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2019-08-19 City Council Agenda Packet
City Council 1 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Monday, August 19, 2019 Special Meeting Council Chambers 5:00 PM Agenda posted according to PAMC Section 2.04.070. Supporting materials are available in the Council Chambers on the Thursday 11 days preceding the meeting. PUBLIC COMMENT Members of the public may speak to agendized items; up to three minutes per speaker, to be determined by the presiding officer. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located on the table at the entrance to the Council Chambers, and deliver it to the City Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful. Public comment may be addressed to the full City Council via email at City.Council@cityofpaloalto.org. TIME ESTIMATES Time estimates are provided as part of the Council's effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Council reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. To ensure participation in a particular item, we suggest arriving at the beginning of the meeting and remaining until the item is called. HEARINGS REQUIRED BY LAW Applicants and/or appellants may have up to ten minutes at the outset of the public discussion to make their remarks and up to three minutes for concluding remarks after other members of the public have spoken. Call to Order Closed Session 5:00-6:00 PM Public Comments: Members of the public may speak to the Closed Session item(s); three minutes per speaker. 1.CONFERENCE WITH CITY ATTORNEY Santa Clara County Superior Court, Case No. 18CV328638 (One Case, as Defendant) –Yvonne Wellhausen v. City of Palo Alto, et al. Authority: Government Code Section 54956.9(d)(1) 2.CONFERENCE WITH CITY ATTORNEY- EXISTING LITIGATION Santa Clara County Superior Court, Case No. 18CV328469 (One Case, as Defendant) –Jay Greer v. City of Palo Alto Authority: Government Code Section 54956.9(d)(1) Special Orders of the Day 6:00-6:15 PM 3.Presentation of Mayor's Green Business Leader Awards 2 August 19, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Agenda Changes, Additions and Deletions City Manager Comments 6:15-6:25 PM Oral Communications 6:25-6:40 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 6:40-6:45 PM 4.Approval of Action Minutes for the August 5, 2019 Council Meeting Consent Calendar 6:45-6:50 PM Items will be voted on in one motion unless removed from the calendar by three Council Members. 5.Approval of an Exemption From Competitive Solicitation and Approval of Contract Number C20175537 With Kennedy/Jenks Consultants in the Total Amount Not-to-Exceed $279,660 to Provide Extended Design Services to Complete the new Primary Outfall Line at the Regional Water Quality Control Plant, Wastewater Treatment Fund Capital Improvement Program Project, WQ-19002 6.Approval of Contract Number C20175276 With Ranger Pipelines, Inc. in the Amount of $4,146,435 for Water Main Replacement Project 27 (WS-13001) and the Water Distribution System Improvement (WS-11003) Capital Projects in the Oak Creek and Leland Manor/Garland Neighborhoods; and Authorization for the City Manager to Negotiate and Execute Related Change Orders Not-to-Exceed $414,644, for a Total Not-to-Exceed Amount of $4,561,079 7.Authorize the City Manager to Finalize the Purchase of 27,829 Square Feet of Vacant Land Adjacent to 3350 Birch Street and Approve Budget Amendments in the Parks Development Impact Fee Fund and the Capital Improvement Fund 8.Approval of Contract Number C191173677 With CivicRec in the Amount of $389,875 for the Purchase and Implementation of a Recreation Management Software for a 3.5 Year Term; and Approval of a Budget Amendment in the General Fund 9.Adoption of a Resolution Concluding the CustomerConnect Pilot Program; and Repealing Electric Rate Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment) and Resolution Number 9737 10.Adoption of a Resolution Approving and Attesting to the Veracity of the 2018 Annual Power Source Disclosure Report MEMO Q & A Q & A Q & A 3 August 19, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. 11.Approval of the Changes to the Human Services Emerging Needs Fund Policy 12.Policy and Services Committee Recommends the City Council Accept the Status Updates of the Audits of the Citywide Cash Handling and Travel Expense; Cable Franchise and Public, Education and Government (PEG) Fees; Continuous Monitoring: Payments Audit; Utility Meters; and Inventory Management 13.Approval of Amendment Number 2 to Contract Number S19174828 for the Professional Services Agreement With Management Partners for Auditor Services to add $50,000 for a Total Not-to-Exceed Amount of $135,000 for an Additional Two-month Term Through November 14, 2019 Action Items Include: Reports of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Reports of Officials, Unfinished Business and Council Matters. 6:50-7:50 PM 14.Staff Recommends the City Council Receive a Status Update on the North Ventura Coordinated Area Plan (NVCAP) and Endorse an Updated Approach and Schedule to Complete the Project; Direct Staff to Return With Consultant Contracts That are Responsive to the Identified Approach; and Explore Supportive Funding Opportunities From Owners With Significant Property Interests Within the Project Boundary. The Recommendation in This Report is not a Project as Defined in the California Environmental Quality Act (CEQA) 7:50-9:15 PM 15.Approval of the Response to the 2018-2019 Civil Grand Jury of Santa Clara County Report Entitled, “Inquiry into Governance of the Valley Transportation Authority” 9:15-10:30 PM 16.Recommendation for City Council Direction on Establishment of a Rail Blue Ribbon Committee to Advise the City Council on the Selection, Funding, and Support for Grade Separation Projects State/Federal Legislation Update/Action Council Member Questions, Comments and Announcements Members of the public may not speak to the item(s) Adjournment AMERICANS WITH DISABILITY ACT (ADA) Persons with disabilities who require auxiliary aids or services in using City facilities, services or programs or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact (650) 329-2550 (Voice) 24 hours in advance. Q & A MEMO 4 August 19, 2019 MATERIALS RELATED TO AN ITEM ON THIS AGENDA SUBMITTED TO THE CITY COUNCIL AFTER DISTRIBUTION OF THE AGENDA PACKET ARE AVAILABLE FOR PUBLIC INSPECTION IN THE CITY CLERK’S OFFICE AT PALO ALTO CITY HALL, 250 HAMILTON AVE. DURING NORMAL BUSINESS HOURS. Additional Information Standing Committee Meetings Sp. Finance Committee Meeting August 20, 2019 City Council Meeting Cancellation September 2, 2019 Schedule of Meetings Schedule of Meetings Tentative Agenda Tentative Agenda Informational Report Informational Report Regarding the Outcome of the Request for Proposal (RFP) for an Organizational Review of the City Auditor's Office: Professional Services Agreement With Kevin Harper, CPA and Associates for Organizational Review for a Total Not-to-Exceed Amount of $32,780 Significant Gifts to the City, Fiscal Year 2019 Public Letters to Council Set 1 Sp. City Council Meeting - ARB Interviews August 21, 2019 City of Palo Alto (ID # 10433) City Council Staff Report Report Type: Special Orders of the Day Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Presentation of Mayor's Green Business Leader Awards Title: Presentation of Mayor's Green Business Leader Awards From: City Manager Lead Department: Utilities Executive Summary First presented in 2012, the Mayor’s Green Business Leader Awards acknowledge local businesses that have earned national energy efficiency certification through Energy Star or LEED. These companies have proven an exceptional commitment to energy efficient buildings. By extension, these companies and buildings prove their commitment to bettering the environment and are aligned with Palo Alto’s climate goals. The Council and the community hold the Mayor’s Green Business Leader Awards to thank these corporate citizens for their outstanding efforts. Over 130 Mayor’s Green Business Awards have been presented to-date, and many businesses have won consecutive awards over multiple years. This year’s award recipients include: CommonWealth Properties Hines Property Management Hewlett Packard Enterprise Hudson Pacific Properties Jay Paul, Inc. Orchard Commercial Sand Hill Properties SAP Stanford University Verizon VMware Wells Fargo Bank Wilson Sonsini Goodrich and Rosati CITY OF PALO ALTO OFFICE OF THE CITY CLERK August 19, 2019 The Honorable City Council Attention: Finance Committee Palo Alto, California Approval of Action Minutes for the August 5, 2019 Council Meeting Staff is requesting Council review and approve the attached Action Minutes. ATTACHMENTS: • Attachment A: 08-05-19 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 August 5, 2019 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:05 P.M. Present: Cormack; DuBois arrived at 5:06 P.M.; Filseth arrived at 5:40 P.M., Fine; Kniss arrived at 6:32 P.M., Kou, Tanaka Absent: Study Session 1. Study Session With the Palo Alto Art Center Foundation. NO ACTION TAKEN Special Orders of the Day 2. Proclamation Recognizing National Night Out 2019. NO ACTION TAKEN Agenda Changes, Additions and Deletions None Minutes Approval 3. Approval of Action Minutes for the June 17 and 24, 2019 Council Meetings. MOTION: Council Member Cormack moved, seconded by Vice Mayor Fine to approve the Action Minutes for the June 17 and 24, 2019 Council Meetings. MOTION PASSED: 6-0 Kniss absent Consent Calendar Council Member Kou registered a no vote on Agenda Item Number 6. Council Member Tanaka registered a no vote on Agenda Item Number 9. DRAFT ACTION MINUTES Page 2 of 3 City Council Meeting Draft Action Minutes: 08/05/2019 MOTION: Council Member DuBois moved, seconded by Council Member Cormack to approve Agenda Item Numbers 4-10. 4. Resolution 9853 Entitled “Resolution of the Council of the City of Palo Alto Authorizing the Filing of an Application to the State of California Housing and Community Development Department for the Senate Bill (SB) 2 Planning Grant Program; Environmental Assessment: Exempt Under California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3).” 5. 3877 El Camino Real [19PLN-00068]: Request for Approval of a Final Map to Create a one lot Airspace Subdivision for 18 Condominium Units (one Commercial Space, six Residential Flats, and 11 Townhouses). The Final Map Also Includes Access and Utility Easements. Environmental Assessment: Exempt From Provisions of the California Environmental Quality Act (CEQA) in Accordance With Guidelines Section 15268(b)(3) (Ministerial Projects). Zoning District: Service Commercial (CS). 6. SECOND READING: Ordinance 5474 Entitled “Ordinance of the Council of the City of Palo Alto, 1700 & 1730 Embarcadero Road [18PLN-00186]: Request Zoning Map Amendment, Site and Design Review and Design Enhancement Exception to Allow the Demolition of an Existing 18,000 Square Foot Vacant Restaurant Building and a 15,700 Square Foot Audi Service Building, and Construction of two new Automobile Dealerships Totaling 84,900 Square Feet. The Zoning Map Amendment Would Change the Zoning Designation From CS(D) and PC to CS(D)(AD) for Both Parcels. (FIRST READING: June 24, 2019 PASSED: 6-1 Kou no). 7. Policy and Services Recommends the City Council Accept the Business Registry Audit. 8. Approval of the Appointment of Geoffrey (Geo) Blackshire as Fire Chief. 9. SECOND READING: Ordinance 5475 Entitled “Ordinance of the Council of the City of Palo Alto Amending Chapter 5.20 (Refuse Collection) of Title 5 of the Palo Alto Municipal Code Related to the Storage, Sorting, Collection and Removal of Refuse, Including Restrictions on the Type and Color of Refuse Collection Bags and Other Modifications to Make Waste Sorting More Effective and Facilitate Monitoring; and Finding the Ordinance to be Exempt Under California Environmental Quality Act (CEQA) (FIRST READING: June 24, 2019 PASSED: 6-1 Tanaka no).” 10. Selection of Applicants to Interview for an Unfinished Term on the Architectural Review Board. DRAFT ACTION MINUTES Page 3 of 3 City Council Meeting Draft Action Minutes: 08/05/2019 MOTION PASSED FOR AGENDA ITEM NUMBER 4-5, 7-8, 10: 7-0 MOTION PASSED FOR AGENDA ITEM NUMBER 6: 5-1 Kou no, Kniss absent MOTION PASSED FOR AGENDA ITEM NUMBER 9: 5-1 Tanaka no, Kniss absent Closed Session 11. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Authority: Government Code Section 54956.8 Property: Cubberley Conveyance Property and Leased Site, 4000 Middlefield Road, Palo Alto, CA Assessor’s Parcel Nos. 147-08-052 and 053 Agency Negotiators: Ed Shikada, Kristen O’Kane, Molly Stump, Terence Howzell, Kiely Nose, David Ramberg, and Sunny Tong Negotiating Parties: City of Palo Alto and Palo Alto Unified School District Under Negotiation: Lease Price and Terms of Payment (ASD). 12. PUBLIC EMPLOYEE PERFORMANCE EVALUATION Title: City Manager, City Attorney, City Clerk Authority: Government Code Section 54957 (b). MOTION: Council Member Cormack moved, seconded by Vice Mayor Fine to go into Closed Session. MOTION PASSED: 7-0 Council went into Closed Session at 6:32 P.M. Council returned from Closed Session at 10:15 P.M. Mayor Filseth announced no reportable action. Adjournment: The meeting was adjourned at 10:15 P.M. in memory of the victims of gun violence in Gilroy, California, El Paso, Texas, and Dayton, Ohio, as well as in honor of long-time community member Stephanie Munoz who passed away on August 1, 2019. City of Palo Alto (ID # 10376) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Design Services (Extended) for WQCP Primary Outfall Line Title: Approval of an Exemption From Competitive Solicitation and Approval of Contract Number C20175537 with Kennedy/Jenks Consultants in the Total Amount Not-to-Exceed $279,660 to Provide Extended Design Services to Complete the new Primary Outfall Line at Regional Water Quality Control Plant -Wastewater Treatment Fund Capital Improvement Program Project WQ-19002 From: City Manager Lead Department: Public Works Recommendation Staff recommends that the City Council approve an exemption from competitive solicitation and authorize the City Manager or his designee to execute Contract No. C20175537 with Kennedy/Jenks Consultants (Attachment A) to provide engineering services to complete the design of the Primary Outfall Line (Outfall) Project (WQ-19002), through December 31, 2022. The total contract amount is not to exceed $279,660 which includes $254,237 for basic services and $25,423 for additional services. Background The Regional Water Quality Control Plant (RWQCP) has one 54-inch diameter outfall line to convey treated effluent from the RWQCP to the bay, traversing the Palo Alto Airport property. The reinforced concrete pipe, assembled by a bell and spigot type connection, was installed 55 years ago in 1964. The new outfall line design project is consistent with the RWQCP’s Long Range Facilities Plan (LRFP)accepted by Council in July 2012 (Staff Report ID#2914).The LRFP identified the need for a capital project to replace and rehabilitate the outfall pipeline due to insufficient capacity in the existing outfall line.On October 16, 2016, after completion of a request for proposals (RFP) process, Council approved a professional services contract (Staff Report ID# 7245) for design services with Kennedy/Jenks for the Outfall Project. Because the new Outfall alignment will be constructed in the sensitive Baylands environmental habitat, environmental review under the California Environmental Quality Act (CEQA)was completed through preparation of an Initial Study/Mitigated Negative Declaration (MND). On May 21, 2018, Council adopted the MND and approved the 90% design of the Outfall Line (Staff Report City of Palo Alto Page 2 ID# 9096). Discussion In early 2018, the California State Lands Commission (CSLC) notified the City, through submission of a comment letter on the CEQA document during the public circulation period, that the Outfall would extend into lands under the CSLC jurisdiction and management authority, covered by the General Lease between the City and CSLC (PAO Airport Lease). After the City’s design consultant Kennedy/Jenks had completed the design to the 90% level, completion of the design phase of the Outfall project was suspended and delayed 15 months due to unexpected CSLC requirements related to the PAO Airport Lease. CSLC’s authorization of the construction of the new improvements (Outfall) through amendment of the existing PAO Airport Lease was required before the project could proceed. CSLC requested design drawings and specifications to review and comment. Drafting, reviewing, and approval of the lease amendment by the City and CSLC impacted the project schedule. Kennedy/Jenks put in substantive effort to assist the City in responding to CSLC inquiries about the project, exhausting the design budget and delaying the project. On April 25, 2019 the PAO Airport Lease Amendment (Attachment B) was fully executed. Kennedy/Jenks is ready to proceed;however,the original design contract expired on October 29, 2018 and additional funds are needed to complete the scope of services. It is not desirable to solicit a new RFP at this stage of the project. A new consultant would require considerable time and budget to become familiar with and learn the project history, and to then complete the Kennedy/Jenks design. Kennedy/Jenks staff are intimately familiar with the project. They have been involved in the design from the start and their support is crucial for completion of the balance of the design.As Kennedy/Jenks has already taken the design to the 90% design level, it is anticipated that a new RFP solicitation may not receive any responses from other consultants. Palo Alto Municipal Code Section 2.30.360 (b2), Exemptions from Competitive Solicitation Requirements, allows for an exemption from solicitations of bids or proposals whenever solicitations of bids or proposals,would for any reason be impracticable, unavailing or impossible, or where the use of the competitive solicitation process, procedures and requirements would result in a substantial economic loss to the City. As discussed here, the effort to solicit proposals from other consultants would be impractical, as other consultants would probably be reluctant to propose, and even if a proposal is received, it would most likely cost the City more money to award a contract to a new consultant, as opposed to issuing a new contract to Kennedy/Jenks. Because the original contract has expired, it cannot be amended,and it is necessary to enter into a new contract. The proposed contract would be for a 3-year term, with additional funding to allow Kennedy/Jenks to complete the design and provide related support services to the City during the construction bidding and construction phases of the project. Timeline City of Palo Alto Page 3 Construction of the Outfall project is scheduled to be completed by December 31, 2022, with engineering services during construction scheduled to be completed by the same date. Resource Impact Funding for this contract is available in the Wastewater Treatment Fund, Capital Improvement Program Project Plant Repair, Retrofit, and Equipment Replacement (WQ-19002). Funding for construction of the project is available in a separate Wastewater Treatment Fund, Capital Improvement Program Project Outfall Line Construction (WQ-19000). Policy Implications This recommendation does not represent any change to existing City policies. Environmental Review This project has been evaluated in the Outfall Project Mitigated Negative Declaration adopted by Council on May 21, 2018. Attachments: ·Attachment A: Contract for Prof Services (DS) ·Attachment B: PRC 9143.9 Lease Amendment Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C20175537 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND KENNEDY/JENKS CONSULTANTS FOR PROFESSIONAL SERVICES This Agreement is entered into on this 12th day of August, 2019 by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and KENNEDY/JENKS CONSULTANTS, a California corporation, located at 2350 Mission College Boulevard, Suite 525, Santa Clara, CA 95054 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. Pursuant to a request for proposals (RFP) process in 2016, CITY selected CONSULTANT to provide engineering design services for a new outfall pipeline at the Regional Water Quality Control Plant (RWQCP), as well as support services during the construction bidding process and construction phase of the project, and the parties entered into an agreement (referred to as City of Palo Alto Contract No. C17164199 dated October 17, 2016 for the provision of these services as more detailed in that contract. CONSULTANT performed services under that prior agreement bringing the design to a 90% progress point. The parties at that point agreed to hold the design progress at the 90% design level pending receipt of comments from permitting agencies with jurisdiction in the project area. but the design was not completed due to an unanticipated and lengthy delay involving the California State Lands Commission (CSLC). B. The CSLC, having jurisdiction of the property underlying the project area, submitted comments during the environmental document review period and required an amendment to the City’s lease with the CLSC for the property in the project area (“PAO Airport Lease”) in order to proceed with the project. This intervention by the CLSC required 15 months to resolve, and culminated in an amended lease agreement approved by the CSLC on February 4, 2019; the City received a final executed copy on May 6, 2019. During this time, the project was held in abeyance and the prior agreement with CONSULTANT expired under its terms in December 2018. C. CITY desires to complete the design services and other services necessary for the installation of the new outfall pipeline that will run parallel to the existing 54-inch outfall pipeline at the RWQCP, and further desires to engage CONSULTANT to provide these services commenced under the prior agreement (“Services”). D. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. E. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. F. Based on the extenuating circumstances, including the partial completion of services and project delay resulting from permitting issues involving a state agency, the City Council has DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 2 approved an exemption from further competitive solicitation in the award of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional On-Call Provision (This provision only applies if checked and only applies to on-call agreements.) Services will be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A-1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through the earlier of December 31, 2022 or completion of the services in accordance with the Schedule of Performance attached at Exhibit “B” unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Two Hundred Fifty-Four Thousand Two Hundred Thirty-Seven Dollars ($254,237). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed Two Hundred Seventy-Nine Thousand Six Hundred Sixty Dollars ($279,660). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 3 Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C-1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 4 CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the City Manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. Option B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: Bohley Consulting, Inc., CSC, McMillen Jacobs, Tanner Pacific, Inc., WRA. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the City Manager or designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Mark Minkowski, PE as the project manager to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Tom Kapushinski, Public Works Department, Environmental Division, email: Tom.Kapushinski@CityofPaloAlto.org, Telephone:650-617-3130. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 5 the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 6 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrent-ly with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 7 or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 8 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post-consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 9 SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. OR 26.1 CONSULTANT is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. CONSULTANT shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. 26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any contract for public works construction, alteration, demolition, repair or maintenance. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 10 SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this Agreement. 27.11 The individuals executing this Agreement represent and warrant that they DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 11 have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 12 CONTRACT No. C20175537 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ City Manager or designee APPROVED AS TO FORM: __________________________ City Attorney or designee (Required on Contracts over $25,000) KENNEDY/JENKS CONSULTANTS Officer 1 By: Name: Title: Officer 2 (Required for Corp. or LLC) By: Name: Title: Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS EXHIBIT “E”: DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Vice President John Wyckoff Assistant Secretary Douglas B. Henderson Professional Services Rev. April 27, 2018 13 EXHIBIT “A” SCOPE OF SERVICES Palo Alto Regional Water Quality Control Plant Design Services for Completion of WQCP Primary Outfall Line CIP WQ-19002 ISSUED BY: REGIONAL WATER QUALITY CONTROL PLANT ENVIRONMENTAL SERVICES DIVISION PUBLIC WORKS DEPARTMENT CITY OF PALO ALTO DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 14 I. INTRODUCTION AND BACKGROUND CITY intends to install a new outfall line in parallel to the existing 54-inch outfall. The outfall operates 24/7 and conveys final treated water from the Regional Water Quality Control Plant (“RWQCP” or the “Plant”) to an unnamed slough in San Francisco Bay. Upon completion of the new pipeline, it will serve as the primary method of conveyance of the treated wastewater and the existing line will be relined and/or rehabilitated for use as supplemental capacity in light of current sea level rise and the flow-through capacity limitations during high tide / high Plant flow situations. The design of the new outfall line (“Project design”) has been developed by CONSULTANT to a ninety percent (90%) progress point under a prior agreement between CITY and CONSULTANT. The parties agreed to hold the design progress at a 90% design level, pending receipt of commentary from permitting agencies with jurisdiction in the Project area. The prior agreement lapsed during the period of time that the City was working with the California State Lands Commission on a lease amendment necessary for the Project to move forward. The services to be provided under this Agreement are the completion of the services under the prior contract, specifically, the completion of the design of the new outfall line at the RWQCP, the design for the rehabilitation of the existing outfall line, and services during construction bidding, construction, and startup. II. SCOPE OF WORK CONSULTANT shall perform the following services. Task 1 – Design Services Complete the design of the new Outfall pipeline and the rehabilitation method for the existing pipeline (so as to mitigate the issue with leaks at the pipe joints). The design of the new Outfall pipeline stands at a 90% completion level. CONSULTANT shall incorporate comments from the various permitting agencies and bring the design to the 100% completion (final) level by development of the drawings and specifications, so as to prepare a bid ready set of documents for inclusion in the invitation for bids (IFB) for a construction contractor to construct and implement the new Outfall pipeline and the rehabilitation of the existing Outfall pipeline. Task 2 – Construction Coordination CONSULTANT shall assist the CITY in coordinating with the CSLC on its submittal requirements as requested by CITY through completion of Project implementation. CONSULTANT will provide assistance in ensuring Project compliance with the terms DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 15 of the CSLC lease as amended. This likely will include providing responses to CSLC comments on the 100% design submittal documents and some contractor submittals. CONSULTANT shall assist the CITY’s Public Works Department staff in coordinating with CITY’s Airport staff and compliance with FAA requirements/stipulations during construction to minimize operational impacts to the Airport. With the acceptance of the Construction Safety and Phasing Plan (CSPP) already approved by the FAA for this project, work under this task is anticipated to include attendance at one Coordination Meeting with City Airport staff and Construction Contractor, and following up with one additional design document submittal for FAA records. Task 3 – Services during Bidding CITY anticipates that the construction of the Project will take place in two phases. The new pipeline will be installed first, and the rehabilitation of the existing line would not take place until a later date. a. CONSULTANT shall assist CITY in preparation of construction bid package. The construction bid form will be broken down into two phases, the construction of the new pipeline and rehabilitation of the existing 54-inch outfall. b. CONSULTANT shall respond (or assist CITY in responding) to the requests for clarification and/or information from prospective bidders. c. CONSULTANT shall assist CITY with preparation of Project addenda and furnish the original plans, specifications and/or details required for said addenda. d. CONSULTANT shall attend and assist CITY at the pre-bid conference and the project site walk-through. Task 4 – Services during Construction Task 4.1 New Pipeline Services a. CONSULTANT shall review submittals from CITY’s construction contractor (“Construction Contractor”) for conformance with the construction contract between CITY and the contractor (“Construction Contract”). CONSULTANT shall review and return the submittal comments to the CITY within seven calendar days. b. CONSULTANT shall prepare written responses to the Requests for Information (RFI) submitted by the Construction Contractor. CONSULTANT shall review, comment and return the RFI responses to the Construction Contractor and CITY within seven calendar days. c. CONSULTANT shall review and validate the Contract Change Order requests submitted by Construction Contractor for accuracy and correctness, as requested by CITY. d. As requested by CITY, CONSULTANT shall attend periodic Project Progress DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 16 Meetings with the Construction Contractor. Allow for one meeting per month, at a minimum, during the construction phase. e. CONSULTANT shall provide the technical support to the CITY during testing of the new pipeline alignment. CONSULTANT shall assist the CITY in monitoring, documenting and/or validating any testing required by the permitting agencies. f. CONSULTANT shall review equipment O&M Manuals for valves, instruments, etc. g. CONSULTANT shall review the “as-built” or “red line” drawings and documents maintained by the Construction Contractor during construction. Upon construction completion, CONSULTANT shall prepare one full-size, one half-size (11”X17”) sets and two electronic copies of the record drawings. The electronic copies shall be (a) in AutoCAD 3D Civil 2013 format and (b) in a format (such as ‘DXF’) suitable for uploading into CITY’s GIS system. The record drawings shall consist of annotated contract drawings and electronic files showing changes in design and construction. Task 4.2 Existing Outfall Relining and/or Rehabilitation Services a. CONSULTANT shall review submittals from the Construction Contractor for conformance with the Construction Contract. CONSULTANT shall review and return the submittal comments to the CITY within seven calendar days. b. CONSULTANT shall prepare written responses to the Requests for Information (RFI) submitted by the Construction Contractor. CONSULTANT shall review, comment and return the RFI responses to the Construction Contractor and CITY within seven calendar days. c. CONSULTANT shall review and validate the Contract Change Order requests submitted by Construction Contractor for accuracy and correctness, as requested by the CITY. d. As requested by CITY, CONSULTANT shall attend periodic Project Progress Meetings with the Construction Contractor. Allow for one meeting per month, at the minimum, during the construction phase. e. CONSULTANT shall provide the technical support to the CITY during testing of the repaired pipeline alignment. CONSULTANT shall assist the CITY in monitoring, documenting and/or validating any testing required by the permitting agencies. Task 5 – Project Management CONSULTANT shall provide Project Management services during construction through the end of the Project, including: a. Weekly check in conference calls to communicate on project status updates, review upcoming issues, pending issues and action items. Managing the CONSULTANT project team staff and all subconsultants to achieve project schedule and contract budget requirements. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 17 b. Coordinating with CONSULTANT project team accounting staff to monitor the project work progress and preparing project invoices. Additional Services CONSULTANT shall provide additional services if requested by the CITY in accordance with the process set forth in Exhibit C. These services may include additional work due to extension of project scope, additional deliverables/documents, field testing, or other miscellaneous unforeseen expenses. Additional services shall not be performed by CONSULTANT unless agreed to in writing by the CITY Project Manager. III. DELIVERABLES 100% (Final) Design - a. CONSULTANT shall perform final updates derived from CITY’s comments, permitting agencies, and CONSULTANT’s own internal quality control and audits. b. Provide a Final Design Report. c. The new Outfall pipeline design and the method to rehabilitate the existing Outfall pipeline to mitigate joint leaks, shall include complete construction documents with plans, specifications, design calculations and the final construction cost estimates. d. Prepare the design package to comply with the various permitting agencies comments / stipulations, and to solicit construction bids for supply and installation of the new Outfall pipeline and the rehabilitation of the existing Outfall pipeline, respectively. Specifications are to be developed using the 2016 edition of the CSI Master Format for specifications. e. Provide one unbound copy and one Microsoft Word electronic copy of final specifications. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 18 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement. CONSULTANT shall provide a detailed schedule of work consistent with the schedule below within 2 weeks of receipt of the notice to proceed. Milestones Completion No. of Weeks From NTP 1. Design Re-Kickoff Meeting 02 2. Submit 100% Design (Bid Documents) 10 3. Services During Bidding 30 4. Services During Construction 152 DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 19 EXHIBIT “C” COMPENSATION CITY agrees to compensate CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $15,092 (Design Service) Task 2 $61,373 (Construction Coordination) Task 3 $23,675 (Services During Bidding) Task 4 $69,956 (Services during Construction) Task 5 $64,152 (Project Management) Sub-total Basic Services $234,248 Reimbursable Expenses $19,989 Total Basic Services and Reimbursable expenses $254,237 Additional Services (Not to Exceed) $25,423 Maximum Total Compensation $279,660 REIMBURSABLE EXPENSES DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 20 The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. (These reimbursable expenses however shall not be paid to CONSULTANT because the CONSULTANT’s hourly rates include an upcharge to the hourly rate to cover these expenses. These reimbursable expenses may be available to subconsultants whose rates do not include such an upcharge.) All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $1,000 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. CONSULTANT, at te CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement Work required because the following conditions are not satisfied or are exceeded shall be considered as additional services: DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 21 EXHIBIT “C-1” SCHEDULE OF RATES Kennedy/Jenks Billing Rates Classification Hourly Rate Kennedy Jenks ‐ Personnel Compensation Rates 4% 3% 3% Year 2019 2020 2021 2022 Engineer-Scientist-Specialist 1 $130 $135 $139 $143 Engineer-Scientist-Specialist 2 $160 $166 $171 $177 Engineer-Scientist-Specialist 3 $180 $187 $193 $199 Engineer-Scientist-Specialist 4 $195 $203 $209 $215 Engineer-Scientist-Specialist 5 $215 $224 $230 $237 Engineer-Scientist-Specialist 6 $240 $250 $257 $265 Engineer-Scientist-Specialist 7 $265 $276 $284 $292 Engineer-Scientist-Specialist 8 $280 $291 $300 $309 Engineer-Scientist-Specialist 9 $295 $307 $316 $325 CAD-Technician $115 $120 $123 $127 Senior CAD-Technician $130 $135 $139 $143 CAD-Designer $150 $156 $161 $166 Senior CAD-Designer $170 $177 $182 $188 Project Administrator $125 $130 $134 $138 Administrative Assistant $105 $109 $112 $116 Aide $80 $83 $86 $88 In addition to the above Hourly Rates, an Associated Project Cost charge of $9.74 per hour will be added to Personnel Compensation for costs supporting projects including telecommunications, software, information technology, internal photocopying, shipping, and other support activity costs related to the support of projects. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 22 EXHIBIT “C-1” SCHEDULE OF RATES Subconsultant Billing Hourly Rates: Firm Name 2019 2020 2021 2022 Bohley Consulting Inc. $230 $240 $250 $260 CSC $252 $252 $252 $252 McMillen Jacobs See detailed rate sheet Tanner Pacific $260 $260 $260 $260 WRA See detailed rate sheet McMILLEN JACOBS ASSOCIATES “2019 SCHEDULE OF RATES” These are “all-up” rates, meaning that they include direct salary cost, overhead, general and administrative costs not separately accounted for, and profit. They shall remain in effect through December 31, 2019. Classification Hourly Rate Classification Hourly Rate Principal $310.00 Project CAD $155.00 Sr. Associate $270.00 Sr. Staff CAD $145.00 Lead Associate $255.00 Staff CAD $125.00 Associate $235.00 Engineer Intern $110.00 Sr. Project Consultant $225.00 Chief Inspector $205.00 Sr. Project Engineer/ Geologist $225.00 Lead Inspector $165.00 Project Consultant $190.00 Accountant III $165.00 Project Engineer/ Geologist $190.00 Accountant II $135.00 Sr. Staff Consultant $175.00 Accountant I $125.00 Sr. Staff Engineer/ Geologist $175.00 Technical Editor $160.00 Staff Consultant $155.00 Administration III $145.00 Staff Engineer/ Geologist $155.00 Administration II $130.00 Sr. Project CAD $175.00 Administration I $120.00 DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 23 These above rates are modified as follows for years 2020 and 2021 only for those classification most likely to be used as the project moves forward. Classification 2020 Hourly Rate 2021 Hourly Rate Principal $315 $320 Sr. Associate $280 $285 Lead Associate $265 $270 Associate $245 $250 Sr. Project Engineer/ $235 $240 Project Engineer/ Geologist $200 $205 Sr. Staff Engineer/ $185 $190 Lead Inspector $170 $180 WRA ENVIRONMENTAL CONSULTANTS PREFERRED CLIENT RATE SCHEDULE Effective: January 1, 2019 Geoff Smick, Chief Executive Officer and President $263/hr Michael Josselyn, Senior Wetland Scientist 341/hr Sherry Maloney, Chief Financial Officer 263/hr Amanda McCarthy, Chief Operating Officer 263/hr PRINCIPAL 236/hr ASSOCIATE PRINCIPAL 221/hr SENIOR ASSOCIATE 200-221/hr SENIOR ENVIRONMENTAL PLANNER 221/hr SENIOR ASSOCIATE ENGINEER 221/hr SENIOR ASSOCIATE LANDSCAPE ARCHITECT 200/hr ASSOCIATE ENVIRONMENTAL PLANNER 181/hr ASSOCIATE ENGINEER 180/hr ASSOCIATE LANDSCAPE ARCHITECT 168/hr ASSOCIATE 168/hr CONSERVATION STRATEGIES ASSOCIATE / FINANCE MANAGER 169/hr GIS PROFESSIONAL II 164/hr LANDSCAPE ARCHITECT 153/hr CONSERVATION STRATEGIES SCIENTIST 146/hr ENVIRONMENTAL PLANNER I 141/hr SCIENTIST 141/hr 22 Hourly Rate There will be no need for services in the year 2022. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 24 GIS SENIOR TECHNICIAN 133/hr SENIOR LANDSCAPE DESIGNER 133/hr ASSISTANT ENVIRONMENTAL PLANNER II 131/hr SENIOR TECHNICIAN 131/hr CONSERVATION STRATEGIES TECHNICIAN 123/hr GIS TECHNICIAN 118/hr TECHNICIAN 112/hr FIELD TECHNICIAN 90-140/hr PROJECT BIOLOGIST 80-105/hr RESTORATION FOREMAN 89/hr RESTORATION TECHNICIAN 68/hr CLERICAL 74/hr EXPERT WITNESS Rate x 1.5 WRA Preliminary Preferred Client Rate Schedule Note to Reader: WRA's official rates get established for each following year in late December or early January. The rates shown herein for 2020, 2021, and 2022 are therefore estimates and considered “preliminary” Title Preferred Client Hourly Preferred Client Hourly Preferred Client Hourly Preferred Client Hourly Rate (2019) Rate (2020) Rate (2021) Rate (2022) Senior Associate 200 208 216 225 Senior Environmental Planner 221 230 239 249 Senior Associate Engineer 221 230 239 249 Associate Environmental Planner 181 188 196 204 Associate 168 175 182 189 Scientist 141 147 153 159 Associate Landscape Architect 168 175 182 189 Landscape Architect 153 159 165 172 GIS Professional II 164 171 177 184 Environmental Planner 141 147 153 159 Assistant Environmental Planner II 131 136 142 147 Senior GIS Technician 133 138 144 150 Senior Landscape Designer 133 138 144 150 GIS Technician 118 123 128 133 Senior Technician 131 136 142 147 Technician 112 116 121 126 Project Biologist 105 109 114 118 Junior Project Biologist 80 83 87 90 Senior Field Technician 140 146 151 157 Field Technician 110 114 119 124 Junior Field Technician 90 94 97 101 Restoration Technician 68 71 74 76 Clerical 74 77 80 83 DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 25 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 26 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 27 EXHIBIT “E” DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS This Exhibit shall apply only to a contract for public works construction, alteration, demolition, repair or maintenance work, CITY will not accept a bid proposal from or enter into this Agreement with CONSULTANT without proof that CONSULTANT and its listed subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions. City requires CONSULTANT and its listed subcontractors to comply with the requirements of SB 854. CITY provides notice to CONSULTANT of the requirements of California Labor Code section 1771.1(a), which reads: “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.” CITY gives notice to CONSULTANT and its listed subcontractors that CONSULTANT is required to post all job site notices prescribed by law or regulation and CONSULTANT is subject to SB 854-compliance monitoring and enforcement by DIR. CITY requires CONSULTANT and its listed subcontractors to comply with the requirements of Labor Code section 1776, including: Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, CONSULTANT and its listed subcontractors, in connection with the Project. The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of CONSULTANT and its listed subcontractors, respectively. At the request of CITY, acting by its project manager, CONSULTANT and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of CITY’s request. CITY requests CONSULTANT and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project. If the certified payroll records are not produced to the project manager within the 10-day period, DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 Professional Services Rev. April 27, 2018 28 then CONSULTANT and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and CITY shall withhold the sum total of penalties from the progress payment(s) then due and payable to CONSULTANT. Inform the project manager of the location of CONSULTANT’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records. DocuSign Envelope ID: A3C03F3A-BD91-410B-9C93-5B4CD0131ED5 l RECORDED AT THE REQUEST OF AND WHEN RECORDED MAIL TO: STATE OF CALIFORNIA State Lands Commission Attn: Title Unit 100 Howe A venue, Suite 100-South Sacramento, CA 95825-8202 STATE OF CALIFORNIA OFFICIAL BUSINESS Document entitled to free recordation pursuant to Government Code Section 27383 SPAtf ABUPl 1ms lM l'bk kElbkblk'S VS'l A.P.N.: Various County: Santa Clara STATE OF CALIFORNIA STATE LANDS COMMISSION AMENDMENT OF LEASE NO. PRC 9143.9 ~ fE (G fE ~'¥'fE [Q) MAY 6 -2019 WQCP fiNGINEERING WHEREAS, the State of California, acting through the State Lands Commission, hereinafter called Lessor, and City of Palo Alto., have heretofore entered into an agreement designated as Lease No. PRC 9143.9 (Lease), authorized by the State Lands Commission on August 15, 2014, and executed by the State Lands Commission on August 28, 2014, whereby Lessor granted to said Lessee a General Lease -Public Agency Use covering certain State Land situated in Santa Clara County; and WHEREAS, Section 3, Paragraph 16(e) provides that the Lease may be terminated and its terms, covenants and conditions amended, revised, or supplemented only by mutual written agreement of the Lessor and the Lessee (hereinafter referred to as the Parties); and WHEREAS, by reason of the foregoing, it is now the desire of the Parties to amend the Lease. NOW THEREFORE, the Parties hereto agree as follows: 1. The existing Exhibit B, Site and Location Map, to the Lease is hereby deleted in its entirety and replaced with Exhibit B, Site and Location Map, attached and by reference made a part of the Lease and this Amendment (for reference purposes only). 2. Exhibit C, a Mitigation Monitoring Program, is attached and by reference made a part of the Lease and this Amendment. 3. Section 1, Basic Provisions, of the Lease is hereby amended to include the following: Page2 PRC 9143.9 a. LAND USE OR PURPOSE, to add: Continued use and maintenance of a 54- inch-diameter concrete outfall pipeline (with a 60-inch-diameter corrugated metal pipe section approximately 24 feet long), the maintenance of a 36-inch- diameter emergency outfall pipeline, and the construction, use, and maintenance of a 63-inch-diameter outfall pipeline. To replace: '60-inch-diameter steel outfall pipeline' with '60-inch-diameter storm drain pipeline' b. AUTHORIZED IMPROVEMENTS, to add: a 36-inch-diameter emergency outfall pipeline and a 54-inch-diameter concrete outfall pipeline. To replace: '60-inch diameter steel outfall pipeline' with '60-inch-diameter storm drain pipeline' c. AUTHORIZED IMPROVEMENTS under TO BE CONSTRUCTED, to add: a 63-inch-diameter outfall pipeline. 4. Section 2, Special Provisions, which includes one prov1s1on, to add the following provisions: 2. Lessee acknowledges that the Lease Premises and adjacent upland are located in an area that may be subject to effects of climate change, including sea-level rise. To prepare for the potential effects of sea-level rise, including flood damage, erosion damage, tsunamis, and damage from waves and storm-created debris, the Lessee acknowledges and agrees to the following: a. Hazards associated with sea-level rise may require additional maintenance or protection strategies regarding the improvements on the Lease Premises. b. Consistent with Section 3, Paragraph 8, the Lessee assumes the risks associated with such potential hazards and agrees to be solely responsible for all damages, costs, and liabilities to or incurred by Lessee arising as a result of the impacts of such hazards on the Lease Premises. Any additional maintenance or protection strategies necessitated by such hazards and proposed to be implemented by Lessee may require additional approval by Lessor pursuant to Section 3, Paragraph 5(a) and be subject to environmental review. 3. Lessee shall maintain a current National Pollutant Discharge Elimination System (NPDES) permit during the term of the Lease. 4. At least ninety (90) days prior to start of construction of the new 63-inch-diameter outfall project, Lessee shall provide the following for Lessor's review and approval: 2 Page3 PRC 9143.9 a. A final set of engineering design drawings "as issued for construction", certified (stamped, signed, and dated) by a California registered Civil/Structural Engineer, for the new 63-inch diameter outfall project. Also, include the following information in the following drawings: 1. Sheet No. C-02 -(a) details of proposed abandonment for the existing 36- inch diameter emergency outfall, such as pipeline segments to be removed, abandoned in place, both ends plugged with concrete, acceptable trench backfill materials and minimum relative compactions required, and (b) proposed minimum cover for the new 63-inch-diameter outfall. 11. Sheet No. C-05 -(a) continuous pipeline alignment in both plan and profile, (b) details of pipeline material, wall thickness, coating for the existing 54- inch dimeter concrete outfall and 60-inch-diameter storm drain pipelines, and (c) existing 60-inch diameter corrugated metal pipe (CMP) which represents a segment of the 54-inch dimeter concrete outfall. b. A final set of engineering design drawings "as issued for construction'', certified (stamped, signed, and dated) by a California registered Civil/Structural Engineer, for the existing 54-inch-diameter concrete outfall rehabilitation project. c. A final set of detailed design calculations certified (stamped, signed, and dated) by a California registered Civil/Structural Engineer. The calculations shall consider loadings from aircraft (if applicable), soil cover due to the proposed elevated levee crest, etc. d. A set of construction contract specifications. e. A contractor's work execution plan providing details of step-by-step procedures for the project, manpower, equipment, safety procedures, site restoration, etc. Include details of design and drawings for any shoring (sheet piles) and cofferdam with supporting calculations, certified (stamped, signed, and dated) by a California registered Civil/Structural Engineer. Also, include details of precautionary measures to prevent damage to the existing pipelines during installation of new pipeline. f. A set of approved contractor's welding procedures, qualifying welder's certificates, and welding inspection and quality control program and procedures. g. Details of the new pipeline hydrotest procedures and the test pressure, duration, 3 Page4 PRC 9143.9 and passing criteria that will be used. h. A project specific hazardous spill contingency plan. It shall include but not be limited to procedures to be implemented, specific designation of the on-site person who will have responsibility for implementing the plan, on-site spill response materials/tools/equipment, and spill notification protocol and procedures. The plan shall include equipment refueling procedures to prevent/minimize potential spills. It shall also include a complete list of the agencies (with telephone number) to be notified, including but not limited to California State Lands Commission's 24-hour emergency notification number (562) 590-5201, California Governor's Office of Emergency Services (Cal OES) contact number (800) 852-7550, etc. L A construction schedule showing all significant work activities that will take place during the course of construction. 5. Work shall be carried out in conformance with all applicable federal, state, and local regulations, requirements, and current industry standards. 6. Within sixty (90) days of completion of the new 63-inch-diameter outfall project, Lessee shall provide post-construction project verification including: a. A set of "as-built" construction plans, certified (stamped, signed, and dated) by a California registered Civil/Structural Engineer, showing all design changes or other amendments to the construction as originally approved. b. Certified copies of all completed pipeline integrity test results (hydrotests, gauging runs etc.) including copies of any failed test results with an explanation of the reason for failure. c. A post-construction written narrative report confirming completion of the project with discussion of any significant field changes or other modifications to the approved design or execution plan, and providing details of any extraordinary occurrences such as spill incidents, accidents involving serious injury or loss of life etc. It shall include backfill compaction test results including those that passed and did not pass the acceptance criteria. In addition, it shall include written confirmation of site clean-up verification with videography/photography records. d. Details of the post construction maintenance program that provides for leak monitoring and regular internal inspections of the pipeline. 4 Page 5 PRC 9143.9 7. Within sixty (90) days of completion of the existing 54-inch-diameter outfall rehabilitation project, Lessee shall provide a set of "as-built" construction plans, certified (stamped, signed, and dated) by a California registered Civil/Structural Engineer, showing all design changes or other amendments to the construction as originally approved. 8. Within six (6) months of the lease execution, Lessee shall conduct a condition assessment, certified by a California registered Civil/Structural Engineer, of the existing 60-inch diameter storm drain pipeline within the Lease Premises and at least once every five (5) years thereafter. Additionally, Lessee shall conduct such assessments when warranted by extraordinary circumstances such as an accident or a significant seismic event. The assessment schedule may be modified by mutual agreement among the parties hereto. At no cost to Lessor, Lessee shall promptly submit copies of the results of condition assessment, including reports, findings, and recommendations, to Lessor. 9. The existing 54-inch-diameter concrete outfall rehabilitation project shall be completed no later than six (6) months after the new 63-inch-diameter HDPE outfall line has been put into operation. Within five (5) years of completion of the 54-inch diameter concrete outfall rehabilitation project, Lessee shall conduct a condition assessment, certified by a California registered Civil/Structural Engineer, of the pipeline within the Lease Premises and at least once every five (5) years thereafter. Additionally, Lessee shall conduct such assessments when warranted by extraordinary circumstances such as an accident or a significant seismic event. The assessment schedule may be modified by mutual agreement among the parties hereto. At no cost to Lessor, Lessee shall promptly submit copies of the results of condition assessment, including reports, findings, and recommendations, to Lessor. 10. Lessee shall execute a reimbursement agreement with Lessor for any and all Lessor staff costs reasonably incurred reviewing and approving material required under Section 2, Paragraph 4, 6, 7, 8, and 9. 11. At no cost to Lessor and no later than 90 days after the completion of the new 63- inch diameter outfall pipeline, Lessee shall submit detailed drawings of all improvements and man-made structures both under and above ground within the lease premises. 12. Lessee agrees to be bound by and fully carry out, implement, and comply with all mitigation measures and reporting obligations identified as Lessee's, or the party 5 EXHIBITC CALIFORNIA STATE LANDS COMMISSION MITIGATION MONITORING PROGRAM Regional Water Quality Control Plant New Outfall Project (PRC 9143, State Clearinghouse No. 2017122060) The California State Lands Commission (Commission or CSLC) is a responsible agency under the California Environmental Quality Act (CEQA) for the Regional Water Quality Control Plant New Outfall Project (Project). The CEQA lead agency for the Project is the City of Palo Alto. In conjunction with approval of this Project, the Commission adopts this Mitigation Monitoring Program (MMP) for the implementation of mitigation measures for the portion(s) of the Project located on Commission lands. The purpose of a MMP is to impose feasible measures to avoid or substantially reduce the significant environmental impacts from a project identified in an Environmental Impact Report (EIR) or a Mitigated Negative Declaration (MND ). State CEQA Guidelines section 15097, subdivision (a), states in part:1 In order to ensure that the mitigation measures and project revisions identified in the EIR or negative declaration are implemented, the public agency shall adopt a program for monitoring or reporting on the revisions which it has required in the project and the measures it has imposed to mitigate or avoid significant environmental effects. A public agency may delegate reporting or monitoring responsibilities to another public agency or to a private entity which accepts the delegation; however, until mitigation measures have been completed the lead agency remains responsible for ensuring that implementation of the mitigation measures occurs in accordance with the program. The lead agency adopted an MND, State Clearinghouse No. 2017122060, adopted a Mitigation Monitoring and Reporting Program (MMRP) for the whole of the Project (see Exhibit C, Attachment C-1 ), and remains responsible for ensuring that implementation of the mitigation measures occurs in accordance with its program. The Commission's action and authority as a responsible agency apply only to the mitigation measures listed in Table C-1 below. The full text of each mitigation measure, as set forth in the MMRP prepared by the CEQA lead agency and listed in Table C-1, is incorporated by reference in this Exhibit C. 1 The State CEQA Guidelines are found at California Code of Regulations, title 14, section 15000 et seq. February 2019 Page C-1 Regional Water Quality Control Plant New Outfall Project Exhibit C -CSLC Mitigation Monitoring Program Table C-1. Project Impacts and Applicable Mitigation Measures Potential Impact Mitigation Measure (MM)2 Air Quality AIR-1 Biological Resources 810-1 810-2 810-3 810-4 810-5 810-6 Cultural Resources CULT-1 Geology and Soils GE0-1 Noise NOISE-1 Transportation/Traffic TRAFFIC-1 Tribal Cultural Resources TRIBAL-1 2 See Attachment C-1 for the full text of each MM taken from the MMRP prepared by the CEQA lead agency. February 2019 Page C-2 Regional Water Quality Control Plant New Outfall Project ATTACHMENT C-1 Mitigation Monitoring and Reporting Program Adopted by the City of Palo Alto ATTACHMENT C-1 CITY OF PALO ALTO MITIGATION MONITORING+ REPORTING PROGRAM PROJECT NAME APPLICANT AGREEMENT Regional Water Quality Control Plant New Outfall Project James Allen, Regional Water Quality Control Plant Manager APPROVED BY City Council APPLICANT/OWNER Tom Kapushinski, P.E. /LEED AP, Project Engineer City of Palo Alto Public Works Department - Regional Water Quality Control Plant 2501 Embarcadero Way Palo Alto, CA 94303 APPLICATION NUMBER DATE N/A 5/1/18 5/21/18 The Final Mitigated Negative Declaration (MND) for the Regional Water Quality Control Plant New Outfall Project identifies the mitigation measures that will be implemented to reduce the impacts associated with the project. The California Environmental Quality Act (CEQA) was amended in 1989 to add Section 21081.6, which requires a public agency to adopt a monitoring and reporting program for assessing and ensuring compliance with any required mitigation measures applied to proposed development. As stated in section 21081.6(a)(l) of the Public Resources Code: ... the public agency shall adopt a reporting or monitoring program for the changes made to the project or conditions of project approval, adopted in order to mitigate or avoid significant effects on the environment. Section 21081.6 also provides general guidelines for implementing mitigation monitoring programs and indicates that specific reporting and/or monitoring requirements, to be enforced during project implementation, shall be defined as part of adopting an EIR. The mitigation monitoring table lists those mitigation measures that would be included as conditions of approval for the project. To ensure that the mitigation measures are properly implemented, a monitoring program has been devised which identifies the timing and responsibility for monitoring each measure. City of Palo Alto • Mitigation Monitoring+ Reporting Program P a g e I 1 ~~~~--~~~'------~~~~~~~~-'--~~~ Environmental Impact BI0-1 Mitigation Measure equipment off when not in use or reducing the maximum idling time to five minutes (as required by the California airborne toxics control measure Title 13, Section 2485 of California Code of Regulations (CCR]). Clear signage shall be provided for construction workers at all access points. 7. All construction equipment shall be maintained and properly tuned in accordance with manufacturer's specifications. All equipment shall be checked by a certified mechanic and determined to be running in proper condition prior to operation. 8. Post a publicly visible sign with the telephone number and person to contact at the Lead Agency regarding dust complaints. This person shall respond and take corrective action within 48 hours. The Air District's phone number shall also be visible to ensure compliance with applicable regulations. 9. The Contractor shall prepare a SWPPP, to be submitted and approved by the City prior to the start of construction 10. The Contractor shall install rumble strips for trucks exiting the site. BIOLOGICAL RESOURCES Mitigation Measure BI0-1 Protocol level rare plant surveys shall be conducted within suitable habitat and during the blooming periods of Point Reyes bird's-beak, California seablite, and saline clover, in order to confirm the presence or absence of these species within the project site. Surveys for Point Reyes bird's beak and California seablite shall be conducted during the late season, June through October, and surveys for saline clover shall be conducted between April and June, based on the individual specie's blooming season. If these rare plant species are observed during surveys, they shall be avoided by construction if feasible. If avoidance is not feasible, seed shall be collected for replanting, or whole individuals transplanted to a nearby Res.ponsible for lm~lementation liming of Compliance Applicant/Contractor Prior to During, and After Construction Oversight of lmolementation Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring+ Reporting Program P a g e I 3 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~--~- Environmental Impact 810-2 Mitigation Measure protected area containing suitable habitat prior to construction, or stored for replanting in the construction area following completion of construction. Transplanted or reseeded individuals shall be monitored for a minimum of two years following construction to ensure transplantation success. If transplanted individuals do not successfully establish, seed or individuals from established and healthy local populations shall be collected and planted at the project site. Mitigation Measure 810-2 The measures listed below shall be implemented prior to or during construction activities within or adjacent to potential SMHM habitat: a) Prior to ground disturbing activities within and adjacent to potential SMHM habitat, all vegetation within the Project footprint shall be removed using hand-operated tools in the presence of a qualified biological monitor (see below). b) Following vegetation removal, exclusion barriers and/or fencing shall be installed to exclude individuals of this species from areas of active construction. The design of the exclusion barriers and fencing shall be approved by a qualified biologist and shall be installed in the presence of a qualified biological monitor. The fence shall be made of a material that does not allow SMHM to pass through, and the bottom shall be buried to a depth of a minimum of 4 inches so that these species cannot crawl under the fence. All support for the exclusion fencing shall be placed on the inside of the Project footprint. c) A qualified biological monitor shall be present during wildlife exclusion fence installation and removal, and during all vegetation clearing and initial ground disturbance conducted in vegetation in and adjacent to marsh habitats. The monitor shall Responsible for .. ' lmP._lementation timing of Comt?_liance. Applicant/Contractor Prior to and During Construction Ov.ersight of lm~lementation Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e I 4 Environmental lm~act Mitigation Measure have demonstrated experience in biological construction monitoring and knowledge of the biology of the listed species that may be found in the Action Area, including SMHM and CRR. The monitor(s) shall have the authority to halt construction, if necessary, if noncompliance actions occur. The biological monitor(s) shall be the contact person for any employee or contractor who might inadvertently kill or injure a listed species or anyone who finds a dead, injured, or entrapped listed species. Following vegetation removal in potential habitat areas, fence installation, and initial ground disturbance, the biological monitor shall still conduct weekly site checks to provide guidance for fence maintenance, provide environmental sensitivity training, and document compliance with permit conditions. d) The biological monitor shall provide an endangered species training program to all personnel involved in Project construction. At a minimum, the employee education program shall consist of a brief presentation by persons knowledgeable about the biology of listed species with potential to occur in the Action Area, and about their legislative protection to explain concerns to contractors and their employees involved with implementation of the Project. The program shall include a description of these species and their habitat needs; any reports of occurrences in the area; an explanation of the status of these species and their protection under State and Federal legislation; as well as a list of measures being taken to reduce impacts to these species during construction. e) Food-related trash items such as wrappers, cans, bottles, and food scraps shall be disposed of in solid, closed containers (trash cans) and removed at the end of each work day from the investigation site to eliminate an attraction to predators of listed Responsible for lm~lementation Timin~of Goml!liance Oversight of lm~l~entation City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e I 5 ~~~~~~~~~~~~~~~~~~~~~~~~~~~ Environmental lmP.act BI0-6 .Mitigation Measure are below those that will cause injury to fish. Such additional measures may include: • Hydroacoustic monitoring by a sound engineer during in water pile driving work. • Use of a "soft start" to clear fish from the area of acoustic effect. • Use of a wood cushion block between the hammer and the pile. • Use of a bubble curtain or other similar technique to reduce underwater noise. • Complete all impact pile driving work at low tide. • Limiting the number of pile strikes in a day to reduce the cumulative sound pressure impacts to fish. Mitigation Measure BI0-6 • All construction documents shall include requirements for the restoration of temporary excavations in wetlands back to preconstruction grade, and revegetation of temporarily disturbed areas using appropriate native vegetation. Appropriate native vegetation may include pickleweed, saltgrass, Atriplex, and other salt tolerant wetland plant species. Pickleweed and saltgrass may be selectively harvested from adjacent tidal marsh and seasonal wetland areas for transplantation to temporarily impacted areas for restoration. • Limits of construction, wetlands, and buffers shall be clearly marked with high-visibility construction fencing. • Site access of machinery shall be restricted to as few areas as possible to prevent soil compaction. • Appropriate erosion control measures shall be used around soil stockpiles, graded slopes, and slurry management facilities. Erosion control materials shall be wildlife friendly and shall avoid the use of R~ponsible, fQr Implementation 1imingof tompliance Applicant/Contractor Prior to and During Construction OveFSight of Implementation Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e I 8 Environm~ntal lmp_ad CULT-1 Mitigation Measure plastic netting or fixed aperture netting. • A spill prevention and control plan shall be required as part of project specifications to minimize the chance of toxic spills. Spill kits shall be present for any work adjacent to open waters. All spills of oil and other hazardous materials shall be immediately cleaned u and contained. Any hazardous materials cleaned up or used on-site would be properly disposed of at an approved disposal facility. • Litter and Waste Management -Waste collection areas shall be designated on-site. Only watertight dumpsters and trash cans shall be used and inspected for leaks. Dumpsters and cans shall be inspected at the end of each work day when it is raining or windy. Waste collection shall occur regularly. Litter shall be picked up daily. CULTURAL RESOURCES Mitigation Measure CULT-1 If buried materials are encountered, all soil disturbing work shall be halted at the location of any discovery until a qualified archaeologist or paleontologist completes a significance evaluation of the find(s) pursuant to Section 106 of the National Historic Preservation Act (36CFR60.4) and CEQA guidelines (§15064.S[f]), and the State Lands Commission Attorney has been contacted to consult. Prehistoric archaeological site indicators include: obsidian and chert flakes and chipped stone tools; grinding and mashing implements (e.g., slabs and handstones, and mortars and pestles); bedrock outcrops and boulders with mortar cups; and locally darkened midden soils. Midden soils may contain a combination of any of the previously listed items with the possible addition of bone and shell remains, and fire-affected stones. Historic period site indicators generally include: fragments of glass, ceramic, and metal objects; milled and split lumber; and structure and feature remains such as building foundations and discrete trash deposits (e.g., Rejpon~ible for lmP.,iementation 'Jiilnil)_g Qf ComRliance Applicant/Contractor During Construction Oversight of lmJ?_lementation Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring + Reporting Program P a g e I 9 ~nvironmental lml?_act GE0-1 Mitigation Measure wells, privy pits, dumps). The final disposition of any archaeological , historical, and paleontological resources recovered on-site under the jurisdiction off the California State Lands Commission shall be approved by the Commission. GEOLOGY /SOILS Mitigation Measure GE0-1 Dewatering The construction contractor shall implement a dewatering system to preserve the undisturbed bearing capacity of the existing subgrade soils at the bottom of excavations and shall meet the following minimum performance standards: • Stable excavation walls and bottom shall be provided; • A reasonably dry base of excavation shall be provided; • Native soils shall be filtered and loss of ground from dispersion or erosion shall be prevented; • Piping (boiling) of the excavation bottom shall be prevented; • All dewatering and shoring systems shall be installed and removed in accordance with governing (e.g., County, State) requirements; and • The contractor shall allow for the controlled release of groundwater to its static level in a manner that prevents disturbance of bottom soils and prevents flotation or movements of structures or pipelines. The contractor shall be prepared to implement alternative systems should the initial dewatering system fail to achieve these minimum performance requirements. The contractor shall be prepared to locally dewater or modify construction excavations, if and where needed, to provide stable and reasonably dry Responsible for lmp_lementation timing of Compliance Applicant/Contractor During Construction Oy,er;_sight of lmp_lementation Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring+ Reporting Program P a g e I 10 Environmental lmi:?_act HAZ-1 NOISE-1 TRAFFIC-1 Mitigation Measure excavations. The dewatering system shall be localized, targeted, and short-term (days) in order to prevent consolidation and subsidence from prolonged dewatering. Shoring The contractor shall be required to shore the anticipated 12-foot deep excavations with interlocking sheetpiles in accordance with California Division of Occupational Safety and Health (Cal/OSHA) regulations and all other recommendations provided in the site-specific Geotechnical report (Appendix D). All shoring plans shall be submitted to the City for review and approval prior to the start of construction activities. The construction shall ensure the shoring system meets all the minimum performance standards for shoring listed in the Geotechnical Report. HAZARDS & HAZARDOUS MATERIALS See Mitigation Measure TRAFFIC-1 Below. Mitigation Measure NOISE-1 The City shall provide all construction workers appropriate hearing protection. NOISE TRANSPORTATION/TRAFFIC Mitigation Measure TRAFFIC-1 • Prior to issuance of a grading permit, the City shall prepare and submit a Traffic Control Plan for review and approval. The Traffic Control Plan shall include best management practices and traffic measures including but not limited to: Responsible for lm1>lementation Applicant tirriingof Com1>liance During Construction Applicant/Contractor Prior to and During Construction Oyerslght of .. . lm1>lementation Planning and Community Environment Department and Public Works Department Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring+ Reporting Program P a g e I 11 EnVironmental lmJ?_act Mitigation Measure o The City shall require the contractor to provide for passage of emergency vehicles through the project site at all times. o The City shall require the contractor to maintain access to all uses during project construction. o The City shall use traffic cones, signs, lighted barricades, lights, and flagmen as described and specified in the Caltrans Manual of Uniform Traffic Control Devices, current edition, California Supplement, Part 6 Temporary Traffic Control to provide for public safety and convenience during construction. o The contractor shall install advance warning signs to alert bicyclists and motorists of the work zone and lane closures. Advance warning signs may be reflective signs, changeable message boards, cones, and barricades. o Flagging and other means of traffic control shall be required to allow for the safe movement of traffic through the work zone. The contractor shall provide flaggers to temporarily hold traffic for staging equipment or construction. o The City shall provide advanced notice to area residents, schools and emergency agencies when employing temporary traffic control measures. In addition, prior to the start of construction, the City shall provide emergency services with the proposed construction schedule. o The City shall require the construction contractor to provide for passage of emergency vehicles through the project site at all times. o The City shall require the construction contractor to maintain convenient access to driveways and buildings near the work area unless otherwise approved by the City in advance. o The City shall restore pavement, curbs, gutters, Responsible for Implementation Jimingof Compliance Oversight of Implementation City of Palo Alto • Mitigation Monitoring+ Reporting Program P a g e I 12 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~---'~~~~~~--=~~ ; .. .-,_ w..: s:::-•.. ·r, ~ . ,_ ....... .. -' Environmental lm~ad ,1,- r,., ... TRIBAL-1 Mitigation MeasuO! and sidewalks, as necessary, to pre-disturbance conditions or better. o The temporary traffic control/detour portion of the project shall include one additional detour sign posted at the bicycle/pedestrian bridge across San Francisquito Creek between East Palo Alto and Palo Alto. Users approaching from East Palo Alto need to be directed to the detour route. TRIBAL CULTURAL RESOURCES Mitigation Measure TRIBAL-1 In the event that an unanticipated tribal cultural resource is exposed during project construction, work within 30 feet of the discovery shall stop until a City- approved cultural resources professional can identify and evaluate the significance of the discovery and develop recommendations. Recommendations could include preparation of a Treatment Plan, which could require recordation, collection and analysis of the discovery; preparation of a technical report; and curation of the collection and supporting documentation in an appropriate depository. Responsible for lmalementation timingQf Com~liance Applicant/Contractor During Construction Oversight of lmelernentation Planning and Community Environment Department and Public Works Department City of Palo Alto • Mitigation Monitoring+ Reporting Program P a g e I 13 -'1 . City of Palo Alto (ID # 10381) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Water Main Replacement 27 Title: Approval of Contract Number C20175276 With Ranger Pipelines, Inc. in the Amount of $4,146,435 for Water Main Replacement Project 27 (WS- 13001) and the Water Distribution System Improvement (WS-11003) Capital Projects in the Oak Creek and Leland Manor/Garland Neighborhoods, and Authorization for the City Manager to Negotiate and Execute Related Change Orders Not-to-Exceed $414,644, for a Total Not-to-Exceed Amount of $4,561,079 From: City Manager Lead Department: Utilities Recommendation Staff recommends that Council: 1. Approve and authorize the City Manager or his designee to execute the attached contract C20175276 (Attachment A) with RANGER PIPELINES, Inc. ) in an amount not-to-exceed $4,146,435 for the Water Main Replacement (WMR) Project 27 (WS-13001) and the Water Distribution System Improvement (WS-11003) capital improvement projects in the Oak Creek and Leland Manor/Garland neighborhoods. 2. Approve and authorize the City Manager or his designee to negotiate and execute one or more changes to the contract with RANGER PIPELINES for related additional but unforeseen work, which may develop during the project, the total value of which shall not exceed $414,644, or 10% of the contract amount. The total not to exceed contract amount is $4,561,079, which includes contract amount of $4,146,435 and a 10% contingency of $414,644. Background In 2015 the City completed the water distribution system seismic evaluation and condition assessment master study. The pipeline improvements recommended from that study included future capital improvement projects. City of Palo Alto Page 2 This project is the first project in the updated 2015 Water Main Replacement Program that focuses on high-priority pipes in seismically vulnerable areas. The project also includes replacement of some cast iron (CI) and asbestos cement (AC) pipes from a replacement program that began in 1986. Approximately 8% of the City’s existing water distribution system is comprised of CI pipe, while AC pipe accounts for approximately 56%. These pipes are being replaced since both CI and AC water mains can show signs of corrosion and become subject to breaks after many years of use. Using the risk of failure analysis, staff has prioritized replacement of these water mains within the distribution system as part of WMR Project 27. All existing CI and AC water mains in the project area will be replaced with High Density Polyethylene (HDPE) pipe. Replacing the water distribution system mains with HDPE pipe with fused joints will eliminate leaks in the project area, increase the reliability of the water distribution system, protect the quality of supplied water, and provide more reliable flow and pressure for fire protection. As part of the planning and design process, staff coordinated this project with other City departments to minimize interference with other contractors and their schedules. Work in the Sand Hill Road area will be followed by a Public Works’ street paving project. Discussion On May 30, 2019, the City posted a notice inviting formal bids (IFB) for the Water Main Replacement Project 27 (WMR 27) at the City’s electronic procurement system, PlanetBids. The bidding period was 26 calendar days. Three contractors submitted bids on June 25, 2019 as listed on the attached Bid Summary (Attachment B). Cratus, Inc. was the apparent lowest bidder. The City, rejected their bid because Cratus failed to submit required qualification forms, which require prospective bidders to indicate the installation method (by open cut or horizontal directional drilling method) and provide relevant references of water/gas HDPE fusion projects satisfactorily completed in the last three years. Staff has reviewed the remaining two bids and recommends that the bid of $4,146,435 submitted by RANGER PIPELINES, the next lowest bidder, be accepted and that RANGER PIPELINES be declared the lowest responsible and responsive bidder. RANGER PIPELINES’ bid is $135,010 or 3.4% higher than Cratus. The bid is approximately 3.7 percent (3.7%) above the staff engineer's estimate of $3,999,188. City of Palo Alto Page 3 Bid Summary Bid Name/Number Water Main Replacement Project 27, CIP WS-13001, IFB Number 175276 Proposed Length of Project 142 Working Days Number of Bids Mailed to Contractors 0 (electronic documents were available in CPA website) Number of Bid Notices Emailed to Contractors and Builder’s Exchanges 11 Total Days to Respond to Bid 26 Pre-Bid Meeting? Yes (Non-Mandatory) Number of Company Attendees at Pre-Bid Meeting 4 (PROJECT SITE MEETING)/2 (OFFICE MEETING) Number of Bids Received: 3 Bid Price Range $4,011,475 to $4,997,569 *Bid summary provided in Attachment B. Staff believes that bid is slightly higher than the engineer’s estimate due to recent increases in the cost of materials and labor for this type of work, and the fact that there is currently a large demand for construction work in the Bay Area. Although the bid is higher than the engineer’s estimate, there are enough funds available to complete this work. The additional amount of $414,644, which equals 10 percent (10%) of the total contract, is requested for additional unforeseen work that may develop during the project. Any significant delays in the WMR 27 schedule could delay the start of subsequent Public Works’ paving project planned for the Sand Hill Road. The bids received are consistent with the current state of the economy. Staff confirmed with the Contractor's State License Board that RANGER PIPELINES, and their three (3) listed subcontractors, have active licenses on file. Staff checked references provided by RANGER PIPELINES for previous work performed and received positive feedback from other agencies. Staff also confirmed that both RANGER PIPELINES and their subcontractors are registered and in good standing with the Department of Industrial Relations (DIR). In addition, RANGER PIPELINES has contracted with the City in the past for other Utilities CIP projects, including recent Upgrade Downtown project, and has demonstrated the knowledge and ability needed to complete this project (WMR 27) on schedule and within budget. The scope of this contract includes installation of approximately 5,032 linear feet of new HDPE water mains, 35 new HDPE water services, 11 new fire hydrants, 12 gate valves and installation of 18” butterfly valve and related components on 18” existing mains within the limits of the City of Palo Alto. Any landscaping that may be removed as part of the work will be restored in kind when construction is completed. There are locations within this area where Stanford has been working on soil stabilization of the slope adjacent to part of the project area. The remaining 4,118 linear feet of water mains and services will be addressed in the next fiscal year and will be referred to as City of Palo Alto Page 4 WMR 27B. The project is primarily located in Oak Creek and Leland Manor/Garland neighborhoods of the City and will replace mains on Sand Hill Road (Oak Creek West to Swan Drive) and Fulton (Seale Avenue to Embarcadero Road). The contract also includes transmission main repair work on Old Page Mill Road at Gerth Lane. Work includes repairing the 18” transmission main, and installing an 18” butterfly valve, fire hydrants, and ARVs (air relieve valves); project locations are shown on Attachment C. The City will provide written notification to all affected property occupants prior to the start of construction. The Contractor will also provide two written notifications of the work to all abutting property occupants, one at least 7 days prior to the commencement of work at their specific locations, and a second 24 hours prior to mobilization. To minimize disruptions during construction, work on Sand Hill Road and Embarcadero intersection will be performed between 9:00 AM and 4:00 PM Monday through Friday; work on Fulton Street will be performed between 8:45 AM and 5:00 PM Monday through Friday; and work on Old Page Mill Road will be performed between 9:00 AM and 4:00 PM Monday through Friday. No construction work will be allowed in any part of the City during the two-week period between December 23, 2019 and January 4, 2020 and during Thanksgiving week between November 25 and November 29, 2019 unless approved by the City due to necessity to accelerate the schedule to prevent delay for the subsequent Public Works’ project. The construction period for each location will vary depending on the extent of work to be done; residents/business can expect construction in their area lasting a minimum of one month. Resource Impact Funds for this project ($4,146,435) and the contingency amount of ($414,644) are available in the FY 2020 Adopted Capital Budget for the Water Fund in Water Main Replacement (WMR) Project 27 (WS-13001) and Water Distribution System Improvements (WS-11003). Work in the Sand Hill and Fulton areas for $3,886,315 and the contingency amount of $388,632 are associated with WS-13001. The butterfly valve installation work on Old Page Mill Road for $260,120 and the contingency amount of $26,012 are associated with WS-11003. Although the bid price is 3.7% above the engineer’s estimate for this project, there are sufficient funds available to complete the work. Summary of Project Costs for WMR 27 (WS-13001 and WS-11003) Pre-Design/Design Costs $51,592 Construction Costs $4,146,435 10% Contingency $414,644 Staff Time (Includes Engineering & Inspection Time) $414,242 Trench Cut Fees $72,028 TOTAL $5,098,941 City of Palo Alto Page 5 Policy Implications The approval of this contract is consistent with existing City policies including the Council approved 2018 Utilities Strategic Plan-Strategic Objectives, Priority 4 Strategy 1 “Establish a proactive infrastructure replacement program, based on planned replacement before failure to support reliability and resiliency.” Facing an evolving utility business environment, aging infrastructure needs, and sustainability objectives, CPAU must maintain a competitive position in the market. Remaining financially sustainable and competitive in the market while optimizing our resources is key to maintaining and enhancing our value to customers. Strategies in this Priority focus on proactively renewing and managing CPAU’s infrastructure, continuously improving financial processes, enhancing infrastructure maintenance programs, defining CPAU’s role in community resiliency, and achieving sustainable energy resource and water supply plans. Environmental Review This project is categorically exempt from California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines 15301 (repair, maintenance of existing facilities) and 15302 (replacement or reconstruction of existing facilities). Attachments: • Attachment A: C20175276 Ranger Pipelines _Water Main Replacement 27 Project_Final • Attachment B: BID SUMMARY • Attachment C: LOCATION MAPS Invitation for Bid (IFB) Package 1 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT Contract No. C20175276 City of Palo Alto Water Main Replacement 27 Project Invitation for Bid (IFB) Package 2 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT TABLE OF CONTENTS SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS…………………………………….…………..6 1.1 Recitals…………………………………………………………………………………………………………………….6 1.2 Definitions……………………………………………………………………………………………………………….6 SECTION 2 THE PROJECT………………………………………………………………………………………………………...6 SECTION 3 THE CONTRACT DOCUMENTS………………………………………………………………………………..7 3.1 List of Documents…………………………………………………………………………………………….........7 3.2 Order of Precedence……………………………………………………………………………………………......7 SECTION 4 CONTRACTOR’S DUTY…………………………………………………………………………………………..8 4.1 Contractor's Duties…………………………………………………………………………………………………..8 SECTION 5 PROJECT TEAM……………………………………………………………………………………………………..8 5.1 Contractor's Co-operation………………………………………………………………………………………..8 SECTION 6 TIME OF COMPLETION…………………………………………………………………………………….......8 6.1 Time Is of Essence…………………………………………………………………………………………………….8 6.2 Commencement of Work…………………………………………………………………………………………8 6.3 Contract Time…………………………………………………………………………………………………………..8 6.4 Liquidated Damages…………………………………………………………………………………………………8 6.4.1 Other Remedies……………………………………………………………………………………………………..9 6.5 Adjustments to Contract Time………………………………………………………………………………….9 SECTION 7 COMPENSATION TO CONTRACTOR……………………………………………………………………….9 7.1 Contract Sum……………………………………………………………………………………………………………9 7.2 Full Compensation……………………………………………………………………………………………………9 SECTION 8 STANDARD OF CARE……………………………………………………………………………………………..9 8.1 Standard of Care…………………………………………………………………………………..…………………9 SECTION 9 INDEMNIFICATION…………………………………………………………………………………………..…10 9.1 Hold Harmless……………………………………………………………………………………………………….10 9.2 Survival…………………………………………………………………………………………………………………10 SECTION 10 NON-DISCRIMINATION……..………………………………………………………………………………10 10.1 Municipal Code Requirement…………….………………………………..……………………………….10 SECTION 11 INSURANCE AND BONDS.…………………………………………………………………………………10 Invitation for Bid (IFB) Package 3 Rev. March 17, 2017 CONSTRUCTION CONTRACT 11.1 Evidence of Coverage…………………………………………………………………………………………..10 SECTION 12 PROHIBITION AGAINST TRANSFERS…………………………………………………………….…11 12.1 Assignment………………………………………………………………………………………………………….11 12.2 Assignment by Law.………………………………………………………………………………………………11 SECTION 13 NOTICES …………………………………………………………………………………………………………….11 13.1 Method of Notice …………………………………………………………………………………………………11 13.2 Notice Recipents ………………………………………………………………………………………………….11 13.3 Change of Address……………………………………………………………………………………………….12 SECTION 14 DEFAULT…………………………………………………………………………………………………………...12 14.1 Notice of Default………………………………………………………………………………………………….12 14.2 Opportunity to Cure Default…………………………………………………………………………………12 SECTION 15 CITY'S RIGHTS AND REMEDIES…………………………………………………………………………..13 15.1 Remedies Upon Default……………………………………………………………………………………….13 15.1.1 Delete Certain Services…………………………………………………………………………………….13 15.1.2 Perform and Withhold……………………………………………………………………………………..13 15.1.3 Suspend The Construction Contract…………………………………………………………………13 15.1.4 Terminate the Construction Contract for Default………………………………………………13 15.1.5 Invoke the Performance Bond………………………………………………………………………….13 15.1.6 Additional Provisions……………………………………………………………………………………….13 15.2 Delays by Sureties……………………………………………………………………………………………….13 15.3 Damages to City…………………………………………………………………………………………………..14 15.3.1 For Contractor's Default…………………………………………………………………………………..14 15.3.2 Compensation for Losses…………………………………………………………………………………14 15.4 Suspension by City……………………………………………………………………………………………….14 15.4.1 Suspension for Convenience……………………………………………………………………………..14 15.4.2 Suspension for Cause………………………………………………………………………………………..14 15.5 Termination Without Cause…………………………………………………………………………………14 15.5.1 Compensation………………………………………………………………………………………………….15 15.5.2 Subcontractors………………………………………………………………………………………………..15 15.6 Contractor’s Duties Upon Termination………………………………………………………………...15 SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES……………………………………………………………16 16.1 Contractor’s Remedies……………………………………..………………………………..………………….16 Invitation for Bid (IFB) Package 4 Rev. March 17, 2017 CONSTRUCTION CONTRACT 16.1.1 For Work Stoppage……………………………………………………………………………………………16 16.1.2 For City's Non-Payment…………………………………………………………………………………….16 16.2 Damages to Contractor………………………………………………………………………………………..16 SECTION 17 ACCOUNTING RECORDS………………………………………………………………………………….…16 17.1 Financial Management and City Access………………………………………………………………..16 17.2 Compliance with City Requests…………………………………………………………………………….17 SECTION 18 INDEPENDENT PARTIES……………………………………………………………………………………..17 18.1 Status of Parties……………………………………………………………………………………………………17 SECTION 19 NUISANCE……………………………………………………………………………………………………….…17 19.1 Nuisance Prohibited……………………………………………………………………………………………..17 SECTION 20 PERMITS AND LICENSES…………………………………………………………………………………….17 20.1 Payment of Fees…………………………………………………………………………………………………..17 SECTION 21 WAIVER…………………………………………………………………………………………………………….17 21.1 Waiver………………………………………………………………………………………………………………….17 SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS……………………………….18 22.1 Governing Law…………………………………………………………………………………………………….18 22.2 Compliance with Laws…………………………………………………………………………………………18 22.2.1 Palo Alto Minimum Wage Ordinance…………….………………………………………………….18 SECTION 23 COMPLETE AGREEMENT……………………………………………………………………………………18 23.1 Integration………………………………………………………………………………………………………….18 SECTION 24 SURVIVAL OF CONTRACT…………………………………………………………………………………..18 24.1 Survival of Provisions……………………………………………………………………………………………18 SECTION 25 PREVAILING WAGES………………………………………………………………………………………….18 SECTION 26 NON-APPROPRIATION……………………………………………………………………………………….19 26.1 Appropriation………………………………………………………………………………………………………19 SECTION 27 AUTHORITY……………………………………………………………………………………………………….19 27.1 Representation of Parties…………………………………………………………………………………….19 SECTION 28 COUNTERPARTS………………………………………………………………………………………………..19 28.1 Multiple Counterparts………………………………………………………………………………………….19 SECTION 29 SEVERABILITY……………………………………………………………………………………………………19 29.1 Severability………………………………………………………………………………………………………….19 SECTION 30 STATUTORY AND REGULATORY REFERENCES …………………………………………………..19 Invitation for Bid (IFB) Package 5 Rev. March 17, 2017 CONSTRUCTION CONTRACT 30.1 Amendments of Laws…………………………………………………………………………………………..19 SECTION 31 WORKERS’ COMPENSATION CERTIFICATION………………………………………………….….19 31.1 Workers Compensation…………………………………………………………………………………….19 SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS………………………………..…20 32.1 General Notice to Contractor…………………………………………………………………………….20 32.2 Labor Code section 1771.1(a)…………………………………………………………………………….20 32.3 DIR Registration Required…………………………………………………………………………………20 32.4 Posting of Job Site Notices…………………………………………………………………………………20 32.5 Payroll Records…………………………………………………………………………………………………20 Invitation for Bid (IFB) Package 6 Rev. March 17, 2017 CONSTRUCTION CONTRACT CONSTRUCTION CONTRACT THIS CONSTRUCTION CONTRACT entered into on August 19, 2019 (“Execution Date”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City"), and RANGER PIPELINES INCORPORATED ("Contractor"), is made with reference to the following: R E C I T A L S: A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. Contractor is a Corporation duly organized and in good standing in the State of California, Contractor’s License Number 417996 and Department of Industrial Relations Registration Number 1000003604. Contractor represents that it is duly licensed by the State of California and has the background, knowledge, experience and expertise to perform the obligations set forth in this Construction Contract. C. On May 30, 2019, City issued an Invitation for Bids (IFB) to contractors for the Water Main Replacement 27 Project (“Project”). In response to the IFB, Contractor submitted a Bid. D. City and Contractor desire to enter into this Construction Contract for the Project, and other services as identified in the Contract Documents for the Project upon the following terms and conditions. NOW THEREFORE, in consideration of the mutual promises and undertakings hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is mutually agreed by and between the undersigned parties as follows: SECTION 1 INCORPORATION OF RECITALS AND DEFINITIONS. 1.1 Recitals. All of the recitals are incorporated herein by reference. 1.2 Definitions. Capitalized terms shall have the meanings set forth in this Construction Contract and/or in the General Conditions. If there is a conflict between the definitions in this Construction Contract and in the General Conditions, the definitions in this Construction Contract shall prevail. SECTION 2 THE PROJECT. The Project is the Water Main Replacement 27 Project, located at various locations, Palo Alto CA. ("Project"). Invitation for Bid (IFB) Package 7 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 3 THE CONTRACT DOCUMENTS. 3.1 List of Documents. The Contract Documents (sometimes collectively referred to as “Agreement” or “Bid Documents”) consist of the following documents which are on file with the Purchasing Division and are hereby incorporated by reference. 1) Change Orders 2) Field Orders 3) Contract 4) Bidding Addenda 5) Special Provisions 6) General Conditions 7) Project Plans and Drawings 8) Technical Specifications 9) Instructions to Bidders 10) Invitation for Bids 11) Contractor's Bid/Non-Collusion Declaration 12) Reports listed in the Contract Documents 13) Public Works Department’s Standard Drawings and Specifications (most current version at time of Bid) 14) Utilities Department’s Water, Gas, Wastewater, Electric Utilities Standards (most current version at time of Bid) 15) City of Palo Alto Traffic Control Requirements 16) City of Palo Alto Truck Route Map and Regulations 17) Notice Inviting Pre-Qualification Statements, Pre-Qualification Statement, and Pre- Qualification Checklist (if applicable) 18) Performance and Payment Bonds 3.2 Order of Precedence. For the purposes of construing, interpreting and resolving inconsistencies between and among the provisions of this Contract, the Contract Documents shall have the order of precedence as set forth in the preceding section. If a claimed inconsistency cannot be resolved through the order of precedence, the City shall have the sole power to decide which document or provision shall govern as may be in the best interests of the City. Invitation for Bid (IFB) Package 8 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 4 CONTRACTOR’S DUTY. 4.1 Contractor’s Duties Contractor agrees to perform all of the Work required for the Project, as specified in the Contract Documents, all of which are fully incorporated herein. Contractor shall provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including, but not limited to, provision of all necessary labor, materials, equipment, transportation, and utilities, unless otherwise specified in the Contract Documents. Contractor also agrees to use its best efforts to complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents. SECTION 5 PROJECT TEAM. 5.1 Contractor’s Co-operation. In addition to Contractor, City has retained, or may retain, consultants and contractors to provide professional and technical consultation for the design and construction of the Project. The Contract requires that Contractor operate efficiently, effectively and cooperatively with City as well as all other members of the Project Team and other contractors retained by City to construct other portions of the Project. SECTION 6 TIME OF COMPLETION. 6.1 Time Is of Essence. Time is of the essence with respect to all time limits set forth in the Contract Documents. 6.2 Commencement of Work. Contractor shall commence the Work on the date specified in City’s Notice to Proceed. 6.3 Contract Time. Work hereunder shall begin on the date specified on the City’s Notice to Proceed and shall be completed not later than . within One hundred forty two working days (142) after the commencement date specified in City’s Notice to Proceed. By executing this Construction Contract, Contractor expressly waives any claim for delayed early completion. 6.4 Liquidated Damages. Pursuant to Government Code Section 53069.85, if Contractor fails to achieve Substantial Completion of the entire Work within the Contract Time, including any approved extensions thereto, City may assess liquidated damages on a daily basis for each day of Unexcused Delay in achieving Substantial Completion, based on the amount of one thousand dollars ($1,000) per day, or as otherwise specified in the Special Provisions. Liquidated damages may also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents, regardless of impact on the time for achieving Substantial Completion. The assessment of liquidated damages is not a penalty but considered to be a reasonable estimate of the amount of damages City will suffer by delay in completion of the Work. The City is entitled to setoff the amount of liquidated damages assessed against any payments otherwise due to Contractor, Invitation for Bid (IFB) Package 9 Rev. March 17, 2017 CONSTRUCTION CONTRACT including, but not limited to, setoff against release of retention. If the total amount of liquidated damages assessed exceeds the amount of unreleased retention, City is entitled to recover the balance from Contractor or its sureties. Occupancy or use of the Project in whole or in part prior to Substantial Completion, shall not operate as a waiver of City’s right to assess liquidated damages. 6.4.1 Other Remedies. City is entitled to any and all available legal and equitable remedies City may have where City’s Losses are caused by any reason other than Contractor’s failure to achieve Substantial Completion of the entire Work within the Contract Time. 6.5 Adjustments to Contract Time. The Contract Time may only be adjusted for time extensions approved by City and memorialized in a Change Order approved in accordance with the requirements of the Contract Documents. SECTION 7 COMPENSATION TO CONTRACTOR. 7.1 Contract Sum. Contractor shall be compensated for satisfactory completion of the Work in compliance with the Contract Documents the Contract Sum of Four Million One Hundred Forty-Six Thousand Four Hundred Thirty Five Dollars ($4,146,435). [This amount includes the Base Bid and Additive Alternates 32-75.] 7.2 Full Compensation. The Contract Sum shall be full compensation to Contractor for all Work provided by Contractor and, except as otherwise expressly permitted by the terms of the Contract Documents, shall cover all Losses arising out of the nature of the Work or from the acts of the elements or any unforeseen difficulties or obstructions which may arise or be encountered in performance of the Work until its Acceptance by City, all risks connected with the Work, and any and all expenses incurred due to suspension or discontinuance of the Work, except as expressly provided herein. The Contract Sum may only be adjusted for Change Orders approved in accordance with the requirements of the Contract Documents. SECTION 8 STANDARD OF CARE. 8.1 Standard of Care. Contractor agrees that the Work shall be performed by qualified, experienced and well-supervised personnel. All services performed in connection with this Construction Contract shall be performed in a manner consistent with the standard of care under California law applicable to those who specialize in providing such services for projects of the type, scope and complexity of the Project. Invitation for Bid (IFB) Package 10 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 9 INDEMNIFICATION. 9.1 Hold Harmless. To the fullest extent allowed by law, Contractor will defend, indemnify, and hold harmless City, its City Council, boards and commissions, officers, agents, employees, representatives and volunteers (hereinafter individually referred to as an “Indemnitee” and collectively referred to as "Indemnitees"), through legal counsel acceptable to City, from and against any and liability, loss, damage, claims, expenses (including, without limitation, attorney fees, expert witness fees, paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or omissions of Contractor, its employees, Subcontractors, representatives, or agents, in performing the Work or its failure to comply with any of its obligations under the Contract, except such Liability caused by the active negligence, sole negligence, or willful misconduct of an Indemnitee. Contractor shall pay City for any costs City incurs to enforce this provision. Except as provided in Section 9.2 below, nothing in the Contract Documents shall be construed to give rise to any implied right of indemnity in favor of Contractor against City or any other Indemnitee. Pursuant to Public Contract Code Section 9201, City shall timely notify Contractor upon receipt of any third-party claim relating to the Contract. 9.2 Survival. The provisions of Section 9 shall survive the termination of this Construction Contract. SECTION 10 NON-DISCRIMINATION. 10.1 Municipal Code Requirement. As set forth in Palo Alto Municipal Code section 2.30.510, Contractor certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Contractor acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and will comply with all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 11 INSURANCE AND BONDS. 11.1 Evidence of coverage. Within ten (10) business days following issuance of the Notice of Award, Contractor shall provide City with evidence that it has obtained insurance and shall submit Performance and Payment Bonds satisfying all requirements in Article 11 of the General Conditions. Invitation for Bid (IFB) Package 11 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 12 PROHIBITION AGAINST TRANSFERS. 12.1 Assignment. City is entering into this Construction Contract in reliance upon the stated experience and qualifications of the Contractor and its Subcontractors set forth in Contractor’s Bid. Accordingly, Contractor shall not assign, hypothecate or transfer this Construction Contract or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any assignment, hypothecation or transfer without said consent shall be null and void, and shall be deemed a substantial breach of contract and grounds for default in addition to any other legal or equitable remedy available to the City. 12.2 Assignment by Law. The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor or of any general partner or joint venturer or syndicate member of Contractor, if the Contractor is a partnership or joint venture or syndicate or co-tenancy shall result in changing the control of Contractor, shall be construed as an assignment of this Construction Contract. Control means more than fifty percent (50%) of the voting power of the corporation or other entity. SECTION 13 NOTICES. 13.1 Method of Notice. All notices, demands, requests or approvals to be given under this Construction Contract shall be given in writing and shall be deemed served on the earlier of the following: (i) On the date delivered if delivered personally; (ii) On the third business day after the deposit thereof in the United States mail, postage prepaid, and addressed as hereinafter provided; (iii) On the date sent if sent by facsimile transmission; (iv) On the date sent if delivered by electronic mail; or (v) On the date it is accepted or rejected if sent by certified mail. 13.2 Notice to Recipients. All notices, demands or requests (including, without limitation, Change Order Requests and Claims) from Contractor to City shall include the Project name and the number of this Construction Contract and shall be addressed to City at: To City: City of Palo Alto City Clerk 250 Hamilton Avenue P.O. Box 10250 Palo Alto, CA 94303 Copy to: City of Palo Alto Public Works Administration 250 Hamilton Avenue Palo Alto, CA 94301 Attn: AND [Include Construction Manager, If Applicable.] Invitation for Bid (IFB) Package 12 Rev. March 17, 2017 CONSTRUCTION CONTRACT City of Palo Alto Utilities Engineering 250 Hamilton Avenue Palo Alto, CA 94301 Attn: Robert Item In addition, copies of all Claims by Contractor under this Construction Contract shall be provided to the following: Palo Alto City Attorney’s Office 250 Hamilton Avenue P.O. Box 10250 Palo Alto, California 94303 All Claims shall be sent by registered mail or certified mail with return receipt requested. All notices, demands, requests or approvals from City to Contractor shall be addressed to: Ranger Pipelines Incorporated 1790 Yosemite Avenue San Francisco, California 94124 Attn: Thomas Hunt 13.3 Change of Address. In advance of any change of address, Contractor shall notify City of the change of address in writing. Each party may, by written notice only, add, delete or replace any individuals to whom and addresses to which notice shall be provided. SECTION 14 DEFAULT. 14.1 Notice of Default. In the event that City determines, in its sole discretion, that Contractor has failed or refused to perform any of the obligations set forth in the Contract Documents, or is in breach of any provision of the Contract Documents, City may give written notice of default to Contractor in the manner specified for the giving of notices in the Construction Contract, with a copy to Contractor’s performance bond surety. 14.2 Opportunity to Cure Default. Except for emergencies, Contractor shall cure any default in performance of its obligations under the Contract Documents within two (2) Days (or such shorter time as City may reasonably require) after receipt of written notice. However, if the breach cannot be reasonably cured within such time, Contractor will commence to cure the breach within two (2) Days (or such shorter time as City may reasonably require) and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than ten (10) Days after receipt of such written notice. Invitation for Bid (IFB) Package 13 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 15 CITY'S RIGHTS AND REMEDIES. 15.1 Remedies Upon Default. If Contractor fails to cure any default of this Construction Contract within the time period set forth above in Section 14, then City may pursue any remedies available under law or equity, including, without limitation, the following: 15.1.1 Delete Certain Services. City may, without terminating the Construction Contract, delete certain portions of the Work, reserving to itself all rights to Losses related thereto. 15.1.2 Perform and Withhold. City may, without terminating the Construction Contract, engage others to perform the Work or portion of the Work that has not been adequately performed by Contractor and withhold the cost thereof to City from future payments to Contractor, reserving to itself all rights to Losses related thereto. 15.1.3 Suspend The Construction Contract. City may, without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, suspend all or any portion of this Construction Contract for as long a period of time as City determines, in its sole discretion, appropriate, in which event City shall have no obligation to adjust the Contract Sum or Contract Time, and shall have no liability to Contractor for damages if City directs Contractor to resume Work. 15.1.4 Terminate the Construction Contract for Default. City shall have the right to terminate this Construction Contract, in whole or in part, upon the failure of Contractor to promptly cure any default as required by Section 14. City’s election to terminate the Construction Contract for default shall be communicated by giving Contractor a written notice of termination in the manner specified for the giving of notices in the Construction Contract. Any notice of termination given to Contractor by City shall be effective immediately, unless otherwise provided therein. 15.1.5 Invoke the Performance Bond. City may, with or without terminating the Construction Contract and reserving to itself all rights to Losses related thereto, exercise its rights under the Performance Bond. 15.1.6 Additional Provisions. All of City’s rights and remedies under this Construction Contract are cumulative, and shall be in addition to those rights and remedies available in law or in equity. Designation in the Contract Documents of certain breaches as material shall not waive the City’s authority to designate other breaches as material nor limit City’s right to terminate the Construction Contract, or prevent the City from terminating the Agreement for breaches that are not material. City’s determination of whether there has been noncompliance with the Construction Contract so as to warrant exercise by City of its rights and remedies for default under the Construction Contract, shall be binding on all parties. No termination or action taken by City after such termination shall prejudice any other rights or remedies of City provided by law or equity or by the Contract Documents upon such termination; and City may proceed against Contractor to recover all liquidated damages and Losses suffered by City. 15.2 Delays by Sureties. Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the date of the notice of termination, Contractor’s surety shall be deemed to have waived its right to complete the Work under the Contract, and City may immediately make arrangements for the completion of the Work through use of its own forces, by hiring a replacement contractor, or by any other means that City determines advisable under the circumstances. Contractor and its surety shall be jointly and severally Invitation for Bid (IFB) Package 14 Rev. March 17, 2017 CONSTRUCTION CONTRACT liable for any additional cost incurred by City to complete the Work following termination. In addition, City shall have the right to use any materials, supplies, and equipment belonging to Contractor and located at the Worksite for the purposes of completing the remaining Work. 15.3 Damages to City. 15.3.1 For Contractor's Default. City will be entitled to recovery of all Losses under law or equity in the event of Contractor’s default under the Contract Documents. 15.3.2 Compensation for Losses. In the event that City's Losses arise from Contractor’s default under the Contract Documents, City shall be entitled to deduct the cost of such Losses from monies otherwise payable to Contractor. If the Losses incurred by City exceed the amount payable, Contractor shall be liable to City for the difference and shall promptly remit same to City. 15.4 Suspension by City 15.4.1 Suspension for Convenience. City may, at any time and from time to time, without cause, order Contractor, in writing, to suspend, delay, or interrupt the Work in whole or in part for such period of time, up to an aggregate of fifty percent (50%) of the Contract Time. The order shall be specifically identified as a Suspension Order by City. Upon receipt of a Suspension Order, Contractor shall, at City’s expense, comply with the order and take all reasonable steps to minimize costs allocable to the Work covered by the Suspension Order. During the Suspension or extension of the Suspension, if any, City shall either cancel the Suspension Order or, by Change Order, delete the Work covered by the Suspension Order. If a Suspension Order is canceled or expires, Contractor shall resume and continue with the Work. A Change Order will be issued to cover any adjustments of the Contract Sum or the Contract Time necessarily caused by such suspension. A Suspension Order shall not be the exclusive method for City to stop the Work. 15.4.2 Suspension for Cause. In addition to all other remedies available to City, if Contractor fails to perform or correct work in accordance with the Contract Documents, City may immediately order the Work, or any portion thereof, suspended until the cause for the suspension has been eliminated to City’s satisfaction. Contractor shall not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents. City’s right to suspend the Work shall not give rise to a duty to suspend the Work, and City’s failure to suspend the Work shall not constitute a defense to Contractor’s failure to comply with the requirements of the Contract Documents. 15.5 Termination Without Cause. City may, at its sole discretion and without cause, terminate this Construction Contract in part or in whole upon written notice to Contractor. Upon receipt of such notice, Contractor shall, at City’s expense, comply with the notice and take all reasonable steps to minimize costs to close out and demobilize. The compensation allowed under this Paragraph 15.5 shall be the Contractor’s sole and exclusive compensation for such termination and Contractor waives any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect or incidental damages of any kind resulting from termination without cause. Termination pursuant to this provision does not relieve Contractor or its sureties from any of their obligations for Losses arising from or related to the Work performed by Contractor. Invitation for Bid (IFB) Package 15 Rev. March 17, 2017 CONSTRUCTION CONTRACT 15.5.1 Compensation. Following such termination and within forty-five (45) Days after receipt of a billing from Contractor seeking payment of sums authorized by this Paragraph 15.5.1, City shall pay the following to Contractor as Contractor’s sole compensation for performance of the Work : .1 For Work Performed. The amount of the Contract Sum allocable to the portion of the Work properly performed by Contractor as of the date of termination, less sums previously paid to Contractor. .2 For Close-out Costs. Reasonable costs of Contractor and its Subcontractors: (i) Demobilizing and (ii) Administering the close-out of its participation in the Project (including, without limitation, all billing and accounting functions, not including attorney or expert fees) for a period of no longer than thirty (30) Days after receipt of the notice of termination. .3 For Fabricated Items. Previously unpaid cost of any items delivered to the Project Site which were fabricated for subsequent incorporation in the Work. .4 Profit Allowance. An allowance for profit calculated as four percent (4%) of the sum of the above items, provided Contractor can prove a likelihood that it would have made a profit if the Construction Contract had not been terminated. 15.5.2 Subcontractors. Contractor shall include provisions in all of its subcontracts, purchase orders and other contracts permitting termination for convenience by Contractor on terms that are consistent with this Construction Contract and that afford no greater rights of recovery against Contractor than are afforded to Contractor against City under this Section. 15.6 Contractor’s Duties Upon Termination. Upon receipt of a notice of termination for default or for convenience, Contractor shall, unless the notice directs otherwise, do the following: (i) Immediately discontinue the Work to the extent specified in the notice; (ii) Place no further orders or subcontracts for materials, equipment, services or facilities, except as may be necessary for completion of such portion of the Work that is not discontinued; (iii) Provide to City a description in writing, no later than fifteen (15) days after receipt of the notice of termination, of all subcontracts, purchase orders and contracts that are outstanding, including, without limitation, the terms of the original price, any changes, payments, balance owing, the status of the portion of the Work covered and a copy of the subcontract, purchase order or contract and any written changes, amendments or modifications thereto, together with such other information as City may determine necessary in order to decide whether to accept assignment of or request Contractor to terminate the subcontract, purchase order or contract; (iv) Promptly assign to City those subcontracts, purchase orders or contracts, or portions thereof, that City elects to accept by assignment and cancel, on the most favorable terms reasonably possible, all subcontracts, purchase orders or contracts, or portions thereof, that City does not elect to accept by assignment; and (v) Thereafter do only such Work as may be necessary to preserve and protect Work already in progress and to protect materials, plants, and equipment on the Project Site or in transit thereto. Upon termination, whether for cause or for convenience, the provisions of the Contract Documents remain in effect as to any Claim, indemnity obligation, warranties, guarantees, Invitation for Bid (IFB) Package 16 Rev. March 17, 2017 CONSTRUCTION CONTRACT submittals of as-built drawings, instructions, or manuals, or other such rights and obligations arising prior to the termination date. SECTION 16 CONTRACTOR'S RIGHTS AND REMEDIES. 16.1 Contractor’s Remedies. Contractor may terminate this Construction Contract only upon the occurrence of one of the following: 16.1.1 For Work Stoppage. The Work is stopped for sixty (60) consecutive Days, through no act or fault of Contractor, any Subcontractor, or any employee or agent of Contractor or any Subcontractor, due to issuance of an order of a court or other public authority other than City having jurisdiction or due to an act of government, such as a declaration of a national emergency making material unavailable. This provision shall not apply to any work stoppage resulting from the City’s issuance of a suspension notice issued either for cause or for convenience. 16.1.2 For City's Non-Payment. If City does not make pay Contractor undisputed sums within ninety (90) Days after receipt of notice from Contractor, Contractor may terminate the Construction Contract (30) days following a second notice to City of Contractor’s intention to terminate the Construction Contract. 16.2 Damages to Contractor. In the event of termination for cause by Contractor, City shall pay Contractor the sums provided for in Paragraph 15.5.1 above. Contractor agrees to accept such sums as its sole and exclusive compensation and agrees to waive any claim for other compensation or Losses, including, but not limited to, loss of anticipated profits, loss of revenue, lost opportunity, or other consequential, direct, indirect and incidental damages, of any kind. SECTION 17 ACCOUNTING RECORDS. 17.1 Financial Management and City Access. Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Construction Contract in accordance with generally accepted accounting principles and practices. City and City's accountants during normal business hours, may inspect, audit and copy Contractor's records, books, estimates, take-offs, cost reports, ledgers, schedules, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Project. Contractor shall retain these documents for a period of three (3) years after the later of (i) Final Payment or (ii) final resolution of all Contract Disputes and other disputes, or (iii) for such longer period as may be required by law. Invitation for Bid (IFB) Package 17 Rev. March 17, 2017 CONSTRUCTION CONTRACT 17.2 Compliance with City Requests. Contractor's compliance with any request by City pursuant to this Section 17 shall be a condition precedent to filing or maintenance of any legal action or proceeding by Contractor against City and to Contractor's right to receive further payments under the Contract Documents. City many enforce Contractor’s obligation to provide access to City of its business and other records referred to in Section 17.1 for inspection or copying by issuance of a writ or a provisional or permanent mandatory injunction by a court of competent jurisdiction based on affidavits submitted to such court, without the necessity of oral testimony. SECTION 18 INDEPENDENT PARTIES. 18.1 Status of parties. Each party is acting in its independent capacity and not as agents, employees, partners, or joint ventures’ of the other party. City, its officers or employees shall have no control over the conduct of Contractor or its respective agents, employees, subconsultants, or subcontractors, except as herein set forth. SECTION 19 NUISANCE. 19.1 Nuisance Prohibited. Contractor shall not maintain, commit, nor permit the maintenance or commission of any nuisance in connection in the performance of services under this Construction Contract. SECTION 20 PERMITS AND LICENSES. 20.1 Payment of Fees. Except as otherwise provided in the Special Provisions and Technical Specifications, The Contractor shall provide, procure and pay for all licenses, permits, and fees, required by the City or other government jurisdictions or agencies necessary to carry out and complete the Work. Payment of all costs and expenses for such licenses, permits, and fees shall be included in one or more Bid items. No other compensation shall be paid to the Contractor for these items or for delays caused by non-City inspectors or conditions set forth in the licenses or permits issued by other agencies. SECTION 21 WAIVER. 21.1 Waiver. A waiver by either party of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained herein, whether of the same or a different character. Invitation for Bid (IFB) Package 18 Rev. March 17, 2017 CONSTRUCTION CONTRACT SECTION 22 GOVERNING LAW AND VENUE; COMPLIANCE WITH LAWS. 22.1 Governing Law. This Construction Contract shall be construed in accordance with and governed by the laws of the State of California, and venue shall be in a court of competent jurisdiction in the County of Santa Clara, and no other place. 22.2 Compliance with Laws. Contractor shall comply with all applicable federal and California laws and city laws, including, without limitation, ordinances and resolutions, in the performance of work under this Construction Contract. 22.2.1 Palo Alto Minimum Wage Ordinance. Contractor shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, Contractor shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, Contractor shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 23 COMPLETE AGREEMENT. 23.1 Integration. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the parties. SECTION 24 SURVIVAL OF CONTRACT. 24.1 Survival of Provisions. The provisions of the Construction Contract which by their nature survive termination of the Construction Contract or Final Completion, including, without limitation, all warranties, indemnities, payment obligations, and City’s right to audit Contractor’s books and records, shall remain in full force and effect after Final Completion or any termination of the Construction Contract. SECTION 25 PREVAILING WAGES. This Project is not subject to prevailing wages. Contractor is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7, if the public works contract does not include a project of $25,000 or less, when the project is for construction work, or the contract does not include a project of $15,000 or less, when the project is for alteration, demolition, repair, or maintenance (collectively, ‘improvement’) work. Or Contractor is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work Invitation for Bid (IFB) Package 19 Rev. March 17, 2017 CONSTRUCTION CONTRACT in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. Contractor shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. SECTION 26 NON-APPROPRIATION. 26.1 Appropriations. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that the City does not appropriate funds for the following fiscal year for this event, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Construction Contract are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 27 AUTHORITY. 27.1 Representation of Parties. The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. SECTION 28 COUNTERPARTS 28.1 Multiple Counterparts. This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. SECTION 29 SEVERABILITY. 29.1 Severability. In case a provision of this Construction Contract is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not be affected. SECTION 30 STATUTORY AND REGULATORY REFERENCES. 30.1 Amendments to Laws. With respect to any amendments to any statutes or regulations referenced in these Contract Documents, the reference is deemed to be the version in effect on the date that the Contract was awarded by City, unless otherwise required by law. SECTION 31 WORKERS’ COMPENSATION CERTIFICATION. 31.1 Workers Compensation. Pursuant to Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: Invitation for Bid (IFB) Package 20 Rev. March 17, 2017 CONSTRUCTION CONTRACT “I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.” SECTION 32 DIR REGISTRATION AND OTHER SB 854 REQUIREMENTS. 32.1 General Notice to Contractor. City requires Contractor and its listed subcontractors to comply with the requirements of SB 854. 32.2 Labor Code section 1771.1(a) City provides notice to Contractor of the requirements of California Labor Code section 1771.1(a), which reads: “A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or Section 10164 or 20103.5 of the Public Contract Code, provided the contactor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.” 32.3 DIR Registration Required. City will not accept a bid proposal from or enter into this Construction Contract with Contractor without proof that Contractor and its listed subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work, subject to limited exceptions. 32.4 Posting of Job Site Notices. City gives notice to Contractor and its listed subcontractors that Contractor is required to post all job site notices prescribed by law or regulation and Contractor is subject to SB 854-compliance monitoring and enforcement by DIR. 32.5 Payroll Records. City requires Contractor and its listed subcontractors to comply with the requirements of Labor Code section 1776, including: (i) Keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by, respectively, Contractor and its listed subcontractors, in connection with the Project. (ii) The payroll records shall be verified as true and correct and shall be certified and made available for inspection at all reasonable hours at the principal office of Contractor and its listed subcontractors, respectively. Invitation for Bid (IFB) Package 21 Rev. March 17, 2017 CONSTRUCTION CONTRACT (iii) At the request of City, acting by its project manager, Contractor and its listed subcontractors shall make the certified payroll records available for inspection or furnished upon request to the project manager within ten (10) days of receipt of City’s request. City requests Contractor and its listed subcontractors to submit the certified payroll records to the project manager at the end of each week during the Project. (iv) If the certified payroll records are not produced to the project manager within the 10-day period, then Contractor and its listed subcontractors shall be subject to a penalty of one hundred dollars ($100.00) per calendar day, or portion thereof, for each worker, and City shall withhold the sum total of penalties from the progress payment(s) then due and payable to Contractor. This provision supplements the provisions of Section 15 hereof. (v) Inform the project manager of the location of contractor’s and its listed subcontractors’ payroll records (street address, city and county) at the commencement of the Project, and also provide notice to the project manager within five (5) business days of any change of location of those payroll records. IN WITNESS WHEREOF, the parties have caused this Construction Contract to be executed the date and year first above written. CITY OF PALO ALTO ____________________________ Purchasing Manager City Manager APPROVED AS TO FORM: ____________________________ City Attorney or designee APPROVED: ____________________________ Utilities Director CONTRACTOR Officer 1 By:___________________________ Name:________________________ Title:__________________________ Date: _________________________ Officer 2 By:____________________________ Name:_________________________ Title:___________________________ Date:____________________________ ATTACHMENT B CITY OF PALO ALTO BID SUMMARY WATER MAIN REPLACEMENT PROJECT 27; CIP WS-13001, IFB 175276 Bid Date: 6/25/19 Item Quantity Unit Description Unit Extended Unit Extended Unit Extended Unit Extended No.Price ($) Price ($) Price ($) Price ($) Price ($) Price ($) Price ($) Price ($) BASE BID 1 823 LF Install 8" HDPE pipe by HDD or open cut method $300.00 $246,900.00 $425.00 $349,775.00 $420.00 $345,660.00 $241.45 $198,713.35 2 600 LS Install 8" HDPE pipe by HDD or open cut method (pipe material provided by the City) $280.00 $168,000.00 $400.00 $240,000.00 $410.00 $246,000.00 $224.10 $134,460.00 3 18 LF Install 10" HDPE pipe by HDD or open cut method $410.00 $7,380.00 $450.00 $8,100.00 $595.00 $10,710.00 $597.00 $10,746.00 4 238 LF Install 12" HDPE pipe by HDD or open cut method $450.00 $107,100.00 $475.00 $113,050.00 $605.00 $143,990.00 $721.50 $171,717.00 5 154 LF Install 14" HDPE pipe by HDD or open cut method $500.00 $77,000.00 $500.00 $77,000.00 $625.00 $96,250.00 $742.75 $114,383.50 6 3,000 LF Install 16" HDPE pipe by HDD or open cut method $610.00 $1,830,000.00 $580.00 $1,740,000.00 $685.00 $2,055,000.00 $741.85 $2,225,550.00 7 7 LF Install 8" PVC pipe by open cut method at tie-in locations $180.00 $1,260.00 $1,000.00 $7,000.00 $600.00 $4,200.00 $711.60 $4,981.20 8 21 LF Install 10" PVC pipe by open cut method at tie-in locations $200.00 $4,200.00 $1,000.00 $21,000.00 $610.00 $12,810.00 $761.60 $15,993.60 9 92 LF Install 12" PVC pipe by open cut method at tie-in locations $220.00 $20,240.00 $1,000.00 $92,000.00 $615.00 $56,580.00 $767.20 $70,582.40 10 18 LF Install 14" PVC pipe by open cut method at tie-in locations $240.00 $4,320.00 $1,000.00 $18,000.00 $620.00 $11,160.00 $844.00 $15,192.00 11 15 LF Install 8" DI pipe by open cut method at tie-in or other locations)$400.00 $6,000.00 $1,000.00 $15,000.00 $650.00 $9,750.00 $711.60 $10,674.00 12 46 LF Install 12" DI pipe by open cut method at tie-in locations $500.00 $23,000.00 $1,000.00 $46,000.00 $655.00 $30,130.00 $767.20 $35,291.20 13 32 LS Install 2" HDPE services to 5/8" or 1" meter by HDD or open cut method $4,000.00 $128,000.00 $5,000.00 $160,000.00 $5,250.00 $168,000.00 $7,790.00 $249,280.00 14 1 LS Install 4 " HDPE service to 2" meters manifold (1850 Sand Hill Road)$11,000.00 $11,000.00 $10,000.00 $10,000.00 $20,000.00 $20,000.00 $22,595.00 $22,595.00 15 1 LS Install 8" HDPE service to 6" meter by HDD or open cut method and exchange 6" meter (1742 Sand Hill Road)$16,000.00 $16,000.00 $15,000.00 $15,000.00 $25,000.00 $25,000.00 $42,100.00 $42,100.00 16 11 EA Install new fire hydrant assembly, abandon/remove existing fire hydrant assembly $15,500.00 $170,500.00 $15,000.00 $165,000.00 $18,500.00 $203,500.00 $17,810.00 $195,910.00 17 1 LS Install 2" HDPE service to 2" meter by HDD or open cut method and connect to meter flange (1725 Sand Hill Road)$18,000.00 $18,000.00 $10,000.00 $10,000.00 $15,500.00 $15,500.00 $37,925.00 $37,925.00 18 1 EA Perform 6" water main tie-in/abandonment $8,000.00 $8,000.00 $7,000.00 $7,000.00 $10,500.00 $10,500.00 $6,790.00 $6,790.00 19 1 EA Perform 8" water main tie-in/abandonment $9,000.00 $9,000.00 $8,000.00 $8,000.00 $10,800.00 $10,800.00 $6,790.00 $6,790.00 20 2 EA Perform 10" water main tie-in/abandonment $10,000.00 $20,000.00 $9,000.00 $18,000.00 $11,100.00 $22,200.00 $7,900.00 $15,800.00 21 5 EA Perform 12" water main tie-in/abandonment $11,000.00 $55,000.00 $10,000.00 $50,000.00 $11,400.00 $57,000.00 $8,050.00 $40,250.00 22 1 EA Install 4"/6" linestopper $9,000.00 $9,000.00 $12,000.00 $12,000.00 $8,000.00 $8,000.00 $9,430.00 $9,430.00 23 1 EA Install 10" linestopper $12,900.00 $12,900.00 $20,000.00 $20,000.00 $12,500.00 $12,500.00 $12,800.00 $12,800.00 24 2 EA Install 12" linestopper $14,900.00 $29,800.00 $24,000.00 $48,000.00 $14,500.00 $29,000.00 $14,490.00 $28,980.00 25 4 EA Install 8" gate valve $4,000.00 $16,000.00 $3,000.00 $12,000.00 $3,000.00 $12,000.00 $6,425.00 $25,700.00 26 3 EA Install 12" gate valve $7,000.00 $21,000.00 $5,000.00 $15,000.00 $4,000.00 $12,000.00 $7,810.00 $23,430.00 27 2 EA Install 14" gate valve $9,000.00 $18,000.00 $8,000.00 $16,000.00 $10,000.00 $20,000.00 $12,960.00 $25,920.00 28 5 EA Install 16" gate valve $15,000.00 $75,000.00 $11,000.00 $55,000.00 $11,000.00 $55,000.00 $13,900.00 $69,500.00 29 16 EA Exchange 5/8" or 1" meters $250.00 $4,000.00 $3,000.00 $48,000.00 $150.00 $2,400.00 $500.00 $8,000.00 30 1 LS Abandon existing 6" CIP on Tennyson NE of Fulton including valve removal and capping main $1,800.00 $1,800.00 $5,000.00 $5,000.00 $10,000.00 $10,000.00 $33,840.00 $33,840.00 31 1 LS Perform GPS survey $78,000.00 $78,000.00 $75,000.00 $75,000.00 $10,000.00 $10,000.00 $45,000.00 $45,000.00 Total of Base Bid (Items 1 through 31 only, with all applicable taxes included)$3,196,400.00 $3,475,925.00 $3,725,640.00 $3,908,324.25 B: OPTIONAL/ADD ALTERNATE BID 32 1,000 LF Install sheeting, shoring and bracing.$5.00 $5,000.00 $5.00 $5,000.00 $5.00 $5,000.00 $15.00 $15,000.00 33 150 CY Recycle asphalt w/ Petro Mat $25.00 $3,750.00 $10.00 $1,500.00 $75.00 $11,250.00 $50.00 $7,500.00 34 300 LF Perform removal of existing ACP water main $30.00 $9,000.00 $20.00 $6,000.00 $5.00 $1,500.00 $225.60 $67,680.00 35 3 EA Perform removal of existing tee or cross at tie-in locations $1,800.00 $5,400.00 $1,000.00 $3,000.00 $250.00 $750.00 $500.00 $1,500.00 36 10 EA Install 2" temporary blow-off/sample station $1,000.00 $10,000.00 $5,000.00 $50,000.00 $250.00 $2,500.00 $2,500.00 $25,000.00 37 3 EA Install 1" air/vacuum valve combo $5,500.00 $16,500.00 $5,000.00 $15,000.00 $500.00 $1,500.00 $5,450.00 $16,350.00 38 3 EA Install 2" air/vacuum valve combo $6,000.00 $18,000.00 $5,000.00 $15,000.00 $500.00 $1,500.00 $6,100.00 $18,300.00 39 200 LF Install 14" DI pipe by open cut method $550.00 $110,000.00 $100.00 $20,000.00 $100.00 $20,000.00 $767.20 $153,440.00 40 200 LF Install 16" DI pipe by open cut method $600.00 $120,000.00 $100.00 $20,000.00 $100.00 $20,000.00 $767.20 $153,440.00 41 10 EA Relocate existing water meter due to immovable obstruction (greater than 5-feet) $300.00 $3,000.00 $5,000.00 $50,000.00 $100.00 $1,000.00 $500.00 $5,000.00 42 1 EA Install stem into existing line stop saddle on 4"/6" existing main $4,100.00 $4,100.00 $10,000.00 $10,000.00 $4,000.00 $4,000.00 $8,430.00 $8,430.00 43 1 EA Install 2" HDPE services to 1-1/2" or 2" meter by HDD or open cut method $4,200.00 $4,200.00 $5,000.00 $5,000.00 $4,750.00 $4,750.00 $7,990.00 $7,990.00 44 1 EA Install 2" HDPE services to 5/8" or 1" meter manifold by HDD or open cut method $6,000.00 $6,000.00 $7,500.00 $7,500.00 $4,950.00 $4,950.00 $7,790.00 $7,790.00 45 4 EA Reconnect existing water service $4,200.00 $16,800.00 $2,500.00 $10,000.00 $150.00 $600.00 $7,200.00 $28,800.00 46 1 EA Reconnect existing 6" fire service pipe at the main $8,000.00 $8,000.00 $7,500.00 $7,500.00 $500.00 $500.00 $10,200.00 $10,200.00 47 1 EA Reconnect existing 6" fire service pipe at the property line $10,000.00 $10,000.00 $10,000.00 $10,000.00 $500.00 $500.00 $10,200.00 $10,200.00 48 1 EA Install 10" gate valve $5,300.00 $5,300.00 $5,000.00 $5,000.00 $3,250.00 $3,250.00 $7,500.00 $7,500.00 49 2 EA Exchange 1-1/2" or 2" meters $269.00 $538.00 $1,500.00 $3,000.00 $150.00 $300.00 $750.00 $1,500.00 50 3 EA Replace existing meter box with new Armorcast 11"x21"x12" box assembly $300.00 $900.00 $2,000.00 $6,000.00 $150.00 $450.00 $350.00 $1,050.00 51 3 EA Replace existing meter box with new Armorcast 17"x30"x12" box assembly $500.00 $1,500.00 $2,500.00 $7,500.00 $250.00 $750.00 $850.00 $2,550.00 52 3 EA Replace existing meter box with new Armorcast 24"x36"x12" box assembly $600.00 $1,800.00 $3,000.00 $9,000.00 $500.00 $1,500.00 $1,600.00 $4,800.00 53 1,500 SF Install additional concrete pavement $15.00 $22,500.00 $5.00 $7,500.00 $5.00 $7,500.00 $35.00 $52,500.00 54 700 SF Perform additional restoration for concrete panels on Fulton $30.00 $21,000.00 $20.00 $14,000.00 $15.00 $10,500.00 $32.00 $22,400.00 55 3,000 SF Install additional asphalt concrete pavement $15.00 $45,000.00 $3.00 $9,000.00 $7.00 $21,000.00 $11.00 $33,000.00 56 500 LF Install additional curb $25.00 $12,500.00 $10.00 $5,000.00 $10.00 $5,000.00 $35.00 $17,500.00 57 500 LF Install additional gutter $25.00 $12,500.00 $10.00 $5,000.00 $10.00 $5,000.00 $35.00 $17,500.00 58 500 SF Install additional sidewalk $15.00 $7,500.00 $5.00 $2,500.00 $5.00 $2,500.00 $32.00 $16,000.00 59 20,000 Inch/SF Install additional pavement (thickness)$1.00 $20,000.00 $0.25 $5,000.00 $0.25 $5,000.00 $2.00 $40,000.00 60 10,000 Inch/LF Sawcut additional pavement (thickness)$0.25 $2,500.00 $0.25 $2,500.00 $0.05 $500.00 $0.40 $4,000.00 61 500 LF Perform additional sawcutting $2.00 $1,000.00 $1.00 $500.00 $1.00 $500.00 $4.15 $2,075.00 62 25,000 SF Install slurry seal $2.50 $62,500.00 $2.00 $50,000.00 $0.25 $6,250.00 $0.70 $17,500.00 63 15 EA Abandon existing valves $120.00 $1,800.00 $100.00 $1,500.00 $25.00 $375.00 $500.00 $7,500.00 64 10 EA Remove unused meter boxes $60.00 $600.00 $100.00 $1,000.00 $25.00 $250.00 $250.00 $2,500.00 65 7 EA Deep service connections/deep tie-ins (at mains up to 8", if depth of cover exceeds 5.5-feet) $800.00 $5,600.00 $2,000.00 $14,000.00 $500.00 $3,500.00 $1,800.00 $12,600.00 66 7 EA Deep service connections/deep tie-ins (at 10" or larger mains, if depth of cover exceeds 7-feet) $1,000.00 $7,000.00 $2,500.00 $17,500.00 $500.00 $3,500.00 $2,500.00 $17,500.00 67 10 EA Additional pothole due to USA mismark $1,500.00 $15,000.00 $2,000.00 $20,000.00 $50.00 $500.00 $650.00 $6,500.00 68 10 Ton Disposal of excavated soils at Class 1 landfill $350.00 $3,500.00 $150.00 $1,500.00 $150.00 $1,500.00 $800.00 $8,000.00 69 10 Ton Disposal of excavated soils at Class 2 landfill $250.00 $2,500.00 $100.00 $1,000.00 $75.00 $750.00 $450.00 $4,500.00 Total of Optional/Add Alternate Bid 1 (Items 32 through 69 only, with all applicable taxes included)$602,788.00 $423,500.00 $160,675.00 $835,595.00 70 1 LS Install 18" Butterfly Valve (Old Page Mill Road)$80,000.00 $80,000.00 $25,000.00 $25,000.00 $135,000.00 $135,000.00 $155.00 $155,000.00 71 1 LS Furnish and Install (2) Line Stops (Old Page Mill Road)$60,000.00 $60,000.00 $20,000.00 $20,000.00 $55,000.00 $55,000.00 $40,200.00 $40,200.00 72 1 LS Furnish and Install (2) Fire Hydrants (Old Page Mill Road)$30,000.00 $30,000.00 $30,000.00 $30,000.00 $40,000.00 $40,000.00 $35,250.00 $35,250.00 73 1 LS Furnish and Install (2) Air/Vacuum Valves (Old Page Mill Road)$15,000.00 $15,000.00 $12,000.00 $12,000.00 $10,000.00 $10,000.00 $15,100.00 $15,100.00 74 1 LS Furnish and Install (2) 18" Couplings (Old Page Mill Road)$10,000.00 $10,000.00 $5,000.00 $5,000.00 $20,000.00 $20,000.00 $6,400.00 $6,400.00 75 1 LS Perform GPS Survey for Old Page Mill Road Location (Old Page Mill Road)$5,000.00 $5,000.00 $20,000.00 $20,000.00 $120.00 $120.00 $2,000.00 $2,000.00 Total of Optional/Add Alternate Bid 2 (Items 70 through 75 only, with all applicable taxes included)$200,000.00 $112,000.00 $260,120.00 $253,950.00 Total of Optional/Add Alternate Bid (Items 32 through 75 only, with all applicable taxes included)$802,788.00 $535,500.00 $420,795.00 $1,089,545.00 Grand Total - Base Bid and Optional/Add Alternate Bid (items 01 through 75, with all applicable taxes included)$3,999,188.00 $4,011,425.00 $4,146,435.00 $4,997,869.25 RANGER PIPELINES, Inc. DALEO, Inc.BID SUMMARY ENGINEER'S ESTIMATE CRATUS, Inc. (non-responsive bidder) ATTACHMENT C PAGE 1 OF 2 LEGEND Water Main Replacement / / / Area I SAND HILL ROAD / / WMR 27 ~'11s /~ .. \ ~. ~~ r ~C..qb~ I ~~ i ~ i o~o I r I v I --i I I ~ I I en I " I a TENNYSON AVE r ---1 t _ -; 1 ~ ~ ]!I TENNISfilj :-' ~ ' SEALr~n I SEALEAVE Area II FULTON/TENNYSON PROJECT LOCATION MAP (AREAS I AND II) NOT TO SCALE ATTACHMENT C PAGE 2 OF 2 Area Ill OLD PAGE MILL ROAD WMR 27 PROJECT LOCATION MAP (AREA Ill) NOT TO SCALE City of Palo Alto (ID # 10416) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Real Property Acquisition of Vacant Land Adjacent to 3350 Birch Street for Potential Parkland Title: Authorize the City Manager to Finalize the Purchase of 27,829 Square Feet of Vacant Land Adjacent to 3350 Birch Street and Approve Budget Amendments in the Parks Development Impact Fee Fund and the Capital Improvement Fund From: City Manager Lead Department: Administrative Services Recommendation Staff recommends that the Council authorize the City Manager or designee to: 1) Take all actions necessary to finalize the purchase of approximately 27,829 square feet of vacant land adjacent to 3350 Birch Street (Assessor Parcel Numbers 132-33-061, 062, and 063); and 2) Amend the Fiscal Year (FY) 2020 Budget Appropriation Ordinance for the Parks Development Impact Fee Fund by: a. Increasing the Transfer to the Capital Improvement Fund by $2,720,000; and b. Decreasing the Ending Fund Balance by $2,720,000; 3) Amend the Fiscal Year (FY) 2020 Budget Appropriation Ordinance for the Capital Improvement Fund by: a. Increasing the Transfer from the Parks Development Impact Fee Fund by $2,720,000; and b. Creating a Birch Street Improvements capital project and appropriating $2,720,000 to the project for Land Acquisition. Background In Fall 2016, staff learned that a portion of the property owned by Pacific Bell Telephone Company, located at 3350 Birch Street, across a public street from Boulware Park, in the Ventura neighborhood of Palo Alto, would likely be made available for purchase (Report ID # 7987). The Parks and Recreation Commission, along with residents in the Ventura neighborhood recommended that the City Council explore the potential acquisition of the property for possible use as additional parkland. In January 2019, CBRE listed an approximate 27,829 square foot (0.64 acres) portion of the property for sale without an asking price, and on City of Palo Alto Page 2 February 25, 2019, City Council voted unanimously to grant the City Manager authorization to explore, negotiate, and potentially submit an offer to purchase the property (Report ID # 10061). On May 17, 2019, the City entered into contract to acquire the property and as reported in Informational Report ID # 10466 staff had to work through the details of the acquisition to bring the final purchase agreement (Attachment A) forward to City Council at a later date. Discussion The 27,829 square foot property to be acquired by the City comprises three parcels (Assessor Parcel Numbers 132-33-061, 062, and 063) and is bound by Lambert Avenue to the north, Ash Street to the west, Chestnut Avenue to the south, and the remaining property to be retained by Pacific Bell and Birch Street to the east. Boulware Park is a 1.5-acre neighborhood park situated across the street from the southwest corner of the property. The park includes two children’s playgrounds, a basketball court, two picnic areas with barbecues, benches, and a short perimeter pathway. The area surrounding the property and Boulware Park is a mix of residential, industrial, and commercial land uses. Acquisition of the property would allow for the expansion of Boulware Park, which could then meet standard neighborhood park acreage and potentially integrate the street right-of-way between the parcels. The property’s location proximate to the North Ventura Coordinated Area Plan study area also enhances potential connectivity with the Fry’s site. The subject property is not located in a “park search area”, which is defined by the Parks Master Plan as areas where residents lack access to a park within ¼ mile of their homes; however, it is near two other park search areas which are the most densely populated areas in Palo Alto. The property has a Comprehensive Plan Land Use Designation of MISP (Major Institution/Special Facilities) and a Zoning Designation of PF (Public Facility). The City’s Planning and Development Services Department determined that ownership by a public agency and community services uses, such as City facilities would be consistent with the City’s Comprehensive Plan (Attachment B). A Phase I Environmental Site Assessment (ESA) prepared for the City by Northgate Environmental Management, Inc. (www.cityofpaloalto.org/civicax/filebank/documents/72911) revealed that the site was historically occupied by greenhouses for a few decades and is located approximately 400 feet away from the designated margin of a regional groundwater contamination plume associated with the Hewlett-Packard – Varian National Priorities List site. As a result of these findings, a Phase II ESA was commissioned to evaluate the physical environment through testing. The Phase II (www.cityofpaloalto.org/civicax/filebank/documents/72910) indicated that dieldrin is present in the soil on the southern part of the site at a concentration above screening levels for direct human contact in residential land use. The recommended mitigation is to excavate the impacted soil for off-site disposal. A Site Mitigation Cost Estimate (Attachment C) City of Palo Alto Page 3 noted an estimate of $111,069 to excavate and dispose of the affected soil and backfill with clean soil. The soil vapor samples collected at the site contained benzene above screening levels for potential indoor air quality in residential land use but below the screening levels for commercial land use. As the benzene in soil vapor potentially impacts indoor air quality in buildings and no buildings are expected to be constructed on the site, no action is necessary. Although the City is bearing the risk of mitigating the affected soil on the property after negotiations with the seller, the seller reduced the originally negotiated price by $50,000 as a good faith compromise. The City’s Department of Public Works ordered a soil report from Wallace Laboratories. Soil testing was conducted and there were no high levels of toxins or pollutants discovered. The soil composition of the site is typical with a higher than normal level of aluminum, which can be reduced by tilling and amending the soil. The report recommended amending the soil for proper plant growth, which will be incorporated into the scope of any future site improvements. Pacific Bell provided a Preliminary Report (Attachment D) and American Land Title Association (ALTA) Survey (Attachment E) of the property. The ALTA Survey identifies a five-foot-wide water line easement along the eastern perimeter of the property that will need to be recorded through escrow. The water line benefits Pacific Bell’s remaining property. The City may require the water line to be relocated, at its cost, onto Pacific Bell’s remaining property upon 30 days’ written notice. Timeline Upon authorization given by Council, the City Manager will provide the seller with written notice to proceed with the sale under the terms of the contract before the end of the inspection period on September 13, 2019. The closing is scheduled to take place within 15 days thereafter. Resource Impact The total purchase price to be paid at closing to the seller by the City for the property is $2,700,000, $50,000 of which was already funded through a deposit to an escrow account. There will be an additional charge of $549 for the ALTA Extended Owner’s portion of the policy premium and an estimated $20 for overnight delivery. The City has already deposited $50,000 in escrow. An appraisal report prepared by Valbridge Property Advisors as of February 20, 2019 estimated the property’s market value at $2,645,000, assuming the property was free of contamination. Although the City is bearing the risk of mitigating the affected soil on the property and the purchase price is nominally higher than the appraised value, the seller reportedly received multiple offers and still reduced the original negotiated price of $2,750,000 by $50,000 as a good faith compromise after the Site Mitigation Cost Estimate was divulged. The budget appropriation includes $20,000 for the cost of the Phase II ESA as well as other closing costs. City of Palo Alto Page 4 The purchase and closing costs are being funded out of the Parks Development Impact Fee Fund. The remaining balance in the fund after the purchase will be approximately $2.6 million. The Parks Development Impact Fee Fund, which exists to fund acquisition of land and improvements for neighborhood and district parks, is expected to have a balance of $1.2 million after planned park improvements scheduled in the 2020-2024 Five Year Capital Improvement Plan. In addition, the Parkland Dedication In-Lieu Fees ordinance was adopted by Council in 2006 pursuant to the Quimby Act and applies to residential subdivisions only. Per the Quimby Act, the dedicated land or fees, or combination thereof, shall be used only for the purposes of developing or rehabilitating neighborhood or community parks or recreational facilities to serve the subdivision for which the land was dedicated, or fees were paid. Further investigation will be needed to determine if any of the parkland dedication balance could be used at this location $1.6 million is expected to remain after planned park improvements scheduled in the 2020-2024 Five Year Capital Improvement Plan. Policy Implications The Parks, Trails, Natural Open Space and Recreation Master Plan (Adopted September 2017) includes “acquire parkland in high-need areas” as a high-priority project. Policy 1.B in the Parks Master Plan includes a policy aimed at expanding parkland inventory using the National Recreation and Park Association standard of 4 acres/1,000 residents as a guide. The policy states that parkland should expand with population, be well distributed across the community and be of sufficient size to meet the varied needs of neighborhoods and the broader community. The 2030 Comprehensive Plan includes the following policy: Policy C-4.6 Use the National Recreation and Park Association Standards as guidelines for locating and developing new parks. These guidelines are as follows: • Neighborhood parks should be at least two (2) acres in size, although sites as small as ½- acre may be needed as supplementary facilities. The maximum service area radius should be ½-mile. Two acres of neighborhood park land should be provided for each 1,000 people. • District parks should be at least five (5) acres in size. The maximum service area radius should be one (1) mile. Two acres of district park land should be provided for each 1,000 people. • A park should be provided within walking distance of all residential neighborhoods and employment areas. The National Recreation and Park Association defines walking distance as ½-mile. Environmental Review The acquisition of land for use as a park would be exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15316 (Transfer of Ownership of land in Order to Create Parks). Staff will conduct CEQA review in conjunction with any park development plan that may later be proposed for the site. City of Palo Alto Page 5 Attachments: • Attachment A: Purchase Agreement Contract • Attachment B: PCE Letter • Attachment C: Site Mitigation Cost Estimate • Attachment D: Preliminary Title Report • Attachment E: ALTA Survey Attachment A FIRST AMENDMENT TO REAL ESTATE SALE CONTRACT This First Amendment to Real Estate Sale Contract dated June t,2019 (the “Amendment”)is made by and between PACIFIC BELL TELEPHONE COMPANY,a California corporation (“Seller”),and CITY OF PALO ALTO,a California chartered municipal corporation (“Purchaser”). RECITALS: A.Seller and Purchaser are parties to that certain Real Estate Sale Contract dated May 17,2019 (the “Contract”)which provides for the purchase by Purchaser from Seller,of that certain vacant land adjacent to 3350 Birch Street,Palo Alto,California 94306 consisting of approximately 27,829 square feet,as further described in the Contract (the “Property”). B.Purchaser deposited Earnest Money in the amount of $50,000 into escrow on May 21,2019. C.Seller and Purchaser now desire to amend the Contract as set forth herein. AGREEMENT: NOW,THEREFORE,for good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,Seller and Purchaser hereby agree as follows: 1.Inspection Period.Section 1.5 of the Contract is hereby deleted and replaced with the following: “1.5 Inspection Period:The “Inspection Period”is the period beginning on the Effective Date and ending at 5pm on September 13,2019.” 2.Integration.This Amendment in combination with the Contract contains or expressly incorporates by reference the entire agreement of the parties with respect to the matters contemplated herein and supersedes all prior negotiations. 3.Capitalized Terms.Capitalized terms used in this Amendment and not defined herein shall have the same meanings attributed to them in the Contract. 4.Counterparts.This Amendment may be signed in any number of counterpart copies and by the parties hereto on separate counterparts,but all such copies shall constitute one and the same instrument.Delivery of an executed counterpart of a signature page to this Amendment by electronic transmission shall be as effective as delivery of a manually executed counterpart.Any party so executing this Amendment by electronic transmission shaLl promptly deliver a manually executed counterpart,provided that any failure to do so shall not affect the validity of the counterpart executed by electronic transmission. 5.Authority.By signing below,each party represents and warrants that (1)the person signing this Amendment on its behalf has authority to bind that party and (ii)that the party’s execution of this Amendment is not in violation of any by-law,covenants and/or other restrictions placed upon them by their respective entities. 6.No Further Modification.Except as set forth herein,the Contract shall be unmodified and remain in full force and effect. [Signature page follows] 2 IN WITNESS WHEREOF,the Parties have executed this Amendment as of the day and year first above written. SELLER: PACIFIC BELL TELEPHONE COMPANY, a California corporation By:_________ Name:c (UV41 Title: PURCHASER: CITY OF PALO ALTO, a California chartered municipal corporation Nar K ShikadaTitltyMiaer 3 SECOND AMENDMENT TO REAL ESTATE SALE CONTRACT This Second Amendment to Real Estate Sale Contract dated August 19,2019 (the “Amendment”)is made by and between PACIFIC BELL TELEPHONE COMPANY,a California corporation (“Seller”),and CITY OF PALO ALTO,a California chartered municipal corporation (“Purchaser”). RE C IT A L 5: A.Seller and Purchaser are parties to that certain Real Estate Sale Contract dated May 17,2019,as amended by that certain First Amendment to Real Estate Contract dated June 12,2019 (collectively,the “Contract”)which provides for the purchase by Purchaser from Seller,of that certain vacant land adjacent to 3350 Birch Street,Palo Alto,California 94306 consisting of approximately 27,829 square feet,as further described in the Contract (the “Property”). B.Purchaser deposited Earnest Money in the amount of $50,000 into escrow on May 21,2019. C.Seller and Purchaser now desire to amend the Contract as set forth herein. AGREEMENT: NOW,THEREFORE,for good and valuable consideration,the receipt and sufficiency of which is hereby acknowledged,Seller and Purchaser hereby agree as follows: 1.Purchase Price.Section 1.2 of the Contract is hereby deleted and replaced with the following: “1.2 Purchase Price:The total purchase price to be paid to Seller by Purchaser for the Property (the “Purchase Price”)shall be TWO MILLION SEVEN HUNDRED THOUSAND AND NO/l00 DOLLARS ($2,700,000.00).The Purchase Price shall be paid to Seller at Closing,plus or minus prorations and other adjustments hereunder, including all Earnest Money (hereinafter defined)credited against the Purchase Price by federal wire transfer of immediately available funds.” 2.Inspection Period.Section L5 of the Contract is hereby deleted and replaced with the following: “1.5 Inspection Period:The “Inspection Period”is the period beginning on the Effective Date and ending at 5pm on August 30,2019.” 3.Integration.This Amendment in combination with the Contract contains or expressly incorporates by reference the entire agreement of the parties with respect to the matters contemplated herein and supersedes all prior negotiations. 1 4.Capitalized Terms.Capitalized terms used in this Amendment and not defined herein shall have the same meanings attributed to them in the Contract. 5.Counterparts.This Amendment may be signed in any number of counterpart copies and by the par ies hereto on separate counterparts,but all such copies shall constitute one and the same instrument.Delivery of an executed counterpart of a signature page to this Amendment by electronic transmission shall be as effective as delivery of a manually executed counterpart.Any party so executing this Amendment by electronic transmission shall promptly deliver a manually executed counterpart,provided that any failure to do so shall not affect the validity of the counterpart executed by electronic transmission. 6.Authority.By signing below,each party represents and warrants that (i)the person signing this Amendment on its behalf has authority to bind that party and (ii)that the party’s execution of this Amendment is not in violation of any by-law,covenants and/or other restrictions placed upon them by their respective entities. 7.No Further Modification.Except as set forth herein,the Contract shall be unmodified and remain in full force and effect. [Signature page follows] 2 IN WITNESS WHEREOF,the Parties have executed this Amendment as of the day and year first above written. SELLER: PACIFIC BELL TELEPHONE COMPANY. a California corporation By:__________ Name:P C Title: _______________________ PURCHASER: CITY OF PALO ALTO, a California char ered municipal corporation By: _________________________ Name: ___________________________________ Title: _________________________________ 3 May 10, 2019 Sunny Tong, Real Property Manager City of Palo Alto Administrative Services Department 250 Hamilton Avenue Palo Alto, CA 94301 Dear Sunny: The City of Palo Alto Comprehensive Plan Land Use designation for the subject 27,829 square foot site, located adjacent to 3350 Birch Street, is Major Institution/Special Facilities (MISP), which is defined as follows: Institutional, academic, governmental and community service uses and lands that are either publicly owned or operated as non‐profit organizations. Examples are hospitals and City facilities. Consistent with the Comprehensive Plan’s encouragement of housing near transit centers, higher density multi‐ family housing may be allowed in specific locations. Accordingly, ownership by a public agency and community service uses, such as City facilities, would be consistent with the City’s Comprehensive Plan. Sincerely, Elena Lee Attachment: Parcel Report Attachment B 149.7' 65.6' 149.7' 65.7' 199.7' 50.0' ' 50.0' 50.0' 50.0' 166.4' 32.5' 1.9' 108.2' 6.6' 270.2' 100.0' 149.8' 150.0' 100.0' 40.0' 149.7' 199.7' 10.0' 49 198.3' 100.0' 199.7' 98.9' 148.9' 71.4' 179.8' 98.2' 90.0' 100.0' 40.0' 100.0' 50.0' 199.7' 116.5' 55.4' 116.5' 55.4' 105.0' 25.0' 105.0' 25.0' 55.4' 116.5' 55.4' 116.5'55.4' 116.5' 55.4' 116.5'55.4' 116.5' 55.4' 116.5' 9.8' 69.0' 4.6' 45.4' 78.8' 50.0' 75.0'105.0' 75.0'105.0' 0' 120.0' 60.0' 90.0' 55.0' 120.0' 25.0' 47.1' 120.0' 50.0' 120.0' 50.0' 120.0' 50.0' 120.0' 50.0' 120.0' 50.0' 120.0' 50.0' 120.0' 25.0' 120.0' 25.0' 120.0' 50.0' 120.0' 50.0' 120.0' 44.0' 45.0' 105.0' 50.0' 105.0' 50.0' 105.0' 50.0' 105.0' 50.0' 105.0' 50.0' 28.8' 105.0' 28.8' 105.0' 25.0' 105.0' 25.0' 105.0' 78.8' 55.0' 78.8' 55.0' 50.0' 51.6' 3.4'.1'.1'.4' 49.5' 105.0' 50.0' 80.0' 60.0' 120.0' 65.0' 120.0' 120.0' 50.0' 60.0' 55.0' 30.0' 47.1' 25.0' 60.0' 55.0' 60.0' 55.0' 120.0' 52.0' 120.0' 52.0' 90.0' 120.0' 55.0' 120.0' 63.0' 120.0' 63.0' 233.0' 332.5' 120.6' 151.0' 231.7' 105.0' 50 105.0' 50.0' 105.0' 50.0' 105.0' 50.0' 55.4' 116.5' 55.4' 116.5' 50.0' 105.0' 50.0' 105.0' 116.5' 49.2' 116.5' 49.2' 137.6' 158.7' 39.0' 88.7' 78.0' 7.3' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 5 49.2' 49.2' 116.5' 49.2' 116.5' 49 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 47.0' 105.0' 75.0' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 49.2' 116.5' 116.5' 49.2' 116.5' 116.5 4 116.5' 49.2' 116.5' 49.2' 4.0' 60.0' 54.0' 105.0' 50.0' 221.4' 221.4' 9.0' 159.0' 24.6' 77.9' 159.0' 159.0' 91.7' 91.7' 34.6 100.0' 50.0' 100.0' 149.7' 115.7' 165.7' 100.0' 50.0' 199.7' 149.7' 250.0' NDO AVENUE LAMBERT AVENUE CHESTNUT AVENUE ASH STREET BIRCH STREET BIRCH STREET ORINDA STREE 455 3339 447 415 409 421 418 44 434 420 337-343 345-351 417 415 429 439 405 397 391 370 380 390 400 3250 460 3201 450 430 400 360 381 3420 350 3370 307 355 365 3395 281 3350 315 309 325 3421 3394 320 358 356 401 411 425 320 300 280 32753261 3251 250 264 260 274 271 261 251 231 221 211 20220 230 291 290 270 271 260 281 255 250 3225 400 441 445 3335 252 3360 410 290 292 3260 419 This map is a product of the City of Palo Alto GIS This document is a graphic representation only of best available sources. Legend Land Use Designation, Light Industrial Land Use Designation, Major Institution/Special Facility Land Use Designation, Multi-Family Res Land Use Designation, Public Park Land Use Designation, Single Family Res Land Use Designation, Service Commercial 3350 Birch Street 0' 123' Co m p r e h e n s i v e P l a n La n d U s e De s i g n a t i o n M a p CITY O F PALO A L TO I N C O R P O R ATE 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 Alto elee2, 2019-05-10 11:22:12 (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) TABLE 1 Site Mitigation Cost Estimate Rough Order of Magnitude Cost For Discussion Purpose Only Item Unit No. of Units Cost per Unit Extended Cost 1:Soil Excavation, Transportation, Disposal In-Place Cubic Yards of Soil*cy 555 Tons of Soil**Tons 888 Soil Class II non-Haz Load & Transport Tons 888 20$ 17,760$ Soil Class II non-Haz Disposal***Tons 888 30$ 26,640$ Backfill Import and Placement cy 555 25$ 13,875$ Waste Profiling Each 2 1,500$ 3,000$ TASK 1 SUBTOTAL 61,275$ Item Unit No. of Units Cost per Unit Extended Cost 2:Field Observation and Testing Principal Hours 4 261$ 1,044$ Senior Field Geologist Hours 6 157$ 942$ Staff II Engineer/Geologist Hours 24 137$ 3,288$ Project Assistant Hours 4 114$ 456$ Dust Monitoring Program Est 1 7,500$ 7,500$ Laboratory Analysis, Pesticides Each 8 110$ 880$ Laboratory Rush Charges Each 8 110$ 880$ Subcontractor Markup Percent 10%1760 176$ Communication Fee Percent 3.75%5730 215$ TASK 2 SUBTOTAL 15,381$ Item Unit No. of Units Cost per Unit Extended Cost 3:Work Plan, Report, Management Principal Hours 8 261$ 2,088$ Senior Engineer/Geologist Hours 12 157$ 1,884$ Staff II Engineer/Geologist Hours 42 137$ 5,754$ CAD Operator Hours 8 140$ 1,120$ Project Assistant Hours 8 114$ 912$ Communication Fee Percent 3.75%11,758$ 441$ TASK 3 SUBTOTAL 12,199$ Task 1 Soil Excavation, Transportation, Disposal 61,275$ Task 2 Field Observation and Testing 15,381$ Task 3 Work Plan, Report, Management 12,199$ PROJECT TOTAL 88,855$ PROJECT TOTAL with 25% Contingency 111,069$ Notes *:Assumes impacted soil covers an approximate 10,000 square foot area, 1.5-feet thick **:Assumes 1.6 tons per in-place cubic yard ***:Assumes disposal at Newby Island Landfill as non-hazardous waste Actual costs can vary, perhaps significantly, based on a variety of factors not presently known Task Description Task Description Task Description Site Mitigation Cost Estimate A Portion of 3350 Birch Street Palo Alto, California 1 of 1 DRAFT - July 12, 2019 Attachment C Order Number: NCS-954339-SF Page Number: 1 First American Title Insurance Company First American Title Insurance Company National Commercial Services 101 Mission Street, Suite 1600 San Francisco, CA 94105-1730 Trish McNulty AT&T Corporate Real Estate 2260 E Imperial Hwy El Segundo, CA 90245 Phone: 312-814-7401 Escrow Officer: Kimberleigh Toci Phone: (415)837-2251 Email: ktoci@firstam.com Owner: Pacific Bell Telephone Company Property: Vacant land, Palo Alto, CA PRELIMINARY REPORT In response to the above referenced application for a policy of title insurance, this company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception below or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of said policy or policies are set forth in Exhibit A attached. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liability for certain coverages are also set forth in Exhibit A. Copies of the policy forms should be read. They are available from the office which issued this report. Please read the exceptions shown or referred to below and the exceptions and exclusions set forth in Exhibit A of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects, and encumbrances affecting title to the land. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. Attachment D Order Number: NCS-954339-SF Page Number: 2 First American Title Insurance Company Dated as of March 27, 2019 at 7:30 A.M. The form of Policy of title insurance contemplated by this report is: To Be Determined A specific request should be made if another form or additional coverage is desired. Title to said estate or interest at the date hereof is vested in: Pacific Bell Telephone Company, a California corporation The estate or interest in the land hereinafter described or referred to covered by this Report is: Fee Simple The Land referred to herein is described as follows: (See attached Legal Description) At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in said policy form would be as follows: 1. General and special taxes and assessments for the fiscal year 2019-2020, a lien not yet due or payable. 2. Real property taxes are currently assessed under the State Board of Equalization Public Utility Tax Roll; Code Area No. 279-43 (03) 27 PCL 11 . Which includes this and other property; for full particulars, please contact the State Board of Equalization Property Tax Validation Division, Telephone Number (916) 322-2323. Additional information to follow upon request. 3. The lien of supplemental taxes, if any, assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code. 4. Rights of parties in possession. 5. Any facts, rights, interests or claims which would be disclosed by a correct ALTA/NSPS survey. Order Number: NCS-954339-SF Page Number: 3 First American Title Insurance Company INFORMATIONAL NOTES 1. The property covered by this report is vacant land. 2. According to the public records, there has been no conveyance of the land within a period of twenty- four months prior to the date of this report, except as follows: A document recorded October 03, 2018 as Instrument No. 24036252 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation A document recorded October 03, 2018 as Instrument No. 24036253 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation A document recorded October 03, 2018 as Instrument No. 24036254 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation A document recorded October 03, 2018 as Instrument No. 24036255 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation A document recorded March 18, 2019 as Instrument No. 24136705 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation A document recorded March 18, 2019 as Instrument No. 24136706 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation Order Number: NCS-954339-SF Page Number: 4 First American Title Insurance Company A document recorded March 18, 2019 as Instrument No. 24136707 of Official Records. From: Pacific Bell Telephone Company, a California corporation, formerly known as and which acquired title as The Pacific Telephone and Telegraph Company, a California corporation To: Pacific Bell Telephone Company, a California corporation 3. This preliminary report/commitment was prepared based upon an application for a policy of title insurance that identified land by street address or assessor's parcel number only. It is the responsibility of the applicant to determine whether the land referred to herein is in fact the land that is to be described in the policy or policies to be issued. 4. Should this report be used to facilitate your transaction, we must be provided with the following prior to the issuance of the policy: A. WITH RESPECT TO A CORPORATION: 1. A certificate of good standing of recent date issued by the Secretary of State of the corporation's state of domicile. 2. A certificate copy of a resolution of the Board of Directors authorizing the contemplated transaction and designating which corporate officers shall have the power to execute on behalf of the corporation. 3. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 4. Requirements which the Company may impose following its review of the above material and other information which the Company may require. B. WITH RESPECT TO A CALIFORNIA LIMITED PARTNERSHIP: 1. A certified copy of the certificate of limited partnership (form LP-1) and any amendments thereto (form LP-2) to be recorded in the public records; 2. A full copy of the partnership agreement and any amendments; 3. Satisfactory evidence of the consent of a majority in interest of the limited partners to the contemplated transaction; 4. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 5. Requirements which the Company may impose following its review of the above material and other information which the Company may require. C. WITH RESPECT TO A FOREIGN LIMITED PARTNERSHIP: 1. A certified copy of the application for registration, foreign limited partnership (form LP-5) and any amendments thereto (form LP-6) to be recorded in the public records; 2. A full copy of the partnership agreement and any amendment; 3. Satisfactory evidence of the consent of a majority in interest of the limited partners to the contemplated transaction; 4. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 5. Requirements which the Company may impose following its review of the above material and other information which the Company may require. D. WITH RESPECT TO A GENERAL PARTNERSHIP: 1. A certified copy of a statement of partnership authority pursuant to Section 16303 of the California Corporation Code (form GP-I), executed by at least two partners, and a certified copy of any amendments to such statement (form GP-7), to be recorded in the public records; 2. A full copy of the partnership agreement and any amendments; 3. Requirements which the Company may impose following its review of the above material required herein and other information which the Company may require. E. WITH RESPECT TO A LIMITED LIABILITY COMPANY: Order Number: NCS-954339-SF Page Number: 5 First American Title Insurance Company 1. A copy of its operating agreement and any amendments thereto; 2. If it is a California limited liability company, a certified copy of its articles of organization (LLC-1) and any certificate of correction (LLC-11), certificate of amendment (LLC-2), or restatement of articles of organization (LLC-10) to be recorded in the public records; 3. If it is a foreign limited liability company, a certified copy of its application for registration (LLC-5) to be recorded in the public records; 4. With respect to any deed, deed of trust, lease, subordination agreement or other document or instrument executed by such limited liability company and presented for recordation by the Company or upon which the Company is asked to rely, such document or instrument must be executed in accordance with one of the following, as appropriate: (i) If the limited liability company properly operates through officers appointed or elected pursuant to the terms of a written operating agreement, such documents must be executed by at least two duly elected or appointed officers, as follows: the chairman of the board, the president or any vice president, and any secretary, assistant secretary, the chief financial officer or any assistant treasurer; (ii) If the limited liability company properly operates through a manager or managers identified in the articles of organization and/or duly elected pursuant to the terms of a written operating agreement, such document must be executed by at least two such managers or by one manager if the limited liability company properly operates with the existence of only one manager. 5. A certificate of revivor and a certificate of relief from contract voidability issued by the Franchise Tax Board of the State of California. 6. Requirements which the Company may impose following its review of the above material and other information which the Company may require. F. WITH RESPECT TO A TRUST: 1. A certification pursuant to Section 18100.5 of the California Probate Code in a form satisfactory to the Company. 2. Copies of those excerpts from the original trust documents and amendments thereto which designate the trustee and confer upon the trustee the power to act in the pending transaction. 3. Other requirements which the Company may impose following its review of the material require herein and other information which the Company may require. G. WITH RESPECT TO INDIVIDUALS: 1. A statement of information. The map attached, if any, may or may not be a survey of the land depicted hereon. First American Title Insurance Company expressly disclaims any liability for loss or damage which may result from reliance on this map except to the extent coverage for such loss or damage is expressly provided by the terms and provisions of the title insurance policy, if any, to which this map is attached. Order Number: NCS-954339-SF Page Number: 6 First American Title Insurance Company LEGAL DESCRIPTION Real property in the City of Palo Alto, County of Santa Clara, State of California, described as follows: PARCEL ONE: LOT 1 AND 2, BLOCK 13, AS SHOWN ON THAT CERTAIN MAP ENTITLED, "MAP NO. 2 SUNNYSIDE ADDITION TO THE TOWN OF MAYFIELD, SANTA CLARA, CO., CALIFORNIA" BEING A RESUBDIVISION OF BLOCK 9, 10, 11, 13 AND 14 OF SUNNYSIDE ADDITION", AS RECORDED IN BOOK "K" OF MAPS, PAGE 47, AND ALSO A SUBDIVISION OF LOT 12 OF LAMBERT TRACT AS RECORDED IN BOOK "C" OF MISCELLANEOUS RECORDS, PAGE 350, RECORDS OF SANTA CLARA CO., CALIFORNIA, HERE SHOWN AS BLOCK 15, WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON DECEMBER 19, 1905 IN BOOK "L" OF MAPS, PAGE 12. PARCEL TWO: ALL THAT CERTAIN REAL PROPERTY SITUATE IN THE CITY OF PALO ALTO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, BEING A PORTION OF LOT 3 OF BLOCK 13 AS SHOWN ON "MAP NO.2, SUNNYSIDE ADDITION" FILED IN BOOK "L" OF MAPS AT PAGE 12, SANTA CLARA COUNTY RECORDS, AND A PORTION OF PARCEL ONE AS DESCRIBED IN THAT CERTAIN CERTIFICATE OF LOT MERGER, RECORDED SEPTEMBER 12, 2018, AS SERIES NUMBER 24022183 SANTA CLARA COUNTY, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT ON THE NORTHEASTERLY LINE OF SAID LOT 3, SAID POINT BEING DISTANT NORTH 56°27'00" WEST 4.26 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 3; THENCE FROM SAID POINT OF BEGINNING, PERPENDICULAR TO SAID NORTHEASTERLY LINE, NORTH 33°33'00" EAST, A DISTANCE OF 2.90 FEET TO A POINT WITHIN SAID PARCEL ONE; THENCE ALONG A TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 20.00 FEET, THROUGH A CENTRAL ANGLE OF 90°00'00" AND AN ARC DISTANCE OF 31.42 FEET TO A POINT WITHIN SAID PARCEL ONE; THENCE NORTH 56°27'00" WEST, A DISTANCE OF 92.23 FEET TO A POINT ON THE NORTHWESTERLY LINE OF SAID PARCEL ONE; THENCE SOUTH 33°33'00" WEST, A DISTANCE OF 78.31 FEET ALONG THE NORTHWESTERLY LINES OF SAID PARCEL ONE AND SAID LOT 3 TO THE MOST WESTERLY CORNER OF SAID LOT 3; THENCE SOUTH 56°27'00" EAST, A DISTANCE OF 116.49 FEET ALONG THE SOUTHWESTERLY LINE OF SAID LOT 3 TO THE MOST SOUTHERLY CORNER OF SAID LOT 3, BEING ON THE NORTHWESTERLY LINE OF SAID PARCEL ONE; THENCE NORTH 33°33'00" EAST, A DISTANCE OF 22.44 FEET ALONG SAID NORTHWESTERLY LINE OF PARCEL ONE TO A POINT; THENCE NORTH 56°27'00" WEST, A DISTANCE OF 4.26 FEET; THENCE NORTH 33°33'00" EAST 32.97 FEET TO THE POINT OF BEGINNING. THE ABOVE PARCEL IS AS DESCRIBED AS LOT 3 IN THAT CERTAIN CERTIFICATE OF COMPLIANCE (LOT LINE ADJUSTMENT) RECORDED SEPTEMBER 12, 2018, AS INSTRUMENT NUMBER 24022189 SANTA CLARA COUNTY OFFICIAL RECORDS. Order Number: NCS-954339-SF Page Number: 7 First American Title Insurance Company PARCEL THREE: ALL THAT CERTAIN REAL PROPERTY SITUATE IN THE CITY OF PALO ALTO, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, BEING A PORTION OF LOT 12 OF BLOCK 13 AS SHOWN ON "MAP NO.2, SUNNYSIDE ADDITION" FILED IN BOOK "L" OF MAPS AT PAGE 12, SANTA CLARA COUNTY RECORDS, AND A PORTION OF PARCEL ONE AS DESCRIBED IN THAT CERTAIN CERTIFICATE OF LOT 'MERGER, RECORDED SEPTEMBER 12, 2018, AS SERIES NUMBER 24022183, SANTA CLARA COUNTY, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID LOT 12, THENCE FROM SAID POINT OF BEGINNING, NORTH 33°33 '00" EAST, A DISTANCE OF 50.23 FEET ALONG THE SOUTHEASTERLY LINE OF SAID LOT 12 TO A POINT; THENCE LEAVING SAID SOUTHEASTERLY LINE, NORTH 56°27'00" WEST, A DISTANCE OF 38.35 FEET; THENCE PERPENDICULAR TO THE SOUTHWESTERLY LINE OF SAID PARCEL ONE, NORTH 33°33'00" EAST, A DISTANCE OF 49.72 FEET TO A POINT WITHIN SAID PARCEL ONE; THENCE AT RIGHT ANGLES, NORTH 56°27'00" WEST, A DISTANCE OF 15.09 FEET TO A POINT WITHIN SAID PARCEL ONE; THENCE AT RIGHT ANGLES, NORTH 33°33'00" EAST, A DISTANCE OF 13.32 FEET TO A POINT WITHIN SAID PARCEL ONE; THENCE ALONG A TANGENT CURVE TO THE LEFT HAVING A RADIUS OF 20.00 FEET, THROUGH A CENTRAL, ANGLE OF 90°00'00" AND AN ARC DISTANCE OF 31.42 FEET TO A POINT WITHIN SAID PARCEL ONE; THENCE NORTH 56°27'00" WEST, A DISTANCE OF 43.05 FEET TO A POINT ON THE SOUTHEASTERLY LINE OF LOT 3, BLOCK 13 OF SAID "MAP NO.2, SUNNYSIDE ADDITION", SAID POINT BEING DISTANT NORTH 33°33'00" EAST 22.44 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT 3; THENCE SOUTH 33°33'00" WEST, A DISTANCE OF 133.27 FEET ALONG SAID SOUTHEASTERLY LINE OF LOT 3 AND THE NORTHWESTERLY LINES OF SAID PARCEL ONE AND SAID LOT 12, TO THE MOST WESTERLY CORNER OF SAID LOT 12; THENCE SOUTH 56°27'00" EAST, A DISTANCE OF 116.49 FEET ALONG THE SOUTHWESTERLY LINE OF SAID LOT 12 TO THE POINT OF BEGINNING. THE ABOVE PARCEL IS AS DESCRIBED AS LOT 12 IN THAT CERTAIN CERTIFICATE OF COMPLIANCE (LOT LINE ADJUSTMENT) RECORDED SEPTEMBER 12, 2018, AS INSTRUMENT NUMBER 24022189 SANTA CLARA COUNTY OFFICIAL RECORDS. APN: 132-33-050, a portion Order Number: NCS-954339-SF Page Number: 8 First American Title Insurance Company NOTICE I Section 12413.1 of the California Insurance Code, effective January 1, 1990, requires that any title insurance company, underwritten title company, or controlled escrow company handling funds in an escrow or sub-escrow capacity, wait a specified number of days after depositing funds, before recording any documents in connection with the transaction or disbursing funds. This statute allows for funds deposited by wire transfer to be disbursed the same day as deposit. In the case of cashier's checks or certified checks, funds may be disbursed the next day after deposit. In order to avoid unnecessary delays of three to seven days, or more, please use wire transfer, cashier's checks, or certified checks whenever possible. If you have any questions about the effect of this new law, please contact your local First American Office for more details. NOTICE II As of January 1, 1991, if the transaction which is the subject of this report will be a sale, you as a party to the transaction, may have certain tax reporting and withholding obligations pursuant to the state law referred to below: In accordance with Sections 18662 and 18668 of the Revenue and Taxation Code, a buyer may be required to withhold an amount equal to three and one-third percent of the sales price in the case of the disposition of California real property interest by either: 1. A seller who is an individual with a last known street address outside of California or when the disbursement instructions authorize the proceeds be sent to a financial intermediary of the seller, OR 2. A corporate seller which has no permanent place of business in California. The buyer may become subject to penalty for failure to withhold an amount equal to the greater of 10 percent of the amount required to be withheld or five hundred dollars ($500). However, notwithstanding any other provision included in the California statutes referenced above, no buyer will be required to withhold any amount or be subject to penalty for failure to withhold if: 1. The sales price of the California real property conveyed does not exceed one hundred thousand dollars ($100,000), OR 2. The seller executes a written certificate, under the penalty of perjury, certifying that the seller is a resident of California, or if a corporation, has a permanent place of business in California, OR 3. The seller, who is an individual, executes a written certificate, under the penalty of perjury, that the California real property being conveyed is the seller's principal residence (as defined in Section 1034 of the Internal Revenue Code). The seller is subject to penalty for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding requirement. The California statutes referenced above include provisions which authorize the Franchise Tax Board to grant reduced withholding and waivers from withholding on a case-by-case basis. The parties to this transaction should seek an attorney's, accountant's, or other tax specialist's opinion concerning the effect of this law on this transaction and should not act on any statements made or omitted by the escrow or closing officer. The Seller May Request a Waiver by Contacting: Franchise Tax Board Withhold at Source Unit P.O. Box 651 Sacramento, CA 95812-0651 (916) 845-4900 Order Number: NCS-954339-SF Page Number: 9 First American Title Insurance Company Privacy Policy We Are Committed to Safeguarding Customer Information In order to better serve your needs now and in the future, we may ask you to provide us with certain information. We understand that you may be concerned about what we will do with such information - particularly any personal or financial information. We agree that you have a right to know how we will utilize the personal information you provide to us. Therefore, together with our parent company, The First American Corporation, we have adopted this Privacy Policy to govern the use and handling of your personal information. Applicability This Privacy Policy governs our use of the information which you provide to us. It does not govern the manner in which we may use information we have obtained from any other source, such as information obtained from a public record or from another person or entity. First American has also adopted broader guidelines that govern our use of personal information regardless of its source. First American calls these guidelines its Fair Information Values, a copy of which can be found on our website at www.firstam.com. Types of Information Depending upon which of our services you are utilizing, the types of nonpublic personal information that we may collect include: Information we receive from you on applications, forms and in other communications to us, whether in writing, in person, by telephone or any other means; Information about your transactions with us, our affiliated companies, or others; and Information we receive from a consumer reporting agency. Use of Information We request information from you for our own legitimate business purposes and not for the benefit of any nonaffiliated party. Therefore, we will not release your information to nonaffiliated parties except: (1) as necessary for us to provide the product or service you have requested of us; or (2) as permitted by law. We may, however, store such information indefinitely, including the period after which any customer relationship has ceased. Such information may be used for any internal purpose, such as quality control efforts or customer analysis. We may also provide all of the types of nonpublic personal information listed above to one or more of our affiliated companies. Such affiliated companies include financial service providers, such as title insurers, property and casualty insurers, and trust and investment advisory companies, or companies involved in real estate services, such as appraisal companies, home warranty companies, and escrow companies. Furthermore, we may also provide all the information we collect, as described above, to companies that perform marketing services on our behalf, on behalf of our affiliated companies, or to other financial institutions with whom we or our affiliated companies have joint marketing agreements. Former Customers Even if you are no longer our customer, our Privacy Policy will continue to apply to you. Confidentiality and Security We will use our best efforts to ensure that no unauthorized parties have access to any of your information. We restrict access to nonpublic personal information about you to those individuals and entities who need to know that information to provide products or services to you. We will use our best efforts to train and oversee our employees and agents to ensure that your information will be handled responsibly and in accordance with this Privacy Policy and First American's Fair Information Values. We currently maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. Order Number: NCS-954339-SF Page Number: 10 First American Title Insurance Company CLTA/ALTA HOMEOWNER'S POLICY OF TITLE INSURANCE (02-03-10) EXCLUSIONS In addition to the Exceptions in Schedule B, You are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of those portions of any law or government regulation concerning: (a) building; (d) improvements on the Land; (b) zoning; (e) land division; and (c) land use; (f) environmental protection. This Exclusion does not limit the coverage described in Covered Risk 8.a., 14, 15, 16, 18, 19, 20, 23 or 27. 2. The failure of Your existing structures, or any part of them, to be constructed in accordance with applicable building codes. This Exclusion does not limit the coverage described in Covered Risk 14 or 15. 3. The right to take the Land by condemning it. This Exclusion does not limit the coverage described in Covered Risk 17. 4. Risks: (a) that are created, allowed, or agreed to by You, whether or not they are recorded in the Public Records; (b) that are Known to You at the Policy Date, but not to Us, unless they are recorded in the Public Records at the Policy Date; (c) that result in no loss to You; or (d) that first occur after the Policy Date - this does not limit the coverage described in Covered Risk 7, 8.e., 25, 26, 27 or 28. 5. Failure to pay value for Your Title. 6. Lack of a right: (a) to any land outside the area specifically described and referred to in paragraph 3 of Schedule A; and (b) in streets, alleys, or waterways that touch the Land. This Exclusion does not limit the coverage described in Covered Risk 11 or 21. 7. The transfer of the Title to You is invalid as a preferential transfer or as a fraudulent transfer or conveyance under federal bankruptcy, state insolvency, or similar creditors' rights laws. LIMITATIONS ON COVERED RISKS Your insurance for the following Covered Risks is limited on the Owner's Coverage Statement as follows: For Covered Risk 16, 18, 19, and 21 Your Deductible Amount and Our Maximum Dollar Limit of Liability shown in Schedule A. Your Deductible Amount Our Maximum Dollar Limit of Liability Covered Risk 16: 1% of Policy Amount or $2,500.00 (whichever is less) $10,000.00 Covered Risk 18: 1% of Policy Amount or $5,000.00 (whichever is less) $25,000.00 Covered Risk 19: 1% of Policy Amount or $5,000.00 (whichever is less) $25,000.00 Covered Risk 21: 1% of Policy Amount or $2,500.00 (whichever is less) $5,000.00 ALTA RESIDENTIAL TITLE INSURANCE POLICY (6-1-87) EXCLUSIONS In addition to the Exceptions in Schedule B, you are not insured against loss, costs, attorneys' fees, and expenses resulting from: 1. Governmental police power, and the existence or violation of any law or government regulation. This includes building and zoning ordinances and also laws and regulations concerning: (a) and use (b) improvements on the land (c) and division (d) environmental protection This exclusion does not apply to violations or the enforcement of these matters which appear in the public records at Policy Date. This exclusion does not limit the zoning coverage described in Items 12 and 13 of Covered Title Risks. 2. The right to take the land by condemning it, unless: (a) a notice of exercising the right appears in the public records on the Policy Date (b) the taking happened prior to the Policy Date and is binding on you if you bought the land without knowing of the taking 3. Title Risks: Order Number: NCS-954339-SF Page Number: 11 First American Title Insurance Company (a) that are created, allowed, or agreed to by you (b) that are known to you, but not to us, on the Policy Date -- unless they appeared in the public records (c) that result in no loss to you (d) that first affect your title after the Policy Date -- this does not limit the labor and material lien coverage in Item 8 of Covered Title Risks 4. Failure to pay value for your title. 5. Lack of a right: (a) to any land outside the area specifically described and referred to in Item 3 of Schedule A OR (b) in streets, alleys, or waterways that touch your land This exclusion does not limit the access coverage in Item 5 of Covered Title Risks. 2006 ALTA LOAN POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. a. Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement erected on the Land; iii. the subdivision of land; or iv. environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. b. Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters a. created, suffered, assumed, or agreed to by the Insured Claimant; b. not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 13, or 14); or e. resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law. 6. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is a. a fraudulent conveyance or fraudulent transfer, or b. a preferential transfer for any reason not stated in Covered Risk 13(b) of this policy. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the Insured Mortgage in the Public Records. This Exclusion does not modify or limit the coverage provided under Covered Risk 11(b). The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that arise by reason of: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. Order Number: NCS-954339-SF Page Number: 12 First American Title Insurance Company 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. 2006 ALTA OWNER'S POLICY (06-17-06) EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. a. Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement erected on the Land; iii. the subdivision of land; or iv. environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. b.Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters a. created, suffered, assumed, or agreed to by the Insured Claimant; b. not Known to the Company, not recorded in the Public Records at Date of Policy, but known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or e. resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is a. a fraudulent conveyance or fraudulent transfer; or b. a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The above policy form may be issued to afford either Standard Coverage or Extended Coverage. In addition to the above Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage policy will also include the following Exceptions from Coverage: EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that arise by reason of: 1. (a) Taxes or assessments that are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the Public Records; (b) proceedings by a public agency that may result in taxes or assessments, or notices of such proceedings, whether or not shown by the records of such agency or by the Public Records. 2. Any facts, rights, interests, or claims that are not shown by the Public Records but that could be ascertained by an inspection of the Land or that may be asserted by persons in possession of the Land. 3. Easements, liens or encumbrances, or claims thereof, not shown by the Public Records. 4. Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land and not shown by the Public Records. 5. (a) Unpatented mining claims; (b) reservations or exceptions in patents or in Acts authorizing the issuance thereof; (c) water rights, claims or title to water, whether or not the matters excepted under (a), (b), or (c) are shown by the Public Records. 6. Any lien or right to a lien for services, labor or material not shown by the public records. ALTA EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (07-26-10) Order Number: NCS-954339-SF Page Number: 13 First American Title Insurance Company EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys' fees, or expenses that arise by reason of: 1. a. Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to i. the occupancy, use, or enjoyment of the Land; ii. the character, dimensions, or location of any improvement erected on the Land; iii. the subdivision of land; or iv. environmental protection; or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. b. Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 5, 6, 13(c), 13(d), 14 or 16. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims, or other matters a. created, suffered, assumed, or agreed to by the Insured Claimant; b. not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; c. resulting in no loss or damage to the Insured Claimant; d. attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 11, 16, 17, 18, 19, 20, 21, 22, 23, 24, 27 or 28); or e. resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Insured Mortgage. 4. Unenforceability of the lien of the Insured Mortgage because of the inability or failure of an Insured to comply with applicable doing-business laws of the state where the Land is situated. 5. Invalidity or unenforceability in whole or in part of the lien of the Insured Mortgage that arises out of the transaction evidenced by the Insured Mortgage and is based upon usury or any consumer credit protection or truth-in-lending law. This Exclusion does not modify or limit the coverage provided in Covered Risk 26. 6. Any claim of invalidity, unenforceability or lack of priority of the lien of the Insured Mortgage as to Advances or modifications made after the Insured has Knowledge that the vestee shown in Schedule A is no longer the owner of the estate or interest covered by this policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11. 7. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching subsequent to Date of Policy. This Exclusion does not modify or limit the coverage provided in Covered Risk 11(b) or 25. 8. The failure of the residential structure, or any portion of it, to have been constructed before, on or after Date of Policy in accordance with applicable building codes. This Exclusion does not modify or limit the coverage provided in Covered Risk 5 or 6. 9. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction creating the lien of the Insured Mortgage, is a. a fraudulent conveyance or fraudulent transfer, or b. a preferential transfer for any reason not stated in Covered Risk 27(b) of this policy. Attahcment E CITY COUNCIL MEETING __8/19/2019__ [X] Placed Before Meeting [ ] Received at Meeting Item #7 City of Palo Alto M E M O R A N D U M TO: City Council DATE: 8/19/2019 SUBJECT: Real Property Acquisition of Vacant Land Adjacent to 3350 Birch Street for Potential Parkland This memorandum transmits a correction to the “Timeline” Section of City Manager Report ID #10416, Item # 7 on the August 19, 2019 City Council Agenda, Real Property Acquisition of Vacant Land Adjacent to 3350 Birch Street for Potential Parkland. The Second Amendment to Real Estate Sale Contract with the seller changed the term of the inspection period from ending September 13, 2019 to ending August 30, 2019. The Timeline Section should read: “Upon authorization given by Council, the City Manager will provide the seller with written notice to proceed with the sale under the terms of the contract before the end of the inspection period on September 13, 2019 August 30, 2019. The closing is scheduled to take place within 15 days thereafter.” There are no anticipated implications as a result of this correction; staff is prepared to provide notice by the earlier deadline pending City Council action at the August 19th meeting. Kiely Nose Director, Administrative Services CITY MANAGER: Ed Shikada City Manager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ity of Palo Alto (ID # 10440) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Approval of a contract with CivicRec for $388,875 for Recreation Management System Software Title: Approval of Contract Number C191173677 With CivicRec in the Amount of $389,875 for the Purchase and Implementation of a Recreation Management Software for a 3.5 Year Term and Approval of a Budget Amendment in the General Fund From: City Manager Lead Department: Community Services Recommendation Staff recommends that the City Council: 1. Authorize the City Manager to execute the attached Professional Services Agreement between the City of Palo Alto and CivicRec to provide a new recreation management system with a not to exceed amount of $389,875 and a term of 3.5 years. 2. Amend the Fiscal Year 2020 Budget Appropriation Ordinance for the General Fund by: a. Increasing the Community Services Department contractual services expense appropriation by $139,410; and b. Increasing the Community Services Department charges for service revenue appropriation by $139,410. Background The Community Services Department uses a Recreation Management Software to process program registrations, memberships, facility rentals and point of sale transactions across the department. The Recreation Management Software is heavily used by the department, with: • Over 30,000 unique users and 1,600 organizations in CSD’s database, • Close to $6 million flowing through the Department’s software each year representing: o Approximately 15,500 class, camp, and workshop registrations, o Over 20,000 rentals per year including: ▪ 6,500 rentals to non-profit and cosponsored groups, ▪ 6,000 bookings for the administrative needs of City departments, City of Palo Alto Page 2 ▪ 4,500 rentals in our parks, plazas, and open spaces, and ▪ 1,500 rentals in our community centers and theatres. • Additionally, we anticipate as many as 180,000 ticketed and member entries (projected) following the opening of the redesigned Junior Museum and Zoo. For the past five years, the Department has utilized ActiveNet, a full-suite software vendor that purchased CLASS, the Department’s prior vendor. The City’s contract with ActiveNet expires in December 2019. The City issued a Request for Proposals (RFP) for a recreation management system to 18 leading providers in November 2018. The City received six responses to the RFP, which were reviewed by a selection team comprised of Community Services and Information Technology staff. Three of the six bids were comprehensive, and able to provide a solution for each of the RFP’s requirements, and three were focused on just some aspects of the RFP’s requirements. The City conducted in-depth, on-site, scripted demonstrations of all functional areas of the software with each finalist. Representatives from the Community Services Department, Information Technology, and Administrative Services Department attended the demonstrations. Approximately two dozen staff from the three departments also tested each of the vendors’ programs in ‘Demo Mode’ and provided extensive feedback to the evaluation panel via surveys. In addition to the demonstrations and user testing, the selection team reviewed additional documentation and checked references with more than 30 public sector vendor clients. After conducting these reviews, staff identified CivicRec as the product that is best suited to meet Palo Alto’s current and future needs. CivicRec was evaluated, along with other vendors, on a variety of factors including quality, performance, and effectiveness of the solution, cost, and prior record of performance. CivicRec was the highest ranked bidder and offered the lowest cost solution. Staff added projected credit card processing fees to the cost estimates submitted by each vendor to evaluate the full cost of each provider’s services. The total projected cost of working with the three comprehensive vendors over the contract term is estimated to be: • $175,000 per year with CivicRec • $206,000 per year with PerfectMind • $214,000 per year with ActiveNet CivicRec Overview CivicRec, a CivicPlus company, has over 10 years of experience designing software specifically to meet the needs of municipal parks and recreation departments. CivicRec works with over 300 City of Palo Alto Page 3 municipalities in California alone including several nearby municipalities such as South San Francisco, Union City, San Ramon, Pleasant Hill, and San Bruno. CivicRec is an advanced, all-inclusive cloud-based solution that meets all the functional needs of the City and provides a positive registration experience for program users. CivicRec can provide all the program features already in place in Palo Alto as well as several enhancements. New features and benefits include: • An improved mobile interface, which easily scales to fit any screen • Easier search and filtering options for registrations and facility rentals • More robust reporting tools • The ability to sell tickets to facilities and events online and in-person • The ability to send automated post-program surveys to participants to easily gather feedback • Social sign-ons so that users can access the platform using their Google or Facebook account, should they prefer to do so CivicPlus, the parent company of CivicRec, has been recognized for its exemplary customer service, which is a feature that will be highly valuable for the many City staff who use the program. CivicPlus frequently wins industry customer services awards for their exemplary services. Contract Details This contract covers the term of August 2019 through December 2023, with a not-to-exceed amount of $389,875. This includes an annual subscription fee of $250 per day in FY 2019-20, ($96,250 in future years,) plus one-time implementation costs of up to $43,000 and hardware and other one-time purchases of up to just under $27,340. Below are the projected costs of implementing the new contract, and 3.5 years of service: Costs FY20 (prorated from August 20th thru year end) FY21 FY22 FY23 (prorated to six months) Total contract amount Implementation; one-time purchases $43,000 None None None $43,000 Hardware; one- time purchases $17,500 $4,920 $4,920 None $27,340 Annual Fee $78,910 $96,250 $96,250 $48,125 $319,535 City of Palo Alto Page 4 Total per fiscal year $139,410 $101,170 $101,170 $48,125 $389,875 Contract Expense This contract will require a budget adjustment for FY 2020 in order to align with the new business model. Under the current model, the department pays no annual fee. Instead, the vendor keeps a portion of the revenue collected on the City’s behalf as a percentage of each transaction. This percentage varies, depending on whether the transaction is made by cash/check or credit, and averages approximately 4% per transaction including standard credit card transaction fees. In recent years, the current vendor, ActiveNet, has received average amounts that total just over $200,000 per year through this revenue percentage model. Staff has compared the proposed CivicRec financial model (flat annual service fee plus credit card processing fees using the City’s credit card processor) with the current ActiveNet financial model (percentage per transaction service fee plus credit card processing fees) and projects that the City will save approximately $40,000 per year in fees. The City anticipates that CivicRec annual fees plus credit card transaction fees will amount to approximately $175,000 per year as compared to approximately $214,000 per year with AcitveNet. Adopting this new financial model should result in increased revenues in the Community Services Department associated with class, camp, and facility usage fees. In addition, CivicRec features robust ticketing and membership options which can be utilized by the Junior Museum and Zoo (JMZ) for processing ticket fees that will be part of the JMZ new operating model when it reopens in 2020. The JMZ had anticipated that a stand-alone ticketing and membership software would cost approximately $40,000-50,000 per year. Because of the structure of the financial terms in this contract, staff recommends amending the Fiscal Year 2020 Budget Appropriation Ordinance for the General Fund by increasing the Community Services Department contractual services expense appropriation by $139,410 and increasing the Community Services Department charges for service revenue appropriation by $139,410. Implementation Timeline: Project kick-off will begin immediately and will continue through the fall. The system is anticipated to go-live to the public in December 2019. The City will continue to use the ActiveNet system until the CivicRec system goes live. City of Palo Alto Page 5 The Department will begin a robust marketing and education plan to aid our current user base in transitioning to a new software system. Staff are confident that CivicRec’s enhancements with improved functionality and a more user-friendly layout will make the implementation worthwhile. Resource Impact The proposed new contract with CivicRec operates under a different business model than the one with the current vendor, Activenet. Transitioning to the new business model with CivicRec will result in a cost neutral Budget Amendment Ordinance to adjust anticipated revenues and expenses. The table below contains the estimated revenues and expenses for the current ActiveNet business model in comparison to the proposed CivicRec model. These numbers have been rounded to represent a full year of operations anticipated in FY 2021 based on amounts from previous years. Revenue and Fees ActiveNet CivicRec Gross Revenue 5,900,000 5,900,000 Annual Service Fee - (96,250) Credit Card Processing Fees - (80,000) Transaction Fees (214,000) - Net Revenue to City 5,686,000 5,723,750 Staff recommends that Council amend the Fiscal Year 2020 Budget Appropriation Ordinance for the General Fund by increasing the Community Services Department contractual services expense appropriation by $139,410 and increasing the Community Services Department charges for service revenue appropriation by $139,410 to align the Fiscal Year 2020 budget with anticipated implementation and transition costs. After implementation of CivicRec and a year of operations, staff will re-evaluate and bring forward recommendations for adjustments, if needed, during the Fiscal Year 2021 annual budget process. Attachments Attachment A: Contract for Recreation Management Software with CivicRec, a CivicPlus Company Attachments: • Attachment A: CivicPlus Contract for Recreation Management System Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C19173677 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND CIVICPLUS INCORPORATED FOR PROFESSIONAL SERVICES This Agreement is entered into on this 20th day of August, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and CIVICPLUS LLC., a Kansas company, located at 302 S. 4th Street, Suite 500, Manhattan, Kansas, 66502 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to implement a Recreation Management Software System that meets the current and future needs of the City of Palo Alto Community Services Department (“Project”) and desires to engage a consultant to provide product and services in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 31, 2022 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement. Both parties acknowledge Exhibit “B” is a non-binding estimate only and not governed by the time is of the essence requirement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 2 not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. Notwithstanding the foregoing, CONSULTANT will not be liable hereunder for any delay in the time or completion of the Services for any action or inaction of CITY. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Three Hundred Eighty Seven Thousand Dollars ($387,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit invoices on a monthly, quarterly, or half-year basis to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 3 may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. The CITY will cooperate and communicate with CONSULTANT when any local or state law is made effective that may affect the services, however CONSULTANT is ultimately responsible for keeping itself informed of and staying in compliance with all laws as described in this Section 7. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions by CONSULTANT, including, but not limited to, the costs of corrections such errors and omissions by CONSULTANT, any change order markup costs, or costs arising from delay caused by the errors and omissions by CONSULTANT or unreasonable delay in correcting the errors and omissions by CONSULTANT. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Dustin Flentie as the Account Executive to have supervisory responsibility for the performance, progress, and execution of the Services and to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 4 other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Jazmin LeBlanc, Community Services Department, 1305 Middlefield Rd, Palo Alto, CA 94301, Telephone (650) 463-4950. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, Client will own the Customer Content (defined as any website graphic designs, webpage or software content, module content, importable/exportable data, and archived information as created by CivicPlus on behalf of Client pursuant to this Agreement) developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from the Customer Content shall be vested in the CITY. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work.” SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to the negligent, reckless, or willful actions or omissions of CONSULTANT during the performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 5 covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving sixty (60) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 6 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 7 CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 8 employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.30 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 9 consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this Agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 10 CONTRACT No. C19173677 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: CONSULTANT Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” REQUIREMENTS APPENDIX EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS EXHIBIT “E”: INFORMATION PRIVACY POLICY EXHIBIT “F”: VENDOR CYBERSECURITY TERMS & CONDITIONS DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Jeff Logan 8/6/2019 Brian Rempe 8/6/2019 Professional Services Rev. April 27, 2018 11 EXHIBIT “A” SCOPE OF SERVICES Overview CONSULTANT agrees to provide a Recreation Management Software System that meets the current and future needs of CITY’s Community Services Department. This shall be a RMSS that is commercially available and requires minimal customization to meet the CITY’s needs. CONSULTANT shall provide a fully hosted (web) solution with minimal local client (PC) software install which provides staff and customers the greatest flexibility in accessing the software. The product shall provide a secured Data Center that separates credit card information from the CITY’s network and overall makes Payment Card Industry (PCI) compliance less costly for the CITY. The software solution will enable the CITY to provide excellent customer service both in person and online for its main business activities including, but not limited to, daily recreation program administration and registration, facility and field reservations, memberships, payment processing and reporting. In addition, the system will provide for efficient and effective business processes and management tools to assist in program administration. Overall ease of use, including robust data management and reporting capabilities, is critical. The Department wants to automate and incorporate as many processes as possible. The software solution must include the ability to create custom catalog and brochures based on program and activity data. The ideal software will provide an online catalog and brochure builder that facilitates custom page layouts based on program and activity data, and have the ability to style, publish and print activity brochures, export data into Adobe InDesign software, and will be adaptive to the changing needs of the organization and its customers. The CONSULTANT will provide implementation, project management, technical installation expertise and on-site training to help speed employee and public acceptance and usage of the system. The CONSULTANT will coordinate with the CITY to implement the proposed Project Schedule. CONSULTANT shall offer a coordinated approach and will specify the type and level of support anticipated from CITY staff. Part of the project implementation will include weekly, written status reports, in electronic format, by the vendor’s project manager at a mutually agreed upon time after contract award or verbally whenever requested by CITY’s project lead. These status reports will recap work done and bring attention to anything that may cause a delay in completing implementation. CITY anticipates implementation to begin immediately upon contract approval with full system implementation by December 2019. Software Components The RMSS must be user friendly and must be able to manage the creation, operation, billing and management of a wide variety of recreational programs and rental facilities operated by the CITY and offered to its residents. The features required are listed in Exhibit A-1 of this Agreement. Consultant will build CivicRec to be compliant to ADA (Section 508) and WCAG 2.0 A and AA levels. Consultant is currently working with an outside vendor to assess the compliance of CivicRec’s software and will create a project plan to address any gaps to the guidelines that are DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 12 found. CivicRec will share the project plan that is developed to address deficiencies within the first 12 months of this contract period. If the City reasonably deems the ADA compliance work plan to be insufficient, CivicRec shall work with the City to improve the plan until it is reasonably sufficient to both parties. If no agreement can be reached within three months of the City receiving the work plan, City shall reduce the Annual Service Fee for CivicRec by five percent until the work plan is deemed reasonably sufficient. CONSULTANT will work with the CITY to integrate its preferred merchant services provider into the CivicRec software so that customers experience a seamless process for payments. At the time of execution of this contract, the CITY plans to integrate CivicRec with Elavon, as the City already holds a merchant services contract with that company (as Merchant Services are not a part of the software package described in this Agreement). During the term of this Agreement, it is possible that the City will transition to another provider, and CONSULTANT will work with the City should this occur. The City acknowledges such transition may incur additional fees. Consultant will communicate any such fees to the City in writing prior to beginning work and will not begin any work unless the City has agreed to pay such fees in writing. Client further acknowledges that the payments described in this Agreement do not include any transaction fees imposed by any merchant services providers (including but not limited to Elavon). Technical and Customer Support CONSULTANT will provide the CITY will a dedicated Client Success Manager to help implement the tools needed to successfully meet the level of community engagement that the CITY desires. Upon Go Live, CITY will have a dedicated Client Success Manager to provide further information on how to utilize the tools in the CITY’s new CONSULTANT system. The client success manager will help keep CITY apprised of new CivicPlus products and optimize the RMS. CONSULTANT will also provide 24/7 access to the CONSULTANT online Help Center where users can review articles, user guides, FAQs, and can get tips on best practices. The Help Center also provides our release notes to keep customers in the loop on upcoming enhancements and maintenance. The Community Forum allows customers to interact with each other, send CivicPlus feedback and suggestions for future system enhancements, and view trending topics among members - along with other functional and engaging features and capabilities. CONSULTANT will also provide maintenance and technical support with the following parameters: Data Security CONSULTANT shall utilize industry standards, insurance requirements, and PCI requirements to ensure that CONSULTANT is only accessed in the manner it’s intended to be accessed and by DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 13 people who are authorized to do so. Methods include: • Physical security data centers: Netsolace (Tier II), Digital Reality (Tier III), and Rackspace (Tier III) • Server firewalls • Anti-virus scanning • IP logging and filtering • Application security monitoring All data centers provide a network operation center with 24/7/365 monitoring of the data center environment, system availability, and performance. The data centers are SSAE 16 compliant. CONSULTANT shall have policies and procedures in place to ensure continuity and disaster recovery. CONSULTANT shall utilize local, replicated servers to ensure that copies of data, software, and files are always available and up to date. These servers can be rolled over in the event of hardware failure or other local issues. In addition, shall have a process that encrypts backups once each day and sends them off site for purposes of disaster recovery. This process shall ensure that they can reconstitute the entire product and underlying data structure with limited downtime and loss of data. CP Pay shall maintain a secure, Level 1 PCI DSS certified payment gateway integrated within the CivicPlus Platform that CITY can use within any CivicPlus solution or third-party product. In addition, CONSULTANT shall follow the requirements of Exhibits E (“Information Privacy Policy) and F (“Vendor Cybersecurity Terms & Conditions”) to this Agreement. Implementation Requirements CONSULTANT will provide CITY with an Implementation Consultant who will work closely with CITY throughout the entire project deployment process. The Implementation Consultant will act as a liaison between CITY and CONSULTANT, ensuring that milestones are met, status calls are conducted, issues/considerations are addressed, and startup is a painless process. Phase checklists as well as a detailed project plan will be utilized to facilitate project activities and track milestones. Additionally, the Implementation Consultant will guide CITY staff through configuring the system and assist CITY with any technical questions. The CONSULTANT Help Center will also be available throughout the implementation, as well as after Go Live. Implementation Consultant will be available throughout implementation to offer guidance and best practice guidelines for configuring the CONSULTANT system to meet CITY unique practices and offerings. CITY will receive tips and advice on how to make it work more efficiently for CITY and residents. During the implementation period, CITY and CONSULTANT will work together to import and/or configure production data, develop and test integration to third party systems, and complete system training with lead and frontline staff. CONSULTANT will also assist with marketing promotion for the new site and online registration. After front line training is complete, CONSULTANT will complete a final data import (if required) and CITY will ensure the site is fully configured and ready for launch. Once CITY has indicated a Go for launch, CITY will place a new link on CITY site which will redirect customers to CONSULTANT. During this time, CONSULTANT is available to be on site with CITY or can be available remotely for DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 14 immediate assistance dependent on CITY preference. CONSULTANT will import certain data from CITY’s current Activenet database to the new RMS, leveraging custom developed scripts and libraries. Data imports to be automated and provided by CONSULTANT include: 1. All GL Codes 2. Users 3. Memberships 4. GIS/Resident 5. Activities 6. Facilities 7. User Credits 8. Additional financial data exports may be desired by CITY The CITY will have access to the Implementation Project via Mavenlink, CONSULTANT’s project management software. Mavenlink offers task management with a multi-level work breakdown structure, Gantt Chart-based project plan and centralized communication. This includes centralized project communication and task management tools in a cloud-based project workspace. Conversations are linked to files and tasks for easy reference. Tasks, deliverables and milestones are aligned to the scope of work. The tools available through Mavenlink combined with regular check-ins between Implementation Consultant and CITY Project Manager provide ample opportunities to review project, check deliverables and communicate any feedback, positive feedback, or concerns, quickly and efficiently. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 15 EXHIBIT A-1 REQUIREMENTS APPENDIX (see next page) DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Must Have Nice to Have Type Feature Yes No Notes X Accounts Each account includes Address (primary and secondary - i.e. P.O. Box for mailing, street for residency), Phone Number (primary and secondary), Birthdate, Email Address for each adult, school grade, primary and emergency contacts, demographic indicators, scholarship (financial assistance) status, special notes (e.g. food allergy, asthma, physical disability, etc.) X X Accounts Ability to create accounts for organizations; ability for to pay via organization credit card vs individual user X X Accounts Effective search with the ability to search for patron by multiple criteria and partial information in order to access patron record, transaction history, facility permits, etc.X X Accounts Individual user accounts within family account X X Accounts Ability to share children's accounts with divorced parents (one child account with the two separate parents accounts). All credits or refunds stay with the paying parent's account.X X Accounts Ability to remove member of the family from the family account to their own account (divorce or adult children). This should be reversible.X X Accounts Ability to deactivate/hide patron that is deceased so they don't show on family account receipt. This should be reversible.X X Accounts Ability to search based on text (or text fragment) on any field in a patron account record.X Since CivicRec is browser based the browser search/find functions should serve to meet this need. X Accounts Ability to merge duplicate accounts without loss of history or transactions. Duplicates could include groups, families, and patrons.X X Accounts Staff is notified if there seems to be a duplicate account for the patron he/she is helping.X X Accounts Ability to suspend an account (make inactive)X X Accounts Easily identify residents vs nonresidents by street address. System should import list of residents, but prefer GIS integration.X X Accounts Ability for staff to edit residency of individual patrons.X X Accounts Allow for selection of preferred method of communication (e.g., email vs. phone vs. text), at the preferred email address, number, etc.X X Accounts Option for patron to opt-out of marketing emails & texts X X Accounts Ability to make notes only seen by staff. Notes should appear in an obvious place.X X Accounts Ability for staff to make financial adjustments to patron account X X Accounts Accept 3rd party payments (Someone outside account is paying)X X Accounts Track patron transaction history X X Accounts Ability to enter zip code and city and state fields are automatically populated at terminal or online X X Accounts Ability for administrators to assign permissions to override/amend fees across all modules (e.g. POS item, class registration, event ticket)X X Accounts Ability to assign patron types (e.g., resident, non-resident, non-profit) in order to apply separate charges to each type X X Accounts Ability to track account demographics (income, ethnicity)X Staff may use Custom Data Fields to record data about users beyond that which is normally captured by CivicRec. X Accounts Automatically promote grade level for all patrons annually by an administrator- defined date. Individual patron grade level should be manually adjustable by staff.X X Accounts Ability for staff to attach/insert documents/scanned forms (e.g. medical waiver, field trip authorization, etc.) to patron's account X Waivers, Receipts, Photos, etc are all tracked in CivicRec. For document upload of sensitive Protected Health Information (PHI) and Personally Identifying Information (PII), we are addressing this need through product development to enhance this experience and will be avaialble to the City at no additional expense once completed. X Accounts Ability to export patron list based on participation history for e-blasts, news items, newsletters, flyers, etc.X X Accounts Ability to create attractive, colorful e-blasts for news items, newsletters, and flyers targeted based on patron history X Software will export activity data into a file for use with a desktop publishing program for the production of an activity guide, course catalog, or activity flyers. X Accounts Ability for staff to print liability waivers that were signed online and include evidence of patron's consent X X Accounts Staff accounts include option to record certifications (with expiration).X Account notes can contain such information. For document upload of sensitive Protected Health Information (PHI) and Personally Identifying Information (PII), we are looking at integrations with services like Dropbox and Google Drive for document storage. X Accounts Ability for ongoing Level (prerequisite) Tracking with Pass/Fail indication. Notification sent to parent via email or as an alert in their account online. Patrons cannot sign up for classes without proper prerequisite(s). Should be available to instructors online. Partial CivicRec does provide tools to help enforce pre-requisites for purposes of blocking registration until the pre- requisite has been met and we have planned development to support the tracking of pass/fail for completion in 2020, we are not able to provide the ability to send notifications to parents and instructors as described at this time and is not included in this SOW. X Accounts Ability for ongoing Skill (progress) Tracking with Pass/Fail indication. Notification sent to parent via email or as an alert in online portal. Should be available to instructors online.Partial CivicRec does not yet support the tracking of progress with Pass/Fail indication we have planned development to support in 2020. CivicRec is not able to provide the ability to send notifications to parents and instructors as described and is not included in this SOW X Child Care Check in/out process meeting state requirements CivicPlus would need to understand what the required state requirements entail- to be discussed and scoped. While CivicRec does support check-in for both activities and reservations, check-out tools are not yet available for all as described. X Child Care Check in/out (unique to each child/family) that records date, time, & name of person checking in/out Partial X Child Care Auto-generate monthly bill with detailed usage (check in/out)X X Child Care Ability to store patron photo in his/her account X X Facilities Ability to manage reservations for multiple facilities, facility types, and centers. Issue permit for each reservation.X X Facilities Ability to create rooms/areas within a facility that can be reserved separately or together X X Facilities Automatically generate rental permit number X X Facilities Ability to enter new reservations and automatically create a permit to include patron/ organization name, address, date, facilities reserved, detailed rental charges, etc.X X Facilities Ability to set up prompts for unique administrator-defined facility-specific questions during facility reservation process (e.g., Will you be serving alcohol?). Questions would also appear for facilities with online reservations enabled. X X Facilities Ability to modify dates, fees, etc. on closed reservations without having to delete the reservation and creating a new one with the adjustments X X Facilities Ability to cancel any reservation X X Facilities Ability to create recurring reservations (e.g., every Tuesday and Thursday for the next four months) in one process; and ability to create recurring reservations in the past.X X Facilities Ability to create random recurring reservations with any combination of any date sequence in one process; and ability to create recurring reservations in the past.X X Facilities Ability for staff to reserve multiple facilities, for any date range, in a single process without requiring duplicate data entry.X X Facilities Prior to completion of a multi-date reservation, all reservations must be displayed to allow for adjustment or deletion without need to process another transaction X Instructions: Complete this requirements list by responding to each line by putting an "x" in the Yes (This requirement currently exists and can be demonstrated.) or No (This requirement is not supported and/or is not provided as part of this proposal) column. If No, use the Notes column in each row to describe alternative methods to achieve features, if space allows. Attach any additional details and clearly reference each corresponding alternative in the Notes column. TBD While CivicRec does support check-in for both activities and reservations, check-out tools are not yet available for all as described. CivicRec is planning on this development as a part of the product backlog and will be available to the City once completed DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Facilities Refunds should only be linked to the reservation that was canceled, unless manually applied to other transactions by staff.X X Facilities Automatically calculate total fees for reservation X X Facilities Ability to edit (override) fees at time of reservation or thereafter, based on staff security clearance X X Facilities Ability to amend charges, add extra fees, allow partial payments, rental damage deposits and refunds, payment reversals, and credit balance refunds X X Facilities Allow for tracking, billing, and collecting of fees for billable services such as staff costs, overtime fees, facility damage, lighting, clean-up, and security X X Facilities Ability for administrators to assign default fees for facility and/or patron types X X Facilities Ability to assign multiple fees to each facility X X Facilities Easily add hourly and/or flat rate fees to reservation for nonresident, setup, custodial, etc.X X Facilities Identify Non-profit/private/etc. and show only corresponding rental rates, with option to view all rates.X X Facilities Staff view of facility reservation only lists site-specific fees & options (e.g. for athletic fields don't show gym fees or options)X X Facilities If per-transaction fees are charged, internal bookings are exempt from fees X For purposes of merchant processing fees are associated to all CC/Debit transactions. No additional fees for staff booking internally for non-fee based reservations. X Facilities Option to send permits, room set-up diagrams, receipts, etc. via email X X Facilities All email correspondence with patrons should be managed by system. Email from patrons should be routed to the staff working on a reservation interaction (not general department email box). Staff responses should not come from her/his personal City email address. As a result, system should retain both sides of communication history with patron. X Facilities Option to automatically reserve facilities when creating/coding classes X X Facilities Class reservation of a facility includes setup or breakdown time in facility reservation. Setup time must not be included in class schedule online or in brochure export (Adobe InDesign format). X X Facilities Ability for staff to attach/insert scanned application and other related documents to permit X CivicRec is currently addressing the need to attach additional document as described through product roadmap and once completed the City will have available for use at no additional expense. X Facilities Facility booking tracks "still due" paperwork or forms (insurance certificate, etc.)X Additional development is being addressed for automated reminders that should serve to meet this need. Once completed the City will have this available at no additional expense. X Facilities Facility booking emails to remind patron of "still due" paperwork or forms (insurance certificate, etc.)X Additional development is being addressed for automated reminders that should serve to meet this need. Once completed the City will have this available at no additional expense. X Facilities Integrate with insurance certificate tracking software X X Facilities Ability for staff to print, preview, or e-mail receipts, rental permits, etc. with reprint and/or multi-copy options X X Facilities Ability to print reservation confirmation, with reprint and/or multi-copy options X X Facilities Ability to reprint a permit from facility calendar without having to go to a different screen X X Facilities System must create and track invoices X X Facilities Ability for staff to search for available space based on defined parameters (e.g. room for 30 people on Wednesday nights for one hour)Partial X Facilities Program facility set-up/maintenance needs can be linked to each program. Ability to print facility schedule with set-up notes X X Facilities Ability to define unique operating hours for each facility (open and close)X X Facilities Ability to disallow facility reservations on certain days for holidays, City closures, etc. Should be defined separately for each facility.X X Facilities Ability to view facility schedules by year, month, week, day, hours, half hour.X CivicRec allows the viewing of facility schedules by month, week, and day. X Facilities Ability to reserve in minute increments. Should be available from calendar view.X X Facilities System must allow reservations at least three years in the future.X X Facilities Prevent reservations of a facility if already reserved (prevent double-bookings)X X Facilities Drag and drop rental conflict resolution TBD X Facilities Alert staff if a booking conflict exists prior to completion of a reservation.X X Facilities Display on-screen, in calendar view, reservation schedules for multiple facilities at once, by day, week, month or year. Schedule default and alternate views can be customized by each staff. X X Facilities Display reservation and usage information of a single facility or multiple facilities in a grid or calendar format. In this format, staff can click or hover over on a reservation to view more detailed information without the need to go into the reservation itself. X X Facilities Ability to edit existing rental permits, based on staff permissions X X Facilities Ability for staff to color-code different types of reservations on-screen and on calendars based personal preference X X Facilities Ability to create internal/administration/maintenance bookings without necessity to link to any family or organization X X Facilities Permits list administrator-defined site-specific information (do's & don'ts, site contact info, etc.). Sites: gym, park, etc.X X Facilities Option to include administrator-conditions of use letter along with rental permit.X X Facilities Automatically remove facility bookings for cancelled classes.X X Facilities Online System allows detailed facility information to be displayed including, availability, schedules, comments, fees, and facility photos and videos X X Facilities Online Detailed, user-friendly facility search function which allows patrons to search for available facilities online. Search criteria to include types, locations, amenities, keywords, dates, times, capacity, and day of week. Ability to clearly display available facilities based on user-defined parameters X X Facilities Online System allows online facility reservation requests which require staff approval before permit is issued to patron. This is a request for reservation, not an online booking. A message should be sent to responsible staff for approval. Payment is taken with the reservation request, but should not be processed until reservation request is approved by staff. X X Facilities Online Only facilities selected by administrators will be reservable online. For facilities excluded from online reservations, system should still allow administrators to make their details and/or availability viewable online. X X Facilities Online Ability to set minimum and maximum number of days/months in advance that a reservation can be made. System automatically determines if a reservation falls within that time frame. X X Facilities Online System displays liability waivers with “I Agree and “I Disagree” options for patron input. If patron selects “I Disagree” option, the reservation cannot be completed. Allow patron to print or email liability waiver to themselves. X Using Prompts the client can configure a custom prompt for "I Disagree", but CivicRec does not yet support the functionality if they select "I Disagree" the reservation cannot be completed. In order to provide this, the City would need to use CivicRec's waiver functions and make them required to be completed in order to continue in the reservation process. Should the user elect not to agree to the waiver/agreement they will not be allowed to continue in the checkout/reservation process to help the City accomplish their goal. X Facilities Online Ability for staff to print liability waivers with evidence of patron's consent.X X Facilities Online Online facility booking process that can track special requirements (insurance, jump house application, etc.) for each facility. Tracking might include ability to upload documents such as an insurance endorsements. Additional special requests trigger another level of rules & requirements (e.g. filter or contingency questions). Partial We have plans for a few things like collected documents, but we understand this as asking for a complete workflow management tool that has not yet been scoped and detailed. Therefore, CivicRec is not able to provide functionality as described. However, Waivers, Receipts, Photos, etc are all tracked in CivicRec. For document upload of sensitive Protected Health Information (PHI) and Personally Identifying Information (PII), we are addressing this need through product development to enhance this experience and will be avaialble to the City at no additional expense once completed. Partial While CivicRec does provide communication tools for purposes of sending both email and SMS messages to patrons, CivicRec does not yet support the ability to reference historical SMS messages sent to patrons from staff and does not provide functionality and/or manage/maintain history of communication sent back from patron to department staff While CivicRec does not yet completely supported functionality as described, in addition to how CivicRec can provide some of this need out of the box there are potential workarounds we're happy to demonstrate in order to best determine if those might help in the short-term. Needs further scoping to understand the requirements entailed, DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Facilities Online Ability for patron to scan and attach any required documents for reservation (e.g., proof of residence/ business status, non-profit status, proof of insurance, etc.)X While not currently available this is being addressed through product development and will be available to the City at no additional expense once completed. X Facilities Online Allow patrons to view reserved times without the ability to see details (e.g., who has reserved the time or what it was reserved for)X X Facilities Online Patron view of facility reservation only lists site-specific fees & options (e.g. for athletic fields don't show gym fees or options)X X Facilities Online Suggest other similar facility if requested facility is booked X X Facilities Online Allow cart to expire after certain period of time if patron does not check out X X Facilities Online Show transaction timer for cart expiration. (e.g. Ticketmaster)X X Facilities Reports Customizable facility report formats X X Facilities Reports Ability to print or preview facility calendars including all rooms in a facility by date range or by individual rooms with fit-to-page option.X X Facilities Reports Ability to print and/or email facility calendars by date, facility, or specific room. Calendars must include beginning and ending reservations times and staff-defined rental title.X X Facilities Reports Ability to create report for easy analysis of reservations by various parameters (facility, type of rental, resident, non-resident, non-profit)X X Facilities Reports Ability to track reservations into staff-defined statistics and reporting groups (e.g., all wedding reservations)X X Facilities Reports Ability to produce reports that include one, some, or all of the following options and data elements: All reservations for a specific facility type, such as a meeting room or field, all reservations for a specific facility, all reservations for a specific date range, all reservations for a specific patron or organization (e.g., non-profits), all reservations for a specific staff member X X Facilities Reports Ability to choose which groups/accounts are included in report results. (E.g. Report that shows all rentals but allows to exclude reservations for some groups.)X X Facilities Reports Ability to report all financial activity for rentals by date range, site, type of facility (gym, field, picnic area, etc.), number of hours, etc.X X Facilities Reports Ability to preview reports on-screen X X Facilities Reports Ability to choose to print or email permits, facility rules and regulations, etc.X X Facilities Reports Ability to run a marketing report listing all patrons with reservations for a staff- defined search range (e.g., all patrons who reserved picnic areas for last month) and email/text/send notifications for upcoming events X X Facilities Reports Reservation report showing all reservations made by an individual patron or organization for a specific date range X X Facilities Reports Ability to create reports by facility and date, showing any reservation special requests and set-up requirements with option to include set-up chart X X Facilities Reports Ability to print rules and regulations letter and set-up chart at the time rental permit is issued. Include option to email the permit with these attachments.X X Facilities Reports Allow facility schedule inquiries by date range X X Facilities Reports Ability to view schedules for multiple facilities at one time X X Facilities Reports View reservation information by patron/organization name or by permit number X X Finance System must allow for: (a) Full payment (b) Partial payment (c) Payment from patron credit (d) Payment reversals (e) Payment cancellations and backdating (f)Payment plans with automated tracking (g) Credit balance refunds (h) Rental deposit refunds X X Finance Allow split payments among multiple payment methods (cash, check, credit, gift certificate, etc.).X X Finance System must provide complete end-of-day reports (summary and detail options), to include as a minimum: (a)End of shift cash out process/report (b) Receipt transaction listing with receipt number, time of transaction and amount of transaction, and patron name, if checks, include check numbers (c) Daily GL account distribution (d)System must have the ability to balance (cash out) by staff member, location, for any date range, any time range, by function, by general ledger account number, by payment method, or for the entire system. X X Finance System must have the ability to cancel any transaction(s) with the following options: (a)Apply credit to household balance (b) Apply surcharge fees (c)Apply split refund payment types (i.e., ability to process a refund with portions applied to multiple refund payment methods) (d) Refund later from system (e) Backdate a payment cancellation X X Finance Refund to payment type used at time of purchase (cash or check by check, credit card to credit card)X X Finance Ability to apply account credit to any transaction in any module in person or online.X X Finance Payment processor - either vendor hosts or a Third party X Client has elected to use Elavon as their third-party payment processor. X Finance If a third party payment processor is used, there must be some identifier that helps identify which transaction in recreation system ties to which payment in third party payment system. X X Finance Option for auto bill pay (recurring credit card charge)X X Finance Allow multiple, user-defined payment methods to be used online, including Financial Assistance.X X Finance Require payment reference information to be entered during transaction processing (e.g., when processing a check, check number is required for tracking purposes)X X Finance As revenue is tracked (i.e., transactions are processed), the revenue generated may be linked to unique general ledger codes. Example: If an Arts program is offered, a class fee and a registration fee are required. The system must have the ability to separate the class fee and the registration fee into two unique GL accounts and/or sub-accounts, automatically. Revenue from any part of the system (module) may be associated with any GL code in the system X X Finance System must provide for linking revenue to chart of account codes (general ledger accounts).X X Finance Ability to track revenue generated from activities that have not started yet (i.e., deferred revenue)X X Finance Allow multiple, administrator-defined payment methods to be established (e.g., coupons, gift certificates, fee waivers, etc.)X X Finance System must allow for tax rate option to be set up.X X Financial Assistance Patron's account should show Financial Assistance eligibility. For example, when registering an eligible patron in person, the system should show staff that the person has Financial Assistance available. X X Financial Assistance Automatically remove Financial Assistance status from patron accounts on system administrator-defined expiration date. Unused funds should go back to the main Financial Assistance account. X DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Financial Assistance Ability to offer & track Financial Assistance that is restricted to system administrator- defined activities X X Financial Assistance Financial Assistance redeemable online for approved activities X X Financial Assistance Generate form letter to notify or remind recipient of Financial Assistance status (available funds & expiration date). Options to email or print letter.X X GIS Integrate with the City's GIS system (Esri ArcGIS) for residency information X The City may opt to have CivicRec integrate with its Esri ArcGIS system for purposes of local resident determination, service fees apply. X Implementation Detail project timeline with carefully spelled out phases of installation, training, testing, etc.X X Implementation Ability to interface with City’s future financial software TBD Due to ambiguity, CivicPlus cannot agree without knowing more concerning the future financial software and what system the client is planning on using. To be further scoped and discussed. We do offer financial extract services, and we can integrate with the City's selected payment gateway (for credit card processing). Additionally, we can also produce a GL extract compatible with the City's financial system. We have interfaced with a number of different systems and are confident that we can produce a file compatible with yours. Service fees apply. Although, these may be different functions, need to discuss further to understand. X Implementation Extensive capability testing on a test/trainer database prior to going live X X Implementation Extensive on-site training X Training and travel fees apply. X Implementation Detailed training on how to customize reports X X Implementation Web-based training for staff and instructors X X Implementation Extensive training for staff, administrators, and any others where appropriate X X Implementation If data migration is possible, ability to transfer any monies on patron accounts to new system, including rental deposits, credit on account, amount owed X X Implementation Ability to roll over patron and facility details and history from existing CLASS system X Please see proposal for additional details concerning data imports. X Implementation Dedicated vendor project manager X X Leagues Provides for the scheduling of any number of leagues with normal regular season, round robin, and single/double elimination, including playoffs.X X Leagues System automatically reserves facilities during the schedule generation process X X Leagues Ability to design full leagues (schedules, standings, and rosters)X X Leagues Automatically calculates team record and winning percentage X X Leagues Ability to cancel games and reschedule X X Leagues Ability to import our own schedule (in place of system-generated schedule).X X Leagues Allows manual adjustment to a league schedule to meet any special requirements X X Leagues Allows for any adjustments to any game in the schedule X X Leagues Allows for creation of tournament brackets at the end of the regular season based on league standings X Comment for both: While CivicRec does not yet support the ability for staff to create tournament brackets at the end of the regular season based on league standings, we are anticipating the release of the ability to create/produce Single Elimination tournament brackets in 2019 with additional options planned for future release in 2020.X Leagues Effective method for managing “round-robin” and tournaments X X Leagues Ability to create league and coach/division specific email lists X X Leagues Produce and print individual league team rosters.X X Leagues Ability to email or text schedules, standings, and rosters and post online X X Leagues Count forfeits as a loss and a half in standings.X X Leagues Ability for staff to take a class list and assign youth to specific teams at will. Team rosters would include contact info, special needs, etc.X X Leagues League Coaches Portal: allow coaches to look up rosters, communicate with team members (via system & not personal account), etc. (similar to Team Snap)X X Memberships Batch renewal billing: roll over members into new cycle and automatically generate invoice (to manually mail or email).X X Memberships Ability to create a variety of membership pass types and time periods (annual, quarterly, punch pass)X X Memberships Option to print membership cards which can be used to pull up an account or check- in to a class. Includes ability to report on check-ins to track usage. Cards could be mag-strip, barcode, HID, etc. X X Memberships Ability to check-in via smartphone (via an email barcode or app; doesn't matter how)X This is currently supported via e-tickets with barcode scanning. X Memberships Option to limit class registration to those with a valid membership (membership validation by age, program/class, etc.)X X Memberships Ability to track and report on visit history X X Online Website should meet is the Web Content Accessibility Guidelines (http://www.w3.org/TR/WCAG20/) See Exhibit A: Software Components X Online Ability to offer an online store that ties into point of sale (aware of inventory). Items would be for pickup only.X X Online E-mail address is login credential X X Online Ability for patron to select their own password X X Online Option for patron to login using other credentials such as Google, Facebook, etc.X X Online Alert patron of scheduling conflicts between class they are adding and existing classes on account X This is currently specific to active registrations in same class their attempting to enroll into. X Online Alert patron if signing up for a class they do not meet the requirements for (prerequisites, age limit, etc.). System should give reason for error, rather than simply preventing registration. X X Online Patron start page suggests classes family members might like X X Online Ability for patrons to attach/Insert scanned forms (e.g. medical waiver, field trip authorization, etc.) to patron's account X While CivicRec does not yet support attaching documents as described we will be starting the development needed for this later this year and will continue working on completing this in 2020. Once completed the City will have access to use as neededXOnlineAllow cart to expire after certain period of time if patron does not check out X X Online System displays liability waivers with “I Agree and “I Disagree” options for patron input. If patron selects “I Disagree” option, the transaction cannot be completed. Allow patron to print or email liability waiver to themselves. X Using Prompts the client can configure a custom prompt for "I Disagree", but CivicRec does not yet support the functionality if they select "I Disagree" the reservation cannot be completed. In order to provide this, the City would need to use CivicRec's waiver functions and make them required to be completed in order to continue in the reservation process. Should the user elect not to agree to the waiver/ agreement they will not be allowed to continue in the checkout/reservation process to help the City accomplish their goal.X Online Offer electronic signature for liability waiver X X Online Ability for patron to add family or individual class schedule into personal electronic calendar (e.g. Outlook Calendar, iCal, Google Calendar, csv file, etc.)X X Online Patron-specific salutations when registering such as "happy birthday" or anniversary of being a patron X X Online Option for staff and instructors to record program attendance X X Online Ability for instructors to update patron skill or prerequisite record.X This is a permission based functionality assigned to users as the City deems fit. X Online Allow league coaches to look up rosters, communicate with team members (via system & not personal account), etc. (similar to Team Snap)X X Online Accurately, translate online pages into different languages X While CivicRec does not provide language support most groups meet this need through browser translation tools available. X Online Option to make donations and buy items in online store without having to create an account X For purposes of "guest-checkout" functionalities this is currently supported in- house. For all online transactions patrons are required to log into an active user account. X Online Option for administrators to include class details online. Details include: detailed class information, spaces available, comments, fees, dates, times, instructors, no class dates, and age/grade requirement online. Option for staff to include links to documents (e.g. class supply list, dress code, etc.) X X Online Present custom, activity-specific questions during the online registration process X X Online Ability to disallow online registration for certain classes X X Online Class and facility locations show addresses using online mapping (e.g. Bing Maps, Google Maps, Map Quest etc.)X X Online Responsive view - adjusts to smart phones/tablets and PC's X DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Online Ability for patron to create account and use it right away.X X Online System alerts patron of existing account when registering, etc. (to prevent duplicates)X X Online User-friendly option for patrons to reset a forgotten online password or retrieve a forgotten username.X X Online Ability for patron to update email, phone, etc. with the exception of physical address (due to non-resident fee) and birthdate. Only staff and administrators should be able to change physical address and birthdate. X X Online Robust search function, allowing patrons to quickly find program details and information based on program criteria (name, location, type, age, activity code)X X Online Ability to browse classes and availability online without requiring an account X X Online Suggest similar classes if a class is full X X Online Patrons may add themselves to a wait list X X Online Allow patrons to add special needs (physical, dietary, etc.) notes during online registration X X Online When registering, prompt patron to confirm emergency contact data is correct during checkout X X Online Periodically prompt patron to confirm phone, email address, contact, & other staff- defined data are correct. Intent is to make sure best method of contact is current.X X Online Patron may request refund online, with automatic staff notification. Refunds require staff processing.X While not currently available this is something CivicRec is addressing through product development and will be available to the City once completed at no additional expense. X Online Cancelled classes appear as "cancelled" online (they are not removed from listing)X The City can choose to manage this function as needed, both cancel and/or remove from online viewing. This feature can be set to manage automatically or manually. X Online Upselling recommendations like on Amazon (while browsing and during checkout). Upselling should make sure there is space in the class(es) before promoting.X X Online Add activities to cart and view cart before check out X X Online Show transaction timer for cart expiration. (e.g. Ticketmaster, but with more time.)X X Online If item is placed in patron cart, spot is not guaranteed until checkout is completed X X Online Allow patrons to view/print schedule of all household registrations. Ability to add/remove individual household members from calendar view.X You do have the ability to view/print schedule of all household registrations, and to view all household members from calendar view. Members are not removable from calendar view. X Online Allow patrons to view account information, current/history/future enrollments online X X Online Detailed class registration receipts must be provided on-screen with option to print.X X Online System must meet the PCI/CISP credit card industry Payment Applicator Best Practices specifications X CivicRec is certified as PCI SAQ-D compliant as a service provider. CP Pay is certified as PCI Level 1 compliant. X Online Online patrons must be notified in real-time if credit card is declined X Expired credit cards are typically indicated by a real- time return code from the merchant provider. Some merchant providers (e.g. OpenEdge) even have decline minimizing capabilities which will map the refund to the cardholders newly received card. X Online Credit card payments must be automatically deposited directly into City accounts at the end of each day X Additional dependency on the Merchant Services being used by the Department. X Online Ability for administrators to control online registrations by season, specific dates, and patron residency, etc.X X Online Ability for instructors to view and print class list online X X Online Ability for instructors to communicate with patrons via email or text (patron's preferred communication method). Allow instructors to add email addresses or texts that are not on class roster. If an instructor is going to cancel or change something about an individual class meeting, clerical should be notified. Communication should come from system and not from instructor's personal email address or cell phone number. X Permission based and available for use as needed. X Online Ability for instructors to change class size max/min. Instructor's supervisor should be notified of any changes.X Permission based and available for use as needed. X Online Ability to conduct online surveys based on staff-defined criteria within the system using email and social media.X These surveys utilize email and not social media. X Online Options for website design so it matches close to our city website X X Online Create and update webpages without having to edit html X X Online Ability for staff to post videos with class descriptions, facility descriptions, help information, landing/home pages, etc.X In order to maintain a judicious use of CivicRec we do not support the use of video. If needed the City may choose to embed video links for purposes of redirecting users for additional information. X Online If per-transaction fees or revenue percentages are charged, process donations without them (excludes credit card fee)X X Payment processing Third party (for PCI compliance). Interface will not capture or store any payment card information on or within the City of Palo Alto servers or network environment.X X Point of Sale Ability to sell items in person at sites X X Point of Sale Ability to customize receipt format (e.g. with different information per site, with City logo, etc.)X X Point of Sale Itemized receipts X X Point of Sale Flexibility in entering/changing amounts X X Point of Sale Option to attach patron information to transaction X X Point of Sale Ability to easily process refunds from point of sale X X Publishing Formatted Brochure export to Adobe InDesign, editable if format changes X X Publishing Formatted Brochure export to Adobe InDesign to multiple languages X This would be a requirement of the City staff to manage. CivicRec provides the tools to export information out of CivicRec in an InDesign format but does not manage multiple languages. X Registration Upon completion of any transaction, the roster, household history, cash journal, general ledger, billing information (if applicable) and activity financial status reports are all updated immediately. X X Registration Option for administrators to give staff ability to override requirements (e.g. age, grade, skill level, fees, etc.). Would be nice to have the option to make this override permanent.X X Registration Allow for age or grade-specific classes that a patron cannot sign up for if not the corresponding age or grade.X X Registration Display the number of registrants currently enrolled in a class X X Registration Automatically generate wait lists for classes reaching the maximum number of enrollees X X Registration Display the number of registrants currently on the wait list for a class X X Registration Allow staff to manually change wait list order. (E.g. Move someone up or down in priority.)X X Registration Automatically notify staff of wait list change when an opening becomes available. This will allow staff to notify the appropriate person on the wait list.X X Registration Option for staff to prorate class fees once a class has started X X Registration Staff must be notified immediately if a credit card is declined.X X Registration Registration refunds must not be applied to other transactions without manual intervention (linking)X DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Registration All email correspondence with patrons should be managed by system. Email from patrons should be routed to the staff working on a registration interaction (not general department email box). Staff responses should not come from her/his personal City email address. As a result, system should retain both sides of communication history with patron. X All incoming emails are managed through staff's department email. X Registration Digital signature pad at front counters (so they don't have to fill out a registration form) would need to be able to confirm registration is correct before signing.X While CivicRec does support e-signature options, CivicRec is not currently integrated with stand alone hardware tools for purposes of meeting this need. X Registration Automatic E-mail confirmations and reminders X X Registration Ability to easily email instructors their rosters with the specific information they want (names with emails or names with food allergies, birthdates, etc.). Should exclude sensitive information (e.g. address, etc.). X X Registration Prevent sensitive information from being emailed out by unaware staff.X X Registration Ability for staff to email patrons their individual or family class schedules X CivicRec's public dashboard tools prove especially useful in sharing this information with patrons. X Registration Ability to offer and track trial (free) classes. This should be reportable.X X Registration Each program can be linked to a staff-defined activity category (e.g., Youth Arts & Crafts, Youth Athletics)X X Registration Allows for activity to be associated with an activity sub-category and be searchable by the categories and sub-categories (e.g., Category: Youth Programs, Sub-Category: Dance)X X Registration Ability to offer pre-enrollment for the next session to current session participants with two options: 1.Pre-enroll in the exact same class (same day & time) in the next session (e.g. Mondays at 10 am). 2.Pre-enroll in any class in the next session (like a priority registration). All current patrons are notified of pre-enrollment opportunity by email with option to pay corresponding class fee online. Include option to also send notification by snail mail. This pre-enrollment option should only be available to patrons in the same category of class. For example, pre-enrollment in Gymnastics is only available to current Gymnastics patrons. Example of the two pre-enrollment options above 1.Currently registered in Gymnastics Level A on Mondays at 10 -> pre-enroll patron in Gymnastics Level A on Mondays at 10 in the next session 2.Currently Registered in Gymnastics Level A on Mondays at 10 -> allow patron to choose any Gymnastics class at any day & time (that they qualify for) X X Registration Private Lesson Management. Ability for patron to register online for single private lessons. Notification sent to instructor and staff when private lesson is scheduled.X X Registration Drop-In Class Management. Patrons can register for a class that is only for drop-ins. Ability to sell drop-in classes that traditionally have used punch cards (prefer different method than punch cards). Staff must have the ability to record when a drop-in class has been used. Drop-In Class package tied to family and not to specific participant. Usage tracked on both ends of online portal (staff and patron portal). Want patron to appear on a class list for the classes they attended. X X Registration Transactions Update patron history record, program roster, receipts, general ledger account distribution with a single transaction entry X x Registration Transactions Multiple window option for staff during registration (e.g., staff can do more than one thing at a time such as searching patron or activity info while processing a transaction.)X X Registration Transactions Staff is able to update and make changes to any part of a transaction at any point in the process X X Registration Transactions Allow staff to override requirements (age, gender, grade, prerequisite, etc.) with appropriate security clearance X X Registration Transactions Do not allow duplicate registrations (same person into same activity).X X Registration Transactions Automatically check if patron’s registration conflicts with other programs already registered in X CivicRec currently provides alerts for users if attempting to enroll in activities already enrolled in. CivicRec does not check against other existing registrations and would be the responsibility of the registrant to ensure availability until this can be addressed at a later time through development. X Registration Transactions Suggestions provided to staff if a class is full X X Registration Transactions Ability to register a patron for multiple activities/ programs without having to reselect that person for each program.X X Registration Transactions Ability to register multiple family members into multiple programs in one transaction without having to reselect the household, with all transactions printing on one receipt.X X Registration Transactions Warn staff if registration does not meet the specific requirements (age, gender, grade, prerequisite, etc.)X X Registration Transactions Ability to apply discounts to a transaction or account as needed X X Registration Transactions Ability to offer multi-child (sibling) discounts. Multi-child discount to apply to selected "grouped" activities.X X Registration Transactions Easy reference for staff to last transaction processed (receipt number, patron name, etc.)X X Registration Transactions Allow for automatic calculations of multiple child/ patron discounts based on enrollments into the same type of sessions or programs.X X Registration Transactions Allow for the cancellations of an individual or entire class in a single transaction, with the option to apply the funds to another program, keep the money on patron’s account, or process a refund. X X Registration Transactions Ability for staff to transfer a patron or whole class from one activity to another in one transaction (i.e., no need to withdraw from an activity in one transaction, and then enroll in another activity in a second transaction) X X Registration Transactions Ability to choose to print or email receipts for any type of transaction. Should follow patron's communication preference.X X Registration Transactions Additional comments added during activity set-up should print on receipt. Further comments can be added by staff before printing.X X Registration Transactions Customizable receipts (include City/Department logo)X X Registration Transactions Ability to produce receipts with program information, dates, times, locations, descriptive comments, payment information, date/time of transaction, staff and payment method, department information (donations, non-profit tax id, etc.) X X Registration Transactions Ability for staff to make entries to special notes section during registration and ability for it to print on activity roster if selected (e.g., allergies, medical, etc.)X X Registration Transactions Option for administrators to add prompt for specific staff to remind them to confirm phone, email address, & other staff-defined data with patron. Would be nice to be able to set this to turn on/off on a regular schedule (e.g. quarterly). X Current prompts are tied to registration/reservation processes. X Registration Transactions Ability for staff to process registrations with payment via tablets at offsite events (Summer child care and at special events-street fair booths) and email receipts X X Registration Transactions If per-transaction fees are charged, internal registrations are exempt from fees (i.e. free classes, donations)X For purposes of merchant processing CivicRec does not collect/charge fees for non-fee based registrations and would be restricted to Debit/CC transactions only. X Reports Real-time financials X DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Reports Standard system reports which provide demographic and statistical information for program sessions, categories, types, ages, genders, etc., and ability export to Excel and produce graphs and charts X X Reports Ability to customize reports X X Reports Ability to sort reports by department, staff, instructor, class, site, GL account, payment type, etc.X X Reports Ability to print account statements based on user-defined criteria X X Reports Ability to view/print rosters and attendance sheets by user-defined fields (e.g., enrollment date, in alphabetical order, age, order of entry, etc.)X X Reports Standard report listing all activities patron is/has been currently enrolled in - ability to select by dates X X Reports Report showing activities not meeting minimum enrollment (sorted by supervisor, instructor, site, etc.)X X Reports Report showing activities reaching the maximum enrollment (sorted by supervisor, instructor, site, etc.)X X Reports Ability to view/print activity listings, in summary or detail, by selecting a range of activities with start date (e.g., print all classes beginning the week of April 1)X X Reports Report showing number registered in programs by category, sub-category, class, instructor, supervisor, site, etc.X X Reports Ability to create class roster that includes special notes (food allergy, prescription medication, etc.)X X Reports Extensive, ad-hoc (customizable) reporting options X X Reports Schedule-able reports delivered by email to staff-defined email address(es).X X Reports View real-time dashboards of financials, trends and histories Partial While CivicRec's reporting tools are not currently capable of providing custom dashboards for viewing multiple reports at the same time and does not provide the ability to create trend reporting, CivicRec's reporting tools can be used to access and export this information for the department to use internally as needed. We are continuing work needed to expose this information through CivicRec's API and will be made available to the City once development is completed. X Reports Reports should be available in both summary and detail (where applicable) and by date range.X X Reports Exportable to PDF, Excel, Word, XML, rich text, csv, etc.X CivicRec supports the ability to export via XML, CSV and PDF. X Reports Refund reports for specified date ranges, with ability to exclude payment type (e.g. credit cards, check, cash)X X Reports Ability to report sales tax revenue by staff-defined date range. Report should include both point of sale and online revenue.X X Reports Track upcoming payment plan due dates X X Reports Aging report X CivicRec has a very powerful reporting engine. There are 100+ standard/canned reports in CivicRec. However, staff can basically take any report and customize it to their liking. Filters can be added and/or removed. Fields can be added and/or removed. Reports can be sorted, saved, emailed, exported, or scheduled for regular delivery to any email address. CivicRec will gladly take any reasonable reporting request from the City and ensure that it is made available as requested. X Reports If a third party payment processor is used, ability to generate and print financial reports from payment processor.X X Reports Instructor payment report based on percentage or flat rate. Removes registration fee and non-resident fee before calculation.X X Reports Ability to calculate instructor pay. Allows only certain program fees to be included in instructor pay processing calculation.X X Reports Report that splits percentage or flat rate payment between multiple instructors based on their individual payment share X X Reports View/print instructor contact information, certifications, pay rate for verification purposes X X Reports Produce comparison reports (e.g., mail-in & walk-in vs. online registration, resident vs. non-resident, etc.)X X Reports Ability to view/print revenue report by activity, preferably with option to create graphs and charts for easy analysis of revenues X X Reports Produce report showing enrollments for all programs within a given parameter (e.g., Spring 2015) or by dates, by activity category, etc.X X Reports Ability to create mailing labels (various sizes) directly from system based on staff- selected criteria X X Reports Audit trail to show which staff made each accounting transaction X X Security Different levels of authorization for multiple staff. Ability to limit staff access to only what they need to fulfill their role.X X Security Option to set staff permissions to only view facility bookings without ability to make changes or to take payment.X X Security System must meet the PCI/CISP credit card industry Payment Applicator Best Practices specifications.X X Security System must comply with new credit card chip technology requirements X CivicRec's ability to meet this requirement will depend on which merchant option the City chooses to work with. Please see proposal for additional information. Course/Setup Custom codes, use the same code year after year X X Course/Setup Activity codes follow logical naming convention (either auto-generated or staff- generated)X X Course/Setup Allows for unlimited length program descriptions. Descriptions will appear in brochure export, online registration site, on–screen in system searches.X X Course/Setup Ability to roll over activity/program information from one season to another and automatically generate new class/program/activity codes X X Course/Setup Designate minimum and maximum number of participants X X Course/Setup Designate minimum and maximum school grade range. Date for grade verification should be adjustable by staff.X X Course/Setup Ability to set separate registration start dates based on patron status (e.g. resident and non-resident), prior class enrollment, and memberships X X Course/Setup Automatically select and apply the appropriate patron fee type (resident, non- resident, senior, non-profit, etc.) based on information in a patron’s record X X Course/Setup Programs can be associated with multiple facilities/locations and the system automatically reserves those facilities X X Course/Setup Option to change activity status to open/closed/cancelled X X Course/Setup Programs can be associated with off-site locations (e.g., Class takes place at a business such as an Ice Skating rink)X X Course/Setup Allow for entry of dates class will not meet and the total number of class meetings adjusted accordingly. Must also print on receipt.X X Course/Setup A unique comment/note can be associated with a program (e.g. bring a yoga mat). Appears on receipt and as part of program information.X X Course/Setup One min/max shared by multiple programs or activities (e.g. two programs in the same room at the same time with one maximum)X CivicRec currently tracks min/max to individual sessions. X Course/Setup Option to allow for prerequisites to be linked to a program, so only registrants who have taken the prerequisites (e.g. class(es), skill level(s), etc.) can sign up X X Course/Setup Allow multiple, separate fees to be linked to each program and for each separate fee to be linked to a different GL account number X X Course/Setup Ability to assign multiple instructors to one program X X Course/Setup Multiple pay rates can be linked to each instructor (hourly, percentage, per participant, flat fee)X X Course/Setup Automatically calculate discount fees/coupons or incentives to programs X X Course/Setup Incentive options (e.g., register/pay by certain date and receive a discounted fee, early bird registration)X DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 X Course/Setup Allow for staff-defined enrollment prompts allowing for any data fields/questions to be set up and tracked for the program. Prompts will pop-up during registration process (e.g., What is your child’s t-shirt size? How did you hear about this program?) X X Course/Setup Separate registration dates for resident and non-resident, memberships, for online, mail- in and walk-in registrations (e.g. pre-registration)X X Course/Setup Option to send out email/text reminder to patrons before class/ program begins X X Course/Setup Option to track make-up classes (or to tell if someone has used up all classes paid for). Administrators can limit number of allowed make-ups per patron. Allow make ups to be added up to the administrator-defined class maximum. X X Course/Setup Enrollment History Management. E.g. ability to identify when last gymnastics class was taken and set restrictions on ability to re-enroll. For example, Student registered in 2012 for Level 2. Wants to re-register for Level 2 in 2015. System does not allow registration, notifies them that they have not participated in gymnastics for over 4 months and will need to begin at Level 1. X While CivicRec retains and tracks this information there is not currently a way to restrict users from re-enrolling in programs they've already participated in unless they're currently enrolled in which case CivicRec flags and notifies users of active enrollment status. X Support Live responsive technical support, available during normal business hours in the Pacific Time Zone.X X Support Tiered levels of user access to technical support (e.g., recreation staff, system administrator, IT, etc.). System administrators should be notified when anyone else (e.g. recreation staff, IT) contacts customer support directly. X You can restrict those that can request assistance. There is no additional charge for us to help any member of the City that requires assistance in the system. X Support Extensive online help for patrons X X Support Up to date system manuals/help for staff (printed or online)X X Support Timely notification of updates and enhancements (with full descriptions) and training on how to use enhancements X X Support Payment Processor - Third party host - customer service hours similar to City of Vacaville Community Services business hours X X Support Online interface to open/track support issues and availability of knowledge database.X X Support Provide fixes and patches for problems encountered between software releases.X X Data Security Provide full back up and restore functions.X X Data Security Provide high availability on 24/7 schedule.X X Data Security Provide 99.9% uptime after exclusion of scheduled maintenance and hardware failure.X X Data Security Provide full system recovery capabilities.X X Data Security System will not display or print passwords.X X Data Security Ability to purge select data based upon retention schedule.X X PCI Compliance Solution must meet PCI DSS / CISP credit card industry Payment Applicator Best Practices.X CivicRec is PCI SAQ-D compliant as a service provider. CP Pay is certified as PCI Level 1 compliant (please see proposal for additional information). X PCI Compliance Vendor will provide proof of PCI compliance annually - PCI DSS Certificate of Compliance.X CivicRec maintains PCI compliance through an Approved Scanning Vendor (ControlScan). We are scanned monthly and provided a quarterly certificate of compliance. Our customers are provided a copy of that certificate for use in their own PCI Compliance. X PCI Compliance Vulnerability scans to be performed by PCI Security Standards and it's results will be available for CSD on request.X CivicRec maintains PCI compliance through an Approved Scanning Vendor (ControlScan). We are scanned monthly and provided a quarterly certificate of compliance. Our customers are provided a copy of that certificate for use in their own PCI Compliance. X PCI Compliance Vendor will notify in writing and voice immediately if any data breach has been detected on any hosted system and will provide detailed assurance/information on what CSD information has been compromised during this breach. X X System Ability to access via tablet/Ipad/mobile device X X System Patron/organization data must be shared across all modules of the system (Registration, Facility Booking, Memberships, Online, Child Care, etc.).X X System Staff-facing programs should be compliant with accessibility standards (guidelines from Section 508 of the Rehabilitation Act of 1973) See Exhibit A: Software Components X System More than one staff member may update the system at the same time, in the same program. System must prevent the loss of data when two or more people (staff, administrators, patrons) are updating the same record. X X System System automatically assigns a unique transaction number to each reservation and/or registration X X System System must allow the administrators to define how much history is retained and when it is archived X X System All transactions, reports, etc. in the system should be in real-time X X System Customizable “dashboard” display with current information without having to run a report. Examples include: reservation calendar, tracking registrations for specific programs, upcoming rentals, "still due" paperwork, etc. X CivicRec maintains both Public/Staff dashboards for users, though customization of these dashboards is not currently available we are continuing to address this through product development and the City will have this available once completed at no additional expense. X System Option to automatically email rosters to instructors at a specified time.X X System Ability to include custom text/logos on all receipts, rental permits, and reports X X System On-going trainer/testing database (i.e., ability to test transactions offline, hidden from public website). Could be used to train new employees or to test out features.X X System Offer gift cards/ rewards X CivicRec supports both Gift Card and Coupon Code functions to meet this need. While CivicRec does provide the ability to add logos and custom text to things like receipts and permits using provided templates, CivicRec does not support adding custom text/logos to reports available through CivicRec's reporting tools DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 16 EXHIBIT “B” SCHEDULE OF PERFORMANCE The Parties mutually agree that the timelines below are nonbinding estimates only and that the time is of the Essence requirement of Section 3 of the Agreement shall not be interpreted to govern the below timeline. Following execution, the parties will mutually agree upon a more detailed timeline that shall be governed by Section 3, subject to the exception that Consultant shall not be liable or responsible for any delay or failure to meet any deadline to the extent such failure was caused by the City. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 17 DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 18 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement based on the rate schedule attached as Exhibit C-1. The compensation to be paid to CONSULTANT under this Agreement for all services, additional services, and reimbursable expenses shall not exceed the amount(s) stated in Section 4 of this Agreement. CONSULTANT agrees to complete all Services and Additional Services, including reimbursable expenses, within this/these amount(s). Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth in this Agreement shall be at no cost to the CITY. REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: None All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 19 EXHIBIT “C-1” SCHEDULE OF RATES A. One-Time Standard Implementation Costs: $24,000 Standard implementation shall include: 1. System Development 2. Project Implementation 3. Four (4) Hours of Virtual Consulting 4. Two (2) Days of On-Site CivicTraining™ 5. Eight (8) Hours of Virtual CivicTraining™ 6. CP Pay™ Merchant Account 7. GL Code Import 8. Additional Data Imports: Users 9. ArcGIS Integration 10. Salesforce API Integration (Optional Additional Services) Enhanced implementation costs for automated exports from Activenet to CONTRACTOR which shall only be charged if requested by City in writing: 11. Memberships export $3,000 12. User Credits export $2,000 13. Facilities export $2,000 14. Activities export $2,000 15. Custom financial extracts $10,000 B. Annual Services: $250.51 per day from the start of the contracting period through June 30, 2020. Staring July 1, 2020, $96,250/per year or $263.70 per day for partial year costs. Annual Services shall include: 1. CONTRACTOR Recreation Management Software Licensing 2. Software Maintenance Including Service Patches and System Enhancements 3. 24/7 Technical Support and Access to the CivicPlus Community 4. Dedicated Client Success Manager 5. CONTRACTOR reserves the right to reassess the historical data and transaction volume annually to ensure that the Annual Service Fees accurately reflects the transaction volume processed in the prior year The Total First Year Fees shall be invoiced as follows: • Within 60 days of full execution of this Agreement – Standard Implementation Costs and Annual Services fees for services through December 31, 2019. • The earlier of 6 months from full execution or upon completed implementation of the CONTRACTOR’s Recreation Management Software – annual service fees for services between January 1, 2020 and June 30, 2020. Upon completion of the full first year, CONTRACTOR shall invoice the City quarterly in advance of service in sync with the City’s fiscal year (invoices on July 1, October 1, January 1, and April 1 each year.) Annual services, including but not limited to hosting, support and maintenance services, shall be subject to a 5% annual increase beginning in Year 3 of service. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 20 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES WORKER’S COMPENSATION YES EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Professional Services Rev. April 27, 2018 21 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 1 of 8 EXHIBIT “E” POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 INFORMATION PRIVACY POLICY POLICY STATEMENT The City of Palo Alto (the “City”) strives to promote and sustain a superior quality of life for persons in Palo Alto. In promoting the quality of life of these persons, it is the policy of the City, consistent with the provisions of the California Public Records Act, California Government Code §§ 6250 – 6270, to take appropriate measures to safeguard the security and privacy of the personal (including, without limitation, financial) information of persons, collected in the ordinary course and scope of conducting the City’s business as a local government agency. These measures are generally observed by federal, state and local authorities and reflected in federal and California laws, the City’s rules and regulations, and industry best practices, including, without limitation, the provisions of California Civil Code §§ 1798.3(a), 1798.24, 1798.79.8(b), 1798.80(e), 1798.81.5, 1798.82(e), 1798.83(e)(7), and 1798.92(c). Though some of these provisions do not apply to local government agencies like the City, the City will conduct business in a manner which promotes the privacy of personal information, as reflected in federal and California laws. The objective of this Policy is to describe the City’s data security goals and objectives, to ensure the ongoing protection of the Personal Information, Personally Identifiable Information, Protected Critical Infrastructure Information and Personally Identifying Information of persons doing business wit the City and receiving services from the City or a third party under contract to the City to provide services. The terms “Personal Information,” “Protected Critical Infrastructure Information”, “Personally Identifiable Information” and “Personally Identifying Information” (collectively, the “Information”) are defined in the California Civil Code sections, reference. referred to above, and are incorporated in this Policy by PURPOSE The City, acting in its governmental and proprietary capacities, collects the Information pertaining to persons who do business with or receive services from the City. The Information is collected by a variety of means, including, without limitation, from persons applying to receive services provided by the City, persons accessing the City’s website, and persons who access other information portals maintained by the City’s staff and/or authorized third‐party contractors. The City is committed to protecting the privacy and security of the Information collected by the City. The City acknowledges federal and California laws, policies, rules, regulations and procedures, and industry best practices are dedicated to ensuring the Information is collected, stored and utilized in compliance with applicable laws. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 2 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 The goals and objectives of the Policy are: (a) a safe, productive, and inoffensive work environment for all users having access to the City’s applications and databases; (b) the appropriate maintenance and security of database information assets owned by, or entrusted to, the City; (c) the controlled access and security of the Information provided to the City’s staff and third party contractors; and (d) faithful compliance with legal and regulatory requirements. SCOPE The Policy will guide the City’s staff and, indirectly, third party contractors, which are by contract required to protect the confidentiality and privacy of the Information of the persons whose personal information data are intended to be covered by the Policy and which will be advised by City staff to conform their performances to the Policy should they enjoy conditional access to that information. CONSEQUENCES The City’s employees shall comply with the Policy in the execution of their official duties to the extent their work implicates access to the Information referred to in this Policy. A failure to comply may result in employment and/or legal consequences. EXCEPTIONS In the event that a City employee cannot fully comply with one or more element(s) described in this Policy, the employee may request an exception by submitting Security Exception Request. The exception request will be reviewed and administered by the City’s Information Security Manager (the “ISM”). The employee, with the approval of his or her supervisor, will provide any additional information as may be requested by the ISM. The ISM will conduct a risk assessment of the requested exception in accordance with guidelines approved by the City’s Chief Information Officer (“CIO”) and approved as to form by the City Attorney. The Policy’s guidelines will include at a minimum: purpose, source, collection, storage, access, retention, usage, and protection of the Information identified in the request. The ISM will consult with the CIO to approve or deny the exception request. After due consideration is given to the request, the exception request disposition will be communicated, in writing, to the City employee and his or her supervisor. The approval of any request may be subject to countermeasures established by the CIO, acting by the ISM. MUNICIPAL ORDINANCE This Policy will supersede any City policy, rule, regulation or procedure regarding information privacy. RESPONSIBILITIES OF CITY STAFF DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 3 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 A. RESPONSIBILITY OF CIO AND ISM The CIO, acting by the ISM, will establish an information security management framework to initiate and coordinate the implementation of information security measures by the City’s government. The City’s employees, in particular, software application users and database users, and, indirectly, third party contractors under contract to the City to provide services, shall by guided by this Policy in the performance of their job responsibilities. The ISM will be responsible for: (a) developing and updating the Policy, (b) enforcing compliance with and the effectiveness of the Policy; (c) the development of privacy standards that will manifest the Policy in detailed, auditable technical requirements, which will be designed and maintained by the persons responsible for the City’s IT environments; (d) assisting the City’s staff in evaluating security and privacy incidents that arise in regard to potential violations of the Policy; (e) reviewing and approving department‐specific policies and procedures which fall under the purview of this Policy; and (f) reviewing Non‐ Disclosure Agreements (NDAs) signed by third party contractors, which will provide services, including, without limitation, local or ‘cloud‐based’ software services to the City. B. RESPONSIBILITY OF INFORMATION SECURITY STEERING COMMITTEE The Information Security Steering Committee (the “ISSC”), which is comprised of the City’s employees, drawn from the various City departments, will provide the primary direction, prioritization and approval for all information security efforts, including key information security and privacy risks, programs, initiatives and activities. The ISSC will provide input to the information security and privacy strategic planning processes to ensure that information security risks are adequately considered, assessed and addressed at the appropriate City department level. C. RESPONSIBILITY OF USERS All authorized users of the Information will be responsible for complying with information privacy processes and technologies within the scope of responsibility of each user. D. RESPONSIBILITY OF INFORMATION TECHNOLOGY (IT) MANAGERS The City’s IT Managers, who are responsible for internal, external, direct and indirect connections to the City’s networks, will be responsible for configuring, maintaining and securing the City’s IT networks in compliance with the City’s information security and privacy policies. They are also responsible for timely internal reporting of events that may have compromised network, system or data security. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 4 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 E. RESPONSIBILITY OF AUTHORIZATION COORDINATION The ISM will ensure that the City’s employees secure the execution of Non‐Disclosure Agreements (NDA), whenever access to the Information will be granted to third party contractors, in conjunction with the Software as a Service (SaaS) Security and Privacy Terms and Conditions. An NDA must be executed prior to the sharing of the Information of persons covered by this Policy with third party contractors. The City’s approach to managing information security and its implementation (i.e. objectives, policies, processes, and procedures for information security) will be reviewed independently by the ISM at planned intervals, or whenever significant changes to security implementation have occurred. The CIO, acting by the ISM, will review and recommend changes to the Policy annually, or as appropriate, commencing from the date of its adoption. GENERAL PROCEDURE FOR INFORMATION PRIVACY A. OVERVIEW The Policy applies to activities that involve the use of the City’s information assets, namely, the Information of persons doing business with the City or receiving services from the City, which are owned by, or entrusted to, the City and will be made available to the City’s employees and third party contractors under contract to the City to provide Software as a Service consulting services. These activities include, without limitation, accessing the Internet, using e‐mail, accessing the City’s intranet or other networks, systems, or devices. The term “information assets” also includes the personal information of the City’s employees and any other related organizations while those assets are under the City’s control. Security measures will be designed, implemented, and maintained to ensure that only authorized persons will enjoy access to the information assets. The City’s staff will act to protect its information assets from theft, damage, loss, compromise, and inappropriate disclosure or alteration. The City will plan, design, implement and maintain information management systems, networks and processes in order to assure the appropriate confidentiality, integrity, and availability of its information assets to the City’s employees and authorized third parties. B. PERSONAL INFORMATION AND CHOICE Except as permitted or provided by applicable laws, the City will not share the Information of any person doing business with the City, or receiving services from the City, in violation of this Policy, unless that person has consented to the City’s sharing of such information during the conduct of the City’s business as a local government agency with third parties under contract to the City to provide services. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 5 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 C. METHODS OF COLLECTION OF PERSONAL INFORMATION The City may gather the Information from a variety of sources and resources, provided that the collection of such information is both necessary and appropriate in order for the City to conduct business as a local government agency in its governmental and proprietary capacities. That information may be gathered at service windows and contact centers as well as at web sites, by mobile applications, and with other technologies, wherever the City may interact with persons who need to share such formation in order to secure the City’s services. The City’s staff will inform the persons whose Information are covered by this Policy that the City’s web site may use “cookies” to customize the browsing experience with the City of Palo Alto web site. The City will note that a cookie contains unique information that a web site can use to track, among others, the Internet Protocol address of the computer used to access the City’s web sites, the identification of the browser software and operating systems used, the date and time a user accessed the site, and the Internet address of the website from which the user linked to the City’s web sites. Cookies created on the user’s computer by using the City’s web site do not contain the Information, and thus do not compromise the user’s privacy or security. Users can refuse the cookies or delete the cookie files from their computers by using any of the widely available methods. If the user chooses not to accept a cookie on his or her computer, it will not prevent or prohibit the user from gaining access to or using the City’s sites. D. UTILITIES SERVICE In the provision of utility services to persons located within Palo Alto, the City of Palo Alto Utilities Department (“CPAU”) will collect the Information in order to initiate and manage utility services to customers. To the extent the management of that information is not specifically addressed in the Utilities Rules and Regulations or other ordinances, rules, regulations or procedures, this Policy will apply; provided, however, any such Rules and Regulations must conform to this Policy, unless otherwise directed or approved by the Council. This includes the sharing of CPAU‐collected Information with other City departments except as may be required by law. Businesses and residents with standard utility meters and/or having non‐metered monthly services will have secure access through a CPAU website to their Information, including, without limitation, their monthly utility usage and billing data. In addition to their regular monthly utilities billing, businesses and residents with non‐standard or experimental electric, water or natural gas meters may have their usage and/or billing data provided to them through non‐City electronic portals at different intervals than with the standard monthly billing. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 6 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 Businesses and residents with such non‐standard or experimental metering will have their Information covered by the same privacy protections and personal information exchange rules applicable to Information under applicable federal and California laws. E. PUBLIC DISCLOSURE The Information that is collected by the City in the ordinary course and scope of conducting its business could be incorporated in a public record that may be subject to inspection and copying by the public, unless such information is exempt from disclosure to the public by California law. F. ACCESS TO PERSONAL INFORMATION The City will take reasonable steps to verify a person’s identity before the City will grant anyone online access to that person’s Information. Each City department that collects Information will afford access to affected persons who can review and update that information at reasonable times. G. SECURITY, CONFIDENTIALITY AND NON‐DISCLOSURE Except as otherwise provided by applicable law or this Policy, the City will treat the Information of persons covered by this Policy as confidential and will not disclose it, or permit it to be disclosed, to third parties without the express written consent of the person affected. The City will develop and maintain reasonable controls that are designed to protect the confidentiality and security of the Information of persons covered by this Policy. The City may authorize the City’s employee and or third party contractors to access and/or use the Information of persons who do business with the City or receive services from the City. In those instances, the City will require the City’s employee and/or the third party contractors to agree to use such Information only in furtherance of City‐related business and in accordance with the Policy. If the City becomes aware of a breach, or has reasonable grounds to believe that a security breach has occurred, with respect to the Information of a person, the City will notify the affected person of such breach in accordance with applicable laws. The notice of breach will include the date(s) or estimated date(s) of the known or suspected breach, the nature of the Information that is the subject of the breach, and the proposed action to be taken or the responsive action taken by the City. H. DATA RETENTION / INFORMATION RETENTION DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 7 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 The City will store and secure all Information for a period of time as may be required by law, or if no period is established by law, for seven (7) years, and thereafter such information will be scheduled for destruction. I. SOFTWARE AS A SERVICE (SAAS) OVERSIGHT The City may engage third party contractors and vendors to provide software application and database services, commonly known as Software‐as‐a‐Service (SaaS). In order to assure the privacy and security of the Information of those who do business with the City and those who received services from the City, as a condition of selling goods and/or services to the City, the SaaS services provider and its subcontractors, if any, including any IT infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, while it performs such services and/or furnishes goods to the City, to the extent any scope of work or services implicates the confidentiality and privacy of the Information. These requirements include information security directives pertaining to: (a) the IT infrastructure, by which the services are provided to the City, including connection to the City's IT systems; (b) the SaaS services provider’s operations and maintenance processes needed to support the IT environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. The term “IT infrastructure” refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. Prior to entering into an agreement to provide services to the City, the City’s staff will require the SaaS services provider to complete and submit an Information Security and Privacy Questionnaire. In the event that the SaaS services provider reasonably determines that it cannot fulfill the information security requirements during the course of providing services, the City will require the SaaS services provider to promptly inform the ISM. J. FAIR AND ACCURATE CREDIT TRANSACTION ACT OF 2003 CPAU will require utility customers to provide their Information in order for the City to initiate and manage utility services to them. Federal regulations, implementing the Fair and Accurate Credit Transactions Act of 2003 (Public Law 108‐159), including the Red Flag Rules, require that CPAU, as a “covered financial institution or creditor” which provides services in advance of payment and which can affect consumer credit, develop and implement procedures for an identity theft program for new and existing accounts to detect, prevent, respond and mitigate potential identity theft of its customers’ Information. DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 Page 8 of 8 POLICY AND PROCEDURES 1‐64/IT Revised: December 2017 CPAU procedures for potential identity theft will be reviewed independently by the ISM annually or whenever significant changes to security implementation have occurred. The ISM will recommend changes to CPAU identity theft procedures, or as appropriate, so as to conform to this Policy. There are California laws which are applicable to identity theft; they are set forth in California Civil Code § 1798.92. NOTE: Questions regarding this policy should be referred to the Information Technology Department, as appropriate. Recommended: 12/5/2017 Director Information Technology/CIO Date Approved: 12/13/2017 City Manager Date DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 City of Palo Alto Information Security Document Version: V2.7 Doc: InfoSec 110 Page 1 of 3 EXHIBIT “F” In order to assure the privacy and security of the personal information of the City’s customers and people who do business with the City, including, without limitation, vendors, utility customers, library patrons and other individuals and businesses, who are required to share such information with the City, as a condition of receiving services from the City or selling goods and services to the City, including, without limitation, the Software as a Service services provider (the “Consultant”) and its subcontractors, if any, including, without limitation, any Information Technology (“IT”) infrastructure services provider, shall design, install, provide, and maintain a secure IT environment, described below, while it renders and performs the Services and furnishes goods, if any, described in the Statement of Work, Exhibit B, to the extent any scope of work implicates the confidentiality and privacy of the personal information of the City’s customers. The Consultant shall fulfill the data and information security requirements (the “Requirements”) set forth in Part A below. A “secure IT environment” includes: (a) the IT infrastructure, by which the Services are provided to the City, including connection to the City's IT systems; (b) the Consultant’s operations and maintenance processes needed to support the environment, including disaster recovery and business continuity planning; and (c) the IT infrastructure performance monitoring services to ensure a secure and reliable environment and service availability to the City. “IT infrastructure” refers to the integrated framework, including, without limitation, data centers, computers, and database management devices, upon which digital networks operate. In the event that, after the Effective Date, the Consultant reasonably determines that it cannot fulfill the Requirements, the Consultant shall promptly inform the City of its determination and submit, in writing, one or more alternate countermeasure options to the Requirements (the “Alternate Requirements” as set forth in Part B), which may be accepted or rejected in the reasonable satisfaction of the Information Security Manager (the “ISM”). Part A. Requirements: The Consultant shall at all times during the term of any contract between the City and the Consultant: (a) Appoint or designate an employee, preferably an executive officer, as the security liaison to the City with respect to the Services to be performed under this Agreement. (b) Comply with the City’s Information Privacy Policy: VENDOR CYBERSECURITY TERMS AND CONDITIONS This Exhibit shall be made a part of the City of Palo Alto’s Professional Services Agreement or any other contract entered into by and between the City of Palo Alto (the “City”) and CivicPlus Inc. (the “Consultant”) for the provision of Software as a Service services to the City (the “Agreement”). DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 City of Palo Alto Information Security Document Version: V2.7 Doc: InfoSec 110 Page 2 of 3 (c) Have adopted and implemented information security and privacy policies that are documented, are accessible to the City and conform to ISO 27001/2 – Information Security Management Systems (ISMS) Standards. See the following: http://www.iso.org/iso/home/store/catalogue_tc/catalogue_detail.htm?csnumber=42103 http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=50297 (d) Conduct routine data and information security compliance training of its personnel that is appropriate to their role. (e) Develop and maintain detailed documentation of the IT infrastructure, including software versions and patch levels. (f) Develop an independently verifiable process, consistent with industry standards, for performing professional and criminal background checks of its employees that (1) would permit verification of employees’ personal identity and employment status, and (2) would enable the immediate denial of access to the City's confidential data and information by any of its employees who no longer would require access to that information or who are terminated. (g) Provide a list of IT infrastructure components in order to verify whether the Consultant has met or has failed to meet any objective terms and conditions. (h) Implement access accountability (identification and authentication) architecture and support role‐based access control (“RBAC”) and segregation of duties (“SoD”) mechanisms for all personnel, systems, and software used to provide the Services. “RBAC” refers to a computer systems security approach to restricting access only to authorized users. “SoD” is an approach that would require more than one individual to complete a security task in order to promote the detection and prevention of fraud and errors. (i) Assist the City in undertaking annually an assessment to assure that: (1) all elements of the Services’ environment design and deployment are known to the City, and (2) it has implemented measures in accordance with industry best practices applicable to secure coding and secure IT architecture. (j) Provide and maintain secure intersystem communication paths that would ensure the confidentiality, integrity, and availability of the City's information. (k) Deploy and maintain IT system upgrades, patches and configurations conforming to current patch and/or release levels by not later than one (1) week after its date of release. Emergency security patches must be installed within 24 hours after its date of release. (l) Provide for the timely detection of, response to, and the reporting of security incidents, including on‐going incident monitoring with logging. (m) Notify the City within one (1) hour of detecting a security incident that results in the unauthorized access to or the misuse of the City's confidential data and information. (n) Inform the City that any third party service provider(s) meet(s) all of the Requirements. (o) Perform security self‐audits on a regular basis and not less frequently than on a quarterly basis, and provide the required summary reports of those self‐audits to the ISM on the annual anniversary date or any other date agreed to by the Parties. (p) Accommodate, as practicable, and upon reasonable prior notice by the City, the City’s performance of random site security audits at the Consultant’s site(s), including the site(s) of a third party service provider(s), as applicable. The scope of these audits will extend to the Consultant’s and its third party service provider(s)’ awareness of security policies and DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 City of Palo Alto Information Security Document Version: V2.7 Doc: InfoSec 110 Page 3 of 3 practices, systems configurations, access authentication and authorization, and incident detection and response. (q) Cooperate with the City to ensure that to the extent required by applicable laws, rules and regulations, the Confidential Information will be accessible only by the Consultant and any authorized third party service provider’s personnel. (r) Perform regular, reliable secured backups of all data needed to maximize the availability of the Services. (s) Maintain records relating to the Services for a period of three (3) years after the expiration or earlier termination of this Agreement and in a mutually agreeable storage medium. Within thirty (30) days after the effective date of expiration or earlier termination of this Agreement, all of those records relating to the performance of the Services shall be provided to the ISM. (t) Maintain the Confidential Information in accordance with applicable federal, state and local data and information privacy laws, rules, and regulations. (u) Encrypt the Confidential Information before delivering the same by electronic mail to the City and or any authorized recipient. (v) Unless otherwise addressed in the Agreement, shall not hold the City liable for any direct, indirect or punitive damages whatsoever including, without limitation, damages for loss of use, data or profits, arising out of or in any way connected with the City’s IT environment, including, without limitation, IT infrastructure communications. Part B. Alternate Requirements: DocuSign Envelope ID: 60609F19-259E-4699-A499-AE3CE0A86883 City of Palo Alto (ID # 10467) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Adoption of Resolution to Conclude CustomerConnect and Residential TOU Rate Title: Adoption of a Resolution Concluding the CustomerConnect Pilot Program and Repealing Electric Rate Schedule E-1 TOU (Residential Time-of- Use Rate Adjustment) and Resolution Number 9737 From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council adopt a resolution (Attachment A) concluding the CustomerConnect Pilot Program and repealing Electric Rate Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment) and Resolution Number 9737 by December 31, 2019. Background In December 2012, City Council approved the CustomerConnect pilot program to evaluate the application of advanced metering infrastructure (AMI) in Palo Alto (Staff Report 3330). At a cost of $450,000 over 5-years, the pilot provided advanced electricity, natural gas and water meters for single family residential customers to monitor their hourly utility consumption to use utility services more efficiently. With the initial participation of 300 customers in CustomerConnect program, including a subset of 117 customers using residential time-of-use (TOU) rate adjustment in conjunction with their residential E-1 rate, the program achieved its objectives. Program highlights include City staff gaining experience in the following areas: 1. Installation and maintenance of advanced meters and communication networks; 2. Implementation of residential TOU electricity retail rates; 3. Assessing the potential to conserve energy by maintaining electric system voltage at the lower end of the acceptable voltage range, a practice known as conservation voltage reduction; 4. Evaluation of ways to lower the system integration cost for a full-scale AMI implementation; City of Palo Alto Page 2 5. Evaluation of ways to integrate AMI into the distribution outage management system (OMS); 6. Evaluation of ways to optimally integrate flexible customer technology like batteries and electric vehicles. Staff presented a report summarizing the lessons learned and findings from the pilot to the UAC in 2017 (UAC Report, 09/06/2017). Discussion The pilot phase of the CustomerConnect pilot program ended in December 2017, and staff continues to maintain and operate the pilot program systems (advanced meters, mesh network for meter communication, utility network portals, and customer usage online portal) for the 96 customers still enrolled. The mesh network, which is critical for meter communication as well as application of the TOU rates, was built on a 3G wireless platform, which will become obsolete by the end of 2019. Continuing to use it will require a $40,000 to $80,000 upgrade to transition to the 4G wireless platform. Given the additional costs of upgrading to a new wireless platform and the staffing resources needed to maintain the pilot program’s systems, staff recommends concluding the CustomerConnect pilot program by the end of 2019 and reallocating resources for the implementation of the full-scale AMI system in the next 3 to 5 years. As a result, TOU rates will be discontinued, along with the online portal displaying participants’ interval utility usage.1 CPAU’s residential customer E-1 rate schedule will continue to apply to all of the customers who participated in the CustomerConnect program, but the TOU rates adjustment will no longer be applied in conjunction with the E-1 rate.2 Staff will notify all pilot program participants and provide information about the change in early October. Resource Impact Existing staff will undertake the tasks required to conclude the CustomerConnect program and inform customers with TOU rates that their residential E1-rate schedules will continue to apply, absent the TOU rate adjustment. Policy Implications Concluding the CustomerConnect pilot program and focusing resources towards full scale deployment of the AMI system is in line with the Utilities Strategic Plan to deploy AMI to increase reliability, customer service and improve response time (Priority#3, Strategy#2). 1 Of the 300 customers who originally signed up and recruited for the pilot, 24, or 8%, have logged and viewed their consumption patterns in the month of May 2019. 2 TOU customers with electric vehicles on average have generally seen a $2-3/month reduction on their bills due to their participation in the CustomerConnect program. Council originally approved the TOU rates in 2012 and extended them indefinitely in 2018 (Resolution 9737, 02/05/2018). City of Palo Alto Page 3 Environmental Review The Council’s decision to repeal the TOU rates and conclude the CustomerConnect Program does not meet the California Environmental Quality Act’s (CEQA) 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, and therefore, no environmental review is required. Attachments: • Attachment A: Resolution to Conclude CustomerConnect and Residential Time-of-Use Rate Attachment A *Not Yet Approved* 6055242 Resolution No. _____ Resolution of the Council of the City of Palo Alto Concluding the CustomerConnect Pilot Program and Repealing Electric Rate Schedule E- 1 TOU (Residential Time-of-Use Rate Adjustment) and Resolution Number 9737 R E C I T A L S A. On December 10, 2012, the City Council adopted the Residential CustomerConnect pilot program and voluntary electric time of use (TOU) rate schedule (Staff Report 3330, Resolution 9320), on February 23, 2015, the Council extended the TOU rates through December 31, 2017 (Staff Report 5459, Resolution 9495), and on February 5, 2018, Council extended the TOU rates indefinitely, or until Council acts to modify or repeal them (Staff Report 8743, Resolution 9737). B. On November 19, 2018, the City Council approved the Smart Grid and Utilities Technology Plan, which includes the implementation of an Advanced Metering Infrastructure (AMI)- based smart grid system to serve our customers (Staff Report 9780). C. The CustomerConnect Pilot Program’s mesh network, which is critical for meter communication, was built on a 3G wireless platform, which will become obsolete by the end of 2019, and will require a $40,000 to $80,000 upgrade to work with the 4G wireless platform. D. Given the additional costs of upgrading to a new wireless platform and staffing resources needed to maintain the CustomerConnect Pilot Program and TOU rates, staff recommends discontinuing the CustomerConnect Pilot Program by the end of 2019, and reallocating those resources towards the implementation of a full-scale AMI system. The Council of the City of Palo Alto RESOLVES as follows: SECTION 1. The CustomerConnect Pilot Program will conclude as of December 31, 2019. SECTION 2. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility Rate Schedule E-1 TOU (Residential Time-of-Use Rate Adjustment) is repealed. SECTION 3. Resolution 9737, adopted by the Council on February 5, 2018, to be repealed as of December 31, 2019. SECTION 4. The 96 Customer Accounts remaining in the CustomerConnect pilot program and currently subject to Utility Rate Schedule E-1 TOU will remain on Utility Rate Schedule E-1 during and after the conclusion of the CustomerConnect pilot program. Attachment A *Not Yet Approved* 6055242 SECTION 5. The Council finds that the adoption of this resolution does not meet the California Environmental Quality Act’s (CEQA) 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, and therefore, no environmental review is required. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ ___________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ ___________________________ Assistant City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services City of Palo Alto (ID # 10490) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Council Priority: Climate/Sustainability and Climate Action Plan Summary Title: Approval of the 2018 Annual Power Source Disclosure Report Title: Adoption of a Resolution Approving and Attesting to the Veracity of the 2018 Annual Power Source Disclosure Report From: City Manager Lead Department: Utilities Recommendation Staff recommends that the City Council adopt a resolution (Attachment A) approving the 2018 annual Power Source Disclosure Report (Exhibit A to Attachment A) and attesting to its veracity. Background Senate Bill 1305 (SB 1305) was approved in 1997 to ensure that all retail suppliers of electricity disclose to consumers the sources of energy used to provide the electric service in an accurate, reliable and easy to understand manner. The SB 1305 Report is commonly referred to as the Power Source Disclosure (PSD) Report. The City of Palo Alto submits an annual PSD Report to the California Energy Commission (CEC) by June 1st of each year. The information contained in this reporting is used to prepare the annual Power Content Label (PCL), which is mailed to our customers by October 1st of each year and posted on the City’s website at https://www.cityofpaloalto.org/gov/depts/utl/residents/resources/pcm/power_content_label. asp and on the CEC’s website at http://www.energy.ca.gov/pcl/labels/. Discussion In 2017, the CEC regulation1 implementing SB 1305 was updated, and the changes became retroactively effective as of October 31, 2016. The changes included a provision that requires utilities to engage a third-party certified public accountant to perform an audit to verify the specific purchases, resales, and self-consumption of energy by fuel type.2 The regulation includes an exemption from the audit requirement for publicly owned electric utilities, if the 1 “Power Source Disclosure Program Regulations,” California Energy Commission, CEC-300-2017-048, October 2016. http://docketpublic.energy.ca.gov/PublicDocuments/14-OIR- 01/TN216978_20170412T103905_Power_Source_Disclosure_Program_Amended_Regulations.pdf. 2 California Code of Regulations Title 20, Section 1394(b)(1). City of Palo Alto Page 2 governing board of the utility “approves at a public meeting the submission to the Energy Commission of an attestation of the veracity of the annual report.”3 This audit exemption, however, can only be applied to one electric service product offered by the utility; any additional products are required to go through an auditing process to satisfy the audit requirement. In Palo Alto’s case, this means that the standard power mix can be approved by the City Council, as described above. However, the City’s voluntary PaloAltoGreen program, which is available to all commercial customers and allows them to pay a small premium in order to receive a power supply comprised of only wind and solar generation, is subject to the audit requirement. Palo Alto has already hired a third-party certified public accountant to perform an audit of the PaloAltoGreen program in order to maintain Green-e certification, and the CEC’s audit requirements largely overlap with the Green-e certification audit requirements. Staff will also pursue any additional audit requirements to satisfy the CEC’s regulations. In 2018, the City of Palo Alto Utilities Department’s (CPAU’s) hydroelectric generation was below long-term average levels as weather conditions were drier following a wet year in 2017. However, due to a declining load along with five new utility-scale solar projects that came online in the past few years, Palo Alto still had an energy surplus and sold the excess generation on the market. The power mix percentages listed in the PSD Report reflect the share of the total energy purchased by the City, as opposed to the share of the City’s retail sales. Utilities Department staff submitted the City’s annual PSD Report for calendar year 2018 (Exhibit A to Attachment A) to the CEC in May 2019, along with the associated attestation form. (Please note that all Palo Alto net purchases in 2018 were considered carbon neutral, consistent with the Carbon Neutral Plan (Staff Report 3550).) The 2018 PCL will be mailed to each electric customer as a bill insert in September 2019, in accordance with the CEC regulation. The attached resolution (Attachment A) approves the annual PSD Report submission and provides the attestation to the veracity of the report as required for exemption from the third party audit requirement for the City’s standard power mix. Staff anticipates submitting the City’s annual PSD Report for calendar year 2019 to the CEC around May 2020, and providing the 2019 PCL to electric customers around September 2020. Resource Impact Adoption of the attached resolution will not result in a financial impact to the City. Policy Implications Adoption of the attached resolution will enable the City to comply with the CEC regulation implementing SB 1305 (California Code of Regulations, Title 20, Article 5, Sections 1390 to 1394). 3 California Code of Regulations Title 20, Section 1394(b)(2). City of Palo Alto Page 3 Environmental Review Adoption of the attached resolution is not subject to California Environmental Quality Act (CEQA) review, as it is an administrative governmental activity that will not result in any direct or indirect physical change to the environment (CEQA Guidelines section 15378(b)(5)). Attachments: • Attachment A: Resolution Approving Palo Alto Power Source Disclosure 2018 (with Exhibit A) *NOT YET APPROVED* 6055237 Resolution No. _______ Resolution of the Council of the City of Palo Alto Approving and Attesting to the Veracity of the 2018 Annual Power Source Disclosure Report R E C I T A L S A. Senate Bill 1305 was adopted in 1997, establishing an Electricity Generation Source Disclosure Program, (“Power Source Disclosure Program”), which requires retail suppliers of electricity to annually submit a Power Source Disclosure Report to the California Energy Commission. B. The City of Palo Alto is a retail supplier of electricity as defined by the Power Source Disclosure Program (Ca. Code of Regs., Title 20, Section 1391(r)). C. The Power Source Disclosure Regulation was updated effective October 31, 2016, requiring an annual audit by an outside certified public accountant of the information in the annual Power Source Disclosure Report, with an exemption from this requirement for one electric service product for publicly owned utilities, if the governing body of the publicly owned utility approves at a public meeting the submission to the California Energy Commission of an attestation of the veracity of the annual report. D. The annual Power Source Disclosure Report for Palo Alto’s secondary electric service product, which is provided to commercial customers who participate in the PaloAltoGreen program, must undergo an audit by an outside certified public accountant. E. In May 2019, Utilities Department staff prepared and submitted the 2018 Annual Power Source Disclosure Report to the California Energy Commission in accordance with the applicable regulations (Ca. Code of Regs, Title 20, Sections 1390-1394). The Council of the City of Palo Alto (“City”) RESOLVES: SECTION 1. To approve the submission and attest to the veracity of the 2018 Annual Power Source Disclosure Report (attached as Exhibit A to this resolution), which staff submitted to the California Energy Commission in May 2019. / / / / / / / / *NOT YET APPROVED* 6055237 SECTION 2. The Council finds that the adoption of this resolution is not subject to California Environmental Quality Act (CEQA) review because adoption of this resolution is an administrative governmental activity that will not result in any direct or indirect physical change to the environment (CEQA Guidelines section 15378(b)(5)). INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ___________________________ _______________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ___________________________ _______________________ Assistant City Attorney City Manager ___________________________ Director of Utilities ___________________________ Director of Administrative Services Version: April 2019 Name James Stack Title Senior Resource Planner Mailing Address 250 Hamilton Ave., 3rd Floor City, State, Zip Palo Alto, CA 94301 Phone (650) 329-2314 E-mail james.stack@cityofpaloalto.org Website URL for PCL Posting https://www.cityofpaloalto.org/gov/depts/utl/residents/resources/pcm/power_content_label.asp If you have questions, contact PSD staff at PSDprogram@energy.ca.gov or (916) 653-0237. This Annual Report Template includes Schedules 1 and 2, applicable to retail suppliers. Power pools are required to report using Schedules 3 and 4 provided in a separate reporting template. Submit the Annual Report and Attestation in PDF format with an Excel version of the Annual Report to PSDprogram@energy.ca.gov. Remember to fill in the Retail Supplier Name and Product Name above, and submit separate reports and attestations for each additional product if multiple electric service products were offered in the previous year. RETAIL SUPPLIER NAME City of Palo Alto Electric Utility CONTACT INFORMATION NOTE: Information submitted in this report is not automatically held confidential. If your company wishes the information submitted to be considered confidential an authorized representative must submit an application for confidential designation (CEC-13), which can be found on the California Energy Commissions's website at http://www.energy.ca.gov/commission/chief_counsel/documents/CEC13.pdf. ELECTRIC SERVICE PRODUCT NAME Palo Alto Standard Rate ANNUAL REPORT TO THE CALIFORNIA ENERGY COMMISSION: For the Year Ending December 31, 2018 Power Source Disclosure Program GENERAL INSTRUCTIONS Retail suppliers are required to use the posted template and are not allowed to make edits to this format. Please complete all requested information. Schedule 1 and 2, applicable to: Retail Suppliers EXHIBIT A Version: April 2019 Unit No. Fuel Type Location (State or Province)RPS ID WREGIS GU ID EIA ID FERC QF ID Gross MWh Procured MWh Resold or Self- Consumed Net MWh Procured WAPA - Nimbus Hydro Folsom, CA W 1161 444 4081.42 4081.42 WAPA - Nimbus -- RECs only Hydro Folsom, CA W 1161 444 4860.58 4860.58 WAPA - Lewiston Hydro CA W 1108 75.57 75.57 WAPA - Lewiston -- RECs only Hydro CA W 1108 177.43 177.43 WAPA - Stampede -- RECs only Hydro CA W 1177 812 812 Half Moon Bay (Ox Mountain)Landfill Gas Half Moon Bay, CA W 2033 56895 42583 42583 Keller Canyon Landfill Gas Pittsburg, CA W 2071 56897 14891 14891 Santa Cruz LFG Landfill Gas Watsonville, CA W 2014 56428 9461 9461 Shiloh Wind Solano County, CA W 231 56362 64758 64758 New Spicer Meadows Hydro Tuolomne County, CA W 1260 54554 3260.01 3260.01 High Winds Wind Solano County, CA W 229 56075 42656 42656 Collierville Large Hydro Murphys, CA W 1258, 1259 54554 83142.94 83142.94 Hydro Solar -- self-consumed Solar Murphys, CA W 1266 11 11 0 Hydro Solar -- RECs only Solar Murphys, CA W 1266 11 11 WAPA - J.F.Carr Large Hydro CA W 1164 2518 15743.3 15743.3 WAPA - Folsom Large Hydro CA W 1156 thru 58 2518 41002.29 41002.29 WAPA - Keswick Large Hydro CA W 1165 2518 23056.82 23056.82 WAPA - New Melones Large Hydro CA W 1159, 1160 2518 37254.51 37254.51 WAPA - Shasta Large Hydro CA W 1168 thru 72 2518 125406.24 125406.24 WAPA - Spring Creek Large Hydro CA W 1174 2518 9854.15 9854.15 WAPA - Trinity Large Hydro CA W 1175, 1176 2518 20924.58 20924.58 WAPA - O'Neill Large Hydro CA W 1167, 1186 2518 183.5 183.5 EE Kettleman - Land - Centaurus Solar W 4695 54226 54226 Elevation Solar C Solar W 5298 115971 115971 Crow Creek Solar Solar W 7962 53569 53569 Hayworth Solar Solar W 4719 61369 61369 San Joaquin LFG Landfill Gas W 3883 33077 33077 Johnson Canyon LFG Landfill Gas W 3397 10123 10123 Western Antelope Blue Sky Ranch B - Western Antelope Blue Sky Ranch B Solar W 5300 57506 57506 Gianelli Powerplant (units 2 and 6)Large Hydro W 1162, W1288 11369 11369 445 Bryant St. Parking Garage - 445 Bryant St. Parking Garage Solar 63610A W 5647 0 0 520 Webster St. Parking Garage - 520 Webster St. Parking Garage Solar 63611A W 5648 75 75 Seattle City Light Large Hydro 4185 4185 0 0 0 0 945,665 888,033 Total Retail Sales Total Net PurchasesRetail Supplier Name:City of Palo Alto Electric Utility Electric Service Product Name:Palo Alto Standard Rate ALL PROCUREMENTS (Specific and Unspecified) Facility Name ANNUAL REPORT TO THE CALIFORNIA ENERGY COMMISSION: Power Source Disclosure Program For the Year Ending December 31, 2018 SCHEDULE 1: POWER PROCUREMENTS AND RETAIL SALES Applicable to: Retail Suppliers INSTRUCTIONS: Submit a separate annual report for each electric service product offered in 2018. List all purchases (Specific and Unspecified) made ONLY in the 2018 calendar year. Add additional rows if needed. If a purchase was for unbundled RECs include the term "REC Only" in parentheses after the facility name in the Facility Name column, and categorize the power as the fuel type of the generating facility from which the unbundled REC was derived. If power was purchased through a transaction that expressly transferred energy only and not the RECs associated with that energy, identify the power as "Unspecified Power" in the Fuel Type column. If purchased power was from a renewable electrical generation facility that is not certified for participation in California's RPS Program, identify the Fuel Type as "Other". Version: April 2019 Net Purchases (MWh) Percent of Total Retail Sales (MWh) Specific Purchases Renewable 573,543 65% Biomass & Biowaste 110,135 12% Geothermal - 0% Eligible Hydroelectric 13,267 1% Solar 342,727 39% Wind 107,414 12% Coal - 0% Large Hydroelectric 372,122 35% Natural Gas - 0% Nuclear - 0% Other - 0% Total Specific Purchases 945,665 100% Unspecified Power (MWh)- 0% Total 945,665 100% Total Retail Sales (MWh)888,033 ANNUAL REPORT TO THE CALIFORNIA ENERGY COMMISSION: Power Source Disclosure Program Applicable to: Retail Suppliers For the Year Ending December 31, 2018 SCHEDULE 2: ANNUAL POWER CONTENT LABEL CALCULATION Comments: INSTRUCTIONS: Total your specific purchases (by fuel type) and generic purchases from Schedule 1 and enter these numbers in the first column. The remainder of this sheet is automated. If for any fuel type (including generic) the numbers in the INSTRUCTIONS: Total specific purchases by fuel type and enter these values in the first column. If purchased power was from a transaction that expressly transferred energy only and not the RECs associated with that energy, identify the power as "Unspecified Power". Total Retail Sales will autopopulate from Schedule 1. Any difference between total net purchases and total retail sales will be applied pro-rata to each non-renewable fuel type. Each fuel type total will then be divided automatically by retail sales to calculate fuel mix percentages. City of Palo Alto (ID # 10497) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Changes to the Emerging Needs Fund Policy Title: Approval of Changes to the Human Services Emerging Needs Fund Policy From: City Manager Lead Department: Community Services Recommendation Staff recommends that the City Council approve revisions to the Human Services Emerging Needs Fund Policy to broaden the application criteria to allow for greater utilization by nonprofit organizations. Executive Summary The Emerging Needs Fund, approved by City Council in 2017, provides funding to non- profit organizations for emergency needs and critical/emerging needs in Palo Alto. Criteria for determining what constitutes an emergency need and a critical/emerging need are described in the discussion below and in the current policy. To date, four applications have been approved to assist with emergency and critical/emerging needs in the community. Staff has reviewed the policy governing the oversight and use of the fund and is recommending three changes to assist with greater utilization of the funding by nonprofit organizations serving the Palo Alto community. These changes are: 1) Timeframe: Agencies would be able to receive funding every two years instead of every three years as stated in the current policy; and 2) Eligibility: The critical/emerging needs funding category would be divided into two separate categories: critical needs and emerging needs, with different eligibility requirements; and 3) Prioritization: A ranked system would be used to prioritize funding requests by level of need, with top consideration given to emergency needs, then critical needs, and last, emerging needs. It is recommended that 20% of the total funding be earmarked for emergency needs. The revised policy is included as Attachment A with the changes to the current policy indicated. City of Palo Alto Page 2 Background City Council approved a $50,000 funding allocation for the Human Services Emerging Needs Fund (HSENF) as part of the FY2017 budget. The purpose of the funding was to assist with emergency or critical/emerging needs of Human Services Resource Allocation Process (HSRAP) grantees outside of the biennial funding process as well as the needs of other nonprofits serving Palo Alto residents. Council directed staff to draft a policy to oversee this new funding program. A draft policy was reviewed by the Human Relations Commission (HRC) at their February https://www.cityofpaloalto.org/civicax/filebank/documents/56501 & March 2017 meetings https://www.cityofpaloalto.org/civicax/filebank/documents/57059 after which the Council approved the policy on March 27, 2017. http://paloaltocityca.iqm2.com/Citizens/FileOpen.aspx?Type=15&ID=1565&Inline=True The fund has been operational for two years. Four grants have been awarded during this time for a total of $24,025; two grants of $10,000 (Counseling & Support Services for Youth, and Heart & Home Collaborative), and two others at $2,150 (Ada’s Café) and $1,875 (Peninsula HealthCare Connections). At the end of each fiscal year, all unused funding is returned to the General Fund. Staff felt that a review of the current policy governing the use of the fund was in order to analyze how well the fund had been working and make any suggested changes for the future. A revised policy was presented, discussed and unanimously approved by the HRC at their April 11, 2019 meeting. https://www.cityofpaloalto.org/civicax/filebank/documents/71326 Discussion During staff’s review of the policy governing the HSENF and its actual use over the past two years, two key findings were uncovered: 1) There is a continuing need for an Emergency Fund of this type in the community. Two of the grant requests that have been received and funded over the past two years have been for emergency needs. Although the volume of requests received has not been high, the HSENF is the only local funding source that can assist nonprofits serving Palo Alto residents with emergency needs. The two grants given in this category include replacement of kitchen equipment crucial to the operations of Ada’s Café and funding for an additional mental health therapist at Gunn High School after a student suicide in 2018. 2) The qualification standards for the current application process should be changed to better align with level of Human Service Needs faced by local nonprofits. The current application requires that applicants meet one the following high standards to be considered for funding under the “critical/emerging needs” category: “An urgent critical need that was not evident during the original HSRAP funding period” or “An urgent City of Palo Alto Page 3 existing critical need for which normal funding is no longer available and for which a demonstrated human consequence will occur if funding is not obtained.” Staff is of the opinion that it is crucial to hold the bar high to qualify for funding under this category as to not encourage nonprofits to use the fund as a stopgap between HSRAP funding cycles. However, in staff’s review of the HSENF and in conversations with many nonprofits serving local residents, it was discovered that many local agencies have “emerging” needs which they feel are crucial to address, but they do not rise to the high bar set by the existing policy in which “a demonstrated human consequence will occur if funding is not obtained.” Therefore, this led staff and the HRC to separate “critical” and “emerging” needs in the proposed changes to the policy. A description of what qualifies as emergency, critical and emerging needs can be found below. The following changes to the HSENF are recommended: 1) Time frame – It is recommended that agencies be able to receive funding every two years instead of every three years as stated in the current policy. When establishing the current policy, staff was concerned with possible over use of the fund. In practice, that has not been the case. In addition, for mid- to large-size nonprofits who have numerous programs addressing a myriad of needs, the three-year rule in practice did not allow for the fund to assist with crucial needs affecting clients in very different programs areas. Therefore, a change to a two year eligiblity guideline seems more practical. 2) New Eligiblity definitions under Emerging Needs –It is recommended that new language be approved under a newly-established and separate emerging needs funding category. In the current policy, critical and emerging needs are combined together in the same category with the same application criteria. Proposed new language and a seperate funding category is recommended to allow applicants who do not meet the requirements of the currently combined Critical/Emerging Needs category to apply for funding. Current Policy: Emergency Needs: • An unforeseen event that has or will significantly interrupt essential services such as a natural disaster, storm damage, theft, equipment failure or similar occurrence. • A request that is time sensitive in nature and could not have been predicted or reasonably planned for. Emerging/Critical needs: City of Palo Alto Page 4 • An emerging or critical need that was not evident during the original funding period. (HSRAP grantee) • An existing critical need for which normal funding is no longer available and for which a demonstrated human consequence will occur if funding is not obtained. (All Applicants) Proposed Policy: Emergency Needs: No change from current policy • An unforeseen event that has or will significantly interrupt essential services such as a natural disaster, storm damage, theft, equipment failure or similar such occurrence. • A request that is time sensitive in nature and could not have been predicted or reasonably planned for. Critical Needs: No change from emerging/critical needs category in current policy • An urgent critical need that was not evident during the oirignal HSRAP funding period. (HSRAP grantee) • An urgent existing critical need for which normal funding is no longer available and for which a demonstrated human consequence will occur if funding is not obtained. (All Applicants) Emerging Needs: New category • A need that has not come up before or the approach to addressing the need is new, even though it may not rise to the level of an emergency or critical need. • To develop or expand a program/service that will enhance the quality of life for vulnerable populations. The new language under Emerging Needs allows applicants to: • Submit a request for a need that was evident during the HSRAP application period, but was not approved for funding (usually due to limited amount of total funding available), yet is still worthwhile to help the clients they serve. • The ability to explore/expand a program. The most frequent call that staff receives from nonprofits when inquiring about the current policy are for needs that do not meet any of the needs allowed in the current policy, but could meet the needs of a vulnerable population in the community City of Palo Alto Page 5 (homeless, children, disabled, seniors, etc.). In addition, there are small nonprofits that provide valuable services to the community, but they do not have the institutional capacity to fill out the HSRAP application. Staff and the HRC feel that it would be valuable to be able to allocate funding (outside of HSRAP) to causes that address the needs of vulnerable populations. In the proposed prioritization of funding applications explained below, emerging needs would be the lowest priority considered for funding each quarterly application period. 3) Prioritization – It is recommended that a ranked system be approved that prioritizes funding requests by level of need, with top consideration given to Emergency Needs, then Critical needs, and last, Emerging Needs. In addition, it is recommended that 20% of the total funding be earmarked for Emergency Needs. With the addition of an expanded definition for emerging needs, staff and the HRC felt that it was important to consider and prioritize funding requests in order of the level of need or impact on the clients and/or the agency. To ensure that there is always funding for emergency needs, 20% of the total budgeted amount would be reserved for this category. The proposed policy also allows the Community Services Department Director to have final discretion as to the final funding allotments. Timeline Upon approval of the policy, staff will promptly communicate the availability of the fund to nonprofit agencies serving the community. Resource Impact $50,000 in funding was approved as part of the Fiscal 2020 Adopted Operating budget in the Non-Departmental section of the General Fund. Policy Implications The following areas of the Comprehensive Plan are pertinent to this report: Program C1.16.2 Leverage available funding to pursue support of teen mental, physical, social and emotional health programs Program C1.18.2 Support, promote and publicize the provision of comprehensive senior services in coordination with senior service providers. Comprehensive services include addressing senior nutrition, mental health and transportation. Policy C-1.20 Leverage available funding to support the development of, and improved City of Palo Alto Page 6 access to, programs that address all types of developmental disabilities, including physical, sensory, cognitive or social/emotional needs. Policy C-1.21 Support provision, funding or promotion of services for persons with disabilities through the Human Relations Commission, the Parks and Recreation Division, the Arts and Sciences Division and other City departments. Policy C-1.22 Support and promote County, City, State and nonprofit services addressing the needs of the low-income and unhoused community especially in the areas of permanent supportive housing and temporary housing which addresses food, clothing, health care, mental health and transportation needs. GOAL C-5 Sustain the health, well-being, recreation and safety of residents and visitors and improve the quality, quantity and affordability of social services for all community members, including children, youth, teens, seniors, the unhoused and people with disabilities. Environmental Review This program is not a project as defined by the California Environmental Quality Act (CEQA) and is not subject to CEQA review. Attachments: • Attachment A: Human Services Emerging Needs Fund Policy -DRAFT Changes to current policy are indicated with a comment. The City of Palo Alto traditionally allocates human services funding every two years through an application and selection process called the Human Services Resource Allocation Process (HSRAP.) This program funds human services organizations that provide services in a variety of areas as defined by a priority of needs established by staff and the Human Relations Commission. City Council gives final approval of these grant allocations. The Emerging Needs Fund aims to assists nonprofit organizations serving Palo Alto residents with short-term and/or urgent funding to address emergency, critical or emerging human services need. These grants are based on need and an agency may not receive funding more than once in a two year period. Grants can be awarded up to $10,000. Due to limited funding, partial grants may be awarded. All grants are subject to the availability of funds. Funding Categories The Emerging Needs Fund assists nonprofits serving Palo Alto residents with short-term and/or urgent funding needs. Grant requests will be prioritized for funding in the order of need listed below, with at least 20% of total funding earmarked for Emergency Needs. ** 1) Emergency Needs: • An unforeseen event that has or will significantly interrupt essential services such as a natural disaster, fire, storm damage, theft, equipment failure or similar such occurrence. • A request that is time sensitive in nature and could not have been predicted or reasonably planned for. 2) Critical Needs: • An urgent critical need that was not evident during the original HSRAP funding period. (HSRAP grantees) • An urgent existing critical need for which normal funding is no longer available and for which a demonstrated human consequence will occur if funding is not obtained. (All applicants) 3) Emerging Needs: • A need that has not come up before or the approach to addressing the need is new, even though it may not rise to the level of an emergency or critical need. • To develop or expand a program/service that will enhance the quality of life for vulnerable populations. ATTACHMENT A Policy - City of Palo Alto Human Services Emerging Needs Fund Draft Revised Copy Commented [MV1]: Agencies would be are able to receive funding every two years instead of every three years as stated in the current policy Commented [MV2]: A ranked system would be used to prioritize funding requests by level of need with top consideration given to Emergency Needs, then Critical needs and lastly Emerging Needs. It is recommended that 20% of the total funding be earmarked for Emergency Needs Commented [MV3]: In the current policy, Critical and Emerging Needs are combined together in the same category with the same application criteria. Proposed new language and a seperate funding category is being proposed to allow applicants who do not meet the requirements of the currently combined Critical/Emerging Needs category to apply for funding. ** Community Services Department Director has final discretion as to funding earmarks. Generally, Emerging Needs Grants are not awarded for: • Sectarian or religious purposes • Political purposes • Paying expenses that should have been anticipated • Fundraising and marketing expenses • Training expenses unless directly tied to emergency or critical need • Operating deficit or retroactive support (no more than one month after incurring expenses.) Application Process Emergency Needs: An agency may initiate a request for Emergency Needs funding at any time by emailing the Manager of Human Services and providing a short, one paragraph explanation of the need. If the need potentially meets the criteria of the Emerging Needs Fund, the agency will be invited to submit an application. Do not submit an application unless your agency has been invited to do so. If you are invited to submit an application, please submit application information requested below. Critical Needs & Emerging Needs: Applications for and Critical Needs and Emerging Needs may be submitted on a quarterly basis on the following dates. The dates for 2019/20 are: • September 6, 2019 • December 6, 2019 • March 6, 2020 • June 5, 2020 Please submit application information requested below. Application: An application consists of a written responses addressing the numbered items listed below and should be no more than three pages in length TOTAL. Please respond in question/answer format for each question. Up to four pages of supporting documentation may be attached to the application. Please include the following: 1. Brief history and mission of the organization. 2. Indicate whether you are requesting funding in order to address an emergency, critical or emerging need. 3. Explain how your application meets the fund’s criteria. 4. The cause of the unanticipated or non-budgeted costs for which there are no other resources. 5. Why these needs have risen to the level of an urgent response. 6. How many Palo Alto clients are affected and how? 7. What needs to be done to address the need? Describe any services/programs you plan to offer? 8. How will you address these needs in the future? 9. Why these specific funds will only be needed once? 10. The past sources of the agency’s resources and other options to cover the funding need and any other funders sought or already committed to addressing this need. Include in-kind and voluntary contributions and collaborative assistance as well as financial support. 11. A budget narrative including a simple itemized expense and income budget for addressing the request. Please indicate the time period covered. Be sure to show how City of Palo Alto funds will be used. 12. Supporting documentation for all requested reimbursements (i.e. repair bill, new piece of equipment) must accompany the request. Application Submittal Applications may be submitted in any of the following ways: Email: mary.constantino@cityofpaloalto.org Fax: 650-856-8756 Mail: Cubberley Community Center 4000 Middlefield Rd. #T2 Palo Alto, CA 94303 In person: a map of Cubberley Community Center has been provided with this application Review & Selection Process When reviewing Emerging Needs Grant applications we look for: • Organizations that have the capacity to respond to the emergency, critical and/or emerging need and present a reasonable plan to address the need along with a sound financial plan • Organizations and programs that meet a documented need of Palo Alto residents • Organizations whose requests are in closest alignment with purpose of fund Applications are reviewed by City staff and representatives from the Human Relations Commission. Staff in the Office of Human Services will oversee the grant process but will not sit on the Selection Committee. The selection process may include follow-up questions, clarification of material submitted, requests for additional information, and/or an interview process or as deemed appropriate by the Selection Committee. The final decision is made by the City Manager or his designee. Grant award & Reporting Requirements All applicants will generally be informed via email regarding the status of their funding request within two weeks of submission. All successful requests will be funded within two weeks after receiving an “invoice” by the organization. Reporting requirements involve the submission of a simple report that describes the following: 1. How the funds were spent. 2. How the Palo Alto clients of the affected program/service were impacted as a result of the grant. 3. Progress on plans to address this need on an ongoing basis (if applicable.) The report will be due one month after the funds have been expended or three months after the Emerging Needs grant is awarded, whichever is earlier. Additional Information If you have any questions about the application or the application process, please contact Minka van der Zwaag, Human Services Manager at 650-463-4953 or minka.vanderzwaag@cityofpaloalto.org Updated – June 25, 2019 City of Palo Alto (ID # 10547) City Council Staff Report Report Type: Consent Calendar Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: P&S Recommendation to Accept Status Updates of Audits Title: Policy and Services Committee Recommends the City Council Accept the Status Updates of the Audits of the Citywide Cash Handling and Travel Expense; Cable Franchise and Public, Education and Government (PEG) Fees; Continuous Monitoring: Payments Audit; Utility Meters; and Inventory Management From: City Manager Lead Department: Administrative Services Recommendation The Policy and Service Committee and Staff recommend the City Council acceptance of the status updates of the Audits of the Citywide Cash Handling and Travel Expense; Cable Franchise and Public, Education and Government (PEG) Fees; Continuous Monitoring: Payments Audit; Utility Meters; and Inventory Management (CMR ID#9565). Discussion At its meetings on October 23, 2018 the Policy and Services Committee approved and unanimously recommended that the City Council accept the reports. As part of Council’s motion, they requested that their comments be conveyed in the transmittal of the audit reports to Council. The main comment the committee had was the suggestion that if the amount of staff time needed to implement a recommendation outweighed the benefit of the recommendation then it should be reviewed in the future. Additional comments are captured in the minutes at the link below. The status on the audits was subsequently reviewed June 11, 2019 by the Policy and Services Committee. The item did not receive a unanimous vote at that meeting so the item will be scheduled as an action item when it is transmitted to Council. The item is tentatively scheduled as an action item for the September 9, 2019 Council meeting. The Policy and Services Committee minutes from October 23, 2018 are available at: October 23, 2018 Minutes CITY OF PALO ALTO OFFICE OF THE CITY CLERK August 19, 2019 The Honorable City Council Palo Alto, California Approval of Amendment Number 2 to Contract Number S19174828 for Professional Services Agreement With Management Partners for Auditor Services to add $50,000 for a Total Not-to-Exceed Amount of $135,000 for an Additional two-month Term Through November 14, 2019 Recommendation The Mayor recommends that Council approve an amendment to the professional services agreement with Management Partners, Inc., for auditor services to add $50,000, up to $135,000, for an additional two-month term through November 14, 2019. Background Former City Auditor Harriet Richardson retired in February 2019, creating need for the City Council to appoint a qualified person or entity to perform interim audit services while the City Auditor position is vacant (CMR # 10182). Through this service agreement with Management Partners, the City Auditor’s Office has been provided services from a qualified expert to coordinate and review work performed as designated by City Council. During this time, the Council Appointed Officers (CAO) Committee continues to oversee an assessment of the auditing function which is expected to be completed by October 2019. The findings and recommendation to the full Council will follow. Discussion Under this agreement, Management Partners has provided qualified professional services since late March 2019. In accordance with the scope of services, the interim audit work completed has included review of numerous audit reports, review of audit work in progress, and coordination of audit work as needed to prepare audits reports presented at Policy and Services Committee. This work will continue through the term of agreement. The attached professional services agreement contract amendment provides for Management Partners to continue to perform audit services on an interim basis until Council determines further action. While the term date of this amendment is November 14, 2019, the City Council retains the right to suspend or terminate the services for any reason, after 10 days’ notice. Resource Impact Contract costs will continue to be funded through salary savings in the City Auditor’s Office budget as a result of the City Auditor vacancy; therefore, no additional appropriation of funds is Page 2 required. Contract costs are based on $165/hour rate plus any hours necessary to complete work outlined in scope of services and travel expenses as needed. Environmental Review No impact. Approval of this contract is exempt under the California Environmental Quality Act (CEQA) Guidelines. ATTACHMENTS: • Attachment A: Amendment 1 (PDF) Department Head: Beth Minor, City Clerk Page 3 1 Revision July 20, 2016 AMENDMENT NO. 1 TO CONTRACT NO. S19174828 BETWEEN THE CITY OF PALO ALTO AND MANAGEMENT PARTNERS, INC. This Amendment No. 1 to Contract No. S19174828 (“Contract”) is entered into August 5, 2019, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Management Partners, Inc. Incorporated, located at 2107 N. First Street, STE 470, San Jose, CA 95131 (“CONSULTANT”). R E C I T A L S A. The Contract was entered into between the parties for the provision of Consulting Service to conduct performance audits and reviews of CITY departments, programs and services on a temporary basis. B. The parties wish to amend the Contract to extend the term by two months through November 14, 2019, as authorized by section 2.30.280(a)(2) of the Palo Alto Municipal Code. C. The parties wish to amend the Contract to increase the agreed not to exceed compensation amount for Contract Services by Fifty Thousand Dollars ($50,000.00). NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the parties agree: SECTION 1. Section 2 TERM of the Contract is hereby amended to read as follows: “The Term of this Agreement shall be from the date of its full execution through November 14, 2019, unless terminated earlier pursuant to Section 19 of this Agreement. ” SECTION 2. Section 4 NOT TO EXCEED COMPENSATION is hereby amended to read as follows: “The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed One Hundred Thirty-five Thousand Dollars ($135,000.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “HOURLY RATE SCHEDULE,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY.” DocuSign Envelope ID: 623F4FFE-8BA8-473C-B112-634BF9B0DAF2 2 Revision July 20, 2016 SECTION 3. Except as herein modified, all other provisions of the Contract, including any exhibits and subsequent amendments thereto, shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Amendment No. 1 to Contract No. S19174828 on the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: City Attorney MANAGEMENT PARTNERS, INC. Name: Jerry Newfarmer DocuSign Envelope ID: 623F4FFE-8BA8-473C-B112-634BF9B0DAF2 Certificate Of Completion Envelope Id: 623F4FFE8BA8473CB112634BF9B0DAF2 Status: Completed Subject: Please DocuSign: Amend #1 S19174828 - Management Partners - ready to be signed.pdf Source Envelope: Document Pages: 2 Signatures: 1 Envelope Originator: Certificate Pages: 2 Initials: 0 Terry Loo AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Terry.Loo@CityofPaloAlto.org IP Address: 12.220.157.20 Record Tracking Status: Original 8/8/2019 9:21:36 AM Holder: Terry Loo Terry.Loo@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp jerry Newfarmer jnewfarmer@managementpartners.com President & CEO Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 75.61.103.249 Sent: 8/8/2019 9:24:06 AM Viewed: 8/8/2019 9:26:29 AM Signed: 8/8/2019 9:32:27 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Jan Perkin jperkins@managementpartners.com President & CEO Security Level: Email, Account Authentication (None) Sent: 8/8/2019 9:32:29 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Beth Minor Beth.Minor@CityofPaloAlto.org City Clerk City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/8/2019 9:32:30 AM Viewed: 8/8/2019 9:34:58 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Carbon Copy Events Status Timestamp Sandra Blanch sandra.blanch@cityofpaloalto.org Asst Director, HR/Risk Management City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 8/8/2019 9:32:31 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 8/8/2019 9:32:31 AM Certified Delivered Security Checked 8/8/2019 9:32:31 AM Signing Complete Security Checked 8/8/2019 9:32:31 AM Completed Security Checked 8/8/2019 9:32:31 AM Payment Events Status Timestamps City of Palo Alto (ID # 10238) City Council Staff Report Report Type: Action Items Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Status Update on North Ventura Coordinated Area Plan and Request for Direction Title: Staff Recommends the City Council Receive a Status Update on the North Ventura Coordinated Area Plan and Endorse an Updated Approach and Schedule to Complete the Project; Direct Staff to Return With Consultant Contracts That are Responsive to the Identified Approach; and Explore Supportive Funding Opportunities From Owners With Significant Property Interests Within the Project Boundary. The Recommendation in This Report is not a Project as Defined in the California Environmental Quality Act. From: City Manager Lead Department: Planning and Development Recommendation Staff recommends the City Council receive a status update on the North Ventura Coordinated Area Plan and take the following actions: 1. Direct staff to return with a contract with Water Resource Associates Environmental Consultants (WRA) for the purpose of studying the feasibility of converting the channelized Matadero Creek into an open space corridor (Attachment A – Scope of Work). 2. Direct staff to return with an amended contract with Perkins+Will for additional services related to the North Ventura Coordinated Area Plan (Attachment B – Revised Scope of Work). 3. Endorse the overall approach, project schedule, and specific direction regarding the Working Group’s role in the North Ventura Coordinated Area Plan (Attachment C). 4. Direct staff to explore additional funding opportunities with large property owners in the project study area to share plan development costs. Executive Summary On March 11, 2019, the City Council held a Town Hall meeting on the Ventura neighborhood and received an update on the North Ventura Coordinated Area Plan (NVCAP). At that meeting, Council City of Palo Alto Page 2 directed staff to evaluate and propose policies related to inclusionary and workforce housing; preventing residential displacement; limiting the amount and size of future office space; and, exploring economic value capture opportunities associated with any increase in development potential within the Plan area. While not part of the motion, there was also interest on Council to explore more design options that integrate Matadero Creek as an open space feature in the plan and enhance its connection to Boulware Park. To implement these actions, amendments to the contract with the City’s prime consultant, Perkins+Will, are required as are adjustments to the project timeline. The amended contract and scope includes additional sub-consultant analyses and work. Staff also proposes to enter into a new contract with WRA, a consultant who will study creek options. Due to the proposed amendments, staff requests Council’s support for staff to engage landowners with large property interests in the project boundary area to help fund extension of the project schedule, environmental studies, an additional plan alternative, and community engagement. If directed by Council, staff would return with a request to authorize the City Manager to enter into funding agreements. This also report includes responses to comments received by some Working Group members. Some are not satisfied with the direction the project is taking and have offered specific recommendations that aligns their interests to this work effort. With the updates to the project schedule and contract, staff is incorporating some changes; a list of suggestions from some Working Group members and staff’s responses are included in Attachment C. Council’s endorsement or modification of staff’s response to the Working Group comments is important to provide clear focus and direction for the duration of the project. Lastly, and importantly with respect to project expectations, staff recently learned that the owner of 340 Portage1 has expressed a desire to retain the building. At this time, the owner is not motivated by current or anticipated city policy and market conditions, including rental income and construction costs, to redevelop the property in a way that would yield significant housing units. This perspective is aligned with some community interests that support preserving potential historic resources, but it may also limit opportunities to improve multi-modal access through this neighborhood, lessen developer-funded contributions to support infrastructure improvements, and result in fewer affordable housing units. Council’s expectations regarding a final set of long-range planning alternatives that can feasibly be achieved should be considered in concert with this request for additional funding to complete the project. Without willing property owners, the plan will be unable to realize the Council’s project goals. Background The North Ventura Coordinated Area Plan is a long-range planning document for an area of the city near the California Avenue Caltrain transit station and located within the City’s only Priority Development Area – a boundary intended to focus commercial and residential development due to its proximity to high quality transit. The City’s adopted Comprehensive Plan includes policies2 to guide development and plan for community amenities and specifically encourages the preparation of a plan for this area. 1 This property has several tenants, including Global Playground and Fry’s Electronics. 2 Policy L-1.7: Use coordinated area plans to guide development, such as to create or enhance cohesive neighborhoods in areas of Palo Alto where significant change is foreseeable. Address both land use and City of Palo Alto Page 3 In 2017, Council adopted a resolution of interest for grant funding to prepare the plan, and the project is funded by a Caltrans grant, with matching funds from the Sobrato organization. In early 2018, the Council adopted goals and policies to guide this effort and selected Working Group members to assist staff. By mid-year 2018, Perkins+Will was selected3 as the prime consultant to develop the area plan and work began in October 2018. The project was expected to take approximately two years and is restricted by the grant agreement from taking longer unless an extension is authorized through the funding agencies. The two-year timeline influenced the scope of work, deliverables and expectations to complete the project within this schedule. transportation, define the desired character and urban design traits of the areas, identify opportunities for public open space, parks and recreational opportunities, address connectivity to and compatibility with adjacent residential areas; and include broad community involvement in the planning process. Program L4.10.1 Prepare a coordinated area plan for the North Ventura area and surrounding California Avenue area. The plan should describe a vision for the future of the North Ventura area as a walkable neighborhood with multi-family housing, ground floor retail, a public park, creek improvements and an interconnected street grid. It should guide the development of the California Avenue area as a well-designed mixed use district with diverse land uses and a network of pedestrian-oriented streets. 3 https://www.cityofpaloalto.org/civicax/filebank/documents/65671 City of Palo Alto Page 4 On March 11, 2019, the Council held a town hall discussion for the North Ventura neighborhood, which included a check-in meeting with the Working Group. Council received an update and directed staff4 to incorporate additional analysis into the plan alternatives. This subject public meeting is in part to respond to the Council direction, but also addresses concerns raised by some Working Group members who were left unsatisfied that there was not more opportunity for dialogue at the town hall meeting. Since the town hall, staff time has been devoted to responding to Council’s direction, negotiating and revising the contract with the consultant, soliciting additional consultant expertise, and considering feedback received from some Working Group members. Discussion At the March 2019 town hall, the City Council clearly expressed strong interest in analyzing options to transform the channelized portion of Matadero Creek within the project boundary into an open space area. The original scope of work did not include the level of analysis required to explore feasibility and design options for the creek. This type of analysis requires specialized expertise in hydrological processes, engineering and design, as well as an understanding of the regulatory process involving multiple regional entities. To prepare this analysis, staff recommends the City hire WRA in the amount of approximately $93,300, which includes the standard 10% for contingency reserve. A proposed scope, timeline and cost are provided as Attachment A. Through the informal bid process, staff solicited proposals from firms specializing in the needed analysis; proposal reviewers selected WRA. Once the contract is authorized, the analysis is expected to take approximately 12-14 weeks. Staff anticipates some elements of the area planning process can occur concurrently to the preparation of this study. If supported by Council, staff will return with contract and scope of work for an upcoming consent calendar agenda. Perkins+Will Contract Amendment The City entered into a contract with Perkins+Will on June 25, 2018 for professional services to develop the NVCAP. The contract, including all subconsultants, was not to exceed $769,068. A copy of the original contract is included as Attachment D. This work is funded through a Caltrans grant and supported by matching funds from the Sobrato Organization. The City’s contribution has principally been staff time and resources. 4 Excerpt from Council approved minutes. Council Member DuBois moved, seconded by Vice Mayor Fine to Update project direction to include: A. Removal of the Stanford playing fields from the park space counted for Ventura use; B. Evaluate and propose policies around: 1. Higher required inclusionary housing; 2. Workforce housing; 3. Preventing displacement of existing residents; C. Evaluate and propose office size limits to encourage small office uses; and D. Evaluate and propose an objective accounting for economic value provided to property owners as part of the specific plan versus current zoning, and the value of any community amenities. City of Palo Alto Page 5 Since the launch of this planning effort, the project teams have faced several challenges. Over the past several months, staff and the consultant have worked to address concerns and refined the project scope and updated the schedule. As a result, the overall project timeline increased by 11 months for a total anticipated timeline of 35 months total and the project scope of work increased approximately by $333,738, ($367,112 with a 10% contingency), for a 40% increase from the not-to-exceed amount of $769,068. A portion of the additional costs are due to council-requested items (approximately $104,000). Another portion results from the extension of time, which requires the consultant to provide ongoing project management and other services, as well as increases to design development that were insufficiently funded in the first scope. Lastly, a portion of the increased budget reflects staff response to requests for additional time and analysis including additional Working Group meetings, decision-maker meetings (such as City Council), and meetings with other review bodies (Planning and Transportation Commission, Architectural Review Board, and Historic Resources Board). The expanded scope includes: • Economic Value of NVCAP • Evaluation of Proposed Policies • Additional Alternative (for a total of 3 alternatives) • Revision of Alternatives Considering Additional Analyses (creek study, historic study, etc.) • Parking Model Calibration • Increase Working Group meeting from 2 hours to 3 hours per meeting • Additional Decision-Maker Meetings (5 additional meetings) • Expanded EIR • Financial Analysis • Project Management Extension including Coordination between Consultant and City Staff While the increase in scope, schedule, and budget are considerable, these amendments will provide the resources necessary to meet community expectations in terms of quality and engagement within the time parameters of the grant. Land use planning consultant work in Palo Alto often requires more community engagement and analysis than firms typically expect; the updated scope reflects this. In addition, both Perkins+Will and the City have experienced staffing changes and shortages throughout the project. As a result, some aspects of project execution have been sub-optimal. Following extended negotiations, Perkins+Will has waived $57,933 worth of services performed. Staff and Perkins+Will have clarified expectations, staffing, roles, and responsibilities so that future execution and project management adheres to the scope. NVCAP Schedule and Expectations and Working Group Comments This plan is guided by Council endorsed goals and objectives that relate to housing and land use, mobility, community facilities and infrastructure, and other interests. The contract and scope of services similarly reflect a process that uses stakeholders, through a working group and other touchpoints with the community, to comment on draft concepts and ultimately a final plan. The progress on this project has largely followed the planning and engagement strategy identified in the scope of services. One component of this strategy was to ask interested community members to serve City of Palo Alto Page 6 in an advisory role to staff. The Council appointed fourteen Working Group members and two alternates, who have since been placed into the group following two resignations. The Municipal Code and the March 5, 2018 Council staff report5 outline the anticipated role of the Working Group, which is advisory to staff, the City’s boards and commissions, and City Council. Staff and consultants have benefited from their engagement in this process and have made changes to its outreach strategy as the group has influenced the consultant’s work. Five of the 14 Working Group members, however, have expressed concern about their role and the direction of the project generally, preferring instead to propose a path that diverges somewhat from the approach staff and consultants have advanced. In principle staff does not object to these concepts, though some ideas require Council direction as they would further impact the schedule and project costs. A summary of the comments expressed by some members of the Working Group6 and staff’s recommended approach or response are provided in Attachment C for Council’s consideration. Funding Opportunities The timeline imposed by Caltrans, the grant funding agency, has necessitated an aggressive schedule to prepare a coordinated area plan. Staff is working with Caltrans to request a time extension. If granted, the City will have a one-time extension of up to two-years. Within this revised timeframe, the City can and must complete public outreach, environmental review, writing and adoption of the plan—including design and development standards, economic feasibility, and implementation measures. New analysis related to Matadero Creek and learning that 340 Portage (including the associated office building at 3201-3205 Ash Street) is an historic resource are unanticipated tasks that will likely be sufficient justification to support a one-time only extension. The Sobrato Organization has previously contributed funds toward the NVCAP effort by providing an approximately 11.47% in matching funds required by the funding agencies to secure the grant and $138,000 for the environmental review process. The funding agreement was approved by the City Council at the November 6, 2017 public hearing authorizing the project initiation. The Sobrato Organization owns 340 Portage (the former cannery that now houses Fry’s Electronics) and a number of other properties in the project area. Staff has been in recent conversations with representatives of this landowner about unanticipated costs related to the Fry’s building historic analysis and other environmental-related costs. Other large landowners within the project boundary may be willing to contribute money toward the costs of preparing a coordinated plan for this area. Any funds received would not convey any entitlement, guarantee future development, nor grant these owners more input into plan outcomes. These properties represent parcels of land that are more likely to redevelop or can support more development opportunity. While no specific benefit would be conveyed to these owners for their financial contributions, they (and others in the area) may anticipate greater development opportunity in the future. 5 March 5, 2018 Council Report: https://www.cityofpaloalto.org/civicax/filebank/documents/63646 6 Other Working Group members may agree with the comments expressed by a minority of the group, but because of Brown Act rules, have not signed a letter presented to the Working Group. Staff is not aware of other members that have similar concerns. City of Palo Alto Page 7 Notwithstanding staff’s perspective, some in the community and individual Councilmembers may not view this as appropriate and may prefer the City use General Fund revenue to support any additional funding needs to complete the project. Before engaging property owners further, staff seeks Council’s direction on how to proceed on this issue. 340 Portage: Historic Evaluation The Historic Resources Board (HRB) held a public hearing on the draft historic report prepared for the NVCAP area on July 25, 2019.7 The purpose of the hearing was to receive HRB and public feedback on the historic resources evaluation (HRE) prepared for 340 Portage and the associated office building at 3201-3205 Ash Street. Staff provided an overview of the NVCAP process and the historic consultant, Page and Turnbull, presented their findings. The historic consultant’s report finds that 340 Portage and the Ash Street office are individually significant under the State’s Criterion 1 (events) and therefore eligible for listing in the California Register of Historical Resources (California Register). Several correspondences were submitted by members of the public and five members of the public spoke at the hearing, including Gloria Hom, the granddaughter of the original builder of the cannery, Thomas Foon Chew. The comments shared at the meeting and correspondences included a range of opinions. Some members of the public recommended that the historically buildings be preserved, and the historic importance be protected. Others recommended that building more housing be prioritized over preservation of the former cannery building. The HRB concurred that the building is historically significant and eligible for listing in the California Register of Historical Resources as well as the National Register of Historic Places. Because of the historic significance, the HRB supports that the buildings be preserved in some way and incorporated into the redevelopment of the North Ventura area. Some members of the HRB also recommended that the City Council amend the NVCAP goals to explicitly include preservation of historic resources. Staff will bring this topic to a future Working Group meeting for their consideration and recommendations and to a subsequent City Council meeting. 340 Portage: Redevelopment Potential The subject property is the largest individual parcel in the study area containing approximately 12 of the project boundary’s 60 acres. The City’s Housing Element identifies a realistic yield of 221 housing units on this property based on existing zoning requirements. The City’s Comprehensive Plan and the project objectives for the NVCAP anticipates a mixed-use neighborhood with interconnectivity, mobility, enhanced infrastructure, increased open space, and higher density housing. The subject parcel is key and in many ways was the impetus for engaging in this planning effort. However, staff learned recently that the owner has little interest in demolishing (whole or in part) the existing ~240,000 square foot commercial building. While this perspective is well-aligned with community interests supporting the preservation of the City’s cultural history, it also presents some challenges implementing expressed housing policies and other neighborhood improvements, including enhanced mobility. Future housing at this site may not meet the density, mix of bedrooms, or affordability expectations shared by some in the community or at least not at the height limits that are 7 Staff report link: https://bit.ly/336wpL9 City of Palo Alto Page 8 expressed in the City’s planning documents or supported by many in the community. The anticipated expiration of the Fry’s lease at the end of the year may also influence the owner’s interests to re- establish a new retail use in compliance with current zoning regulations and further forestall any redevelopment of the site in the near term. The City does not have any restrictions regarding the filing of any applications within the project boundary while preparing the NVCAP. Staff anticipates developing plan scenarios that account for all reasonable redevelopment strategies, including preservation of the existing building. This information is provided so the Council is aware of these opportunities and constraints and can make informed decisions about the subject spending requests needed to support this project. These issues and how best to achieve project related goals and balance varied interests will be discussed by the Working Group, the public, Council-appointed boards and commissions, and ultimately, the City Council. Policy Implications Council direction on the staff recommendation will significantly impact the NVCAP in terms of costs, schedule, and community engagement. The City is committed to completing the NVCAP process within a timeline prescribed by the funding agencies in order to be reimbursed for invoices paid to the consultant. This deadline is December 1, 2020 and staff anticipates the granting of an extension through at least fall 2021. Per Caltrans, jurisdictions may be given a one-time extension of up to two years or December 1, 2022. To date, the City’s financial contribution to this effort has been staff resources, historic evaluation completed by consultant Page and Turnbull, and some incidental costs supporting the Working Group. The recommendations and Council directed options will require the City to contribute General Fund resources toward this effort. In addition to increased costs, the schedule for this project is expected to lengthen. The longer schedule in and of itself increases costs, but also makes it more difficult to sustain community interest, retain Working Group members, and it will delay staff work from other Council directed policy projects. Moreover, while there may have been some latitude in meeting the project schedule with the original two-year timeline, with the extension – if granted—this effort must be completed on time or the City may be required to repay any reimbursements made by funding agencies. Direction on project expectations and responses to Working Group comments will help provide clear direction and is anticipated to help focus future discussions. The Working Group is a valuable component of the public engagement strategy and their work must be meaningful to sustain interest and, their role as either advisors supporting staff or as community members directing the planning effort requires clarification. Resource Impact The recommendation in this report seeks direction to return to Council with a contract to conduct a feasibility and costing analysis to integrate Matadero Creek into an open space area within the NVCAP project boundary. Funding was allocated in the department’s Adopted Fiscal Year 2020 budget to cover the cost of this work. Staff will also return to Council shortly with an amendment to the Perkins + Will contract. Staff anticipates requesting a budget amendment of approximately $367,112 to cover the City of Palo Alto Page 9 costs of the additional work. This amount could adjust if there is a change in direction or expanded work needed to respond to some Working Group member’s comments. The City is also already directly funding work being completed by Page and Turnbull, a historic evaluation consultant already hired by the City. The cost, identified below, includes the technical analysis and presentations at public hearings. Table 1: Additional Approximate Project Costs $769,068 Original Budget for Perkins+Will $367,112 Perkins+Will – Analyses, Project Management, Meetings* (Not funded) $93, 237 WRA Creek Restoration Analysis* (Funded) $19,000 Page & Turnbull Historic Study (In process and funded) $479,349 Estimated Total of Additional Costs $1,248,417 Total Project Cost (Original with Proposed Addition) *Including 10% contingency for additional services Timeline If authorized, staff will return to City Council with a contract for WRA and an amended contract with Perkins+Will for Council approval on consent shortly; staff will discuss potential funding from interested property owners; staff will continue to pursue the grant deadline extension from Caltrans and the Metropolitan Transportation Agency (MTC). Lastly, pending Council direction, staff will update the Working Group format and/or structure as needed. Environmental Analysis The recommendations in this report do not qualify as a project in accordance with section 15378 of the California Environmental Quality Act (CEQA) Guidelines. Future action to approve contracts with the firms identified in this report is anticipated to be exempt from CEQA in accordance with CEQA Guidelines section 15306 (Class 6) which exempts information collection, research and resource evaluation from environmental review. Attachments: Attachment A: WRA Scope of Work Matadero Creek Concepts (PDF) Attachment B: Draft Perkins+Will NVCAP Scope (PDF) Attachment C: Staff Response to Proposal for NVCAP Working Group Process (PDF) Attachment D: Approved Perkins+Will NVCAP Contract (PDF) 2169-G East Francisco Blvd, San Rafael, CA 94901 (415) 454-8868 info@wra-ca.com www.wra-ca.com MATADERO CREEK IMPROVEMENT CONCEPTS SCOPE OF WORK AND ESTIMATED COST Prepared for: Elena Lee, Senior Planner City of Palo Alto Planning & Community Environment 250 Hamilton Avenue – Fifth Floor Palo Alto, CA 94301 (650) 329-2442 Elena.Lee@cityofpaloalto.org May 24, 2019 WRA Project No. 29113 PURPOSE This Scope of Work describes the preparation of conceptual creek improvement designs for Matadero Creek within the North Ventura Coordinated Area Plan boundaries. It is our understanding that WRA will prepare three conceptual improvement designs that range from full naturalization to no impact. The design concepts will consider all constraints and opportunities communicated to us by Perkins + Will, along with the Santa Clara Valley Water District (SCVWD) responses to questions dated March 27, 2019. WORK PRODUCTS • Three (3) Conceptual Creek Improvement Plans • Budgetary Cost Comparison SCOPE OF WORK WRA will perform the services outlined below. Task 1: Site Assessment The WRA design lead will perform a site assessment to gain an understanding of the existing creek condition and gain perspective on the scale of the project. The assessment will include a desktop review of existing aerial photography, historical aerial photography, soils mapping, vapor intrusion area information, and preliminary Area Plan documentation. We will also conduct one site visit to photograph the existing conditions and take rough measurements of the channel. This task also includes coordination with the City and BKF team to integrate appropriate elements of the North Ventura Coordinated Area Plan (Plan) into the improvement concepts. Scope of Work and Estimated Cost Matadero Creek Improvement Concepts — Project#29113 — May 24, 2019 2 Task 2: Prepare Conceptual Creek Improvement Scenarios Under this task, WRA will prepare three conceptual design concepts showing improvement scenarios for the approximately 800 linear feet of Matadero Creek within the Plan area for Perkins + Will to include in the Plan. The concepts will range from maximum appropriate naturalization of the channel to no interference with the existing channel. Comments from the SCVWD provided in March 2019 will be addressed. WRA will review other elements of the plan, including open space, recreation, landscaping, public access and Santa Clara Valley Water District maintenance needs, and integrate those elements into the design concept as appropriate. Each concept will include a plan view of the creek in the Plan area, along with a typical section showing the proposed improvements. The graphics will be provided to Perkins + Will in AutoCAD or Adobe software format for inclusion into Plan documents. WRA will revise the concepts one time under this task based on input from Perkins + Will, SCVWD, the City, other agencies and information gathered during public meetings. If more than one round of revisions is required, WRA may request additional fees. A range of anticipated costs for implementation and maintenance of each scenario will be prepared by WRA and provided with the final design concepts. Task 3: Hydraulic Modeling WRA will run a preliminary surface water hydrologic and hydraulic model to inform the design of the scenarios described above. The models will be preliminary in nature and will be used to show that each of the proposed designs will not raise the 100-year water surface elevation or result in aggradation, degradation or other instability of the proposed condition. Each of the proposed designs will be represented by a typical cross section, horizontal alignment, and vertical profile. A memo describing the parameters, methodology, assumptions and limitations of the model will be provided to the City and Perkins + Will along with the final design concepts. Task 4: Meetings This task covers preparation and participation in meetings required to complete the project. Included are the following meetings. The number of meetings is included in parentheses: • In-person project kick-off meeting with City of Palo Alto and Perkins + Will (1) • Working Group meeting (3) • Decision maker meeting (1) • City Council Meetings (2) • Meeting with SCVWD (1), • Interagency Review Meeting – Corps, RWQCB, CDFW, NMFS, USFWS (1) • Meeting with Architectural Board or other agencies (3) • Video conference coordination meetings with City of Palo Alto, Perkins + Will or SCVWD (3) All meeting costs related to materials preparation, travel and debriefing are included in the estimated fees for this task. Task 5: Project Management WRA will perform project management and coordination efforts associated with the scope of work outlined herein. Under this task, WRA will manage the work described in the scope and coordinate with City of Palo Alto, project team members, resource agencies and the SCVWD through the completion of Scope of Work and Estimated Cost Matadero Creek Improvement Concepts — Project#29113 — May 24, 2019 3 the work. WRA will also prepare and submit monthly invoices and coordinate project status and budget. SCHEDULE This work can begin upon receipt of authorization from the Client of this Scope of Work. STAFFING Brian Bartell will be the Project Director for the work and George Salvaggio will be the Project Manager. They will be assisted by Lead Engineer Ben Snyder. Mr. Bartell has over 20 years of stream restoration experience, and Mr. Salvaggio has over 20 years of ecological restoration and parks and open space planning experience. Mr. Snyder has extensive hydraulic modeling experience, including work on Lower Matadero Creek and other South Bay flood control channels under the jurisdiction of the SCVWD. The team will be supported by junior design staff as needed. ASSUMPTIONS The following assumptions have been made in the preparation of this Scope of Work: • Estimated costs herein are on a time and materials basis, and completion of the project will not exceed the given budget. Should contingencies arise, WRA will inform the Client immediately, • WRA will be granted access to the site, • WRA will use publicly available topography and site information to prepare plans and models. If available information is found to be insufficient, WRA will perform site survey at time and materials basis at WRA’s preferred rates upon written permission from Client. • Perkins + Will and the City will provide any relevant guiding documents to WRA at the start of the project, • One round of revisions to the design concepts is included in this scope of work. Any additional revisions will be completed on a time and materials basis at WRA’s preferred rate upon written authorization from the client, • Hydraulic modeling will be preliminary in nature, and based on parameters agreed upon with, and hydrology provided by, the SCVWD prior to the start of modeling, • SCVWD will provide a rating curve for the culvert under Alma Street, • Meetings requested by the client outside of the scope of work described above will be attended on a time and materials basis at WRA’s preferred rate, • Final production of design concepts will be completed by Perkins + Will in their layout and formatting, ESTIMATED COST The estimated cost for the services described in this Scope of Work is provided below. This cost is based on the assumptions above, and is subject to change based on the specific conditions encountered during the conduct of this work. Costs may be reallocated between tasks, but the total cost will not be exceeded without authorization. Scope of Work and Estimated Cost Matadero Creek Improvement Concepts — Project#29113 — May 24, 2019 4 Task Cost 1. Site Assessment $5,900 2. Prepare Conceptual Creek Improvement Scenarios $27,798 3. Hydraulic Modeling $12,541 4. Meetings $30,166 5. Project Management $8,352 Total $84,757 (Approval / Signature Page Follows) Scope of Work and Estimated Cost Matadero Creek Improvement Concepts — Project#29113 — May 24, 2019 5 APPROVAL TO PROCEED To authorize WRA’s services and to signify their mutual intent to be legally bound by this Scope of Work, authorized representatives of the parties hereby execute this agreement, effective upon the date when both parties have signed below. For Client ____________________________________________________________ _________________ Signature Date ____________________________________________________________ Printed Name and Title ____________________________________________________________ Email Address Billing Information: __________________________________________________________________________________ Name and Email (if different from above) For WRA ____________________________________________________________ _________________ Signature Date ____________________________________________________________ Printed Name and Title Task Start Date Duration End Date Notice to Proceed/Kickoff Meeting 7/1/2019 4 7/5/2019 Desktop Assessment 7/1/2019 11 7/12/2019 Site Assessment 7/15/2019 4 7/19/2019 Meet with SCVWD 7/15/2019 4 7/19/2019 Working Group Meeting #1 7/22/2019 4 7/26/2019 Draft Concepts 7/22/2019 18 8/9/2019 Hydraulic Modeling 7/29/2019 11 8/9/2019 Concept Submittal 8/12/2019 4 8/16/2019 Concept Review 8/19/2019 11 8/30/2019 Working Group Meeting #2 9/2/2019 4 9/6/2019 Address Comments 9/2/2019 25 9/27/2019 Interagency Review Meeting 9/12/2019 1 9/13/2019 Working Group Meeting/Decision Maker Meeting 9/16/2019 4 9/20/2019 Concept Resubmittal 9/30/2019 4 10/4/2019 Meetings (City Council, Video Conferences)7/1/2019 95 10/4/2019 Project Management 7/1/2019 95 10/4/2019 Ju n - 1 9 Ju l - 1 9 Au g - 1 9 Se p - 1 9 Oc t - 1 9 No v - 1 9 Notice to Proceed/Kickoff Meeting Desktop Assessment Site Assessment Meet with SCVWD Working Group Meeting #1 Draft Concepts Hydraulic Modeling Concept Submittal Concept Review Working Group Meeting #2 Address Comments Interagency Review Meeting Working Group Meeting/Decision… Concept Resubmittal Meetings (City Council, Video… Project Management Matadero Creek Improvement Concept Preliminary Schedule Project Name:Perkins + Will Palo Alto Creek Improvement Concepts Project Number:29113 Date:4/2/2019 Rate Schedule:Preferred Personnel Hours by Task* Task #Task Description Br i a n B a r t e l l Se n i o r A s s o c i a t e L a n d s c a p e Ar c h i t e c t Ge o r g e S a l v a g g i o Pr i n c i p a l Be n S n y d e r Se n i o r A s s o c i a t e E n g i n e e r An d r e w S m i t h As s o c i a t e E n g i n e e r Ru s s e l l P r a n g e As s o c i a t e L a n d s c a p e A r c h i t e c t Ju n i c e U y Se n i o r L a n d s c a p e D e s i g n e r Ch r i s Z u m w a l t GIS P r o f e s s i o n a l I I WRA Cost by Task WRA Direct Expenses Sub-Contractor Total Cost Task Total 1 Desktop assessment/background 1,824$ -$ 1,824$ Site visit 3,890$ 186$ 4,076$ -$ -$ -$ 5,900$ 2 Draft concepts 9,706$ -$ 9,706$ comment coordination 2,288$ -$ 2,288$ revise concepts 7,294$ -$ 7,294$ graphics 6,464$ -$ 6,464$ cost estimate 2,046$ -$ 2,046$ 27,798$ 3 Hydrology/existing model assessment 1,263$ -$ 1,263$ hydraulic model setup 3,668$ -$ 3,668$ hydraulic model of 4 concepts 7,610$ -$ 7,610$ 12,541$ 4 Kickoff meeting (1)1,996$ 45$ 2,041$ Meetings with working group (3)6,943$ 243$ 7,186$ Meeting with decision maker (1)3,060$ 83$ 3,143$ City Council Meetings (2)4,469$ 83$ 4,552$ Meeting with SCVWD (1)1,686$ 83$ 1,769$ Interagency Review Meeting (1)5,264$ 45$ 5,309$ Other Meetings (3)4,350$ 236$ 4,586$ Video conference coordination meetings (3)1,580$ -$ 1,580$ -$ 30,166$ 5 Project Management 8,352$ -$ 8,352$ 8,352$ TOTAL LABOR HOURS TOTAL COST $83,753 $1,004 $0 $84,757 12 6 12 6 1 1 2 2 18 8 3.5 4 32 6 8 2 6 1 4 8 1 1 4 16 4 8 3 4 4 1 4 10 6 10 30 3 3 2 2 4 4 2 4 40 2 4 18 22 4 8 4 6 24 26 168.00$ 133.00$ 164.00$ 236.00$ 221.00$ 180.00$ 2 2 4,200$ 6421 15,104$ 20,111$ 91 9,180$ 20,832$ 51 124 12,768$ 1,558$ 96 9.5 200.00$ 2 10 10 EXHIBIT “A” SCOPE OF SERVICES (DRAFT) CONSULTANT shall perform the tasks and services set forth in this Scope of Services. Task 1 Project Initiation and Management Task 1.1 Project Management and Oversight CONSULTANT will provide project management and oversight for all tasks detailed in this scope of services for the duration of the Agreement. CONSULTANT’S project management activities will consist of, but are not limited to: Refine the work program in consultation with CITY to accomplish the principal activities under this Scope of Services, and refine a timeline for completing the work with milestones and deliverables consistent with the schedule in Exhibit B “Schedule of Performance”. Regularly update the work plan and timeline to reflect actual progress Review the proposed community engagement tools and engagement strategy Outline project goals and objectives Identify engagement activities Identify target demographic and interest groups and identify methods of communication and engagement Confirm coordination, facilitation and communication responsibilities Outline schedule, format, and resources for all engagement activities Provide overall management of CONSULTANT team, including sub consultants Provide oversight of budget, scope, schedule, deliverables and QA/QC Prepare and submit a monthly invoice by task and percentage of completion that details work performed by the CONSULTANT team and identifies expense charges. Invoiced tasks related to CEQA review shall include a notation on the invoice identifying them as “CEQA review”. Weekly calls between CONSULTANT project manager and CITY from October 1, 2019 through June 2020. 1.1 Interim work products Refined work program Refined project schedule Monthly invoices Community engagement strategy Style Guide and Project Logo An important first step in creating project materials will include the preparation of an identifiable brand to apply to all print and digital publications in the community engagement effort. This exercise will ensure that all materials adhere to a graphic style that community members can easily associate with the project. CONSULTANT shall create a project logo and style guide, with fonts, color schemes and other design elements. 1.1 A Deliverable Project logo and style guide, with fonts, color schemes and other design elements Task 1.2 Progress Meetings CONSULTANT will facilitate regular progress meetings (these may be conference calls or in- person, depending on agenda items) with City Staff to coordinate and report on contract matters, project progress, upcoming events and deliverables. CONSULTANT and City staff will jointly organize a kickoff meeting at the outset of the Agreement. This kickoff meeting will be for 4 hours and during this meeting the CONSULTANT team will meet with the City’s project manager to establish appropriate project protocols and tour the site prior to immersing itself in the background conditions information. At the kick-off meeting CONSULTANT shall create consensus around key design and planning principles that set the foundation for the entire project and establish goals and performance targets for the project. CONSULTANT assumes weekly progress phone calls or video conferences between August 2018 and June 2020 while the design alternatives are being developed and through completion of the draft Administrative Plan; calls paused for the summer of 2019 and will resume October 1, 2019. Upon delivery of the Administrative Draft to City staff at the end of June 2020, progress meetings/check -in will commence on an as-needed basis to prepare for Working Group/ Decision Maker meetings as defined in Task 2.4 below and Final Plan Adoption. Please note that any further extension of schedule to develop the Administrative Draft Coordination Area Plan beyond June 2020 will require a re-evaluation of the effort and associated budget, working in collaboration with the City, for an assessment of Additional Services #2. 1.2 Interim work products Meeting agendas Meeting action items Task 2 Community Engagement The City will convene all outreach events, including location, noticing, and publicizing and will prepare notices and staff reports for all public hearings and study sessions. The CONSULTANT team will be responsible for facilitating the relevant meetings, preparation of outreach/meeting materials, and associated tasks as listed below. Task 2.1 Working Group Members of the CONSULTANT team will facilitate up to nine Working Group meetings that will be open and noticed to the public. The Working Group is composed of City Council- selected community members including stakeholders, property owners, residents and business representatives. CONSULTANT will plan for one of the Working Group meetings to be combined with City Council Meeting #1 from Task 2.4, as a joint session to select project goals. The Working Group meetings will include goal setting, understanding of background conditions, feedback on proposed alternatives, and participation in evaluation of alternative concept plans. A self-guided walking tour will be developed for the Working Group. The purpose of the site walking tour will be to experience the scale of the Plan Area, provide context and explore physical constraints and opportunities. The Working Group will also serve as a conduit to the wider community and review. The potential topics to be covered at each of these meeting is listed below and referenced in the schedule. Further refinement to the topics for each meeting will be made in consultation with the City during project development. The CONSULTANT shall attend a total of eight (8) Working Group meetings. Working Group Meeting 5 and beyond shall be 3 hours in length. CONSULTANT shall arrange for necessary subconsultants to attend Working Group meetings. Subconsultant attendance and participation in Working Group meetings is defined in the Schedule of Rate (Exhibit C-1) and elaborated below. Any participation in Working Group meetings beyond state participation will incur additional costs subject to written approval from the CITY. Working Group #1 – context setting of the Plan Area Working Group # 2 – existing conditions Working Group # 3 –Neighborhood Metrics and Precedent Analysis Working Group # 4 – joint meeting with City Council on project status Working Group # 5 – Plan Alternatives Development I(ARUP and Strategic Economics subconsultants shall attend and participate) Working Group # 6 – Reset Meeting (City Staff only). Working Group #7 – Report Out on Creek and HRB (City Staff only). Working Group #8a - presentation of three alternatives and analyses - part I (ARUP and Strategic Economics subconsultants shall attend and participate) Working Group #8b - presentation of three alternatives and analyses - part II (ARUP and Strategic Economics subconsultants shall attend and participate) Working Group # 9 – report on feedback and insights from Community Workshop #2 and progress update (City Staff only) Working Group # 10– e EIR Scoping and Final/Farewell Meeting Working Group –additional meeting, subject to City approval as an Additional Service (Note: CONSULTANT team in consultation with the City will determine the most appropriate time to conduct this meeting. The billing rates in Exhibit C-1 will apply if City authorizes this meeting as an Additional Service to be billed on a time and materials basis.) 2.1 Interim work products Meeting agendas Meeting action items Task 2.2 Stakeholder Meetings CONSULTANT team will facilitate and solicit feedback from key stakeholder groups at up to fifteen meetings to be arranged by City staff. Stakeholders may include, but are not limited to, those from the following sectors or interest groups: Businesses in the plan area - including Fry’s, auto repair shops, professional offices, tech companies and start-ups Property owners Residents from adjacent neighborhoods and resident groups (Ventura Neighborhood Association, PAN) Representatives from organizations, including Palo Alto Forward, Asian Americans for Community Involvement (AACI), Silicon Valley Climate Action Alliance, Palo Alto Housing (http://pah.community/about-us/misson-history/) and other groups Advocate groups (e.g., youth, affordable housing, education), such as Palo Alto Housing Corporation (non-profit, manages city’s AH program), Youth Community Service, Community Working Group (https://communityworkinggroup.org/), Rotary/Lions/Kiwanis (https://www.cityofpaloalto.org/partners/service_organizations/default.asp), SV Bicycle Coalition Working with the City staff, CONSULTANT team will identify 3-5 key questions/clarifications request of the Stakeholder group to inform the development of land use alternatives. These questions will be sent to the stakeholders prior to the meeting for meaningful input during the sessions. Stakeholder meetings, when feasible, shall be grouped to solicit consolidated feedback. Stakeholders meetings outside of this on-site format will be conducted via phone. Each stakeholder meeting shall be for 30 to 40 minutes. 2.2 Interim work products Meeting agendas including 3-5 Stakeholder questions Meeting action items Task 2.3.A Community Workshops Members of the CONSULTANT team will facilitate two community workshops. The first community workshop will be a visioning exercise to discuss potential land use and transportation strategies. The second community workshop will be a presentation for feedback on the three plan alternatives. Task 2.3.B Pop-Up Workshops (support City) CONSULTANT will prepare public outreach materials based on on-going land use alternatives development to solicit broad community involvement. City staff will facilitate up to two sets of pop- up workshops or intercept meetings at two to three key locations in and around the planning area. These informal community meetings will be designed to “meet the community where they are” and facilitate discussion centered around the well-attended location and the overall planning area. The following are potential venues, locations or events pop-up workshops could be held: Caltrain station California Ave Farmers’ Market - Sundays 9am-1pm College Terrace Branch Library (standalone display) CONSULTANT team will not attend the Pop-up Workshops. 2.3 Interim work products Public outreach materials Task 2.4 Decision-Maker Meetings Members of the CONSULTANT team will attend up to five (5) public meetings or study session/hearings with elected officials and/or boards/commissions such as City Council, Architectural Review Board and Planning & Transportation Commission. The agendas and meeting minutes for these sessions will be prepared by City Staff. These meetings are anticipated to address the following topics (topics a r e subject to change, as determined by City): Decision Maker Meeting #1March 2019 – report back on existing conditions analysis and summary of Community Visioning Workshop; joint session with Working Group to identify project goals and vision. Decision Maker Meeting #2 December 2019 - with Planning and Transportation Commission to present alternatives as a study session. Decision Maker Meeting #3 March 2020 with Planning and Transportation Commission to report on community workshop and to seek guidance on recommended preferred alternative approach. Decision Maker Meeting # 4 April 2020 –Receive approval from City Council on preferred Plan. Decision Maker Meeting #5 – Architectural Review Board (TBD)– Note: If additional meetings are required, CONSULTANT assumes attendance by at least two CONSULTANT team members, and preparation time on a time and material basis. One team member may be sufficient; the CONSULTANT shall confer with CITY staff in advance of reducing the number of team members attending meetings. The billing rates submitted in the fee proposal will apply for the Time and Materials authorization as an additional scope item. Task 2.5 Project Website To augment the community engagement efforts conducted via public meetings, CONSULTANT will prepare digital platforms to provide convenient access to the engagement effort for the community to share their voice and participate in the process. CONSULTANT, through its subconsultant Plan to Place, will host and prepare a wireframe for the project website to foster input from the CONSULTANT’s project team and City as the foundation for a tailored project website. The website will have a distinct web address and will be optimized to ensure compatibility across different devices and translatable into different languages. The website will serve as the primary online portal for community engagement and will include: Important project updates Upcoming events, including a map and a timeline Updated summaries of workshop, forums, and other meetings Opportunities to submit ideas and subscribe to project mailing lists Access to educational resources and materials, both existing and developed for the purpose of the outreach effort 2.5 Interim work product Website with regular updates at key intervals Task 2.6 Mailing List In order to ensure interested individuals and parties stay looped in to project developments, a mailing list will be maintained, accessible via the project website and sign-up sheets and information cards at public events. E-mail campaigns will be pushed through the mailing list to notify subscribers of upcoming engagement opportunities and events. City staff to manage mailing list. CONSULTANT to coordinate with staff on preparation of distribution of email notifications and other communications. 2.6 Interim work product Mailing List Task 2.8 Surveys - Mobile and Online CONSULTANT will prepare a digital platform to conduct two (2) community surveys through the project website. CONSULTANT, through its subconsultant Plan to Place, will also work with Granicus the City to integrate their Communications Cloud software as a multi-channel platform to elevate, streamline and track communications efforts. The Communications Cloud also has a metrics/reporting capability to measure results and assess the input received. The tailored survey campaign will aim to reach underrepresented members of the community. Findings from these surveys will be assessed and merged with data sets from other survey resources. The surveys may also be translated and will be consistent with those distributed through the website and email to ensure a standardized set of responses. The CONSULTANT team will provide support to City staff to administer surveys through the City’s existing Open City Hall platform or another alternative as appropriate. 2.8 Interim work product Preparation of 2 surveys and summary of results Task 3 Background Conditions Task 3.1 Data Collection and Mapping The CONSULTANT team will prepare geographical information using GIS-based maps for the study area boundary and wider context, including pedestrian walkways, bikeways, transit, vehicular, parking and other transportation networks and features. The CONSULTANT team will coordinate the mapping areas and provide the final product to the City in a digital form that allows the layers of information to be easily accessed as needed. A deep understanding and consideration of the complex layers that make up our current and future urban environments is critical to the creation of great and high performance networks and places. Using an innovative approach to planning and design, the CONSULTANT team will use this information to create a smart 3D model of the site and surrounding context. This model will include site opportunities and constraints, assets and challenges. This 3D model will be critical in the analysis and representation of existing and planned conditions and will be utilized throughout the entire project for concept and alternatives development and visualizations. The GIS based map as well as the 3D model will allow the CONSULTANT to develop appropriate 2D and 3D graphic material that illustrates the existing site as well as the future functioning of the site within the physical context of the city as a whole. CONSULTANT through its transportation subconsultant ARUP will request and assemble available transportation and parking data from the City of Palo Alto and its CONSULTANT’S to establish a baseline. CONSULTANT will collect turning movement counts for up to ten intersections in and just outside the project area and selected segment volumes. These intersections will be selected based on VTA TIA requirements and will supplement intersection counts available from the VTA Congestion Management Program (CMP) monitoring system. This will include counts at up to two unsignalized intersections to facilitate signal warrant analysis. Intersection pedestrian and bicycle counts will also be conducted at all locations. In addition, CONSULTANT will conduct parking inventory and occupancy counts, both on streets and within off-street facilities during peak times. Task 3.2 Policy Context CONSULTANT will review and analyze existing adopted plans and policies as a foundation for developing the Coordinated Area Plan, including but not limited to: City of Palo Alto Comprehensive Plan, goals, policies and programs City Council approved draft project goals and objectives California Avenue Concept Study draft proposals City of Palo Alto Masterplan for parks, trails, natural open space and recreation Green stormwater infrastructure plan Sustainability and climate action plan Bike and pedestrian transportation plan Applicable zoning and development standards Residential off-street parking study Task 3.3 Background Conditions Analysis CONSULTANT will prepare geographical information using GIS-based maps for the Coordinated Area Planning process, including the following layers of information: Existing land use and development patterns Development capacity Market rate and affordable housing Transit and transportation, including biking and walking Existing cultural and natural resources Public open space and community amenities Infrastructure systems and capacity Task 3.4 Base Maps CONSULTANT will prepare a Base Map for use in the Coordinated Area Plan. BKF will utilize information from the City to identify the sewer, storm, water and electric/gas within the Coordinated Area Plan on the base map. CONSULTANT’s work on this task is based on the following assumptions: City will provide GIS base with topography and existing property data. City will provide the CONSULTANT team with record drawings, utility block maps and studies related to the areas infrastructure (water, wastewater, storm water/drainage, electrical, gas, communication, etc.) City will provide the CONSULTANT team with existing utility capacity analysis reports and studies. 3.4 Interim work product Base Map Task 3.5 Housing Including Affordable Housing CONSULTANT, through its subconsultant Strategic Economics, will review the Housing Element and Comprehensive Plan to identify issues and opportunities related to housing and affordable housing. Some of the potential topics to be considered in this task could include the supply of existing market-rate and below-market-rate housing in the Plan Area, the amount of housing capacity based on zoning, estimates of the need for market-rate and affordable housing in Palo Alto based on RHNA and barriers to housing production. 3.5 Interim work product Memo summarizing issues and opportunities for housing/affordable housing in the Plan Area Task 3.6 Market Snapshot Report CONSULTANT, through its subconsultant Strategic Economics, will analyze and describe current market conditions for residential, R&D/office and commercial retail uses. The analysis will focus on determining the development product types, sales prices, and/or rents that would be achievable in the North Ventura Area. Subtasks will include the following: Residential Market Conditions – Strategic Economics will interview residential developers and brokers, summarize current rents and sales price for higher-density residential products (rental and ownership product types) in the Plan Area and identify market- supportable product types and opportunity sites for housing; and determine the likely sales prices/rents of new housing by type. R&D/ Office – Based on employment projections, existing market reports, interviews with local brokers and/or developers, and review of office and R&D development trends, Strategic Economics will examine types of R&D and office development likely to be supportable in the Plan Area. Retail and Restaurants - Strategic Economics will assess the demand for “soft goods” retail stores and restaurants in the Plan Area based on: city sales tax data; data on rent, vacancy, and new construction trends for retail districts in Palo Alto and neighboring cities from brokers and Costar; and interviews with local retail and mixed-use developers. The analysis will provide an understanding of the market opportunities and barriers to retail and mixed-use development in the Plan Area. The findings of the analysis will be used to develop an understanding of market-driven opportunities and constraints in the area, which will then inform development of the plan alternatives. The findings of the market snapshot will also provide key input needed for the economic feasibility analysis, implementation, and fiscal impact analysis tasks described in Tasks 4 and 5. 3.6 Interim work products Draft Market Snapshot Memo Final Market Snapshot Memo Task 3.7 Existing Utilities Analysis CONSULTANT, through its subconsultant BKF, will utilize the existing conditions base map prepared by the CONSULTANT project team to review the existing storm, sewer and water within the Coordinated Area Plan. BKF will review the existing utility sizes, condition and identify existing capacity, identifiable capacity deficiencies, identifiable utility system upgrades required, and describe the existing utility infrastructure. BKF will provide a narrative of the existing utilities, any identified deficiencies, and any identified opportunities for system upgrades or efficiencies. Based on the demand BKF can assist with recommendations on how to improve utility systems or identify future studies that may be needed to model, analyze, evaluate, and determine impacts to the systems. 3.7 Interim work product Existing utilities summary memorandum Task 3.8 Transportation and Parking CONSULTANT, through its subconsultant ARUP, will review and summarize relevant transportation plans and policies. This will include documenting planned transportation infrastructure improvements that could affect accessibility to the site. CONSULTANT will utilize available data, traffic counts, and parking counts to characterize existing transportation conditions. Qualitative street characterizations of the project area based on observations will be provided. CONSULTANT will also provide a description of current transportation issues such as deficiencies that impact safety, mobility and access in the project area. CONSULTANT will identify opportunities to improve transportation to and within the site, which could include additional transit service (Caltrain and El Camino Real corridor), safer roads and intersections and non-traditional approaches to improve mobility such as Mobility as a Service. ARUP will prepare a transportation section of the report, which will summarize policy context, existing conditions and identify issues and opportunities. This will point to potential transportation strategies that will be developed in later study phases. 3.8 Interim work product Transportation and parking summary memorandum Task 3.9 Environmental Assessment As part of the existing conditions analysis related to natural and man-made hazards and hazardous materials (including the regional plume and affected groundwater), CONSULTANT, through its subconsultant DJP&A, will prepare a Screening Level Phase I ESA for the area. Preparation of the Screening Level Phase I ESA includes the following: Acquiring database reports to help establish the presence and type of contamination incidents reported in the site vicinity. Reviewing on-line databases (GeoTracker and Envirostor) and available documents for up to ten facilities. Based on these reviews, a figure will be prepared that will present the reported and more significant ground water contamination plumes within the site boundaries. Reviewing aerial photos to help develop a history of the previous site uses and adjacent area. Summarizing the anticipated site hydrogeology based on readily available public information. Completing a brief site visit from public right-of-way to observe existing conditions and note readily observable indications of past or present activities that may have or could cause significant site contamination. 3.9 Interim work product Screening Level Phase I ESA Note: CONSULTANT shall identify on its invoices all work performed under this subtask 3.9 with the notation “CEQA review” (in addition to describing the substantive work performed), so that these work items will be invoiced towards the $138,000 CEQA funding available for the project. Task 3.10 Opportunities and Constraints CONSULTANT will compile all data from Tasks 3.1 through 3.9 into a consolidated background conditions memo, including a narrative on existing opportunities and constraints. 3.10 Deliverable Existing conditions memo with opportunities and constraints summary Task 3.11 Creek Analysis CONSULTANT will receive analysis and updates from WRA, a consultant under contract with the CITY. CONSULANT will incorporate the analysis of the Matadero Creek into the three plan alternatives. Task 3.12 Historic Analysis of 340 Portage CONSULANT will receive analysis from Page and Turnbull, a consultant under a separate and direct contract with the CITY, regarding the historic nature of 340 Portage Street. CONSULTANT will incorporate and include this analysis in the plan alternatives as necessary and into the final plan as necessary. Task 4 Analysis of Options and Draft Plan Components Task Task 4.1 Development of Alternatives Based on information gathered during Tasks 2 and 3, CONSULTANT will work closely with City staff, stakeholders and the community to develop three land use/urban design alternatives for the study area. Test fit alternatives will be studied for these selected sites, to understand development yields and market support among other factors. For the purposes of policy discussion, environmental assessment and downtown character, the alternatives will contrast different land use compositions and development densities. Each land use alternative will include a summary of the development potential, including a list of the analysis assumptions made. Draft land use alternatives will include information about: Land uses and densities Building massing and heights Street network and connectivity Public open space and community amenities Opportunities for multi-modal improvements and accessibility Parking supply and demand Two and three dimension massing graphic outputs from the 3D model and precedent images will be utilized to communicate the characteristics of the alternatives in an easy-to-understand format. 4.1 Deliverable Three (3) Draft land use/urban design alternatives with development summary table Task 4.2 Comparison of Alternatives The alternatives will be compared to each other with respect to the goals and framework established during Tasks 2 and 3 to help illustrate the differences between the alternative proposals. The comparison will include the relative merits of the development alternatives for additional housing opportunities, including the supply of affordable housing and an analysis of potential sources for additional employment opportunities and the workforce characteristics required for such employment. Other aspects to be compared will include density and land use, distribution and amount of open space, impacts on traffic/parking and vehicle trip generation, where there are differences between the two approaches. CONSULTANT through its subconsultant ARUP will advise on three proposed street network and parking options for the project area. This will include the following: proposing initial circulation options that allow developing baseline parking projections based on different programs; proposing a suite of transportation improvements that reduce parking requirements and trip generation; advising on a street hierarchy for the site, and developing parking access recommendations. Based on alternative land use programs and street configurations, ARUP will analyze parking impacts and traffic for three land use/transportation improvement options. Parking demand will be calculated using a spreadsheet model, taking into account proposed driving reduction measures, feeding back into site parking design. The projected demand for each alternative will be compared with Palo Alto’s current parking requirements and any available findings of its residential off-street parking study, and parking ratios appropriate for the site will be recommended. Traffic Analysis To estimate traffic impacts ARUP will take both a traditional intersection impact approach and conduct a Vehicles Miles Travelled (VMT) analysis. For the former we will utilize a Traffix modeling software to determine impacts on no more than ten (10) key intersections in and around the project area based on alternative land use programs and proposed alternative transportation infrastructure and services, and using the results to determine what if any traffic infrastructure upgrades would be required for each option. This evaluation is to be distinguished from the anticipated project-level Traffic Impact Analysis (TIA), which is described in Task 6.1. This analysis will nonetheless establish background and cumulative conditions, using assumptions from the Comprehensive Plan and VMT’s regional model, and evaluate the impact of each land use alternative on key intersection Level of Service (LOS). It will also serve as the basis for developing the project TIA. Vehicle Miles Travelled Analysis ARUP will perform a VMT analysis consistent with State guidelines to compare the regional impact of the two alternatives. This is consistent with the approach taken in the Comprehensive Plan. Municipal Fiscal Impact Study CONSULTANT, through its subconsultant Strategic Economics, will estimate the fiscal impact of development in the Plan Area. The analysis will estimate the fiscal impact of potential future development scenarios compared to the baseline existing conditions on the City of Palo Alto’s General Fund. The fiscal study will estimate the potential change in City operating revenues and expenditures resulting from projected growth in residential, office/R&D and retail land uses. Strategic Economics will analyze the property tax, sales tax, and other major sources of General Fund revenues generated by the development in the Draft Plan, compared to the existing land uses. After conducting interviews with key City departments including Police, Fire, Public Works, Parks and Recreation, Strategic Economics will calculate the increase in General Fund expenditures for providing services to new residents and employees under each scenario. Based on the results of the fiscal assessment, Strategic Economics will determine whether the estimated public revenues would offset increases in the cost of public services to serve new development. The fiscal impact study will be conducted for each of the 3 plan alternatives. NOTE: This analysis relates to task 4.2a and 4.2b. Infrastructure CONSULTANT, through its subconsultant BKF, will compare water and wastewater demand calculations for the three alternatives. BKF will also provide an infrastructure cost estimate based on the preferred concept plan/program, including: proposed utilities, hardscape, roadway improvements and storm water treatment. BKF will provide this pricing as a supplement to the project cost estimator. The estimated cost will represent the level of information known at that time, and will be used as an indicator of overall costs, for use in the project evaluation/cost estimate by the CONSULTANT project team. Any Incompatibilities with Existing Policies CONSULTANT will prepare a commentary on the extent to which any aspect of the three alternatives deviate from current City policies and ordinances. Where appropriate, CONSULTANT will comment on the restrictions imposed by existing policies and offer suggestions for any changes necessary to facilitate the proposals. Evaluation charrettes CONSULTANT will prepare the above referenced analyses in advance of, and for review and discussion, at a four-hour (4) ‘evaluation charrette’. The charrette will include City Staff and relevant members of the CONSULTANT design team to review the CONSULTANT team analyses, and prepare for presenting the three alternatives to the Working Group, decision-makers, and the public. CONSULTANT shall prepare a second four-hour (4) charette, following presentation of the three plan alternatives to the Working Group, decision-makers, and others. The purpose of this charette will be to understand the connection between feedback and the plan alternatives and to agree upon any needed adjustments as well as to evaluate the presentation, materials, and outreach. Members of the CONSULTANT design team will summarize this charrette for the benefit of the meeting with the Decision-Makers Meeting #3. 4.2 Deliverables Comparative summary memo of the alternatives (Urban Design, Traffic, Economics, Infrastructure) Charrette preparation, consultant coordination and meeting materials. Task 4.2a Evaluation of Proposed Policies CONSULTANT, through their subconsultant Strategic Economics, will assess the financial feasibility of imposing new requirements for new development in the Plan Area, which may include: Higher inclusionary requirements than the current Below-Market-Rate policy requirements for rental and ownership housing. New workforce housing requirements in addition to the current Below Market Rate (BMR) requirements. The definition of workforce household income targets will be developed in coordination with City Staff. Based on research of similar policies in other cities, and taking into account the existing conditions of the NVCAP area and the Palo Alto market context, Strategic Economics will also provide guidance on the viability of establishing policies to accomplish the following objectives: Prevent displacement of existing residents in the NVCAP area Encourage small office uses (for smaller businesses) through tools such as imposing a limit on office building sizes or other strategies Encourage unconventional housing type (co-ops missing middle, etc.) 4.2a Deliverable Memo Report that addresses all of Task 4.2a to be incorporated into the Plan. Task 4.2b Evaluation of Financial Feasibility and Economic Value of NVCAP CONSULTANT, through its subconsultant Strategic Economics, will (1) measure and compare the financial feasibility of three NVCAP development alternatives, and (2) will analyze the economic value of the NVCAP development alternatives to property owners (defined as the increase in residual land value created from new land use regulations / zoning / incentives). Strategic Economics will also assess the extent to which the value created by new development in the NVCAP development alternatives can help to pay for community infrastructure and amenities included in the alternatives (e.g., parks/open space, creek restoration, bicycle and pedestrian facilities, roadways, etc.). The findings of these analyses will allow decisionmakers to better understand which alternatives are more likely to be delivered by private developers, and to understand the extent to which each alternative can generate private funding to deliver desired infrastructure and amenities. Financial Feasibility As a first step, Strategic Economics will work with Perkins+Will to obtain three plan alternatives that provide sufficient detail to develop pro forma models that analyze the alternatives’ financial feasibility. Working closely with the City, CONSULTANT, through its subconsultant Strategic Economics will build a pro forma model that measures the economic feasibility of building prototypes that exemplify the range of land uses and development products envisioned in the plan alternatives. The land uses will likely include R&D/office, mixed-use, and residential. The building prototype inputs (height, unit sizes, parking, etc.) will be developed in close coordination with CONSULTANT. The market inputs will be based on the market analysis in Task 3.6 and vetted with developers active in Palo Alto and neighboring cities. The prototypes will detail factors such as the building formats, building heights, parking spaces and format, square feet of different land uses, number and types of housing units, square feet of demolished uses, and land area of new public and private streets, paseos, plazas, etc. The analysis will be structured to provide information about the economic incentives and disincentives to build the types of development products that are desired in the Plan Area, and the potential for private development to help fund infrastructure improvements in the Plan Area. Strategic Economics will also require order-of-magnitude cost estimates (developed by other Perkins+Will consultant team members) for the construction of significant new infrastructure and amenities in each alternative. Strategic Economics will conduct additional research to develop revenue and cost inputs for use in the pro forma analysis. In work related to Task 5.3, Strategic Economics analyzed the financial feasibility of specific housing prototypes; under Task 5.3, Strategic Economics will also conduct additional research to develop inputs to perform a pro forma financial feasibility analysis for R&D/Office and mixed-use development. Under Task 4.2b, Strategic Economics will complete additional research to update inputs to the previous residential pro forma analysis and will develop revenue and cost inputs applicable to the comprehensive and specific NVCAP development alternatives, including demolition of existing structures and construction of on-site infrastructure and amenities. The analysis will rely on market data, as well as interviews with brokers, developers, and other local real estate experts. Value Capture Using rates of return and/or residual land values that are consistent with current market expectations, Strategic Economics will determine the financial feasibility of each alternative. Strategic Economics will then describe the trade‐offs from each alternative, including the extent to which development in the alternative generates value that could be dedicated to public infrastructure and amenity investments or community benefits, and the gap in infrastructure costs that would need to be covered by the City, outside grants, or other funding sources. Strategic Economics will participate in two meetings with local developers/property owners/stakeholders to inform the analysis. Strategic Economics will also participate in two calls with City staff to guide the analysis and report on the results, and will participate in up to two additional meetings of the working group, community, or City Council to present the results. Finally, Strategic Economics will perform a comparable analysis of the preferred plan alternative to allow comparison against the three NVCAP development alternatives. 4.2b Deliverable Strategic Economics will deliver one memo report that addresses all of Task 4.2b through the comparison of the NVCAP development alternatives. Strategic Economics will deliver a brief follow-up memorandum that describes results of the analysis of the preferred plan alternative. BKF to prepare ROM infrastructure cost estimation of all three draft plan alternatives (NOTE: Placeholder. Yet receive fee input from BKF) Task 5 Draft Coordinated Area Plan Task 5.1 Preferred Concept Plan and Program Based on comments from the Working Group, stakeholders, and direction from City staff and Decision-Makers, the CONSULTANT team will refine the preferred concept plan for the North Ventura Coordinated Area Plan. The preferred concept plan will serve as the basis for the preparation of Development Standards, Design Criteria and the Coordinated Area Plan Report. 5.1 Deliverable Preferred concept plan and program Task 5.2 Draft Coordinated Area Plan Report The CONSULTANT team will work with City staff to confirm an agreed outline and Table of Contents for the Coordinated Area Plan and will then prepare a Draft Report for review by City staff and stakeholders. The Draft Report will incorporate the preferred plan, programs and guidelines prepared in the previous task. As necessary, the Coordinated Area Plan Report will include supporting plans, diagrams, sketches and pictures to convey, illustrate and exemplify Coordinated Area Plan content. The proposed schedule allows for one review of the Administrative Draft Plan by City staff. One set of consolidated comments will be submitted by the City to the CONSULTANT team after review of the Administrative Draft Plan. CONSULTANT will present the preferred plan to the Working Group, and Decision-Makers and will facilitate one community workshop to solicit community reaction to the development of the preferred plan. The draft and final Coordinated Area Plan Report will include the following sections. Land use The report will illustrate the distribution, location and intensity of land uses, including industrial, office, retail, entertainment, residential, community amenities, public open space and parking supply within the study area. Transportation CONSULTANT through its subconsultant ARUP will further develop transportation infrastructure, services and programs for the preferred option, describing these using narratives, mapping and typical cross-sections and plans. ARUP will advise in the development of design guidelines for streets and other transportation infrastructure (e.g., bike/ped paths, transit stops). Utilities and Infrastructure CONSULTANT through its subconsultant BKF will prepare utility demand forecasts for the Coordinated Area Plan, based on land uses supplied by CONSULTANT to determine if thecurrent infrastructure is able to accommodate the proposed land uses and infrastructure presented as part of the Coordinated Area Plan. BKF will also contact utility providers with required project utility demands to verify existing capacities or required changes to the utility infrastructure to meet the demand. Development Standards and Design Criteria The CONSULTANT team will prepare Development Standards and Design Criteria for the private and public realms. These standards and criteria will “implement” and reinforce the preferred plan, focusing on the desired character of the Coordinated Area Plan. Such a framework will focus on the character, function and needs of the district, in particular the linkages between activity nodes and the character and needs of the public realm, pedestrian paths and building heights and orientation that frame and structure the streets. The standards and criteria will speak to both the built form and lands and character of the study area. CONSULTANT will consider the changing urban fabric, land use, density, open space, connections to adjacent areas, neighborhood transitions, circulation, sustainability and streets. Architectural design requirements will address street design and hierarchy, building design including streetwall and setbacks, public and private open spaces, street furniture such as fences, arcades, sidewalk treatments etc. and concept design of parking areas. Specific building types, such as community centers, if included in the preferred plan, will also be addressed. The guidelines will provide direction to private and public entities making improvements in the area and will be folded in the final report. 5.2 Deliverables Draft Coordinated Area Plan Report Final Coordinated Area Plan Report Task 5.3 Financial Feasibility and Economic Analysis Under Task 4.2b CONSULTANT will develop an initial Financial Feasibility and Value Capture analysis. Upon selection of a preferred Plan alternative, CONSULTANT, working close with the City and through its subconsultant Strategic Economics, will finalize the Financial Feasibility (4.2b), and Value Capture (4.2b), and Economic Analysis (4.1). Working closely with the City CONSULTANT through its subconsultant Strategic Economics will build a pro forma model that measures the economic feasibility of building prototypes that exemplify the range of land uses and development products envisioned in the Draft Plan. The land uses will likely include R&D/office, mixed-use, and residential. The building prototype inputs (height, unit sizes, parking, etc.) will be developed in close coordination with CONSULTANT. The market inputs will be based on the market analysis in Task 3.6 and vetted with developers active in Palo Alto and neighboring cities. The analysis will be structured to provide information about the economic incentives and disincentives to build the types of development products that are desired in the Plan Area, and the potential for private development to help fund infrastructure improvements in the Plan Area. In addition to the economic feasibility analysis, Strategic Economics will also provide a summary of the potential economic benefits of public infrastructure investments based on a review of existing literature and studies measuring the property value increases related to public realm and infrastructure improvements. 5.3 Deliverables Draft Financial Feasibility and Economic Analysis Memo Final Financial Feasibility and Economic Analysis Memo Task 5.4 Funding and Financing Implementation Strategy CONSULTANT through its subconsultant Strategic Economics will contribute to the implementation strategy for the North Venture Comprehensive Area Plan, focusing on identifying the funding sources and financing tools available to implement the infrastructure improvements identified in the Draft Plan. The strategy will incorporate the findings of the financial feasibility analysis to establish whether private developers and property owners could potentially contribute to necessary improvements. Based on the analysis, Strategic Economics will provide recommendations on using property-based financing tools like community facilities districts (CFDs), tax increment financing (TIF), benefit assessment districts, and other similar mechanisms. Strategic Economics will also identify available state and regional grants to help fund infrastructure improvements in the Plan Area. 5.4 Deliverables Draft Funding and Financing Strategy Memo Final Funding and Financing Strategy Memo Task 5.5 Parking Model Calibration CONSULTANT, through its subconsultant Arup, proposes to provide a context-sensitive analysis of parking demand that responds to transportation demand management (TDM) best practices. This analysis will utilize and calibrate two models: a parking model and a sketch planning model, to develop a customized set of parking ratios for each proposed land use type that respond to unique local characteristics. Arup will use a parking model developed by the Urban Land Institute (ULI) and the International Council of Shopping Centers (ICSC) that measures the peak parking demand for every land use within a mixed- use development, while accounting for opportunities to share parking across land uses. Arup will leverage existing parking demand data for the NVCAP existing conditions report to calibrate ULI’s shared parking model to accurately reflect the existing parking conditions at the site. Other model calibrations will include the quantification of existing and planned land use, adjustments for vehicle occupancies, and adjustments for market synergy e.g. the relationship among planned land uses that reduces total parking demand. Once the model is calibrated, we will use it to test the different land use scenarios to calculate future parking demand with the current mode share. To estimate the impact of proposed transportation demand management (TDM) strategies on parking demand, as well as the site’s proximity to high quality transit, Arup will then utilize a sketch planning model (such as MXD, CalEMod or GreenTrip Connect) to estimate the impact of TDM strategies on the current mode split, which will be fed into the calibrated parking model to determine estimated parking demand. This add service complements the original scope of work by 1) incorporating a sketch planning model to forecast how TDM strategies will perform in the unique local context of the site, given its it accurately predicts existing conditions prior to testing future land use scenarios. 5.5 Deliverables Technical memo detailing the methodology, key inputs and assumptions, and full results. Executive summary of the analysis and key findings that is appropriate for non-technical audiences including the NVCAP working group, City Council and other interested parties. Slide deck version of the executive summary Arup Project Manager Autumn Bernstein’s attendance at up to two additional public meetings to present the findings of this analysis. Task 6 Task 6.1 As of the effective date of this Agreement, the City anticipates that an Addendum to the Comprehensive Plan Final Environmental Impact Report (2017) would be the appropriate level of environmental review for the North Ventura Coordinated Area Plan. CONSULTANT’s subconsultant DJP&A will review the development assumptions and findings of the Comprehensive Plan Final Environmental Impact Report (2017) and assist as needed in preparing the existing conditions analysis. All this data will be compared to the Draft Plan for the North Ventura Coordinated Area Plan to determine the need for additional technical analyses and whether a different course of CEQA review may be appropriate. If it is deemed that an Addendum is the appropriate level of clearance, the subconsultant shall prepare the Addendum and all required documentation. If potential issues are found that could require an Initial Study/Mitigated Negative Declaration (IS/MND) or Supplemental Environmental Impact Report (SEIR), meaning the proposed plan would result in new or more significant impacts than were identified in the Comprehensive Plan Final Environmental Impact Report (2017), DJP&A would notify the City immediately to determine next steps. Once a final determination is made on the level of environmental review required, DJP&A would prepare the necessary analysis based on new technical analyses (as warranted) and existing data. DJP&A and ARUP will assist with the preparation of the background conditions analysis for the following resource areas as this data would most likely be required for the environmental review: Traffic, parking, transit, bicycle, and pedestrian facilities and demand Cultural and natural resources Natural and man-made hazards and hazardous materials, including the regional plume and affected groundwater Parks, community centers, schools and other public facilities and conditions Consistent with the Comprehensive Plan, ARUP will provide for this amendment both a traditional the Level of Service (LOS) Traffic Impact Analysis (TIA) and a projection of project-generated VMT technical memorandum, utilizing the Synchro Analysis in task 4.2. This will be a multimodal approach, focusing not only on traffic but also transit, bicycle and pedestrian connectivity, convenience, and safety. Transportation impacts will be analyzed in accordance with the standards and methodologies found in VTA's Transportation Impact Analysis Guidelines. It is assumed that TIA trip threshold of 100 or more net new peak hour trips will be met. The following scenarios will be analyzed: Existing Existing plus Project Background Background plus Project Cumulative Cumulative plus Project It is assumed that signal warrant analyses for up to two currently unsignalized intersections will be conducted. The TIA may include the following optional tasks: Impact analysis of four freeway segments and eight freeway ramps Local street traffic volume impact analysis using the TIRE methodology for up to four residential street segments Bus transit service delay/quality of service analysis These optional tasks will be considered outside of scope and billed at time and materials using ARUP rates in Exhibit _. DJP&A will review the proposed project in relation to the findings of the Screening Level Phase I ESA under Task 3.9, to determine potential impacts/mitigation measures. DJP&A will prepare Technical Environmental Reports analyzing the draft Coordinated Area Plan for all topics as warranted (and if not covered by the Comprehensive Plan EIR). These may include, but not be limited to, CEQA issues such as transportation (LOS and VMT); air quality; noise; soils and groundwater (i.e., related to the existing plume and groundwater issues); and greenhouse gas emissions and at least one non-CEQA issue: parking. Note: CONSULTANT shall identify on its invoices all work performed under Task 6 with the notation “CEQA review” (in addition to describing the substantive work performed), so that these work items will be invoiced towards the $138,000 CEQA funding available for the project. Task 6.1a Supplemental Environmental Impact Report Subsequent to the initiation of the project, it was determined that a Supplemental Environmental Impact Report would be the appropriate level of CEQA review. As such, the following additional tasks are anticipated in addition to Task 6.1: David J. Powers & Associates (DJPA) to prepare a Notice of Preparation (NOP). DJPA to attend a scoping meeting during the public circulation of the NOP. DJPA to complete additional analysis for cumulative impacts and alternatives to the proposed project. DJPA to respond to public comments on the Draft EIR. DJPA to prepare final EIR. DJPA to submit all required documents to the State Clearinghouse in accordance to CEQA. Task 7 Hearings and Coordinated Area Plan Adoption Task 7.1 Hearings Members of the CONSULTANT team will attend up to two hearing by the Planning and Transportation Commission; one hearing with the Architectural Review Board one hearing with the Historic Review Board and up to two hearings by the City Council to present the plan for adoption. This is in distinction to Task 2.4 Decision-Maker meetings that allows the decision-makers to weigh in on the effort versus Hearings that are for attendance during plan adoption. Task 7.2 Adopted Plan CONSULTANT will prepare and submit the final Coordinated Area Plan in both an editable digital and a PDF format upon adoption by the City Council. Note: For additional meetings that may be required CONSULTANT team assumes attendance by at least two personnel and preparation time on a time and material basis. The billing rates in Exhibit B will apply for the Time and Materials authorization upon approval by the City as an Additional Service. Task 8 Additional Services In addition to the meetings noted in Tasks 2 and 7, additional services that may be included under this contract include: 1. Additional Working Group Meetings (Task 2.1) 2. Additional Decision Maker and public Hearings, such as City Council Finance or Policy and Services Committees (Tasks 2.4 and 7.1) Attachment C Staff Response to April 17, 2019 Proposal for the NVCAP Working Group Process A summary of the comments expressed by five members of the Working Group and staff’s responses are provided below. The comments were provided at the April 17, 2019 meeting and specifically raise concerns about the Working Group’s role and the direction of the project generally. Staff believes these concerns can generally be addressed as described below and unless directed otherwise by the City Council, will proceed accordingly. 1. Co‐Chairs. A preference for co‐chairs to agree on the communication needs and agenda for each meeting. Staff Response: If this would be beneficial to the Working Group, staff does not have an objection. Having the members of the Group select leaders who can assist in facilitation, communication, and keeping meetings on track can enhance the productivity of the meetings. The task of setting the meeting agendas, however, would remain the purview of staff and the consultants in order to advance the project within the specified timeline. 2. Existing Conditions Report and Expert Consultation. A list of technical studies was requested to be provided before meetings begin; these include the following: Hydrology Study Vegetation and Wildlife Public and Environmental Safety Public Services and Utilities Cultural and Historical Resources Visual Quality and Design Geologic and Seismic Hazards Noise A detailed Market Feasibility Study Existing, recently completed, and approved buildings – including square feet of office space and number of housing units, plus a comparison with downtown Palo Alto Requirements and Restrictions regarding development in this area (i.e. open space) per the Comp Plan and other city guidelines The full draft Existing Conditions should be shared with the group and discussed. Staff Response: The complete draft Existing Conditions Report has been provided, along with a presentation at a Working Group meeting. The Existing Conditions Report will be a chapter of the final plan and updated as needed before the completion of the project. Staff will provide reports and analysis as performed and available and used to update or inform policy recommendations; it may not be available, however, at the start of such discussions. The planning process is iterative and while analyses are important, the available budget, staff resources, and expertise limit the quantity, quality, and specificity of analysis that can be performed in relation to the project. 3. Communication. More timely responses to all questions and all relevant information obtained by the City and consultants shared with the Working Group. Staff Response: Staff will provide more timely responses to Working Group member inquiries. As stated above, however, staff may not be able to satisfy the curiosity of each member and their inquiries. Information simply may not be readily available. 4. Working Group Meetings. More time should be allocated for dialogue and discussion. Staff Response: The proposed scope increases the working group meetings from 2 hours to 3 hours. The schedule adds one additional Working Group meeting at a cost of $13,619. While more time lends itself to more dialogue, the City must also balance these discussions with the need to complete the project within a specified timeframe. 5. Concept Plans / Final Design. The coordinated area plan should be responsive to project goals and opinions of all stakeholders. Staff Response: The City Council serves as the ultimate decision‐maker regarding the final plan. The consultant team and staff will channel the desires of community members, Working Group members, other review bodies (PTC, HRB, and ARB) and all stakeholders into the plan. As these stakeholders are diverse, it is highly likely that compromises will be made. The plan seeks to meet the project goals identified by the City Council, however the plan may not respond to the opinions of all stakeholders in ways they find satisfactory. This is the nature of dynamic community work that seeks to find the best path balancing numerous goals, variables, and a multiplicity of approaches. 6. PAUSD Representative. Request to include a representative from the school district to participate in the Working Group to act as a liaison and evaluate the necessity of a school for Ventura neighborhood. Staff Response: City staff have been in regular communication with members of the PAUSD School Board (Todd Collins) and district staff (Robert Golton and James Novak). In addition, staff has presented and will continue to present as appropriate at the City School Liaison meetings. PAUSD may find understanding the impact of plans on school enrollment to be appropriate once the three alternatives have been defined or once a preferred alternative has been selected. In order to formally add a member of the PAUSD board or staff to the Working Group, the City Council would need to remove an existing member and appoint a PAUSD representative, or amend the Code (section 19.10) to increase the number of Working Group members allowed for Coordinated Area Plans. The Code provides for a maximum of 14 Working Group members and each of these positions are held by community representatives. The City Council could also choose to name a PAUSD member as an alternate to the Working Group. The position title of Working Group alternate is not identified in the municipal code and its distinction from a Working Group member is unclear. For the past alternates, participation was limited to the public comment portion of the Working Group meeting to distinguish its role and to respect the code provision for a maximum of 14 members. As there is no formal voting anticipated for the Working Group, the role of the alternate is uncertain and if used in a manner similar to other Working Group members, this approach appears at odds with the municipal code. 7. Measure of Successful Outcome. Clear definition of what constitutes a successful outcome and how final decisions will be made. Staff Response: The purpose of the NVCAP is to develop a long‐range plan to manage and direct changes within the project area over the next fifteen to twenty years. During the planning process, the Working Group members will advise staff by (1) evaluating three plan alternatives against the goals established by the City Council and (2) recommending a preferred alternative. Reaching a clear preferred alternative may not be possible given the limited time available and the potential for divergent views. If no clear consensus or majority perspective emerges, then the Working Group can provide decision makers with an evaluation of the merits of each alternative and insights into why members supported different plan alternatives. Ultimately, the City Council will be presented with all the plan alternatives considered by the Working Group, a preferred alternative if one emerges and an analysis from staff as to how each plan aligns with previously articulated project goals and objectives. Staff anticipates a wide range of community interests will continue to be expressed through this process. Balancing these interests is a shared responsibility among all stakeholders to create a plan that elected officials determine is most representative of community goals. 8. Subcommittees. Interest for individual or small group meetings to allow Working Group members to conduct a more in‐depth review on the following topics: a. Matadero Creek b. Historic and Cultural Preservation c. Financial Analysis of Neighborhood Serving Retail and Small Offices d. Financial Analysis of Housing e. Environmental Safety f. Transportation (Parking, Car Traffic, Walking and Biking) Staff Response: Small group settings provide a useful and effective format for discussion that can augment the full Working Group discussion. Staff propose to incorporate more opportunities for small group and focused discussions into the Working Group meetings. Adding committees will require additional scope, time, and budget. While some Working Group members welcome an increase in time, others may find this additional commitment an unwelcome burden and untenable. Subcommittee meetings are required by code to be open to the public and noticed. Staff’s preference is to create opportunities within the established meetings for this small group discussion. Individuals are also welcome to research particular areas of interest in preparation for the Working Group meetings. 1 of 40 CITY OF PALO ALTO CONTRACT NO. C18171717 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND PERKINS + WILL FOR PROFESSIONAL SERVICES This Agreement is entered into on this 25th day of June, 2018, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Perkins + Will , a Delaware corporation, located at 2 Bryant Street, Suite 300, San Francisco, California, 94105 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to undertake a planning process and prepare a Coordinated Area Plan for the North Ventura area to guide the development of a walkable, mixed-use neighborhood with multifamily housing, commercial services, well-defined connections to transit, bicycle and pedestrian facilities, urban design strategies, and design guidelines to strengthen and support the neighborhood fabric and connections to transit, pedestrian, and bicycle facilities (“Project”), and desires to engage a consultant to provide services to facilitate and complete the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through December 31 2020, unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Timely performance of services is an essential element of this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 2 of 40 reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (“Basic Services”), and reimbursable expenses, shall not exceed Six Hundred Ninety Nine Thousand One Hundred Fifty Three Dollars ($699,153.00). CONSULTANT agrees to complete all Basic Services, including reimbursable expenses, within this amount. In the event Additional Services are authorized, the total compensation for Basic Services, Additional Services and reimbursable expenses shall not exceed Seven Hundred Sixty Nine Thousand Sixty Eight Dollars ($769,068.00). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY. Additional Services shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 3 of 40 perform Services under this Agreement. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: Arup 560 Mission Street, Suite 700 San Francisco, CA. 94105 Plan to Place 524 San Anselmo Avenue, # 114 San Anselmo, CA. 94960 Strategic Economics 2991 Shattuck Avenue #203 Berkeley, CA 94705 David J. Powers & Associates 1871 The Alameda, Ste. 200 San Jose, CA. 95126 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 4 of 40 BKF Engineers 1730 North First Street, Suite 600 San Jose, CA. 95112 CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Geeti Silwal as the Principal in Charge to have supervisory responsibility for the performance, progress, and execution of the Services and Nivi Das as the Project Manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Elena Lee, Planning and Community Environment Department, 250 Hamilton Avenue, Palo Alto, CA. 94303, Telephone: (650) 617-3196. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work products, including without limitation, all writings, drawings, plans, reports, specifications, calculations, data, documents, and other materials and copyright interests developed for CITY by CONSULTANT under this Agreement (collectively, “Work Products”) are the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the Work Products pursuant to this Agreement shall be vested in CITY, and CONSULTANT hereby waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Notwithstanding any other provision of this Section, CITY acknowledges and agrees that CONSULTANT may use CONSULTANT’s pre-existing intellectual property (including, without limitation, know-how and proprietary methodologies) (“Pre-Existing IP”) in CONSULTANT’s provision of the services and deliverables under this Agreement, and nothing in this Agreement transfers, or is intended to transfer, ownership in CONSULTANT’s Pre-Existing IP to CITY where such Pre-Existing IP is not a Work Product under this Agreement. Neither CONSULTANT nor its contractors, if any, shall make any of such Work Products available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the Work Products for use in or application to circumstances not contemplated by the scope of work of this Agreement. SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 5 of 40 Agreement. SECTION 16. INDEMNITY. 16.1. This Agreement includes both design professional services as defined in Civil Code Section 2782.8 and other services. As to Claims that arise out of work performed by a design professional as defined in Civil Code Section 2782.8, the following provision shall apply: To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement. As to Claims that arise out of work performed other than by a design professional, the following provision shall apply: To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 6 of 40 policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that, except for Professional Liability and Worker’s Compensation insurance, the insurance is primary coverage and will not be canceled by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 7 of 40 termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, and 25. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 8 of 40 and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.30 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 9 of 40 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This document represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This document may be amended only by a written instrument, which is signed by the parties. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement which, from time to time, may be referred to in any duly executed amendment hereto are by such reference incorporated in this Agreement and will be deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 10 of 40 27.10 All unchecked boxes do not apply to this Agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement. 27.13 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. SECTION 28. FEDERAL-AID GRANT ASSURANCES (49 CFR 26). 28.1. CONSULTANT shall not discriminate on the basis of race, color, national origin, or sex in the performance of this Agreement. CONSULTANT shall carry out applicable requirements of 49 CFR 26 in the award and administration DOT-assisted contracts. Failure by CONSULTANT to carry out these requirements is a material breach of this Agreement, which may result in the termination of this Agreement or such other remedy as CITY deems appropriate. 28.2. CONSULTANT shall ensure that all subcontracts to perform work under this Agreement include the assurances stated in subsection 28.1 above as applied to each subconsultant or subcontractor. 28.3. CONSULTANT shall cooperate with CITY in completing all requirements of the federal funding for work under this Agreement, including, but not limited to, requirements under the State of California, Department of Transportation (Caltrans) Disadvantaged Business Enterprise (DBE) Program Plan and CITY’s Implementation Agreement with Caltrans thereunder. SECTION 29. PROMPT PAYMENT TO SUBCONTRACTORS (49 CFR 26.29) CONSULTANT shall not hold retainage from any subconsultants. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 11 of 40 CONTRACT No. C18171717 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO APPROVED AS TO FORM: PERKINS + WILL Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 Geeti Silwal Principal Assistant City Attorney Sandra Lee Ed Shikada Assistant City Manager 12 of 40 EXHIBIT “A” SCOPE OF SERVICES CONSULTANT shall perform the tasks and services set forth in this Scope of Services. Task 1 Project Initiation and Management Task 1.1 Project Management CONSULTANT will provide project management for all tasks detailed in this scope of services for the duration of the Agreement. CONSULTANT’S project management activities will consist of, but are not limited to: Refine the work program in consultation with CITY to accomplish the principal activities under this Scope of Services, and refine a timeline for completing the work with milestones and deliverables consistent with the schedule in Exhibit B “Schedule of Performance”. Regularly update the work plan and timeline to reflect actual progress Review the proposed community engagement tools and engagement strategy Outline project goals and objectives Identify engagement activities Identify target demographic and interest groups and identify methods of communication and engagement Confirm coordination, facilitation and communication responsibilities Outline schedule, format, and resources for all engagement activities Provide overall management of CONSULTANT team, including sub consultants Provide oversight of budget, scope, schedule, deliverables and QA/QC Preparen and submit a monthly invoice by task and percentage of completion that details work performed by the CONSULTANT team and identifies expense charges. Invoiced tasks related to CEQA review shall include a notation on the invoice identifying them as “CEQA review”. 1.1 Interim work products Refined work program Refined project schedule Monthly invoices Community engagement strategy Task 1.1A Style Guide and Project Logo DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 13 of 40 An important first step in creating project materials will include the preparation of an identifiable brand to apply to all print and digital publications in the community engagement effort. This exercise will ensure that all materials adhere to a graphic style that community members can easily associate with the project. CONSULTANT shall create a project logo and style guide, with fonts, color schemes and other design elements. 1.1A Deliverable Project logo and style guide, with fonts, color schemes and other design elements Task 1.2 Progress Meetings CONSULTANT will facilitate regular progress meetings (these may be conference calls or in- person, depending on agenda items) with City Staff to coordinate and report on contract matters, project progress, upcoming events and deliverables. CONSULTANT and City staff will jointly organize a kickoff meeting at the outset of the Agreement. This kickoff meeting will be for 4 hours and during this meeting the CONSULTANT team will meet with the City’s project manager to establish appropriate project protocols and tour the site prior to immersing itself in the background conditions information. At the kick-off meeting CONSULTANT shall create consensus around key design and planning principles that set the foundation for the entire project and establish goals and performance targets for the project. CONSULTANT assumes weekly progress meetings between August 2018 and January 2019 while the design alternatives are being developed. CONSULTANT assumes bi-weekly check-in conference calls (February through April), while preparing the Coordinated Area Plan- Administrative Draft. Upon delivery of the Administrative Draft to City staff, progress meetings/check-in will commence on an as-needed basis to prepare for Working Group/ Decision Maker meetings as defined in Task 2.4 below and Final Plan Adoption. 1.2 Interim work products Meeting agendas Meeting action items Task 2 Community Engagement The City will convene all outreach events, including location, noticing, and publicizing and will prepare notices and staff reports for all public hearings and study sessions. The CONSULTANT team will be responsible for facilitating the relevant meetings, preparation of outreach/meeting materials, and associated tasks as listed below. Task 2.1 Working Group Members of the CONSULTANT team will facilitate up to nine Working Group meetings that will be open and noticed to the public. The Working Group is composed of City Council- selected community members including stakeholders, property owners, residents and business representatives. CONSULTANT will plan for one of the Working Group meetings to be combined with City Council Meeting #1 from Task 2.4 , as a joint session to select project goals. The Working Group meetings will include site walking tour, goal setting, understanding of background conditions, feedback on proposed alternatives, and participation in evaluation of DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 14 of 40 alternative concept plans. The purpose of the site walking tour will be to experience the scale of the Plan Area, provide context and explore physical constraints and opportunities. The Working Group will also serve as a conduit to the wider community and review. The potential topics to be covered at each of these meeting is listed below and referenced in the schedule. Further refinement to the topics for each meeting will be made in consultation with the City during project development. Working Group #1 – context setting and walking tour of the Plan Area Working Group # 2 – joint session with Decision Makers to identify project goals Working Group # 3 – report back on Community Workshop, land use alternatives presentation, and evaluation charrette Working Group # 4 – report back on Preferred Alternative approach guidance from Decision Makers meeting Working Group # 5 – input on Draft Plan components Working Group # 6 – review of Draft Plan components Working Group # 7 – input on Final Draft and EIR Addendum Working Group # 8 – input on Final Draft and EIR Addendum Working Group # 9 – additional meeting, subject to City approval as an Additional Service (Note: CONSULTANT team in consultation with the City will determine the most appropriate time to conduct this meeting. The billing rates in Exhibit C-1 will apply if City authorizes this meeting as an Additional Service to be billed on a time and materials basis.) 2.1 Interim work products Meeting agendas Meeting action items Task 2.2 Stakeholder Meetings CONSULTANT team will facilitate and solicit feedback from key stakeholder groups at up to fifteen meetings to be arranged by City staff. Stakeholders may include, but are not limited to, those from the following sectors or interest groups: Businesses in the plan area - including Fry’s, auto repair shops, professional offices, tech companies and start-ups Property owners Residents from adjacent neighborhoods and resident groups (Ventura Neighborhood Association, PAN) Representatives from organizations, including Palo Alto Forward, Asian Americans for Community Involvement (AACI), Silicon Valley Climate Action Alliance, Palo Alto Housing (http://pah.community/about-us/misson-history/) and other groups Advocate groups (e.g., youth, affordable housing, education), such as Palo Alto Housing Corporation (non-profit, manages city’s AH program), Youth Community Service, Community Working Group (https://communityworkinggroup.org/), Rotary/Lions/Kiwanis (https://www.cityofpaloalto.org/partners/service_organizations/default.asp), SV Bicycle Coalition DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 15 of 40 Working with the City staff, CONSULTANT team will identify 3-5 key questions/clarifications request of the Stakeholder group to inform the development of land use alternatives. These questions will be sent to the stakeholders prior to the meeting for meaningful input during the sessions. Stakeholder meetings, when feasible, shall be grouped to solicit consolidated feedback. Stakeholders meetings outside of this on-site format will be conducted via phone. Each stakeholder meeting shall be for 30 to 40 minutes. 2.2 Interim work products Meeting agendas including 3-5 Stakeholder questions Meeting action items Task 2.3.A Community Workshops Members of the CONSULTANT team will facilitate two community workshops. The first community workshop will be a visioning exercise to discuss potential land use and transportation strategies. The second community workshop will be a presentation for feedback on the preferred plan. Task 2.3.B Pop-Up Workshops (support City) CONSULTANT will prepare public outreach materials based on on-going land use alternatives development to solicit broad community involvement. City staff will facilitate up to two sets of pop-up workshops or intercept meetings at two to three key locations in and around the planning area. These informal community meetings will be designed to “meet the community where they are” and facilitate discussion centered around the well-attended location and the overall planning area. The following are potential venues, locations or events pop-up workshops could be held: CalTrain station California Ave Farmers’ Market - Sundays 9am-1pm College Terrace Branch Library (standalone display) CONSULTANT team will not attend the Pop-up Workshops. 2.3 Interim work products Public outreach materials Task 2.4 Decision-Maker Meetings Members of the CONSULTANT team will attend up to four meetings or study session/hearings with elected officials and/or boards/commissions such as City Council, Architectural Review Board and Planning & Transportation Commission. The agendas and meeting minutes for these sessions will be prepared by City Staff. These meetings are anticipated to address the following topics (topics are subject to change, as determined by City): DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 16 of 40 Decision Maker Meeting #1 – report back on existing conditions analysis and summary of Community Visioning Workshop; joint session with Working Group to identify project goals and vision. Decision Maker Meeting #2 – report back on concept alternatives, Working Group evaluation charrette, and seek guidance on recommended preferred alternative approach. Decision Maker Meeting #3 – report back on Working Group proposed Plan components and EIR status update; seek guidance on recommended Staff changes to the Administrative Draft Plan. Decision Maker Meeting #4 – seek guidance on Final Coordinated Plan + Environmental Review/CEQA Clearance Note: If additional meetings are required, CONSULTANT assumes attendance by at least two CONSULTANT team members and preparation time on a time and material basis. The billing rates submitted in the fee proposal will apply for the Time and Materials authorization as an additional scope item. Task 2.5 Project Website To augment the community engagement efforts conducted via public meetings, CONSULTANT will prepare digital platforms to provide convenient access to the engagement effort for the community to share their voice and participate in the process. CONSULTANT, through its subconsultant Plan to Place, will host and prepare a wireframe for the project website to foster input from the CONSULTANT’s project team and City as the foundation for a tailored project website. The website will have a distinct web address and will be optimized to ensure compatibility across different devices and translatable into different languages. The website will serve as the primary online portal for community engagement and will include: Important project updates Upcoming events, including a map and a timeline Updated summaries of workshop, forums, and other meetings Opportunities to submit ideas and subscribe to project mailing lists Access to educational resources and materials, both existing and developed for the purpose of the outreach effort 2.5 Interim work product Website with regular updates at key intervals Task 2.6 Mailing List In order to ensure interested individuals and parties stay looped in to project developments, CONSULTANT and City staff will maintain a mailing list, accessible via the project website and sign-up sheets and information cards at public events. E-mail campaigns will be pushed through the mailing list to notify subscribers of upcoming engagement opportunities and events. 2.6 Interim work product DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 17 of 40 Mailing List Task 2.8 Surveys - Mobile and Online CONSULTANT will prepare a digital platform to conduct two (2) community surveys through the project website. CONSULTANT, through its subconsultant Plan to Place, will also work with Granicus the City to integrate their Communications Cloud software as a multi-channel platform to elevate, streamline and track communications efforts. The Communications Cloud also has a metrics/reporting capability to measure results and assess the input received. The tailored survey campaign will aim to reach underrepresented members of the community. Findings from these surveys will be assessed and merged with data sets from other survey resources. The surveys may also be translated and will be consistent with those distributed through the website and email to ensure a standardized set of responses. The CONSULTANT team will provide support to City staff to administer surveys through the City’s existing Open City Hall platform or another alternative as appropriate. 2.8 Interim work product Preparation of 2 surveys and summary of results Task 3 Background Conditions Task 3.1 Data Collection and Mapping The CONSULTANT team will prepare geographical information using GIS-based maps for the study area boundary and wider context, including pedestrian walkways, bikeways, transit, vehicular, parking and other transportation networks and features. The CONSULTANT team will coordinate the mapping areas and provide the final product to the City in a digital form that allows the layers of information to be easily accessed as needed. A deep understanding and consideration of the complex layers that make up our current and future urban environments is critical to the creation of great and high performance networks and places. Using an innovative approach to planning and design, the CONSULTANT team will use this information to create a smart 3D model of the site and surrounding context. This model will include site opportunities and constraints, assets and challenges. This 3D model will be critical in the analysis and representation of existing and planned conditions and will be utilized throughout the entire project for concept and alternatives development and visualizations. The GIS based map as well as the 3D model will allow the CONSULTANT to develop appropriate 2D and 3D graphic material that illustrates the existing site as well as the future functioning of the site within the physical context of the city as a whole. CONSULTANT through its transportation subconsultant ARUP will request and assemble available transportation and parking data from the City of Palo Alto and its CONSULTANT’S to establish a baseline. CONSULTANT will collect turning movement counts for up to ten intersections in and just outside the project area and selected segment volumes. These intersections will be selected based on VTA TIA requirements and will supplement intersection counts available from the VTA Congestion Management Program (CMP) monitoring system. This will include counts at up to two unsignalized intersections to facilitate DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 18 of 40 signal warrant analysis. Intersection pedestrian and bicycle counts will also be conducted at all locations. In addition, CONSULTANT will conduct parking inventory and occupancy counts, both on streets and within off-street facilities during peak times. Task 3.2 Policy Context CONSULTANT will review and analyze existing adopted plans and policies as a foundation for developing the Coordinated Area Plan, including but not limited to: City of Palo Alto Comprehensive Plan, goals, policies and programs City Council approved draft project goals and objectives California Avenue Concept Study draft proposals City of Palo Alto Masterplan for parks, trails, natural open space and recreation Green stormwater infrastructure plan Sustainability and climate action plan Bike and pedestrian transportation plan Applicable zoning and development standards Residential off-street parking study Task 3.3 Background Conditions Analysis CONSULTANT will prepare geographical information using GIS-based maps for the Coordinated Area Planning process, including the following layers of information: Existing land use and development patterns Development capacity Market rate and affordable housing Transit and transportation, including biking and walking Existing cultural and natural resources Public open space and community amenities Infrastructure systems and capacity Task 3.4 Base Maps CONSULTANT will prepare a Base Map for use in the Coordinated Area Plan. BKF will utilize information from the City to identify the sewer, storm, water and electric/gas within the Coordinated Area Plan on the base map. CONSULTANT’s work on this task is based on the following assumptions: City will provide GIS base with topography and existing property data. City will provide the CONSULTANT team with record drawings, utility block maps and studies related to the areas infrastructure (water, wastewater, storm water/drainage, electrical, gas, communication, etc.) DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 19 of 40 City will provide the CONSULTANT team with existing utility capacity analysis reports and studies. 3.4 Interim work product Base Map Task 3.5 Housing Including Affordable Housing CONSULTANT through its subconsultant Strategic Economics will review the Housing Element and Comprehensive Plan to identify issues and opportunities related to housing and affordable housing. Some of the potential topics to be considered in this task could include the supply of existing market-rate and below-market-rate housing in the Plan Area, the amount of housing capacity based on zoning, estimates of the need for market-rate and affordable housing in Palo Alto based on RHNA and barriers to housing production. 3.5 Interim work product Memo summarizing issues and opportunities for housing/affordable housing in the Plan Area Task 3.6 Market Snapshot Report CONSULTANT through its subconsultant Strategic Economics will analyze and describe current market conditions for residential, R&D/office and commercial retail uses. The analysis will focus on determining the development product types, sales prices, and/or rents that would be achievable in the North Ventura Area. Subtasks will include the following: Residential Market Conditions – Strategic Economics will interview residential developers and brokers, summarize current rents and sales price for higher-density residential products (rental and ownership product types) in the Plan Area and identify market-supportable product types and opportunity sites for housing; and determine the likely sales prices/rents of new housing by type. R&D/ Office – Based on employment projections, existing market reports, interviews with local brokers and/or developers, and review of office and R&D development trends, Strategic Economics will examine types of R&D and office development likely to be supportable in the Plan Area. Retail and Restaurants - Strategic Economics will assess the demand for “soft goods” retail stores and restaurants in the Plan Area based on: city sales tax data; data on rent, vacancy, and new construction trends for retail districts in Palo Alto and neighboring cities from brokers and Costar; and interviews with local retail and mixed-use developers. The analysis will provide an understanding of the market opportunities and barriers to retail and mixed-use development in the Plan Area. The findings of the analysis will be used to develop an understanding of market-driven opportunities and constraints in the area, which will then inform development of the plan alternatives. The findings of the market snapshot will also provide key input needed for the economic feasibility analysis, implementation, and fiscal impact analysis tasks described in Tasks 4 and 5. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 20 of 40 3.6 Interim work products Draft Market Snapshot Memo Final Market Snapshot Memo Task 3.7 Existing Utilities Analysis CONSULTANT through its subconsultant BKF will utilize the existing conditions base map prepared by the CONSULTANT project team to review the existing storm, sewer and water within the Coordinated Area Plan. BKF will review the existing utility sizes, condition and identify existing capacity, identifiable capacity deficiencies, identifiable utility system upgrades required, and describe the existing utility infrastructure. BKF will provide a narrative of the existing utilities, any identified deficiencies, and any identified opportunities for system upgrades or efficiencies. Based on the demand BKF can assist with recommendations on how to improve utility systems or identify future studies that may be needed to model, analyze, evaluate, and determine impacts to the systems. 3.7 Interim work product Existing utilities summary memorandum Task 3.8 Transportation and Parking CONSULTANT through its subconsultant ARUP will review and summarize relevant transportation plans and policies. This will include documenting planned transportation infrastructure improvements that could affect accessibility to the site. CONSULTANT will utilize available data, traffic counts, and parking counts to characterize existing transportation conditions. Qualitative street characterizations of the project area based on observations will be provided. CONSULTANT will also provide a description of current transportation issues such as deficiencies that impact safety, mobility and access in the project area. CONSULTANT will identify opportunities to improve transportation to and within the site, which could include additional transit service (Caltrain and ECR corridor), safer roads and intersections and non- traditional approaches to improve mobility such as Mobility as a Service. ARUP will prepare a transportation section of the report, which will summarize policy context, existing conditions and identify issues and opportunities. This will point to potential transportation strategies that will be developed in later study phases. 3.8 Interim work product Transportation and parking summary memorandum Task 3.9 Environmental Assessment As part of the existing conditions analysis related to natural and man-made hazards and hazardous materials (including the regional plume and affected groundwater), CONSULTANT’s subconsultant DJP&A will prepare a Screening Level Phase I ESA for the area. Preparation of the Screening Level Phase I ESA includes the following: Acquiring database reports to help establish the presence and type of contamination incidents reported in the site vicinity. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 21 of 40 Reviewing on-line databases (GeoTracker and Envirostor) and available documents for up to ten facilities. Based on these reviews, a figure will be prepared that will present the reported and more significant ground water contamination plumes within the site boundaries. Reviewing aerial photos to help develop a history of the previous site uses and adjacent area. Summarizing the anticipated site hydrogeology based on readily available public information. Completing a brief site visit from public right-of-way to observe existing conditions and note readily observable indications of past or present activities that may have or could cause significant site contamination. 3.9 Interim work product Screening Level Phase I ESA Note: CONSULTANT shall identify on its invoices all work performed under this subtask 3.9 with the notation “CEQA review” (in addition to describing the substantive work performed), so that these work items will be invoiced towards the $138,000 CEQA funding available for the project. Task 3.10 Opportunities and Constraints CONSULTANT will compile all data from Tasks 3.1 through 3.9 into a consolidated background conditions memo, including a narrative on existing opportunities and constraints. 3.10 Deliverable Existing conditions memo with opportunities and constraints summary Task 4 Analysis of Options and Draft Plan Components Task 4.1 Development of Alternatives Based on information gathered during Tasks 2 and 3, CONSULTANT will work closely with City staff, stakeholders and the community to develop two land use/urban design alternatives for the study area. Test fit alternatives will be studied for these selected sites, to understand development yields and market support among other factors. For the purposes of policy discussion, environmental assessment and downtown character, the alternatives will contrast different land use compositions and development densities. Each land use alternative will include a summary of the development potential, including a list of the analysis assumptions made. Draft land use alternatives will include information about: Land uses and densities Building massing and heights Street network and connectivity Public open space and community amenities Opportunities for multi-modal improvements and accessibility DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 22 of 40 Parking supply and demand Two and three dimension graphic outputs from the 3D model will be utilized to communicate the characteristics of the alternatives in an easy-to-understand format. 4.1 Deliverable 2 Draft land use/urban design alternatives with development summary table Task 4.2 Comparison of Alternatives The alternatives will be compared to each other with respect to the goals and framework established during Tasks 2 and 3 to help illustrate the differences between the alternative proposals. The comparison will include the relative merits of the development alternatives for additional housing opportunities, including the supply of affordable housing and an analysis of potential sources for additional employment opportunities and the workforce characteristics required for such employment. Other aspects to be compared will include density and land use, distribution and amount of open space, impacts on traffic/parking and vehicle trip generation, where there are differences between the two approaches. CONSULTANT through its subconsultant ARUP will advise on two proposed street network and parking options for the project area. This will include the following: proposing initial circulation options that allow developing baseline parking projections based on different programs; proposing a suite of transportation improvements that reduce parking requirements and trip generation; advising on a street hierarchy for the site, and developing parking access recommendations. Based on alternative land use programs and street configurations, ARUP will analyze parking impacts and traffic for two land use/transportation improvement options. Parking demand will be calculated using a spreadsheet model, taking into account proposed driving reduction measures, feeding back into site parking design. The projected demand for each alternative will be compared with Palo Alto’s current parking requirements and any available findings of its residential off-street parking study, and parking ratios appropriate for the site will be recommended. Traffic Analysis To estimate traffic impacts ARUP will take both a traditional intersection impact approach and conduct a Vehicles Miles Travelled (VMT) analysis. For the former we will utilize a Traffix modeling software to determine impacts on no more than ten (10) key intersections in and around the project area based on alternative land use programs and proposed alternative transportation infrastructure and services, and using the results to determine what if any traffic infrastructure upgrades would be required for each option. This evaluation is to be distinguished from the anticipated project-level Traffic Impact Analysis (TIA), which is described in Task 6.1. This analysis will nonetheless establish background and cumulative conditions, using assumptions from the Comprehensive Plan and VMT’s regional model, and evaluate the impact of each land use alternative on key intersection Level of Service (LOS). It will also serve as the basis for developing the project TIA. Vehicle Miles Travelled Analysis ARUP will perform a VMT analysis consistent with State guidelines to compare the regional impact of the two alternatives. This is consistent with the approach taken in the Comprehensive Plan. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 23 of 40 Fiscal Impact Study CONSULTANT through its subconsultant Strategic Economics will estimate the fiscal impact of development in the Plan Area. The analysis will estimate the fiscal impact of potential future development scenarios compared to the baseline existing conditions on the City of Palo Alto’s General Fund. The fiscal study will estimate the potential change in operating revenues and expenditures resulting from projected growth in residential, office/R&D and retail land uses. Strategic Economics will analyze the property tax, sales tax, and other major sources of General Fund revenues generated by the development in the Draft Plan, compared to the existing land uses. After conducting interviews with key City departments including Police, Fire, Public Works, Parks and Recreation, Strategic Economics will calculate the increase in General Fund expenditures for providing services to new residents and employees under each scenario. Based on the results of the fiscal assessment, Strategic Economics will determine whether the estimated public revenues would offset increases in the cost of public services to serve new development. Infrastructure CONSULTANT through its subconsultant BKF will compare water and wastewater demand calculations for the two alternatives. BKF will also provide an infrastructure cost estimate based on the preferred concept plan/program, including: proposed utilities, hardscape, roadway improvements and storm water treatment. BKF will provide this pricing as a supplement to the project cost estimator. The estimated cost will represent the level of information known at that time, and will be used as an indicator of overall costs, for use in the project evaluation/cost estimate by the CONSULTANT project team. Any Incompatibilities with Existing Policies CONSULTANT will prepare a commentary on the extent to which any aspect of the two alternatives deviate from current City policies and ordinances. Where appropriate, CONSULTANT will comment on the restrictions imposed by existing policies and offer suggestions for any changes necessary to facilitate the proposals. Evaluation charrette CONSULTANT will prepare the above referenced analyses in advance of, and for review and discussion, at an all-day ‘evaluation charrette’. The first half of the day will include the City Staff and relevant members of the CONSULTANT design team to discuss with the Working Group on the relative merits of the two alternatives and will constitute one of the six contracted Working Group meetings. The second half of the day will include City Staff and relevant members of the CONSULTANT design team to discuss the findings of the morning session, review the CONSULTANT team analyses, and agree on methodology for selecting a preferred alternative for carrying forward to a Decision-Makers meeting. Depending on City staff and Working Group availability, the two half days may not be held on the same day. The preferred scheme could be one of the two alternatives or a hybrid of the most favorable aspects of the two (to the extent possible). Members of the CONSULTANT design team will summarize this charrette for the benefit of the meeting with the Decision-Makers Meeting #2. 4.2 Deliverables Comparative summary memo of the alternatives (Urban Design, Traffic, Economics, Infrastructure) DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 24 of 40 Task 5 Draft Coordinated Area Plan Task 5.1 Preferred Concept Plan and Program Based on comments from the Working Group, stakeholders, and direction from City staff and Decision-Makers, the CONSULTANT team will refine the preferred concept plan for the North Ventura Coordinated Area Plan. The preferred concept plan will serve as the basis for the preparation of Development Standards, Design Criteria and the Coordinated Area Plan Report. 5.1 Deliverable Preferred concept plan and program Task 5.2 Draft Coordinated Area Plan Report The CONSULTANT team will work with City staff to confirm an agreed outline and Table of Contents for the Coordinated Area Plan and will then prepare a Draft Report for review by City staff and stakeholders. The Draft Report will incorporate the preferred plan, programs and guidelines prepared in the previous task. As necessary, the Coordinated Area Plan Report will include supporting plans, diagrams, sketches and pictures to convey, illustrate and exemplify Coordinated Area Plan content. The proposed schedule allows for one review of the Administrative Draft Plan by City staff. One set of consolidated comments will be submitted by the City to the CONSULTANT team after review of the Administrative Draft Plan. CONSULTANT will present the preferred plan to the Working Group, and Decision-Makers and will facilitate one community workshop to solicit community reaction to the development of the preferred plan. The draft and final Coordinated Area Plan Report will include the following sections. Land use The report will illustrate the distribution, location and intensity of land uses, including industrial, office, retail, entertainment, residential, community amenities, public open space and parking supply within the study area. Transportation CONSULTANT through its subconsultant ARUP will further develop transportation infrastructure, services and programs for the preferred option, describing these using narratives, mapping and typical cross-sections and plans. ARUP will advise in the development of design guidelines for streets and other transportation infrastructure (e.g., bike/ped paths, transit stops). Utilities and Infrastructure CONSULTANT through its subconsultant BKF will prepare utility demand forecasts for the Coordinated Area Plan, based on land uses supplied by CONSULTANT to determine if the DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 25 of 40 current infrastructure is able to accommodate the proposed land uses and infrastructure presented as part of the Coordinated Area Plan. BKF will also contact utility providers with required project utility demands to verify existing capacities or required changes to the utility infrastructure to meet the demand. Development Standards and Design Criteria The CONSULTANT team will prepare Development Standards and Design Criteria for the private and public realms. These standards and criteria will “implement” and reinforce the preferred plan, focusing on the desired character of the Coordinated Area Plan. Such a framework will focus on the character, function and needs of the district, in particular the linkages between activity nodes and the character and needs of the public realm, pedestrian paths and building heights and orientation that frame and structure the streets. The standards and criteria will speak to both the built form and lands and character of the study area. CONSULTANT will consider the changing urban fabric, land use, density, open space, connections to adjacent areas, neighborhood transitions, circulation, sustainability and streets. Architectural design requirements will address street design and hierarchy, building design including streetwall and setbacks, public and private open spaces, street furniture such as fences, arcades, sidewalk treatments etc. and concept design of parking areas. Specific building types, such as community centers, if included in the preferred plan, will also be addressed. The guidelines will provide direction to private and public entities making improvements in the area and will be folded in the final report. 5.2 Deliverables Draft Coordinated Area Plan Report Final Coordinated Area Plan Report Task 5.3 Financial Feasibility and Economic Analysis Working closely with the City CONSULTANT through its subconsultant Strategic Economics will build a pro forma model that measures the economic feasibility of building prototypes that exemplify the range of land uses and development products envisioned in the Draft Plan. The land uses will likely include R&D/office, mixed-use, and residential. The building prototype inputs (height, unit sizes, parking, etc.) will be developed in close coordination with CONSULTANT. The market inputs will be based on the market analysis in Task 3.6 and vetted with developers active in Palo Alto and neighboring cities. The analysis will be structured to provide information about the economic incentives and disincentives to build the types of development products that are desired in the Plan Area, and the potential for private development to help fund infrastructure improvements in the Plan Area. In addition to the economic feasibility analysis, Strategic Economics will also provide a summary of the potential economic benefits of public infrastructure investments based on a review of existing literature and studies measuring the property value increases related to public realm and infrastructure improvements. 5.3 Deliverables Draft Financial Feasibility and Economic Analysis Memo Final Financial Feasibility and Economic Analysis Memo DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 26 of 40 Task 5.4 Funding and Financing Implementation Strategy CONSULTANT through its subconsultant Strategic Economics will contribute to the implementation strategy for the North Venture Comprehensive Area Plan, focusing on identifying the funding sources and financing tools available to implement the infrastructure improvements identified in the Draft Plan. The strategy will incorporate the findings of the financial feasibility analysis to establish whether private developers and property owners could potentially contribute to necessary improvements. Based on the analysis, Strategic Economics will provide recommendations on using property-based financing tools like community facilities districts (CFDs), tax increment financing (TIF), benefit assessment districts, and other similar mechanisms. Strategic Economics will also identify available state and regional grants to help fund infrastructure improvements in the Plan Area. 5.4 Deliverables Draft Funding and Financing Strategy Memo Final Funding and Financing Strategy Memo Task 6 Task 6.1 As of the effective date of this Agreement, the City anticipates that an Addendum to the Comprehensive Plan Final Environmental Impact Report (2017) would be the appropriate level of environmental review for the North Ventura Coordinated Area Plan. CONSULTANT’s subconsultant DJP&A will review the development assumptions and findings of the Comprehensive Plan Final Environmental Impact Report (2017) and assist as needed in preparing the existing conditions analysis. All this data will be compared to the Draft Plan for the North Ventura Coordinated Area Plan to determine the need for additional technical analyses and whether a different course of CEQA review may be appropriate. If it is deemed that an Addendum is the appropriate level of clearance, the subconsultant shall prepare the Addendum and all required documentation. If potential issues are found that could require an Initial Study/Mitigated Negative Declaration (IS/MND) or Supplemental Environmental Impact Report (SEIR), meaning the proposed plan would result in new or more significant impacts than were identified in the Comprehensive Plan Final Environmental Impact Report (2017), DJP&A would notify the City immediately to determine next steps. Once a final determination is made on the level of environmental review required, DJP&A would prepare the necessary analysis based on new technical analyses (as warranted) and existing data. DJP&A and ARUP will assist with the preparation of the background conditions analysis for the following resource areas as this data would most likely be required for the environmental review: Traffic, parking, transit, bicycle, and pedestrian facilities and demand Cultural and natural resources Natural and man-made hazards and hazardous materials, including the regional plume and affected groundwater DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 27 of 40 Parks, community centers, schools and other public facilities and conditions Consistent with the Comprehensive Plan, ARUP will provide for this amendment both a traditional the Level of Service (LOS) Traffic Impact Analysis (TIA) and a projection of project-generated VMT technical memorandum, utilizing the Synchro Analysis in task 4.2. This will be a multimodal approach, focusing not only on traffic but also transit, bicycle and pedestrian connectivity, convenience, and safety. Transportation impacts will be analyzed in accordance with the standards and methodologies found in VTA's Transportation Impact Analysis Guidelines. It is assumed that TIA trip threshold of 100 or more net new peak hour trips will be met. The following scenarios will be analyzed: Existing Existing plus Project Background Background plus Project Cumulative Cumulative plus Project It is assumed that signal warrant analyses for up to two currently unsignalized intersections will be conducted. The TIA may include the following optional tasks: Impact analysis of four freeway segments and eight freeway ramps Local street traffic volume impact analysis using the TIRE methodology for up to four residential street segments Bus transit service delay/quality of service analysis These optional tasks will be considered outside of scope and billed at time and materials using ARUP rates in Exhibit _. DJP&A will review the proposed project in relation to the findings of the Screening Level Phase I ESA under Task 3.9, to determine potential impacts/mitigation measures. DJP&A will prepare Technical Environmental Reports analyzing the draft Coordinated Area Plan for all topics as warranted (and if not covered by the Comprehensive Plan EIR). These may include, but not be limited to, CEQA issues such as transportation (LOS and VMT); air quality; noise; soils and groundwater (i.e., related to the existing plume and groundwater issues); and greenhouse gas emissions and at least one non-CEQA issue: parking. Note: CONSULTANT shall identify on its invoices all work performed under Task 6 with the notation “CEQA review” (in addition to describing the substantive work performed), so that these work items will be invoiced towards the $138,000 CEQA funding available for the project. Task 7 Hearings and Coordinated Area Plan Adoption Task 7.1 Hearings DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 28 of 40 Members of the CONSULTANT team will attend one hearing by the Planning and Transportation Commission and up to two hearings by the City Council to present the plan for adoption. Task 7.2 Adopted Plan CONSULTANT will prepare and submit the final Coordinated Area Plan in both an editable digital and a PDF format upon adoption by the City Council. Note: For additional meetings that may be required CONSULTANT team assumes attendance by at least two personnel and preparation time on a time and material basis. The billing rates in Exhibit B will apply for the Time and Materials authorization upon approval by the City as an Additional Service. Task 8 Additional Services In addition to the meetings noted in Tasks 2 and 7, additional services that may be included under this contract include: 1. Additional Working Group Meetings (Task 2.1) 2. Additional Decision Maker and public Hearings, such as City Council Finance or Policy and Services Committees (Tasks 2.4 and 7.1) DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 EXHIBIT “B” SCHEDULE OF PERFORMANCE CONSULTANT shall perform the Services so as to complete each milestone within the number of days/weeks specified below. The time to complete each milestone may be increased or decreased by mutual written agreement of the project managers for CONSULTANT and CITY so long as all work is completed within the term of the Agreement (See following Page, Attachment A). 29 of 40 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 PROPOSED SCHEDULE / June 12, 2018 ATTACHMENT "A" 2018 2019 2020 Tasks Months AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB 1. PROJECT INITIATION + MANAGEMENT Kickoff Meeting + Site Tour Project Management 2. COMMUNITY ENGAGEMENT Working Group Meetings (9) Stakeholder Meetings (15) Community Workshops (2) Decision Maker Meetings (4) Pop-up Workshops Support (2) 3. BACKGROUND CONDITIONS Data Collection Analysis Exisitng Conditions Memo 4. ANALYSIS OF OPTIONS + DRAFT PLAN COMPONENTS Development of Alternatives Comparison of Alternatives 5. DRAFT COORDINATED AREA PLAN Preferred Plan + Program Coordinated Area Plan Report Financial Feasibility+ Economic Analysis + Funding Strategy 6. TECHNICAL ANALYSIS + EIR Technical Reports Administrative Draft EIR Addendum Final EIR Addendum 7. HEARINGS + ADOPTION Planning + Transportation Commission City Council Adoption Hearing Existing Conditions Walk Tour Back-to-back meetings Combined session: Goal Setting Visioning Workshop Alternatives Evaluation Charette Report Back on Preferred Alternative Approach Preferred Alternative Workshop Review of Draft Plan Components City Review Reserve Meeting Final Draft Plan Review City Review KEY DELIVERABLES Note: Any changes to the schedule beyond the 18-months proposed will be re-evaluated for time and effort. Draft Existing Conditions Memo Land Use Concept Alternatives Preferred Alternative Administrative Draft Coordinated Area Plan Draft EIR Addendum Adopted Plan + EIR Addendum NORTH VENTURA COORDINATED AREA PLAN Ho l i d a y s Ho l i d a y s DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 30 of 40 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as Exhibit C-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE Task 1 NOT TO EXCEED AMOUNT $76,967.00 (Project Coordination and Management) Task 2 (Community Engagement) $101,282.00 Task 3 (Background Conditions) $129,509.00 Task 4 (Analysis of options and draft plan components) $118,428.00 Task 5 (Draft Coordinated Area Plan) $154,638.00 Task 6 (Technical analyses and EIR) $87,177.00 Task 7 (Hearings and adoption) $29,652.00 Sub-total Basic Services $697,653.00 Reimbursable Expenses (other Direct Cost) $1,500.00 Total Basic Services and Reimbursable expenses $699,153.00 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 31 of 40 Additional Services (Not to Exceed) $69,915.00 Maximum Total Compensation $769,068.00 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense anticipated to be more than $500.00 shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide additional services only by advanced, written authorization from the CITY. The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including reimbursable expense, for such services based on the rates set forth in Exhibit C-1. The additional services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s Project Manager and CONSULTANT prior to commencement of the services. Payment for additional services is subject to all requirements and restrictions in this Agreement. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 32 of 40 EXHIBIT “C1” SCHEDULE OF RATES Cost Proposal Form Palo Alto North Ventura Coordinated Area Plan 18‐Jun‐18 PERKINS+WILL TEAM Perkins+Will Silwal Ass. Principal $ 248.26 Das PM $ 181.86 Hall Sr. Designer $ 186.59 Chambers UD3 $ 151.78 Cleveland LA2 $ 126.43 Total hours Subtotal labor Other Direct Costs TOTAL Task 1: Project Coordination and Management Task 1.1 Project Management 8 100 108 $20,172 $100 $20,272 Task 1.1A Style Guide and Project Logo $0 $0 Task 1.2.1 Kick‐off meeting 8 8 8 8 32 $6,148 $100 $6,248 Task 1.2.2 Progress meetings 24 96 24 144 $27,060 $27,060 Task Total 40 204 8 32 0 284 $53,380 $200 $53,580 Task 2: Community Engagemant Task 2.1 Working group meetings 10 40 70 120 $20,571 $100 $20,671 Task 2.2 Stakeholder meetings 20 32 52 $8,589 $8,589 Task 2.3A Community workshops 16 16 40 72 $10,471 $600 $11,071 Task 2.3B Pop‐up workshops 4 4 $727 $727 Task 2.4 Decision Maker meetings 8 40 48 $9,450 $9,450 Task 2.6 Project website 4 4 $727 $727 Task 2.7 Mailing list 4 4 $727 $727 Task 2.8 Surveys (management/coordination only) 8 24 32 $5,098 $5,098 Task Total 18 20 116 142 40 336 $56,360 $700 $57,060 Task 3: Background Conditions Task 3.1 Data collection and mapping 8 14 20 40 82 $12,691 $200 $12,891 Task 3.2 Policy context 6 16 24 46 $8,118 $8,118 Task 3.Background conditions analysis 8 12 25 40 85 $13,077 $13,077 Task 3.4 Base maps 16 40 56 $7,486 $7,486 Task 3.5 Housing including affordable housing 1 1 $182 $182 Task 3.6 Market Snapshot 1 1 $182 $182 Task 3.7 Existing utilities analysis 1 1 $182 $182 Task 3.8 Transportation and parking 2 2 $364 $364 Task 3.9 Screening Level Phase 1 ESA 1 1 $182 $182 Task 3.10 Opportunities and constraints 6 1 16 24 40 87 $13,357 $100 $13,457 Task Total 28 7 58 109 160 362 $55,819 $300 $56,119 Task 4: Analysis of options and draft plan components Task 4.1 Development of alternatives 16 4 32 80 120 252 $37,984 $100 $38,084 Task 4.2 Comparison of Alternatives 8 4 16 24 32 84 $13,387 $13,387 Task Total 24 8 48 104 152 336 $51,372 $100 $51,472 Task 5: Draft Coordinated Area Plan Task 5.1 Preferred concept plan and program 8 4 16 80 120 228 $33,013 $33,013 Task 5.2 Draft Coordinated area plan Report 16 8 32 160 160 242 $55,912 $55,912 Task 5.3 Financial Feasibility and Economic Analysis 4 4 $727 $727 Task 5.4 Funding and Financing Implementation Strategy 4 4 $727 $727 Task Total 24 20 48 240 280 478 $90,379 $0 $90,379 Task 6: Technical analyses and EIR Task 6.1 Technical analyses and EIR addendum 20 20 $3,637 $3,637 Task Total Task 7: Hearings and adoption 0 20 0 0 0 20 $3,637 $0 $3,637 Task 7.1 Hearings 4 24 28 $5,471 $5,471 Task 7.2 Adopted plan + Final Report 4 8 42 40 94 $13,918 $200 $14,118 Task Total 8 0 32 42 40 122 $19,389 $200 $19,589 Subtotal All 142 279 310 669 672 $330,337 $1,500 $331,837 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 33 of 40 Cost Proposal Form Palo Alto North Ventura Coordinated Area Plan 18‐Jun‐18 PERKINS+WILL TEAM Strategic Economics $ Srivastava Principal 192.00 Braun Sr Associate $ 121.00 $ St‐Louis Associate 94.00 $ Reifsnyde Analyst 89.00 Total hours Subtotal labor Other Direct Costs TOTAL Task 1: Project Coordination and Management Task 1.1 Project Management Task 1.1A Style Guide and Project Logo Task 1.2.1 Kick‐off meeting 4 4 8 $1,252 $1,252 Task 1.2.2 Progress meetings Task Total 4 4 0 0 0 8 $1,252 $1,252 Task 2: Community Engagemant Task 2.1 Working group meetings 4 6 10 $1,494 $1,494 Task 2.2 Stakeholder meetings 2 2 $626 $626 Task 2.3A Community workshops 6 6 $726 $726 Task 2.3B Pop‐up workshops $0 Task 2.4 Decision Maker meetings 6 6 $1,152 $1,152 Task 2.6 Project website $0 Task 2.7 Mailing list $0 Task 2.8 Surveys (management/coordination only) $0 Task Total 12 14 0 0 0 22 $3,998 $3,998 Task 3: Background Conditions Task 3.1 Data collection and mapping Task 3.2 Policy context Task 3.Background conditions analysis Task 3.4 Base maps Task 3.5 Housing including affordable housing 4 8 16 8 36 $3,952 $3,952 Task 3.6 Market Snapshot 10 56 90 30 186 $19,826 $19,826 Task 3.7 Existing utilities analysis Task 3.8 Transportation and parking Task 3.9 Screening Level Phase 1 ESA Task 3.10 Opportunities and constraints Task Total 14 64 106 38 0 222 $23,778 $23,778 Task 4: Analysis of options and draft plan components Task 4.1 Development of alternatives Task 4.2 Comparison of Alternatives 10 50 60 24 144 $15,746 $15,746 Task Total 10 50 60 24 0 144 $15,746 $15,746 Task 5: Draft Coordinated Area Plan Task 5.1 Preferred concept plan and program Task 5.2 Draft Coordinated area plan Report Task 5.3 Financial Feasibility and Economic Analysis 28 52 100 15 195 $22,403 $22,403 Task 5.4 Funding and Financing Implementation Strategy 12 30 50 92 $10,634 $10,634 Task Total 40 82 150 15 0 287 $33,037 $33,037 Task 6: Technical analyses and EIR Task 6.1 Technical analyses and EIR addendum Task 7: Hearings and adoption Task Total 0 0 0 0 0 0 $0 $0 Task 7.1 Hearings Task 7.2 Adopted plan + Final Report Task Total 0 0 0 0 0 0 $0 $0 Subtotal All $77,811 $1,500 $79,311 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 34 of 40 Cost Proposal Form Palo Alto North Ventura Coordinated Area Plan 18‐Jun‐18 PERKINS+WILL TEAM BKF $ North VP 212.00 $ Stanley PM 197.00 $ Engineer 3 168.00 $ Engineer 2 148.00 $ Engineer 1 129.00 Total hours Subtotal labor Other Direct Costs TOTAL Task 1: Project Coordination and Management Task 1.1 Project Management 0 $0 $0 Task 1.1A Style Guide and Project Logo Task 1.2.1 Kick‐off meeting 3 3 $636 $100 $736 Task 1.2.2 Progress meetings 0 $0 Task Total 3 0 0 0 3 $636 $100 $736 Task 2: Community Engagemant Task 2.1 $0 0 $0 $0 Task 2.2 Stakeholder meetings 0 $0 Task 2.3A Community workshops 0 $0 $0 Task 2.3B Pop‐up workshops Task 2.4 Decision Maker meetings 0 $0 $0 Task 2.6 Project website 0 $0 $0 Task 2.7 Mailing list 0 $0 $0 Task 2.8 Surveys (management/coordination only) Task Total 0 0 0 0 0 $0 $0 $0 Task 3: Background Conditions $0 Task 3.1 Data collection and mapping 0 $0 $0 Task 3.2 Policy context 0 $0 $0 Task 3.Background conditions analysis 0 $0 $0 Task 3.4 Base maps 2 4 6 12 8 32 $5,028 $211 $5,239 Task 3.5 Housing including affordable housing 0 $0 $0 Task 3.6 Market Snapshot 0 $0 $0 Task 3.7 Existing utilities analysis 1 2 6 8 12 29 $4,346 $4,346 Task 3.8 Transportation and parking 0 $0 $0 Task 3.9 Screening Level Phase 1 ESA $0 Task 3.10 Opportunities and constraints 1 2 8 6 9 26 $3,999 $200 $4,199 Task Total 4 8 20 26 29 87 $13,373 $411 $13,784 Task 4: Analysis of options and draft plan components $0 Task 4.1 Development of alternatives 0 $0 $0 Task 4.2 Comparison of Alternatives 2 4 8 12 10 36 $5,622 $5,622 Task Total 2 4 8 10 36 $5,622 $0 $5,622 Task 5: Draft Coordinated Area Plan 0 $0 Task 5.1 Preferred concept plan and program 0 $0 $0 Task 5.2 Draft Coordinated area plan Report 4 8 6 8 20 46 $7,196 $300 $7,496 Task 5.3 Financial Feasibility and Economic Analysis 1 2 6 8 12 29 $4,346 $4,346 Task 5.4 Funding and Financing Implementation Strategy 0 $0 $0 Task Total 5 10 12 16 32 75 $11,542 $300 $11,842 Task 6: Technical analyses and EIR 0 $0 Task 6.1 Technical analyses and EIR addendum 0 $0 $0 Task 7: Hearings and adoption Tas k 0 0 0 0 0 $0 $0 $0 0 $0 Task 7.1 Hearings 0 $0 $0 Task 7.2 Adopted plan + Final Report 0 $0 $0 Task Total 0 0 0 0 0 $0 $0 $0 0 $0 Subtotal All $31,173 $811 $31,984 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 35 of 40 Cost Proposal Form Palo Alto North Ventura Coordinated Area Plan 18‐ Jun‐18 PERKINS+WILL TEAM ARUP Chazan Principal $ 318.00 Hrones PM $ 192.00 Yamasaki Planner $ 130.00 Walker Engineer $ 130.00 Total hours Subtotal labor Other Direct Costs TOTAL Task 1: Project Coordination and Management Task 1.1 Project Management 1 30 31 $6,078 $6,078 Task 1.1A Style Guide and Project Logo Task 1.2.1 Kick‐off meeting 8 8 $1,536 $1,536 Task 1.2.2 Progress meetings 0 $0 $0 Task Total 1 38 0 0 39 $7,614 $0 $7,614 Task 2: Community Engagemant Task 2.1 Working group meetings 0 $0 40 40 $7,680 $7,680 Task 2.2 Stakeholder meetings 9 9 $1,728 $1,728 Task 2.3A Community workshops 8 12 20 $3,096 $3,096 Task 2.3B Pop‐up workshops Task 2.4 Decision Maker meetings 0 $0 $0 Task 2.6 Project website 0 $0 $0 Task 2.7 Mailing list 0 $0 $0 Task 2.8 Surveys (management/coordination only) Task Total 0 57 12 0 69 $12,504 $0 $12,504 Task 3: Background Conditions 0 $0 Task 3.1 Data collection and mapping 4 20 24 $3,368 $3,368 Task 3.2 Policy context 2 4 12 $904 $904 Task 3.Background conditions analysis 8 20 28 $4,136 $4,136 Task 3.4 Base maps 0 $0 $0 Task 3.5 Housing including affordable housing 0 $0 $0 Task 3.6 Market Snapshot 0 $0 $0 Task 3.7 Existing utilities analysis 0 $0 $0 Task 3.8 Transportation and parking 4 20 24 $3,368 $5,500 $8,868 Task 3.9 Screening Level Phase 1 ESA Task 3.10 Opportunities and constraints 16 16 32 $5,152 $5,152 Task Total 0 34 80 0 120 $16,928 $5,500 $22,428 Task 4: Analysis of options and draft plan components 0 $0 Task 4.1 Development of alternatives 2 12 40 54 $8,140 $8,140 Task 4.2 Comparison of Alternatives 2 36 50 180 268 $37,448 $37,448 Task Total 4 48 90 180 322 $45,588 $0 $45,588 Task 5: Draft Coordinated Area Plan 0 $0 Task 5.1 Preferred concept plan and program 0 $0 $0 Task 5.2 Draft Coordinated area plan Report 40 70 20 130 $19,380 $19,380 Task 5.3 Financial Feasibility and Economic Analysis Task 5.4 Funding and Financing Implementation Strategy 0 $0 $0 Task Total 0 40 70 20 130 $19,380 $0 $19,380 Task 6: Technical analyses and EIR 0 $0 Task 6.1 Technical analyses and EIR addendum 20 120 140 $19,440 $19,440 Task Total Task 7: Hearings and adoption 0 20 0 120 140 $19,440 $0 $19,440 0 $0 Task 7.1 Hearings $0 $0 Task 7.2 Adopted plan + Final Report 6 24 24 54 $7,392 $7,392 Task Total 0 6 24 24 54 $7,392 $0 $7,392 0 $0 $0 Subtotal All $128,846 $5,500 $134,346 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 36 of 40 Cost Proposal Form Palo Alto North Ventura Coordinated Area Plan 18‐Jun‐18 PERKINS+WILL TEAM Plan 2 Place Javid Principal $ 180.00 Chambers Syka Subtotal labor Other Direct Costs TOTAL Outreach $ 120.00 Design $ 80.00 Total hours Task 1: Project Coordination and Management Task 1.1 Project Management 12 4 4 20 $2,960 $50 $3,010 Task 1.1A Style Guide and Project Logo 8 52 $5,600 $235 $5,835 Task 1.2.1 Kick‐off meeting 8 8 $1,440 $50 $1,490 Task 1.2.2 Progress meetings 0 $0 Task Total 28 4 56 28 $10,000 $335 $10,335 Task 2: Community Engagemant Task 2.1 Working group meetings 24 24 $4,320 $200 $4,520 Task 2.2 Stakeholder meetings 0 $0 Task 2.3A Community workshops 24 24 $4,320 $200 $4,520 Task 2.3B Pop‐up workshops $0 $0 Task 2.4 Decision Maker meetings 0 $0 $0 Task 2.6 Project website 16 4 102 122 $11,520 $200 $11,720 Task 2.7 Mailing list 8 4 24 36 $3,840 $200 $200 $4,040 Task 2.8 Surveys (management/coordination only) 8 16 24 $2,720 $2,920 Task Total 80 8 142 230 $26,720 $1,000 $27,720 Task 3: Background Conditions Task 3.1 Data collection and mapping 0 $0 $0 Task 3.2 Policy context 0 $0 $0 Task 3.Background conditions analysis 0 $0 $0 Task 3.4 Base maps 0 $0 $0 Task 3.5 Housing including affordable housing 0 $0 $0 Task 3.6 Market Snapshot 0 $0 $0 Task 3.7 Existing utilities analysis 0 $0 $0 Task 3.8 Transportation and parking 0 $0 $0 Task 3.9 Screening Level Phase 1 ESA Task 3.10 Opportunities and constraints 0 $0 $0 Task Total 0 0 0 0 $0 $0 $0 Task 4: Analysis of options and draft plan components Task 4.1 Development of alternatives 0 $0 $0 Task 4.2 Comparison of Alternatives Task Total 0 0 0 0 $0 $0 $0 Task 5: Draft Coordinated Area Plan Task 5.1 Preferred concept plan and program 0 $0 $0 Task 5.2 Draft Coordinated area plan Report 0 $0 $0 Task 5.3 Financial Feasibility and Economic Analysis Task 5.4 Funding and Financing Implementation Strategy 0 $0 $0 Task Total 0 0 0 0 $0 $0 $0 Task 6: Technical analyses and EIR Task 6.1 Technical analyses and EIR addendum $0 $0 Task Total Task 7: Hearings and adoption 0 0 0 0 $0 $0 $0 Task 7.1 Hearings 0 $0 $0 Task 7.2 Adopted plan + Final Report 0 $0 $0 Task Total 0 0 0 0 $0 $0 $0 Subtotal All $36,720 $1,335 $38,055 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 37 of 40 Cost Proposal Form Palo Alto North Ventura Coordinated Area Plan 18‐Jun‐18 PERKINS+WILL TEAM David J Powers and Associates TEAM TOTAL George Principal $ 250.00 Lisenbee $ 195.00 Total hours Subtotal labor Other Direct Costs TOTAL Task 1: Project Coordination and Management $31,030 $5,835 $13,042 $27,060 Task 1.1 Project Management 2 6 8 $1,670 $1,670 Task 1.1A Style Guide and Project Logo Task 1.2.1 Kick‐off meeting 4 4 8 $1,780 $1,780 Task 1.2.2 Progress meetings Task Total 6 10 16 $3,450 $3,450 $76,967 Task 2: Community Engagemant Task 2.1 Working group meetings $0 $34,365 $10,943 $19,413 $727 $10,602 $12,447 $4,767 $8,018 Task 2.2 Stakeholder meetings Task 2.3A Community workshops Task 2.3B Pop‐up workshops Task 2.4 Decision Maker meetings Task 2.6 Project website Task 2.7 Mailing list Task 2.8 Surveys (management/coordination only) Task Total 0 0 0 $0 $0 $0 $101,282 Task 3: Background Conditions $0 $17,819 $9,022 $21,053 $12,725 $4,134 $20,008 $4,528 $9,232 $8,182 $22,808 Task 3.1 Data collection and mapping 8 8 $1,560 $1,560 Task 3.2 Policy context Task 3.Background conditions analysis 6 12 18 $3,840 $3,840 Task 3.4 Base maps Task 3.5 Housing including affordable housing Task 3.6 Market Snapshot Task 3.7 Existing utilities analysis Task 3.8 Transportation and parking Task 3.9 Screening Level Phase 1 ESA $8,000 $8,000 Task 3.10 Opportunities and constraints Task Total 6 20 26 $5,400 $8,000 $13,400 $129,509 Task 4: Analysis of options and draft plan components $0 $46,224 $72,203 Task 4.1 Development of alternatives Task 4.2 Comparison of Alternatives Task Total 0 0 0 $0 $0 $0 $118,428 Task 5: Draft Coordinated Area Plan $0 $33,013 $82,788 $27,476 $11,361 Task 5.1 Preferred concept plan and program Task 5.2 Draft Coordinated area plan Report Task 5.3 Financial Feasibility and Economic Analysis Task 5.4 Funding and Financing Implementation Strategy Task Total 0 0 0 $0 $0 $0 $154,638 Task 6: Technical analyses and EIR $0 $87,177 Task 6.1 Technical analyses and EIR addendum 30 100 130 $27,000 $37,100 $64,100 Task Total Task 7: Hearings and adoption 30 100 130 $27,000 $37,100 $64,100 $87,177 $0 $8,141 $21,510 Task 7.1 Hearings 6 6 12 $2,670 $2,670 Task 7.2 Adopted plan + Final Report Task Total 6 6 12 $2,670 $0 $2,670 $29,651 $0 Subtotal All $38,520 $45,100 $83,620 $699,153 DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 38 of 40 Additional Service $69,915 Total Not To Exceed Amount $769,068 NOTE #1 All expenses related to in‐house printing of materials are estimated as 'OTHER DIRECT COSTS' and are billed at 100% without mark‐up NOTE #2 David J Powers and Associates 'OTHER DIRECT COSTS' for Task 3.9 and 6.1 included specialist technical sub‐consultants NOTE #3 ARUP 'OTHER DIRECT COSTS' for Optional Task 3.8 included traffic count sub‐consultant NOTE #4 See separtae matrix for P+W labor rates and breakdown of overhead elements NOTE #5 All funding related to environmental/CEQA related tasks (Task 3.9 and all tasks under Task 6) will charged towards $138,000 in funding for environmental review DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 39 of 40 INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES WORKER’S COMPENSATION YES EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES PER CLAIM AND IN THE AGGREGATE $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. EXCEPT FOR PROFESSIONAL LIABILITY AND WORKERS’ COMPENSATION COVERAGE, A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 40 of 40 C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 9482BC46-EC77-467B-AA2F-2C6C37892529 City of Palo Alto (ID # 10568) City Council Staff Report Report Type: Action Items Meeting Date: 8/19/2019 City of Palo Alto Page 1 Council Priority: Transportation and Traffic Summary Title: Approval of Response to Grand Jury Report Regarding VTA Title: Approval of Response to the 2018-2019 Civil Grand Jury of Santa Clara County Report, Entitled, “Inquiry into Governance of the Valley Transportation Authority” From: City Manager Lead Department: City Manager Recommendation Staff recommends that the City Council approve the following response to the 2018- 2019 Civil Grand Jury of Santa Clara County Report, entitled, “Inquiry into Governance of the Valley Transportation Authority.” Background On June 18, 2019, the Civil Grand Jury of Santa Clara County released a report which carefully examines the operation and governance of the Valley Transportation Authority (VTA) as part of VTA’s responsibility to assure the public interest of the people of Santa Clara County. The report is included as Attachment B. Discussion The Grand Jury’s Report includes five (5) findings and approximately 12 recommendations (see pages 43 through 46). Finding 1 is most relevant to the City of Palo Alto (specifically 1c, 1d, and 1e). Pursuant to Penal Code Sections 933 and 933.05, the Grand Jury requested a response from the City of Palo Alto regarding those 3 specific recommendations (listed below from the Grand Jury Report). Finding #1: The VTA Board, currently made up exclusively of elected officials from the Santa Clara County, Board of Supervisors, the City of San José and the other smaller cities in the County, suffers from: o A lack of experience, continuity and leadership; o Inadequate time for the directors to devote to their duties to the VTA Board due to their primary focus on the demands of their elected City of Palo Alto Page 2 positions; o A lack of engagement on the part of some directors, fostered in part by the committee system, resulting in VTA functioning largely as a staff- driven organization; o Domination, in terms of numbers, seniority and influence, by representatives of the Santa Clara County Board of Supervisors and the City of San José; and o Frequent tension between the director’s fiduciary duties to VTA and its regional role, on the one hand, and the political demands of their local elected positions, on the other. Recommendation 1a: VTA should commission a study of the governance structures of successful large city transportation agencies, focusing on such elements as: board size; term of service; method of selection (directly elected, appointed or a combination); director qualifications; inclusion of directors who are not elected officials; and methods of ensuring proportional demographic representation. This study should be commissioned prior to December 31, 2019. Recommendation 1b: As the appointing entity with an interest in the transit needs of all County residents, the County of Santa Clara should commission its own study of transportation agency governance structures, focusing on the elements listed in Recommendation 1a. This study should be commissioned prior to December 31, 2019. Recommendation 1c: As constituent agencies of VTA, each of the cities in the County should prepare and deliver to VTA and the County Board of Supervisors a written report setting forth its views regarding VTA governance, with specific reference to the elements listed in Recommendation 1a. These reports should be completed and delivered prior to December 31, 2019. Recommendation 1d: Within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation, including appropriate amendments to Sections 100060 through 100063 of the California Public Utilities Code, to improve the governance structure of VTA (which potentially could include an increase in the directors’ term of service, the addition of term limitations and the inclusion of appointed directors who are not currently serving elected officials). Recommendation 1e: In order to provide more continuity in the leadership of the VTA Board, within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation amending Section 100061 of the California Public Utilities code to provide that the Chairperson of the VTA Board shall be elected for a term of two years rather than one. City of Palo Alto Page 3 A draft response letter for the City Council to consider is attached as Attachment A. Resource Impact There is no immediate fiscal impact resulting from this report. Policy Implications There is no immediate policy implication resulting from this report. Environmental Review There is no environmental review required for this report. Attachments: • Attachment A: Draft CGJ letter re VTA • Attachment B: CGJ VTA Final Report - 06.18.19 August 19, 2019 Honorable ______ Presiding Judge Santa Clara County Superior Court 191 North First Street San Jose, CA 95113 Re: Civil Grand Jury Report - Inquiry into Governance of the Valley Transportation Authority (June 18, 2019) Honorable _______, On behalf of the City of Palo Alto, I would like to express our appreciation for the effort and commitment demonstrated by the Santa Clara County Civil Grand Jury’s report, entitled Inquiry into Governance of the Valley Transportation Authority (June 18, 2019). As required by California Penal Code §§ 933(c) & 933.05 (a) & (b), this letter represents the City’s response on recommendations that involve the City of Palo Alto. The following are the recommendations most relevant to Palo Alto, along with our responses: Recommendation 1a: VTA should commission a study of the governance structures of successful large city transportation agencies, focusing on such elements as: board size; term of service; method of selection (directly elected, appointed or a combination); director qualifications; inclusion of directors who are not elected officials; and methods of ensuring proportional demographic representation. This study should be commissioned prior to December 31, 2019. Response: The City of Palo Alto requests that the charge to VTA be clarified to include not only “large city” transportation agencies, but specifically metropolitan areas (such as Portland, Oregon) where transit agency service areas span multiple municipalities. It is also important that VTA engage all cities equally in this study, and not allow the current governance structure to limit the involvement of cities that do not currently have voting representatives on the VTA board. Recommendation 1b: As the appointing entity with an interest in the transit needs of all County residents, the County of Santa Clara should commission its own study of transportation agency governance structures, focusing on the elements listed in Recommendation 1a. This study should be commissioned prior to December 31, 2019. Response: The City of Palo Alto requests that the charge to the County of Santa Clara be clarified to specifically include metropolitan areas (such as Portland, Oregon) where transit agency service areas span multiple municipalities. Recommendation 1c: As constituent agencies of VTA, each of the cities in the County should prepare and deliver to VTA and the County Board of Supervisors a written report setting forth its views regarding VTA governance, with specific reference to the elements listed in Recommendation 1a. These reports should be completed and delivered prior to December 31, 2019. Response: The City of Palo Alto appreciates the Civil Grand Jury’s recommendation that cities be directly and actively engaged in the discussion of alternative governance structures for VTA. Consistent with the circumstances described in the Civil Grand Jury’s report, however, smaller cities are not immediately positioned to engage and advance a consensus position on this issue. Meaningfully providing input to this process will require that cities without designated seats on the VTA Board be given the time and resources necessary to consider a consensus position. Specifically, it may be necessary to evaluate the governance of VTA not only in terms of population distribution, but also factors such as employment and sales tax generation given that a majority of VTA’s revenues are generated from sales tax measures. As a major employment center and sales tax generator at the edge of VTA’s service territory, Palo Alto has historically been underrepresented in VTA policy decision in ways that do not serve the travelling public. How representation relates to communities of interest with shared permanent transportation issues, such as Caltrain and High Speed Rail interests may also be a consideration. Pending decisions on railroad grade separation funding under Measure B pose further risks to VTA’s ability to follow through on commitments made to Santa Clara voters, such that a thoughtful consideration of governance is particularly timely. The City of Palo Alto therefore requests that VTA provide funding to an appropriate fiscal agent, such as the Cities Association of Santa Clara County, to provide the resources needed for a thoughtful discussion of alternatives and positions by cities without designated seats on the VTA Board. This discussion should include the potential support for organizations similar to Councils of Governments that can sustainably represent the interests of multiple municipalities. Once this funding is committed, at least 120 days will be needed to complete the discussion and documentation of perspectives and recommendations to the VTA Board and County Board of Supervisors. Recommendation 1d: Within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation, including appropriate amendments to Sections 100060 through 100063 of the California Public Utilities Code, to improve the governance structure of VTA (which potentially could include an increase in the directors’ term of service, the addition of term limitations and the inclusion of appointed directors who are not currently serving elected officials). Response: Per the response comments provided for Recommendation 1C, the City of Palo Alto is open to participating in the development of such legislation, assuming it addresses the root concerns that lead to underrepresentation of the smaller jurisdictions, particularly communities bordering other counties. Recommendation 1e: In order to provide more continuity in the leadership of the VTA Board, within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation amending Section 100061 of the California Public Utilities code to provide that the Chairperson of the VTA Board shall be elected for a term of two years rather than one. Response: While continuity is very important for the functionality of the board, the continuity is only effective if it is fairly distributed among the constituent agencies. In other words, extending the term for chairpersons representing San Jose or Santa Clara County could actually exacerbate other issues discussed in the report. Given this, we believe it may be premature to commit to a specific action such as increasing the Chairperson’s term to two years. Palo Alto would prefer to hold this recommendation in abeyance in order to allow time for overall recommendations to be developed. Should you have any questions or concerns regarding this response, please feel free to contact City Manager Ed Shikada at ed.shikada@cityofpaloalto.org. Sincerely, Eric Filseth, Mayor cc: VTA Board Palo Alto City Council 2018-2019 Civil Grand Jury of Santa Clara County June 18, 2019 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY Page 1 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table of Contents GLOSSARY AND ABBREVIATIONS......................................................................................... 2 SUMMARY .................................................................................................................................... 4 METHODOLOGY ......................................................................................................................... 6 DISCUSSION ................................................................................................................................. 8 A Brief History of the VTA ...................................................................................................... 8 Structure of the VTA Board .................................................................................................... 9 The VTA Board in Action ...................................................................................................... 11 VTA’s Operating Performance ............................................................................................. 18 VTA’s Financial Management ............................................................................................... 22 The Extension of Light Rail Service to Eastridge ................................................................ 26 Designing a More Effective Structure for the VTA ............................................................. 35 CONCLUSIONS........................................................................................................................... 40 FINDINGS AND RECOMMENDATIONS................................................................................. 43 Finding 1 .................................................................................................................................. 43 Finding 2 .................................................................................................................................. 44 Finding 3 .................................................................................................................................. 45 Finding 4 .................................................................................................................................. 46 Finding 5 .................................................................................................................................. 46 REQUIRED RESPONSES ........................................................................................................... 47 APPENDIX A – The Guidelines for Member Agency Appointments to the VTA Board of Directors ........................................................................................................................................ 48 APPENDIX B – VTA Operating Statistics and 2017 National Trends ........................................ 50 APPENDIX C – Peer Agency Comparisons ................................................................................ 53 REFERENCES ............................................................................................................................. 58 Page 2 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY GLOSSARY AND ABBREVIATIONS AC Transit Alameda County Transit. A peer transit agency to VTA. APTA American Public Transit Association. A national association of which VTA is a member. BART Bay Area Rapid Transit. A peer transit agency. County County of Santa Clara CPC Capital Program Committee. A standing committee of the VTA Board of Directors. DOT US Department of Transportation. A national transportation agency. EBRC Eastridge-BART Regional Connector. Current nomenclature for the Eastridge light rail extension (Phase 2). Farebox recovery ratio Fares collected from passengers divided by operating expenses. FTA Federal Transit Administration. A federal agency providing transit data (see NTD) and services. HMTA Houston Metro Transit Agency HOV High Occupancy Vehicle LRT Light rail transit [system] MTC Metropolitan Transportation Commission. A Bay Area regional transportation coordination and planning agency. Next Network VTA's Next Network is a redesign of the transit network and is one component of an agency-wide effort to make public transit faster, more frequent and more useful for Santa Clara County travelers. NTD National Transportation Database. Database of statistics and metrics maintained by FTA. PUC California Public Utilities Code SCCTD Santa Clara County Transit District SCVWD Santa Clara Valley Water District Page 3 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA Santa Clara Valley Transportation Authority VRH Vehicle Revenue Hours Page 4 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY SUMMARY The Santa Clara Valley Transportation Authority (VTA) is an independent special district created by the California legislature in 1972. Initially, the Santa Clara County (County) Board of Supervisors provided direct oversight of VTA and acted as its Board of Directors. Effective January 1, 1995, pursuant to further legislation, VTA began operating under a separate Board of Directors (VTA Board) composed of elected officials from throughout the County appointed to serve by the County Board of Supervisors and the governing authorities of VTA’s constituent municipalities, with the allocation of VTA Board representation generally based on population. For many years, VTA has been plagued by declining operating performance and recurring budget gaps between projected revenues and expenses (referred to as structural financial deficits) – notwithstanding significant population growth and, in recent years, increased employment levels throughout much of Silicon Valley. The 2003-2004 Santa Clara County Civil Grand Jury conducted an “Inquiry into the Board Structure and Financial Management of the Valley Transportation Authority”1 which found, among other things, that: The operating performance of VTA compared unfavorably to its peer organizations; The VTA Board had not effectively managed the finances of VTA, resulting in a substantial structural financial deficit that was projected to increase in the following year; and A root cause of VTA’s poor performance was the governance structure of the VTA Board, which was “too large, too political, too dependent on staff, too inexperienced in some cases, and too removed from the financial and operational performance of VTA.” To address these issues and attempt to make the VTA Board more responsive, the 2003-2004 Grand Jury proposed various changes to the Board’s structure. Although responses filed by seven of VTA’s constituent municipalities were supportive of some or all the recommended changes, VTA’s response defended the status quo, and most of the other municipalities adopted VTA’s position. Accordingly, the recommended changes were not made. The 2008-2009 Grand Jury again examined the governance of VTA and reiterated some of the same concerns noted in the earlier report, although the focus of the 2008-2009 report was primarily on the role and functioning of the VTA Board’s appointed advisory committees. 1 http://www.scscourt.org/court_divisions/civil/cgj/2004/BoardStructureFinancialMgmtVTA.pdf Page 5 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The 2018-2019 Civil Grand Jury (Grand Jury) revisited the subject of VTA’s governance and the work of the earlier grand juries and found that: VTA’s operating performance has continued to deteriorate over the last 10 years, relative to both its own historical performance and the performance of its peers, across a wide variety of metrics; The VTA Board has consistently failed to adequately monitor VTA’s financial performance and has taken action, albeit less than fully effective action, only in the face of imminent financial crises; and Despite the serious ongoing structural financial deficit, the VTA Board has been unwilling to review and reconsider decisions made years or even decades ago regarding large capital projects (and their attendant operating costs) that are no longer technologically sound or financially viable, based on their costs and projected ridership. The Grand Jury concluded that today, more so than in 2004 or 2009, the VTA Board is in need of structural change to enable it to better protect the interests of the County’s taxpayers and address the many complex challenges presented by emerging trends in transportation, rapidly evolving technology and the changing needs of Silicon Valley residents. The Grand Jury recommends several changes to the governance structure and operations of the VTA Board which will improve the Board’s ability to effectively perform its important oversight and strategic decision-making functions. The Grand Jury further recommends that the VTA Board consider deferral of Phase 2 of the Eastridge light rail extension project pending a full review of the future role of light rail in VTA’s transit system. Such a review should study alternative ways to meet the needs of the residents of East San Jose for modern, efficient public transportation without extending a costly and outdated light rail system and worsening VTA’s already precarious financial condition. In January 2019, the incoming Chairperson of the VTA Board issued a summary of her “2019 Perspectives and Priorities”2 for VTA (see Board of Director’s Meeting, January 7, 2019, section 8.2). Among the goals articulated by the Chairperson was improved board governance. The Chairperson announced that she would “convene a board working group to look at a range of board governance practices,” with a view to improving “board engagement and effectiveness.” The Grand Jury commends the Chairperson for focusing on the important subject of governance. This report may aid the Chairperson and the rest of the Board in that endeavor. 2 http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=12&ID=2133&Inline=True Page 6 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY METHODOLOGY The 2018-2019 Civil Grand Jury began this investigation of VTA on August 15, 2018 and concluded its work on May 29, 2019. The investigation primarily followed from issues highlighted in the report of the 2003-2004 Grand Jury and focused on the structure of the VTA Board of Directors, the effectiveness of its oversight of VTA’s operating and financial performance, its handling of the agency’s persistent structural financial deficit and its ability to address the many complex challenges facing VTA as it confronts the future of transportation in Silicon Valley. The Grand Jury employed a broad range of data gathering and investigative methods, including: Site visits were made to VTA headquarters, one of the VTA bus yards, VTA’s downtown customer service center, and bus and light rail stops and stations. The transit system was used, including the purchase of Clipper Cards, riding buses and light rail trains during peak and off-peak hours, stops at and transit through Diridon Station, Eastridge, downtown and North County rail and bus facilities, and assessing access to transit stops by walking to stations and stops and using VTA parking sites. Interviews were conducted with 37 individuals (some more than once) over more than 50 hours. Interviewees included a substantial number of individuals who served as members of the VTA Board and its committees during 2018 and 2019, senior and mid-level VTA staff personnel, city and county government officials, and representatives of various community stakeholder groups. Governing documents were reviewed, including: (i) provisions of the California Public Utilities Code (PUC), which established VTA, particularly PUC Sections 100060 through 100063, which set forth the governance structure of the VTA Board; (ii) provisions of the VTA Administrative Code, adopted by the VTA Board to supplement the provisions of the PUC; and (iii) agreements among members of city groups who share representation on the VTA Board regarding the process for rotating their representation on the Board and collectively choosing their appointees. In addition, data regarding attendance records for VTA Board and committee meetings, directors’ terms in office and voting records were examined. Reports specific to VTA were reviewed, including: (i) the 2003-2004 and 2008-2009 Civil Grand Jury reports and the responses thereto; (ii) a 2007 report entitled “Santa Clara Valley Transportation Authority Organizational and Financial Assessment,” by the Hay Group (Hay Report); (iii) a 2008 report on VTA by the California State Auditor; (iv) a 2010 thesis entitled “Assessing Transit Performance: Recommended Performance Standards for the Page 7 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Santa Clara Valley Transit Authority,” authored by a San Jose State University master degree candidate; (v) a 2016 report entitled “Transit Choices Report,” prepared for VTA by the consulting firm Jarrett Walker +Associates; and (vi) numerous public documents published by VTA and/or available on its website. These and other documents referred to in this report are listed in the Reference Section. Comparisons were made of VTA’s performance in various operating and financial categories to the performance of other transit organizations utilizing data compiled by the American Public Transportation Association (APTA), the United States Department of Transportation (DOT), The Business Insider, the Federal Transit Administration (FTA) published in the National Transit Database (NTD), the Public Transit Factbook and other federal and industry indices and metrics. Industry and “think tank” reports and articles discussing and comparing transit agency performance, including, among others, the Cato Institute, the Heritage Foundation and the Hudson Institute, were also reviewed. For purposes of comparison, operating data from peer agencies serving the metropolitan areas of Portland, Minneapolis, Houston, Dallas, Salt Lake City, Denver, San Francisco, Sacramento and San Diego were reviewed. In connection with a comparison of governance structures, other agencies, including those serving Los Angeles, Seattle, Vancouver B.C., Austin, Chicago, New York, the District of Columbia and Phoenix, were considered. Attendance at regularly scheduled meetings of the VTA Board and its committees, including the Administration and Finance Committee, Capital Program Committee (CPC), Governance and Audit Committee, and Ad Hoc Financial Stability Committee between October 2018 and May 2019, as well as Board workshops on the Future of Transportation in Silicon Valley and the proposed biennial budget for fiscal years 2020 and 2021. Audio and video recordings of some of the meetings noted above, as well as other meetings of the VTA Board and certain committees conducted from January 2018 forward were reviewed. Page 8 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY DISCUSSION A Brief History of the VTA Santa Clara County Transit District (SCCTD) was created by the County’s voters in June 1972 and took over operations of three financially strapped private bus companies. SCCTD was initially managed by the County’s Department of Public Works, but in 1974 became a separate agency governed directly by the County Board of Supervisors. SCCTD initially focused on upgrading and replacing its inherited fleet of buses. Assisted by federal funding and a voter approved half-cent sales tax in 1976, SCCTD began to acquire diesel buses and build repair facilities. In the 1980s, SCCTD embarked upon the construction of its light rail transit system, utilizing funding received from the federal government and the proceeds of additional voter-approved sales taxes. The first segment of the light rail system opened for service in late 1987, and the entire initial 21-mile system was completed in 1991. Four extensions of the system were completed by 2005, and additional extensions are currently in the planning stages. SCCTD completed a two-part reorganization, in early 1995. SCCTD was designated the Congestion Management Agency for the County under a joint powers agreement among the County and its 15 cities. At the same time, legislation reconstituting the Board of Directors from five directors, all of whom were County Supervisors, to 12 consisting of two County Supervisors, five San José City Council members and five city council members representing the remaining 14 cities, selected on a rotating basis by the governing authorities of those cities. The name of the agency was changed to the Santa Clara Valley Transportation Authority in 1996, from which the acronym VTA was adopted. Today, VTA is a complex, multi-billion-dollar enterprise that provides bus, light rail and paratransit services within Santa Clara County. In addition, VTA participates in funding other agencies that provide regional rail service, including Caltrain, the commuter rail line serving the San Francisco Peninsula, the Capitol Corridor operating between Silicon Valley and the Sacramento area, and the Altamont Corridor Express, connecting Stockton and San José. VTA also is responsible for county-wide transportation planning, including congestion management, the design and construction of highway, pedestrian and bicycle improvement projects, and the promotion of transit-oriented development. Page 9 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Structure of the VTA Board The present structure of the VTA Board was authorized by legislation effective January 1, 1995. In the legislation proposed by the County Board of Supervisors, the VTA Board was to have been composed of five directly elected members (corresponding to the five county supervisorial districts) and 11 appointed members of various elected bodies in the county. As ultimately adopted, the enabling legislation eliminated the directly elected directors. Instead, PUC Section 100060 provided for a Board consisting of 12 voting members and alternates, all of whom are elected public officials, with the allocation of Board representation generally based on population. Under the formula outlined in PUC Section 100060, and further spelled out in Section 2-13 of the VTA Administrative Code, the VTA Board is composed of: Two voting members and one alternate who are members of the Santa Clara County Board of Supervisors; Five voting members and one alternate representing the City of San José; One voting member and one alternate representing the cities of Los Altos, Los Altos Hills, Mountain View and Palo Alto; One voting member and one alternate representing the cities of Campbell, Cupertino, Los Gatos, Monte Sereno and Saratoga; One voting member and one alternate representing the cities of Gilroy and Morgan Hill; and Two voting members and one alternate representing the cities of Milpitas, Santa Clara and Sunnyvale. All the voting members and alternates, other than the County supervisors, must be currently serving as mayors or city council members of the city they represent. Each of the four groups of smaller cities may collectively determine their representative, and each group has adopted an agreement specifying, in varying degrees of detail, the manner in which the group’s appointed representatives will rotate among the member cities and how individual representatives are to be selected. PUC Section 100060(c) provides, importantly, that “[t]o the extent possible, the appointing powers shall appoint individuals to the VTA Board who have expertise, experience, or knowledge relative to transportation issues.” The VTA Administrative Code and the inter-city agreements contain similar directives. In 2015, the Governance and Audit Committee of the VTA Board adopted a set of Guidelines for Member Agency Appointments to the VTA Board of Directors (Guidelines). The Guidelines Page 10 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY contain several recommendations emphasizing, among other things, the value of a candidate’s expertise and prior experience on the VTA Board or its Policy Advisory Committee. The Guidelines also express the expectation that VTA Board members “[h]ave a fiduciary responsibility to vote for the best interests of the region, not those of their city/county group or appointing jurisdiction,” and “should be able to attend Board and standing committee meetings regularly.” A full copy of the Guidelines is attached as Appendix A. In addition to the voting members and alternates, the VTA Administrative Code provides that members of the Metropolitan Transportation Commission (MTC) who reside in Santa Clara County, and who are not voting members or alternates, shall be invited to serve as ex-officio, non- voting members of the Board3. The VTA Board currently has one such ex-officio member. VTA Board members serve for a term of two years4. The VTA Administrative Code “strongly encourages” appointing authorities to reappoint representatives to successive terms, and some members do serve multiple terms5. One director who recently left the VTA Board had served as a director or alternate representing San José and the County for a total of 13 years, but missed eight Board meetings in his last two years of service. The two voting directors currently representing the County have served as directors or alternates for a total of 14.5 and 12.5 years. The current Mayor of San José has served as a director for 11.5 years. However, many directors who serve on a rotating basis as representatives of the smaller city groups do not serve successive terms, and directors’ two-year terms are frequently cut short when they are not re-elected, term out or otherwise cease to serve in their elected position. PUC Section 100061 requires the VTA Board to elect its Chairperson and Vice Chairperson annually. Both officers serve for terms of one calendar year, straddling two fiscal years of the VTA (July 1 to June 30). By informal convention, the Vice Chairperson one year becomes Chairperson the following year. 3 VTA Administrative Code Section 2-15 4 PUC Section 100060.2 5 VTA Administrative Code Section 2-14 Page 11 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The VTA Board in Action As noted above, the VTA Board consists of a rotating group of elected public officials appointed by the County Board of Supervisors, the City of San José and the four groups of smaller cities. Although the PUC, the VTA Administrative Code and the Guidelines all admonish the appointing authorities to appoint VTA Board members who have appropriate expertise, experience and knowledge, as a practical matter, appointments are often made based more on political considerations than on the candidate’s qualifications. From the candidate’s point of view, appointment to the VTA Board, one of the largest agencies in the County, is generally considered a plus for his or her political advancement. Candidates often express an interest in serving on the VTA Board largely because they see service on the Board as a “resume builder.” As a result, appointees to the VTA Board often have no previous experience with transportation, finance or leadership of a commercial enterprise, let alone one with annual revenues of over a half billion dollars and assets of $5 billion. New directors often know little about VTA’s operations or finances, or the organization and functioning of the Board. In our interviews, the Grand Jury learned that one director was unclear about how directors were chosen or even how many directors there are. Another, representing one of the smaller city groups, was unfamiliar with the provisions of the inter-city agreement governing appointments to the Board and considers appointments as simply the political prerogative of the mayor of the city whose turn it is to make the appointment. Because new directors often have little or no experience with transportation agency operations or transit policy, they face a steep learning curve to even begin to become effective Board members. There is no “boot camp” for new directors. The orientation program provided by the VTA staff is brief and presents only a high-level overview of VTA and basic information regarding Board procedures. When speaking with the Grand Jury, some directors couldn’t recall going through any orientation at all. Workshops are conducted by the VTA staff, generally about twice a year, to provide background information to the directors, often focusing on a specific issue. These workshops are relatively short, sometimes poorly attended and often cancelled. For example, both director workshops scheduled to be held in 2018 were cancelled. A workshop held on February 22, 2019, ambitiously addressed the important and complex topic of “The Future of Transportation in Silicon Valley.” The workshop was attended by eight of the 12 voting members of the VTA Board, three of the six alternates and the ex officio member and lasted a little over three hours. Needless to say, the workshop merely scratched the surface of the topic. A few Board members have attended transportation-related, third party-sponsored programs and seminars on their own initiative to enhance their knowledge on issues of transportation management and policy. There is no formal policy requiring or encouraging attendance at external training programs or conferences or other forms of continuing education. Page 12 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Influence on the VTA Board The City of San José dominates the VTA Board with the ability to appoint five of the 12 directors, which should not be unexpected given San José’s share of the County’s population. Although the San José directors technically are appointed by the San José City Council, the Mayor recommends those appointments. Thus, the Mayor effectively controls the initial selection of the San José directors as well as their tenure on the Board and, therefore, has the ability to exercise considerable influence over a substantial portion of the VTA Board. Since some members of the County Board of Supervisors who have served on the VTA Board previously served on the San José City Council or represented supervisorial districts within San José, these relationships may further enhance San José’s dominance on the VTA Board. Given that representatives of the City of San José and the County Board of Supervisors are often able to serve multiple terms on the VTA Board, they gain experience and the ability to add value. However, representatives of the smaller city groups are subject to the rotational provisions of their inter-city agreements, limiting their ability to serve consecutive terms. Accordingly, the San José and County representatives often dominate the Board in terms of experience and influence as well as numbers. Current voting members of the VTA Board representing San José and the County have served an average of 4.3 years and 10.5 years, respectively, including non-concurrent terms but excluding service by some of them as alternates. However, the current voting members representing the smaller cities have served an average of only 1.9 years. Board Member Preparation All of the members of the VTA Board are primarily focused on their other duties as local elected officials; their position on the VTA Board is clearly of secondary importance to most, if not all, directors and, as noted above, viewed by some principally as a “resume builder” and a one day a month job. Directors confront their other duties as elected officials and, in the case of smaller city directors, private employment or business interests, which themselves may be demanding and time-consuming. Directors often find it difficult to digest the massive amounts of information provided to them by the VTA staff to help them fulfill their responsibilities and prepare for meaningful participation in Board meetings. For example, meeting materials for VTA Board meetings typically run more than 300 pages, and committee meeting packages can be as voluminous. Here too the representatives of the smaller city groups are at a disadvantage. While members of the County Board of Supervisors and the San José City Council have dedicated staffs that can help them review and distill VTA-supplied materials and analyze issues, the representatives of the smaller city groups have little or no staff support. Although members of the VTA staff make themselves available to Page 13 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY meet with directors to discuss VTA business, particularly in advance of monthly meetings, the Grand Jury learned that some directors take little or no advantage of these opportunities. VTA Committees Like many complex organizations — both governmental and private — the VTA Board maintains a system of standing committees. These include the Administration and Finance Committee, the CPC, and the Governance and Audit Committee, among others. The Board also has a number of advisory committees and occasionally appoints ad hoc committees to deal with specific matters. For example, the Ad Hoc Financial Stability Committee (which will be discussed further in this report) was formed in January 2018 and was active throughout 2018. The Board’s committee structure is both a benefit and a detriment. Because Board members have other public and private commitments, it is challenging to deal with all the complex issues affecting VTA; thus, delegation of certain responsibilities is necessary. On the other hand, the committee structure tends to create a certain level of disengagement. Board members are assigned by the Chairperson to serve on standing committees. Several interviewees expressed the opinion that committee assignments are often made with little or no input from the affected Board members, and some committee members only learn of their appointment when they see their name on a list. Because of their various time commitments, Board members often are unfamiliar with or just defer to and trust the staff and their fellow directors regarding issues passed upon initially by committees of which they are not members. When those issues come before the full Board, often by way of its consent calendar, there is little or no discussion or debate. In some cases, matters of some significance are also placed on the consent calendar at the committee level, with the result that only the staff conducts any significant review of the matter. This system works well for some topics, like the approval of construction contracts, but can leave many directors uninformed about important topics to which the full Board should be attentive. Topics like monitoring VTA’s financial affairs and structural financial deficit (which is principally left to the Administration and Finance Committee) and major ongoing capital programs, which are monitored by the CPC demand full engagement by all directors. At the October 2018 Board meeting, in reference to a report on the consent calendar, one of the directors stated, “Instead of going to committee, this type of report should go to the full Board…We should have [Board] workshops on several of these reports.” Page 14 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Alternate VTA Board Members Like the use of committees, the system of alternate Board members has both advantages and disadvantages. Alternate members cannot vote at meetings except when they are attending in place of a voting member. Accordingly, alternate members often do not attend Board or committee meetings. If they attend meetings at all, they typically sit in the audience and do not participate. The existence of alternate Board members is useful in securing a quorum at Board and committee meetings when a voting member is absent. However, the availability of an alternate can serve as justification for voting members to make meetings a lower priority. Additionally, because alternate members frequently are called upon at the last minute, they may be even less prepared than voting members with the agenda and meeting materials. The alternate faces the decision to vote on matters in accordance with his or her own beliefs and opinions, or to vote the way he or she believes the voting member being replaced would have voted. This type of voting “by proxy” is inconsistent with good governance practices and would not be permitted by members of a corporate board of directors. VTA Board Meetings The VTA Board meets once a month in the evening. Board committees meet between three and 11 times a year. Attendance at Board and committee meetings varies greatly. Data compiled by the Grand Jury show that during 2017, 2018 and the first four months of 2019, attendance by voting members at Board meetings and workshops averaged approximately 87%. Individual attendance ranged from 61 to 92%. During the same period, attendance by voting members at committee meetings averaged approximately 86%. Often, directors arrive at meetings late, step away from the meeting, or leave early, but their partial participation is not always reflected in the attendance records. The conduct of Board meetings observed by the Grand Jury is characterized by limited debate and discussion, typically with active participation by only a few directors and some directors not participating at all. The Board does very little on an ongoing basis to monitor and assess directors’ performance. The Grand Jury learned from our interviews that guidelines were developed to aid the Board in measuring its effectiveness, but no action has been taken to implement these guidelines. Board members receive a self-assessment questionnaire at the end of the year, but, according to several interviewees, many are not completed or returned, and no action is taken to follow up or seek feedback. Page 15 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA Board Effectiveness In short, the VTA Board suffers from: a lack of experience and continuity by many directors; dominance, in terms of numbers, seniority and influence, by representatives of San José and the County; inadequate time for the directors to devote to the Board’s oversight and policy-making functions; a lack of engagement by some of the directors, fostered in part by the committee system, resulting in VTA functioning largely as a staff-driven organization; and conflicts of interest, which are often irresolvable, between the directors’ fiduciary duty to VTA and its regional role, on the one hand, and the political demands of their local elected positions, on the other. In assessing the effectiveness of VTA, several preliminary observations are in order. First, nothing in this report is meant to suggest that the members of the VTA Board are not honorable and hard-working public servants who are doing their best to perform the duties of a very difficult position under extremely difficult circumstances. Similarly, the Grand Jury has found that the VTA senior management staff is a competent team of professionals doing their best to run a very complex organization within the policy guidance provided by the VTA Board. As one member of the Board stated at the February directors’ workshop, “the staff is like a racehorse that we are keeping in the starting gate.” For their part, members of the senior staff are sometimes reluctant to draw the Board’s attention to matters of concern where they realize there is political resistance on the part of some directors and feel that raising an issue would be a waste of time. Some senior staff members are frustrated by what they perceive as an unwillingness of the Board to support needed action or make important changes at the policy level. Several staff members pointed to other transit districts, such as those in Portland, Austin and San Diego, as agencies whose policymakers are prepared to make tough decisions and take risks to improve public transit. According to some staff members and directors, this frustration, in part, has resulted in a general decline in morale at the senior staff level. The process used in the recent reorganization of senior staff responsibilities has contributed to additional morale problems. Some key members of senior management have recently announced that they will be leaving VTA. Page 16 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The Grand Jury also recognizes that many of the problems facing VTA are not unique to it as a transit organization or to the specific geographic or demographic characteristics of the Silicon Valley. Like many other transit organizations, VTA must deal with nationwide transportation trends, including increasing congestion and competition from ride-hailing companies and corporate-run employee bus services, as well as looming challenges posed by autonomous, driverless vehicles. Moreover, operating a transit system in a largely suburban region presents greater challenges than are typically faced in more densely populated urban areas, having concentrated downtown business centers. It is because of the complex and evolving nature of the problems facing VTA that active and enlightened Board oversight and strategic vision are more essential than ever to the organization’s future success. Having those observations in mind, the Grand Jury has noted that VTA and the VTA Board have been subject to criticism over the years from various quarters. As described above, the 2003-2004 and 2008-2009 Grand Juries were critical of the Board and its governance structure. However, criticism of the management and Board of VTA has not been limited to the Civil Grand Jury. A number of investigations, studies and articles, including the Hay Report which was commissioned by VTA itself, have criticized VTA’s operational and financial performance and the effectiveness of VTA governance. In 2007, one writer referred to VTA as possibly “the nation’s worst managed transit agency, at least among those serving big cities.”6 Even members of the VTA Board have questioned the Board’s effectiveness. For example, at a meeting of the VTA Board in October 2018, one director made the comment, “we have to break the mold of ‘same ole, same ole’…Board, we have to step up and change things.” Upon assuming her position in January 2019, the current Chairperson of the VTA Board announced that she would “convene a board working group [later designated the Ad Hoc Board Enhancement Committee] to look at a range of board governance practices” with a view to improving “board engagement and effectiveness.”7 At the Board workshop in February 2019, the participating directors, by a unanimous show of hands, agreed that VTA needs to make “radical changes” to address its many challenges. As one director put it, “We just had a workshop where we had a long conversation and we pretty much had a consensus where we have to do things differently and think outside the box.” The Ad Hoc Board Enhancement Committee held its first meeting on May 29, 2019. A complete review and assessment of the operations and management of VTA is far beyond the means of the Grand Jury or the scope of this report. Accordingly, the Grand Jury has chosen to focus its attention on the consideration of the effectiveness of the VTA Board’s oversight and policymaking, as exemplified by three areas of concern: VTA’s poor and continually deteriorating operating performance; 6 “The Nation's Worst Transit Agency", The Antiplanner, March 26, 2007 7 http://santaclaravta.iqm2.com/Citizens/FileOpen.aspx?Type=12&ID=2133&Inline=True . See section 8.2 of Minutes for the January 9, 2019 Board of Directors meeting. Page 17 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY the VTA Board’s inadequate oversight of the agency’s financial performance and its structural financial deficit; and the VTA Board’s unwillingness, to date, to reconsider the merits of significant pending capital projects that may be indicative of its general ability to guide the organization strategically. Page 18 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA’s Operating Performance VTA Operating Trends The 2003-2004 Grand Jury reviewed VTA’s operations and found that its operating performance compared unfavorably to its own benchmarks as well as the performance of peer agencies. Among other things, its report noted that: VTA’s operating costs had risen substantially faster than the rate of inflation; and Fares collected from VTA’s passengers divided by VTA’s operating expenses (referred to as the farebox recovery ratio) for the previous two years had been 11.6% and 12%, compared to the national average of more than 20%, meaning that the taxpayers of Santa Clara County were providing a much greater than average subsidy of transit operations. The 2018-2019 Grand Jury again examined VTA’s operating statistics and found that VTA’s performance has continued to deteriorate over the past 10 years, relative to both its historical performance and the performance of its peers, across a wide variety of metrics, including continuing increases in operating costs and further reductions in farebox recovery. Since the 2008-2009 recession, the population of Santa Clara County has increased by approximately 10.6%. During that 10-year period, bus and light rail vehicle revenue hours (VRH) ,which measures the amount of service VTA offers, increased by 6.4% while operations employee headcount (i.e., operators and maintenance personnel) grew by 8.9%. Total operations expense rose by 63.2% between 2009 and 2018, including a one-year increase of 17.1% between 2017 and 2018 alone. As operations expense increased, overall farebox recovery declined from 13.5% in 2009 to 9.3% in 2017 – substantially worse than the ratios that the 2003-2004 Grand Jury cited as unacceptably low back in 2004. Meanwhile, despite increases in employment and income levels in Silicon Valley, the public’s actual use of VTA’s services (as measured by passenger trips on buses and light rail) dropped by 19.2% between 2009 and 2018 and by 14.8% in the last two years alone. According to U.S. Census Bureau data, in 2017 (the last year for which such data is available), public transit was used as a means of transportation to work by only 4.8% of Santa Clara County’s commuters, little more than the combined percentage of those who walked or biked to work and fewer than the 5.3% who worked at home. Despite the declining use of transit during the last ten years, VTA continued to increase its employee headcount (both operations employees and administrative staff) and add to its fleet of buses and train cars, further increasing operating expense. Page 19 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY As a result of the dramatic increases in operations expense and the concurrent decline in ridership, VTA’s cost per passenger trip for buses and light rail combined increased from $5.61 in 2009 to $9.30 in 2017, 90.5% of which was covered by taxpayer subsidies. Detailed data regarding VTA’s operations are shown in Appendix B, and the trends discussed above are depicted in Figure 1 below. Figure 1 - VTA Operations Trends since 2009 Peer Agency Comparison The FTA issues an annual NTD report summarizing nationwide data and trends for transit agencies throughout the United States. In its most recent survey, for 2017, the FTA reported that for transit agencies serving populations of more than one million people: Operating cost per passenger trip for buses and light rail ranged from a low of $3.27 to a high of $9.31 with VTA’s cost per trip of $9.28 nearly the highest in the nation; Operating expense per revenue hour ranged from a low of $84.82 to a median of $123.20 and a high of $249.83 with VTA’s operating expense per revenue hour of $199.79 at about the top 10th percentile in the nation; and -25 0 25 50 75 1 2 3 4 5 6 7 8 9 10 Ch a n g e s i n c e 2 0 0 9 ( % ) Year Chart Title County Population Full-time Ops Employees Vehicle Revenue Hours (VRH) Passenger (Bus+LR) Trips Ops Expense 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Page 20 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Farebox recovery for light rail systems (combined bus and light rail data was not available) ranged from 7.6% to 47.2% with VTA’s light rail system farebox recovery of 7.6%, the lowest in the nation, requiring taxpayers to subsidize 92.4% of the cost of light rail service. Since the FTA surveys contain data for more than 800 transit agencies, including many with operating environments that differ significantly from VTA’s, the Grand Jury selected a cohort of ten peer agencies for further review using the following guidelines: Only agencies operating both buses and light rail systems were included; Only agencies serving urbanized communities with population and service areas generally comparable to VTA’s were included; and Agencies identified as VTA’s peers by interviewees or transit experts were also considered for inclusion. Based on these guidelines, public transit agencies serving the metropolitan areas of Portland, Minneapolis, Houston, Dallas, Salt Lake City, Denver, San Francisco (SF), Sacramento and San Diego were chosen for comparison. Comparisons of FTA operating data for the 10 peer agencies from 2009 through 2017 are shown in Appendix C. In summary, comparative data for three key metrics show the following: Operating Cost per Trip: VTA’s operating cost per trip was the highest of all 10 peer agencies in each of the nine years. In addition, VTA’s cost per trip increased by 65% over the period, second only to Sacramento’s increase of 86%. Passenger Trips per Revenue Hour: The effectiveness of VTA’s service, as measured by the number of passenger trips per revenue hour, was consistently among the lowest of the peer group, and second lowest in 2017 and 2018. San Diego, with a lower population density than VTA’s, achieved almost twice the ridership per hour as VTA in the last five years. Not surprisingly, San Francisco, with its significantly greater population density, consistently recorded the highest number of trips per hour. Farebox Recovery: VTA had the lowest farebox recovery in the peer group for its total operations since 2012. 2012. Page 21 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table 1 below summarizes VTA’s operating performance in 2017 relative to the peer group. Table 1 - VTA Operating Performance Versus Peer Group in 2017 Performance Measure 10-Peer Average Best Worst VTA Rating Service Effectiveness Passenger Trips per Revenue Hour 34.0 63.8 (SF Muni) 23.4 (Dallas) 24.3 (2nd to last) Service Efficiency Operating Cost per Passenger Trip $5.30 $3.00 (San Diego) $9.30 (VTA) $9.30 (Last) Farebox Recovery Ratio 21.5% 34.7% (San Diego) 9.3% (VTA) 9.3% (Last) In short, while all VTA’s peer agencies suffered declines in ridership over the last decade, all but one of the other agencies were more successful than VTA at controlling increases in costs. It is important to note that, despite the continuing decline in key operating metrics, between 2016 and 2019, VTA’s operations management has successfully improved performance in a number of significant areas, including: a 20% improvement in miles between major mechanical schedule loss; a 24% reduction in passenger concerns (complaints); a 3% improvement in light rail miles between chargeable accidents; and a 7% improvement in light rail on-time performance. In addition, the Grand Jury had direct experience utilizing VTA transportation services during our investigation and observed vehicles that were clean, performance that was generally on-time, and operators who were friendly and resourceful. Page 22 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY VTA’s Financial Management VTA is highly dependent on sales tax for its operating revenue. Currently, sales tax receipts provide approximately 80% of VTA’s revenue, while farebox revenue provides about 7%. Remarkably, in an environment of robust population and economic growth, VTA’s farebox receipts have decreased from $36.2 million in 2009 to $34.5 million in 2018, a decline of 5%. Over that same period, operating expenses have increased by a staggering 51%. Adding further pressure to VTA’s revenue stream is the steadily decreasing contribution of federal operating grants, which peaked at $59 million in 2010 and fell to $3.8 million in 2018. To address its revenue shortfall, VTA has begun to tap Measure A and Measure B sales tax receipts, originally earmarked for capital improvements, to help fund transit operations. For 2018 and 2019, the VTA Board approved the transfer of $44 million and $14 million, respectively, of these funds to supplement VTA’s operating revenue. To further address the shortfall, VTA has drawn down its reserves to help fund operating deficits. Given its history of low fare collections, declining ridership and uncertain governmental assistance, the answer would seem to be increased attention to cost management, with an emphasis on labor costs, by far the largest component of VTA’s operating expense. However, VTA’s combined operations and administrative headcount continues to rise each year despite the decline in ridership. The Grand Jury found the VTA Board has not vigorously addressed these issues through its budget process by embracing the type of comprehensive cost management strategy that is called for by the environment of limited resources in which VTA is currently operating. The 2018-2019 Budget Process VTA operates on a biennial budget cycle with a budget for the following two fiscal years adopted in June of each odd-numbered year. The proposed budget is reviewed by the Administration and Finance Committee and forwarded to the full VTA Board with the Committee’s recommendation. The proposed 2018-2019 budget, as recommended by a three-to-one vote of the Administration and Finance Committee in May 2017, showed projected operating deficits of $20 million and $26 million for fiscal years 2018 and 2019, respectively, and similar deficits for subsequent years. Taking into account the annual need for local funds on the order of $30 million to support VTA’s capital programs, the total gap between projected revenues and expenses (referred to as a structural financial deficit) contemplated by the budget was between $50 and $60 million. Compounding the widening budget gap was the fact that, over the preceding six years, operating expenses had grown twice as fast as revenues, and VTA had consistently failed to meet its ridership and farebox recovery projections. For example, in fiscal years 2016 and 2017, VTA’s farebox recovery had fallen short of budget projections by 7.3% and 18.9%, respectively. Page 23 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Nevertheless, rather than undertaking a thorough review of the proposed budget and making hard decisions regarding meaningful reductions in operating and capital expenses, or even sending the budget back to the Committee for further study, the VTA Board adopted the budget on June 1, 2017, by a vote of eleven to one, thereby assuring operating deficits for the following two years. To no one’s surprise, the projected operating deficits materialized and were largely funded by drawing down VTA’s reserves. Capital reserves, which had stood at $49.5 million at June 30, 2017, had been depleted to $5 million by the middle of the following year. Ad Hoc Financial Stability Committee In January 2018, the incoming Chairperson of the VTA Board recognized that some action had to be taken to address the structural deficit problem, which had become critical. Rather than engaging the full Board, for example by convening an all-day workshop, to address the problem that the Board and the Administration and Finance Committee should have been actively monitoring all along, the Chairperson chose to create an Ad Hoc Financial Stability Committee. The Committee was chaired by an ex officio member of the Board and included only two actual voting directors. The Committee then invited a group of approximately 12 “stakeholders” to participate. Stakeholders included employees, representatives of organized labor and several individuals from community organizations – each with their own agenda, but none with the fiduciary duty to make tough policy decisions solely in the best interests of VTA and County taxpayers. As the 2003-2004 Grand Jury report noted, “[i]t is the fiduciary responsibility of the Board, not a committee, a business lobbying group, or business community leaders, to provide oversight and direction” regarding VTA’s operations and financial management. The use of an ad hoc committee was hardly a new concept for the VTA Board. The Board had historically followed a pattern of waiting for a financial crisis to arise and then appointing an ad hoc committee. That committee would attempt to deal with the crisis and come up with a fix. In most cases, the fix would last a few years, relying primarily on new sources of revenue that would hopefully emerge. However, in any event, the composition of the Board — and responsibility for dealing with the problem — would have changed. The Board would then realize that another financial crisis was taking place, and the process would be repeated. Most recently, Ad Hoc Financial Stability Committees had been formed to deal with financial crises in 2001 and 2010. The Ad Hoc Financial Stability Committee met sporadically between March and December 2018 to discuss the structural deficit, its implications and potential cost-saving measures. Three of the nine scheduled meetings were cancelled. At a meeting of the Committee in August 2018, in response to a question, VTA’s Chief Financial Officer underscored the urgency of VTA’s financial situation by stating that VTA could continue its operations for no more than 18 to 24 months before Page 24 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY going “off a cliff.” On June 20, 2018, the Committee held a three-hour workshop to discuss strategies and solutions to address the budget and structural deficit. During the workshop, the stakeholders broke out into working groups to consider possible solutions. Although no consensus was reached, a wide variety of suggestions were made, which were reviewed by the VTA staff and discussed at subsequent meetings. These recommendations included, among other things, substantial fare increases, implementation of wage cuts, a hiring freeze, a reduction of fleet size, and a delay of further capital expenditures on light rail expansion. At its final meeting in December 2018, the Ad Hoc Financial Stability Committee concluded that the defeat in November of a ballot measure to repeal fuel taxes and vehicle fees (California Proposition 6) and the collection of sales tax on out-of-state sales beginning at some unspecified point in the future (later determined to be April 2019) would infuse additional revenues into the budget. The fuel and vehicle monies would result in an additional $23 to $27 million per year in annual revenues. The sales tax would, when implemented, increase revenues by $5.5 million per year. After these painless fixes, the Committee then addressed the annual structural deficit of approximately $25 million that still remained by proposing three initiatives: reducing the proposed increase in bus and rail service hours – not from their actual fiscal 2018 levels, but from the even higher levels originally budgeted for fiscal year 2019 as a part of VTA’s Next Network program – saving approximately $15 million annually; a fare increase indexed to inflation, saving approximately $2 million annually (which was subsequently deferred until 2021); and a voluntary early-retirement program projected to save another $1 million annually. After six meetings over a nine-month period (including the three-hour workshop) involving three directors and a dozen stakeholders, as well as untold hours of VTA staff support time, the Ad Hoc Financial Stability Committee recommended a total of only $18 million in projected cost savings to address the remaining $25 million deficit target, leaving a $7 million gap unaddressed. Several serious cost-cutting measures brought forward at the workshop were not actively considered. At its meeting, on December 6, 2018, the VTA Board unanimously accepted the recommendations of the Committee, and the Committee stood down. By any measure, the VTA Board’s oversight of the agency’s financial affairs, as exemplified by its adoption of the 2018-2019 budget and the handling of the built-in structural financial deficit, has been weak and ineffective. The inability of the VTA Board to meaningfully address the deficit can be attributed, in part, to the lack of financial expertise on the Board, a lack of preparation and engagement on the part of some directors — exacerbated by the delegation of the problem to the Ad Hoc Financial Stability Committee — and the VTA Board’s inability or unwillingness to deal Page 25 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY with controversial and politically-charged topics such as labor costs and expensive capital programs. The 2020-2021 Budget Process The VTA Board will consider VTA’s proposed biennial budget for fiscal years 2020 and 2021 at its meeting on June 6, 2019. The proposed budget shows net surpluses of approximately $2 million in 2020 and $4 million in 2021. However, the proposed budget does not take into account the outcome of pending labor negotiations with the Amalgamated Transit Union (ATU) that have been ongoing since August 2018. VTA has reported that its current proposal to the ATU, if accepted, would result in a total additional cost of $30.9 million over the next three years. Since the VTA's proposal is the best possible outcome of the negotiations, the budget understates expenses and virtually assures continuing deficits. Other risks acknowledged in the budget could further increase these deficits. Page 26 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The Extension of Light Rail Service to Eastridge Light Rail in the United States Light rail transports people using electric motive power and light-weight rails (hence the name). Light rail transit (LRT) systems, originally called trams or trolleys, evolved in the early 1900s to move employees to businesses and industries located in downtown or central business districts. They were less expensive to build than traditional heavy railway systems, and the cars were likewise less expensive to build and operate. In the late 1960s, private transportation companies, including those that operated LRT systems, began to struggle financially and subsequently were transitioned to public ownership with the expectation that better public transport could be achieved using a mix of city, state and federal funding. LRT systems in the United States have not met the original expectations of transit planners or the public. Coupled with the downward trend of public transit ridership and expanding infrastructure regulations, LRT systems have experienced ever-increasing installation and operations costs. Due in part to its high costs and fixed routes, light rail is now viewed by many industry experts as a technology whose time has passed. In October 2017, Randal O’Toole, a senior fellow with the Cato Institute and a recognized expert in light rail policy analysis, recommended the following: 8 “First, transit agencies should stop building rail transit. Buses made most rail transit obsolete nearly 90 years ago. Buses can move more people faster, more safely, and for far less money than light rail, meaning light rail was obsolete even before San Diego built the nation’s first modern light-rail line in 1981.” … “Second, as existing rail lines wear out, transit agencies should replace them with buses. The costs of rehabilitating lines that have suffered from years of deferred maintenance is nearly as great as (if not greater than) the cost of building them in the first place.” Cities whose densities and post-automobile development sprawl aren’t particularly suitable for efficient light rail service have begun to reexamine the viability of constructing, operating and maintaining expensive light rail systems. For example, in March of this year, the Phoenix City Council voted to delay and likely kill an ambitious expansion of its existing light rail system. Calling it a “train to nowhere,” city leaders determined that the reallocation of capital funds from light rail to an expansion of a flexible bus system and the repair of a deteriorating road system would be a better use of the taxpayers’ money and have a more positive impact on transit 8 “The Coming Transit Apocalypse”, Randal O’Toole, Cato Institute, October 2017 Page 27 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY effectiveness.9 A Phoenix Arizona initiative measure that will be on the ballot in August 2019 proposes to halt six additional light rail extension projects that were previously approved by the Phoenix voters in 2015 and forbid the city from funding any other future light rail extensions.10 VTA’s Light Rail System Santa Clara County’s LRT system, first proposed in the early 1980s, was conceived as a loop connecting to a future integration of Bay Area Rapid Transit (BART) and the San José Airport with transfer points throughout the County with feeder lines to support access to and from the loop to business and residential areas. The intent was to transport large numbers of residents quickly — at upwards of 55 mph — and cost-efficiently to and from jobs, entertainment and shopping, and to link San José and Santa Clara County with the entire BART system. As funding issues arose and interest group views emerged, the loop concept was abandoned in favor of direct spoke- like connections between downtown centers (e.g., San José) and various residential and business areas. VTA’s LRT began service in December 1987 with a 6.8-mile corridor between Santa Clara and downtown San José. An additional 14.3 miles were added by 1991 in 5 separate extensions (under the auspices of the SCCTD). VTA then followed with 4 more extensions: into Mountain View (1999), Milpitas (2001), East San José (2004) and the last corridor, Diridon to Winchester, completed in October 2005. The ultimate construction cost of this system was almost $2 billion. Today, VTA operates a 3-line LRT system consisting of 42 route miles, 61 stations and 21 park- n-ride lots. Due to unprecedented declines in revenues beginning in 2008, the implementation plan for further light rail expansion was modified to provide for construction of additional extensions in phases. Two significant extensions, to Eastridge and Vasona Junction, remain under consideration by VTA. Overly optimistic ridership projections justified the construction of the $2 billion light rail system in an environment that did not have the trip densities necessary to support this mode of transit. The federal government had its own doubts and initially did not approve funding, thereby creating the necessity of funding the project, in part, with local tax measures. As suggested above, the design and layout of the VTA LRT system deviated from the initial concepts, largely driven by political and financial considerations rather than strategic decisions. Despite the high capital costs of the system, the airport remains inaccessible directly via light rail, there is uneven access to jobs, entertainment and shopping, and operating speeds are far below 9 “Phoenix Votes to Delay, Likely Kill, West Phoenix Light-Rail Line", Jessica Boehm, Arizona Republic, March 21, 2019 10 “Phoenix Voters Could Kill Light Rail to These 6 Neighborhoods”, Jessica Boehm, Arizona Republic, April 15, 2019 Page 28 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY those expected or technically feasible. VTA LRT has been in operation for over 30 years but continues to underperform in effectiveness and ridership. VTA LRT Operational and Financial Challenges Since its inception, VTA’s light rail system has struggled with operational and financial inefficiencies caused by low ridership and high operating costs. Despite a vibrant local economy with burgeoning job growth and population expansion, the public’s interest in and utilization of light rail has deteriorated. Over the past ten years, light rail ridership has declined by 21% and, currently, fewer than 1% of Santa Clara County residents regularly utilize light rail. During the same period, the farebox recovery ratio for light rail has declined 36%. In just the past five years, light rail ridership has declined 15% while operating expenses have increased 54%. Meanwhile, VTA has continued to increase capacity without a corresponding demand for its product, resulting in higher operating costs of which less than 8% is covered by fare revenue. Put more bluntly, the taxpayers pay for more than 92% of the LRT system’s operating costs. VTA has failed to accurately estimate the ongoing operating and capital costs of maintaining the light rail system, a fact that has led, in part, to its recurring financial deficits. Table 2 below outlines metrics comparing operations of VTA’s light rail system versus its peers (using 2017 NTD data) that reveal its poor performance, including: Cost per Passenger: Highest among peers ($11.61) Subsidy per Passenger Trip: Highest among peers ($10.73) Operating Cost per Hour: Highest among peers ($487.58) Farebox Recovery Ratio: Lowest among peers (7.6%) Passenger Trips: Lowest among peers (9.1 million miles) Passengers Boarded per Hour: Second lowest among peers (42) Page 29 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table 2 - VTA Light Rail Peer Statistics (2017) Legend: Ms = value in millions Worst in peer group 2nd worst in peer group In light of the VTA LRT system’s intrinsic design issues, unacceptably slow speeds in portions of its routes, extremely high operating costs and the lack of ridership and revenue to support those costs, a case can be made for dismantling or phasing out the light rail system altogether. At a meeting of the CPC on March 28, 2019, a member of the VTA staff responded to a question from a Board member by confirming that operating costs could be cut in half and farebox recovery doubled if a bus-only system were deployed. In fact, light rail operating expenses are closer to three times the cost of bus operations, but the point remains that a large reduction in the taxpayer subsidy of VTA operations could be achieved by focusing future investment in transit solutions other than light rail, as Phoenix has decided to do. One director noted at the March 28, 2019 CPC Peer Agency Name Service Area Population Route Miles Fare Revenue Earned ($Ms) Total Operating Costs ($Ms) Farebox Recovery Ratio Operating Cost per Hour Boardings per Hour Passenger Trips (Ms) Cost per Passenger Revenue per Passenger Subsidy per Passenger Santa Clara VTA 1,664,496 42.2 $8.06 $106.0 7.6% $487.58 42 9.1 $11.61 $0.88 $10.73 Sacramento Regional Transit District 1,723,634 42.9 $14.80 $67.8 21.8% $272.55 46 11.4 $5.93 $1.29 $3.64 Dallas Area Rapid Transit 5,121,892 93 $27.71 $175.2 15.8% $356.20 61 29.9 $5.84 $0.92 $4.92 Denver Regional Transportation District 2,374,203 58.5 $38.16 $115.2 33.1% $145.09 31 24.6 $4.67 $1.55 $3.12 San Francisco Municipal Railway 3,281,212 36.8 $39.22 $213.8 18.4% $368.95 88 50.9 $4.19 $0.77 $3.42 Houston Metropolitan Transit Authority 4,944,332 22.7 $5.97 $65.2 9.2% $227.04 63 18.3 $3.56 $0.33 $3.23 Portland Tri- County Metropolitan Transportation District 1,849,898 60 $49.38 $138.8 35.6% $222.51 63 39.7 $3.49 $1.24 $2.25 Salt Lake City Utah Transit Authority 1,021,243 44.8 $17.97 $64.7 27.8% $180.35 52 18.8 $3.44 $0.95 $2.49 Minneapolis Metro Transit 2,650,890 23 $24.14 $70.9 34.0% $166.23 55 23.8 $2.98 $1.01 $1.97 San Diego Metropolitan Transit System 2,956,746 53.5 $38.97 $82.5 47.3% $168.24 76 37.6 $2.19 $1.04 $1.15 Page 30 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY meeting, “We have to really broaden our thought process with regard to light rail. The worst position that VTA can get into is being the last transit agency to be deploying an old technology.” The Eastridge LRT Extension Although operating statistics demonstrate the high cost and inefficiency of light rail as a mode of transportation, the VTA Board has continued to consider construction of two additional light rail extensions that would require additional capital outlays in the hundreds of millions of dollars. These two extension projects, to Vasona Junction and the Eastridge Transit Center, have been in the planning stage for years, have been the subject of countless VTA staff studies and reports and have been considered by the Board and its committees, particularly the CPC, at numerous meetings. Finally, at its meeting on March 28, 2019, the CPC approved placing the Vasona project on an indefinite hold, based on its capital costs, high operating costs and projected ridership that failed to meet VTA’s minimum criteria for a new project. However, the Eastridge project remains alive. The proposed Eastridge light rail extension is part of a two-phase project. Phase 1 of the project, which included conceptual design, pedestrian and bus improvements, and improvements of the Eastridge Transit Center, has been completed. Phase 2, which is now referred to as the Eastridge- BART Regional Connection, or EBRC, would add a 2.4-mile rail line and related infrastructure connecting the Alum Rock Station and the Eastridge Transit Center. In the original design, most of the rail extension was to have been constructed at street level on Capitol Expressway. The design was subsequently changed to an elevated track above the roadway for the entire 2.4 miles at an estimated additional cost of $75 million, which would enable the trains to run at higher speeds. The total cost of the project, which was originally estimated at $377 million, is now projected to be $599 million, of which $146 million has been spent on Phase 1, and $453 million would be spent on Phase 2 ($13 million has been spent to date on design and other preparatory work). If Phase 2 is continued, work is currently estimated to be completed in 2025. Page 31 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Table 3 below outlines the cost and status of the Eastridge project*: Table 3 - Eastridge (EBRC) Phases, Costs and Status Project Cost Sub-total Cost Status Notes Concept $11M Completed Original Construction $56M Completed Phase 1 – pedestrian improvements $19M Completed Phase 1 – bus improvements $60M Completed Eastridge Transit Center Phase 1 sub-total - $146M Phase 2 – EBRC various studies/design $13M Initial design work completed Phase 2 – EBRC completion (2023-25) $440M Under review Does not meet minimum operations criteria until well after 2025 Phase 2 sub-total - $453M Plus $2-3M per year in new operational costs Project total - $599M Costs almost $250 million/mile *Data from VTA CPC Agenda Packet item #7, pages 36 and 37, dated March 28, 2019 and updates presented in the Board of Directors meeting on April 4, 2019. The VTA Board has considered various aspects of the Eastridge project more than 20 times since 2000. Each time, the Board has made a decision that allowed work on the project to continue, often kicking the ultimate decision on the fate of the project down the road by noting that its current decision was not the final word on the project and that there would be opportunity for further consideration of the project and final approval at a future date. For example, at its meeting on May 3, 2018, the Board considered the viability of the light rail extension to Eastridge. After a lengthy discussion, the Board approved a funding strategy for proceeding with the project, but the Chairperson noted that there would be still more decision points at which the project could again be considered by both the CPC and the full Board. At the same time, the Board approved a resolution authorizing a staff study of alternatives to light rail for the Eastridge extension. VTA staff has confirmed that, a year later, this study still has not been completed. At the March 28, 2019 meeting of the CPC (at which the Committee agreed that the Vasona Junction extension should be put on hold), Phase 2 of the Eastridge project was again considered. At the meeting, the Mayor of San José, serving as Chairperson of the Committee, asked the following question, “Is the current light rail system one we want to continue to invest in? Our ridership is challenged. Our cost-effectiveness system-wide is 10% on farebox return [it is actually less than 10%]. That 10% is already among the very lowest in the nation in terms of farebox Page 32 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY return, and light rail actually hurts us. The question is: what does the process look like for us to be re-evaluating the entire system to see if we want to start thinking differently about the entire light rail system? I hate to think we are doubling down on a failed system.” Another committee member echoed that sentiment, noting, “We have to choose our transportation modes in a cost- effective and efficient manner. I support to do additional evaluation of what is needed for that corridor. The train has not left the station on Eastridge.” Yet, after a lengthy discussion about an overall re-evaluation of light rail before proceeding with the Eastridge extension, no concrete action was taken in that direction, and both of these directors joined with a third to support a motion to move forward with the project and kick the ultimate decision down the road yet again. The vote was three to two in favor of the motion, but it failed for lack of the required four aye votes needed to pass. The fate of the Eastridge extension project is now once again in the hands of the VTA Board, and its final resolution will be a test of the Board’s leadership. The issue will be considered by the Board again at its meeting on June 6, 2019. Although the subject of the extension was not on the agenda at the Board’s May meeting, the Mayor of San José signaled his intentions. Despite the comments he made at the March CPC meeting, the Mayor stated, “I will vote to proceed immediately with the construction of the Eastridge transit project when it comes before the VTA Board in June. I expect we will move forward without delay.” The investigation of the Grand Jury report was completed on May 29, 2019, and this report does not reflect any actions taken at the June 6, 2019 meeting. As pointed out above, the remaining capital cost to complete the 2.4-mile extension is currently estimated at $453 million, or almost $189 million per mile. According to most recent staff projections included in the May 2019 EBRC Supplemental Environmental Impact Report (SEIR), the new light rail extension would attract approximately 61111 new riders (net of a reduction in bus ridership on the existing bus lines that run parallel to the proposed rail extension) by 2025. Therefore, the additional capital cost would be equal to approximately $720,000 for each new rider in the first year of service. Once completed, the Eastridge extension would become part of an outmoded light rail system that is one of the most expensive and heavily subsidized LRT systems in the country, with declining ridership and operating costs more than double the cost of bus operations. The extension, upon completion, is projected to have a miniscule impact on transit usage in the East San José/Milpitas corridor over the next 24 years (i.e., an increase of only 0.07% by 2043 and just over half that when service begins).12 Moreover, the current design permanently removes two existing high occupancy vehicle (HOV) lanes from the Capitol Expressway, without any foreseeable commensurate reduction in automobile traffic, a fact that may not be widely 11 EBRC SEIR, May 2019, page 71, Table 5.1-11. http://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/EBRC_Vol1_FSEIR-2%20(1).pdf 12 EBRC SEIR, May 2019, page 72 Page 33 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY understood in the East San José community. As noted in the SEIR, “[t]he proposed removal of the HOV lanes would result in higher average automobile delays and higher automobile travel times on Capitol Expressway.”13 Further, despite claims that the Eastridge Transit Center is among the busiest in the VTA system, there is an average of only seven riders per bus trip into and out of that center. Based on our interviews, the Grand Jury has found virtually no support for the project among the VTA staff, although they continue to move the project forward in compliance with incremental policy decisions made by the VTA Board. The argument supporting the Eastridge extension is essentially political. The extension was one of 13 transportation improvement projects envisioned by Measure A and passed by the voters in 2000. For various reasons, most related to budget challenges brought about by the dot com “bubble” in the early 2000s and the later economic recession, the implementation of the Eastridge project has been delayed, along with some of the other Measure A projects. In the interim, the once-promising LRT system has become technically outmoded and increasingly expensive. Yet, proponents of the extension, including powerful political forces, contend that the periodic, incremental approvals of the project by the VTA Board that have kept the project alive over the years have reinforced a “promise” to complete it, even though the VTA Board has both the right and the duty to re-evaluate capital projects when they are no longer viable. Proponents also contend that completion of the project is a matter of “economic equity,” balancing the needs of a relatively low-income, transit-dependent area of Santa Clara County with the type of transit services provided elsewhere in the County (although, as noted above, the Vasona Junction project that was to have served the Los Gatos area was recently put on hold). The challenge to the VTA Board, in the exercise of its fiduciary duties to the taxpayers and transit users of the County, is to address such questions as: Can any further investment in VTA’s present LRT system be justified, much less one that will cost $720,000 for each prospective new rider? Does the proposed Eastridge extension meet VTA’s standards for new transit projects, including minimum projected ridership criteria? Before proceeding with the project, should the Board undertake a thorough review of the light rail system and its future as a mode of transportation in Silicon Valley, as suggested by members of the CPC? 13 Ibid, page 72 Page 34 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Can the recognized needs of the residents of East San José for modern, efficient public transportation be better served by an alternative to the proposed Eastridge light rail extension? VTA should aspire to take an industry-leading role in the future of public transportation, commensurate with the role of Silicon Valley as a worldwide leader in technology and innovation. Whether the VTA Board is able to put aside local political considerations and answer these questions based on the interests of all the taxpayers and residents of Silicon Valley will say much about its effectiveness as a policy-making body and whether VTA will be able to achieve such leadership aspirations. Page 35 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Designing a More Effective Structure for the VTA There are countless variations in models for governing a regional transit agency, and there is no perfect structure that fits all situations. Even when transit agencies set out to reorganize their own governance structure in response to acknowledged defects, they realize they must choose among alternative structures having both advantages and disadvantages. Virtually all the individuals interviewed by the Grand Jury, including directors and senior staff, agreed that VTA could benefit from a more knowledgeable and engaged Board of Directors that is more sharply focused on VTA’s role as a regional transit agency and less on local political interests. However, there is less consensus on how best to achieve that goal. Nevertheless, it is useful to examine some of the variable features of alternative governance structures, how they have been implemented by other transit agencies and how changes to the structure of VTA’s governance might result in a more effective Board. Number of Directors The VTA Board has 12 voting members. As pointed out in the 2003-2004 Grand Jury’s report, the VTA Board is larger than the boards of many regional transit agencies. Alameda County Transit (AC Transit) and BART, for example, have boards of seven and nine members, respectively, while two other transit agencies in California have five-person boards. However, transit agency boards across the country range widely in size, from as few as five to more than 20. The agency serving Dallas/Fort Worth, for example, has a 15-person board, while the Phoenix and Salt Lake City transit agencies each has a 16-member board. The 2003-2004 Grand Jury Report concluded that a smaller Board, of five to seven members, “would be more involved in and accountable for the financial and operational management of VTA.” Some current members of the VTA Board agree that a smaller Board would be preferable, although others disagree. While the current Grand Jury agrees that reducing the size of the Board might result in more focused decision-making, a reduction in Board size, in and of itself, would not address fundamental issues of lack of experience, inadequate continuity, competing time commitments and conflicts of interest between VTA and local priorities. Accordingly, a reduction in the size of the VTA Board should only be considered in conjunction with other structural changes that directly address these key issues. Term of Service VTA directors serve for terms of two years. Although some directors serve more than one term (often consecutive), directors whose positions rotate among groups of smaller cities generally do not serve consecutive terms. Furthermore, a director’s term can be cut short if the director ceases to serve in his or her elected position. Page 36 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY The term of service for directors of regional transit agencies in California and other larger metropolitan areas generally ranges between two and four years, with three and four-year terms being common. In California, for example, directors of BART, AC Transit and transit agencies serving Santa Barbara, Stockton and Bakersfield serve four-year terms. Directors of agencies serving Austin and Vancouver, B.C. serve for three years. In an independent review of the agency serving Vancouver, a Governance Review Panel concluded that “longer-term decision-making requires a minimum of three-year terms,” although the panel also recommended that members not be allowed to serve more than six consecutive years in order to vary the “mix of management, finance, legal and other skills to match [the agency’s] changing needs over time.”14 Among the individuals interviewed, there was substantial support for longer terms to provide additional time for directors to become knowledgeable about VTA’s operations and transit issues, to participate in more than one budget cycle and to participate more effectively in the Board’s long-term planning function. In addition, lengthening the term of service would mitigate the advantage currently enjoyed by representatives of San José and Santa Clara County, who typically serve substantially longer terms than the representatives of the smaller city groups and dominate the Board, in part, as a result of their greater experience. Not all interviewees agreed, however. One made the point that, if a director is unqualified in the first place, a four-year term would just mean that the Board would be burdened with an unqualified member for twice as long. Additionally, since under the current structure a director’s term ends when he or she leaves elected office, a four-year term is more likely than a two-year term to be cut short, lessening to some degree the impact of a change to a longer term. Nevertheless, extending the term of VTA directors to four years would increase the average term of Board service and, accordingly, would provide some valuable experience and continuity to the Board and enhance the influence of the smaller cities. Likewise, establishing term limits or limits on total years of service would mitigate the dominance of San José and the County and allow the Board to evolve over time to meet its changing needs. As described above, the PUC specifies the annual election of the Board’s Chairperson and Vice Chairperson. The VTA Administrative Code provides that the election of the two officers shall be conducted at the last meeting of the calendar year, when practical, and that they shall serve for the ensuing calendar year.15 The Administrative Code also specifies that the two positions shall be rotated annually, according to a fixed schedule, among representatives of San José, Santa Clara County and the smaller city groups16. There was considerable support among the persons interviewed for extending the Chairperson’s term from one to two years. As pointed out above, because VTA operates on a June 30 fiscal year, 14 “TransLink Governance Review", TransLinK Governance Review Panel, January 26, 2007, page 22 15 VTA Administrative Code Section 2-26 16 Ibid Page 37 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY the Chairperson’s calendar year term of service straddles two fiscal years, disconnecting the Chairperson from the budget process and accountability for operating and financial results. He or she inherits one annual budget in mid-stream and serves only halfway through another. Lengthening the Chairperson’s term would help address this problem by allowing the Chairperson to oversee VTA’s financial performance for at least one full fiscal year. Coordinating the term of the Chairperson with the agency’s June 30 fiscal year would further connect the Chairperson with VTA’s budget process and the oversight of its financial performance. Similarly, reviewing the VTA General Manager’s performance on a fiscal year rather than a calendar year basis would also improve direct accountability for the organization’s performance to budget. Direct Election of Directors Under the current governance structure, members of the VTA Board are appointed to serve by the jurisdictions they represent, either through direct appointment by a mayor or city council or, in the case of the groups of smaller cities, by arrangement among the cities. As pointed out above, as originally proposed by the County Board of Supervisors, the VTA Board would have been composed of a combination of five directly elected members and 11 appointed members. Although the direct election of directors of transit agencies is not common in California, there are exceptions, including BART and AC Transit, both of which have directly elected directors serving four-year terms. Other regional public bodies use a direct election model for some or all their directors. The Santa Clara Valley Water District (SCVWD), for example, has a board of seven directors, directly elected by supervisorial district. Benefits of an elected board include direct accountability to the public and the directors’ increased focus on the affairs of the agency as their primary, rather than secondary, public service responsibility. Direct election would also eliminate the possibility of directors’ terms being shortened when they cease to serve in their elected position. In theory at least, candidates who serve on an elected board also would be more likely to have an interest in and commitment to public transportation issues than would appointed directors. On the other hand, directly elected VTA Board members, like other elected officials, may tend to have a parochial view if they are elected to represent specific districts or municipalities, so the goal of encouraging a regional view of strategic planning responsibilities might not be fully realized. Some interviewees supported changing to a direct election model for the VTA Board, based on the potential benefits noted above. Others, however, did not favor such a change. Several pointed out what they perceived to be a lack of effectiveness of the BART Board of Directors as evidence that the change would not be worthwhile. Others noted that moving to a direct election model would be complicated, politically difficult and costly – again, not justifying the change. One interviewee observed that, at the end of the day, voters pay very little attention to the direct election of directors Page 38 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY of governmental agencies, noting that many voters do not even know that an agency like SCVWD, for example, even exists, much less who its directors are. Appointed Directors Who Are Not Elected Officials Like VTA, many regional transit districts have boards consisting exclusively of elected officials representing the constituent communities making up the district. In at least three California transit agencies (those serving Santa Barbara, San Francisco and Stockton), the appointed boards of directors include interested citizens who are not currently serving as elected officials, and the enabling legislation of another transit district, serving the Bakersfield area, specifically provides that elected officials are not eligible for appointment as members of the Board. Transit agencies whose directors are not current elected officials are not uncommon in other parts of the country. Examples of transit agencies with appointed boards that do not include elected public officials are those serving Houston, Austin, Vancouver, B.C. and Toronto. The flexibility to appoint non-politicians to serve on the board of a transit agency allows the appointing authority to select directors having a wide range of business, financial and transportation-related experience with a mandate to serve non-politically and make evidence- driven policy decisions based on demonstrated need and financial feasibility. The Houston Metropolitan Transit Authority (HMTA), for example, has a board of nine members, five of whom are appointed by the Mayor of Houston, two by the Harris County Commissioners Court and two by the mayors of other cities in its service area. The Board of the HMTA currently includes a retired lawyer, a certified public accountant, a banker, executives of large companies and experts on infrastructure, construction and budget management. Partially offsetting the benefits of removing elected public officials from a transit agency’s governance structure are concerns of accountability. The level of commitment of non-elected directors to their local communities’ views on transit policy and priorities, including land use and development, is uncertain. However, some senior VTA staff and directors feel that the staff gets little support from VTA Board members in connection with VTA’s dealings with city governments on these issues. Some transit districts have chosen to balance the benefits of a predominantly non-political governing board with some participation by elected officials. For example, the board structure of the transit agency serving the Austin area was revised in 2011 from 100% elected officials to a mix of two elected officials and five non-politicians, with the City of Austin, the largest participant and underwriter of the system, having a predominant say in the appointments. The enabling legislation went a step further and specified that one appointed member of the board must have at least 10 years of experience as a financial or accounting professional and another must have at Page 39 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY least 10 years of experience in an executive-level position in a public or private organization.17 As one commentator noted at the time the legislation was proposed, “What the board would lose in elected officials, it would presumably gain in knowledge.”18 In 2011, the Legislative Auditor of the State of Minnesota issued an evaluation report that analyzed various governance structures for the agency principally responsible for the Twin Cities’ transit system, as potential alternatives to the existing structure under which all members of the governing council are appointed by the governor. After analyzing and comparing various structures, including the existing appointment system and the direct election of council members, the Auditor concluded that the optimal model would be a combination of appointed and elected officials that “would provide the Council with an effective mix of regional and local perspectives.”19 Silicon Valley offers an unparalleled pool of talented individuals, including entrepreneurs who have introduced cutting-edge technologies, products and services, as well as countless experts with leadership experience in finance and executive management of large organizations. Current and retired leaders of Silicon Valley companies and organizations have made numerous contributions in support of a wide range of community activities, including the arts, healthcare, education and other civic and charitable endeavors. Surely, appointing authorities could identify qualified public sector leaders who would be willing to serve on the VTA Board, and VTA would benefit from their knowledge and experience. 17 Texas Transportation Code Section 451.5021(b) 18 "What's Wrong With Cap Metro...and What's Right", Lee Nichols, Austin Chronicle, April 24, 2009 19 "Governance of Transit in the Twin Cities Region", Office of the Legislative Auditor, January 2011, page 44 Page 40 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY CONCLUSIONS VTA is a complex, multi-billion-dollar enterprise. In addition to operating a large transit system, VTA has responsibility for county-wide transportation planning, including congestion management, the design and development of highway, pedestrian and bicycle improvement projects and the promotion of transit-oriented development. VTA is governed by a part-time Board of Directors composed solely of elected public officials, each of whom is burdened by the obligations of his or her office and subject to local political interests. A few of the directors have served for many years, but others have served for less than two. Appointees to the VTA Board often have little or no previous experience with transportation, finance or leadership of a large organization, let alone one the size of VTA. Today, VTA faces a series of challenges which, taken together, can be fairly characterized as a crisis. The following challenges, among others, must be addressed by the VTA Board: Year after year, VTA operates one of the most expensive and least efficient transit systems in the country. Empty or near-empty buses and light rail trains clog the County’s streets but are used regularly by fewer than 5% of the County’s commuters. Operating costs increase continuously, and taxpayers subsidize 90% of these costs, to the tune of about $5.50 per rider for each bus trip and $10.75 per rider for each light rail trip. VTA veers from one financial crisis to another. In June 2017, the VTA Board adopted the 2018-2019 biennial budget and consciously approved a built-in structural financial deficit of $50 to $60 million per year. In January 2018, an ad hoc committee of the VTA Board was formed to deal with the crisis caused by the budget deficit. In August 2018, VTA’s Chief Financial Officer advised the committee that the agency was 18 to 24 months away from going “off a cliff.” At the end of 2018, the ad hoc committee made weak and only partially effective recommendations to address VTA’s structural financial deficit and didn’t seriously consider such important but politically sensitive topics as reductions in employee headcount or the scrapping or deferral of large capital projects. Light rail ridership is declining steadily throughout the country. Experts have pronounced the early twentieth century concept of light rail transit obsolete, and other regional transit agencies are contemplating abandoning light rail system extensions. VTA, however, continues to move forward with an extension of its light rail system — one that currently has among the highest operating costs and lowest ridership in the country. The remaining capital cost of the proposed 2.4-mile Eastridge extension project is currently estimated at $440 million, representing approximately $720,000 for each new rider that the staff estimates will actually use the extension during the first year of its operation. The project Page 41 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY makes no financial sense and survives only because powerful political forces continue to support it. VTA needs to carefully consider whether the recognized needs of the residents of East San José for modern, efficient public transportation can be met without “doubling down on a failed system,” as one director put it, and worsening VTA’s precarious financial condition. Although a detailed review of the long-pending BART to Silicon Valley project was beyond the scope of the Grand Jury’s inquiry, a number of our interviewees, including senior VTA staff and members of the VTA Board, noted its importance to the future of VTA. VTA’s proposed fiscal years 2020-2021 capital budget calls for a staggering $713.5 million in Measure A and Measure B tax funds for the BART Phase 2 project. The operating agreement between VTA and BART remains in negotiation, and several of our interviewees expressed concern that important issues regarding the sharing of system-wide capital and operating costs remain unresolved and that such costs could fall disproportionately on VTA. One director expressed the opinion that BART-related cost control issues are more significant for VTA than those related to the Eastridge light rail extension. A senior staff member stated unequivocally that “BART is going to bankrupt VTA.” An interested stakeholder similarly predicted that BART “will be the demise of VTA.” Whether or not these assessments are accurate, it is clear that the financial health of VTA is dependent on the success of BART in the South Bay Area. That success is dependent, in turn, on VTA effectively implementing BART Phase 2 and meeting its ridership and revenue goals. VTA’s operating territory is the Silicon Valley – the world’s leading center of innovation and cutting-edge technology. Several of VTA’s key staff members have noted that they had joined VTA in the hope that VTA would take an industry-leading role in the future of transportation, commensurate with the role that companies and other institutions in the Silicon Valley have taken in the introduction of all manner of new products, technologies and services. Yet, little such innovation has been evident at VTA in recent years. In fact, as noted above, VTA seems to be “doubling down” on old technology. At the Board’s recent workshop on “The Future of Transportation in Silicon Valley,” the directors present (two-thirds of the voting members and half of the alternates) seemed to recognize this problem and unanimously agreed that VTA needs to make “radical changes” in the way it provides its services. If VTA is going to meet the many challenges it faces, the VTA Board will have to make good on its commitment to radical change. So, the question becomes, is the Board capable of making the policy decisions and providing the strategic oversight necessary to accomplish such change? The Grand Jury has concluded that, as presently structured and operated, that level of capability does not appear to be present. Accordingly, the Grand Jury recommends a number of changes in the structure of the VTA Board and in the way directors are selected, trained and evaluated that it Page 42 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY believes will assist VTA in addressing its many challenges and achieving its aspiration of becoming a leader in the transportation industry. Page 43 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY FINDINGS AND RECOMMENDATIONS Finding 1 The VTA Board, currently made up exclusively of elected officials from the Santa Clara County, Board of Supervisors, the City of San José and the other smaller cities in the County, suffers from: A lack of experience, continuity and leadership; Inadequate time for the directors to devote to their duties to the VTA Board due to their primary focus on the demands of their elected positions; A lack of engagement on the part of some directors, fostered in part by the committee system, resulting in VTA functioning largely as a staff-driven organization; Domination, in terms of numbers, seniority and influence, by representatives of the Santa Clara County Board of Supervisors and the City of San José; and Frequent tension between the director’s fiduciary duties to VTA and its regional role, on the one hand, and the political demands of their local elected positions, on the other. Recommendation 1a VTA should commission a study of the governance structures of successful large city transportation agencies, focusing on such elements as: board size; term of service; method of selection (directly elected, appointed or a combination); director qualifications; inclusion of directors who are not elected officials; and methods of ensuring proportional demographic representation. This study should be commissioned prior to December 31, 2019. Recommendation 1b As the appointing entity with an interest in the transit needs of all County residents, the County of Santa Clara should commission its own study of transportation agency governance structures, focusing on the elements listed in Recommendation 1a. This study should be commissioned prior to December 31, 2019. Recommendation 1c As constituent agencies of VTA, each of the cities in the County should prepare and deliver to VTA and the County Board of Supervisors a written report setting forth its views regarding VTA governance, with specific reference to the elements listed in Recommendation 1a. These reports should be completed and delivered prior to December 31, 2019. Page 44 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Recommendation 1d Within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation, including appropriate amendments to Sections 100060 through 100063 of the California Public Utilities Code, to improve the governance structure of VTA (which potentially could include an increase in the directors’ term of service, the addition of term limitations and the inclusion of appointed directors who are not currently serving elected officials). Recommendation 1e In order to provide more continuity in the leadership of the VTA Board, within six months following the completion of the studies and reports specified in Recommendations 1a, 1b and 1c, the County of Santa Clara and/or one or more of VTA’s other constituent agencies, should propose enabling legislation amending Section 100061 of the California Public Utilities code to provide that the Chairperson of the VTA Board shall be elected for a term of two years rather than one. Recommendation 1f Prior to December 31, 2019 and pending changes contemplated by Recommendation 1e, VTA should adopt a policy of routinely reappointing an incumbent Chairperson for a second one-year term at the end of his or her initial term, absent unusual circumstances. Recommendation 1g In order to better connect the Chairperson with the budget process and accountability for operating and financial results, prior to December 31, 2019, VTA should amend Section 2-26 of the VTA Administrative Code to provide that the Chairperson and Vice Chairperson shall serve terms coinciding with VTA’s fiscal year ending June 30, rather than the calendar year. Finding 2 The California Public Utilities Code, the VTA Administrative Code and the Guidelines for Member Agency Appointments to the VTA Board of Directors adopted by the Governance and Audit Committee of the Board (Guidelines) all contain provisions requiring that, to the extent possible, the appointing agencies shall appoint individuals to the VTA Board who have expertise, experience or knowledge relative to transportation issues. Nevertheless, appointees to the VTA Board often lack a basic understanding of VTA’s operations and transportation issues, generally. Page 45 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Recommendation 2 In order to help assure that individuals appointed to serve on the VTA Board have the appropriate qualifications, prior to December 31, 2019, VTA should take vigorous action to enforce compliance by appointing agencies with the qualification and suitability requirements of: (i) Section 100060(c) of the California Public Utilities Code; (ii) Section 2-14 of the VTA Administrative Code; and (iii) the Guidelines. Finding 3 The VTA Board lacks effective policies designed to assure productive participation by members of the VTA Board. Recommendation 3a In order to help make directors become and remain productive members of the VTA Board, prior to December 31,2019, VTA should: (i) implement and enforce attendance at an intensive, multi- session onboarding bootcamp for incoming directors that would provide detailed information regarding VTA’s operations, financial affairs and currently pending large-scale projects as well as the organization and operations of the Board and directors’ duties and obligations; (ii) prepare and provide to each director a detailed handbook of directors’ duties, similar to the “Transit Board Member Handbook” published by the American Public Transportation Association; (iii) enforce attendance at Board and committee meetings by providing Board attendance records to appointing agencies and removing directors from committees for repeated non-attendance; and (iv) implement a robust director evaluation process, with the participation of an experienced board consultant, that would include mandatory completion by each director of an annual self- evaluation questionnaire and Board review of a composite report summarizing the questionnaire responses. Recommendation 3b In order to further enhance the effectiveness of the directors, prior to December 31,2019, VTA should develop a program to encourage continuing education of the Board members by: (i) scheduling and enforcing attendance at more frequent and intensive Board workshops on important issues regarding transit policy, developments in transportation technology, major capital projects and VTA’s financial management; and (ii) requiring directors to attend, at VTA’s expense, third- party sponsored industry conferences and educational seminars. Page 46 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Finding 4 The Grand Jury commends the Chairperson of the VTA Board for recognizing the need to improve Board engagement and effectiveness by convening the Ad Hoc Board Enhancement Committee to review the Board’s governance structure and practices. Recommendation 4 None. Finding 5 VTA continues to consider an extension of VTA’s light rail system to the Eastridge Transit Center, at an additional capital cost of over $450 million, although VTA’s light rail system is one of the most expensive, heavily subsidized and least used light rail systems in the country, many transit experts consider light rail obsolete, and VTA is suffering from chronic structural deficits that would be exacerbated by the continuation of the project as currently defined. Recommendation 5a VTA should consider following recommendations made by several directors that it undertake a thorough review of VTA’s light rail system and its future role as a mode of transportation in Silicon Valley before proceeding with the Eastridge extension project. This review, as it pertains specifically to the analysis of the viability of the Eastridge extension, should be undertaken with the participation of an independent consultant and should consider such issues as projected ridership estimates, project cost estimates including future operating and capital costs, and the projected impact on traffic congestion on Capitol Expressway with the removal of two HOV lanes. Recommendation 5b VTA should consider whether the recognized needs of the residents of East San José for modern, efficient public transportation can be better served by an alternative to the proposed light rail extension. Page 47 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY REQUIRED RESPONSES Pursuant to Penal Code sections 933 and 933.05, the Grand Gury requests responses as follows: From the following governing bodies: Responding Agency Finding Recommendation Santa Clara Valley Transportation Authority 1, 2, 3, 4 and 5 1a, 1f, 1g, 2, 3a, 3b, 5a and 5b County of Santa Clara 1 1b, 1d and 1e City of Campbell 1 1c, 1d and 1e City of Cupertino 1 1c, 1d and 1e City of Gilroy 1 1c, 1d and 1e City of Los Altos 1 1c, 1d and 1e City of Milpitas 1 1c, 1d and 1e City of Monte Sereno 1 1c, 1d and 1e City of Morgan Hill 1 1c, 1d and 1e City of Mountain View 1 1c, 1d and 1e City of Palo Alto 1 1c, 1d and 1e City of Santa Clara 1 1c, 1d and 1e City of San José 1 1c, 1d and 1e City of Saratoga 1 1c, 1d and 1e City of Sunnyvale 1 1c, 1d and 1e Town of Los Altos Hills 1 1c, 1d and 1e Town of Los Gatos 1 1c, 1d and 1e Page 48 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY APPENDIX A – The Guidelines for Member Agency Appointments to the VTA Board of Directors Page 49 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Page 50 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY APPENDIX B – VTA Operating Statistics and 2017 National Trends This appendix presents operational metrics comparing VTA against national trends using an FTA annual summary. Table B1 VTA Operating Statistics 2009 - 2018 Year County Popula- tion1 (millions) Bus Ridership1 Light Rail Ridership1 VTA Operations Full-Time Employees1 Fleet Size1& 2 VTA Operations Expense ($)1 Vehicle Revenue Hours3&4 Total Unlinked Passenger Trips3&4 2009 1.77 34,510,273 10,754,161 1649 547 254,285,943 1,487,469 45,264,434 2010 1.79 31,983,494 9,749,882 1588 523 257,953,581 1,406,463 41,733,376 2011 1.814 31,395,126 10,014,504 1576 593 263,322,297 1,357,169 41,409,630 2012 1.841 32,053,755 10,373,042 1599 544 278,532,013 1,383,007 42,426,797 2013 1.87 32,432,354 10,742,292 1614 542 293,447,169 1,411,180 43,174,646 2014 1.894 32,475,527 10,952,965 1687 542 311,287,342 1,464,798 43,428,492 2015 1.92 32,623,599 11,320,497 1724 639 319,978,046 1,524,011 43,944,096 2016 1.934 32,195,504 10,722,932 1758 599 335,140,300 1,555,226 42,918,436 2017 1.946 29,057,047 9,132,084 1761 559 354,494,193 1,569,744 38,189,131 2018 1.957 28,048,405 8,507,095 1795 571 414,975,000 1,582,146 36,555,500 Notes: 1. From VTA report "Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018" listed in References, item number 15, and State Department of Finance http://www.dof.ca.gov/Forecasting/Demographics/Estimates/E-2/documents/PressReleaseJul2018.pdf 2. Fleet size includes the total number of buses and light rail cars 3. Vehicle Revenue Hours (VHR) and Unlinked Passenger Trips (UPT) data from FTA NTD https://www.transit.dot.gov/ntd/data-product/ts22-service-data-and-operating-expenses-time-series-system-0 4. Operating expense, UPTs and VHRs include only directly operated bus and light rail vehicles Page 51 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY For the charts below, the Grand Jury used data from the 'National Transit Summaries & Trends 2017”20, “Santa Clara Valley Transit Authority Annual Agency Profile 2017”21, and “Service Data and Operating Expenses Time-Series by System”22 to examine VTA’s operations and performance in the national arena. 20 2017 National Transit Summaries and Trends https://www.transit.dot.gov/sites/fta.dot.gov/files/docs/ntd/130636/2017-national-transit-summaries-and-trends.pdf 21 Santa Clara Valley Transit Authority Annual Agency Profile 2017 https://www.transit.dot.gov/ntd/transit-agency-profiles/santa-clara-valley-transportation-authority 22 Service Data and Operating Expenses Time-Series by System https://www.transit.dot.gov/ntd/data-product/ts22-service-data-and-operating-expenses-time-series-system-0 0 1 2 3 4 5 6 7 8 9 10 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Op e r a t i n g C o s t ( $ ) Percentile 2017 Operating Cost ($) per Passenger Trip 2017 Operating Cost per Passenger Trip Data National Distribution ($) 2017 Operating Cost per Passenger Trip Data VTA ($) Page 52 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY 0 50 100 150 200 250 300 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Op e r a t i n g C o s t ( $ ) Percentile 2017 Operating Cost ($) per Revenue Hour 2017 Operating Cost per Revenue Hour Data National Distribution ($) 2017 Operating Cost per Revenue Hour Data VTA ($) 0 5 10 15 20 25 30 35 40 45 50 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Fa r e R e c o v e r y R a t i o % Percentile 2017 Fare Recovery Ratio 2017 Fare Recovery Ratio National Data (%)2017 Fare Recovery Ratio VTA (%) Page 53 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY APPENDIX C – Peer Agency Comparisons This appendix presents various operational metrics for VTA and nine peer agencies. Generally, VTA under-performs all or most of these agencies as noted. Source of data: https://www.transit.dot.gov/sites/fta.dot.gov/files/February%202019%20Adjusted%20Database.xlsx 20 30 40 50 60 70 80 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tr i p p e r H o u r Year Passenger Trips per Revenue Hour (Bus & Light Rail ) Portland Minneapolis Houston Dallas Utah Denver VTA SF Muni Sacramento San Diego VTA competes for lowest Page 54 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 100 120 140 160 180 200 220 240 260 2009 2010 2011 2012 2013 2014 2015 2016 2017 Op e r a t i n g C o s t s $ p e r H o u r Year Operating Expense per Revenue Hour (Bus & Light Rail) Portland ($)Minneapolis ($)Houston ($) Dallas ($)Utah ($)Denver ($) VTA ($)SF Muni ($)Sacramento ($) San Diego ($) VTA now trending highest Page 55 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 2 3 4 5 6 7 8 9 10 2009 2010 2011 2012 2013 2014 2015 2016 2017 Op e r a t i n g C o s t s $ p e r T r i p Year Operating Expense per Passenger Trip (Bus & Light Rail) Portland ($)Minneapolis ($)Houston ($) Dallas ($)Utah ($)Denver ($) VTA ($)SF Muni ($)Sacramento ($) San Diego ($) VTA is highest Page 56 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 0 10 20 30 40 50 60 2009 2010 2011 2012 2013 2014 2015 2016 2017 Fa r e b o x R e c o v e r y R a t i o % Year Farebox Recovery Ratio (Bus & Light Rail) Portland Minneapolis Houston Dallas Utah Denver VTA SF Muni Sacramento San Diego VTA competes for lowest Page 57 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY Source of data https://www.transit.dot.gov/ntd/data-product/ts21-service-data-and-operating-expenses-time-series- mode-2 0 5 10 15 20 25 30 35 40 45 2009 2010 2011 2012 2013 2014 2015 2016 2017 Fa r e b o x R e c o v e r y % Year Farebox Recovery Ratio (All Operations) Portland Minneapolis Houston Dallas Utah Denver VTA SF Muni Sacramento San Diego VTA is lowest Page 58 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY REFERENCES 1. VTA Ad Hoc Financial Stability Committee Archives for 2018, http://www.vta.org/Get- Involved/Ad-Hoc-Financial-Stability-Committee 2. The Coming Transit Apocalypse, O’Toole, October 24, 2017 https://www.cato.org/publications/policy-analysis/coming-transit-apocalypse 3. Santa Clara Valley Transportation Authority Ad Hoc Financial Recovery Committee February 10, 2010 http://www.vta.org/sfc/servlet.shepherd/version/download/068A0000001Fbgu 4. California Public Utilities Code (PUC), Sections 100060 through 100063. https://codes.findlaw.com/ca/public-utilities-code/puc-sect-2870.html 5. Measure A Transit Improvement Program. See VTA.org Live Website. http://www.vta.org/projects-and-programs/programs/2000-measure-a-transit-improvement- program 6. Santa Clara Valley Transportation Authority Administration Code, w/ Amendments through June 7, 2018. http://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/admin_code.pdf 7. American Public Transportation Association (APTA), Quantifying Reporting Transit Sustainability Metrics. June 2012 8. Business Insider, These North American cities have the best public transit systems. November 4, 2017. https://www.businessinsider.com/best-subway-public-transit-north-america- 2017-10#3-vancouver-13 9. The Best Cities for Public Transportation, SmartAsset Publication. September 20, 2018. https://smartasset.com/mortgage/best-cities-for-public-transportation 10. Assessing Transit Service Improvement, May 3, 2010, San José State University, Urban Planning, Honors Report, Tyree. http://www.sjsu.edu/urbanplanning/docs/URBP298Docs/urbp298_HonorsReport_Tyree.pdf 11. Hay Group, VTA Organizational and Financial Assessment, March 2007. http://www.vta.org/sfc/servlet.shepherd/version/download/068A0000001FbYn 12. Santa Clara Valley Transportation Authority. Transit Choices Report, Jarrett Walker Associates, February 3, 2016. https://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/Transit_Choices_Report_Full.pdf 13. Transit Services Guidelines, VTA January 2019. http://www.vta.org/News-and- Media/Connect-with-VTA/Community-Engagement-to-Begin-on-2019-New-Transit-Service- Plan#.XMXYsbdKjIU 14. Jarrett Walker, Randal O’Toole, CATO Institute, October 2, 2018, The Future of Public Transit. https://www.cato.org/events/the-future-of-public-transit 15. VTA Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2018. http://vtaorgcontent.s3-us-west-1.amazonaws.com/Site_Content/CAFR_FY_2018.pdf Page 59 of 60 INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORTATION AUTHORITY INQUIRY INTO GOVERNANCE OF THE VALLEY TRANSPORATION AUTHORITY 16. Long Range Transportation Plan for Santa Clara County. VTP2040 undated. http://vtaorgcontent.s3-us-west- 1.amazonaws.com/Site_Content/VTP2040_final_hi%20res_030315.pdf 17. Why We Need to Stop Subsidizing Public Transit, CATO Institute, Randal O’Toole, May 2018. https://www.cato.org/publications/commentary/why-we-need-stop-subsidizing-public- transit 18. California State Auditor, Santa Clara County Transportation Authority, July 2008, Report 2007-129 SUMMARY. https://www.bsa.ca.gov/reports/summary/2007-129 19. National Transit Database. October 20, 2018. https://www.transit.dot.gov/ntd 20. The Great Transit Rip-Off: Joel Kotkin and Wendell Cox, August 25, 2017. https://www.dailynews.com/2017/08/25/the-great-transit-rip-off-joel-kotkin-and-wendell-cox/ 21. Silicon Valley Can’t Get Transit Right, Eric Jaffee, January 11, 2013. https://www.citylab.com/transportation/2013/01/silicon-valley-cant-get-transit-right/4374/ 22. Paying for Silicon Valley’s Transit Upgrade. The Hudson Institute, Walter Russell Mead, April 24, 2017. https://www.hudson.org/research/13566-paying-for-silicon-valley-s-transit- upgrade 23. Charting Public Transit’s Decline, CATO Institute, Randal O’Toole, November 8, 2018. https://www.cato.org/publications/policy-analysis/charting-public-transits-decline 24. America Needs a Rational Transit Policy, Wendell Cox, Heritage Foundation, March 24, 2015. https://www.heritage.org/transportation/report/america-needs-rational-transit-policy 25. American Public Transportation Association: Transit Board Member Handbook. July 2014 26. It’s Never Too Late to Stop a Transportation Megafolly, Randal O’Toole, CATO, March 5, 2019. https://www.cato.org/publications/commentary/its-never-too-late-stop-transportation- megafolly 27. Getting to the Route of It. The Role of Governance in Regional Transit. The Transit Center. EnoTrans, Washington D.C. October 1, 2014. https://www.enotrans.org/wp- content/uploads/Transit-Governance.pdf 28. New York City MTA Board Leadership. From Live Website. https://new.mta.info/transparency/leadership/board-members 29. Governance of Regional Transit Systems. Washington D.C., New York, Toronto. Wilson Center. Canada Institute, June 2014. https://www.scribd.com/document/233493152/Governance-of-Regional-Transit-Systems- Washington-New-York-and-Toronto 30. Houston Metro Board Leadership. From Live Website https://www.ridemetro.org/pages/boardofdirectors.aspx 31. Austin Texas Metro Board Leadership. From Live Website https://www.capmetro.org/board/ Note: All links verified June 9, 2019 City of Palo Alto (ID # 10572) City Council Staff Report Report Type: Action Items Meeting Date: 8/19/2019 City of Palo Alto Page 1 Council Priority: Grade Separations Summary Title: Recommendation for Rail Blue Ribbon Committee Title: Recommendation for City Council Direction on Establishment of a Rail Blue Ribbon Committee to Advise the City Council on the Selection, Funding, and Support for Grade Separation Projects From: City Manager Lead Department: City Manager Recommendation Staff recommends that the City Council provide direction to staff on establishment of a Rail Blue Ribbon Committee (“RBRC”) to supplement current community engagement and develop recommendations to the City Council on the selection, funding plan, and strategies for local and regional support of rail grade separations. Background Palo Alto is proactively working to address a critical impending need – maintaining crosstown access and safety – given the ongoing Caltrain electrification project and expected increasing frequency of train preemption at Charleston Road, Meadow Drive, Churchill Avenue, and Palo Alto Avenue. Given that addressing this need requires multiyear planning and construction of grade separations with costs in the hundreds of millions, the effort to date has been an extensive and complex technical and community planning process. The complexity of the decision-making ahead is driven by numerous factors, such as: • Localized and Neighborhood Impacts – All grade separation options are major construction projects that have a wide range of localized impacts. The existing Community Advisory Panel (CAP) has been instrumental in ensuring that the technical analysis of options addresses the issues of concern in a manner that can be clearly understood by neighbors. • Physical and Engineering Constraints – The City has engaged AECOM, a leading City of Palo Alto Page 2 engineering consultant, in the technical evaluation of options. Working with City staff, AECOM is currently evaluating options that can meet Caltrain operating requirements and other engineering criteria within the tight physical constraints of each crossing. • VTA Funding Decisions – Santa Clara County’s 2016 Measure B provides $700 million for grade separations in Palo Alto, Mountain View, and Sunnyvale. VTA has begun the process of implementing Measure B across all funding programs, and establishing criteria for allocation to each city. The amount and timing of Palo Alto being able to access these funds is unclear, and represents a competitive environment given interests among the cities as well as other VTA funding priorities that at some point could threaten the fulfillment of Measure B’s commitment to grade separation funding. • Caltrain Long-Range Plans and Approvals Required – Caltrain is currently undertaking a long range business plan, identifying operational, financial, and governance considerations for its long term sustainability. Caltrain’s role in the completion of grade separation projects, of which there may be 42 along the corridor, is unclear and will impact the cost and timing of construction, as well as ultimately requiring Caltrain approval for all grade separation projects. • Local Funding Options Under Consideration – The City Council Finance Committee has initiated evaluation of possible local funding methods such as a business tax for a portion of the funding needed for grade separations as well as other needs. State law limits cities’ ability to place local tax measures to council election cycles, which means the City can only advance a measure in November 2020 or 2022. • Criticality of Construction Management – After local decisions are made on preferred alternatives and funding, cooperation agreements will be required between the City, VTA, and Caltrain that define roles and responsibilities through environmental clearance, final design, and construction. As multiple public works projects that will extend over several years, it will be critical for these agreements to reflect a commitment to minimizing the disruption and other impacts that such major construction could have throughout Palo Alto. Given these complex and interrelated considerations, the City Council has expressed an interest in revisiting the role of a community working group to support development of a longer term strategy for the decision-making needed on rail grade separations. Discussion To date, the City has relied on a Community Advisory Panel (CAP), recently expanded and referred to as the Expanded Community Advisory Panel (XCAP), to provide neighborhood-level feedback to the technical analysis of grade separation options. The City of Palo Alto Page 3 XCAP has ensured that the grade separation options being considered are evaluated in a comprehensive and balanced manner that addresses neighborhood concerns, as well as presented to the community in a manner that is clear and supports resident engagement. Given this role, the XCAP is advisory to the City Manager and comprised of community members selected by staff. The XCAP is not subject to Brown Act rules nor Fair Political Practices Commission (FPPC) conflict of interest screening. Current participants on the XCAP include residents from various neighborhoods: Greg Brail, Phil Burton, Tony Carrasco, Inyoung Cho, Megan Kanne, Larry Klein, Patricia Lau, Nadia Naik, Keith Reckdahl, and David Shen, as well as a few organizational representatives:, Barbara Best (PAUSD), Adina Levin (Friends of Caltrain) Billy Riggs (PTC), and Judy Kleinberg (Chamber of Commerce). The XCAP provides invaluable input to staff on the development and communication of highly technical and potentially contentious issues. XCAP members have also dedicated significant personal time over the past year to meet with neighbors and increase awareness and understanding of the options and complex tradeoffs that must be considered in the decisions ahead for the city. While on June 24 the City Council approved an amendment to the contract with AECOM to continue the selection of preferred grade separation alternatives (Report #10463), the city manager acknowledged and councilmembers expressed interest in a more comprehensive community engagement approach. This included questions regarding the XCAP and revisiting an advisory role directly to the City Council. Recognizing the range of issues involved with the work ahead, the council has expressed interest in a more robust approach to support not only the selection of alternatives, but also developing the community support needed to successfully obtain voter approval on a local funding measure as well as the advocacy needed to ensure regional and other external funding. In order to accomplish this goal, staff has developed an option for the City Council to consider: establishing a new panel to directly advise the Council on grade separation decisions, with consideration to the community-wide benefits and impacts, local and regional political considerations, and financing strategy for implementation. For discussion, we refer to this new panel as the “RBRC.” This reflects a connection to the successful model used several years ago with an Infrastructure Blue Ribbon Committee (IBRC) for the development of recommendations that led to the Infrastructure Plan projects approved by Palo Alto voters and currently being delivered throughout the city. The goal of the RBRC would be to provide the City Council with strategic recommendations that recognize the interplay of issues that range from neighborhood- specific concerns with grade separation options to the need for citywide voter support and the regional competition for funding and project commitments. City of Palo Alto Page 4 As proposed, the RBRC would be additional to the XCAP and distinct in the following aspects: • The RBRC would not evaluate technical aspects of grade separation options, but use the evaluation developed by staff and the XCAP to formulate recommendations to the City Council. • The RBRC would be selected by and report directly to the City Council, and as such be subject to Brown Act and applicable conflict of interest rules (effectively precluding individuals with real estate or financial interests potentially affected by the alternatives). RBRC meetings would be open to the public and supported by staff. • The RBRC would provide advice to the City Council that reflects an understanding of the political environments locally and regionally, and the advocacy viability of options in light of these considerations. • The RBRC would require some parameters to conduct its business, such as selection of a chair/vice chair and voting on recommendations. Staff recommends that the XCAP be retained in order to continue its valuable role ensuring that neighborhood perspectives are reflected in the development and evaluation of the grade separation alternatives. Should the City Council approve proceeding with the RBRC, staff will review and revise the current community engagement workplan to reflect incorporation of the RBRC into the decision-making process. With the basic concepts outlined above, staff recommends that the RBRC would ideally be comprised of former Palo Alto mayors or city councilmembers. These individuals have direct experience in balancing the complex and competing issues presented here, but would also, as a body, demonstrate to regional stakeholders the significance of the grade separation issue to Palo Alto. Subject to City Council approval to pursue this approach, staff would also recommend that the City formally request the following organizations actively participate in RBRC discussions in a non-voting capacity: • Palo Alto Chamber of Commerce, • Stanford University, • Caltrain, • VTA, and • Silicon Valley Leadership Group; as well as any other organizations the Council feels essential to informed decision- making and setting the groundwork for subsequent steps. If the City Council approves this approach, staff requests City Council direction on two key elements: (1) the RBRC’s scope of assignment, and (2) its composition and selection of individuals. City of Palo Alto Page 5 Scope of RBRC Assignment The core role of the RBRC would be to advise the City Council on the selection of grade separation alternatives. What may be less certain is the role the RBRC should play in the development of a funding strategy for implementation. At one level of involvement, the RBRC’s role could be limited to making recommendations on dollar amounts that should be targeted for city ballot measure funding, without regard to the type of measure. At a higher level, the RBRC could be tasked with recommending a dollar target, timing, and parameters of a city ballot measure (such as a general or dedicated business tax) as well as next steps for regional and other external funding. A greater level of RBRC involvement in development of the funding strategy would likely involve the RBRC in the design of polling as well as a community awareness campaign leading to decisions on a ballot measure. Composition and Selection of RBRC Members As noted above, Staff recommends the RBRC be comprised of former Palo Alto mayors or city councilmembers in order to reflect the qualifications and stature needed to make key recommendations to the City Council as well as potentially continue their involvement in next steps. The total number of members on the RBRC will drive the magnitude of staff effort required to organize and support the RBRC. As such, staff would recommend the group consist of 10-15 voting members; however, staff will support whatever composition the City Council deems needed. Options for identifications of individuals to serve could include: • each Councilmember selecting 1-2 individuals to serve, • referral to the City Manager to return to council with a recommended slate of members, • an open application process with candidates to be interviewed by the City Council, or • some combination of the above. Staff requests City Council direction on the approach most appropriate to advance the City’s interests. Timeline, Resource Impact, Policy Implications The current timeline for the evaluation of grade separation alternatives is designed to support a City Council decision later this calendar year. If the City Council approves the establishment of an RBRC as proposed, the current workplan could proceed to the point of identifying all the relevent considerations for alternatives, and possibly elimination of some alternatives, while keeping open the final decision on preferred alternatives. The RBRC could then use this information in the formulation of its recommendations through Spring 2020 in anticipation of a potential city (and other regional transportation City of Palo Alto Page 6 ballot measures) in November 2020. Other timing considerations include the ongoing decision-making processes at VTA and Caltrain, recognizing that Palo Alto will be in a better position to advocate for funding allocations once locally preferred alternatives are selected. In addition, the Palo Alto Avenue crossing at the northern city limit is also on hold with plans for a comprehensive study of downtown/University access, pending decisions on other grade crossings and the availability of resources to dedicate to that effort. Environmental Review The decision to establish a Rail Blue Ribbon Committee is not a project as defined by the California Environmental Quality Act (CEQA). CITY OF PALO ALTO OFFICE OF THE CITY CLERK August 19, 2019 The Honorable City Council Palo Alto, California Informational Report Regarding the Outcome of the RFP for an Organizational Review of the City Auditor's Office: Professional Services Agreement With Kevin Harper, CPA and Associates for Organizational Review for a Total Not-to-Exceed Amount of $32,780 Recommendation No Council action is required as the contract amount is below the dollar threshold for Council approval. Background A Request for Proposal (RFP) was conducted by Staff to retain a company that would complete an organizational review of the City Auditor’s Office and review current industry standard practices by other agencies. The Council Appointed Officers’ Committee (CAO) recommended Staff move forward with a professional services contract with Kevin Harper, CPA and Associates to conduct the organizational review of the City Auditor’s Office for a total not-to-exceed amount of $32,780. Former City Auditor Harriet Richardson retired in February 2019, and Council directed Staff to conduct a RFP for an organizational review of the City Auditor’s Office. On May 2, 2019, the CAO Committee reviewed the responses and unanimously selected Kevin Harper to conduct the review (Minutes). This contract amount is below the threshold requiring Council approval, however, this item was placed as an informational item in order to keep Council apprised of the outcome of the RFP. Resource Impact Contract costs will be funded through salary savings in the City Auditor’s Office budget as a result of the City Auditor vacancy; therefore, no additional appropriation of funds is required. Environmental Review No impact. Approval of this contract is exempt under the California Environmental Quality Act (CEQA) Guidelines. ATTACHMENTS: • Attachment A: C20174966_K_Harper_CPA_Assoc (PDF) Page 2 Department Head: Beth Minor, City Clerk Professional Services Rev. April 27, 2018 1 CITY OF PALO ALTO CONTRACT NO. C20174966 AGREEMENT BETWEEN THE CITY OF PALO ALTO AND KEVIN W. HARPER CPA AND ASSOCIATES FOR PROFESSIONAL SERVICES This Agreement is entered into on this 19th day of June, 2019, (“Agreement”) by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and Kevin W. Harper CPA and Associates, a sole proprietor, located at 20885 Redwood Road, No. 202, Castro Valley, California 94546 ("CONSULTANT"). RECITALS The following recitals are a substantive portion of this Agreement. A. CITY intends to have an organizational review of the City Auditor's Office (“Project”) conducted and desires to engage a consultant to conduct the review in connection with the Project (“Services”). B. CONSULTANT has represented that it has the necessary professional expertise, qualifications, and capability, and all required licenses and/or certifications to provide the Services. C. CITY in reliance on these representations desires to engage CONSULTANT to provide the Services as more fully described in Exhibit “A”, attached to and made a part of this Agreement. NOW, THEREFORE, in consideration of the recitals, covenants, terms, and conditions, in this Agreement, the parties agree: AGREEMENT SECTION 1. SCOPE OF SERVICES. CONSULTANT shall perform the Services described at Exhibit “A” in accordance with the terms and conditions contained in this Agreement. The performance of all Services shall be to the reasonable satisfaction of CITY. Optional Additional Services Provision (This provision only applies if checked and only applies to Additional Services.) Additional Services (as defined in Section 4, entitled “NOT TO EXCEED COMPENSATION,” below, may be authorized by CITY, as needed, with a Task Order assigned and approved by CITY’s Project Manager. Each Task Order shall be in substantially the same form as Exhibit A- 1. Each Task Order shall designate a CITY Project Manager and shall contain a specific scope of work, a specific schedule of performance and a specific compensation amount, in accordance DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 2 with this Agreement. The total price of all Task Orders issued under this Agreement shall not exceed the amount of Compensation set forth in Section 4 of this Agreement. CONSULTANT shall only be compensated for work performed under an authorized Task Order and CITY may elect, but is not required, to authorize work up to the maximum compensation amount set forth in Section 4. SECTION 2. TERM. The term of this Agreement shall be from the date of its full execution through October 31, 2019 unless terminated earlier pursuant to Section 19 of this Agreement. SECTION 3. SCHEDULE OF PERFORMANCE. Time is of the essence in the performance of Services under this Agreement. CONSULTANT shall complete the Services within the term of this Agreement and in accordance with the schedule set forth in Exhibit “B”, attached to and made a part of this Agreement. Any Services for which times for performance are not specified in this Agreement shall be commenced and completed by CONSULTANT in a reasonably prompt and timely manner based upon the circumstances and direction communicated to the CONSULTANT. CITY’s agreement to extend the term or the schedule for performance shall not preclude recovery of damages for delay if the extension is required due to the fault of CONSULTANT. SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be paid to CONSULTANT for performance of the Services described in Exhibit “A” (also called “Basic Services”), and any specified reimbursable expenses, shall not exceed Twenty Nine Thousand Eight Hundred Dollars ($29,800). CONSULTANT agrees to complete all Basic Services, including any specified reimbursable expenses, within this amount. In the event Additional Services (defined below) are authorized, the total compensation for Basic Services, Additional Services and any specified reimbursable expenses shall not exceed Thirty Two Thousand Seven Hundred Eighty Dollars ($32,780). The applicable rates and schedule of payment are set out at Exhibit “C-1”, entitled “SCHEDULE OF RATES,” which is attached to and made a part of this Agreement. Any work performed or expenses incurred for which payment would result in a total exceeding the maximum amount of compensation set forth herein shall be at no cost to the CITY. Additional Services, if any, shall be authorized in accordance with and subject to the provisions of Exhibit “C”. CONSULTANT shall not receive any compensation for Additional Services performed without the prior written authorization of CITY, via a Task Order as provided in Section 1 (“SCOPE OF SERVICES”). “Additional Services” shall mean any work that is determined by CITY to be necessary for the proper completion of the Project, but which is not included within the Scope of Services described at Exhibit “A”. SECTION 5. INVOICES. In order to request payment, CONSULTANT shall submit monthly invoices to the CITY describing the services performed and the applicable charges (including an identification of personnel who performed the services, hours worked, hourly rates, and reimbursable expenses), based upon the CONSULTANT’s billing rates (set forth in Exhibit “C- 1”). If applicable, the invoice shall also describe the percentage of completion of each task. The information in CONSULTANT’s payment requests shall be subject to verification by CITY. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 3 CONSULTANT shall send all invoices to the City’s project manager at the address specified in Section 13 below. The City will generally process and pay invoices within thirty (30) days of receipt. SECTION 6. QUALIFICATIONS/STANDARD OF CARE. All of the Services shall be performed by CONSULTANT or under CONSULTANT’s supervision. CONSULTANT represents that it possesses the professional and technical personnel necessary to perform the Services required by this Agreement and that the personnel have sufficient skill and experience to perform the Services assigned to them. CONSULTANT represents that it, its employees and subconsultants, if permitted, have and shall maintain during the term of this Agreement all licenses, permits, qualifications, insurance and approvals of whatever nature that are legally required to perform the Services. All of the services to be furnished by CONSULTANT under this agreement shall meet the professional standard and quality that prevail among professionals in the same discipline and of similar knowledge and skill engaged in related work throughout California under the same or similar circumstances. SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself informed of and in compliance with all federal, state and local laws, ordinances, regulations, and orders that may affect in any manner the Project or the performance of the Services or those engaged to perform Services under this Agreement. CONSULTANT shall procure all permits and licenses, pay all charges and fees, and give all notices required by law in the performance of the Services. SECTION 8. ERRORS/OMISSIONS. CONSULTANT is solely responsible for costs, including, but not limited to, increases in the cost of Services, arising from or caused by CONSULTANT’s errors and omissions, including, but not limited to, the costs of corrections such errors and omissions, any change order markup costs, or costs arising from delay caused by the errors and omissions or unreasonable delay in correcting the errors and omissions. SECTION 9. COST ESTIMATES. If this Agreement pertains to the design of a public works project, CONSULTANT shall submit estimates of probable construction costs at each phase of design submittal. If the total estimated construction cost at any submittal exceeds ten percent (10%) of CITY’s stated construction budget, CONSULTANT shall make recommendations to CITY for aligning the PROJECT design with the budget, incorporate CITY approved recommendations, and revise the design to meet the Project budget, at no additional cost to CITY. SECTION 10. INDEPENDENT CONTRACTOR. It is understood and agreed that in performing the Services under this Agreement CONSULTANT, and any person employed by or contracted with CONSULTANT to furnish labor and/or materials under this Agreement, shall act as and be an independent contractor and not an agent or employee of CITY. SECTION 11. ASSIGNMENT. The parties agree that the expertise and experience of CONSULTANT are material considerations for this Agreement. CONSULTANT shall not assign or transfer any interest in this Agreement nor the performance of any of CONSULTANT’s obligations hereunder without the prior written consent of the city manager. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 4 Consent to one assignment will not be deemed to be consent to any subsequent assignment. Any assignment made without the approval of the city manager will be void. SECTION 12. SUBCONTRACTING. Option A: No Subcontractor: CONSULTANT shall not subcontract any portion of the work to be performed under this Agreement without the prior written authorization of the city manager or designee. Option B: Subcontracts Authorized: Notwithstanding Section 11 above, CITY agrees that subconsultants may be used to complete the Services. The subconsultants authorized by CITY to perform work on this Project are: CONSULTANT shall be responsible for directing the work of any subconsultants and for any compensation due to subconsultants. CITY assumes no responsibility whatsoever concerning compensation. CONSULTANT shall be fully responsible to CITY for all acts and omissions of a subconsultant. CONSULTANT shall change or add subconsultants only with the prior approval of the city manager or his designee. SECTION 13. PROJECT MANAGEMENT. CONSULTANT will assign Kevin Harper as the Manager to have supervisory responsibility for the performance, progress, and execution of the Services and Kevin Harper as the project manager to represent CONSULTANT during the day-to-day work on the Project. If circumstances cause the substitution of the project director, project coordinator, or any other key personnel for any reason, the appointment of a substitute project director and the assignment of any key new or replacement personnel will be subject to the prior written approval of the CITY’s project manager. CONSULTANT, at CITY’s request, shall promptly remove personnel who CITY finds do not perform the Services in an acceptable manner, are uncooperative, or present a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property. CITY’s project manager is Beth Minor, City Clerk, Palo Alto, CA 94303, Telephone: (65) 329- 2379. The project manager will be CONSULTANT’s point of contact with respect to performance, progress and execution of the Services. CITY may designate an alternate project manager from time to time. SECTION 14. OWNERSHIP OF MATERIALS. Upon delivery, all work product, including without limitation, all writings, drawings, plans, reports, specifications, calculations, documents, other materials and copyright interests developed under this Agreement shall be and remain the exclusive property of CITY without restriction or limitation upon their use. CONSULTANT agrees that all copyrights which arise from creation of the work pursuant to this Agreement shall be vested in CITY, and CONSULTANT waives and relinquishes all claims to copyright or other intellectual property rights in favor of the CITY. Neither CONSULTANT nor its contractors, if any, shall make any of such materials available to any individual or organization without the prior written approval of the City Manager or designee. CONSULTANT makes no representation of the suitability of the work product for use in or application to circumstances not contemplated by the scope of work. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 5 SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at any reasonable time during the term of this Agreement and for three (3) years thereafter, CONSULTANT’s records pertaining to matters covered by this Agreement. CONSULTANT further agrees to maintain and retain such records for at least three (3) years after the expiration or earlier termination of this Agreement. SECTION 16. INDEMNITY. [Option A applies to the following design professionals pursuant to Civil Code Section 2782.8: architects; landscape architects; registered professional engineers and licensed professional land surveyors.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. [Option B applies to any consultant who does not qualify as a design professional as defined in Civil Code Section 2782.8.] 16.1. To the fullest extent permitted by law, CONSULTANT shall protect, indemnify, defend and hold harmless CITY, its Council members, officers, employees and agents (each an “Indemnified Party”) from and against any and all demands, claims, or liability of any nature, including death or injury to any person, property damage or any other loss, including all costs and expenses of whatever nature including attorneys fees, experts fees, court costs and disbursements (“Claims”) resulting from, arising out of or in any manner related to any negligence, recklessness or intentional misconduct in the performance or nonperformance by CONSULTANT, its officers, employees, agents or contractors under this Agreement, regardless of whether or not it is caused in part by an Indemnified Party. 16.2. Notwithstanding the above, nothing in this Section 16 shall be construed to require CONSULTANT to indemnify an Indemnified Party from Claims arising from the active negligence, sole negligence or willful misconduct of an Indemnified Party. 16.3. The acceptance of CONSULTANT’s services and duties by CITY shall not operate as a waiver of the right of indemnification. The provisions of this Section 16 shall survive the expiration or early termination of this Agreement. SECTION 17. WAIVERS. The waiver by either party of any breach or violation of any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 6 SECTION 18. INSURANCE. 18.1. CONSULTANT, at its sole cost and expense, shall obtain and maintain, in full force and effect during the term of this Agreement, the insurance coverage described in Exhibit "D". CONSULTANT and its contractors, if any, shall obtain a policy endorsement naming CITY as an additional insured under any general liability or automobile policy or policies. 18.2. All insurance coverage required hereunder shall be provided through carriers with AM Best’s Key Rating Guide ratings of A-:VII or higher which are licensed or authorized to transact insurance business in the State of California. Any and all contractors of CONSULTANT retained to perform Services under this Agreement will obtain and maintain, in full force and effect during the term of this Agreement, identical insurance coverage, naming CITY as an additional insured under such policies as required above. 18.3. Certificates evidencing such insurance shall be filed with CITY concurrently with the execution of this Agreement. The certificates will be subject to the approval of CITY’s Risk Manager and will contain an endorsement stating that the insurance is primary coverage and will not be canceled, or materially reduced in coverage or limits, by the insurer except after filing with the Purchasing Manager thirty (30) days' prior written notice of the cancellation or modification. If the insurer cancels or modifies the insurance and provides less than thirty (30) days’ notice to CONSULTANT, CONSULTANT shall provide the Purchasing Manager written notice of the cancellation or modification within two (2) business days of the CONSULTANT’s receipt of such notice. CONSULTANT shall be responsible for ensuring that current certificates evidencing the insurance are provided to CITY’s Chief Procurement Officer during the entire term of this Agreement. 18.4. The procuring of such required policy or policies of insurance will not be construed to limit CONSULTANT's liability hereunder nor to fulfill the indemnification provisions of this Agreement. Notwithstanding the policy or policies of insurance, CONSULTANT will be obligated for the full and total amount of any damage, injury, or loss caused by or directly arising as a result of the Services performed under this Agreement, including such damage, injury, or loss arising after the Agreement is terminated or the term has expired. SECTION 19. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES. 19.1. The City Manager may suspend the performance of the Services, in whole or in part, or terminate this Agreement, with or without cause, by giving ten (10) days prior written notice thereof to CONSULTANT. Upon receipt of such notice, CONSULTANT will immediately discontinue its performance of the Services. 19.2. CONSULTANT may terminate this Agreement or suspend its performance of the Services by giving thirty (30) days prior written notice thereof to CITY, but only in the event of a substantial failure of performance by CITY. 19.3. Upon such suspension or termination, CONSULTANT shall deliver to the DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 7 City Manager immediately any and all copies of studies, sketches, drawings, computations, and other data, whether or not completed, prepared by CONSULTANT or its contractors, if any, or given to CONSULTANT or its contractors, if any, in connection with this Agreement. Such materials will become the property of CITY. 19.4. Upon such suspension or termination by CITY, CONSULTANT will be paid for the Services rendered or materials delivered to CITY in accordance with the scope of services on or before the effective date (i.e., 10 days after giving notice) of suspension or termination; provided, however, if this Agreement is suspended or terminated on account of a default by CONSULTANT, CITY will be obligated to compensate CONSULTANT only for that portion of CONSULTANT’s services which are of direct and immediate benefit to CITY as such determination may be made by the City Manager acting in the reasonable exercise of his/her discretion. The following Sections will survive any expiration or termination of this Agreement: 14, 15, 16, 19.4, 20, 25 and 27. 19.5. No payment, partial payment, acceptance, or partial acceptance by CITY will operate as a waiver on the part of CITY of any of its rights under this Agreement. SECTION 20. NOTICES. All notices hereunder will be given in writing and mailed, postage prepaid, by certified mail, addressed as follows: To CITY: Office of the City Clerk City of Palo Alto Post Office Box 10250 Palo Alto, CA 94303 With a copy to the Purchasing Manager To CONSULTANT: Attention of the project director at the address of CONSULTANT recited above SECTION 21. CONFLICT OF INTEREST. 21.1. In accepting this Agreement, CONSULTANT covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of the Services. 21.2. CONSULTANT further covenants that, in the performance of this Agreement, it will not employ subconsultants, contractors or persons having such an interest. CONSULTANT certifies that no person who has or will have any financial interest under this Agreement is an officer or employee of CITY; this provision will be interpreted in accordance with the applicable provisions of the Palo Alto Municipal Code and the Government Code of the State of California. 21.3. If the Project Manager determines that CONSULTANT is a “Consultant” DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 8 as that term is defined by the Regulations of the Fair Political Practices Commission, CONSULTANT shall be required and agrees to file the appropriate financial disclosure documents required by the Palo Alto Municipal Code and the Political Reform Act. SECTION 22. NONDISCRIMINATION. As set forth in Palo Alto Municipal Code section 2.30.510, CONSULTANT certifies that in the performance of this Agreement, it shall not discriminate in the employment of any person due to that person’s race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. CONSULTANT acknowledges that it has read and understands the provisions of Section 2.30.510 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Section 2.30.510 pertaining to nondiscrimination in employment. SECTION 23. ENVIRONMENTALLY PREFERRED PURCHASING AND ZERO WASTE REQUIREMENTS. CONSULTANT shall comply with the CITY’s Environmentally Preferred Purchasing policies which are available at CITY’s Purchasing Department, incorporated by reference and may be amended from time to time. CONSULTANT shall comply with waste reduction, reuse, recycling and disposal requirements of CITY’s Zero Waste Program. Zero Waste best practices include first minimizing and reducing waste; second, reusing waste and third, recycling or composting waste. In particular, CONSULTANT shall comply with the following zero waste requirements: (a) All printed materials provided by CCONSULTANT to CITY generated from a personal computer and printer including but not limited to, proposals, quotes, invoices, reports, and public education materials, shall be double-sided and printed on a minimum of 30% or greater post-consumer content paper, unless otherwise approved by CITY’s Project Manager. Any submitted materials printed by a professional printing company shall be a minimum of 30% or greater post- consumer material and printed with vegetable based inks. (b) Goods purchased by CONSULTANT on behalf of CITY shall be purchased in accordance with CITY’s Environmental Purchasing Policy including but not limited to Extended Producer Responsibility requirements for products and packaging. A copy of this policy is on file at the Purchasing Division’s office. (c) Reusable/returnable pallets shall be taken back by CONSULTANT, at no additional cost to CITY, for reuse or recycling. CONSULTANT shall provide documentation from the facility accepting the pallets to verify that pallets are not being disposed. SECTION 24. COMPLIANCE WITH PALO ALTO MINIMUM WAGE ORDINANCE. CONSULTANT shall comply with all requirements of the Palo Alto Municipal Code Chapter 4.62 (Citywide Minimum Wage), as it may be amended from time to time. In particular, for any employee otherwise entitled to the State minimum wage, who performs at least two (2) hours of work in a calendar week within the geographic boundaries of the City, CONSULTANT shall pay such employees no less than the minimum wage set forth in Palo Alto Municipal Code section 4.62.030 for each hour worked within the geographic boundaries of the City of Palo Alto. In addition, CONSULTANT shall post notices regarding the Palo Alto Minimum Wage Ordinance in accordance with Palo Alto Municipal Code section 4.62.060. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 9 SECTION 25. NON-APPROPRIATION 25.1. This Agreement is subject to the fiscal provisions of the Charter of the City of Palo Alto and the Palo Alto Municipal Code. This Agreement will terminate without any penalty (a) at the end of any fiscal year in the event that funds are not appropriated for the following fiscal year, or (b) at any time within a fiscal year in the event that funds are only appropriated for a portion of the fiscal year and funds for this Agreement are no longer available. This section shall take precedence in the event of a conflict with any other covenant, term, condition, or provision of this Agreement. SECTION 26. PREVAILING WAGES AND DIR REGISTRATION FOR PUBLIC WORKS CONTRACTS 26.1 This Project is not subject to prevailing wages. CONSULTANT is not required to pay prevailing wages in the performance and implementation of the Project in accordance with SB 7 if the contract is not a public works contract, if the contract does not include a public works construction project of more than $25,000, or the contract does not include a public works alteration, demolition, repair, or maintenance (collectively, ‘improvement’) project of more than $15,000. OR 26.1 CONSULTANT is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute the contract for this Project from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of Palo Alto. CONSULTANT shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates as a minimum. CONSULTANT shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782, 1810, and 1813, of the Labor Code pertaining to prevailing wages. 26.2 CONSULTANT shall comply with the requirements of Exhibit “E” for any contract for public works construction, alteration, demolition, repair or maintenance. SECTION 27. MISCELLANEOUS PROVISIONS. 27.1. This Agreement will be governed by the laws of the State of California without regard to conflict of law provisions. 27.2. In the event that an action is brought, the parties agree that trial of such action will be vested exclusively in the state courts of California in the County of Santa Clara, DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 10 State of California. 27.3. The prevailing party in any action brought to enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. The prevailing party shall be entitled to recover an amount equal to the fair market value of legal services provided by attorneys employed by it as well as any attorneys’ fees paid to third parties. 27.4. This Agreement represents the entire and integrated agreement between the parties and supersedes all prior negotiations, representations, and contracts, either written or oral. This Agreement may be amended only by a written instrument, which is signed by the authorized representatives of the parties and approved as required under Palo Alto Municipal Code. 27.5. The covenants, terms, conditions and provisions of this Agreement will apply to, and will bind, the heirs, successors, executors, administrators, assignees, and consultants of the parties. 27.6. If a court of competent jurisdiction finds or rules that any provision of this Agreement or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement and any amendments thereto will remain in full force and effect. 27.7. All exhibits referred to in this Agreement and any addenda, appendices, attachments, and schedules to this Agreement referred to herein are by such reference incorporated in this Agreement and are deemed to be a part of this Agreement. 27.8 In the event of a conflict between the terms of this Agreement and the exhibits hereto or CONSULTANT’s proposal (if any), the Agreement shall control. In the case of any conflict between the exhibits hereto and CONSULTANT’s proposal, the exhibits shall control. 27.9 If, pursuant to this contract with CONSULTANT, CITY shares with CONSULTANT personal information as defined in California Civil Code section 1798.81.5(d) about a California resident (“Personal Information”), CONSULTANT shall maintain reasonable and appropriate security procedures to protect that Personal Information, and shall inform City immediately upon learning that there has been a breach in the security of the system or in the security of the Personal Information. CONSULTANT shall not use Personal Information for direct marketing purposes without City’s express written consent. 27.10 All unchecked boxes do not apply to this Agreement. 27.11 The individuals executing this Agreement represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities. 27.12 This Agreement may be signed in multiple counterparts, which, when executed and delivered by all the parties, shall together constitute a single binding agreement. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 11 CONTRACT No. C20174966 SIGNATURE PAGE IN WITNESS WHEREOF, the parties hereto have by their duly authorized representatives executed this Agreement on the date first above written. CITY OF PALO ALTO ____________________________ Chief Procurement Officer Adrian Brown APPROVED AS TO FORM: __________________________ City Attorney or designee (Required on Contracts over $25,000) Kevin W. Harper CPA and Associates By: Name: Kevin Harper Title: Owner Attachments: EXHIBIT “A”: SCOPE OF SERVICES EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER EXHIBIT “B”: SCHEDULE OF PERFORMANCE EXHIBIT “C”: COMPENSATION EXHIBIT “C-1”: SCHEDULE OF RATES EXHIBIT “D”: INSURANCE REQUIREMENTS DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 12 EXHIBIT “A-1” PROFESSIONAL SERVICES TASK ORDER Consultant hereby agrees to perform the work detailed below in accordance with all the terms and conditions of the Agreement referenced in Item 1A below. All exhibits referenced in Item 8 are incorporated into the Agreement by this reference. The Consultant shall furnish the necessary facilities, professional, technical and supporting personnel required by this Task Order as described below. CONTRACT NO. ISSUE DATE Purchase Requisition No. 1A. MASTER AGREEMENT NUMBER (MAY BE SAME AS CONTRACT NO. ABOVE) 1B. TASK ORDER NO. 2. CONSULTANT 3. PERIOD OF PERFORMANCE: START: COMPLETION: 4 TOTAL TASK ORDER PRICE: $__________________ BALANCE REMAINING IN MASTER AGREEMENT/CONTRACT $_______________ 5. BUDGET CODE_______________ COST CENTER________________ COST ELEMENT______________ WBS/CIP__________ PHASE__________ 6. CITY PROJECT MANAGER’S NAME & DEPARTMENT:_____________________________________ 7. DESCRIPTION OF SCOPE OF SERVICES MUST INCLUDE: WORK TO BE PERFORMED SCHEDULE OF WORK BASIS FOR PAYMENT & FEE SCHEDULE DELIVERABLES REIMBURSABLES (with “not to exceed” cost) 8. ATTACHMENTS: A: Scope of Services B: __________________________________ I hereby authorize the performance of the work described in this Task Order. APPROVED: CITY OF PALO ALTO BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ I hereby acknowledge receipt and acceptance of this Task Order and warrant that I have authority to sign on behalf of Consultant. APPROVED: COMPANY NAME: ______________________ BY:____________________________________ Name __________________________________ Title___________________________________ Date ___________________________________ DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 13 EXHIBIT “A” SCOPE OF SERVICES 1. Research and provide a written comparison of Palo Alto’s City Auditor function with similar government agencies. Comparisons to include, but not be limited to the following: a. Duties and organizational placement of independent audit function; b. Staffing and budget relative to citywide budget; c. Annual number of audits generated, and cost per audit; d. Hours spent per audit, both by auditors and responding organizations; and, e. Other objective measures of audit productivity and effectiveness. Comparisons: Internal Auditor + Internal Team Internal Auditor + Contract Team Contract Auditor + Contract Team Additional: Internal Liaison + Contract Auditor + Contract Team 2. Identify and develop written recommendations for the allocation of responsibilities between the Office of the City Auditor and responsibilities that fall under other Council Appointed Officers. Specifically, relative to functions under the City Manager (“the Administration”), evaluate organizational options associated with placement of audit functions within the Administration versus independent of the Administration given the ultimate goals of transparent, efficient, and effective services to the public. 3. Review and provide written best practice comparisons of the current City Auditor organizational and resource structure compared to other agencies, professional standards, and applicable research. Conduct Survey of Other Agencies: Survey a dozen or more cities with internal performance-audit departments and those who source most of that work externally, and include a couple of counties, particularly for the “mostly external” side. The survey will include local Bay Area cities where possible. Consultant will include a survey report within the best practice comparisons report. Questions will include the following: DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 14 For cities with Internal groups - What is Staff size and budget? - How many audits per year? - What is budget for external auditing support? For cities (or counties) using External agencies - Cost of a typical performance audit? - Is quality consistently acceptable? - Who oversees the engagement? (City Mgr, Dedicated Liaison, CFO … ?) 4. Review and develop written recommendations for the professional qualifications and licensure required for the City Auditor position. 5. Consult as needed with the City’s Council Appointed Officer Committee throughout the engagement, and present results to the full City Council upon completion. 6. Additional Services as may be directed in writing by the CITY’s project manager, per Section 1 (“Scope of Services”) and Section 4 (“Not to Exceed Compensation”). DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 15 EXHIBIT “C” COMPENSATION The CITY agrees to compensate the CONSULTANT for professional services performed in accordance with the terms and conditions of this Agreement, and as set forth in the budget schedule below. Compensation shall be calculated based on the hourly rate schedule attached as exhibit C-1 up to the not to exceed budget amount for each task set forth below. CONSULTANT shall perform the tasks and categories of work as outlined and budgeted below. The CITY’s Project Manager may approve in writing the transfer of budget amounts between any of the tasks or categories listed below provided the total compensation for Basic Services, including reimbursable expenses, and the total compensation for Additional Services do not exceed the amounts set forth in Section 4 of this Agreement. BUDGET SCHEDULE NOT TO EXCEED AMOUNT Task 1 $ $1,200 (Meet with City Officials) Task 2 $ 2,400 (Meet with City Auditor and Read Relevant City Documents) Task 3 $ 7,100 (Survey similar governments) Task 4 $ 2,025 (Research professional standards and best practices) Task 5 $ 6,000 (Develop findings and recommendations) Task 6 $ 7,200 (Write report) Task 7 $ 1,200 (Review findings and recommendations with City) Task 8 $ 1,200 (Meeting to present report) Task 9 $ 1,200 (Project administration) (Continued on the next page.) DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 16 Sub-total Basic Services $29,525 Reimbursable Expenses $275 Total Basic Services and Reimbursable expenses 29,800 Additional Services (Not to Exceed) $2,980 Maximum Total Compensation $32,780 REIMBURSABLE EXPENSES The administrative, overhead, secretarial time or secretarial overtime, word processing, photocopying, in-house printing, insurance and other ordinary business expenses are included within the scope of payment for services and are not reimbursable expenses. CITY shall reimburse CONSULTANT for the following reimbursable expenses at cost. Expenses for which CONSULTANT shall be reimbursed are: NOT TO EXCEED $275. A. Travel outside the San Francisco Bay area, including transportation and meals, will be reimbursed at actual cost subject to the City of Palo Alto’s policy for reimbursement of travel and meal expenses for City of Palo Alto employees. B. Long distance telephone service charges, cellular phone service charges, facsimile transmission and postage charges are reimbursable at actual cost. All requests for payment of expenses shall be accompanied by appropriate backup information. Any expense shall be approved in advance by the CITY’s project manager. ADDITIONAL SERVICES The CONSULTANT shall provide Additional Services (as defined in Section 4, entitled “NOT TO EXCEED COMPENSATION”) only by advanced, written authorization from the CITY via a Task Order as detailed in Section 1 (“SCOPE OF SERVICES”). The CONSULTANT, at the CITY’s project manager’s request, shall submit a detailed written proposal including a description of the scope of the Additional Services, schedule, level of effort, and CONSULTANT’s proposed maximum compensation, including any reimbursable expenses, for such services based on the rates set forth in Exhibit C-1. The proposed Additional Services scope, schedule and maximum compensation shall be negotiated and agreed to in writing by the CITY’s project manager and CONSULTANT prior to commencement of the services, and in accordance with this Agreement. Payment for any Additional Services is subject to all requirements and restrictions in this Agreement DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 17 EXHIBIT “C-1” SCHEDULE OF RATES Partner $240/hr. Director/Senior Manager $185/hr. Manager $160/hr. Senior Auditor $135/hr. Staff Auditor $95/hr. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 18 EXHIBIT “D” INSURANCE REQUIREMENTS CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW, AFFORDED BY COMPANIES WITH AM BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW: REQUIRED TYPE OF COVERAGE REQUIREMENT MINIMUM LIMITS EACH OCCURRENCE AGGREGATE YES YES WORKER’S COMPENSATION EMPLOYER’S LIABILITY STATUTORY STATUTORY YES GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL LIABILITY BODILY INJURY PROPERTY DAMAGE BODILY INJURY & PROPERTY DAMAGE COMBINED. $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES AUTOMOBILE LIABILITY, INCLUDING ALL OWNED, HIRED, NON-OWNED BODILY INJURY - EACH PERSON - EACH OCCURRENCE PROPERTY DAMAGE BODILY INJURY AND PROPERTY DAMAGE, COMBINED $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 YES PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND NEGLIGENT PERFORMANCE ALL DAMAGES $1,000,000 YES THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: CONTRACTOR, AT ITS SOLE COST AND EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY CONTRACTOR AND ITS SUBCONSULTANTS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSUREDS CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS, AND EMPLOYEES. I. INSURANCE COVERAGE MUST INCLUDE: A. A PROVISION FOR A WRITTEN THIRTY (30) DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S AGREEMENT TO INDEMNIFY CITY. C. DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL. II. CONTACTOR MUST SUBMIT CERTIFICATES(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE AT THE FOLLOWING URL: https://www.planetbids.com/portal/portal.cfm?CompanyID=25569. III. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL INSUREDS” A. PRIMARY COVERAGE WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSUREDS. DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Professional Services Rev. April 27, 2018 19 B. CROSS LIABILITY THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSUREDS UNDER THE POLICY SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY OF THE COMPANY UNDER THIS POLICY. C. NOTICE OF CANCELLATION 1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE NON-PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. 2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON- PAYMENT OF PREMIUM, THE CONSULTANT SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION. VENDORS ARE REQUIRED TO FILE THEIR EVIDENCE OF INSURANCE AND ANY OTHER RELATED NOTICES WITH THE CITY OF PALO ALTO AT THE FOLLOWING URL: HTTPS://WWW.PLANETBIDS.COM/PORTAL/PORTAL.CFM?COMPANYID=25569 OR HTTP://WWW.CITYOFPALOALTO.ORG/GOV/DEPTS/ASD/PLANET_BIDS_HOW_TO.ASP DocuSign Envelope ID: 44C2D0EE-A0C8-40F1-BD7F-6C9B9900EB77 Certificate Of Completion Envelope Id: 44C2D0EEA0C840F1BD7F6C9B9900EB77 Status: Completed Subject: Please DocuSign: C20174966 K Harper CPA Associates; FINAL 4 Partial Signature.docx Source Envelope: Document Pages: 19 Signatures: 1 Envelope Originator: Certificate Pages: 2 Initials: 0 Adrian Brown AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-08:00) Pacific Time (US & Canada) 250 Hamilton Ave Palo Alto , CA 94301 Adrian.Brown@CityofPaloAlto.org IP Address: 12.220.157.20 Record Tracking Status: Original 6/17/2019 8:48:06 AM Holder: Adrian Brown Adrian.Brown@CityofPaloAlto.org Location: DocuSign Security Appliance Status: Connected Pool: StateLocal Storage Appliance Status: Connected Pool: City of Palo Alto Location: DocuSign Signer Events Signature Timestamp Kevin Harper kharper@kevinharpercpa.com Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 71.198.154.207 Sent: 6/17/2019 9:48:32 AM Viewed: 6/18/2019 4:10:30 PM Signed: 6/18/2019 4:15:00 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Beth Minor Beth.Minor@CityofPaloAlto.org City Clerk City of Palo Alto Security Level: Email, Account Authentication (None) Sent: 6/18/2019 4:15:02 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Adrian Brown adrian.brown@cityofpaloalto.org Chief Procurement Officer CIty of Palo Alto Security Level: Email, Account Authentication (None) Sent: 6/18/2019 4:15:03 PM Resent: 6/18/2019 4:15:06 PM Viewed: 6/18/2019 5:28:01 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 6/18/2019 4:15:03 PM Certified Delivered Security Checked 6/18/2019 4:15:03 PM Signing Complete Security Checked 6/18/2019 4:15:03 PM Completed Security Checked 6/18/2019 4:15:03 PM Payment Events Status Timestamps City of Palo Alto (ID # 10496) City Council Staff Report Report Type: Informational Report Meeting Date: 8/19/2019 City of Palo Alto Page 1 Summary Title: Gifts to the City, FY 2019 Title: Significant Gifts to the City, Fiscal Year 2019 From: City Manager Lead Department: Administrative Services This is an informational report and no Council action is required. Discussion The City of Palo Alto’s Policy and Procedure 1-18, Gifts and Donations to the City of Palo Alto, (Attachment A) requires annual reports to the City Council regarding significant gifts that have been accepted on behalf of the City. This policy was updated in October 2014, to help clarify reporting of significant gifts over $5,000 only. In compliance with this policy, Attachment B lists all of the significant gifts (over $5,000) received during Fiscal Year 2019. All gifts had a designated purpose as stated under the “Use of Gift” column. Staff monitors designated restrictions to comply with the Donor’s request. In addition, the Fair Political Practices Commission (FPPC) regulates gifts to employees. The regulations contain guidelines on when these types of gifts should be disclosed as gifts to the City. Gifts required to be disclosed pursuant to this regulation are now also reported on FPPC Form 801, and that gift information is now posted to the City Clerk’s web page as required by the FPPC. Annual reports of gifts will continue to be provided to the Council, and Form 801 information will be available on the City Clerk’s website throughout the year as gifts are received. Attachments: • Attachment A: Gifts to the City Policy 1-18 • Attachment B: FY 2019 Gifts Received Over $5,000 Attachment A POLICY AND PROCEDURES 1-18 Revised: October 1, 2014 Effective: December 1, 1989 GIFTS AND DONATIONS TO THE CITY OF PALO ALTO POLICY STATEMENT The purpose of this policy is to: • Establish uniform procedures for the receipt of gifts to the City of Palo Alto; • Cultivate and maintain an environment where residents and businesses want to contribute to the City's programs and facilities; • Promptly acknowledge and express appreciation for the gifts; • Assure the gifts are properly inventoried, and Comply with the Political Reform Act and Fair Political Practices Commission Regulations. It is essential that gifts be properly reported and reviewed carefully for impact on the City's resources and for consistency with City policies and procedures concerning cash handling and inventory. City employees are prohibited from accepting personal gifts (see Section 1301, Merit System Rules and Regulations). Gifts to elected and appointed City officials and “designated” City employees (see Palo Alto Municipal Code, Chapter 2.09) are also regulated by the State of California Fair Political Practices Commission. Applicability of this Policy The procedures stated in Section A apply to gifts offered or given to the City, gifts actively solicited by the City, and gifts from community groups that support various City operations (e.g. Friends of the Library, the Recreation Foundation, etc.). They do not apply to minor individual contributions which will be quickly consumed in a City- sponsored event, work contributed by individual volunteers, sponsorship of a City activity, or donations of advertising, publicity, graphics, etc. in exchange for City acknowledgment. The procedures are consistent with those applicable to grants and other funding requests (see Policy and Procedures 1-12). The Fair Political Practices Commission has adopted requirements (2 Cal.Code Regs. § 18944.2) for reporting payments made to agencies that would otherwise constitute gifts to public officials. Payments may be considered gifts to the City when the City receives and controls the payment, uses the payment for official business, and identifies the recipient. Such payments must be reported as provided in section B of this policy. Table 1 summarizes acknowledgement and reporting requirements for gifts. PROCEDURES A. City Requirements for Accepting and Acknowledging Gifts Department heads, including Council Appointed Officers, are authorized to accept gifts tendered by cash or cash equivalents or by electronic funds transfers (e.g., ACH transfer, credit card payment or online gifts) on behalf of the City. The City Clerk’s Office will report on behalf of the City Council. Implementation of this policy is the responsibility of the department head, including Council Appointed Officers. Thresholds for implementation of the procedures vary with the category of the gift, as shown in Table 1. The estimated value of a gift is based on the donor's estimate. The City will not independently assign a value to the gift unless it is cash. Gifts accepted by the City become the property of the City of Palo Alto and are to be used for public benefit. Unless a special agreement concerning the ultimate disposition of the gift is entered into at the time the gift is accepted, it is understood that the City has sole authority to determine the use, transfer, handling, or disposition of the gift. Gifts made to officials directly or for which the donor donors designates by name, class, or other title the official who may use the payment are not gifts to the City, but rather individual gifts that may be required to be reported on FPPC Form 700. Employees may not accept individual gifts. Department heads should review material gifts to: • determine what the estimated costs to the City will be for any related installation, maintenance, operation, storage or liability that may be incurred by acceptance of the object; • ensure that the gift is properly documented, catalogued, and/or inventoried in the department and division records; • prepare and install an appropriate sign or nameplate consistent with the City’s naming policy; • ensure that the object will be satisfactorily maintained. Acknowledgment of Gifts The manner in which a gift is acknowledged must be appropriate to the nature of the gift and consistent with the donor's wishes. 1. Within thirty (30) days of receipt of a gift, the department head must send an acknowledgment letter if the gift is worth $100 or more, thanking the donor on behalf of the City of Palo Alto. a. The letter should clearly identify the gift and confirm the placement of the object that has been given to the City, or the use to which the gift will be devoted. b. Gifts to a governmental entity are treated similarly to charitable contributions for purposes of tax deductions. However, the donor will be responsible to the Internal Revenue Service and Franchise Tax Board for substantiating his or her own tax deduction. The City will not provide any tax services to donors. c. Except for gifts of cash or cash equivalents, where the donor amount is apparent, no dollar amount should be stated in the letter. Instead, the letter should contain the following paragraph: Your gift may be tax deductible. To determine the amount you may properly deduct for tax purposes, you should consult your tax preparer or tax attorney. d. The department head or his/her designee will sign the letter and forward a copy to the ASD Director. e. For a particularly significant gift (over $5,000), recipient department head in consultation with the ASD Director may ask that a letter be prepared for the Mayor's signature. 2. The recipient department head, in consultation with the ASD Director, will determine if the gift warrants a public announcement and in what manner it should be made. The donor will be notified in advance of any announcement, and has the right to request anonymity. 3. The ASD Director is responsible for: a. maintaining a record of all gifts that are accepted, including a description of the gift, the donor’s name and address (unless anonymous), the date the gift was received, and the disposition of the gift. b. reporting annually any significant gifts over $5,000 to the City Council regarding the gifts that have been accepted on behalf of the City. 4. Each department should also maintain a record of all gifts that are accepted, which includes a description of the gift, the donor's name and address, the date the gift was received, and the disposition of the gift. B. Fair Political Practices Commission Requirements for Accepting and Reporting Gifts to the City In addition to the requirements listed above, departments receiving gifts to the City must comply with Title 2 of the California Code of Regulations section 18944.2, summarized below: Payments or similar gifts that are controlled by the City and used for official City business may be considered gifts to the agency rather than gifts to an individual although the individual may receive a personal benefit from the payment, if all of the following requirements are met:. (1) City controls use of payment: The city manager or designee must determine and control the City’s use of a payment. The donor may identify a purpose for the payment, but may not designate by name, title, class, or otherwise, the official/employee who may use the payment. The City Manager or designee shall select the individual(s) who will use the payment any may not select himself or herself as the user. (2) Official City business. The payment must be used for official City business. (3) Reporting. Within 30 days after use of the payment, the head of the department of the official/employee who used the gift must report the payment on the Form 801 and forward it to the City Clerk. Form 801 is available at the Fair Political Practices Commission website online at http://www.fppc.ca.gov. The City Clerk shall post a copy of the form or the information in the form on the City website, and shall maintain the forms for a period of not less than four years. (4) Limitations on payments for travel. Payments for travel, including transportation, lodging, and meals, are not gifts to the City but are considered personal gifts or income that the official or employee may be required to report on his or her FPPC Form 700 (a) if the donor designates by name, title, class, or otherwise, the official or employee who may use the payment, (b) if the City Manager or designee has not preapproved the travel in writing by signing the Form 801 or other travel pre-approval in advance or the trip, and/or (c) to the extent that such payments exceed the City’s reimbursement rates for travel, meals, lodging, and other actual and necessary expenses. NOTE: Questions and/or clarification of this policy should be directed to the Administrative Services Department. Questions and/or clarification of the Form 801 reporting requirements should be directed to the City Clerk or City Attorney’s Office. Attachments: Attachment A: Table 1- Summary of Gift Categories and Reporting Requirements Attachment A Table 1 Summary of Gift Categories and Reporting Requirements Gift Category Acknowledge‐ ment Letter Copy of acknowledge‐ ment to ASD? Account information re deposit to ASD? Form 801 to City Clerk? Other Requirements Cash or cash equivalent that will be used for official City business over $100 (cash, check, money order, travelers check, cashier’s check or online donation) X X X Cash or cash equivalent that will be used by an individual employee for official city business X X X X For payments used for official travel, see limitations set forth in policy section B(4). Stocks, other securities X X Contact ASD re deposition of this type of gift. The City’s investment policy (1‐39) precludes purchase of stocks, but the City may accept them as gifts if sold within a reasonable amount of time and ASD Director determines that cost of sale will not exceed cost of stock. Services (skilled services performed by a business or professional firm) X X Department head evaluates services to determine impact to department’s operating budget or CIP. Contact City’s Risk Manager to determine potential liability exposure. Material Gifts (Objects of art, equipment, property, other tangibles) X X If item has a value of $5,000 or more, also provide ASD Director with documentation regarding value of gift for fixed assets accounting. Real Property (Privately owned land and/or land improvements) All gifts require approval from ASD Real Estate Division and should be referred there. Real Estate/ASD will submit a written recommendation to the City Council for acceptance or rejection of the gift. Attachment B FY 2019 Gifts over $5,000 Date Donor Dept Gift Use of Gift August 1, 2018 Pacific Library Partnership (PLP) Library $5,000 Was received to host a one‐day staff development event in August 2018 to encourage utilization of technology to enhance library services August 1, 2018 Pacific Library Partnership (PLP) Library $6,756.99 Received on behalf of the California State Library Initiatives Book Project to cover costs for expanding the Library's bilingual book collections for children August 27, 2018 Anonomous Donor Police $29,554 Department Canine Program October 2, 2018 Friends of Palo Alto Parks Community Services $11,726 Donation for adopt‐a‐park Heritage Park Improvements Receipt #3239 December 10, 2018 Palo Alto Art Center Foundation Community Services $81,000 To support Palo Alto Art Center Children's program positions January 1, 2019 Pacific Library Partnership (PLP) Library $5,953 Redistribution of PLP funds for collections database purchases as per the California Library Services Act (CLSA) ‐ enki for $2,353, and Overdrive for $3,600 February 27, 2019 Norma Reiss Community Services $5,000 Two memorial benches at the Palo Alto Baylands April ‐ June 2019 Pacific Library Partnership (PLP) Library $9,506 PLP grant for Self Service Preservation, Digitization & Conversion Station; provides equipment access and support to the community to digitize their own documents, photos and sound and video recordings. Varies Friends of the Palo Alto Library Library $81,000 Collection replacement. Varies Friends of the Palo Alto Library Library $67,500 Support for youth and adult programs at all libraries (Friends paid performers and associated program supplies throughout the year); includes $2,000 for purchase, throughout the year, of refreshments at staff meetings and staff supplies, supplies for staff break rooms, and other small items of staff recognition; $1,500 for volunteer appreciation.