.7% Total $ 1,829,773 100.0% $ 1,777,788 100.0% CABLE TV FRANCHISE Statements of Franchise Revenues and Expenditures For the Years Ended December 31, 2015 and 2014 2015 2014 See accompanying notes to the financial statements. 3 Attachment A CABLE TV FRANCHISE Notes to the Financial Statements For the Years Ended December 31, 2015 and 2014 4 NOTE 1 – JOINT OPERATING AGREEMENT AND BASIS OF ACCOUNTING In July 1983, a Joint Exercise of Powers Agreement was entered into by and between the Cities of Palo Alto, Menlo Park, East Palo Alto, the Counties of San Mateo and Santa Clara, and the Town of Atherton (Members) for the purpose of obtaining a state-of-the-art cable service for residents, businesses, and institutions, within each of their jurisdictions in the most efficient and economical manner possible. On August 9, 2000, the City of Palo Alto (City), acting on behalf of the Members, signed a Franchise Agreement with TCI Cablevision of California, Inc., a wholly owned subsidiary of AT&T Broadband (AT&T), third party contractor, which was granted a non-exclusive franchise to construct, operate, maintain and repair a cable television system within the Members jurisdictions. In 2002, the Franchise Agreement was transferred from AT&T to Comcast Corporation (Comcast). TCI Cablevision of California, Inc. also signed an asset purchase agreement with Cable Communications Cooperative of Palo Alto, Inc. (CCCOPA), the former cable television system operator/owner, and acquired the system. In October 1988, the Members entered into a Joint Operating Agreement in which the City was granted the power and the authority to administer and coordinate the activities of the franchise and exercise the rights and responsibilities of the City pursuant to the Franchise Agreement. The activities are administered by the City and are accounted for within the City’s Agency Fund. The program is accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual (both measurable and available) and expenditures are recognized when the liability is incurred. On January 1, 2007, the Digital Infrastructure and Video Competition Act (DIVCA) went into effect. Under DIVCA, cable and video service franchises are now granted exclusively by the California Public Utilities Commission (Commission) rather than by local franchising entities. On March 30, 2007, the Commission granted AT&T a statewide franchise. Comcast was allowed to seek a state franchise after January 1, 2008, when another state franchise holder (in this case AT&T) entered the local market. On January 2, 2008, the Commission granted Comcast a state franchise. On June 9, 2009, the Members approved an amended and restated Joint Exercise of Powers Agreement, in substitution of the existing Joint Exercise of Powers Agreement and the Joint Operating Agreement, to reflect changes in the law due to DIVCA and to continue to allow the City to administer the cable and video franchise enforcement and monitoring process for state franchise holders. The accompanying financial statements are intended to present the Franchise’s revenues and expenditures pursuant to the Joint Exercise of Powers Agreement and are not intended to be a complete presentation of the Franchise’s financial position or results of operations. As compensation for services under the state franchise agreements, AT&T and Comcast pay annual franchise fees in an amount equal to 5% of annual gross revenues, taking into account a reasonable adjustment for bad debts. From these fees the City is first reimbursed for out-of-pocket franchise administration costs. The remaining fees are distributed to each Member according to the percentage of revenues derived from the residents and businesses in each of the entities compared to revenues in total. Attachment A CABLE TV FRANCHISE Notes to the Financial Statements For the Years Ended December 31, 2015 and 2014 5 NOTE 2 – PRIOR FRANCHISE SETTLEMENTS A prior Franchise Agreement with CCCOPA was set to expire on March 24, 2001. On June 21, 1999, the City hired a cable communications consultant and retained the services of a law firm to assist in the franchise renewal process. On July 31, 2000, CCCOPA reimbursed the City $185,000 toward the actual costs incurred as part of the franchise renewal efforts. On July 24, 2000, the City reached a settlement with CCCOPA in the amount of $220,000 to resolve outstanding claims resulting from CCCOPA’s alleged failure to fully perform under the prior Franchise Agreement. On November 22, 2004, the City reached a settlement agreement with Comcast regarding cable plant construction claims in the amount of $175,000. This money was to be used towards the institutional network connection costs. In 2006, the City conducted a franchise compliance audit performed by the City Auditor’s Office. A settlement was reached in the amount of $155,391. In addition, CCCOPA paid the City a $250,000 grant to acquire, install, and/or maintain equipment to be used in connection with an institutional network defined in the Franchise Agreement. The settlements and grant have been deposited and are being held by the City and earning interest. The City has since spent a part of the balance on various projects including installing and maintaining the institutional network equipment. As of December 31, 2015 and 2014, the remaining balance on deposit with the City, including $3,065 and $4,142, respectively, in interest receivable, was $1,101,977 and $1,200,217, respectively. NOTE 3 –SUBSEQUENT EVENTS Distribution to Members Subsequent to the fiscal year ended December 31, 2015, the Franchise distributed the franchise fee for the quarter ended December 31, 2015 of $457,705 to its members in January 2016. Franchise Settlements In 2016, the City concluded a franchise compliance audit performed by the City Auditor’s Office. The City Auditor discovered that AT&T and Comcast did not consistently calculate the fees due in accordance with Digital Infrastructure and Video Competition Act (aka, “DIVCA”) and the municipal code of each of the cable joint powers members. As a result of the audit, the City received a settlement from AT&T in the amount of $75,647. The City is currently negotiating a settlement with Comcast and expects a settlement in the range of $50,000 to $100,000.   Attachment A FINANCE COMMITTEE TRANSCRIPT Page 1 of 17 Finance Committee Action Minutes November 15, 2016 Special Meeting Tuesday, November 15, 2016 Chairperson Filseth called the meeting to order at 6:06 P.M. in the Community Meeting Room, 250 Hamilton Avenue, Palo Alto, California. Present: Filseth (Chair), Holman, Schmid, Wolbach Absent: Oral Communications None. Action Items 1. Macias Gini & O'Connell's Audit of the City of Palo Alto's Financial Statements as of June 30, 2016, and Management Letter Council Member Schmid: Oh sorry. It seems logical that we do Number 2 before Number 1. Number 1 asks us to approve the audit. The Audit refers to the Comprehensive Annual Financial Report (CAFR). It would seem that if we have any questions about that, that we get them resolved before we approve the audit. Chair Filseth: Sorry. Let me ask the City Auditor, the Audit is mostly about two or three very specific things, isn’t it? Harriet Richardson, City Auditor: The Audit Reports are whether or not the financial statements are fairly reported in all material aspects, and then you have the financial statements there, which MGO is here to discuss and we have Finance Staff here to answer questions where you can get into the details, and that’s really how we’ve done it in the past. Council Member Schmid: If I could just make the point that in the audit letter it specifically refers under the aspects of accounting practices… James Keene, City Manager: Do you have the page number for that? Attachment B TRANSCRIPT    Page 2 of 17 Finance Committee Transcript November 15, 2016   Council Member Schmid: It’s on Packet Page 12 and 13. It refers to notes 11 and 12 in the CAFR Report. It seems to me those are issues we will be discussing and it would be good to hear the audit input on that, since it describes in there how they have had interactions with the Staff about the preparation of those footnotes. Chair Filseth: My inclination is that it would be preferable, since we have M.G.O. here, to proceed with Item 1, but let me ask Staff for a comment on that one as well. Lalo Perez, Chief Financial Officer: Lalo Perez, Chief Financial Officer. That’s how we’ve done it. There is also no reason, if the Committee wanted to hold off on the final vote of the audit until you went through Item 2, that’s fine too. M.G.O. has agreed to stay. They typically do for Item 2 as well, but it’s not an issue for us. Chair Filseth: So you folks are planning on staying for Item 2? James Keene, City Manager: Yeah, I was going to argue we stay the course until I heard this, because otherwise we would be paying them more money, but since they’re going to be here… Chair Filseth: The only reason I can think of is if there is anybody, any speakers from the public that want to speak to Item 1 but don’t want to stay around for Item 2. But it’s only Neilson. Why don’t we to that then. Why don’t we reorder and do Item Number 2 before Item Number 1? Is everybody okay with that? Mr. Perez: You’re the lead on that but my suggestion would be that you might want to hear from the auditor to first hear what they have found, and then we can proceed to the Staff presentation on 2. It kinds of goes in sequence, and then come back to that. Chair Filseth: Are you okay with that? James Keene, City Manager: Yeah. Chair Filseth: Let’s do that then. Neilson, we beg your forbearance. Neilson Buchanan: I’m sitting here remembering my professional career which involves some 21 audits of a public entity, so I’m very reminiscent of how much fun it is to put these things to bed. I want to preface this by, I Attachment B TRANSCRIPT    Page 3 of 17 Finance Committee Transcript November 15, 2016   have absolutely no doubt that the audit’s in pristine condition, but I want to ask a question, and unfortunately, when you ask a question at a time like this, people always kind of worry there is something untoward that I might be thinking about the audit, and I don’t. I want to ask a question purely for information point of view and all I’ll be asking the Committee to do is to ask Staff to follow up on my puzzlement. My puzzlement has to do with the parking assessment district for the University Avenue. Over the course of the last two to three years, working on permit parking, big questions have come up on the interface between the residential property parking and the commercial core. I have done everything within my capabilities to try to understand how decisions are made, what decisions are made, how pricing is going to interface, so the only thing I would ask you to ask the auditors in the prevue of their financial review, are the funds that flow from the participants in the Parking Assessment District that seem to come through the City, the City takes off a small administrative fee and then it seems to go on to the bond holders. All I really would like to know and I would like the Council to know is that part of what the auditors have reviewed in the tons of different accounts and cash flows. So that’s, hopefully I’m expressing it in a simple enough fashion. Now the reason I asked for that is in the next 120 days or so the City Council is going to get a parking fee study coming through, and that’s going to trigger exactly how is all the pricing differentials and incentives for all parking, including Caltrain and the neighborhoods, and the more we know about this question the better that discussion is going to be. So once again, I don’t mean to make any representation that something is not right, but I do want to represent that it is really hard to figure out how the parking assessment district operates, who’s got authority to set fees, who owns title of the garages. I have gone to every meeting possible asking those questions, and all I’ve gotten is conflicting information. Thank you. Ms. Richardson: Good evening Mr. Chair and members of the Committee, Harriett Richardson, City Auditor. In accordance with the City Charter and the Palo Alto Muni Code requirements, our office staff assists the City Auditor, coordinates the City’s Annual Financial Audit. Macias, Gini & O’Connell, also called MGO for short, conducted the audit for the sixth year. We just recently renewed their contract, so they’re in the first year of a new contract period that we did through requests for proposal process. They are presenting nine reports tonight. They issued an unmodified opinion for all of the City’s basic financial statements, which means that they concluded that the statements presented are presented fairly in all material respects. So the auditors did not have any findings or recommendations this year and there were no outstanding recommendations from prior fiscal years. I would like to point out that the audits that M.G.O conducts focus on financial reporting and whether there are any material misstatements, where the audits that my office conducts address operational risk, compliance and Attachment B TRANSCRIPT    Page 4 of 17 Finance Committee Transcript November 15, 2016   strategic objectives that may or may not have financial impact; however, during the course of the audit we do meet with M.G.O. and talk about the recently completed audits from my office and audits that are in progress and other issues that we may be aware of that could potentially impact the City’s financial statements. I would like to thank David Bullick and Irene Chan from M.G.O. as well as Cindy Pon for coming here tonight in place of David, for their diligence and hard work in completing the audit. I would also like to thank Lalo Perez, David Ramberg and Laura Kuryk and her staff in Administrative Services Department (ASD) for the assistance they provide to M.G.O. to complete the audit on time, but more importantly, for the work they do year-round to ensure that we receive an unmodified opinion on our financial statements as well as no audit findings. So now I will turn it over to Irene, right here. This is Irene and this is Cindy, from M.G.O. and they are here to present their results of the Report to you. Irene Chan, Senior Manager, Macias Gini & O’Connell: Thank you Harriett. Good evening Council Members. Irene Chan, Senior Manager from M.G.O., the Engagements Manager as well. So thank you for inviting us here to present to you the results of the audits. We’ll start off with the attachments in your meeting packets. You have actually six attachments there, first off with the Report to the City Council. That is the required communication from us to the governing board. It summarizes the results of the audits and if there is any current year findings that will be included in there too. I will go over in details a little bit after this. The second attachment is the original Water Quality Control Plan financial statements that discuss the operating cost of the plans and how the costs are allocated among the members. The third attachment is the Public Improvement Cooperation. That’s related to your 2002 Certificate of Participation that pays for the cap reimprovements for your downtown parking garages. Following that is the General Obligation (GO) Bonds for the library projects audits that you (inaudible) and approved it in 2008 for the construction of the City’s libraries and the financial statements of the project activities funded by the bond proceeds. Again, the appropriation limit that’s on the spending limit on the appropriation established at the beginning of the year and cable TV franchise, the audit of the franchise fee and also the distribution of the net receipts to the members. On the second item, that includes just the CAFR. The CAFR itself, obviously it’s a City-wide financial statement that talks about the financial positions of the City. During this year there isn’t too much of exciting activities going on, it’s rather quiet. There is a footnote that discusses some activities like paying off the partial of the 2010 and 2013 GO Bonds that you guys approved last year as well. There is a footnote that discusses pension, postemployment benefits of the City’s employees. So like Harriett mentioned, I am happy to say that based on our audit, the results we offer, we basically gave unmodified opinions. Everything is clean. There is no Attachment B TRANSCRIPT    Page 5 of 17 Finance Committee Transcript November 15, 2016   current year finding that results from the audit. Out of the prior year finding has been corrected as of last year, so there isn’t anything reported as well. So with that said, I will go over details of the Report to the City Council with you. If you go to the attachments, the required communication starting on page 1, and there are really two portions I would say. The first part of it talks about the quality aspects of the financial statements. It talks about what the standard coming in this year as new standards, and also estimates to your financial statement what sensitive information included on your CAFR. The second part talks about the results of the audit, any issue that we have encountered. Mr. Perez: Sorry Irene. For the Finance Committee members it starts on Page 12. Thank you Irene. Ms. Chan: Thanks Lalo. So this year there are four new General Accounting Standards Board (GASB) standards that became effective for the Fiscal Year 2016. There isn’t too big of impacts to the financial statement. You see the GASB rates 72, 73, 76 and 79. After that is the list of sensitive estimates that is used on your financial statement. So those are estimates based on management methodology to determine for the balances of the year. Very typical is the fair value of the City’s investments. GASB 72 this year adds some additional guidance on how to measure these fair value and they added a new disclosure, basically shows additional information on how the fair value was measured. You can actually see that in the Footnote 3 in the CAFR. Other estimates include the allowances of your receivables based on the collectability of the notes and loans outstanding, the useful life of certain fixed assets, and some other estimates are based on the actuary studies. As Council Member Schmid talked about that there is a sensitive disclosure that is considered sensitive would be note 11 for your pension plan, 12 for your post-employment benefits to the employees and the community contingency note 16. So that’s the first half of the required communication. The second half of that talks about the issue that we have encountered with the management, such as if there are any difficulties or if there is any material misstatements based on the results and I am glad to say there are no difficulties we encountered. We really appreciate the assistance from the management throughout the course of the audit. To me the audit is pretty efficient and went pretty well. I would say that there is a pretty quiet year before the new GASB came up for the Other Post Employment Benefits (OPEB), which is coming up for the City’s Fiscal Year 2018. So that concludes my presentations. I guess I will open up for questions if you guys have any. Attachment B TRANSCRIPT    Page 6 of 17 Finance Committee Transcript November 15, 2016   Mr. Perez: Chair Filseth, before you proceed to questions, may I address the speakers commence, that way if the speaker decides he doesn’t want to wait, he has that option? Chair Filseth: Yes. Mr. Perez: Thank you for that. It is a very complex area and we have had the discussion multiple times including what some of the members of the Parking Committee, the University Avenue that have come and spoken to you. So there are three parts, just to quickly remind you of them. There is the parking assessment, which is the assessment that issued the bonds to build the garages. That is the money we collect from the partials and it goes directly to the bonds. That’s one of the easiest things that an auditor could review because it is segregated funding, there are disclosure requirements and it’s pretty clean and said. The second one is Parking Permit Fund. Now that you have a lot of latitude, a lot of control. You as the Council can set the fees based on recommendations that we give you. We have an increase of fees for the University Parking District, for example, in several years. You could set them at any rate that you wanted to. You could use those funds for whatever you wanted to. We segregate them in a special fund and we call them out in our financials, in our budget, and therefore, in our financials. It’s totally understood why it’s difficult to follow, but there seems to be a confusion between the assessment and the permit fees. They are two distinctively different pots of funds. Then the third one is the parking in-lieu, which again, that is limited to the use and it has been designated for the construction of garages in the downtown district and you have somewhere in the $4 million balance for that. So I would be more than happy to sit down with Mr. Buchanan and get into some of the details or questions he has, and I am sure that Harriett would be able to do the same on the audit side and go through those details, but I can understand the challenge to getting this all understood, because it is very complex and three separate entities per se. Chair Filseth: The third one is the parking in-lieu fees is for the construction of future garages, but doesn’t have anything to do with the existing garages, is that correct? Mr. Perez: That is exactly correct, and that’s why it gets very confusing, because the term “assessment” seems to be used among all three of those pots of funds, and that’s when it becomes very confusing, because if Staff’s here assessment, we automatically go to the bond issuance and the garages that were built, but then people are really talking about the permit fees fund, which is a different entity. So right now the majority of the use of the funds for the parking fees are for operation and maintenance of the parking Attachment B TRANSCRIPT    Page 7 of 17 Finance Committee Transcript November 15, 2016   lots and garages, so that even complicates it even more, because it’s the same garages that were built, but that’s not what’s paying for the garages to be built, it’s paying for the operation and maintenance and for staffing to support the administration of the fees and managing the contracts and agreements for the operational maintenance. Mr. Keene: So I think, as Lalo said, he’s more and the Staff is more than willing to dive deeper outside of this meeting. I would just say that I think one of the things that will get, I don’t know if it will ever get completely clear, between what is what we’re doing appropriately according to accepted financial practices, and what is legal, versus what different constituencies might think of as fair, because we certainly have some folks on the business community side of stuff who pound on us about how they see the connection on the permit fees and on the Parking Assessment District and kind of get it all mangled up. They are making an argument about fairness, which is, you know, a perspective, and I just want to separate that out from, so the kind of the CAFR kind of concerns that connect back to the parking assessment district component here. Chair Filseth: Thank you very much for the explanation. Questions on the Audit Report? Council Member Schmid. Council Member Schmid: I guess the key question is, who controls, who uses the parking that has been constructed. Now my understanding is back in, was it the 80’s or the 90’s, everyone who participated in the parking assessment payments were given free parking for a number of square footage that was entered into the Assessment District, which created something like 9,000 you know, parking rights. Is that part of the issue here is we have created, through the Parking Assessment District, parking rights that do not necessarily have spaces? Ms. Richardson: That question came up during the parking funds audit, so we looked at that and it didn’t actually give them rights to that many spaces. They paid into the fund for a portion of the cost based on the percentage of spaces they had, but it didn’t actually give them rights to that many spaces, and I know that sometimes Staff Reports indicates that there’s prepaid spaces for that many, and that Planning has looked at whether or not they should revisit the way they approach that, but it doesn’t actually give them rights to that many spaces. If it did we would need to have several more garages to accommodate all those spaces. Attachment B TRANSCRIPT    Page 8 of 17 Finance Committee Transcript November 15, 2016   Council Member Schmid: Yeah, I just note whenever there is a rebuilding, redevelopment in the downtown, they come and start by saying “we have guaranteed X number of spaces” and that’s always been accepted. Ms. Richardson: That’s been accepted and I know that Planning has been looking at that because that’s not really the intent, that they are guaranteed that many spaces. Council Member Schmid: Okay, so you would be a good reference if that issue arises? Ms. Richardson: It will probably come up again. Council Member Schmid: Thank you. Chair Filseth: Questions and comments, I think, from the Committee on the audit? Council Member Schmid: Well, let me (inaudible) certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements were the disclosures of the City’s pension plans in note 11, the retiree health benefits in note 12. Now you mentioned in your letter that you had dialogs with the Staff about how they dealt with and treated certain of the information in there, and I notice in CAFR there are a couple of sections under Note 11 and 12 that have numbers. Now those numbers are sensitive and controversial. Can you tell us anything about, I guess your job was to make sure that things were done correctly and sensitively to the data that was given. Can you tell us about your dialogs with the Staff on this? Cynthia Pon, Partner, Macias Gini & O’Connell: In terms of sensitivity, what is meant by this is that the amounts and the disclosures related to the pension disclosure and the retiree health disclosures, there are actual assumptions or other variables that if there are changes in any of those variables, the amounts in the financial statements and the disclosures will change significantly. So for example, currently the pension discount rate is at 7.65 percent, so you know, if there is a change in California Public Employee Retirement System (CalPERS) actuarial discount rate from 7.65 percent to 6.65 or 8.65, the amounts in the City’s financial statements will change accordingly as well. So that’s what is meant by, in terms of significance is that these amounts and disclosures will fluctuate, depending on management’s estimates of these variables included imbedded in these assumptions. Attachment B TRANSCRIPT    Page 9 of 17 Finance Committee Transcript November 15, 2016   Council Member Schmid: Now actually I thought that in our discussions and approval of the pension, we had accepted a rate of 7.5 as the discount rate. There is extensive argument about whether that rate was too high and yet in your Report and the CAFR it says 7.65? Ms. Pon: 7.65. Council Member Schmid: Where did that come from? Ms. Pon: The delta is that there is a discussion I believe on Page, I forgot what page of the Report. Council Member Schmid: Page 87. Ms. Pon: That there has been a change this year. In the past, it was 7.5, but it was net of the Administrative Fee of 0.15. What CalPERS did this last year was they updated the amounts to comply with GASB statement 67, 68, and included the Administrative Fee as part of the discount rate. So in the past it was net, now it’s gross. Council Member Schmid: The last communication we got from CalPERS was that they were adding an addendum that they were going to lower the discount rate each time there was a performance above it. That’s the only change that I think we were informed of. The fact that they have actually raised the rate during a time when their performance has been disastrous is quite striking. There was no discussion of… Ms. Pon: I think there is a difference between the funding requirements that CalPERS provided, study to the City every year saying “this is the funding requirement, this is the annual required contribution” for various entities, participants of their plan versus the accounting requirements where they could throw in, say, well this is your net pension liability versus your unfunded actuarial accrued liability. So there is a change in the way pension accounting is being reported with GASB 68 this last two years now versus in the past an organization would show a liability if an organization did not pay the annual required contribution for that year. So in the past if you didn’t pay that mortgage you would have a liability. Now they say, well every year they’re trying to measure what is the net pension liability for the year and this is what’s now being reported on the financial statements. As such we’ve been seeing a lot of our clients with more volatility in their statement of net position or what used to be called the balance sheet. You know, there is more volatility now and as a result the expenses are also more volatile in terms of the full accrual presentation. But there isn’t a change in the way an Attachment B TRANSCRIPT    Page 10 of 17 Finance Committee Transcript November 15, 2016   organization has been funding it, so when you look at the general fund, for example, the required contribution year over year, the contribution amount generally has been increasing, but there isn’t that volatility that one now sees in the financial statements on an accrual basis. Council Member Schmid: What is the role of the external auditor going through the accounts in… Ms. Pon: We review the results from the actuarial reports. We perform census testing on the data that is provided to the actuary to come up with the concluded amounts. We evaluate the results as it relates to other comparable entities. Council Member Schmid: But you do not evaluate the discount rate used? Ms. Pon: We look to see if it is reasonable. Council Member Schmid: The reason I raise this is they have had substantial internal discussions between their auditor and their own internal auditor has said it was time to change the discount rate. So you do not look at the discussion that our pension auditor or CalPERS auditor had? Ms. Pon: Well, you know, it some way, another member of our organization does do that, because we, for the 2016, 2015, over the last few years our firm is also the CalPERS financial statement auditors, so we have looked at that, but it is a different office and a different team that’s been doing that, but we do look at that as part of the CalPERS audit. Now that’s a different hat. Mr. Keene: I do think it’s important to remember that there are some requirements in the financial reports and the disclosures that have to be followed that don’t always hit all of the strategic policy or even longer term fiscal issues that we’re having in parallel to this. I mean not only during our budget discussions, but, you know, Lalo will be talking to you this year about the fact that the current rate of return in CalPERS is significantly down and their schedule right now would call of them to not revisit resetting that figure until February of 2018, so one of the more interesting things for us, both policy wise and maybe even politically in a sense, is what do we want to do as a City to advocate for a faster adjustment downward on that investment return. I mean, that’s where the real differences are going to come for us and, of course, we’re just one city even in that regard. But, you know, I think the auditors are bound to adhere to certain requirements, but even then I think the main point of this was to identify that this is variable Attachment B TRANSCRIPT    Page 11 of 17 Finance Committee Transcript November 15, 2016   potentially volatile and that these liabilities could significantly change as we go forward. That’s what I see the note saying. Ms. Pon: And in terms of funding policy, we have other clients that fund more than the annual required contribution, but they are a minority versus a majority, but we do have clients that do fund more because they are looking down the horizon as well and saying, you know, when I have one time revenues it may be prudent for my city or my district to save that and put it into that, so in the future my annual required contribution rate won’t be as high. So that’s a policy decision that other organizations have been grappling with. Council Member Schmid: Yeah, I would just make the note that you mentioned that this is sensitive, it is extremely sensitive to the City because we are entering into contracts each year that, for salary increases that have long-term pension and health care cost attached that have huge implications for our future, and that number which was in debate of a discount rate is very important, and I guess I would think that an external auditor, as you say you have lots of clients who are making choices paying different rates would indicate that this number is a number that should be looked at carefully. Chair Filseth: I have a question or two on exactly this section as well, so I was going to say, is there anybody else who has questions on this specific topic? I want to make sure that, I don’t know where the role of the auditor leaves off and the role of our Finance Department begins, and I don’t want to spend too much time talking about our Finance Department when we have the auditor here, but I didn’t quite understand the discussion about… Council Member Schmid: What page are you on? Chair Filseth: I’m on Page 87 here. The discussion of discount rate, there is a discussion of, sorry. I don’t know what Packet Page. Mr. Perez: Packet Page 200. Chair Filseth: Packet Page 200, thank you. There is a discussion here of, should we use the municipal bond rate instead of the 7.65 percent discount rate, and I didn’t quite understand that discussion. Ms. Pon: Under the accounting standards 68, if the pension plan, when they project out their liabilities going forward and they deemed that they don’t have enough funds on hand, then what will happen or what is required is Attachment B TRANSCRIPT Page 12 of 17 Finance Committee Transcript November 15, 2016 that instead of using a long-term discount rate, they would need to blend it with a municipal bond rate, usually a lower rate, and they will be, I guess not required, to use a lower discount rate, but since the CalPERS did a stress test on their current situation and deemed that using the long-term rate as the current situation is appropriate. Chair Filseth: Okay, I kind of guessed it was something like that. So the discount rate isn’t exactly the same as CalPERS’s expected return rate, right? The discount rate is what we have to discount the future value of the unfunded liability at to figure out what it’s worth today, right? So why would we not use our cost of capital which I assume is the municipal bond rate which is going to be 3 or 4 percent, right? Ms. Pon: Because in terms of CalPERS portfolio, it’s more than just U.S. Government Municipal Bonds. They also have an extensive investment portfolio that’s… Chair Filseth: But isn’t the critical number the City’s cost of financing, not CalPERS return rate? Ms. Pon: No. Mr. Perez: Yes, I guess, to interject a little bit, and that’s going to be on the accounting side. You’re still not dealing with the trust side, right, and I think that’s really where you want to focus on, the trust, because that’s where you’re going to make the payment. So it’s important to know what it is on the accounting side for that number. If I may interrupt here, I can probably give you a quick briefing. I think it’s appropriate. Every year CalPERS holds a forum and it was three weeks ago. I attended with a couple of members of my Staff and Human Resources (HR) and it was quite a change in scenery, you’ll be happy to hear that Council Member Schmid. There was a very strong push by the agencies and by Staff of CalPERS that the world was not going to be 7.5 and a deep acknowledgement with the Board all present for the most part, I kind of looked for that. There were presentations done where pension trust experts were video clipped and shown to the audience by the Chief Investment Officer saying, look, everybody is talking about 4 to 6 percent returns. There’s no way we can hit 7.5. We’re admitting that to you right now. Council Member Holman: That was pre-election. Mr. Perez: Correct. Well you could argue that post-election the bond market is getting better, but we won’t go there. The message was clear that they Attachment B TRANSCRIPT Page 13 of 17 Finance Committee Transcript November 15, 2016 recognized that it was not sustainable and what was driving it down was the global markets, to your point, global equities, global bonds. They were doing well in their real estate, they were doing excellent in our U.S. equities and they did a survey, so I’ll send you the results of the survey because it’s out now, I just didn’t happen to bring it with me. They were asking all of us through the league, though that session and various other forums, if you believe that it is time to change the rate of return assumption, are you willing to take it all at once, or phase it in? The issue has been that there’s been a lot of pressure and the Board’s reluctance to move on doing it all at once is because what happens is then agencies have to have a much bigger annual required contribution to make that payment, an so they’re trying to get a gauge so they can present that information to the Board in terms of what should be done, because they acknowledge that we probably can’t wait till February of 2018, and that was the message that we were saying as finance officers that were in there, because finance officers, HR staff, we’re all mixed in this room, and us as finance officers are saying, why wait. We know you’re not going to make it. You know you’re not going to make it. Why postpone it? So that’s why they are doing the survey. The Board is going to take this into discussions this week, they were presenting the results of the survey. So I think it’s going to be a mixed bag. The good thing is that we’re learning more and more that there are various ways to go forward with this. That we’re not limited to what PERS parameters are set and so I think we’re getting better education, better educated as I attend more of these sessions, as I spend more time with Mr. Bartel and I think we’re going to provide you options on how we do this. Basically what we’re doing is we going to a negative amortization when we continue to have these returns that are less than 7.5, so now CalPERS has shown them in our reports and they show you what the different amortization, what it does. So you have options on how you can prefund this because you can see that it makes sense. So our plan, not necessarily for tonight, is to bring you that information, bring you those options, have that part of the education process for all of us so we can see what options we have. That we don’t necessarily have to wait for CalPERS to make a change on the rate. If they do make a change, though, we have to be prepared because it will alter whatever plans we make, because it’s like refinancing your mortgage. You go from 30 to 15, but also then your variable rate changes, a double whammy potentially, so we will have to be well prepared and informed. Chair Filseth: If I can summarize here then, what we’re saying is that 7.65 percent, that number is already a little bit out of date, okay, and when you said this is a sensitive number, you meant sensitive in the technical sense, right? Okay, but at 7.65 percent, you know, the City owes half a billion dollars it doesn’t have and if you change 7.65 percent to 5 percent, how big is the number? Attachment B TRANSCRIPT Page 14 of 17 Finance Committee Transcript November 15, 2016 Ms. Pon: If you go to Page 90, there is a disclosure on the sensitivity chart, plus one and minus one percent from 7.65 percent. Council Member Schmid: What page? Ms. Pon: Um, Page 90. Mr. Perez: Page 203 of your Packet, and it’s on the upper part of the page. Chair Filseth: You are going from 6.5 to 5? Ms. Pon: Yeah. But in terms of, because this is as of a measurement date of June 30, 2015, so that’s another element is terms of sensitivity, the data it takes, the time it takes to arrive and compute these amounts, it takes some time, so this information is as of 2015, or ’14 rolling to ’15 and at that point in time with a 7.65 the City miscellaneous plan has a net pension liability of $206 million, in the safety plan and $113 million, so if we have 1 percent lower, you’re adding about another $150 million plus or minus. Chair Filseth: Okay so $50 million per percent. That’s just on pension not OPEB. Ms. Pon: Not OPEB. Council Member Schmid: Yeah, I would just add a comment. I looked at the first one of these reports when I arrived at the Council nine years ago and the unfunded liability has doubled since that time, and that’s with “good returns” they were getting. Chair Filseth: Well it was zero in 2001. Ms. Pon: And it could have been negative in 2008, ’09, ‘10. Council Member Schmid: So these problems compound themselves. Everyone admits the problem, but now there is a political problem with how to tell people, and I guess my base question is, can the external auditor be a help to us in that situation, by identifying a potential problem? Ms. Pon: I think presenting the information leaves for you to make the decisions and ask the questions. Attachment B TRANSCRIPT    Page 15 of 17 Finance Committee Transcript November 15, 2016   Council Member Schmid: Okay, is this the right place to ask questions? What are we going to do? Chair Filseth: Maybe in two weeks. I going to offer a suggestion in two weeks when we start talking about the 2018 Budget, or the 2017 Budget might be… We have the Auditor here. Mr. Keene: I mean, with all due respect… Chair Filseth: We’re going to need policy here. Mr. Keene: Yeah, I mean I don’t think any external auditor wants to be put on the spot for making the policy recommendations and she has a responsibility to dispense the required responsibilities within the practice, and GASB and all sorts of other reporting requirements to do that, and that’s what she has done here. I would imagine that there isn’t a problem at all though if we’re sitting there and we’re having a policy discussion, let’s get real. Everything we’re going to do, I mean, we can point our fingers at CalPERS as much as we can. The real question is, how much extra money do we want to be putting aside as a City? I mean, it doesn’t matter. Nobody is going to come to our rescue on the outside, and so that’s really a, that’s a priority question, that’s a revenue and expenditure extreme question, but I’m sure if we called up our external auditor and said, if we were to start paying down our unfunded liability, would you think that’s a problem, I’m sure they would say we think that would be a good thing. They’d be happy to do that for us. Chair Filseth: Yeah, I think it is what it is and what we do is up to us. I mean, this process sort of helps us sort of scale where we are. Questions on other parts of the audit? Council Member Wolbach? Council Member Holman. Council Member Holman: This is a very simple one but I didn’t understand what it was about. So on the landfill closure liability, actual cost, post closure care costs may be higher due to inflation variances, changes in technology. What do changes in technology have to do with the landfill closure costs? That’s on Packet Page 13. Ms. Pon: Because right now in terms of the landfill post closure estimate, this is also an estimate in terms of what the liability is. It’s not something that you already have a bill and you know how much you are going to be paying, so that this, if there are changes in regulation or changes in technology that could improve the, or change the estimating technique, then the liability could be lower or it could be higher. Attachment B TRANSCRIPT Page 16 of 17 Finance Committee Transcript November 15, 2016 Council Member Holman: But I still don’t understand what changes in technology have to do with that. Regulations I understand, inflation variances I understand. Changes in technology I do not understand. Ms. Pon: Improved monitoring. Mr. Keene: Yeah, well, I don’t know. Is this saying this is one directional, this issue? I would think it could go both ways. Council Member Holman: I still don’t understand why that’s a fluctuating, why that’s an effect. What changes in technology would be an effect or could have an effect? Mr. Keene: Well, I could certainly see if we had some improved capping, more efficient venting, you know, how we would vent methane gases and, or whatever, or that certainly could have a positive effect. I’m not exactly sure on the technology side why we would have a negative effect that would generate increased costs. I could see on the regulatory side. We’re not connecting on this? Council Member Holman: I guess what I’m thinking of in changes in technology are not necessarily environmental technology. Is that what’s intended here, environmental technology? Mr. Keene: Mm-Hmm. Council Member Holman: Okay, that helps. Chair Filseth: So I actually didn’t have anything else. It looks good. Thank you. So let’s see, so what we said was we would proceed to the next item before we come back and make motions? Council Member Schmid: I think we had the discussion that I wanted to make, so I would be happy to move ahead with the vote. Chair Filseth: In that case do you want to move to accept Staff recommendation (inaudible). Do we want to move, do we have a Motion here? I’ll move it then. Recommend the Staff recommendation without having further comments or discussion. All in favor. Motion passes unanimously. Thank you very much. Attachment B TRANSCRIPT    Page 17 of 17 Finance Committee Transcript November 15, 2016   MOTION: Chair Filseth moved, seconded by Council Member Schmid to recommend the City Council approve the City of Palo Alto’s audited financial statements for the Fiscal Year ended June 30, 2016, and the accompanying reports provided by Macias Gini & O’Connell LP. MOTION PASSED: 4-0 Attachment B City of Palo Alto (ID # 7585) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Santa Clara County Firesafe Council Agreement Amendment Title: Approval of an Amendment to Stewardship Agreement Number S13147834 With Santa Clara County Fire Safe Council for an Additional Amount of $181,500 Annually for Three Years for a Total Amount Not-to- exceed $987,630 to Implement Elements of the Foothills Fire Plan (an Interdepartmental Initiative of Fire, Community Services, and Public Works) and Extend the Term two Years to June 30, 2020 From: City Manager Lead Department: Public Works Recommendation Staff recommends that Council approve and authorize the City Manager or his designee to execute an amendment to Stewardship Agreement S13147834 (Attachment A) with the Santa Clara County Fire Safe Council to add $181,500 annually and extend the term two years, for a total amount not to exceed $987,630.67 and term of seven years for an expanded scope of services. Executive Summary The contract with the Santa Clara County Fire Safe Council (SCCFSC) was initially established through Capital Improvement Program project Foothills Wildland Fire Mitigation PO-12003, to implement specific fuels treatment elements of the Foothills Fire Management Plan (adopted by Council in May 2009) that were beyond staff resources. Since then, tasks such as roadside clearing, vegetation management, and fuels assessment have required interdepartmental coordination and contract management meriting consolidation of multiple contracts into an amendment with the Santa Clara County Fire Safe Council. Background Stewardship Agreement S13147834 was signed in July 2013 to ensure the Santa City of Palo Alto Page 2 Clara County Fire Safe Council (SCCFSC) and City of Palo Alto cooperate in the preservation, protection and enhancement of the Foothills Fire Management Plan project area. In 2015, the Parks and Recreation Commission recommended to Finance Committee and Council (Attachment B pages 1 and 3, respectively) funding departments and levels for ongoing implementation of the Foothills Fire Plan. As part of the Fiscal Year 2016 Adopted Operating Budget annual funding was appropriated. An interdepartmental committee was established, consisting of Community Services, Public Works, Fire, Office of Emergency Services and Utilities Departments staff and they evaluated plan recommendations to identify tasks that could be more effectively and cost efficiently delivered by SCCFSC. The interdepartmental committee manages implementation of the Foothills Fire Plan, the agreement with the SCCFSC and an initial annual budget of $50,000 for tasks completed by SCCFSC. Discussion The continued scope of services includes roadside vegetation clearing, vegetation management in Foothills Park and open space preserves, fuels and fire danger assessments, and education, outreach and partnership programs for fire prevention or preparedness. Delay or denial of the amendment would delay fire prevention and pre- suppression thereby increasing fire danger. The SCCFSC has proven capable and efficient in implementing desired tasks, therefore an amendment to the stewardship agreement is recommended. Timeline The current 5-year stewardship agreement will expire on April 30, 2017. If approved, the amendment would extend the agreement to seven years for a June 30, 2020 expiration date. Resource Impact Funding is available in Fiscal Year 2017 departmental budgets to implement all City of Palo Alto Page 3 recommended tasks in the Foothills Fire Plan for the current year, including $60,000 from Fire, $54,800 from Public Works, and $66,700 from Community Services, for a total of $181,500. This funding will also be recommended to remain in the Fiscal Year 2018 Budget and ongoing as part of the upcoming FY 2018 Budget Process. Policy Implications This recommendation does not represent any change to existing City policies. Environmental Review (If Applicable) The recommended action is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301(h) (maintenance of existing landscape). Attachments:  Attachment A: S13147834 Santa Clara Fire Safe Council- Amendment No.1-Final  Attachment B: PRC recommendation to Council 28 April 2015 1 Revision July 20, 2016 AMENDMENT NO. 1 TO CONTRACT NO. S13147834 BETWEEN THE CITY OF PALO ALTO AND THE SANTA CLARA FIRE SAFE COUNCIL INC This Amendment No. 1 to Contract No. S13147834 (“Contract”) is entered into February 13, 2017, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Santa Clara County Fire Safe Council Inc., a California public benefit corporation organized under the California Nonprofit Public Benefit Corporation Law, located at 2053 Lincoln Avenue, Suite B, San Jose, California 95125 (“STEWARD”). R E C I T A L S A. The Contract was entered into between the parties for the provision of fire assessment, prevention, outreach and education, fuels treatment, and other purposes outlined in the Foothills Fire Management Plan (“FFMP”) and approved annual work plans. B. The parties now wish to amend the Contract to expand the scope of services, and extend the term for an additional two years, with a corresponding increase in the compensation. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Subsection 2.1 of Section 2 of the Agreement, entitled “SCOPE OF SERVICES” is hereby amended include the additional responsibility set forth in items E and G below, to read as follows: 2.2 The STEWARD shall: A. Coordinate all its activities in the FFMP Project Area with the City Manager or designee. B. Under the direction of the CITY, perform road clearing and other fuel reduction activities in accordance with the Plan. C. Under the direction of the CITY, provide and staff educational programs to educate the public about Defensible Space and wildfire protection. D. Under the direction of the CITY, provide chipping and other fuel reduction services to City resident and homeowners. E. Under direction of the City, assess vegetative fuel loads and recommend treatments or fire prevention measures Attachment A 2 Revision July 20, 2016 F. Under the direction of the CITY, mobilize volunteers for STEWARD’s FFMP Project Area projects and programs. G. Under the direction of the CITY, organize fundraising efforts for STEWARD’s FFMP Project Area projects and programs. H. Within one-hundred twenty (120) days after the Parties’ execution of the Agreement, and thereafter on or before October 1 of each subsequent year during the term of this Agreement, the STEWARD shall submit to the City Manager, or designee, a proposed written annual work plan of activities to be carried out in the FFMP Project Area during the current fiscal year (the “Work Plan”). Within 120 days of Agreement execution and thereafter on or before December 1 of each subsequent year, the STEWARD shall submit a proposed budget and request for CITY funding for the following fiscal year. The STEWARD and the City Manager, or designee, shall jointly review the Work Plan, the budget, and any request for CITY funding, and shall jointly develop performance objectives and standards for the STEWARD’S activities to be incorporated into the Work Plan. Upon approval, the City Manager, or designee, shall forward any budget request to the City Council in accordance with the CITY’s annual budget process. Any payments from approved requests for CITY funding will be made on an invoiced basis following completion of one or more approved activities as outlined in the annual Work Plan. Invoices shall be submitted no more frequently than monthly. Activities that may be included in annual Work Plans may include, but are not limited to the issues identified in this section. I. As of September 1, 2014, and on or before September 1 of each succeeding fiscal year during the term of this Agreement, the STEWARD and the City Manager, or designee, shall conduct a performance review, indicating the activities that have been carried out in the FFMP Project Area for the past fiscal year, and conformance to the agreed upon performance objectives and standards. The performance review shall serve as a basis for consideration of any requests for extension of the term of this agreement and related funding. J. The STEWARD may perform other services related to the preservation, protection and enhancement of the FFMP Project Area, as approved, in writing, by the CITY SECTION 2. Subsection 2.4 of Section 2 of the Agreement, entitled “SCOPE OF SERVICES” is hereby amended increase compensation, to read as follows: 2.4 As compensation for the services fully and faithfully being provided during the Term specified in Section 3.1 by the STEWARD hereunder, the CITY shall pay the STEWARD the first year’s payment upon signing and receipt of the STEWARD’S invoice and thereafter at the beginning of each following fiscal year commencing July 1, 2014, the amount of fifty thousand dollars ($50,000.00) for year 1, year 2 and year 3. The CITY shall pay the STEWARD’S invoices for activities completed in an approved annual work plan, the amount not to exceed two hundred ninety three thousand one hundred thirty one dollars ($293,131.00) for year 4. 3 Revision July 20, 2016 The CITY shall pay the STEWARD’S invoices for activities completed in an approved annual work plan, the amount not to exceed one hundred eighty-one thousand five hundred dollars ($181,500.00) per each year, for year 5, year 6 and year 7. The cumulative total not-to-exceed amount under this Contract is Nine Hundred eighty seven thousand six hundred thirty one Dollars ($987,631.00). SECTION 3. Subsection 2.5 of Section 2 of the Agreement, entitled “SCOPE OF SERVICES” is hereby deleted in its entirety. 2.5 The payment amount set forth in Section 2.4 above will be adjusted on each July 1 of FY 2014-15, FY 2015-16 and FY 2016-17. The amount of the adjusted compensation will be negotiated by the Parties on or before July 1 of 2014, 2015 and 2016, respectively, and be based on an adjustment factor reflected in the Consumer Price Index - All Urban Consumers for the San Francisco-Oakland- San Jose MSA. FY 2013-14 will be considered the base year 100 for purposes of the adjustment calculation. SECTION 4. Section 3 of the Agreement, entitled “TERM: EXTENSION; TERMINATION” is hereby amended to extend the termination date from June 30, 2018 to June 30, 2020, and delete the provision providing for periodic extensions, to read as follows: 3.1 The term of this Agreement (the "Term") shall be seven (7) years, commencing on July 1, 2013, unless it is earlier terminated as herein provided. 3.2 Either Party may terminate this Agreement at any time, with or without cause, upon thirty (30) days' prior written notice given to the other Party. Upon such written notice delivered to STEWARD, it will promptly discontinue its performance of services. 3.3 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. STEWARD agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and STEWARD waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY, but retains a non-exclusive right to continue to use all such items, which are not the CITY’s confidential materials or documents. STEWARD makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work nor use by the CITY or others in the future. 3.4 Upon a suspension or termination, STEWARD shall thereafter deliver to the CITY Manager, within a reasonable time, a copy of the studies, sketches, drawings, computations, and other data, whether or not completed, which have not been previously delivered to the CITY, prepared by STEWARD or its contractors, if any, or given to STEWARD or its 4 Revision July 20, 2016 contractors, if any, and are connected with this Agreement. Such materials will become the property of CITY. 3.5 Upon a suspension or termination by CITY, STEWARD 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 STEWARD, CITY will be obligated to compensate STEWARD only for the greater of the portion of STEWARD’s services which are of direct and immediate benefit to CITY or the portion(s) which the CITY may utilize, as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. 3.6 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 5. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO City Manager (Contract over $85k) Purchasing Manager (Contract over $25k) Contracts Administrator (Contract under $25k) APPROVED AS TO FORM: City Attorney or designee (Contract over $25k) Contracts Administrator (Checklist Approval) SANTA CLARA FIRE SAFE COUNCIL INC. Officer 1 By: Name: Title: Officer 2 (Required for Corp. or LLC) By: Name: Title: Memorandum DATE: April 28, 2015 TO: Finance Committee FROM: Parks and Recreation Commission REGARDING: Support for Funding to Implement the Foothills Fire Management Plan. The Foothills Fire Management Plan was adopted by Council on May 18, 2009. The objectives of the plan are: life safety, structure and infrastructure protection, ignition prevention, fire containment, and natural resource protection and enhancement. The plan was developed with lesson learned from the Oakland Hills Fire and the associated loss of lives. Palo Alto’s foothills have very similar conditions to the areas of the Oakland Hills, and the plan goals are designed to address and mitigate the impacts of fire hazards. The Plan identifies 51 areas (approximately 330 acres of City land) where treatments are to be conducted. These treatments are found within Foothills Park, Pearson-Arastradero Preserve, and 12 miles of City roadways. The highest priorities are the treatment of roadways which are evacuation routes and entrapment hazards (citizens to evacuate and allow emergency personnel and equipment to access safety). Roadside treatments also helps protect city infrastructure (water reservoirs, electric and gas lines) which would be severely impacted by a foothills fire. The Plan identifies a five year cycle of treatments. The five-year costs to implement the first cycle of recommended projects were estimated to be approximately $700,000 in 2009. In FY12, Council approved a new CIP (PO-12003) Foothills Wildland Fire Mitigation Program, which was funded for $200,000 for FY12. The project requires significant staff management. Fire, Police, Public Works, Emergency Services, and Community Services Departments all lacked the available staff time to effectively manage the project. In FY 2013, the City formed a partnership with the Santa Clara County Fire Safe Council to secure their assistance in managing and implementing the project. Since forming the partnership with the Fire Safe Council the following Plan treatments have been implemented: 1. Evacuation routes on: a. Arastradero Road (30-ft on city owned land; 10-ft on private property) b. Los Trancos Road (10-ft easement only) c.Approximately 1-1/2 miles of Page Mill Road (north side only) 2.Vegetation clearing core sections of Foothills Park a.Towle Camp (campground) b. Wildhorse Valley road (evacuation route) c. Oak Grove Picnic Area and restroom (100-ft defensible space) d.Orchard Glen Picnic area and restroom e.Foothills Park maintenance shop (100-ft defensible space) f.Fire Station 8 (100-ft defensible space) g.Corte Madera Water Tank (100-ft defensible space) h. Corte Madera Pump Station (100-ft defensible space) Attachment B i. Boronda Water Tank (100-ft defensible space) j. Boronda Pump Station (100-ft defensible space) k. Park Water Tank (100-ft defensible space) The remaining balance of the CIP (PO-12003) Foothills Wildland Fire Mitigation Program is $49,000. Staff anticipates the existing CIP funding will be exhausted by end of FY15. The consultant who wrote the Foothills Fire Management Plan recently provided an updated estimate of the funding required to achieve the goals of the Fire Plan. The total FY16 funding needed for this project is $181,500; however, since the Fire Department already has $60,000 budgeted for this work, the total new annual funding requested for this project is $121,500. The partnership with the Fire Safe Council will allow staff to fully utilize this funding. The funds needed for subsequent years will vary. It is anticipated that FY17 will require less funding (CSD will require approximately $48,000 in FY17), while some future years will cost more due to the cycles of vegetation treatment. The costs for funding the Fire Plan are divided between Community Services, Public Works, and the Fire Departments. Fire: $60,000. (Fire already has $60,000 in their on-going budget for this work, so there will be no additional funding requested by the Fire Department) -Planned prescribed burns and/or risk assessment and training about wildland fire behavior $56,000. -1/3rd of project management consultant $4,000. Public Works: $54,800 -Cost of treating roadsides totals $40,800. -Cost for road side survey work $10,000 -1/3rd of project management consultant $4,000. Community Services: $66,700 -Treatments inside City parklands are estimated to total $52,700 -Cost for in-park survey work $10,000 -1/3rd of project management consultant $4,000. The Parks and Recreation Commission strongly supports fully funding this critical fire protection program. Date: May 26, 2015 To: Palo Alto City Council From: PRC Re: Memorandum to City Council recommending that funds for implementing the Foothills Fire Management Plan be incorporated and approved annually as part of the fiscal year operating budget. Summary: Public safety for Palo Alto residents and visitors in all of our parks and open space is the highest priority for PRC. The Foothills Fire Management Plan was adopted by Council on May 18, 2009. The objectives of the plan are: life safety, structure and infrastructure protection, ignition prevention, fire containment, and natural resource protection and enhancement. These treatments are found within Foothills Park, Pearson-Arastradero Preserve, and 12 miles of City roadways. The highest priorities are the treatment of roadways which are evacuation routes and entrapment hazards (for citizens to evacuate and to allow emergency personnel and equipment to access the areas). In 2009 the five-year costs to implement the first cycle of recommended projects were estimated to be approximately $700,000. In 2012 a $200,000 CIP to implement the Fire Plan was approved. Staffing constraints precluded work until 2013 when interdepartmental arrangement among Community Services, Public Works and the Fire Department did substantial work and used $151,000 of this CIP leaving only $49,000, which will be spent by the end of this fiscal year and is actually insufficient for the planned work. Tonight the PRC passed the following motion: To insure that residents are protected from fire risks in Foothills Par and Arastradero Preserve, PRC recommends that council approve necessary maintenance for the Foothills Fire Management plan annually and routinely in the respective departmental budgets rather than have this work be subject to prioritization, and potential non-approval, of longer term CIP projects. The joint department implementation plan and projected budget from CSD staff is attached for your reference. City of Palo Alto (ID # 7677) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Utilities 2017 Legislative Guidelines Title: Adoption of a Resolution Approving the 2017 City of Palo Alto Utilities Legislative Policy Guidelines From: City Manager Lead Department: Utilities RECOMMENDATION Staff and the Utilities Advisory Commission (UAC) recommends that Council adopt the attached resolution (Attachment A) approving amendments to the Utilities Legislative Policy Guidelines, as recommended by the UAC on January 11, 2017. EXECUTIVE SUMMARY Each year, Utilities Department staff drafts legislative and regulatory guidelines reflecting forthcoming and historical issues and priorities. These draft guidelines are reviewed by the UAC prior to moving to the City Council for approval. This year, at its January 11, 2017 meeting, the UAC reviewed and voted unanimously to recommend that Council approve the amended guidelines. BACKGROUND The utility industry is a high-profile and heavily regulated industry subject to continuous legislative action at both the state and federal levels. Such legislation can influence, among other things, the reliability and security of the supply and distribution infrastructure, customer service and billing, program design, rate design, and activities and costs associated with climate protection. Recognizing the high-profile and subject-specific nature of the utilities industry and the fast past of the legislative and regulatory process, the Utilities Department annually prepares a set of guidelines for review and approval by both the UAC and the City Council. The Utilities Legislative Guidelines were drafted parallel to the City’s Legislative Priorities and Legislative Program Manual (2017 update), as approved the Policy and Services Committee on November 29, 2016. The Guidelines contain complementary goals such as preserving and enhancing local accountability and oversight, ensuring system/program reliability, and preserving reasonable rates. These Utilities department-specific priorities are intended to City of Palo Alto Page 2 operate in conjunction with the City’s priorities, and are consistent with the City’s overarching legislative principles. DISCUSSION The proposed Utilities Legislative Policy Guidelines (Exhibit 1) were updated to respond to recent legislative and regulatory trends. At its January meeting, the Commission discussed whether the policies covered regulatory advocacy in addition to legislative and whether they provided staff with the ability to respond to federal legislative proposals. The Commission also discussed Western issues, both the Central Valley Project and regionalization of the California energy markets. After discussion, the UAC voted to recommend approval of the 2017 Legislative Guidelines as modified by: (1) Moving the guideline “support infrastructure and reliability, including equitable allocation of funds for increasing the security of infrastructure” from the suggested Wastewater category to the All Utilities category; and (2) Ensuring the Fiber category reflected the appropriate “dig once” wording. Staff incorporated those changes to Exhibit 1. Attachment A is the resolution for Council’s consideration, Attachment B is the redlined version of the 2017 update, and Attachment C is the draft minutes of the UAC meeting. RESOURCE IMPACT There is no direct resource impact associated with adoption of the proposed legislative policy guidelines. However, actions taken that support the efficient use of the City’s assets and resources will help control costs, implement the Council’s policies and goals, and protect utility customers. POLICY IMPLICATIONS The recommendation is consistent with Council policy and supports the Utilities Strategic Plan’s objectives of: ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. ENVIRONMENTAL REVIEW The Council’s adoption of a resolution adopting the Utilities Legislative Policy Guidelines is not a project requiring California Environmental Quality Act (CEQA) review, under California Public Resources Code Sec. 21065, 21080(b)(8), and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. Attachments:  Exhibit 1: 2017 Utilities Legislative Guidelines  Attachment A: RESO Legislative Guidelines  Attachment B: Changes from 2016 guidelines  Attachment C: Draft Minutes of the January 11 UAC Special Meeting Utilities Legislative Policy Guidelines January 2017 Update Page 1 of 16 EXHIBIT 1 Approved by City Council on February 13, 2017; Resolution #--- Utilities’ Legislative Policy Guidelines Formal advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities General Manager or City Manager. ALL UTILITES Goals 1.Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2.Support efforts to maintain or improve the reliability of the supply, transmission, storage and distribution/collection infrastructures. 3.Support government action that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, supporting electrification efforts, and recognizes early voluntary action advancing both. 4.Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 1.Advocate goals through active participation in joint action efforts, including supporting the efforts of common goals through external organizations Federal, State, and Regional  2.Support legislation that results in locally designed, cost-effective and efficient solutions to the goal of GHG emissions reductions. Federal, State, and Regional  3.Promote legislation and regulations that have undergone stakeholder review and cost benefit analysis to support effective and consistent reporting requirements, customer communications, and program results Federal, State, and Regional Reliability Councils  Utilities Legislative Policy Guidelines January 2017 Update Page 2 of 16 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 4.Oppose unreasonable and inequitable financial burdens and support policy changes that assist customers through active participation in the legislative activities of the Northern California Power Agency (NCPA) and the California Municipal Utilities Association (CMUA). Federal, State, and CPUC  5.Advocate for state and federal grants for local and regional energy efficiency and conservation measures, renewable resources, fiber, fuel switching, wastewater collection systems and recycled water projects. Federal and State  6. Maintain right of way access for utility infrastructure. Federal and State  7.Protect the value of existing assets and contracts and local regulatory approvals of same. Federal and State  8. Support government action allowing CPAU to maintain customer confidentiality. State  9.Maintain existing low cost municipal financing options for infrastructure projects and advocate for new federal and state programs that recognize critical infrastructure needs. Federal and State  10.Promote utility legislation and regulations that support reasonable and consistent notification, compliance, and reporting requirements for operations, services, communications, billing and payments. Federal and State  Utilities Legislative Policy Guidelines January 2017 Update Page 3 of 16 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability & Infrastructure 3. Climate Protection 4. Service & Cost Control 11. Through Account Representatives, educate key customer accounts about significant policy actions that could affect their business Local  12. Oppose government action that could adversely impact our customers or that include mandates we could not reasonably achieve. Federal and State  13.Support cap-and-trade market designs that: protect consumers from the exercise of market power; allocate allowances that mitigate impacts to Palo Alto customers while preserving City environmental goals; advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues; provide flexible compliance mechanisms such as banking and borrowing of allowances; and allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. State  14.Support infrastructure security and reliability including equitable allocation of funds for increasing the security of infrastructure. Regional/ State  Utilities Legislative Policy Guidelines January 2017 Update Page 4 of 16 ELECTRIC Goals 1.Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2.Preserve/enhance the reliability, local oversight, and security of infrastructure. 3.Support legislation that recognizes early voluntary action to combat climate change including initiatives to reduce GHG emissions and specifically exempts a municipality from burdensome requirements in subsequent legislation that could result from the early action. 4.Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 1.Advocate goals through NCPA, CMUA, American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and the Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff to speak with a coordinated voice. Federal and State  2.Support NCPA in its continued efforts to streamline state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State  3.Advocate for legislation/regulations that provide local accountability and support for: locally-designed and implemented solar programs and rates development of long-term plans and reasonable and flexible integrated resource planning requirements development of distributed energy resources and plans, and standards and permitting requirements for connecting such resources to the local distribution system; transparent and consistent accounting and reporting of CHG emissions and portfolio content; balancing state and local policy Federal and State  Utilities Legislative Policy Guidelines January 2017 Update Page 5 of 16 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control implementation and ratepayer equity; equitable rate design and tariffs; cost-effective electric efficiency and demand-side management programs; implementation of renewable portfolio standards in a reasonable manner; cost-effective and locally beneficial storage; direct access; advanced meters and smart grid design and implementation; use of public benefit funds (as allowed in AB 1890 (1996); and Electrification, including electric vehicle infrastructure 4.Support legislation for renewable portfolio standards that: maintain local compliance authority; avoid mandates for technology or source specific carve outs; allow utilities to pursue the most cost effective resources available to meet portfolio needs including use of Renewable Energy Certificates (RECs); ensure fair application of RPS standards, avoiding punitive and/or duplicative non- compliance penalties; restrict extension of CEC jurisdiction and attempts of the CPUC to claim jurisdiction or obtain de facto jurisdiction over Publicly Owned Utilities; allow local distributed generation to count in full towards RPS; and prioritize the use of the existing transmission system over building new transmission. Local and State  5.Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding solutions/options for projects that: enhance/ensure reliability; ensure equitable cost allocation following beneficiary pays principles (including protection against imposition of state- Local, State, and Federal  Utilities Legislative Policy Guidelines January 2017 Update Page 6 of 16 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control owned electric contract costs on municipal utility customers); improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards); support the continuation of federal and state financial incentives that promote increased renewable development; improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation); and reduce the environmental impact on the Bay Area and the Peninsula. 6.Advocate for actions on matters impacting the Western Area Power Administration (Western) such as: support Congressional hearings to explore modernizing regulation and generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries; protection of the status of Western Power Marketing Administration and cost-based rates; provisions for preference customers’ first take at land available with economic potential for wind farms; balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts without compromising the primary mission of Western and recognizing the achievements already made in California without adding duplicate costly efforts; monitoring and evaluating impacts of Delta conveyance proposals on Western Base Resource allocation; and advocating for an equitable distribution of costs between water and power customers of the Central Valley Project. Federal, State and Regional  Utilities Legislative Policy Guidelines January 2017 Update Page 7 of 16 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control advocating for clear product provisions, fair allocation of Base Resource Capacity and fair contract terms under Western’s 2025 Power Marketing Plan and new Western Base Resource contracts. 7.Advocate for actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) and the Western Electricity Coordinating Council (WECC). Federal, State and Regional  8.Support fair and reasonable application of grid reliability requirements established by NERC, WECC, and FERC and seek appropriate remedies (if needed) for punitive application of fees and fines. Federal and Regional  9.Work with CAISO and/or FERC: to give buyers of renewable intermittent resources relief from imbalance penalties; to promote financial and operational changes that result in timely and accurate settlement and billing; and to provide critical input on the need for various transmission projects in light of the escalating costs to the City to import power using the bulk transmission system. Federal and State  10.Monitor cyber security issues to ensure that CPAU, which currently does not have critical cyber assets, retains local control over its cyber security needs while remaining exempt from NERC cyber security standards. Support NCPA to protect it and its member agencies from unnecessary cyber security regulations. Federal and Regional  Utilities Legislative Policy Guidelines January 2017 Update Page 8 of 16 FIBER OPTIC Goals 1.Preserve and enhance the authority of local government to (1) develop broadband solutions that align with community needs and (2) expand consumer choice for competitive Internet connectivity and other advanced services delivered over fiber-optic networks. 2.Encourage the competitive delivery of broadband services by permitting the use of public rights-of- way and Utilities infrastructure in a responsible manner, provided that local rights of way authority and management is preserved and the use does not compromise the City’s existing utility safety and services obligations. 3.Support local government authority over zoning-related land use for communications infrastructure in accordance with reasonable and non-discriminatory regulations. 4.Support the Council’s Technology and the Connected City initiative to fully leverage the City’s fiber- optic asset to provide ubiquitous and reliable ultra-high-speed broadband connectivity. Goals Legislative Policy Guidelines Venue 1.Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 1.Advocate for these goals through the APPA, CMUA, National Association of Telecommunications Officers and Advisors (NATOA), National League of Cities (NLC), and the Next Century Cities initiative (NCC), with support from City staff. Federal and State  2.Support legislation and regulations that preserve and enhance municipal delivery of conventional and advanced telecommunication services as prescribed by the Telecommunications Act of 1996. Federal and State  3.Support the goals of the Federal Communications Commission’s (FCC), National Broadband Plan to improve Internet access nationwide. Federal and State  4.Oppose legislation and regulations that benefit the incumbent cable TV and telephone companies at the expense of community-owned fiber-optic and wireless networks. Federal and State  5.Support legislation and regulations that preserve and enhance consumer protections related to the incumbent providers of telecommunication Federal and State  Utilities Legislative Policy Guidelines January 2017 Update Page 9 of 16 Goals Legislative Policy Guidelines Venue 1.Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives services. 6.Continue to support the Council’s municipal fiber and wireless initiatives. Local  7.Support legislation and regulations that: Permit the use of public right-of- way and Utilities infrastructure; Preserve local rights-of-way authority and management; Preserve local government zoning and siting authority for wireless and wireline communication facilities; Support local “dig once” policies to deploy infrastructure such as communications conduit for future fiber and wireless networks capable of delivering next- generation broadband services Oppose legislation and regulations that reduce compensation received by local governments for the use of the public rights-of-way and other public properties that support communication infrastructure . Federal, State and Local  Utilities Legislative Policy Guidelines January 2017 Update Page 10 of 16 NATURAL GAS Goals 1.Preserve/enhance the ability of municipal utilities to develop their own demand side efficiency and conservation programs, alternative gas supplies, and rate structure. 2.Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 3.Support efforts to reduce greenhouse gas emissions and protect the environment. 4.Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environ- ment 4. Cost Control 1.Leverage the American Public Gas Association (APGA) to assist in natural gas goals . Primarily Federal with minor advocacy at State level  2.Work with NCPA and CMUA to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State  3.Support cost effective renewable gas supplies from in or out of state sources. Advocate for locally reasonable mandated renewable portfolio standards. Federal and State  4.Advocate for financing or funding for cost-effective natural gas efficiency and solar water heating end uses. Federal and State  5.Support market transparency and efforts to eliminate market manipulation through reasonable oversight. Federal  6.Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal  7.Support efforts to improve pipeline safety. Federal and State  8.Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. State  Utilities Legislative Policy Guidelines January 2017 Update Page 11 of 16 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environ- ment 4. Cost Control 9.Oppose legislative proposals resulting in unreasonable costs for Palo Alto’s customers. Federal and State  10.Support legislation that aims to protect public health and encourages transparency regarding hydraulic fracturing or “fracking” for natural gas development, while opposing blanket moratoriums that aren’t supported by science. Federal and State  Utilities Legislative Policy Guidelines January 2017 Update Page 12 of 16 WASTEWATER COLLECTION Goals 1.Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 2.Encourage efforts to increase the reliability of the local wastewater collection systems. 3.Maintain the provision of reliable and sustainable wastewater collection service at a fair price. 4.Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly, time-intensive reporting requirements and improve value and accuracy of information reported to the public. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliable Infrastructure 3. Maintain service 4. Valuable reporting 1.Advocate goals through active participation in the Association of Bay Area Governments (ABAG), and CMUA. Local, Regional & State  2.Support regulations of wastewater collection systems that recognize: local jurisdictions’ proactive efforts to replace and maintain wastewater collections systems; the need to provide affordable and cost based collection service; and the unique characteristics of each collection system. Local, Regional & State  3.Support provision of sufficient resources for regional agencies to enable them to advocate for: environmentally sustainable, reliable wastewater collection service at a fair price; and regional comparisons of wastewater collection projects for future state grant funding. Local and Regional  4.Advocate for funding and local regulations for wastewater collections system projects and requirements that reduce overflows and improve collection system efficiency. Regional, State and Federal  Utilities Legislative Policy Guidelines January 2017 Update Page 13 of 16 WATER Goals 1.Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the ability to optimize volumetric and fixed charges to balance the goals of revenue certainty and water use efficiency. 2.Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 3.Support efficiency and recycled water programs in order to minimize the use of imported supplies. 4.Maintain the provision of an environmentally sustainable, reliable supply of high quality water at a fair price. Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 1.Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA) and CMUA, with support from Palo Alto staff for BAWSCA. Local, Regional and State  2.Advocate to ensure that legislative actions regarding the Hetch Hetchy Regional Water System include: timely rebuilding of the regional water system; assurance that the SFPUC is adequately assessing and mitigating risks of infrastructure failure; maintenance of the quality of delivered water; minimization of any increase in the cost of water; no additional exposure to more frequent or severe water shortages; support for the existing water system and its operation. Local, Regional and State  3.Advocate for interpretations or implementation of Water Code provisions that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional and State  Utilities Legislative Policy Guidelines January 2017 Update Page 14 of 16 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 4 .Support BAWSCA in efforts to achieve: an environmentally sustainable, reliable supply of high quality water at a fair price; a SFPUC rate structure that is consistent with the Water Supply Agreement and is based on water usage; a contract amendment to modify the drought time water allocation between the SFPUC and the BAWSCA agencies; preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system; and regional planning for conservation, recycled water, and other water supply projects. Local and Regional  5.Advocate for actions that: preserve Palo Alto’s existing contractual rights; preserve local control over water use; and limit encroachment from outside jurisdictions. Local and Regional  6.Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional and State  7.Support notification requirements that inform residents/customers but do not inflict undue or unobtainable requirements on the utility. State  8.Support local control of public benefit funding levels and program design. State  9.Support beneficiary pays methodologies to prevent taxes or fees imposed on SFPUC customers to fund infrastructure improvements and costs of water sources that do not serve Palo Alto customers. State and Regional  Utilities Legislative Policy Guidelines January 2017 Update Page 15 of 16 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 10.Advocate for financing, funding, and, where applicable, tax exemption, for water conservation programs, water rebate programs, and recycled water projects that meet end-use needs and conserve potable water; oppose legislation that would reduce such funding. State, Regional and Federal  11.Support legislation that promotes responsible groundwater management. State  12.Support Proposition 218 reform efforts to provide ratemaking flexibility to balance preservation, revenue sustainability, and low income programs. State  13.Advocate for water conservation policies (both drought response and long term) that achieve water sustainability while minimizing customer and commercial impact, protecting the City’s urban canopy and minimizing the City’s enforcement costs. Local and State  14.Protect SFPUC’s water rights.Local and State  15.Support legislation that would protect the City’s infrastructure and treatment investments from future state-wide cuts in water use. State  16. Oppose government action that creates undue burdens on or unreasonably expands the role and responsibility of water suppliers. State  Not Yet Approved 170131 jb 6053903 January 2017 Update Resolution No. _____ Resolution of the Council of the City of Palo Alto Approving the City of Palo Alto Utilities’ Legislative Policy Guidelines R E C I T A L S A. The City of Palo Alto Utilities Strategic Plan (“Strategic Plan”), approved by the Palo Alto City Council on July 18, 2011, [Staff Report #1880], and amended on August 5, 2013 (Staff Report #3950), provides a set of Strategic Objectives for the City of Palo Alto Utilities Department (CPAU) to follow in ensuring a reliable and safe supply of utility resources, providing customer service excellence, managing costs, and ensuring environmental sustainability. B. CPAU annually identifies Utilities’ Legislative Policy Guidelines that facilitate the Strategic Plan’s Strategic Objectives, and advocates for utility-related issues at Federal and State legislative forums in furtherance of those objectives. C. Action on some of these issues may require active involvement of Palo Alto elected and appointed officials. D. The Utilities’ Legislative Policy Guidelines were presented to the UAC at its January 11, 2017 meeting, and the UAC voted unanimously to recommend that the City Council approve the Utilities’ Legislative Policy Guidelines. The Council of the City of Palo Alto hereby RESOLVES as follows: SECTION 1. The Council hereby adopts the resolution approving the Utilities Legislative Policy Guidelines, effective February 13, 2017. All prior versions of the City of Palo Alto Utilities Legislative Policy Guidelines are hereby repealed and replaced in their entirety by the Utilities Legislative Policy Guidelines, attached to this Resolution as Exhibit 1. SECTION 2. Staff will review the Guidelines annually and any proposed changes will be approved by City Council. SECTION 2. The Council finds that the adoption of this resolution is not a project requiring California Environmental Quality Act (CEQA) review, under California Public Resources ATTACHMENT A Not Yet Approved 170131 jb 6053903 January 2017 Update Code Sec. 21065, 21080(b)(8), and CEQA Guidelines Section 15378(b)(5), because it is an administrative governmental activity which will not cause a direct or indirect physical change in the environment. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Senior Deputy City Attorney City Manager ___________________________ Asst. City Manager/Utilities General Manger ___________________________ Director of Administrative Services Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 1 of 22 EXHIBIT A Approved by City Council on January XX, 2017; Resolution #--- Utilities’ Legislative Policy Guidelines Formal advocacy positions taken in alignment with these guidelines will be subject to the approval of the Utilities General Manager or City Manager as per the City’s Legislative Program Manual. ALL UTILITES Goals 1.Preserve/enhance local accountability in the control and oversight of matters impacting utility programs and rates for our customers while balancing statewide climate protection goals. 2.Support efforts to maintain or improve the reliability and security of the supply, transmission, storage, and distribution/collection, and data infrastructures. 3.Support legislationgovernment action that makes bold progress in cost effectively reducing greenhouse gas (GHG) emissions, , supporting electrification efforts, and recognizes without penalizing early voluntary action, and supports statewide climate protection goals advancing both. 4.Maintain the City of Palo Alto Utilities’ (CPAU’s) ability to provide safe, reliable, sustainable, and competitively-priced utility services. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 1.Advocate goals through active participation in joint action efforts., including supporting the efforts of common goals through external organizations Federal, State, and Regional     2.Support legislation that allows local evaluationresults in locally designed, cost-effective and design of more efficient energy solutions, fuel switching, and demand control programs to the goal of GHG emissions reductions. Federal, State, and Regional    ATTACHMENT B Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 2 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 3. Promote utility legislation and regulations that have undergone stakeholder review and cost benefit analysis to support effective and consistent compliance and reporting requirements. Ensure such legislation, customer communications, and regulations have received stakeholder review and cost benefit analysis.program results Federal, State, and Regional Reliability Councils    4. Oppose unreasonable and inequitable financial burdens and support policy changes that assist customers through active participation in CMUA and NCPAthe legislative activities. of the Northern California Power Agency (NCPA) and the California Municipal Utilities Association (CMUA). Federal, State, and CPUC   5. Advocate for state and federal grants for local and regional energy efficiency and conservation measures, renewable resources, fiber optic, fuel switching, wastewater collection systems and recycled water projects. Federal and State    6. Maintain right of way access for utility infrastructure. Federal and State   7. Protect the financial and operational value of utilityexisting assets and contracts; preserve and local regulatory controlapprovals of bothsame. Federal and State    Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 3 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 8. Enhance utilitySupport government action allowing CPAU to maintain customer protections for data security and confidentiality. Federal and State   9. Maintain existing low cost municipal financing options for infrastructure projects and advocate for new federal and state programs that recognize critical infrastructure needs. Federal and State    10. Oppose government action that could adversely impact our customers or that include mandates we could not reasonably achieve. Federal and State   11. Promote utility legislation and regulations supportingthat support reasonable and consistent notification, compliance, and reporting requirements for utility notifications, , safetyoperations, services, public communications, billing, and payments, and customer assistance. Federal and State   12. Through Account Representatives, educate key customer accounts about significant policy actions that could affect their business Local   Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 4 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 13. 11. Support Proposition 26 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income assistance programs.Oppose government action that could adversely impact our customers or that include mandates we could not reasonably achieve. Federal and State   Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 5 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability, Security & Infrastructure 3. Climate Protection 4. Service & Cost Control 14. Support cap-and-trade market designs that: • protect consumers from the exercise of market power; • allocate allowances that mitigate impacts to Palo Alto customers while preserving City environmental goals; • advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues; • provide flexible compliance mechanisms such as banking and borrowing of allowances; and • allocate funds generated from cap-and-trade markets to GHG related activities, not as a revenue source for state or federal general funds.12. Seek state and regional funding to enhance the efficiency, security, and reliability of infrastructure that maintains utility customer data security and confidentiality. Federal and State     Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 6 of 22 ELECTRIC Goals 1. Preserve/enhance the ability of municipal utilities to exercise local accountability and oversight over matters impacting customer service, programs (such as demand side efficiency and conservation programs), and rate structure. 2. Preserve/enhance the reliability, local oversight, and security of infrastructure. 3. Support legislation that recognizes early voluntary action in reducingto combat climate change including initiatives to reduce GHG emissions and specifically exempts a municipality from burdensome requirements in subsequent legislation that could result from the early action. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control 1. Advocate goals through Northern California Power Agency (NCPA), California Municipal Utilities Association (, CMUA),, American Public Power Association (APPA), Transmission Agency of Northern California (TANC), and the Bay Area Municipal Transmission Group (BAMx) with support from Palo Alto staff; strive to present the same or substantially the same messagespeak with a coordinated voice. Federal and State     2. Support NCPA in its continued efforts to streamline the state regulatory reporting responsibilities, to eliminate duplicative data and report submittals to multiple state regulatory agencies, including the CEC, CARB, and the California Independent System Operator (CAISO). State   3. Advocate for legislation/regulations that provide local accountability and design ofsupport for: • Net Energy Metering (NEM) successor programs designed to fit local conditions and priorities; • Electric Integrated Resource Plans • cost-effective renewablelocally-designed and implemented solar programs and rates • development of long-term plans and reasonable and flexible integrated resource planning requirements • development of distributed Federal and State     Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 7 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control generationenergy resources and cogeneration projectsplans, and standards and permitting requirements for connecting such resources to the local distribution system; • transparent and consistent accounting and reporting of GHG emissions and portfolio content; • balancing state and local policy implementation and ratepayer equity; • equitable rate design and tariffs; • cost-effective electric efficiency and demand-side management programs; • implementation of renewable portfolio standards in a reasonable manner; • cost-effective and locally beneficial storage integration; • direct access requirements; • smartadvanced meters and smart grid design and implementation; and • use of public benefit funds (as allowed in AB 1890 (1996)); and • Electrification, including electric vehicle infrastructure 4. Support cap-and-trade market designs that: • protect consumers from the exercise of market power; • allocate allowances that help mitigate impacts to Palo Alto customers while providing incentives for utilities to lower GHG emission portfolios; • provide flexible compliance mechanisms such as banking and borrowing of allowances; and • allocate funds generated from cap-and- trade markets to cost-effective GHG- reduction related activities, not as a revenue source for state or federal general funds. Federal and State    5.4. Support legislation for renewable portfolio standards that: • maintain local compliance authority; • avoid mandates for technology or source specific carve outs, and minimum term Local and State    Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 8 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control requirements; • allow utilities to pursue allthe most cost- effective resources available to meet portfolio needs including use • of Renewable Energy Certificates (RECs); • ensure uniformfair application of RPS standards, avoiding punitive and/or duplicative non-compliance penalties; • restrict new regulations expandingextension of CEC jurisdiction and attempts of the CPUC to claim jurisdiction or obtain de facto jurisdiction over publicly owned utilitiesPublicly Owned Utilities; • allow local distributed generation to count in full towards RPS; and • prioritize the use of the existing transmission system assets over building new transmission. 5. Support/encourage transmission, generation, and demand-reduction projects and solutions including advocating for financing or funding 6.solutions/options for projects that: • enhance/ensure reliability; • ensure equitable cost allocation following beneficiary pays principles (including protection against imposition of state- owned electric contract costs on municipal utility customers); • improve procurement flexibility (e.g. resource adequacy rules that ensure reliability and provide flexibility in meeting operational requirements or flexibility in meeting State renewable portfolio standards); • support the continuation of federal and state financial incentives that promote increased renewable development; • improve market transparency (particularly transparency of IOU’s transmission and procurement planning and implementation activities); and • reduce negative the environmental impactsimpact on the Bay Area and the Local, State, and Federal     Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 9 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control Peninsula. 7.6. Advocate for Congressional, legislative, or administrative actions on matters impacting costs or operations of the Western Area Power Administration (Western) such as: • support of Congressional Field Hearingshearings to explore modernizing flood control strategies, river regulation and generation strategies at Central Valley Project (CVP) plants to enhance generation, water delivery, flood control and fisheries; • protection of the status of Western Power Marketing Administration and cost-based rates; • provisions for preference customers’ first take at land available land with economic potential for wind farms; • balancing efforts for competing environmental improvements in rivers and Delta conditions with water supply and hydropower impacts; • support grid modernization without compromising the primary mission of Western and recognizing the achievements already made in California without adding duplicate costly efforts; • monitoring and evaluating impacts of Delta conveyance proposals on Western Base Resource allocation; and • advocating for an equitable distribution of costs between water and power customers of the Central Valley Project; and • advocating for clear product provisions, fair allocation of Base Resource Capacity and fair contract terms under Western’s 2025 Power Marketing Plan and new Western Base Resource contracts. Federal, State and Regional    8.7. Advocate for Congressional or administrative actions on matters relating to overly burdensome reporting and compliance requirements established by the North American Reliability Corporation (NERC), the Federal Energy Regulatory Commission (FERC) Federal, State and Regional    Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 10 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability 3. GHG Reduction 4. Cost Control or the Western Electricity Coordinating Council (WECC). 9.8. Support fair and reasonable application of grid reliability requirements established by NERC, WECC, or FERC and seek appropriate remedies (if needed) for inequitable or punitive application of fees and fines. Federal and Regional    10.9. Work with CAISO and/or FERC: • to give buyers of renewable intermittent resources relief from imbalance penalties; • to promote financial and operational changes that result in timely and accurate settlement and billing; and • to provide critical input on the need for various transmission projects in light of the escalating costs to the City to import power using the bulk transmission system. Federal and State    10. Work with NCPA, CMUA and NERC 10. Monitor cyber security issues to ensure that: • Federal, state and regional designations of “ CPAU, which currently does not have critical cyber assets” are appropriately applied to only truly critical local distribution infrastructure; and • CPAU, retains local control over implementation of utility industryits cyber security needs while remaining exempt from NERC cyber security standards, policies. Support NCPA to protect it and procedures. its member agencies from unnecessary cyber security regulations. Federal and Regional   Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 11 of 22 FIBER OPTIC Goals 1. Preserve and enhance the authority of local government to (1) develop broadband solutions that align with community needs and (2) expand consumer choice for competitive Internet connectivity and other advanced services delivered over fiber-optic networks. 2. Encourage the competitive delivery of broadband services by permitting the use of public rights-of- way and Utilities infrastructure in a responsible manner, provided that local rights of way authority and management is preserved and contractual or otherthe use does not compromise the City’s existing utility safety, service, and operational sservices obligations. 3. Support local government authority over zoning-related land use for communications infrastructure in accordance with reasonable and non-discriminatory regulations. 4. Support the Council’s Technology and the Connected City initiative of 2013, to fully leverage the City’s fiber- optic asset to provide ubiquitous and infrastructure assets such as public rights-of- way, utility poles and conduit for thereliable ultra-high-speed broadband expansion.connectivity Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives 1. Advocate for these goals through the American Public Power Association (APPA), California Municipal Utilities Association (, CMUA),, National Association of Telecommunications Officers and Advisors (NATOA), National League of Cities (NLC), and the Next Century Cities initiative (NCC), with support from City staff. Federal and State     2. Support legislation and regulations that preserve and enhance municipal delivery of conventional and advanced telecommunication services as prescribed by the Telecommunications Act of 1996. Federal and State    3. Support the goals of the Federal Communications Commission’s (FCC), National Broadband Plan to improve Internet access nationwide. Federal and State    4. Oppose legislation and regulations that benefit the incumbent cable TV, and telephone, and telecommunications companies at the expense of community-owned fiber-optic and wireless networks. Federal and State    5. Support legislation and regulations that Federal and    Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 12 of 22 Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives preserve and enhance utility customer data security and confidentialityconsumer protections byrelated to the incumbent providers of telecommunication services. State 6. Continue to sSupport the Council’s municipal fiber and wireless initiatives. directive to concurrently pursue the findings and recommendations in the Fiber-to-the-Premises Master Plan and Wireless Network Plan and continue discussions and negotiations with third parties considering new service deployments in Palo Alto. Local   7.6. Support legislation and regulations that::: • Permit the contractual use of public right-of- way and Utilities infrastructure; • Preserve local rights-of-way authority and management; • Preserve local government zoning and siting authority for wireless and wireline communication facilities; • Support local “dig once” policies to deploy infrastructure such as communications conduit for future fiber and wireless networks capable of delivering next- generation broadband services. • ensure conduit and fiber are available for lease on reasonable terms; and • Oppose legislation and regulations that arbitrarily reduce compensation received by local governments from other entities for the economic use of the public rights-of-way and other public properties required for that support communication infrastructure (e.g., utility poles, Federal, State and Local     Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 13 of 22 Goals Legislative Policy Guidelines Venue 1. Support Municipal Delivery 2. Competitive Delivery 3. Local Authority over Land Use 4. Support Council Initiatives streetlight poles, ducts and conduits). NATURAL GAS Goals 1. Preserve/enhance the ability of municipal utilities to develop and implement their own demand side efficiency and conservation programs, alternative gas supplies, and rate structuresstructure. 2. Increase the security and reliability of the gas supply and transmission infrastructure. This includes retaining access to intra- and interstate gas transmission systems to reliably serve customers. 3. Support efforts to reduce greenhouse gas emissions and protect the environment. 4. Preserve just and reasonable utility rates/bills established by local governing bodies. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environment 4. Cost Control 1. Advocate most of these goals mainly throughLeverage the American Public Gas Association (APGA) with minor support from Palo Alto staffto assist in natural gas goals . Primarily Federal with minor advocacy at State level     2. Work with Northern California Power Agency (NCPA) and California Municipal Utilities Association (CMUA) to the extent that the City’s goals as a gas distributor align with generators’ use of natural gas. Federal and State     3. Support cost effective renewable gas supplies from in or out of state sources. In case ofAdvocate for locally reasonable mandated renewable portfolio standards, advocate for controls and off- ramps similar to the electric RPS that minimize customer cost impact. Federal and State     Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 14 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environment 4. Cost Control 4. Advocate for financing or funding for cost-effective natural gas efficiency and solar water heating end uses. Federal and State     5. Support market transparency and efforts to eliminate market manipulation through reasonable oversight. Federal  6. Support municipal utilities’ ability to enter into pre-pay transactions for gas supplies. Federal  7. Support efforts to improve pipeline safety. Federal and State    8. Work with partners to discourage extension of CPUC regulatory authority over municipal gas operations. State    10. 9. Oppose legislative proposals resulting in unreasonable costs for Support cap-and-trade market designs that: • protect consumers from the exercise of market power; • allocate allowances that mitigate impacts to Palo AltoAlto’s customers while preserving City environmental goals; • advocate for an allowance allocation methodology that provides flexibility for Palo Alto to structure rates to align GHG costs and revenues; • provide flexible compliance mechanisms such as banking and borrowing of allowances; and • allocate funds generated from cap- and-trade markets to GHG related activities, not as a revenue source for state or federal general funds. Federal and State     Utilities Legislative Policy Guidelines Utilities Legislative Policy Guidelines Janu Page 15 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliability of Infrastructure 3. Environment 4. Cost Control 11. 10. Support legislation that aims to protect public health and encourages transparency regarding the practice of hydraulic fracturing or “fracking” for natural gas development, while opposing blanket moratoriums that aren’t supported by science. Federal and State   Utilities Legislative Policy Guidelines January 2017 Update AAA Page 16 of 22 WASTEWATER COLLECTION Goals 1. Support ability of municipal utilities to develop and manage their own conservation and efficiency programs and retain authority over ratemaking, including the imposition of non-volumetric customer meter or infrastructure charges for wastewater collection service. 2. Encourage efforts to increase the reliability of the local wastewater collection systems. 3. Maintain the provision of reliable and sustainable wastewater collection service at a fair price. 4. Support equal comparisons of wastewater collection systems by regulatory agencies in order to minimize and reduce onerous, costly, time-intensive reporting requirements and improve value and accuracy of information reported to the public. Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliable Infrastructure 3. Maintain service 4. Valuable reporting 1. Advocate goals through active participation in the Association of Bay Area Governments (ABAG).), and CMUA. Local, Regional & State     2. Support regulations of wastewater collection systems that recognize: • local jurisdictions’ proactive efforts to replace and maintain wastewater collections systems; • the need to provide affordable and cost based collection service; and • the unique characteristics of each collection system. Local, Regional & State    3. Support provision of sufficient resources for regional agencies in their pursuit ofto enable them to advocate for: • environmentally sustainable, reliable wastewater collection service at a fair price; and • regional comparisons of wastewater collection projects for future state grant funding. Local and Regional    4. Support infrastructure security and reliability including equitable allocation of funds for increasing the security of infrastructure. Regional, and State   Utilities Legislative Policy Guidelines January 2017 Update AAA Page 17 of 22 Goals Legislative Policy Guidelines Venue 1. Local Accountability 2. Reliable Infrastructure 3. Maintain service 4. Valuable reporting 5. Advocate for funding and local regulations for wastewater collectioncollections system projects and requirements that reduce overflows and improve collection system efficiency. Regional, State and Federal   Utilities Legislative Policy Guidelines January 2017 Update AAA Page 18 of 22 WATER Goals 1. Support the ability of publicmunicipal utilities and districts to develop and implementmanage their own water efficiency and conservation and efficiency programs while retainingand retain authority over ratemaking, including the ability to optimize volumetric, and fixed, and drought- related pricing and charges to balance the goals of revenue certainty and water use efficiency. 2. Increase the security and reliability of the regional water system owned and operated by the San Francisco Public Utilities Commission (SFPUC). 3. Support efficiency and recycled water programs in order to minimize the use of imported supplies. 4. ProvideMaintain the provision of an environmentally sustainable and, reliable suppliessupply of high quality water. at a fair price. Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 1. Advocate goals through active participation in the Bay Area Water Supply and Conservation Agency (BAWSCA), California Urban Water Conservation Council (CUWCC),) and California Municipal Utilities Association (CMUA),, with support from Palo Alto staff for BAWSCA Local, Regional and State     2. Participate in CUWCC Best Management Practice (BMP) revisions and development to ensure that aggressive and cost- effective efficiency goals are incorporated and operating proposals are reasonable, achievable, and cost-effective. State     Utilities Legislative Policy Guidelines January 2017 Update AAA Page 19 of 22 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 3.2. Advocate to ensure that legislative actions regarding the Hetch Hetchy Regional Water System include: • timely rebuilding of the regional water system; • assurance that the SFPUC is adequately assessing and mitigating risks of infrastructure failure; • maintenance of the quality of delivered water; • minimization of any increase in the cost of water; • no additional exposure to more frequent or severe water shortages; • increased real-time monitoring data availability to ensure water quality; • support for the existing water system and its operation; • SWRCB responsiveness to SFPUC water quality issues;. Local, Regional and State   3. 4. Advocate for interpretations or implementation of Water Code provisions that maintain or reinforce the authorities and protections available to the City and BAWSCA members outside of San Francisco. Local, Regional and State    Utilities Legislative Policy Guidelines January 2017 Update AAA Page 20 of 22 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 5. 4. Support BAWSCA in efforts to enable it to advocate forachieve: • an environmentally sustainable, reliable supply of high quality water at a fair price; • for Wholesale Customers’ rights under the Water Supply Agreement for water from SFPUC that meets quality standards; • a SFPUC rate structure that is consistent with the Water Supply Agreement and is based on water usage; • a contract amendment to modify the drought time water allocation between the SFPUC and the BAWSCA agencies; • preservation of Palo Alto’s existing contractual water allocation and transportation rights on the SFPUC Hetch Hetchy system; and • regional planning for conservation, recycled water, and other water supply projects. Local and Regional     6. 5. Advocate for actions that: • preserve Palo Alto’s existing contractual rights; and • preserve local control over water use; and • limit encroachment from outside jurisdictions. Local and Regional   67. Support infrastructure security and reliability including an interconnection between the SCVWD West Pipeline with the SFPUC’s Bay Division Pipelines 3 and 4. Regional and State  78. Support notification requirements that inform residents/customers but do not inflict undue or unobtainable requirements on the utility. State   89. Support local control of public benefit funds, funding levels and program design. State   Utilities Legislative Policy Guidelines January 2017 Update AAA Page 21 of 22 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 910. Support beneficiary pays methodologies to prevent taxes or fees imposed on SFPUC customers to fund infrastructure improvements and costs of water sources that do not serve Palo Alto customers. State and Regional    101. Advocate for financing or, funding, and, where applicable, tax exemption, for water conservation programs, water rebate programs, and recycled water projects that meet end-use needs and conserve potable water and; oppose legislation that would reduce such funding. State, Regional and Federal     11.12. Support infrastructure security and reliability that includes equitable allocation of funds for increasing the security of infrastructure and that protects the City from unnecessary regulations. Support legislation that promotes responsible groundwater management. Local, State and Federal     123. Support legislation that promotes responsible groundwater management while recognizing Palo Alto’s existing and historical groundwater extraction practices. Support Proposition 218 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income programs. State     134. Support Proposition 218 reform efforts to provide ratemaking flexibility to balance conservation, revenue sustainability, and low income assistance programs.Advocate for water conservation policies (both drought response and long term) that achieve water sustainability while minimizing customer and commercial impact, protecting the City’s urban canopy and minimizing the City’s enforcement costs. Local and State     Utilities Legislative Policy Guidelines January 2017 Update AAA Page 22 of 22 Goals Legislative Policy Guidelines Venue 1. Local Authority 2. Reliable Infrastructure 3. Minimize imports 4. Supplies at fair cost 145. Advocate for reasonable statewide water conservation efforts (both drought response and long term) that achieve required water savings while minimizing customer and commercial impact, protecting the City’s urban canopy and minimizing the City’s enforcement costs.Protect SFPUC’s water rights. Local and State    156. ProtectSupport legislation that would protect the CityCity’s infrastructure and County of San Francisco’streatment investments from future state-wide cuts in water rights as well as those of the co- grantees of the Raker Actuse. State     167. Support legislationOppose government action that would protectcreates undue burdens on or unreasonably expands the City’s infrastructurerole and treatment investments from future state-wide cuts inresponsibility of water use.suppliers State    EXCERPTED DRAFT MINUTES OF THE JANUARY 11, 2017 SPECIAL MEETING UTILITIES ADVISORY COMMISSION ITEM 1: ACTION: Staff Recommendation that the Utilities Advisory Commission Recommend that the City Council Adopt a Resolution Approving the Updated City of Palo Alto Utilities Legislative Policy Guidelines Acting Assistant Director of Engineering Debbie Lloyd said staff comes to the UAC annually to update the legislative guidelines. These guidelines are used when staff meets with legislators. The attachment to the report shows the redline changes. Commissioner Trumbull asked if the guidelines covered regulatory items as well as legislative; Lloyd responded that they did. Senior Resource Planner Heather Dauler said staff also coordinated with the City’s guidelines as well. There were no changes to the goals for all utilities. The first recommendation was to provide policy guidance enabling staff to engage with key accounts when legislation comes up that would affect them. The next recommendations were to strike redundant language related to ratemaking, customer data security infrastructure, and cap and trade. The changes for the electric utility included modifications to language related to Net Energy Metering (NEM) successor programs to reflect the fact the City has already adopted a successor program. The only change for the gas utility was to modify redundant language related to the cap and trade program. The only change for the wastewater collection utility was to add a basic guideline related to infrastructure security. Commissioner Schwartz asked why infrastructure security wasn’t applicable to all utilities, not just wastewater; Dauler said staff could consider that. Dauler discussed the changes recommended for the water utility guidelines. The guideline related to the CUWCC BMPs was recommended to be deleted because it was not currently applicable. Staff also recommended adding language related to SFPUC. Staff also recommended streamlining language related to Proposition 218. This was also in preparation for dealing with new upcoming State conservation plans. Schwartz said policies were changing at the Federal level, with California trying to maintain its leadership role. Was there any specific language needed to give staff the ability to respond to those issues? ATTACHMENT C Dauler believed existing language was sufficient. Lloyd said it was also possible to return to the UAC and Council if a change was needed. She agreed with Dauler that the existing language gave staff adequate flexibility. Commissioner Johnston asked whether the guidelines were in priority order. Lloyd said there was no priority order in the guidelines. The guidelines were meant to achieve the three to four high level goals for each section. Utilities General Manager Shikada said the legislative guidelines were often effectively defensive, particularly to deal with “gut and amend” bills at the end of the legislative section. He addressed Commissioner Schwartz’s point about Federal action, saying he expected there to be lead time to respond to those issues. Danaher asked whether the guidelines addressed energy efficiency; Dauler said they did. Dauler discussed potential issues that were going to arise in 2017. She said that regionalization was potentially going to be delayed. Lloyd said anticipated changes to environmental policy under the Trump administration could affect the appetite for other states to join California in a regional energy market. The City would be involved in upcoming discussions related to these issues through the BAMX group. Dauler discussed Western issues. There was some hope that progress would be made on the Central Valley Project Improvement Act (CVPIA). Chair Cook asked staff to state for the record why we were interested in Western issues. Dauler said the Western Area Power Administration provided a large fraction of the City’s power. The CVPIA was passed a long time ago to address environmental impacts of the CVP, but there was some concern that the costs passed to power customers were too high. Lloyd said staff was beginning working with Western on the next contract period ten years from now. Schwartz asked whether regionalization could affect the carbon content of the power we buy Lloyd said regionalization could affect the carbon content of market power. Shikada said staff expected major changes to these issues due to the Trump administration. Dauler said changes to Federal policies were expected due to the 2016 presidential election and the new appointees of the new administration. California was preparing to fight anticipated actions. In 2016 water was a major issue due to drought. Currently the legislature was waiting to see whether precipitation would obviate the need for a drought bill. There was also an energy bill in 2016 that contained provisions that would help with dam relicensing, but it died. The bill sponsor was interested in it, but it was not clear whether there would be appetite in the House to move it forward. Public speaker Jeff Hoel spoke regarding Fiber. He noted there was no discussion of Fiber Utility issues in the staff presentation. He said there were differences between the redlined and final draft. He noted there was no discussion of Dig Once. He asked whether the policy change would take effect prior to Council action. Dauler said there were no substantive changes to Fiber policies proposed. The Dig Once policy language remained unchanged. Commissioner Trumbull verified that no changes to policy would occur until Council acted. Shikada noted there were unintentional differences between the redline and final drafts in that the proposed Dig Once language changes shown in the redline had not been made in the final version. Dauler said it was the intention to keep Dig Once language in the policy. She would follow up to fix the issue with Fiber guideline six. ACTION: Commissioner Trumbull moved, seconded by Commissioner Danaher to recommend approval of the guidelines with the correction of the Dig Once language. The motion carried unanimously (6-0, with Chair Cook, Vice Chair Danaher, Commissioners Forssell, Johnston, Schwartz, and Trumbull voting yes and Commissioner Ballantine absent). City of Palo Alto (ID # 7704) City Council Staff Report Report Type: Consent Calendar Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: TMA Funding Agreement Amendment Title: Amendment of an Existing Funding Agreement With the Palo Alto Transportation Management Association (PATMA) and Silicon Valley Community Foundation Extending the Term of the Agreement for Two Years (to December 2018) and Providing $100,000 per Year From: City Manager Lead Department: Planning and Community Environment Recommendation: Staff recommends that the City Council approve and authorize the City Manager or his designee to amend the existing funding agreement between the City of Palo Alto, the Silicon Valley Community Foundation, and the Palo Alto Transportation Management Association (PATMA), extending the term of the agreement for two years and providing an additional $100,000 per year for use by the PATMA in reducing single occupant vehicle (SOV) commute trips to/from Downtown Palo Alto. Background & Discussion Following direction from City Council in 2013, staff worked to develop Transportation Demand Management (TDM) strategies to encourage alternatives to solo driving as part of a multi- faceted effort to address traffic and parking concerns. The development of a Transportation Management Association (TMA) for Palo Alto was seen as a key component of this approach. The Palo Alto TMA (PATMA) was formed and incorporated as a nonprofit in January 2016. In June, 2016, Council authorized the City Manager to formalize the provision of City funding for TMA programs by executing a Funding Agreement between the City of Palo Alto, the Silicon Valley Community Foundation (SVCF), and the Palo Alto Transportation Management Association (PATMA). SVCF holds and administers a fund restricted to specific charitable purposes and has legal discretion and control over the restricted account. The Agreement expires on July 1, 2017. Under the Agreement, the City transferred the sum of $100,000 to City of Palo Alto Page 2 SVCF, to be deposited into the restricted account for "pilot projects" intended to reduce single occupancy vehicle trips by downtown workers, as mutually agreed upon by the City Manager and PATMA. As part of the Fiscal Year 2016 Adopted Operating Budget, $100,000 was allocated for TMA pilot projects. Several Councilmembers expressed concern regarding the use of the funding and transparency, and expressed a desire for the City to maintain an oversight role in the use of the funding. As a result, the City Council authorized the City Manager (Staff Report 6823) to enter into a Funding Agreement between the City of Palo Alto, the Silicon Valley Community Foundation, and the Palo Alto Transportation Management Association. The agreement governs the use of the $100,000 provided by the City of Palo Alto in FY16. The agreement limits the use of the City-provided funds to “pilot projects” conducted by the TMA with the intent to reduce single-occupancy vehicle trips by downtown commuters. The agreement makes funding for pilot programs contingent on the TMA providing reports twice annually to the City Council, with updates on the implementation and effectiveness of the pilot programs, conducting open meetings, and providing documents created by the TMA to the public. Representatives of the TMA are currently scheduled to provide a report to the City Council on March 6, 2017. In 2016, the TMA Board of Directors, at City Council request, developed a two year business plan that identified the resources required to fund activities. The budget included a baseline scenario denoting potential achievements with a minimum of continued funding of $100,000 annually. In anticipation, staff requested an additional $100,000, which Council approved as part of the Fiscal Year 2017 Adopted Operating Budget. Separately, the City supports the PATMA through a contract with MIG consultants which supports a part-time staff person, and supports the TMA’s annual survey of commuters to gaugue the program’s effectiveness. Funds available under the MIG contract will be exhausted later this year, and the PATMA will need to identify additional funds to hire and support a permanent staff person. With the recommended action, staff is requesting that City Council approve an extension of the City’s existing agreement with the PATMA and SVCF for two years (to December 2018), provide an additional $100,000 in funding from the City that was budgetted in FY2017, and commit to an additional $100,000 in FY2018. Under the terms of the agreement, the funding would be used for pilot projects agreed upon by the City Manager. Policy Implications The support of the Palo Alto TMA is consistent with the following Comprehensive Plan Policies: City of Palo Alto Page 3  Goal T-1: Less Reliance on Single-Occupant Vehicles  Policy T-3: Support the development and expansion of comprehensive, effective programs to reduce auto use at both local and regional levels. Resource Impact Staff is requesting an amendment of the Funding Agreement to include an additional $200,000: $100,000 for Fiscal Year 2017 and $100,000 for Fiscal Year 2018. The Fiscal Year 2017 Approved Operating Budget includes $100,000 for TMA pilot programs. Staff will explore alternative funding sources beyond the General fund for the $100,000 necessary in Fiscal Year 2018 and anticipates bringing forward recommendations as part of the Fiscal Year 2018 annual budget process. Environmental Review The requested action is exempt from review under the California Environmental Quality Act (CEQA) since it can be seen with certainty that there is no possibility of a significant impact on the environment (State CEQA Guidelines Section 15061(b)(3)). Attachments: Attachment A 2016-01-30 Amendment No 1 TMA Funding Agmt (DOCX) Attachment B June 2016 TMA Funding Agreement FINAL (PDF) 1 AMENDMENT NO. 1 TO AGREEMENT AMONG CITY OF PALO ALTO, SILICON VALLEY COMMUNITY FOUNDATION, AND THE PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION TO PROVIDE FUNDING FOR TRANSPORTATION DEMAND MANAGEMENT SERVICES This Amendment No. 1 (“Amendment”) to the Agreement to provide funding for transportation demand management services (“Agreement”) is entered into February 13, 2017, by and among the City of Palo Alto, a California chartered municipal corporation (“CITY”), the Palo Alto Transportation Management Association, a California nonprofit public benefit corporation (“PATMA”), and Silicon Valley Community Foundation, a California nonprofit public benefit corporation ("SVCF") (collectively, “the parties”). R E C I T A L S A. The Agreement was entered into among the parties to provide funding for transportation demand management services for the Palo Alto Transportation Management Association. B. The parties wish to amend the Agreement to extend its term and increase the contribution provided by CITY. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2, Term, is hereby amended to read as follows: “2. Term. The term of this Agreement shall be from the Effective Date through December 31, 2018.” SECTION 2. Section 3, City Deposit, is hereby amended to read as follows: “3. City Deposit. The City shall annually transfer the sum of $100,000 (“City Funds”) to SVCF, to be deposited into the Restricted Account for use for the purposes described in this Agreement. The total amount of City Funds to be provided during the term of this Agreement shall not exceed $300,000.” // // // // // 2 // SECTION 3. Except as herein modified, all other provisions of the Agreement, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties have by their duly authorized representatives executed this Amendment on the date first above written. PALO ALTO TRANSPORTATION MANAGEMENT ASSOCIATION: ________________________________ Name: __________________________ Title: ___________________________ SILICON VALLEY COMMUNITY FOUNDATION: ________________________________ Name: __________________________ Title: ___________________________ CITY OF PALO ALTO: _______________________________ James Keene City Manager APPROVED AS TO FORM: ______________________________ Albert S. Yang Senior Deputy City Attorney 20 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 DocuSign Envelope ID: D4E6F812-D1CA-4EA5-9ECB-74E4F880AF96 City of Palo Alto (ID # 7603) City Council Staff Report Report Type: Action Items Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Retail Preservation Ordinance (First Reading) Title: PUBLIC HEARING: Adoption of an Ordinance Amending Chapter 18 of the Palo Alto Municipal Code Making Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground Floor Combining District to Certain Properties Located Downtown; Modifying the Definition of Retail; Adding Regulations to Improve Pedestrian Oriented Design Standards in the Downtown; and Related Changes. The Proposed Ordinance is Exempt From the California Environmental Quality Act (CEQA) per Section 15308. The Planning and Transportation Commission Recommended Approval of the Proposed Ordinance From: City Manager Lead Department: Planning and Community Environment Recommendation: Staff recommends that the Council adopt the attached Retail Preservation Ordinance (Attachment A). Executive Summary: To allow for continued retail protections following the expiration of the Retail Interim Urgency Ordinance in April 2017, the City Council has directed staff to prepare an ordinance that:  protects retail and retail-like uses from conversion to non-retail uses on a citywide basis;  expands the Ground Floor (GF) district boundaries to reincorporate downtown parcels that were previously removed from the district and to create a continuous ground-floor retail environment; and  adds design standards to the Downtown Commercial – Community (CD-C) (GF) district that support active retail uses and pedestrian-oriented ground-floor design. The attached ordinance would accomplish these objectives and is explained in greater detail below. City of Palo Alto Page 2 Background: This section summarizes the recent history of citywide and Downtown retail protections over the past 15 years, and direction on the proposed ordinance as provided by the City Council, Architectural Review Board, and Planning and Transportation Commission. Ground-Floor Regulations and Protections Since 2001 The GF district regulations and boundaries have been modified several times in the last 15 years based on changes in market conditions Downtown:  The GF district regulations were initially implemented in 1986. Over time, the district was modified to include a set of conditionally permitted uses in addition to the list of permitted retail uses, and to allow use exceptions when the vacancy rate for ground floor properties was 5 percent or greater and the ground floor space had been vacant and available for six months or more.  In December 2001, at the end of the dot-com boom, the City Council adopted an ordinance that prohibited the conversion of neighborhood-serving retail uses to office uses in Downtown and several other commercial districts. The purpose of the ordinance was to retain neighborhood-serving retail for residents, prevent the loss of sales tax revenue, and prevent the higher lease rates from office uses from driving up lease rates for retail uses.  In November 2009, amidst the recession, retail vacancy rates approached 10 percent Downtown. A 2009 ordinance eliminated the 5 percent trigger. Also, in an effort to concentrate retail activity in the core of Downtown, the City Council voted to remove the GF overlay on several parcels outside of the core that were identified as marginally viable for retail use: along Alma Street, portions of High Street (near Hamilton Avenue); along the circle ramps connecting University Avenue and Alma Street; and along Kipling and Cowper north of University Avenue. The purpose of these changes was to address concerns about the loss of revenue-generating retail. Additionally, the ordinance sought to retain a thriving retail sector by concentrating retail in higher foot traffic areas along University Avenue and the immediate vicinity and allowing more flexibility to lease ground floor space for either office or retail uses outside of the core area (i.e., outside of the GF district). (See related staff report: http://www.cityofpaloalto.org/civicax/filebank/documents/17614)  In April 2013, with the market having rebounded, the City Council voted to extend the GF boundary on Emerson Street (generally between Hamilton and Forest Avenues). The intent was to prevent conversions of retail into office use. (See related staff report: City of Palo Alto Page 3 http://www.cityofpaloalto.org/civicax/filebank/documents/33817)  Subsequently, a 2015 interim urgency ordinance (described further below) was adopted in response to a net loss of retail square footage citywide over the preceding 15 years, in part because of the increase in office rent and demand to locate in Palo Alto, and the pressure this put on retail uses to convert to office. Interim Urgency Ordinance for Retail Preservation In mid-2015, the City Council adopted an interim urgency ordinance prohibiting the conversion of ground floor spaces used for retail and retail like uses to office or other uses (Attachment B & C). The ordinance, which will sunset on April 30, 2017, was intended to protect retail spaces from converting to other uses while the City developed permanent zoning amendments to enhance retail preservations. The interim urgency ordinance prohibits the conversion of ground floor retail use “permitted or operating as of March 2, 2015 or thereafter” to any other non-retail use. The interim ordinance currently applies to legal non-conforming uses, stating that such uses “shall remain… and shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70” of the Palo Alto Municipal Code (PAMC). The ordinance also applies to basements “currently in retail use or in use for retail support purposes,” and contains an exemption for “pipeline projects.” There are also provisions regarding “waivers and adjustments” (PAMC Chapter 18.85.104) which allow an applicant to request a waiver based on economic hardship by “showing that applying requirements [of the ordinance] would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property.” Recent Permanent Zoning Amendments Since the interim urgency ordinance was adopted, the City has adopted a permanent zoning amendment affecting the California Avenue Area (Ordinance No. 5358, adopted October 26, 2015) and closed a loophole affecting the Community Commercial (CC), Neighborhood Commercial (CN), and Service Commercial (CS) zoning districts (Ordinance No. 5373, adopted January 11, 2016). City Council Direction The City Council discussed proposed retail protections citywide and in the Downtown and the South of Forest Area (SOFA II) on August 22 and October 17, 2016 and provided feedback to staff’s proposed approach. At that time staff indicated its intent to present two ordinances to Council: one that addressed the citywide retail preservation objectives and a second focused on the Downtown. With respect to the citywide ordinance, staff communicated its intent to codify City of Palo Alto Page 4 the interim regulations with minor amendments that clarified certain provisions and to modify the waiver requirements. The purpose of this ordinance was to prohibit retail and retail like uses from transitioning to other non-retail uses, citywide. Regarding the Downtown ordinance, staff received specific feedback from the City Council which is summarized below: 1. Protect existing ground floor retail and retail like uses from converting to non-retail uses; 2. Clarify the intent of the “retail services” definition to specify the business be open to the public (i.e., no door buzzers) during typical hours of operation, and removed the exhaustive list of examples used to describe a retail use; 3. Maintain the mix of existing uses allowed in the GF district, but preclude personal services uses on University Avenue 4. Add regulations to the GF district protecting basements used for retail and retail like uses in the Downtown; 5. Restore the prior GF boundaries and re-designate parcels that were removed from the CD-C (GF) district during the recession; 6. Eliminate an existing provision in the GF boundary that allows 25% of the ground floor space not adjacent to the street to be used for other permitted uses; 7. Prohibit reflective glass and require window transparency for non-conforming uses in the GF district in the Downtown; and 8. Develop design standards that support active uses and pedestrian-oriented ground- floor experience Downtown (note: the Council did not support additional design standards for SOFA II). Since the Council meeting, staff concluded that merging the two efforts into one ordinance was a more efficient approach. Additional direction from the City Council not addressed in the draft ordinance is described in the “Subsequent Ordinances and/or Studies” section below. Council also directed staff to complete informal community outreach to get feedback on the interim and proposed ordinances. Staff conducted a series of stakeholder interviews as described below and maintained an electronic mailing list and project website to keep interested parties up-to-date on the draft ordinance, meeting dates, and ways to stay involved: http://www.cityofpaloalto.org/gov/depts/pln/advance/downtown_retail_ordinance_.asp. Additionally, the retail ordinance has benefited from several other parallel community outreach initiatives in the city, including the intercept surveys completed Downtown as part of the Downtown Cap Evaluation and the Citizens Advisory Committee assembled for the Comprehensive Plan Update. Architectural Review Board Direction City of Palo Alto Page 5 The Architectural Review Board (ARB) discussed potential design standards (items #7, and #8, above) in the CD-C (GF) district at a study session on November 3, 2016. Although the ARB did not take formal action, Board members generally supported the following types of standards/design features:  Encourage clear glass in storefront windows (vs. tinted or translucent windows) to increase visibility in and out of retail spaces.  Prioritize usable recessed areas in front of stores and/or entryways for outdoor seating and display areas, to support interaction between retail spaces and the public street.  Consider a minimum window transparency requirement (i.e., minimum length for openings—windows and doors—based on the linear frontage of the property)  Encourage pedestrian-oriented features such as public seating.  Continue to enforce the existing design guidelines in the Pedestrian Shopping (P) and Downtown Commercial (CD) zoning districts as well as the Downtown Urban Design Guidelines through the existing architectural review process. See ARB staff report: http://www.cityofpaloalto.org/civicax/filebank/documents/54498. Planning & Transportation Commission Action The Planning and Transportation Commission (PTC) held public hearings over two meetings on December 14, 2016 and January 11, 2017. Some Commissioners expressed support for the draft ordinance, specifically the intent to prevent the conversion of retail spaces to non-retail uses as a way to protect and promote vibrancy in commercial districts. Other Commissioners objected to the premise of the ordinance as a way to support retail development and to the scope and scale of the community outreach process. In general, Commissioners were concerned that the ordinance presented too broad a reach and recommended additional analysis to focus and refine retail preservation and retail support policies at the neighborhood or district level. Additionally, Commissioners wanted to see a broader community outreach effort, such as subcommittee or stakeholder working group, to determine more specific policy interventions. Ultimately, the PTC made two formal recommendations to the City Council: 1. Recommend approval of the draft ordinance (with minor modifications, as proposed herein) and request that the Council direct the PTC to further study refinements to the ordinance, including evaluating non-viable retail areas that may be removed from protection in the new ordinance. (Passed 4-2) 2. Request that the Council direct the PTC to review the impacts of the ordinance with retailers and other members the community to get more in-depth feedback and suggest amendments to the ordinance after that time. (Passed 5-1) City of Palo Alto Page 6 (See PTC staff reports from December 14, 2016 (http://www.cityofpaloalto.org/civicax/filebank/documents/55201) and January 11, 2017 (http://www.cityofpaloalto.org/civicax/filebank/documents/55393). Excerpts from the meeting minutes are included with this report as Attachment E. On balance, Commissioners supporting the above motion, found the ordinance responsive to city council direction and the city’s retail interests. The dissenting perspective from the PTC included a strong expression of dissatisfaction with the public outreach efforts and frustration about the time constraint associated with this project to have a permanent ordinance in place prior to the expiration of the interim ordinance. This perspective favored allowing the interim ordinance expire in favor of a more robust community engagement effort to craft more finely tuned regulations that respected the different commercial districts in the city. The dissenting commissioners offered the second motion listed above which was supported 5-1 by the Commission. Discussion & Analysis: The draft ordinance is based on City Council direction, as described in the Background section above, and as modified by the PTC. (PTC directed modifications are described below.) The draft ordinance creates the following policy changes and/or makes permanent the existing interim urgency ordinance policies: (Analysis is provided in italics below and the subsequent subsections.) Citywide Measures 1. Modify the Retail Services and Personal Service Definitions: a. Remove the extensive list of example uses from the Retail Services definition and define it more generally as use open to the public during typical business hours that is predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use. b. Clarify that personal service includes fitness and exercise studies, such as yoga or a martial arts studio (in addition to art and dance studios) and confirm that it is intended for an individual or small group instruction of 15 or fewer students/customers at one time. As directed by the City Council, this provision removes the extensive list of retail uses and focuses instead on the intent of retail uses to be open to the public during typical business hours and with sales and services for customers and clients. The broader definition of retail seeks to respond to the changing nature of retail in Palo Alto which is expected to continue to shift towards restaurants, services, and experiences. City of Palo Alto Page 7 Generally, the PTC and stakeholders supported the broader definition of retail to allow more flexibility in leasing and more diversity in commercial district offerings. These revisions also clarify that a yoga studio, and similar fitness related uses, of 15 students/customers is defined as personal service instead of commercial recreation, which requires a conditional use permit. This clarification is consistent with current interpretations of the zoning ordinance. 2. Protect existing ground-floor retail and retail like uses from converting to non-retail uses citywide: retail and retail like uses are interchangeable provided the use is permitted or conditionally permitted in the district. This provision continues the citywide moratorium on conversion of uses permitted or operating as of March 2, 2015, as expressed in the Interim Urgency Ordinance and applicable to all zoning districts. Projects in the pipeline as of this date would be exempt from the ordinance. The protections would be codified in the use classification tables of each zoning district with a note referencing a new subsection in Section 18.40 (General Standards and Exceptions) of the PAMC. Notably, and in contrast to the Interim Urgency Ordinance, this provision would only pertain to sites where the retail or retail-like uses are permitted in the underlying base zoning district. In other words, the ordinance would not apply to legal and non- conforming uses and primarily affects the CN, CC, CS, CD, ROLM, RP, GM, and RM districts where retail uses are permitted or conditionally permitted. The PTC suggested that these provisions could be further refined to address specific needs and dynamics of specific districts or neighborhoods. 3. Modify the waiver/hardship provisions to include a process that is less stringent than the constitutional takings standard used in the interim ordinance. The proposed ordinance provides two different paths for waivers, one of which would be applicable to each site, depending on its location. The ordinance would: a. Maintain the existing economic hardship threshold that requires demonstration of an unconstitutional taking in the GF and R-Combining Districts. b. Provide an opportunity to consider an alternate viable active use, requiring the applicant to provide the following evidence to be considered by the Planning Director, or referred to the City Council.  Provide a 10-year history of the site's occupancy and reasons for respective tenants discontinuing their use of the site;  Provide a map that indicates all the existing surrounding uses, both residential and non-residential, within a one city block; include the corresponding zone district on the map; City of Palo Alto Page 8  Provide analysis that demonstrates the proposed use will support the purpose of the zoning district and Comprehensive Plan land use designation, and will encourage active pedestrian-oriented activity and connections. In addition to the economic hardship waiver to demonstrate a constitutional taking, the proposed ordinance provides a second exception for properties outside the GF and the R combining districts. This exception offers property owners additional flexibility on sites where retail uses have shown not to be viable and where a proposed alternate use meets the intent of the base district. The purpose of the evidence requested is to understand the viability of existing and future uses on the site based on both the site characteristics and the surrounding uses; and to determine whether a substitute service, office or manufacturing use could be designed and/or conditioned to contribute to the goals and purposes of the zoning district. 4. Expand the GF district purposes in Section 18.30(C) of the PAMC to extend beyond use classifications and reflect a desire for active pedestrian-oriented uses, with a high level of transparency and visual interest and the ground level. The current GF district purposes are focused on type of use and on the Downtown, specifically. The proposed revision seeks to: (1) capture the contribution of architectural form, such as transparency and pedestrian-orientation, that create a vibrant commercial district; and (2) clean up the Downtown-focused language to recognize that the GF district is currently applied as a combining district in the Midtown and Charleston commercial areas, in addition to Downtown. 5. Amend an existing provision in Section 18.20(C).020 to reorganize how building lobbies and reception areas are addressed on the ground floor level in the GF district. This PTC recommendation deletes a reference from the permitted uses section related to building entrances, lobbies and reception areas serving non‐ground floor uses. In its place, the PTC recommends adding a new sub-section to address building entrances and lobbies serving non-ground floor uses. This represents an organizational change to the code as opposed to a substantive policy change. Downtown Measures 1. Protect all existing basement retail and retail like or retail support uses from converting to non-retail uses in the CD-C (GF) district. The draft ordinance continues the Interim Urgency Ordinance provision to restrict the conversion of basements—but only in the CD-C (GF) district. A forthcoming report as part of the Downtown Cap Evaluation studied existing basements Downtown to determine the impacts of retail to office conversion and estimate the potential for City of Palo Alto Page 9 basements to serve as office space. Though a complete inventory was not feasible, the report found a substantial opportunity for office uses in basements which are currently being used as storage and ancillary retail functions. The proposed ordinance would help to prevent such conversions. 2. Modify the GF district where it is combined with the CD-C district to do the following: a. Allow yoga studios, dance studios, martial arts studios, and similar uses only on parcels that do not contain frontage on University Avenue. b. Require clear glass. Low-e glass or a minimal amount of tinting to achieve sun control is acceptable if the glass appears essentially transparent when viewed from the outside. Opaque and reflective glass shall not be used. c. Require 70% of any sidewalk-fronting frontage to have transparent window/door openings between 2.5 and 10 feet above grade. d. Prohibit window coverings in non-conforming tenant spaces fronting onto a sidewalk, during business hours. Require displays of merchandise, artwork or items of visual interest where customer privacy requires window coverings. Exceptions are permitted where operations preclude transparency (e.g., theaters). e. Remove provision 18.30(C).020(b) which allows 25% of the ground-floor area not fronting a street from being occupied by a use in the applicable underlying CD district (such as office) The draft ordinance proposes to regulate architectural form and transparency with items a through d above, in an effort to support active pedestrian-oriented uses that encourage window shopping and a high degree of visibility between the store interior and passersby on the street. Bullet e seeks to strengthen the retail core of the GF district by removing the provision that allows for ground-floor office. (This provision is currently suspended by the Urgency Ordinance). However, it should be noted that removal this provision would limit some uses that some planning and transportation commissioners and councilmembers thought could be useful, such as optometrists. There may be some uses that have an active retail component and ancillary medical office uses that would be precluded by this change. Yoga studios and similar uses up to 15 customers or students would be permitted by right, except on University Avenue; yoga studios with more customers at a time would be considered a commercial recreation use and subject to a conditional use permit. Notably, the draft ordinance lifts the suspension on allowing conditional uses in the GF district. It does add a new required finding that the proposed conditional use will City of Palo Alto Page 10 not be detrimental to the retail environment or the pedestrian-oriented design objectives of the GF district. If the Council wanted to further restrict or regulate conditional uses on University Avenue or another subdistrict, additional provisions would need to be added or the list of conditional uses in the GF district regulations would need to be removed or refined. 3. Extend the GF boundary to Alma Street and Hamilton Avenue, re-designating the parcels that were withdrawn in 2009 and adding parcels to create a continuous ground-floor retail environment in the western portion of Downtown. The GF overlay would be added to the following parcels: 125, 124, 116, and 102 University Ave., 525, 529, 542 and 550 High St., 539 and 535 Alma St., 115, 150, 156, 158, and 164 Hamilton Ave. This map amendment is intended to expand the Downtown core area where ground- floor retail and the design standards identified above would be required to create a more continuous retail experience on the ground-floor. Some of these properties are currently occupied by uses that are not permitted in the GF overlay district—such as office, financial services, and real estate offices. As a result these properties (including 124, 116, and 102 University Ave., and 539 and 535 Alma St.) would become non-conforming uses until the existing use discontinues and they were required to comply with the GF provisions. Discontinue is a defined term in the municipal code (18.70.040) and it occurs after a use ceases operation for one year or longer. Some of these properties were designed as offices and do not have architectural features, such as storefront windows and doors, that make retail viable. Therefore, these property owners may be limited in the retailers that they can lease to. Some Planning Commissioners expressed concern about extending the boundaries for the GF beyond those determined during the 2001 planning process. 4. Amend an existing provision in Section 18.30(C).040 pertaining to annual vacancy monitoring for properties located downtown in the GF district. This is a minor change to existing code language. This section requires an annual report the PTC and City Council to monitor the vacancy rate in the CD-C and GF districts downtown. The PTC recommends this section be amended to include a survey of land uses in addition to the vacancy rate in the annual report. SOFA II Proposed Measures In addition to the provisions described above, which are included in the draft ordinance in Attachment A, staff recommends that the Council add the following provision to the proposed ordinance: 1. Allow private educational facilities in certain portions of the RT-35 District in SOFA II. City of Palo Alto Page 11 Based on a waiver request and feedback from property owners, during August and October 2016 Council hearings, the City Council considered modifications to the Interim Ordinance to allow private educational facilities to replace discontinuing retail or retail- like uses in SOFA II. While a majority of Council members voted for such an amendment (5-4), a super majority was required for approval and therefore the amendment failed. To respond to the Council’s intended direction, staff recommends adding the following provision to allow flexibility in SOFA II, outside of the retail core area:  Any ground floor Retail or Retail-Like use permitted or operating as of March 2, 2015 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. Property owners would be prohibited from converting a discontinued retail use to a private school and then to office. This provision was inadvertently excluded from the draft ordinance reviewed by the Commission. Staff’s efforts to introduce the concept with an at-places memo was rejected by the Commission for reasons that included being unfamiliar with the topic, procedural concerns about incorporating this language into SOFA II and concern about singling out a few properties that would benefit from this provision. Because the above provision was previously endorsed by a majority of the City Council, staff is reintroducing the concept. The Council may recall previous efforts to incorporate this provision into the existing interim retail preservation ordinance failed due to a lack of support; eight votes were needed to affect the change; five affirmative votes were recorded. Subsequent Ordinances and/or Studies Remaining issues identified by the City Council will be addressed through subsequent ordinances and/or studies: 1. Comprehensive Plan (underway):  Building Height Requirements: During the Comprehensive Plan Update (Comp Plan Update) discussion on January 30, 2017, the City Council discussed a potential increase to the maximum building height, including an increase from 50 to 55 or 60 feet for buildings containing ground floor retail and housing, which would allow for better design. While the Council elected not to include this concept in the Comp Plan Update, it could consider an ordinance to increase in the minimum first floor height requirement as a method to encourage inviting and active retail uses at a later date. 2. Future Policy Work: City of Palo Alto Page 12  Aligning the Planned Community (PC) Zone: Consider whether PC zoned parcels downtown could be aligned with GF and/or P combining district requirement (e.g., with respect to design standards and guidelines)  Amortization for Non-Conforming Uses: Policies regarding amortization of non- conforming uses would be addressed separately and subsequent to approval of the permanent ordinance. Amortization ordinances can take significantly more time to complete, given the work required with affected property owners, and it will not be feasible to prepare such an ordinance prior to the upcoming expiration of the interim urgency ordinance.  Window Transparency for Nonconforming Uses: Staff in consultation with the City Attorney’s office is still exploring the best means to address the Council’s interest to apply the new window transparency standards to existing nonconforming land uses in the ground floor and pedestrian combining districts. It is anticipated that another code amendment will be required to give the city the authority to effectuate this change. In the interim, if the new transparency provisions are adopted, staff would explore an outreach effort to inform tenants and property owners of the new requirements and encourage voluntary compliance. Summary of Key Issues The following section provides feedback from community members interviewed as part of the development of the ordinance and further analyzes some of the ordinance’s key provisions. Mixed Feedback from Community Members Staff and consultants conducted 24 informal interviews between November 2016 and January 2017 with community members and other stakeholders that live and/or work in the Palo Alto, including developers/property owners, small retail/personal service business owners or store managers, architects, and residents (see Attachment D for list of interviewees). The purpose of the conversations was to solicit feedback from a broad range of viewpoints on the interim urgency ordinance and the direction proposed by the City Council for the permanent ordinance. Interviewees expressed a variety of perspectives about retail development in Palo Alto, which are summarized below:  Consider the Future of Retail in Palo Alto. Stakeholders supported a broader definition of active uses in the existing neighborhood commercial districts, encouraging the City to be realistic about the future of retail. Retail product sales are shifting to online retailers. Palo Alto’s future is in restaurants and other food businesses, personal services and experiences, as well as arts, cultural, and quasi-public uses. City of Palo Alto Page 13  Need for More Affordable Businesses. The prices at retail businesses Downtown are expensive; ideally more affordable retailers would be available.  Mixed Opinions about Expanding the GF District. While some stakeholders supported the idea of extending the GF district (for example, to Alma Street or into the SOFA II district), others thought it was unnecessary and overly prescriptive for these lower quality retail streets. Several stakeholders identified the “middle” of University Avenue (roughly Emerson to Waverly Streets) as the most viable retail location. Hamilton Avenue and several side streets intersecting University Avenue (namely Ramona and Emerson Streets) were seen as secondary retail locations. Alma Street was identified as a poor retail location by several stakeholders because of Caltrain and vehicle traffic and noise, and the lack of foot traffic. Moreover, potential retail sites outside the Downtown core may be challenged by a lack of onsite parking and exclusion from the Downtown parking assessment district.  Mixed Opinions about the Moratorium on Conversions. Many stakeholders tend to favor more flexibility in finding tenants, based on current market conditions and expressed concern about a proliferation in vacant spaces. However, other interviewees tend to support policy interventions that support retail over office uses (which are seen as contributing to traffic congestion). Several stakeholders thought that if any protections are provided, they should only be on University Avenue and the intersecting side streets Downtown and potentially on California Avenue.  Consider Alternate Policy Mechanisms. A few stakeholders recommended using more typical policy mechanisms to regulate the quality and design of uses, specifically the conditional use permit process, specific finding requirements, and the precise/specific planning process to develop plans for individual neighborhood commercial areas.  Strength in Mix of Uses for Retailers & in Office Worker Foot Traffic. Retailers Downtown generally support the mix of uses in the core, with office workers and hotel guests serving as the strongest customer base. Several Downtown business owners mentioned that they are considering closing on Sundays since business is so slow. Further from the Downtown core, retailers tend to rely on the local resident population as their customer base.  Private Schools and Medical Offices are Getting Squeezed. A few stakeholders acknowledged that there are some specific business types (such as private schools and after-school programs, and medical offices, including therapists and chiropractors) which are getting squeezed by the current market and moratorium. These businesses can locate either in retail storefront spaces or office spaces, but were (1) not included as a retail or retail-like use under the Interim Urgency Ordinance and (2) cannot generally afford the current office lease rates.  Mixed Support for Waivers/Exceptions, if Reasonable. Some stakeholders support waivers and exceptions to allow certain low-quality retail sites to convert to other uses, while a moratorium is in place. A few interviewees expressed concern that the threshold City of Palo Alto Page 14 for an exception under the current Urgency Ordinance is too high and the requirements are confusing. Additionally, stakeholders were concerned about a lack of clarity in the timeline for a waiver to be granted, the burden on the property owner to provide adequate documentation, and the message that it sends to prospective tenants about the value of a space.  Some Support for Design Standards. Stakeholders were generally supportive of design standards that encourage active retail uses and pedestrian-oriented design through the use of clear glass and removing curtains and other window coverings. However, several stakeholders thought such standards were unnecessary and overly prescriptive. Other related comments:  Housing to Support Business. Many stakeholders expressed support for more housing Downtown and elsewhere in the city to support retail businesses and to provide more affordable housing for retail workers. Several retailers cited challenges in hiring and retaining workers because of the cost of housing locally.  Parking Constraints. Nearly all stakeholders, including residents, employers, customers, and developers expressed frustration about a lack of parking Downtown. At the same time, several stakeholders proposed removing on-street parking to create outdoor dining areas, seating or parklets to support more active use of the street and sidewalks.  Infrastructure and Transit Investments. Several stakeholders stated that the City and business associations need to invest in transit, alternate travel modes, and additional parking garages to make local retail shopping more convenient. Pros and Cons of Continuing a Moratorium and Extending the GF Boundary The draft ordinance would modify, but continue the moratorium on the conversion of retail uses, as stated by in the current Interim Urgency Ordinance. The Interim Urgency Ordinance has been successful in that it has prevented the conversion of retail uses during the past 18 months. Continuing such a prohibition would help to ensure that discontinued retail spaces would continue to be available for new retail uses and would preclude office or manufacturing uses from occupying these spaces. However, a moratorium and extension of the GF boundary do not guarantee that retail uses would necessarily occupy these spaces. In Downtown, in 2016, the vacancy rate for retail uses remains very low (<3%), while the lease rates Downtown have increased to $6.50-$8.25 per square feet, suggesting that the retail market is competitive and potentially too expensive for smaller businesses to find space Downtown. (See the most recent Downtown Monitoring Report for details: http://www.cityofpaloalto.org/civicax/filebank/documents/51729.) Property owners and developers interviewed as part of this project and/or who have requested waiver/exceptions have identified challenges in leasing retail spaces in non-prime locations— City of Palo Alto Page 15 further from the main corridors of University Avenue, El Camino Real, etc., despite at times lowering lease rates. Whether owners are holding out to lease to a tenant at a certain price or whether the market truly cannot bear a retail tenant in a sub-price location, the result is, at times, that a space will remain vacant for months or even years. Other Administrative Changes Some provisions in the Interim Urgency Ordinance have proven difficult to administer. The proposed ordinance addresses these issues. Notably, staff has not included a provision from the existing interim ordinance that would have protected retail and retail-like uses in districts where such uses are not permitted or conditionally permitted. Language has been added to clarify the ordinance does not have precedence over specific amortization language in the municipal code that may relate to specific properties. Additionally, the terms “permitted and operating,” which is a key phrase in the ordinance as it relates to the establishment of retail and retail like uses has been clarified. Other Design Standards Considered and Rejected/Postponed Other design standards were discussed with decision-makers and stakeholders and were ultimately rejected or are recommended to be postponed:  Minimum First Floor Height: Staff recommended and the City Council discussed a potential minimum first floor height requirement, such as 15 feet. Based on feedback from the ARB, architects, and developers, such a standard is not feasible within the CD district’s existing 50-foot height limit, without reducing the feasibility of constructing a 4-story building. As mentioned in the Next Step section above, this standard will be reconsidered as part of the Comprehensive Plan Update.  SOFA II Design Standards: Staff recommended and the City Council discussed potential design standard amendments for SOFA II. The Council determined that additional design standards were not needed in this area.  SOFA II Medical Office Size Threshold: The Council requested a recommendation on medical office size in SOFA II. Per existing SOFA II district regulations, medical uses are capped at 5,000 square feet. No change is proposed in order to maintain this small- to mid-size medical office uses.  Lobby Sizes: The GF district allows lobby and reception areas serving non-ground floor uses (such as for office uses on upper floors), but does not regulate the width of the frontage or size of the lobby area. As lobbies serving tenants on upper floors tend not to be leasable areas, they are typically relatively small in size; further regulatory restrictions are not warranted. Policy Implications Implications for the SOFA II district and the Comprehensive Plan are discussed below. City of Palo Alto Page 16 Implications for SOFA II Zoning Districts The SOFA II RT-35 and RT-50 residential transition districts emphasize residential and mixed use development with residential districts. The retail uses in these districts tend to cater to local residential areas that have limited foot traffic compared with Downtown. Currently, the Coordinated Area Plan prevents new ground-floor office in the Homer/Emerson Corridor1 which includes many of the retail tenant spaces in the Plan Area. The proposed ordinance would extend these protections to other retail and retail like uses in SOFA II. The waiver provisions would apply citywide. Comprehensive Plan Policy Implementation The draft ordinance supports land use and economic development policies envisioned by the City’s Comprehensive Plan. The Comprehensive Plan identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale “centers” with a mix of uses as focal points for neighborhoods (Goal L-4). Policy L-20 suggests that the City “encourage street frontages that contribute to retail vitality…” and Policy B-5 calls on the City to “maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City’s economic base.” The draft ordinance also supports Comprehensive Plan policies in the Downtown and SOFA II, which seek to maintain “a mix of commercial, civic, cultural, recreational and residential uses” Downtown and “promote quality design that recognizes the regional and historical importance of the area and reinforces its pedestrian character” (Policy L-23) and “enhance the character of the South of Forest Area (SOFA) as a mixed use area” (Policy L-25). Resource Impact: The city engaged Lexington Planning to assist staff with consulting services related to this effort in the amount of $25,000. This cost and related staff time and resources were expended from the Planning and Community Environment department operating budget. While there was no economic study prepared for this project, it is not anticipated the provisions of this ordinance would result in a substantial impact to city sales and property tax revenues. Timeline: The ordinance would be effective 31 days following Council’s adoption (on second reading). If the second reading occurs on or before March 27, 2017, it would become effective just prior to April 30, 2017, which is when the urgency interim ordinance would cease to be in effect. Environmental Review 1 The Homer/Emerson Corridor means all sites bordering Homer Avenue between Alma Street and Ramona Street and/or Emerson Street between Forest Avenue and Channing Street. City of Palo Alto Page 17 The subject project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. Specifically, the project is categorically exempt under CEQA Section 15308 as a regulatory action taken by the City pursuant to its police power and in accordance with Government Code Section 65858 to assure maintenance and protection of the environment. As a result of implementation of the ordinance, no substantially greater or more severe impacts are anticipated and no development is proposed, beyond what is currently allowed by the Zoning Ordinance and Comprehensive Plan. Attachments: Attachment A Ordinance Ground Floor Retail Preservation (PDF) Attachment B Ordinance 5325 (Retail Preservation Interim Ordinance) (PDF) Attachment C Ordinance 5330 (Retail Preservation Interim Ordinance Extension) (PDF) Attachment D List of Stakeholder Interviewees (PDF) Attachment E: Excerpted Draft Minutes from 12-14-16 and 1-11-17 PTC Meeting (PDF) NOT YET APPROVED   1  November 23, 2015      Ordinance No. ____  Ordinance of the Council of the City of Palo Alto Limiting the Conversion of  Ground Floor Retail and “Retail Like” Uses Citywide      The Council of the City of Palo Alto does ORDAIN as follows:     SECTION 1.  Findings and Declarations.     A. The City of Palo Alto has long been considered the birth place of Silicon Valley.   With its proximity to Stanford University, its international reputation, its deep ties to  technology firms, its highly rated public school system and its ample public parks, open space  and community centers, Palo Alto continues to serve as a hub for technology based business.    B. Palo Alto is considered one of Silicon Valley's most desirable office markets,  leading to rapidly increasing rental rates for commercial property.  In particular, average  commercial rental rates have gone up significantly from 2013 to 2015.  In 2013 the average  monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12  in 2015.  While retail rents have also increased during this period, retail rents are considerably  lower than office rents.  The average monthly rental rate for retail in 2013 was $4.21 and in  2015 was $4.88.      C. These record high monthly rental rates for office and low vacancy rates have  created financial incentives to replace current retail use with office use where such conversions  are permitted by the City’s zoning ordinance.  These economic pressures are more severe in the  downtown and California Avenue commercial areas but exist throughout the City. In addition,  these trends place particular pressure on small and medium‐sized businesses.    D. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff  to consider whether zoning‐based protections for ground floor retail uses need to be  strengthened where they currently exist and expanded to areas of the City where they do not.    E. This direction is consistent with the City’s existing Comprehensive Plan, which  identifies the desirability of neighborhood serving retail (Policy L‐16) and envisions inviting,  pedestrian‐scale “centers” with a mix of uses as focal points for neighborhoods (Goal L‐4).   Policy L‐20 suggests that the City “encourage street frontages that contribute to retail vitality…”  and Policy B‐5 calls on the City to “maintain distinct business districts within Palo Alto as a  means of retaining local services and diversifying the City’s economic base.”       K.  The City of Palo Alto enacted Urgency Interim Ordinance 5325 on May 11, 2015  to prevent the conversion of ground floor space to office or other non‐retail uses, which was a  trend in the City’s commercial districts.    L. The urgency interim ordinance was extended through adoption of Ordinance  5330 on June 15, 2015, and is set to expire on April 30, 2017.  170124 ay/2017‐01‐23     2     January 23, 2017                                                                                                                                                                                                                        M. The City’s land use data shows that there was a loss of approximately 70,000  square feet of retail‐type uses in the period from 2008 until the urgency interim ordinance was  adopted.  This loss of retail‐type uses coincided with an increase in commercial office rents,  such that property owners had an economic incentive to convert ground floor retail spaces to  office use where this was permitted by the City’s zoning regulations.    N. The economic conditions that favor conversion of retail space to office space  remain in place because office rents remain higher than retail rents.  According to the most  recent data available, in the third quarter of 2016, Palo Alto’s retail asking rates were higher  than any other city in the South Bay.  In tandem with these high retail lease rates, vacancy rates  for retail spaces have remained low, averaging 2.6% over the first three quarters of 2016.   Despite the strong demand for retail space, office lease rates in Palo Alto were 42% higher than  retail rates, with similarly low vacancy rates.    O. Since the urgency interim ordinance was adopted, the City has adopted  permanent retail protections for the California Avenue business district, and has adopted an  ordinance closing a loophole in PAMC Section 18.16.050 that was allowing the loss of retail  space along El Camino Real.      P. In anticipation of the expiration of the urgency interim ordinance (Ordinance  5330), and in order to provide protections for the entire City, the City Council desires to adopt  permanent retail protections.     SECTION 2. Section 18.04.030 of Chapter 18.04 of the Palo Alto Municipal Code is  hereby amended to amend definitions 114 and 125 and to add definition 125.1 as follows:    (114) “Personal service” means a use providing services of a personal convenience  nature, and cleaning, repair or sales incidental thereto, including:    (A) Beauty shops, nail salons, day spas, and barbershops;  (B) Self‐service laundry and cleaning services; laundry and cleaning pick‐up  stations where all cleaning or servicing for the particular station is done  elsewhere; and laundry and cleaning stations where the cleaning or servicing  for the particular station is done on site, utilizing equipment meeting any  applicable Bay Area Air Quality Management District requirements, so long as  no cleaning for any other station is done on the same site, provided that the  amount of hazardous materials stored does not at any time exceed the  threshold which would require a permit under Title 17 (Hazardous Materials  Storage) of this code;  (C) Repair and fitting of clothes, shoes, and personal accessories;  (D) Quick printing and copying services where printing or copying for the  particular service is done on site, so long as no quick printing or copying for  any off‐site printing or copying service is done on the same site;  (E) Internet and other consumer electronics services;  170124 ay/2017‐01‐23     3     January 23, 2017                                                                                                                                                                                                                        (F) Film, data and video processing shops, including shops where processing for  the particular shop is done on site, so long as no processing for any other shop  is done on the same site; and  (G) Art, dance or music studios intended for an individual or small group of  persons in a class (see “commercial recreation” for other activities).  (H)  Fitness and exercise studios, or similar uses, intended for an individual or small  group of 15 or fewer students/customers at one time (see “commercial  recreation” for other activities).    (125) “Retail service” means a use generally open to the public during typical business  hours and predominantly engaged in providing retail sale, rental, service, processing, or  repair of items primarily intended for consumer or household use, including but not  limited to the following: groceries, meat, vegetables, dairy products, baked goods,  candy, and other food products; liquor and bottled goods, household cleaning and  maintenance products; drugs, cards, and stationery, notions, books, tobacco products,  cosmetics, and specialty items; flowers, plants, hobby materials, toys, household pets  and supplies, and handcrafted items; apparel, jewelry, fabrics, and like items; cameras,  photography services, household electronic equipment, records, sporting equipment,  kitchen utensils, home furnishing and appliances, art supplies and framing, arts and  antiques, paint and wallpaper, carpeting and floor covering, interior decorating services,  office supplies, musical instruments, hardware and homeware, and garden supplies;  bicycles; mopeds and automotive parts and accessories (excluding service and  installation); cookie shops, ice cream stores and delicatessens.     (A) “Extensive retail service,” as used with respect to parking requirements,  means a retail sales use having more than seventy‐five percent of the gross  floor area used for display, sales, and related storage of bulky commodities,  including household furniture and appliances, lumber and building materials,  carpeting and floor covering, air conditioning and heating equipment, and  similar goods, which uses have demonstrably low parking demand generation  per square foot of gross floor area.  (B) “Intensive retail service” as used with respect to parking requirements, means  any retail service use not defined as extensive retail service.    (125.1) “Retail‐Like Use” means a use generally open to the public during typical  business hours and predominantly engaged in providing services closely related to retail  services, including but not limited to:    (A) Eating and drinking services, as defined in Section 18.04.030 (47);  (B) Hotels, as defined in Section 18.04.030 (73);  (C) Personal services, as defined in Section 18.04.030 (114);  (D) Theaters;  (E) Travel agencies;  (F) Commercial recreation, as defined in Section 18.04.030 (33);  170124 ay/2017‐01‐23     4     January 23, 2017                                                                                                                                                                                                                        (G) Commercial nurseries;  (H) Auto dealerships, as defined in Section 18.04.030 (12.5);  (I) Day Care Centers, as defined in Section 18.04.030 (42);   (J) Automobile Service Stations, as defined in Section 18.04.030(13); and  (K) Automotive Services, as defined in Section 18.04.030 (14).     SECTION 3. Chapter 18.30(A) of Title 18 of the Palo Alto Municipal Code is hereby  amended to add section 18.30(A).055:    18.30(A).055   Design Standards    The following design standards shall apply in the R combining district:    (a) Exterior windows on the ground floor shall use transparent glazing.  Low‐e glass or  minimal tinting to achieve sun control is permitted, so long as the glazing appears  transparent when viewed from the ground level. Opaque or reflective glazing is  prohibited on the ground floor for ground floor exterior windows in the R combining  district.    (b) Window coverings are not permitted on the ground floor during typical business  hours.  Where operations preclude transparency (e.g., theaters) or where privacy  requires window coverings, sidewalk‐facing frontage shall include items of visual  interest including displays of merchandise or artwork.    SECTION 4. Chapter 18.30(C) of Title 18 of the Palo Alto Municipal Code is hereby  amended to read as follows:    18.30(C).010   Specific Purpose    The ground floor combining district is intended to provide design guidelines and modify  the uses allowed in the CD commercial downtown districts and subdistricts to allow only  retail, eating and drinking and other service‐oriented commercial development uses on  the ground floor promote active, pedestrian‐oriented uses, with a high level of  transparency and visual interest at the ground level. For the purposes of this chapter,  "ground floor" means the first floor which is above grade. Where the ground floor  combining district is combined with the CD a commercial district, the regulations  established by this chapter shall apply in lieu of the uses normally allowed in the CD  underlying district. Except for the regulations relating to uses set forth in this chapter, all  other regulations shall be those of the applicable underlying CD district.    18.30(C).020   Permitted Uses    (a) The following uses shall be permitted in the GF combining district, subject to  restrictions in section 18.40.160:  170124 ay/2017‐01‐23     5     January 23, 2017                                                                                                                                                                                                                          (1) Eating and drinking;  (2) Hotels;  (3) Personal services, except for parcels with frontage on University Avenue,  where uses defined in 18.04.030(114)(G) and (H) are not permitted;  (4) Retail services;  (5) Theaters;  (6) Travel agencies;  (7) Entrance, lobby or reception areas serving non‐ground floor uses;  (8)(7) All other uses permitted in the underlying district, provided such uses  are not on the ground floor.    (b) Elimination or conversion of basement space currently in Retail or Retail‐Like use  or related support purposes is prohibited.  (b) Notwithstanding subsection (a), not more than twenty‐five percent of the  ground floor area not fronting on a street may be occupied by a use permitted in  the applicable underlying CD district.     (c) Entrance, lobby, or reception areas serving non‐ground floor uses may be  located on the ground floor.    18.30(C).030   Conditional Uses    (a) The following uses may be conditionally allowed on the ground floor in the GF  ground floor combining district, subject to issuance of a conditional use permit in  accord with Chapter 18.76 (Permits and Approvals) and with the additional  finding required by subsection (b), subject to restrictions in section 18.40.160:    (1) Business or trade school;  (2) Commercial recreation;  (3) Day care;  (4) Financial services, except drive in services;  (5) General business service;  (6) All other uses conditionally permitted in the applicable underlying CD  district, provided such uses are not on the ground floor.    (b) The director may grant a conditional use permit under this section only if he or  she makes the following findings in addition to the findings required by Chapter  18.76 (Permits and Approvals):   (1)   The location, access or design of the ground floor space of the existing  building housing the proposed use, creates exceptional or extraordinary  circumstances or conditions applicable to the property involved that do  not apply generally to property in the same district.  170124 ay/2017‐01‐23     6     January 23, 2017                                                                                                                                                                                                                        (2)   The proposed use will not be detrimental to the retail environment or the  pedestrian‐oriented design objectives of the GF combining district.    (c) Any use conditionally permitted pursuant to this section shall be effective only  during the existence of the building that created the exceptional circumstance  upon which the finding set forth in subsection (c) was made.    18.30(C).035   Design Standards    Where the GF combining district is combined with the CD‐C subdistrict, the following  design standards shall apply:    (c) Exterior windows on the ground floor shall use transparent glazing.  Low‐e glass or  minimal tinting to achieve sun control is permitted, so long as the glazing appears  transparent when viewed from the ground level. Opaque or reflective glazing is  prohibited on the ground floor for ground floor exterior windows in the GF  combining district.    (d) At least 70 percent of any sidewalk‐facing frontage shall have transparent  window/door openings between 2.5 and 10 feet above grade.    (e) Window coverings are not permitted on the ground floor during typical business  hours.  Where operations preclude transparency (e.g., theaters) or where privacy  requires window coverings, sidewalk‐facing frontage shall include items of visual  interest including displays of merchandise or artwork.    18.30(C).040   Annual Monitoring of Ground Floor Retail Use  A downtown retail vacancy rate and use survey shall be prepared annually in September  of each year, and a report shall be prepared conveying that information to the Planning  and Transportation Commission and City Council prior to the end of the year.  The  purpose of the survey is to assess changes in retail use in the downtown zones.  The  vacancy rate shall address all areas zoned CD‐C or GF in downtown.     SECTION 5. Sections 18.85.010 through 18.85.060 of Chapter 18.85 of Title 18 of the  Palo Alto Municipal Code, which establish the Retail Preservation Interim Ordinance, and which  expire on April 30, 2017, are hereby deleted in their entirety.    SECTION 6. Section 18.40.160 of Chapter 18.40 of Title 18 of the Palo Alto Municipal  Code is hereby added to read as follows:    18.40.160 Retail Preservation    (a) Conversion of Retail and Retail‐Like Uses Prohibited.   170124 ay/2017‐01‐23     7     January 23, 2017                                                                                                                                                                                                                        (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.    (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.  (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 a 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.    (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;  170124 ay/2017‐01‐23     8     January 23, 2017                                                                                                                                                                                                                        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 Planning Director  together with any supporting documentation. The Planning Director, in his or her  sole discretion, may act on a request for waiver or refer the matter to the City  Council.  A decision by the Planning Direction may be appealed to the City  Council by written form in the manner prescribed by the Planning Director.    (d) Reconstruction.  Any ground floor Retail use existing on or after March 2, 2015 may be  demolished and rebuilt provided that the portion of square footage used as Retail use  on or after March 2, 2015 is not reduced except that Retail square footage may be  reduced by the minimum amount needed to provide access to any new upper floor  and/or lower level.    (e) Applicability to Current Requirements.  Nothing in this section shall alter requirements  of site‐specific Planned Community zoning ordinances or adopted conditions of  approval.  Nothing in the section shall be construed to waive the requirement for a  conditional use permit or other entitlement where such requirements currently exist.     SECTION 7. Section 18.13.030 of Chapter 18.13 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     18.13.030   Land Uses        Table 1 specifies the permitted and conditionally permitted land uses in the multiple‐ family residence districts.  Table 1  Multiple Family Residential Uses  [P = Permitted Use • CUP = Conditional Use Permit Required]       RM‐ 15  RM‐ 30  RM‐ 40  Subject to  Regulations  in:  ACCESSORY AND SUPPORT USES  Accessory Facilities and uses customarily incidental to permitted P P P Chapter  170124 ay/2017‐01‐23     9     January 23, 2017                                                                                                                                                                                                                        uses 18.40  Home Occupations, when accessory to permitted residential uses P P P Chapter  18.42  Horticulture, Gardening, and Growing of food products for  consumption by occupants of a site P P P   Surface Parking Facilities located on abandoned railroad rights‐of‐ way  CUP CUP   EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES  Churches and Religious Institutions CUP CUP CUP  Private Clubs, Lodges, or Fraternal Organizations, excluding any  such facility operated as a business for profit   CUP   Private Educational Facilities CUP CUP CUP  PUBLIC/QUASI‐PUBLIC USES  Community Centers CUP CUP CUP  Utility Facilities essential to provision of utility services but  excluding construction or storage yards, maintenance facilities, or  corporation yards.  CUP CUP CUP   RECREATION USES  Neighborhood Recreational Centers CUP CUP CUP  RESIDENTIAL USES  Single‐Family P (1) P (1) P (2)  Two‐Family P (1) P (1) P (1)  Multiple‐Family P P P  Village Residential P (3) (3) 18.13.050  Mobile Homes P P P  Residential Care Homes P P P  SERVICE AND RETAIL USES  Convalescent Facilities CUP  Day Care Centers CUP CUP P 18.40.160  Small Family Day Care Homes P P P  Large Family Day Care Homes P P P  Small Adult Day Care Homes  P P P  Large Adult Day Care Homes CUP CUP CUP  Eating and Drinking Services, except drive‐in and take‐out services  CUP CUP 18.13.040(f), 18.40.160  Personal Services and Retail Services of a neighborhood‐serving  nature  CUP CUP 18.13.040(f),  18.40.160  TEMPORARY USES  Temporary Uses, subject to regulations in Chapter 18.42 CUP CUP CUP 18.42.050  170124 ay/2017‐01‐23     10     January 23, 2017                                                                                                                                                                                                                        P = Permitted Use CUP = Conditional Use Permit  Required  (1)   Permitted use only on lots less than 8,500 square feet in size.     (2)   Permitted use only on lots less than 6,000 square feet in size.  (3)   Permitted use only if lot is substandard in size, e.g., less than 8,500 square feet or less than 70 feet in width, or at the  perimeter of a site in excess of one acre where used as a transition to low‐density residential area.  SECTION 8. Section 18.16.040 of Chapter 18.16 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     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:  ACCESSORY AND SUPPORT USES     Accessory facilities and activities customarily associated with  or essential to permitted uses, and operated incidental to the  principal use.  P P p 18.42  Drive‐in services or take‐out services associated with  permitted uses(3) CUP CUP CUP 18.42  Tire, battery, and automotive service facilities, when  operated incidental to a permitted retail service or shopping  center having a gross floor area of more than 30,000 square  feet.   CUP   18.42,  18.40.160  EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES  Business and Trade Schools P P  Churches and Religious Institutions P P P  Private Educational Facilities CUP P P  170124 ay/2017‐01‐23     11     January 23, 2017                                                                                                                                                                                                                        Private Clubs, Lodges, or Fraternal Organizations CUP P P  MANUFACTURING AND PROCESSING USES  Recycling Centers CUP CUP CUP  Warehousing and Distribution CUP  OFFICE USES  Administrative Office Services P 18.16.050  Medical Offices CUP CUP CUP 18.16.050  Professional and General Business Offices P P P 18.16.050  PUBLIC/QUASI‐PUBLIC USES  Utility Facilities essential to provision of utility services but  excluding construction or storage yards, maintenance  facilities, or corporation yards.  CUP CUP CUP   RECREATION USES  Commercial Recreation CUP CUP CUP 18.40.160  Outdoor Recreation Services CUP CUP CUP  RESIDENTIAL USES  Multiple‐Family P(1) P(1) P(1) 18.16.060(b)  Home Occupations P P P  Residential Care Homes P P P  RETAIL USES  Eating and Drinking Services, excluding drive‐in and take‐out  services P P P 18.40.160  Retail Services, excluding liquor stores P P P 18.40.160  Liquor stores CUP P P 18.40.160  Shopping Centers P   18.16.060(e),  18.40.160  SERVICE USES  Ambulance Services CUP CUP CUP  Animal Care, excluding boarding and kennels P P P  Boarding and Kennels CUP  Automobile Service Stations CUP CUP CUP 18.30(G),  18.40.160   Automotive Services CUP 18.40.160  Convalescent Facilities CUP P P  Day Care Centers P P P 18.40.160  Small Family Day Care Homes P P P  Large Family Day Care Homes P P P  Small Adult Day Care Homes P P P  170124 ay/2017‐01‐23     12     January 23, 2017                                                                                                                                                                                                                        Large Adult Day Care Homes CUP P P  Banks and Financial Services V CUP P(2) P(2)  General Business Services CUP P  Hotels P P 18.16.060(d), 18.40.160  Mortuaries CUP P P  Neighborhood Business Services P 18.16.060(f)  Personal Services P P P 18.16.060(f),  18.40.160  Reverse Vending Machines P P P  TEMPORARY USES  Farmer's Markets CUP CUP CUP  Temporary Parking Facilities provided that such facilities shall  remain no more than five years. CUP CUP CUP   TRANSPORTATION USES  Parking as a principal use CUP CUP  Transportation Terminals CUP CUP  P = Permitted Use CUP = Conditional Use Permit Required     (1)   Residential is only permitted as part of a mixed use development, pursuant to the provisions of Section 18.16.060(b), or  on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions  of Section 18.16.060(c).     (2)   Except drive‐in services.     (3)   So long as drive up facilities, excluding car washes, provide full access to pedestrians and bicyclists.  A maximum of two  such services shall be permitted within 1,000 feet, and each use shall not be less than 150 feet from one another.     (4)   For properties in the CN and CS zone districts, businesses that operate or have associated activities at any time between  the hours of 10:00 p.m. and 6:00 a.m. require a conditional use permit.       (b)   Late Night Use and Activities       The following regulations restrict businesses that operate or have associated activities at any time  between the hours of 10:00 p.m. and 6:00 a.m., where such site abuts or is located within 50 feet of  residentially zoned properties.          (1)   Such businesses shall be operated in a manner to protect residential properties from excessive  noise, odors, lighting or other nuisances from any sources during those hours.          (2)   For properties located in the CN or CS zone districts, businesses that operate or have associated  activities at 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 that the operations or activities are compatible with the nearby residentially zoned property.       (c)   CN District: Special Use Requirements in the Charleston and Midtown Shopping Centers     The following regulations shall apply to areas of Charleston Center and the Midtown Shopping Center  as defined in Section 18.16.030.       170124 ay/2017‐01‐23     13     January 23, 2017                                                                                                                                                                                                                        Table 2 shows the uses permitted and conditionally permitted on the ground floor of the applicable  areas of the Charleston Center and Midtown Shopping Centers.  Permitted and conditional uses  specified in subsection (a) of this section shall only apply to the ground floor of the areas of the  Charleston and Midtown Shopping Centers as listed in Table 2.  Uses lawfully existing on January 16,  2001 may be continued as non‐conforming uses but may only be replaced with uses permitted or  conditionally permitted under this subsection.    TABLE 2  CHARLESTON AND MIDTOWN SHOPPING CENTERS GROUND FLOOR USES  P = Permitted Use   CUP = Conditional Use Permit Required   X = Prohibited Use   LAND USES  Charleston  Shopping  Center  Midtown  Shopping  Center  Subject to Regulations in:  ACCESSORY AND SUPPORT USES  Accessory facilities and uses customarily incidental  to permitted uses. P P  EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES  Churches and Religious Institutions CUP CUP  Private Educational Facilities CUP CUP  MANUFACTURING AND PROCESSING USES  Recycling Centers CUP CUP  OFFICE USES  Neighborhood‐serving offices that do not exceed  2,500 square feet in floor area. P 18.16.050  Neighborhood‐serving offices exceeding 2,500  square feet in floor area. CUP 18.16.050  Administrative office uses and general business  office uses (other than neighborhood‐serving travel  agencies and insurance agencies) other than those  legally in existence on January 16,2001  X X 18.16.050  Medical offices not exceeding 2,500 square feet in  area, professional offices, travel agencies, and  insurance agencies  CUP 18.16.050  PUBLIC/QUASI‐PUBLIC USES  Utility Facilities essential to provision of utility  services but excluding construction or storage  yards, maintenance facilities, or corporation yards.  CUP CUP   RECREATION USES  Commercial Recreation CUP CUP 18.40.160  170124 ay/2017‐01‐23     14     January 23, 2017                                                                                                                                                                                                                        Outdoor Recreation Services CUP CUP  Private Clubs, Lodges, or Fraternal Organizations CUP CUP  RESIDENTIAL USES  Residential uses of any nature X X  RETAIL USES  Eating and Drinking Services, excluding drive‐in and  take‐out services P P 18.40.160  Retail Services, excluding liquor stores P P 18.40.160  Liquor stores CUP CUP 18.40.160  SERVICE USES  Ambulance Services CUP CUP  Animal Care, excluding boarding and kennels P P  Automobile Service Stations CUP CUP 18.30(G), 18.40.160  Convalescent Facilities CUP CUP  Day Care Centers P P 18.40.160  Financial Services CUP CUP  Mortuaries CUP CUP  Neighborhood Business Services P P  Personal Services P P 18.40.160  Reverse Vending Machines P P  TEMPORARY USES  Farmers' Markets CUP CUP  Temporary Parking Facilities, provided that such  facilities shall remain no more than five years. CUP CUP  P = Permitted Use          CUP = Conditional Use Permit Required        X = Prohibited Use  (d)   Charleston Shopping Center: Additional Use Restrictions            (1)   Any office use first occupying space at the Center on or after January 16, 2001, shall obtain a  written determination from the director of planning and community environment that it qualifies as a  neighborhood serving use, as defined in this chapter, before occupying its premises. The applicant shall  submit such information as the director shall reasonably require in order to make the determination,  and the director shall issue the determination within 30 days of receiving a complete  application.  Failure to submit the required information shall be grounds for determining that a business  is not neighborhood‐serving.                (2)   No more than 7,850 square feet of total floor area at the Center shall be occupied by office  uses at any time.      170124 ay/2017‐01‐23     15     January 23, 2017                                                                                                                                                                                                                                (3)   Prior to approving a conditional use permit for neighborhood‐serving offices larger than 2,500  square feet in total floor area, the city shall find that the proposed use will be neighborhood‐serving,  that it will be conducted in a manner that will enhance and strengthen the Center as a neighborhood  resource, and that it will not diminish the retail strength of the center.       (e)   Midtown Shopping Center: Additional Use Restrictions               (1)   An existing ground floor office may be replaced with another office if                (a)   the new tenant or owner will continue the existing business or practice; or                 (b)   a conditional use permit is issued for the new office use.          (2)   No conditional use permit shall be issued for any new office use on the ground floor unless, in  addition to the findings required for a conditional use permit as specified in Section 18.76.010, the city  finds that the proposed use will be neighborhood serving, that it will be conducted in a manner that will  enhance and strengthen the Midtown Shopping District as a neighborhood resource, and that it will not  diminish the retail strength of the District.                  (3)   For properties at 711, 719, and 721 Colorado Avenue, and 689 Bryson Avenue, buildings not  fronting on Middlefield Avenue, designed and used for office purposes, and not well suited to other uses  are exempt from the provisions of this subsection (b).    SECTION 9. Section 18.18.050 of Chapter 18.18 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     18.18.050   Land Uses        The uses of land allowed by this chapter in each commercial zoning district are  identified in the following table. 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.        Permitted and conditionally permitted land uses for the CD district are shown in Table 1:     Table 1  CD Permitted and Conditionally Permitted Uses  P  Permitted Use • CUP  Conditional Use Permit Required   CD‐C CD‐S CD‐ N  Subject to  regulations in  Chapter:  ACCESSORY USES  Accessory facilities and activities associated with or essential to  permitted uses, and operated incidental to the principal use P P P   Drive‐in or Take‐out Services associated with permitted uses (2) CUP CUP CUP  170124 ay/2017‐01‐23     16     January 23, 2017                                                                                                                                                                                                                        Tire, battery, and automotive service facilities, when operated  incidental to a permitted retail service or shopping center having  a gross floor area of more than 30,000 square feet  CUP   18.40.160  EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES  Business and Trade Schools P P  Churches and Religious Institutions P P P  Private Educational Facilities P P CUP  Private Clubs, Lodges, or Fraternal Organizations P P CUP  MANUFACTURING AND PROCESSING USES  Recycling Centers CUP CUP CUP  Warehousing and Distribution CUP OFFICE USES  Administrative Office Services P 18.18.060(f)  Medical, Professional, and General Business Offices P P P 18.18.060(f)  PUBLIC/QUASI‐PUBLIC FACILITY USES  Utility Facilities essential to provision of utility services but  excluding construction or storage yards, maintenance facilities, or  corporation yards  CUP CUP    RECREATION USES  Commercial Recreation CUP CUP CUP 18.40.160  Outdoor Recreation Services CUP CUP CUP  RESIDENTIAL USES  Multiple‐Family P(1) P (1) P (1) 18.18.060(b)  Home Occupations P P P  Residential Care Homes P P P  RETAIL USES  Eating and Drinking Services, except drive‐in or take‐out services P P P 18.18.060(g),  18.40.160  Retail Services, excluding liquor stores P P P 18.18.060(g),  18.40.160  Shopping Centers P    18.18.060(g),  18.40.160   Liquor Stores P P CUP 18.40.160  SERVICE USES  Animal Care, excluding boarding and kennels P P P  Ambulance Services CUP CUP CUP 18.30(G)  Automobile Service Stations CUP CUP CUP 18.40.160  Automobile Services CUP 18.40.160  170124 ay/2017‐01‐23     17     January 23, 2017                                                                                                                                                                                                                        Convalescent Facilities P P CUP  Day Care Centers P P P 18.40.160  Small Family Day Care Homes P P P  Large Family Day Care Homes P P P  Small Adult Day Care Homes P P P  Large Adult Day Care Homes  Financial Services, except drive‐up services P P CUP  General Business Services CUP P P  Hotels P P P 18.18.060(d),  18.40.160  Mortuaries P P CUP  Personal Services P P P 18.18.060(g),  18.40.160  Reverse Vending Machines P P P  TRANSPORTATION USES  Parking as a principal use CUP CUP Passenger Transportation Terminals CUP TEMPORARY USES  Indoor Farmers’ Markets CUP CUP CUP  Temporary Parking Facilities, provided that such facilities shall  remain no more than five years CUP CUP CUP   P  Permitted Use                CUP  Conditional Use Permit Required     (1)   Residential is only permitted as part of a mixed use development, pursuant to the provisions of Section18.18.060(b), or  on sites designated as Housing Opportunity Sites in the Housing Element of the Comprehensive Plan, pursuant to the provisions  of Section 18.18.060(c).     (2)   Drive‐up facilities, excluding car washes, provide full access to pedestrians and bicyclists.  A maximum of two such  services shall be permitted within 1,000 feet and each use shall not be less than 150 ft from one another.    SECTION 10. Section 18.20.030 of Chapter 18.20 of Title 18 of the Palo Alto Municipal  Code is hereby amended to read as follows:     18.20.030   Land Uses    (a) Permitted and Conditionally Permitted Land Uses        Table 1 lists the land uses permitted or conditionally permitted in the industrial and  manufacturing districts.    Table 1  Industrial/Manufacturing District Land Uses  [P = Permitted Use   CUP = Conditional Use Permit Required]  170124 ay/2017‐01‐23     18     January 23, 2017                                                                                                                                                                                                                            MOR ROLM  ROLM(E)  RP  RP(5) GM  Subject to  regulations in  Chapter:  ACCESSORY AND SUPPORT USES  Accessory facilities and activities customarily  associated with or essential to permitted uses, and  operated incidental to the principal use.  P P P P Chs. 18.40,  18.42  Automatic Teller Machines P P P P 18.20.030(d)  Home Occupations, when accessory to permitted  residential uses. P P P P Chs. 18.40,  18.42  EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES  Business and Trade Schools P  Religious Institutions P P P  Colleges and Universities P P P  Private Clubs, Lodges, or Fraternal Organizations CUP CUP CUP CUP  Private Schools (K‐12) CUP CUP CUP CUP  HEALTH CARE SERVICES  Ambulance Services CUP Convalescent Facilities CUP CUP CUP CUP 18.23.100( B)  Medical Office P CUP CUP Medical Research P P P 18.20.030(c)  Medical Support Retail P 18.20.030(b)  Medical Support Services P 18.20.030(b)  MANUFACTURING AND PROCESSING USES  Manufacturing P P P 18.23.100( B)  Recycling Centers CUP CUP CUP  Research and Development CUP P P P 18.23.100( B)  Warehousing and Distribution P P P  OFFICE USES  Administrative Office Services P P CUP  Financial Services CUP CUP Professional and General Business Office P P  PUBLIC/QUASI‐PUBLIC USES  Service and Equipment Yards P  Utility Facilities CUP  Utility Facilities essential to provision of utility  services but excluding construction/storage yards, CUP CUP CUP    170124 ay/2017‐01‐23     19     January 23, 2017                                                                                                                                                                                                                        maintenance facilities, or corporation yards  RECREATION USES  Commercial Recreation CUP CUP CUP 18.40.160  Neighborhood Recreational Centers CUP RESIDENTIAL USES  Single‐Family Not permitted 18.20.040(b) Two‐Family Not permitted  Multiple‐Family CUP CUP CUP Residential Care Homes P CUP CUP CUP 18.23.100( B)  RETAIL USES  Eating and Drinking Services, excluding drive‐in and  take‐out services  CUP CUP CUP 18.40.160  Retail Services CUP CUP CUP 18.40.160  SERVICE USES  Animal Care, excluding boarding and kennels P  Boarding and Kennels CUP  Day Care Centers P CUP CUP CUP 18.23.100( B),  18.40.160  Emergency Shelters for the Homeless   P  (ROLM(E)     18.20.030(d)  Family Day Care Homes     Small Family Day Care P CUP CUP CUP 18.23.100( B)     Large Family Day Care P CUP CUP CUP 18.23.100( B)  General Business Services P  Lodging     Hotels providing not more than 10% of rooms with  kitchens CUP    18.40.160  Mortuaries and Funeral Homes P  Personal Services CUP CUP CUP 18.40.160  Vehicle Services     Automobile Service Stations, subject to site and  design review in accord with the provisions of  Chapter 18.30(G)  CUP CUP  18.40.160     Automotive Services CUP 18.40.160     Off‐site new vehicle storage for auto dealerships  located in Palo Alto  CUP  CUP   TEMPORARY USES  Temporary Parking Facilities, provided that such  facilities shall remain no more than five years CUP CUP CUP CUP   170124 ay/2017‐01‐23     20     January 23, 2017                                                                                                                                                                                                                        TRANSPORTATION USES  Passenger Transportation Terminals CUP        (b)   Limitations on Medical Support Service and Medical Support Retail Uses in the Medical Office and Medical Research  (MOR) Zone        (1)   The intent of this limitation is to restrict medical support service and medical support retail uses in the Medical Office  and Medical Research (MOR) zone in order to preserve and facilitate space for medical offices and medical research facilities.        (2)   Floor area devoted to medical support services and medical support retail uses in the Medical Office and Medical  Research (MOR) zoning district shall not exceed twenty percent (20%) of the total gross floor area within the district.        (3)   The director may require a report from the property owner or applicant whenever application is made to the city to  develop new space for medical support service or medical support retail uses or to convert existing space to such uses. The  report shall identify the gross floor area of buildings on each site within the zoning district and the gross floor area of medical  support service and medical support retail uses for each site. The director may, from time to time, establish procedures and  standards implementing this Section 18.20.030(b).     (c)   Automatic Teller Machines        (1)   Automatic teller machines may be allowed as an accessory use in the MOR, ROLM, ROLM(E), RP, RP(5), and GM districts  when incidental to a primary use on the site and when accessible only from the interior of a building.        (2)   Automatic teller machines may be allowed as a permitted use in the MOR, ROLM, ROLM(E), RP, RP(5), and GM districts  when incidental to a primary use on the site and when accessible from the exterior of a building. Staff level Architectural  Review is required prior to issuance of a building permit.     (d)   Emergency Shelters for the Homeless     Emergency shelters for the homeless may be allowed as a permitted use in the ROLM(E) district on properties located east of  Highway 101, subject to the following performance and design standards.       Performance and Design Standards for Emergency Shelters for the Homeless.       An emergency shelter for the homeless shall conform to all site development standards and performance criteria of the  ROLM(E) zone district except as modified by the following performance and design standards:          (1)   The construction of and/or renovation of a building for use as an emergency shelter shall conform to all applicable  building and fire code standards.        (2)   There shall be provided one parking space for each three (3) beds in the emergency shelter.        (3)   Shelters shall have designated smoking areas that are not visible from the street and which are in compliance with all  other laws and regulations.        (4)   There shall be no space for outdoor congregating in front of the building adjacent to the street and no outdoor public  telephones.        (5)   There shall be a refuse area screened from view.        (6)   Maximum number of persons/beds.  The emergency shelter for the homeless shall contain no more than 40 beds.        (7)   Size and location of exterior and interior on‐site waiting and client intake areas.  Shelters shall provide 10 square feet of  interior waiting and client intake space per bed.  In addition, there shall be two office areas provided for shelter staff.  Waiting  and intake areas may be used for other purposes as needed during operations of the shelter.        (8)   On‐site management.  On‐site management and on‐site security shall be provided during hours when the emergency  shelter is in operation.        (9)   The emergency shelter provider shall submit an operations plan that addresses the standards for operation contained in  the Palo Alto Quality Assurance Standards for Emergency Shelters for the Homeless.        (10)   Distance to other facilities.  The shelter must be more than 300 feet from any other shelters for the homeless.        (11)   Length of stay.  Temporary shelter shall be available to residents for no more than 60 days.  Extensions up to a total  stay of 180 days may be provided if no alternative housing is available.        (12)   Outdoor lighting shall be sufficient to provide illumination and clear visibility to all outdoor areas, with minimal  shadows or light leaving the property.  The lighting shall be stationary, and directed away from adjacent properties and public  rights‐of‐way.       170124 ay/2017‐01‐23     21     January 23, 2017                                                                                                                                                                                                                         SECTION 11. Section 5.020 of the South of Forest Area Coordinated Area Plan, Phase II  (SOFA II CAP) is hereby amended to read as follows:    5.020           RT Districts ‐ Land Uses    (a)    Permitted and Conditionally Permitted Uses    Table 1 shows the uses permitted or conditionally permitted in the RT‐35 and RT‐50 districts.    Table 1: RT District Permitted and Conditionally Permitted Uses  RT-35 RT-50 Also see regulations in Section: ACCESSORY AND SUPPORT USES Accessory uses to the primary use P EDUCATIONAL, RELIGIOUS, AND ASSEMBLY USES Private educational facilities P Private clubs, lodges, or fraternal organizations P Religious institutions P OFFICE USES Medical, professional, and general business offices P See restrictions on size and location in subsections (b) and (c) PUBLIC/QUASI-PUBLIC USES Utility facilities CUP RECREATION USES Commercial recreation CUP RESIDENTIAL USES Home occupations P Lodging (including bed and breakfast facilities) P Multiple-family uses, including SRO housing P Residential care homes P Two-family uses P RETAIL USES Retail services, excluding liquor stores P 18.40.160    170124 ay/2017‐01‐23     22     January 23, 2017                                                                                                                                                                                                                          RT-35 RT-50 Also see regulations in Section: SERVICE USES Automobile service stations, subject to site and design review as specified in Chapter 18.82 of the Palo Alto Municipal Code CUP(1) 18.40.160 Automotive services, including tire services CUP(1)18.40.160 Convalescent facilities P Day care centers P 18.40.160 Day care homes, small adult P Day care homes, large adult P Day care homes, small family P Day care homes, large family P Eating and drinking facilities, except drive-in services P 18.40.160 Financial services P General business services P Personal services P 18.40.160 Reverse vending machines P Warehousing and Distribution CUP TEMPORARY USES Temporary parking facilities for up to five years CUP Temporary uses, subject to regulations in Chapter 18.90 of the Palo Alto Municipal Code CUP TRANSPORTATION USES Parking as a principal use CUP Transportation terminals CUP(1) (1) New uses of this nature are only permitted in that area bounded by High Street on the east, Alma street on the west, Forest Avenue on the north, and Addison Avenue on the south.   (b)     Office Uses    (1) No new gross square footage of a medical, professional or general business or administrative office  use shall be allowed, once the gross square footage of such office uses, or any combination of such  uses, on a site has reached five thousand gross square feet.  (2) No conversion of gross square footage from any other use to a medical, professional or general  business or administrative office use shall be allowed once the gross square footage of such office  uses, or any combination of such uses, on a site has reached five thousand gross square feet.  (3) Subdivision of a parcel shall not increase the square footage of allowed office uses.  (4) In the case of a lot merger, the resulting parcel is subject to the five‐thousand‐gross‐square‐foot  limit set forth in subsections one and two.     (c)  Protection of Specific Uses     170124 ay/2017‐01‐23     23     January 23, 2017                                                                                                                                                                                                                        (1)  For sites in the Homer/Emerson Corridor (as defined in Appendix C‐1) located in   the RT‐35 or RT‐50 districts, medical, professional, and general business offices   may not be located on the ground floor of a building unless such offices:    (A)  have been continuously in existence in that space since March 19, 2001, and, as of that date,  were neither non‐conforming nor in the process of being amortized pursuant to PAMC  Chapter 18.95;  (B)  occupy a space that was not occupied by retail services, eating and drinking services,  personal services, or automotive services on March 19, 2001 or thereafter;  (C)  occupy a space that was vacant on March 19, 2001;  (D)  are located in new or remodeled ground floor areas built on or after March 19, 2001 if the  ground floor area devoted to retail services, eating and drinking services, personal services,  and automobile services does not decrease; or  (E)  are located in commercial space constructed under a building permit issued in reliance on  Section 8 of Ordinance 4730 (which defines commercial space for which an ARB approval had  been granted prior to March 19, 2001 as “space not occupied by retail, personal services,  eating and drinking services, housing, or automotive services”).  (2)  For all sites outside of the Homer/Emerson Corridor, in the RT‐35 or RT‐50   districts, housing on the ground floor may not be replaced by office uses.  (3)  For all sites outside of the Homer/Emerson Corridor, in the RT‐35 or RT‐50   districts, housing on the ground floor may not be replaced by office uses.    SECTION 12. The Zoning Map adopted pursuant to Section 18.08.040 of Chapter 18.08  of Title 18 of the Palo Alto Municipal Code is hereby amended as follows:    The Ground Floor (GF) combining district shall be extended to additionally include: 125,  124, 116, and 102 University Ave., 525, 529, 542 and 550 High St., 539 and 535 Alma St., 115,  150, 156,158, and 164 Hamilton Ave.  The revised boundaries of the (GF) combining district are  shown on the map labeled Exhibit “A,” attached hereto and incorporated herein by reference.     SECTION 13.  This Ordinance supersedes Ordinance Nos. 5325 and 5330, and any  provision of the Palo Alto Municipal Code inconsistent with the provisions of this Ordinance.   Additionally, this Ordinance shall supersede any conflicting provisions of the SOFA II  Coordinated Area Plan.     SECTION 14.  Severability.  If any provision, clause, sentence or paragraph of this  ordinance, or the application to any person or circumstances, shall be held invalid, such  invalidity shall not affect the other provisions of this Ordinance which can be given effect  without the invalid provision or application and, to this end, the provisions of this Ordinance  are hereby declared to be severable.    SECTION 15.  Effective Date.  This ordinance shall be effective on the thirty‐first date  after the date of its adoption and shall not apply to any project where a discretionary permit or  entitlement application, other than a “use and occupancy permit,” was submitted to the City  before March 2, 2015.  Nothing in this ordinance shall be construed to affect a vested right  existing before its effective date.     SECTION 16.  CEQA.  The City Council finds that this Ordinance falls under the California  Environmental Quality Act (CEQA) exemption found  in Title 14 California Code of Regulations  Section 15061(b)(3) and 15301 because it is designed to preserve the status quo.  170124 ay/2017‐01‐23     24     January 23, 2017                                                                                                                                                                                                                           INTRODUCED:     PASSED:     AYES:     NOES:    ABSTENTIONS:    ABSENT:     ATTEST:      APPROVED:    ______________________________    ____________________________  City Clerk      Mayor    APPROVED AS TO FORM:    ____________________________   City Manager  ______________________________  Senior Deputy City Attorney    ____________________________   Director of Planning and    Community Environment  934 -944 927 932 233 281 933 -937 943 327 1001 942 469 475 744 459 832 801 427-453 920 912 362 370 900 838 846 471 459 835 -855460 815 840836 834 845 400 803 928930 93 1 933 83 5 -837 831 -833 451453 802800 810 -816 818 -820 828 -830 817 -819 825 567-569 559563 521-529 531-539 541-547 556 596 904 926 561-567 569 84 527-533 543 551 510520 558-560 903 825 837 581 575940934 813-823 501-509 511-519 539541543 515-517 809 811 420 1001 1011 3 365 1010 376 370 1020 1022 345 331 329 10611033 1027 1017-1023 980960 990 342-352 354-362 326 1019 1027 1035-1037 405 409 427 1050 426-430 432-438 10551033 1043 4671042 1036 1018 1000 448 452 450 451 439 944 471 483948952 959947925 915 933935 425-443 451449 463-465 936-940 458 460 440 428426 1028- 1030 536 526 1001 1011- 1015 1021 525 540 542 483 904 912 468 918 926 537 965-971 505-507 519-521 939-945 931-935 923-925 518-520 59 5851048 1044 5 56 1026 1022580 574 566 539 552548 546544 9999 136 610 116-122 150 535529525 542516140 102 116124 163 145 566556 167 528 643635 635 645- 685 660- 666 620 180 164 158156 624628632 636640 644 617621 151-165 171-195 203 642640636 200 151 115 125 135 514 101 440 444 436432 427 425 117119 630616 208 228220 240 575 530- 534536540 552 177 156 201209215225 595 229231 611-623 180 508500 625-631 170172174 542 544 538- 542536534 552548546 541- 547 230-238 734 723 721 702- 730220-244 744 701 731 755757 771 200 160 728-732 762- 776740-746 250 275 270 255741 265 724 730 651 221-225 227 668 707 205 201203451449 209 219 221 233235450460470 442444 400 420 430 411 425 429 185 165 181 412 250 420 245 171-169 441- 445 435- 439 346344 333335 342 344 431 460 450 235530 220220B 222 240 514278 274270 250 545 540 251485255 271 281 300 310 301 581 259-267 533535 537 261267 518-526 532 520-526 530-536 271 281 252 270 240-248 202- 216 228226 234238 244 242 210- 216 228-234 223- 229 209215 247-259 240 232230 311-317 251 360 344 326 340 337339 323 317 400 420 332330 314 353 355 367 305 347 265272-278 418 319 321-341 328 330 300-310 431401 366 436 426 369 335 319 390 301 315 375 307-311 325330 3321&23301-3 324 326316 318 373-377 416-424 361 314 338 340 560 345 321325 315 529 285 555 650636628 385 365 375380 345 664 325650-654 661 635300 690 675 555541-549533 535- 539 318320322324326 352 425 439-441 435429425 415-419 405403453 461 383460 502 510 526 520 540 499 467 459 439 425 555 400 436-452 456 379 370-374 376380-382 384-396 550-552 364 360 431 440-444 423 499 475 421-423 431-433 432428 460-476 450 635 446 430 400 745 720706 385744734 724-730 720712704 360 351 315737 332 300 653 -681 683 685 512 501 619 609605 518 482486496 610 630 455 400 653-687 543-545 532534 542544 550 552 554556 558560562564 470 313 334 333 325326 342 303301 229 336 308 310 312 316 318 311 331 315 319 317 321 335 426-428 427-431 183 359357 341 343 228220 356-360 347-367 351357 369-379360 258- 296 193173169159 449Units 1-4 419 350 210 204176 365 375 381 181- 187 302-316 379310 320 328 332 340 437 412 311A-B404 313 325 327 333 407401385 411 452 378-390 360 - 1A - 1C360 - 2A - 2C360 - 3A - 3C360 - 4A - 4C360 - 5A - 5C360 - 6A 344-348 418420 482 328 456 321 325 330204 218 236 240 250-252 477 475 467 457 453249235 225 221 201 460 275 505-509 239- 243 209- 213 210- 214 513-519 460 474472228-230130 136-144 150 465 164 166 466 446 453 176 545 548 151 134 552 135-137 141-143 100 457-459 471-479 483-485 465-467 459-461 432 470-472 565 555 535 531174170 525 507505 189185179 160164152144 171A 171B 535 558 201 516512 520 209 215 223 231 521 580 239-245 530-540 544-554 212- 216 218-222 175 168160150 181177169 145 580 110 590 151155 190 194192 577575 333 335- 337 351 457451 465463 489-499360 530 480 420 430 480 463 451443437411405 419405401 441 480-498 347 351 355 359 525 430 473 332- 342 425415 400 570568 556 550 543 327321315305 343 515 525 551 555 328 309-311 518-528 536-540 552-554 558-562 573 591-599 557-571 330-332 318-320 406-418 417 542548568 524 550 500-528 578 564 550 546 540 530 531-535 541 505 525 537 555 565 571 530 520 440-446 579 567 600 555 581 420-438 437 566 224 228 244 579 575 565 559 2 604 576 566 3422222222 505 610-616 678 676 674672 642 636-638 567 555 711 701705 725 525 759 730718704 734 738-740 760 746-750 71 8 89 850 530 6097760 1 18 1028 1036 1044 1052 1013 1021 1029 1037 1047 1057 10041000 1006 1020 1024 1030 1040 1048 251 10911085 1035 10271023 1017 1001 1060 1043 15 1090 1080 1040 1028 1053 1055 623 137 145 700 780 790 744 111150 753100 825805 33 51 75 63 841 44 675 49 41 711 799 703 100 101 139654 625 1019 1027 A B 1035 1052 1044 1061 10 10101045 1028 1020160 1001 1005 1009 1015 1027 1037 1010 1024 1004 930 975945929931 948 181 940 960 145900 955 999875 853 925 81 855 901-907 909 87 98 1038 1036 917921 925 735 849 707 847 842828 820248 230-232 212 825 829833 839 800 812818 882 165831 801 815 809801 841 791153 718 774 761 795745 201 209 834836 845 895 926 190 934 942 948 203 209 219 225 929200 240 904 910 926 270 935 904 909 909A 101 109 25 217 222 148 171 421 130 312 318 324 317 301 186 192 323 329 151 325 329 334 131 129 101 301 235 258 212 163 115 291247 131 141 145 150 210 201 207 164 202 158 180 165 147 143 125 149 101 150 170172 165167169171 101- 119 121 123 129 139 235 251249 252 247 244250 177220 261 251-257 205245231225213 205 170 172 206 234240 183 251 270 241-247 215- 237 210- 216 124 124A 132 144 152 147 221-243 275 220 246 250 260 166162130 129 160 154 116112180 - 180A 171 219 219 235 262 202 245 254 252 250 151 159 203 215 221 313-317318 220-224 238 319-323311-317 339327-335 197185 177 170 451 422422A 429 437 121 151 187- 197 309167-169 165 135 143149155 302310 314320 161 171 101 115 110 120 354 344 334 364 160- 164126 134 150 168 181 179 542-550 531-539 532 759 223-239 905 911-917907 188190 251- 293 202 206 208 210 212 216 220 1008 159 275 539 201 400 27 168 865857 302 324 340 795 848 918 903 903A 408412 440 483A - F 435 751 735 745 532 210 727 733 335 328 330 345 214 350 800 806 441 441A 230302306308 312316 301 303 305 307 309 325 251 807 821 829 801 818-824 420 424 430 832A 832 842A 842 852A 852 862A 862 872A 872 351A 351 355A 355 359A 359 363A 363 367A 367 425 911 943 951 918 936 940 944 271 253 241 301 319 919A919 935 949 928 936 940-946 353 264 367 361 310 1005 1010 1020 423425 457-467 469-471473-481 454 729 733-743 734-740 724-732 936 824 826828 920 949 943941 715 95 445 324 328 545547549 590 425447 827 565585595 904 315 507 561 706 536 200 100 280-290 150158 162 164 276 516 698 161 159 157777 132 127 180 528 120 247 372 524 548550 538 152 207 345 336 515 658 227 27 29 539 115 550 321 558 965 140 350 808 915 461 435433 945 1012 421 727 218 255 206 2 1032 1035 1037 453 167 739 260 840 650 642 351 451 551 375 530 643 415 12 700 55 802 99 89 87 901 560564568572576580584588592594 906908 910912914 916918920 922924 548 423 668 901 305-313 423 405 352354 611 320322 346 323 470 471 484 115 528 426 264 430 1001 508 756- 760 940 930 544546 51 7 549 454-458 211213 151 160 257 433-457 482 330 349 117 401 539 440 691 755 67 312 202 651 443445 447 716 218 398 998 262 335 218 640-646506 119121 120 149 327469 469 261 263 201 303 401 403 254 401 91 40 101 150 819 301 725 595 705 363 541 321319 600 146 411-419 229 355365 111 121 548 597 143 127 602604 502 504506 432434436 HIGHSTREET RAMONA STREET EMERSONSTREET QUARRYROAD EMERSON STREET HOMERAVENUE ELCAMINOREALL L ELCAMINOREAL BRYANT STREET PALO ALT O AVEN U PALO ALTO AVENU E HAW TH O R N E AV E NU E EMERSONSTREET RAMONA STREET EMERSONSTREET HAW TH O R N E AV E NU E HIGHSTREET EVERETTAVENUE EVERETT AVENUE HIGHSTREET ALMA STREET ALMA STREET ALMASTREET LYTTONAVENUE ELCAMINOREAL QUARRYROAD ALMASTREET EMERSON STREET RAMONA STREET LYTTONAVENUE UNIVERSITYAVENUE RAMONASTREET BRYANTSTREET HIGH STREET EMERSONSTREET ALMA STREET EMERSON STREET HIGH STREET HIGH STREET HAMILTONAVENUE HAMILTONAVENUE EMERSONSTREET HAMIL TONAVENUE GILMANSTREET WAVERLEYSTREET BRYANT STREET FORESTAVENUE FORESTAVENUE BRYANTSTREET RAMONASTREET RAMONA STREET BRYANTSTREET FLORENCESTREET KIPLINGSTREET LYTTON AVENUE WAVERLEY STREETWAVERLEY STREET EVERETT AVENUE EVERETTAVENUE BRYANT STREET WAVERLEY STREET HAWTHORNEAVENUE RAMONA STREET BRYANT STREET LYTTON AVENUE UNIVERSITYAVENUE COWPER STREET KIPLING STREET UNIVERSIT YAVENUE UNIVERSIT YAVENUE COWPERSTREET WAVERLEY STREET HAMIL TONAVENUE RUTHVENAVENUE REET TASSOSTREET RUTHVEN AVENUE WEBSTERSTREET HAWT COWPER STREET COWPERSTREET WAVERLEYSTREET HAWTHORNEAVENUE HAWTHORNEAVENUE KIPLINGSTREET EVERETTAVENUE COWPERSTREET WEBSTERSTREET EVE WEBSTERSTREET WEBSTERSTREET LYTTONAVENUE TASSO STREET SCOTTSTREET ADDISONAVENUE BRYANTSTREET BRYANTSTREET ADDISONAVENUE HAMIL TONAVENUE COWPER STREET FORESTAVENUE FORESTAVENUE WAVERLEYSTREET BRYANT STREET HOMERAVENUE WAVERLEY STREET CHANNINGAVENUE RAMONASTREET RAMONASTREET WEBSTERSTREET WEBSTERSTREET COWPER STREET HOMERAVENUE HOMERAVENUE COWPERSTREET KIPLINGSTREET CHANNINGAVENUE WAVERLEYSTREET ADDISONAVENUE LY WEBSTER STREET WAVERLEYSTREET WEBSTER STREET ADDISONAVENUE COWPER STREET WEBSTER STREETWEBSTER STREET CHANNINGAVENUE C COWPER STREET U N I V ER S I T Y C I R C L E EVERETTCOURT LANE 39 LANE B EASTLANE 7 EASTLANE 5 EAST LANE 6 EAST LANE20EAST LANE30 LANE20WEST LANE21 MITCHELL LANE LANE33 LANE 15 EAST BRYANTCOURT PAULSENLANE LANE 12 WEST LANE 11 WEST CENTENNIAL WALK LANE D EAST LANE D WEST PEARLANE DOWNINGLANE LANE56 ELCAMINOREAL PALO AVENU E SHOPPING CENTERW AY PISTACH EPLACE PENINSULA CORRIDOR JOINT POWERS BOARDNINSULA CORRIDOR JOINT POWERS BOARD P ALM D RIV E PALOROAD EMERSONSTREET EMERSON STREET HIGHSTREET HIGHSTREET HIGHSTREET ALMASTREET ALMA STREET ALMA STREET ALMASTREET ALMA STREETFORESTAVENUE CHANNINGAVENUE HOMERAVENUE ADDISONAVENUE ELCAMINOREALELCAMINOREAL ELCAMINOREALELCAMINOREAL ELCAMINOREALELCAMINOREAL EMBARCADERO R OAD WELLSAVENUE URBANLANE URBANLANE ENCINA A VENUE ENCINAAVENUE MEDICAL FOUN D ATIONWAY LANE 7 WEST LANE8WEST LANEAWEST LANEBWEST CHANNINGAVENUE This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Transportation Station University Avenue/Downtown Business District - Commercial Center Existing Ground Floor (GF) Combining District Zoned Parcels Proposed Ground Floor (GF) Combining District Zoned Parcels SOFA II CAP '055'0 Pr o p o s e d Gr o u n d Fl o o r Co m b i n i n g Di s t r i c t Ad d i t i o n s re v . 20 1 6 1 2 0 6 CITY O F PALO A L TO IN C O R PO 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 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo AltoRRivera, 2016-12-08 09:48:00 (\\cc-maps\gis$\gis\admin\Personal\RRivera.mdb) EX H I B I T A Ordinance No. 5325 Urgency Interim Ordinance of the Council of the City of Palo Alto Adopting a Temporary Moratorium on the Conversion of Ground Floor Retail and "Retail Like" Uses to Other Uses Citywide FINDINGS A. The City of Palo Alto has long been considered the birth place of Silicon Valley. With its proximity to Stanford University, its international reputation, its deep ties to technology firms, its highly rated public school system and its ample public parks, open space and community centers, Palo Alto continues to serve as a hub for technology based business. B. Palo Alto is considered one of Silicon Valley's most desirable office markets. According to one study Class A office rates have climbed 49 percent since the start of 2010. The same study reported Class B office space increasing by 114.4% since 2010. C. In particular, average commercial rental rates have gone up significantly from 2013 to 2015. In 2013 the average monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12 in 2015. While retail rents have also increased during this period, retail rents are considerably lower than office rents. The average monthly rental rate for retail in 2013 was $4.21 and in 2015 was $4.88. D. Price increases have been even more significant in the downtown area. In 2013 the average downtown monthly office rent was $6.37. In 2015 the rate increased to $7.33. E. At the end of 2014, Palo Alto's downtown vacancy rate was a low 2.83 percent, according to a report prepared by Newmark Cornish & Carey. F. These record high monthly rental rates for office and low vacancy rates have created financial incentives to replace current retail use with office use where such conversions are permitted by the City's zoning ordinance. These economic pressures are more severe in the downtown and California Avenue commercial areas but exist throughout the City. G. The data submitted by the City to support the Valley Transportation Authority's Congestion Management Plan (CMP) each fiscal year suggests that there has been a loss of approximately 70,000 square feet of retail-type uses in the period from 2008 to the present. The CMP data is broad in the sense that it inclupes uses like automotive services in the "retail" category even though they are considered separate uses in the City's zoning ordinance. However any overstatement of the trend towards less retail is likely to be offset by the data's reliance on a list of discretionary applications processed by the City, since there have also been recent conversions of retail space to office space that did not require discretionary approvals and are not included in the 70,000 square foot number. 1 150429 cs 0131335 May 11,2015 H. City residents have seen this occurring in the City's commercial districts as the City's Architectural Review Board has considered projects like those affecting Spagos restaurant at 265 Lytton, lnhabiture at 240 Hamilton Ave, Palo Alto Bowl at 4301 El Camino Real, and Club Illusions Restaurant at 260 California Avenue. In addition, familiar retail businesses like the Zibibbo restaurant have closed and their spaces have been acquired and occupied by non-retailers. Likewise the old location for Fraiche Yogurt, which moved from Emerson Street to Hamilton Avenue, was immediately re-purposed as office space. I. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff to consider whether zoning-based protections for ground floor retail uses need to be strengthened where they currently exist and expanded to areas of the City where they do not. J. On April 6, 2015, the City Council discussed these issues in detail and directed staff to prepare an urgency ordinance that would preserve existing ground floor retail and retail-like uses until permanent zoning revisions can be prepared. K. This direction is consistent with the City's existing Comprehensive Plan, which identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale "centers" with a mix of uses as focal points for neighborhoods (Goal L- 4). Policy L-20 suggests that the City "encourage street frontages that contribute to retail vitality ... " and Policy B-5 calls on the City to "maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City's economic base." L. Palo Alto is in the process of updating its Comprehensive Plan, and it is expected that the updated Comprehensive Plan will contain additional policies and programs designed to preserve existing retail uses in the City. M. The public's health, safety and welfare are currently and immediately detrimentally affected as neighborhood-serving retail service and related uses are priced-out by rising rents and replaced by uses that do not provide similar services or activate the street frontage by creating pedestrian activity and visual interest (i.e. shop windows and doors). These changes affect neighborhood quality of life, and mean that local residents have to drive to similar retail destinations in other locations, diminishing the public health benefit when residents can walk to needed services and increasing traffic congestion, vehicle miles traveled and greenhouse gas emissions. N. Unless abated, the City's actions to approve conversion of ground floor spaces from retail to other uses will exacerbate the reduction of retail and changes described above, resulting in the need for the proposed interim ordinance. 0. The City Council desires on an interim basis to temporarily suspend conversions of retail and retail like uses to office throughout the City as such conversions may be in conflict with the City's Comprehensive Plan and zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study 2 150520 cs 0131335 May 11,2015 within a reasonable time. P. The possible extension of this interim ordinance beyond 45 days would not have a material effect on the development of projects with a significant component of multifamily housing because a specific exemption has been included to address this requirement of State law. Q. This urgency interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings. A 4/5 vote is required for adoption. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. The following Section 18.85.100 (Retail Preservation) is added to a new Chapter 18.85 entitled "Interim Zoning Ordinances" to the Palo Alto Municipal Code to read as follows: "18.85.100 Retail Preservation 18.85.101 Definitions. For the purposes of this Ordinance, the term "Retail" shall include a modified definition of "Retail Service" as well as the "Retail Like" uses defined below: (a) Retail Service: A use predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use, including but not limited to the following: groceries, meat, vegetables, dairy products, baked goods, candy, and other food products; liquor and bottled goods, household cleaning and maintenance products; drugs, cards, and stationery, notions, books, tobacco products, cosmetics, and specialty items; flowers, plants, hobby materials, toys, household pets and supplies, and handcrafted items; apparel, jewelry, fabrics, and like items; cameras, photography services, household electronic equipment, records, sporting equipment, kitchen utensils, home furnishing and appliances, art supplies and framing, arts and antiques, paint and wallpaper, carpeting and floor covering, interior decorating services, office supplies, musical instruments, hardware and homeware, and garden supplies; bicycles; mopeds and automotive parts and accessories (excluding service and installation); cookie shops, ice cream stores and delicatessens. 150520 cs 0131335 (b) Retail Like Uses including but not limited to: (1) Eating and drinking service as defined in Section 18.04 (47); (2) Hotels as defined in Section 18.04 (73); (3) Personal services as defined in Section 18.04.030 (115); (4) Theaters; 3 May 11, 2015 (5) Travel agencies; (6) Commercial recreation; (7) Commercial nurseries; (8) Auto dealerships defined in Section 18.040.030(a)(12.5); (9) Day Care Centers defined in Section 18.040.030(a)(42); (10) Service Stations; and (11) Automotive Services. To qualify as a Retail use under this definition, the use shall be generally open to the public. 18.85.102 Moratorium on Retail Conversions. The City Council hereby enacts this Urgency Interim Ordinance establishing a moratorium on the conversion of any ground floor Retail use permitted or operating as of March 2, 2015 or thereafter to any other non-Retail use anywhere in the City. (a) 25% Exemption Suspended. During the pendency of this Ordinance, Section 18.30(C).020 permitting not more than twenty-five percent ofthe ground floor area not fronting on a street to be occupied by a non-retail service use otherwise permitted in the applicable underlying CD district shall be suspended. (b) Conditionally Permitted Uses Suspended. During the pendency of this Ordinance, no ground floor Retail use operating as of March 2, 2015 may be replaced by any other non-Retail use, including uses for which Conditional Use Permits are currently allowed. (c) Legal Nonconforming Uses. During the pendency of this Ordinance legal nonconforming Retail use shall remain as a grandfathered use and shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70. (d) Conversion of Basements. During the pendency ofthis Ordinance, elimination of or conversion of basement space currently in Retail use or in use for retail support purposes shall be prohibited. 18.85.103 Exemptions. The following shall be exempt from this Ordinance: (a) Pipeline Projects. Any Retail use where a discretionary permit or entitlement application to convert such Retail use to a non-Retail use was submitted to the City on or before March 2, 2015 and is currently pending. For purposes of this Ordinance a 11Use and Occupancy" Permit Application shall not constitute a discretionary permit. (b) Vested Rights. Any Retail use for which an applicant has received a valid building permit from the City and performed substantial work and incurred substantial liabilities in good faith reliance on such permit as of the date ofthis Ordinance. 4 150520 cs 0131335 May 11,2015 18.85.104 Waivers and Adjustments. The following shall be grounds for a request for waiver or adjustment of this Ordinance: (a) Economic Hardship. An applicant may request that the requirements of this Ordinance be adjusted or waived based on a showing that applying the requirements of this Ordinance would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. (b) Multi-family uses. Any project which (i) contains four or more housing units, (ii) the multi-family housing component constitutes at least one-third or more of the total square footage of the project and (iii) otherwise complies with all sections of the Zoning Code may apply for a waiver or modification from this Ordinance upon a finding that this Ordinance would have a material effect on the multi-family component of such project. (c) 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. Any such request under this section shall be submitted to the Planning and Community Development Director together with an economic analysis or other supporting documentation and shall be acted upon by the City Council. 18.85.105 Reconstruction. Any ground floor Retail use existing on or after March 2, 2015 may be demolished and rebuilt provided that the portion of square footage used as Retail use on or after March 2, 2015 is not reduced except that Retail square footage may be reduced by the minimum amount needed to provide access to any new upper floor and/or lower level parking. 18.85.106 Applicability to Current Requirements. Nothing in this ordinance shall alter requirements of site-specific Planned Community zoning ordinances or adopted conditions of approval. Nothing in the ordinance shall be construed to waive the requirement for a conditional use permit or other entitlement where such requirements currently exist." SECTION 3. Study. The City Council directs the Department of Planning & Community Environment to consider and study possible amendments to the Comprehensive Plan and zoning ordinance to preserve existing Retail uses. SECTION 4. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of this Urgency Interim Ordinance. SECTION 5. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such 5 150520 cs 0131335 May 11,2015 invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 6. Effective Period. This Urgency Ordinance shall take full force and effect immediately upon adoption. In accordance with Government Code Section 65856, this Ordinance shall be in full force and effect for a period offorty-five (45) days from adoption. This Ordinance shall expire on June 25, 2015 unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 7. ~-The City Council finds that this Ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: May 11, 2015 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSTENTIONS: ABSENT: ATTEST: ~~ APPROVED: ~~~ City Clerk Mayor APPROVED AS TO FORM: ./~~- Senior Assistant City/.: t: 6 150520 cs 0131335 May 11,2015 Ordinance No. 5325 Urgency Interim Ordinance of the Council of the City of Palo Alto Adopting a Temporary Moratorium on the Conversion of Ground Floor Retail and "Retail Like" Uses to Other Uses Citywide FINDINGS A. The City of Palo Alto has long been considered the birth place of Silicon Valley. With its proximity to Stanford University, its international reputation, its deep ties to technology firms, its highly rated public school system and its ample public parks, open space and community centers, Palo Alto continues to serve as a hub for technology based business. B. Palo Alto is considered one of Silicon Valley's most desirable office markets. According to one study Class A office rates have climbed 49 percent since the start of 2010. The same study reported Class B office space increasing by 114.4% since 2010. C. In particular, average commercial rental rates have gone up significantly from 2013 to 2015. In 2013 the average monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12 in 2015. While retail rents have also increased during this period, retail rents are considerably lower than office rents. The average monthly rental rate for retail in 2013 was $4.21 and in 2015 was $4.88. D. Price increases have been even more significant in the downtown area. In 2013 the average downtown monthly office rent was $6.37. In 2015 the rate increased to $7.33. E. At the end of 2014, Palo Alto's downtown vacancy rate was a low 2.83 percent, according to a report prepared by Newmark Cornish & Carey. F. These record high monthly rental rates for office and low vacancy rates have created financial incentives to replace current retail use with office use where such conversions are permitted by the City's zoning ordinance. These economic pressures are more severe in the downtown and California Avenue commercial areas but exist throughout the City. G. The data submitted by the City to support the Valley Transportation Authority's Congestion Management Plan (CMP) each fiscal year suggests that there has been a loss of approximately 70,000 square feet of retail-type uses in the period from 2008 to the present. The CMP data is broad in the sense that it inclupes uses like automotive services in the "retail" category even though they are considered separate uses in the City's zoning ordinance. However any overstatement of the trend towards less retail is likely to be offset by the data's reliance on a list of discretionary applications processed by the City, since there have also been recent conversions of retail space to office space that did not require discretionary approvals and are not included in the 70,000 square foot number. 1 150429 cs 0131335 May 11,2015 H. City residents have seen this occurring in the City's commercial districts as the City's Architectural Review Board has considered projects like those affecting Spagos restaurant at 265 Lytton, lnhabiture at 240 Hamilton Ave, Palo Alto Bowl at 4301 El Camino Real, and Club Illusions Restaurant at 260 California Avenue. In addition, familiar retail businesses like the Zibibbo restaurant have closed and their spaces have been acquired and occupied by non-retailers. Likewise the old location for Fraiche Yogurt, which moved from Emerson Street to Hamilton Avenue, was immediately re-purposed as office space. I. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff to consider whether zoning-based protections for ground floor retail uses need to be strengthened where they currently exist and expanded to areas of the City where they do not. J. On April 6, 2015, the City Council discussed these issues in detail and directed staff to prepare an urgency ordinance that would preserve existing ground floor retail and retail-like uses until permanent zoning revisions can be prepared. K. This direction is consistent with the City's existing Comprehensive Plan, which identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale "centers" with a mix of uses as focal points for neighborhoods (Goal L- 4). Policy L-20 suggests that the City "encourage street frontages that contribute to retail vitality ... " and Policy B-5 calls on the City to "maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City's economic base." L. Palo Alto is in the process of updating its Comprehensive Plan, and it is expected that the updated Comprehensive Plan will contain additional policies and programs designed to preserve existing retail uses in the City. M. The public's health, safety and welfare are currently and immediately detrimentally affected as neighborhood-serving retail service and related uses are priced-out by rising rents and replaced by uses that do not provide similar services or activate the street frontage by creating pedestrian activity and visual interest (i.e. shop windows and doors). These changes affect neighborhood quality of life, and mean that local residents have to drive to similar retail destinations in other locations, diminishing the public health benefit when residents can walk to needed services and increasing traffic congestion, vehicle miles traveled and greenhouse gas emissions. N. Unless abated, the City's actions to approve conversion of ground floor spaces from retail to other uses will exacerbate the reduction of retail and changes described above, resulting in the need for the proposed interim ordinance. 0. The City Council desires on an interim basis to temporarily suspend conversions of retail and retail like uses to office throughout the City as such conversions may be in conflict with the City's Comprehensive Plan and zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study 2 150520 cs 0131335 May 11,2015 within a reasonable time. P. The possible extension of this interim ordinance beyond 45 days would not have a material effect on the development of projects with a significant component of multifamily housing because a specific exemption has been included to address this requirement of State law. Q. This urgency interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings. A 4/5 vote is required for adoption. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. The following Section 18.85.100 (Retail Preservation) is added to a new Chapter 18.85 entitled "Interim Zoning Ordinances" to the Palo Alto Municipal Code to read as follows: "18.85.100 Retail Preservation 18.85.101 Definitions. For the purposes of this Ordinance, the term "Retail" shall include a modified definition of "Retail Service" as well as the "Retail Like" uses defined below: (a) Retail Service: A use predominantly engaged in providing retail sale, rental, service, processing, or repair of items primarily intended for consumer or household use, including but not limited to the following: groceries, meat, vegetables, dairy products, baked goods, candy, and other food products; liquor and bottled goods, household cleaning and maintenance products; drugs, cards, and stationery, notions, books, tobacco products, cosmetics, and specialty items; flowers, plants, hobby materials, toys, household pets and supplies, and handcrafted items; apparel, jewelry, fabrics, and like items; cameras, photography services, household electronic equipment, records, sporting equipment, kitchen utensils, home furnishing and appliances, art supplies and framing, arts and antiques, paint and wallpaper, carpeting and floor covering, interior decorating services, office supplies, musical instruments, hardware and homeware, and garden supplies; bicycles; mopeds and automotive parts and accessories (excluding service and installation); cookie shops, ice cream stores and delicatessens. 150520 cs 0131335 (b) Retail Like Uses including but not limited to: (1) Eating and drinking service as defined in Section 18.04 (47); (2) Hotels as defined in Section 18.04 (73); (3) Personal services as defined in Section 18.04.030 (115); (4) Theaters; 3 May 11, 2015 (5) Travel agencies; (6) Commercial recreation; (7) Commercial nurseries; (8) Auto dealerships defined in Section 18.040.030(a)(12.5); (9) Day Care Centers defined in Section 18.040.030(a)(42); (10) Service Stations; and (11) Automotive Services. To qualify as a Retail use under this definition, the use shall be generally open to the public. 18.85.102 Moratorium on Retail Conversions. The City Council hereby enacts this Urgency Interim Ordinance establishing a moratorium on the conversion of any ground floor Retail use permitted or operating as of March 2, 2015 or thereafter to any other non-Retail use anywhere in the City. (a) 25% Exemption Suspended. During the pendency of this Ordinance, Section 18.30(C).020 permitting not more than twenty-five percent ofthe ground floor area not fronting on a street to be occupied by a non-retail service use otherwise permitted in the applicable underlying CD district shall be suspended. (b) Conditionally Permitted Uses Suspended. During the pendency of this Ordinance, no ground floor Retail use operating as of March 2, 2015 may be replaced by any other non-Retail use, including uses for which Conditional Use Permits are currently allowed. (c) Legal Nonconforming Uses. During the pendency of this Ordinance legal nonconforming Retail use shall remain as a grandfathered use and shall not be subject to the change, discontinuance, or termination provisions of Chapter 18.70. (d) Conversion of Basements. During the pendency ofthis Ordinance, elimination of or conversion of basement space currently in Retail use or in use for retail support purposes shall be prohibited. 18.85.103 Exemptions. The following shall be exempt from this Ordinance: (a) Pipeline Projects. Any Retail use where a discretionary permit or entitlement application to convert such Retail use to a non-Retail use was submitted to the City on or before March 2, 2015 and is currently pending. For purposes of this Ordinance a 11Use and Occupancy" Permit Application shall not constitute a discretionary permit. (b) Vested Rights. Any Retail use for which an applicant has received a valid building permit from the City and performed substantial work and incurred substantial liabilities in good faith reliance on such permit as of the date ofthis Ordinance. 4 150520 cs 0131335 May 11,2015 18.85.104 Waivers and Adjustments. The following shall be grounds for a request for waiver or adjustment of this Ordinance: (a) Economic Hardship. An applicant may request that the requirements of this Ordinance be adjusted or waived based on a showing that applying the requirements of this Ordinance would effectuate an unconstitutional taking of property or otherwise have an unconstitutional application to the property. (b) Multi-family uses. Any project which (i) contains four or more housing units, (ii) the multi-family housing component constitutes at least one-third or more of the total square footage of the project and (iii) otherwise complies with all sections of the Zoning Code may apply for a waiver or modification from this Ordinance upon a finding that this Ordinance would have a material effect on the multi-family component of such project. (c) 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. Any such request under this section shall be submitted to the Planning and Community Development Director together with an economic analysis or other supporting documentation and shall be acted upon by the City Council. 18.85.105 Reconstruction. Any ground floor Retail use existing on or after March 2, 2015 may be demolished and rebuilt provided that the portion of square footage used as Retail use on or after March 2, 2015 is not reduced except that Retail square footage may be reduced by the minimum amount needed to provide access to any new upper floor and/or lower level parking. 18.85.106 Applicability to Current Requirements. Nothing in this ordinance shall alter requirements of site-specific Planned Community zoning ordinances or adopted conditions of approval. Nothing in the ordinance shall be construed to waive the requirement for a conditional use permit or other entitlement where such requirements currently exist." SECTION 3. Study. The City Council directs the Department of Planning & Community Environment to consider and study possible amendments to the Comprehensive Plan and zoning ordinance to preserve existing Retail uses. SECTION 4. Written Report. At least ten (10) days before this Urgency Ordinance or any extension expires, the City Council shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of this Urgency Interim Ordinance. SECTION 5. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such 5 150520 cs 0131335 May 11,2015 invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 6. Effective Period. This Urgency Ordinance shall take full force and effect immediately upon adoption. In accordance with Government Code Section 65856, this Ordinance shall be in full force and effect for a period offorty-five (45) days from adoption. This Ordinance shall expire on June 25, 2015 unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 7. ~-The City Council finds that this Ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo. INTRODUCED AND PASSED: May 11, 2015 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSTENTIONS: ABSENT: ATTEST: ~~ APPROVED: ~~~ City Clerk Mayor APPROVED AS TO FORM: ./~~- Senior Assistant City/.: t: 6 150520 cs 0131335 May 11,2015 DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 Ordinance No. 5330 Ordinance of the Council of the City of Palo Alto Extending Urgency Interim Ordinance 5325 Adopting a Temporary Moratorium on the Conversion of Ground Floor Retail and "Retail Like" Uses to Other Uses Citywide FINDINGS A. The City of Palo Alto has long been considered the birth place of Silicon Valley. With its proximity to Stanford University, its international reputation, its deep ties to technology firms, its highly rated public school system and its ample public parks, open space and community centers, Palo Alto continues to serve as a hub for technology based business. B. Palo Alto is considered one of Silicon Valley's most desirable office markets. According to one study Class A office rates have climbed 49 percent since the start of 2010. The same study reported Class B office space increasing by 114.4 % since 2010. C. In particular, average commercial rental rates have gone up significantly from 2013 to 2015. In 2013 the average monthly rental rate citywide for office was $4.57 per square foot. That rate increased to $5.12 in 2015. While retail rents have also increased during this period, retail rents are considerably lower than office rents. The average monthly rental rate for retail in 2013 was $4.21 and in 2015 was $4.88. D. Price increases have been even more significant in the downtown area. In 2013 the average downtown monthly office rent was $6.37. In 2015 the rate increased to $7.33. E,. At the end of 2014, Palo Alto's downtown vacancy rate was a low 2.83 percent, according to a report prepared by Newmark Cornish & Carey. F. These record high monthly rental rates for office and low vacancy rates have created financial incentives to replace current retail use with office use where such conversions are permitted by the City's zoning ordinance. These economic pressures are more severe in the downtown and California Avenue commercial areas but exist throughout the City. G. The data submitted by the City to support the Valley Transportation Authority's Congestion Management Plan (CMP) each fiscal year suggests that there has been a loss of approximately 70,000 square feet of retail-type uses in the period from 2008 to the present. The CMP data is broad in the sense that it includes uses like automotive services in the "retail" category even though they are considered separate uses in the City's zoning ordinance. However any overstatement of the trend towards less retail is likely to be offset by the data's reliance on a list of discretionary applications processed by the City, since there have also been recent conversions of retail space to office space that did not require discretionary approvals and are not included in the 70,000 square foot number. H. City residents have seen this occurring in the City's commercial districts as the City's Architectural Review Board has considered projects like those affecting Spagos restaurant at 265 Lytton, lnhabiture at 240 Hamilton Ave, Palo Alto Bowl at 4301 El Camino Real, and Club Illusions Restaurant at 260 California Avenue. In addition, familiar retail businesses like the 150521 cs 0131444 1 June 15, 2015 DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 Zibibbo restaurant have closed and their spaces have been acquired and occupied by non- retailers. Likewise the old location for Fraiche Yogurt, which moved from Emerson Street to Hamilton Avenue, was immediately re-purposed_ as office space. I. Based on these trends, on March 2, 2015, the Palo Alto City Council asked staff to consider whether zoning-based protections for ground floor retail uses need to be strengthened where they currently exist and expanded to areas of the City where they do not. J. On April 6, 2015, the City Council discussed these issues in detail and directed staff to prepare an urgency ordinance that would preserve existing ground floor retail and retail-like uses until permanent zoning revisions can be prepared. K. This direction is consistent with the City's existing Comprehensive Plan, which identifies the desirability of neighborhood serving retail (Policy L-16) and envisions inviting, pedestrian-scale "centers" with a mix of uses as focal points for neighborhoods (Goal L-4). Policy L-20 suggests that the City "encourage street frontages that contribute to retail vitality ... " and Policy B-5 calls on the City to "maintain distinct business districts within Palo Alto as a means of retaining local services and diversifying the City's economic base." L. Palo Alto is in the process of updating its Comprehensive Plan, and it is expected that the updated Comprehensive Plan will contain additional policies and programs designed to preserve existing retail uses in the City. M. The public's health, safety and welfare are currently and immediately detrimentally affected as neighborhood-serving retail service and related uses are priced-out by rising rents and replaced by uses that do not provide similar services or activate the street frontage by creating pedestrian activity and visual interest (i.e. shop windows and doors). These changes affect neighborhood quality of life, and mean that local residents have to drive to similar retail destinations in other locations, diminishing the public health benefit when residents can walk to needed services and increasing traffic congestion, vehicle miles traveled and greenhouse gas emissions. N. Unless abated, the City's actions to approve conversion of ground floor spaces from retail to other uses will exacerbate the reduction of retail and changes described above, resulting in the need for the proposed interim ordinance. 0. The City Council desires on an interim basis to temporarily suspend conversions of retail and retail like uses to office throughout the City as such conversions may be in conflict with the City's Comprehensive Plan and zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time. P. The possible extension of this interim ordinance beyond 45 days would not have a material effect on the development of projects with a significant component of multifamily housing because a specific exemption has been included to address this requirement of State law. 150618 cs 0131444 2 June 15, 2015 \ DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 Q. This urgency interim ordinance is adopted in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 and is based on the need to protect the public safety, health and welfare as set forth in the above findings. A 4/5 vote is required for adoption. R. The City Council adopted Interim Ordinance No. 5325 on May 11, 2015, by a four- fifths vote after a public hearing pursuant to Government Code Section 65858 and Ordinance 5325 will expire on June 25, 2015. S. The Council desires to extend Interim Ordinance 5325 in accordance with the requirements of Government Code Section 65858 and Palo Alto Municipal Code Section 2.04.270 for an additional period of 22 months and 15 days. This extension is based on the need to protect the public safety, health and welfare as set forth in the above findings and a 4/5 vote is required for passage. The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings. The findings listed above are hereby incorporated. SECTION 2. Written Report. Government Code Section 65858(d) states that "ten days prior to the expiration of an interim ordinance or any extension, the legislative body [the City Council] shall issue a written report describing the measures taken to alleviate the conditions which led to the adoption of the ordinance. Pursuant to this provision, the City Council hereby reports that much of the factors which gave rise to Urgency Interim Ordinance No. 5325 still apply, namely increasing commercial rental rates; low office vacancy rates; retail service uses being priced out of market and being replaced by office and other uses; and increased traffic congestion, vehicle miles traveled and greenhouse gas emissions resulting from these changing land use patterns. The City Council has undertaken a number of actions since the adoption of Ordinance Number 5325, including directing staff to bring to the Planning and Transportation Commission a "backstop" ordinance to retain retail and retail like uses as well as directing staff to more closely study retail protection initiatives together with a formula retail ban in the California Avenue commercial district. Staff has also begun detailed reviews of regulatory schemes from other jurisdictions. In order to have adequate time to fashion and propose appropriate regulations, and to ensure that the current and immediate threat to the public safety, health and welfare continues to be forestalled, adoption of this ordinance is necessary. SECTION 3. Moratorium. The City Council hereby extends Interim Urgency Ordinance No. 5325 establishing a moratorium on the conversion of any ground floor Retail use permitted or operating as of March 2, 2015 or thereafter to any other non-Retail use anywhere in the City. SECTION 4. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this.Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. 150618 cs 0131444 3 June 15, 2015 DocuSign Envelope ID: D49C6B91-8428-4594-8DCD-3FD97FOAE507 SECTION 5. Effective Period. This extension ordinance shall take full force and effect ' immediately upon expiration of Interim Ordinance No.5325. In accordance with Government Code Section 65856, this ordinance shall be in full force and effect for an additional period of 22 months and 15 days following expiration of Interim Ordinance No. 5325. Thus the moratorium shall expire on April 30, 2017, unless this period is extended by the City Council as provided in Government Code Section 65858. SECTION 6. Supersedes Earlier Ordinances. During the time period that this Ordinance is effective, this Ordinance supersedes any provision of the Palo Alto Municipal Code inconsistent with the provisions of this Ordinance. SECTION 7. g,QA. The City Council finds that this ordinance falls under the California Environmental Quality Act (CEQA) exemption found in Title 14 California Code of Regulations Section 15061(b)(3) because it is designed to preserve the status quo and therefore does not have the potential to significantly impact the environment. This ordinance is also categorically exempt under CEQA Section 15308 as a regulatory action taken by the City pursuant to its police power and in accordance with Government Code Section 65858 to assure maintenance and protection of the environment pending the evaluation and adoption of potential local legislation, regulation, and policies. Adoption of the proposed interim ordinance is categorically exempt from review under Section 15301 (Class One -Existing Facilities) of the California Environmental Quality Act (CEQA) Guidelines since it will temporarily perpetuate existing environmental conditions. INTRODUCED AND PASSED: June 15, 2015 AYES: BERMAN, BURT, DUBOIS, FILSETH, HOLMAN, KNISS, SCHARFF, SCHMID, WOLBACH NOES: ABSTENTIONS: ABSENT: ATIEST: /. ~~ City Clerk APPROVED AS TO FORM: re,;:s~ii:r LC2CEDQ84ABC3429 Senior Assistant City Attorney 150618 cs 0131444 APPROVED: ~tlL Mayor GDocuSlgned by: ~4~, 39E7298FB2064DB ... City Manager CaS:~ Director of Planning and Community Environment 4 June 15, 2015 City of Palo Alto ‐ Retail Preservation Ordinance   List of Stakeholders   Individuals and retailers interviewed between November 2016 and January 2017:   Neilson Buchanan   Simon Cintz  Benjamin Cintz  Brad Ehikian  Christian Hansen  Ken Hayes   Chop Keenan  Judith Kleinberg  Julia Moran  John McNellis  Randy Popp  Roxy Rapp  Beth Rosenthal  Jonny Satz  Lund Smith  Elaine Uang  Leaf & Petal | Cassis  Patagonia  Skin Spirit  Spot Pizza  Susan Graf LTD  Three Seasons  Title Nine Sports  Vivre    December 14, 2016 Excerpted PTC Meeting Minutes regarding Retail Ordinance _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. unanimous; unanimous support for the Motion. Ok. That concludes Item Number 4. 1 2 MOTION PASSED (5-0-0-1, Commissioner Fine absent) 3 4 Commission Action: Recommend that the City Council Adopt the staff recommended 5 ordinance. Motion made by Commissioner Rosenblum, seconded by Commissioner 6 Tanaka motion is APPROVED 5-0. 7 Amended Motion: 8 A. Amend Section 9 - 9.18.54.020(b) Item E to remove required parking in guest 9 parking, motion made by Commissioner Tanaka, seconded by Commissioner 10 Gardias, APPROVED 3-2 Commissioner Waldfogel and Rosenblum AGAINST. 11 B. Amend the ordinance to remove Section 5 18.42.140 from the ordinance. Motion 12 made by Commissioner Gardias, seconded by Commissioner Tanaka; motion FAILED 13 3-1-1; Vice-chair Waldfogel and Chair Alcheck Against; Commissioner Rosenblum 14 Abstained. 15 5. Recommendation to the City Council for the Adoption of an Ordinance Making 16 Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground 17 Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground 18 Floor Combining District to Certain Properties Located Downtown and in the South 19 of Forest Avenue Coordinated Area Plan; Modifying the Definition of Retail; Adding 20 Regulations to Improve Pedestrian Oriented Design Standards; and Related Changes. 21 The Proposed Ordinance is Exempt from the California Environmental Quality Act 22 (CEQA) Per Section 15308 23 [Note-out of order, took Number 5 first before Number 4 (above)] 24 25 Chair Alcheck: Alright, what I'd like to do right now is begin with Item Number 5 instead of 26 Number 4 and what we'll do is… that last item took a little longer was, as you could tell, 27 complicated, more complicated than I think we imagined. What I would like to do is begin 28 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. tonight with Item 4 as it, what I'm going to term as an abbreviated session. I’d like staff to 1 prepare, to present its report. I'd like to take comments from the public that we have here and 2 then what I would like to do is have one efficient, very efficient round of questions from the 3 Commission to staff so that when we bring this item back for a second session some of the 4 issues that you may have uncovered in your review for tonight are responded to. So with that 5 please begin your presentation. 6 7 Staff woman: Thank you, Chair. Tonight we're bringing to you the first public hearing on the 8 Retail Preservation Ordinance and I would like to introduce Jeannie Eisberg. She's the City 9 consultant who is the Project Manager for this project. 10 11 Jean Eisberg, Lexington Planning: Hi. Good evening, Chair Alcheck and Members of the 12 Commission; again, my name is Jean Eisberg and I'll just give a short presentation and then if 13 you have any questions I'm happy to provide more detail. 14 15 So based on the City Council's direction staff has prepared a draft ordinance for retail 16 protection citywide and in Downtown and South of Forest Avenue 2 (SOFA 2) and we're 17 requesting your review of a recommendation to the Council to protect City, excuse me, to 18 protect retail conversion citywide, add design standards in two of the combining districts in 19 Downtown and California Ave., and modify the GF Foundry Downtown. So just looking back at 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. the interim urgency ordinance this prohibits ground floor or basement retail and retail like uses 1 citywide from converting into office or other nonretail uses. It was adopted during a period of 2 time in the City and particularly Downtown where we were seeing a lot of vacancies, vacant 3 retail spaces being replaced by office uses. This is the list of uses that the interim ordinance 4 protects and you'll see the same list of uses is carried forward in the draft ordinance. 5 6 The Council twice discussed priorities for permanent retail protections and these are the 7 outcomes that drove the draft ordinance before you tonight. I'm not going to go into them in 8 detail, but they are in the report. The Architectural Review Board (ARB) discussed some of the 9 potential design standards in their meeting in November and they expressed support for more 10 transparency, for recesses, articulation, but also supported the continued implementation of 11 the existing design guidelines in the City. 12 13 There are seven key points to the ordinance laid out in the staff report. First, modifying the 14 definition so this provision removes the extensive list of retail uses that's in the code and 15 focuses instead on the intent of retail uses to promote active pedestrian oriented uses during 16 public, excuse me, open to the public during typical business hours and the sale and services for 17 customers and clients. And this is intended to respond to the changing nature of retail both in 18 Palo Alto and across the country shifting towards restaurants, experiences, services as opposed 19 to retail sales. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 So Number 2 this provision continues the citywide moratorium on retail conversions. So these 2 protections would be codified in the use classification tables of zoning district. One notable 3 change is that the draft ordinance only protects uses that are permitted or conditionally 4 permitted in the underlying zoning district. 5 6 In terms of [waiters] first the ordinance proposes to maintain the existing economic hardship 7 threshold that requires demonstration of an unconstitutional taking. Additionally, except in the 8 Downtown GF the ordinance provides an opportunity to consider an alternative viable use if it 9 meets the intent of the zoning district. The current GF district proposes purposes are focused 10 on type of use and on the Downtown. The proposed revision here seeks to capture the 11 contribution of architectural form such as transparency and pedestrian orientation in this 12 purpose statement and also to clean up the Downtown focused language acknowledging that 13 the GF district is applied elsewhere in the City. 14 15 In terms of Downtown the draft ordinance continues the interim ordinance provision to restrict 16 the conversion of basements, but only in the GF districts Downtown. And then the next two 17 slides show modifications to the GF district regulations Downtown. So first fitness studios and 18 similar uses up to 15 customers would be permitted by right except on University Avenue 19 where the Council was concerned about window coverings and here students’ studios with 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. more than 15 students would be considered a commercial recreation use which are subject to 1 conditional use permits. The ordinance also proposes to remove the existing provision that 2 allows 25 percent of the ground floor area to be occupied by use in the underlying CD district 3 such as office and this is intended to strengthen the retail core. 4 5 In terms of design standards the ordinance proposes to require clear glass with only a minimal 6 amount of tinting, 70 percent of the sidewalk fronting frontage would be required to have 7 transparent doors and windows. Window coverings in non-conforming spaces such as office 8 spaces in the GF that front onto a sidewalk would be prohibited during business hours. And 9 here there would be some exceptions for uses that require privacy and that these uses we 10 would encourage or require artwork displays of merchandise or other visual interest. 11 12 Lastly a map amendment is intended to expand the Downtown core area where ground floor 13 retail and the design standards I just mentioned would be required to create a more continuous 14 retail experience on the ground floor. So looking at the map the dark pink areas show the 15 existing GF boundary. In yellow the map identifies proposed locations near Alma, University, 16 and Hamilton where the GF foundry would be brought back, restored from its pre 2009 map 17 locations. Some of these properties shown in yellow are currently occupied by uses that are 18 not permitted in the GF overlay so such as office, financial services, real estate offices. As a 19 result these properties would become non-conforming uses and they would be required to 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. comply with the GF provisions if those uses vacated; however, some of these properties were 1 designed as offices and do not have architectural features that typically would support retail 2 development. So this may limit what property owners can do, can lease to. A note on the SOFA 3 2 plan, the SOFA 2 plan currently prevents new ground floor office in the Homer/Emerson 4 corridor. So this ordinance would extend protections to other retail and retail like uses in SOFA 5 2 namely in, along Addison Street and would also allow for the alternate viable use waiver 6 process that I mentioned. 7 8 In terms of outreach we conducted 17 informal interviews last month with community 9 members and other stakeholders that live and work in Palo Alto including developers, property 10 owners, small business owners, store managers, architects, residents. Their feedback is 11 summarized in the report. Generally it was mixed. There's mixed support for the existing 12 interim ordinance and for the proposed extension of it. 13 14 This lays out our work so far and the timing going forward. The ordinance the interim 15 ordinance expires in April and so we're looking to go to the Council in February for the first 16 reading of the permanent ordinance. And lastly the Commission and staff have received some 17 correspondence since the staff report was published expressing concern about the extension of 18 the GF foundry, concerns about where private educational facilities may be located, desire for 19 more flexibility and allowing different types of uses to replace retail, and concerns about traffic 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. and parking especially Downtown. That concludes my presentation. I'm happy to answer any 1 questions. 2 3 Chair Alcheck: Ok. I would like to invite the individuals who filled out comment cards to come 4 speak. I will allot five minutes per speaker. 5 6 Vice-Chair Waldfogel: I’d like to start with Mike Powers followed by Simon Cintz. 7 8 Mike Powers: Good evening, Commissioners; my name is Mike Powers. I'm with McNellis 9 Partners in Palo Alto. We’re as you're probably aware we’re owners of a number of properties 10 in the Downtown corridor including the West Elm building. With [Roxy Wrap] years ago we put 11 Anthropologie in a building. Also Lululemon is a tenant and the infamous Alma Plaza. So we've 12 had over, we have 35 years’ experience. Probably 70 projects of which over 60 are retail. So I 13 think you have in your packages John McNellis’ transmittal indicating kind of the difficulties that 14 retail developers have. And in terms of trying to come up with ordinances that protect the 15 unique nature of Downtown Palo Alto while at the same time can have some serious negative 16 consequences in terms of future uses for building. 17 18 So I'm not going to take much of your time here. Just to point out a couple things I think kind of 19 our opinion that the expansion of the geographic areas to the SOFA really was going to, we 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. don't own property by the way so it doesn't have a negative impact on us per se, but I just think 1 there'd be a tremendous difficulty for those property owners in finding retailers that are 2 interested. All the hard and soft good retailers are going to Stanford which is a kind of a very 3 nice high class problem that the City has when you have one of the world's literally one of the 4 world's best shopping centers just walking distance away from a downtown. So you are 5 attracting some of the best retailers, but not necessarily per se in the Downtown corridor 6 unless they fit into a very specific parameters. 7 8 The other thing I think that the retail world has changed and so if you're looking at expanding 9 the definition of retail services the type of services we see in our 25 plus shopping centers, the 10 type of tenants that we're attracting, the soft goods retailers aren't there, the hard goods, 11 electronics, aren't there. It's more along the lines of medical offices, financial institutions, 12 fitness, some of what you're addressing here, some clearly aren't fitting into the retail 13 definition as being suggested, but I think we would urge you to keeping the right vitality of 14 ground floor properties as an expansive of a definition in terms of services, retail, quasi-office 15 that are open to the public whether it be the State Farm Insurance agencies, title companies 16 that will go a long way in addition to restaurants to helping keep up the vitality and uniqueness 17 of Palo Alto. And I'm here to answer any other questions from retailer perspectives if you want, 18 but with that thank you for your time. 19 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Vice-Chair Waldfogel: Thank you. Simon Cintz followed by Ben Cintz. 1 2 Simon Cintz: Good evening, my name is Simon Cintz. My brother Ben is going to speak next 3 here. Our firm, our family has been in Palo Alto since the early 1950’s when fine dining on 4 University Avenue meant eating at the lunch counter at Woolworth's Five-and-Dime. We own 5 four small commercial properties in Palo Alto. 6 7 We're, I want to specifically speak about Section 5 of the proposed ordinance. This is the 8 blanket citywide prohibition against any and all ground floor retail conversion. This is a one size 9 fits all approach to retail preservation. It doesn't matter what type of retail. It doesn't matter 10 where the retail is located. It doesn't matter whether or not the retail is viable in this location. 11 It ignores most of the issues that should be considered in a carefully thought out process. Is the 12 way Palo Alto wants to do zoning and city planning? It's important to note that almost all of 13 Palo Alto’s existing retail is currently protected by current zoning and ordinances. Section 5 of 14 this proposed ordinance only serves to protect a very small portion of Palo Alto’s existing retail 15 including retail properties where retail is no longer viable. What is the real benefit of this 16 proposed citywide prohibition against ground floor retail conversions? That's an important 17 question. 18 19 Let's imagine what would happen if this ordinance was in place when our family applied to 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. convert our 1960’s auto repair garage to what is now about a 3,400 square foot medical/dental 1 office building at 882 Emerson in the SOFA area. We now have two dentists and one doctor in 2 our building. More than half of their patients are Palo Alto residents. It cost us hundreds of 3 thousands of dollars to do the conversion which you could only do because of an increased rent 4 that we would get from medical office space. 5 6 If this ordinance had been in place prior to the conversion Palo Alto would still have an auto 7 garage at our location. The garage parking was surrounded with a chain link fence along the 8 sidewalk. The junk cars were parked nearest the fence because they weren't going to go 9 anywhere soon. It was just plain ugly. Palo Alto citizens have benefited more by having access 10 to medical/dental services now offered in our building instead of having an auto garage. The 11 citizens of Palo Alto have benefited by having many of the old auto garages in the SOFO area 12 converted to non-retail uses. For example, this ordinance would have prevented the 13 conversion of the auto garage at 930 Emerson to what now occupies the space. It is a state of 14 the art private school. Many of the students are from are from Palo Alto families. Isn’t our 15 community benefited more by a school than an auto garage? 16 17 This citywide prohibition against ground floor retail will interfere with the process of making 18 adjustments in neighborhoods which will allow them to better adapt to change in an 19 appropriate way. One might argue that the ordinance provides an appeals process. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Unfortunately, it still sets the bar much too high to get a realistic exception to do a conversion. 1 The actual effect will be that no retail no matter how non-viable or how inappropriate it is for a 2 neighborhood now or in the future will be able to convert to use that is more beneficial to the 3 citizens of Palo Alto. A suggestion in SOFA and possibly other areas of Palo Alto small 4 medical/dental uses should be allowed as a permitted retail conversion under restricted 5 circumstances. Small medical/dental offices benefit our community and can be successful in 6 areas that have limited pedestrian traffic. Doctors and dentists often get their referrals from 7 health plans and the like and can operate in areas that other retail is not or that other that 8 retail is not viable. 9 10 Finally this proposed ordinance that we are considering tonight fails to follow a careful process 11 that our City has followed in the past. When the 2009 retail ordinance was being developed a 12 stakeholder group was formed. We had a number of meetings. When SOFA 2 was being 13 developed there were many community meetings. In the case of this proposed ordinance 14 which affects all retail areas of our City only 17 people were interviewed by a consultant. Many 15 people, ourselves included, were not on given an opportunity to participate. This does not 16 legitimately qualify as community outreach for an ordinance that affects so much of our City. 17 Thank you. 18 19 Vice-Chair Waldfogel: Thank you very much. Ben Cintz please. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Ben Cintz: Good evening, Commissioners. My name is Benjamin Cintz. My brother, Simon, just 2 spoke. I live in Palo Alto, live in the Midtown area now. Used to live near Professorville prior to 3 that and grew up here and then moved away and moved back. It's a wonderful city. And I have 4 my law office on El Camino here in Palo Alto as well. 5 6 What I'd like to address tonight really is two things, one is that I think the stakeholder meetings 7 there needs to be more outreach. I wrote to Hillary Gitelman and on September 1st. On 8 September 2nd she got back to me and I had asked her about the stakeholder participation and 9 she said thanks for this message Ben, we are reaching out to you and other stakeholders as we 10 move forward. Stay tuned. I was not contacted. Now I don't need to be contacted, but the 11 point is that I think others do. And I think it should be a process similar to other stakeholder 12 processes which is where the stakeholders get together and have a discussion; my 13 understanding that this process was an interview process where people were interviewed. I 14 was part of the stakeholder process for Downtown Residential Preferential Parking (RPP) and I 15 think it was a very useful process and I think we could utilize that process again. This is an 16 important decision for the entire City because it affects all properties as my brother pointed 17 out. So I think it would be important to make a recommendation that further input be provided 18 because I think the future of properties in Palo Alto and the quality of life in Palo Alto are 19 affected. Thank you. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Vice-Chair Waldfogel: Thank you. 2 3 Chair Alcheck: Ok. That concludes public comment. What I'd like to do now is essentially 4 bifurcate this review of this item, but I think to make our next opportunity more effective I 5 think it makes sense for us to go and have one round of comments or questions so that maybe 6 some of those comments and questions can be staff can prepare answers to those comments 7 or questions next time we meet. So you may have answers now. My preference is that you 8 don't answer and we pick this up with the staff having the opportunity to respond to our 9 questions. And the best way to do that is to sort of address them in the minutes or use the 10 minutes of this next piece for that. Ok, so why don't we start on this end with Commissioner 11 Gardias and go straight down and [unintelligible] you could spend a few minutes laying the 12 groundwork for our next meeting. 13 14 Commissioner Gardias: Thank you. So I just want to understand the objective because it's 15 stated clearly that staff wants to recommend adoption to the City Council, but I understand 16 that you're proposing there is going to be a follow up meeting and it is we will not meet the 17 staff recommendation tonight. 18 19 Chair Alcheck: Yeah. I'm not going to call for a Motion on this item. We're going to postpone 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. the review of this to the next meeting. 1 2 Commissioner Gardias: That's fine. So in terms of the comments and we tried to establish 3 procedure with Chair Fine back not that long ago that we would respond immediately to the 4 constituency that speaks to us. Would you mind just responding to this concerns about 5 possibility of broadening, listening to the merchants and those that are subject of this possibly 6 permanent regulation. Is there a possibility to broaden this, the reach out to the community 7 and the stakeholders before the follow up meeting? 8 9 Jonathan Lait, Assistant Director: So I’ll look to the Chair just to see if I got the impression you 10 didn’t want to have a question and answer (Q&A), but rather (interrupted) 11 12 Chair Alcheck: Yeah. That’s a unique question because he wants to know if you can do it before 13 the follow up. My real preference is we sort of identify the areas of concern/questions and we 14 allow staff to address them at the next meeting since we have to we really do have to get Item 15 Number 4 and we're running late. So I don't want this to turn into a dialogue. I really would 16 prefer we don't do that. So my preference would be that you present all their concerns and 17 questions and then staff will answer those the next time we meet, ok? 18 19 Commissioner Gardias: So that's the question that I ask that. My question is that I would 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. appreciate and I'm sure the community and stakeholders if there is a broader survey or reach 1 out to the community and the merchants for their input to this ordinance before the next 2 meeting. So that's my first comment. Then if I can go from the top and I'm going to go by the 3 pages because that's how I allocated my comments. So please bear with me, they may be 4 scattered. 5 6 So if I go through the, the first item is the definition and then it seems to me in general that we 7 are just getting very prescriptive in number of the ordinances which on the one hand which 8 maybe satisfies our number of the inputs that we're getting and number of the shake hands 9 that we have to make, but on the other hand just makes administrative burden upon ourselves 10 because to each one of these processes we need to have exception that's later on reviewed by 11 the Director as opposed to the pure law that just clearly states to the developers, merchants, 12 and everybody else how this should work. Definition of the retail in this and then specifying 13 different uses of retail use or retail like uses is an example of this. My comment is pretty much 14 just to simplify the definition, get rid of all these different categories or different types of the 15 retailer. Just stay with the retail. Everybody knows what it is. We know what retail services 16 are. We should have two categories; we should have one definition for each one. So that's my 17 first comment. 18 19 Number two is that I have a question that since we were not expecting answer I will just convey 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. this to you. It says on Page Number 229 about the pipeline projects and for the follow up 1 meeting I would like to pretty much know… I'm just going through the questions because that 2 was the ask. How many pipeline projects are we have for this that would be subject of this 3 ordinance? 4 5 Then on Page 236 there is a passage, there is a paragraph this is under subsequent ordinances 6 and studies and then it just talks about the future work which is Paragraph Number 2 and talks 7 about the Planned Community (PC) zone parcels. So I know that we have historical PC zone 8 parcels, but [unintelligible] we don't have any longer the PC zoning. I would like to have a 9 clarification about this paragraph, what it talks about. 10 11 I'm going to jump briefly to the Page 243, 243 that talks about design standards. In general 12 Paragraph 18.30a.085 it's just a piecemeal. We need to have a clear drive. Are we getting into 13 the design standards for retail or we don't. And I think that this will be the discussion that we 14 should have among ourselves and to in order to justify the position of this Commission, but 15 clearly the design standards that are here presented to us about the windows and the windows 16 covering this is just a small part of the comprehensive design standards there should be or 17 there should not be in this ordinance. Right now you're just proposing us just two of them, 18 exterior windows and coverings, but then and then also I think that height of the windows 19 some it’s somewhere else, but then as you may know it's much more than this, right? We can 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. talk about like the height of the clear ceiling for the retail. We can talk about the windows 1 space in terms of the active retail. We can talk about the distances between the buildings and 2 access points. We can talk about the limitation of the office lobby. We can talk about the 3 transparency of the glazing and how far the wall that would be from the facades how far there 4 will be any wall that's that would define the initial space. I'm just giving you a couple of 5 examples because the design standards it's much more than just two paragraphs or two points 6 that are in here. So I would like to just either have really deep draft on this so we can discuss 7 this or just drop it altogether from the list. 8 9 Another example is that if you talk about lobby sizes. It's the same story. You can… it should be 10 on also under the design standards. Example is that the building that's next to CVS on 11 University where you have a pretty much lobby that serves nobody I think that house it's 12 housed over there currently where pretty much [passerbyers] they see empty lobby. There is 13 no service. There is no retail. When it was designed it was designed with no public in mind 14 whatsoever. It's just an empty space. So that's an example, another example of this how we 15 should regulate this. When you think about the great cities like New York you know that that 16 majority of the facade is the selling space and then if you want to get to the second level then 17 pretty much there is only just a door and then you just behind this door there is a staircase 18 behind this or the entire front façade is taken with the retail space and you get to the building 19 from the back side. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Chair Alcheck: I want to just (interrupted) 2 3 Commissioner Gardias: There's (interrupted) 4 5 Chair Alcheck: Just a second. I want to take the opportunity to just encourage Commissioners 6 that if they can also, we should also use the opportunity to email staff in the next several weeks 7 specific questions that they can add to this list. Because what I really would like if everyone 8 takes ten minutes we're not, we’re going to be here another hour. So if as we go through this if 9 there's lots of questions consider writing an email to staff directly which I hope I will ask staff to 10 incorporate into this longer list of questions. 11 12 Yeah, why don't we do this? Why don’t we set the timer? I’m going to give you two more 13 minutes to get through your questions and then I’m going to give everybody five minutes to get 14 through theirs. Ok? 15 16 Commissioner Gardias: Ok, I will do my best. So if you go to Page 246 on at the bottom there is 17 a Paragraph 2b that talks about a 2,000 foot radius that is for the applicant to present the 18 burden for exemption, if I remember. What is 2,000 feet? It's 300, this is 300 meters. This is 19 unreasonable burden up on the merchants just to ask them to do the survey [unintelligible] 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. them up and submit to the City in their radius of 300 meters. It's a large distance. I'd 1 recommend just to remove it all together. 2 3 Also when you talk about the on the same page Paragraph C, waivers and adjustments, this 4 should be periodic. This should be the wavier and adjustments should be for a period of time. 5 If we allow for an exemption from this regulation this should be for a specific period of time 6 upon which this extension expires. So there should be aware period and there should be a 7 definition for how long this exemption would take place. And so my proposal is that pretty 8 much waiver would expire within three years. Thank you. 9 10 Chair Alcheck: Commissioner Waldfogel [note-Vice-Chair]. 11 12 Vice-Chair Waldfogel: I'll try to be brief. I first of all thank you for very clear presentation. I like 13 the graphics. I really support the idea of Downtown district vibrancy. I agree with 14 Commissioner Gardias we shouldn't be too prescriptive. I mean I think our goal is to create an 15 interesting Downtown. I mean I would I think that the core needs to be needs to read urban. 16 It’d be great if there were some kind of unexpected urban experiences possible outside of core. 17 So I just think as long as we can define it along those terms I'm comfortable. 18 19 The medical office, dental office, health care, we need these in town. I've heard anecdotes in 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. San Francisco that things like urgent care storefronts or deactivating business districts I’d kind 1 of like to understand I mean maybe you guys can come back to us with just some comments 2 about what's the right way to weave those kind of offices into an urban fabric. I don’t have a 3 really strong point of view right now. I also think it would be great if you could when you come 4 back if you could show us some prototypes. Are we trying to look like Chestnut Street in San 5 Francisco? I mean I'm not prescribing, but just saying are we're trying? I don't think we're 6 trying to look like Rodeo Drive in Beverly Hills, but it's another prototype we all get or Melrose 7 Street in West Hollywood or these are all possible prototypes. And I just think if we could say 8 these are kind of the prototypes that we’re aiming for in the core and adjacent to the core that 9 would be helpful. 10 11 Chair Alcheck: Alright, I’ll be brief as well. This is not in any particular order. I think my issues 12 with the report are that it lacks context, and important context. The majority of none of this 13 Commission was here in 2009 and more importantly a great deal number of our staff really 14 wasn't, right? Our Director, our Assistant Director, and one of the things that may be the result 15 of the lack of interviewing or actually I don't even really love the idea of the word interviewing, 16 but sort of the lack of outreach maybe sort of a fundamental lack of context. And so I'm 17 grappling with two sort of concerns. 18 19 Number one I believe that the pitchforks in town are being raised because of traffic related to 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. office. And we’ve adopted an office cap last year and now and the interim retail ordinance as it 1 was and, but and now we're expanding on this interim retail ordinance in ways that in my mind 2 sort of ignore the context. And so what I'm hoping is is that we can understand the context 3 better with new information. What is that information? I think it's really important to 4 understand what happened in 2009. In 2009 and I'm going to shed light on this, but I'm hoping 5 that you will actually shed light on this when we meet or staff will shed light on this. We had 6 this situation where if there was more than 5 percent vacancy in retail you could convert it into 7 office and at that time we had 15 percent vacancy and the and the community came together, 8 the business owner, retailers owners came together and staff came together and they decided 9 to sort of remove that safety valve or what I would call a safety valve for retailers and in 10 exchange put forward the 2009 ordinance. Despite the fact that I would argue that retail is just 11 a use that has substantially suffered in the last 10 years we had the highest retail sales ever last 12 year. 13 14 So this notion that we're going to now expand what was pretty restrictive into a more 15 restrictive and more encompassing and farther reaching thing seems counterintuitive to me in 16 general. Why are we going here? Is it because we really don't want any more office and this is 17 another tool to just stop office? If that's the case ok, but are we actually helping retail? And 18 that context I think is really important. I think the reason why the report lacks it is probably 19 because the outreach to business owners was not sufficient enough. And I think when we meet 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. again I'm going to sort of discuss that same issue, that there may have not been enough and 1 sufficient outreach reach. 2 3 And the most important thing I want to suggest tonight which is that I think at the next meeting 4 I'm going to strongly encourage us to consider in a more expansive view of what is retail. It 5 may be that anything that where people come in to spend some money should be accepted as 6 retail: banks, you heard one individual talk about State Farm. Retail is not despite this great 7 year we had retail is not doing that well. And my biggest concern is that we're not setting them 8 up to succeed in the same way that we may have in 2009. 9 10 I also am concerned about the citywide proposal. We were talking really about a specific G area 11 and then this element of the ordinance is going to dramatically change it in a way that we didn't 12 discuss last year. And I think the last piece of context here is that… the without that without 13 incorporating more sort of business owners into this it sort of freaks me out because they were 14 a big part of the 2009 process that stakeholders group. Again, that goes back to context. So 15 that those are my comments; I'd love to see those addressed or to at least have a discussion 16 about those elements next time we meet. Commissioner Tanaka. 17 18 Commissioner Tanaka: So I’ll keep this really brief. So I think what this proposal does is it really 19 kind of uses the stick so to speak to try to force retail to be in Palo Alto which in general I 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. actually want to have very vibrant strong retail in Palo Alto. I think, I don’t think anyone here 1 doesn’t, but I think that the part that I think is really lacking is the carrot, right? Is to actually 2 make property owners want to have retail because retail will do well. And it's not that retail 3 can't do well in Palo Alto because we look at Town & Country. It’s done amazingly well since it's 4 been kind of renovated and Stanford Shopping Center’s also doing extremely well. And I think 5 what they've done is they've created a business environment that allows retail to thrive and it's 6 not, it wasn't, it didn't happen because of some sort of mandate, right? Some sort of forcing of 7 retail there, it happened because the creation of retail was good, the business environment was 8 good, they had a right mix of retail. 9 10 And I kind of want to echo what some of my fellow Commissioners said earlier which is I think 11 what we should do is because this is actually a really complex problem. It’s not something that 12 we’re going to solve in even one meeting. I think this is going to actually how we get strong 13 vibrant retail in Palo A is not a simple easy question. I think what we should do is and I think 14 one of the speakers mentioned this earlier, but I think we should form a stakeholder group with 15 retail professionals, right? Property owners, people who are in retail to really look at how do 16 you make vibrant retail in Palo Alto? What do we need to do to enable this business 17 environment that would that rather than trying to force the property owner to put retail in the 18 property owner will want to do it because the retail will make a ton of money, right? You [take 19 a] percentage rent. They could get all these other kind of… it's drawn in versus being forced in 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. because I think if we just try to force it what happens is you create vacancies, right? I mean 1 maybe we want retail here, but they couldn't, they can’t rent it out to a retailer, right? It and 2 that I think that's not good for anyone. 3 4 So I think maybe even on the Planning and Transportation Commission (PTC) maybe there 5 should be some sort of subcommittee to really look at this issue more closely, but I think it 6 needs to really involve folks in the business community that know a lot about retail and can 7 actually study some of the barriers that that doesn't enable strong retail here in Palo Alto. And 8 then we can start addressing some of those barriers and how to get rid of them. So because I 9 think this is very much the stick approach versus trying to also create the business environment 10 that allows retail to thrive. So that's my thoughts. 11 12 Commissioner Rosenblum: I’ll also try to be very brief because I think everyone has brought up 13 several of the points that are on my mind. So since this original urgency ordinance was adopted 14 I've always felt it's too one dimensional and it's a very surface level analysis of retail, meaning 15 we love retail therefore make it so that retail is protected on the ground floor. And not only 16 that, we don't particularly like nail salons so let's restrict those and we don't… the “we” are 17 people sitting up here and I find it frankly a little disturbing that a town that has this much 18 talent is doing things this one dimensionally. 19 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. I think retail is a complicated issue especially given today's environment of what's changing in 1 consumption habits, but when I talk to retailers again they say Number 1 difficult for me to 2 retain employees, Number 2 you are simultaneously driving away my customers i.e. a lot of 3 these retailers Downtown especially rely on the people who are working Downtown as their 4 employer as their customers. So you're simultaneously making it difficult for my employees to 5 live here, for my customers to shop here and yet you say you love me and you want me to take 6 more space. So what I would propose doing is I do think that this is something we should take 7 time on and have a proper stakeholder group that has more representatives. I think there were 8 five retailers represented, I don't know how many the property owners are listed by their 9 names I believe so I don't know how many of them were property owners versus neighborhood 10 activists, etcetera. But I think that you should do a good job of bringing us a very 11 representative stakeholder group together and then this is an opportunity. 12 13 I think SOFA is an example of a pretty good I don't know if that was a specific plan or area plan 14 under the term of art of how plans come together, but I think it's time for a pretty specific plan 15 around the way retail, housing, and employment work together. And by that I may not just 16 where they're permitted, but how they work together. So for example, I work for Palantir, a 17 large Downtown concern. We've done experiments where employees are encouraged to go to 18 local businesses and we basically we’ve done pilot programs where we reimburse or that we 19 introduce to local restaurants and stuff, but it's it takes work for someone to figure this out; 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. how can local employees spend their dollars in our local environment without overwhelming 1 the capacity of any individual restaurant for example. But there's a tremendous opportunity 2 between housing employment and retail and I think by analyzing it at the surface level that 3 we're doing we're really doing a disservice to what could be a great area. 4 5 The only really specific comment I have is there are some buildings that simply were not built 6 for retail because they were built under a regime where they were not part of this retail district. 7 So for example, the buildings at the corner of University and Alma as an example and 8 somewhere in this ordinance or in the study we need to talk about what do we do about these 9 kinds of cases and why are we including them if we know that they can't comply? And so what 10 is the plan for that? But in general I agree that this should be put more towards a I hate to say 11 it, but a study session but it should be a fairly extensive group that gets together. This is a big 12 deal. It's not something that I think people on the dais without really talking to retailers should 13 just be making up. 14 15 Chair Alcheck: Ok, thank you. This, the make-up of this Commission is going to change in 16 January and the make-up of the City Council is going to change in January. I know that there is 17 a perceived deadline for this because of the sunset of the ordinance. I don't know how this is 18 going to play out. Judging by some of the comments it sounds like two meeting, having this at 19 the next meeting may not create a final result if some issues aren’t… So I don't know that that's 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. the case because again this Commission will change its make-up, but I don't know I mean we 1 will postpone this now to our next meeting or how will this, how will we deal with this calendar 2 issue? 3 4 Mr. Lait: Well so yeah we would recommend that the item get continued to January 11th where 5 we can have more input from the Commission. We kind of did a once pass and there wasn't the 6 ability to go back and forth. 7 8 Chair Alcheck: Right. I think that that's wise and I'm going to call for that Motion. It's 9 hypothetical because the make-ups are so confusing here, but if at that time the new 10 Commission desires to explore this even further that may require some sort of involvement in 11 determining how you want to proceed with the sunset situation if you don't have enough time 12 to get in front of Council. 13 14 Mr. Lait: Right. So I… 15 16 Chair Alcheck: I guess what I'm really trying to say is I don't know that moving forward to 17 Council without… let's do this next meeting and see what happens. I'm just suggesting to you 18 that it may be prudent to have a portion of the discussion next time revolve around how we 19 would deal with the timeliness of this if we couldn't get it done in January 11th. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Mr. Lait: Ok. And I don't think it has to be solved on January 11th, but it would probably need to 2 be solved by the next meeting in January to get this to Council or maybe a meeting in February, 3 maybe the first meeting February to get this to Council in March. The absolute latest that we 4 can get this to the Council I think is right around the 14th and I'm not sure if that's a Monday, 5 but like mid-March is the idea because there’s got to be a first reading and then a second 6 reading and then the ordinance effective 30 days after. 7 8 Chair Alcheck: So what I guess our goal will be to if we determine that we want to pursue a 9 greater amount of research into this topic and create stakeholder groups then we'll make that 10 recommendation as quickly as we can in the processes that we have and then it will be up to 11 that new City Council to determine whether or not they want to do that or not. 12 13 Mr. Lait: Right. And I guess what I would say is and we can have more of an offline 14 conversation about it if you want, but I think that there's I don't think this Commission wants to 15 hold the advancing an ordinance so that the Council is not able to act on a policy direction that 16 they told us which was to implement (interrupted) 17 18 Chair Alcheck: No, I don't think we're going to do that. The question is is whether you will 19 proceed with a recommendation to pass the ordinance or recommendation to not. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Mr. Lait: Right. Ok. 2 3 Chair Alcheck: And I hope that we will be able to arrive at one of those choices in one meeting, 4 but I think it might be wise when you do your calendaring to at least save some space in case 5 we exceed that time. 6 7 Mr. Lait: Ok, yeah. That I think we can accommodate. Thank you. 8 9 Chair Alcheck: Ok, alright so I'm going to ask for a Motion right now to what's the correct 10 terminology here? 11 12 Mr. Lait: Continue to January 11th. 13 14 Chair Alcheck: Continue this agendized item to the January 11th meeting, our next meeting in 15 the 2017. Can I get a Motion? 16 17 MOTION 18 19 Vice-Chair Waldfogel: So moved. 20 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Chair Alcheck: Second? 2 3 SECOND 4 5 Commissioner Gardias: Second. 6 7 Chair Alcheck: Great. All those in favor please raise your hand. Ok that passes unanimously. 8 Thank you to the people who came out to speak tonight and thank you to staff for hanging 9 around. 10 11 MOTION PASSED (5-0-0-1, Commissioner Fine absent) 12 13 [note—go back up to Item 4] 14 15 Commission Action: Continue to the public hearing to January 11, 2017 Motion made 16 by Chair Alcheck, seconded by Commissioner Gardias, motion APPROVED 5-0. 17 Approval of Minutes 18 Public Comment is Permitted. Five (5) minutes per speaker.1,3 19 20 Chair Alcheck: I am going to ask that I have a Motion for approval of the minutes. 21 _______________________ 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Palo Alto Planning & Transportation Commission 1 Commissioner Biographies, Present and Archived Agendas and Reports are available online: 2 http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The PTC Commission members are: 3 4 Chair Michael Alcheck 5 Vice Chair Asher Waldfogel 6 Commissioner Adrian Fine 7 Commissioner Przemek Gardias 8 Commissioner Eric Rosenblum 9 Commissioner Greg Tanaka 10 11 Get Informed and Be Engaged! 12 View online: http://midpenmedia.org/category/government/city-of-palo-alto or on Channel 26. 13 14 Show up and speak. Public comment is encouraged. Please complete a speaker request card 15 located on the table at the entrance to the Council Chambers and deliver it to the Commission 16 Secretary prior to discussion of the item. 17 18 Write to us. Email the PTC at: Planning.Commission@CityofPaloAlto.org. Letters can be 19 delivered to the Planning & Community Environment Department, 5th floor, City Hall, 250 20 Hamilton Avenue, Palo Alto, CA 94301. Comments received by 2:00 PM the Tuesday preceding 21 the meeting date will be included in the agenda packet. Comments received afterward through 22 2:00 PM the day of the meeting will be presented to the Commission at the dais. 23 24 Material related to an item on this agenda submitted to the PTC after distribution of the 25 agenda packet is available for public inspection at the address above. 26 Americans with Disability Act (ADA) 27 It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a 28 manner that is readily accessible to all. Persons with disabilities who require materials in an 29 appropriate alternative format or who require auxiliary aids to access City meetings, programs, 30 or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing 31 ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 32 24 hours in advance of the meeting, program, or service. 33 January 11, 2017 Excerpted PTC Meeting Minutes regarding Retail Ordinance 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok here's what I'd like to do. I'd like to have a vote on the current Motion unless 1 someone has an amendment they want to make themselves. Barring that I really appreciate the 2 effort to encourage our new Commissioners to make amendments, I do, but let's do this. We 3 have a current Motion on the table to move this forward with typical conditions of development. 4 All those in favor of this Motion please say aye and raise your hand. Ok. Five in favor. All 5 opposed? One. The Motion passes. I want to take a five minute break and then we'll pick up on 6 Agenda Item Number 3. Thank you. 7 8 MOTION PASSED (5-1, Commissioner Summa opposed) 9 10 Commission Action: 11 Motion: Recommend approval of the project to the City Council, subject to typical conditions of 12 approval. Motion made by Vice Chair Waldfogel, seconded by Chair Alcheck; motion PASSES 5-1, 13 Commissioner Summa against. 14 15 Substitute Motion: Continue the project to January 25, 2017. Motion made by Commissioner 16 Lauing, seconded by Commissioner Summa; motion FAILED 2-3-1, Chair Alcheck, Vice Chair 17 Waldfogel, and Commissioner Rosenblum against, Commissioner Gardias abstaining. 18 19 Substitute Motion: Continue the project to allow staff time to demonstrate the legality of the 20 legality of the accessory structure. Motion made by Commissioner Summa, seconded by 21 Commissioner Rosenblum; motion FAILED 3-3, Chair Alcheck, Vice Chair Waldfogel, and 22 Commissioner Lauing against accessory structure. 23 24 The Commission took a break 25 26 3. Recommendation to the City Council for the Adoption of an Ordinance Making 27 Permanent Interim Urgency Ordinance 5330 (Limiting the Conversion of Ground 28 Floor Retail and Retail Like Uses), With Some Modifications; Extending the Ground 29 Floor Combining District to Certain Properties Located Downtown and in the South of 30 Forest Avenue Coordinated Area Plan; Modifying the Definition of Retail; Adding 31 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Regulations to Improve Pedestrian Oriented Design Standards; and Related Changes. 1 The Proposed Ordinance is Exempt from the California Environmental Quality Act 2 (CEQA) Per Section 15308. Continued from 12/14/16 Meeting 3 4 Chair Alcheck: [Note-starts in progress] retail preservation ordinance. I have speaker cards 5 here. I have four speaker cards. If you have a speaker card for this item can you please just 6 bring it up to me? Ok I'm going to give we have six or so speakers I'm going to give you each five 7 minutes time to speak on this item. Do we want to start with comments first or how do you 8 want to do that? 9 10 Jonathan Lait, Assistant Director: We thought we'd just do like a little two minute recap just to 11 sort of frame the discussion and if you're ok with that I’ll ask Jean to make that presentation. 12 13 Chair Alcheck: Ok before you sort of start I just want to sort of let the rest of the Commissioners 14 know we begin a very quick sort of discussion on this before the new year and we didn't really 15 have a lot of time that meeting so we pushed it and there was also this sensibility that the 16 Commission’s make up was going to change a little bit and we might want to wait till the new 17 Commission members who are here to sort of jump in and go in-depth. And so with that please 18 staff take it away. 19 20 Jean Eisberg, Lexington Planning: Ok, thank you. Good evening, Chair Alcheck and Members of 21 the Commission; I'm Jean Eisberg, Planning Consultant with Lexington Planning. As mentioned 22 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. we were here back in December on the 14th. Staff didn't have an opportunity that night to 1 respond to the Commission's questions and comments. We've done that in the staff report 2 that's before you tonight. I'm just going to recap a couple items. I'm not going to repeat the 3 presentation from last month. 4 5 So in December the Commission made some comments recommending policy measures that 6 could help support retail. This included housing production, retail incentives, parking 7 management strategies. So those topics could be addressed in an area plan, in a economic 8 development strategy, and they're currently being addressed in the Comprehensive Plan and in 9 a parking management study Downtown. But this draft ordinance is very narrow in that it’s a 10 zoning intervention, a very narrow zoning intervention to address one issue affecting retail. It 11 responds to Councils concerns about office and non-retail uses replacing retail and installing 12 window shades and films reducing the vibrancy particularly Downtown. So as a result the 13 Council directed staff to revise the interim ordinance to permanently protect retail spaces from 14 converting to office or non-retail uses citywide and to add provisions to the GF ground floor 15 district Downtown to require window transparency in all ground floor spaces including non-16 conforming uses. 17 18 In terms of outreach the Planning Commission also asked about the outreach efforts. The City 19 Council directed staff to conduct informal community outreach. And so what we did was a 20 number of stakeholder interviews. At this point we've met with 23 individuals to gain their 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. perspectives. This includes some of Palo Alto’s largest commercial property owners Downtown, 1 a commercial brokerage firm representing over 90 properties citywide, architects, residents, 2 and a number of small business owners and retailers. And this feedback is summarized in the 3 December staff report. 4 5 Additionally in front of you you should have received a memo today it's also in the back of the 6 room with an additional staff recommendation to allow property owners in the South of Forest 7 Avenue 2 (SOFA 2) the southern tip of SOFA 2 and the RT-35 district to replace retail uses with 8 private educational facilities. The Council had expressed support for this specific provision this 9 fall and staff is now recommending including that in the draft ordinance to provide some 10 additional flexibility in this vacant retail area outside of the Downtown and SOFA 2 core. 11 12 Lastly just a reminder about timing; so the interim ordinance expires April 30th, the intention is 13 to have a permanent ordinance in place at that time. So we're aiming to go to Council for the 14 first reading in February and are requesting tonight that you review and consider a 15 recommendation to the Council that protects retail conversion citywide, adds design standards 16 in the Downtown GF and California Avenue combining districts and modifies the ground floor 17 boundary Downtown. That concludes my presentation. I’m happy to answer any questions. 18 Thank you. 19 20 Chair Alcheck: Thank you. I'm going to open in the public hearing now and invite our 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. community members to speak. You’ll each have five minutes and Vice-Chair Waldfogel will call 1 you up. 2 3 Vice-Chair Waldfogel: Great. Let's start with Benjamin Cintz followed by Terry Shuchat. 4 5 Benjamin Cintz: My brother will also be speaking and is it possible for me to defer for now and 6 then add my time to his? His name is Simon Cintz. 7 8 Vice-Chair Waldfogel: Yes absolutely. Let's see where do we have… I think fourth in the list, is 9 that ok? 10 11 Mr. B. Cintz: That's fine. Thank you very much. 12 13 Vice-Chair Waldfogel: Ok. Great. So it’s Terry Shuchat followed by Christian Hansen. 14 15 Terry Shuchat: Good evening, I'm Terry Shuchat. For the last 51 years I've owned a retail 16 camera store Keeble & Shuchat in Palo Alto. Having had that many years’ experience in retail I’d 17 like to kind of share with you the state of retail today and it's not good. If you had asked me a 18 year ago if I would retire someday due to my old decrepit age I would say absolutely never. I 19 like my business. I love it there. I've got great people working there. I have no reason to retire; 20 however, we've been put out of business basically by the Internet and by the smartphone. So 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. technology has raised havoc with the camera industry. A good portion of the cameras that we 1 used to sell were replaced by smart phones. A lot of our business has been taken away by the 2 Internet. So I think you need to be quite liberal when you when you look at retail. And I built in 3 1977 a two-story 16,000 square foot building for my business. At one point we had seventy 4 employees. So we were the largest camera store in all of greater Northern California. 5 6 The second story is an office area. We've always use it for offices and right now I'm trying to 7 rent the building. So our plan will be to separate the first floor from the second floor. Let the 8 second floor continue as office space as it's been and the first floor will continue as retail. I am 9 deluged with calls from realtors who are very, very interested in the office space. I have 10 received hardly any calls regarding the retail space. 11 12 If you ask people in Palo Alto what would you like to see in retail? Oh, I'd like to see the local 13 hardware store back. I want to see the jewelry store back. Why did you close your camera 14 store? Well the reason all these stores have closed is because they're not getting support. And 15 I think you're going to find if you make retail on the first floor difficult to fill that Palo Alto is 16 going to have a lot of vacant space. And I think the City would be much better off with that 17 space filled with some type of business, so extending the concept of retail would be a really a 18 great idea to encourage people to open businesses. Because if you look at companies like 19 Macy's, Sears, even Wal-Mart their businesses are suffering and they're suffering because of the 20 Internet. Now they're in the Internet business also, but they're in the process of closing stores 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. or reducing the size of their stores. So what you can't expect to see in Palo Alto is what we used 1 to have in retail with lots of small locally owned stores. 2 3 I was born in Palo Alto so I have seen huge, huge changes here in retail and as I was growing up 4 so many of the small retail businesses were locally owned and a large portion of those people 5 also owned the buildings they were in. Today on California Avenue I own my building. Bob 6 Davidson who owns the paint store owns his building. There's about two other businesses that 7 are owner occupied. All the rest of the retail stores are either owned by developers who have 8 moved in and have redone the business or the buildings or by large concerns so that it's 9 unfortunately also the cost of retail space in Palo Alto is extremely high. And due to that cost 10 small retail or even medium sized retail or even like my store which was a large store really can't 11 survive. So I would like to encourage you I mean I'm all for the second story as I said. I get calls 12 from realtors every day, every few days inquiring about our office space upstairs. So office 13 spaces is really very easy to occupy and that's why so many people would like to convert their 14 first floor retail to office space. I am all for having retail, but I think you have to be realistic as to 15 what type of retail if any retail is going to fill certain spaces that are available. Thank you. 16 17 Vice-Chair Waldfogel: Thank you. Christian Hansen followed by I’m not sure which Cintz, 18 Benjamin or Simon. 19 20 Christian Hansen: Good evening, Commissioners. My name's Christian Hansen. I just wanted to 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. share with you my experience in a building that we own on 999 Alma which is the Anthropologie 1 building. We purchased that building a couple years ago and fully knowing that Anthropologie 2 was not getting the business that they wanted and they were talking about moving. We know 3 now that they've moved to the mall to a much larger building where they get more foot traffic. 4 5 I've been marketing… when we bought the building we had some flexibility in how we could 6 market the space. We knew that because they were struggling in retail it would be difficult for 7 us to get another retail in that space, retailer. So with the SOFA 2 zoning you're allowed some 8 additional flexibility to market; for example, you can have up to 5,000 square feet (sf) of office, 9 but you have to maintain a retail component. We've been marketing that space for a year now 10 strictly as retail and I have not yet received an offer on the full space. And I hate coming here 11 and telling everyone that because that really makes it difficult for me to be competitive when I 12 go negotiate with prospective tenants. I have received an informal offer for a portion of the 13 space along Alma which would leave the alley space behind the Alma frontage to lease which 14 would be extremely difficult. Again I, we would love to lease the space. We've been trying to 15 market it to any tenant at an undisclosed price because we wanted to see all offers and it’s been 16 very difficult. 17 18 We did receive some interest from a school and I know one of the things discussed here tonight 19 was to fold in education use as a retail like use. And we've been working on this for… with the 20 school to try to get this through the City for a year or six months. I don't know, because it's 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. taken so long I don't know if the school is still going to be a round in a viable option for us, but 1 as you look at what to do with this retail ordinance I would just let you know that time, the time 2 it takes there's a waiver provision that's proposed to say if you're struggling like we are you can 3 come in, you can submit a waiver, and you can approve or deny it. But as you know as tenants 4 are looking for space they don't always have two, three, four, six months to wait around for us 5 to figure out with the City if we can lease up the space and the use that they want. So we again 6 start back at square one. So I hope the education use is still around when this goes through. 7 8 But the other thing I would just want to mention is that SOFA 2 was a very well thought out 9 zoning plan. There was a lot of thought, a lot of study. I mean the packet I know is 200 pages 10 thick and they seem to have thought of almost everything and this ordinance blankets the 11 whole City saying that no, there can be no change from retail. And specifically in the SOFA 12 ordinance it retail is protected on the Homer and Emerson corridors there's no conversion of 13 ground floor retail. It's not allowed. You're not allowed to convert ground floor retail to any 14 other use. It's protected in the SOFA 2. The southerly most tip like where we're at on Addison 15 where there's virtually no retail was excluded from that for good reason, to give us some 16 flexibility so that we can lease our space. 17 18 And I call it luck that we just happened to buy this building right around the time that this 19 emergency ordinance came through and we had a tenant vacate, but this is something that not 20 everyone is feeling now, but as spaces roll and tenants move out this is going to be something 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. that's that a lot of the tenants on the periphery are going to be faced with. So I would just 1 encourage you to remember that when these specific areas of the City that are on the outskirts 2 when the zoning ordinances were constructed they were done with a lot of thought, a lot of 3 study, and I would urge the Council to leave or the Commission to leave that as is. And I agree 4 that it's important to preserve the livelihood of certain areas and retail corridors, but they… it's 5 not the whole City. There are certain areas. Thank you. 6 7 Vice-Chair Waldfogel: Thank you. Simon Cintz followed by John Goldman. 8 9 Simon Cintz: Hi, my name is Simon Cintz. My brother and I our family has been in Palo Alto 10 since the early 1950s. Our family owns four small commercial properties in Palo Alto, two in the 11 SOFA area, two along El Camino. 12 13 I wanted to say I really hope that this Commission will listen to the last two speakers Mr. 14 Shuchat and Mr. Hansen. I have bought cameras at Keeble & Shuchat. I have gone in there 15 many times for various photographic things. You know I really do wish that they could stay, but 16 that's being nostalgic and I hope this Commission will stop being nostalgic and become realistic. 17 And that's what these two people are really saying, what's realistic given the changing 18 environment is not what's in front of you as a proposed ordinance. 19 20 The blanket citywide prohibition against any and all ground floor retail conversion is a one size 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. fits all approach to retail preservation. I'm referring specifically to Section 5 of the proposed 1 ordinance. It doesn't matter what type of retail. It doesn't matter where the retail is located. It 2 doesn't matter whether or not the retail is viable in this location. It ignores most of the issues 3 that should be considered in a carefully thought out process. Is this the way Palo Alto wants to 4 do zoning and city planning? It's important to note that almost all of Palo Alto’s existing retail is 5 currently protected by current zoning ordinances. This ordinance only serves to protect a very 6 small portion of Palo Alto’s existing retail including retail properties where retail is no longer 7 viable. What is the real benefit added by this ordinance? 8 9 It's also important note the ordinance mentions that there 70,000 sf of retail has been lost since 10 2008. Let's put this in perspective; I asked Miss Jean Eisberg how much retail there was in Palo 11 Alto, she looked it up said 2.6 million sf of retail in Palo Alto. This means that 2.7 percent of our 12 retail has been lost in about six or seven years. This isn't much considering the changing nature 13 of retail. So let's put this thing in perspective and what retail really is available to the citizens of 14 Palo Alto. 15 16 In our own family situation we converted an auto garage that was built in the 1960s by my 17 parents into the ground floor into dental/medical. There’s about 3,300 sf. We have a two 18 dentists and a doctor there. Most of their patients are Palo Alto residents. It serves Palo Alto. 19 Would the residents rather have the benefit of these medical offices/dental offices or would 20 they rather have the auto garage that was there which had a chain link fence around it and the 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. old junk cars were parked against the fence because they weren't going to go anywhere. Now 1 we have a really a very attractive place. It benefits, it certainly looks a lot better and I think it 2 provides much more benefit to the citizens of Palo Alto. 3 4 One might argue that the ordinance provides for an appeals process. As pointed out earlier I 5 think by Mr. Hansen it sets a bar that’s way too high for a realistic exception for a conversion. It 6 would take forever. Conversion should be allowed in those areas with a little pedestrian traffic. 7 I mean the ordinance and the staff report often talks about encouraging pedestrian traffic. Well 8 you’re not going to encourage pedestrian traffic by sticking in a retail use in the middle of a 9 place that doesn't have pedestrian traffic. The area around Anthropologie and what used to be 10 the old Addison Antique is a good example of an area that I could literally lie down on the 11 sidewalk there and nobody's going to step over me, ok? 12 13 I hope that you would consider medical, small medical and dental as an appropriate 14 replacement for retail and the last thing I want to say is if you really want to help retailers, if you 15 really want to help the City of Palo Alto’s residents with retail, fix the parking problem. 16 Everybody will cheer. The residents will cheer, the store owners will cheer, the property owners 17 will cheer. That's really the problem. That's really where the focus should be to make retail 18 successful is fix the parking problem. Thank you. 19 20 Vice-Chair Waldfogel: John Goldman followed Brad Ehikian. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 John Goldman: Ok, hello. So I've been in property management and leasing in Palo Alto for 20 2 years. In fact this month is my, will be my 20 year anniversary. So I've been highly involved in 3 managing retail tenants and doing retail leasing. I've been friends with retailers and talked to 4 them many times over the years. I was on the ground floor retail stakeholder group in 2009. By 5 the way our firm we manage about 65 buildings in Palo Alto including 43 in Downtown and no 6 one asked me my opinion or invited me to a stakeholder group. 7 8 The 2009 process was very productive. I mean there were groups from retail, building owners, 9 regular unaffiliated citizens and it was very minor changes, but we had at least 6 probably two 10 hour meetings and everyone left shaking hands and felt… and some of that was to tweak the 11 thing I’m going to talk about is vacancy. Like people were seeing these boarded up buildings on 12 Alma Street in and other areas that had… no one views that as good and productive for retail to 13 have a bunch of vacant buildings. If you went to the mall and every other store was closed 14 you’d go to a different mall. Like I used to go to the one down in Cupertino that was falling 15 apart and it was like it was depressing. 16 17 So, so I talk regularly to retailers and interestingly the two things that they've been absolutely 18 panicked about was when they started hearing about the… well, I'll just talk about one. The 19 other one is too political, but the legislating of tech out of Downtown as discussed by the Mayor 20 last year I had so many people calling me saying what's going to happen, I'm going to be out of 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. business, this is insane. So they… I don't know how this ordinance is supposed to help the 1 retailers. There's not a lot in it for them that they're seeing. Their biggest concern that they talk 2 to me about is foot traffic and they don't want more retail. They want a consolidated customer 3 base in a shopping district like University Avenue. They don't want people running around onto 4 Everett Street trying to find, to buy some clothes over there. They want to force people into 5 where they are. 6 7 So let's see I just wrote a couple thing… yeah, they don't want vacant buildings breaking up the 8 district that they're very happy now. And whenever we have a vacancy that's one of the 9 common calls I get is: when are you going to lease the building next door to me? It's making my 10 block bad. People don't walk here anymore. And at one time I read a study from a retail 11 consultant who said one section a 100 foot of vacant block face can destroy an entire block that 12 people won't walk there anymore. 13 14 So just one other note, I mean really the retailers that are succeeding in the current 15 environment with all the things that everyone else already talked about are restaurants that 16 serve a lot of booze or expensive coffee, cell phone retailers and hair salons. There's really not 17 the vacuum cleaner store and the penny candy store is just people are ordering all that stuff on 18 Amazon. And the retailers this they have a lot of pressures whether it's the minimum wage, 19 California laws like paid time off, workers comp, medical insurance, liability insurance, license 20 and compliance. I mean just a new retail or small retailer comes in they have to get a use and 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. occupancy permit for about $450 and they have a number of other requirements. A business 1 registry is $300. The costs of their employees being able to park; I mean the Transportation 2 Management Association (TMA) has done some things to give free bus passes and other things 3 to the employees of these retailers. That's helpful to retailers because hiring for Downtown 4 Palo Alto is very difficult. Our office is next to Spot Pizza and that's the Number 1 problem he 5 has. He can’t hire people and giving them free bus passes that's something that actually works. 6 That's the kind of thing the City can do to help the retailers. 7 8 So yeah that's pretty much my observations. I’ve been around a long time. I'm always happy to 9 talk to anyone about what I know and introduce other friends and people who've also been 10 around and seen a lot of things happen in Downtown Palo Alto. Thank you. 11 12 Vice-Chair Waldfogel: Thank you. Brad Ehikian followed by Chop Keenan. 13 14 Brad Ehikian: Hello, my name is Brad Ehikian and I’m a partner over at Premier Properties. So 15 we as John mentioned we've managed about 43 properties Downtown and I think we're 16 averaging about sixty leases a year in Palo Alto. Just as a kind of some a personal anecdotes we 17 are seeing retail environment change right before our eyes. I would probably say 90 percent of 18 the calls I receive are from restaurants. This is a similar trend we're seeing in other downtowns. 19 It makes sense because restaurants are coming to our area to take advantage of our very robust 20 office environment. That's built in clients for them. It's created this symbiotic relationship 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. between the office and the restaurant and they've been able to thrive under that environment. 1 Retailers on the other hand are shedding space to provide more show room type of 2 environments and they're essentially distributing a lot of their goods to help reduce overhead 3 and inventory. You know just name few we got FLOR, West Elm, Rejuvenation, Restoration 4 Hardware, Design Within Reach, The Shade Store, I mean I can go on and on. These are the 5 changes and trends we're seeing in the retail environment. 6 7 In my experience in discussion with retailers the biggest killer is vacancy. Vacancy will destroy a 8 block. If our intent is to help promote and protect retail we need to really ensure that we're 9 creating a vibrant area and protecting our core business districts which would allow for really 10 maximum foot traffic and exposure. Let's take our current environment in Palo Alto right now; 11 we have a very thriving market. With that said we just lost two of our major retailers to 12 Stanford Shopping Center. We saw, lost the North Face and Anthropologie. I use those two 13 because those are probably the most well-known, but those are on the outskirts. In both cases 14 rent was not the issue. They're going over to Stanford and they're paying probably three X the 15 rent but they're getting 100 times more the foot traffic. This to our retails is key. That's the 16 most important part to our retailers. So now University Avenue may come close, but are out… a 17 lot of the side streets don't have that kind of traffic. 217 Alma, the former North Face, that's 18 going on vacant a year. We don't ask a price. We're trying to find everybody. We're looking for 19 anybody who's out there. It's a very challenging site for us to get leased. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. So really at the end of day we're asking really what are we trying to do here? What's the end 1 goal? Very little of this ordinance does anything to really help our retailers. TMA as John had 2 mentioned was a kind of really the first step in providing some assistance to our retailers, but by 3 adding more retail and expanding our district will only hurt our existing businesses. So I would 4 recommend going back to the original 2009 ordinance and keeping things the way they are 5 without any retail citywide protections. Thank you 6 7 Vice-Chair Waldfogel: Chop Keenan please. 8 9 Chop Keenan: Good evening, 700 Emerson, Chop Keenan. I want to call this the retail 10 enhancement ordinance not the retail preservation ordinance because I think that's what we're 11 all about. I started buying property and improving them in Downtown Palo Alto in 1972. And so 12 we've done Whole Foods and Aquarius and the Varsity Theater twice, all of the 600 block where 13 Dan Gordon is and the corner of University and High and on and on. I mean I'm a retail nut and 14 I've got a retail centers all around the Bay Area, almost two million sf of them. So I'm in that 15 game all the time. I know what works. 16 17 Parking certainly works. We're in a parking district in the core Downtown. SOFA has no parking 18 district and SOFA was a three and a half year specific plan with an Environmental Impact Report 19 (EIR). If you go to alter that I would suggest you're going to need an EIR. I noticed and also in 20 the Comp Plan discussions the reluctance to get into another specific plan area because there 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. are so forever and to what end? 1 2 So what's good short of just shelving this plan? What's the enhancement? I sent all of you an 3 email that was from John McNellis which expanded allowable uses in the retail core. Banks are 4 a perfect example. They are high traffic generating. Anything I have in my shopping centers in 5 San Ramon and San Jose, Berkeley I've got dentists and I've got tutoring and I've got financial 6 banks. So rather than expanding that out of the core I would expand that in the core. It was 15 7 percent vacancy on University Avenue in 2009 when that last update on the retail ordinance 8 was done. We went building by building looking at which are appropriate for retail and which 9 are just functionally not. And west of High Street was very problematic; Zebra Copy, everybody 10 laments their Zebra Copy left. They were always six months behind in their rent. They just 11 weren't making it there. And if I hear one more time about everybody crying about Rudy's, 12 nobody here has ever been to Rudy's Pub, but ok Doria; says a lot about you. 13 14 So I can… there's not much in this ordinance that I think is good. Eliminating that 25 percent 15 office ground floor exemption is terrible. I would say that the Downtown and SOFA are highly 16 regulated already. One size fits all I can guarantee Downtown is different than SOFA. SOFA’s 17 different than Midtown. Midtown is different Cal Ave. As long as we're talking about the whole 18 City one size fits all, eliminate the chain store restriction in Cal Ave. It’s their finally their day in 19 the sun comes. Cal Ave. used to go across the tracks, it was a very vibrant district. Put in 20 Oregon Avenue and it died. It's having its day in the sun because it too is mixed use. Every time 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. I have an office user that's also a customer. This is what… we’re the envy of every city in 1 America is Downtown Palo Alto. We’re working hard on traffic, on parking and I urge you to 2 step back from this ordinance. 3 4 The outreach that was made by Ms. Eisberg was very superficial and one way. Just it wasn’t 5 engaging. I’d love to have a working session with this Council [Note-Commission] and talk to the 6 users and property owners particularly in the Downtown and in SOFA to get more than a five 7 minute sound bite. So you know what's happening to retail in America. Putting our finger in the 8 retail dike with this ordinance when there's a tsunami on the other side is not constructive. 9 Thanks so much. 10 11 Chair Alcheck: Ok. What I'd like to do now is have our Commissioners weigh in. Let's start from 12 the other side and we’ll go down the line and everybody please incorporate your comments and 13 questions into your time. 14 15 Commissioner Gardias: Thank you. So let me think about this how to start. So I think that at 16 first thank you very much for those from the property management and owners, property 17 owners, and merchants and Mr. Shuchat. You’re the legend of Palo Alto and you are. You are, 18 yes. So thank you very much for taking your evening and coming here to us. And with saying 19 this I think that we would be extremely interested in having this gentleman and all other men, 20 merchants, systemic and deep perspective of this on this how we can improve retail in Palo Alto. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. So I'm saying this because when I look at this ordinance and I'm just asking ourselves the 1 question that somebody raised here: what are we trying to achieve here? And I'm not really 2 sure if this document conveys or convinces me to any idea that we want to have with preserving 3 or expanding or just making changes to a retail merchants in Palo Alto. 4 5 First of all I'd like to understand what's the strategy? I’d like to understand the broader picture. 6 I can tell the staff and my colleagues what I think about this, but there needs to be some sort of 7 consensus and the greater understanding what's our end goal of this and other retail 8 ordinances. We agreed that we want to just preserve it. We want to have it thriving, but this 9 means nothing. So this documents lacks greater understanding and consensus of the 10 community what we're trying to do. That's Number 1. 11 12 So with this I hope that with these comments that maybe besides of the discussion on this that 13 staff can make an effort to engage with the discussion with the community of the merchants 14 because this topic will not go away. There's going to be the recession. There will be a change of 15 minds. There will be change, there is already ongoing change toward in the attitude toward the 16 malls that are not thriving as used. There is a youth population that recognizes the value of the 17 stores long the streets. So I think that the winds are changing across America the way I see it, 18 but we have to think this through because there are of course other Internet forces as 19 somebody said here that we are have to overcome in order to make this gentleman wealthy, 20 right? Because that will thrive as long as they are wealthy and their businesses will be wealthy 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. to overcome also the cost that's associated with running the businesses. But then with this 1 there needs to be a set of the planning decisions that will bring the foot traffic, that will make 2 that will bring the lower cost skilled employees, that will allow them to for flexible 3 arrangements, that will maybe ease up on the regulations. So that's in terms of the larger 4 perspective. 5 6 So with saying this I'm just asking because I have number of the detailed questions, but it may 7 take a while. So are we going to have a couple of rounds? Because now I can just stop and just 8 allow somebody else. Ok, thank you. 9 10 Chair Alcheck: Yes, please. 11 12 Commissioner Lauing: Ok, thanks. The staff's intent here is for this to be basically very narrow 13 and some of the comments that I read in the last minutes from December and here tonight are 14 very worthwhile, but I'm not sure that all of them or many of them apply to the narrow issue of 15 preserving ground floor retail. And the second thing is that we're talking about this of course 16 for merchants and of course for developers, but we're talking about this with respect to the 17 vitality of the area in mixed use area for our citizens. So that needs to be the focus here. 18 Anything that we would recommend with respect to this ordinance doesn't preclude a lot of 19 these other things like more parking and how to do promotions which I saw in the minutes from 20 the last meeting and so on. It doesn't preclude that, but it’s just not quite the same subject as 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. what we're dealing with here. So I think more the question is, is this ordinance what we need or 1 is it does it need to be added to or subtracted from? 2 3 Two comments that I wanted to make that were prepared and I don't know if we're just all on 4 the same page or many of the speakers were looking over my shoulder, but one of the things 5 that was there in the 2009 ordinance and is still extremely important is this issue of where is 6 there marginally viable retail locations? And the three businesses that I put in my own notes 7 where the three that you mentioned which is over by Addison Antiques and Anthropologie on 8 the one hand on Alma and then also the ski shop, what’s the name of it? North Face, thank you. 9 So it does seem to me that there is room for defining some areas that in 2017 we might now 10 define as marginal, marginally viable and address that maybe even going overboard and saying 11 those can now be offices. We can't deal with that tonight so in terms of the methodology City 12 staff can give us advice on how to proceed with that, but I think there are some areas that may 13 need to be exempt from the one fits all kind of regulation. 14 15 And the second thing is that and this is been mentioned so I would just since I currently have the 16 floor say I do think that small medical offices can make some sense. It's all about traffic, 17 pedestrians, getting services and getting an eye exam and getting my glasses taken care of and 18 going to the shoe repair guy on the same street on California Avenue sounds… I do it. It’s fine, 19 should… that seems fine to me. So those two are examples of things that we could consider as 20 amendments to what's in front of us. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 I do think that the last staff that we got was there's only about two percent vacancy and that 2 may be old, but relative to when this report was published, but that was November of 2016. So 3 it seems like except for these more marginal areas that there are retailers that want to move 4 into the vacant space, thank goodness not like 2009, with some notable exceptions that we just 5 heard from Mr. Shuchat as well. So in some sense what I'm saying is I don't feel like it's broken. 6 That preserving ground floor retail for citizens to walk by and see all of the options is terrific. 7 Clearly I actually cut my teeth in retail. I was in it for about 10 years. It's all about traffic. It's 8 what you sell and where you are. So there has to be some issues around that that we can look 9 at as well again I think sort of outside the narrow definition of what we're dealing with right 10 now. 11 12 One comment that would make just on the wording is that we're trying to get a much more 13 broad definition of what retail is. I'd be very supportive of that as long as it doesn't get 14 ambiguous because then somebody’s going to have to be making the decision on a lease by 15 lease basis. So I think that for a first round is all I have to say. 16 17 Vice-Chair Waldfogel: So this proposed ordinance responds to direction from the City Council 18 and my view is that we should forward this more or less as written to the Council. And if Council 19 the current Council wants to provide us different direction then they can send us new direction 20 and we can move forward on that basis. But I think that a lot of speculative deliberation tonight 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. on what the Council may or may not want that's different from what the Council previously 1 directed to staff and previously directed indirectly to us is potentially a waste of time. That said 2 I agree with my colleagues with Commissioner Lauing’s view on medical and dental office 3 particularly outside of the core retail districts. So I wouldn't want to see a lot more of that on 4 Cal Ave. or on University, but in the periphery I think that would be potentially a great thing. 5 6 I think there's an open question whether ground floor office particularly with shaded windows 7 creates the same hole in the street that a retail vacancy creates. So I think we just want to be 8 careful as we think about and when we talk about vacancy and talk about the risks of vacancy 9 that we're cognizant that there are occupancies that create the same effect on the street as a 10 retail vacancy. And retail may be in a crisis, but we happen to be in or near zip codes where 11 retail is working. And we know that retail is working in the Stanford Shopping Center and in 12 Town & Country. Retail appears to work in Downtown Los Altos. It appears to work in Los 13 Gatos. It appears to work in San Carlos. It appears to work in Belmont. And not all of those 14 cities have heavy office conditions to drive that retail. So I think that understanding why it is 15 that retail works in some of those communities is something that's important for us to explore 16 and to understand better. But as I said my general view is that we should just forward this 17 forward this to Council and see if Council has any new direction for us. 18 19 Chair Alcheck: Ok. Well I'll start by saying that I found the inclusion of the 2009 minutes and 20 notes to be particularly informative. I think one of the main things I sort of took away from that 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. was the notion that there was a really exhaustive effort made to engage a members of the 1 community in a process that wasn't necessarily self-serving, but really City serving. I appreciate 2 that there was a Council direction here, but I consider our appointment to this Commission to 3 be not necessarily an appointment to essentially enact the Council's direction, but really to give 4 Council perspective. Maybe it's a perspective they share and maybe it's a perspective they 5 don't, but if for example we find many aspects of this ordinance problematic I think now is a 6 great opportunity to let them know. 7 8 And I'd say the number one thing that I find problematic about what we're what we have in 9 front of us is this notion that we didn't engage the community the way we did in 2009. And just 10 so we're clear here 2009 was just the beginning of our recovery. So that engagement essentially 11 was on the heels of a crisis. I think we're in the 82nd or 83rd month of our recovery. We've 12 never had a 10 year recovery. I don't know that we've had a nine year recovery. So we're four 13 months away from eight years. I don't know. Or that mean that we're going have a crisis in 4 14 months or 8 months or 12 months or 14 months or 16 months? I can guarantee you it's coming. 15 I just don't know when. I'm not going to put money on it, but it's not going to we're not going to 16 have a 10 year recovery. 17 18 And so the question is are we about to essentially codify something that doesn't speak to what 19 potentially is looming, in which case we'll be in a crisis let's say in 2019 or 2018. And then we're 20 going to want to get together with everybody and figure out well what can we do to help you 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. because we've got vacancies everywhere. I feel you were telling me about your camera store. I 1 swear I felt really guilty because I the last camera I bought was on Amazon and it was an single-2 lens reflex (SLR) because I had a kid and I wanted to take pictures of them and it's the absolute 3 truth. We're buying everything online. And one easy thing that I'd love to see staff come back 4 to is essentially what could only be described as the broadest definition of retail. I'd like to see 5 an ordinance that essentially had a definition of retail that someone would be like how is that 6 retail? I'd like to see the broadest definition on the table that we could pare back as opposed to 7 sitting here and saying well what about if added dental offices? Which aren’t included or what 8 if a yoga studio or what… I don't want to… I don't think any of us are qualified to just call it off 9 the dais. I’d rather have a definition that would be really broad. Frankly if there are shopping 10 malls that have dental offices and financial planners and tutoring centers then our definition of 11 retail should incorporate those because I assume that anything that generates foot traffic for a 12 shopping center like Stanford or its competitors is probably worth consideration. 13 14 I don't know, I'm really uncomfortable moving this forward to Council as is and I take a little 15 solace in the fact that the Councils’ make up has changed dramatically in the last election. So 16 maybe the direction that we've given is… it's not enough I think to just say this is ready for their 17 vote. And I would I mean I would like to hear everybody's thoughts before we sort of delve into 18 the specifics, but I would argue that the most concerning issue is that I don't think any of this 19 addresses a potential crisis that's coming in the next 18 months. And the worst thing that could 20 happen is if this accelerates problems in our town that would have come anyways because it 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. wasn't sort of sensitive. 1 2 I'd argue that in 2009, I don't even know if the 2009 ordinance if we can just rest on that alone. 3 I don't even know if that's a good fallback and I'll tell you why. Let’s just put some context here, 4 right? iPhone is 2007. The whole retail framework has changed. I do most of my retail on my 5 phone now. Like literally all of it. I don't even use my computer for retail. I literally buy 6 everything I buy on my phone. And that the retail landscape has changed so dramatically 7 between 2009 and 2017 that I don't I don't know that even the 2009 framework is enough. I 8 think we need to essentially understand what it is that we're doing. 9 10 I think the argument about parking is persuasive. I think we don't acknowledge how valuable 11 the business users are to the retail operators. When we talk about getting business, getting 12 tech out of Downtown I can imagine the retailers getting scared, but again I want to hear from 13 everybody else. My biggest concern remains the sort of looming economic conditions and how 14 are we addressing them without input based on the last seven years of experience. So I’m going 15 to pass it to Doria and we’ll come back. 16 17 Commissioner Summa: So I'll keep my comments general and I want to thank everybody from 18 the public that came here to speak. And I'm sorry if you didn't think the public outreach process 19 was good enough. And I also notice that there aren't any small business operators here tonight 20 which kind of surprises me and including any traditional retail, well Terry, but… so that was kind 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. of striking to me. I want to agree with a lot of my colleagues and especially with comments that 1 this is kind of a narrow ordinance that the Council wants us to take a look at that they felt was 2 important. And I don't think it's so, I don't think we're going through this ordinance solve the 3 parking problem for sure and other complicated issues. I think the idea of this ordinance was 4 kind of a quit the convert, to stop the conversion of what had been retail to office uses basically 5 and to support creative ideas to a certain extent about retail zones. 6 7 So I have some specific ideas here, but oh ok. So and I'm kind of interested in sending this to 8 Council quickly because I know you guys saw it before. I don't want to get into specific things, 9 but I don't want to try to solve other bigger problems with this ordinance. What I want to do, 10 what I think the Council intended to do and what I'd like to support is stopping the conversion of 11 ground floor retail. And I think that another one of my colleagues made a very good point that 12 conversion of office to ground on the ground floor to as a use can be as devastating as a 13 vacancy. I think that's an interesting point. 14 15 And another thing that I always like to do when I'm considering these issues is to be fair to 16 everybody and I think that it's so important how retail uses to support one another. And I'll very 17 believe briefly use as an example the Anthropologie store and Addison Antiques. That was 18 beginning to create a really cool little retail area out of unusual buildings that were kind of 19 warehouse buildings. It could have… I mean I really like that. I went to both of them every time 20 I went to one of them. I'll probably never go to Anthropologie now that it's at the mall, but I'm 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. sure they'll make more money and that's fine. But I would also like this ordinance and I think 1 that's the intent to encourage rather than limit creative uses of retail. And I think many of the 2 uses that were that some colleagues would like to broaden I think that the description of retail 3 is broadened here and many of the uses that have been mentioned are already at least available 4 as conditional uses. So I'm going to leave it at that for right now. 5 6 Commissioner Rosenblum: Great. Yeah, since this has come to us a couple times also we can 7 kind of start in the middle, but I did want to just bring it back. I've said this before, but as a 8 meta point I do agree the retail protection ordinance is focused on the wrong side of “loving 9 retail and wanting to encourage retail.” When I talk to retailers it's not even among their top 10 five concerns is protection for ground for retail. They bring up always how they find employees. 11 Even before foot traffic they say it's difficult for me to get employees, it’s difficult for me to 12 retain employees. Next is foot traffic and they worry about the consistency of the 13 neighborhood. They don't want vacancies. They don't want a dead zone. It also does feel like 14 an overreaction I think the point was well said, 2.6 million sf of retail in Palo Alto. The reason 15 cited in the report for triggering this urgency ordinance is 70,000 square [foot fit] that had been 16 converted over the previous eight years. It feels a little bit like taking a bazooka to swat a very 17 annoying mosquito. 18 19 And I also agree with Vice-Chair Waldfogel that the Council the new Council may have very 20 different direction and so overly debating this before getting that new direction may be 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. premature. Having said that a couple things that are between the general and the specific; so 1 first there have been many people talk about the makeup of the stakeholder group. This was 2 brought up in our last meeting. I was not that happy with the involvement of the stakeholder 3 group at that time and I'm still not. And I don't think the new report really addressed it. 4 5 A couple of things super minor, but the very least in the report you should bucket who is who. I 6 had to go up and look up every person and see who are they, how many property developers, 7 how many property owners, how many retailers, what type of retailer are they? You have five 8 retailers of which one is a restaurant. One is laser hair removal, etcetera. If the majority of our 9 retailers that are coming in are say restaurants then they should have proportional 10 representation. You don't want to have just Spot Pizza represent the entire restaurant industry 11 of Palo Alto. When you read the notes from 2009 it did indeed seem to be a very vibrant 12 stakeholder group that did block by block walking. And it was a tight group and I agree with our 13 Chair that the inclusion of the notes from 2009 I found very enlightening: their process, the 14 participation, etcetera. It also included by the way a quote from Cicero from Mr. Chop Keenan. 15 So next time we can up the game and get more Latin quotations. But the quote was good. He 16 said Cicero said not knowing your history is like looking to the world through the eyes of a child 17 and I think that's a good thing. So looking at 2009 was really enlightening for me. 18 19 So second I think that we're very premature to extend what we have to citywide. I think what's 20 going on in the Downtown corridor and preventing conversions is a good thing, but there's no 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. way we can apply this the rest of the City. I agree that Midtown is different from where I used 1 to live in South Palo Alto is different from many other many neighborhood types shopping 2 areas. If we want to look at those we should look at them one by one. I don't think this 3 ordinance is anywhere near a good tool for citywide and if the point of this meeting was to say 4 do we extend it citywide then I would be a strong no. 5 6 I also don't agree with extending the map of the protected 2009 boundary. I do think that the 7 original intent of the of the emergency ordinance to basically halt anything that was violating 8 the spirit of what we had done so things that were not in any way retail suddenly taking over a 9 ground floor and pretending somehow to be retail absolutely that should be stopped. But 10 somehow believing that extending our boundaries of protected retail towards really marginal 11 cases I think is poor. I live very close, I live three blocks from that North Face store and it breaks 12 my heart. It's a great location for an apartment building right across from Caltrain. It's part of 13 our neighborhood. It breaks my heart to have this this wonderful space that's been unoccupied 14 for a year and I was always wondering why there's retail there. There's nothing else around 15 there. It's just other apartment buildings. And so it's something that seems odd that we would 16 want to expand to these marginal cases. 17 18 And so and then finally to the extent that we should do our job, bring this back to Council as as 19 instructed I agree that if there is useful comments to put forward it would be what they already 20 have expanding it to include the whole City is certainly premature. Taking what they currently 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. have and enforcing that within the boundaries that had previously been established I have no 1 problem with. I think that having a two percent vacancy doesn't show that we yet I have seen 2 any ill effect of the previous ordinance and would be supportive of continuing. But with that I 3 agree with Vice-Chair Waldfogel they may have different direction for this whole retail area, but 4 certainly extending this to the citywide is premature. And I’ll end my comments with that. 5 6 Chair Alcheck: Ok, let's go to the lights. If you have sort of a second round of comments just 7 turn your light on and I’ll call on you and we'll continue this discussion for a little longer. Ok, 8 Commissioner Gardias and then Commissioner Summa. 9 10 Commissioner Gardias: Thank you. So I believe that we have at least one supporter on the City 11 Council to strengthen our mandate, Greg Tanaka, who was saying many times that he believes 12 in the greater and stronger role of the Planning and Transportation Commission (PTC). So I 13 think that that with this I would be leaning toward having a discussion on this ordinance. And 14 this would extend our perspective this way extending our perspective to the City Council not 15 necessarily awaiting their directions. I'm sure that they would appreciate our perspective. And I 16 have more comments if we agree on this direction. Thank you. 17 18 Commissioner Summa: So I had some specific comments. One of them is about in the 19 conditional uses the first one which is business or trade school. So I'm assuming by business or 20 trade school you don't need mean business school as in Columbia Business School or Stanford 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Business School. And I'm wondering if business school and trade school as a ground floor retail 1 use is maybe archaic? And I think that most trade schools probably don't want to be in such 2 expensive retail buildings. The three so trade schools and those kinds of things are regulated by 3 the state and we only have three. One of them is Downtown. It's the Berlitz and the other two 4 are kind of like on San Antonio in general manufacturing. And I worry that this business school 5 and trade school conditional use is A) archaic and also might be used as a loophole by 6 businesses that really aren't retail. So I would like to make a recommendation that we look into 7 that. It's a very specific thing, but I think it could improve the conditional uses. 8 9 And then I also when it comes to the waivers and adjustments and I don't mean this to sound at 10 least the least bit insensitive, but having economic hardship be listed as a reason for a waiver or 11 adjustment is kind of troubling to me because I wouldn't like it to encourage people to ask to 12 have a waiver just because they know they can make more money currently by renting retail 13 space versus office space. I don't consider owning a property that has a zoning use restriction to 14 be an economic hardship. So I found that kind of troubling and I think that having it happen at 15 the Director’s level without any public hearing makes it very difficult for adjacent businesses to 16 know that it has happened. And everybody on both sides today has stressed the importance of 17 what's happening down the block, 100 feet of a vacancy can be destructive to thriving retail. 18 19 So I think that there should be a public hearing for a process like this and in fact I don't know 20 why it shouldn't just be a variance. Because I'm worried that on the one hand under the 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. documentation required. There's a very strict suggestion that people would have to provide a 1 map of 2,000 foot radius of every business use, but I don't think the process as proposed would 2 allow for I don't know how a business would know if somebody next door was in time to appeal 3 the Director's decision and I think that can have a real effect on businesses nearby. So those are 4 my two comments for now. 5 6 Commissioner Lauing: So basically the point that I want to underscore because I still think we're 7 not aligned on this and maybe we can't be, but we're not being asked by this ordinance or by 8 the Council to come up with a what I’ll call a comprehensive master plan for retail vitality for 9 retailers themselves, for retailers and developers. What we’re asked specifically about should 10 we protect ground floor retail with glass for new tenants coming in? That's basically what we're 11 being asked for. All these discussions about other things we could do for retailers are 12 completely valid. Totally valid in my judgment, but it's not part and parcel of this right now. So 13 one option I think is to take this back to Council and say that we can generally support the intent 14 if we do of first floor retail, but we would like you to consider reduction. Not expansion as this 15 one currently does, but reduction of some of the non-viable retail areas focusing on the more of 16 a core is what I'm saying. We can use the broader definition of retail that cities already put in 17 here as an example of the broader definition that we would like to see and ask for more 18 guidance. Because that way we kind of get a couple of things that I think we're mostly aligned 19 on and still ask for the guidance without getting into a whole comprehensive study of lots of 20 different things that could make retailing better. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Chair Alcheck: Yeah. I so let me respond to that. I think you make a very, very valid point about 2 sort of the intent of the review. I think that you're acknowledging one of the issues that I'm sort 3 of dealing with which is that we're reviewing this interim ordinance, but it incorporates a lot of 4 changes that are expanding its reach. And it's and those expansions are intended to enhance 5 the retail, but no one's really spent a lot of time evaluating them. And so there is concern that 6 maybe that's a mistake. And I agree with you that we weren’t asked to essentially come up with 7 a retail enhancement program. I don't dislike your suggestion actually. I think it might be one 8 route which is essentially to encourage the removal of the elements of this that are technically 9 expansive until such time as we're given to review their broader impacts and potentially include 10 a community oriented approach. I'm going to, let's hear from everybody else and see what they 11 think. Commissioner Fine. 12 13 Vice-Chair Waldfogel: Not present. 14 15 Chair Alcheck: [Unintelligible] Commissioner Rosenblum. 16 17 Commissioner Rosenblum: Thank you. I think we can take this in two ways. We can do the 18 narrow assignment that Council gave to us and I think they're asking us A) to approve a map. So 19 there's the existing 2009 outline and then there's a number of properties designated in yellow 20 in the Downtown corridor that would be added to that. So it's University Circle. There's a 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. couple of blocks along Hamilton, etcetera. And so they're asking us… it's attachment, it’s 1 Proposed Ground Floor Commercial District Additions. 2 3 Vice-Chair Waldfogel: Page what? 4 5 Commissioner Rosenblum: Exhibit A. 6 7 Mr. Lait: I believe we have an at places memo with color maps at the (interrupted) 8 9 Commissioner Rosenblum: Yeah. Yeah so it’s Exhibit A. And so one we're being asked to 10 approve a map I think. Number two we're being asked to think about the same restrictions 11 being applied citywide. Is that not the case? 12 13 Mr. Lait: There's more to it than that. There one is the expansion of the ground floor area as 14 you noted on Exhibit A. We've modified on in the GF area some of the permitted uses. 15 16 Commissioner Rosenblum: Yes. 17 18 Mr. Lait: And on University Avenue specifically we've even made some other refinements to 19 that. The existing interim ordinance already applies citywide. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Rosenblum: Yeah. 1 2 Mr. Lait: What this ordinance does is codify that ability to convert existing retail where it exists 3 as of March 2015 to be converted to a non-retail or non-retail like use. 4 5 Commissioner Rosenblum: Ok. Thank you. And so then number three was I was going to lump 6 several things together which is the categories of retail that are acceptable and the wavers. So 7 basically how do you apply to get out of it? And so in the narrow task of giving feedback my 8 personal kind of votes on these things would be first on the map as proposed is too expansive. 9 That I don't really understand how even buildings like University Circle which by the way was a 10 big part of the 2009 PTC discussion about whether or not it should be eligible and why it’s not 11 eligible, etcetera. But when you look at these buildings they just weren't built for retail. I don't 12 even know what you would do if their tenants move out. I mean I… you punch a hole and 13 rebuild the ground floor. I honestly don't know what they would do. One my questions for staff 14 in a moment what would happen? 15 16 But so first my answers in order would be the map expansion or adding a property seems ill 17 advised. Number two so I had actually thought we were being asked if this should also be 18 expanded to citywide, but we were saying that was already in the interim ordinance for this is 19 outside of that, but any expansion I think of anything that we're considering for the Downtown 20 corridor to apply citywide I think is also ill advised. And then finally around the waivers and uses 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. I didn't have a problem with the set of waivers. The definition of permitted uses I always think 1 is a can of worms. I always think it's easier to exclude uses rather than dictating every category 2 under the sun of creatures that can get on the ark. And I just think it's leading us down a bad 3 path although I have to admit when I looked at it it seemed logical, no major red flags. So 4 putting that aside those would be my couple of votes around if we're talking about what we 5 want to get back to Council to fulfill our assignment. 6 7 But more generally following up on Commissioner Gardias’ comment people like Council 8 Member Tanaka really do want us to take this job a bit more expansively. And so I would love 9 for Council to say we'd like you PTC to come back with a more comprehensive retail vitality 10 study that includes everything from parking to the map itself to how does Transportation 11 Demand Management (TDM) relate to the Downtown retail area. And I think that would be a 12 median relevant assignment. So that would be my vote for how to pursue this in a less 13 piecemeal fashion. 14 15 Chair Alcheck: Yeah, alright. Let me ask a question to my fellow Commissioners here. So it's 16 sort of my impression that we and correct me if I’m wrong, it’s sort of my impression that this 17 interim ordinance was put in place in what could be described as a response to concerns over 18 excessive office uses. And the sort of notion behind it being interim was this idea that it would 19 come back and during that period of time we would actually review it and give it maybe a more 20 in-depth analysis before codifying it. And I think that the concern and I want to hear from you 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. guys, but I think one of the concerns that you're hearing from some the Commissioners here is 1 that I don't know that we did the analysis during the interim period to justify putting this into 2 law. And you know one option could theoretically, I hate the notion that we are operating with 3 a time line, it's so arbitrary. They've got to prove it before it lapses in April? Alright, well then 4 one suggestion could be extend it for six months. And let's take six months and figure out 5 whether or not this should be codified. 6 7 Let’s just be clear here, everything that we're talking about is here is just a recommendation. So 8 anybody that showed up tonight to participate has to show up at City Council because this may 9 not necessarily translate. And I think one of the questions we have to ask ourselves is do we 10 want to recommend maybe a six month continuance of the interim ordinance and request that 11 they allow the Planning Commission and the staff to work together to analyze the greater 12 impacts as opposed to expand and codify permanently what is potentially an unanalyzed 13 interim ordinance. I see a staff light. 14 15 Mr. Lait: Well I just wanted to respond to the question about the what's been done in the 16 interim since the interim ordinance was adopted. Because the suggestion was that there hasn’t 17 been any analysis that's been done since then (interrupted) 18 19 Chair Alcheck: No. I don't want to suggest there hasn't been analysis. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: No, but I mean there's specific things that have been done and I think it's important at 1 least to articulate some of those. 2 3 Chair Alcheck: Please. 4 5 Mr. Lait: You're absolutely correct that when you, when the City, when cities adopt a an urgency 6 ordinance the idea there is to immediately stem the problem and stop what's happening and to 7 take that time for how [ready] how many months or years up to two years to study and 8 evaluate how you might adopt some permanent regulations to address it or maybe decide that 9 the issue is not urgent and you let it lapse. Since this interim ordinance was adopted there was 10 we heard reference to it this evening in an unfavorable way, but there was a reference to the 11 California Avenue regulations and the change doors and some other issues to address small 12 businesses on California Avenue. There was another regulation during this time that we studied 13 and that the Commission made recommendation on having to do with the California 14 commercial neighborhood and neighborhood commercial areas where we addressed a loophole 15 in some of those issues that were resulting in retail spaces being converted to office. We have 16 also gone to the City Council and we have sought their guidance on the next year which was sort 17 of this Downtown and the rest of the ordinance of the interim ordinance and we got guidance 18 from the Council. And we believe that the guidance that we got from the Council is reflected in 19 in this ordinance. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. So I don't think we're just simply changing the date and now running through the system again. 1 I think there has been some guidance and thoughtful dialogue that has been granted. Now to 2 the public outreach I hear the comments that have been made about that and I don't take 3 objection to that. I will note that when we did get City Council direction on this and I think we 4 reported this in the staff report it was pretty clear to us and maybe we got it wrong, but they 5 did want to do an informal outreach. It was our impression that there was not the expanded 6 outreach of 2009 that they were seeking. And so we'll find out when we go to Council whether 7 we got that right or wrong and certainly there's always an opportunity for more dialogue on 8 such issues. But I do think that I'm hearing some of the comments about moving this forward to 9 Council I think that is important and I do appreciate the constraint that you're expressing 10 relative to the deadline and wanting to have a more robust dialogue about that. 11 12 Chair Alcheck: Ok, I appreciate that. Let me ask you just a quick question. There's sort of a 13 difference between community outreach right now everybody has an opportunity for five 14 minutes and what I would call a much more involved process which was the 2009 process. And 15 I guess my question is I'm not for one minute suggesting that you didn't get the Council 16 direction correct. I'm just curious if in your professional opinion this ordinance could be 17 improved if it, if we incorporated a more exhaustive community involved process. If we 18 followed the parameters of the 2009 process do you think this could be improved? 19 20 Mr. Lait: Well I think any time you allow for open dialogue and conversation then yeah you can 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. probably address some of the issues that are problematic. I mean we've heard the Commission 1 express concerns about some of these marginal areas. I've also heard how some of these 2 marginal areas can actually turn into something kind of neat and exciting and that's great, but 3 then what's the economics behind that? So yeah we have not done a, not consulted with an 4 economic consultant to talk about feasibility of retail in certain parts of the City and if we 5 wanted to get that fine grain analysis that's an opportunity. And I think I've heard some 6 comments about the interrelationship of this and the customers that you have through office 7 and the housing opportunities and how all this stuff comes together. That is definitely a much 8 more expansive effort and would result in some more information, but I think that… well, so I 9 think that answers your question. 10 11 Chair Alcheck: [Unintelligible] Commissioner Gardias. 12 13 Commissioner Gardias: Ok. Thank you, but I would like to talk about the so there are two topics 14 one is the greater perspective so let me just relate to this. If we pursue so in regards of pursuing 15 that greater aspect and retail strategy and greater study if we decide to take this route in 16 addition what I understand would be also looking into this ordinance so doing two at the same 17 time that's what Commissioner Rosenblum suggested and I liked it very much. In regards to the 18 first item I think this should be related to the works on the Comprehensive Plan. So however we 19 formulate this there needs to some be some relationship to the team that formulates polices on 20 the Comprehensive Plan. Otherwise there was going to be conflict of work pretty much. They 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. will be just doing their work, there is going to be another work done by Commission, and then it 1 will result with the confusion. So ok, please. 2 3 Mr. Lait: If I… so I, yes. I would agree with that. And I think just so we understand procedurally 4 how this would happen as I'm understanding some of the as the dialogues emerging there may 5 be a recommendation on the ordinance itself and then there would be also this 6 recommendation to the Council requesting that they direct the PTC to further examine these 7 issues. And so the Council's going to think about that recommendation in the context of the 8 Comp Plan effort that's under way. And they will think yes and in fact I think that the Comp Plan 9 is now entering into a new phase and looking at the business economics side of it. So all the 10 stuff is sort of coming together right now and we recognize that there is these different 11 elements that need to feed into the dialogue, but we believe and I think some of the 12 Commissioners have reflected this, this is a much more narrow focus. Yes, there's a broader 13 conversation that ought to take place and should take place, but we still need Council direction 14 on when and where that's going to take place whether that's the Comp Plan or another effort. 15 16 Commissioner Gardias: And I agree. And in this regards I can I am ready just to start looking into 17 the ordinance itself if my colleagues agree because I have prepared a set of comments to this. 18 19 Chair Alcheck: Why don’t you let me get through the remaining lights and then see where they 20 go. Commissioner Summa. Go ahead. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Summa: Oh, I wasn’t sure I hit my light. Yeah, I kind of agree that what the 2 Council's looking for us to do tonight is a comment specifically on this ordinance and many of 3 those broader issues will presumably be dealt with in the very, very comprehensive 4 Comprehensive Plan. And that I think if we just punt it I don't feel like we’ll be doing our job this 5 evening. I've already and I've already made some specific comments. I have some more to 6 make, but that's just kind of where I'm going with the larger process. 7 8 Chair Alcheck: Ok, so basically we have two different tracks here. We have a number of 9 Commissioners who don't believe that it's worth the time to delve into these, to delve into the 10 issues that they find troubling because they want greater Council guidance. And there are some 11 that would like to delve into the issues that they find problematic and ask for greater Council 12 guidance. Is that sort of where you are you? You want to get specific and move it along? 13 14 Commissioner Summa: Yeah. 15 16 Chair Alcheck: Right. 17 18 Commissioner Summa: I think so. I think that's what Council wants from us. 19 20 Chair Alcheck: So those are sort of two different paths and I'm prepared to shelve it. So I how 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. do you want to proceed? Does anybody... I’m open. I'm open to getting specific. I think I'd 1 rather get specific and talk about the issues that we find problems with then simply pass it 2 along. So why don’t we go in order? Commissioner Gardias why don’t you kick it off and… 3 4 Commissioner Lauing: I was going to say that I'm not sure tonight in any amount of time we can 5 get through all the specifics. If we're going to talk about we recommend this with these changes 6 to the staff presentation and we have to go into what geographies we're recommending and I 7 just don't know how we can get there tonight. So I think there is merit, no is what I'm saying, I 8 think there is merit in getting a little bit more time from the Council, but to give them sort of a 9 preliminary indication that, if this is true, that we generally do support maintaining first floor 10 retail glass for new tenants. But we need further time to look at this because we actually think 11 that it should be a more constrained amount of geography than what's in the current memo, 12 etcetera, etcetera. 13 14 Chair Alcheck: Yeah. 15 16 Commissioner Lauing: So we would like to have some more time to do that and in the meantime 17 when you send this back to us and hopefully give us more time you can also give us more 18 direction. So it just doesn't seem to tonight like we can get deep enough into it without 19 spending hours on it and maybe still have it defeated I don't know. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: So here's where I'm interpreting your suggestion and I'm assuming Commissioner 1 [Note-Vice-Chair] Waldfogel’s probably on board with that suggestion. And so we have two 2 Commissioners (interrupted) 3 4 Vice-Chair Waldfogel: [Unintelligible] question for staff. 5 6 Chair Alcheck: Got it. So but I assume that you're sort of on board with that so we have two 7 Commissioners that are prepared to not discuss the details. I have two Commissioners that 8 would like to talk about specifics. [Unintelligible – people talking off microphone] And one 9 suggestion to potentially continue it to another meeting where you could I don't know that we'd 10 have support for that here either. At some point we need to have a Motion and I'm afraid I 11 don't know that we have enough consensus on how we want to proceed. So yeah, please. 12 13 Vice-Chair Waldfogel: Is so the current ordinance is an urgency ordinance that has a two year 14 time frame. Is that correct? 15 16 Mr. Lait: [Unintelligible] 17 18 Vice-Chair Waldfogel: And is it possible to extend that or do we need to we need to bring in a 19 replacement? 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: Yeah there's no further opportunities to extend that urgency ordinance. It expires on 1 the 30th of April and I think the Council is interested in having a new set of regulations in place 2 before that happens. 3 4 Vice-Chair Waldfogel: Yeah, so if we want to keep what's in place we have to move something 5 forward in a timely fashion is what I'm understanding. I mean that said I agree with a lot of the 6 comments that we've heard that there's a deeper question here about what really supports 7 retail, but I feel pretty strongly that we just have to move this forward and then we can delve 8 into what direction we want from Council on the process. Whether it's Citizen Advisory 9 Committee (CAC) or the Comp Plan process or whether we should set up a subcommittee to 10 explore this further even if we don't have another ordinance in front of us. But I just feel like we 11 have to move this forward. 12 13 Commissioner Lauing: Are you suggesting that for tonight or maybe if we met in two weeks and 14 retackled it? 15 16 Vice-Chair Waldfogel: Well I think there's some hard deadlines here because this needs to go 17 through what is it? Two readings at the Council and if you walk this back and look at the 18 schedule to agendize it first reading, second reading we're pretty much at three minutes to 19 midnight. Am I close to right there? 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Lauing: So two weeks from now is not an option? 1 2 Mr. Lait: Well I'm not going to say it's not an option, but I will tell you that we're very nervous 3 about giving the Council enough time. So the Commission feels pinched on time I also don't 4 want the Council to feel pinched on time. If they want to take another meeting to discuss the 5 issues I'm concerned that if the Commission continues it they may not have that luxury of doing 6 that. 7 8 Chair Alcheck: Ok, I have a light from Commissioner Gardias. Do you have, you want to 9 comment on this? 10 11 Commissioner Gardias: As I said I’m ready to dive in and start discussing the ordinance itself. 12 13 Chair Alcheck: Ok. Ok what I'm going to do is I'm going to allow any light to proceed with their 14 comments and if a lit light proposes a Motion then we'll hear it, but I can't put words in your 15 mouths. So I have a light from Gardias and now I have a light from Commissioner Rosenblum 16 and I'll go in order of the lights as they see them. So if you'd like… 17 18 Commissioner Gardias: Since I just spoke maybe Commissioner (interrupted) 19 20 Chair Alcheck: Ok. We’ll start with Commissioner Rosenblum and the next light I have is 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Doria. So let's start. I keep switching. 1 2 Commissioner Rosenblum: Well so I'd like to make just a base Motion and then see if we can 3 build off this. So that the we're looking to extend this emergency ordinance into an official 4 ordinance. So I'd like to make a Motion to adopt what the Chair suggested which is to extend 5 the current ordinance, is this permissible for six months? Are we allowed to recommend this? 6 7 Albert Yang, Senior Deputy City Attorney: So the interim ordinance is limited to two years and at 8 that point it's really meant to be adopted either as a permanent ordinance or for some 9 permanent regulation to go into effect. 10 11 Mr. Lait: That said though the Commission could recommend could it not to the City Council 12 that they adopt this ordinance for a limited term? 13 14 Mr. Yang: Yes, I think that raises a question of how that differs from an extension of the interim 15 ordinance. 16 17 Chair Alcheck: Can I ask for some clarity here? Is there a sort of is it forbidden to essentially 18 implement a new interim ordinance that is very similar, but called version two? 19 20 Cara Silver, Senior Assistant City Attorney: So we're kind of threading the needle of the 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. distinction between the emergency ordinance that was actually adopted as a moratorium which 1 banned retail conversion versus a brand new set of regulations that more clearly prescribe what 2 uses should be there and which should not. So if you compare side by side the interim 3 ordinance the interim urgency moratorium ordinance with the new ordinance that we're 4 proposing you'll see that the language is very different. So you can certainly as Albert 5 mentioned you can't legally extend the moratorium for longer than two years. That's off the 6 table under state law, but you can adopt an interim ordinance. So you could recommend that 7 Council accept this ordinance that we're proposing for say a six month period and then do 8 further study during that time period. 9 10 MOTION #1 11 12 Commissioner Rosenblum: Ok. Yeah so this, thank you for that option; so just to explain where 13 my head is there's two things that we could do if we want more time, but also want to fill our 14 obligation to Council then we can make this a limited interim ordinance. Where my heart is 15 though is to give more clear direction which is that they basically roll back to the 2009 16 boundaries with stricter protections because I think where people went wrong were retail 17 spaces converting into uses that really were not retail that should have been protected. And 18 people came and rightly said this is wrong, people are pulling a fast one on us. They said that 19 this should be retail, but this is clearly not a retail use. And so I think part of the work that staff 20 did was define much more clearly what constitutes retail, what is eligible and so to me it's a 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. matter of being better enforcers and clearer, but I think that the boundaries that have been 1 established in 2009 are very logical and they did exclude areas that are fairly marginal and other 2 areas if retail could thrive there I think retail will find a way, but I think we want a very good 3 dense corridor. 4 5 So where my heart is is to give advice to Council to go to the 2009 boundaries, but include the 6 clear definitions of retail and retail service that has been provided by staff. So that would be my 7 Motion is to adopt the boundaries prescribed by the 2009 retail ordinance with the permitted 8 uses being outlined in this ordinance over a permitted retail and retail like services. 9 10 Chair Alcheck: Do I have a second? 11 12 Commissioner Lauing: Well I’ll second it at least for discussion purposes because I have a 13 question about what I seconded. 14 15 Chair Alcheck: Ok. I'll second the ordinance and you are feel free to ask a question. 16 17 Commissioner Lauing: Ok, thank you. So let me (interrupted) 18 19 SECOND 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: I mean I'll second the Motion. 1 2 Commissioner Lauing: Ok what you're saying is this regulation wording except the 2009 3 boundaries? 4 5 Commissioner Rosenblum: I'm saying that I the thing I dislike about this ordinance are the 6 boundaries. That clarifying the definition of what is retail and retail like service making it easier 7 to enforce I like. What I think we got wrong was making it too expansive and so I think that the 8 goal of this was noble which is to make a high functioning dense area of retail and not have 9 offices sneak their way in, but I think they that we cast too wide a net. So yes, it's I'm saying 10 constrict the boundary, but otherwise the definitions of permitted services and waivers I would 11 adopt. 12 13 Commissioner Lauing: Ok. 14 15 Chair Alcheck: Yes. 16 17 Commissioner Summa: So I'm a little confused. Does that mean you just want it to be 18 Downtown? 19 20 Commissioner Rosenblum: Yeah, I think it should apply to the Downtown area. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Summa: So I really want the Downtown core as our chief retail area to be very 2 strong and I agree with that, but there's other areas that are very important for people who 3 want to have something they can walk to particularly for retail all over the City that have been 4 like the CN zones have been fairly ravaged by illegal conversion. So I would like to extend it and 5 I don't think this ordinance is going to kick anybody out. It's just going to say once this is 6 available again to a new tenant it will have to become what it was meant to be. So I don't want 7 to just take care of Downtown I really want to take care of the whole City. 8 9 Commissioner Rosenblum: Yeah if I can, if I can address that? 10 11 Chair Alcheck: Yes. 12 13 Commissioner Summa: Yeah. 14 15 Commissioner Rosenblum: I agree with this. I think there are lots of retail areas in Palo Alto that 16 are important. My point is that the I think Council looked at Downtown when they crafted this 17 initial urgency ordinance and thought about the situation we face there and then took the same 18 prescription and painted the rest of the City. And I just think that each area is somewhat 19 different and I have experience personally with a couple of the retail areas in Palo Alto and so I 20 go to Town & Country. I used to live in South Palo Alto so went to Charleston Shopping Center 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. area and Midtown. So I know some of them, but I'm not sure what prescriptions should be for 1 each of these areas. And so I feel like even Cal Ave. I don't know what the boundaries should 2 be. And I feel like the Downtown area was well studied in 2009. They went block by block by 3 block and you can read that the discussion and so I'd be very supportive of a similar process in 4 Cal Ave. and South Palo Alto and Midtown and come up with what the ordinances should be in 5 those areas. I just don't think that that anyone did that. 6 7 Mr. Lait: So Chair? I have some information that may be informative to your deliberations. So 8 as I'm understanding the Motion. It's move the staff report, the recommendation and staff 9 report with the exception that the GF boundary not be expanded and in fact restored to the 10 2009 boundaries which you have on your map here. Ok. And just so we're clear that would not 11 include the 2013 expansion. Ok, very good. 12 13 So I wanted to just clarify a point that I heard from Commissioner Summa and maybe for the 14 rest of the Commission in areas where there is a ground floor protection today or expanded if 15 there is existing non-retail or retail like uses in that space. Let's say an office is in that space, 16 that office use can leave and a new office use could be established. This ordinance doesn't 17 require the immediate transition when one office leaves it has to now be retail. Our code has a 18 non-conforming provision that says when a use is abandoned and I think it’s 12 months then if 19 you are in a GF area and you're an office use and the sites been abandoned for 12 months that's 20 when the GF standards of now you got to be ground floor retail would kick in. So practically 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. speaking the GF boundary where the rest of the ordinance already would protect any property 1 that has retail on the ground floor. So for example we've got the 2013 map here which 2 Commissioner Rosenblum is suggesting not be included in the GF boundary in each one of these 3 areas where there is retail that retail is still protected under the ordinance. 4 5 Commissioner Rosenblum: Yeah and I to respond to that also I understand that and thanks for 6 the clarification. And my colleagues could say no I disagree I want to also include the 2013 or 7 even the new suggested areas as well. I'm reacting to a lot of the at least petitioners tonight 8 that the state of retail is changing and I think having an area that we're really going to protect 9 and do a great job of making sure that every single store front is protected for retail and exciting 10 and vibrant is better than trying to expand the footprint and possibly have to make 11 compromises. And so I would like to see us adopt quite strong protections in that in the areas 12 we really want to see retail thrive. And so to me the 2009 boundaries were very well 13 established. 2013 my only issue with it again is actually my issue with it is that it's not as well 14 defined as the 2009 corridor, it’s just a it's an appendage. I don't have a strong feeling about it 15 to be honest. I have a stronger feeling about extending what we've done to the more marginal 16 which were designated in yellow in Attachment A and to take the same implications for 17 everyone I think is premature. The 2013 versus 2009 I my feelings are less strong. I feel like the 18 2009 boundaries were better defined, but I don't have a strong feeling about including 2013 or 19 not. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok, yeah I wanted to speak to the second and then to the Motion as well. I think 1 one of the challenges here is this look, it's incredibly sort of eye opening that we had a 2 commercial property owner sort of testify tonight that they are unable to lease a space and 3 they're not even advertising a price they're just asking for anybody to make an offer. And it's 4 not inaccurate to suggest that by doing that that individual is sort of putting themselves in a 5 tough financial position because in theory it's public knowledge now that there's no 6 competition. That's not where you want to be when you're a property owner, right? What 7 happens to that Anthropologie space? How do they fill it? 8 9 And one of the concerns that I think you're hearing from some of us on the Commission here is 10 without engaging a process like the 2009 without having a process like the 2009 maybe on Cal 11 Ave. and maybe on some of our other areas where we really want to focus on a core how can 12 we simply codify this? I think that's our discomfort. Our discomfort is not with the sort of heart 13 of this notion it's why are we doing this blind? When we clear, you know what's funny about 14 this a little bit? The individuals that participated the 2009 process are all still in in the 15 community and they're eager to participate. And the staff level we have a lot of new members. 16 And so we have the same community that was involved in 2009, some of the same Planning 17 Commissioners that were in 2009 are now on the City Council, and we have an entirely new 18 staff essentially make up. And so the notion that we wouldn't maybe draw on those community 19 members to participate in the process again now seems like a mistake and I think that's what 20 you're hearing from us tonight. I have two lights. We have a Motion on the table. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Mr. Lait: Can I clarify the Motion? Because I think what I stated is not what I'm hearing stated. 2 So just to be clear the Motion is I thought the Motion was move the staff report which includes 3 implementing the interim ordinance which applies citywide that if you have retail you cannot 4 convert that to a retail a non-retail or retail like use. And but what the dialogue is that I'm 5 hearing is that no, what you want is forget about the expansion citywide, restore the 2009 6 boundary, keep this definition of retail and retail like though I don't know what the significance 7 of that would necessarily be, and yes or no on University Avenue changes with the yoga studios 8 and things of that nature? That maybe we don't have the answer to that question right now, 9 but so in essence the change I mean and this isn’t precise, but in essence what we're saying is 10 let the ordnance expire. But before it expires change the map back to the 2009 standard 11 instead of the 2016 standard that we have today. 12 13 Chair Alcheck: [Unintelligible] the clarity if the ordinance expired that's exactly what would 14 happen except it wouldn't incorporate maybe some of these new definitions. 15 16 Mr. Lait: Yeah. It wouldn't include the retail definition. 17 18 Chair Alcheck: Right which we heard tonight and some Commissioners had mentioned that they 19 are interested in expanded definition of retail. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: Ok so the Motion then just for clarity of the record is to amend the GF boundary back 1 to the 2009 and adopt the new retail definition that we have. 2 3 Commissioner Rosenblum: Yeah, I agree. It's very close to just letting it expire. 4 5 Mr. Lait: Ok, thank you. 6 7 Chair Alcheck: Hold on. 8 9 Commissioner Rosenblum: The thing that I wanted to keep though was I think the community 10 reaction if I read the community reaction correctly was that there were ground floor properties 11 which had been converted from retail to other uses that shouldn't have been or that they're 12 pulling a fast one that it’s not actually retail. And so that the extent that we can get clarity 13 around what is permitted retail versus not I think would give people comfort. That if we say this 14 is a protected area that we actually will get retail that the community wants to see there. I do 15 think that's important. What I think we did poorly was in saying in addition we want to expand 16 the geographic boundaries of where retail is because even in the core retail areas our retail is 17 not thriving. And so it's not a problem of having too little or expanding the footprint it's a 18 problem of making sure that what exists is healthy and contiguous of good retail so we don't 19 have blank spaces of stuff that people don't consider to be retail. So we want to keep offices 20 out of there or offices disguising as retail. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Chair Alcheck: Ok I’ve got lots of lights; Commissioner Gardias then Commissioner [Note-Vice-2 Chair] Waldfogel then Commissioner Summa. 3 4 FRIENDLY AMENDMENT #1 TO MOTION #1 5 6 Commissioner Gardias: Just want to make a comment about the 2013 area. I think that this is 7 viable commercial area and if there was going to be if this Motion on the floor was going to 8 move I will try to amend it without adding this because I go there all the time. I sometimes eat 9 at those restaurants and it's a nice place to go. So I think that it should be within the 10 boundaries. 11 12 Commissioner Rosenblum: I would accept that. 13 14 Chair Alcheck: Would you like to make an amendment? Can you just be specific about the area? 15 16 Commissioner Rosenblum: Add the 2013 expansion of the beyond 2009. 17 18 Commissioner Gardias: Yes. 19 20 Chair Alcheck: Ok. Do you accept that? 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Rosenblum: Yes. 2 3 FRIENDLY AMENDMENT #1 TO MOTION #1 ACCEPTED 4 5 Chair Alcheck: Alright, I will accept that. Commissioner [Note-Vice-Chair] Waldfogel. 6 7 Vice-Chair Waldfogel: So I think that a lot of good points are being raised that retail needs to be 8 looked at citywide, but I think that until we do that we really need to keep some version of what 9 we have in place right now. If you think about retail outside of the Downtown core you think 10 about areas like Midtown where a big parcel just traded and who knows what will happen as 11 that evolves. You think of all parcels like the SummerWinds Nursery down on San Antonio 12 which I believe traded sometime in the last year or two. And I think that there are valid 13 questions that can be that should be studied about what are viable districts for retail and what 14 can happen in the in these districts, but I think that until we know the answer to that we 15 shouldn't just abandon all of these districts and just say hey let's just take away all the 16 protection and let whatever happens happen. I think that we have a responsibility to look out 17 for the interests of the residents of Palo Alto and I think we should study these questions, but I 18 just don't think that tonight is the time to try to sort out which districts are and aren't viable and 19 which ones are and aren't worth protection. I mean that's not what the City Council directed 20 and if they want something different I really think that they should ask for it. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Summa: Thanks. I won't be supporting the Motion. I don't see it as a one size fits 2 all solution because there's different zones and different zones have different development 3 standards that respond to what they're what's in that zone, what they're adjacent to and so I 4 don't see it as one size fits all at all. And for that reason I cannot support the Motion. 5 6 Commissioner Lauing: Yes I just wanted to comment that keep going back to we're trying to get 7 a focus on a simple thing for tonight and we're under time constraints because it's the Motion, 8 I'm sorry, and ordinance that’s expiring. But we're trying to figure out if it's logical to have first 9 floor retail with glass be reserved for retailers. And I think we can opine on that and give 10 Council probably our endorsement for that. Given the time constraints I think we have to do it 11 in a different way which is to say yes let's go ahead with that given the time constraints, but 12 number one we actually think it's a little bit too broad. Because now there's some non-viable 13 retail that we should take a look at and in fact what that means is we should take a look at all of 14 the corridors with the emphasis being on Downtown. I think we all agree with that. That that 15 has to be maintained in its vibrancy and anything outside of that is a whole different set of 16 Motions, discussions, what I called earlier a master plan for retail. That's a whole different 17 other assignment. So I don't think we can just roll back to 2009 and start feeding back in 18 Emerson Street and Midtown and so on to just get there in the time frame that we have. 19 20 Chair Alcheck: Ok, well we have a Motion on the floor, but I would I am I and it may not get a 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. consensus, but one assuming it does… regardless of what happens when we take a vote on this 1 Motion I would like to suggest that it's possible that we could make a recommendation that 2 regardless of where we fall on this particular Motion could theoretically be unanimous which is 3 that we would very much like Council to give us the opportunity to explore this topic in greater 4 detail. And what I heard here tonight is that almost everybody wants to dive into this. The 5 question is whether they want to do it tonight or not. 6 7 Commissioner Lauing: You're speaking specifically about the geographies for this? 8 9 Chair Alcheck: I'm talking about the whole thing whether or not it makes sense to open up a 10 community outreach involvement and go block by block in California Avenue or whether it 11 makes sense to eliminate the 25 percent office space that currently is a part of the… I mean 12 we're not even really getting into the specifics, but this ordinance eliminates the 25 percent 13 office space that you can currently use. So when we do that what happens to the flexibility? Do 14 they get to have back office for your… we haven't explored any of it. 15 16 Commissioner Lauing: But just you, just for clarity your comments are specifically on this topic 17 not the broader issue of what can we do for retailers in a master plan kind of like? 18 19 Chair Alcheck: Yeah. So… 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Lauing: Ok. 1 2 Chair Alcheck: So what I'm trying to say it would be disingenuous to sort of suggest that we at 3 least in my opinion the maker and the seconder of this Motion is suggesting that we simply roll 4 back and that there is no issue and that's perfectly fine. I think the question is what elements of 5 this current draft ordinance that we see are potentially problematic? So you're right, there's a 6 broader question of how we enhance retail. But in this specific ordinance there's a specific 7 clause that says we're eliminating the 25 percent. Is that going to help any retailer? And are 8 the retailers in our community going to say hey guys, that's a really important part of what we 9 do every day and if you eliminate that… nobody's vetted this the way that we did the 2009. And 10 that is from my perspective the biggest problem with it. It’s not that it can't or won't help, it’s 11 that it hasn't been vetted properly. And so my point is that regardless of where we go on this 12 Motion I would very much be in favor of a follow up recommendation that could sit aside and 13 adjoin the report that maybe the, we could have a greater number of members support which 14 would be like please let us explore the items in greater complexity. And frankly it's for the City 15 Attorney's Department to figure out how we can do that in a legal way, but I'm uncomfortable 16 with this notion that simply because state law forbids us to enact an ordinance for a few more 17 months that we have to enact a bad one. That's where I'm at. So that's all I'm saying. 18 19 So I'm, I'd like… we have a Motion on the floor and I'm ready to vote on it. And my preference is 20 that immediately following that vote we can also see if we can make a recommendation that 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. represents where all of us stand despite maybe differing opinions on what we should do with 1 this specific ordinance at this time. I think all of us are in agreement on what we feel is needed 2 and maybe that's something we could unanimously support in conjunction with whatever 3 happens in this next vote. Does anybody want to make another comment before I take a vote 4 on this Motion? 5 6 Commissioner Lauing: I just think we should specify exactly what it is. Just read it one more 7 time if somebody’s written it down. 8 9 Commissioner Rosenblum: Yeah so now we are forwarding on the ordinance in so far as it 10 defines permitted uses for retail and retail like services, waivers so it prohibits conversions 11 within a specified area. What it's adjusting is the boundary of the GF area to the 2009 plus the 12 2013 extension. So it's only applied to the Downtown core. So essentially the protections given 13 to the rest of the City would expire or we’re recommending to Council to let that expire. I agree 14 with Commissioner [Note-Chair] Alcheck that then the next step would be for us to look at the 15 rest of the City and probably enact a series of measures around some specific areas. But that 16 what we're talking about right now is essentially what was given to us with a contraction of the 17 boundary so it no longer applies to the whole City. It applies to the 2009 plus 2013 expanded 18 boundary. So it's the Downtown core. 19 20 Chair Alcheck: Any other clarifying questions? 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Gardias: If I may, right? So I just want to understand when SOFA became part 2 was SOFA ever a part of those boundaries or this is the recent addition? 3 4 Ms. Eisberg: No. So SOFA 2 is not the ground floor boundaries shown on that map do not 5 include SOFA 2. No. 6 7 Commissioner Gardias: So it is recent it is this time staff recommendation to add SOFA. 8 9 Ms. Eisberg: So the ground floor overlay is not recommended for the SOFA 2 district. The 10 ordinance this moratorium getting carried forward the requirement that retail be replaced by 11 retail or retail like would be applied in SOFA 2 just as it would be applied elsewhere in the City 12 where those underlying uses are permitted uses. 13 14 Commissioner Gardias: Thank you. 15 16 Commissioner ?: [unintelligible-off mike] 17 18 Ms. Eisberg: The ordinance would, but the ground floor districts that are shown on that map the 19 ground floor combining overlay is only what's shown on that map. So there's the ground floor 20 overlay and then there's the separately this ordinance that would apply citywide where the uses 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. are permitted in the underlying zone. 1 2 Chair Alcheck: Ok, so 3 4 Commissioner Lauing: I clicked. 5 6 Chair Alcheck: Do you have another? 7 8 Commissioner Lauing: I just wanted to speak to what I understand the Motion to be. It seems to 9 me the trade off at base here is that we leave some retail areas under protected by 10 recommending the Motion that's on the table. If that were to be accepted by Council that 11 would mean that those areas would be unprotected for an unknown amount of time because 12 there would have to be another whole Motion in place. Whereas if we didn't do that and 13 instead voted for the City staff presented Motion we would be overprotecting some areas that 14 maybe most of us think are not all necessary anymore because of some non-viable retail. But 15 without the latter people tomorrow could start converting retail to offices. 16 17 Commissioner Rosenblum: Yeah, I think that that's the correct interpretation. So I think that 18 this [unintelligible] of ordnance is why I have an empty building, the North Face building, in my 19 neighborhood. And it's been empty for this length of time. So I think it's these sorts of things so 20 you’re right, it’s a tradeoff of having more of those versus unfortunate conversions versus 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. unfortunate vacancies. So I agree I think that you’ve framed it nicely. 1 2 Chair Alcheck: Yeah I would add that overprotecting the overprotection option is codifying it. 3 It's not an interim overprotection it's a permanent overprotection. And the look again it's just 4 my perspective there's no saying what Council will do. They could ignore our recommendation 5 completely and pursue the interim ordinance and enact it. I think what we're really doing 6 tonight is not necessarily deciding what Council is going to do. We're suggesting to them that 7 among the six of us we had tremendous concerns about the expansiveness of this and many of 8 us didn't feel comfortable without greater time. And I think what this Motion suggests isn't 9 necessarily what we think they should do it suggests that we think that overdoing something 10 permanently is worse than potentially under protecting something and giving us time to do it 11 right. I think that's what we're suggesting that there's a slight preference there. Again we… 12 13 Commissioner Lauing: It just seems to me that if we think it's the worst of two evils that all of us 14 have to vote on the worst of two evils then we do have to say we need more time to do a bit 15 more research. And if that’s two weeks from now or a week from now or whatever that's what 16 we have to do. 17 18 Chair Alcheck: Sure Summa go ahead. 19 20 Commissioner Summa: So I don't see it is the worst of two evils. I take your point that throwing 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. the baby out with the bathwater at this time seems very drastic and that's what the waiver is 1 for; the waiver is actually for the North Face building and I can see them being successful in 2 applying for it. So I think we have to remember that built into this recommendation by staff 3 which I have some little [nigli] thing problems with some of which I have already expressed, but 4 I cannot support rolling it back, the rolling back the protection and I think the waiver really 5 contemplated that there are situations when it will not be viable. 6 7 VOTE 8 9 Chair Alcheck: I see no more lights. So we have a Motion of the floor. I'd like to put it to a vote. 10 All we have six Commissioners tonight so we will need four for this Motion to pass assuming 11 that no one abstains. Ok. All those in favor of supporting the Motion as outlined say aye and 12 raise your hand. That’s two. All those opposed. That's four. Ok that Motion failed. The floor is 13 open and anybody that would like to make a Motion is welcome to. 14 15 MOTION #1 FAILED (2-4, Vice-Chair Waldfogel, Commissioners Summa, Lauing, and Gardias 16 against) 17 18 Commissioner Summa: Oh, go ahead. 19 20 MOTION #2 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Lauing: I was going to move that we adopt the City presented Motion, I'm sorry 2 ordinance, to Council with the reservation that there has to be some relook at some of those 3 areas because they may no longer be viable retail. 4 5 Mr. Lait: And maybe before there's a second on that can I ask the Motion maker if that also 6 might include the at places memo where staff is recommending private schools along a certain 7 stretch of Alma in the RT-35 zone? 8 9 Commissioner Lauing: Given that it was at place I didn’t even read it yet so. 10 11 Mr. Lait: So maybe I can spend a second just to explain what this memo does. 12 13 Chair Alcheck: Let me ask a question before you start. Is this related to the conversation that 14 one of the speakers mentioned about the tenant that may or may not be interested anymore 15 because of the amount of time it's taken. 16 17 Mr. Lait: Yeah I believe that was part of the conversation. 18 19 Chair Alcheck: It's that space. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: Well it's a number of properties on Alma. It would include the one that was discussed 1 this evening. 2 3 Chair Alcheck: Ok. Why don’t you go into detail about it so that everybody's aware? 4 5 Mr. Lait: Ok I'll just briefly summarize. During the Council's review of a waiver request under 6 the existing interim ordinance a property owner had requested a waiver. There was a public 7 discussion about the ordinance and an interest from the Council in fact direction to staff by an 8 8-0 vote to prepare an amendment to the urgency ordinance to allow schools, private schools, I 9 think its south of Channing Street, Avenue? 10 11 Ms. Eisberg: In this case south of Channing. 12 13 Mr. Lait: To allow in the RT-35 adjacent to Alma south of Channing private schools to be a 14 permitted use. So there would be retail, retail like, and private schools for this discrete several 15 block area on Alma. Staff went through that process presented the ordinance the City Council 16 and while it had a majority vote of 5-4 it required a supermajority and therefore failed to pass at 17 the Council meeting. The ensuing dialogue it was suggested at least our read of the 18 administrative record suggests that there is at least that time Council interest in having that 19 ordinance be implemented into this effort that is before the Planning Commission tonight. So 20 that was inadvertently left off of the ordinance that's included in your packet and so we're 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. trying to correct that and by way of this at places memo ask the PTC as part of your Motion that 1 you include for the RT-35 areas adjacent to Alma south of Channing that private schools also be 2 a permitted use. And then there’s some protections where if a private school does go in there it 3 cannot then convert over to office. 4 5 Commissioner Summa: So I have a question about that and that I guess for staff and so I'm a 6 little confused. So if it requires a supermajority and it failed then it failed. So I'm not sure why 7 that is so significant really. And then I'm a bit uncomfortable with this for two reasons. One I 8 don't know that you can, I think you would have to amend SOFA not change it through this 9 process. So I'm not sure that would be the correct way to do it and it does feel a little bit like 10 (interrupted) [unintelligible-man off mike] and so and then it does feel a little bit like a situation 11 where there should be a waiver or variance because it's applying basically to two buildings I 12 think and I don't I see a sense of unfairness when an ordinance is written that has an exclusion 13 for one property owner. That should be, that fall under the waiver and/or because I don't think 14 it's a legal process too SOFA would have to be amended. 15 16 Chair Alcheck: Let me cut you off for a second. I think it's more important if I could just find out 17 from the maker of the Motion if he three wishes to include that. 18 19 Commissioner Lauing: Well I didn't know until seconds ago what it was so that's the problem. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok. 1 2 Commissioner Lauing: We should probably get a legal opinion on this or can it just go back to 3 Council on its own for them to add it to it? 4 5 Mr. Lait: Absolutely. You don't have to include it [unintelligible] Motion. We’ll highlight the 6 issue for Council and there may be some interest in advancing it or not so, but that does not 7 need to be part of your Motion. 8 9 Chair Alcheck: Ok so your Motion as is. 10 11 Mr. Lait: Yep. 12 13 Commissioner Lauing: We don’t have a second yet. 14 15 Chair Alcheck: Do I have a second? 16 17 Commissioner Summa: Can you restate it? I'm sorry. 18 19 Commissioner Lauing: Did somebody write it down? 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: I think was to move the staff report with also a recommendation that the Council direct 1 the PTC to examine the request that the PTC have the opportunity to examine the ordinance in 2 more detail. Is that correct? 3 4 Commissioner Lauing: Well no, specifically that we be able to look at the geographies because 5 there may now be some of those areas that are nonviable retail which actually has a definition 6 from 2009. 7 8 Mr. Lait: So to examine the geographies of where the ordinance would apply. 9 10 Commissioner Lauing: Well right now the way it's written it applies everywhere. 11 12 Mr. Lait: That's right. 13 14 Commissioner Lauing: But we want to have the opportunity to come back to them and 15 potentially recommend areas that should be trimmed because they're nonviable. That's the 16 Motion. 17 18 Chair Alcheck: Do I have a second? 19 20 SECOND 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Vice-Chair Waldfogel: I’ll second. 2 3 Chair Alcheck: Ok. So we have a second of the Motion. Would you mind restating it one more 4 time so that I can make sure Commissioner Gardias has heard it? We have a Motion on the 5 floor that's been seconded and the Motion is… 6 7 Mr. Lait: Well so as I understand it and I’ll I may not get the precise wording, but it's basically to 8 move the staff report, adopt the ordinance, a recommendation to City Council to adopt the staff 9 recommended ordinance and a corollary request that recognition that there may be some 10 properties that this net is cast widely and that there was there would be interest presumably 11 after the ordinance gets adopted that would allow the PTC an opportunity to reexamine the 12 geographic areas where this ordinance applies and maybe pull it back in some of these marginal 13 areas. 14 15 Commissioner Lauing: If it's considered that they're nonviable retail. 16 17 Mr. Lait: Nonviable retail. 18 19 Chair Alcheck: Ok at this time I'm going to see if there's anybody interested in making 20 amendments to the current Motion? I have an amendment from Commissioner Gardias. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Gardias: Well so what I would like to do because I think that what I'm going to 2 say is supported with the reason that we didn't vet this ordinance. So amendments that I will 3 propose will pretty much. 4 5 Chair Alcheck: Let's do them one at a time. 6 7 Commissioner Gardias: Be ok (interrupted) 8 9 Chair Alcheck: And let’s treat them as Unfriendly. 10 11 Commissioner Gardias: [Unintelligible] of this be maybe changed because of certain reasons. So 12 I will do them one at a time. 13 14 Chair Alcheck: Let’s do them one at a time, treat them as Unfriendly, and we’ll vote on them 15 right away. 16 17 UNFRIENDLY AMENDMENT #1 TO MOTION #2 18 19 Commissioner Gardias: Ok. So the first one is you can go to packet Page 57 and that is 20 18.30A085 design standards. So Amendment is to remove entirely this this paragraph. And the 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. reason if you ask is pretty much that what I already said at the prior hearing that this is just a 1 piecemeal standard and there should be for me to support this there should be comprehensive 2 standards if at all. But then for this specific area I don't believe that we need to have any design 3 standards if you just told me about [meet down] or Charleston or some other Center I would say 4 yes that's different area. But for the Downtown I believe that we should minimize restrictions. 5 So for this reason I want to propose to remove entirely this paragraph. 6 7 Chair Alcheck: Yeah just to be clear you're entirely removing A and B or just A? 8 9 Commissioner Gardias: This is Section 3. 10 11 Chair Alcheck: Section 3, [18.30A.085] this paragraph? Starting with external? Exterior. 12 13 Commissioner Gardias: That's correct. Yes. 14 15 Chair Alcheck: And what about Paragraph B? 16 17 Commissioner Gardias: Yes. 18 19 Chair Alcheck: Ok. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Gardias: Entire paragraph. 1 2 Chair Alcheck: The entire part. Ok I'll second that Unfriendly Amendment. I'd like to put it to a 3 vote (interrupted) 4 5 Mr. Lait: And just for clarification this only affects California Avenue. 6 7 Chair Alcheck: Basically we're omitting a section of the ordinance that he thinks is unacceptable. 8 9 Commissioner Gardias: So just a moment. So I didn't understand that. So it relates to the 10 California Avenue? 11 12 Mr. Lait: It only relates to Cal the R combining district which is located on California Avenue. 13 This does not apply to Downtown. 14 15 Chair Alcheck: Is there a section that applies the same sort of regulation to a part of Downtown 16 it’s just separated? 17 18 Ms. Eisberg: Yes. So beginning on the bottom of Page 58 in your packet [18.30C.035] those 19 design standards and what are identified as C, D, and E below that. Those would apply to the GF 20 combining district in the CDC sub district which is Downtown. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Chair Alcheck: Ok so let me just ask the maker of the amendment (interrupted) 2 3 Commissioner Gardias: Just a moment, could you give me, could you refer me to the page 4 again? 5 6 Ms. Eisberg: It starts on the very bottom of Page 58, design standards, and then the top of Page 7 59. 8 9 Chair Alcheck: It's the next Page 59. Top of 59. It’s essentially the same. 10 11 Commissioner Gardias: Yes, it’s same, same story. 12 13 Ms. Eisberg: Similar, yeah. 14 15 Commissioner Gardias: So we were going to go one at a time, but I just flipped the page and I 16 have exactly the same comments. So (interrupted) 17 18 Chair Alcheck: Ok so just let me clarify. You would like to remove Paragraphs A and B on Page 19 57 and Paragraphs C, D, and E that the 18… Paragraph C, D, And E at the top of Page 59. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commissioner Gardias: Correct, but I will provide you different reasons for the record if you're 1 interested because they are totally two different reasons for why I would like to remove them 2 for Downtown and for California. 3 4 Chair Alcheck: Let me do this, let me just second the… I'm going to second, does anybody want 5 to second this Unfriendly Amendment? 6 7 Commissioner Rosenblum: I have a point of order though. 8 9 Chair Alcheck: Ok. 10 11 Commissioner Rosenblum: If I am opposed to the underlying Motion and now we're on 12 amendments I have no issue with the amendment per se I would support the amendment. I 13 have problem with the whole underlying Motion and so how do I address that? 14 15 SECOND 16 17 Chair Alcheck: Let me tell you how I feel this process is going because it’s not particularly 18 smooth at this point, but essentially we had a Motion and it failed and now we have an 19 alternate Motion and in order for me to support this Motion I've got to change the 20 recommendation as it is which means that and it sounds like there are other individuals who are 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. interested in some changes which means we're getting specific. Which is something a number 1 of us suggested they didn't want to do today, but I'm with you I don't feel comfortable 2 supporting the current Motion as is and so I am trying to give in order to get some majority here 3 I'm trying to give Commissioners an opportunity to make a Motion that they could support. And 4 so we have an amendment that what may be a series of amendments and I want to give 5 essentially if Commissioner Gardias can amend this then he may support it. And if he supports 6 it then that's three people that may support it and that's one more you know anyways. So you 7 get it. 8 9 Alright, so we have an Unfriendly Amendment to remove these design standards. Do have a 10 second? I ok, fine. I seconded it. Are we prepared to take a vote or does anybody want to ask 11 anymore clarifying questions. Let's take a vote. All those in favor of (interrupted) 12 13 Commissioner Rosenblum: Last time we had people speaking against the Motion. So can I have 14 an opportunity to do that? 15 16 Chair Alcheck: Yes. Wait, no, no, no. We're not voting on the Motion. We're voting on an 17 Unfriendly Amendment. 18 19 Commissioner Rosenblum: Ok, alright. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. VOTE 1 2 Chair Alcheck: I will give you an opportunity to speak to your dissent if that makes you feel 3 comfortable, but for this particular amendment all those in favor of this Unfriendly Amendment 4 please say aye or raise your hand. Ok we have two. All those opposed to this Amendment? We 5 have three and clearly an abstention. I think that means it fails. Ok, what’s your next 6 Amendment? 7 8 UNFRIENDLY AMENDMENT #1 FAILED (2-3-1, Commissioner Rosenblum abstained) 9 10 UNFRIENDLY AMENDMENT #2 TO MOTION #2 11 12 Commissioner Gardias: Second Amendment is to remove the burden... just a moment I will give 13 you the specific paragraph. This is on Page 60. And this is the last line item on that page 14 number, page number of the packet 60 that talks about the radius of 2,000 feet radius that 15 needs to be where the study needs to be provided by the applicant. So I proposed to reduce it 16 to a City block as opposed to 2,000 feet. 17 18 Chair Alcheck: Ok. Is anyone that would like a second that Unfriendly Amendment? 19 20 SECOND 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Rosenblum: Second. 2 3 Chair Alcheck: Great. Ok, do you want to speak to your second? 4 5 Commissioner Rosenblum: No. Just it's more logical unit for people to be able to deal with. I 6 think that it makes sense. 7 8 VOTE 9 10 Chair Alcheck: Ok. Alright, let's put it to a vote. All those in favor of this Unfriendly Amendment 11 please raise your hand. Ok that’s five in favor. All those opposed? One opposed. Motion is so 12 amended. 13 14 UNFRIENDLY AMENDMENT #2 PASSED (5-1, Commissioner Summa against) 15 16 UNFRIENDLY AMENDMENT #3 TO MOTION #2 17 18 Commissioner Gardias: So next one is on Page 59. And this is in regards to paragraph 19 18.30C.040 in the middle of the page that talks about annual monitoring of ground floor retail 20 use. And I proposed to amend it to add words “and use” after a Downtown retail vacancy 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. survey… a Downtown retail vacancy rate and use survey. And this is due to pretty much to 1 broaden the survey to bring to the Commission more meaningful material as opposed to only 2 vacancy rate because without the structure it doesn't tell me anything. So I need to know the 3 structure of the vacancy rate. 4 5 Mr. Lait: Ok so we’re on packet Page 59 which is Page 6 of the ordinance and you're looking at 6 1830C.040 and you would like to insert the words what after what? 7 8 Commissioner Gardias: And use after vacancy rate. 9 10 Mr. Lait: And use [unintelligible]. 11 12 Commissioner Gardias: A Downtown retail vacancy rate and use surveys. 13 14 Mr. Lait: And use survey. Ok. 15 16 Chair Alcheck: So essentially when you say use do you mean like not just retail you want the 17 specific use that vacated if it’s vacant? 18 19 Commissioner Gardias: I simply just want to know that something… I simply want to have the 20 besides of the vacancy rate I want to have some structure in the survey that would just bring us 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. square footage, what was so that retail that abandoned this property, this space, and some 1 other uses. 2 3 Chair Alcheck: So like if it was a restaurant that abandoned or a clothing shop? 4 5 Commissioner Gardias: Exactly, yes. 6 7 Chair Alcheck: You want specific? Does that make sense to staff? 8 9 Mr. Lait: Yeah, you want to know the uses. 10 11 Chair Alcheck: Yeah I mean the use is retail. I think what he's suggesting is he wants a little… we 12 heard tonight for example that 95 percent of the calls they get are from restaurants and not 13 from clothing shops if you will. And so I think what he's suggesting is he would like a more 14 specific distinction on the vacancy rate. So if… that somehow reflects the abandoned user. 15 16 Mr. Lait: Probably use like [Institute of Transportation Engineers (ITE)] codes or however it’s set 17 up or we can just draw from the retail type of uses versus office uses versus, right? I mean 18 that’s what you're, the categories is what you're looking for. 19 20 Commissioner Gardias: Exactly. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Mr. Lait: Ok. That’s understandable. 2 3 Commissioner Gardias: Something that would allow me to understand what this vacancy rate 4 (interrupted) 5 6 Chair Alcheck: Let me just ask question do we need to amend that or can that just be 7 incorporated? 8 9 Mr. Lait: No, I’d amend it. 10 11 Chair Alcheck: Ok, let’s amend it. 12 13 Mr. Lait: If that’s what you’re interested in. 14 15 Chair Alcheck: Ok. Do we have a second? 16 17 SECOND 18 19 Commissioner Gardias: Second. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. VOTE 1 2 Chair Alcheck: Great. Let’s vote on it, all those in favor of amending the annual monitoring of 3 ground floor retail use provision please raise your hand. Oh, it’s unanimous. Great. The Motion 4 is so amended. 5 6 UNFRIENDLY AMENDMENT #3 PASSED (6-0) 7 8 UNFRIENDLY AMENDMENT #4 TO MOTION #2 9 10 Commissioner Gardias: Ok so next one if you go to Page 58 then this is part of the paragraph 11 permitted uses that starts on the prior Page 57 and that lists all the permitted uses and then it 12 within those permitted uses there is a point seven and eight and one talks about entrance lobby 13 or reception area serving non-ground floor uses, all other uses permitted in the underlying 14 district provided such uses are not on the ground floor. So I propose to remove both. And the 15 reason is that pretty much that is that should be part of the design standards or farther 16 understanding how truly the retail would work in conjunction with other uses on the lot. In 17 other words point seven and point eight don't mean anything it just provide confusion in this 18 ordinance. That's how I see this. 19 20 Vice-Chair Waldfogel: Should we get staff to respond to that? Is this what enables non-retail 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. use on upper floors? Isn't doesn't Bullet 8 allow the non-retail uses on upper floors? I mean 1 without that you wouldn't be able to use the underlying say office use (interrupted) 2 3 Commissioner Gardias: Or [unintelligible]. 4 5 Vice-Chair Waldfogel: That’s how I read it, but… 6 7 Commissioner Gardias: On the upper floors? 8 9 Mr. Lait: That's correct. 10 11 Ms. Eisberg: Right, that’s correct. 12 13 Vice-Chair Waldfogel: I think what that says, but I would like staff to respond to that. 14 15 Commissioner Gardias: Does it relate to the upper floor (interrupted) 16 17 Ms. Eisberg: Right so this is just in the ground floor overlay district. So this is not a citywide 18 application. So what Bullet Point 8 says and this is existing today is that other uses that are 19 permitted in the underlying district which in our case may be looking at Downtown that's going 20 to be the CD district would be permitted on upper floors. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Gardias: Ok, so I would throw this, right? But so could you comment on the on 2 your perspective because I would still strike Number 7. 3 4 Ms. Eisberg: So seven would just then if you struck that you couldn't have a lobby, a lobby area 5 that served those upper floor uses. 6 7 Mr. Lait: So if you have retail on the ground floor and you want to change your building or make 8 some changes what we're trying to do there is allow for a small lobby to allow for that transit. 9 [Unintelligible] would the ordinance talked about not losing square footage of retail, but here 10 we would say well you could lose a little bit of retail square footage to accommodate a lobby 11 serving a, oh sorry, serving a upper floor. 12 13 Ms. Eisberg: But just be clear so this is just in the GF so if you think about University Avenue 14 there are several places where you have a lobby entrance. 15 16 Commissioner Gardias: Right. 17 18 Ms. Eisberg: That's not retail (interrupted) 19 20 Commissioner Gardias: And I totally understand, right? So but logically the way that I just so I 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. can withdraw it, but let me just tell you a logical argument why it should not be there, right? 1 And this is the reason why I just wanted to strike out the provisions about the design because 2 it's a piecemeal, doesn't mean anything, right? It's going to be there comprehensive and it's 3 going to mean something and it's going to just address the height, the glass clearance, the 4 distance from the floor, from the window pane or the facades to the back wall and then 5 entrance, how much of the area is dedicated to the retail versus entrance to the second floor. 6 It's a separate paragraph, right? That was the reason that I didn't like the design that was just 7 talking about 70 percent of the transparent window because it just didn't look to me as properly 8 done homework, right? This item about entrances/lobbies should have been regulated by the 9 design because otherwise it's just it's not doesn't mean anything, doesn't say specifically how 10 large it should be, how or what would be the relationship to the retail area and so forth. 11 12 Mr. Lait: So I with the possibility of me being corrected here I think I agree with your point that 13 Number 7 should be struck and maybe instead of having it there we add a Letter C in that 14 section that uses words to sort of articulate what we're trying to get at which is retail… you 15 know we’ll have to quantify this maybe somehow, but a small amount of retail may be removed 16 in order to accommodate an upper floor, a lobby or upper floor access or something like that. 17 And just rather than establish it as like a used as permitted which seems kind of odd. 18 19 Commissioner Gardias: Right. Yes, exactly. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Mr. Lait: We’ll say we’ll recognize in a new Letter C that some retail may get lost a small amount 1 to accommodate a lobby. 2 3 Commissioner Gardias: That’s fine. 4 5 Mr. Lait: Ok. 6 7 Commissioner Gardias: I totally agree, right? But again, right, I hope that are we going to revisit 8 it again. I recommend you that you read some other ordinances of other cities how they 9 resolve it. Every ordinance that just looks into this properly it just has a proper it either has 10 nothing because the retail is thriving or it has a beefed up and analyzed logically categorized 11 section about the design standards. And then pretty much it's clear for the architects for the 12 plan there's what truly should be done. 13 14 Mr. Lait: And just one clarifying point. We're not trying to establish any kind of design criteria. 15 What we're trying to do is say it is ok to lose a little bit of retail because elsewhere in this 16 ordinance it says you shouldn’t, thou shall not remove a square foot of retail, but here we're 17 saying we recognize that you may remove a little bit of retail in order to accommodate this 18 entry or this lobby serving other parts of the building. 19 20 Commissioner Gardias: I agree. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Mr. Lait: Ok. 2 3 Commissioner Gardias: Ok so with this words sorry for the long discussion. 4 5 Chair Alcheck: That's a good one. We’ll this, I think we’ll treat this proposed amendment as 6 incorporating language in as a Letter C that addresses I don't know if the word access is the right 7 one, but access to upper floors. And we’ll just rely on staff to make that language work. So do I 8 have a second for this? 9 10 SECOND 11 12 Commissioner Lauing: I’ll second that. 13 14 VOTE 15 16 Chair Alcheck: Great. Ok all those in favor of this Unfriendly Amendment please raise your 17 hand. It’s unanimous. Ok the Motion is so amended. Commissioner Gardias do you want to 18 continue or can maybe we see if there's other amendments from other individuals? 19 20 UNFRIENDLY AMENDMENT #4 PASSED (6-0) 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Gardias: Yeah so let's see if anybody else has some amendments. I may have one 2 or more too. 3 4 UNFRIENDLY AMENDMENT #5 TO MOTION #2 5 6 Chair Alcheck: Alright I've got a couple amendments. I'd like to suggest that we return the 25 7 percent office use on the ground floor retail. So the ordinance used to allow that 25 percent of 8 the ground floor could be utilized as office and I'd like to return that because this ordinance just 9 removes it and I’m unclear on why that's a good idea. So I'd like to 10 11 Commissioner Lauing: Is there a place that's written down here anywhere? 12 13 Chair Alcheck: It's not in the... 14 15 Commissioner Lauing: Not in the ordinance. 16 17 Chair Alcheck: It's not in the ordinance because the ordinance essentially doesn't carve out the 18 opportunity. Essentially you’d have to add it to the ordinance. Is that right? 19 20 Ms. Eisberg: Right. You can see it as a strike out under on Page 58. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Mr. Lait: Ordinance Page 5. 2 3 Ms. Eisberg: Ordinance Page 5 just under where we were just talking about (interrupted) 4 5 Chair Alcheck: It says notwithstanding Subsection [unintelligible] not more than 25 percent of 6 the ground floor area not fronting on a street may be occupied by a use permit in the applicable 7 underlying CD district. So that used to be a component of this. it allowed ground floor retail to 8 utilize some of the space for back office or office in general. It's been removed and it's unclear 9 sort of why that’s (interrupted) 10 11 Commissioner Lauing: Could we get staff to comment on that? 12 13 Chair Alcheck: Sure. I guess my first question is do I even have a second? 14 15 SECOND 16 17 Commissioner Gardias: I will second it. 18 19 Chair Alcheck: Ok, great; staff do you want to tell us why you removed that in the interest of 20 potentially informing the vote? 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Ms. Eisberg: So one that was a specific advice from the Council as a way to encourage more 2 retail and essentially more, promoting more retail rather than allowing office. 3 4 Chair Alcheck: Alright so I think the reason is Council direction. I would just argue that this is an 5 area that I don't know has been properly vetted and I'm concerned about it. But I'd rather not 6 spend a whole round going through it. I'd rather just sort of see if there’s support for it so do I 7 need to restate the Amendment? Ok, alright. So all those in favor of unstriking Paragraph B at 8 the top of Page 58 please raise your hand. I have three in support. All those opposed? I have 9 three opposed. OK that Motion that Unfriendly Amendment fails. Are there any other 10 amendments? 11 12 UNFRIENDLY AMENDMENT #5 FAILED (3-3, Vice-Chair Waldfogel, Commissioners Lauing and 13 Summa against) 14 15 UNFRIENDLY AMENDMENT #6 TO MOTION #2 16 17 Commissioner Gardias: Yes, please. So please refer to Page 57 and that is Paragraph 18 [18.30C.010]. This is just a general statement. So what I'm proposing is to remove after word 19 “promote” which is on the third line, third row under this paragraph under specific purpose to 20 say “promotes local commerce” and then strike out the rest of the words after that through in 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. the same sentence. So pretty much it would read that “promotes local commerce,” the ground 1 floor combining district is intended to provide design guidelines and blah, blah, blah… and sub 2 districts to promote local commerce. There reason that I'm just doing this although I'm typically 3 indifferent about this preambles is that I think this is the this is what we should be doing other 4 things I'm not really finding intuitive and understanding, understandable, so I think that the 5 commerce should be the key of this ordinance. 6 7 Mr. Lait: So the rest of the sentence gets struck? 8 9 Commissioner Gardias: That’s correct. 10 11 Chair Alcheck: Ok can we get a little clarification here? What section of the sentence are we 12 eliminating? 13 14 Commissioner Gardias: This is Page 57. 15 16 Chair Alcheck: Yes. 17 18 Commissioner Gardias: Paragraph specific purpose [18.30C010] (interrupted) 19 20 Chair Alcheck: Yeah. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Gardias: And after word promote which is the one, two, three, four, the fourth 2 line. 3 4 Chair Alcheck: Yeah. 5 6 Commissioner Gardias: Under this specific paragraph there is a word promotes. 7 8 Chair Alcheck: Yes. 9 10 Commissioner Gardias: Which says, “promote active pedestrian oriented uses with a high level 11 of transparency and visual interest,” but I would strike out the whole the rest of the sentence 12 after the word “promote” and I would say, “promote local commerce” instead. 13 14 Chair Alcheck: Ok. Do I have a second for amendment? 15 16 Vice-Chair Waldfogel: I’d second it if you kept the end of the sentence, I mean after “with.” 17 With a high level of transparency [unintelligible]. 18 19 Commissioner Gardias: I accept. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Vice-Chair Waldfogel: So you want to make that Motion [Note-Friendly Amendment]? 1 2 Commissioner Gardias: Yes. So pretty much we’ll insert the (interrupted). 3 4 Chair Alcheck: Local commerce instead of active pedestrian oriented uses. 5 6 Commissioner Gardias: Exactly. We remove “active pedestrian oriented uses” and instead we’ll 7 just insert “local commerce” and then the rest of the sentence will remain. 8 9 Chair Alcheck: You guys with us? 10 11 Mr. Lait: Yeah. 12 13 Chair Alcheck: Ok, alright, let's put it to a vote. All those in favor of this Unfriendly Amendment 14 please raise your hand. I’ll support it. That's three in favor. All those opposed to it? Three 15 opposed. Ok, do you have any other amendments that you'd like to propose? 16 17 UNFRIENDLY AMENDMENT #6 FAILED (3-3, Vice-Chair Waldfogel, Commissioners Lauing and 18 Summa against) 19 20 Commissioner Gardias: No, but there is a couple of probably editorial errors. I don't know, it 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. may be beyond the boundary of this, but I would just recommend that you go through this. 1 There are some like for example on Page 55 (interrupted) 2 3 Chair Alcheck: You mean like typos? 4 5 Commissioner Gardias: Yeah. There is on Page 55 it refers to the section, Section 2 it refers to 6 the Paragraph 125.2 which I couldn't find and maybe I just couldn't find it. Maybe it’s 7 somewhere, right, but maybe it doesn't exist. And also on Page 57 there is another issue like 8 this. So I'm sure that some (interrupted) 9 10 Chair Alcheck: Ok I’ll just request that if Commissioner found any typos or sort of clerical errors 11 let's email them to Director Lait, Assistant Director Lait, and hopefully they'll get incorporated. I 12 think that’s a better use of time. Ok, do I have any other amendments to the… Commissioner 13 Summa. 14 15 UNFRIENDLY AMENDMENT #7 TO MOTION #2 16 17 Commissioner Summa: I mentioned this in, whoops, sorry. I mentioned this in my comments 18 earlier, but I'm wondering if anybody is interested in pursuing my idea that waivers and 19 exceptions, waivers and adjustments should be handled in a public hearing not at the Director’s 20 level. And my thinking behind that is I don't know how people would know that a decision like 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. that was made to appeal it in a timely fashion and I think that can really change the viability of a 1 business to have the adjacent business change from a retail use. But if no one's interested I'll 2 drop it. 3 4 Chair Alcheck: Do I have a second? 5 6 Commissioner Gardias: May I propose something? 7 8 Commissioner Summa: Yeah. 9 10 Commissioner Gardias: [Unintelligible]. 11 12 Chair Alcheck: [Unintelligible] are you proposing an amendment to her (interrupted) 13 14 Commissioner Gardias: I’m proposing I would if you modify it in a certain way I would accept 15 your proposal. And if you consider that applicant may appeal Director’s decision to the PTC I 16 would support such an amendment, as opposed to the Council. 17 18 Commissioner Summa: I actually think that the City by policy an appeal of that nature goes to 19 the Council so I mean I'm not looking... 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: Ok, hold on. I want to do this in an organized way. We have a proposed 1 Unfriendly Amendment. You're suggesting an alternative. I don't really want to debate the 2 alternative. I want to… if, are you willing to second her current Unfriendly Amendment? Ok 3 and the assumption is you don’t want to edit with his suggestion? 4 5 Commissioner Summa: No. 6 7 UNFRIENDLY AMENDMENT #7 FAILED FOR LACK OF SECOND 8 9 Chair Alcheck: Ok. So do I have a second for this Unfriendly Amendment? Ok, seeing none are 10 any other Unfriendly Amendments or Amendments? Ok, alright. So we have a Motion on the 11 floor as amended. I don't think it's wise to read through all the amendments since we voted on 12 each one I assume we're all very sort of knowledgeable about them. 13 14 Commissioner Lauing: Or can I just summarize since I made the Motion? 15 16 Chair Alcheck: Yeah well [obviously] I would actually prefer if staff did that. So what I’d like to 17 do is have staff sort of run down them quickly and only the ones, only the amendments that 18 were passed. 19 20 Mr. Lait: Ok. Just [unintelligible] we’ve got the standing Motion. The amendments that passed 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. were going to change the 2,000 foot radius to be a city block. And we’re amending Section 4 1 [180 or 30C040] regarding the Downtown vacancy rate and use survey to get data on the use 2 survey. And the other amendment that passed it was the one having to do with amending 3 Section [1830C020]. We're going to remove line Number 7 and add a new Letter C that would 4 allow for the loss of some retail square footage to allow access to other levels of the building. 5 And there was actually one other one that passed and that I believe and that was the let me ask 6 question, the one about the local commerce, did that pass? Ok so local commerce being added 7 to Section 4 [1830C010] [unintelligible-lots of talking]. Ok so that one failed. Ok. So everything 8 up to that point. So there were three amendments. 9 10 Chair Alcheck: Ok would the maker or the seconder like to speak to their Motion? 11 12 Commissioner Lauing: Yeah just briefly to summarize. 13 14 Chair Alcheck: Please. 15 16 Commissioner Lauing: The ideal would be not to have to vote tonight, to have some more time 17 to spend on looking at the specific geographies that we think should be covered by this, but we 18 can't do that because we're out of time relative to the expiration of the temporary law. So the 19 alternative is to overprotect some retail where maybe it's not needed or to under protect and 20 therefore in the latter case offices could go into retail spaces starting tomorrow. Hence my 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. preference for the Motion made to overprotect in the short term and work it later to look for 1 nonviable retail. 2 3 Chair Alcheck: Would the seconder like to speak to the Motion? 4 5 Vice-Chair Waldfogel: Just to agree with those comments. 6 7 Chair Alcheck: Ok at this time I'd like to put this Motion as amended to a vote. 8 9 Commissioner Rosenblum: I’d ask for opportunity to speak to a dissenting voice. 10 11 Chair Alcheck: Ok so (interrupted) 12 13 Mr. Lait: Yeah after the vote. 14 15 Chair Alcheck: Yeah typically I let anybody speak to their dissent after the vote. 16 17 Commissioner Rosenblum: All due respect with my Motion we had several people express their 18 concern prior to the vote. 19 20 Chair Alcheck: Ok I will if you'd like to comment on this vote go ahead. 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Commissioner Rosenblum: Yeah. So I think this is a really sweeping ordinance. It's protecting 2 retail across the City and I think that the original ordinance was done in a obviously some urgent 3 urgency ordinance. It was done in a hurried fashion. We've heard from stakeholders from 4 2009. We know who the stakeholders were. Very few people were involved, especially 5 retailers. I'm kind of shocked that we're even considering bringing this from interim ordinance 6 to a permanent measure because we feel there is time pressure. I don't think this was ever a 7 great ordinance and certainly there was very little community involvement in crafting this 8 ordinance. And so I think the responsible thing to do would be to let it expire. And by the way 9 it's not the end the world it brings us back to the state of the world 15 months ago that… so it's 10 not that we're actually going to a Lord of the Flies land, we're going back to the world before 11 this interim ordinance. And then give us the time to actually work on each of our other valuable 12 retail areas. 13 14 So I don't feel the same time pressure I guess, but if I did I certainly wouldn't want to pass this. I 15 would want more community involvement and specifically I’d want retailers to get involved. I 16 think that we're trying to balance retail vitality i.e. setting up that atmosphere for them to 17 succeed against the interest of the community i.e. having good retail to enjoy and I think that 18 we want the people involved that can make us something really great. So I would far prefer just 19 to see this expire. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. VOTE 1 2 Chair Alcheck: Ok, thank you. At this time I’d like to put the current Motion as amended to 3 vote. All those in favor please raise your hand. We have four in support and all those opposed? 4 And two opposed. 5 6 Do you want to speak to your dissent? Ok. I'll speak to the dissent real quick. I agree with 7 Commissioner Rosenblum. I think it's a lot harder to undo something than to do something. 8 We do a lot of things right in the City, but I never think sort of the pressure of time is a good 9 reason to sort of pass something that we're uncomfortable with. And so my hope is that when 10 the Council gets this topic on their agenda I hope that the biggest takeaway for them from our 11 deliberations tonight is just how dissatisfied we are with the ordinance. In fact it sounds to me 12 like the majority of individuals on this Commission actually oppose the ordinance as written. 13 There just a, there's just isn't a majority that’s willing to see it lapse during the interim that 14 they'd like to have to fix it. So that Motion passes. 15 16 MOTION #2 PASSED (4-2, Chair Alcheck and Commissioner Rosenblum against) 17 18 MOTION #3 19 20 Chair Alcheck: I would like to suggest a Motion right now to recommend that the City Council 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. grant the PTC the opportunity to review the impacts of this retail preservation ordinance in 1 conjunction with the community and retailers specifically at a later date and amend the 2 ordinance in such ways as recommended at that time. 3 4 SECOND 5 6 Commissioner Rosenblum: I’d second. 7 8 Chair Alcheck: Ok does anybody, do you want to speak to your second? 9 10 Commissioner Rosenblum: I think that would be natural given the way our last Motion was 11 structured that recommended that we go back and look at properties that may be or areas that 12 may be problematic that that would be the natural result is that they would send this back to 13 us. 14 15 Chair Alcheck: Ok I'd like to take a vote. 16 17 Commissioner Lauing: Can I just ask a question about your intent? This is the one again about 18 sort of the geography just like what you said. This isn't the sort of [unintelligible-talking off 19 mike] could be other things as well? 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Chair Alcheck: I'm suggesting that we go back involve the retail… my ordinance, my 1 recommendation is that City Council give us an opportunity to get in depth on this topic. And 2 hopefully that could involve a dialogue with some of the retail owners and something akin to 3 what took place in 2009 to identify what we really could do to enhance retail the way that I 4 think was the intent. It's a suggestion. 5 6 Commissioner Lauing: Ok, great. Thanks. 7 8 VOTE 9 10 Chair Alcheck: Ok and all those in favor of this recommendation please raise your hand. Ok all 11 those opposed? Ok it’s 5-1. Would you like to speak to your dissent? 12 13 MOTION #3 PASSED (5-1, Commissioner Summa against) 14 15 Commissioner Summa: Just super briefly, but I don't think that was exactly on the agenda 16 tonight and I think you're asking for a huge citywide complicated study and I'm not sure that 17 staff even has the time right now to do that. So it didn't seem practical to me. 18 19 Chair Alcheck: Ok. 20 21 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Commission Action: 1 2 Motion: Recommend approval of an ordinance to the City Council that restores the ground floor 3 retail protection boundary to the 2009 boundary and amend the retail and retail like definition 4 recommended by staff; reject all other staff proposed amendments. Motion made by 5 Commissioner Rosenblum, seconded by Chair Alcheck; motion FAILS 2-4 Vice Chair Waldfogel, 6 Commissioner Summa, Commissioner Lauing, Commissioner Gardias against. 7 8 Amendment: Restore the 2013 ground floor retail protection boundary. Amendment made by 9 Commissioner Gardias and supported by original motion makers. 10 11 Motion: Recommend approval of the staff proposed ordinance and forward a request to the 12 City Council that it direct the Planning and Transportation Commission to further study 13 refinements to the ordinance, including evaluating non-viable retail areas that may be removed 14 from protection in a new ordinance. Motion made by Commissioner Lauing, seconded by Vice 15 Chair Waldfogel; motions PASSES with applicable amendments below 4-2, Chair Alcheck and 16 Commissioner Rosenblum against. 17 18 Unfriendly Amendment: Remove 18.30(A).0A5. Motion made by Commissioner Gardias, 19 seconded Chair Alcheck; motion FAILS 2-3-1 Vice Chair Waldfogel, Commissioner Gardias and 20 Commissioner Summa against, Commissioner Rosenblum abstaining. 21 22 Unfriendly Amendment: Amend 18.40.160 (c) (2)(B) Waivers and Adjustments as follows - …A 23 map that indicates all the existing surrounding uses, both residential and non-residential, within 24 one city block a 2,000-foot radius; include…Motion made by Commissioner Gardias, seconded 25 by Chair Alcheck; motion PASSES 5-1, Commissioner Summa against. 26 27 Unfriendly Amendment: Amend Section 4 18.30.(C).040 to include the following addition ‘A 28 downtown retail vacancy rate and use survey…’ Motion made by Commissioner Gardias, and. 29 seconded by Commissioner Rosenblum; motion PASSES 6-0. 30 31 Unfriendly Amendment: Amend Section 18.30(C).020 by removing number seven (7) and add a 32 new letter (c) allowing the loss of some retail square footage to allow access to other levels of 33 the building. Motion made by Commissioner Gardias, seconded by Commissioner Lauing; 34 motion PASSES 6-0. 35 36 Unfriendly Amendment: Amend Section 4 18.30(C)010 Specific Purpose, as follows ‘…promote 37 local commerce, active, pedestrian‐oriented uses, with a high level of transparency and visual 38 interest at the ground level. Motion made by Commissioner Gardias, seconded by Chair Alcheck; 39 motions FAILS 3-3 Vice Chair Waldfogel, Commissioner Lauing and Commissioner Summa 40 against. 41 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. 1 Unfriendly Amendment: Amend the ordinance to require the request for a waiver to be 2 considered at public hearing. Motion made by Commissioner Summa; motions FAILS for lack of 3 a second. 4 5 Motion: Request the City Council direct the Planning and Transportation Commission to meet 6 with retailers and members in the community for an opportunity to get more in depth feedback 7 on this topic and suggest future amendments to this ordinance. Motion made by Chair Alcheck, 8 seconded by Commissioner Rosenblum; motion PASSES 5-1, Commissioner Summa against. 9 10 Approval of Minutes 11 Public Comment is Permitted. Five (5) minutes per speaker.1,3 12 13 4. November 30, 2016 and December 14, 2016 Draft Planning & 14 Transportation Commission Meeting Minutes 15 16 Chair Alcheck: Alright let's move on to approving the minutes. Let's start with… actually let's just 17 do them together; November 30th and the December 14th minutes. Can I get a Motion to 18 approve the minutes? 19 20 MOTION 21 22 Commissioner Rosenblum: I move to approve the minutes. 23 24 Chair Alcheck: Second? 25 26 SECOND 27 28 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Vice-Chair Waldfogel: Second. 1 2 Chair Alcheck: Thank you. All those in favor approving the minutes from November 30th and 3 December 14th please raise your hand. That's three. All those opposed? All those abstained? 4 Ok. That's four in favor, two abstains. 5 6 MOTION PASSED (4-0-2, Commissioners Luaing and Summa abstained) 7 8 Commission Action: 9 Motion: Approve the minutes for November 30, 2016 and December 14, 2016. Motion made by 10 Commissioner Rosenblum, seconded by Vice Chair Waldfogel; motion PASSES 4-0-2 11 Commissioners Lauing and Summa abstaining. 12 13 Committee Items 14 Commissioner Questions, Comments or Announcements 15 16 Chair Alcheck: Ok the last piece of business tonight is I need to make an appointment to the as a 17 representative to the Citizens Advisory Commission (CAC). And in discussing it with Vice-Chair 18 and the Planning staff we felt that Commissioner Summa would be the best person to sit as our 19 delegated liaison. That is in light of the fact that she is currently been serving on the 20 Commission, she's familiar with it, though her role would change slightly now it would go from a 21 voting role to a non-voting role, but we felt that your experience there would provide sort of 22 invaluable so the… invaluable insight. And the assumption moving forward is that when those 23 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. meetings take place you can sort of provide us input and updates and status updates from those 1 meetings and involve us. 2 3 Ok, are there any other items? Ok. With that I'd like to close this hearing. Time is 10:57. 4 Adjourned. 5 6 Commissioner Doria Summa was appointed to the Citizen Advisory Committee for the 7 Comprehensive Plan Update. 8 9 Adjournment 10:57pm 10 11 1. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson’s presentation will be allowed up to fifteen (15) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. 2. The Chair may limit Oral Communications to 30 minutes for all combined speakers. 3. The Chair may reduce the allowed time to speak to three minutes to accommodate a larger number of speakers. Palo Alto Planning & Transportation Commission 1 Commissioner Biographies, Present and Archived Agendas and Reports are available online: 2 http://www.cityofpaloalto.org/gov/boards/ptc/default.asp. The PTC Commission members are: 3 4 Chair Michael Alcheck 5 Vice Chair Asher Waldfogel 6 Commissioner Przemek Gardias 7 Commissioner Ed Lauing 8 Commissioner Eric Rosenblum 9 Commissioner Doria Summa 10 11 12 Get Informed and Be Engaged! 13 View online: http://midpenmedia.org/category/government/city-of-palo-alto or on Channel 26. 14 15 Show up and speak. Public comment is encouraged. Please complete a speaker request card 16 located on the table at the entrance to the Council Chambers and deliver it to the Commission 17 Secretary prior to discussion of the item. 18 19 Write to us. Email the PTC at: Planning.Commission@CityofPaloAlto.org. Letters can be 20 delivered to the Planning & Community Environment Department, 5th floor, City Hall, 250 21 Hamilton Avenue, Palo Alto, CA 94301. Comments received by 2:00 PM the Tuesday preceding 22 the meeting date will be included in the agenda packet. Comments received afterward through 23 2:00 PM the day of the meeting will be presented to the Commission at the dais. 24 25 Material related to an item on this agenda submitted to the PTC after distribution of the 26 agenda packet is available for public inspection at the address above. 27 28 Americans with Disability Act (ADA) 29 It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a 30 manner that is readily accessible to all. Persons with disabilities who require materials in an 31 appropriate alternative format or who require auxiliary aids to access City meetings, programs, 32 or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing 33 ada@cityofpaloalto.org. Requests for assistance or accommodations must be submitted at least 34 24 hours in advance of the meeting, program, or service. 35 City of Palo Alto (ID # 7515) City Council Staff Report Report Type: Action Items Meeting Date: 2/13/2017 City of Palo Alto Page 1 Summary Title: Permanent Downtown RPP Program Title: Adoption of a Resolution Amending Resolutions 9473 and 9577 to Continue the Downtown Residential Preferential Parking (RPP) Program with Minor Modifications and finding the Action Exempt from the California Environmental Quality Act From: City Manager Lead Department: Planning and Community Environment Recommendation Staff recommends that the City Council conduct a public hearing and take the following actions: 1. Adopt a Resolution amending Resolutions 9473 and 9577 to make permanent the Downtown Residential Preferential Parking (RPP) Program (Attachment A) and direct staff to make corresponding changes to the Residential Preferential Parking (RPP) Administrative Guidelines; and 2. Find the program exempt from review under the California Environmental Quality Act (CEQA). Executive Summary In early 2014, the City began significant efforts to address the parking and traffic challenges, particularly in the Downtown core, through a strategic multi-pronged approach of parking management, parking supply and transportation demand management programs. The strategy includes implementation of the Downtown Residential Preferential Parking (RPP) Program, which went into effect in September 2015. The introduction of this program has required the development and launch of a new online permit sales website and sales support, installation of signage in the permit area, negotiation and oversight of an enforcement contract, extensive community outreach and data collection. Phase 1 of the program regulated non-resident parking around the Downtown commercial core by introducing Resident and Employee Parking Permits and restricting non-permit holders to two-hour parking between the hours of 8:00am and 5:00pm on Monday through Friday. Resident Parking Permits are for residents who live within the Downtown RPP program area while the Employee Parking Permits are for any individuals who are employed within and City of Palo Alto Page 2 commuting to the Downtown area. Phase 2 of the program, which went into effect on April 1, 2016, capped the number of Employee Parking Permits and established ten Employee Parking Zones in an effort to better distribute non-resident parkers. Eligibility Areas, which can petition to join the program administrative, were also created as part of Phase 2 of the program. The minor program modifications in the attached Resolution to make the Downtown Residential Preferential Parking (RPP) Program permanent include:  Reduction of the Employee Parking Permit term from one year to six months;  Elimination of the five-day employee scratcher hangtag permits;  Expansion of the hours of enforcement from 8:00am to 6:00pm (currently enforcement is from 8:00am to 5:00pm);  Reduction of the number of employee permits by 10% per year until they are zeroed- out; and  Insertion of a reference to the program goals of reducing impacts of overflow parking from the commercial district on the neighborhood and maintaining an on-street parking occupancy of 85% or less. Implementation of the recommended program changes, if approved by the City Council, will occur when Phase 2 permits expire on March 31, 2017. Background and Discussion The Citywide Residential Preferential Parking Ordinance originally, adopted in December 2014 and amended in February 2016, includes parameters for all residential preferential parking programs citywide, and is included as Attachments B and C. Resolutions 9473 and 9577 provide specific direction on the details of the Downtown Residential Preferential Parking (RPP) Program and are included as Attachments D and E. The Residential Preferential Parking (RPP) Administrative Guidelines outline the administrative rules and guidelines for the program, and can be amended by the Planning and Community Environment Director. These are included as Attachment F. Downtown Residential Preferential Parking (RPP) Program Phase 2 parking permits were made available through an online permit sales website in March 2016, and were required for parking on-street in the district as of April 1, 2016. Permit holders were notified of the required new permits via mailed notices, email, social media, and the City’s website. Staff supported the sale of permits by responding to email and phone inquiries, hosting an employer workshop at City Hall, conducting on-site help sessions at the Avenidas Senior Center, and through customer service contract staff on-site at City Hall for one month before and one month after permits were required. All residents and individuals who are living or are employed and working within the geographic area of the Downtown Residential Preferential Parking (RPP) Program are eligible to purchase permits. A map of the Downtown Residential Preferential Parking (RPP) Program is included as Attachment G. The following types of permits have been available to residents and employees City of Palo Alto Page 3 during Phase 2:  Resident Annual Sticker: one free of charge and up to three additional at $50/year  Resident Annual Hangtag: up to two per residence at $50/year  Resident One-day Scratcher Hangtag: $5/each; limit of 50 per year  Employee Full-price Sticker: $466/year  Employee Reduced Sticker: $100/year; available to those who qualify based on income  Employer Annual Hangtag: $466/year  Employee One-day Scratcher Hangtag: $5/each  Employee Five-day Scratcher Hangtag: $15/each Attachment H shows the number of Phase 2 Resident Parking Permits and Employee Parking Permits sold as of December 22, 2016—a total number of 7,014, 5,679 of which were Resident Parking Permits and 1,335 of which were Employee Parking Permits. In Phase 2, employee permits are zone-specific, meaning that employees and employers purchase a permit for a specific Employee Parking Zone. A total of 2,000 Employee Parking Permits are authorized for Phase 2, however a portion of these permits are being held in reserve until additional streets within Employee Parking Zones 9 and 10 elect to join the program through the Eligibility Area administrative annexation process. Half of the available permits in each Employee Parking Zone were reserved for low-income workers and the majority have sold out, requiring the release of additional low-income reduced Employee Parking Permits. The City Council received a status report on Phase 2 on September 6, 2016 and the staff report and correspondence from that hearing are available at: http://www.cityofpaloalto.org/civicax/filebank/documents/53641. At that meeting, the Council directed staff to return to Council by January 15, 2017 with proposals for changes to implement at the end of Phase 2, that include:  Freeze sale of Employee Parking Permits in Employee Parking Zones 9 and 10 and allow future streets in these zones to be added for resident-only parking, reducing the total number of available employee permits in all zones by this amount;  Eliminate five-day scratcher hangtag permits;  Propose quantitative objectives;  Give priority to low-income workers (already included in the program);  Require employer registration in the Business Registry (already included in the program); and  Require employer participation in the Palo Alto Transportation Management Association (TMA) or a staff-approved transportation demand management program (TDM), if legally permissible. Both Phase 1 and Phase 2 included priority for low-income employees and required registration City of Palo Alto Page 4 in the Business Registry for employers wishing to purchase Employee Parking Permits. The proposed resolution would continue these aspects of the program, eliminate five-day scratcher hangtag permits, and articulate program objectives. The recommended Resolution does not require participation in the Palo Alto Transportation Management Association (TMA), but this requirement should be considered in the future as the TMA expands, retains additional staff, and identifies a regular stream of funding. This requirement, if implemented today, would add additional administrative burdens to the fledgling organization, as its cooperation would be required to verify initial and continuing membership for businesses. The recommended Resolution would continue the Downtown Residential Preferential Parking (RPP) Program with a number of minor modifications identified by City Council, Staff and stakeholders. To support the recommendation, the parking occupancy survey data from Phase 2 is included as Attachment I. The Phase 2 parking citation data is included as Attachment J The recommended Resolution amends Resolutions 9473 and 9577 to make permanent the Downtown Residential Preferential Parking (RPP) Program, by making the following minor modifications:  Reduce the Employee Parking Permit term from one year to six months in order to ensure that Employee Parking Permits are not sitting unused due to employee departures and turnover. The most recent daytime parking occupancy survey counted only 436 Employee Parking Permits on-street at one point in time. With a total of 1,335 total Employee Parking Permits issued for Phase 2, this represents a show-rate of only 32%. Staff believes that this is the result of many Employee Parking Permits being withheld from circulation due to the one-year term and relatively high turnover in the retail and services industries. Reducing the term of the Employee Parking Permits to six months will allow unused permits to reenter circulation more quickly and also reduce the upfront costs of an Employee Parking Permit. Staff recommends that six-month Employee Parking Permits be priced at $233 and low-income reduced-price permits be sold for $25. Both of these rates reflect 50% of the current annual permit or the current six month cost if prorated.  Eliminate the five-day employee scratcher hangtag permits due to their unpopularity. During Phase 2 only one five-day employee scratcher hangtag has been sold. The added administrative burden of offering an additional permit type is not justified with such low sales.  Expand the hours of enforcement to 8:00am to 6:00pm from the current hours of 8:00am to 5:00pm in order to better mitigate the impacts of employee parking on residential streets and ensure consistency with the recommendations to be included within the Downtown Parking Management Study, scheduled for Council consideration in March 2017. This study will make a strong recommendation to extend the enforcement of the downtown commercial area parking regulations to 6:00pm, and in order to prevent the displacement of vehicles to the Downtown Residential Preferential City of Palo Alto Page 5 Parking (RPP) Program, staff believes that the enforcement hours should be consistent.  Reduce the number of Employee Parking Permits by 10% per year, as directed by City Council in February 2016. This reduction in permits is in support of the City Council’s goal to reduce the downtown employee drive-alone rate by 30% by 2030 through the efforts of the Palo Alto Transportation Management Association (TMA). In lieu of a reduction in permits in the outermost Employee Parking Zones initially, as originally proposed, Staff is instead recommending a reduction across the board in all ten Employee Parking Zones, but a larger reduction in the zones closest to the downtown commercial area which have a higher concentration of two-hour parkers. The table below outlines the staff recommendation for permit reduction in year one of the program. Staff will continue to conduct occupancy counts and monitor permit sales by Employee Parking Zone. The Employee Parking Permit allocation per Employee Parking Zone is subject to change annually with approval from the Planning and Community Environment Director. Table 1: Recommended Reduction in Employee Parking Permits by Zone Permit Type Total Issued Current Max Authorized Max Recommended Max Recommended Rate of Reduction Employee Annual Zone 1 75 75 75 60 20% Employee Annual Zone 2 117 120 120 96 20% Employee Annual Zone 3 282 225 225 202 10% Employee Annual Zone 4 182 190 190 152 20% Employee Annual Zone 5 177 175 175 140 20% Employee Annual Zone 6 101 100 100 90 10% Employee Annual Zone 7 135 135 135 128 5% Employee Annual Zone 8 270 365 365 348 5% Employee Annual Zone 9 1 25* 245 233 5% Employee Annual Zone 10 35 105* 370 351 5% Total Employee Annual 1,335 1,515 2,000 1,800 10% *Permits in Employee Parking Zones 9 and 10 are being held in reserve until additional streets are annexed. Source: Department of Planning and Community Environment, December 2016  Insert a reference the program goals of reducing impacts of overflow parking from the commercial district on the neighborhood and maintaining an on-street parking occupancy of 85% or less in order to provide the Planning and Community Environment Director a framework to measure the performance of the program and justify modifications to the Administrative Guidelines and/or the Employee Parking Permit allocation per Employee Parking Zone. (85% has been the metric used to determine streets where parking is saturated since data collection for the downtown RPP program began in 2014.) City of Palo Alto Page 6 Petitions from Eligible Streets The Citywide Residential Preferential Parking Ordinance, as amended in February 2016, enables the designation of Eligibility Areas adjacent to existing residential preferential parking program areas. An Eligibility Area was created for the Downtown Residential Preferential Parking (RPP) Program through Resolution 9577, whereby streets within the area are pre-approved by City Council to join the program through an administrative annexation process. This process requires residents to self-organize and submit a petition including signatures from at least 50% of households on the block requesting annexation into the program. Staff then mails a survey to all households on the block regarding the program, and at least 70% of households must reply with a positive response. If the required positive response is received, the block is approved for inclusion into the program, signage is installed, permit information is shared with residents, and a pro-rated number of Employee Parking Permits are released from reserve. During Phase 2, the following blocks within the Eligibility Area have been administratively annexed into the Downtown Residential Preferential Parking (RPP) Program:  500 Chaucer Street  500 Hale Street  600 Hale Street  800 Palo Alto Avenue  1000 Hamilton Avenue  1100 Hamilton Avenue Public Input Phase 1 and Phase 2 were the result of over 12 months of work by a dedicated group of resident and business stakeholders. The City Council thanked the group for its service upon initiation of Phase 2, but many of the stakeholders have remained engaged. Staff met with these stakeholders and other interested members of the public on January 4, 2017 to discuss the data provided in this staff report and potential changes to the program that should be considered at the end of Phase 2. The notes from this meeting and subsequent communications from the stakeholders are included as Attachments K and L. Timeline Downtown Residential Preferential Parking (RPP) Program Phase 2 permits expire on March 31, 2017. Assuming the City Council adopts a resolution making desired program adjustments on February 13, 2017 as requested, Staff expects to make signage modifications and outreach to permit holders in the next month or so, such that enforcement can continue after March 31, 2017. Resource Impact The amended resolution and RPP Administrative Guidelines will have a small impact on the adopted budget for Downtown RPP Program. The current FY 2017 Adopted Operating Budget City of Palo Alto Page 7 assumed revenues of $461,000 inclusive of a $230,000 transfer from the General Fund and expenses of $850,000 to administer the Downtown RPP Program. These current operating funds as well as funding from the Capital Improvement Project Residential Preferential Parking (PL-15003) approved at $330,045 in the FY 2017 Adopted Capital Budget are sufficient to continue the Downtown RPP Program beyond the March 2017 expiration in the current fiscal year. Permit generation and customer service costs are estimated at $86,000 while updates to signage are estimated at $36,410 for a total cost of $122,410. No ongoing implications to budgeted levels are anticipated as a result of the recommendations in this report. Related contract amendments (for this program and the Evergreen Park/Mayfield program) will be placed on the Council’s consent agenda for approval later this month or next month. Policy Implications The implementation of Downtown Residential Preferential Parking (RPP) Program is consistent with the three-pronged approach staff has presented to optimize parking within the Downtown core. It is also consistent with the following Comprehensive Plan goals: 1. Goal T-8, Program T-49: Implement a comprehensive program of parking supply and demand management strategies for Downtown Palo Alto 2. Policy T-47: Protect residential areas from the parking impacts of nearby business districts Environmental Review Adoption of a resolution regarding an Downtown Residential Preferential Parking (RPP) Program is exempt from review under the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this document may have a significant effect on the environment and Section 15301 in that this proposed document will have a minor impact on existing facilities. Attachments:  Attachment A - Resolution for Downtown RPP  Attachment B - Citywide RPP Ordinance 5294  Attachment C - Citywide RPP Ordinance 5380  Attachment D - Downtown RPP Phase 1 Resolution 9473  Attachment E - Downtown RPP Phase 2 Resolution 9577  Attachment F - RPP Administrative Guidelines Approved  Attachment G - Downtown RPP Program Area Map  Attachment H - Downtown RPP Phase 2 Permits Sold 03-01-2016 to 12-22-2016  Attachment I - Downtown RPP Phase 2 Parking Occupancy Surveys  Attachment J - Downtown RPP Phase 2 Citation Data  Attachment K - Downtown RPP Phase 2 Stakeholder Meeting Agenda & Notes 2017-01- 04  Attachment L - Downtown RPP Phase 2 Stakeholder Data & Input ****NOT YET APPROVED**** 1 Resolution No. _______ Resolution of the Council of the City of Palo Alto Amending Resolutions 9473 and 9577 to Continue the Downtown Residential Preferential Parking District (RPP) Program with Minor Modifications R E C I T A L S A. California Vehicle Code Section 22507 authorizes the establishment, by city council action, of permit parking programs in residential neighborhoods for residents and other categories of parkers. B. A stakeholders’ group comprised of Downtown residents and business interests was convened to discuss the implementation of Residential Preferential Parking Districts (RPP Districts). C. On December 15, 2015 the Council adopted Ordinance No. 5294, adding Chapter 10.50 to Title 10 (Vehicles and Traffic) of the Palo Municipal Code. This Chapter establishes the city-wide procedures for RPP Districts in the city. D. On December 1, 2014, the Council adopted Resolution No. 9473 implementing the Downtown Residential Preferential Parking Pilot Program. The implementation anticipated a two-phased pilot program. Parking permits issued for Phase 1 of this pilot program expired on March 31, 2016. E. On February 23, 2016 the Council adopted Resolution No. 9577 to update the process for implementing Phase 2 of the Downtown Neighborhood preferential parking pilot program. Permits issued for Phase 2 of this pilot program will expire on March 31, 2017. F. It is the goal of the City to reduce the impacts of non-resident overflow parking from the Downtown Commercial District on the surrounding neighborhoods, and to maintain an on-street parking occupancy in those neighborhoods of 85% or less. G. The Council desires to amend Resolution Nos. 9473 and 9577 to conclude the pilot program and implement the permanent Downtown Residential Preferential Parking Program. These modifications shall apply to all Downtown Residential Employee Parking Zones. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES, as follows: SECTION 1. Findings. The criteria set forth in Section 10.50.030 for the designation of the Downtown Residential Preferential Parking District described in 3.A of this Resolution have been met as follows: ****NOT YET APPROVED**** 2 (1) That non-resident vehicles do, or may, substantially interfere with the use of on-street or alley parking spaces by neighborhood residents, in that based on observation there are few available parking spaces available midday, while the streets are relatively unoccupied at midnight thus demonstrating the parking intrusion is largely by non-residents. (2) That the interference by the non-resident vehicles occurs at regular and frequent intervals, either daily or weekly, in that the parking intrusion is contained to the daytime hours during the regular workweek. (3) That the non-resident vehicles parked in the area of the proposed district create traffic congestion, noise, or other disruption (including shortage of parking spaces for residents and their visitors) that disrupts neighborhood life, in that based on information from residents and other city departments the vehicle congestion is interfering with regular activities. (4) Other alternative parking strategies are not feasible or practical in that the City has implemented a series of alternative parking strategies in the past and concurrently and there is still a shortage of parking available SECTION 2. Duration and Issuance of Permits. The following provisions shall apply to the Downtown Residential Preferential Parking Program District: A. Resident Parking Permits: Resident Parking Permits will be distributed pursuant to the criteria listed under Section 5.C of this Resolution. Resident Parking Permits shall be valid for one-year increments, commencing on April 1, 2017. Resident Parking Permits will be valid anywhere within the boundaries of the Downtown Residential Preferential Parking Program District. B. Employee Parking Permits: The City shall also issue permits to Downtown Employees pursuant to the criteria listed under Section 5.C of this Resolution. Employee Parking Permits shall be in effect for six months. The first round of permits shall become effective on April 1, 2017 and expire on September 30, 2017. New Employee Parking Permits will be available for purchase every six months thereafter. C. Temporary Work Parking Permits: The City shall also issue Temporary Work Parking Permits for contractors or construction workers completing work for households located within the Downtown Residential Preferential Parking Program District. Prices and duration of the Temporary Work Parking Permits will be determined by the Development Services Director at the time of application. D. Duration: These regulations shall commence on April 1, 2017. The City will make permits available for Residents, Employees, and Contractors prior to April 1, 2017. ****NOT YET APPROVED**** 3 E. Permanent Regulations: The Downtown Residential Preferential Parking Program shall remain in force until the City Council takes action to extend, modify, or rescind. SECTION 3. Downtown Residential Preferential Parking Program District Boundaries. A. Annexed Zones. The areas shown on Exhibit A are included in the Downtown Residential Preferential Parking Program District. B. Eligibility Areas. The areas shown on Exhibit A as Eligibility Areas are eligible for administrative annexation, as provided in Palo Alto Municipal Code Section 10.50.085. SECTION 4. Hours and Days of Enforcement. A. Hours. The Downtown Residential Preferential Parking Program parking regulations shall be in effect Monday through Friday from 8:00 AM to 6:00 PM, except holidays as defined in Palo Alto Municipal Code Section 2.08.100. Outside of these enforcement hours, any motor vehicle may park in the Downtown Residential Preferential Parking Program District, subject to other applicable parking regulations. B. Re-parking Prohibited. During the regulated days and hours of enforcement, no person shall park in the same Employee Parking Zone within the Downtown Residential Preferential Parking Program District for more than two continuous hours without a valid permit. C. Exemptions. A vehicle lawfully displaying a valid Resident Parking Permit or Employee Parking Permit in the proper fashion shall be exempt from the two-hour time limit. Electric vehicles parked at and using an electric charging station within the Downtown Residential Preferential Parking Program District shall be exempt from the two-hour limit. Other vehicles exempt from the parking regulations are identified in Palo Alto Municipal Code Section 10.50.070. SECTION 5. Residential and Employee Parking Permits. A. Duration. Resident Parking Permits shall be available on an annual basis. One-day Resident Parking Permits shall also be available. Employee Parking Permits shall be available on a six-month basis. One-day Employee Parking Permits shall also be available. B. Purchase of Permits. Requirements and eligibility for purchase of both Resident Parking Permits and Employee Parking Permits shall be listed in ****NOT YET APPROVED**** 4 the Residential Preferential Parking Administrative Guidelines, as approved by the Planning and Community Environment Director. C. Parking Permit Sales. 1. Resident Parking Permits. a. Annual Resident Parking Permit Stickers. Each residential address may obtain up to four (4) annual Resident Parking Permit Stickers at the costs listed in Section 6.A. b. Annual Resident Parking Permit Hangtags: Each residential address may purchase up to two (2) annual Residents Parking Permit Hangtags, which are transferable within a household. The permit shall clearly indicate the date through which it is valid. c. Daily Resident Parking Permits. Each residential address may purchase up to 50 Daily Resident Parking Permits annually. These permits may be in the form of scratcher hangtags, an on-line issuance system, or such other form as the City may decide. The permit shall clearly indicate the date through which it is valid. 2. Employee Parking Permits. The City may issue Employee Parking Permits for use by employees working in the Downtown area as specified in Exhibit A. Employee Parking Permits shall be subject to the following regulations: a. Commuting Only. Employee Parking Permits are for the exclusive use by employees working for businesses within the proposed Downtown Residential Preferential Parking Program District boundaries while commuting to work. b. Employee Parking Zones. No person shall park in the same employee parking zone within the Downtown Residential Preferential Parking Program District for more than two continuous hours without a valid permit. Re- parking on the same day in the same zone by any person without a valid parking permit or otherwise exempt from Chapter 10.50 shall be prohibited. c. Employee Parking Permit Cost. Employees may purchase permits at the costs listed in Section 6.D. d. Six-month Employee Parking Permit Cap. The City shall issue no more than 1,800 Employee Permits during the first year of the permanent Downtown Residential Preferential Parking Program implementation. The Employee ****NOT YET APPROVED**** 5 Parking Permits thereafter are to be allocated among the existing, annexed, and eligible Employee Parking Zones according to Table 1 of Exhibit B initially, and which shall be updated annually by the Planning and Community Environment Director. Only streets participating in the Downtown Residential Preferential Parking Program may be allocated permits. e. Six-month Employee Parking Permit Reduction Strategy. Following the first year allocation of 1,800 Six-month Employee Parking Permits, the City will decrease the total number of issued Employee Parking Permits by 10% per year. The Planning and Community Environment Director shall be authorized to adopt Administrative Guidelines to implement this reduction in a manner that encourages the City Council’s goal of reducing the drive-alone rate by 30% by 2030 through the efforts of the Palo Alto Transportation Management Association and the further goal of minimizing parking impacts to residential neighborhoods. f. Six-month Employee Parking Permit Priority for Low-income Employees. The Planning and Community Environment Director shall reserve approximately half of the annual employee permits in each zone for purchase by employees who qualify for reduced price permits based on hourly or annual income. The other half will be sold on a first come, first serve basis to all employees. g. Employee Parking Zones. Each Employee Parking Permit shall be issued for only one of the Employee Parking Zones as shown in Exhibits A and subject to the Permit Allocation totals in Exhibit B. The issued Employee Parking Permit shall entitle the permit holder to park only in that zone for more than two hours. ****NOT YET APPROVED**** 6 h. Daily Employee Parking Permits. Daily Employee Parking Permits will be available to employees only, and will not be available for sale to employers. Employees will be limited to purchase up to four (4) daily parking permits per month, or roughly one per week. 1. Distribution of daily employee permits. Daily employee permits will be zone- specific and will be sold randomly. No daily employee permits will be sold in Zones 9 and 10. Employees will not select a specific zone when purchasing a daily permit, and will receive a zone specific daily employee permit selected at random at the time of mailing. SECTION 6. Cost of Parking Permits. The cost of Parking Permits shall be as follow and may be adjusted from time to time to maintain consistency with parking permits issued for Downtown lots and garages: A. Annual Resident Parking Permit Sticker: First permit $0/year; second permit $50/year; third permit $50/year; fourth permit $50/year. No more than four parking permits will be sold per residential address. B. Annual Resident Parking Permit Hangtag: A residential address may purchase up to two Annual Resident Parking Permit Hangtags at $50/year. Additional permits may be approved by the Planning and Community Environment Director upon a showing of good cause. C. Daily Resident Parking Permit: A residential address may purchase up to 50 Daily Resident Parking Permits per year at $5/each. D. Employee Parking Permits 1. Full-price Permit: $233/six months 2. Reduced-price Permit for Low-income Employees: $25/six months 3. Reduced-price Permit for Addison Elementary School employees: $25/six months E. Temporary Work Parking Permit: Issued by Palo Alto Development Center with cost and duration determined at time of application by the Development Services Director. SECTION 7. CEQA. This resolution is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no ****NOT YET APPROVED**** 7 possibility the adoption and implementation of this resolution may have a significant effect on the environment and Section 15301 in that this proposed ordinance will have a minor impact on existing facilities. SECTION 8. Supersede. To the extent any of the provisions of this resolution are inconsistent with the regulations set forth in Resolution 9473 or Resolution 9577, this resolution shall control. SECTION 9. Effective Date. This resolution shall take effect immediately, except that Section 3(B) shall not go into effect until the corresponding implementing ordinance becomes effective. Enforcement shall commence, pursuant to Chapter 10.50 and the California Vehicle Code, when signage is posted. INTRODUCED AND PASSED: February 13, 2017 AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: __________________________ __________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: _______________________ ____________________ Senior Assistant City Attorney City Manager _____________________ Director of Planning and Community Environment Univ e r s i t y A v e Lyt t o n A v e Eve r e t t A v e Haw t h o r n e A v e Ruth v e n A v e Poe S t Pa l o A l t o A v e Eve r e t t C t Hi g h S t Al m a S t El C a m i n o R e a l E m e r s o n S t Br y a n t S t W a v e r l y S t Ki p l i n g S t Co w p e r S t W e b s t e r S t By r o n S t Mi d d l e f i e l d R d Fu l t o n S t G u i n d a S t Bo y c e A v e Forest Ave Hamilton Ave Fife Ave Channing Ave Parkinson Ave Guinda St Greenwood Se n e c a S t Ch a u c e r S t Ha l e S t Ra m o n a S t Hi g h S t E m e r s o n S t Br y a n t S t Sc o t t W a v e r l y S t Kip l i n g Co w p e r S t W e b s t e r S t By r o n S t By r o n S t Mi d d l e f i e l d R d Fu l t o n S t Ra m o n a S t Fl o r e n c e Gil m a n Ta s s o Ham i l t o n A v e For e s t A v e Hom e r A v e Cha n n i n g A v e Add i s o n A v e Linc o l n A v e King s l e y A v e Melv i l l e A v e Kell o g g A v e MENLO PARK STANFORD Downtown Residential Preferential Parking Program Li n c o l n A v e Ad d i s o n A v e Embarca d e r o R o a d 3 4 5 6 7 8 9 10 2 1 Visit http://paloalto.parkingguide.com/parking-program/downtown-residential-preferential-parking-program/ for additional information or contact 650-329-2520. PaloAlto A v e Downtown RPP District Approved Eligibility Area Non-RPP Parking in RPP District Downtown Non-RPP Downtown RPP Program Area Approved Eligibility Area Non-RPP Parking in RPP District (check signs) RPP Employee Parking Zones Exhibit A Table 1. Downtown RPP Program Employee Parking Zones and Allocations Employee Parking Zone Boundaries Permit Allocation 1 Lytton Avenue between Alma Street and Webster Street (where RPP restrictions are in place) 300 blocks of: Alma Street, High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street Everett Avenue between Alma Street and Webster Street 60 2 200 blocks of: Alma Street, High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street Hawthorne Avenue between Alma Street and Webster Street 96 3 100 blocks of: Alma Street, High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street Palo Alto Avenue between Alma Street and Webster Street Poe Street Ruthven Avenue Tasso Street 202 4 Palo Alto Avenue between Webster Street and Guinda Street 600 block of Hawthorne Avenue 600 and 700 blocks of Everett Avenue, Lytton Avenue, University Avenue 100-500 blocks of Webster Street, Byron Street, Middlefield Road, Fulton Street 152 5 600 and 700 blocks of Hamilton Avenue 200-700 blocks of Forest Avenue and Homer Avenue 700 blocks of Ramona Street, Bryant Street, Waverley Street, Cowper Street 600-700 blocks of Webster Street, Byron Street, Middlefield Road, Fulton Street 1401 6 800 blocks of Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street, Webster Street, Middlefield Road Channing Avenue between Ramona Street and Guinda Street 90 7 900 blocks of Ramona Street, Bryant Street, Waverley Street, Cowper Street, Webster Street, Middlefield Road Addison Avenue between High Street and Guinda Street 128 8 1000 and 1100 blocks of High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Cowper Street, Webster Street, Byron Street, Middlefield Road, 348 Exhibit B Employee Parking Zone Boundaries Permit Allocation Fulton Street Lincoln Avenue and Kingsley Avenue between Alma Street/Embarcadero Road and Guinda Street Embarcadero Road from Alma Street to Kingsley Avenue 9 1200 block of Bryant Street 1200-1300 blocks of Waverley Street 1200-1400 blocks of Cowper Street, Webster Street, Byron Street 1300-1400 blocks of Tasso Street 1200-1500 blocks of Middlefield Road 1200-1300 blocks of Fulton Street Melville Avenue between Embarcadero Road and Guinda Street Kellogg Avenue between Cowper Street and Middlefield Road Embarcadero Road between Kingsley Avenue and Middlefield Road 25 (233)* 10 Guinda Street between Palo Alto Avenue to Melville Avenue Palo Alto Avenue between Guinda Street and Hale Street 500 blocks of Chaucer Street and Hale Street 600 block of Hale Street 800 blocks of Lytton Avenue, Homer Avenue and Palo Alto Avenue 800 and 900 blocks of University Avenue, Hamilton Avenue 800-1100 blocks of Forest Avenue Boyce Avenue between Guinda Street and Hale Street 1000-1100 blocks of Fife Avenue 800-900 blocks of Channing Avenue and Addison Avenue 800-1000 blocks of Lincoln Avenue 800 block of Melville Avenue 1000-1100 blocks of Hamilton Avenue 105 (351)* Total Six-month Employee Parking Permits 1,800 *A portion of Six-month Employee Parking Permits in this Employee Parking Zone are held in reserve and only released as additional streets within that zone opt into the Downtown RPP Program. The number in parenthesis is the total maximum number of permits if all streets within the zone were to opt in. Source: Department of Planning & Community Environment, January 2017 Ordinance No. 5294 Ordinance of the Council of the City of Palo Alto Amending Title 10 (Vehicles and Traffic) of the Palo Alto Municipal Code by Adding Chapter 10.50 (Residential Preferential Parking Districts) and Section 10.04.086 (Parking Enforcement Contractor) The City Council of the City of Palo Alto does 0 RDAIN as follows: Section 1. Chapter 10.50 (Residential Preferred Parking Districts) is hereby added to Title 10 (Vehicles and Traffic) of the Palo Alto Municipal Code to read as follows: Sections: RESIDENTIAL PREFERENTIAL PARKING DISTRICTS Purpose Definitions RFP Designation Criteria Initiation by City Council Initiation by Neighborhood Petition 10.50.010 10.50.020 10.50.030 10.50.040 10.50.050 10.50.060 10.50.070 10.50.080 10.50.090 10.50.100 Establishment of Residential Preferential Parking Districts Administration of Districts Annexation of New Areas to Existing Districts Modification or Termination of Districts Violations and Penalties 10.50.010 Purpose. Residential preferential parking districts are intended to restore and enhance the quality of life in residential neighborhoods by reducing the impact of parking associated with nearby businesses and institutional uses. The procedures and standards in this chapter are intended to provide flexibility so that the city council may adopt, after consultation with residents and neighboring businesses and institutions, parking programs that appropriately protect each neighborhood's unique characteristics. Residential preferential parking districts should be designed to accommodate non-residential parking when this can be done while meeting the parking availability standards determined by the city to be appropriate for the district in question. Residential preferential parking programs may be designed to reduce non-residential parking over time to give non-residential parkers time to find other modes of transportation or parking locations. 10.50.020 Definitions. The following words and phrases shall have the following meanings: 140826 jb 01312SOC 1 December 9, 2014 a) "Director" shall mean the director of planning and community environment. b) "Dwelling unit" shall mean a self-contained house, apartment, stock cooperative unit, or condominium unit occupied by a single household exclusively for residential purposes. These residential purposes may include lawful home occupations. c) "Employee permit" shall mean a permit issued to an employee working at a business located within an RPP District or as defined in an RPP district specific resolution. d) "Guest permit" shall mean a permit issued to a Resident on an annual basis for use by a person visiting a residence in an RPP District or for workers providing services such as caregiving, gardening, repair maintenance and construction, to the Resident. The number of Guest permits issued to Residents shall be specified in administrative regulations adopted by the Director. e) "Non-resident vehicle" shall mean a vehicle operated by a person whose destination is not to a residence within the Residential Preferential Parking District. f) "Resident" shall mean a natural person living in a dwelling unit in an RPP District. g) "Residential Preferential Parking District" or "RPP District" shall mean a geographical area in which the city council has established a preferential parking permit system pursuant to California Vehicle Code section 22507. h) "Visitor permit" shall mean a temporary 24-hour permit issued to a Resident for use by a person visiting a residence in an RPP District. 10.50.030 RPP Designation Criteria The council may designate an area as a Residential Preferential Parking District based upon the following criteria: (1) That non-resident vehicles do, or may, substantially interfere with the use of on-street or alley parking spaces by neighborhood residents; (2) That the interference by the non-resident vehicles occurs at regular and frequent intervals, either daily or weekly; (3) That the non-resident vehicles parked in the area of the proposed district create traffic congestion, noise, or other disruption (including shortage of parking spaces for residents and their visitors) that disrupts neighborhood life; ( 4) Other alternative parking strategies are not feasible or practical. 10.50.040 Initiation by City Council The city council may, by motion, initiate consideration of a RPP District by directing staff to undertake the analysis and outreach process set forth in Section · 10.50.0SO(d) and (e). 10.50.050 Initiation by Neighborhood Petition Residents may request the formation of an RPP District in their neighborhood. The request shall be made, and considered, in the following manner: (a) Form of Application. 140826 jb 0131250C 2 December 9, 2014 (1) The director shall establish a standard form for the application for the formation of a new RPP District, as well as a list of submittal requirements for use by interested residents. These requirements shall include a narrative describing the nature and perceived source of non-residential parking impact, as well as suggested district boundaries. The director shall also approve a standard form for use in demonstrating resident support for the application. (2) Residents shall initiate a request for establishment of an RPP District by neighborhood petition by completing the official application form. (3) Residents are encouraged to consult with the employers and employees thought to be the source of the parking impact as they develop their proposals. (b) Timing and Review of Applications. Each calendar year, the Director of Planning and Community Environment shall review all applications received prior to March 31st of that year to determine whether the RPP District criteria established in this Chapter are met. ( c) Prioritization of Applications. Applications determined by the Director to meet the criteria in paragraph (b) above shall be presented to the Planning and Transportation Commission. The commission shall review the requests and recommend to the director which proposal or proposals should be given priority for review and possible implementation in the current calendar year. In making its recommendations, the commission shall consider the severity of non-residential parking impact, the demonstrated level of neighborhood support, and the staff resources needed to process requests. ( d) Staff Review of Applications and Community Outreach. Once an application has been selected for council consideration during the current calendar year, staff shall promptly review the application, gather additional information and conduct a community outreach program. At a minimum the review process shall include the following: (1) The City shall complete parking occupancy studies to quantify the nature of the problem identified in the petition. Data shall be collected when schools in the Palo Alto Unified School District and Stanford University are in session, unless these institutions are irrelevant to the problem to be addressed. (2) Upon completion of the consultation and outreach process, the city attorney shall prepare a draft resolution containing the proposed boundaries and hours of enforcement. Staff shall undertake a survey of resident support within the RPP District. The results of this survey shall be included in and reported to the planning and transportation commission and the city council. ( e) Planning and Transportation Commission Review. Staff shall bring the proposed RPP District to the planning & transportation commission no later than September of the calendar year in which consideration began. The commission shall review the draft resolution at a noticed public hearing and make a recommendation to the city council regarding the RPP District. This recommendation may include 140826 jb 0131250C 3 December 9, 2014 proposed modifications of the boundaries. The commission's recommendation shall be forwarded to the city council no later than September 30th. 10.50.060 Establishment of Residential Preferential Parking Districts (a) Adoption of Resolution Establishing District. Following the completion of the procedures described in Section 10.50.050, the City Council shall hold a public hearing on a proposed resolution to establish the residential preferential parking district. The resolution may specify a trial period of up to two years. Any such trial period shall begin running after the signs have been posted and permits issued. The council may adopt, modify, or reject the proposed resolution. (b) Resolution. The resolution shall specify: (1) The findings that the criteria set forth in Section 10. 50.030 have been met. (2) The term of the trial period, if applicable. (3) The boundaries and name of the residential preferential parking district. The boundary map may also define areas which will become subject to the regulations of the residential preferential parking district in the future if the council approves a resident petition for annexation as provided in Section 10.50.080 below. ( 4) Hours and days of enforcement of parking regulations and other restrictions that shall be in effect for non-permit holders, such as two-hour parking limits, overnight parking limits, or "no re-parking" zones. (5) The number of permits, if any, to be issued to merchants or other non- residential users, which number may be scheduled to reduce over time. (6) Resident permit rates which are set by City Council policy will be uniform across each district. (7) Such other matters as the Council may deem necessary and desirable, including but not limited to fee rates and whether non-residential parking permits are allowed to be issued and transferred. ( c) Permanent Adoption. Before the expiration of the trial period, if applicable, the city council shall hold a noticed public hearing and determine whether the RPP District should be made permanent as originally adopted, modified or terminated. The council's action shall be in the form of a resolution. 10.50.070 Administration of Districts (a) Issuance and Fees. (1) No permit will be issued to any applicant until that applicant has paid all of his or her outstanding parking citations, including all civil penalties and related fees. (2) A residential parking permit may be issued for a motor vehicle if the following requirements are met: A. The applicant demonstrates that he or she is currently a resident of the area for which the permit is to be issued. 140826 jb 0131250C 4 December 9, 2014 B. The applicant demonstrates that he or she has ownership or continuing custody of the motor vehicle for which the permit is to be issued. C. Any motor vehicle to be issued a permit must have a vehicle registration indicating registration within the area for which the permit is to be issued. (3) Visitor or guest parking permits may be issued for those vehicles or to those individuals or households that qualify for those permits under the resolution establishing the RPP District. ( 4) Employee parking permits may be issued to those individuals and for those vehicles that qualify for such permits under the resolution establishing the RPP District. (b) No Guarantee of Availability of Parking. A parking permit shall not guarantee or reserve to the permit holder an on-street parking space within the designated residential preferential parking zone. ( c) Restrictions and Conditions. Each permit issued pursuant to this Section shall be subject to each and every condition and restriction set forth in this Chapter and as provided for in the resolution establishing the specific RPP District, as may be amended from time to time. The issuance of such permit shall not be construed to waive compliance with any other applicable parking law, regulation or ordinance. (d) Exemptions. The following vehicles are exempt from RPP District parking restrictions in this Chapter: · (1) A vehicle owned or operated by a public or private utility, when used in the course of business. (2) A vehicle owned or operated by a governmental agency, when used in the course of official government business. (3) A vehicle for which an authorized emergency vehicle permit has been issued by the Commissioner of the California Highway Patrol, when used in the course of business. ( 4) A vehicle parked or standing while actively delivering materials or freight. (5) A vehicle displaying an authorized exemption permit issued by the City of Palo Alto. (6) A vehicle displaying a State of California or military-issued disabled person placard or license plates. (7) A vehicle parked for the purpose of attending or participating in an event taking place at a school within the Palo Alto Unified School District or another event venue within the RPP District, provided that the vehicle is parked within two blocks of the venue, the venue has requested and received approval from the City at least fourteen days before the event date, and the venue distributes notices to all addresses within a two -block radius of the venue. The RPP District Resolution shall specify the covered venues and number of permitted events per year. (8) All vehicles are exempt from parking restrictions pursuant to this Chapter on the following holidays: January 1, July 4, Thanksgiving Day, and December 25. 140826 jb 0131250C 5 December 9, 2014 ( e) Authority of Staff a. The director is authorized to adopt administrative regulations that are consistent with the purposes of this Chapter. Prior to adoption the director shall conduct a noticed public meeting soliciting input on such guidelines. b. The Police Department or private parking enforcement contractor as approved by the Chief of Police shall have the authority to enforce the administrative regulations established pursuant to this Chapter. 10.50.080 Annexation of New Areas to Existing Districts Residents of any block may petition the director for annexation into a contiguous RPP District. The petition shall be on forms provided by the department. If the petition meets the criteria established in administrative regulations adopted by the director, a resolution annexing it to the RPP District shall be prepared by the city attorney and submitted to the city council, together with the director's recommendation on the proposed annexation. The city council may approve, deny, or modify the annexation. 10.50.090 Modification or Termination of Districts (a) Opting out. After final adoption of an RPP District, Residents may file an application with the director to opt out of the RPP District. The minimum number of blocks and percentage of units supporting the opt-out shall be specified by the director in the administrative guidelines. Applications for opting out shall be made in the form and manner prescribed by the director and shall be acted up on by the director. Any opt out application shall be filed within ninety (90) days after council adoption of the resolution establishing the RPP District. (b) Dissolution. The city council following a noticed public hearing may adopt a resolution dissolving the RPP District: (1) Upon receipt and verification of a petition signed by 50% or more of all the households within an approved RPP District boundary, or (2) Upon findings by the City Council that the criteria for designating the RPP District are no longer satisfied. 10.50.100 Violations and Penalties (a) No person shall park a vehicle adjacent to any curb in a residential preferential parking zone in violation of any posted or noticed prohibition or restriction, unless the person has a valid and current residential preferential parking permit, visitor permit, guest permit or employee permit for that vehicle, or is otherwise exempt. Violations of this sub-section shall be punishable by a civil penalty under Chapter 10.60.010. (b) No person shall sell, rent, or lease, or cause to be sold, rented, or leased for any value or consideration any RPP District parking permit, visitor permit or guest permit. Upon violation of this subsection, all permits issued to for the benefit of the 140826 jb 0131250C 6 December 9, 2014 dwelling unit or business establishment for which the sold, rented, or leased permit was authorized shall be void. Violation of this sub-section (b) shall be punishable as a n infraction. ( c) No person shall buy or otherwise acquire for value or use any RPP District parking permit, guest permit or visitor permit except as provided for in this chapter. Violation of this sub-section (c) shall be punishable as an infraction. SECTION 2. Section 10.04.086 (Parking Enforcement Contractor) of Title 10 (Vehicles and Traffic) of the Palo Alto Municipal Code is hereby added to read as .follows: 10.04.086 Parking Enforcement Contractor "Parking Enforcement Contractor" means any duly qualified company that the City has entered into a contract with and that has been approved by the Chief of Police to provide enforcement of Chapter 10.50 relating to Palo Alto Municipal Code infractions only in parking zones. Enforcement includes both the issuance and processing of citations for RPP District parking violations. SECTION 3. Section 10.08.015 (Authority of Parking Enforcement Contractor) of Title 10 (Vehicles and Traffic) of the Palo Alto Municipal Code is hereby added to read as follows: 10.08.015 Authority of Parking Enforcement Contractor The City may enter into a contract with a duly qualified company, approved by the Chief of Police, to provide enforcement of Chapter 10.50 relating to RPP District parking violations (as permissible by the Palo Alto Municipal Code). SECTION 4. Section 10.60.010 (Parking violations punishable as civil penalties) of Title 10 (Vehicles and Traffic) of the Palo Alto Municipal Code is amended to read as follows: 10.60.010 Parking Violations Punishable as Civil Penalties Except as otherwise provided, violations of any provision of Chapters 10.36, 10.40, 10.44, 10.46, aru:l 10.47. and 10.50 of this Title 10 (hereinafter referred to as a "parking violation") shall be punishable by a civil penalty (hereinafter referred to as a "parking penalty"). These parking penalties, together with any late payment penalties, administrative fees, and other related charges shall be established by ordinance or resolution of the city council. SECTION 5. CEQA. T~is ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuantto Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this Ordinance may have 140826 jb 0131250C 7 December 9, 2014 a significant effect on the environment and Section 15301 in that this proposed ordinance will have a minor impact on existing facilities. SECTION 6. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this Ordinance are hereby declared to be severable. SECTION 7. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: December 2, 2014 PASSED: December 15, 2014 AYES: BERMAN, BURT, HOLMAN, KLEIN, KNISS, PRICE, SCHARFF, SCHMID SHEPHERD NOES: ABSENT: ABSTENTIONS: NOT PARTICIPATING: ~ Interim City Clerk APPROVED: 140826 jb 01312SOC 8 December 9, 2014 019 Planning 1 Ordinance No. 5380 Ordinance of the Council of the City of Palo Alto to Add Section 10.50.085 (Eligibility Areas) and to Amend Section 10.50.090 (Modification or Termination of Districts) of the Palo Alto Municipal Code Relating to Residential Parking Programs The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Recitals. The Council of the City of Palo Alto finds and declares as follows: A. In response to resident concerns about their ability to opt­out of their ­evaluated the existing procedures. B. To provide greater opportunity and a fairer process for residents, the opt­out procedures related to the Residential Preferential Parking program should be revised. SECTION 2. Title 10, Section 10.50.085 of the Palo Alto Municipal Code is added to read as follows: 10.50.085 Eligibility Areas When it is determined that particular areas may experience spill­over from previously designated RPP Districts, the Council may designate by resolution those areas as an Eligibility Area. Designated Eligibility Areas may petition the director for annexation into an existing RPP District. The petition shall be on forms provided by the department. If the petition meets the criteria established in the administrative guidelines adopted by the director, the director shall approve the Eligibility Area for annexation. SECTION 3. Title 10, Section 10.50.090 of the Palo Alto Municipal Code is amended to read as follows: 10.50.090 Modification or termination of districts. (a) Opting out. After final adoption of an RPP District, Residents may file an application with the director to opt out of the RPP District. The minimum number of blocks and percentage of units supporting the opt­out shall be specified by the director in the administrative guidelines. Applications for opting out shall be made in the form and manner prescribed by the director and shall be acted up on by the director. Any opt out application shall be filed within ninety days after council adoption of the resolution establishing the RPP District. (b) Timing and Review of Opt Out Applications. Each calendar year, the director of planning and community environment shall review all opt out applications received prior to March 31st DocuSign Envelope ID: 363324BA-55E5-41DA-ABAB-0377F4F4770F 019 Planning 2 of the year to determine whether the opt out criteria established in the administrative guidelines are met. (b)(c) Dissolution. The city council following a noticed public hearing may adopt a resolution dissolving the RPP District: (1) Upon receipt and verification of a petition signed by 50% or more of all the households within an approved RPP District boundary; or (2) Upon findings by the city council that the criteria for designating the RPP District are no longer satisfied. SECTION 4. Severability. If any provision, clause, sentence or paragraph of this ordinance, or the application to any person or circumstances, shall be held invalid, such invalidity shall not affect the other provisions of this ordinance which can be given effect without the invalid provision or application and, to this end, the provisions of this ordinance are hereby declared to be severable. SECTION 5. CEQA. This ordinance is exempt from the requirements of the California Environmental Protection Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this ordinance may have significant effect on the environment and Section 15301 in that this proposed ordinance will have a minor impact on existing facilities. // // // // // // // // // // // // // DocuSign Envelope ID: 363324BA-55E5-41DA-ABAB-0377F4F4770F 019 Planning 3 SECTION 6. Effective Date. This ordinance shall be effective on the thirty­first date after the date of its adoption. INTRODUCED: February 1, 2016 PASSED: February 23, 2016 AYES: DUBOIS, FILSETH, KNISS, SCHMID, WOLBACH NOES: ABSTENTIONS: BERMAN, BURT, HOLMAN, SCHARFF ABSENT: ATTEST: APPROVED: City Clerk Mayor City Manager Senior Assistant City Attorney Director of Planning and Community Environment DocuSign Envelope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esolution No. 9473 Resolution of the Council of the City of Palo Alto Establishing the Downtown Residential Preferential Parking District Under Chapter 10.50 ofthe Municipal Code RECITALS A. California Vehicle Code Section 22507 authorizes the establishment, by city council action, of permit parking programs in residential neighborhoods for residents and other categories of parkers. B. A stakeholders' group comprised of Downtown residents and business interests met 9 times and made its recommendations to the City on (1) the provisions of a master ordinance establishing city-wide procedures for Residential Preferential Parking Districts (RPP Districts) and (2) the particular program rules to be applied to the Downtown RPP District. C. On June 11, 2014, September 10, 2014 and November 12, 2014, the Planning and Transportation Commission held public hearings to consider the proposed master ordinance and the proposed Downtown Neighborhood preferential parking programs. D. On December 15, 2015 the Council adopted Ordinance No. 5294, adding Chapter 10.50 to Title 10 (Vehicles and Traffic) ofthe Palo Municipal Code. This Chapter establishes the city-wide procedures for RPP Districts in the city. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES, as follows: SECTION 1. Findings. The criteria set forth in Section 10.50.030 for designating a Residential Preferential Permit Zone have been met as follows: (1) That non-resident vehicles do, or may, substantially interfere with the use of on-street or alley parking spaces by neighborhood residents; (2) That the interference by the non-resident vehicles occurs at regular and frequent intervals, either daily or weekly; (3) That the non-resident vehicles parked in the area ofthe proposed district create traffic congestion, noise, or other disruption (including shortage of parking spaces for residents and their visitors) that disrupts neighborhood life; (4) Other alternative parking strategies are not feasible or practical. SECTION 2. Duration and Trial Period. The Trial Period for the Downtown RPP District shall be divided into two phases. 1 141016 jb 0131252B Rev. November 17, 2014 1. Phase 1: The first phase shall start from the date that the both installation of signage is complete and enforcement of the District has begun, and last for a period of 6 months. Resident permits will be distributed pursuant to the criteria listed under Section 5.C of this Resolution. During the first phase the City shall also issue permits to Employees pursuant to the criteria listed under Section 5.C of this Resolution. All permits shall expire at the end of the trial period. The City will collect parking occupancy data on all blocks within the Downtown RPP District to determine how many Employee Permits (both low-wage and professional) should be sold during the subsequent phase of the program. During Phase 1, both Employee and Resident permits will be valid anywhere within the boundaries ofthe RPP District. During this phase the City may issue a survey to elicit qualitative and quantitative feedback on the program. 2. Phase 2: The second phase shall follow Phase 1 and last for at least 12 months. The City will make permits for Phase 2 available prior to the initiation of Phase 2. During the second phase the City will regulate the number of Employee Permits issued based on parking occupancy data collected in the first phase. It is expected this distribution of permits will be iterative and adjusted during the course of Phase two. 3. The RPP District shall remain in force until the City Council takes action to extend, modify, or rescind. The City Council shall consider whether to make the RPP District and its parking program permanent, modify the District and/or their parking regulations, or terminate them no later than December 31, 2016. SECTION 3. District Established. Pursuant to Chapter 10.50, the Downtown Residential Preferred Parking District is hereby established. The boundaries of the Downtown RPP District are shown on Exhibit A attached to this resolution and made a part of it. Blocks that are directly adjacent to or in the immediate vicinity ofthe Downtown RPP District may become subject to the regulations of the Downtown RPP District in the future if the council approves a resident petition for annexation as provided in Palo Alto Municipal Code Section 10.50.080. SECTION 4. Hours and Days of Enforcement. In both Phase 1 and Phase 2, the parking regulations shall be in effect Monday through Friday from 8:00AM to 5:00 PM. During the regulated days and hours of enforcement, no person shall park in the same on-street parking space within the Downtown RPP for more than two continuous hours without a valid permit. A vehicle lawfully displaying an Employee Parking Permit or a Resident Parking Permit shall be exempt from the two-hour limit. Other vehicles exempt from the parking regulations are contained in Chapter 10.50. Outside of these 2 141016 jb 0131252B Rev. November 17, 2014 enforcement hours, any motor vehicle may park in the Downtown RPP, subject to other applicable parking regulations. SECTION 5. Residential Parking Permits. A. Duration. With the exception of the 6-month trial period, both Employee and residential permits shall be made available on a monthly, quarterly and annual basis and may be renewed if the applicant continues to be eligible to receive a permit. One-day visitor permits for residents will also be available during both Phases 1 and 2. B. Purchase of Permits. Requirements and eligibility for purchase of permits for both residents and Employees shall be listed in the Administrative Regulations. C. Permit Sales a. Phase 1. i. Each residential address within the Downtown RPP District may receive up to two 6-month permits at no cost. ii. Guest and Visitor permits may be sold at the costs listed in section GB and GC. iii. Permit costs will be pro-rated for the 6 month period (e.g. half of the annual fee). iv. All Employees may purchase permits pursuant to the costs listed in Section GD, pro-rated for 6 months. b. Phase 2. 141016 jb 01312528 i. Resident Permits. 1. Residential Permits. Each residential address may purchase permits at the costs listed in Section GA. 2. Daily Visitor Permits. Each residential address may purchase up to 50 Daily Visitor Parking Permits annually. These permits may be in the form of "scratcher" hang tags, an on-line issuance system, or such other form as the city may decide. The permit shall clearly indicate the address to which it was issued and the date for which it is valid. 3. Annual Guest Permits: Each residential address may purchase up to two (2) annual guest permits, which are transferable within a household. The permit shall clearly indicate the address to which it was issued and the date for which it is valid. 3 Rev. November 17, 2014 ii. Employee Permits. The City may issue Employee Parking Permits for use by employees working in the area as specified in Exhibit A. Employee Permits shall be subject to the following regulations: 1. Commuting Only. Employee Parking Permits are for the exclusive use by employees working for businesses within the proposed District boundaries while commuting to work. 2. Limit of Sales. The Director will limit Employee permit sales according to a threshold listed in the Administrative Regulations, and give priority to low-wage workers. Employees may purchase permits at the costs listed in Section 6D. 3. Reduced Allocation. After Phase 1, the Director may reduce the allocation of Employee Parking over time as additional parking and transportation options become available. D. Signage and Allocation of Spaces. During Phase 2, the City shall regulate which on-street parking spaces shall be dedicated to Employee Parking by selecting one of the following methods: 1. Employee Parking Permit spaces shall be clearly signed and marked as such by the City; 2. Employee Parking Permits shall be assigned by block/blocks; or 3. Other reasonable method designed to distribute Employee Parking throughout the Downtown District and to avoid undue parking saturation in one neighborhood at the expense of others. E. Permit Priority. During Phase 1, the Director will recommend to the City Council the maximum number of Employee permits to be issued during Phase 2, such that the issuance of Employee Permits does not adversely affect parking conditions for residents and merchants in the District in accordance with Section 22507 (b) of the Vehicle Code. The Director shall give permit priority to lower wage earners. SECTION 6. Cost of Residential and Residential Visitor Parking Permits. During the Initial Trial Period the cost of Parking Permits shall be: A. Resident Permit: a. Phase 1: Residents shall receive up to two permits per residential address at no cost. b. For Phase 2, the prices are as follows: First permit $0/year; second permit $50/year; third permit $50/year; fourth permit $50/year. No more than four parking permits will be sold per residential address in either phase. 4 141016 jb 01312526 Rev. November 17, 2014 B. Annual Guest Permit-A residential address may purchase up to two Annual Guest Permits at $50/year ($25 each for Phase 1). C. Visitor Daily Permit--$5/each D. Employee Permits a. Standard Permit --$466/year ($233/6 months) b. Reduced Rate for income qualifying employees--$100/year ($50/6 months) SECTION 7. ~· This ordinance is exempt from the requirements ofthe California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this Ordinance may have a significant effect on the environment and Section 15301 in that this proposed ordinance will have a minor impact on existing facilities. SECTION 8. Effective Date. This resolution shall take effect upon the effective date of Ordinance No. 5294, amending Title 10 (Vehicles and Traffic) of the Palo Alto Municipal Code by Adding Chapter 10.50 (Residential Preferential Parking Districts) and Section 10.04.086 (Parking Enforcement Contractor). Enforcement shall commence, pursuant to Chapter 10.50 and the California Vehicle Code, when signage is posted. INTRODUCED AND PASSED: December 2, 2014 AYES: BERMAN, BURT, HOLMAN, KLEIN, KNISS, PRICE, SCHARFF, SCHMID, SHEPHERD NOES: ABSENT: ABSTENTIONS: ~ Interim City Clerk APPROVED: 5 141016 jb 01312526 Rev.November17,2014 Exhibit A -Boundaries of Downtown RPP District Fig. 1 PRELIMINARY DOWNTOWN RPP DISTRICT >.:'i~: .. -.. {~'~( .-'('::~~< ::c 10' :r m 3 <1l ii! 0 :l ~ ·;;. 'T1 0 ~ :l n <1l DOWNTOWN COMMERCIAL DISTRICT SOFA m 3 OJ <1l -< ii! 0 "' :l ::c :l ... 10' VI VI :r ... ... VI ... Ruthven Ave Hawthorne Ave A Everett Ave -g; ~ tE 0" Lytton Ave ;;;! ., ., 0 University Ave Hamilton Ave Forest Ave ~ < !!l -< VI Homer Ave ... A -o· :l Ul Channing Ave ~ !!l Addison Ave n 0 :E "0 Kingsley Ave Boundary includes Melvi the 300 and 400 block of Lincoln, · but not the 500, 600 or 700 block. is appro~iT~~e •·. ··.· .. s:: a: Q. iD ::!> <1l 0:: ;;o Q. 0 ~ •• 0 .,, '~ ·!;. ,;·,.-·' Figure 1 illustrates the Downtown RPP District as currently proposed. Residents living within the bound- ary would need to purchase Parking Permits to park on the streets for more than two hours during the hours of the permit enforcement if the program is implemented. *Downtown Business District and the SOFA Business District (shown on the map) are not included in the RPP District Existing 2-hour parking will not be altered as part of the RPP District plan. 1 160211 jb 0131499 Rev. February 11, 2016 Resolution No. 9577 Resolution of the Council of the City of Palo Alto Amending Resolution 9473 to Implement Phase 2 of the Downtown Residential Preferential Parking District Pilot Program R E C I T A L S A. California Vehicle Code Section 22507 authorizes the establishment, by city council action, of permit parking programs in residential neighborhoods for residents and other categories of parkers. B. A comprised of Downtown residents and business interests has been meeting to discuss the implementation of Residential Preferential Parking Districts (RPP Districts). C. On December 15, 2015 the Council adopted Ordinance No. 5294, adding Chapter 10.50 to Title 10 (Vehicles and Traffic) of the Palo Municipal Code. This Chapter establishes the city­wide procedures for RPP Districts in the city. D. On December 1, 2014, the Council adopted Resolution No. 9473 implementing a Downtown Neighborhood preferential parking pilot program. The implementation anticipated a two phased pilot program. Permits issued for Phase 1 of this pilot program will expire on March 31, 2016. E. The Council desires to amend Resolution 9473 to update the process for implementing Phase 2 of the Downtown Neighborhood preferential parking program pilot. These modifications shall only apply to Phase 2 of the pilot. NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES, as follows: SECTION 1. Findings. The criteria set forth in Section 10.50.030 for annexing the additional areas described in 3(A) of this Resolution as part of the Downtown Residential Preferential Permit Zone have been met as follows: (1) That non­resident vehicles do, or may, substantially interfere with the use of on­street or alley parking spaces by neighborhood residents, in that based on observation there are few available parking spaces available midday, while the streets are relatively unoccupied at midnight thus demonstrating the parking intrusion is largely by non­residents. (2) That the interference by the non­resident vehicles occurs at regular and frequent intervals, either daily or weekly, in that the parking intrusion is contained to the daytime hours during the regular workweek. DocuSign Envelope ID: 6BDB2611-4168-4F6F-90B0-F43B17F6E1C2 2 160211 jb 0131499 Rev. February 11, 2016 (3) That the non­resident vehicles parked in the area of the proposed district create traffic congestion, noise, or other disruption (including shortage of parking spaces for residents and their visitors) that disrupts neighborhood life, in that based on information from residents and other city departments the vehicle congestion is interfering with regular activities. (4) Other alternative parking strategies are not feasible or practical in that the City has implemented a series of alternative parking strategies in the past and concurrently and there is still a shortage of parking available SECTION 2. Duration and Trial Period. The following provisions shall apply to Phase 2 of the Trial Period for the Downtown RPP District: A. Resident Permits: Resident permits will be distributed pursuant to the criteria listed under Section 5.C of this Resolution. Phase 2 permits shall be in effect for one year commencing on April 1, 2016. Resident permits will be valid anywhere within the boundaries of the Downtown RPP District. B. Employee Permits: The City shall also issue permits to Employees pursuant to the criteria listed under Section 5.C of this Resolution. The first round of Phase 2 permits shall be in effect from April 1, 2016 to March 31, 2017. Subsequent Phase 2 Employee permits shall be in effect for one year. C. Duration: The second phase shall commence on April 1, 2016 and last for at least 12 months. The City will make permits for Phase 2 available prior to the initiation of Phase 2. D. Permanent Regulations: The RPP District shall remain in force until the City Council takes action to extend, modify, or rescind. The City Council shall consider whether to make the RPP District and its parking program permanent, modify the District and/or their parking regulations, or terminate them no later than December 31, 2016. SECTION 3. Phase 2 Downtown RPP Boundaries. A. Annexed Zones. The areas shown on Exhibit A are hereby annexed into the Downtown Residential Parking Zone. B. Eligibility Areas. The areas shown on Exhibit A are eligible for administrative annexation as provided in Palo Alto Municipal Code Section 10.50.085. C. Employee Parking Zones. No person shall park in the same employee parking zone within the Downtown RPP for more than two continuous hours without a valid permit. Re­parking on the same day in the same zone by any person without a valid permit or otherwise exempt from Chapter 10.50 shall be prohibited. DocuSign Envelope ID: 6BDB2611-4168-4F6F-90B0-F43B17F6E1C2 3 160211 jb 0131499 Rev. February 11, 2016 SECTION 4. Hours and Days of Enforcement. In Phase 2, the parking regulations shall be in effect Monday through Friday from 8:00 AM to 5:00 PM, except holidays as defined in Palo Alto Municipal Code Section 2.08.100. During the regulated days and hours of enforcement, no person shall park in the same on­street parking space within the Downtown RPP for more than two continuous hours without a valid permit. In addition, no person shall park in the same employee parking zone within the Downtown RPP for more than two continuous hours without a valid permit. A vehicle lawfully displaying an Employee Parking Permit or a Resident Parking Permit shall be exempt from the two­hour limit. Other vehicles exempt from the parking regulations are contained in Chapter 10.50. Outside of these enforcement hours, any motor vehicle may park in the Downtown RPP, subject to other applicable parking regulations. SECTION 5. Residential and Employee Parking Permits. A. Duration. Phase 2 Residential Permits shall be available on an annual basis only. One­day visitor permits for residents will also be available during Phase 2. B. Purchase of Permits. Requirements and eligibility for purchase of permits for both residents and Employees shall be listed in the Administrative Regulations. C. Permit Sales Phase 2. 1. Resident Permits. a. Residential Permits. Each residential address may obtain up to four Resident permits at the costs listed in Section 6A. b. Daily Visitor Permits. Each residential address may purchase up to 50 Daily Visitor Parking Permits annually. tags, an on­line issuance system, or such other form as the city may decide. The permit shall clearly indicate the date through which it is valid. c. Annual Guest Permits: Each residential address may purchase up to two (2) annual guest permits, which are transferable within a household. The permit shall clearly indicate the date for which it is valid. 2. Annual Employee Permits. The City may issue Employee Parking Permits for use by employees working in the area as specified in Exhibit B. Employee Permits shall be subject to the following regulations: a. Commuting Only. Employee Parking Permits are for the exclusive use by employees working for businesses within DocuSign Envelope ID: 6BDB2611-4168-4F6F-90B0-F43B17F6E1C2 4 160211 jb 0131499 Rev. February 11, 2016 the proposed District boundaries while commuting to work. b. Employee Permit Cost. Employees may purchase permits at the costs listed in Section 6D. c. First Year Permit Cap. The City shall issue Employee permits on an iterative basis to ensure that the issuance of Employee Permits does not adversely affect parking conditions for residents and merchants in the District in accordance with Section 22507 (b) of the Vehicle Code. Notwithstanding the above, the City shall issue no more than 2,000 Employee Permits during the first year of Phase 2, which are to be allocated among the existing, annexed, and eligible Employee Parking Zones according to Council adopted administrative guidelines. Only streets participating in the RPP program may be allocated permits. d. Employee Permit Reduction Strategy. Following the first year of Phase 2, the City will begin decreasing annual employee permits by approximately 200 permits per year, based on parking occupancy analysis and mode split analysis. The reduction in permits will occur in the outermost zones of the Downtown RPP district initially, and affect inner zones in subsequent years. The Director shall be authorized to adopt administrative guidelines to implement this reduction in a goal of reducing the drive­alone rate by 30% by 2030 through the efforts of the Palo Alto Transportation Management Association and the further goal of minimizing parking impacts to residential neighborhoods. e. Permit Priority for lower wage earners. The Director shall reserve approximately half of the annual employee permits in each zone for purchase by employees who qualify for reduced price permits based on hourly or annual income. The other half will be sold on a first come, first serve basis to all employees. DocuSign Envelope ID: 6BDB2611-4168-4F6F-90B0-F43B17F6E1C2 5 160211 jb 0131499 Rev. February 11, 2016 f. Employee Parking Zones. Employees may only park in the zone authorized by the employee permit. The zones are described and depicted in Exhibit B and Exhibit C. g. Daily and Five­ Daily and five­ available to employees only, and will not be available for sale to employers. Employees will be limited to purchase up to four (4) daily parking permits per month, or roughly one per week. Alternatively, employees may purchase one (1) five­day scratcher per month, which allows them to park in the RPP district up to five (5) times in one calendar month. 1. Distribution of daily and scratcher permits. Daily and five­day employee scratchers will be zone­specific and will be sold randomly. No daily or five­day scratchers will be sold in Zones 9 and 10. Employees will not select a specific zone when purchasing a daily or five­ day permit, and will receive a zone specific daily or vive­day permit selected at random at the time of mailing. SECTION 6. Cost of Parking Permits. During Phase 2 the cost of Parking Permits shall be: A. Resident Permit: First permit $0/year; second permit $50/year; third permit $50/year; fourth permit $50/year. No more than four parking permits will be sold per residential address. B. Annual Guest Permit A residential address may purchase up to two Annual Guest Permits at $50/year. Additional permits may be approved by the Director upon a showing of good cause. C. Visitor Daily Permit ­­ $5/each D. Employee Permits 1. Standard Permit ­­$466/year 2. Reduced Rate for income qualifying employees ­­ $100/year 3. Reduced Rate for Addison Elementary School employees ­ $100/year DocuSign Envelope ID: 6BDB2611-4168-4F6F-90B0-F43B17F6E1C2 6 160211 jb 0131499 Rev. February 11, 2016 SECTION 7. CEQA. This resolution is exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of Title 14 of the California Code of Regulations since it can be seen with certainty that there is no possibility the adoption and implementation of this resolution may have a significant effect on the environment and Section 15301 in that this proposed ordinance will have a minor impact on existing facilities. SECTION 8. Supersede. To the extent any of the provisions of this resolution are inconsistent with the Phase 2 regulations set forth in Resolution 9473, this resolution shall control. SECTION 9. Effective Date. This resolution shall take effect immediately, except that Section 3(B) shall not go into effect until the corresponding implementing ordinance becomes effective. Enforcement shall commence, pursuant to Chapter 10.50 and the California Vehicle Code, when signage is posted. INTRODUCED AND PASSED: February 23, 2016 AYES: DUBOIS, FILSETH, KNISS, SCHMID, WOLBACH NOES: ABSENT: ABSTENTIONS: BERMAN, BURT, HOLMAN, SCHARFF ATTEST: City Clerk Mayor APPROVED AS TO FORM: APPROVED: Senior Assistant City Attorney City Manager Director of Planning and Community Environment DocuSign Envelope ID: 6BDB2611-4168-4F6F-90B0-F43B17F6E1C2 University Ave Lytton Ave Everett Ave Hawthorne Ave Poe St Forest Ave Forest Ave Channing Ave Addison Ave Lincoln Ave Kingsley Ave Melville AveMelville Ave Kellogg AveKellogg Ave Churchill Ave Coleridge Ave Downtown RPP District SOFA DOWNTOWN COMMERCIAL DISTRICT Downtown RPP District Proposed Eligibility Areas Proposed Annexed Streets (SGY7MKR)RZIPSTI-(&(&**&*&*)' Downtown RPP Parking Zones  5  6  7  8  9  10  4 1  2  3  (SGY7MKR)RZIPSTI-(&(&**&*&*)' Zone Boundaries Permit Allocation 1 Lytton Avenue between Alma Street and Webster Street (where RPP restrictions are in place) 300 blocks of: Alma Street, High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street Everett Avenue between Alma Street and Webster Street 75 2 200 blocks of: Alma Street, High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street Hawthorne Avenue between Alma Street and Webster Street 120 3 100 blocks of: Alma Street, High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street Palo Alto Avenue between Alma Street and Webster Street Poe Street Ruthven Avenue Tasso Street 225 4 Palo Alto Avenue between Webster Street and Guinda Street 600 block of Hawthorne Avenue 600 and 700 blocks of Everett Avenue, Lytton Avenue, University Avenue 100 500 blocks of Webster Street, Byron Street, Middlefield Road, Fulton Street 190 5 600and700blocksofHamiltonAvenue 200 700 blocks of Forest Avenue and Homer Avenue 700 blocks of Ramona Street, Bryant Street, Waverley Street, Cowper Street 600 700 blocks of Webster Street, Byron Street, Middlefield Road, Fulton Street 175 6 800 blocks of Ramona Street, Bryant Street, Waverley Street, Kipling Street, Cowper Street, Webster Street, Middlefield Road Channing Avenue between Ramona Street and Guinda Street 100 7 900 blocks of Ramona Street, Bryant Street, Waverley Street, Cowper Street, Webster Street, Middlefield Road Addison Avenue between High Street and Guinda Street 135 8 1000 and 1100 blocks of High Street, Emerson Street, Ramona Street, Bryant Street, Waverley Street, Cowper Street, Webster Street, Byron Street, Middlefield Road, Fulton Street Lincoln Avenue and Kingsley Avenue between Alma Street/Embarcadero Road and Guinda Street Embarcadero Road from Alma Street to Kingsley Avenue 365 9 1200 block of Bryant Street 1200 1300 blocks of Waverley Street 1200 1400 blocks of Cowper Street, Webster Street, Byron Street 1300 1400 blocks of Tasso Street 1200 1500 blocks of Middlefield Road 1200 1300 blocks of Fulton Street Melville Avenue between Embarcadero Road and Guinda Street Kellogg Avenue between Cowper Street and Middlefield Road Embarcadero Road between Kingsley Avenue and Middlefield Road 25 (245)* 10 Guinda Street between Palo Alto Avenue to Melville Avenue Palo Alto Avenue between Guinda Street and Hale Street 800 blocks of Lytton Avenue and Homer Avenue 800and900blocksofUniversityAvenue,HamiltonAvenue 800 1100 blocks of Forest Avenue Boyce Avenue between Guinda Street and Hale Street 1000 1100 blocks of Fife Avenue 800 900 blocks of Channing Avenue and Addison Avenue 800 1000 blocks of Lincoln Avenue 800 block of Melville Avenue 55 (370)* Total Permits 2000 *A portion of permits in this zone will be held in reserve and released as additional streets opt into the Downtown RPP district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esidential Preferential Parking (RPP) Administrative Guidelines Updated October 31, 2016 Version 2.0  City of Palo Alto  Residential Preferential Parking (RPP) Administrative Guidelines  Updated October 31, 2016   PURPOSE   The City of Palo Alto is committed to preserving the quality of life of its residential neighborhoods. On  December 2, 2014, City Council adopted a City‐wide RPP Ordinance which allows any neighborhood  within the City to petition to become a Residential Preferential Parking (RPP) District, where  neighborhood parking is regulated for non‐permit holders. Three documents govern the creation of an  RPP District in Palo Alto:  1.Chapter 10.50 of the Palo Alto Municipal Code, which outlines the criteria which must be met and the process which must be taken for a residential neighborhood to become an RPP District; 2.A neighborhood‐specific resolution, which must be adopted by the City Council and outlines the specific characteristics of the RPP program; 3.The document within, “RPP Administrative Guidelines”, which provides additional detail on RPP program implementation. The Guidelines may be modified at a City staff level, and provide detail on policies and procedures related to RPP Districts. All three documents work in concert to govern the development and operation of the City’s RPP  Districts, and all should be reviewed prior to an RPP District’s initiation.  PARKING PERMIT POLICIES  Resident Permit Eligibility  The requirements to obtain a parking permit as a resident are:   A completed application form (online) in the residents’ name and address. A current DMV vehicle registration for each vehicle the applicant is requesting a parking permit. Proof of residency/ownership in the resident’s/owner’s name reflecting the permit address in the permit area. Acceptable proof of residency shall be a driver’s license, the vehicle registration, a utility bill, car insurance policy, lease agreement or a preprinted personal check with the resident’s name and address. 1.The residential permit can be purchased on an annual duration online at www.cityofpaloalto.org/parking.  Parking permits are issued for uses within the RPP District area. Standard long‐term residential parking permits are not transferable between vehicles. Annual permit cost may be pro‐rated for purchase midway through the annual timeframe. 2.Guests of Residents: A resident is also eligible to purchase up to two (2) transferable hang‐tag permits for guests, which are annual permits that may be used for a nanny, baby‐sitter, caregiver, household employee, or other regular visitor to the household. Annual hangtag permits must be purchased by the resident of the household and may be transferred between vehicles. Only two (2) annual hangtag permits are allowed per household. 3.Visitors of Residents: Any resident within the RPP District area is eligible to purchase daily permits annually for events which may take place at a household. Daily permits must be purchased by a resident of the household and are only valid for a single day use. Each household can receive a maximum of 50 daily permits each calendar year.   Version 2.0    Employee Permit Eligibility (applicable to downtown RPP and others as designated by resolution):  Annual, quarterly, five‐day and daily Employee permits are available.    The requirements to obtain a parking permit as an employee are:    A completed application form (online) with the employees’ name and address.    A current DMV vehicle registration for each vehicle for which the applicant is requesting a  parking permit.    Proof of employment at a business in the employee’s name, which includes an address within  the RPP District. Acceptable proof of employment shall be a W‐2 wage statement or letter from  employer.     All employees who work at a registered, code‐compliant business within an RPP District are eligible to  purchase permits, unless otherwise restricted by the City for parking capacity reasons. Parking permit  stickers or hangtags are issued to employees within the RPP District.     Where applicable, the City may decide to issue permits which are transferrable between employees of  the same business. These permits will be in the form of a hangtag, which must be placed on the  rearview mirror of the employee vehicle. Possession of an employee permit which is assigned to a  specific block or zone does not entitle the employer to renew a permit in the same block or zone.      Annual permit cost may be pro‐rated for purchase midway through the annual timeframe.    If an employee with an annual permit leaves the company, the employer may transfer the remaining  balance of the unused permit to another employee by returning the original permit and transferring the  balance of time to a new one. The new permit will expire at the same date of the original permit  expiration. The City may, at its discretion, issue Employee Guest permits to eligible employers within an  RPP district, for use by their guests or visitors.    The City may immediately revoke all permits issued to businesses and employees at businesses that are  unregistered and/or operating in violation of the Palo Alto Municipal Code and/or state and federal  regulations.      Reduced Price Permits: Certain employees may be eligible for a reduced‐price permit if they meet either  of the income requirements listed below. Proof of income must be provided at the time of purchase,  and information may be audited at any time by the City.    INCOME VERIFICATION OPTIONS    a. Option A: Employees who earn an annual income which is exactly or less than $50,000.  The City will evaluate this limit annually and adjust for inflation.  b. Option B: Employees who make a pre‐tax hourly wage which is exactly or less than 2x  the governing city or state minimum wage (whichever is greater) are eligible for a  reduced price permit.     Submittal requirements provided for proof of income include: tax return and two consecutive wage  statements.    Version 2.0    Other Policies    1. Any attempt to alter the permit shall immediately render the permit invalid.   2. Permit holder assumes full responsibility of any loaning of their vehicle.   3. Possession of an RPP permit does not guarantee a parking spot. It is understood that a greater  amount of parking permits may be issued than there are available on‐street parking spaces. This  may create an environment of natural competition for on‐street parking between neighborhood  residents and other permit holders.  4. Permit validity: RPP permits are not valid in any City parking garage or lot, and City‐issued  garage or lot permits are not valid in RPP Districts. RPP permits are only valid for the RPP District  for which they are issued.  5. The City of Palo Alto is not responsible for the loss of or damage to any vehicle or its contents.  6. Abandoned Vehicles: Parking a vehicle unmoved longer than 72 consecutive hours on a City  street is in violation of PAMC 10.60.07(d). Parking permits shall not exempt vehicles from this  requirement.   7. For new vehicles or license plates, the permit holder must surrender the current valid permit to  the Revenue Collections office. If the permit does not come off intact, pieces will be accepted.  8. Temporary Permits: Temporary permits can be printed online once a valid permit holder has  submitted payment for a permit. The temporary permit must be displayed on the front  dashboard.  9. Replacement Fees: There is a permit replacement fee of $10.00 for regular permits reissued for  any reason, prior to the normal renewal period.  10. Refunds: Refunds are issued on annual permits only, and a refund will only be given through the  third quarter and prorated at the quarterly rate. The permit holder must remove the current  permit and return it to the Revenue Collections office.  11. Permit Placement: The permit must be affixed on the outside of the rear windshield driver’s  side lower left corner, or left side of the bumper. Do not place your permit in any other location.  Placing your permit in another location or behind tinted windows may invalidate your parking  exemption.  12. Vehicle Eligibility: Parking permits may be issued only for passenger non‐commercial and  passenger commercial (i.e., SUV’s, small pick‐up trucks, etc.) vehicles registered to residents  residing within the residential parking permit area. Vehicles defined as oversized by the City’s  Oversized Vehicle Parking ordinance, such as commercial trucks, boat trailers, RV’s (camping  trailers, motor homes, etc.), trailers and work‐type commercial vehicles, including taxis and  limousines, are not eligible for residential parking permit program permits.     Eligible Exceptions for a Parking Permit Sticker   Company Cars – A residential parking permit sticker may be issued for residents who have company cars  as their primary transportation vehicle. To obtain a permit, the person must be a legal resident within  the residential permit parking area who has a motor vehicle for his/her exclusive use and under his/her  control where said motor vehicle is registered to his/her employer and he/she presents a valid  employee identification card or other proof of employment that is acceptable to the City.   Leased Cars – A residential parking permit sticker may be issued for a resident who has a leased car. To  obtain a permit, the person must be a legal resident within the residential permit parking area who has  a motor vehicle registered to a vehicle‐leasing company and/or leased to the resident’s employer,  providing said vehicle is for the resident’s exclusive use and provides proof or the lease agreement  which is acceptable to the City.    Version 2.0    The requirements to obtain a parking permit sticker for a company or leased car are:    A completed application form in the residents’ name and address.    A current DMV vehicle registration for each vehicle the applicant is requesting a parking permit.    Proof of residency/ownership in the resident’s/owner’s name reflecting the permit address in  the permit area. Acceptable proof of residency shall be a driver’s license, the vehicle  registration, a utility bill, car insurance policy, lease agreement or a preprinted personal check  with the resident’s name and address.     Caregivers – Caregivers may be issued a parking permit sticker for a permit parking area provided the  address of the resident receiving the care is within said parking area.     The requirements to obtain a parking permit sticker for a caregiver are:    A completed application form in both the residents’ and caregivers name and address.    A current DMV vehicle registration for each vehicle for which the applicant is requesting a  parking permit.    Proof of residency/ownership in the resident’s/owner’s name reflecting the permit address in  the permit area. Acceptable proof of residency shall be a utility bill, car insurance policy, lease  agreement or a preprinted personal check with the resident’s name and address.    A letter from the resident identifying the permit applicant as the caregiver.     Fine Amount   The fine for violation of the Residential Parking Permit Program regulations is set within the City’s  Comprehensive Fee Schedule.    Misuse of Parking Permits   Any person selling, fraudulently using, reproducing or mutilating a parking permit issued in conjunction  with the residential parking permit program shall be guilty of an infraction and shall be subject to a  citation for each offense and the forfeiture of all permits in conflict, or such other fine or penalty as the  City Council may set by ordinance.    Neighborhood Support for RPP District Implementation  As outlined in the ordinance, the City may choose to conduct a survey of a proposed neighborhood to  determine whether support exists for RPP District implementation. The survey may be conducted either  prior to the recommendation of RPP District implementation to Council, or during a trial period of the  program, but before final implementation. The survey shall be conducted electronically or via U.S. mail.  Each household using a separate U.S.P.S. address will be allowed one (1) vote either in favor or against  the implementation of an RPP program. The current threshold for RPP District implementation is a vote  of 70% of the returned surveys in favor of implementation.    Eligibility Areas  As outlined in the ordinance, the City Council may adopt a resolution identifying particular areas as RPP  Eligibility Areas. Following the adoption of the RPP Eligibility Areas, residents within these areas may  petition the Director of Planning and Community Environment to be annexed into an existing RPP  District. The petition must include the following:  • A completed application form (online) including the residents’ names and addresses.     Version 2.0  • A current DMV vehicle registration of each vehicle for which any RPP District parking permit had  previously been approved in the applicants’ names.    Upon the receipt of a petition that includes the above information for a simple majority, or 50%+1 of the  identified segment’s neighbors, the City may choose to conduct a survey of the proposed neighborhood  to determine whether additional support exists for annexation into the existing RPP District. The survey  shall be conducted electronically or via U.S. mail. Each household using a separate U.S.P.S. address will  be allowed one (1) vote either in favor or against annexation into the existing RPP District. The current  threshold for RPP District implementation is a vote of 70% of the returned surveys in favor of  implementation.    Approval of annexation for RPP Eligibility Areas will take effect without Council adoption.     Opt Out Procedures  Current residents of an existing RPP District that no longer wish to participate in the RPP program may  petition to opt out of their RPP District between January 1st and March 31st of the year. The petition  must be submitted to and will be approved at the discretion of the Director of Planning and Community  Environment.     Residents of the same existing RPP District shall initiate a request to opt out of their RPP District by  neighborhood petition. The petition will be available as a standard form online, and must include the  following:  • A completed application form (online) including the residents’ names and addresses.   • A current DMV vehicle registration of each vehicle for which any RPP District parking permit had  previously been approved in the applicants’ names.    Upon the receipt of a petition that includes the above information for a simple majority, or 50%+1 of the  identified segment’s neighbors, the City may choose to conduct a survey of the proposed neighborhood  to determine whether additional support exists for opting out of the RPP District. The survey shall be  conducted electronically or via U.S. mail. Each household using a separate U.S.P.S. address will be  allowed one (1) vote either in favor or against opting out of the existing RPP District. The current  threshold for RPP District implementation is a vote of 70% of the returned surveys in favor of opting out.    Petitions that do not include a simple majority of the identified segment’s neighbors will not be  considered for opt out.    Effective upon approval of their opt‐out petition, residents will no longer be entitled to RPP District  resident parking permits.     Approval of an opt‐out petition may not be construed to waive compliance of the RPP District parking  restrictions that remain in place.    Upon the approval of an application, the City shall provide written notice electronically or via U.S. mail  to all residents impacted by the opt‐out, including the effective date of the opt‐out, the expiration date  of any remaining valid parking permits, and contact information for further inquiries or concerns.      Occupancy Study Requirements    Version 2.0  During the course of RPP District initiation, the City will conduct parking occupancy studies for the  neighborhood in question. Studies will be conducted at various hours and be compared to an inventory  calculation to show percentages of occupancy by block face. Weekday studies will not be conducted on  Mondays, Fridays or holidays.            Version 2.0  Neighborhood Petition Form  City of Palo Alto Residential Parking Permit Program Request Form     The purpose of this form is to enable neighborhoods to request to be annexed to an existing Residential  Preferential Parking area or the initiation of a Residential Preferential Parking Program in accordance  with the City of Palo Alto’s adopted Residential Parking Permit Program Policy and Procedures. This form  must be filled out in its entirety and submitted with any request to:     City of Palo Alto   Transportation Division  250 Hamilton Avenue, Floor 5  Palo Alto, CA 94301    Feel free to attach additional sheets containing pictures, occupancy maps, additional testimony or  additional text if the space provided is insufficient.     1. Requesting Individual’s Contact Information     Name: ____________________________________________   Address: ____________________________________________   Phone Number: _______________________________________   Email: _______________________________________       2. Please describe the nature of the overflow parking problem in your neighborhood.  1. What streets in your neighborhood do you feel are affected by overflow parking?   2. How often does the overflow occur?  3. Does the impact vary from month to month, or season to season?                          3. Can you identify a parking impact generator that is the cause of overflow parking in the  neighborhood? Are there any facilities (churches, schools, shopping centers, etc.) near this location  that generate a high concentration of vehicle and pedestrian traffic? Please list your understanding of  the causes:          Version 2.0      4. Please describe how a Residential Parking Permit Program will be able to eliminate or reduce  overflow parking impacting the neighborhood. Please include your suggestion for the boundary of the  program:                           5. Is there neighborhood support for submittal of this Residential Parking Permit Program application?  Have you contacted your HOA/Neighborhood Association?                    Version 2.0  Neighborhood Petition Form (Street by Street Basis)    THE UNDERSIGNED BELOW AGREE TO THE FOLLOWING:     1. All persons signing this petition do hereby certify that they reside on the following street, which is  being considered for residential preferential parking: ______________________________________     2. All persons signing this petition do hereby agree that the following contact person(s) represent the  neighborhood as facilitator(s) between the neighborhood residents and City of Palo Alto staff in matters  pertaining to this request:     Name: _________________________ Address: ___________________ Phone #: __________________   Name: _________________________ Address: ___________________ Phone #: __________________   Name: _________________________ Address: ___________________ Phone #: __________________     ONLY ONE SIGNATURE PER HOUSEHOLD    Name (Please Print)  Address  Phone Number  Signature   1.________________ _________________________ __________________ ___________________   2.________________ _________________________ __________________ ___________________   3.________________ _________________________ __________________ ___________________   4.________________ _________________________ __________________ ___________________   5.________________ _________________________ __________________ ___________________   6.________________ _________________________ __________________ ___________________   7.________________ _________________________ __________________ ___________________   8.________________ _________________________ __________________ ___________________   9.________________ _________________________ __________________ ___________________   10._______________ _________________________ __________________ ___________________   11._______________ _________________________ __________________ ___________________   12._______________ _________________________ __________________ ___________________   13._______________ _________________________ __________________ ___________________   14._______________ _________________________ __________________ ___________________   15._______________ _________________________ __________________ ___________________   16._______________ _________________________ __________________ ___________________   17._______________ _________________________ __________________ ___________________   18._______________ _________________________ __________________ ___________________   19._______________ _________________________ __________________ ___________________   20._______________ _________________________ __________________ ___________________  21._______________ _________________________ __________________ ___________________   22._______________ _________________________ __________________ ___________________   23._______________ _________________________ __________________ ___________________   24._______________ _________________________ __________________ ___________________  25._______________ _________________________ __________________ ___________________   26._______________ _________________________ __________________ ___________________   27._______________ _________________________ __________________ ___________________   28._______________ _________________________ __________________ ___________________  29._______________ _________________________ __________________ ___________________   30._______________ _________________________ __________________ ___________________     Version 2.0  31._______________ _________________________ __________________ ___________________   32._______________ _________________________ __________________ ___________________  33._______________ _________________________ __________________ ___________________  34._______________ _________________________ __________________ ___________________  35._______________ _________________________ __________________ ___________________  36._______________ _________________________ __________________ ___________________  37._______________ _________________________ __________________ ___________________  38._______________ _________________________ __________________ ___________________  39._______________ _________________________ __________________ ___________________  40._______________ _________________________ __________________ ___________________      Univ e r s i t y A v e Lyt t o n A v e Eve r e t t A v e Haw t h o r n e A v e Ruth v e n A v e Poe S t Pa l o A l t o A v e Eve r e t t C t Hi g h S t Al m a S t El C a m i n o R e a l E m e r s o n S t Br y a n t S t W a v e r l y S t Ki p l i n g S t Co w p e r S t W e b s t e r S t By r o n S t Mi d d l e f i e l d R d Fu l t o n S t G u i n d a S t Bo y c e A v e Forest Ave Hamilton Ave Fife Ave Channing Ave Parkinson Ave Guinda St Greenwood Se n e c a S t Ch a u c e r S t Ha l e S t Ra m o n a S t Hi g h S t E m e r s o n S t Br y a n t S t Sc o t t W a v e r l y S t Kip l i n g Co w p e r S t W e b s t e r S t By r o n S t By r o n S t Mi d d l e f i e l d R d Fu l t o n S t Ra m o n a S t Fl o r e n c e Gil m a n Ta s s o Ham i l t o n A v e For e s t A v e Hom e r A v e Cha n n i n g A v e Add i s o n A v e Linc o l n A v e King s l e y A v e Melv i l l e A v e Kell o g g A v e MENLO PARK STANFORD Downtown Residential Preferential Parking Program Li n c o l n A v e Ad d i s o n A v e Embarca d e r o R o a d 3 4 5 6 7 8 9 10 2 1 Visit http://paloalto.parkingguide.com/parking-program/downtown-residential-preferential-parking-program/ for additional information or contact 650-329-2520. PaloAlto A v e Downtown RPP District Approved Eligibility Area Non-RPP Parking in RPP District Downtown Non-RPP Downtown RPP Program Area Approved Eligibility Area Non-RPP Parking in RPP District (check signs) RPP Employee Parking Zones Permit Type Full-price Hangtag Reduced Hangtag Full-price Sticker Reduced Sticker Free Sticker Total Issued Current Maximum Authorized Maximum Resident Annual 1,221 2,681 952 4,854 N/A N/A Resident One-day Scratcher 825 825 N/A N/A Total Resident Permits 2,046 2,681 952 5,679 Employee One-day Scratcher 163 163 N/A N/A Employee Five-day Scratcher 1 1 N/A N/A Total Employee Scratcher 164 164 Employee Annual Zone 1 23 14 38 75 75 75 Employee Annual Zone 2 40 16 61 117 120 120 Employee Annual Zone 3 143 25 114 282 225 225 Employee Annual Zone 4 49 37 96 182 190 190 Employee Annual Zone 5 46 41 90 177 175 175 Employee Annual Zone 6 27 24 50 101 100 100 Employee Annual Zone 7 33 35 67 135 135 135 Employee Annual Zone 8 104 40 34 92 270 365 365 Employee Annual Zone 9 1 0 0 1 25 245 Employee Annual Zone 10 18 8 9 35 105 370 Total Employee Annual 484 234 617 1,335 1,515 2,000 Notes 1. A total of 40 Employee Annual Zone 8 Reduced Hangtags were purchsed by PAUSD for Addison Elementary School staff. 2. A handful of individuals purchased the bulk of the hangtags in Employee Parking Zones 3 and 8. Additional research is warranted. A cap on hangtags may be considered. 3. Employee Parking Zones 3, 5 and 6 have been slightly oversold. Contractor states that this may be due to errors in issuing replacement permits. This needs to be addressed. Downtown Residential Preferential Parking Permit Program Permits Sold (March 1 to December 22, 2016) 27% 63 % 0% 0%0% 33 % 63 % 10 0 % 38 % 20 % 25 %0% 33 % 63 % 0% - 49% Parking Occupancy 80%54%31%20%69%82%81%33%75%30%50% - 84% Parking OccupancyHigh St High 85% - 100%+ Parking Occupancy75%70%25%38%100%125% 89 % 86 % 14%Legend 38 % 38 % 75 % 43 % 38 % 30 % 63 %0% 70 % 25 % 25 % 40 % 63 % 67 % 10 0 % 0% 10 0 % 38 % 63 % 60 % 44 % 10 % Ad d i s o n 73% 40 % 69%54%23%57%69%50%71%33%19%33%23% Lin c o l n 40% 56 % 50 % 11 % 43 % 38 %0% 0% Ramona St Ramona25%56%25%83%35%93%73%58% 0%37% Kin g s l e y 0% 28 % 33 % 60 % 38 %0%83 % 86 % 45 % 75 % 56 % 43 % 20 % 60 % 17%77%21%69%60%57%33% 38%0%44%7%0% Bryant St Bryant64% Ha w t h o r n e A v 43% Ev e r e t t A v 40% Ly t t o n A v 45% Un i v e r s i t y A v 63% Ha m i l t o n A v 25% Fo r e s t A v 80% Ho m e r A v 53% Ch a n n i n g A v 0% 25 %Pa l o A l t o A v 0% Po e S t 31 % 13 % 11 % 0%64% 75% 56 %9%33 % 78 % 56 % 20%85%100%38%55%80%85% 59 % 77 % 63 % 33 % 39 % 24 % 35 % #D I V / 0 ! 67 % 6%67% Waverley St Waverley Waverley0% 8% 59%100%44%36%67%35%10%120%20%58%75%12%21%17% 29 % 42 % 72 % 0% 56%85%123%40%138%69%62%64%13%19% 90 % 33 % 10 0 % 89 % 75 % 39 % 44 % 29 %0% 50% 4% Cowper St Cowper Cowper Cowper Ru t h v e n A v 14%63%64%57%33%45%54%76%64%79%24%0%0%0% 25 % 60 % 0% 17 %0% 13 % 33 % 73 %0%0% 22 % 0%0%0%0% 0% ## # # # 22 % 0% Ha m i l t o n A v 50%50% 18% Tasso St Tasso 0%23%200%0%17% 0%30%75%77%50%75%59%59%40%0%0%0% 21% 39 % 41 % 12 0 % 13 6 % 79 % 62 % 56 % 83 % 76 % 18 % 0%44%77% 50% 25%69%22%75% 57 %0%11 %0% 17 % 61 % 44 % 56 % 12 % Un i v e r s i t y A v 0%40%69%0% 0%0% Me l v i l l e 0%86% 21% Webster St Webster Webster Webster 29%53%53%80%27%71%43%88%75% 50% 15 7 % 0%11 % 14 %0%0%11 %0%0%0%0%0%0%0% 44 % 23%36%40%0%0%0%0%52% Ke l l o g g 38% 15 % 35 % 33 %0%19 % 47 % 40 % 0%0%0%0%0%38 % 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 64% Ad d i s o n 8% Lin c o l n 0% Kin g s l e y 0% Pa l o A l t o A v Byron St Byron 64 % 6%40%15%0%0% 50 %0%0%0% 0%60%40%0% 0% Pa l o A l t o A 10 0 % 80 % 25%0% 8%0% Fulton 13%70%58%91%0% Fulton St 25% 0% 0% 33 % 33 % 33 % 0%14 % 0%57 % 22 % 38 % 50 % 87 % 12 0 % 61 % 54 % 36 % 29 % 0%0%0% 15 0 % 25 % 0% City of Palo Alto Downtown Parking Survey 6/30/2016 8 AM - 10 AM Total Occupancy 0%114%17%62%33%8%36%25%30%13%0% Palo Alto Av Guinda Guinda 4% Ev e r e t t A v 0% Ly t t o n A v e 10% 38%46% Un i v e r s i t y A v 47% Ha m i l t o n A v 46%36%0%32% 44%63%23%0% 25 %4% 14 3 % 33 % 0% 12 % 0%33% Ha w t h o r n e A v 58% Ev e r e t t A v 47% Ly t t o n A v 50 % 14 % 29 % 29 % 11 % 11 % 0% 38 % 43 % 0%0% 54% 0%0% 33%58%30% Kipling 21% 45 % 57 % 33 % 0% 47% Kipling St 24%45%46% 11 % 33 % 33 % 33 %0% 30 % 25 % 25%73% 68 % 53 % 67 % 33 % 12 9 % 50 % 29 % 83 % 14 %0% 18 6 % 89 % 53 % 42 % 70 % 32 % 25 % 71 % 14 % 84 % 50 % 17 % 25 % 10 0 % 93 % 62 % 100%93% 36 % 89 % 25 % 78 % 4% 29 % 91% 0% 75 % 50 % 50 % 10 0 % 0% Emerson St Emerson 86 % 12 9 % 10 0 % 60 % 63 % 86 % 11 3 % 45 % 75 % 85%33%47% 80%30% 48 % Pa l o A l t o A v 69%75%46%33%100%93%65% 63 % 0% 31%7%0%29%75%100%64%0%0% 0%0% 33 % 63 % 10 0 % 38 % 20 % 25 %0% 33 % 38 % 38 % 0% 75 % 50 % 50 % 10 0 % 0% Alma St Alma4% 48 % Pa l o A l t o A v 18% 10 0 % 33% 0%0% 67 % 63 % 10 0 % 88 % 40 % 88 % 10 0 % 67 % 50 % 0% - 49% Parking Occupancy 80%77%100%80%100%94%81%133%100%0%50% - 84% Parking OccupancyHigh St High 85% - 100%+ Parking Occupancy92%100%63%92%100%100% 10 0 % 10 0 % 14%Legend 25 % 62 % 75 % 11 4 % 63 % 10 0 % 10 0 % 40 % 11 0 % 63 % 25 % 40 % 50 % 83 % 10 0 % 17 % 75 % 50 % 25 % 12 0 % 44 % 40 % Ad d i s o n 67% 40 % 106%92%92%57%106%93%100%92%31%67%0% Lin c o l n 40% 67 % 67 % 78 % 10 0 % 10 0 % 10 0 % 38% Ramona St Ramona42%75%75%100%82%93%93%100% 0%26% Kin g s l e y 25% 22 % 33 % 80 % 38 % 80 % 83 % 86 % 82 % 50 % 56 % 43 % 40 % 40 % 28%100%86%106%60%100%50% 75%0%44%0%25% Bryant St Bryant18% Ha w t h o r n e A v 50% Ev e r e t t A v 100% Ly t t o n A v 45% Un i v e r s i t y A v 63% Ha m i l t o n A v 75% Fo r e s t A v 87% Ho m e r A v 80% Ch a n n i n g A v 0% 25 %Pa l o A l t o A v 0% Po e S t 31 %0% 79 % 100%82% 75% 33 % 10 0 % 56 % 89 % 67 % 20%0%75%75%100%60%100% 76 % 10 0 % 63 % 52 % 56 % 33 % 25 % #D I V / 0 ! 0% 18%0% Waverley St Waverley Waverley0% 8% 59%125%89%100%100%106%30%110%47%67%69%35%5%17% 53 % 32 % 50 % 0% 78%100%131%60%162%69%54%50%47%31% 14 0 % 87 % 50 % 33 % 25 % 33 % 94 % 12 %0% 50% 4% Cowper St Cowper Cowper Cowper Ru t h v e n A v 21%100%36%71%67%91%92%29%57%43%35%0%0%0% 19 % 60 % 29 % 17 %0% 13 % 83 % 10 0 % 0%0% 22 % 0%0%0%0% 0% ## # # # 22 % 85% Ha m i l t o n A v 83%50% 18% Tasso St Tasso 0%0%0%0%17% 14%30%75%100%60%83%82%47%47%0%0%0% 21% 83 % 41 % 90 % 82 % 71 % 92 % 69 % 83 % 59 % 12 % 107%69%62% 6% 69%69%22%75% 0%14 % 11 % 25 % 22 % 67 % 67 % 78 % 82 % Un i v e r s i t y A v 0%30%77%0% 0%0% Me l v i l l e 0%100% 21% Webster St Webster Webster Webster 57%60%93%80%27%100%29%88%75% 50% 29 % 11 % 11 %0%57 % 75 % 78 %0%0%0%0%0%0%0% 44 % 31%57%67%100%0%0%0%52% Ke l l o g g 38% 75 % 47 % 47 % 67 % 10 6 % 21 % 40 % 0%0%0%0%0%38 % 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 43% Ad d i s o n 8% Lin c o l n 0% Kin g s l e y 0% Pa l o A l t o A v Byron St Byron 18 % 6%40%69%92%0% 50 %0%0%0% 0%50%27%0% 5% Pa l o A l t o A 10 0 % 20 % 33%0% 33%0% Fulton 25%60%50%100%0% Fulton St 58% 0% 0% 17 % 50 % 17 % 0%57 % 0%43 % 11 % 25 % 39 % 27 % 80 % 56 % 77 % 57 % 29 % 0%0%0% 12 5 % 0% 0% City of Palo Alto Downtown Parking Survey 6/30/2016 12 PM - 2 PM Total Occupancy 0%57%33%8%33%0%14%8%20%13%0% Palo Alto Av Guinda Guinda 8% Ev e r e t t A v 0% Ly t t o n A v e 70% 54%54% Un i v e r s i t y A v 53% Ha m i l t o n A v 46%36%18%26% 33%63%23%50% 63 % 22 % 43 % 22 % 0% 0% 20%44% Ha w t h o r n e A v 67% Ev e r e t t A v 80% Ly t t o n A v 67 %0%29 % 43 % 11 % 56 % 10 0 % 10 0 % 57 % 0%0% 38% 0%0% 92%92%50% Kipling 29% 10 0 % 57 % 50 % 0% 60% Kipling St 71%100%100% 56 % 67 % 50 % 67 % 15 0 % 52 % 25 % 38%91% 42 % 60 % 10 0 % 56 % 12 9 % 25 % 57 % 83 % 71 % 86 % 10 0 % 95 % 89 % 63 % 70 % 47 % 10 0 % 43 % 86 % 84 % 50 % 0%75 % 10 0 % 93 % 90 % 117%100% 73 % 78 % 63 % 56 % 8% 53 % 82% 0% 75 % 50 % 10 0 % 75 % 86 % Emerson St Emerson 10 0 % 12 9 % 10 0 % 10 0 % 75 % 10 0 % 11 3 % 82 % 50 % 77%33%47% 80%90% 64 % Pa l o A l t o A v 81%75%100%78%100%100%88% 10 0 % 33% 69%57%89%71%81%100%64%62%25% 0%0% 67 % 63 % 10 0 % 88 % 40 % 88 % 10 0 % 67 % 25 % 62 % 0% 75 % 50 % 10 0 % 75 % 86 % Alma St Alma13% 64 % Pa l o A l t o A v 36% 38 % 0% 10 0 % 0% 10 0 % 75 % 10 0 % 10 0 % 40 % 50 % 38 % 56 % 38 % 0% - 49% Parking Occupancy 80%54%115%110%100%94%106%56%100%40%50% - 84% Parking OccupancyHigh St High 85% - 100%+ Parking Occupancy58%90%63%100%100%108% 89 % 12 9 % 0%Legend 44 % 38 % 38 % 10 0 % 38 % 10 0 % 10 0 % 50 % 11 0 % 50 % 50 % 10 0 % 75 % 10 0 % 10 0 % 50 % 10 0 % 63 % 25 % 30 % 67 % 40 % Ad d i s o n 67% 10 0 % 69%77%108%107%106%71%107%108%13%17%8% Lin c o l n 27% 67 % 50 % 67 % 10 0 % 10 0 % 10 0 % 0% Ramona St Ramona58%88%69%142%94%107%87%25% 0%16% Kin g s l e y 50% 39 % 17 % 80 % 25 % 90 % 10 0 % 10 0 % 10 9 % 10 0 % 78 % 43 % 20 % 70 % 39%115%93%106%320%43%22% 81%0%44%13%33% Bryant St Bryant50% Ha w t h o r n e A v 29% Ev e r e t t A v 50% Ly t t o n A v 73% Un i v e r s i t y A v 88% Ha m i l t o n A v 25% Fo r e s t A v 80% Ho m e r A v 67% Ch a n n i n g A v 0% 19 %Pa l o A l t o A v 0% Po e S t 46 % 33 % 26 % 71%64% 75% 78 % 10 0 % 78 % 10 0 % 44 % 20%65%50%50%73%120%100% 65 % 69 % 38 % 29 %6%10 % 15 % #D I V / 0 ! 0% 6%83% Waverley St Waverley Waverley0% 8% 35%125%67%73%100%112%10%100%13%42%44%29%32%0% 35 % 32 % 50 % 0% 72%69%123%87%154%62%62%71%20%6% 15 0 % 60 % 50 % 11 1 % 25 % 39 % 67 % 12 %0% 50% 0% Cowper St Cowper Cowper Cowper Ru t h v e n A v 29%50%45%64%100%73%85%41%7%64%29%0%0%0% 13 % 27 % 14 % 17 %0% 38 %0% 73 %0%0% 22 % 0%0%0%0% 0% ## # # # 22 % 54% Ha m i l t o n A v 67%50% 18% Tasso St Tasso 0%15%0%0%17% 21%10%58%92%50%50%47%53%53%0%0%0% 21% 50 % 35 % 11 0 % 10 0 % 71 % 46 % 63 % 58 % 82 % 6% 0%31%69% 56% 19%69%22%75% 0%0%0%0% 6%44 % 17 % 56 % 29 % Un i v e r s i t y A v 0%40%46%0% 0%0% Me l v i l l e 0%71% 21% Webster St Webster Webster Webster 57%27%47%50%27%7%36%38%75% 50% 0%0%0%14 % 43 %0%33 %0%0%0%0%0%0%0% 44 % 31%43%47%69%0%0%0%52% Ke l l o g g 38% 30 % 53 % 27 % 53 % 38 % 26 % 40 % 0%0%0%0%0%38 % 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 50% Ad d i s o n 15% Lin c o l n 0% Kin g s l e y 0% Pa l o A l t o A v Byron St Byron 27 % 24%27%38%23%0% 50 %0%0%0% 0%70%27%0% 5% Pa l o A l t o A 10 0 % 0% 17%0% 17%0% Fulton 8%70%58%36%0% Fulton St 67% 0% 0% 33 % 50 % 33 % 17 % 14 % 0%43 % 78 % 38 % 33 % 80 %0%39 % 54 % 50 % 29 % 0%0%0% 10 0 % 63 % 0% City of Palo Alto Downtown Parking Survey 6/30/2016 5 PM - 7 PM Total Occupancy 0%114%17%15%33%17%50%17%40%13%0% Palo Alto Av Guinda Guinda 12% Ev e r e t t A v 14% Ly t t o n A v e 60% 77%46% Un i v e r s i t y A v 47% Ha m i l t o n A v 23%27%0%11% 17%50%38%58% 0%22 % 57 % 22 % 0% 0% 0%56% Ha w t h o r n e A v 50% Ev e r e t t A v 60% Ly t t o n A v 50 % 14 % 43 % 71 % 11 % 67 % 50 % 13 % 10 0 % 0%0% 38% 0%0% 75%92%70% Kipling 36% 64 % 57 % 50 % 0% 60% Kipling St 65%64%92% 22 % 44 % 17 % 83 % 12 5 % 30 % 35 % 38%73% 74 % 53 % 83 % 44 % 15 7 % 25 % 14 % 50 % 71 % 10 0 % 71 % 63 % 42 % 26 % 90 % 21 % 38 % 10 0 % 10 0 % 84 % 11 0 % 50 % 75 % 11 7 % 20 % 67 % 111%79% 73 % 78 %0%89 % 17 % 35 % 100% 10 0 % 88 % 75 % 10 0 % 12 5 % 0% Emerson St Emerson 12 9 % 15 7 % 11 3 % 80 % 75 % 11 4 % 13 8 % 10 9 % 10 0 % 100%33%29% 107%30% 36 % Pa l o A l t o A v 50%42%85%61%94%129%100% 38 % 0% 50%50%78%100%69%100%64%0%0% 10 0 % 0% 10 0 % 75 % 10 0 % 10 0 % 40 % 50 % 38 % 56 % 44 % 38 % 10 0 % 88 % 75 % 10 0 % 12 5 % 0% Alma St Alma9% 36 % Pa l o A l t o A v 77%25%0% 80%80% Alma St Alma9% 20 % Pa l o A l t o A v 0%17%54%78%94%100%88% 27 % 56 %0%22 % 4% 35 % 18% 0% 38 % 38 % 10 0 % 75 % 71 % Emerson St Emerson 10 0 % 12 9 % 10 0 % 60 % 13 %0%38 % 73 % 50 % 70 % 32 % 10 0 % 43 % 86 % 74 % 50 % ## # # # 63 % 17 % 47 % 24 % 117%36% 25 % 25%27% 16 % 40 % 10 0 % 56 % 12 9 % 13 % 29 % 17 % 71 % 86 % 10 0 % 84 % 74 % 58 % 15% 0%0% 42%92%20% Kipling 14% 82 % 14 % 33 % 0% 27% Kipling St 53%36%100% 56 % 44 % 33 % 67 % 15 0 % 30 % 25 %9%29 %0% 0% 0% 20%0% Ha w t h o r n e A v 17% Ev e r e t t A v 20% Ly t t o n A v 33 %0%0%0%0% 56 % 0% 63 % 21 % 0%0% 10%13%0% Palo Alto Av Guinda Guinda 4% Ev e r e t t A v 0% Ly t t o n A v e 20% 23%23% Un i v e r s i t y A v 0% Ha m i l t o n A v 23%9%9%11% 0%13%0%25% City of Palo Alto Downtown Parking Survey 6/30/2016 12 PM - 2 PM No Permits 0%0%33%0%7%0%0%8% 0% 0% 17 % 0%17 % 0%57 % 0%14 % 0%0% 11 % 20 % 60 % 33 % 31 % 21 % 29 % 0%0%0% 10 0 % 0% 0% 50 %0%0%0% 0%20%20%0% 0% Pa l o A l t o A 10 0 % 20 % 25%0% 33%0% Fulton 4%20%8%27%0% Fulton St 17% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 29% Ad d i s o n 8% Lin c o l n 0% Kin g s l e y 0% Pa l o A l t o A v Byron St Byron 0% 0%7%31%31%0% 44 % 23%7%33%31%0%0%0%52% Ke l l o g g 38% 10 % 18 % 27 % 20 % 44 % 21 % 40 % 0%0%0%0%0%38 % 50% 14 %0%0%0%43 % 50 % 56 %0%0%0%0%0%0%0% 21% Webster St Webster Webster Webster 7%27%13%70%27%71%14%44%25% 0% 19%69%22%75% 0%0%11 % 13 % 0%17 % 33 % 78 % 76 % Un i v e r s i t y A v 0%0%77%0% 0%0% Me l v i l l e 0%86%21% 83 % 41 % 40 % 64 % 36 % 62 % 31 % 25 % 47 % 12 % 53%25%23%46% Ha m i l t o n A v 33%36% 18% Tasso St Tasso 0%0%0%0%17% 7%20%25%38%60%75%76%12%20%0%0%0% 29 %0%0%0% 83 % 91 %0%0% 22 % 0%0%0%0% 0% ## # # # 22 % 50% 4% Cowper St Cowper Cowper Cowper Ru t h v e n A v 0%88%0%29%58%73%92%6%14%29%12%0%0%0% 6%33 %0% 22%54%115%60%162%8%8%43%27%19% 60 % 27 % 13 % 22 % 25 % 11 % 44 %6%0% 6%0% Waverley St Waverley Waverley0% 4% 0%75%22%55%93%106%30%10%33%33%0%24%5%0% 35 % 21 % 22 % 41 % 54 % 13 % 24 % 11 % 10 %5% #V A L U E ! 0%25 %Pa l o A l t o A v 0% Po e S t 23 %0% 21 % 100%82% 75% 33 % 10 0 % 56 % 11 % 11 % 20%0%25%63%64%60%100%38%#VALUE!44%0%8% Bryant St Bryant5% Ha w t h o r n e A v 43% Ev e r e t t A v 50% Ly t t o n A v 45% Un i v e r s i t y A v 63% Ha m i l t o n A v 75% Fo r e s t A v 53% Ho m e r A v 33% Ch a n n i n g A v #VALUE!#VALUE!0% Kin g s l e y 0% 17 % 17 % 60 % 25 % 80 % 83 % 86 % 73 % 50 % 11 %0%0% 20 % 22%31%86%106%40%14%11%13% Ramona St Ramona33%13%75%100%82%47%67%8% 33 % 20 % Ad d i s o n 33% 40 % 25%54%31%57%106%93%93%92%31%28%0% Lin c o l n 0% 33 % 33 % 56 % 10 0 % 10 0 % 10 0 % 89 % 10 0 % 7%Legend 13 % 54 % 38 % 71 % 63 % 10 0 % 10 0 % 40 % 10 0 % 63 % 25 % 40 % 50 % 83 % 10 0 % 17 % 75 %0%0% 50 %0% 67%38%100%70%100%94%75%133%17%0% High St High 0% - 25% 25% - 50% 50%+25%30%63%92%93%100% 18% 25 % 11% 19%57%78%71%81%100%64%62%0% 0%0% 67 % 50 % 88 % 88 % 40 % 88 % 10 0 % 33 % 0%8%18% 0%0% 12 % Pa l o A l t o A v 69%8%31%0%0%0%0% 27 %0%13 % 11 % 4% 12 % 18% 0%0% 13 %0%0% 14 % Emerson St Emerson 0%0%0%20 % 13 % 43 % 38 %9%0% 0% 5%0% 0%0% 0%0% 0%0% 33 %7%38 % 0%36% 0% 13%36% 0%0% 0%0%0% 0%0%0%0%0%0% 5%0%0% 0% 0%0% 8%0%0% Kipling 0% 0%14 %0% 0% 7% Kipling St 18%18%0% 0%11 %0%0%0% 17 % 0%0%14 %0% 0% 0% 0%0% Ha w t h o r n e A v 0% Ev e r e t t A v 40% Ly t t o n A v 0%0%0%0%0% 0% 10 0 % 25 % 14 % 0%0% 0%0%0% Palo Alto Av Guinda Guinda 0% Ev e r e t t A v 0% Ly t t o n A v e 40% 0%0% Un i v e r s i t y A v 7% Ha m i l t o n A v 8%0%0%0% 0%25%0%0% City of Palo Alto Downtown Parking Survey 6/30/2016 12 PM - 2 PM Employee Permits 0%0%0%0%7%0%0%0% 0% 0% 0%0%0%0%0%0%0%0%0% 6%0%10 % 17 % 38 %0% 29 % 0%0%0% 0%0% 0% 50 %0%0%0% 0%30%0%0% 0% Pa l o A l t o A 10 0 % 0% 0%0% 0%0% Fulton 0%0%17%27%0% Fulton St 17% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 14% Ad d i s o n 0% Lin c o l n 0% Kin g s l e y 0% Pa l o A l t o A v Byron St Byron 0% 0%0%0%62%0% 44 % 0%0%20%69%0%0%0%52% Ke l l o g g 38% 25 %6%7%33 % 50 %0%40 % 0%0%0%0%0%38 % 50% 0%0%0%0%14 % 25 % 22 %0%0%0%0%0%0%0% 21% Webster St Webster Webster Webster 0%0%60%10%27%14%0%31%19% 0% 25%69%22%75% 0%0%0%13 % 0%6%11 % 0% 0% Un i v e r s i t y A v 0%0%0%0% 0%0% Me l v i l l e 0%0%21% 0%0%10 % 18 % 7%15 % 6%8%0%0% 13%44%23%15% Ha m i l t o n A v 8%0% 18% Tasso St Tasso 0%0%0%0%17% 0%0%0%0%0%0%0%24%7%0%0%0% 0%0%0%0%0%0%0%0% 22 % 0%0%0%0% 0% ## # # # 22 % 50% 0% Cowper St Cowper Cowper Cowper Ru t h v e n A v 0%13%9%0%0%0%0%12%7%0%0%0%0%0% 0%0%0% 33%15%8%0%0%38%0%7%7%0% 10 %7%13 % 0%0% 6%17 %0%0% 0%0% Waverley St Waverley Waverley0% 0% 41%0%22%9%0%0%0%40%7%25%50%0%0%0% 12 %0%0%24 % 31 % 13 % 0%6%5%0% #D I V / 0 ! 0%0%Pa l o A l t o A v 0% Po e S t 0%0% 32 % 0%0% 0% 0%0%0%11 %0% 20%0%0%0%18%0%0%25%0%44%0%0% Bryant St Bryant5% Ha w t h o r n e A v 7% Ev e r e t t A v 20% Ly t t o n A v 0% Un i v e r s i t y A v 0% Ha m i l t o n A v 0% Fo r e s t A v 20% Ho m e r A v 20% Ch a n n i n g A v 0%0%0% Kin g s l e y 0% 0% 0%0%0%0%0%0%9%0%0%0%0% 0%0%15%0%0%0%36%6%6% Ramona St Ramona0%25%0%0%0%40%7%58% 0%10 % Ad d i s o n 0% 0% 75%15%23%0%0%0%7%0%0%28%0% Lin c o l n 7% 0%0%11 %0%0%0%0%0% 0%Legend 0%0% 0%0%0%0%0%0%0%0%0%0%0%0%0%0%0% 25 % 13 % 50 %0% 7%15%0%0%0%0%0%0%42%0% High St High 0% - 25% 25% - 50% 50%+42%10%0%0%0%0% 0% 25 % 11% 0%0%0%0% 13 %0%0%0%0%0% Alma St Alma4% 12 % Pa l o A l t o A v 0%0% 13 %0%0% 14 % 0%0% 25 % 11% 44%0%11%0%0%100%64%0%17% 0%0%0%0% 13 %0%0%0%0%0% 0%0%29% 0%10% 24 % Pa l o A l t o A v 13%50%8%0%6%0%0% 18 % 22 % 50 % 22 % 0% 6% 45% 0% 25 %0%0%0%0% Emerson St Emerson 0%0%0%20 % 50 % 57 % 38 %0%0% 0% 11 %0% 0%0% 5%0% 0%13 % 50 % 40 % 29 % 0%29% 0% 0%27% 26 % 20 % 0%0%0% 13 % 29 % 67 %0%0%0% 5%16 %5% 23% 0%0% 25%0%30% Kipling 14% 18 % 29 % 17 % 0% 27% Kipling St 0%27%0% 0%11 % 17 %0%0% 4% 38 % 13 %0%22 % 0% 0% 0%44% Ha w t h o r n e A v 42% Ev e r e t t A v 13% Ly t t o n A v 33 %0%29 % 43 % 11 % 0% 0% 13 % 21 % 0%0% 10%0%0% Palo Alto Av Guinda Guinda 4% Ev e r e t t A v 0% Ly t t o n A v e 10% 31%31% Un i v e r s i t y A v 47% Ha m i l t o n A v 15%27%9%16% 33%25%23%25% City of Palo Alto Downtown Parking Survey 6/30/2016 12 PM - 2 PM Resident Permits 0%57%0%8%20%0%14%0% 0% 0% 0%50 % 0%0%0%0%29 % 11 % 25 % 22 %7%10 %0%8%36 % 29 % 0%0%0% 25 %0% 0% 50 %0%0%0% 0%0%7%0% 5% Pa l o A l t o A 10 0 % 0% 8%0% 0%0% Fulton 21%40%25%45%0% Fulton St 25% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 0% Ad d i s o n 0% Lin c o l n 0% Kin g s l e y 0% Pa l o A l t o A v Byron St Byron 18 % 6%27%31%0%0% 44 % 8%50%13%0%0%0%0%52% Ke l l o g g 38% 40 % 24 % 13 %7%13 %0%40 % 0%0%0%0%0%38 % 50% 14 % 11 % 11 %0%0%0%0%0%0%0%0%0%0%0% 21% Webster St Webster Webster Webster 43%33%20%0%27%0%14%13%31% 6% 25%69%22%75% 0%14 %0%0% 22 % 28 % 22 % 0% 6% Un i v e r s i t y A v 0%30%0%0% 0%0% Me l v i l l e 0%0%21% 0%0%40 % 0%29 % 0%31 % 50 % 12 % 0% 40%0%15%23% Ha m i l t o n A v 42%14% 18% Tasso St Tasso 0%0%0%0%17% 7%10%33%31%0%8%6%12%20%0%0%0% 0% 17 %0% 13 %0%0%0%0% 22 % 0%0%0%0% 0% ## # # # 22 % 50% 0% Cowper St Cowper Cowper Cowper Ru t h v e n A v 21%0%27%43%8%18%0%12%36%14%24%0%0%0% 13 % 27 %0% 22%15%8%0%0%23%46%0%13%13% 70 % 53 % 25 % 11 %0% 17 % 33 %6%0% 12%0% Waverley St Waverley Waverley0% 4% 18%50%44%9%7%0%0%60%7%8%13%12%0%17% 6%11 % 28 % 12 % 15 % 38 % 29 % 39 % 19 % 20 % #D I V / 0 ! 0%0%Pa l o A l t o A v 0% Po e S t 8%0% 21 % 0%0% 0% 0%0%0%67 % 56 % 20%0%50%13%9%0%0%13%0%44%0%17% Bryant St Bryant9% Ha w t h o r n e A v 0% Ev e r e t t A v 20% Ly t t o n A v 0% Un i v e r s i t y A v 0% Ha m i l t o n A v 0% Fo r e s t A v 13% Ho m e r A v 27% Ch a n n i n g A v 0%0%26% Kin g s l e y 25% 6% 17 % 20 % 13 %0%0%0%0%0%44 % 43 % 40 % 20 % 6%38%0%0%20%50%33%19% Ramona St Ramona8%19%0%0%0%7%20%33% 11 % 10 % Ad d i s o n 33% 0% 6%23%15%0%0%0%0%0%0%11%0% Lin c o l n 33% 33 % 33 % 11 %0%0%0%0%0% 7%Legend 13 %8% 38 % 43 %0%0%0%0% 10 %0%0%0%0%0%0%0%0% 25 % 13 % 20 % 50 % 7%15%0%0%0%0%6%0%42%0% High St High 0% - 25% 25% - 50% 50%+17%50%0%0%7%0% 0% 50 % 11% 0%0%0% 13 %0%0%0%0%0% 33 % Alma St Alma0% 24 % Pa l o A l t o A v 0% 25 %0%0%0%0% 13 %8% 50 % 11% 6%0%0%0%0%100%64%0%8% 0%0%0% 13 %0%0%0%0%0% 33 % 0% 27% 50 % 0%0% 43 % 75 % 64% 83%50%50% ‐ 84% Parking OccupancyHigh St High 85% ‐ 100%+ Parking Occupancy42%90% 63 % 88 % 80 % 29%Legend 44 % 31 % 13 % 71 % 50 % 10 % 62%33%71% 50 % 0% ‐ 49% Parking Occupancy 67%38% 28 % Pa l o  Alt o  Av 44%67%77% 67 % 38 % 50 % 60 % 88%38%69% 14 0 % 63 % 29 % 0%44%8% 50 % 33 % 40 % 13% Ramona St Ramona 33%44%87%100%47% Li n c o l n 60% 44 % 50 % 33 % 43 % Emerson St Emerson 27 % 22 % 63 % 78 % 13 % 24 % 44 % 17 % 20 % 63 % 30 % 80% Ho m e r  Av Un i v e r s i t y  Av Ha m i l t o n  Av 22%62% 12 9 % 47%8% Bryant St Bryant 63%56%44% 53% Kin g s l e y 50%67% Ch a n n i n g  Av 36%56% 44 % 61% 50% Ad d i s o n 22 % 29 % 80 % 30 %43% 70 % 32% Ha w t h o r n e  Av 86% Ev e r e t t  Av 60% Ly t t o n  Av 93% Fo r e s t  Av 86 % 6%14 % 75 % 10 0 % 78 % 37 % 50 % 33 % 56 % 18%5%33% 24 % 37 % 37 % 27 % 33 % 53 % 25 % 120%33%50%38% 35 % 75 % 0% 19 % 87 % 62 % 59 % 23 % 0% 59%125%56%64% Pa l o  Alt o  Av 0% Po e  St 20%45%200%50%55% 38 % 27 % 0% Waverley St Waverley Waverley0% 108%46%36%20%19% 50 % 25%91%39%77%18% 0%0% 40%67%80% Kipling St Kipling 24%73% 44 % 22 % 18 % 0%0%0% 13 0 % 80 % 44 % 33 % 50 % 50% 10 0 % 57% 14 % 50 %0%57 % 71% 50 % 20 % 13 % 40 % 50 % 57 % 33 % 56 % 50% 27 % Cowper St Cowper Cowper Ru t h v e n  Av 43%0% 67%69%50%0%0%0% 57%47%0%0%0%45%0% 0% 50 % 39 % Un i v e r s i t y  Av 85% 18% Tasso St Tasso 0%0%0%17% 0%0% 0% ## # # # 22 % 0%0%0% 0%0%22 % 56 % 42 % 59 % 18 % 0% Me l v i l l e 0%21% 14 %0%0% 88 % 39 % Ha m i l t o n  Av 42%64%85%67%44% 70 % 45 % 71 % 77 % Ev e r e t t  Av 40% Ly t t o n  Av 86% 0% 0% 80%44% Ha w t h o r n e  Av 42% 75%69%56%69% 0% 0%0%38 % 14%10%No Parking Zone 0%59% 0% 36%60%73%70%136%50%36%21% Webster St Webster Webster Webster 22%75% 0%50% 29 %0%11 % 43 % 43 % 88 %0%0%0%0%0% 52% Pa l o  Alt o  Av Byron St Byron 18 % 6%33%23%92%0% 44 % Ke l l o g g 38% 17 % 43 %0%29 % 44 % 44 % 10 0 % 88 % 31% Lin c o l n 0% 38 % 44 % 38%50%27%92%0%0%0%21 % 40 % 0%0%0%0% 0% 0%0%0% 86 % 65 % 35 % 33 % 73 % Kin g s l e y 0%0% 0% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 50% Ad d i s o n 0%60%27%0% 0% 30 % 43 % 33 % 10 0 % 80 % 10 0 % 50 % 13 % 50 % 0% Palo Alto Av Guinda Guinda Pa l o  Alt o  A 0% 0% Fulton St Fulton  8%70%25%27%62%46%0% 0%0%0% 6%33%50%13%38%33%0% 0%0%61 % 92 % 57 % 29 % 0%0%0% 19%43%0%0% 17 % 33 % 67 % 17 % 71 %0% Un i v e r s i t y  Av 13% Ha m i l t o n  Av 21%36%27% 0% 22 % 13 % 28 % Ev e r e t t  Av 12% Ly t t o n  Av e 17% 17%38%58%25%8%0% City of Palo Alto Downtown Parking Survey 12/1/2016 8 AM ‐ 10 AM Total Occupancy 0%157%14%31%36% 17% Alma St Alma13% 0%50 % 0% 38%0%0% 0% 43 % 75 % 44 % 31 % 28 % Pa l o  Alt o  Av 67 % 38 % 50 % 22 % 27% 25 % 11% 13 % 43 % 10 0 % 91% 100%60%50% ‐ 84% Parking OccupancyHigh St High 85% ‐ 100%+ Parking Occupancy100%110% 75 % 75 % 10 0 % 0%Legend 44 % 85 % 10 0 % 10 0 % 10 0 % 90 % 85%92%118% 38 % 0% ‐ 49% Parking Occupancy 80%85% 32 % Pa l o  Alt o  Av 88%83%108% 10 0 % 75 % 18 8 % 20 % 88%77%92% 71 % 56%8% 38 % 33 % 20 % 44% Ramona St Ramona 50%88%100%87%73% Li n c o l n 60% 56 % 67 % 10 0 % 10 0 % Emerson St Emerson 73 % 10 0 % 38 % 44 % 13 % 24 % 33 % 17 % 80 % 88 % 10 0 % 80% Ho m e r  Av Un i v e r s i t y  Av Ha m i l t o n  Av 33%77% 12 9 % 53%8% Bryant St Bryant 69%94%44% 16% Kin g s l e y 25%73% Ch a n n i n g  Av 79%63% 33 % 61% 92% Ad d i s o n 0%0%60 % 50 %79% 80 % 64% Ha w t h o r n e  Av 86% Ev e r e t t  Av 100% Ly t t o n  Av 93% Fo r e s t  Av 10 0 % 0%0% 75 % 10 0 % 10 0 % 37 % 75 % 38 % 44 % 12%5%17% 18 % 32 % 32 % 27 % 50 % 58 % 94 % 130%27%50%44% 35 % 13 0 % 0% 19 % 80 % 62 % 47 % 54 % 0% 88%125%133%82% Pa l o  Alt o  Av 0% Po e  St 20%65%100%138%118% 38 % 27 % 0% Waverley St Waverley Waverley0% 108%69%43%33%25% 33 % 38%100%89%85%0% 0%0% 73%83%80% Kipling St Kipling 47%91% 33 % 10 0 % 12 % 0%0%0% 15 0 % 17 3 % 56 % 22 % 25 % 50% 10 0 % 36% 86 % 67 % 67 % 57 % 71% 19 % 20 % 4%35 % 50 % 86 % 44 % 11 1 % 50% 31 % Cowper St Cowper Cowper Ru t h v e n  Av 29%13% 67%46%31%0%0%0% 36%47%0%0%0%0%0% 0% 39 % 39 % Un i v e r s i t y  Av 77% 18% Tasso St Tasso 0%0%0%17% 0%0% 0% ## # # # 22 % 0%0%0% 0%0%22 % 56 % 58 % 94 % 12 % 0% Me l v i l l e 0%21% 14 %0%0% 63 % 17 % Ha m i l t o n  Av 92%71%77%60%38% 60 % 55 % 43 % 69 % Ev e r e t t  Av 113% Ly t t o n  Av 100% 0% 0% 80%78% Ha w t h o r n e  Av 42% 69%56%50%69% 0% 0%0%63 % 50%0%0%23%59% 0% 29%60%73%80%136%71%79%21% Webster St Webster Webster Webster 22%75% 0%50% 14 %0%0%29 % 71 % 11 3 % 10 0 % 0%0%0%0% 52% Pa l o  Alt o  Av Byron St Byron 9% 0%33%23%100%0% 25 % Ke l l o g g 38% 0%29 % 14 % 43 % 78 % 89 % 10 0 % 75 % 38% Lin c o l n 0% 38 % 44 % 23%43%20%100%0%0%0%37 % 40 % 0%0%0%0% 0% 0%0%0% 64 % 50 % 18 % 20 % 53 % Kin g s l e y 0%0% 0% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 29% Ad d i s o n 0%50%13%0% 0% 17 % 29 % 56 % 10 0 % 40 % 75 % 50 % 25 % 50 % 10 % Palo Alto Av Guinda Guinda Pa l o  Alt o  A 0% 0% Fulton St Fulton  13%60%58%73%62%54%0% 0%0%0% 28%33%50%50%54%42%0% 0%0%56 % 85 % 50 % 29 % 0%0%0% 31%57%0%0% 17 % 33 % 50 % 83 % 86 %0% Un i v e r s i t y  Av 53% Ha m i l t o n  Av 14%50%55% 0% 22 % 13 % 39 % Ev e r e t t  Av 0% Ly t t o n  Av e 33% 33%38%75%25%46%0% City of Palo Alto Downtown Parking Survey 12/1/2016 12 PM ‐ 2PM Total Occupancy 2%114%0%38%36% 25% Alma St Alma22% 22 %25 % 11% 69%36%33% 13 % 43 % 10 0 % 44 % 85 % 32 % Pa l o  Alt o  Av 10 0 % 75 % 18 8 % 0% ‐ 49% Parking Occupancy Legend 85% ‐ 100%+ Parking Occupancy 50% ‐ 84% Parking Occupancy 11 % 18% 38 % 0% 13 % 57 %0% 82% 58%60% High St 67%80% 63 % 75 % 14 0 % 14% 44 % 54 % 75 % 86 % 38 % 70 % 77%42%53% 50 % 67%77% 32 % Pa l o  Alt o  Av 50%58%92% 67 % 50 % 75 % 20 % 56%77%92% 10 0 % 12 9 % 11 3 % 14 0 % 50 % 14 % 93%83%56%78%8% 50 % 33 % 10 % 6% Ramona St Ramona 67%44%40%93%53% Li n c o l n 53% 33 % 17 % 22 % 86 % Emerson St Emerson 82 % 89 % 50 % 67 % 8% 24 % 33 % 17 % 60 % 50 % 60 % 67% Ho m e r  Av Un i v e r s i t y  Av Ha m i l t o n  Av 44%115% 12 9 % 45% Ha w t h o r n e  Av 64% Ev e r e t t  Av 33%8% Bryant St Bryant 69%63%44% 42% Kin g s l e y 17%80% Ch a n n i n g  Av 64%19% 11 % 61% 67% Ad d i s o n 0%0%80 % 40 %64% 90 % 80% Ly t t o n  Av 71% Fo r e s t  Av 11 4 % 18%5%33%100%47%67%38% 35 % 50 0 % 0% 13 % 73 % 43 % 53 % 31 %0%5% 53 % 50 % 33 % 44 % 31 % 10 0 % 10 0 % 78 % 0% 29%100%33%73% Pa l o  Alt o  Av 0% Po e  St 20%65%75%100%73% 31 % 27 % 24 % 32 % 37 % 33 % 33 % 26 % 0% Waverley St Waverley Waverley0% 69%62%43%0%19% 8% 35%0%0%0%9% 17 % 38%36%28%77%24% 0%0% 73%58%80% Kipling St Kipling 53%82% 33 % 39 % 0%0%0%0% 15 0 % 80 % 38 % 22 % 50 % 29% 10 0 % 36% 71 % 83 % 33 % 43 % 53%0% 6%7%9%20 % 25 % 71 % 78 % 56 % 50% Cowper St Cowper Cowper Ru t h v e n  Av 50%0% 40%92%31%0%0%0% 57% 0% 33 % 22 % Un i v e r s i t y  Av 62% 18% Tasso St Tasso 0%15%0%17% 0%0% 0% ## # # # 22 % 0%10%0% 0%0%22 % 50 % 50 % 76 % 24 % 0% Me l v i l l e 0%21% 0% 14 % 22 % 13 % 56 % Ha m i l t o n  Av 33%86%69%53%38% 60 % 36 % 64 % 54 % Ev e r e t t  Av 60% Ly t t o n  Av 86% 14 % 6% 100%67% Ha w t h o r n e  Av 42% 50%69%0%69% 0% 0%0%38 % 71%0%0%0%47% 0% 71%67%60%60%136%64%64%21% Webster St Webster Webster Webster 22%75% 0%50% 29 % 11 % 22 % 43 % 29 % 75 % 56 %0%0%0%0% 52% Pa l o  Alt o  Av Byron St Byron 0% 6%47%15%46%0% 50 % Ke l l o g g 38% 50 % 43 % 71 % 57 % 22 % 22 % 50 % 50 % 0% Lin c o l n 0% 38 % 44 % 38%50%27%77%0%0%0%21 % 40 % 0%0%0%0% 0% 0%0%0% 93 % 60 % 47 % 20 % 27 % Kin g s l e y 0%0% 0% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 36% Ad d i s o n 0%60%20%0% 0% 26 % 29 % 22 % 10 0 % 80 % 75 % 75 % 63 % 50 %0%0% 5% Palo Alto Av Guinda Guinda Pa l o  Alt o  A 0% 0% Fulton St Fulton  29%50%75%45%54%23%0% 0%0%0% 44%17%17%88%54%33%0% 7%10 % 39 % 77 % 71 % 29 % 0% 25%7%0%0% 0% 17 % 50 %0% 43 %0% Un i v e r s i t y  Av 93% Ha m i l t o n  Av 21%43%36% 43 % 11 %0% 44 % Ev e r e t t  Av 35% Ly t t o n  Av e 58% 42%15%42%25%23%0% City of Palo Alto Downtown Parking Survey 12/1/2016 5PM ‐ 7PM Total Occupancy 2%171%14%54%43% 17% Alma St Alma13% 11 %38 % 0% 44%43%0% 13 % 57 %0% 44 % 54 % 32 % Pa l o  Alt o  Av 67 % 50 % 75 % City of Palo Alto Downtown Parking Survey 12PM‐2PM Employee Permits 0% 0% 0% 0% 43 % 0% 36% 42% 20%50% ‐ 84%High St 85% ‐ 100%+17%20% 50 % 38 % 30 % 0%Legend 6%8% 25 % 57 %0%0% 0%41% 0%0% ‐ 49% 7%8% 4% Pa l o  Al t o  Av 44%8%23% 33 % 0% 10 0 % 0% 44%31%8% 0%0%0%0% 29 % 0%17%0% 0% 11 % 10 % 0% Ramona St Ramona 17% 6%0% 40% 33% Lin c o l n 0% 0%0% 22 %0% Emerson St 0% 22 %0%0% 4% 24 %0% 0%0% 25 %0% 7% Ho m e r  Av Un i v e r s i t y  Av Ha m i l t o n  Av 11%15% 0% 0%0% Bryant St Bryant 0%38%44% 0% Ki n g s l e y 0%0% Ch a n n i n g  Av 36%38% 0% 17% 42% Ad d i s o n 0%0%0% 0%29% 0% 41% Ha w t h o r n e  Av 29% Ev e r e t t  Av 20% Ly t t o n  Av 21% Fo r e s t  Av 0% 0%0% 13 % 0% 11 % 0% 13 % 0% 0% 0%0%0% 0%0%0%0%0%5%0% 20%0%8%6% 10 % 10 0 % 0%0% 7%0%0%15 % 0% 41%50%67%27% Pa l o  Alt o  Av 0% Po e  St 20%30%0%100%27% 0%0% 0% Waverley St Waverley Waverley0% 31% 0% 0% 0% 0% 0% 13%64%22%0%0% 0%0% 20%17%0% Kipling St Kipling 6%0% 0%0%0%0%0%0%20 % 27 % 6% 0%0% 0% 0% 0% 0% 0%0%0% 29% 0%0%0%0% 13 % 14 % 0% 11 % 50% 0% Cowper St Cowper Cowper Ru t h v e n  Av 0%0% 0%0%0%0%0%0% 0%0%0%0%0%0%0% 0%0%11 % Un i v e r s i t y  Av 46% 18% Tasso St Tasso 0% 0%0% 17% 0%0% 0% ## # # # 22 % 0%0%0% 0%0% 22 % 38 %0%0%0% 0% Me l v i l l e 0%21% 0%0%0%0% 0% Ha m i l t o n  Av 17%29%31%0%6% 10 % 27 %0%31 % Ev e r e t t  Av 33% Ly t t o n  Av 0% 0% 0% 0%0% Ha w t h o r n e  Av 0% 25% 19% 31% 69% 0% 0%0%0% 0%0%0%0%6% 0% 0%0%40%0%0%0%0%21% Webster St Webster Webster Webster 22%75% 0%50% 0%0%0%0%0%0%67 % 0%0%0%0% 52% Pa l o  Alt o  Av Byron St Byron 0% 0%0%0%92%0% 0% Ke l l o g g 38% 0%0%0%0%0% 0% 0% 38 % 31% Lin c o l n 0% 38 % 44 % 0%0%0%77%0% 0% 0%16 % 40 % 0%0%0%0% 0% 0%0%0% 14 % 20 %0%0%27 % Ki n g s l e y 0%0% 0% 0% Middlefield Av Middlefield Middlefield 60 % Fo r e s t Ho m e r Ch a n n i n g 29% Ad d i s o n 0%30% 0% 0% 0% 0%0%0% 10 0 % 20 %0%0%0%50 % 0% Palo Alto Av Guinda Guinda Pa l o  Alt o  A 0% 0% Fulton St Fulton  0%0%17%18%0%0%0% 0%0%0% 0%0%17%6%0%0%0% 0%0%0%15 %0% 29 % 0%0%0% 0%0%0%0% 0%0% 17 % 33 % 14 %0% Un i v e r s i t y  Av 7% Ha m i l t o n  Av 0%0%0% 0%0%0% 11 % Ev e r e t t  Av 0% Ly t t o n  Av e 0% 8% 0% 33% 0% 0% 0% 12/1/2016 0%0%0%0%0% 0% Alma St Alma17% 0%0% 0% 13%0%0% 43 % 0% 6%8%4% Pa l o  Al t o  Av 33 % 0% 10 0 % Downtown Residential Preferential Parking District Pilot Program Serco Enforcement Citations Given January 18, 2017 Citations in 2015 Citations in 2016 Downtown RPP Meeting Wednesday January 4th Meeting Notes A. Concerns/Comments • Zone 8 enforcement could be more robust, as Zone 6/7 employee tags are seen in the area. • 10 permit cap for employees are hard for employers, accommodations could possibly be made for larger employers. • Occupancy data should begin red threshold at 80%, not 85%. (Against industry standard). • What is 2,000 maximum authorized permit based on? More data should justify this, not a conservative guess. • Data that uses an “urban standard” should be possibly switched to a “residential standard”, if it exists. • Some of the occupancy data is hard to understand or looks incomplete (references to Zone 10 data). • Who parks in occupancy data maps? Employees or residents? • RPP program seems too aggressive in some areas, noticing empty streets in RPP. • Outreach of RPP needs to be more robust, especially for retailers and their employees. • 12-2 employee occupancy is not red at all. • Southern boundaries of zones 5-7 are totally solid all day long. • Zone system seems outdated, especially for residents close to Downtown core (feel as though it isn’t working well). • Enforcement robustness is working well. • Deeper analysis for retailers would be great so they can identify employee/resident parking in their area. Suggestions/Recommendations • Align contractor permits available at the MSC with scratchers as they are perceived to be expensive (~$72/week). • Scratchers should be expanded. Especially employees. • It would be great to see citation numbers. • Maybe a 0$ low-income permit for employees, or a quarterly rate. • A different tiered employee system for 1st floor retailers (mixed use areas find it hard to purchase permits). • We feel there is a supply issue-tweak permits numbers allowed. • Experiment with making subzones in really high-use areas. • Please break down who is parking where (alluding to making T2 reporting more comprehensive) • The 10% phase down of permits will really hurt employers, even with the TDM, more lots/garages, etc. • Investigate sliding enforcement hours later in the day, or add more hours in the afternoon (early morning employees not really a problem). • 2 hour parking limit could be shifted (perhaps longer?) • High use areas (bordering Downtown core) can stand to use the 10% phase down, but not in the outer extents like 9 and 10. B. Ancillary Resident/Employer notes: 1) The parking for a school in an RPP district is a unique issue. Addison School covers one block, but one block face is on Middlefield which is not suitable for parking. Perhaps permits should be sold for Addison through the principle's office. They could sell them only to school employees and they would only be valid for use on one of the school's 3 face blocks. These permit parking signs and stickers must have a unique color. I would suggest parking stickers that go on the inside lower left corner of the rear car widow. These type of stickers could be moved from one vehicle to another but it not as convenient as a hang tag to move. The stickers could be coded to a particular vehicle but that could be changed in the computer at the schools request if an employee moves or is transferred. I have mentioned before that buying a parking permit should not authorize anyone to park in front of a school all day who does not belong there. Also having a parking sticker on your car should not prevent police from having "probable cause" to approach a vehicle and inquire the nature of their business if parked in front of a school all day. Just my thoughts, thanks for your consideration, Paul 2) I remain very pleased that you are making the time to engage stakeholders in an update of the Downtown RPP. And I wish to thank you and Josh for taking our questions into consideration. Since these open meetings have significant time constraints, I would like to ask that in the future city staff share any new data and analysis AHEAD OF TIME so that participants can have the opportunity to become familiar with it before we meet. I believe this will make our time together more productive. 3) The clustering issue to which Neilson referred in his message and which we wish to discuss at our meeting on January 4 is especially prevalent on the West side of the Downtown RPP district in the areas immediately adjacent to the commercial core. In DTS the area bounded by Bryant Street, High Street, Forest Avenue and Embarcadero Road is consistently fully parked. In fact, 13 of the 17 blocks in that area are fully parked or overly parked on a daily basis during working hours. It is this specific area for which we believe we have a low cost, easy to implement solution . . . and that is to turn this specific area into an unique zone the permits for which can be more granularly managed. Please see the attached files for details of the data we collected at the beginning of December. Thanks! Michael mehodos@mac.com 4) We are prepared to elaborate on these concerns on Jan 4 and look forward hearing your responses. Call John Guislin or Neilson Buchanan if you have any questions. Our primary concerns are: Council policy requires annual reduction in the number of non-resident vehicles parked on residential streets. We dont have information to understand the numbers and types permits issued during the last nine months of Phase 2. Therefore, we submitted the attached request for public records covering Aug 1 thru Dec 31. Severe clustering on some streets is evident and this too must be addressed by staff and Council. Residents have compiled data and will continue through January 2017 and beyond. Michael Hodos will be submitting data demonstrating the clustering problems. He also has a low-cost solution for you to consider. Reduction of non-resident vehicles can be managed by reducing number of non- resident vehicles permits and balancing among the 8 zones. This requires active management and review by city staff quarterly. We are hopeful that the January 4 meeting and staff report to Council will also address the long-standing concerns below. Cost of enforcement and technology. Consistent placement of permits on vehicles can be improved. Some technology was introduced in 2016 but more technology is warranted. We are confident that staff and residents are in agreement that permits must be consistently placed on vehicles at designated locations to lower enforcement costs. Lack of technology, especially garage guidance technology, restricts efficiency of city garages and lots. This creates more parking pressure upon residential neighborhoods. Two-hour parking. Unlimited 2-hr will compromise integrity of the Council's commitment to reduce non-resident vehicles. Certain zones obviously are vulnerable to commercial parking spillover from the commercial core. The current study of commercial core parking and pricing will highlight the scope of this problem as it impacts RPP. Inconsistent Quality Standards. Inconsistent quality standards for bumper/window stickers compromises RPP. Attached are the photos of stickers in use within the commercial core and neighborhoods. The highest quality sticker (for city garages and lots) contains serial number, location, license plate and expiration. We noted that many of the parking permits in use in the City Hall garage (CC) do not comply with RRP or commercial core sticker standards. Also the orange "CC medalion" stickers are not consistently on rear bumpers or windows to reduce enforcement costs. Hangtag Design. Hangtags are subject to fraud and abuse. We will present to you and Council examples of easily counterfeited hang tags. Only technology can eliminate this abuse which will escalate over time as prices incentives are created. We have not found technology which can read hang tag through a window shield. Use of hangtags next year should be exception not the rule. Temporary Permits. Phase 2 resulted in temporary paper permits without expiration dates. Some of these dashboard paper permits are still in use by residents and non- residents. It is possible that bumper stickers are in use on other vehicles. Next year all temporary paper permits must have expiration dates to eliminate abuse and lower enforcement costs. Admin Guidelines. We are still unclear about the notification and approval process for Administrative Guidelines for RPP. Please cover this issue on January 4 and in your upcoming staff report to City Council. Loss of Residential Parking Spaces. We understand that parking spaces may be reduced soon only to improve bike safety on a limited number of intersections. We ask that Administrative Guidelines prescribe a notification and comment period for reduction of any parking capacity in the residential neighborhoods. The number of permits to be issued must be reduced in proportion to the loss of parking capacity. Expectations for January 4. We are hopeful that you can address most of these issues during Wednesday's community meeting. If you are unable to address the issues, then lets conclude the meeting with understanding of a follow-up timetable. Neilson Buchanan 155 Bryant Street Palo Alto, CA 94301 650 329-0484 650 537-9611 cell cnsbuchanan@yahoo.com Downtown Residential Preferential Parking District Pilot Program Resident Compiled Data Report 1/4/2017 Downtown Residential Preferential Parking District Pilot Program Residents Response to RPP Stakeholder Meeting January 4, 2017 1/23/2017 Residents Response to RPP Stakeholder Meeting Jan 4, 2017 I.Starting April 1, 2017, the total number of employee permits authorized must be reduced to 1,135. This reduction is based on Resolution 9577 passed Feb. 23, 2016, Council directions in Action Minutes from the Special Meeting on Sept. 6, 2016, and data collected from actual permit sales. The reduction calculation is detailed below: !Resolution 9577 states: Following the first year of Phase 2, the City will begin decreasing annual employee permits by approximately 200 permits per year…. The reduction in permits will occur in the outermost zones of the Downtown RPP district initially, and affect inner zones in subsequent years. !Council’s Action Minutes from Sept 6, 2016 state: o Direct Staff to return to Council by Jan 15, 2017 with proposals for changes to implement at the end of Phase 2 that include: o Elimination of 5 day passes o Propose quantitative standards to reduce the impact on neighborhoods, to eliminate spillover and to reduce parking congestion o Give priority to lower wage employees o Require registration in the Business Registry Certificate Program and, if legally permissible, participation in the Downtown TMA o Return with a draft of overriding RPP goals o Implement a freeze on the sale of employee permits in Zones 9 and 10 and reduce the number of available permits in all zones by this amount. Direct Staff to return with options to allow additional streets to petition to be added as resident only parking in zones 9 and 10. !Employees permit sales in Phase 2 totaled 1,335 !The initial estimate of employee permits authorized was set at 2,000 with no real data to support this number. Now that we have data, it is time to adjust the maximum employee permit number to reflect actual demand and the mandated annual reduction. Initial employee permit estimate 2,000 Actual employee permits sold 1,335 DELTA 665 Employee permits allocated for zones 9 & 10 615 Initial allocation – unsold permits – annual reduction = New Max Employee Permits 2,000 -665 -200 = 1135 NOTES: 1. Reducing the total employee permits available next year to 1,135 aligns with both the number of employee permits sold in year one, the termination of selling employee permits in zones 9 and 10 and the annual reduction as directed by Council. 2. Commercial interests have long requested data on which to base decisions. After 9 months of RPP, we have clear data on the demand for employee permits. 3. Reducing the number of employee parking permits also supports Council’s goal of reducing the number of SOV trips to the downtown area. II. Given the significant clustering problem in parts of zones 1-8, Residents recommend that: On Feb 6 Council should direct staff to report back to Council not later than August 28, 2017 with a plan to reduce non-resident permits and 2-hr parking in the zones which have severe street face clustering (less than 20% vacant space midday) with that plan to be implemented no later than April 1, 2018. III. Staff must follow through on all of Council’s ACTION MINUTES from the special Meeting on Sept 6, 2016 as stated in the minutes below: “Direct Staff to return to Council by Jan 15, 2017 with proposals for changes to implement at the end of Phase 2 that include: 1. Elimination of 5 day passes 2. Propose quantitative standards to reduce the impact on neighborhoods, to eliminate spillover and to reduce parking congestion 3. Give priority to lower wage employees 4. Require registration in the Business Registry Certificate Program and, if legally permissible, participation in the Downtown TMA 5. Return with a draft of overriding RPP goals 6. Implement a freeze on the sale of employee permits in Zones 9 and 10 and reduce the number of available permits in all zones by this amount. Direct Staff to return with options to allow additional streets to petition to be added as resident only parking in zones 9 and 10.” IV. Residents recommend that Staff return to Council by August 1, 2017 with reports on the following topics: 1. The impact of paid parking in the downtown core on Residential 2 hour parking 2. Pricing disparities among parking programs 3. Permit formats that allow effective enforcement (i.e. clearly marked dates of validity) and that are tamper resistant 4. Program cost updates (to be reported to Council every 6 months) CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR February 13, 2017 The Honorable City Council Palo Alto, California City of Palo Alto Sales Tax Digest Summary First Quarter Sales (January - March 2016) The following files are attached for this informational report for which no action is required. ATTACHMENTS:  Attachment A: Sales Tax Digest Summary - Background and Discussion (PDF)  Attachment B: MuniServices Sales Tax Digest Summary (PDF)  Attachment C: Economic Categories and Segments (PDF)  Attachment D: MuniServices Economic News and Trends (PDF) Department Head: Harriet Richardson, City Auditor Page 2 Informational Report to the City Council  BACKGROUND  Sales and use tax was estimated to be about $27.6 million, or 15 percent, of projected General Fund  revenue in the City’s adopted operating budget for fiscal year 2016. This revenue includes sales and use  tax for the City of Palo Alto and pool allocations from the state and Santa Clara County.1  We contract with MuniServices LLC (MuniServices) for sales and use tax recovery services and  informational reports. We use the recovery services and informational reports to help identify  misallocation of tax revenue owed to the City, and to follow up with the State Board of Equalization to  ensure that the City receives identified revenues. We include sales and use tax recovery information in  our quarterly reports to the Policy and Services Committee.  The California Revenue and Taxation Code, Section 7056, requires that sales and use tax data remain  confidential. Therefore, the City may not disclose amounts of tax paid, fluctuations in tax amounts, or  any other information that would disclose the operations of a business. This report, including the  attached Sales Tax Digest Summary, includes certain modifications and omissions to maintain the  required confidentiality of taxpayer information.  We share the information provided by MuniServices with the Administrative Services Department (ASD)  for use in revenue forecasting and budgeting and coordinated this report with them.  DISCUSSION  MuniServices prepared the attached report (Attachment B) covering calendar year 2016 first quarter  sales (January through March 2016). These funds are reported as part of the City’s fiscal year 2016  revenue. In September, ASD should receive information from the state on aggregate sales and use tax  receipts for the second quarter of 2016.  Following are some highlights of the sales and use tax information:  Palo Alto’s overall sales and use tax revenue (cash receipts) for the first quarter of 2016 increased by about $273,000, or 4.6 percent, including pool allocations, compared to the first quarter of 2015. For all Santa Clara County jurisdictions, sales and use tax revenue for the first quarter of 2016 increased by $4.8 million, or 5.1 percent, compared to the first quarter of 2015. Statewide, almost every region in California experienced an increase in sales and use tax revenue for the year ending in March 2016, with a one‐year statewide increase of 3.1 percent. Palo Alto’s sales and use tax revenue totaled $27.4 million for the year ending in March 2016, an increase of 6.6 percent from $25.7 million during the prior one‐year period. Excluding pool allocations and adjusting for prior‐period and late payments, Palo Alto’s sales and use tax revenue for the first quarter of 2016 increased by 1.3 percent compared to the first quarter of 2015 and increased by 3.9 percent compared to the prior year. 1 See definitions of state and county pools on page 3.  Office of the City Auditor  Sales Tax Digest Summary – First Quarter Sales (January – March 2016)  Attachment A City of Palo Alto | Office of the City Auditor | Sales Tax Digest Summary 2  More detailed information is shown in Attachment B.  Economic Influences on Sales and Use Tax  In its Economic News & Trends (Attachment D), MuniServices discusses economic influences, including  national and state economic trends, e‐commerce, and auto and retail sales, that may affect the City’s  sales and use tax revenue.  The California Employment Development Department reports that the June 2016 unemployment rate,  which is not seasonally adjusted, was 4.0 percent in Santa Clara County and 2.8 percent in Palo Alto.  Economic Category Analysis  MuniServices’ analysis of economic categories for the year ending March 2016 shows:  Economic category  % of Palo Alto’s sales  and use tax revenue  % Increase (Decrease)  compared to prior year  General retail 35.5% (3.3%)  Food products 20.0% 6.2%  Business‐to‐business 17.9% 22.8%  Construction 4.0% 10.9%  Miscellaneous 22.6% 0.3%  The following chart shows sales and use tax revenue by geographic area, based on information  provided by MuniServices.  Palo Alto’s Sales and Use Tax Revenue by Geographic Area  For the Year Ending March 2016  (Amounts include tax estimates and exclude pool allocations)  DEFINITIONS  In California, either sales tax or use tax may apply to a transaction, but not both. The sales and use tax  rate in Palo Alto is 8.75 percent.  Stanford Shopping  Center $5.5 million, 24% Stanford Research  Park $2.9 million, 13% Downtown/University Avenue $3.4 million, 15% California Ave/Park Blvd/Lambert Ave $1.5 million, 7% Town & Country $0.6 million, 3% All Other Areas $8.9 million, 38% Attachment A City of Palo Alto | Office of the City Auditor | Sales Tax Digest Summary 3  Sales tax – imposed on all California retailers; applies to all retail sales of merchandise (tangible personal  property) in the state.  Use tax – generally imposed on consumers of merchandise (tangible personal property) that is used,  consumed, or stored in this state; purchases from out‐of‐state retailers when the retailer is not  registered to collect California tax, or for some other reason does not collect California tax; leases of  merchandise (tangible personal property).  Countywide/statewide pools – mechanisms used to allocate local tax that cannot be identified with a  specific place of sale or use in California. Local tax reported to the pool is distributed to the local  jurisdiction each calendar quarter using a formula that relates to the direct allocation of local tax to each  jurisdiction for a given period.  Examples of taxpayers who report use tax allocated through the countywide pool include construction  contractors who are consumers of materials used in the improvement of real property and whose job  site is regarded as the place of business, out‐of‐state sellers who ship goods directly to consumers in the  state from inventory located outside the state, and California sellers who ship goods directly to  consumers in the state from inventory located outside the state.  Other examples of taxpayers who report use tax through the pools include auctioneers, construction  contractors making sales of fixtures, catering trucks, itinerant vendors, vending machine operators and  other permit holders who operate in more than one local jurisdiction but are unable to readily identify  the particular jurisdiction where the taxable transaction takes place.  Respectfully submitted,  Harriet Richardson  City Auditor  Sources: MuniServices  California State Board of Equalization  California Employment Development Department  City of Palo Alto Fiscal Year 2016 Adopted Operating Budget  Audit staff:  Lisa Wehara  Attachment A City of Palo Alto Sales Tax Digest Summary Collections through June 2016 Sales through March 2016 (2016Q1) www.MuniServices.com (800)800-8181 Page 1 California Overview The percent change in cash receipts from the prior year was 3.1% statewide, 3.1% in Northern California and 3.0% in Southern California. The period’s cash receipts include tax from business activity during the period, payments for prior periods and other cash adjustments. When we adjust for non-period related payments, we determine the overall business activity increased for the year ended 1st Quarter 2016 by 2.9% statewide, 3.1% in Southern California and 2.5% in Northern California. City of Palo Alto For the year ended 1st Quarter 2016, sales tax cash receipts for the City increased by 6.6% from the prior year. On a quarterly basis, sales tax revenues increased by 4.6% from 1st Quarter 2015 to 1st Quarter 2016. The period’s cash receipts include tax from business activity during the period, payments for prior periods and other cash adjustments. Excluding state and county pools and adjusting for anomalies (payments for prior periods) and late payments, local sales tax increased by 3.9% for the year ended 1st Quarter 2016 from the prior year. On a quarterly basis, sales tax activity increased by 1.3% in 1st Quarter 2016 compared to 1st Quarter 2015. Regional Overview This seven-region comparison includes estimated payments and excludes net pools and adjustments. % of Total / % Change City of Palo Alto California Statewide S.F. Bay Area Sacramento Valley Central Valley South Coast Inland Empire North Coast Central Coast General Retail 35.5 / -3.3 28.3 / 3.0 26.7 / 1.3 27.8 / 4.0 30.7 / 3.2 29.2 / 3.1 26.6 / 5.3 28.4 / 3.2 31.6 / 0.9 Food Products 20.0 / 6.2 20.4 / 5.2 21.8 / 5.6 16.8 / 3.8 16.5 / 4.0 21.6 / 5.2 17.0 / 5.5 18.4 / 2.9 30.7 / 1.5 Construction 4.0 / 10.9 9.6 / 7.9 9.5 / 6.4 11.3 / 7.1 12.1 / 5.5 8.3 / 5.9 12.2 / 18.2 13.4 / 6.4 9.4 / 3.3 Business to Business 17.9 / 22.8 16.5 / -0.6 20.0 / 4.1 14.3 / 5.7 12.9 / -9.0 16.0 / -3.0 15.4 / 1.0 8.3 / -7.1 6.2 / 10.9 Miscellaneous/Other 22.6 / 0.3 25.2 / 3.6 22.0 / 1.8 29.9 / 6.3 27.8 / 3.7 24.9 / 2.7 28.8 / 8.1 31.4 / 1.9 22.1 / 1.7 Total 100.0 / 3.9 100.0 / 2.9 100.0 / 2.7 100.0 / 4.3 100.0 / 0.9 100.0 / 2.3 100.0 / 5.4 100.0 / 1.5 100.0 / 1.0 City of Palo Alto State Wide S.F. Bay Area Sacramento Valley Central Valley South Coast Inland Empire North Coast Central Coast Largest Segment Restaurants Restaurants Restaurants Restaurants Department Stores Service Stations Restaurants Service Stations Restaurants % of Total / % Change 17.8 / 6.5 14.4 / 6.5 15.5 / 6.6 15.8 / 6.5 13.6 / 1.5 26.6 / -2.2 11.1 / 6.9 11.4 / 11.7 22.2 / 0.9 2nd Largest Segment ***Auto Sales - New Auto Sales - New Auto Sales - New Auto Sales - New Restaurants Auto Sales - New Auto Sales - New Misc. Retail % of Total / % Change *** / ***11.1 / 7.2 10.7 / 6.2 11.3 / 6.7 10.8 / 7.8 12.9 / 4.1 11.0 / 10.1 11.3 / -12.8 10.8 / 11.4 3rd Largest Segment Department Stores Department Stores Department Stores Department Stores Restaurants Food Markets Department Stores Department Stores Department Stores % of Total / % Change 10.0 / -4.0 9.5 / 0.5 7.9 / -1.5 9.3 / 0.3 10.7 / 6.8 8.4 / 0.3 10.6 / 3.3 11.0 / 1.1 8.6 / -2.9 *** Not specified to maintain confidentiality of tax information CITY OF PALO ALTO ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 1st QUARTER 2016 ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 1st QUARTER 2016 BENCHMARK YEAR 2016Q1 COMPARED TO BENCHMARK YEAR 2015Q1 Gross Historical Sales Tax Performance by Benchmark Year and Quarter (Before Adjustments) Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 2 $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 BENCHMARK YEAR QUARTERLY Net Cash Receipts for Benchmark Year 1st Quarter 2016: $27,352,428 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q1 BMY is sum of 2016 Q1 and 2015 Q4, Q3 & Q2) Restaurants 15% Department Stores 8% Miscellaneous Retail 8% Electronic Equipment 7%Leasing 3% Food Markets 2% Leasing 3% Recreation Products 1% All Other 37% Net Pools & Adjustments 16% Attachment B City of Palo Alto www.MuniServices.com (800)800-8181 Page 3 TOP 25 SALES/USE TAX CONTRIBUTORS The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended 1st Quarter 2016. The Top 25 Sales/Use Tax contributors generate 49.9% of Palo Alto’s total sales and use tax revenue. Anderson Honda Integrated Archive Systems Tesla Motors Apple Stores Loral Space Systems The Pace Gallery Audi Palo Alto Macy's Department Store Tiffany & Company Bloomingdale's Magnussen's Toyota USB Leasing Bon Appetit Management Co.Neiman Marcus Department Store Varian Medical Systems CVS/PHARMACY Nordstrom Department Store Volvo Cars Palo Alto Eat Club Pottery Barn Kids Wilkes Bashford Fry's Electronics Stanford University Hospital Hewlett-Packard Tesla Lease Trust Sales Tax from Largest Non-confidential Economic Segments $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 Benchmark Year 2016Q1 Benchmark Year 2015Q1 Attachment B City of Palo Alto www.MuniServices.com (800)800-8181 Page 4 Historical Analysis by Calendar Quarter Economic Category % 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 2014Q2 2014Q1 2013Q4 2013Q3 General Retail 26.7% 1,668,860 2,526,551 1,935,178 2,009,743 1,797,756 2,591,589 1,994,264 2,032,155 1,791,298 2,585,931 1,945,413 Miscellaneous/Other 23.5% 1,468,705 1,491,158 1,609,541 1,564,157 1,400,769 1,655,225 1,400,415 1,437,507 1,283,210 1,553,169 1,196,569 Food Products 17.9% 1,119,559 1,166,195 1,146,174 1,167,014 1,061,755 1,096,087 1,054,462 1,051,681 972,997 1,009,848 950,359 Business To Business 14.8% 928,407 1,428,210 888,609 833,370 757,827 885,327 596,226 970,762 858,119 1,268,059 848,634 Net Pools & Adjustments 17.2% 1,074,507 1,226,261 1,060,979 1,039,250 968,777 1,178,482 945,653 786,945 1,013,633 1,095,801 924,963 Total 100.0% 6,260,038 7,838,375 6,640,481 6,613,534 5,986,884 7,406,710 5,991,020 6,279,050 5,919,257 7,512,808 5,865,938 Economic Segments % 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 2014Q2 2014Q1 2013Q4 2013Q3 Miscellaneous/Other 41.8% 2,617,484 3,237,983 2,720,241 2,549,852 2,370,361 2,906,134 2,211,697 2,577,014 2,328,959 3,184,808 2,230,000 Restaurants 16.0% 999,036 1,029,733 1,019,505 1,045,011 942,709 962,018 936,160 940,540 870,158 890,739 833,865 Miscellaneous Retail 7.4% 464,015 714,151 478,994 479,298 415,270 628,099 508,061 514,133 481,305 661,268 458,124 Department Stores 7.0% 435,470 714,831 553,325 595,374 503,590 750,481 548,595 591,500 472,857 762,760 574,389 Apparel Stores 5.4% 337,876 519,318 397,534 428,100 370,810 507,843 398,747 429,748 365,777 515,296 400,201 Service Stations 2.0% 123,004 140,758 173,082 181,582 148,902 166,861 203,484 215,162 184,185 177,096 214,276 Food Markets 1.7% 104,790 116,778 113,092 106,818 104,856 117,245 105,600 98,705 90,272 104,592 104,815 Business Services 0.8% 51,471 76,156 51,885 120,003 103,773 131,505 66,163 62,060 63,768 61,832 57,139 Recreation Products 0.8% 52,385 62,406 71,844 68,246 57,836 58,042 66,860 63,243 48,343 58,616 68,166 Net Pools & Adjustments 17.2% 1,074,507 1,226,261 1,060,979 1,039,250 968,777 1,178,482 945,653 786,945 1,013,633 1,095,801 924,963 Total 100.0% 6,260,038 7,838,375 6,640,481 6,613,534 5,986,884 7,406,710 5,991,020 6,279,050 5,919,257 7,512,808 5,865,938 *Net Pools & Adjustments reconcile economic performance to periods’ net cash receipts. The historical amounts by calendar quarter: (1) include any prior period adjustments and payments in the appropriate category/segment and (2) exclude businesses no longer active in the current period. Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 5 Quarterly Analysis by Economic Category, Total and Segments: Change from 2015Q1 to 2016Q1 Ge n e r a l R e t a i l Fo o d P r o d u c t s Co n s t r u c t i o n Bu s i n e s s t o Bu s i n e s s Mi s c / O t h e r 20 1 6 / 1 T o t a l 20 1 5 / 1 T o t a l % C h g La r g e s t G a i n Se c o n d L a r g e s t Ga i n La r g e s t D e c l i n e Se c o n d L a r g e s t De c l i n e Campbell 1.8% 3.7% 2.9% -13.8% -9.9% 2,137,810 2,188,880 -2.3%Recreation Products Restaurants Business Services Service Stations Cupertino -17.6% 6.4% -19.8% 8.6% -11.4% 4,877,716 4,829,767 1.0%Business Services Office Equipment Bldg.Matls-Whsle Department Stores Gilroy -0.8% 4.6% 14.3% 14.0% 7.6% 3,185,988 3,043,944 4.7%Auto Sales - New Misc. Vehicle Sales Service Stations Apparel Stores Los Altos -6.9% 13.7% 22.3% 21.2% -6.3% 518,359 495,041 4.7%Restaurants Liquor Stores Furniture/Appliance Service Stations Los Gatos -11.1% 2.3% 32.3% -7.6% -15.3% 1,481,022 1,607,090 -7.8%Bldg.Matls-Retail Restaurants Miscellaneous Other Auto Sales - New Milpitas -2.9% 10.9% 4.6% -3.2% -0.5% 4,301,908 4,279,212 0.5%Restaurants Office Equipment Electronic Equipment Furniture/Appliance Morgan Hill 2.2% 5.3% 6.0% -23.2% -0.7% 1,700,925 1,745,997 -2.6%Restaurants Misc. Vehicle Sales Electronic Equipment Service Stations Mountain View -0.4% 5.9% -20.0% 45.5% -8.2% 3,942,546 3,590,713 9.8%Office Equipment Restaurants Light Industry Electronic Equipment Palo Alto -7.3% 5.7% 9.6% 8.6% 3.6% 5,185,530 5,121,394 1.3%Leasing Restaurants Furniture/Appliance Department Stores San Jose -0.6% 1.9% 3.1% 18.0% -1.4% 36,801,795 35,251,152 4.4%Light Industry Energy Sales Office Equipment Service Stations Santa Clara -5.1% 5.4% -1.3% 12.7% -4.9% 10,126,901 9,754,604 3.8%Office Equipment Business Services Auto Sales - New Electronic Equipment Santa Clara Co.-6.4% -3.0% -25.6% -17.6% 1.3% 892,579 979,159 -8.8%Office Equipment Service Stations Bldg.Matls-Whsle Electronic Equipment Saratoga 9.7% -0.3% 129.3% 26.5% -11.1% 211,018 208,590 1.2%Electronic Equipment Furniture/Appliance Service Stations Office Equipment Sunnyvale -2.1% 6.7% -2.2% -3.5% -1.2% 6,186,416 6,256,695 -1.1%Light Industry Auto Sales - New Electronic Equipment Health & Government Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 6 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 El Camino Real 1,090,870 1,055,524 1,049,438 1,038,409 2,563,317 1,084,815 1,108,045 1,102,757 1,105,340 1,090,236 1,088,571 1,140,412 1,188,495 Town and Country 522,374 523,504 525,116 550,852 570,860 590,134 624,333 629,346 637,224 644,288 636,497 639,830 642,372 Midtown 183,780 184,646 185,301 185,348 185,472 185,910 187,120 188,251 192,122 194,028 195,907 192,190 193,066 East Meadow Area 74,680 77,869 100,045 103,590 107,316 109,171 114,419 104,735 117,701 172,602 166,805 161,897 173,019 Charleston Center 76,315 78,734 81,455 90,116 84,760 86,432 86,288 87,413 88,622 89,612 90,642 91,711 91,991 City of Palo Alto - Selected Geographic Areas of the City Benchmark Year 1st Quarter 2016 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 El Camino Real Town and Country Midtown East Meadow Area Charleston Center *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q1 BMY is sum of 2016 Q1 and 2015 Q4, Q3 & Q2) Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 7 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Stanford Shopping Ctr 5,519,326 5,501,836 5,508,513 5,637,256 5,647,210 5,685,894 5,713,169 5,726,273 5,769,236 5,775,751 5,765,715 5,670,796 5,501,996 Stanford Research Park 5,995,489 5,075,848 7,949,998 7,307,557 4,299,015 4,027,889 3,724,671 3,304,003 3,082,331 2,869,143 2,411,043 2,953,900 2,924,944 Downtown 3,007,123 3,027,279 3,022,194 3,068,553 3,108,592 3,124,224 3,189,273 3,220,248 3,251,198 3,318,323 3,351,331 3,399,758 3,445,331 San Antonio 2,047,925 1,997,654 2,106,291 2,122,586 2,234,235 2,393,463 2,453,548 2,495,915 2,504,156 2,465,311 2,483,850 2,476,949 2,517,603 California Avenue 1,058,098 1,072,925 1,078,153 1,104,341 1,104,237 1,109,685 1,119,047 1,120,996 1,113,385 1,108,904 1,106,175 1,097,493 1,091,796 City of Palo Alto - Selected Geographic Areas of the City Benchmark Year 1st Quarter 2016 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 Stanford Shopping Ctr Downtown #REF!San Antonio California Avenue 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Stanford Shopping Ctr Downtown San Antonio California Avenue $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Stanford Shopping Ctr Stanford Research Park Downtown San Antonio California Avenue *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q1 BMY is sum of 2016 Q1 and 2015 Q4, Q3 & Q2) Attachment B City of Palo Alto www.MuniServices.com (800)800-8181 Page 8 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Valley Fair 6,865,443 6,808,919 6,815,517 6,883,838 6,885,378 6,958,214 7,108,448 7,455,179 7,588,546 7,273,028 7,282,265 7,248,371 7,228,310 Stanford Shopping Ctr 5,519,326 5,501,836 5,508,513 5,637,256 5,647,210 5,685,894 5,713,169 5,726,273 5,769,236 5,775,751 5,765,715 5,670,796 5,501,966 Oakridge Mall 3,972,739 3,974,067 3,954,094 3,924,360 3,934,469 3,972,556 4,005,370 4,040,521 4,159,367 4,236,080 4,215,653 4,158,194 4,075,061 Hillsdale 2,367,315 2,356,855 2,367,935 2,387,185 2,374,185 2,401,370 2,438,295 2,450,278 2,494,792 2,513,866 2,470,404 2,434,086 2,410,095 Santana Row 1,795,942 1,938,742 2,156,984 1,765,101 2,453,638 2,523,193 2,525,349 2,565,665 2,634,908 2,706,867 2,735,522 2,834,796 2,807,754 City of Palo Alto - Regional Shopping Mall Comparison Benchmark Year 1st Quarter 2016 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Valley Fair Stanford Shopping Ctr Oakridge Mall Hillsdale Santana Row *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q1 BMY is sum of 2016 Q1 and 2015 Q4, Q3 & Q2) Attachment B Economic Categories and Segments Economic Category Economic Segment Description Business to Business - sales of tangible personal property from one business to another business and the buyer is the end user. Also includes use tax on certain purchases and consumables. Business Services Advertising, banking services, copying, printing and mailing services Chemical Products Manufacturers and wholesalers of drugs, chemicals, etc. Electronic Equipment Manufacturers of televisions, sound systems, sophisticated electronics, etc. Energy Sales Bulk fuel sales and fuel distributors and refiners Heavy Industry Heavy machinery and equipment, including heavy vehicles, and manufacturers and wholesalers of textiles and furniture and furnishings Leasing Equipment leasing Light Industry Includes, but is not limited to, light machinery and automobile, truck, and trailer rentals Office Equipment Businesses that sell computers, and office equipment and furniture, and businesses that process motion pictures and film development Construction Building Materials – Retail Building materials, hardware, and paint and wallpaper stores Building Materials - Wholesale Includes, but is not limited to, sheet metal, iron works, sand and gravel, farm equipment, plumbing materials, and electrical wiring Food Products Food Markets Supermarkets, grocery stores, convenience stores, bakeries, delicatessens, health food stores Food Processing Equipment Processing and equipment used in mass food production and packaging Liquor stores Stores that sell alcoholic beverages Restaurants Restaurants, including fast food and those in hotels, and night clubs Attachment C Economic Categories and Segments Economic Category Economic Segment Description General Retail – all consumer focused sales, typically brick and mortar stores Apparel Stores Men’s, women’s, and family clothing and shoe stores Department Stores Department, general, and variety stores Drug Stores Stores where medicines and miscellaneous articles are sold Florist/Nursery Stores where flowers and plants are sold Furniture/Appliance Stores where new and used furniture, appliances, and electronic equipment are sold Miscellaneous Retail Includes, but is not limited to, stores that sell cigars, jewelry, beauty supplies, cell phones, and books; newsstands, photography studios; personal service businesses such as salons and cleaners; and vending machines Recreation Products Camera, music, and sporting goods stores Miscellaneous/Other Miscellaneous/Other Includes but not limited to health services, government, nonprofit organizations, non- store retailers, businesses with less than $20,000 in annual gross sales, auctioneer sales, and mortuary services and sales Transportation Auto Parts/Repair Auto parts stores, vehicle and parts manufacturing facilities, and vehicle repair shops Auto Sales - New New car dealerships Auto Sales - Used Used car dealerships Miscellaneous Vehicle Sales Sale and manufacture of airplanes and supplies, boats, motorcycles, all-terrain vehicles, trailers and supplies Service stations Gas stations, not including airport jet fuel Attachment C ECONOMIC NEWS & TRENDS July 20, 2016 ECONOMIC NEWS & TRENDS Attachment D CONTENTS Section 1: U.S. Economy (CPI, financial market and economies, metro economies, employment data) Page 1 Section 2: California’s Economy (Revenue, forecast and outlook, employment and labor, expenditures) Page 3 Section 3: Sector Profile: California’s Non-Profits (Economic contribution, State and regional data) Page 4 Section 4: E-Commerce (Quarterly sales, retail sales, luxury resale, warehouses, foreign good purchases) Page 5 Section 5: California Auto Sales (Outlook, auto lending risks, used car lease trends) Page 6 Section 6: Gasoline (Trends and news) Page 7 Section 7: Supermarkets (Supplier news and trends) Page 7 Section 8: Retail Trends (Inventory, bookstores, mall trends, shadow lending, expansions) Page 8 Section 9: Restaurant News (Expansions and trends) Page 11 Section 10: Cannabis (Economic impact of sales) Page 11 HIGHLIGHTS California economy ranking: Became the 6th largest economy in the world with $2.46 trillion in gross state product. (DOF, June, 2016) United State GDP: Grew by 1.2 % in 1Q2016. (DOF, July, 2016) E-commerce sales in the U.S: 1Q2016 accounted for 7.7% of total sales; estimated at $1,183.9 billion for 4Q2016; a decrease of 0.2% from the 4Q2015. (US Census Bureau, May, 2017) Major component indexes that rose in June: Shelter, rent, lodging away from home, medical care, prescription drugs, medical care services, education, airline fares, tobacco, alcoholic, recreation (BLS, July, 2015) Major component indexes that declined in June: Used cars and trucks, new vehicles, apparel, communication, household furnishings, operations. (BLS, July, 2016) Imports and exports: Year-to-date goods and services is $41.1 billion, which is the highest on record. (US Census Bureau, June, 2016) California automobile dealers’ sales: Increased in 1Q2016; new light vehicles exceeded 500,000; represents 22nd consecutive year-over-year increase in quarterly registrations; on track to top 2 million units. (CNDA, May, 2016) California used car registrations: Increased 11.7% in 1Q2016. YTD through March for 2016 is 975,233, an 11% change from 2015 to 2016. (CNDA, May, 2016) National new vehicles sales in 2016: Cuts the forecast by 300,000 (or 1.7%) (LWC Automotive, July 2016) California gas prices: Declined 37% from June 2014 to May 2016. (BOE and EIA) California sales and use tax year to date: $126 million below the month’s forecast of 2.563 billion; Fiscal year 2015-16 sales tax revenues are $108 million below forecast. (DOF, July, 2016) California’s unemployment: Decreased to 5.2% and nonfarm payroll jobs increased by 4,200; lowest in San Mateo County at 2.6%; the highest is 19.4% in Imperial County (for May, 2016). (EDD, May, 2016; DOF July, 2016) California homes sales: Increased 0.6% in May; the statewide median price of existing single-family homes sold in May increased to $518,760 or 6.3% increase from a year ago. (DOF, July, 2016) CLIENT SERVICE TEAM Patricia.Dunn@MuniServices.com (Contracts) Julia.Erdkamp@MuniServices.com (Client Service Manager) Mary.Flynn@MuniServices.com (Client Service Manager) Robert.Hamud@MuniServices.com (Client Service Manager) Bret.Harmon@MuniServices.com (AVP Client Innovation) Doug.Jensen@MuniServices.com (Senior Vice President, Client Services) Fran.Mancia@MuniServices.com (Vice President, Government Relations) Brenda.Narayan@MuniServices.com (Government Relations, Report Editor) Marina.Sloan@MuniServices.com (Client Service Manager) Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 1 www.MuniServices.com SECTION 1 - U.S. ECONOMY Consumer Price Index (June, 2016) http://www.bls.gov/news.release/cpi.nr0.htm (released July 15, 2016) The CPI is a measure of the average change in prices over time of goods and services purchased by households. Consumer Price Index for All Urban Consumers (CPI-U): Increased 0.2% in June and 1.0% over the last 12 months. Food index: Fell 0.1% in June after a 0.2% decrease in May. The index for food at home fell 0.3%; this index declined 1.3% over the past year, its largest decline since February 2010. Four of the six major grocery store food groups declined. The non-alcoholic beverages index fell 0.7% in June, the largest decline since 2013. The only major grocery store food group index to rise in June was cereals and bakery products, which increased by 0.1%. Energy index: Increased 1.3% in June; which is the fourth increase in a row; the gasoline index continued to rise increasing 3.3% in June after a 2.3% advance in May. This index has declined 9.4% over the past year, with all of its major components falling over the period. Major component indexes that rose in June: Shelter (0.3%), rent index (0.4%) and lodging away from home rose 0.6%. The medical care index increased 0.4%; prescription drugs rose 1.3%, and the medical care services index increased 0.2%. The education index increased 0.5%, and airline fares rose 1.6% after declining in May. The index for motor vehicle insurance continued to rise 0.2%, tobacco 0.6%, alcoholic beverages and recreation both at 0.1%. Major component indexes that declined in June: Used cars and trucks (fell 1.1% after a 1.3% decline in May; May is the largest decline since March 2009). New vehicles declined 0.2% for a fifth consecutive decline. The apparel index fell 0.4% after rising in May. Communication, household furnishings and operations also declined. U.S. Trends and Outlook Financial Market and Economies (2Q2016) Sources: http://www.federalreserve.gov; http://www.census.gov/foreign-trade/Press- Release/current_press_release/ftdpress.pdf; http://dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2016/june/documents/jun-16.pdf U.S. economy: Continued but slow GDP growth in the two percentage range; driven by increase in consumer spending and housing. Anticipates continued steady gains in employment through 2018 and a steady decrease in the unemployment rate over the next two years. 1.7% real GDP growth in 2016, 2.8% in 2017 and 2.1% in 2018 U.S. manufacturing: Production will grow 2.6% in 2016, 3.0% in 2017, and 2.8% in 2018. Growth will slow to 2.6% in 2019 and 2.0% in 2020. Interest rates: The Federal Reserve Board members all voted against raising interest rates in 2Q2016. Business spending: Increasing by 4% in 2016. Inflation: 1.4% in 2016; 1.9% in 2017, and 2.0 in 2018. All are higher than the 0.7% inflation experienced in 2015 caused by low oil prices. The core inflation rate (without gas or food prices) will be 1.7% in 2016, 1.9% in 2017, and 2.0% in 2018. Food sales: $455.6 billion in May, 2016 (an increase of 2.0% from May. 2015). Retail trade sales: Core retail sales were up 0.4% from April 2016; non-store retailers were up 12.2% from May, 2015; while Health and Personal Care Stores were up 8.3% from last year. Imports of services: $41.1 billion which is the highest on record. Rental vacancy rate: 7.0%, down 0.1 percentage point from the 1Q2015 rate of 7.1%. Homeownership rate: 63.5%, down 0.2 (+/- 0.4)* percentage points from 1Q2015 rate of 63.7%. The homeownership rates in the Northeast, Midwest, South and West were not statistically different from the rates in 1Q2015 Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 2 www.MuniServices.com US Metro Economies in 2016-2017 http://usmayors.org/metroeconomies/ (June, 2016) Job growth: In 2016 a total of 52 (14%) metros will have job growth of more than 3%; 152 (40%) will gain more than 2%, and 273 (72%) greater than 1%. Thirty-seven metros however will lose jobs in 2016. Goods Manufacturing Product (GMP): Real GMP growth in 2016 will exceed 3% for 42 (11%) metros, 2% for 126 (33%), 1% for 255 (67%), and will be positive for 333 (87%). In 2017, GMP growth for all metros of 2.7% again leads the increase in US GDP. Eighty-one percent of metros (309), are projected to see real GMP growth of at least 2% in 2017, with 33% (125) exceeding 3% growth. Though the Sun Belt areas will still lead the US, growth will be more evenly distributed with the Northeast and Midwest improving significantly. Employment: In 2016 the USCM’s estimate that another 20 metros will have prerecession peak levels of employment, bringing the total to 250, or 66%. And by year-end 2016 we forecast that 264 metros (69%) will have achieved this job recovery. While these job gains will enable most metros to reach new heights of economic activity, it will still be the case that 117 metros (31%) will yet enter 2017 with fewer jobs than they supported almost a decade ago. Employment growth between 1% and 2% is forecast in 2017 for 203 metros (53%). Sixty five metros (17%) will see job growth greater than 2%, only 3 metros are projected to see a decline. U.S. Employment Data (June, 2016) http://www.bls.gov/news.release/empsit.nr0.htm (next release is August 5, 2016) Unemployment: Risen to 4.9% Employment: Loss: Mining continued to trend down in June. Since reaching its peak in September 2014, mining has lost 211,000 jobs; Gains: Total nonfarm payroll employment rose by 287,000 in June, 2016 Retail: Retail trade added 30,000 jobs in June. Employment gains occurred in general merchandise stores (+9,000), health and personal care stores (+5,000 Over the past 12 months, retail trade has added 313,000 jobs Health care: Increased by 58,000 in June (March, 2015 to March, 2016). Job gains occurred in ambulatory health care services (+19,000) and hospitals (+15,000), about in line with average monthly gains over the prior 12 months in each industry Social assistance: Child day care services added 15,000 jobs in June Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 3 www.MuniServices.com SECTION 2 - CALIFORNIA’S ECONOMY Economic and Revenue Update (July, 2016) http://dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2016/june/documents/jun-16.pdf http://dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2016/july/documents/jul-16.pdf California’s economy: Became the 6th largest in the world in 2015 with $2.46 trillion in gross state product. In real terms, state growth was 4.1% for the year. Residential permits: Increased by 8.7% in May to annual total of 117,000 permits in May. After both categories added 54,000 units each in April, permits for single-family units were down 10.8% to 48,000, while multifamily units totaled 69,000, up 28.3% from April. The five-month average is now 100,000, slightly above the 12-month average of 96,000. Non-residential construction: Grew by 1.8% in May to $28.8 billion. Real estate: Sales of existing single-family homes increased 0.6% in May, following a 2.4-percent drop in April. The statewide median price of existing single-family homes sold in May climbed to $518,760, a 6.3-percent increase from a year ago and just 12.7% off the pre-recession peak of $594,530 reached in May, 2007. (DOF, July, 2016) California Forecast / Economic Outlook http://www.pacific.edu/Documents/school-business/BFC/Forecasts/CA-Metro-Forecast-May2016.pdf (May, 2016); http://beaconecon.com/Misc/Beaconomics_Summer2016.pdf; CBRE Group Growth: The California economy maintained a steady course and is on track for a fifth consecutive year of economic growth, job creation, and lower unemployment. California ranked first among the 50 states in economic growth last year with a 4.1% gain. Steady growth in real gross state product at approximately 3% through 2019. Gross state product grew at an estimated 2.0% rate in 1Q2016. Tourism: Growing tourism and a gradual shift in consumer spending from retail to restaurants has led the leisure and hospitality sector to exceed 4% job growth in each of the past 4 years; projected to add more than 35,000 additional jobs over the next year. Commercial office space: The fastest growing company headcount is about 400 employees. In San Francisco rents have increased by 137% since 2010. The tech sector overall occupies 22 million square feet or 29% of the entire city’s office market. The largest consumer of space in the city has been Salesforce.com. (CBRE Group) Rents: The effect of a less-than-healthy owner-occupied housing market has been a falling homeownership rate and higher rents. Rents will continue to increase in markets where supply is constrained. State and local government employment: Is one of the slowest growing sectors, projected to grow less than 1% over the next year. State and local government payrolls in California will finally regain their 2008 level in late 2017. Construction jobs: Nearly 40,000 new jobs are anticipated in each of the next three years, just below a 5% annual growth rate. Despite this expected growth, there will still be fewer Construction jobs in 2020 than before the recession. Jobs: Outpaced the nation in terms of job gains, with a 2.8% yearly increase in May compared to the nation’s 1.7% rate. The U.S. goods and trade (exports and imports) California ports was up marginally to 18.12% (12-month moving total, up from 18.03% in April) Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 4 www.MuniServices.com California Labor and Employment Trends http://www.labormarketinfo.edd.ca.gov/Publications/Labor-Market-Analysis/calmr.pdf (May, 2016); http://ajed.assembly.ca.gov/sites/ajed.assembly.ca.gov/files/California%20Economy%20Employment%20Data%20revised- %20May%2020%2C%202016.pdf Unemployment rate: Decreased to 5.2 and nonfarm payroll jobs increased by 4,200. Lowest unemployment rates: Was 2.6% in San Mateo County in May. Other counties with rates below 4.0% in May: Marin (2.8%); San Francisco (2.9%); Santa Clara (3.3%); Napa (3.4%); San Luis Obispo (3.5%); Sonoma (3.5%); Orange (3.6%); and Alameda (3.8%). Highest unemployment rate: The highest unemployment rate in May was 19.4% in Imperial County. Employment gains: Forty-seven of the 50 areas recorded month-over increases in nonfarm payrolls. Anaheim-Santa Ana- Irvine experienced the largest job gain (11,700 jobs) while Mono County experienced the largest month-over job loss (810 jobs). Forty-five of the 50 sub-state areas recorded year-over employment gains, with the Los Angeles-Long Beach-Glendale showing the largest numerical job growth of 101,000 jobs (2.4%) and Madera County showing the largest percentage growth of 6.7% (2,400 jobs). Job decrease: Mariposa and Colusa County showed the largest numerical job decrease of 50 jobs while Sierra showed the largest percentage decrease of 6.5% (-40 jobs). Sectors increases and decreases: Within nonfarm industries, six sectors saw month-over job gains and five sectors saw job decline. The sectors with increased employment in May were: professional and business services (12,800); educational and health services (12,800); financial activities (2,300); information (1,900); other services (1,600); and government (1,000). Sectors that lost jobs were: leisure & hospitality (-7,300); manufacturing (-5,000); construction (-2,800); trade, transportation, and utilities (-1,500); and mining and logging (-600). SECTION 3 – SECTOR PROFILE: CALIFORNIA’S NON-PROFITS ECONOMIC CONTRIBUTION AND IMPACT California’s Non-Profit Sector http://calnonprofits.org/publications/causes-count Economic activity: Contributes 15% (or 1/6) of California’s Gross State Product (GSP). Industry ranking: Nonprofits rank as the 4th largest industry in California by employment, producing more jobs than the construction, finance, or real estate industries. Regional data profiles: Bay Area: Home to 19% of the state’s population, 28% of its nonprofits, and 53% of its total nonprofit revenue; Central Valley: Home to 4% of the state’s population, 5% of its nonprofits, and 2% of its total nonprofit revenue; Far North: Home to 3% of the state’s population, 4% of its nonprofits, and 2% of its total nonprofit revenue; Inland Empire: Home to 11% of the state’s population, 6% of its nonprofits, and 3% of its total nonprofit revenue; Los Angeles: Home to 29% of the state’s population, 21% of its nonprofits, and 21% of its total nonprofit revenue; Orange County: Home to 8% of the state’s population, 8% of its nonprofits, and 5% of its total nonprofit revenue; Sacramento: Home to 6% of the state’s population, 6% of its nonprofits, and 4% of its total nonprofit revenue; San Diego: home to 9% of the state’s population, 9% of its nonprofits, and 7% of its total nonprofit revenue; San Joaquin: Home to 11% of the state’s population, 7% of its nonprofits, and 4% of its total nonprofit revenue; Sierras: Home to 1% of the state’s population, 1% of its nonprofits, and less than 1% of its total nonprofit revenue. Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 5 www.MuniServices.com SECTION 4 - E-COMMERCE Quarterly Retail E-Commerce Sales / 1st Q 2016/ Released May 17, 2016 http://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf (second quarter 2016 release on August 16, 2016) Estimate: Adjusted for seasonal variation for 1Q2016, but not for price changes, was $92.8 billion, an increase of 3.7% from the 4Q2015. Total retail sales: Estimated at $1,183.9 billion for 4Q 2016; a decrease of 0.2% from the 4Q 2015. Increase in estimates: Increased 15.2% from the 1Q 2015. E-commerce sales: 1Q2016 accounted for 7.7% of total sales. Retail Sales Gain - Fueled by Web http://www.usatoday.com/story/money/2016/06/14/retail-sales-post-solid-gain-may/85845800/ (June 14, 2016) http://www.nasdaq.com/article/retail-sales-gain-is-fueled-by-web--wsj-20160514-00003 (May 14, 2016) Retail Sales: Grew more slowly in May after surging the previous month but still posted a solid gain. Driven partly by rising gasoline prices, sales increased 0.5%. In May rose 1.3% at sporting goods stores, 0.8% at restaurants and bars, 0.3% at electronics and appliance stores, 0.6% at health and personal care stores, 0.8% at clothing stores and 1.3% online. Partly offsetting the gains were declines of 0.9% at department stores, 1.8% at building material stores and 0.1% at furniture stores. Retail sales make up the bulk of consumer spending, which comprises 70% of economic activity. On-line shopping: Retail sales include online shopping on Amazon, rival websites and applications. In the past year, Internet and catalog sales have grown more than three times as fast as overall sales, up 10.2%. Department-store sales, meanwhile, sank 1.7% over the past 12 months. Amazon is now the second-largest apparel seller in the U.S., behind Wal-Mart Stores Inc. (Morgan Stanley). That category was once dominated by department stores. Executives at traditional large retailers struggled to explain the slump, which for some companies was their worst since the recession. Larger Retailers: Struggling even though they are getting an increasing amount of revenue from their own e-commerce operations. Executives at Nordstrom, which gets 20% of its sales online, cited weak traffic to malls as well as aggressive discounting online for its slump. The global economy is ratcheting up price pressures as well. Consumer prices for apparel, home wares and other goods often imported from overseas have flattened or fallen due to a stronger dollar. In some cases that means retailers' margins shrink between placing orders and stocking their shelves. Even higher-priced luxury retailers haven't been immune. Foot traffic to apparel stores declined 7.2% in April. China’s growing E-Commerce: Chinese consumers already make up for almost half of global online retail sales, and are only growing in numbers. Online retail sales amounted to $581.61 billion in 2015, surging 33.3% from the previous year. Compared to brick-and-mortar retailing in China, e-commerce sales often experience fewer licensing requirements and quicker customs clearance. Expected to comprise 42% of growth in private consumption by 2020. Resale Luxury and Designer Labels https://www.thredup.com/resale; http://www.wsj.com/articles/ranking-the-resale-value-of-designer-fashion-labels-1465414071?mod=e2tw (June 8, 2016)’ http://www.chicagotribune.com/business/ct-luxury-garage-sale-funding-0601-biz-20160531-story.html (June 2, 2016) Growth in the resale market is expected to outpace all e-commerce and retail sectors over the next 10 years. By some estimates, over $8 billion of clothing in American closets is unused and ignored. Los Angeles and San Francisco are among the top 10 cities with the greatest amount of resale activity. Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 6 www.MuniServices.com New U.S. Rules Make Foreign Goods Better Deal for Online Shoppers http://www.nasdaq.com/article/new-us-rules-make-foreign-goods-better-deal-for-online-shoppers-20160504- 01842#ixzz4E4OvKdZS (June 28, 2016) A change in trade rules is making it cheaper and easier for American consumers to buy overseas goods online, heartening merchants abroad but threatening stiffer competition for U.S. retailers. Since about a month ago, the government has allowed Americans to import up to $800 at a time of most foreign goods without having to pay import duties or tax. Until the new rules took effect March 10, duties averaged 33% on the top 50 products brought into the U.S. when purchases exceeded $200, according to United Parcel Service Inc. On a $201 purchase of costume jewelry, U.S. customs would collect a duty of 110%, more than doubling the price. Now, those duties are zero, providing the price totals less than $800. Warehouses Growth and Employment Trend Wall Street Journal, Bureau of Labor and Colliers Internatinol (June 9, 2016) New warehouses can top one million square feet and contain thousands of different types of items. May data cites that 185 million square feet is under construction (3,200 football fields). In the Los Angeles/ Inland Empire (16.2 million square feet is under construction). U.S. warehouse jobs are among the fastest growing categories for employment. SECTION 5 - AUTO SALES AND TRENDS California Auto Outlook/ 1st Q 2016 / Released May, 2016 http://www.cncda.org/CMS/Pubs/CA%20Auto%20Outlook%201Q%202016.pdf; http://www.autodealermonthly.com/news/story/2016/07/lmc-automotive-revises-us-auto-sale-forecast-sales-to-steer- downward.aspx New Vehicle Market: Increased in 1Q2016. New light vehicle registrations in the state exceeded 500,000 units for Q12016 and improved 3.8% versus a year earlier. It was 22nd consecutive year-over-year increase in quarterly registrations. Future gains: Strong consumer interest in the abundance of new vehicles being introduced by manufacturers, combined with low fuel prices, attractive incentive offers, and low interest rates should help keep the market on an upward path for at least the next 12 months. Note that national forecasts predict slower sales for new cars that fall below 2015 records. Used vehicle market: Increased 11.7% during the first three months of this year versus a year earlier. U.S. Regulator Flags Auto-Lending Risks http://www.occ.treas.gov/publications/publications-by-type/other-publications-reports/semiannual-risk- perspective/semiannual-risk-perspective-spring-2016.pdf Banking regulator warns about growing credit risk in the auto-lending sector, raising the prospect of fresh regulatory pressure in the area. Auto lending has been increasing in recent years amid historically low interest rates, cheap gasoline and stronger consumer demand. Leasing a Used Car http://www.wsj.com/articles/hot-on-the-lot-leasing-a-used-car-1460417861 Finance companies and dealers are offering leases as a way to make payments affordable for people who don’t qualify for cheap deals on new cars or those looking to save cash. Sales of used cars rose 7% in 1Q2016. More than 16% of vehicles purchased new and used in the final three months of 2015 were leased, compared with 11.5% in the same period in 2012. Used-vehicle supply was extremely thin four years ago following a sales drought during the financial crisis. Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 7 www.MuniServices.com SECTION 6 - GASOLINE Gas Price Trends https://www.boe.ca.gov/news/pdf/ep616_accessible.pdf http://www.eia.gov/Energyexplained/index.cfm?page=gasoline_factors_affecting_prices http://energyalmanac.ca.gov/gasoline/index.html (current California statistics and data) Declining Gas Prices: Declined 37% from June, 2014 to May, 2016. Factors Affecting Gas Prices: The retail price of gasoline includes four main components: The cost of crude oil; Refining costs and profits; Distribution and marketing costs and profits; and Taxes (U.S. Energy Information Administration) Major Factors Influencing Volatility in California: The California refinery system runs near its capacity limits, which means there is little excess capability in the region to respond to unexpected shortfalls; California is isolated and lies a great distance from other supply sources (e.g., 14 days travel by tanker from the Gulf Coast), which prevents a quick resolution to any supply/demand imbalances; and the region uses a unique gasoline that is difficult and expensive to make, and as a result, the number of other suppliers who can provide product to the State are limited. California and U.S. Gas Prices There is a strong relationship between California gas prices and U.S. gas prices. California state gas taxes averaged $0.59 per gallon on January 1, 2016, while the U.S. average state tax was $0.48 per gallon, an $0.11 per gallon differential (American Petroleum Institute). Starting on January 1, 2015, California petroleum refiners became subject to meeting cap and trade carbon allowance requirements; most analysts believe cap and trade added about $0.12 per gallon to retail gasoline prices starting in 2015. The Consumer Response to a Year of Low Gas Prices https://www.jpmorganchase.com/corporate/institute/institute-insights.htm (July 7, 2016, JP Morgan Study) On average, gas prices in the United States were 25% lower in 2015 than in 2014. It is estimated that the lower gas prices generated a potential savings of about $630 for middle-income households. Altogether households spent 58% of their total potential gas savings. Of that amount, households spent 24% or roughly $150 at gas stations. They spent 34%, over $200 on things other than gas, primarily on restaurants and retail. The remaining 42% might have been saved or otherwise spent on purchases not typically paid for using a debit or credit card, notably vehicles or other durables. SECTION 7 - SUPERMARKETS New Future for Independent Natural Retail http://supermarketnews.com/natural-food-stores/crafting-new-future-independent-natural-retail http://newhope.com/nfm-market-overview/2016-nfm-market-overview-pdf-download http://www.wsj.com/articles/attention-shoppers-yoga-in-aisle-3-1465860325 Rather than trying to compete with Kroger, Whole Foods Market, Sprouts Farmers Market and the like, many independents are focusing on providing much more than a place to buy food. They’re offering classes in obscure crafts such as sausage making and home fermenting. They’re reaching into underserved neighborhoods with experimental mini-stores. They’re returning to the activist, local roots from which this industry was born. Supermarkets have long featured bank branches and dry cleaners, but transforming them into village-like destinations is a newer experiment. Most of these enhanced stores appear to be located in affluent suburbs and city neighborhoods, places where shoppers are more inclined to order groceries from e-commerce sites or meals from services such as Blue Apron. Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 8 www.MuniServices.com Millennials Are Driving the Rise of the Grocerant https://www.npd.com/wps/portal/npd/us/news/press-releases/2016/millennials-are-driving-the-rise-of-the-grocerant/ Restaurant-quality and fresh food, chef-driven menus, in-store experiences have given rise to the “Grocerant” and inspiration to Millennials to visit and spend. In-store dining and take-out of prepared foods from grocers has grown nearly 30% since 2008, and accounted for 2.4 billion foodservice visits and $10 billion of consumer spending in 2015. Over 40% of the U.S. population purchases prepared foods from grocery stores, and while Millennials use grocery stores less than other generational groups, retail foodservice is gaining traction with them. Changes, News and Trends http://www.theshelbyreport.com (April, 2016 to July, 2016) Aldi: Plans to operate about 45 stores in California by end of 2016 Andronico: Sales rising 3% to 3.5% since last year after installing Instacart delivery programs Raley’s: Announced flagship store for Truckee; will be Rancho Murieta’s only full service grocery store; opening in Rancho Cordova, two others in Sacramento Safeway: Open new store in Mountain View Smart and Final: Re-opened all 33 lease locations (formerly Haggen) Super King: Opens 7th store in Santa Ana SECTION 8 - RETAIL TRENDS Retailers Cut Back On In-Store Inventory http://www.wsj.com/articles/retailers-rethink-inventory-strategies-1467062280 (June 27, 2016) Every move of inventory is an added cost that eats away at already thin margins. Target has moved bulky items into centralized distribution locations. Kohl’s is aiming to lower inventory by 10% by the end of next year, after seeing it swell 15% over the past five years as the department-store chain tried to become a bigger online player. Home Depot has weathered the shift to online shopping habits better than most, with sales at existing stores up at least 5% in each of the past three year. Hand-on Services Brick and Mortar Retail Growth www.nreionline.com Hands-on services and attractive merchandising are luring customers into beauty departments and independent changes. Percentage change from 2015, based on five-month sales totals: Sports goods (6.4%); food services (6.9%); health and personal care that include beauty (7.3%); and building materials and garden (8.0%). Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 9 www.MuniServices.com Bookstores - In-Store Printing http://www.thelowdownblog.com/2016/04/how-tech-is-bringing-readers-back-into.html (April, 24, 2016) Bookstores of the future may well feature other cool technology that makes book shopping easier while expanding choices. Espresso Book Machine prints new paperbacks in five minutes or less. These are heady days for independent booksellers, whose ranks have grown to 1,712 bookstores operating in 2,227 locations in 2015, compared with 1,410 bookstores in 1,660 locations in 2010, according to the American Booksellers Association. Amazon has opened a bookstore in Seattle and has a second planned for La Jolla. Retailers Bolt Aging Malls for Luxurious Spots to Lure Customers from the Web https://eresearch.fidelity.com/eresearch/evaluate/news/basicNewsStory.jhtml?symbols=RH&storyid=201604210248DOWJ ONESDJONLINE000182&provider=DOWJONES&product=DJONLINE&sb=1 The shifting shopping habits have prompted chains such as Williams-Sonoma Inc. and Macy's Inc. to close stores in secondary malls to focus on web sales and more upscale shopping centers. Many of the top malls are attracting higher-end tenants and leasing space to upscale restaurants and gyms, or hosting events. As a result, shoppers are more apt to bypass smaller, local malls that tend to stock basic items more easily purchased online. Small Businesses at Malls http://www.cnbc.com/2016/06/21/small-businesses-shake-up-the-mix-at-local-malls.html (June 21, 2016) With sales growth at small-business retailers outpacing that of their larger competitors nearly every month over the past four years, landlords are looking more favorably at mom-and-pop tenants than in the past. As shopping centers seek to differentiate themselves from neighboring properties, and drum up traffic in an increasingly digital world, adding small businesses to the mix is an easy way for property owners to accomplish both goals. The largest publicly traded owner and operator of open-air shopping centers in North America, has expanded a program that offers small businesses one year of free rent and reduced property charges. Shadow Lending http://www.wsj.com/articles/slowdown-in-shadow-lending-tightens-credit-on-main-street-1467679698 (July, 2016) A $98 billion drop in bonds backed by loans makes it harder for businesses, shopping-mall owners and consumers to refinance debt. There are more than $10 trillion in outstanding securities backed by U.S. consumer, business and other loans. The remainder consists of collateralized loan obligations, commercial mortgage-backed securities and other bonds underpinned by outstanding credit-card debt, auto loans and assets like solar-panel leases and vacation timeshares. Retail & Restaurant Expansion Guide, North America (Summer, 2016) http://www.cushmanwakefield.com/en/research-and-insight/download/?report={6118FDB1-A72A-4B0E-AFEA- D44978422FAD}&field={9811993E-4C4B-49AE-9907-0562CB471AE4}& The report shows that despite declining store sales and predictions that traditional stores and malls will be killed off by online shopping, retailers are still opening lots of new bricks-and-mortar stores. The report lists the expansion plans for close to 2,000 retail and restaurant chains over the next 12 months. It shows that most of the retail growth this year and in 2017 will be driven by discount and dollar stores and off-price apparel, food and services, such as hair salons and massage chains. Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 10 www.MuniServices.com Retail Store Changes and News www.nreionline.com; www.plainvanillashsell.com; http://retailindustry.about.com/od/USRetailStoreClosingInfoFAQs/fl/US- 2016-Store-Closings-All-Retail-Chain-Store-Locations-To-Be-Closed_2.htm (April, 2016 to July, 2016) Ambercrobie & Fitch: Closing 60 stores per year Aeropostale: Closing 175 in the years ahead Anytime Fitness: Ranked #1 global franchise Apple: Expected to introduce new smartphone; consumer are purchasing from third-party retailers rather than Apple Brookstone: Filed bankruptcy in 2014; expanding in China with three stores Barnes and Noble: Closing 223 stores through 2023; 10 stores closing in fiscal 2017 while opening four new concept stores Bargain Hunt: Takes over Office Depot space in Antioch; one of 20 planned nationwide this year Big Lots: Projects adding stores Chicos: Closing 120 by 2017 Coach: Growth in sales increased in the U.S.; first quarterly sales increase in nearly three years Dollar Tree: Adding new stores and distribution center for growth; average customer salary at $40, 000 Gap: Had its credit rating cut to junk status H&M: Opening more stores as other retailers bet on the web Hancock Fabrics: 255 closing in various locations J.Crew: Closing stores; opening discount namesake stores, J. Crew Factory and Madewell Jos. A. Banks: Will close 250 stores this year (was purchased by Men’s Warehouse) Kohl’s: 18 underperforming stores will close this year; half in California Kmart: Closed 16 store in March; same store sales dropped 6.1 % for the quarter ending April 30 Les Schwab: Expanding in July (four in Riverside County and one in San Bernardino) Lulumon: Concerns the company is not keeping up with athletic market and capitalizing on the trend of workout gear for everyday life (WSJ, June, 2016) Macys: Last year announced plans to close 35-40 stores Michaels: Creating a modern brick-and-mortar experience in stores Office Depot: Closed 56 stores in the final quarter of 2015 and planning 50 closings in 2016 PacSun: Closed over 250 stores between January 2011 and September 2015 Petco: Opening stores throughout the Country including one in Los Angeles in April PetSmart: Expands with 12 new stores in 1Q2016 with California locations in El Centro, Goleta, and Van Nuys Pet Supplies Plus: Entry into new states including California Pier One: Closing 100 by 2017 Ralph Lauren: Revenue and profit have declined; closing 50 stores Sears: Will close 68 Kmart and 10 Sears stores nationwide this summer Sephora: Will open in JCPenny’s new flagship store in Salinas T-Mobile: Will open about 1,400 more retail stores this year to keep pace with its expanding network footprint Shake Shack: Bolstering its unit growth plans in California Sports Authority: Dick’s wins auction for company Sports Chalet: Closing all California locations and stopped selling on-line Staples: Staples closed between 242 stores between 2014 and 2015; another 50 is planned for 2016 Sears: Sears will close 50 locations in 2016 T.J. Maxx, Marshalls, and HomeGoods: Will have 5,600 stores (from 3,700) when it is finished expanding Victoria Secrets: Shifting and setting aside more space for sportswear under garments Walgreens: Closing 200 by 2017 Williams Sonoma: Owns West Elm and Pottery Barn. Gets half of its sales from e-commerce; has suffered in recent quarters because of competition Attachment D ECONOMIC NEWS & TRENDS July 20, 2016 11 www.MuniServices.com SECTION 9 – RESTAURANT TRENDS U.S. Restaurant Industry Continues To Grow at Slow Pace but There Are Pockets of Stronger Growth https://www.npd.com/wps/portal/npd/us/news/press-releases/2016/us-restaurant-industry-continues-to-grow-at-slow- pace-but-there-are-pockets-of-stronger-growth/ (June 7, 2016) Visits to fast-food restaurants had been growing at a quarterly clip of 2% since September 2015, but haven't grown at all in March, April or May (NPD Group Inc.) Restaurants are among the first industries to benefit when consumers are feeling flush, but recent economic indicators may be giving people pause about dining out. Job growth slowed last month, and gas prices are starting to climb again. Chipotle: Working to win customers with free items Creamistry: Continues expansion in Southern California DavidsTEA: Opens 200th store in the U.S. Dickeys: Opening franchise in 12 locations including Northern San Diego Dunkin Donuts: Eight new openings in Los Angeles and more Freshi: Opens seven stores in four countries Hooters: To open 10 new Hooters locations in Sacramento over the next six years. Ikes Place: Opening 24 stores across California Johnny Rockets: Opening 14 mall locations in 2016 Juice It Up!: Will develop throughout Southern California; first location is in Beaumont McDonalds: Closing 500 in 2016 and beyond Noodles & Company: Added 15 new restaurants Quiznos: Closed more than 300 stores; has less than 1,000 locations down from 5,000 in 2006 Pie Hole: Expands into Orange County with 1st franchise ShopHouse Southeast Asian Kitchen: 15th location opened in Los Angeles; continues plan for growth in three existing markets SECTION 10: CANNABIS The Economic Impacts of Cannabis Sales in the State of California http://www.icfi.com/insights/white-papers/2016/economic-impact-of-marijuana-sales-in-california; http://www.muniservices.com/services/cannabis-support-services/ Legal sales of cannabis by residents and visitors could support between 81,000 and 103,000 annual jobs and between $8.4 billion and $10.6 billion in total industry activity. ICF estimate that California residents could consume between 1,435 and 1,824 tons per year if cannabis legalized for recreational use. ICF estimates sales revenue between $15.9 billion and $20.2 billion per year. Using the California state sales tax base rate of 7.5%, these sales revenue estimates amount to tax revenue between $1.2 billion and $1.5 billion per year. If SB 987 (known as the Marijuana Value Tax Act) passes, which proposes a 15% excise tax on cannabis purchased from retailers, these tax revenue estimates would double to at least between $2.4 billion and $3.0 billion per year. Attachment D CITY OF PALO ALTO OFFICE OF THE CITY AUDITOR February 13, 2017 The Honorable City Council Palo Alto, California City of Palo Alto Sales Tax Digest Summary Second Quarter Sales (April - June 2016) The following files are attached for this informational report for which no action is required. ATTACHMENTS:  Attachment A: Sales Tax Digest Summary - Background and Discussion (PDF)  Attachment B: MuniServices Sales Tax Digest Summary (PDF)  Attachment C: Economic Categories and Segments (PDF)  Attachment D: MuniServices Economic News and Trends (PDF) Department Head: Harriet Richardson, City Auditor Page 2 Informational Report to the City Council  BACKGROUND  Sales and use tax represents about $27.6 million, or 15 percent, of projected General Fund revenue in  the City’s adopted operating budget for fiscal year 2016. Actual sales and use tax revenue was $30.0  million for fiscal year 2016. This revenue includes sales and use tax for the City of Palo Alto and pool  allocations from the state and Santa Clara County.1  We contract with MuniServices LLC (MuniServices) for sales and use tax recovery services and  informational reports. We use the recovery services and informational reports to help identify  misallocation of tax revenue owed to the City, and to follow up with the State Board of Equalization to  ensure that the City receives identified revenues. We include sales and use tax recovery information in  our quarterly reports to the Policy and Services Committee.  The California Revenue and Taxation Code, Section 7056, requires that sales and use tax data remain  confidential. Therefore, the City may not disclose amounts of tax paid, fluctuations in tax amounts, or  any other information that would disclose the operations of a business. This report, including the  attached Sales Tax Digest Summary, includes certain modifications and omissions to maintain the  required confidentiality of taxpayer information.  We share the information provided by MuniServices with the Administrative Services Department (ASD)  for use in revenue forecasting and budgeting and coordinated this report with them.  DISCUSSION  MuniServices prepared the attached report (Attachment B) covering calendar year 2016 second quarter  sales (April through June 2016). These funds are reported as part of the City’s fiscal year 2017 revenue.  In December, ASD should receive information from the state on aggregate sales and use tax receipts for  the third quarter of 2016.  Following are some highlights of the sales and use tax information:  Palo Alto’s overall sales and use tax revenue (cash receipts) for the second quarter of 2016 increased by about $794,000, or 12.0 percent, including pool allocations, compared to the second quarter of 2015. For all Santa Clara County jurisdictions, sales and use tax revenue for the second quarter of 2016 increased by $4.9 million, or 4.7 percent, compared to the second quarter of 2015. Statewide, almost every region in California experienced an increase in sales and use tax revenue for the year ending in June 2016, with a one‐year statewide increase of 2.4 percent. Palo Alto’s sales and use tax revenue totaled $28.1 million for the year ending in June 2016, an increase of 8.3 percent from $26.0 million during the prior one‐year period. 1 See definitions of state and county pools on page 3.  Office of the City Auditor  Sales Tax Digest Summary – Second Quarter Sales (April – June 2016)  Attachment A City of Palo Alto | Office of the City Auditor | Sales Tax Digest Summary 2  Excluding pool allocations and adjusting for prior‐period and late payments, Palo Alto’s sales and use tax revenue for the second quarter of 2016 increased by 8.6 percent compared to the second quarter of 2015 and increased by 6.1 percent compared to the prior year. More detailed information is shown in Attachment B.  Economic Influences on Sales and Use Tax  In its Economic News & Trends (Attachment D), MuniServices discusses economic influences, including  national and state economic trends, employment data, and auto and retail sales, that may affect the  City’s sales and use tax revenue.  Preliminary estimates from the California Employment Development Department show that the  September 2016 unemployment rate, which is not seasonally adjusted, was 3.8 percent in Santa Clara  County and 2.6 percent in Palo Alto.  Economic Category Analysis  MuniServices’ analysis of economic categories for the year ending June 2016 shows:  Economic category  % of Palo Alto’s sales  and use tax revenue  % Increase (Decrease)  compared to prior year  General retail 35.3% (1.6%)  Food products 19.7% 6.1%  Business‐to‐business 19.3% 31.9%  Construction 3.8% (7.7%)  Miscellaneous 22.6% (0.3%)  The following chart shows sales and use tax revenue by geographic area, based on information  provided by MuniServices.  Palo Alto’s Sales and Use Tax Revenue by Geographic Area  For the Year Ending June 2016  (Amounts include tax estimates and exclude pool allocations)  Stanford Shopping  Center $5.5 million, 23% Stanford Research  Park $3.1 million, 13% Downtown/University Avenue $3.7 million, 16% California Ave/Park Blvd/Lambert Ave $1.5 million, 7% Town & Country $0.6 million, 3% All Other Areas $9.1 million, 38% Attachment A City of Palo Alto | Office of the City Auditor | Sales Tax Digest Summary 3  DEFINITIONS  In California, either sales tax or use tax may apply to a transaction, but not both. The sales and use tax  rate in Palo Alto is 8.75 percent.  Sales tax – imposed on all California retailers; applies to all retail sales of merchandise (tangible personal  property) in the state.  Use tax – generally imposed on consumers of merchandise (tangible personal property) that is used,  consumed, or stored in this state; purchases from out‐of‐state retailers when the retailer is not  registered to collect California tax, or for some other reason does not collect California tax; leases of  merchandise (tangible personal property).  Countywide/statewide pools – mechanisms used to allocate local tax that cannot be identified with a  specific place of sale or use in California. Local tax reported to the pool is distributed to the local  jurisdiction each calendar quarter using a formula that relates to the direct allocation of local tax to each  jurisdiction for a given period.  Examples of taxpayers who report use tax allocated through the countywide pool include construction  contractors who are consumers of materials used in the improvement of real property and whose job  site is regarded as the place of business, out‐of‐state sellers who ship goods directly to consumers in the  state from inventory located outside the state, and California sellers who ship goods directly to  consumers in the state from inventory located outside the state.  Other examples of taxpayers who report use tax through the pools include auctioneers, construction  contractors making sales of fixtures, catering trucks, itinerant vendors, vending machine operators and  other permit holders who operate in more than one local jurisdiction but are unable to readily identify  the particular jurisdiction where the taxable transaction takes place.  Respectfully submitted,  Harriet Richardson  City Auditor  Sources: MuniServices  California State Board of Equalization  California Employment Development Department  City of Palo Alto Fiscal Year 2016 Adopted Operating Budget  Audit staff:  Lisa Wehara  Attachment A City of Palo Alto Sales Tax Digest Summary Collections through September 2016 Sales through June 2016 (2016Q2) www.MuniServices.com (800)800-8181 Page 1 California Overview The percent change in cash receipts from the prior year was 2.4% statewide, 3.2% in Northern California and 1.8% in Southern California. The period’s cash receipts include tax from business activity during the period, payments for prior periods and other cash adjustments. When we adjust for non-period related payments, we determine the overall business activity increased for the year ended 2nd Quarter 2016 by 2.5% statewide, 2.6% in Southern California and 2.3% in Northern California. City of Palo Alto For the year ended 2nd Quarter 2016, sales tax cash receipts for the City increased by 8.3% from the prior year. On a quarterly basis, sales tax revenues increased by 12.0% from 2nd Quarter 2015 to 2nd Quarter 2016. The period’s cash receipts include tax from business activity during the period, payments for prior periods and other cash adjustments. Excluding state and county pools and adjusting for anomalies (payments for prior periods) and late payments, local sales tax increased by 6.1% for the year ended 2nd Quarter 2016 from the prior year. On a quarterly basis, sales tax activity increased by 8.6% in 2nd Quarter 2016 compared to 2nd Quarter 2015. Regional Overview This seven-region comparison includes estimated payments and excludes net pools and adjustments. % of Total / % Change City of Palo Alto California Statewide S.F. Bay Area Sacramento Valley Central Valley South Coast Inland Empire North Coast Central Coast General Retail 35.3 / -1.6 28.3 / 2.6 26.7 / 1.1 27.9 / 4.2 30.8 / 3.3 29.2 / 2.2 26.8 / 5.9 28.5 / 4.5 31.5 / 0.9 Food Products 19.7 / 6.1 20.6 / 5.0 22.0 / 5.2 16.9 / 3.6 16.6 / 3.9 21.8 / 5.1 17.1 / 5.5 18.4 / 3.0 30.8 / 2.0 Construction 3.8 / -7.7 9.7 / 7.5 9.5 / 4.1 11.4 / 7.1 12.2 / 5.4 8.4 / 5.8 12.4 / 20.2 13.5 / 7.7 9.5 / 5.1 Business to Business 19.3 / 31.9 16.5 / -0.1 20.1 / 4.0 14.2 / 5.1 12.7 / -8.0 16.1 / -2.1 15.4 / 0.7 8.6 / -3.7 6.2 / 5.8 Miscellaneous/Other 22.6 / -0.3 24.9 / 2.8 21.8 / 1.4 29.7 / 6.5 27.7 / 3.7 22.0 / 1.9 28.3 / 7.6 31.0 / 1.6 22.0 / 1.9 Total 100.0 / 6.1 100.0 / 2.5 100.0 / 2.3 100.0 / 4.2 100.0 / 1.0 100.0 / 1.8 100.0 / 5.4 100.0 / 2.6 100.0 / 1.4 City of Palo Alto State Wide S.F. Bay Area Sacramento Valley Central Valley South Coast Inland Empire North Coast Central Coast Largest Segment Restaurants Restaurants Restaurants Restaurants Department Stores Service Stations Restaurants Auto Sales - New Restaurants % of Total / % Change 17.6 / 6.3 14.6 / 6.1 15.7 / 6.0 16.0 / 6.2 13.6 / 1.9 26.0 / -1.6 11.1 / 6.3 11.7 / 13.8 22.3 / 1.5 2nd Largest Segment ***Auto Sales - New Auto Sales - New Auto Sales - New Auto Sales - New Restaurants Auto Sales - New Department Stores Misc. Retail % of Total / % Change *** / ***11.1 / 5.7 10.7 / 4.9 11.3 / 4.9 10.8 / 6.6 13.3 / 6.0 10.9 / 7.9 11.0 / 1.3 10.8 / 8.2 3rd Largest Segment Miscellaneous Retail Department Stores Department Stores Department Stores Restaurants Food Markets Department Stores Restaurants Auto Sales - New % of Total / % Change 10.1 / 16.1 9.5 / 0.5 7.8 / -1.8 9.2 / 0.4 10.8 / 6.2 8.6 / 1.7 10.4 / 2.3 10.6 / 4.3 8.7 / 12.0 *** Not specified to maintain confidentiality of tax information CITY OF PALO ALTO ECONOMIC CATEGORY ANALYSIS FOR YEAR ENDED 2nd QUARTER 2016 ECONOMIC SEGMENT ANALYSIS FOR YEAR ENDED 2nd QUARTER 2016 BENCHMARK YEAR 2016Q2 COMPARED TO BENCHMARK YEAR 2015Q2 Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 2 Gross Historical Sales Tax Performance by Benchmark Year and Quarter (Before Adjustments) $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 BENCHMARK YEAR QUARTERLY Net Cash Receipts for Benchmark Year 2nd Quarter 2016: $28,146,636 *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q2 BMY is sum of 2016 Q2, Q1 & 2015 Q4 & Q3) Restaurants 15% Miscellaneous Retail 8% Electronic Equipment 8% Department Stores 8%Leasing 4%Food Markets 2% Leasing 4% Recreation Products 1% All Other 34% Net Pools & Adjustments 16% Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 3 TOP 25 SALES/USE TAX CONTRIBUTORS The following list identifies Palo Alto’s Top 25 Sales/Use Tax contributors. The list is in alphabetical order and represents the year ended 2nd Quarter 2016. The Top 25 Sales/Use Tax contributors generate 51.0% of Palo Alto’s total sales and use tax revenue. Anderson Honda Integrated Archive Systems Tesla Lease Trust Apple Stores Macy's Department Store Tesla Motors Audi Palo Alto Magnussen'S Toyota The Pace Gallery Bloomingdale's Neiman Marcus Department Store Tiffany & Company Bon Appetit Management Co.Nordstrom Department Store USB Leasing CVS/Pharmacy Pottery Barn Kids Varian Medical Systems Eat Club Redwood City Electric Volvo Cars Palo Alto Fry's Electronics Space Systems Loral Hewlett-Packard Stanford University Hospital Sales Tax from Largest Non-confidential Economic Segments $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 $4,500,000 Benchmark Year 2016Q2 Benchmark Year 2015Q2 Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 4 Historical Analysis by Calendar Quarter Economic Category % 2016Q2 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 2014Q2 2014Q1 2013Q4 General Retail 28.9% 2,141,794 1,673,846 2,526,551 1,935,178 2,009,743 1,797,756 2,591,589 1,994,264 2,032,155 1,791,298 2,585,931 Miscellaneous/Other 21.8% 1,617,307 1,413,133 1,491,158 1,609,541 1,564,157 1,400,769 1,655,225 1,400,415 1,437,507 1,283,210 1,553,169 Food Products 16.1% 1,194,369 1,126,103 1,166,195 1,146,174 1,167,014 1,061,755 1,096,087 1,054,462 1,051,681 972,997 1,009,848 Business To Business 15.4% 1,140,526 974,162 1,428,210 888,609 833,370 757,827 885,327 596,226 970,762 858,119 1,268,059 Net Pools & Adjustments 17.7% 1,313,745 1,072,794 1,226,261 1,060,979 1,039,250 968,777 1,178,482 945,653 786,945 1,013,633 1,095,801 Total 100.0% 7,407,741 6,260,038 7,838,375 6,640,481 6,613,534 5,986,884 7,406,710 5,991,020 6,279,050 5,919,257 7,512,808 Economic Segments % 2016Q2 2016Q1 2015Q4 2015Q3 2015Q2 2015Q1 2014Q4 2014Q3 2014Q2 2014Q1 2013Q4 Miscellaneous/Other 40.1% 2,973,047 2,607,097 3,237,983 2,720,241 2,549,852 2,370,361 2,906,134 2,211,697 2,577,014 2,328,959 3,184,808 Restaurants 14.4% 1,068,502 1,005,688 1,029,733 1,019,505 1,045,011 942,709 962,018 936,160 940,540 870,158 890,739 Miscellaneous Retail 9.2% 681,345 469,360 714,151 478,994 479,298 415,270 628,099 508,061 514,133 481,305 661,268 Department Stores 7.4% 546,629 435,470 714,831 553,325 595,374 503,590 750,481 548,595 591,500 472,857 762,760 Apparel Stores 6.0% 444,383 337,880 519,318 397,534 428,100 370,810 507,843 398,747 429,748 365,777 515,296 Service Stations 2.0% 144,735 123,004 140,758 173,082 181,582 148,902 166,861 203,484 215,162 184,185 177,096 Food Markets 1.5% 109,108 104,676 116,778 113,092 106,818 104,856 117,245 105,600 98,705 90,272 104,592 Business Services 0.9% 65,510 51,647 76,156 51,885 120,003 103,773 131,505 66,163 62,060 63,768 61,832 Recreation Products 0.8% 60,737 52,422 62,406 71,844 68,246 57,836 58,042 66,860 63,243 48,343 58,616 Net Pools & Adjustments 17.7% 1,313,745 1,072,794 1,226,261 1,060,979 1,039,250 968,777 1,178,482 945,653 786,945 1,013,633 1,095,801 Total 100.0% 7,407,741 6,260,038 7,838,375 6,640,481 6,613,534 5,986,884 7,406,710 5,991,020 6,279,050 5,919,257 7,512,808 *Net Pools & Adjustments reconcile economic performance to periods’ net cash receipts. The historical amounts by calendar quarter: (1) include any prior period adjustments and payments in the appropriate category/segment and (2) exclude businesses no longer active in the current period. Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 5 Quarterly Analysis by Economic Category, Total and Segments: Change from 2015Q2 to 2016Q2 Ge n e r a l R e t a i l Fo o d P r o d u c t s Co n s t r u c t i o n Bu s i n e s s t o Bu s i n e s s Mi s c / O t h e r 20 1 6 / 2 T o t a l 20 1 5 / 2 T o t a l % C h g La r g e s t G a i n Se c o n d L a r g e s t Ga i n La r g e s t D e c l i n e Se c o n d L a r g e s t De c l i n e Campbell 5.2% 6.4% -3.7% -23.9% 10.6% 2,318,937 2,416,561 -4.0%Recreation Products Restaurants Business Services Service Stations Cupertino -17.4% 8.4% -45.6% -18.8% 13.4% 5,260,419 6,530,019 -19.4%Office Equipment Restaurants Business Services Bldg.Matls-Whsle Gilroy -2.3% 4.9% 12.1% 22.2% -1.5% 3,627,576 3,532,484 2.7%Heavy Industry Auto Sales - New Service Stations Apparel Stores Los Altos -6.7% 9.3% -15.0% -14.4% 11.3% 562,140 568,561 -1.1%Liquor Stores Restaurants Service Stations Furniture/Appliance Los Gatos -7.7% 2.1% 1.4% -34.5% 11.4% 1,601,032 1,748,209 -8.4%Restaurants Business Services Office Equipment Miscellaneous Other Milpitas -1.6% 7.5% 55.7% -23.7% 2.9% 4,966,322 5,066,048 -2.0%Bldg.Matls-Whsle Restaurants Electronic Equipment Office Equipment Morgan Hill 4.0% 6.7% 4.3% 0.3% 0.4% 1,932,710 1,892,765 2.1%Heavy Industry Misc. Vehicle Sales Service Stations Electronic Equipment Mountain View 2.5% 0.8% -1.4% 42.3% 13.5% 4,237,788 3,926,348 7.9%Business Services Miscellaneous Retail Auto Sales - New Light Industry Palo Alto 5.7% 3.9% -8.5% 23.1% -10.3% 6,093,993 5,613,826 8.6%Leasing Miscellaneous Retail Office Equipment Department Stores San Jose -0.5% 5.8% 2.8% 6.5% 2.2% 38,541,231 37,797,727 2.0%Light Industry Restaurants Office Equipment Service Stations Santa Clara 0.8% 0.4% -3.2% -1.4% 2.1% 10,906,435 11,032,886 -1.1%Business Services Office Equipment Electronic Equipment Light Industry Santa Clara Co.-14.8% 3.1% -0.1% -40.3% 18.4% 1,013,597 1,143,982 -11.4%Restaurants Service Stations Office Equipment Health & Government Saratoga -25.3% -1.9% 37.2% -20.3% 13.9% 238,127 262,731 -9.4%Bldg.Matls-Retail Food Markets Miscellaneous Retail Service Stations Sunnyvale -1.0% 3.0% -9.2% 5.4% 2.0% 6,683,287 6,615,403 1.0%Electronic Equipment Auto Sales - New Office Equipment Health & Government Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 6 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 El Camino Real 1,055,524 1,049,438 1,038,409 2,563,317 1,084,815 1,108,045 1,102,757 1,105,340 1,090,236 1,088,571 1,140,412 1,188,495 1,210,148 Town and Country 523,504 525,116 550,852 570,860 590,134 624,333 629,346 637,224 644,288 636,497 639,830 642,372 632,157 Midtown 184,646 185,301 185,348 185,472 185,910 187,120 188,251 192,122 194,028 195,907 192,190 193,066 207,568 East Meadow Area 77,869 100,045 103,590 107,316 109,171 114,419 104,735 117,701 172,602 166,805 161,897 173,019 185,564 Charleston Center 78,734 81,455 90,116 84,760 86,432 86,288 87,413 88,622 89,612 90,642 91,711 91,991 92,121 City of Palo Alto - Selected Geographic Areas of the City Benchmark Year 2nd Quarter 2016 $- $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 El Camino Real Town and Country Midtown East Meadow Area Charleston Center *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q2 BMY is sum of 2016 Q2, Q1 & 2015 Q4 & Q3) Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 7 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Stanford Shopping Ctr 5,501,836 5,508,513 5,637,256 5,647,210 5,685,894 5,713,169 5,726,273 5,769,236 5,775,751 5,765,715 5,670,796 5,501,966 5,464,490 Stanford Research Park 5,075,848 7,949,998 7,307,557 4,299,015 4,027,889 3,724,671 3,304,003 3,082,331 2,869,143 2,411,043 2,953,900 2,924,944 3,119,427 Downtown 3,027,279 3,022,194 3,068,553 3,108,592 3,124,224 3,189,273 3,220,248 3,251,198 3,318,323 3,351,331 3,399,758 3,445,331 3,672,532 San Antonio 1,997,654 2,106,291 2,122,586 2,234,235 2,393,463 2,453,548 2,495,915 2,504,156 2,465,311 2,483,850 2,476,949 2,517,603 2,451,491 California Avenue 1,072,925 1,078,153 1,104,341 1,104,237 1,109,685 1,119,047 1,120,996 1,113,385 1,108,904 1,106,175 1,097,493 1,091,796 1,090,901 City of Palo Alto - Selected Geographic Areas of the City Benchmark Year 2nd Quarter 2016 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 Stanford Shopping Ctr Downtown #REF!San Antonio California Avenue 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Stanford Shopping Ctr Downtown San Antonio California Avenue $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Stanford Shopping Ctr Stanford Research Park Downtown San Antonio California Avenue *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q2 BMY is sum of 2016 Q2, Q1 & 2015 Q4 & Q3) Attachment B City of Palo Alto www.MuniServices.com (800) 800-8181 Page 8 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Valley Fair 6,808,919 6,815,517 6,883,838 6,885,378 6,958,214 7,108,448 7,455,179 7,588,546 7,273,028 7,282,265 7,248,371 7,228,310 7,063,549 Stanford Shopping Ctr 5,501,836 5,508,513 5,637,256 5,647,210 5,685,894 5,713,169 5,726,273 5,769,236 5,775,751 5,765,715 5,670,796 5,501,966 5,464,490 Oakridge Mall 3,974,067 3,954,094 3,924,360 3,934,469 3,972,556 4,005,370 4,040,521 4,159,367 4,236,080 4,215,653 4,158,194 4,075,061 3,871,802 Hillsdale 2,356,855 2,367,935 2,387,185 2,374,185 2,401,370 2,438,295 2,450,278 2,494,792 2,513,866 2,470,404 2,434,086 2,410,095 2,363,729 Santana Row 1,938,742 2,156,984 1,765,101 2,453,638 2,523,193 2,525,349 2,565,665 2,634,908 2,706,867 2,735,522 2,834,796 2,807,754 2,754,804 City of Palo Alto - Regional Shopping Mall Comparison Benchmark Year 2nd Quarter 2016 $- $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 Valley Fair Stanford Shopping Ctr Oakridge Mall Hillsdale Santana Row *Benchmark year (BMY) is the sum of the current and 3 previous quarters (2016Q2 BMY is sum of 2016 Q2, Q1 & 2015 Q4 & Q3) Attachment B Economic Categories and Segments Economic Category Economic Segment Description Business to Business - sales of tangible personal property from one business to another business and the buyer is the end user. Also includes use tax on certain purchases and consumables. Business Services Advertising, banking services, copying, printing and mailing services Chemical Products Manufacturers and wholesalers of drugs, chemicals, etc. Electronic Equipment Manufacturers of televisions, sound systems, sophisticated electronics, etc. Energy Sales Bulk fuel sales and fuel distributors and refiners Heavy Industry Heavy machinery and equipment, including heavy vehicles, and manufacturers and wholesalers of textiles and furniture and furnishings Leasing Equipment leasing Light Industry Includes, but is not limited to, light machinery and automobile, truck, and trailer rentals Office Equipment Businesses that sell computers, and office equipment and furniture, and businesses that process motion pictures and film development Construction Building Materials – Retail Building materials, hardware, and paint and wallpaper stores Building Materials - Wholesale Includes, but is not limited to, sheet metal, iron works, sand and gravel, farm equipment, plumbing materials, and electrical wiring Food Products Food Markets Supermarkets, grocery stores, convenience stores, bakeries, delicatessens, health food stores Food Processing Equipment Processing and equipment used in mass food production and packaging Liquor stores Stores that sell alcoholic beverages Restaurants Restaurants, including fast food and those in hotels, and night clubs Attachment C Economic Categories and Segments Economic Category Economic Segment Description General Retail – all consumer focused sales, typically brick and mortar stores Apparel Stores Men’s, women’s, and family clothing and shoe stores Department Stores Department, general, and variety stores Drug Stores Stores where medicines and miscellaneous articles are sold Florist/Nursery Stores where flowers and plants are sold Furniture/Appliance Stores where new and used furniture, appliances, and electronic equipment are sold Miscellaneous Retail Includes, but is not limited to, stores that sell cigars, jewelry, beauty supplies, cell phones, and books; newsstands, photography studios; personal service businesses such as salons and cleaners; and vending machines Recreation Products Camera, music, and sporting goods stores Miscellaneous/Other Miscellaneous/Other Includes but not limited to health services, government, nonprofit organizations, non- store retailers, businesses with less than $20,000 in annual gross sales, auctioneer sales, and mortuary services and sales Transportation Auto Parts/Repair Auto parts stores, vehicle and parts manufacturing facilities, and vehicle repair shops Auto Sales - New New car dealerships Auto Sales - Used Used car dealerships Miscellaneous Vehicle Sales Sale and manufacture of airplanes and supplies, boats, motorcycles, all-terrain vehicles, trailers and supplies Service stations Gas stations, not including airport jet fuel Attachment C ECONOM MIC NEWS && TRENDS ECON NOMIC NNEWS & October &TREND 19, 2016 DS Attachment D ECONOMIC NEWS & TRENDS October 19, 2016 2 www.MuniServices.com U.S. Economy and Indicators http://www.census.gov (released September 16, 2016); Washington Post (October 12, 2016); Kiplinger (October 7, 2016) http://dof.ca.gov/Forecasting/Economics/Economic_and_Revenue_Updates/documents/2016/October/Oct-16.pdf U.S. GDP: Grew by an annualized 1.4% in 2Q 2016 after a 0.8% growth in the first quarter; predictions for 2% in 2017. Growth is reflective of consumer spending and exports that were offset by negative contributions from inventory investment, residential fixed investment, state and local government spending, and nonresidential fixed investment. Some officials noted that the labor market is still healing evidenced by the return of workers to the labor force. Interest Rates: In September, the Federal Reserve opted against raising interest rates; rates were increased in December for the first time since the Great Recession. There is concern that waiting too long may force a hike if inflation gets ‘out of hand’ and sending the country back into a recession. Manufacturing and Trade Inventories and Sales for August 2016: Total business sales were $1,304.1 billion, up 0.2% from July. Sales for Retail and Food Services for September: $459.8 billion, an increase of 0.6% from August. Rental Vacancy Rate for 2Q2016: 6.7%, down from the 2Q2015 rate of 6.8%. Homeownership Rate: 2Q2016 was 62.9% down from the 2Q2015 rate of 63.4%. New Residential Sales in August: 609,000, which is 7.6% below the revised July 2016 estimate of 659,000. Services Sector for 2Q2016: $3,457.9 billion, an increase of 3.4% from the 1Q2016 and up 4.3% from 2Q2015. E-commerce sales: 2Q2016 accounted for 8.1% of total U.S. sales. Total retail sales: Estimated at $1, 201.9 billion for 2Q2016; an increase of 1.5% from the 1Q2016. Consumer Price Index for September, 2016 http://www.bls.gov/news.release/pdf/cpi.pdf (released October 18, 2016) Consumer Price Index for All Urban Consumers: Increased 0.3% in September and 1.5% over the last 12 months. Food Index: Food at home fell 1.1% for the fifth month; food away from home increased 0.2%. Over the last 12 months, the food at home index has declined 2.2%, the largest 12-month decline since December 2009. Gasoline Index: Rose 5.8% in September after falling 0.9% in August and accounted for more than half of all the items increase. The fuel oil index rose by 2.4%, natural gas increased (0.8%) following larger increases in July and August. The gasoline index has declined 6.5% over the last year. Indexes Unchanged: Household furnishings and operations. Indexes That Rose: Shelter (0.4%), rent (0.3%), owner equivalent (0.4%), hospital services index (1.7%), prescription drugs (0.8%), medical care services (0.2%), motor vehicle insurance (0.4%), alcohol beverages (0.3%), and tobacco (0.4%). Indexes Declining: Apparel (0.7%), communications (0.8%) which is the largest decline since October 2014, used cars and trucks (0.3%), new vehicles (0.1%). U.S. Employment Data for August http://www.bls.gov/news.release/empsit.nr0.htm Unemployment: 5.0, which is a little change since August and represents about 7.9 million unemployed persons. Retail Trade: Added +22,000 jobs, clothing and clothing accessories +14,000, and gasoline stations +8,000. Over the year, employment in retail trade has risen by 317,000. Food Services and Drinking Places: +30,000 and has increased by 300,000 over the year. Professional and Business Services: Rose by 67,000 and has risen by 582,000 over the year; management and technical consulting services +16,000, and administrative and support services +35,000. Attachment D ECONOMIC NEWS & TRENDS October 19, 2016 3 www.MuniServices.com Health Care: Increased by 33,000, ambulatory health care services +24,000, and hospitals +7,000; over the past 12 months health care added 445,000 jobs. National healthcare costs is expected to have changes with either presidential candidate winning, whether it is raising premium subsidies for people who buy individual coverage, adding tax credits, or letting people deduct premium on tax returns. U.S. Economic Outlook http://soba.ucr.edu/centers/pdf/Thornberg_Southwest_Riverside_Forecast_6_8_2016.pdf; http://www.forbes.com/sites/billconerly/2016/09/16/u-s-economic-forecast-2017-2018-mild-rebound/#5dad22b123b6 Outlook: For 2017 looks brighter than this year’s performance. 2016 suffered from the short-term impact of reduced petroleum drilling more than the long-term benefit of cheaper gasoline. Consumer Spending: Adding to the better performance next year will be continued gains in consumer spending, as well as housing and non-residential construction. Consumer attitudes are stable at a good level, a bit above the long-run average. Consumers in 2017 should continue increasing their spending in line with their incomes. This is in contrast to what happened a decade ago when spending was being fueled by debt accumulation. Worker competition: The competition for workers has finally shifted the economic balance toward labor to a small degree. Median real wages for a full-time worker have grown 4% over the past two years. Housing bubble: There is no sign of anything resembling a housing bubble re-emerging, as low interest rates imply that overall housing affordability is still very good. Tight credit remains a major impediment to full recovery. Corporate profits: Will remain weak and government spending will stay constrained through the election cycle. And while the dollar has stabilized, it continues to be elevated compared to the last decade. Recession: The next U.S. downturn will be in three years, according to 31 economists. State and Local Governments: Are increasing both their revenue and expenditures at a mild pace, just over 2% not adjusted for inflation. Slack economic growth doesn’t generate much tax gains. California: Leading and not lagging the nation; California in January 2015 became the 6th largest economy in the world with $2.46 trillion in gross state product. California Economic and Revenue Update for 2Q2016 State Controller, Department of Finance, October, 2016 Revenues: Year-to-date revenues are $217 million below the expected $24.807 billion. Personal Income Tax: Largest portion of General Fund receipts at almost $7.14 billion which exceeded budget projections by $127.7 million. Sales and Use Taxes: $70 million below the month’s forecast of $2.033 billion. Year-to-date revenues are $221 million below forecast. Other revenues: Estate, alcoholic beverage, tobacco taxes, and pooled money interest were $2 million above the month’s forecast of $35 million. Construction: Residential permits: Increased by 43.4% in August to annual total of 113,170 units, the highest since April 2014. Permits for single-family units increased by 11.9% to 46,300, while multifamily permits increased by 78.3% to 66,870 in August. During the first eight months of 2016, more than half of the total 97,000 residential permits were for multifamily. Non-residential construction: Fell in August by 23.4% to $20.9 billion. Real estate sales in August: Existing single-family homes increased 1.1% (420,000 units). Sales of the first eight months in 2016 increased by 0.1% compared to the same period in 2015. Median Price Single Family Home: Remained above $526, 580; median was 11% (or $67,950) less than the pre-recession peak of $594,530 from May of 2007. Personal income: California’s personal income in the second quarter of 2016 grew by 3.6% compared to a year ago, following 4.7% growth in the first quarter. In 2015, California’s personal income grew 6.4%, while U.S. personal income grew by 4.5%. Wages and salaries: For $1.4 trillion of total personal income of $2.2 trillion in the second quarter of 2016, and grew by 4.8% on a year-over-year basis. Attachment D ECONOMIC NEWS & TRENDS October 19, 2016 4 www.MuniServices.com California Labor and Employment Trends Labor Market Information, EDD, August, 2016 Unemployment: The number of unemployed Californians fell by 85,000 (7.4%) over the 12-months ending in August 2016. This was California’s smallest year-over decrease in number since July 2011 (76,000) and its smallest year-over percentage decrease since November 2011 (7.3%). U.S. unemployment was 4.9% in August, unchanged from July, and down 0.2% from a year ago. Civilian employment: There were 1,170,000 fewer unemployed Californians in August 2016 than there were at the height of the recession in October 2010, but 202,000 more than there were at the pre-recession low in September 2006. Employed Californians increased by 57,000 persons to 18,170,000 in August 2016. Non-Farm Jobs: Up 151,000 jobs (0.1%) over the month and up 2,447,000 jobs (1.7%) over the year. In comparison, California non-farm jobs were up 63,100 jobs (0.4%) over the month and up 378,000 jobs (2.3%) since August 2015. Sectors: The largest gains in August were in the government (27,900), professional and business services (14,400), trade, transportation, and utilities (10,300), and private sector (35,000) sectors. Leisure and hospitality has a gain of 31,900 to date in 2016. Month-over job losses were manufacturing (3,400) and mining and logging (400). California Auto Trends for 2nd Q 2016 http://www.cncda.org/ New Vehicle Market: Increased in 2Q2016. New vehicle registrations were up 1.8% versus a year earlier. Used vehicle market: Gain of 7.4% in first half of 2016; used registrations for vehicles six years old or newer were up by more than 17% in the first half of this year, while new vehicles increased by less than 3%. Registrations: 2.8% change: YTD 15 (1,017,198) and YTD (1,045,440); New retail light vehicle registrations in California increased 3.0% during the first six months of this year, while fleet registrations slipped 1.1%. Retail car registrations declined. Light trucks (consisting of pick-ups, SUVs, and vans) were up 14%. Future Gains: Strong consumer interest in the abundance of new vehicles, combined with low fuel prices, attractive incentive offers, and low interest rates should help keep the market on an upward path for at least the next 12 months. National forecasts predict slower sales for new cars that fall below 2015 records; forecast cut by 300,000 (or 1.7%) (LWC Automotive, July 2016) California New Car Dealer 2016 Economic Impact Report: New Vehicles Sold: 2,052,750 (2015); 1,848,254 (2014); Used Retail Vehicles Sold: 769,500 (2015); 691,189 (2014); Total Sales: $117.36 billion (2016 Report); $105.12 billion (2015 Report) Gasoline https://www.consumeraffairs.com/gas-prices The national average price for regular unleaded gasoline has increased for 12 of the past 14 days, reaching today’s price of $2.26 per gallon. Pump prices typically decline during this time of year due to lower driving demand after the busy summer driving season has concluded and the changeover from summer-blend to a cheaper-to-produce winter-blend gasoline, which took place in many parts of the country starting on September 15. Consumer Affairs reports from September 29, 2016 report that gas prices are not going back to $3 a gallon anytime soon. Attachment D ECONOMIC NEWS & TRENDS October 19, 2016 5 www.MuniServices.com Retail Sales and Food Services (Advanced Estimates for September) http://www.marketwatch.com/story/us-retail-sales-climb-06-in-september-2016-10-14-81033311 Retail and Auto Sales: Retail has grown slowly because cheaper gas. Sales at retail stores rose 0.3% in September. Auto sales are about 1/5 of retail spending. Gasoline Service Stations: 2.4% pick-up last month; gasoline averaged $2.20 a gasoline in September, up from $2.16 in August. Restaurants: Increase since April with a 0.8% gain. Department Stores: Receipts fell 0.7%. Sales fell at stores that sell clothes, electronics and pharmacies. In August, retail sales declined 0.2% instead of 0.3%. Food Services and Drinking Places: Increased 0.8% in August, the biggest advance since February. Retail categories: Ten of 13 major retail categories showed gains in September. Motor vehicle dealers, furniture stores, restaurants and building supply outlets were among those showing solid increases. Miscellaneous Retail Establishments: Jumped 1.8% in September; helped by Apple Inc.'s iPhone 7, with pre- orders four times as great as for previous models. Convenience Stores: The U.S. industry, with more than 154,000 stores across the country, conducts 160 million transactions a day, sells 80% of the fuel purchased in the country and had total sales of $575 billion in 2015. (Association of Convenience and Refueling, October, 2016) Home Improvements: Analysts predicted sales at existing stores will rise 4.8% at Home Depot and 4% at Lowe's. Repairs and remodeling is expected to surpass $300 billion in 2016 (http://www.jchs.harvard.edu/) Holiday Spending and Hiring: Sales in November and December, excluding autos, gas and restaurant sales are expected to increase a solid 3.6% to $655.8 billion , higher than the 10-year average of 2.5% and above the seven-year average of 3.4% since recovery began in 2009. The National Retailer Federation (NFR) is forecasting non-store sales to increase between 7 and 10% to as much as $117 billion. Retailers are expected to hire between 640,000 and 690,000 seasonal workers this holiday season, in line with last year’s 675,300 new holiday positions. Retailers open on Thanksgiving include Best Buy, Kohl’s, Macy’s Sears, Target and Walmart. (NFR, October, 2016) Luxury: Designer brands are suffering some of their slowest revenue growth since the 2008 financial crisis. Luxury department stores are recognizing that their clients are keen on high-quality bargains. (Wall Street Journal, July 2016) On-Line Grocery Trends: Amazon: Making progress toward brick-and-mortar stores to augment home delivery of groceries, convenience store, and curbside pick up. Wal-Mart: Purchased web retailer Jet.com; Wal-Mart gets more than half of its U.S. revenue from food and groceries. Food: Lower food prices at supermarkets but not at restaurants because of low agricultural commodity and transportation costs. Grocers face increasing competition from online shopping outlets, which adds pressures to grocers’ thin profit margins. Restaurateurs will hold menu prices fairly steady, despite the drop in farm prices for corn, wheat, meat and other foods. Americans seek deals in supermarkets yet accustomed to paying more when dining out. (Kiplinger, October 7, 2016) Restaurant Trends: While same-store sales and customer traffic trends were a mixed bag in recent months (‘restaurant recession’) that did not paint a complete picture on the health of the overall industry. A better performance metric is total restaurant industry sales, which is both existing restaurant sales and sales at new restaurants that enter the market. Contributors to growth in the restaurant Industry: a) Labor market is healthy (the number-one driver of restaurant sales is a healthy labor market); b) wage growth is picking up; c) households have breathing room (housing debt is rising again), d) pent-up demand remains elevated (consumers have yet to get their fill of restaurants), and e) consumers crave experience. (http://www.restaurant.org/News-Research/News/5-reasons-restaurant-growth-will-continue.) Attachment D